SEC Filing | Visteon Corporation

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-K

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002, or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-15827

VISTEON CORPORATION

(Exact name of Registrant as specified in its charter)


Delaware (State of incorporation)		38-3519512 (I.R.S. employer identification no.)
17000 Rotunda, Dearborn, Michigan (Address or principal executive offices)		48120 (Zip code)

Registrant’s telephone number, including area code: (800)-VISTEON

Securities registered pursuant to Section 12(b) of the Act:


		Name of each exchange on
Title of each class		which registered

Common Stock, par value $1.00 per share		New York Stock Exchange

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ü No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

Yes ü No

As of January 31, 2003, the registrant had outstanding 129,024,309 shares of common stock. The aggregate market value of such common stock held by non-affiliates of the registrant as of such date was $877,805,738, based on the closing price of the common stock on that date ($6.87 a share) as reported by the New York Stock Exchange.

Document Incorporated by Reference*


Document		Where Incorporated

Proxy Statement		Part III (Items 10, 11, 12 and 13)


*	As stated under various Items of this Report, only certain specified portions of such document are incorporated by reference in this Report.

PART I

ITEM 1. BUSINESS

Overview

Visteon Corporation is a leading global supplier of automotive systems, modules, and components to global vehicle manufacturers and the automotive aftermarket. Headquartered in Dearborn, Michigan, we have global capabilities, with regional headquarters in Cologne, Germany, Yokohama, Japan, and São Paulo, Brazil. We have a workforce of approximately 77,000 and a network of manufacturing sites, technical centers, sales offices and joint ventures located in every major region of the world.

Visteon operates in two business segments: Automotive Operations and Glass Operations.

Automotive Operations: Visteon is a leading global supplier of automotive systems, modules and components in the following product areas: climate control, interior, exterior, powertrain, chassis, and electronics. Our products are featured on vehicles built by many leading automotive manufacturers, including Ford Motor Company, General Motors, Toyota, Daimler-Chrysler, Volkswagen, Honda, Renault, Nissan, Hyundai, Peugeot, Mazda and BMW.

Glass Operations: Our Glass Operations segment is composed of our vehicle glazing product group, which produces glass products for Ford and aftermarket customers, and our commercial glass product group, which produces float glass for commercial architecture.

Visteon was incorporated in Delaware in January 2000 as a wholly-owned subsidiary of Ford. Ford subsequently transferred to Visteon the assets and liabilities comprising its automotive components and systems business. Visteon separated from Ford on June 28, 2000 when all of the common stock of Visteon was distributed by Ford to its shareholders.

Financial Information About Business Segments

Business segment financial information can be found on pages 72-74 of this Annual Report on Form 10-K (Note 16, “Segment Information”, of our consolidated financial statements).

Automotive Parts Industry

The automotive parts industry provides systems, modules, and components to vehicle manufacturers for the manufacture of new vehicles, as well as to the aftermarket for use as replacement and enhancement parts. Historically, large vehicle manufacturers operated internal divisions to provide a wide range of component parts for their vehicles. More recently, vehicle manufacturers have moved towards a competitive sourcing process for automotive parts, including increased purchases from independent suppliers, as they seek lower-priced and/or higher-technology products. Demand for aftermarket products tends to increase when vehicle owners retain their vehicles longer, as these vehicles generally have a greater need for repairs.

Industry Trends. The following key trends have been affecting the automotive parts industry over the past several years:


	•	Demand for Safe and Environmentally Friendly Products. Consumers are increasingly interested in products and technologies that make them feel safer and more secure. Vehicle manufacturers and many governmental regulators are increasingly requiring safe and environmentally friendly products. This demand coupled with advances in technology have led to a number of new product opportunities for companies like Visteon possessing strong innovation capabilities such as advanced front lighting systems, driver information technologies, emissions controls, fuel consumption improvements and recyclable materials. In addition, Visteon is prepared to support the technology needs of advanced systems to support environmentally focused power systems, such as fuel cells, which could revolutionize the automotive industry.

ITEM 1. BUSINESS — (Continued)


	•	Increasing Electronics Integration and Technological Content. Electronics integration, which typically involves replacing bulky mechanical components with electronic ones and/or adding new electrical functions to the vehicle, allows vehicle manufacturers improved control over vehicle weight, costs and functionality. Integrated electronic solutions help auto manufacturers improve fuel economy through weight reduction and reduce emissions through improved air and engine control systems. In addition, Visteon is combining its leadership position in automotive supply with leaders in non-automotive electronics to offer vehicle manufacturers integrated technologies that meet key consumer and regulatory needs.

	•	Globalization of Suppliers. In order to serve multiple markets more efficiently, vehicle manufacturers are assembling vehicle platforms globally. With this globalization, vehicle manufacturers are increasingly interested in global suppliers that can better serve multiple markets, address local consumer preferences while controlling design costs and minimizing import tariffs in local markets. Visteon’s presence in more than 190 facilities, in 25 countries, on 6 continents makes it well positioned to meet this need.

	•	Ongoing Industry Consolidation. The worldwide automotive parts industry is consolidating as suppliers seek to achieve operating synergies through business combinations, shift production to locations with more flexible work rules and practices, acquire complementary technologies, build stronger customer relationships and follow their customers as they expand globally. Visteon’s ability to provide vehicle manufacturers with single-point sourcing of integrated systems and modules on a global basis has improved its ability to respond to this consolidation.

	•	Design of several model derivatives off of a single vehicle platform. Vehicle manufacturers have moved to designing and producing several vehicle models off of a single vehicle platform. With this method, vehicle manufacturers will vary the design of some components to create the different vehicle models and standardize other components across the platform, helping to reduce the overall cost of design and manufacture of each model. Suppliers like Visteon with its broad product line of innovative new systems are well positioned to assist vehicle manufacturers in differentiating each of their vehicle models.

	•	Increased competitive intensity and market pressures on OEs. As vehicle manufacturers are under increasing pressure to adjust to changing consumer preferences and to incorporate technological advances, they are shortening product development times. These shorter development times allow vehicle manufacturers to effectively introduce vehicles and features that match prevailing consumer preferences. In order to simplify the vehicle design and assembly processes and reduce their costs, vehicle manufacturers are experimenting with opportunities for their suppliers to provide fully engineered, pre-assembled systems rather than individual components. By offering sophisticated systems and modules rather than individual components, automotive suppliers like Visteon are well positioned to capture value from the design, engineering, research and development and assembly functions vehicle manufacturers are increasingly looking to outsource.

ITEM 1. BUSINESS — (Continued)

Products

Visteon designs and manufactures components, systems, and modules that can make up as much as 40% of the value of a vehicle. We support our products with a full-range of styling, design, testing and manufacturing capabilities, including just-in-time and in-sequence delivery.

The following discussion describes the major product groups within each segment. Financial information relating to sales attributable to each of these product groups can be found in Note 16, “Segment Information”, of our consolidated financial statements.

Automotive Operations

Chassis Products & Systems. Visteon designs and manufactures a wide array of chassis-related products, from driveline systems for popular all-wheel drive vehicles to steering and suspension systems.


Chassis Product Lines		Description

Driveline		Visteon produces all of the major components for an all-wheel drive system. Major products include front and rear independent suspension and solid-beam axles, propshafts, halfshafts, and power transfer units. Visteon’s slip-in-tube propshaft is an example of our exclusive technology that reduces weight and improves NVH and vehicle crash performance.
Steering		Visteon designs and produces hydraulic power assisted steering systems, rack and pinion steering gears, recirculating ball nut steering gears, and power steering pumps. We have also developed electric power assisted steering (EPAS) systems, which use electric motors rather than conventional hydraulics.
Suspension		Visteon’s suspension products include corner and suspension modules, brake hubs and rotors, knuckles and spindles, in a variety of materials, and stabilizer bars.

Interior Products & Systems. Visteon is one of the leading global suppliers of cockpit systems, instrument panels, door modules and interior trim and console modules.


Interior Product Lines		Description

Cockpits		Visteon’s cockpits incorporate the latest in driver information, entertainment, vehicle controls and climate control features and package a variety of structural, electronic and safety components. We provide our customers with a complete array of services including advanced engineering and computer aided design, styling concepts and modeling, and just-in-sequence delivery of manufactured parts.
Instrument Panels		Visteon’s instrument panels consist of a substrate and the optional assembly of structure, ducts, registers, passenger airbag system (integrated or conventional), finished panels and the glove box assembly.
Door Modules & Interior Trim		Visteon provides a wide range of door trim panels and modules as well as a variety of interior trim products.
Console Modules		Visteon’s console modules expand the functionality of today’s console offerings, delivering flexible and versatile storage options to the consumer. The modules are interchangeable units and offer consumers a wide range of storage options that can be tailored to their individual needs.

ITEM 1. BUSINESS — (Continued)

Climate Control Products & Systems. Visteon is one of the leading global suppliers of components, modules, and systems that provide automotive heating, ventilation and air conditioning, and powertrain cooling.


Climate Control Product Lines		Description

Climate Systems		Visteon designs and manufactures fully integrated heating, air conditioning and powertrain cooling systems.
Heat Exchangers		Heat exchangers provide the mechanism of heat transfer for automotive air conditioning and powertrain cooling systems. Included in the offering are radiators, condensers, evaporator and heater cores, integrated heat exchangers, cooling modules and intercoolers.
Fluid Transport		Fluid transport includes refrigerant handling lines, powertrain cooling lines, accumulator/ receiver dryers, and fittings designed to suit specific customer requirements.
Air Handling		Visteon’s air handling modules heat and cool air and distribute it throughout the passenger cabin.
Controls		Visteon designs and manufactures mechanical and electronic A/C and heater controls. These controls allow the passengers to select various air temperature, speed and distribution combinations for optimal comfort.
Compressors		Compressors pump refrigerant through the air conditioning systems. Compressor technologies include fixed and variable displacement swashplate designs, as well as fixed and variable capacity scroll designs.
Powertrain Cooling		Cooling functionality and thermal management for the vehicle powertrain system (engine and transmission) is provided by powertrain cooling.
Front End Modules		The front end module integrates structural, exterior cooling, electrical, and lighting components and subsystems in order to achieve improvements in packaging, and vehicle thermal and front-end structure performance.

Powertrain Products & Systems. Visteon offers innovative designs in engine management, fuel storage and delivery, and electrical conversion systems, which are designed to provide the automotive customer with solutions that enhance powertrain performance, fuel economy and emissions control.


Powertrain Product Lines		Description

Engine Management		Visteon has a complete line of products for vehicle engine and powertrain management, including the powertrain control module. Our diverse line of sophisticated powertrain products are designed to deliver improved fuel economy and reduced emissions while enhancing performance. These products include air charging assemblies and air induction systems, torque enhancement systems, intake manifolds, long life filtration systems, fuel injectors and rails, mechanical and electronic throttle bodies, and ignition coils among others.
Electrical Conversion		Visteon offers a wide range of alternators and starters to meet differing needs of the automotive customer. In addition, Visteon is working to develop technologies that meet future higher-voltage vehicle architectures and power requirements, such as 42 Volt.
Fuel Storage & Delivery		Visteon manufactures systems and components to support low emissions vehicles. The principal products in these systems are plastic blow-molded and thermoformed fuel tanks, fuel pumps and delivery modules, and fuel vapor storage systems.

ITEM 1. BUSINESS — (Continued)

Electronic Products & Systems. Visteon is one of the leading global suppliers of high-tech in-vehicle entertainment, driver information, wireless communication, safety and security electronics.


Electronic Product Lines		Description

Audio		Visteon produces a wide range of audio systems and components, including integrated cassette/CD/MP3 radios and amplifiers. Examples of our new electronics products include digital and satellite radios, HD Radio broadcast tuners, audiophile systems and advanced bluetooth interface modules integrated with Visteon Voice capability. Visteon’s MACH® digital signal processing (DSP) is an integrated technology providing improved performance for entertainment systems and can support branded audio systems such as Boston Acoustics and Sony.
Driver Information		We design and build a wide range of displays, from analog electronic to high impact clusters and LED displays.
Driver Awareness & Personal Security		Visteon has developed numerous products to assist driving and enhance safety. These include Visteon Voice Technology ^™, adaptive cruise control, anti-theft systems, remote keyless entry systems, and tire pressure monitoring. Visteon is working with USDOT to develop lane departure warning systems.
Family Entertainment		Visteon delivers in-vehicle entertainment that provides consumers with DVD and wireless headphones systems capable of interacting with other plug and play multimedia.

Exterior Products & Systems. Visteon’s can provide exterior packages that deliver high quality and functionality to the automotive customer.


Exterior Product Lines		Description

Lighting		We design and build a wide variety of headlamps, rear lamps, high-mount stop lamps, and foglamps.
Bumpers & Exterior Trim		We offer bumper systems, fascias and assemblies and valance panels.

Glass Operations

Our Glass Operations are composed of our vehicle glazing product group, which produces glass products for Ford and aftermarket customers, and our commercial glass product group, which produces float glass for commercial architecture. Glass Operations accounted for about $600 million, or 3%, of our 2002 total sales. The following table provides a description of the Glass Operations segment product lines:


Glass Product Lines		Description

Vehicle Glazing		Products include windshields, backlites, moon roofs, and side windows. Capabilities include glass design, development and manufacturing. Aftermarket replacement glass products are distributed under the Carlite® brand name.
Commercial Glass		We also produce float glass for commercial architectural and automotive markets.

ITEM 1. BUSINESS — (Continued)

Customers

Visteon sells its products primarily to global vehicle manufacturers. In addition, we sell products for use as aftermarket and service parts to automotive original equipment manufacturers and others for resale through their own independent distribution networks.

Vehicle Manufacturers

Visteon does business with all of the world’s largest vehicle manufacturers including Ford, General Motors, Toyota, Daimler-Chrysler, Honda, Volkswagen, Renault, Nissan, Hyundai, Peugeot, Mazda and BMW. Ford is our largest customer, and in 2002 our sales to Ford accounted for about 80% of our 2002 total sales. Our top five customers other than Ford accounted for approximately 8% of our total 2002 sales, which includes certain sales to Mazda Motor Corporation, of which Ford owns a 33.4% equity interest. In 2002, we secured over $1 billion of net new non-Ford business for the second year in a row.

Price reductions are typically negotiated on an annual basis between suppliers and vehicle manufacturers. Such reductions are intended to take into account expected annual reductions in the overall cost to the supplier of providing products and services to the customer, through such factors as overall increases in manufacturing productivity, material cost reductions, and design-related cost improvements. Visteon has an aggressive cost reduction program that focuses on reducing our total costs, which are intended to offset these customer price reductions.

Aftermarket

We sell products to the worldwide aftermarket as replacement parts or as customized products, such as body appearance packages and in-car entertainment systems, for current production and older vehicles. In 2002, our aftermarket sales were $905 million, representing 5% of our total sales. We currently sell 59% of these products to the independent aftermarket and 41% to Ford’s Automotive Consumer Service Group, the principal aftermarket sales organization of Ford. In 2002, aftermarket sales of our glass products were $171 million, representing 1% of our total sales and 19% of our total aftermarket sales.

Arrangements with Ford and its Affiliates

In connection with Visteon’s separation from Ford, Visteon and Ford entered into a series of agreements outlining the terms of separation and the relationship between Visteon and Ford on an ongoing basis. The following summary of certain of these agreements is qualified in all respects by the actual terms of the respective agreements.

Master Transfer Agreement. The master transfer agreement, effective as of April 1, 2000, provided for Ford to transfer to Visteon and/or its subsidiaries, all assets used exclusively by Visteon, including but not limited to real property interests, personal property and ownership interests in subsidiaries and joint ventures.

In addition, Visteon and Ford agreed to a division of liabilities including liabilities related to product liability, warranty, recall, environmental, intellectual property claims and other general litigation claims. Visteon and Ford agreed on a division of responsibility for product liability, warranty and recall matters as follows: (a) Ford will retain liability for all product liability, warranty or recall claims that involve parts made or sold by Visteon for 1996 or earlier model year Ford vehicles, (b) Visteon is liable for all product liability, warranty or recall claims that involve parts made or sold by Visteon for 1997 or later model year Ford vehicles in accordance with Ford’s global standard purchase order terms as applied to other Tier 1 suppliers and (c) Visteon has assumed all responsibility for product liability, warranty or recall claims relating to parts made or sold by Visteon to any non-Ford customers.

ITEM 1. BUSINESS — (Continued)

Supply Agreement and Pricing Letter Agreement. The supply agreement provides that Visteon’s existing purchase orders with Ford as of January 1, 2000, will generally remain in effect at least through the end of 2003, subject to Ford’s right to terminate any particular purchase order for quality or other reasons. In addition, the pricing letter required a one-time 5% price reduction on products that Visteon was supplying to Ford as of January 1, 2000, based on a market pricing review conducted by Ford and Visteon. The pricing letter also required productivity price adjustments in each of 2000, 2001, 2002 and 2003 to reflect competitive price reductions obtained each year by Ford from its other Tier 1 suppliers. Visteon and Ford agreed on a 3.5% productivity price reduction for 2000 on such products. In March 2002, Visteon and Ford reached agreement regarding disputed North American pricing for 2001 as well as general consensus on issues relating to productivity price adjustments for 2002 and 2003. Subsequently in June 2002, Visteon and Ford reached agreement regarding disputed European pricing for 2001 and 2002, as well as certain other commercial matters.

Under the supply agreement, until May 31, 2003, we have a right of last refusal to meet competitive terms, including price, technology, service and design, on replacement products that (1) we produce in North America, Europe and Mexico (for Mexican production intended for export to the U.S. only) and (2) we supplied to Ford on January 1, 2000. Although the right of last refusal does not apply to Ford’s Volvo or Jaguar brand vehicles or to Mazda Motor Corporation’s vehicles, Ford has agreed to use reasonable efforts to provide us with similar opportunities to bid for business with respect to these vehicles.

We have the opportunity to bid on the same basis as other suppliers for other new Ford business. Our ability to realize sales on all Ford business, including business awarded pursuant to existing purchase orders, is in all cases subject to a variety of factors, including the volume and option mix of vehicles actually produced by Ford, the timing of that production and our continuing competitiveness.

Master Separation Agreement. Ford provides a number of transitional services to Visteon pursuant to the master separation agreement and related arrangements, including information technology, human resources, accounting, customs, product development technology and real estate services. Visteon agreed to pay Ford amounts which reflect its fully accounted cost for these services, including a reasonable allocation of internal overhead costs, as well as any direct costs incurred from outside suppliers. Except for certain information technology services, Ford’s obligation to provide these services pursuant to the master separation agreement expired in June 2002, and Visteon and Ford are in the process of negotiating new arrangements covering many of these services.

Hourly Employee Assignment Agreement. The hourly employee assignment agreement sets forth a number of rights and obligations with respect to the United States hourly employees of Ford who (i) were represented by the UAW, (ii) were covered by the Ford UAW Master Collective Bargaining Agreement dated as of September 30, 1999, (iii) were employed in one of Visteon’s facilities as of the date of the spin-off and (iv) after Visteon’s spin-off were assigned to work for Visteon.

Under this agreement, Visteon exercises day-to-day supervision over the covered individuals and Ford will continue to provide the same employee benefits generally offered to other hourly employees of Ford who are represented by the UAW. Visteon reimburses Ford for the wage, benefit and other costs incurred by Ford related to these individuals. However, Visteon’s reimbursement obligation for profit sharing based on Ford’s profits is limited to $50 million per year in each of 2000-2004. After 2004, Visteon will be responsible for reimbursing Ford for the full amount of profit sharing based on Ford’s profits. For further information, see “Workforce” set forth below.

ITEM 1. BUSINESS — (Continued)

Competition

We conduct our business in a complex and highly competitive industry. The global automotive parts industry principally involves the supply of systems, modules, and components to vehicle manufacturers for the manufacture of new vehicles. Additionally, suppliers provide components to other suppliers for use in their product offerings and to the aftermarket for use as replacement or enhancement parts for older vehicles. As the supplier industry continues to consolidate, the overall number of competitors has decreased and the automotive parts industry remains extremely competitive. Vehicle manufacturers rigorously evaluate suppliers on the basis of product quality, price competitiveness, technical expertise and development capability, new product innovation, reliability and timeliness of delivery, product design capability, leanness of facilities, operational flexibility, customer service and overall management. Many of our competitors have lower cost structures, particularly with respect to wages and benefits, than our company.

Our overall product portfolio is extremely broad by industry standards. Very few other Tier 1 suppliers compete across the full range of our product areas. Visteon does have significant competition in each of its market segments; the most significant competitors by segment are listed below.

Automotive Operations. Our principal competitors in the Automotive Operations segment include the following: American Axle & Manufacturing Holdings, Inc., Behr GmbH, Robert Bosch GmbH, Dana Corporation, Delphi Corporation, Denso Corporation, Faurecia Group, Johnson Controls, Inc., Lear Corporation, Magna International, Inc., Siemens VDO, TRW Inc. and Valéo S.A.

Glass Operations. Our principal competitors in the Glass Operations segment include the following: Asahi Glass Company Limited, AFG Industries, Inc., Guardian Industries Corp., Pilkington and PPG Industries, Inc.

International

Financial information about sales and net property by major geographic area can be found on page 74 of this Annual Report on Form 10-K (Note 16, “Segment Information”, of our consolidated financial statements).

Seasonality

Our business is moderately seasonal because our largest North American customers typically halt operations for about two weeks in July for model year changeovers and about one week in December during the winter holidays. In addition, third quarter automotive production traditionally is lower as new models enter production. Accordingly, our third and fourth quarter results may reflect these trends.

Product Research and Development

Visteon’s research and development efforts are intended to maintain our leadership position in the industry and provide us with a competitive edge as we seek additional business with new and existing customers. Total research and development expenditures were approximately $902 million in 2002, $1,037 million in 2001 and $1,115 million in 2000. We realigned resources to focus on our growth businesses and discontinued work on products where revenues and margins were not in line with investments. Visteon also works with technology development partners, including customers, to develop technological capabilities and system enhancements.

ITEM 1. BUSINESS — (Continued)

Intellectual Property

Visteon owns significant intellectual property, including a large number of patents, copyrights, proprietary tools and technologies, and trade secrets, and is involved in numerous licensing arrangements. Although the company’s intellectual property plays an important role in maintaining its competitive position, no single patent, copyright, proprietary tool or technology, trade secret or license, or group of related patents, copyrights, proprietary tools or technologies, trade secrets or licenses, is, in the opinion of management, of such value to Visteon that its business would be materially affected by the expiration or termination thereof. The company’s general policy is to apply for patents on an ongoing basis in the United States and appropriate other countries on its significant patentable developments.

Visteon also views its name and mark as significant to its business as a whole. In addition, the company owns a number of other trade names and marks applicable to certain of its businesses and products that it views as important to such businesses and products.

Raw Materials

Raw materials used by Visteon in the manufacture of our products primarily include steel, aluminum, resins, precious metals and urethane chemicals. All of the materials used are generally readily available from numerous sources except precious metals. Precious metals (for catalytic converter production) are purchased from Ford, and Ford assumes the risk of assuring supply and accepts market price risk. We do not anticipate significant interruption in the supply of raw materials that would have a material impact on our business.

Workforce

Visteon’s workforce as of December 31, 2002, included approximately 77,000 persons, of which approximately 18,000 were salaried and 59,000 were hourly. Of the hourly workforce, approximately 21,500 are covered under the Ford UAW Master Collective Bargaining Agreement but have been indefinitely assigned to work for Visteon, and another 600 hourly employees are employed by Visteon and work in the same UAW-represented facilities. Under an agreement between Ford and Visteon, we have agreed to reimburse Ford for the cost of the Visteon-assigned Ford-UAW hourly employees. This includes amounts (limited to $50 million per year until after 2004) for profit sharing based on Ford’s profits. About $4 million of profit sharing expense was recognized in 2002; no profit sharing expense was recognized in 2001; and the full $50 million was recognized in 2000. We also have agreed with Ford that all new hourly employees hired into our UAW-represented facilities during the term of the current four-year Ford UAW agreement and the terms of the next two master agreements between Ford and the UAW will, for the duration of their employment with and retirement from Visteon, receive wages, benefits and other terms and conditions of employment that closely reflect those required to be provided from time to time by Ford to its UAW-represented employees. The present Ford UAW agreement expires in September 2003. Although we have the right to participate in future negotiations as well as the planning and strategy development concerning the terms of, and issues arising under, the Ford UAW collective bargaining agreements, Ford reserves the right to handle such matters if a joint course of action cannot be agreed upon.

ITEM 1. BUSINESS — (Continued)

In Europe, all Ford employees (both hourly and salaried) working in Visteon facilities at the time of the spin-off became Visteon employees. In the spin-off agreement with the employee representatives, it was agreed that, during their employment and retirement, Visteon would provide these employees with wages, benefits and other terms of employment that closely reflect those provided by Ford to its employees in the respective countries. The majority of our European employees are members of industrial trade unions and confederations within their respective countries. Many of these organizations operate under collective contracts that are not specific to any one employer. Visteon’s national agreement with the British trade unions will expire in November 2004. Visteon’s collective agreement with the German trade unions will expire in February 2004.

We constantly work to establish and maintain positive, cooperative relations with our unions around the world and we believe that our relationships with unionized employees to be satisfactory. There have been no significant work stoppages in the past three years.

Environmental Matters

Visteon is subject to the requirements of federal, state, local and foreign environmental and occupational safety and health laws and regulations. These include laws regulating air emissions, water discharge and waste management. Visteon is also subject to environmental laws requiring the investigation and cleanup of environmental contamination at properties it presently owns or operates and at third party disposal or treatment facilities to which these sites sent or arranged to send hazardous waste. Further, in connection with our spin-off from Ford, Visteon and Ford have generally agreed that we are liable for all future claims relating to the sites that have been transferred to us and our operation of those sites, including off-site disposal. At the time of spin-off, Visteon and Ford also agreed on a division of liability for, and responsibility for management and remediation of, environmental claims existing at that time.

We are aware of contamination at some of our properties and have agreed to an allocation of liability with Ford relating to various third party superfund sites at which Ford has been named as a potentially responsible party. We are in various stages of investigation and cleanup at these sites. At December 31, 2002, Visteon had recorded a reserve of approximately $12 million for this environmental investigation and cleanup. However, estimating liabilities for environmental investigation and cleanup is complex and dependent upon a number of factors beyond our control and which may change dramatically. Accordingly, although we believe our reserves to be adequate based on current information, we cannot assure you that our eventual environmental investigation and cleanup costs and liabilities will not exceed the amount of our current reserve. During 2002, we did not incur any material capital expenditures relating primarily to environmental compliance.

Available Information

Our current and periodic reports filed with the Securities and Exchange Commission, including amendments to those reports, may be obtained through our internet website at www.visteon.com free of charge as soon as reasonably practicable after we file these reports with the SEC.

ITEM 2. PROPERTIES

Our principal executive offices are located in Dearborn, Michigan. We occupy this facility, as well as a number of other facilities, under arrangements with Ford. We also maintain regional headquarters in Cologne, Germany, in Yokohama, Japan and in São Paulo, Brazil.

We and our joint ventures maintain 65 technical facilities/ sales offices and 126 plants in 25 countries throughout the world, of which approximately 96 facilities are owned in fee simple and 95 are leased. The following table shows the approximate total square footage of our principal owned and leased manufacturing facilities by region as of December 31, 2002:


				Total
		Number of		Manufacturing
		Manufacturing		Sites Square
Region		Sites		Footage

				(in millions)
North America			56		27.7
Europe			41		13.2
South America			7		1.0
Asia-Pacific			22		5.6

	Total		126		47.5

In some locations, we have combined a manufacturing facility, technical center and/or customer service center and sales office at a single multi-purpose site. The following table shows the approximate number of various types of facilities by region and segment as of December 31, 2002:

Customer

Manufacturing

Technical

Centers and

Region

Sites

Centers

Sales Offices

North America

Automotive Operations

Glass Operations

–

Europe

Automotive Operations

Glass Operations

–

South America

Automotive Operations

–

Glass Operations

–

Asia-Pacific

Automotive Operations

Glass Operations

–

Total Automotive Operations

121

Total Glass Operations

–

Total company

126

We believe that our facilities are suitable and adequate, and have sufficient productive capacity, to meet our present needs. The majority of our facilities are operating at normal levels based on their respective capacities except those facilities that are in the process of being closed or transferred.

ITEM 3. LEGAL PROCEEDINGS

We are involved in routine litigation incidental to the conduct of our business. We do not believe that any litigation to which we are currently a party would, if determined adversely to us, have a material adverse effect on our financial condition, results of operations or cash flows, although such an outcome is possible.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 4A. EXECUTIVE OFFICERS OF VISTEON

The following table shows information about the executive officers of our company. All ages are as of February 1, 2003:


Name	Age		Position

Peter J. Pestillo		64	Chairman of the Board and Chief Executive Officer
Michael F. Johnston		55	Director, President and Chief Operating Officer
Daniel R. Coulson		59	Executive Vice President and Chief Financial Officer
James C. Orchard		52	Executive Vice President and President, North America and Asia
Stacy L. Fox		49	Senior Vice President, General Counsel and Secretary
Robert H. Marcin		57	Senior Vice President, Corporate Relations

Dr. Heinz Pfannschmidt		55	Vice President and President, Europe and South America

Peter J. Pestillo has been the company’s Chairman of the Board and Chief Executive Officer since the company’s formation in January 2000. Before that, Mr. Pestillo had been the Vice Chairman and Chief of Staff of Ford, and previously Ford’s Executive Vice President, Corporate Relations. Mr. Pestillo had been, prior to the Visteon spin-off in June 2000, a Ford employee since 1980. Mr. Pestillo is also a director of Rouge Industries, Inc. and Sentry Insurance.

Michael F. Johnston has been the company’s President and Chief Operating Officer since September 2000 and was elected to the company’s Board of Directors in May 2002. Before that, Mr. Johnston had been President, e-business for Johnson Controls, Inc., and previously President-North America and Asia of Johnson Control’s Automotive Systems Group, and President of its automotive interior systems and battery operations. Mr. Johnston is also a director of Flowserve Corporation.

Daniel R. Coulson has been Executive Vice President and Chief Financial Officer of the company since the company’s formation in January 2000. Before that, he was Ford’s Director of Accounting. Mr. Coulson had been, prior to the Visteon spin-off in June 2000, a Ford employee since 1965.

James C. Orchard has been Executive Vice President and President, North America and Asia of the company since August 2001. Before that, Mr. Orchard had been Chief Executive Officer, ZF Group North America and South America, and a member of the ZF Board of Management.

Stacy L. Fox has been Senior Vice President, General Counsel and Secretary of the company since the company’s formation in January 2000. Before that, she was Group Vice President and General Counsel of the Automotive Systems Group of Johnson Controls, Inc.

Robert H. Marcin has been the company’s Senior Vice President, Corporate Relations since January 2003 and, prior to that, he served as the company’s Senior Vice President of Human Resources since the company’s formation in January 2000. Before that, he was Executive Director — Labor Affairs for Ford and Ford’s Director, U.S. Union Affairs. Mr. Marcin had been, prior to the Visteon spin-off in June 2000, an employee of Ford or its subsidiaries since 1973.

Dr. Heinz Pfannschmidt has been Vice President and President, Europe and South America of the company since November 2001. Before that, he was President and Chief Executive Officer of TRW Automotive Electronics Worldwide, and a member of the TRW Executive Committee, since September 1999, and Managing Director of Europe, Inflatable Restraint Systems of TRW Automotive prior thereto.

PART II

ITEM 5. MARKET FOR VISTEON’S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Our common stock is listed on the New York Stock Exchange in the United States under the symbol “VC”. As of January 31, 2003, Visteon had 129,024,309 shares of its common stock $1.00 par value outstanding, which were owned by 126,418 stockholders of record. The table below shows the high and low sales prices for our common stock as reported by the New York Stock Exchange, and the dividends we paid per share of common stock for each quarterly period for the last two years.



		2002

		First		Second		Third		Fourth
		Quarter		Quarter		Quarter		Quarter

Common stock price per share
	High	$	16.55	$	16.25	$	13.58	$	8.95
	Low	$	12.09	$	13.64	$	9.47	$	6.57
Dividends per share of common stock		$	0.06	$	0.06	$	0.06	$	0.06



		2001

		First		Second		Third		Fourth
		Quarter		Quarter		Quarter		Quarter

Common stock price per share
	High	$	15.95	$	19.52	$	21.72	$	15.34
	Low	$	11.63	$	14.27	$	10.45	$	11.72
Dividends per share of common stock		$	0.06	$	0.06	$	0.06	$	0.06

ITEM 6. SELECTED FINANCIAL DATA

The following selected consolidated financial data reflect our financial condition, results of operations and cash flows both before and after our spin-off from Ford on June 28, 2000. Selected consolidated financial data for the periods prior to our spin-off reflect the historical financial condition, results of operations and cash flows of the businesses that were considered part of the Visteon business of Ford during each respective period. The historical consolidated statement of income data set forth below for periods prior to our spin-off do not reflect many significant changes that occurred in the operations and funding of our company as a result of our spin-off from Ford.

The selected consolidated financial data should be read in conjunction with, and are qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and accompanying notes included elsewhere in this report. The consolidated statement of income, cash flow and balance sheet data, set forth below, have been derived from our audited financial statements. Certain amounts for prior periods were reclassified to conform with present period presentation.

The following financial information may not reflect what our results of operations, financial condition and cash flows would have been had we operated as a separate, stand-alone entity during the periods presented or what our results of operations, financial condition and cash flows will be in the future.

ITEM 6. SELECTED FINANCIAL DATA — (Continued)


			2002			2001			2000			1999			1998


			(in millions, except per share amounts and percentages)
Statement of Income Data
Sales
	Ford and affiliates		$	14,779		$	14,656		$	16,448		$	17,105		$	16,350
	Other customers			3,616			3,187			3,019			2,261			1,412

		Total sales		18,395			17,843			19,467			19,366			17,762
Costs and expenses
	Costs of sales			17,588			17,105			18,129			17,380			15,897
	Selling, administrative and other expenses			888			855			897			797			731

		Total costs and expenses		18,476			17,960			19,026			18,177			16,628
Operating income (loss)				(81	)		(117	)		441			1,189			1,134
Interest income				23			55			109			79			38
Interest expense				103			131			167			143			82

		Net interest expense		(80	)		(76	)		(58	)		(64	)		(44	)
Equity in net income of affiliated companies				44			24			56			47			26

Income (loss) before income taxes, minority interests and change in accounting				(117	)		(169	)		439			1,172			1,116
Provision (benefit) for income taxes				(58	)		(72	)		143			422			416

Income (loss) before minority interests and change in accounting				(59	)		(97	)		296			750			700
Minority interests in net income of subsidiaries				28			21			26			15			(3	)

Income (loss) before change in accounting				(87	)		(118	)		270			735			703
Cumulative effect of change in accounting, net of tax				(265	)		—			—			—			—

Net income (loss)			$	(352	)	$	(118	)	$	270		$	735		$	703

Earnings (loss) per share:
	Basic and diluted before cumulative effect of change in accounting (based on 130,000,000 shares outstanding for periods prior to our spin-off)		$	(0.68	)	$	(0.91	)	$	2.08		$	5.65		$	5.41
	Cumulative effect of change in accounting			(2.07	)		—			—			—			—

		Basic and diluted	$	(2.75	)	$	(0.91	)	$	2.08		$	5.65		$	5.41

Cash dividends per share			$	0.24		$	0.24		$	0.12			—			—
Statement of Cash Flows Data
Cash provided by (used in) operating activities			$	1,146		$	436		$	(526	)	$	2,482		$	1,376
Cash (used in) investing activities				(607	)		(743	)		(842	)		(1,453	)		(940	)
Cash (used in) provided by financing activities				(383	)		(75	)		924			290			(234	)
Balance Sheet Data, end of period
Total assets			$	11,170		$	11,162		$	11,405		$	12,542		$	9,373
Total debt				1,646			1,922			2,019			2,319			1,125
Total equity				2,978			3,291			3,505			1,499			1,655
Other Financial Data
Depreciation and amortization			$	631		$	666		$	676		$	651		$	565
Capital expenditures				723			752			793			876			861
After tax return on:
	Sales			(0.3	)%		(0.5	)%		1.5	%		3.9	%		3.9	%
	Average assets			(0.5	)%		(0.9	)%		2.5	%		6.8	%		7.8	%


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

This section summarizes significant factors affecting the company’s consolidated operating results, financial condition, and liquidity for the three-year period ended December 31, 2002. This section should be read in conjunction with the company’s consolidated financial statements and related notes appearing elsewhere in this report.

Overview

Visteon is a leading global supplier of automotive systems, modules, and components. We sell our products primarily to global vehicle manufacturers, and also sell to the worldwide aftermarket for replacement and vehicle appearance enhancement parts. We operate in two business segments: Automotive Operations and Glass Operations.

Ford established Visteon as a wholly-owned subsidiary in January 2000, and subsequently transferred to Visteon the assets and liabilities comprising Ford’s automotive components and systems business. Ford completed its spin-off of Visteon on June 28, 2000.

Visteon’s worldwide sales in 2002 were $18.4 billion, up $552 million, or 3%, compared with 2001. For the full year 2002, Visteon reported a net loss of $352 million, or $2.75 per share, including special charges of $407 million after taxes. These special charges include $142 million for restructuring actions, and $265 million for the non-cash write-off of the value of all goodwill reflected in Visteon’s financial statements resulting from the adoption of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets”. Excluding these special charges, Visteon earned $55 million in 2002. Comparatively, in 2001 Visteon reported a net loss of $118 million, or $0.91 per share. The 2001 loss includes special charges of $121 million for restructuring actions; excluding these special charges, Visteon earned $3 million in 2001.

Revenue from Ford and its affiliates totaled 80% of Visteon’s sales in 2002 compared with 82% in 2001. Ford’s 2002 North American production volume was 3% higher than 2001; sales to Ford increased by $123 million or less than one percent. Non-Ford sales were $3.6 billion, or 20% of total sales, for the full year 2002, an increase of $429 million, or 13%, from 2001.

In 2002, Visteon won more than $1 billion in net non-Ford new business for future production from more than a dozen global automakers located in every region of the world. Almost half of this business was outside of North America. In addition, Visteon won more than $500 million in new business with Ford. This was offset by business returned to Ford or lost during the year.

Our solid financial position was further strengthened during 2002. At December 31, 2002, our cash and marketable securities balance was $1.3 billion and our debt-to-capital ratio was 36%, compared with $1.2 billion and 37%, respectively, at year-end 2001.

Within this discussion, reference is made to certain non-GAAP financial measures including “income before taxes, excluding special charges” and “income, excluding special charges”. Visteon’s chief operating decision-makers regularly use these non-GAAP measures when deciding how to allocate resources and when assessing performance. These measures exclude charges recorded for accounting changes, restructuring actions, dispositions, and non-cash impairment charges. Exclusion of special charges allows evaluation of the company’s performance without these items, and is, in management’s opinion, a useful measure of operating performance especially when comparing periods.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)

Restructuring, Dispositions, and Special Charges

The table below presents special charges related to restructuring initiatives and other actions during the past two years:


			Automotive			Glass			Total
			Operations			Operations			Visteon


			(in millions)
2002
Special Charges:
	Exit of Markham & other first quarter actions		$	(95	)	$	—		$	(95	)
	U.S. salaried special early retirement program			(66	)		(5	)		(71	)
	European Plan for Growth			(40	)		—			(40	)
	Loss on sale of restraint electronics business			(26	)		—			(26	)
	Other restructuring (including adjustments to prior year’s expense)			6			3			9

		Total 2002 special charges, before taxes and change in accounting	$	(221	)	$	(2	)	$	(223	)

		Total 2002 special charges, after taxes*	$	(406	)	$	(1	)	$	(407	)

2001
Special Charges:
	Salaried restructuring		$	(132	)	$	(14	)	$	(146	)
	Glass Operations restructuring charges			—			(34	)		(34	)
	European plant consolidations and other			(10	)		(2	)		(12	)

		Total 2001 special charges, before taxes	$	(142	)	$	(50	)	$	(192	)

		Total 2001 special charges, after taxes	$	(90	)	$	(31	)	$	(121	)


*	Includes a reduction in Automotive results of $265 million for a change in accounting (goodwill).

During 2002, Visteon recorded net pre-tax charges of $223 million related to a number of restructuring and other actions and the sale of the restraint electronics business, as described in Note 13 of our consolidated financial statements, which is incorporated herein by reference. In addition, the company adopted Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets”. With this change in accounting, Visteon recorded a non-cash write-off for the entire value of goodwill of $363 million before taxes ($265 million after taxes), as described in Note 14 of our consolidated financial statements, which is incorporated herein by reference. Of the $223 million in pre-tax charges described above, $169 million are expected to be settled in cash and $54 million were non-cash related.

During 2001, Visteon recorded net pre-tax charges of $192 million associated primarily with salaried workforce restructuring and the special voluntary retirement and separation program offered to hourly employees located at Visteon’s Nashville plant, as described in Note 13 of our consolidated financial statements, which is incorporated herein by reference. Of the $192 million in pre-tax charges recorded in 2001, $187 million are expected to be settled in cash and $5 million were non-cash related.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)

In December 2000, Visteon recorded a pre-tax, non-cash impairment write-down of $220 million ($138 million after taxes), to reduce the net book value of the assets associated with the Glass Operations segment to their estimated fair value, as described in Note 13 of our consolidated financial statements, which is incorporated herein by reference. Actual cash payments made for restructuring, including those for severance and special pension benefits, were $88 million in 2002, $94 million in 2001, and zero in 2000. The remaining cash payments for these actions are projected to continue over approximately ten years.

In 2003, we anticipate continued implementation of restructuring actions including the continuation of the European Plan for Growth and other actions under consideration. Charges associated with the European Plan for Growth are expected in 2003 and 2004, with total lifetime restructuring charges of up to $150 million. We are constantly evaluating the possibility of partnerships, sales or closings involving under-performing businesses. We are actively reviewing such possibilities specifically relating to our seating and steering column business. However, there can be no assurance that a transaction or other arrangement favorable to Visteon will occur in the near term or at all.

Results of Operations

2002 Compared with 2001

Sales for each of our segments for 2002 and 2001 are summarized in the following table:



		Year Ended
		December 31,						2002
								over/(under)
		2002			2001			2001


		(in millions)
Automotive Operations		$	17,797		$	17,222		$	575
Glass Operations			598			621			(23	)

	Total sales	$	18,395		$	17,843		$	552

Memo: Sales to non-Ford customers
	Amount	$	3,616		$	3,187		$	429
	Percentage of total sales		20	%		18	%		2	pts

Sales for Automotive Operations were $17.8 billion in 2002, compared with $17.2 billion in 2001, an increase of $575 million or 3%. Sales for Glass Operations were $598 million in 2002, compared with $621 million in 2001, a decrease of $23 million or 4%. Increased sales for Automotive Operations reflect primarily new business and the impact of currency exchange rates, offset partially by price reductions granted to our customers, reduced revenue resulting from the sale of our restraint electronics business effective April 1, 2002, and by precious metals under sourcing arrangements directed by Ford. Reduced sales for Glass Operations reflect lower commercial and aftermarket volume and price reductions, offset partially by stronger Ford North American production volume. Sales to non-Ford customers increased $429 million, or 13%, from 2001 and were 20% of total sales for 2002.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)

Costs of Sales for 2002 were $17.6 billion, $483 million higher when compared with 2001. Costs of sales primarily includes material, labor, manufacturing overhead, and other costs, such as product development costs. The increase in 2002 reflects primarily costs associated with new business, higher wage rates, restructuring actions taken, and the impact of currency exchange rates, offset partially by net material cost reductions, improved labor efficiencies, and reduced product engineering and recall costs. Lower costs associated with precious metals purchased under sourcing arrangements directed by Ford also were an offset. Special charges included in costs of sales were $200 million in 2002 and $150 million in 2001.

Selling, administrative and other expenses for 2002 were $888 million, compared with $855 million in 2001, an increase of $33 million. The increase reflects several infrastructure actions and supplemental resources to support our cost reduction initiatives, including information technology spending, and higher costs associated with recently renewed insurance policies. As discussed in the subsequent event section of this filing, costs associated with infrastructure actions are expected to result in higher selling, administrative and other expenses in 2003 as well. Special charges were lower in 2002, totaling $23 million in 2002 and $42 million in 2001.

Net interest expense of $80 million in 2002 was up from $76 million in 2001.

Equity in net income of affiliated companies was $44 million in 2002, compared with $24 million in 2001, with the increase related primarily to our affiliates located in Asia.

Income (loss) before income taxes, minority interests and change in accounting, including and excluding special charges, is the primary profitability measure used by our chief operating decision makers, as discussed under “Overview” above. The following table shows income (loss) before income taxes, including and excluding special charges for 2002 and 2001, for each of our segments:



			Year Ended
			December 31,						2002
									over/(under)
			2002			2001			2001


			(in millions)
Automotive Operations
	(Loss) before income taxes		$	(138	)	$	(110	)	$	(28	)
	Less: pre-tax special charges included above			221			142			79

		Automotive Operations, excluding special charges	$	83		$	32		$	51

Glass Operations
	Income (loss) before income taxes		$	21		$	(59	)	$	80
	Less: pre-tax special charges included above			2			50			(48	)

		Glass Operations, excluding special charges	$	23		$	(9	)	$	32

Total
	(Loss) before income taxes		$	(117	)	$	(169	)	$	52
	Less: pre-tax special charges			223			192			31

		Income before taxes, excluding special charges	$	106		$	23		$	83

Excluding special charges, income from Automotive Operations in 2002 was $83 million, compared with income of $32 million for the same period in 2001. The $51 million improvement reflects primarily new business, continued cost savings, and earnings from our Asian joint ventures. Price reductions granted to customers, higher wage rates, increased pension and health care costs, and accruals for compensation payments were partial offsets.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)

Income before income taxes excluding special charges for Glass Operations was $23 million in 2002, compared with a loss of $9 million for 2001. The improvement reflects primarily savings from restructuring actions and cost reductions, offset partially by price reductions to customers.

Provision (benefit) for income taxes represents an effective tax rate of 36% for 2002, compared with 37% for 2001.

Minority interests in net income of subsidiaries was $28 million in 2002, compared with $21 million in 2001. Minority interest amounts are related primarily to our 70% ownership interest in Halla Climate Control Corporation located in Korea.

Net income (loss) for 2002 and 2001, both including and excluding special charges, as discussed under “Overview” above, are shown in the following table for each of our segments:



			Year Ended
			December 31,						2002
									over/(under)
			2002			2001			2001


			(in millions)
Automotive Operations
	Net (loss)		$	(367	)	$	(83	)	$	(284	)
	Less: Changes in accounting (goodwill)			265			—			265
	Less: After-tax restructuring charges			141			90			51

		Automotive Operations, excluding special charges	$	39		$	7		$	32

Glass Operations
	Net income (loss)		$	15		$	(35	)	$	50
	Less: After-tax restructuring charges			1			31			(30	)

		Glass Operations, excluding restructuring charges	$	16		$	(4	)	$	20

Total
	Net (loss)		$	(352	)	$	(118	)	$	(234	)
	Less: Change in accounting (goodwill)			265			—			265
	Less: After-tax restructuring charges			142			121			21

		Income, excluding special charges	$	55		$	3		$	52

Excluding special charges after taxes, Visteon reported total income of $55 million for 2002, compared with income of $3 million for 2001. The $52 million improvement reflects primarily the impact of new business, continued cost savings, savings from special actions, and earnings from our Asian joint ventures, offset partially by price reductions granted to customers, higher wage rates, increased pension and health care costs, and accruals for compensation payments.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)

2001 Compared with 2000

Sales for each of our segments for 2001 and 2000 are summarized in the following table:



		Year Ended
		December 31,						2001
								over/(under)
		2001			2000			2000


		(in millions)
Automotive Operations		$	17,222		$	18,721		$	(1,499	)
Glass Operations			621			746			(125	)

	Total sales	$	17,843		$	19,467		$	(1,624	)

Memo: Sales to non-Ford customers
	Amount	$	3,187		$	3,019		$	168
	Percentage of total sales		18	%		16	%		2	pts

Sales for Automotive Operations were $17.2 billion in 2001, compared with $18.7 billion in 2000, a decrease of $1.5 million or 8%. Sales for Glass Operations were $621 million in 2001, compared with $746 million in 2000, a decrease of $125 million or 17%. Decreased sales for Automotive Operations reflect primarily the 15% reduction in Ford North American production volume, price reductions granted to our customers, and unfavorable currency fluctuations. The decrease in sales for Glass Operations reflects primarily lower Ford North American customer production volume and price reductions granted to our customers. Sales to non-Ford customers increased $168 million, or 6%, from 2000 and were 18% of total sales for 2001.

Costs of Sales for 2001 were $17.1 billion, $1 billion lower when compared with 2000. Costs of sales primarily includes material, labor, manufacturing overhead, and other costs, such as product development costs. The decrease reflects primarily net material cost reductions, improved labor efficiencies, the reduction in Ford North American production volume, lower accruals for compensation payments, and favorable currency exchange rates, offset partially by higher wage rates. Special charges in 2001 and 2000 were $150 million and $220 million, respectively.

Selling, administrative and other expenses for 2001 were $855 million, compared with $897 million in 2000, a decrease of $42 million. The decrease reflects primarily savings from restructuring actions, offset partially by $42 million of pre-tax special charges for those actions.

Net interest expense of $76 million in 2001 was up from $58 million in 2000.

Equity in net income of affiliated companies was $24 million in 2001, compared with $56 million in 2000, with the decrease related primarily to the sale of Visteon’s 49% interest in the Conix Group in October of 2000.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)

Income (loss) before income taxes and minority interests, including and excluding special charges, is the primary profitability measure used by our chief operating decision makers, as discussed under “Overview” above. The following table shows income (loss) before income taxes, including and excluding special charges for 2001 and 2000, for each of our segments:



			Year Ended
			December 31,						2001
									over/(under)
			2001			2000			2000


			(in millions)
Automotive Operations
	Income (loss) before income taxes		$	(110	)	$	689		$	(799	)
	Less: pre-tax special charges included above			142			—			142

		Automotive Operations, excluding special charges	$	32		$	689		$	(657	)

Glass Operations
	(Loss) before income taxes		$	(59	)	$	(250	)	$	191
	Less: pre-tax special charges included above			50			220			(170	)

		Glass Operations, excluding special charges	$	(9	)	$	(30	)	$	21

Total
	Income (loss) before income taxes		$	(169	)	$	439		$	(608	)
	Less: pre-tax special charges			192			220			(28	)

		Income before taxes, excluding special charges	$	23		$	659		$	(636	)

Excluding special charges, Automotive Operations’ 2001 income before taxes was $32 million, compared with $689 million for the same period in 2000. The decrease of $657 million reflects primarily a 15% reduction in Ford’s North American production volume, price reductions granted to customers, and unfavorable currency fluctuations. The decrease was offset partially by cost reductions, lower accruals for compensation payments, and cost savings from restructuring actions.

Excluding special charges, Glass Operations’ loss before income taxes was $9 million, compared with a $30 million loss, in 2000. The improvement in 2001 reflects improved operating efficiencies, cost savings, and lower depreciation expense resulting from the 2000 Glass Operations asset write-down, offset partially by lower customer production volume and price reductions granted to customers.

Provision (benefit) for income taxes represents an effective tax rate of 37% in both 2001 and 2000.

Minority interests in net income of subsidiaries was $21 million in 2001, compared with $26 million in 2000. Minority interest amounts are related primarily to our 70% ownership interest in Halla Climate Control Corporation located in Korea.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)

Net income (loss) for 2001 and 2000, both including and excluding special charges, as discussed under “Overview” above, are shown in the following table for each of our segments:



			Year Ended
			December 31,						2001
									over/(under)
			2001			2000			2000


			(in millions)
Automotive Operations
	Net income (loss)		$	(83	)	$	426		$	(509	)
	Less: After-tax special charges			90			—			90

		Automotive Operations, excluding special charges	$	7		$	426		$	(419	)

Glass Operations
	Net (loss)		$	(35	)	$	(156	)	$	121
	Less: After-tax special charges			31			138			(107	)

		Glass Operations, excluding special charges	$	(4	)	$	(18	)	$	14

Total
	Net income (loss)		$	(118	)	$	270		$	(388	)
	Less: After-tax special charges			121			138			(17	)

		Income, excluding special charges	$	3		$	408		$	(405	)

Excluding special charges after taxes, Visteon reported total income of $3 million for 2001, compared with $408 million for 2000. The $405 million decrease reflects primarily a 15% reduction in Ford’s North American production volume, price reductions granted to customers, and unfavorable currency fluctuations, offset partially by cost reductions, lower accruals for compensation payments, and cost savings from restructuring actions. The decline also reflects the non-recurrence of a one-time $20 million gain from the sale of our interest in the Conix Group in 2000.

Recent Factors that May Affect Future Results

The economic outlook for 2003, and its related impact on customer production levels, remains uncertain. Further reductions to customer production levels may adversely affect our results of operations and financial position in 2003. See “Cautionary Statement for Forward-Looking Information” set forth in this report.

Liquidity and Capital Resources

Our balance sheet reflects cash and marketable securities of about $1.3 billion and total debt of about $1.6 billion at December 31, 2002, compared with cash and marketable securities of about $1.2 billion and total debt of about $1.9 billion at December 31, 2001. Our net debt, defined as the amount by which total debt exceeds total cash and marketable securities, was about $370 million at December 31, 2002 and about $740 million at December 31, 2001. The change in our cash and marketable securities and net debt reflects primarily changes in trade working capital, capital expenditures and payments related to restructuring actions. The change in debt reflects primarily lower levels of short-term borrowings in the U.S. and lower borrowing by non-U.S. affiliates.

Our ratio of total debt to total capital, which consists of total debt plus total stockholders’ equity, was 36% at December 31, 2002, an improvement of one percentage point from the December 31, 2001 level.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)

Visteon has financing arrangements providing contractually committed, unsecured revolving credit facilities, with a syndicate of third-party lenders providing for a maximum of $1.8 billion in committed, unsecured credit facilities (the “Credit Facilities”). The terms of the Credit Facilities provide for a 364-day revolving credit line in the amount of $775 million, which expires June 2003, and a five-year revolving credit line in the amount of $775 million, which expires June 2007. The Credit Facilities also provide for a five-year, delayed-draw term loan in the amount of $250 million, which will be used primarily to finance construction of a headquarters facility in Southeast Michigan. Consistent with the prior financing arrangements, any borrowings under the Credit Facilities would bear interest based on a variable interest rate option selected at the time of borrowing. The Credit Facilities contain certain affirmative and negative covenants, including a covenant not to exceed a specified leverage ratio. As of December 31, 2002, Visteon did not have any amounts outstanding under the Credit Facilities. In the opinion of management, Visteon has been in compliance with all covenants since the inception of the revolving credit facilities.

Visteon has a commercial paper program providing up to $1,550 million of borrowing ability. We intend to use the commercial paper program as a source of flexible short-term financing and do not intend to exceed $1,550 million of aggregate borrowing under the commercial paper program and revolving credit lines. As of December 31, 2002, the outstanding balance under our commercial paper program was $166 million. In the event the availability of commercial paper is reduced, our 364-day and five-year revolving credit lines mentioned in the previous paragraph provide a back-up funding source if needed.

In 2000, we completed a public offering of unsecured fixed rate term debt securities totaling $1.2 billion with maturities of five years and ten years. The proceeds of the offering were used to repay an amount previously outstanding under an unsecured, third-party financing arrangement. We have $800 million available under a shelf registration statement on file with the Securities and Exchange Commission through which we are able to issue a variety of debt instruments.

The following table summarizes our expected cash outflows resulting from long-term obligations existing as of December 31, 2002:


												2008
			Total			2003		2004-2005		2006-2007		and after


			(in millions)
Long-term debt			$	1,646		$	348	$	574	$	9	$	715
Operating leases				283			67		77		43		96
Unconditional purchase obligations(a)				91			30		45		16		—
Postretirement
	Pre-funding commitments			945	(b)		—		—		945		(b	)

		Total contractual obligations	$	2,965	(b)	$	445	$	696	$	1,013	$	811	(b)


(a)	Unconditional purchase obligation amounts are related primarily to information technology agreements and exclude purchase obligations related to inventory, property, plant, and equipment purchases in the ordinary course of business.


(b)	Estimated pre-funding amounts are provided through 2007; estimates have not been provided for “2008 and after” because such estimates, in management’s opinion, would be highly uncertain. See page 25 for further discussion of our pre-funding commitment in the “Pension and Postretirement Benefits” section of this Item 7.

We have guaranteed about $25 million of borrowings held by unconsolidated joint ventures and have extended loans of about $8 million to unconsolidated joint ventures, as of December 31, 2002. In addition, we have guaranteed Tier 2 suppliers’ debt and lease obligations of about $16 million, at December 31, 2002, to ensure the continued supply of essential parts.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)

Visteon presently has a credit rating of BBB/Baa2. In the event of a downgrade, we believe we would continue to have access to sufficient liquidity. Although our access to the commercial paper market likely would be limited, we believe other sources of raising funds in the capital markets would remain available. For example, we believe that our receivables are of a quality that would allow access to the market for receivable-based instruments and we believe we would have access to long-term debt and equity markets. In addition, use of our committed unsecured revolving credit facilities and cash balances would be an option. In such case, our cost of borrowing would likely increase.

In January 2002, Visteon established a special-purpose/ variable interest entity to build a headquarters facility to be leased to Visteon. From June 30, 2002, the assets, liabilities, results of operations and cash flows of the entity are included in Visteon’s consolidated financial statements. This entity, owned by an affiliate of a bank, is consolidated based on an assessment that substantially all of the expected residual risks or rewards of the entity reside with Visteon. This assessment included consideration of the terms of the lease agreement, the amount of the owner’s equity investment at risk and that Visteon is the source of the entity’s debt financing. Total assets of this entity were about $36 million at December 31, 2002.

Visteon’s net interest expense of $80 million for 2002 is $4 million higher than 2001. Lower interest rates in 2002 resulted in both lower interest income and interest expense compared with 2001.

In addition, Visteon has entered into interest rate swaps to manage its interest rate risk. These swaps effectively convert all of the unsecured term debt securities maturing on August 1, 2005 and a portion of debt securities maturing on August 1, 2010 into LIBOR-based variable rate debt. As a result, approximately 30% of the company’s borrowings are on a fixed-rate basis while the remainder is subject to changes in short-term interest rates.

Our cash and liquidity needs are impacted by the level, variability, and timing of our customers’ worldwide vehicle production, which varies based on economic conditions and market shares in major markets. Our intra-year needs also are impacted by seasonal effects in the industry, such as the shutdown of operations for about two weeks in July, the subsequent ramp-up of new model production and the additional one-week shutdown in December by our primary North American customers. Based on our present assessment of future customer production levels, over a two-year time horizon, we believe we can meet general and seasonal cash needs using cash flows from operations, cash balances, and borrowings, if needed. We also believe we can supplement these sources with access to the capital markets on satisfactory terms and in adequate amounts, if needed, although there can be no assurance that this will be the case.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)

Pension and Postretirement Benefits

Employees and retirees participate in various pension, health care and life insurance benefit plans sponsored by Visteon and Visteon subsidiaries. Benefit plan liabilities and related asset transfers between Visteon and Ford in connection with our separation from Ford are covered by various employee benefits agreements.

In accordance with the separation-related agreements, in the U.S., Ford retained the pension-related past service obligations for those transferred salaried employees that met certain age and years of service requirements at the date of the separation from Ford. Visteon-assigned Ford-UAW employees participate in the Ford-UAW Retirement Plan, sponsored by Ford. By agreement, Visteon compensates Ford for the pension expense incurred by Ford related to Visteon-assigned Ford-UAW hourly employees. In the U.S., Visteon has a financial obligation for the cost of providing selected health care and life insurance benefits to its employees, as well as Visteon-assigned Ford-UAW employees who retire after July 1, 2000. Ford retained the financial obligation and related prepayments for pension and postretirement health care and life insurance benefits to its employees who retired on or before July 1, 2000.

Also by agreement with Ford, Visteon is required to pre-fund postretirement health care and life insurance benefit obligations related to Visteon-assigned Ford-UAW hourly employees as well as certain salaried employees. The required pre-funding is over a 15 year period beginning in 2006 for the Visteon-assigned Ford-UAW hourly employees, and over a 10 year period beginning in 2011 for those salaried employees. The pre-funding requirement during this period will be determined based upon amortization of the unfunded liability at the beginning of the period, plus annual expense. Based upon estimates of the unfunded liabilities and the related expense, the first required pre-funding payment will be about $465 million in 2006. In addition, benefit payments for related retirees are projected at $80 million in 2006. We expect cash balances, cash flow from operations, borrowings and issuance of securities, if needed, will fund these requirements. In December 2000, the company pre-funded a portion of this obligation by contributing $25 million to a Voluntary Employees’ Beneficiary Association (VEBA) trust.

Cash Flows

Operating Activities

Net cash flows provided by operating activities totaled $1,146 million during the year ended December 31, 2002, compared with $436 million in 2001. Cash provided by operating activities in 2002 reflects primarily income before taxes, excluding special charges and depreciation and amortization, along with changes in trade working capital and net accruals, offset partially by payments related to announced restructuring actions. Our trade working capital improvement in 2002 reflects improvements in the collection of receivables, improved inventory turns, and our efforts to standardize payment terms to suppliers. The cash provided by operating activities in 2001 reflects primarily profits from operations before depreciation and amortization, offset partially by changes in working capital and payments related to restructuring actions.

Investing Activities

Cash used in investing activities was $607 million in 2002 and $743 million in 2001. The primary use of cash for investing activities in each year was for capital expenditures.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)

Our capital expenditures were $723 million in 2002 and $752 million in 2001. Automotive Operations accounted for about $716 million of total 2002 capital expenditures, with the remaining expenditures attributable to Glass Operations. We expect our capital spending in 2003 will be higher than the past few years as we undertake spending to construct a headquarters facility for consolidation of operations and for IT infrastructure. We anticipate that our future headquarters will allow us to centralize customer support functions, research and development and some business operations at less cost than we are spending on those activities today. Visteon had approximately $420 million in outstanding capital commitments as of December 31, 2002. Our capital expenditures are used primarily for machinery and equipment to support our customers’ new product programs. Our capital expenditure program promotes our growth-oriented business strategy by investing in core areas, where efficiencies and profitability can be enhanced, and by targeting funds for new innovative technologies, where long-term growth opportunities can be realized. Capital expenditures also will be used for expansion into new markets outside of the United States and the continued implementation of lean manufacturing strategies.

Financing Activities

Cash used in financing activities totaled $383 million and $75 million in 2002 and 2001, respectively. Cash used in financing activities in 2002 and 2001 reflects primarily reduction of debt, payment of dividends, and the purchase of treasury stock.

On January 10, 2003, the Visteon Board of Directors declared a dividend of $0.06 per share on the company’s common stock, payable on February 24, 2003 to shareholders of record as of January 31, 2003. The dividend declared by the Visteon Board of Directors on October 9, 2002, was paid on December 2, 2002.

Subsequent Event

Agreement with International Business Machines

Since our separation from Ford, Ford has provided us with and charged us for many of our information technology needs. In January 2003, we entered into a 10-year outsourcing agreement with International Business Machines (“IBM”) pursuant to which we will outsource a wide range of IT services on a global basis, including mainframe support services, data centers, customer support centers, application development and maintenance, data network management, desktop support, disaster recovery and web hosting. The service charges under the outsourcing agreement are expected to aggregate about $2 billion during the ten years covered by the agreement, subject to decreases and increases in the service charges based on Visteon’s actual consumption of services to meet its then current business needs. The outsourcing agreement may also be terminated for Visteon’s business convenience after its second full year for a scheduled termination fee. As part of this agreement, IBM will assist us in transitioning from the use of Ford’s IT systems through a one-time, infrastructure replication, application cloning and migration and data warehousing project. We expect additional IT expenditures in 2003 associated with the transition of the outsourcing agreement and the separation from the Ford systems to be in the range of $150 million to $200 million. We anticipate that the result of these actions will be a greater systems separation from Ford, improved flexibility in our overall IT systems and improved global IT services suited to our business.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)

Critical Accounting Policies

A summary of Visteon’s accounting policies is described in Note 2 of our consolidated financial statements, which is incorporated herein by reference. Critical accounting policies are those that are both most important to the portrayal of a company’s financial condition and results, and require management’s most difficult, subjective or complex judgments. Our critical accounting policies are considered the following:

Revenue Recognition — Sales are recognized when there is evidence of a sales agreement, the delivery of goods has occurred, the sales price is fixed or determinable and collectibility is reasonably assured, generally upon shipment of product to customers and transfer of title under standard commercial terms. Significant retroactive price adjustments are estimated by management based upon an assessment of the ultimate outcome of customer negotiations and are recognized in the period when such amounts become probable. Sales are recognized based on the gross amount billed to a customer for those products in which Visteon’s customer has directed the sourcing of certain raw materials or components used in the manufacturer of the final product.

Employee Retirement Benefits — The determination of our obligation and expense for Visteon’s pension and other postretirement benefits, such as retiree healthcare and life insurance, is dependent on our selection of certain assumptions used by actuaries in calculating such amounts. Those assumptions are described in Note 7 of our consolidated financial statements, which is incorporated herein by reference, and include, among others, the discount rate, expected long-term rate of return on plan assets and rates of increase in compensation and healthcare costs. The expected long-term rate of return for pension assets has been chosen based on historical returns for the different asset classes held by our trusts and our asset allocation. In 2003, we reduced the U.S. rate of return assumption used to calculate expense from 9.5% to 9.0%. We estimate that this change will increase expense in 2003 by about $3 million. The discount rate is chosen based on market rates for long-term, high-quality corporate bonds (principally Moody’s Aa 30 year) at our September 30 measurement date. The U.S. discount rate assumption for year end 2002 was 6.75%, reduced from 7.5% at year end 2001. This change increased our U.S. projected benefit obligation by $97 million, and is estimated to increase 2003 expense by about $10 million. In accordance with accounting principles generally accepted in the United States of America, actual results that differ from our assumptions are accumulated and amortized over future periods and therefore, generally affect our recognized expense and recorded obligation in such future periods. Our market-related value of pension assets reflects changes in the fair value of assets over a five-year period, with a one-third weighting to the most recent year. For postretirement healthcare and life insurance, as shown in Note 7 of our consolidated financial statements, which is incorporated herein by reference, we reduced the discount rate to 6.75% and increased the initial health care cost trend rate to 11.0%. While we believe that our assumptions are appropriate, significant differences in our actual experience or significant changes in our assumptions may materially affect our pension and other postretirement obligations and our future expense.

In addition, our postretirement healthcare and life insurance obligation includes the financial obligation Visteon has for the cost of providing selected health care and life insurance benefits to Visteon-assigned Ford-UAW hourly employees who retire after July 1, 2000. The health care and pension costs for these employees are calculated using Ford’s assumptions. The annual pre-funding requirements related to Visteon-assigned Ford-UAW hourly employees as well as certain salaried employees are discussed further in the section “Liquidity and Capital Resources.”


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)

Impairment of Long-Lived Assets and Certain Identifiable Intangibles — Visteon evaluates long-lived assets and long-lived assets to be disposed of for potential impairment at the operating segment level whenever events or changes in business circumstances indicate that the carrying value of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Visteon considers projected future undiscounted cash flows, trends and other circumstances in making such estimates and evaluations. While we believe that our estimates of future cash flows are reasonable, different assumptions regarding such factors as future automotive production volumes (primarily for Ford), selling price changes, labor cost changes, material cost changes, productivity and other cost savings and capital expenditures could significantly affect our evaluations.

Product Recalls — Product recall accruals are made related to our potential financial participation in our customers’ actions to provide remedies related primarily to safety concerns as a result of actual or threatened regulatory or court actions. Our reserves for product recalls include the expected costs to be incurred by Visteon related to these actions. As part of our spin-off from Ford, Visteon and Ford agreed on a division of liabilities including liabilities related to product recalls. Visteon and Ford agreed on a division of responsibility for recall matters as follows: (a) Ford will retain liability for all recall claims that involve parts made or sold by Visteon for 1996 or earlier model year Ford vehicles, (b) Visteon is liable for all recall claims that involve parts made or sold by Visteon for 1997 or later model year Ford vehicles in accordance with Ford’s global standard purchase order terms as applied to other Tier 1 suppliers and (c) Visteon has assumed all responsibility for recall claims relating to parts made or sold by Visteon to any non-Ford customers. Visteon accrues for recall claims for products sold based on management estimates, with support from our sales, engineering, quality and legal activities, of the amount that eventually will be required to settle such claims. This accrual, which is reviewed in detail on a regular basis, is based on several factors, including the terms of Visteon’s Master Transfer Agreement with Ford, past experience, current claims, industry developments and various other considerations.

Deferred Income Taxes — For financial statement purposes, the tax benefit of net operating loss and tax credit carryforwards is recognized as a deferred tax asset, subject to appropriate valuation allowances when it is determined that recovery of the deferred tax asset is unlikely. The company evaluates the tax benefits of net operating loss and credit carryforwards on an ongoing basis. Such evaluations include a review of historical and projected future operating results, the eligible carryforward period and other circumstances. Any valuation allowance recorded would need to be adjusted in the event future taxable income is materially different than amounts estimated. As more fully described in Note 5 of our consolidated financial statements, which is incorporated herein by reference, at December 31, 2002, Visteon’s consolidated balance sheet included a net deferred tax asset of approximately $762 million. Included in this amount is a valuation allowance of $21 million, which was recorded in 2002 for non-U.S. operating loss carryforwards where recovery of these carryforwards is unlikely.

New Accounting Standards and Accounting Changes

Visteon adopted Financial Accounting Standards No. 142 (“SFAS 142”) “Goodwill and Other Intangible Assets” effective January 1, 2002. SFAS 142 no longer permits amortization of goodwill and establishes a new method of testing goodwill for impairment by using a fair-value based approach. See Note 14 of our consolidated financial statements, which is incorporated herein by reference, for a further description related to the adoption of SFAS 142.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)

In April 2002, the FASB issued Financial Accounting Standards No. 145 (“SFAS 145”) “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” Under SFAS 145, gains and losses from the extinguishment of debt would no longer be classified as an extraordinary item, as previously required under Financial Accounting Standards No. 4 “Reporting Gains and Losses from Extinguishment of Debt.” We do not expect the effect of adopting SFAS 145 on Visteon’s results of operations or financial position will be material.

In June 2002, the FASB issued Financial Accounting Standards No. 146 “Accounting for Costs Associated with Exit or Disposal Activities.” SFAS 146 requires recognition of costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. Costs covered by the standard include lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operation, plant closing or other exit or disposal activity. The provisions of the new standard are effective for restructuring, exit or disposal activities initiated after December 31, 2002. We do not expect the effect of adopting SFAS 146 on Visteon’s results of operations or financial position will be material, although SFAS 146 may impact the timing of recognition of costs associated with future restructuring, exit or disposal activities.

In November 2002, the FASB issued Interpretation No. 45 (“FIN 45”) “Guarantor’s Accounting and Disclosure requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” FIN 45 elaborates on the existing disclosure requirements for most guarantees, including loan guarantees. It also clarifies that at the time a company issues a guarantee, the company must recognize an initial liability for the fair value, or market value, of the obligations it assumes under that guarantee. However, the provisions related to recognizing a liability at inception of the guarantee for the fair value of the guarantor’s obligations does not apply to product warranties or to guarantees accounted for as derivatives. The initial recognition and initial measurement provisions apply on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements of FIN 45 are effective for financial statements of interim or annual periods ending after December 15, 2002. We have not yet determined the effect of adopting FIN 45 on Visteon’s results of operations or financial position.

In December 2002, the FASB issued Financial Accounting Standards No. 148 “Accounting for Stock-Based Compensation — Transition and Disclosure — an amendment of FASB Statement No. 123.” This statement amends Financial Accounting Standards No. 123 (“SFAS 123”) “Accounting for Stock-Based Compensation,” to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this statement amends the disclosure requirements of SFAS 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. Beginning in January 2003, Visteon intends to expense the fair value of stock-based awards granted to employees pursuant to SFAS 123. Visteon will adopt this standard on a prospective method basis for stock-based awards granted, modified or settled after December 31, 2002. Current estimates indicate that expensing of stock options will reduce 2003 net income by about $5 million, with the expense increasing to about $15 million over the next three years. Actual compensation expense recognized may vary, as it will be based primarily on the terms of stock-based awards granted and the underlying price of a share of Visteon’s common stock on the date of grant.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)

In January 2003, the FASB issued Interpretation No. 46 (“FIN 46”) “Consolidation of Variable Interest Entities.” Until this interpretation, a company generally included another entity in its consolidated financial statements only if it controlled the entity through voting interests. FIN 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity’s residual returns. We do not anticipate the effect of adopting FIN 46 on Visteon’s results of operations or financial position will be material.

Cautionary Statement regarding Forward-Looking Information

This report contains forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek” and “estimate” signify forward-looking statements. Visteon’s forward-looking statements are not guarantees of future results and conditions but rather are subject to risks and uncertainties, including the following:


	•	Weak economic conditions in the United States, resulting in the current, cyclical decline in the vehicle production rate.

	•	Changes in the operations (including products, product planning and part sourcing), financial condition, results of operations or market share of Visteon’s customers, particularly its largest customer, Ford Motor Company, which is undergoing a comprehensive “revitalization plan.”

	•	Visteon’s ability to increase sales to customers other than Ford; to maintain current business with, and to win future business from, Ford; to generate cost savings to offset or exceed agreed upon price reductions or price reductions to win additional business and, in general, to maintain and improve its operating performance; to recover engineering and tooling costs; to streamline and focus its product portfolio; to sustain technological competitiveness; to compete favorably with automotive parts suppliers with lower cost structures and greater ability to rationalize operations; to achieve the benefits of its restructuring activities; and to exit non-performing businesses on satisfactory terms, particularly due to limited flexibility under existing labor agreements.

	•	Significant changes in the competitive environment in the major markets where Visteon procures materials, components or supplies or where its products are manufactured, distributed or sold, including the implementation of Internet-based purchasing initiatives.

	•	Legal and administrative proceedings, investigations and claims, including product liability, warranty, environmental and safety claims, and any recalls of products manufactured or sold by Visteon.

	•	Changes in economic conditions, currency exchange rates or political stability in foreign countries where Visteon procures materials, components or supplies or where its products are manufactured, distributed or sold.

	•	Shortages of materials or interruptions in transportation systems, labor strikes, work stoppages or other interruptions to or difficulties in the employment of labor in the major markets where Visteon purchases materials, components or supplies to manufacture its products or where its products are manufactured, distributed or sold.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS — (Continued)


	•	Changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, domestic and foreign, that may tax or otherwise increase the cost of, or otherwise affect, the manufacture, licensing, distribution, sale, ownership or use of Visteon’s products or assets.

	•	Visteon’s access to financial resources sufficient in order to make payments related to pensions and other postretirement employee benefits, retirement of outstanding debt and other contractual commitments, all at the levels and times planned by management.

	•	Possible terrorist attacks or acts of war, which could exacerbate other risks such as slowed vehicle production, interruptions in the transportation system, or fuel prices and supply.

	•	Other risks and uncertainties detailed from time to time in Visteon’s Securities and Exchange Commission filings.

These risks and uncertainties are not the only ones facing our company. Additional risks and uncertainties not presently known to Visteon or currently believed to be immaterial also may adversely affect Visteon. Any risks and uncertainties that develop into actual events, could have material adverse effects on Visteon’s business, financial condition and results of operations. For these reasons, do not place undue reliance on our forward-looking statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Visteon is exposed to market risks from changes in currency exchange rates, interest rates and certain commodity prices. To manage these risks, we use a combination of fixed price contracts with suppliers, cost sourcing arrangements with customers and financial derivatives. We maintain risk management controls to monitor the risks and the related hedging. Derivative positions are examined using analytical techniques such as market value and sensitivity analysis. Derivative instruments are not used for speculative purposes, as per clearly defined risk management policies.

Foreign Currency Risk

Our net cash inflows and outflows exposed to the risk of changes in exchange rates arise from the sale of products in countries other than the manufacturing source, foreign currency denominated supplier payments, debt and other payables, subsidiary dividends and investments in subsidiaries. Our on-going solution is to reduce the exposure through operating actions. We use foreign exchange forward contracts to manage a portion of our exposure.

Our primary foreign exchange exposure includes the euro, the Mexican peso and the British pound. Because of the mix between our costs and our revenues in various regions, we generally are exposed to weakening of the euro and British pound and to strengthening of the Mexican peso. For transactions in these currencies, we utilize a strategy of partial coverage. As of December 31, 2002, our coverage for projected transactions in these currencies was about 50% for 2003.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK — (Continued)

As of December 31, 2002 and 2001, the net fair value of financial instruments with exposure to currency risk was a loss of $36 million and a gain of $9 million, respectively. The hypothetical pre-tax gain or loss in fair value from a 10% favorable or adverse change in quoted currency exchange rates would be approximately $86 million and $68 million as of December 31, 2002 and 2001, respectively. These estimated changes assume a parallel shift in all currency exchange rates and include the gain or loss on financial instruments used to hedge loans to subsidiaries. Because exchange rates typically do not all move in the same direction, the estimate may overstate the impact of changing exchange rates on the net fair value of our financial derivatives. It is important to note that gains and losses indicated in the sensitivity analysis would be offset by gains and losses on the underlying exposures being hedged.

Interest Rate Risk

As of December 31, 2002 and 2001, the net fair value of interest rate swaps was a positive $39 million and a negative $9 million, respectively. The potential loss in fair value of these swaps from a hypothetical 50 basis point adverse change in interest rates would be approximately $16 million and $7 million as of December 31, 2002 and 2001, respectively. The annual increase in pre-tax interest expense from a hypothetical 50 basis point adverse change in variable interest rates (including the impact of interest rate swaps) would be approximately $6 million for the years ended December 31, 2002 and 2001. This analysis may overstate the adverse impact on net interest expense due to the short-term nature of our interest bearing investments.

Commodity Risk

We have entered into long-term agreements with some of our key suppliers of non-ferrous metals to protect Visteon from changes in market prices. In addition, some products Visteon manufactures and sells to Ford containing non-ferrous metals are price adjusted monthly based on metal content and market price. Precious metals (for catalytic converter production) are purchased through a Ford directed-source; Ford accepts all market price risk. As a result, we presently do not enter into financial derivatives to hedge these potential exposures. The risk to these exposures may be managed with the use of financial derivatives if, in the future, we enter into substantial floating price contracts with our key suppliers.

Natural gas is a commodity Visteon uses in its manufacturing processing, related primarily to glass production, as well as for heating our facilities. Uncertainty in both supply and demand for this commodity has led to price instability over the last two years. As of December 31, 2002, Visteon has locked in pricing on about 65% of its projected usage for 2003, through fixed price contracts and financial derivatives. As of December 31, 2002 and 2001, the net fair value of natural gas derivatives was a positive $7 million and less than $1 million, respectively. The potential loss in fair value of these derivative contracts from a 10% adverse change in quoted prices would be approximately $4 million and less than $1 million at December 31, 2002 and 2001, respectively.


ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our consolidated financial statements, the accompanying notes and the report of independent accountants that are filed as part of this Report are listed under Item 15, “Exhibits, Financial Statement Schedules, and Reports on Form 8-K”, and are set forth on pages 39 through 75 of this Report.

Selected quarterly financial data for us and our consolidated subsidiaries for 2002 and 2001 are presented in Note 17 of our consolidated financial statements on page 75 of this Report.


ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF VISTEON

The information required by Item 10 regarding our directors is incorporated by reference from the information under the captions “Proposals — Election of Directors”, “Board of Directors — Directors Continuing in Office” and “Board of Directors — Section 16(a) Beneficial Ownership Reporting Compliance” in our 2003 Proxy Statement. The information required by Item 10 regarding our executive officers appears as Item 4A under Part I of this Report.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 is incorporated by reference from the information under the captions “Board of Directors — Director Compensation”, “Executive Compensation — Organization and Compensation Committee Report on Executive Compensation”, “Executive Compensation”, “Appendix C — Executive Compensation” and “Appendix A — Performance Graph” in our 2003 Proxy Statement.


ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Except as set forth herein, the information required by Item 12 is incorporated by reference from the information under the caption “Appendix B — Stockholdings” in our 2003 Proxy Statement.

Equity Compensation Plan Information

Number of

securities

remaining

available for

Number of

future issuance

securities to be

Weighted-

under equity

issued upon

average

compensation

exercise of

exercise price

plans

outstanding

of outstanding

(excluding

options,

securities

warrants and

reflected in

rights

column (a))

Plan category

(a)

(b)

(c) (1)

Equity compensation plans approved by security holders

7,904,839

14.78

8,541,301

Equity compensation plans not approved by security holders

—

Total

7,904,839

8,541,301


(1)	Excludes an indefinite number of securities that may be awarded under the Visteon Corporation Restricted Stock Plan for Non-Employee Directors. Such Plan provides for an annual, automatic grant of 3,000 restricted shares or stock units to each non-employee director of Visteon. There is no maximum number of securities that may be issued under this Plan.


ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by Item 13 is incorporated by reference from the information under the caption “Board of Directors” in our 2003 Proxy Statement.

ITEM 14. CONTROLS AND PROCEDURES

Within the 90-day period prior to the date of filing this report, we carried out an evaluation, under the supervision and with the participation of Visteon’s Disclosure Committee and management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-14 and 15d-14. Based upon, and as of the date of, this evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in Visteon’s periodic SEC reports is recorded, processed, summarized, and reported as and when required. In addition, they concluded that there were no significant deficiencies in the design or operation of internal controls which could significantly affect our ability to record, process, summarize and report financial data. Except as otherwise discussed herein, subsequent to the date of evaluation, there have been no significant changes in Visteon’s internal controls or in other factors that could significantly affect internal controls.

As discussed under “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” above, we have entered into an agreement that will alter our global IT outsourcing arrangements. This outsourcing arrangement and subsequent transition from Ford’s IT systems may affect existing business processes and related internal controls within Visteon. As part of the transition, ongoing evaluations of the internal control activity related to these processes will be performed.

PART IV


ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K


			Page No.

(a)	1.	Consolidated Financial Statements
		Report of Independent Accountants		39
		Consolidated Statement of Income for the years ended December 31, 2002, 2001 and 2000		40
		Consolidated Balance Sheet at December 31, 2002 and 2001		41
		Consolidated Statement of Cash Flows for the years ended December 31, 2002, 2001 and 2000		42
		Consolidated Statement of Stockholders’ Equity for the years ended December 31, 2002, 2001 and 2000		43
		Notes to Financial Statements		44
	2.	Financial Statement Schedules
		None
	3.	Exhibits
		Refer to the “Exhibit Index” on page 76 of this report.
(b)		Reports on Form 8-K

Visteon filed the following Current Reports on Form 8-K during the quarter ended December 31, 2002:

Current Report on Form 8-K dated October 18, 2002, included information relating to Visteon’s third quarter 2002 financial results.

SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, Visteon Corporation has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.


	VISTEON CORPORATION


	By:	/s/ PETER J. PESTILLO*



	Peter J. Pestillo

Date: February 14, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below on February 14, 2003, by the following persons on behalf of Visteon Corporation and in the capacities indicated.


Signature		Title

/s/ PETER J. PESTILLO* Peter J. Pestillo		Chairman of the Board and Chief Executive Officer (Principal Executive Officer)
/s/ MICHAEL F. JOHNSTON* Michael F. Johnston		Director, President and Chief Operating Officer
/s/ DANIEL R. COULSON* Daniel R. Coulson		Executive Vice President and Chief Financial Officer (Principal Financial Officer)
/s/ PHILIP G. PFEFFERLE* Philip G. Pfefferle		Vice President and Controller (Principal Accounting Officer)
/s/ WILLIAM H. GRAY, III* William H. Gray, III		Director
/s/ STEVEN K. HAMP* Steven K. Hamp		Director
/s/ ROBERT H. JENKINS* Robert H. Jenkins		Director
Karl J. Krapek		Director
/s/ CHARLES L. SCHAFFER* Charles L. Schaffer		Director
/s/ THOMAS T. STALLKAMP* Thomas T. Stallkamp		Director
/s/ ROBERT M. TEETER* Robert M. Teeter		Director
By: /s/ STACY L. FOX Stacy L. Fox Attorney-in-Fact*

CERTIFICATIONS

I, Peter J. Pestillo, certify that:


	1.	I have reviewed this annual report on Form 10-K of Visteon Corporation;

	2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

	3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


	a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

	b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

	c)	presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;


	5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):


	a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and


	6.	The registrant’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: February 14, 2003


	/s/ PETER J. PESTILLO
	Peter J. Pestillo
	Chairman and Chief Executive Officer
	(Principal Executive Officer)

I, Daniel R. Coulson, certify that:


	1.	I have reviewed this annual report on Form 10-K of Visteon Corporation;

	2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

	3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


	a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

	b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

	c)	presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;


	5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):


	a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and


	6.	The registrant’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: February 14, 2003


	/s/ DANIEL R. COULSON

	Daniel R. Coulson
	Executive Vice President and
	Chief Financial Officer
	(Principal Financial Officer)

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders

Visteon Corporation

In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) on page 35 present fairly, in all material respects, the financial position of Visteon Corporation and its subsidiaries at December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the company’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 14 to the consolidated financial statements, the company changed its method of accounting for goodwill resulting from its adoption of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” effective January 1, 2002.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Detroit, Michigan

January 17, 2003, except for Note 18,

as to which the date is January 27, 2003

VISTEON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME



			For the Years Ended
			December 31,

			2002			2001			2000


			(in millions, except
			per share amounts)
Sales (Notes 2 and 11)
	Ford and affiliates		$	14,779		$	14,656		$	16,448
	Other customers			3,616			3,187			3,019

		Total sales		18,395			17,843			19,467
Costs and expenses (Notes 2, 11 and 13)
	Costs of sales			17,588			17,105			18,129
	Selling, administrative and other expenses			888			855			897

		Total costs and expenses		18,476			17,960			19,026
Operating income (loss)				(81	)		(117	)		441
Interest income				23			55			109
Interest expense				103			131			167

		Net interest expense		(80	)		(76	)		(58	)
Equity in net income of affiliated companies (Notes 2 and 13)				44			24			56

Income (loss) before income taxes, minority interests and change in accounting				(117	)		(169	)		439
Provision (benefit) for income taxes (Note 5)				(58	)		(72	)		143

Income (loss) before minority interests and change in accounting				(59	)		(97	)		296
Minority interests in net income of subsidiaries				28			21			26

Income (loss) before change in accounting				(87	)		(118	)		270
Cumulative effect of change in accounting, net of tax (Note 14)				(265	)		—			—

Net income (loss)			$	(352	)	$	(118	)	$	270

Basic and diluted earnings (loss) per share (Note 2)
	Before cumulative effect of change in accounting		$	(0.68	)	$	(0.91	)	$	2.08
	Cumulative effect of change in accounting			(2.07	)		—			—

		Basic and diluted	$	(2.75	)	$	(0.91	)	$	2.08

Cash dividends per share			$	0.24		$	0.24		$	0.12

The accompanying notes are part of the financial statements.

VISTEON CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET



		December 31,

		2002			2001


		(in millions)
Assets
Cash and cash equivalents		$	1,204		$	1,024
Marketable securities			74			157

	Total cash and marketable securities		1,278			1,181
Accounts receivable — Ford and affiliates			1,401			1,560
Accounts receivable — other customers			828			834

	Total receivables		2,229			2,394
Inventories (Note 3)			878			942
Deferred income taxes			199			167
Prepaid expenses and other current assets			153			153

	Total current assets		4,737			4,837
Equity in net assets of affiliated companies			191			158
Net property (Note 4)			5,443			5,329
Deferred income taxes			566			322
Goodwill (Note 14)			—			363
Other assets			233			153

	Total assets	$	11,170		$	11,162

Liabilities and Stockholders’ Equity
Trade payables		$	2,083		$	1,915
Accrued liabilities (Note 6)			1,021			945
Income taxes payable			14			30
Debt payable within one year (Note 8)			348			629

	Total current liabilities		3,466			3,519
Long-term debt (Note 8)			1,298			1,293
Postretirement benefits other than pensions (Note 7)			2,283			2,079
Other liabilities (Note 6)			1,142			967
Deferred income taxes			3			13

	Total liabilities		8,192			7,871
Stockholders’ equity
Capital stock (Note 9)
	Preferred stock, par value $1.00, 50 million shares authorized, none outstanding		—			—
	Common stock, par value $1.00, 500 million shares authorized, 131 million shares issued, 129 million and 130 million shares outstanding, respectively		131			131
Capital in excess of par value of stock			3,298			3,311
Accumulated other comprehensive (loss)			(140	)		(231	)
Other			(33	)		(25	)
Earnings retained for use in business (accumulated deficit)			(278	)		105

	Total stockholders’ equity		2,978			3,291

	Total liabilities and stockholders’ equity	$	11,170		$	11,162

The accompanying notes are part of the financial statements.

VISTEON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS



			For the Years Ended
			December 31,

			2002			2001			2000


			(in millions)
Cash and cash equivalents at January 1			$	1,024		$	1,412		$	1,849
Cash flows provided by (used in) operating activities (Note 15)				1,146			436			(526	)
Cash flows from investing activities
	Capital expenditures			(723	)		(752	)		(793	)
	Acquisitions and investments in joint ventures, net			—			(7	)		(28	)
	Purchases of securities			(508	)		(346	)		(126	)
	Sales and maturities of securities			588			260			61
	Other (Note 13)			36			102			44

		Net cash used in investing activities		(607	)		(743	)		(842	)
Cash flows from financing activities
	Commercial paper (repayments) issuances, net			(194	)		8			352
	Payments on short-term debt			—			(1	)		(1,775	)
	Proceeds from issuance of short-term debt			—			1			1,374
	Proceeds from issuance of other debt			115			114			1,279
	Principal payments on other debt			(245	)		(144	)		(290	)
	Purchase of treasury stock			(24	)		(25	)		—
	Cash dividends			(31	)		(31	)		(16	)
	Other			(4	)		3			—

		Net cash (used in) provided by financing activities		(383	)		(75	)		924
Effect of exchange rate changes on cash				24			(6	)		7

Net increase (decrease) in cash and cash equivalents				180			(388	)		(437	)

Cash and cash equivalents at December 31			$	1,204		$	1,024		$	1,412

The accompanying notes are part of the financial statements.

VISTEON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY


										Earnings
							Capital			Retained									Other
							In			for Use in			Accumulated			Prior
			Common Stock				Excess			Business			Other			Owner’s						Unearned
							of Par			(Accumulated			Comprehensive			Net			Treasury			Stock
			Shares		Amount		Value			Deficit)			Loss			Investment			Stock			Compensation			Total


			(in millions)
Year Ended December 31, 2000
Beginning balance				—	$	—	$	—		$	—		$	(67	)	$	1,566		$	—		$	—		$	1,499
Comprehensive income
	Net income										270															270
	Foreign currency translation													(112	)											(112	)

		Comprehensive income																								158
Net transfers and settlements of balances with prior owner																	1,864									1,864
Capitalization/ reclassification of prior owner’s net investment				130		130		3,300									(3,430	)								0
Deferred stock-based compensation				1		1		11															(12	)		0
Cash dividends											(16	)														(16	)

Ending balance				131	$	131	$	3,311		$	254		$	(179	)	$	0		$	—		$	(12	)	$	3,505

Year Ended December 31, 2001
Beginning balance				131	$	131	$	3,311		$	254		$	(179	)	$	0		$	—		$	(12	)	$	3,505
Comprehensive income
	Net (loss)										(118	)														(118	)
	Foreign currency translation													(53	)											(53	)
	Realized and unrealized gains/losses on derivatives, net of tax													5												5
	Change in unrealized loss on marketable securities, net of tax													(2	)											(2	)
	Minimum pension liability, net of tax													(2	)											(2	)

		Comprehensive (loss)																								(170	)
Purchase of treasury stock																				(25	)					(25	)
Deferred stock-based compensation																				13			(13	)		0
Amortization and adjustment of deferred stock-based compensation, net																							9			9
Exercise of common stock options																				3						3
Cash dividends											(31	)														(31	)

Ending balance				131	$	131	$	3,311		$	105		$	(231	)	$	0		$	(9	)	$	(16	)	$	3,291

Year Ended December 31, 2002
Beginning balance				131	$	131	$	3,311		$	105		$	(231	)	$	0		$	(9	)	$	(16	)	$	3,291
Comprehensive income
	Net (loss)										(352	)														(352	)
	Foreign currency translation													170												170
	Realized and unrealized gains/losses on derivatives, net of tax													(13	)											(13	)
	Change in unrealized loss on marketable securities, net of tax													1												1
	Minimum pension liability, net of tax													(67	)											(67	)

		Comprehensive (loss)																								(261	)
Purchase of treasury stock																				(24	)					(24	)
Deferred stock-based compensation																				16			(16	)		0
Amortization and adjustment of deferred stock-based compensation, net								(13	)											(1	)		17			3
Cash dividends											(31	)														(31	)

Ending balance				131	$	131	$	3,298		$	(278	)	$	(140	)	$	0		$	(18	)	$	(15	)	$	2,978

The accompanying notes are part of the financial statements.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS

NOTE 1. Background and Basis of Presentation

Visteon Corporation (“Visteon”) is a leading, global supplier of automotive systems, modules and components. Visteon sells products primarily to global vehicle manufacturers, and also sells to the worldwide aftermarket for replacement and vehicle appearance enhancement parts. Visteon became an independent company when Ford Motor Company (“Ford”) established Visteon as a wholly-owned subsidiary in January 2000 and subsequently transferred to Visteon the assets and liabilities comprising Ford’s automotive components and systems business. Ford completed its spin-off of Visteon on June 28, 2000 (the “spin-off”). Prior to incorporation, Visteon operated as Ford’s automotive components and systems business.

In connection with Visteon’s separation from Ford, Visteon and Ford entered into a series of agreements outlining the business relationship between the two companies following the spin-off which are further discussed in Note 11 of our consolidated financial statements.

Basis of Presentation

The consolidated financial statements as of December 31, 2002 and 2001, and for periods subsequent to the spin-off, include the accounts of Visteon and its wholly-owned and majority-owned subsidiaries. The consolidated financial statements of Visteon for periods prior to the spin-off reflect the historical results of operations and cash flows of the businesses that were considered part of the Visteon business of Ford. Certain amounts for prior periods were reclassified to conform with present period presentation.

Operating costs and expenses for periods prior to the spin-off from Ford include allocations of general corporate overhead related to Ford’s corporate headquarters and common support activities including information systems, product development, accounting and finance, corporate insurance programs, treasury, facilities, legal and human resources. These costs were assessed to Visteon based on usage or similar allocation methodologies. Although Visteon believes the allocations and charges for such services were reasonable, the costs of these services charged to Visteon are not necessarily indicative of the costs that would have been incurred if Visteon had been a stand-alone entity or what they would be in the future.

NOTE 2. Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the company and its majority-owned subsidiaries. Intra-Visteon transactions have been eliminated in consolidation. Companies that are 20% to 50% owned by Visteon are accounted for on an equity basis. From June 30, 2002, the assets, liabilities, results of operations and cash flows of a special-purpose/ variable interest entity, established to build a headquarters facility to be leased to Visteon, are included in Visteon’s consolidated financial statements. This entity, owned by an affiliate of a bank, is consolidated based on an assessment that substantially all of the expected residual risks or rewards of the entity reside with Visteon. This assessment included consideration of the terms of the lease agreement, the amount of the owner’s equity investment at risk and that Visteon is the source of the entity’s debt financing. Total assets of this entity were about $36 million at December 31, 2002.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 2. Accounting Policies — (Continued)

Use of estimates and assumptions as determined by management are required in the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates and assumptions.

Revenue Recognition

Sales are recognized when there is evidence of a sales agreement, the delivery of goods has occurred, the sales price is fixed or determinable and collectibility is reasonably assured, generally upon shipment of product to customers and transfer of title under standard commercial terms. Significant retroactive price adjustments are recognized in the period when such amounts become probable. Sales are recognized based on the gross amount billed to a customer for those products in which Visteon’s customer has directed the sourcing of certain raw materials or components used in the manufacturer of the final product.

Guarantees and Product Warranty

The company enters into agreements that contain indemnification provisions in the normal course of business for which the risks are considered nominal and impractible to estimate.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 2. Accounting Policies — (Continued)

Visteon accrues for warranty obligations for products sold based on management estimates, with support from our sales, engineering, quality and legal activities, of the amount that eventually will be required to settle such obligations. This accrual, which is reviewed in detail on a regular basis, is based on several factors, including the terms of Visteon’s Master Transfer Agreement with Ford, as discussed in Note 11 of our consolidated financial statements, past experience, current claims, production changes, industry developments and various other considerations. The following table presents a reconciliation of changes in the product warranty liability for the selected periods:


	2002			2001			2000


	(in millions)
Beginning balance	$	20		$	18		$	23
Accruals for products shipped		16			18			11
Accruals for pre-existing warranties (including change in estimates)		—			4			(4	)
Settlements		(19	)		(20	)		(12	)

Ending balance	$	17		$	20		$	18

Separate from product warranty obligations, Visteon from time to time also negotiates financial settlements with its customers in connection with recall campaigns undertaken by such customers.

Other Costs

Advertising and sales promotion costs are expensed as incurred. Advertising costs were $17 million in 2002, $19 million in 2001 and $29 million in 2000.

Research and development costs are expensed as incurred and were $902 million in 2002, $1,037 million in 2001 and $1,115 million in 2000.

Pre-production design and development costs relating to long-term supply arrangements are expensed as incurred.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 2. Accounting Policies — (Continued)

Related Party Transaction

A member of Visteon’s Board of Directors is also the Chief Executive Officer of a supplier of contract staffing services to Visteon. Visteon’s payments to this supplier were approximately $115 million in 2002. The supplier has indicated that it expects to recognize approximately $20 million of these payments as revenue in 2002, relating to services performed directly by the supplier. The remaining payments to this supplier are related to arrangements in which the supplier serves as a master vendor on the behalf of many other suppliers and are not expected to be recognized as revenue for such supplier.

Income (Loss) Per Share of Common Stock

Basic income per share of common stock is calculated by dividing net income by the average number of shares of common stock outstanding during the applicable period, adjusted for restricted stock. The calculation of diluted income per share takes into account the effect of dilutive potential common stock, such as stock options, and contingently returnable shares, such as restricted stock. For purposes of the earnings per share calculations, 130 million shares of common stock are treated as outstanding for periods prior to the spin-off from Ford. Basic and diluted income per share were calculated using the following numbers of shares:


		2002			2001			2000


		(shares in millions)
Common shares outstanding			130.3			130.7			130.5
Less: Restricted stock outstanding			(2.6	)		(1.4	)		(0.5	)

	Basic shares		127.7			129.3			130.0
Net dilutive effect of restricted stock and stock options			—			—			—

Diluted shares			127.7			129.3			130.0

For the year ended December 31, 2002 and 2001, potential common stock of about 606,000 and 343,000 shares, respectively, are excluded from the calculation of diluted income per share because the effect of including them would have been antidilutive.

Derivative Financial Instruments

Visteon has operations in every major region of the world and is exposed to a variety of market risks, including the effects of changes in foreign currency exchange rates, interest rates and commodity prices. These financial exposures are monitored and managed by the company as an integral part of the company’s overall risk management program, which recognizes the unpredictability of financial markets and seeks to reduce the potentially adverse effect on the company’s results. The company uses derivative financial instruments, including forward contracts, swaps and options, to manage the exposures in exchange rates, interest rates and commodity prices. All derivative financial instruments are classified as “held for purposes other than trading.” Company policy specifically prohibits the use of leveraged derivatives or use of any derivatives for speculative purposes.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 2. Accounting Policies — (Continued)

Visteon’s primary foreign currency exposures, in terms of net corporate exposure, are in the euro, Mexican peso and British pound. The company uses derivative instruments to hedge expected future cash flows in foreign currencies and firm commitments. The company has entered into interest rate swaps to manage its interest rate risk. As a result of these swaps, approximately 30% of the company’s borrowings are on a fixed rate basis, with the balance on a variable rate basis, subject to changes in short term interest rates. Visteon’s primary commodity-price exposures are aluminum, copper and natural gas, which are managed through derivative financial instruments and fixed-price contracts with suppliers.

The criteria used to determine whether hedge accounting treatment is appropriate are the designation of the hedge to an underlying exposure, reduction of overall risk and correlation between the changes in the value of the derivative instrument and the underlying exposure. Gains and losses on cash flow hedges initially are reported as a component of other comprehensive income (outside earnings) and subsequently reclassified into earnings when the forecasted transaction affects earnings. Gains and losses on interest rate swaps (fair value hedges) are recorded in long-term debt (see Note 12 of our consolidated financial statements). All other derivative gains and losses are recognized in costs of sales. Except for interest rate swaps, these derivatives usually mature in two years or less, consistent with the underlying transactions. The effect of changes in exchange rates, interest rates and commodity prices may not be fully offset by gains or losses on currency derivatives, depending on the extent to which the exposures are hedged.

Foreign Currency Translation

Assets and liabilities of Visteon’s non-U.S. businesses generally are translated to U.S. Dollars at end-of-period exchange rates. The effects of this translation for Visteon are reported in other comprehensive income. Remeasurement of assets and liabilities of Visteon’s non-U.S. businesses that use the U.S. Dollar as their functional currency are included in income as transaction gains and losses. Income statement elements of Visteon’s non-U.S. businesses are translated to U.S. Dollars at average-period exchange rates and are recognized as part of revenues, costs and expenses. Also included in income are gains and losses arising from transactions denominated in a currency other than the functional currency of the business involved. Net transaction gains and losses, as described above, decreased net income $14 million in 2002, and increased net income $6 million and $2 million in 2001 and 2000, respectively. Total foreign currency translation adjustments as a component of accumulated other comprehensive income reduced stockholders’ equity by $62 million and $232 million at December 31, 2002 and 2001, respectively.

Cash and Cash Equivalents

Visteon considers all highly liquid investments purchased with a maturity of three months or less, including short-term time deposits and government agency and corporate obligations, to be cash equivalents.

Marketable Securities

Marketable securities are classified as available-for-sale. The fair value of substantially all securities is determined by quoted market prices. The estimated fair value of securities, for which there are no quoted market prices, is based on similar types of securities that are traded in the market. Book value approximates fair value for all securities.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 2. Accounting Policies — (Continued)

Investments with Affiliates

The following table presents summarized financial data for those affiliates accounted for under the equity method, excluding amounts related to the “Conix Group” which was sold in October 2000 as discussed in Note 13 of our consolidated financial statements. The amounts represent 100% of the assets, liabilities, equity and results of operations of these affiliates. Visteon reports its share of their net assets and net income in the lines “Equity in net assets of affiliated companies” on the Consolidated Balance Sheet and “Equity in net income of affiliated companies” on the Consolidated Statement of Income.



		December 31,

		2002		2001


		(in millions)
Current assets		$	361	$	278
Other assets			318		316

	Total assets	$	679	$	594

Current liabilities		$	217	$	179
Other liabilities			99		94
Stockholders’ equity			363		321

	Total liabilities and stockholders’ equity	$	679	$	594


	2002		2001		2000


	(in millions)
Net sales	$	973	$	747	$	757
Gross profit		217		152		170
Net income		93		63		69

Impairment of Long-Lived Assets and Certain Identifiable Intangibles

Visteon evaluates long-lived assets and long-lived assets to be disposed of for potential impairment at the operating segment level whenever events or changes in business circumstances indicate that the carrying value of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Visteon considers projected future undiscounted cash flows, trends and other circumstances in making such estimates and evaluations. While we believe that our estimates of future cash flows are reasonable, different assumptions regarding such factors as future automotive production volumes (primarily for Ford), selling price changes, labor cost changes, material cost changes, productivity and other cost savings and capital expenditures could significantly affect our evaluations.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 2. Accounting Policies — (Continued)

Goodwill

Visteon adopted Financial Accounting Standards No. 142 (“SFAS 142”) “Goodwill and Other Intangible Assets” effective January 1, 2002. SFAS 142 no longer permits amortization of goodwill and establishes a new method of testing goodwill for impairment by using a fair-value based approach. See Note 14 of our consolidated financial statements for further description related to this accounting change.

Stock-Based Awards

Visteon measures compensation cost related to stock options and restricted stock awards using the intrinsic value method. If compensation cost had been determined based on the estimated fair value of stock options and the fair value set at the date of grant for the restricted stock awards, in accordance with the provisions of SFAS 123. Visteon’s reported net loss, loss per share (on both a basic and diluted basis) and compensation expense would have increased to the pro forma amounts indicated below:



		December 31,

		2002			2001


		(in millions, except
		per share amounts)
As reported
	Net (loss)	$	(352	)	$	(118	)
	(Loss) per share		(2.75	)		(0.91	)
	Compensation expense, net of tax		4			9
Pro forma
	Net (loss)	$	(363	)	$	(120	)
	(Loss) per share		(2.84	)		(0.93	)
	Compensation expense, net of tax		15			11

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 2. Accounting Policies — (Continued)

The following is a summary of the fair values and assumptions used under a Black-Scholes option-pricing model for stock options granted in 2002 and 2001:


	2002			2001

Fair Values
Average fair value of stock option granted in which the exercise price equaled the market price of the stock on the grant date	$	6.27		$	6.83
Average fair value of stock option granted in which the exercise price was less than the market price of the stock on the grant date		N/A		$	7.94
Weighted Average Assumptions
Risk-free interest rate		4.8	%		4.7	%
Expected life (years)		6.0			4.7
Volatility		51.6	%		42.8	%
Dividend yield		1.8	%		1.4	%

Beginning in January 2003, Visteon intends to expense the fair value of stock-based awards granted to employees pursuant to SFAS 123. Visteon will adopt this standard on a prospective method basis for stock-based awards granted, modified or settled after December 31, 2002. See Note 9 of our consolidated financial statements for further information related to stock awards.

NOTE 3. Inventories



		December 31,

		2002		2001


		(in millions)
Raw materials, work-in-process and supplies		$	743	$	812
Finished products			135		130

	Total inventories	$	878	$	942

U.S. inventories		$	548	$	589

Inventories are stated at the lower of cost or market. The cost of most U.S. inventories is determined by the last-in, first-out (“LIFO”) method. The cost of the remaining inventories is determined primarily by the first-in, first-out (“FIFO”) method.

If the FIFO method had been used instead of the LIFO method, inventories would have been higher by $78 million and $86 million at December 31, 2002 and 2001, respectively.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 4. Net Property, Depreciation and Amortization



		December 31,

		2002			2001


		(in millions)
Land		$	125		$	117
Buildings and land improvements			1,561			1,495
Machinery, equipment and other			8,631			8,162
Construction in progress			320			306

	Total land, plant and equipment		10,637			10,080
Accumulated depreciation			(5,527	)		(5,090	)

	Net land, plant and equipment		5,110			4,990
Special tools, net of amortization			333			339

	Net property	$	5,443		$	5,329

Property, equipment and special tools are depreciated principally using the straight-line method of depreciation over the estimated useful life of the asset. On average, buildings and land improvements are depreciated based on a 30-year life; machinery and equipment are depreciated based on a 14-year life. Special tools are amortized using the straight-line method over periods of time representing the estimated life of those tools, with the majority of tools amortized over five years.

Depreciation and amortization expenses related to property, equipment and special tools, excluding amortization expense of goodwill and other intangible assets, were as follows:


		2002		2001		2000


		(in millions)
Depreciation		$	551	$	562	$	585
Amortization			76		79		68

	Total	$	627	$	641	$	653

At December 31, 2002, Visteon had the following minimum rental commitments under non-cancelable operating leases (in millions): 2003 — $67; 2004 — $45; 2005 — $32; 2006 — $24; 2007 — $19; thereafter — $96. Rent expense was $90 million in 2002, $106 million in 2001 and $117 million in 2000.

Maintenance, repairs and rearrangement costs are expensed as incurred. Expenditures that increase the value or productive capacity of assets are capitalized. Pre-production costs related to new facilities are expensed as incurred. At December 31, 2002, Visteon has recognized about $135 million in unbilled receivables related to tooling costs which are not owned by Visteon for which there is an agreement for contractual reimbursement.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 5. Income Taxes

Income (loss) before income taxes, minority interests and change in accounting, excluding equity in net income of affiliated companies, was as follows:


		2002			2001			2000


		(in millions)
U.S.		$	(115	)	$	(343	)	$	104
Non-U.S.			(46	)		150			279

	Total income (loss) before income taxes	$	(161	)	$	(193	)	$	383

The provision (benefit) for income taxes was calculated as follows:


			2002			2001			2000


			(in millions)
Current tax provision (benefit)
	U.S. federal		$	(1	)	$	(6	)	$	127
	Non-U.S.			76			77			91
	U.S. state and local			—			—			12

		Total current		75			71			230

Deferred tax provision (benefit)
	U.S. federal			(57	)		(115	)		(91	)
	Non-U.S.			(72	)		(24	)		7
	U.S. state and local			(4	)		(4	)		(3	)

		Total deferred		(133	)		(143	)		(87	)

		Total provision (benefit)	$	(58	)*	$	(72	)	$	143


	*	Excludes effect of change in accounting.

A reconciliation of the provision (benefit) for income taxes compared with amounts at the U.S. statutory tax rate is shown below:


			2002			2001			2000

Tax provision (benefit) at U.S. statutory rate of 35%				(35	)%		(35	)%		35	%
Effect of:
	Tax on non-U.S. income			13			—			—
	U.S. state and local income taxes			(2	)		(2	)		2
	Tax credits			(6	)		(6	)		(3	)
	Other			(6	)		6			3

		Provision (benefit) for income taxes		(36	)%*		(37	)%		37	%


	*	Excludes effect of change in accounting.

Deferred taxes are provided for the net effect of repatriating earnings of non-U.S. subsidiaries. Deferred tax assets and liabilities reflect the estimated tax effect of accumulated temporary differences between assets and liabilities for financial reporting purposes and those amounts as measured by tax laws and regulations.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 5. Income Taxes — (Continued)

The components of deferred income tax assets and liabilities at December 31 were as follows:



			December 31,

			2002			2001


			(in millions)
Deferred tax assets
	Employee benefit plans		$	1,059		$	961
	Customer allowances and claims			55			34
	Net operating losses and other carryforwards			347			193
	All other			210			202

		Subtotal		1,671			1,390
	Valuation allowance			(21	)		—

		Total deferred tax assets		1,650			1,390

Deferred tax liabilities
	Depreciation and amortization			779			724
	Employee benefit plans			—			10
	All other			109			180

		Total deferred tax liabilities		888			914

Net deferred tax assets			$	762		$	476

The anticipated tax benefit of U.S. net operating loss carryforwards is $155 million at December 31, 2002. These losses will begin to expire in 2021. U.S. general business credit carryforwards are $54 million at December 31, 2002. These credits will begin to expire in 2020. U.S. foreign tax credits and other carryforwards are $57 million at December 31, 2002. These credits and other carryforwards will begin to expire in 2006. The anticipated tax benefit of non-U.S. net operating loss carryforwards is $81 million at December 31, 2002. These losses have carryforward periods ranging from 3 years to indefinite.

For financial statement purposes, the tax benefit of net operating loss and credit carryforwards is recognized as a deferred tax asset, subject to appropriate valuation allowances when it is determined that recovery of the deferred tax asset is unlikely. The company evaluates its net operating loss and credit carryforwards on an ongoing basis. Such evaluations include a review of historical and projected future operating results, the eligible carryforward period and other circumstances. As of December 31, 2002, valuation allowances of $21 million have been recorded against non-U.S. net operating loss carryforwards where recovery of these carryforwards is unlikely.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 6. Liabilities

Current Liabilities

Included in accrued liabilities at December 31 were the following:



		December 31,

		2002		2001


		(in millions)
Salaries, wages and employer taxes		$	170	$	105
Employee benefits, including pensions			384		308
Postretirement benefits other than pensions			92		38
Other			375		494

	Total accrued liabilities	$	1,021	$	945

Noncurrent Liabilities

Included in other noncurrent liabilities at December 31 were the following:



		December 31,

		2002		2001


		(in millions)
Employee benefits, including pensions		$	571	$	418
Minority interests in net assets of subsidiaries			129		109
Other			442		440

	Total other liabilities	$	1,142	$	967

Other current and noncurrent liabilities include amounts related to product warranty.

NOTE 7. Employee Retirement Benefits

Employee Retirement Plans

In the U.S., Visteon hourly employees represented by the UAW and other collective bargaining groups earn noncontributory benefits based on employee service. Visteon salaried employees earn similar noncontributory benefits as well as contributory benefits related to pay and service. In accordance with the separation agreements, Ford retained the past service obligations for those transferred salaried employees who were eligible to retire in 2000 as well as those whose combined age and years of service was at least 60 at the date of the separation from Ford. For all other transferred salaried employees, Visteon assumed the pension obligations as well as assets with a fair value at least equal to the related projected benefit obligation but no less than the amount required to be transferred under applicable laws and regulations. Certain of the non-U.S. subsidiaries sponsor separate plans that provide similar types of benefits to their employees. For these non-U.S. plans, Visteon has assumed all plan benefit obligations for Visteon employees as well as assets that approximate the benefit obligations for funded plans.

In general, the company’s plans are funded with the exception of certain supplemental benefit plans for executives and a plan in Germany; in such cases the unfunded liability is recorded. The company’s policy for funded plans is to contribute annually, at a minimum, amounts required by applicable law, regulation or union agreement. Plan assets consist principally of investments in stocks, and government and other fixed income securities.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 7. Employee Retirement Benefits — (Continued)

Visteon-assigned Ford-UAW employees, comprising about 21,500 people, participate in the Ford-UAW Retirement Plan, sponsored by Ford. By agreement, Visteon compensates Ford for the pension expense incurred by Ford for Visteon-assigned employees. The amount of compensation is disclosed in the table below on the “expense for Visteon-assigned Ford-UAW employees” line, and is calculated by Ford using Ford’s pension assumptions, based on Financial Accounting Standards No. 87 “Employers’ Accounting for Pensions.”

Most U.S. salaried employees are eligible to participate in a defined contribution plan (Visteon Investment Plan) by contributing a portion of their compensation which is partially matched by Visteon. Matching contributions were $31 million in 2001 and were suspended effective January 1, 2002.

Postretirement Health Care and Life Insurance Benefits

In the U.S., Visteon has a financial obligation for the cost of providing selected health care and life insurance benefits to its employees, as well as Visteon-assigned Ford-UAW employees who retire after July 1, 2000. The estimated cost for these benefits is accrued over periods of employee service on an actuarially determined basis. Ford retained the financial obligation and related prepayments for postretirement health care and life insurance benefits to its employees who retired on or before July 1, 2000.

Under the terms of the separation agreements with Ford and in addition to regular benefit payments, Visteon is required to pre-fund postretirement health care and life insurance benefit obligations related to Visteon-assigned Ford-UAW hourly employees as well as certain salaried employees. The required pre-funding is over a 15 year period beginning in 2006 for the Visteon-assigned Ford-UAW hourly employees, and over a 10 year period beginning in 2011 for those salaried employees. The annual pre-funding requirement during this period will be determined based upon amortization of the unfunded liability at the beginning of the period, plus annual expense. The unfunded liability at December 31, 2002, of about $1.9 billion is included in our recorded postretirement health care and life insurance benefit liability. Based upon estimates of the unfunded liabilities and the related expense, the first required pre-funding payment will be about $465 million in 2006. In addition, benefit payments for related retirees are projected at $80 million in 2006. In December 2000, the company pre-funded a portion of this obligation by contributing $25 million to a Voluntary Employees’ Beneficiary Association (“VEBA”) trust.

Effective January 1, 2002, the company revised the eligibility requirement for retiree health insurance coverage for most U.S. employees to 10 years of service after attaining the age of 45.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 7. Employee Retirement Benefits — (Continued)

The company’s expense for retirement benefits was as follows:



		Retirement Plans

																				Health Care and Life
		U.S. Plans									Non-U.S. Plans									Insurance Benefits

		2002			2001			2000			2002			2001			2000			2002			2001			2000


		(in millions, except percentages)
Costs Recognized in Income
Service cost		$	47		$	45		$	55		$	27		$	19		$	37		$	28		$	28		$	26
Interest cost			55			50			82			40			34			41			56			53			61
Expected return on plan assets			(64	)		(64	)		(106	)		(48	)		(49	)		(58	)		—			—			—
Amortization of:
	Transition (asset) obligation		—			(4	)		(7	)		1			—			—			—			—			1
	Plan amendments		8			8			12			6			6			6			(14	)		(1	)		—
	(Gains) losses and other		(2	)		(3	)		(9	)		(4	)		(8	)		—			5			2			—
Special termination benefits			(3	)		52			—			4			1			7			15			19			—
Curtailments			—			(3	)		—			45			1			—			1			—			—
Expense for Visteon-assigned Ford-UAW employees			62			58			74			—			—			—			224			181			170

	Net pension/postretirement expense	$	103		$	139		$	101		$	71		$	4		$	33		$	315		$	282		$	258

Discount rate for expense			7.50	%		7.75	%		7.75	%		6.00	%		6.25	%		6.10	%		7.25	%		7.50	%		7.75	%
Assumed long-term rate of return on assets			9.50	%		9.50	%		9.00	%		9.00	%		10.00	%		9.40	%		6.00	%		6.00	%		6.00	%
Initial health care cost trend rate			—			—			—			—			—			—			9.45	%		8.97	%		7.00	%
Ultimate health care cost trend rate			—			—			—			—			—			—			5.00	%		5.00	%		5.00	%
Number of years to ultimate trend rate			—			—			—			—			—			—			6			7			8

During 2000, asset and liability transfers between Ford and Visteon postretirement benefit plans reduced Visteon’s net pension and postretirement related liabilities by about $1.6 billion. In addition, Ford retained about $573 million of prepaid health care amounts relating to active employees.

Increasing the assumed health care cost trend rates by one percentage point is estimated to increase the aggregate service and interest cost components of Visteon’s net postretirement benefit expense for 2002 by about $56 million and the accumulated postretirement benefit obligation at December 31, 2002, by about $594 million. A decrease of one percentage point would reduce service and interest costs by $43 million and decrease the December 31, 2002, obligation by about $495 million.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 7. Employee Retirement Benefits — (Continued)

The status of these plans as of their most recent measurement dates was as follows:



		Retirement Plans
														Health Care
														and Life
		U.S. Plans						Non-U.S. Plans						Insurance Benefits

		2002			2001			2002			2001			2002			2001


		(in millions, except percentages)
Change in Benefit Obligation
Benefit obligation — beginning		$	703		$	624		$	641		$	514		$	2,707		$	2,232
Service cost			47			45			27			19			95			87
Interest cost			55			50			40			34			192			166
Amendments/ other			28			9			37			72			(69	)		(31	)
Actuarial loss			52			6			31			30			645			254
Special termination benefits			—			3			4			3			16			19
Curtailment			—			(3	)		28			—			(4	)		—
Foreign exchange translation			—			—			70			(22	)		—			(1	)
Benefits paid			(34	)		(31	)		(12	)		(9	)		(45	)		(19	)

	Benefit obligation — ending	$	851		$	703		$	866		$	641		$	3,537		$	2,707

Change in Plan Assets
Plan assets — beginning		$	595		$	680		$	422		$	508		$	26		$	25
Actual return on plan assets			(27	)		(76	)		(61	)		(111	)		—			1
Contributions			30			23			57			40			45			19
Foreign exchange translation			—			—			33			(5	)		—			—
Benefits paid/other			(36	)		(32	)		—			(10	)		(45	)		(19	)

	Plan assets — ending	$	562		$	595		$	451		$	422		$	26		$	26

Funded Status of the Plans
Plan assets in excess of (less than) benefit obligations		$	(289	)	$	(108	)	$	(415	)	$	(219	)	$	(3,511	)	$	(2,681	)
Unrecognized:
	Net (gains) losses		112			(37	)		205			41			1,231			599
	Prior service cost/other		69			58			136			110			(95	)		(35	)

	Net amount recognized	$	(108	)	$	(87	)	$	(74	)	$	(68	)	$	(2,375	)	$	(2,117	)

Amount Recognized in Balance Sheet
Prepaid assets		$	1		$	8		$	15		$	7		$	—		$	—
Accrued liabilities			(257	)		(145	)		(194	)		(121	)		(2,375	)		(2,117	)
Intangible assets			62			49			81			43			—			—
Deferred income taxes			32			1			9			1			—			—
Accumulated other comprehensive income			54			—			15			2			—			—

	Net amount recognized	$	(108	)	$	(87	)	$	(74	)	$	(68	)	$	(2,375	)	$	(2,117	)

Assumptions
Discount rate			6.75	%		7.50	%		5.75	%		6.00	%		6.75	%		7.25	%
Expected rate of return on assets			9.00	%		9.50	%		8.25	%		9.00	%		6.00	%		6.00	%
Rate of increase in compensation			4.00	%		4.50	%		3.75	%		3.75	%		—			—
Initial health care cost trend rate			—			—			—			—			11.00	%		9.45	%
Ultimate health care cost trend rate			—			—			—			—			5.00	%		5.00	%
Number of years to ultimate trend rate			—			—			—			—			5			6
Measurement date			9/30			9/30			9/30			9/30			12/31			12/31

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for employee retirement plans with accumulated benefit obligations in excess of plan assets were $1,538 million, $1,279 million and $870 million, respectively, for 2002 and $789 million, $720 million and $556 million, respectively, for 2001.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 7. Employee Retirement Benefits — (Continued)

The change in the U.S. discount rate from 7.50% to 6.75% for the year ended December 31, 2002, resulted in an increase of $97 million to the U.S. retirement plan benefit obligation, which is included in the 2002 actuarial loss in the table above.

NOTE 8. Debt

Debt at December 31 was as follows:



					Weighted
					Average
			Maturity		Interest Rate						Book Value

					2002			2001			2002		2001


											(in millions)
Debt payable within one year
	Commercial paper					1.7	%		3.1	%	$	166	$	360
	Other — short-term					6.0	%		5.5	%		121		210
	Current portion of long-term debt					5.8	%		5.8	%		61		59

		Total debt payable within one year										348		629

Long-term debt
	Unsecured debt securities			2005-2010		6.4	%		7.4	%		1,239		1,191
	Other			2004-2018		7.3	%		7.6	%		59		102

		Total long-term debt										1,298		1,293

		Total debt									$	1,646	$	1,922

On August 3, 2000, Visteon completed a public offering of unsecured fixed-rate term debt securities totaling $1.2 billion with maturities of five years and ten years. The offering included $500 million of securities maturing on August 1, 2005, and $700 million of securities maturing on August 1, 2010. The five and ten year securities were issued at a slight discount to the stated rates of interest of 7.95% and 8.25%, respectively. Interest rate swaps have been entered into for the unsecured term debt securities maturing on August 1, 2005, and a portion of the debt securities maturing on August 1, 2010. These swaps effectively convert the securities from fixed interest rate to variable interest rate instruments, as further described in Note 12 of our consolidated financial statements. The weighted average interest rates as presented include the effects of interest rate swaps. Interest is payable semi-annually on February 1 and August 1. The unsecured term debt securities agreement contains certain restrictions including, among others, a limitation relating to liens and sale lease-back transactions, as defined in the agreement. In the opinion of management, Visteon was in compliance with all of these restrictions.

Under Visteon’s commercial paper program, $166 million and $360 million was outstanding at December 31, 2002 and 2001, respectively, with a weighted average remaining maturity of 12 and 34 days at December 31, 2002 and 2001, respectively.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 8. Debt — (Continued)

On April 2, 2002, Visteon and Visteon Capital Trust I (the “trust”) filed a shelf registration statement with the Securities and Exchange Commission to register $800 million in securities. Under this shelf process, in one or more offerings, Visteon may sell notes, preferred stock, common stock, depositary shares, warrants, stock purchase contracts and stock purchase units; and the trust may sell trust preferred securities representing undivided beneficial interests in the trust. This shelf registration statement replaces the prior shelf registration statement filed on June 23, 2000. The registration statement became effective on April 12, 2002. Each time Visteon sells securities under this shelf registration statement, a prospectus supplement will be provided that will contain specific information about the terms of that offering. Except as may otherwise be determined at the time of sale, the net proceeds would be used for general corporate purposes.

During the second quarter of 2002, Visteon renewed its financing arrangements with third-party lenders that provide contractually committed, unsecured revolving credit facilities. The new financing arrangements are with a syndicate of lenders providing for a maximum of $1.8 billion in committed, unsecured credit facilities (the “Credit Facilities”). The terms of the Credit Facilities provide for a 364-day revolving credit line in the amount of $775 million, which expires June 2003, and a five-year revolving credit line in the amount of $775 million, which expires June 2007. The Credit Facilities also provide for a five-year delayed draw term loan in the amount of $250 million, which will be used primarily to finance construction of a headquarters facility in Southeast Michigan. Consistent with the prior financing arrangements, any borrowings under the Credit Facilities would bear interest based on a variable interest rate option selected at the time of borrowing. The Credit Facilities contain certain affirmative and negative covenants including a covenant not to exceed a specified leverage ratio. As of December 31, 2002, Visteon did not have any amounts outstanding under the Credit Facilities. In the opinion of management, Visteon has been in compliance with all covenants since the inception of the revolving credit facilities.

The company has additional debt arrangements with respect to a number of its non-U.S. operations, a portion of which are payable in non-U.S. currencies.

Prior to the spin-off from Ford, Visteon had a number of debt and support facility arrangements directly with Ford or its wholly-owned subsidiaries, including a revolving loan arrangement under which Visteon could borrow up to $1,250 million. Interest on this debt was determined quarterly based on Ford’s average interest rate on its U.S. Dollar denominated, publicly traded automotive debt. Upon completing the spin-off from Ford, all debt and support facility arrangements with Ford were terminated. During 2000, amounts outstanding under the revolving loan arrangement of about $1,120 million were converted into an equity investment by Ford, and any remaining amounts outstanding under the arrangements were repaid by Visteon to Ford.

Debt at December 31, 2002, included maturities as follows (in millions): 2003 — $348; 2004 — $47; 2005 — $527; 2006 — $5; 2007 — $4; thereafter — $715.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 9. Capital Stock and Stock Award Plans

Visteon was incorporated in Delaware in January 2000 with an initial capitalization of 10,000 shares of $1.00 par value common stock authorized and 1,000 shares of common stock outstanding. Through an amendment to its certificate of incorporation, the number of common shares authorized and outstanding was increased to 500 million and 130 million, respectively. In addition, 50 million shares of preferred stock, par value $1.00 per share, were authorized, none of which have been issued.

The Visteon Corporation 2000 Incentive Plan (“Incentive Plan”), which is administered by the Compensation Committee of the Board of Directors, provides for the grant of incentive and nonqualified stock options, stock appreciation rights, performance stock rights and stock, and various other rights based on stock. The Visteon Corporation Employees Equity Incentive Plan (“EEIP”), which is administered by an Administrator appointed by the Board of Directors, provides for the grant of nonqualified stock options, stock appreciation rights, performance stock rights and stock, and various other rights based on stock. The Visteon Corporation Restricted Stock Plan for Non-Employee Directors provides for the grant of restricted stock to non-employee directors. The total number of shares of common stock subject to awards under the Incentive Plan and EEIP is 13 million and 6.5 million shares of common stock, respectively. At December 31, 2002, there were 4.5 million and 4 million shares of common stock available for grant under the Incentive Plan and EEIP, respectively. All plans have been approved by shareholders.

Stock options granted under the Incentive Plan or the EEIP have an exercise price equal to the average of the highest and lowest prices at which Visteon common stock was traded on the New York Stock Exchange on the date of grant. Stock options that have been granted become exercisable one-third after one year from the date of grant, an additional one-third after two years and in full after three years, and expire 10 years from the date of grant.

Effective at the date of spin-off and subject to shareholder approval, Visteon granted under the Incentive Plan to some employees about 2 million stock options with an exercise price equal to the average of the highest and lowest prices at which Visteon common stock was traded on the New York Stock Exchange on that date. Shareholder approval was obtained in May 2001 for the grant of these stock options. The difference between the exercise price and the average price of Visteon common stock on the date of shareholder approval will be recognized as compensation expense over the vesting period. Stock option compensation expense before taxes was $3 million and $4 million in 2002 and 2001, respectively.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 9. Capital Stock and Stock Award Plans — (Continued)

Information concerning stock options is as follows:


					Weighted Average
		Shares			Exercise Price

		(in thousands)
Outstanding at December 31, 2000			—		$	—
Granted			5,193			15.60
Exercised			(172	)		13.09
Terminated			(89	)		15.08

Outstanding at December 31, 2001			4,932		$	15.74
Granted			3,491			13.45
Exercised			(24	)		11.96
Terminated			(494	)		15.10

Outstanding at December 31, 2002			7,905		$	14.78

Outstanding but not exercisable at December 31, 2002			5,844

	Exercisable at December 31, 2002		2,061		$	15.05

The following is a summary of the range of exercise prices for stock options that are outstanding and exercisable at December 31, 2002:



	Options Outstanding						Options Exercisable

			Weighted		Weighted				Weighted
Range of	Number		Average		Average		Number		Average
Exercise Prices	Outstanding		Remaining Life		Exercise Price		Exercisable		Exercise Price

	(in thousands)		(in years)				(in thousands)
$ 7.00 - $12.00		72		9.30	$	8.64		11	$	10.13
12.01 - 17.00		5,150		8.58		13.43		1,155		13.18
17.01 - 22.00		2,683		8.36		17.53		895		17.53

		7,905						2,061

Under the Incentive Plan, Visteon has granted restricted stock awards to certain employees with a price equal to the average of the highest and lowest prices at which Visteon common stock was traded on the New York Stock Exchange on the grant date. Restricted stock awards vest after a designated period of time, which is generally five years, or upon the achievement of applicable performance goals at the completion of a performance period, which is generally three years. Performance goals are related to return on equity and quality measures. Compensation expense related to performance-based restricted stock awards is recognized over the performance period based upon an estimate of the likelihood of achieving the performance goals and also reflects changes in the price of Visteon common stock. Restricted stock awards issued to the company’s Board of Directors vest on the third anniversary of the date of the grant. Restricted stock compensation expense before taxes was $3 million and $9 million in 2002 and 2001, respectively.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 9. Capital Stock and Stock Award Plans — (Continued)

Information concerning restricted stock awards is as follows:


					Weighted
		Shares			Average Price

		(in thousands)
Outstanding at December 31, 2000			—		$	—
Granted			1,892			17.39
Lapsed			(65	)		17.46
Terminated			(178	)		17.46

Outstanding at December 31, 2001			1,649		$	17.38
Granted			1,345			13.20
Lapsed			(79	)		17.46
Terminated			(201	)		16.26

	Outstanding at December 31, 2002		2,714		$	15.39

NOTE 10. Litigation and Claims

Various legal actions, governmental investigations and proceedings and claims are pending or may be instituted or asserted in the future against Visteon, including those arising out of alleged defects in Visteon’s products; governmental regulations relating to safety; employment-related matters; customer, supplier and other contractual relationships; intellectual property rights; product warranties; and environmental matters. Some of the foregoing matters involve or may involve compensatory, punitive, or antitrust or other treble damage claims in very large amounts, or demands for recall campaigns, environmental remediation programs, sanctions, or other relief which, if granted, would require very large expenditures.

Litigation is subject to many uncertainties, and the outcome of individual litigated matters is not predictable with assurance. Reserves have been established by Visteon for matters discussed in the foregoing paragraph where losses are deemed probable; these reserves are adjusted periodically to reflect estimates of ultimate probable outcomes. It is reasonably possible, however, that some of the matters discussed in the foregoing paragraph for which reserves have not been established could be decided unfavorably to Visteon and could require Visteon to pay damages or make other expenditures in amounts, or a range of amounts, that cannot be estimated at December 31, 2002. Visteon does not reasonably expect, based on its analysis, that any adverse outcome from such matters would have a material effect on our financial condition, results of operations or cash flows, although such an outcome is possible.

In July 2002, Visteon entered into an agreement to consolidate the resolution of various pending employment-related claims and litigation relating to allegations made by current and former employees at a Michigan facility. The amounts paid pursuant to this agreement were in line with reserves established in the second quarter of 2002.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 11. Arrangements with Ford and its Affiliates

Revenues from Ford and its affiliates approximated 80% in 2002, 82% in 2001 and 84% in 2000 of total sales.

Master Transfer Agreement

The master transfer agreement, effective as of April 1, 2000, provided for Ford to transfer to Visteon and/or its subsidiaries, all assets used exclusively by Visteon, including but not limited to real property interests, personal property and ownership interests in subsidiaries and joint ventures.

Supply Agreement and Pricing Letter Agreement

The supply agreement provides that Visteon’s existing purchase orders with Ford as of January 1, 2000, will generally remain in effect at least through the end of 2003, subject to Ford’s right to terminate any particular purchase order for quality or other reasons. In addition, the pricing letter required a one-time 5% price reduction on products that Visteon was supplying to Ford as of January 1, 2000, based on a market pricing review conducted by Ford and Visteon. The pricing letter also requires productivity price adjustments in each of 2000, 2001, 2002 and 2003 to reflect competitive price reductions obtained each year by Ford from its other Tier 1 suppliers. Visteon and Ford agreed on a 3.5% productivity price reduction for 2000 on such products. In March 2002, Visteon and Ford reached agreement regarding disputed North American pricing for 2001 as well as general consensus on issues relating to productivity price adjustments for 2002 and 2003. Subsequently in June 2002, Visteon and Ford reached agreement regarding disputed European pricing for 2001 and 2002, as well as certain other commercial matters.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 11. Arrangements with Ford and its Affiliates — (Continued)

Master Separation Agreement

Ford provides a number of transitional services to Visteon pursuant to the master separation agreement and related arrangements, including information technology, human resources, accounting, customs, product development technology and real estate services. Visteon agreed to pay Ford amounts which reflect its fully accounted cost for these services, including a reasonable allocation of internal overhead costs, as well as any direct costs incurred from outside suppliers. Except for certain information technology services, Ford’s obligation to provide these services pursuant to the master separation agreement expired in June 2002, and Visteon and Ford are in the process of negotiating new arrangements covering many of these services. For periods prior to and including our spin-off, assessments for these services totaled approximately $179 million in 2000.

Hourly Employee Assignment Agreement

The hourly employee assignment agreement sets forth a number of rights and obligations with respect to the United States hourly employees of Ford who (i) were represented by the UAW, (ii) were covered by the Ford UAW Master Collective Bargaining Agreement dated as of September 30, 1999, (iii) were employed in one of Visteon’s facilities as of the date of the spin-off and (iv) after Visteon’s spin-off were assigned to work for Visteon.

Under this agreement, Visteon exercises day-to-day supervision over the covered individuals and Ford will continue to provide the same employee benefits generally offered to other hourly employees of Ford who are represented by the UAW. Visteon reimburses Ford for the wage, benefit and other costs incurred by Ford related to these individuals. However, Visteon’s reimbursement obligation for profit sharing based on Ford’s profits is limited to $50 million per year in each of 2000-2004. After 2004, Visteon will be responsible to reimburse Ford for the full amount of profit sharing based on Ford’s profits.

NOTE 12. Financial Instruments

Fair Value of Financial Instruments

Estimated fair value amounts have been determined using available market information and various valuation methods depending on the type of instrument. In evaluating the fair value information, considerable judgment is required to interpret the market data used to develop the estimates. The use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value amounts. Further, it should be noted that fair value at a particular point in time gives no indication of future gain or loss, or what the dimensions of that gain or loss are likely to be.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 12. Financial Instruments — (Continued)

The fair value of debt was $1,698 million at December 31, 2002, based on quoted market prices or current rates for similar debt with the same remaining maturities, compared with book value of $1,646 million. The fair value of debt approximated $1,954 million at December 31, 2001. The notional amount of interest rate swaps was $790 million and $500 million, respectively, at December 31, 2002 and 2001. The fair market value of the interest rate swaps was an asset of $39 million and a liability of $9 million at December 31, 2002 and 2001, respectively, with an offsetting amount recorded in long-term debt.

The fair value of foreign currency instruments was estimated using current market rates provided by outside quotation services. The notional amount of foreign currency instruments in equivalent U.S. dollars was $1,007 million and $949 million at December 31, 2002 and 2001, respectively. The notional amount represents the contract amount, not the amount at risk. The fair value of the company’s foreign currency instruments was a liability of $36 million and an asset of $9 million at December 31, 2002 and 2001, respectively.

The notional amount of commodity derivatives was $29 million and $4 million at December 31, 2002 and 2001, respectively. The fair market value of commodity derivatives was an asset of $7 million and less than $1 million at December 31, 2002 and 2001, respectively.

Total realized and unrealized gains and losses on derivatives, net of tax, as a component of accumulated other comprehensive income reduced stockholders’ equity by $8 million at December 31, 2002 and increased stockholders’ equity by $5 million at December 31, 2001. It is anticipated that approximately $10 million of deferred net losses, net of tax, will be reclassified from accumulated other comprehensive income to earnings over the next 12 months as the anticipated underlying transactions occur.

Concentration of Credit Risk

Financial instruments, including cash equivalents, marketable securities, derivative contracts and accounts receivable, expose us to counterparty credit risk for non-performance. Our counterparties for cash equivalents, marketable securities and derivative contracts are banks and financial institutions that meet our requirement of high credit standing. Our counterparties for derivative contracts are substantial investment and commercial banks with significant experience using such derivatives. We manage our credit risk through policies requiring minimum credit standing and limiting credit exposure to any one counterparty, and through monitoring counterparty credit risks. Our concentration of credit risk related to derivative contracts at December 31, 2002, was not significant.

With the exception of accounts receivable from Ford and its affiliates, the company has no significant concentration of credit risk with any individual customer. Management periodically performs credit evaluations of its customers and generally does not require collateral.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 13. Acquisitions, Dispositions and Special Charges

2002 Actions

Visteon recorded total costs of $223 million of pre-tax charges, with $200 million in costs of sales and $23 million in selling, administrative and other expenses, as summarized below:



			2002

			Pre-tax			After-tax


			(in millions)
Restructuring and other charges:
	2002 actions*		$	209		$	134
	Adjustments to prior year’s expenses			(12	)		(8	)

		Total restructuring and other charges		197			126
Loss related to sale of restraint electronics business				26			16

		Total special charges	$	223		$	142


*	2002 amount includes $5 million related to the write-down of inventory.

In the first quarter of 2002, Visteon recorded pre-tax charges of $95 million related to the separation of 820 employees at Markham, Ontario, as a result of the company’s decision to move nearly all of the non-restraint electronics business to facilities in Mexico, the elimination of about 215 engineering positions in the United States to reduce research and development costs, the closure of our Visteon Technologies facility in California and the related discontinuation of support for our aftermarket navigation systems product line, the closure of our Leatherworks facility in Michigan and the elimination of about 240 manufacturing positions in Mexico. Included in the $95 million pre-tax change is $12 million of non-cash charges related to the write-down of equipment to be disposed of and the write-down of aftermarket navigation systems inventory. The engineering-related and Mexican manufacturing-related separations, and the closure of Visteon Technologies, were completed in the first quarter of 2002. The Leatherworks facility was closed in the third quarter of 2002. As of December 31, 2002, Visteon completed moving all of the non-restraint electronics business to other facilities and has separated substantially all Markham employees.

Effective April 1, 2002, Visteon completed the sale of its restraint electronics business to Autoliv, Inc. for $25 million, resulting in a pre-tax charge in the first quarter of 2002 of $26 million ($16 million after-tax) recorded in costs of sales. The sale includes Visteon’s North American and European order book of approximately $150 million in annual sales to Ford Motor Company and its affiliates, and associated manufacturing operations in Markham, Ontario, as well as related assets and liabilities. As part of the sale, approximately 280 employees from Markham and about 95 engineers from Dearborn, Michigan, transferred to Autoliv.

During the third quarter of 2002, Visteon recorded a pre-tax charge in costs of sales of $26 million ($17 million after-tax) related to restructuring manufacturing operations in the UK, Germany and France. Of this charge, $10 million is related to the separation of about 138 hourly employees located at Visteon’s plants in Germany through a special voluntary retirement and separation program. The remaining $16 million is a non-cash impairment charge related to a group of machinery and equipment in Europe for which production activities will be discontinued and the future undiscounted cash flows are less than the carrying value of the assets held for use. Visteon measured the impairment loss by comparing the carrying value of these fixed assets to the expected proceeds from disposal of the assets after completion of remaining production commitments.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 13. Acquisitions, Dispositions and Special Charges — (Continued)

In the fourth quarter of 2002, Visteon recorded pre-tax charges of $88 million ($56 million after-tax), with $65 million in costs of sales and $23 million in selling, administrative and other expenses costs, related to restructuring actions. Of this charge, $71 million is related to the separation of about 308 U.S. salaried employees through a special voluntary early retirement and separation program and $14 million related to the separation of about 200 hourly employees located at Visteon’s plants in Europe through a continuation of a special voluntary retirement and separation program started in the third quarter of 2002. The remaining balance of the charge is related to the elimination of about 189 manufacturing positions in Brazil and other minor actions. The separation of the 308 U.S. salaried employees will take place at various times during 2003.

Accrued restructuring liabilities relating to prior year restructuring plans of $5 million ($3 million after-tax) and $7 million ($5 million after-tax) were credited to costs of sales in the first and fourth quarters of 2002, respectively, reflecting a change in estimated costs to complete these activities.

2001 Actions

During the second quarter of 2001, Visteon recorded pre-tax charges of $158 million ($100 million after-tax), of which $146 million related to the elimination of more than 2,000 salaried positions, mainly in the United States, and $12 million related to the closure of two European facilities, ZEM in Poland and Wickford in the U.K., and other actions. Of the total pre-tax charges, $42 million is recorded in selling, administrative and other expenses and $116 million is recorded in costs of sales.

During the third quarter of 2001, Visteon recorded a pre-tax charge of $34 million ($21 million after-tax) in costs of sales related to special voluntary retirement and separation programs offered to hourly employees located at Visteon’s Nashville Glass plant. This action resulted in the separation of about 245 employees during the third quarter of 2001.

2000 Actions

Visteon recorded a pre-tax charge of approximately $13 million ($8 million after-tax) and $5 million ($3 million after-tax) in the second and third quarters of 2000, respectively, for Visteon employees that were part of special voluntary retirement and separation programs.

In December 2000, Visteon recorded a pre-tax, non-cash impairment write-down of $220 million ($138 million after-tax) in costs of sales to reduce the net book value of the assets associated with the Glass Operations segment to estimated fair value. The write-down was related to property and equipment located primarily at Visteon’s Nashville and Tulsa plants, and was determined on a “held for use” basis. The write-down reflects revised operating projections following the end of discussions regarding a joint venture involving the business, which considered factors including the reduction in estimates of automotive production due to softening market conditions, increased natural gas costs and failure to obtain new business and achieve operational cost savings included in earlier projections.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 13. Acquisitions, Dispositions and Special Charges — (Continued)

In October 2000, the sale of Visteon’s 49% interest in the “Conix Group,” comprised of Conix Corporation, Conix Canada Inc., Conix Belgium N.V. and Conix U.K. Limited, to Decoma International, Inc., was completed. The sale price for the Visteon interest was $140 million, which was satisfied by a cash payment of $50 million and $90 million of 9.5% subordinated Decoma debentures due in 2003, resulting in an after-tax gain of about $20 million, which is included in equity in net income of affiliated companies on the Consolidated Statement of Income. Visteon received payment of the 9.5% subordinated Decoma debentures in 2001. Cash proceeds received from the sale of the “Conix Group” in 2000 and 2001 are classified as cash flows from investing activities on the accompanying Consolidated Statement of Cash Flows.

Reserve Activity

Reserve balances of $37 million and $23 million at December 31, 2002 and 2001, respectively, are included in current accrued liabilities on the accompanying balance sheets. The December 31, 2002, reserve balance of $37 million includes $3 million related to 2001 restructuring activities. The company currently anticipates that the restructuring activities to which all of the above charges relate will be substantially completed by the end of 2003.



			Automotive Operations						Glass Operations

			Employee-Related			Other			Employee-Related			Total


			(in millions)
December 31, 2000 reserve balances			$	—		$	—		$	—		$	—
	Second quarter 2001 actions			137			5			16			158
	Third quarter 2001 actions			—			—			34			34

		Total net expense		137			5			50			192
	Utilization			(120	)		(5	)		(44	)		(169	)

December 31, 2001 reserve balances				17			—			6			23
	First quarter 2002 actions			81			14			—			95
	Third quarter 2002 actions			10			16			—			26
	Fourth quarter 2002 actions			83			—			5			88
	Adjustments to prior year’s expenses			(9	)		—			(3	)		(12	)

		Total net expense		165			30			2			197
	Utilization			(147	)		(30	)		(7	)		(184	)
	Foreign exchange translation			1			—			—			1

December 31, 2002 reserve balances			$	36		$	—		$	1		$	37

Utilization for 2001 of $169 million includes $94 million of cash payments mainly for severance pay, $70 million incurred related to special pension and other postretirement benefits and $5 million related to the non-cash write-down of certain plant assets. Utilization for 2002 of $184 million includes $111 million incurred related to special pension and other postretirement benefits, $43 million of cash payments mainly for severance pay, $28 million related to the non-cash write-down of certain plant assets and inventory and $2 million of cash payments for other exit costs.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 14. Accounting Change

Effective January 1, 2002, Visteon adopted Financial Accounting Standards No. 142 (“SFAS 142”), “Goodwill and Other Intangible Assets.” SFAS 142 no longer permits amortization of goodwill and establishes a new method of testing goodwill for impairment by using a fair-value based approach. Under previous accounting standards, Visteon evaluated goodwill for possible impairment by comparing operating income before amortization of goodwill to the amortization recorded for each of the acquired operations to which the goodwill related. Goodwill is related primarily to the acquisition of the interiors division of Compagnie Plastic Omnium and the increase of Visteon’s ownership in Halla Climate Corporation to 70% by purchasing an additional 35%, both of which occurred in 1999.

SFAS 142 requires goodwill to be evaluated for possible impairment as of January 1, 2002, and periodically thereafter, using a fair-value approach. An initial test for goodwill impairment using a fair-value approach was performed for the Automotive Operations reporting unit by comparing the estimated fair value of our Automotive Operations reporting unit to its net book value. Visteon’s stock market capitalization, as well as market multiples and other factors, were used as the basis for determining the fair value of the Automotive Operations reporting unit. Because the fair value of the Automotive Operations reporting unit was considered less than its net book value, Visteon recorded an impairment loss on goodwill of $363 million ($265 million after-tax) as a cumulative effect of change in accounting principle in the first quarter of 2002. The pre-tax impairment loss consists of $357 million of net goodwill as of December 31, 2001, and $6 million reclassified to goodwill related to certain acquired intangible assets, as required by SFAS 142.

The following presents net income and earnings per share, adjusted to reflect the adoption of the non-amortization provisions of SFAS 142, as of the beginning of the periods presented:


		2002			2001			2000


		(in millions, except
		per share amounts)
Net Income (Loss)
Reported net income (loss)		$	(352	)	$	(118	)	$	270
Goodwill amortization, net of tax			—			17			18

	Adjusted net income (loss)	$	(352	)	$	(101	)	$	288

Earnings (Loss) Per Share — Basic and Diluted
Reported earnings (loss) per share		$	(2.75	)	$	(0.91	)	$	2.08
Goodwill amortization, net of tax			—			0.13			0.14

	Adjusted earnings (loss) per share	$	(2.75	)	$	(0.78	)	$	2.22

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 15. Cash Flows

The reconciliation of net income to cash flows provided by (used in) operating activities is as follows:


			2002			2001			2000


			(in millions)
Net income (loss)			$	(352	)	$	(118	)	$	270
Adjustment to reconcile net income (loss) to cash flows from operating activities:
	Cumulative effect of change in accounting, net of tax			265			—			—
	Depreciation and amortization			631			666			676
	Asset impairment charge related to Glass Operations segment			—			—			220
	Loss (gain) on divestitures			26			—			(21	)
	Earnings of affiliated companies in excess of dividends remitted			(28	)		(12	)		(18	)
	Provision for deferred income taxes			(142	)		(143	)		(87	)
	Sale of receivables			10			—			—
	Changes in assets and liabilities:
		Decrease (increase) in accounts receivable and other current assets		276			(197	)		(85	)
		Decrease (increase) in inventory		85			86			(205	)
		Increase (decrease) in accounts payable, accrued and other liabilities		94			(185	)		(1,690	)
		Increase in postretirement benefits other than pensions		258			256			243
	Other			23			83			171

Cash flows provided by (used in) operating activities			$	1,146		$	436		$	(526	)

Cash paid for interest and income taxes was as follows:


	2002		2001		2000


	(in millions)
Interest	$	120	$	131	$	138
Income taxes		80		44		243

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 16. Segment Information

Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information,” establishes standards for reporting information about operating segments in annual financial statements and requires reporting selected information about operating segments in interim financial reports. It also establishes standards for related disclosures about products and services and geographic operations.

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-makers, or a decision-making group, in deciding how to allocate resources and in assessing performance. Visteon’s chief operating decision-making group is the Strategy Council, which is comprised of the Chairman and Chief Executive Officer and several other senior executives.

Visteon’s organization is focused on customer business groups, and supported by centralized product development, manufacturing and administrative functions. Consistent with this organization, Visteon’s reportable operating segments are Automotive Operations and Glass Operations. Automotive Operations provides various automotive systems and components mainly to OEM customers; Glass Operations supplies architectural and flat glass to a broad customer base, including OEMs.

The accounting policies for the operating segments are the same as those described in Note 2, “Accounting Policies,” of our consolidated financial statements. Visteon evaluates the performance of its operating segments based primarily on sales, income before taxes and net income.

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 16. Segment Information — (Continued)

Financial information for the reportable operating segments is summarized as follows:


		Automotive			Glass			Total
		Operations			Operations			Visteon


		(in millions)
2002
Sales		$	17,797		$	598		$	18,395
Income (loss) before income taxes			(138	)		21			(117	)
Cumulative effect of change in accounting, net of tax			265			—			265
Net income (loss)			(367	)		15			(352	)
Depreciation/ amortization			625			6			631
Capital expenditures			716			7			723
Unconsolidated affiliates:
	Equity in net income		39			5			44
	Investments in		171			20			191
Total assets, end of period			10,908			262			11,170
2001
Sales		$	17,222		$	621		$	17,843
(Loss) before income taxes			(110	)		(59	)		(169	)
Net (loss)			(83	)		(35	)		(118	)
Depreciation/ amortization			661			5			666
Capital expenditures			744			8			752
Unconsolidated affiliates:
	Equity in net income		19			5			24
	Investments in		140			18			158
Goodwill, end of period			363			—			363
Total assets, end of period			10,853			309			11,162
2000
Sales		$	18,721		$	746		$	19,467
Income (loss) before income taxes			689			(250	)		439
Net income (loss)			426			(156	)		270
Depreciation/ amortization			641			35			676
Capital expenditures			771			22			793
Unconsolidated affiliates:
	Equity in net income		50			6			56
	Investments in		122			20			142
Goodwill, end of period			394			—			394
Total assets, end of period			11,116			289			11,405

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 16. Segment Information — (Continued)

Visteon’s major geographic areas are the United States and Europe. Other geographic areas (primarily Canada, Mexico, South America and Asia Pacific) individually are not material. Financial information segregated by geographic area is as follows:


							Total
Geographic Areas	United States		Europe		All Other		Visteon


	(in millions)
2002
Sales	$	13,093	$	2,878	$	2,424	$	18,395
Net property		3,196		1,404		843		5,443
2001
Sales	$	12,677	$	2,781	$	2,385	$	17,843
Net property		3,179		1,249		901		5,329
2000
Sales	$	14,374	$	2,560	$	2,533	$	19,467
Net property		3,253		1,339		905		5,497

Visteon’s sales by group of similar products is as follows:


Product Groups			2002			2001


			(in millions)
Automotive Operations
	Chassis Products & Systems		$	4,544		$	4,584
	Interior Products & Systems			3,982			3,507
	Climate Control Products & Systems			3,786			3,443
	Powertrain Products & Systems			3,320			3,246
	Electronic Products & Systems			2,233			2,198
	Exterior Products & Systems			814			744
	Eliminations			(882	)		(500	)

		Total Automotive Operations		17,797			17,222
Glass Operations				598			621

		Total Visteon	$	18,395		$	17,843

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

NOTE 17. Summary Quarterly Financial Data (Unaudited)



	2002											2001

	First			Second		Third			Fourth			First		Second			Third			Fourth
	Quarter			Quarter		Quarter			Quarter			Quarter		Quarter			Quarter			Quarter


	(in millions, except per share amounts)
Sales	$	4,469		$	5,039	$	4,344		$	4,543		$	4,723	$	4,905		$	3,722		$	4,493
Operating income (loss)		(89	)		127		(75	)		(44	)		68		(42	)		(131	)		(12	)
Income (loss) before income taxes		(107	)		117		(78	)		(49	)		55		(57	)		(146	)		(21	)
Net income (loss)		(338	)		72		(52	)		(34	)		31		(40	)		(95	)		(14	)
Earnings (loss) per share	$	(2.63	)	$	0.56	$	(0.40	)	$	(0.27	)	$	0.24	$	(0.31	)	$	(0.74	)	$	(0.11	)

As discussed further in Note 13 of our consolidated financial statements, Visteon recorded pre-tax charges of $116 million, $26 million and $81 million in the first quarter, third quarter and fourth quarter of 2002, respectively, related to various special charges from restructuring actions and the sale of the restraint electronics business. As discussed further in Note 14 of our consolidated financial statements, results for the first quarter of 2002 include an impairment loss on goodwill of $363 million ($265 million after-tax) as a cumulative effect of change in accounting principle.

Results for the fourth quarter of 2001 include approximately $40 million of pre-tax income related to adjustments made to estimated provisions for various employee fringe benefit accruals recorded during the first nine months of 2001.

As discussed further in Note 13 of our consolidated financial statements, Visteon recorded a pre-tax charge of $158 million in the second quarter of 2001 related to the elimination of more than 2,000 salaried positions worldwide and the closure of two European facilities and other actions. In addition, Visteon recorded a pre-tax charge of $34 million in the third quarter of 2001 for special voluntary retirement and separation programs.

Note 18. Subsequent Event

EXHIBIT INDEX


Exhibit
Number		Exhibit Name

	3.1	Amended and Restated Certificate of Incorporation of Visteon Corporation (“Visteon”) is incorporated herein by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q of Visteon dated July 24, 2000.
	3.2	Amended and Restated By-laws of Visteon as in effect on the date hereof is incorporated herein by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q of Visteon dated November 14, 2001.
	4.1	Indenture dated as of June 23, 2000 between Visteon and Bank One Trust Company, N.A., as Trustee, is incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K of Visteon dated July 31, 2000 (filed August 16, 2000).
	4.2	Form of Common Stock Certificate of Visteon is incorporated herein by reference to Exhibit 4.1 to Amendment No. 1 to the Registration Statement on Form 10 of Visteon dated May 19, 2000.
	10.1	Master Transfer Agreement dated as of March 30, 2000 between Visteon and Ford Motor Company (“Ford”) is incorporated herein by reference to Exhibit 10.2 to the Registration Statement on Form S-1 of Visteon dated June 2, 2000 (File No. 333-38388).
	10.2	Purchase and Supply Agreement dated as of January 1, 2000 between Visteon and Ford is incorporated herein by reference to Exhibit 10.3 to the Registration Statement on Form S-1 of Visteon dated June 2, 2000 (File No. 333-38388).
	10.3	Letter Relating to Price Reductions dated March 31, 2000 from Ford is incorporated herein by reference to Exhibit 10.3.1 to the Registration Statement on Form S-1 of Visteon dated June 2, 2000 (File No. 333-38388).
	10.4	Master Separation Agreement dated as of June 1, 2000 between Visteon and Ford is incorporated herein by reference to Exhibit 10.4 to Amendment No. 1 to the Registration Statement on Form S-1 of Visteon dated June 6, 2000 (File No. 333-38388).
	10.5	Aftermarket Relationship Agreement dated as of January 1, 2000 between Visteon and the Automotive Consumer Services Group of Ford is incorporated herein by reference to Exhibit 10.5 to Amendment No. 1 to the Registration Statement on Form 10 of Visteon dated May 19, 2000.
	10.6	Hourly Employee Assignment Agreement dated as of April 1, 2000 between Visteon and Ford is incorporated herein by reference to Exhibit 10.6 to Amendment No. 1 to the Registration Statement on Form 10 of Visteon dated May 19, 2000.
	10.7	Employee Transition Agreement dated as of April 1, 2000 between Visteon and Ford is incorporated herein by reference to Exhibit 10.7 to Amendment No. 1 to the Registration Statement on Form 10 of Visteon dated May 19, 2000.
	10.8	Tax Sharing Agreement dated as of June 1, 2000 between Visteon and Ford is incorporated herein by reference to Exhibit 10.8 to the Registration Statement on Form S-1 of Visteon dated June 2, 2000 (File No. 333-38388).
	10.9	Visteon Corporation 2000 Incentive Plan is incorporated herein by reference to Appendix E to the Proxy Statement of Visteon dated March 26, 2001.*
	10.10	Form of Revised Change in Control Agreement is incorporated herein by reference to Exhibit 10.10 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2000.*


Exhibit
Number		Exhibit Name

	10.10.1	Schedule identifying substantially identical agreements to Revised Change in Control Agreement constituting Exhibit 10.10 hereto entered into by Visteon with Messrs. Pestillo, Johnston, Coulson, Orchard and Marcin, and Ms. Fox.*
	10.11	Issuing and Paying Agency Agreement dated as of June 5, 2000 between Visteon and The Chase Manhattan Bank is incorporated herein by reference to Exhibit 10.11 to the Quarterly Report on Form 10-Q of Visteon dated July 24, 2000.
	10.12	Corporate Commercial Paper — Master Note dated June 1, 2000 is incorporated herein by reference to Exhibit 10.12 to the Quarterly Report on Form 10-Q of Visteon dated July 24, 2000.
	10.13	Letter Loan Agreement dated as of June 12, 2000 from The Chase Manhattan Bank is incorporated herein by reference to Exhibit 10.13 to the Quarterly Report on Form 10-Q of Visteon dated July 24, 2000.
	10.14	Visteon Corporation Deferred Compensation Plan for Non-Employee Directors is incorporated herein by reference to Exhibit 10.14 to the Annual Report on Form 10-K of Visteon for the period ended December 31, 2000.*
	10.15	Visteon Corporation Restricted Stock Plan for Non-Employee Directors is incorporated herein by reference to Appendix F to the Proxy Statement of Visteon dated March 26, 2001.*
	10.16	Visteon Corporation Deferred Compensation Plan, as amended.*
	10.17	Visteon Corporation Savings Parity Plan.*
	10.18	Visteon Corporation Pension Parity Plan.*
	10.19	Visteon Corporation Supplemental Executive Retirement Plan.*
	10.20	Executive Employment Agreement dated as of September 15, 2000 between Visteon and Michael F. Johnston is incorporated herein by reference to Exhibit 10.20 to the Annual Report on Form 10-K for the period ended December 31, 2001.*
	10.21	Service Agreement dated as of November 1, 2001 between Visteon International Business Development, Inc., a wholly-owned subsidiary of Visteon, and Dr. Heinz Pfannschmidt.*
	10.22	Visteon Corporation Executive Separation Allowance Plan.*
	10.23	Trust Agreement dated as of February 7, 2003 between Visteon and The Northern Trust Company establishing a grantor trust for purposes of paying amounts to certain executive officers under the plans constituting Exhibits 10.14, 10.16, 10.17, 10.18, 10.19 and 10.22 hereto.*
	10.24	Five-Year Revolving Loan Credit Agreement dated as of June 20, 2002 among Visteon, the several banks and other financial institutions or entities from time to time parties to the agreement, JPMorgan Chase Bank, as administrative agent, and Bank of America N.A., as syndication agent.
	10.25	364-Day/ 1-Year Term-Out Credit Agreement dated as of June 20, 2002 among Visteon, the several banks and other financial institutions or entities from time to time parties to the agreement, JPMorgan Chase Bank, as administrative agent, and Bank of America N.A., as syndication agent.
	10.26	Five-Year Term Loan Credit Agreement dated as of June 25, 2002 among Visteon, the several banks and other financial institutions or entities from time to time parties to the agreement, JPMorgan Chase Bank, as administrative agent, and Bank of America N.A., as syndication agent.
	12.1	Statement re: Computation of Ratios.


Exhibit
Number		Exhibit Name

	21.1	Subsidiaries of Visteon.
	23.1	Consent of Independent Accountants, PricewaterhouseCoopers LLP.
	24.1	Powers of Attorney relating to execution of this Annual Report on Form 10-K.
	99.1	Risk Factors.
	99.2	Written Statement of Chief Executive Officer dated February 14, 2003.
	99.3	Written Statement of Chief Financial Officer dated February 14, 2003.


*	Indicates that exhibit is a management contract or compensatory plan or arrangement.

In lieu of filing certain instruments with respect to long-term debt of the kind described in Item 601(b)(4) of Regulation S-K, Visteon agrees to furnish a copy of such instruments to the Securities and Exchange Commission upon request.


                                                                 EXHIBIT 10.10.1

Schedule identifying substantially identical agreements, between Visteon
Corporation ("Visteon") and each of the persons named below, to the Revised
Change in Control Agreement constituting Exhibit 10.10 to the Annual Report on
Form 10-K of Visteon for the period ended December 31, 2002.



                                      Name
                                      ----
                                  Peter J. Pestillo

                                  Michael F. Johnston

                                  Daniel R. Coulson

                                  James C. Orchard

                                  Stacy L. Fox

                                  Robert H. Marcin


                                                                   EXHIBIT 10.16










                               VISTEON CORPORATION
                           DEFERRED COMPENSATION PLAN

                             Effective July 1, 2000
            (Together With All Amendments Through December 11, 2002)






                               VISTEON CORPORATION
                           DEFERRED COMPENSATION PLAN

                  The Visteon Corporation Deferred Compensation Plan (the
"Plan") has been adopted to promote the best interests of Visteon Corporation
(the "Company") and the stockholders of the Company by attracting and retaining
key management employees possessing a strong interest in the successful
operation of the Company and its subsidiaries or affiliates and encouraging
their continued loyalty, service and counsel to the Company and its subsidiaries
or affiliates. The Plan is adopted effective July 1, 2000.



                                      2




                    ARTICLE I. DEFINITIONS AND CONSTRUCTION

         Section 1.01. Definitions.

                  The following terms have the meanings indicated below unless
the context in which the term is used clearly indicates otherwise:

         (a)    Account: The record keeping account maintained to record the
interest of each Participant under the Plan. An Account is established for
record keeping purposes only and not to reflect the physical segregation of
assets on the Participant's behalf, and may consist of such subaccounts or
balances as the Committee may determine to be necessary or appropriate.

         (b)    Beneficiary: The person or entity designated by a Participant
to be his beneficiary for purposes of this Plan (subject to such limitations as
to the classes and number of beneficiaries and contingent beneficiaries and such
other limitations as the Committee may prescribe). A Participant's designation
of Beneficiary shall be valid and in effect only if a properly executed
designation, in such form as the Committee shall prescribe, is filed and
received by the Committee or its delegate prior to the Participant's death. If a
Participant designates his or her spouse as Beneficiary, such designation
automatically shall become null and void on the date of the Participant's
divorce or legal separation from such spouse. If a valid designation of
Beneficiary is not in effect at the time of the Participant's death, the estate
of the Participant is deemed to be the sole Beneficiary. If multiple
beneficiaries have been designated and one or more of the Beneficiaries
predecease the Participant, then upon the Participant's death, payment shall be
made exclusively to the surviving Beneficiary or Beneficiaries unless the
Participant's designation specifies an alternate method of distribution.
Further, in the event that the Committee is uncertain as to the identity of the
Participant's Beneficiary, the Committee may deem the estate of the Participant
to be the sole Beneficiary. Beneficiary designations shall be in writing (or in
such other form as authorized by the Committee for this purpose, which may
include on-line designations), shall be filed with the Committee or its
delegate, and shall be in such form as the Committee may prescribe for this
purpose.

         (c)    Board: The Board of Directors of the Company.



                                      3


         (d)    Code: The Internal Revenue Code of 1986, as interpreted by
regulations and rulings issued pursuant thereto, all as amended and in effect
from time to time. Any reference to a specific provision of the Code shall be
deemed to include reference to any successor provision thereto.

         (e)    Committee: The Organization and Compensation Committee of the
Board.

         (f)    Company: Visteon Corporation, or any successor thereto.

         (g)    Covered Employment Classification: The employment positions
classified by the Company (or by a Participating Affiliate with the consent of
the Company) as Leadership Levels One, Two, Three, Four, Five, Corporate
Officer, Executive Leader, Senior Leader, or Senior Manager/Senior Specialist.

         (h)    Deferrals: An amount credited, in accordance with a
Participant's election under Article III or as directed by the Committee, to the
Participant's Account in lieu of the payment of an equal amount of cash
compensation to the Participant.

         (i)    Employee: A person who is (i) classified by a Participating
Employer as a common law employee enrolled on the active employment rolls of the
Participating Employer, and (ii) regularly employed by the Participating
Employer on a salaried basis (as distinguished from an individual receiving a
pension, retirement allowance, severance pay, retainer, commission, fee under a
contract or other arrangement, or hourly, piecework or other wage).

         (j)    ERISA: The Employee Retirement Income Security Act of 1974, as
interpreted by regulations and rulings issued pursuant thereto, all as amended
and in effect from time to time. Any reference to a specific provision of ERISA
shall be deemed to include reference to any successor provision thereto.

         (k)    Exchange Act: The Securities Exchange Act of 1934, as
interpreted by regulations and rules issued pursuant thereto, all as amended and
in effect from time to time. Any reference to a specific provision of the
Exchange Act shall be deemed to include reference to any successor provision
thereto.

         (l)    Ford Common Stock: The common stock of Ford Motor Company.



                                      4


         (m)    Ford Stock Units: The hypothetical stock units having a value
based primarily on the value of Ford Common Stock.

         (n)    Incentive Plan: The Visteon Corporation 2000 Incentive Plan, as
amended (including for this purpose any predecessor or transitional short-term
or long-term incentive compensation program in effect for periods prior to
January 1, 2001), or any other incentive plan or plans that is subsequently
adopted by the Company as a successor thereto. Investment Options: Subject to
Section 4.04, the hypothetical investment accounts that the Committee may from
time to time establish, which may, but need not, be based upon one or more of
the investment options available under the Visteon Investment Plan. The
Committee may determine to discontinue any previously established Investment
Option, may make an Investment Option available only for reallocations or
transfer of Account balances out of it, and may determine the timing for any
applicable "sunset" period.

         (o)    Participant: An Employee who satisfies the participation
requirements of Section 2.01 and, where the context so requires, a former
Employee entitled to receive a benefit hereunder.

         (p)    Participating Employer: The Company, Visteon Systems LLC,
Visteon Global Technologies, Inc., and each other subsidiary a majority of the
voting stock of which is owned directly or indirectly by the Company, or a
limited liability company a majority of the membership interest of which is
owned directly or indirectly by the Company, that with the consent of the
Committee, participates in the Plan for the benefit of one or more Participants
in its employ.

         (q)    Plan: The Visteon Corporation Deferred Compensation Plan, as
amended and in effect from time to time.

         (r)    Visteon Common Stock: The common stock of the Company.

         (s)    Visteon Common Stock Fund: The Visteon Common Stock Fund that
is an available investment option under the Visteon Investment Plan.

         (t)    Visteon Investment Plan: The Visteon Investment Plan, as
amended and in effect from time to time.



                                       5


         (u)    Visteon Stock Units: The hypothetical stock units having a value
based primarily on the value of Visteon Common Stock. To the extent that a cash
dividend would have been payable with respect to the Visteon Stock Units had the
Units been actual shares of Visteon Common Stock, the amount of the cash
dividend shall be converted to Visteon Stock Units and credited to the
Participant's Account as such.

         Section 1.02. Construction and Applicable Law.

         (a)    Wherever any words are used in the masculine, they shall be
construed as though they were used in the feminine in all cases where they would
so apply; and wherever any words are use in the singular or the plural, they
shall be construed as though they were used in the plural or the singular, as
the case may be, in all cases where they would so apply. Titles of articles and
sections are for general information only, and the Plan is not to be construed
by reference to such items.

         (b)    This Plan is intended to be a plan of deferred compensation
maintained for a select group of management or highly compensated employees as
that term is used in ERISA, and shall be interpreted so as to comply with the
applicable requirements thereof. In all other respects, the Plan is to be
construed and its validity determined according to the laws of the State of
Michigan to the extent such laws are not preempted by federal law. In case any
provision of the Plan is held illegal or invalid for any reason, the illegality
or invalidity will not affect the remaining parts of the Plan, but the Plan
shall, to the extent possible, be construed and enforced as if the illegal or
invalid provision had never been inserted.



                                       6


                           ARTICLE II. PARTICIPATION

         Section 2.01. Eligibility.

         (a)    An Employee who is employed in a Covered Employment
Classification, and any other Employee who has been specifically designated for
participation by the Committee, shall be eligible to participate in the Plan.

         (b)    Notwithstanding anything is subsection (a) to the contrary,
participation in the Plan is limited to United States citizens (whether residing
in or outside of the United States) or citizens of another country permanently
assigned to and residing in the United States, such that citizens of other
countries who are not permanently assigned to the United States, regardless of
whether or not they are on the United States payroll, are not eligible to
participate in the Plan.

         Section 2.02. Certain Transfers of Employment.

                  If directed by the Committee, a Participant whose employment
is transferred to a corporation or other entity (the "Transferee Employer") that
is not a Participating Employer, but in which the Company or an affiliate of the
Company holds an ownership interest, then until the earliest to occur of (a) the
date on which the Participant ceases to be employed by such Transferee Employer,
(b) the date on which the Company or an affiliate of the Company no longer holds
an ownership interest in the Transferee Employer, or (c) such other date
determined by the Committee, the Participant shall be treated as if he or she
were still actively employed by a Participating Employer. The foregoing rule
shall apply only for the purpose of determining whether the Participant has
terminated employment for purposes of the distribution provisions of Article V;
it shall not apply, and the Participant shall not be entitled to make additional
Deferrals and/or receive additional benefits with respect to remuneration
attributable to services rendered with the Transferee Employer (other than
deemed investment gain or loss in accordance with Section 4.03). The Committee
may promulgate such additional rules as may be necessary or desirable in
connection with any such transfer of employment.



                                       7


            ARTICLE III. DEFERRALS AND MATCHING CONTRIBUTION CREDITS

         Section 3.01. Participant Deferrals.

                  In accordance with rules prescribed by the Committee, a
Participant may elect to make Deferrals in accordance with this Article III.

         Section 3.02. Base Salary Deferrals.

         (a)    In accordance with rules prescribed by the Committee, a
Participant who is employed in the United States and who is eligible to
participate in the Incentive Plan and who is actively employed by a
Participating Employer in a Covered Employment Classification at the time of the
election to defer and at the time the deferral will be made is eligible to defer
payment of from 1% to 50% of base salary, or such other percentage specified by
the Committee, in 1% increments. Notwithstanding the foregoing, the Committee
may impose such additional rules, restrictions or limitations on Deferrals as it
deems appropriate in its sole discretion.

         (b)    A Participant's Deferral election shall be submitted in the
manner prescribed by the Committee and shall become effective with respect to
base salary earned by the Participant in the calendar year following the
calendar year in which the Participant's Deferral election is received by or on
behalf of the Committee, or as soon thereafter as practicable, or as otherwise
specified by the Committee. A Participant's Deferral election, once effective,
shall remain in effect until the end of the calendar year unless it is revoked
in accordance with Plan rules.

         Section 3.03. Deferrals of Incentive Plan Awards.

         (a)    In accordance with rules prescribed by the Committee, a
Participant who is employed in the United States and who is eligible to
participate in the Incentive Plan, may elect to defer a cash or stock award made
under the Incentive Plan. An eligible Participant may elect to defer payment
under the Plan from 1% to 100%, or such other percentage specified by the
Committee, in 1% increments, of the cash portion of an award, net of applicable
taxes, but not less than $1,000, provided that such Participant is actively
employed in a Covered Employment Classification at the time of the election to
defer. An eligible Participant may elect to defer payment of a specified whole
number of shares up to 100% of such shares net of applicable


                                       8


taxes, or such other percentage specified by the Committee, but not less than a
whole number of shares with a value of at least $1,000 at the time the deferral
election is made; and provided that such Participant is actively employed in a
Covered Employment Classification at the time of the election to defer. A
deferral election with respect to Restricted Stock Awards must be made during
the election period prior to the beginning of the performance period and
issuance of the restricted shares, rather than prior to the lapse of
restrictions. A Participant's election to defer an Incentive Plan award shall be
effective only for the performance period to which the election relates, and a
Participant's election does not carry over from performance period to
performance period.

         (b)    The Committee shall determine the required timing for
Participants to make elections to defer payment of Incentive Plan awards.

         (c)    Without limiting the Committee's authority under this Section
3.03, the Committee may impose additional restrictions on the number of
Participants who are eligible to defer Incentive Plan awards, and/or impose
additional requirements with respect to the deemed investment of stock awards.

         Section 3.04. Deferral of New Hire Payments.

         (a)    In accordance with rules prescribed by the Committee, a
Participant who is employed in the United States, who is eligible to participate
in the Incentive Plan, and who received an employment offer from the Company
that included a new hire payment in cash is eligible to defer from 1% to 100%,
or such other percentage specified by the Committee, in 1% increments, of such
new hire payment net of applicable taxes, but not less than $1,000, provided
that such Participant is actively employed in a Covered Employment
Classification at the time the new hire payment would otherwise be payable in
the absence of such Deferral.

         (b)    A Participant's election to defer payment of a new hire payment
must be made no later than the day the payment would otherwise be made.



                                       9


         Section 3.05. Deferrals Directed by the Committee.

                  As part of any award made under the Incentive Plan, the
Committee may determine the extent to which payment of the award will be
deferred without regard to any election made the Participant; to the extent that
the Committee directs that any such award be mandatorily deferred, the Deferral
will be credited under this Plan.

         Section 3.06. Revocation of Deferral Elections.

         (a)    A Participant's Deferral election shall be automatically
revoked upon the Participant's termination of employment from the Participating
Employers, unless the Committee determines otherwise. In addition, the Committee
may revoke a Participant's deferral election and take such other action as the
Committee deems necessary or appropriate if the Committee determines that the
Participant is no longer eligible to participate in the Plan or that revocation
of a Participant's eligibility is necessary or desirable in order for the Plan
to qualify under ERISA as a plan of deferred compensation for a select group of
management or highly compensated employees.

         (b)    The Committee at any time may rescind or correct any Deferrals
or credits to any Account made in error or that jeopardize the intended tax
status or legal compliance of the Plan.



                                       10


               ARTICLE IV. ACCOUNTING AND HYPOTHETICAL INVESTMENT

         Section 4.01. Accounting.

                  A Participant Account balance at any point in time shall be
equal to:

         (a)    the bookkeeping amount (if any) credited to the Participant as
of June 30, 2000 under the Ford Motor Company Deferred Compensation Plan and
transferred in book entry form to this Plan; plus

         (b)    any Deferrals credited to the Participant's Account on or after
July 1, 2000 in accordance with Article III, plus (or minus)

         (c)    increases (or decreases) in value, as the case may be, to
reflect deemed investment gain or loss that would have occurred had the
Participant's Account been invested in accordance with Sections 4.02, 4.03 and
4.04 below; minus

         (d)    any distributions from the Account.

         Section 4.02. Hypothetical Investment of Participant Accounts.

         (a)    Investment Designation. In accordance with rules prescribed by
the Committee, each Participant shall designate, in writing or in such other
manner as the Committee may prescribe, how Deferrals made while the designation
is in effect are credited among the Investment Options. When selecting more than
one Investment Option, the Participant shall designate, in whole multiples of 1%
or such other percentage determined by the Committee, the percentage of his or
her Deferrals to be credited to each Investment Option. A Participant's election
shall become effective beginning with the first payroll period commencing on or
after the date on which the election is received and accepted by the Committee,
or as soon thereafter as is practicable, and shall remain in effect unless and
until modified by a subsequent election that becomes effective in accordance
with the rules of this subsection.

         (b)    Reallocation of Account. In accordance with rules prescribed by
the Committee, each Participant (or the Beneficiary of a deceased Participant)
may elect to reallocate his or her Account among the Investment Options. When
selecting more than one Investment Option, the



                                       11


Participant shall designate, in whole multiples of 1% or such other percentage
determined by the Committee, the percentage of his or her Account that is deemed
to be invested in each Investment Option after the investment reallocation is
given effect. A Participant's reallocation election, once effective, shall
remain in effect unless and until modified by a subsequent election that becomes
effective in accordance with the rules of this subsection. Other than a
reallocation of a Participant's Account pursuant to a revised investment
election submitted by the Participant, the deemed investment allocation of a
Participant will not be adjusted on account of differences in the investment
return realized by the various Investment Options that the Participant has
designated.

         (c)    Limitations. Unless otherwise determined by the Committee,
Deferrals of awards of Visteon Common Stock shall be converted into Visteon
Stock Units such that the investment designation and reallocation rules set
forth in subsections (a) and (b) above shall not apply to such Deferral.

         Section 4.03. Deemed Investment Gain or Loss.

                  On a daily basis or such other basis as the Committee may
prescribe, the Account of each Participant will be credited (or charged) based
upon the investment gain (or loss) that the Participant would have realized with
respect to his or her Account had the Account been invested in accordance with
the terms of the Plan and any investment reallocation elections made by the
Participant. Unless otherwise determined by the Committee, where an Investment
Option is also an available investment option under the Visteon Investment Plan,
the methodology for valuing the Investment Option under this Plan and for
calculating amounts to be credited or debited or other adjustments to any
Account with respect to that Investment Option shall be the same as the
methodology used for valuing the corresponding investment option under the
Visteon Investment Plan.

         Section 4.04. Special Rules With Respect to Ford Stock Units.

         (a)    The bookkeeping account accrued by certain Participants under
the Ford Motor Company Deferred Compensation Plan was transferred to this Plan.
One of the hypothetical investment options available under the Ford Motor
Company Deferred Compensation Plan was



                                       12


an investment in Ford Stock Units. In addition to the Investment Options
otherwise established by the Committee, the Plan shall have a Ford Stock Unit
fund with respect to amounts transferred in book entry form from the Ford Motor
Company Deferred Compensation Plan that were deemed to be invested in the Ford
Stock Unit fund at the time of transfer. However, the Ford Stock Unit fund shall
be a "sell only" fund that is not available for the deemed investment of new
Deferrals under Section 4.02(a) above or the reallocation of Deferrals from
other Investment Options in accordance with Section 4.02(b) above; provided that
to the extent that a cash dividend would have been payable with respect to the
Ford Stock Units had the Units been actual shares of Ford Common Stock, the
amount of the cash dividend shall be converted to Ford Stock Units and credited
to the Participant's Account as such.

         (b)    In the event of any merger, share exchange, reorganization,
consolidation, recapitalization, stock dividend, stock split or other change in
corporate structure of the Ford Motor Company affecting Ford Common Stock, the
Committee may make appropriate equitable adjustments with respect to the Ford
Stock Units (if any) credited to the Account of each Participant, including
without limitation, adjusting the number of such Units or the date as of which
such units are valued and/or distributed, as the Committee determines is
necessary or desirable to prevent the dilution or enlargement of the benefits
intended to be provided under the Plan.

         Section 4.05. Accounts are For Record Keeping Purposes Only.

                  Plan Accounts and the record keeping procedures described
herein serve solely as a device for determining the amount of benefits
accumulated by a Participant under the Plan, and shall not constitute or imply
an obligation on the part of a Participating Employer to fund such benefits. In
any event, a Participating Employer may, in its discretion, set aside assets
equal to part or all of such account balances and invest such assets in Visteon
Common Stock, life insurance or any other investment deemed appropriate. Any
such assets shall be and remain the sole property of the Participating Employer,
and a Participant shall have no proprietary rights of any nature whatsoever with
respect to such assets.



                                       13


                            ARTICLE V. DISTRIBUTIONS

         Section 5.01. Distribution of Account.

         (a)    Subject to subsection (b) below, each Participant shall make a
distribution election with respect to each Deferral to this Plan. With respect
to Deferrals originally made to the Ford Motor Company Deferred Compensation
Plan that were transferred to this Plan, the Plan will honor, subject to
subsection (b) below, a Participant's distribution election made under the Ford
Motor Company Deferred Compensation Plan; provided that a Participant, on or
before March 31, 2001, may make a one-time election to revoke the Participant's
prior election with respect to the form and time of distribution of any such
Deferral and make a new election with respect to such Deferral. The
Participant's most recent election in effect on March 31, 2001 with respect to a
particular Ford Motor Company Deferral, including, if applicable, an election
under the Ford Motor Company Deferred Compensation Plan that has not been
superceded by a revised election, shall be irrevocable.

         (b)    Except as otherwise provided in Section 5.02 or 7.07, or as
otherwise determined by the Committee, distribution of the portion of the
Participant's Account that is attributable to a Deferral shall be made on or
before (i) March 15 of the year selected by the Participant for distribution
with respect to the particular Deferral if the Participant is an active employee
of the Participating Employer on the distribution date, (ii) the March 15
following death or termination for reasons other than retirement on or after age
55 with ten or more years of service, or at any age with 30 or more years or
service, notwithstanding any prior selection by the Participant of a subsequent
year for distribution, (iii) the March 15 following retirement if the
Participant selected distribution upon retirement with respect to the particular
Deferral and a lump sum distribution was selected, or if the Participant
selected a particular year for distribution with respect to the particular
Deferral but retired prior to the year selected, or (iv) the March 15 following
retirement with respect to the first annual installment and with subsequent
installments on or before March 15 of each subsequent year as necessary in order
to complete the number of annual installments (not to exceed ten) as were
selected by the Participant with respect to the particular Deferral.




                                       14


         (c)    If installment distributions are payable, the amount of the
first installment will be an amount determined by dividing the value of the
Participant's Account or part thereof relating to a particular Deferral, as of
the applicable valuation date as determined below, by the number of installments
selected by the Participant. Each subsequent distribution will be an amount
determined by dividing the value of the Participant's Account or part thereof
relating to a particular Deferral, as of the applicable valuation date as
determined below, by the number of remaining installment payments under the
method selected by the Participant. Except for installment distributions under
clause (iv) of subsection (b) above, all distributions shall be in the form of a
lump sum payment. Unless otherwise determined by the Committee, the Account or
part thereof relating to a particular Deferral shall be valued, for purposes of
the distribution, as of the following applicable date or as soon thereafter as
practicable: in the case of a lump sum payment or the final installment of an
installment distribution, on the valuation date immediately prior to the date of
payment, and in the case of any other distribution, on March 1 of the year of
distribution or the next preceding day for which valuation information is
available.

         Section 5.02. Hardship Distributions.

                  At the written request of a Participant, the Committee, in its
sole discretion, may authorize the cessation of Deferrals under the Plan by such
Participant and distribution of all or any part of the Participant's Account
prior to his or her scheduled distribution date or dates, or accelerate payment
of any installment payable with respect to any Deferral, upon a showing of
unforeseeable emergency by the Participant. For purposes of this Section,
"unforeseeable emergency" shall mean severe financial hardship resulting from
extraordinary and unforeseeable circumstances arising as a result of one or more
recent events beyond the control of the Participant. In any event, payment shall
not be made to the extent such emergency is or may be relieved (i) through
reimbursement or compensation by insurance or otherwise, (ii) by liquidation of
the Participant's assets, to the extent the liquidation of such assets would not
itself cause severe financial hardship and (iii) by cessation of Deferrals under
the Plan. Withdrawals of amounts because of unforeseeable emergency shall only
be permitted to the extent reasonably necessary to satisfy the emergency.
Examples of what are not considered to be unforeseeable emergencies include the
need to send a Participant's child to college or the desire to purchase a home.
The Committee shall determine the applicable distribution date and the date as
of which





                                       15


the amount to be distributed shall be valued with respect to any
financial hardship withdrawal or distribution. Any Participant whose Deferrals
have ceased under the Plan pursuant to this Section may not elect to recommence
Deferrals until the next calendar year.



                                       16



           ARTICLE VI. RULES WITH RESPECT TO VISTEON COMMON STOCK AND
                              VISTEON STOCK UNITS

         Section 6.01. Transactions Affecting Visteon Common Stock.

                  In the event of any merger, share exchange, reorganization,
consolidation, recapitalization, stock dividend, stock split or other change in
corporate structure of the Company affecting Visteon Common Stock, the Committee
may make appropriate equitable adjustments with respect to the Visteon Stock
Units (if any) credited to the Account of each Participant, including without
limitation, adjusting the number of such Units or the date as of which such
units are valued and/or distributed, as the Committee determines is necessary or
desirable to prevent the dilution or enlargement of the benefits intended to be
provided under the Plan.

         Section 6.02. No Shareholder Rights With Respect to Visteon Stock
Units.

                  Participants shall have no rights as a stockholder pertaining
to Visteon Stock Units credited to their Accounts.



                                       17


                        ARTICLE VII. GENERAL PROVISIONS

         Section 7.01. Administration.

         (a)    Subject to subsection (b) below, the Committee shall administer
and interpret the Plan. To the extent necessary to comply with applicable
conditions of Rule 16b-3, the Committee shall consist of not less than two
members of the Board, each of whom is also a director of the Company and
qualifies as a "non-employee director" for purposes of Rule 16b-3. If at any
time the Committee shall not be in existence or not be composed of members of
the Board who qualify as "non-employee directors", then all determinations
affecting Participants who are subject to Section 16 of the Exchange Act shall
be made by the full Board, and all determinations affecting other Participants
shall be made by the Board or an officer appointed by the Board.

         (b)    Subject to such limits as the Committee may from time to time
prescribe or such additional or contrary delegations of authority as the
Committee may prescribe, the Company's Director of Compensation and Benefits may
exercise any of the authority and discretion granted to the Committee hereunder,
provided that (i) the Director of Compensation and Benefits shall not be
authorized to amend the Plan, (ii) the Director of Compensation and Benefits
shall not exercise authority and responsibility with respect to non-ministerial
functions that relate to the participation by Participants who are subject to
Section 16 of the Exchange Act at the time any such delegated authority or
responsibility otherwise would be exercised, or that relates to the
participation in the Plan by the Director of Compensation and Benefits. To the
extent that the Director of Compensation and Benefits is authorized to act on
behalf of the Committee, any references herein to the Committee shall be also be
deemed references to the Director of Compensation and Benefits.

         (c)    The Committee (or where applicable in accordance with subsection
(b) above, the Director of Compensation and Benefits) may adopt and modify rules
and regulations relating to the Plan as it deems necessary or advisable for the
administration of the Plan. The Committee (or where applicable in accordance
with subsection (b) above, the Director of Compensation and Benefits) shall have
the discretionary authority to interpret and construe the Plan, to make benefit
determinations under the Plan, and to take all other actions that may be
necessary or appropriate




                                       18

for the administration of the Plan. Each determination, interpretation or other
action made or taken pursuant to the provisions of the Plan by the Committee
shall be final and shall be binding and conclusive for all purposes and upon all
persons, including, but without limitation thereto, the Company, its
stockholders, the Participating Employers, the directors, officers, and
employees of the Company or a Participating Employer, the Plan participants, and
their respective successors in interest.

         Section 7.02. Restrictions to Comply with Applicable Law.

                  Notwithstanding any other provision of the Plan, the Company
shall have no liability to make any payment under the Plan unless such delivery
or payment would comply with all applicable laws and the applicable requirements
of any securities exchange or similar entity. In addition, transactions under
the Plan are intended to comply with all applicable conditions of Rule 16b-3
under the Exchange Act. The Committee may take such action as the Committee
deems appropriate so that transactions under the Plan will be exempt from
Section 16 of the Exchange Act, and shall have the right to restrict or prohibit
any transaction to the extent it deems such action necessary or desirable for
such exemption to be met.

         Section 7.03. Claims Procedures.

         (a)    Claim for Benefits. Any Participant or Beneficiary (hereafter
referred to as the "claimant") under this Plan who believes he or she is
entitled to benefits under the Plan in an amount greater than the amount
received may file, or have his or her duly authorized representative file, a
claim with the Committee. Any such claim shall be filed in writing stating the
nature of the claim, and the facts supporting the claim, the amount claimed and
the name and address of the claimant. The Committee shall consider the claim and
answer in writing stating whether the claim is granted or denied. The written
decision shall be within 90 days of receipt of the claim by the Committee (or
180 days if additional time is needed and the claimant is notified of the
extension, the reason therefor and the expected date of determination prior to
commencement of the extension). If the claim is denied in whole or in part, the
claimant shall be furnished with a written notice of such denial containing (i)
the specific reasons for the denial, (ii) a specific reference to the Plan
provisions on which the denial is based, (iii) an explanation of the Plan's
appeal procedures set forth in subsection (b) below, (iv) a description of any
additional


                                       19


material or information which is necessary for the claimant to submit or perfect
an appeal of his or her claim, and (v) an explanation of the Participant's or
Beneficiary's right to bring suit under ERISA following an adverse determination
upon appeal.

         (b)    Appeal. If a claimant wishes to appeal the denial of his or her
claim, the claimant or his or her duly authorized representative shall file a
written notice of appeal to the Committee within 90 days of receiving notice of
the claim denial. In order that the Committee may expeditiously decide such an
appeal, (ii) a specific reference to the Plan provisions on which the appeal is
based, (iii) a statement of the arguments and authority (if any) supporting each
ground for appeal, and (iv) any other pertinent documents or comments which the
appellant desires to submit in support of the appeal. The Committee shall decide
the appellant's appeal within 60 days of its receipt of the appeal (or 120 days
if additional time is needed and the claimant is notified of the extension, the
reason therefor and the expected date of determination prior to the commencement
of the extension). The Committee's written decision shall contain the reasons
for the decision and reference to the Plan provisions on which the decision is
based. If the claim is denied in whole or in part, such written decision shall
also include notification of the claimant's right to bring suit for benefits
under Section 502(a) of ERISA and the claimant's right to obtain, upon request
and free of charge, reasonable access to and copies of all documents, records or
other information relevant to the claim for benefits.

         Section 7.04. Participant Rights Unsecured.

         (a)    Unsecured Claim. The right of a Participant or his Beneficiary
to receive a distribution hereunder shall be an unsecured claim, and neither the
Participant nor any Beneficiary shall have any rights in or against any amount
credited to his Account or any other specific assets of a Participating
Employer. The right of a Participant or Beneficiary to the payment of benefits
under this Plan shall not be assigned, encumbered, or transferred, except by
will or the laws of descent and distribution. The rights of a Participant
hereunder are exercisable during the Participant's lifetime only by him or his
guardian or legal representative.

         (b)    Contractual Obligation. The Company may authorize the creation
of a trust or other arrangements to assist it in meeting the obligations created
under the Plan. However, any liability to any person with respect to the Plan
shall be based solely upon any contractual


                                       20


obligations that may be created pursuant to the Plan. No obligation of a
Participating Employer shall be deemed to be secured by any pledge of, or other
encumbrance on, any property of a Participating Employer. Nothing contained in
this Plan and no action taken pursuant to its terms shall create or be construed
to create a trust of any kind, or a fiduciary relationship between a
Participating Employer and any Participant or Beneficiary, or any other person.

         Section 7.05. Income Tax Withholding.

                  The Company shall withhold from any benefit payment amounts
required to be withheld for Federal and State income and other applicable taxes.

         Section 7.06. Amendment or Termination of Plan.

         (a)    There shall be no time limit on the duration of the Plan.
However, the Company, by action of the Senior Vice President - Human Resources,
may at any time or for any reason amend or terminate the Plan; provided, that
the Committee shall have the exclusive amendment authority with respect to any
amendment that, if adopted, would increase the benefit payable to the Senior
Vice President - Human Resources by more than a de minimis amount. No amendment
or termination may reduce or eliminate any Account balance accrued to the date
of such amendment or termination (except as such Account balance may be reduced
as a result of investment losses allocable to such Account).

         (b)    In the event that the Internal Revenue Service publishes rules,
regulations or other guidance (whether in proposed, temporary or final form)
governing the administration and operation of deferred compensation plans,
including, without limitation, rules or guidance regarding Participant elections
and the distribution of benefits, the Company's Director of Compensation and
Benefits may adopt one or more amendments to the Plan that the Director of
Compensation and Benefits determines to be necessary or desirable taking into
account the rules, regulations or other guidance published by the Internal
Revenue Service.

         Section 7.07. Deduction from Distributions.

                  Anything contained in the Plan notwithstanding, a
Participating Employer may deduct from any distribution hereunder all amounts
owed to the Company or a Participating


                                       21


Employer by the Participant for any reason, and all taxes required by law or
government regulations to be deducted or withheld.

         Section 7.08. No Assignment of Benefits.

                  No rights or benefits under the Plan shall, except as
otherwise specifically provided by law, be subject to assignment (except for the
designation of beneficiaries pursuant to subsection (c) of Section 1.01), nor
shall such rights or benefits be subject to attachment or legal process for or
against a Participant or his or her Beneficiary.

         Section 7.09. Administrative Expenses.

                  Costs of establishing and administering the Plan will be paid
by the Participating Employers.

         Section 7.10. Successors and Assigns.

                  This Plan shall be binding upon and inure to the benefit of
the Participating Employers, their successors and assigns and the Participants
and their heirs, executors, administrators, and legal representatives.


                                       VISTEON CORPORATION



                                       /s/ Robert H. Marcin
                                       ----------------------------------------
                                       ROBERT H. MARCIN
                                       SENIOR VICE PRESIDENT - HUMAN RESOURCES


                                       22


                                                                   EXHIBIT 10.17







                               VISTEON CORPORATION
                               SAVINGS PARITY PLAN

                             Effective July 1, 2000
                     (as amended through December 11, 2002)






                               VISTEON CORPORATION
                               SAVINGS PARITY PLAN

                  The Visteon Corporation Savings Parity Plan (the "Plan") has
been adopted to promote the best interests of Visteon Corporation (the
"Company") and the stockholders of the Company by attracting and retaining key
management employees possessing a strong interest in the successful operation of
the Company and its subsidiaries or affiliates and encouraging their continued
loyalty, service and counsel to the Company and its subsidiaries or affiliates.
The Plan is adopted effective July 1, 2000.


                                      -2-



                    ARTICLE I. DEFINITIONS AND CONSTRUCTION

         Section 1.01. Definitions.

                  The following terms have the meanings indicated below unless
the context in which the term is used clearly indicates otherwise:

         (a)    Account: The record keeping account maintained to record the
interest of each Participant under the Plan. An Account is established for
record keeping purposes only and not to reflect the physical segregation of
assets on the Participant's behalf, and may consist of such subaccounts or
balances as the Committee may determine to be necessary or appropriate.

         (b)    Beneficiary: The person or entity designated by a Participant
to be his beneficiary for purposes of this Plan (subject to such limitations as
to the classes and number of beneficiaries and contingent beneficiaries and such
other limitations as the Committee may prescribe). A Participant's designation
of Beneficiary shall be valid and in effect only if a properly executed
designation, in such form as the Committee shall prescribe, is filed and
received by the Committee or its delegate prior to the Participant's death. If a
Participant designates his or her spouse as Beneficiary, such designation
automatically shall become null and void on the date of the Participant's
divorce or legal separation from such spouse. If a valid designation of
Beneficiary is not in effect at the time of the Participant's death, the estate
of the Participant is deemed to be the sole Beneficiary. If multiple
beneficiaries have been designated and one or more of the Beneficiaries
predecease the Participant, then upon the Participant's death, payment shall be
made exclusively to the surviving Beneficiary or Beneficiaries unless the
Participant's designation specifies an alternate method of distribution.
Further, in the event that the Committee is uncertain as to the identity of the
Participant's Beneficiary, the Committee may deem the estate of the Participant
to be the sole Beneficiary. Beneficiary designations shall be in writing (or in
such other form as authorized by the Committee for this purpose, which may
include on-line designations), shall be filed with the Committee or its
delegate, and shall be in such form as the Committee may prescribe for this
purpose.

         (c)    Board: The Board of Directors of the Company.




                                      -3-


         (d)    Code: The Internal Revenue Code of 1986, as interpreted by
regulations and rulings issued pursuant thereto, all as amended and in effect
from time to time. Any reference to a specific provision of the Code shall be
deemed to include reference to any successor provision thereto.

         (e)    Committee: The Organization and Compensation Committee of the
Board.

         (f)    Company: Visteon Corporation, or any successor thereto.

         (g)    Employee: A person who is (i) classified by a Participating
Employer as a common law employee enrolled on the active employment rolls of the
Participating Employer, and (ii) regularly employed by the Participating
Employer on a salaried basis (as distinguished from an individual receiving a
pension, retirement allowance, severance pay, retainer, commission, fee under a
contract or other arrangement, or hourly, piecework or other wage).

         (h)    ERISA: The Employee Retirement Income Security Act of 1974, as
interpreted by regulations and rulings issued pursuant thereto, all as amended
and in effect from time to time. Any reference to a specific provision of ERISA
shall be deemed to include reference to any successor provision thereto.

         (i)    Exchange Act: The Securities Exchange Act of 1934, as
interpreted by regulations and rules issued pursuant thereto, all as amended and
in effect from time to time. Any reference to a specific provision of the
Exchange Act shall be deemed to include reference to any successor provision
thereto.

         (j)    Investment Options: The hypothetical investment accounts that
the Committee may from time to time establish, which may, but need not, be based
upon one or more of the investment options available under the Visteon
Investment Plan. The Committee may determine to discontinue any previously
established Investment Option, may make an Investment Option available only for
reallocations or transfer of Account balances out of it, and may determine the
timing for any applicable "sunset" period.

         (k)    Limitations: The limitations on benefits and/or contributions
imposed on qualified plans by Section 415 and Section 401(a)(17) of the Code.



                                      -4-


         (l)    Matching Contribution Credits: Amounts credited to a
Participant's Account pursuant to Article III.

         (m)    Participant: An Employee who satisfies the participation
requirements of Section 2.01 and, where the context so requires, a former
Employee entitled to receive a benefit hereunder.

         (n)    Participating Employer: The Company, Visteon Systems LLC,
isteon Global Technologies, Inc., and each other subsidiary a majority of the
voting stock of which is owned directly or indirectly by the Company, or a
limited liability company a majority of the membership interest of which is
owned directly or indirectly by the Company, that with the consent of the
Committee, participates in the Plan for the benefit of one or more Participants
in its employ.

         (o)    Plan: The Visteon Corporation Savings Parity Plan, as amended
and in effect from time to time.

         (p)    Visteon Common Stock: The common stock of the Company.

         (q)    Visteon Common Stock Fund: The Visteon Common Stock Fund that
is an available investment option under the Visteon Investment Plan.

         (r)    Visteon Investment Plan: The Visteon Investment Plan, as amended
and in effect from time to time.

         (s)    Visteon Stock Units: The hypothetical stock units having a value
based primarily on the value of Visteon Common Stock. To the extent that a cash
dividend would have been payable with respect to the Visteon Stock Units had the
units been actual shares of Visteon Common Stock, the amount of the cash
dividend shall be converted to Visteon Stock Units and credited to the
Participant's Account as such.

         Section 1.02. Construction and Applicable Law.

         (a)    Wherever any words are used in the masculine, they shall be
construed as though they were used in the feminine in all cases where they would
so apply; and wherever any words are use in the singular or the plural, they
shall be construed as though they were used in the




                                      -5-


plural or the singular, as the case may be, in all cases where they would so
apply. Titles of articles and sections are for general information only, and the
Plan is not to be construed by reference to such items.

         (b)    This Plan is intended to be a plan of deferred compensation
maintained for a select group of management or highly compensated employees as
that term is used in ERISA, and shall be interpreted so as to comply with the
applicable requirements thereof. In all other respects, the Plan is to be
construed and its validity determined according to the laws of the State of
Michigan to the extent such laws are not preempted by federal law. In case any
provision of the Plan is held illegal or invalid for any reason, the illegality
or invalidity will not affect the remaining parts of the Plan, but the Plan
shall, to the extent possible, be construed and enforced as if the illegal or
invalid provision had never been inserted.



                                      -6-


                           ARTICLE II. PARTICIPATION

         Section 2.01. Eligibility.

         (a)    An Employee who participates in the Visteon Investment Plan, has
made a Contribution Spillover Election pursuant to Article IV of the Visteon
Investment Plan, and whose benefit thereunder is restricted by the Limitations
shall be eligible to participate in the Plan; provided, however, that the
Committee may restrict eligibility as it deems necessary to ensure that the Plan
continues to be maintained for a select group of management or highly
compensated employees as that term is used in ERISA.

         (b)    Notwithstanding anything is subsection (a) to the contrary,
participation in the Plan is limited to United States citizens (whether residing
in or outside of the United States) or citizens of another country permanently
assigned to and residing in the United States, such that citizens of other
countries who are not permanently assigned to the United States, regardless of
whether or not they are on the United States payroll, are not eligible to
participate in the Plan.

         Section 2.02. Certain Transfers of Employment.

                  If directed by the Committee, a Participant whose employment
is transferred to a corporation or other entity (the "Transferee Employer") that
is not a Participating Employer, but in which the Company or an affiliate of the
Company holds an ownership interest, then until the earliest to occur of (a) the
date on which the Participant ceases to be employed by such Transferee Employer,
(b) the date on which the Company or an affiliate of the Company no longer holds
an ownership interest in the Transferee Employer, or (c) such other date
determined by the Committee, the Participant shall be treated as if he or she
were still actively employed by a Participating Employer. The foregoing rule
shall apply only for the purpose of determining whether the Participant has
terminated employment for purposes of the distribution provisions of Section
4.04; it shall not apply, and the Participant shall not be entitled to receive
additional benefits with respect to remuneration attributable to services
rendered with the Transferee Employer (other than deemed investment gain or loss
in accordance with Section 4.03). The Committee may promulgate such additional
rules as may be necessary or desirable in connection with any such transfer of
employment.



                                      -7-


                   ARTICLE III. MATCHING CONTRIBUTION CREDITS

         Section 3.01. Matching Contribution Credits.

                  If contributions by or on behalf of a Participant under the
Visteon Investment Plan, and the related Company matching contributions under
the Visteon Investment Plan, for any plan year beginning on or after July 1,
2000, are restricted in order to comply with the Limitations, there shall be
credited to the Participant's Account an amount equal to the difference between
(i) the matching contribution which would have been made under the Visteon
Investment Plan based upon the Participant's actual elections under that plan
had the Participant's elections been applied without regard to the Limitations,
and (ii) the matching contribution actually allocated to the Participant's
account under the Visteon Investment Plan for the plan year.


                                      -8-


                ARTICLE IV. ACCOUNTING, HYPOTHETICAL INVESTMENT
                                AND DISTRIBUTION

         Section 4.01. Accounting.

                  A Participant Account balance at any point in time shall be
equal to:

         (a)    the bookkeeping amount (if any) credited to the Participant as
of June 30, 2000 under the Ford Motor Company Benefit Equalization Plan (defined
contribution component) and transferred in book entry form to this Plan; plus

         (b)    any amounts credited to the Participant's Account on or after
July 1, 2000 under the terms of this Plan, plus (or minus)

         (c)    increases (or decreases) in value, as the case may be, to
reflect deemed investment gain or loss that would have occurred had the
Participant's Account been invested in accordance with Sections 4.02 and 4.03
below; minus

         (d)    any withdrawals or distributions from the Account.

         Section 4.02. Hypothetical Investment of Participant Accounts.

         (a)    Deemed Investment of Matching Contribution Credits. Subject to a
Participant's right to reallocate the deemed investment of his Account in
accordance with subsection (b) below, all Matching Contribution Credits under
Section 3.01 (the "Convertible Amount") shall be treated as if they were
invested in the Visteon Common Stock Fund. Accordingly, the Convertible Amount
shall be converted, for record keeping purposes, into whole and fractional
Visteon Stock Units in accordance with the rules applicable to the purchase of
units under the Visteon Common Stock Fund. Likewise, any dividends that would
have been payable on the Visteon Stock Units credited to a Participant's Account
had such Units been actual shares of Visteon Common Stock shall be converted,
for record keeping purposes, into whole and fractional Visteon Stock Units in
accordance with the rules applicable to the purchase of units under the Visteon
Common Stock Fund.



                                      -9-


         (b)    Reallocation of Account. In accordance with rules prescribed by
the Committee, each Participant, other than a Participant who is subject to
Section 16 of the Exchange Act, may elect to reallocate his or her Account among
the Investment Options. When selecting more than one Investment Option, the
Participant shall designate, in whole multiples of 1% or such other percentage
determined by the Committee, the percentage of his or her Account that is deemed
to be invested in each Investment Option after the investment reallocation is
given effect. A Participant's reallocation election, once effective, shall
remain in effect unless and until modified by a subsequent election that becomes
effective in accordance with the rules of this subsection. Other than a
reallocation of a Participant's Account pursuant to a revised investment
election submitted by the Participant, the deemed investment allocation of a
Participant will not be adjusted to reflect differences in the relative deemed
investment return realized by the various Investment Options that the
Participant has designated.

         Section 4.03. Deemed Investment Gain or Loss.

                  On a daily basis or such other basis as the Committee may
prescribe, the Account of each Participant will be credited (or charged) based
upon the investment gain (or loss) that the Participant would have realized with
respect to his or her Account had the Account been invested in accordance with
the terms of the Plan and any investment reallocation elections made by the
Participant. Unless otherwise determined by the Committee, where an Investment
Option is also an available investment option under the Visteon Investment Plan,
the methodology for valuing the Investment Option under this Plan and for
calculating amounts to be credited or debited or other adjustments to any
Account with respect to that Investment Option shall be the same as the
methodology used for valuing the corresponding investment option under the
Visteon Investment Plan.

         Section 4.04. Distribution.

                  The balance in a Participant's Account shall be paid, in cash,
by the Participating Employer to the Participant, or if the Participant is
deceased, to the Participant's Beneficiary. Payment shall be made as soon as
practicable after the Participant's death, retirement or other termination of
employment. The amount of the payment shall be equal to the amount credited to
the Participant's Account at the time of distribution as determined under this
Article IV.


                                      -10-


         Section 4.05. Accounts are For Record Keeping Purposes Only.

                  Plan Accounts and the record keeping procedures described
herein serve solely as a device for determining the amount of benefits
accumulated by a Participant under the Plan, and shall not constitute or imply
an obligation on the part of a Participating Employer to fund such benefits. In
any event, a Participating Employer may, in its discretion, set aside assets
equal to part or all of such account balances and invest such assets in Visteon
Common Stock, life insurance or any other investment deemed appropriate. Any
such assets shall be and remain the sole property of the Participating Employer,
and a Participant shall have no proprietary rights of any nature whatsoever with
respect to such assets.

                                      -11-


           ARTICLE V. RULES WITH RESPECT TO VISTEON COMMON STOCK AND
                              VISTEON STOCK UNITS

         Section 5.01. Transactions Affecting Visteon Common Stock.

                  In the event of any merger, share exchange, reorganization,
consolidation, recapitalization, stock dividend, stock split or other change in
corporate structure of the Company affecting Visteon Common Stock, the Committee
may make appropriate equitable adjustments with respect to the Visteon Stock
Units (if any) credited to the Account of each Participant, including without
limitation, adjusting the number of such Units or the date as of which such
units are valued and/or distributed, as the Committee determines is necessary or
desirable to prevent the dilution or enlargement of the benefits intended to be
provided under the Plan.

         Section 5.02. No Shareholder Rights With Respect to Visteon Stock
Units.

                  Participants shall have no rights as a stockholder pertaining
to Visteon Stock Units credited to their Accounts.


                                      -12-


                         ARTICLE VI. GENERAL PROVISIONS

         Section 6.01. Administration.

         (a)    Subject to subsection (b) below, the Committee shall administer
and interpret the Plan. To the extent necessary to comply with applicable
conditions of Rule 16b-3, the Committee shall consist of not less than two
members of the Board, each of whom is also a director of the Company and
qualifies as a "non-employee director" for purposes of Rule 16b-3. If at any
time the Committee shall not be in existence or not be composed of members of
the Board who qualify as "non-employee directors", then all determinations
affecting Participants who are subject to Section 16 of the Exchange Act shall
be made by the full Board, and all determinations affecting other Participants
shall be made by the Board or an officer appointed by the Board.

         (b)    Subject to such limits as the Committee may from time to time
prescribe or such additional or contrary delegations of authority as the
Committee may prescribe, the Company's Director of Compensation and Benefits may
exercise any of the authority and discretion granted to the Committee hereunder,
provided that (i) the Director of Compensation and Benefits shall not be
authorized to amend the Plan, (ii) the Director of Compensation and Benefits
shall not exercise authority and responsibility with respect to non-ministerial
functions that relate to the participation by Participants who are subject to
Section 16 of the Exchange Act at the time any such delegated authority or
responsibility otherwise would be exercised, that relates to the participation
in the Plan by the Director of Compensation and Benefits. To the extent that the
Director of Compensation and Benefits is authorized to act on behalf of the
Committee, any references herein to the Committee shall be also be deemed
references to the Director of Compensation and Benefits.

         (c)    The Committee (or where applicable in accordance with subsection
(b) above, the Director of Compensation and Benefits) may adopt and modify rules
and regulations relating to the Plan as it deems necessary or advisable for the
administration of the Plan. The Committee (or where applicable in accordance
with subsection (b) above, the Director of Compensation and Benefits) shall have
the discretionary authority to interpret and construe the Plan, to make benefit
determinations under the Plan, and to take all other actions that may be
necessary or appropriate


                                      -13-


for the administration of the Plan. Each determination, interpretation or other
action made or taken pursuant to the provisions of the Plan by the Committee
shall be final and shall be binding and conclusive for all purposes and upon all
persons, including, but without limitation thereto, the Company, its
stockholders, the Participating Employers, the directors, officers, and
employees of the Company or a Participating Employer, the Plan participants, and
their respective successors in interest.

         Section 6.02. Restrictions to Comply with Applicable Law.

                  Notwithstanding any other provision of the Plan, the Company
shall have no liability to make any payment under the Plan unless such delivery
or payment would comply with all applicable laws and the applicable requirements
of any securities exchange or similar entity. In addition, transactions under
the Plan are intended to comply with all applicable conditions of Rule 16b-3
under the Exchange Act. The Committee shall administer the Plan so that
transactions under the Plan will be exempt from Section 16 of the Exchange Act,
and shall have the right to restrict or prohibit any transaction to the extent
it deems such action necessary or desirable for such exemption to be met.

         Section 6.03. Claims Procedures.

         (a)    Claim for Benefits. Any Participant or Beneficiary (hereafter
referred to as the "claimant") under this Plan who believes he or she is
entitled to benefits under the Plan in an amount greater than the amount
received may file, or have his or her duly authorized representative file, a
claim with the Committee. Any such claim shall be filed in writing stating the
nature of the claim, and the facts supporting the claim, the amount claimed and
the name and address of the claimant. The Committee shall consider the claim and
answer in writing stating whether the claim is granted or denied. The written
decision shall be within 90 days of receipt of the claim by the Committee (or
180 days if additional time is needed and the claimant is notified of the
extension, the reason therefor and the expected date of determination prior to
commencement of the extension). If the claim is denied in whole or in part, the
claimant shall be furnished with a written notice of such denial containing (i)
the specific reasons for the denial, (ii) a specific reference to the Plan
provisions on which the denial is based, (iii) an explanation of the Plan's
appeal procedures set forth in subsection (b) below, (iv) a description of any
additional material


                                      -14-


or information which is necessary for the claimant to submit or perfect an
appeal of his or her claim, and (v) an explanation of the Participant's or
Beneficiary's right to bring suit under ERISA following an adverse determination
upon appeal.

         (b)    Appeal. If a claimant wishes to appeal the denial of his or her
claim, the claimant or his or her duly authorized representative shall file a
written notice of appeal to the Committee within 90 days of receiving notice of
the claim denial. In order that the Committee may expeditiously decide such an
appeal, (ii) a specific reference to the Plan provisions on which the appeal is
based, (iii) a statement of the arguments and authority (if any) supporting each
ground for appeal, and (iv) any other pertinent documents or comments which the
appellant desires to submit in support of the appeal. The Committee shall decide
the appellant's appeal within 60 days of its receipt of the appeal (or 120 days
if additional time is needed and the claimant is notified of the extension, the
reason therefor and the expected date of determination prior to the commencement
of the extension). The Committee's written decision shall contain the reasons
for the decision and reference to the Plan provisions on which the decision is
based. If the claim is denied in whole or in part, such written decision shall
also include notification of the claimant's right to bring suit for benefits
under Section 502(a) of ERISA and the claimant's right to obtain, upon request
and free of charge, reasonable access to and copies of all documents, records or
other information relevant to the claim for benefits.

         Section 6.04. Participant Rights Unsecured.

         (a)    Unsecured Claim. The right of a Participant or his Beneficiary
to receive a distribution hereunder shall be an unsecured claim, and neither the
Participant nor any Beneficiary shall have any rights in or against any amount
credited to his Account or any other specific assets of a Participating
Employer. The right of a Participant or Beneficiary to the payment of benefits
under this Plan shall not be assigned, encumbered, or transferred, except by
will or the laws of descent and distribution. The rights of a Participant
hereunder are exercisable during the Participant's lifetime only by him or his
guardian or legal representative.

         (b)    Contractual Obligation. The Company may authorize the creation
of a trust or other arrangements to assist it in meeting the obligations created
under the Plan. However, any liability to any person with respect to the Plan
shall be based solely upon any contractual


                                      -15-


obligations that may be created pursuant to the Plan. No obligation of a
Participating Employer shall be deemed to be secured by any pledge of, or other
encumbrance on, any property of a Participating Employer. Nothing contained in
this Plan and no action taken pursuant to its terms shall create or be construed
to create a trust of any kind, or a fiduciary relationship between a
Participating Employer and any Participant or Beneficiary, or any other person.

         Section 6.05. Income Tax Withholding.

                  The Company shall withhold from any benefit payment amounts
required to be withheld for Federal and State income and other applicable taxes.

         Section 6.06. Amendment or Termination of Plan.

                  There shall be no time limit on the duration of the Plan.
However, the Company, by action of the Senior Vice President - Human Resources,
may at any time and for any reason, amend or terminate the Plan; provided that
the Committee shall have the exclusive amendment authority with respect to any
amendment that, if adopted, would increase the benefit payable to the Senior
Vice President - Human Resources by more than a de minimis amount. Any Plan
amendment or termination may reduce or eliminate a Participant's benefit under
the Plan, including, without limitation, an amendment to eliminate future
benefit payments for some or all Participants, whether or not in pay status at
the time such action is taken.

         Section 6.07. Effect of Inimical Conduct.

                  Anything contained in the Plan notwithstanding, all rights of
a Participant under the Plan to receive distribution of all or any part of his
or her Account shall cease on and as of the date on which it has been determined
by the Committee that such Participant at any time (whether before or subsequent
to termination of such Participant's employment) acted in a manner inimical to
the best interests of the Company or a subsidiary or affiliate thereof.

         Section 6.08. No Assignment of Benefits.

                  No rights or benefits under the Plan shall, except as
otherwise specifically provided by law, be subject to assignment (except for the
designation of beneficiaries pursuant




                                      -16-


to subsection (b) of Section 1.01), nor shall such rights or benefits be subject
to attachment or legal process for or against a Participant or his or her
Beneficiary.

         Section 6.09. Administrative Expenses.

                  Costs of establishing and administering the Plan will be paid
by the Participating Employers.

         Section 6.10. Successors and Assigns.

                  This Plan shall be binding upon and inure to the benefit of
the Participating Employers, their successors and assigns and the Participants
and their heirs, executors, administrators, and legal representatives.


                                 VISTEON CORPORATION



                                 /s/ Robert H. Marcin
                                 -------------------------------------
                                 ROBERT H. MARCIN
                                 SENIOR VICE PRESIDENT-HUMAN RESOURCES



                                      -17-







                                                                   EXHIBIT 10.18









                               VISTEON CORPORATION
                               PENSION PARITY PLAN

                             Effective July 1, 2000
                     (as amended through December 11, 2002)






                               VISTEON CORPORATION
                               PENSION PARITY PLAN

         The Visteon Corporation Pension Parity Plan (the "Plan") has been
adopted to promote the best interests of Visteon Corporation (the "Company")
and the stockholders of the Company by attracting and retaining key management
employees possessing a strong interest in the successful operation of the
Company and its subsidiaries or affiliates and encouraging their continued
loyalty, service and counsel to the Company and its subsidiaries or affiliates.
The Plan is adopted effective July 1, 2000.



                                      -2-


                    ARTICLE I. DEFINITIONS AND CONSTRUCTION

         Section 1.01. Definitions.

         The following terms have the meanings indicated below unless the
context in which the term is used clearly indicates otherwise:

         (a)    Board: The Board of Directors of the Company.

         (b)    Beneficiary: The person or entity designated by a Participant
to be his beneficiary for purposes of this Plan (subject to such limitations as
to the classes and number of beneficiaries and contingent beneficiaries and such
other limitations as the Committee may prescribe). A Participant's designation
of Beneficiary shall be valid and in effect only if a properly executed
designation, in such form as the Committee shall prescribe, is filed and
received by the Committee or its delegate prior to the Participant's death. If a
Participant designates his or her spouse as Beneficiary, such designation
automatically shall become null and void on the date of the Participant's
divorce or legal separation from such spouse. If a valid designation of
Beneficiary is not in effect at the time of the Participant's death, the estate
of the Participant is deemed to be the sole Beneficiary. If multiple
beneficiaries have been designated and one or more of the Beneficiaries
predecease the Participant, then upon the Participant's death, payment shall be
made exclusively to the surviving Beneficiary or Beneficiaries unless the
Participant's designation specifies an alternate method of distribution.
Further, in the event that the Committee is uncertain as to the identity of the
Participant's Beneficiary, the Committee may deem the estate of the Participant
to be the sole Beneficiary. Beneficiary designations shall be in writing (or in
such other form as authorized by the Committee for this purpose, which may
include on-line designations), shall be filed with the Committee or its
delegate, and shall be in such form as the Committee may prescribe for this
purpose.

         (c)    Code: The Internal Revenue Code of 1986, as interpreted by
regulations and rulings issued pursuant thereto, all as amended and in effect
from time to time. Any reference to a specific provision of the Code shall be
deemed to include reference to any successor provision thereto.

         (d)    Committee: The Organization and Compensation Committee of the
Board.



                                      -3-


         (e)    Company: Visteon Corporation, or any successor thereto.

         (f)    Employee: A person who is (i) classified by a Participating
Employer as a common law employee enrolled on the active employment rolls of the
Participating Employer, and (ii) regularly employed by the Participating
Employer on a salaried basis (as distinguished from an individual receiving a
pension, retirement allowance, severance pay, retainer, commission, fee under a
contract or other arrangement, or hourly, piecework or other wage).

         (g)    ERISA: The Employee Retirement Income Security Act of 1974, as
interpreted by regulations and rulings issued pursuant thereto, all as amended
and in effect from time to time. Any reference to a specific provision of ERISA
shall be deemed to include reference to any successor provision thereto.

         (h)    Limitations: The limitations on benefits and/or contributions
imposed on qualified plan by Section 415 and Section 401(a)(17) of the Code.

         (i)    Participant: An Employee who satisfies the participation
requirements of Section 2.01 and, where the context so requires, a former
Employee entitled to receive a benefit hereunder.

         (j)    Participating Employer: The Company, Visteon Systems LLC,
Visteon Global Technologies, Inc., and each other subsidiary a majority of the
voting stock of which is owned directly or indirectly by the Company, or a
limited liability company a majority of the membership interest of which is
owned directly or indirectly by the Company, that with the consent of the
Committee, participates in the Plan for the benefit of one or more Participants
in its employ.

         (k)    Plan: The Visteon Corporation Pension Parity Plan, as amended
and in effect from time to time.

         (l)    Retirement Plan: The Visteon Pension Plan (including both the
contributory plan and Balance Plus), the Salaried Retirement Plan of Visteon
Systems, LLC, or such other qualified defined benefit retirement plans as the
Committee may designate.



                                      -4-


         Section 1.02. Construction and Applicable Law.

         (a)    Wherever any words are used in the masculine, they shall be
construed as though they were used in the feminine in all cases where they would
so apply; and wherever any words are use in the singular or the plural, they
shall be construed as though they were used in the plural or the singular, as
the case may be, in all cases where they would so apply. Titles of articles and
sections are for general information only, and the Plan is not to be construed
by reference to such items.

         (b)    This Plan is intended to be a plan of deferred compensation
maintained for a select group of management or highly compensated employees as
that term is used in ERISA, and shall be interpreted so as to comply with the
applicable requirements thereof. In all other respects, the Plan is to be
construed and its validity determined according to the laws of the State of
Michigan to the extent such laws are not preempted by federal law. In case any
provision of the Plan is held illegal or invalid for any reason, the illegality
or invalidity will not affect the remaining parts of the Plan, but the Plan
shall, to the extent possible, be construed and enforced as if the illegal or
invalid provision had never been inserted.



                                      -5-


                           ARTICLE II. PARTICIPATION

         Section 2.01. Eligibility.

         (a)    An Employee who participates in a Retirement Plan and whose
benefit thereunder is restricted by the Limitations shall be eligible to
participate in the Plan; provided, however, that the Committee may restrict
eligibility as it deems necessary to ensure that the Plan continues to be
maintained for a select group of management or highly compensated employees as
that term is used in ERISA.

         (b)    Notwithstanding anything is subsection (a) to the contrary,
participation in the Plan is limited to United States citizens (whether residing
in or outside of the United States) or citizens of another country permanently
assigned to and residing in the United States, such that citizens of other
countries who are not permanently assigned to the United States, regardless of
whether or not they are on the United States payroll, are not eligible to
participate in the Plan.

         Section 2.02. Certain Transfers of Employment.

                If directed by the Committee, a Participant whose employment
is transferred to a corporation or other entity (the "Transferee Employer") that
is not a Participating Employer, but in which the Company or an affiliate of the
Company holds an ownership interest, then until the earliest to occur of (a) the
date on which the Participant ceases to be employed by such Transferee Employer,
(b) the date on which the Company or an affiliate of the Company no longer holds
an ownership interest in the Transferee Employer, or (c) such other date
determined by the Committee, the Participant shall be treated as if he or she
were still actively employed by a Participating Employer. The foregoing rule
shall apply only for the purpose of determining whether the Participant has
terminated employment for purposes of determining the Participant's distribution
commencement date; it shall not apply, and the Participant shall not be entitled
to receive additional benefits with respect to remuneration attributable to
services rendered with the Transferee Employer. The Committee may promulgate
such additional rules as may be necessary or desirable in connection with any
such transfer of employment.



                                      -6-


                      ARTICLE III. PENSION PARITY BENEFIT

         Section 3.01. Calculation and Payment of Pension Parity Benefit.

         (a)    The Pension Parity Benefit shall be a periodic benefit equal in
amount to the difference between (i) the benefit that is payable to or on behalf
of a Participant under the Retirement Plan, and (ii) the corresponding benefit
that would be payable under the Retirement Plan if such benefit were calculated
without regard to the Limitations.

         (b)    The Pension Parity Benefit shall be paid by the Participating
Employer in the same form and for the same period as is paid the corresponding
benefit under the Retirement Plan. Accordingly, the Pension Parity Benefit shall
be paid to the person receiving payment of the corresponding benefit under the
Retirement Plan with each payment being made, as nearly as practicable, at the
same time as the corresponding benefit from the Retirement Plan.

         Section 3.02. Optional Distribution Method.

         (a)    As an alternative to the periodic Pension Parity Benefit
described in Section 3.02 above, the Participant who is eligible for the Pension
Parity Benefit and the applicable Participating Employer may agree on a lump sum
payment that is the actuarial equivalent of the periodic Pension Parity Benefit
described in Section 3.02 above, subject to the following conditions and such
other conditions as may be determined by the Committee:

                (i)    The actuarial equivalent lump sum payment shall be
                       determined on the basis of the interest rates and
                       mortality tables which would be used by the Pension
                       Benefit Guaranty Corporation for determining the present
                       value of liability for pensioners' benefits in the case
                       of a terminated retirement plan under Title IV of ERISA
                       and which are in effect in the month prior to the month
                       when the Participant's Pension Parity Benefit is
                       scheduled to begin.

                (ii)   The agreement must be entered into (A) prior to the
                       year in which the Participant's retirement occurs and (B)
                       not later than six months before the actual retirement
                       date.



                                      -7-


                (iii)  The agreement, once entered, is irrevocable.

                (iv)   Evidence of good health at the time of the agreement
                       will be required.

         (b)    Payment of the lump sum benefit shall be made by the Company as
soon as practicable after payment of the Participant's benefit under the
Retirement Plan begins.

         Section 3.03. Pension Parity Calculation Is For Record Keeping Purposes
Only.

                The Pension Parity Benefit, and the record keeping procedures
described herein serve solely as a device for determining the amount of benefits
accumulated by a Participant under the Plan, and shall not constitute or imply
an obligation on the part of a Participating Employer to fund such benefits. In
any event, a Participating Employer may, in its discretion, set aside assets
equal to part or all of such benefit and invest such assets in Visteon common
stock, life insurance or any other investment deemed appropriate. Any such
assets shall be and remain the sole property of the Participating Employer, and
a Participant shall have no proprietary rights of any nature whatsoever with
respect to such assets.



                                      -8-


                         ARTICLE IV. GENERAL PROVISIONS

         Section 4.01. Administration.

         (a)    Subject to subsection (b) below, the Committee shall administer
and interpret the Plan. To the extent necessary to comply with applicable
conditions of Rule 16b-3, the Committee shall consist of not less than two
members of the Board, each of whom is also a director of the Company and
qualifies as a "non-employee director" for purposes of Rule 16b-3. If at any
time the Committee shall not be in existence or not be composed of members of
the Board who qualify as "non-employee directors", then all determinations
affecting Participants who are subject to Section 16 of the Exchange Act shall
be made by the full Board, and all determinations affecting other Participants
shall be made by the Board or an officer appointed by the Board.

         (b)    Subject to such limits as the Committee may from time to time
prescribe or such additional or contrary delegations of authority as the
Committee may prescribe, the Company's Director of Compensation and Benefits may
exercise any of the authority and discretion granted to the Committee hereunder,
provided that (i) the Director of Compensation and Benefits shall not be
authorized to amend the Plan, (ii) the Director of Compensation and Benefits
shall not exercise authority and responsibility with respect to non-ministerial
functions that relate to the participation by Participants who are subject to
Section 16 of the Exchange Act at the time any such delegated authority or
responsibility otherwise would be exercised, that relates to the participation
in the Plan by the Director of Compensation and Benefits. To the extent that the
Director of Compensation and Benefits is authorized to act on behalf of the
Committee, any references herein to the Committee shall be also be deemed
references to the Director of Compensation and Benefits.

         (c)    The Committee (or where applicable in accordance with subsection
(b) above, the Director of Compensation and Benefits) may adopt and modify rules
and regulations relating to the Plan as it deems necessary or advisable for the
administration of the Plan. The Committee (or where applicable in accordance
with subsection (b) above, the Director of Compensation and Benefits) shall have
the discretionary authority to interpret and construe the Plan, to make benefit
determinations under the Plan, and to take all other actions that may be
necessary or appropriate



                                      -9-


for the administration of the Plan. Each determination, interpretation or other
action made or taken pursuant to the provisions of the Plan by the Committee
shall be final and shall be binding and conclusive for all purposes and upon all
persons, including, but without limitation thereto, the Company, its
stockholders, the Participating Employers, the directors, officers, and
employees of the Company or a Participating Employer, the Plan participants, and
their respective successors in interest.

         Section 4.02. Restrictions to Comply with Applicable Law.

                Notwithstanding any other provision of the Plan, the Company
shall have no liability to make any payment under the Plan unless such delivery
or payment would comply with all applicable laws and the applicable requirements
of any securities exchange or similar entity.

         Section 4.03. Claims Procedures.

         (a)    Claim for Benefits. Any Participant or Beneficiary (hereafter
referred to as the "claimant") under this Plan who believes he or she is
entitled to benefits under the Plan in an amount greater than the amount
received may file, or have his or her duly authorized representative file, a
claim with the Committee. Any such claim shall be filed in writing stating the
nature of the claim, and the facts supporting the claim, the amount claimed and
the name and address of the claimant. The Committee shall consider the claim and
answer in writing stating whether the claim is granted or denied. The written
decision shall be within 90 days of receipt of the claim by the Committee (or
180 days if additional time is needed and the claimant is notified of the
extension, the reason therefor and the expected date of determination prior to
commencement of the extension). If the claim is denied in whole or in part, the
claimant shall be furnished with a written notice of such denial containing (i)
the specific reasons for the denial, (ii) a specific reference to the Plan
provisions on which the denial is based, (iii) an explanation of the Plan's
appeal procedures set forth in subsection (b) below, (iv) a description of any
additional material or information which is necessary for the claimant to submit
or perfect an appeal of his or her claim, and (v) an explanation of the
Participant's or Beneficiary's right to bring suit under ERISA following an
adverse determination upon appeal.



                                      -10-


         (b)    Appeal. If a claimant wishes to appeal the denial of his or her
claim, the claimant or his or her duly authorized representative shall file a
written notice of appeal to the Committee within 90 days of receiving notice of
the claim denial. In order that the Committee may expeditiously decide such an
appeal, (ii) a specific reference to the Plan provisions on which the appeal is
based, (iii) a statement of the arguments and authority (if any) supporting each
ground for appeal, and (iv) any other pertinent documents or comments which the
appellant desires to submit in support of the appeal. The Committee shall decide
the appellant's appeal within 60 days of its receipt of the appeal (or 120 days
if additional time is needed and the claimant is notified of the extension, the
reason therefor and the expected date of determination prior to the commencement
of the extension). The Committee's written decision shall contain the reasons
for the decision and reference to the Plan provisions on which the decision is
based. If the claim is denied in whole or in part, such written decision shall
also include notification of the claimant's right to bring suit for benefits
under Section 502(a) of ERISA and the claimant's right to obtain, upon request
and free of charge, reasonable access to and copies of all documents, records or
other information relevant to the claim for benefits.

         Section 4.04. Participant Rights Unsecured.

         (a)    Unsecured Claim. The right of a Participant or his beneficiary
to receive a distribution hereunder shall be an unsecured claim, and neither the
Participant nor any beneficiary shall have any rights in or against any specific
assets of a Participating Employer. The right of a Participant or beneficiary to
the payment of benefits under this Plan shall not be assigned, encumbered, or
transferred, except by will or the laws of descent and distribution. The rights
of a Participant hereunder are exercisable during the Participant's lifetime
only by him or his guardian or legal representative.

         (b)    Contractual Obligation. The Company may authorize the creation
of a trust or other arrangements to assist it in meeting the obligations created
under the Plan. However, any liability to any person with respect to the Plan
shall be based solely upon any contractual obligations that may be created
pursuant to the Plan. No obligation of a Participating Employer shall be deemed
to be secured by any pledge of, or other encumbrance on, any property of a
Participating Employer. Nothing contained in this Plan and no action taken
pursuant to its terms


                                      -11-


shall create or be construed to create a trust of any kind, or a fiduciary
relationship between a Participating Employer and any Participant or
beneficiary, or any other person.

         Section 4.05. Income Tax Withholding.

                  The Company shall withhold from any benefit payment amounts
required to be withheld for Federal and State income and other applicable taxes.

         Section 4.06. Amendment or Termination of Plan.

                  There shall be no time limit on the duration of the Plan.
However, the Company, by action of the Senior Vice President - Human Resources,
may at any time and for any reason, amend or terminate the Plan; provided that
the Committee shall have the exclusive amendment authority with respect to any
amendment that, if adopted, would increase the benefit payable to the Senior
Vice President - Human Resources by more than a de minimis amount. Any Plan
amendment or termination may reduce or eliminate a Participant's benefit under
the Plan, including, without limitation, an amendment to eliminate future
benefit payments for some or all Participants, whether or not in pay status at
the time such action is taken.

         Section 4.07. Effect of Inimical Conduct.

                  Anything contained in the Plan notwithstanding, all rights of
a Participant under the Plan to receive distribution of all or any part of his
or her benefit shall cease on and as of the date on which it has been determined
by the Committee that such Participant at any time (whether before or subsequent
to termination of such Participant's employment) acted in a manner inimical to
the best interests of the Company or a subsidiary or affiliate thereof.

         Section 4.08. No Assignment of Benefits.

                  No rights or benefits under the Plan shall, except as
otherwise specifically provided by law, be subject to assignment nor shall such
rights or benefits be subject to attachment or legal process for or against a
Participant or his or her beneficiary.



                                      -12-


         Section 4.09. Administrative Expenses.

                  Costs of establishing and administering the Plan will be paid
by the Participating Employers.

         Section 4.10. Successors and Assigns.

                  This Plan shall be binding upon and inure to the benefit of
the Participating Employers, their successors and assigns and the Participants
and their heirs, executors, administrators, and legal representatives.


                                         VISTEON CORPORATION



                                         /s/ Robert H. Marcin
                                         -------------------------------------
                                         ROBERT H. MARCIN
                                         SENIOR VICE PRESIDENT-HUMAN RESOURCES


                                      -13-







                                                                   EXHIBIT 10.19













                               VISTEON CORPORATION
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

              Effective July 1, 2000, Together With All Amendments
                        Adopted Through December 11, 2002







                               VISTEON CORPORATION
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


         The Visteon Corporation Supplemental Executive Retirement Plan (the
"Plan") has been adopted to promote the best interests of Visteon Corporation
(the "Company") and the stockholders of the Company by attracting and retaining
key management employees possessing a strong interest in the successful
operation of the Company and its subsidiaries or affiliates and encouraging
their continued loyalty, service and counsel to the Company and its subsidiaries
or affiliates. The Plan is adopted effective July 1, 2000.







                                      -2-


                    ARTICLE I. DEFINITIONS AND CONSTRUCTION


         Section 1.01. Definitions. The following terms have the meanings
indicated below unless the context in which the term is used clearly indicates
otherwise.

         (a)    Balance Plus Program: The Balance Plus component of the Visteon
Pension Plan.

         (b)    Beneficiary: The person or entity designated by a Participant
to be his or her beneficiary for purposes of this Plan (subject to such
limitations as to the classes and number of beneficiaries and contingent
beneficiaries and such other limitations as the Committee may prescribe). A
Participant's designation of beneficiary shall be valid and in effect only if a
properly executed designation, in such form as the Committee shall prescribe, is
filed and received by the Committee or its delegate prior to the Participant's
death. If a Participant designates his or her spouse as beneficiary, such
beneficiary designation automatically shall become null and void on the date of
the Participant's divorce or legal separation from such spouse. If a valid
designation of beneficiary is not in effect at the time of the Participant's
death, the estate of the Participant is deemed to be the sole beneficiary. If
multiple beneficiaries have been designated and one or more of the beneficiaries
predecease the Participant, then upon the Participant's death, payment shall be
made exclusively to the surviving beneficiary or beneficiaries unless the
Participant's designation specifies an alternate method of distribution.
Further, in the event that the Committee is uncertain as to the identity of the
Participant's beneficiary, the Committee may deem the estate of the Participant
to be the sole beneficiary. Beneficiary designations shall be in writing (or in
such other form as authorized by the Committee for this purpose, which may
include on-line designations), shall be filed with the Committee or its
delegate, and shall be in such form as the Committee may prescribe for this
purpose.

         (c)    Board: The Board of Directors of the Company.

         (d)    Code: The Internal Revenue Code of 1986, as interpreted by
regulations and rulings issued pursuant thereto, all as amended and in effect
from time to time. Any reference to a specific provision of the Code shall be
deemed to include reference to any successor provision thereto.


                                      -3-



         (e)    Committee: The Organization and Compensation Committee of the
Board.

         (f)    Company: Visteon Corporation, or any successor thereto.

         (g)    Covered Employment Classification: The employment positions
classified by the Company (or by a Participating Employer with the consent of
the Company) as Leadership Level One, Leadership Level Two, Leadership Level
Three, Leadership Level Four, Corporate Officer, Executive Leader or Senior
Leader.

         (h)    Credited Service: The years and any fractional year of credited
service at retirement, without duplication and not exceeding one year for any
calendar year, of the Participant under all the Retirement Plans; provided, that
solely for purposes of this Plan as applied to a Participant who is a
Transferred Group I or II Employee as defined under the Visteon Pension Plan,
and subject to Section 2.03, the Participant's credited service under all of the
Retirement Plans shall be deemed to include, to the extent not otherwise
considered under the Retirement Plans, the Participant's credited service
recognized under the General Retirement Plan of Ford Motor Company for
employment through June 30, 2000.

         (i)    Eligibility Service: Subject to Section 2.05, service with a
Participating Employer while employed in a Covered Employment Classification;
provided, that in the case of a Participant who was covered under the Ford Motor
Company Supplemental Executive Retirement Plan on June 30, 2000, Eligibility
Service recognized for such Participant under the Ford Motor Company
Supplemental Executive Retirement Plan as of June 30, 2000 shall be recognized
as Eligibility Service under this Plan.

         (j)    Employee: A person who is (i) classified by a Participating
Employer as a common law employee enrolled on the active employment rolls of the
Participating Employer, and (ii) regularly employed by a Participating Employer
on a salaried basis (as distinguished from a pension, retirement allowance,
severance pay, retainer, commission, fee under a contract or other arrangement,
or hourly, piecework or other wage).

         (k)    ERISA: The Employee Retirement Income Security Act of 1974, as
interpreted by regulations and rulings issued pursuant thereto, all as amended
and in effect from time to



                                      -4-


time. Any reference to a specific provision of ERISA shall be deemed to include
reference to any successor provision thereto.

         (l)    Participant: Subject to Section 2.05, an Employee who is
employed in a Covered Employment Classification, and where the context so
requires, a former Employee entitled to receive a benefit hereunder.

         (m)    Participating Employer: The Company, Visteon Systems, LLC,
Visteon Global Technologies, Inc., and each other subsidiary a majority of the
voting stock of which is owned directly or indirectly by the Company or a
limited liability company a majority of the membership interest of which is
owned directly or indirectly by the Company, that with the consent of the
Committee, participates in the Plan for the benefit of one or more Participants
in its employ.

         (n)    Plan: The Visteon Corporation Supplemental Executive Retirement
Plan, as amended and in effect from time to time.

         (o)    Retirement Plans: The Visteon Pension Plan (other than the
                Balance Plus Program) and the Salaried Retirement Plan of
                Visteon Systems, LLC, as amended and in effect from time to
                time.

         Section 1.02. Construction and Applicable Law.

         (a)    Wherever any words are used in the masculine, they shall be
construed as though they were used in the feminine in all cases where they would
so apply; and wherever any words are use in the singular or the plural, they
shall be construed as though they were used in the plural or the singular, as
the case may be, in all cases where they would so apply. Titles of articles and
sections are for general information only, and the Plan is not to be construed
by reference to such items.

         (b)    This Plan is intended to be a plan of deferred compensation
maintained for a select group of management or highly compensated employees as
that term is used in ERISA, and shall be interpreted so as to comply with the
applicable requirements thereof. In all other respects, the Plan is to be
construed and its validity determined according to the laws of the State of
Michigan to the extent such laws are not preempted by federal law. In case any
provision of



                                      -5-


the Plan is held illegal or invalid for any reason, the illegality or invalidity
will not affect the remaining parts of the Plan, but the Plan shall, to the
extent possible, be construed and enforced as if the illegal or invalid
provision had never been inserted.






















                                      -6-


         ARTICLE II. SUPPLEMENTAL BENEFITS FOR PARTICIPANTS OTHER THAN
              PARTICIPANTS COVERED UNDER THE BALANCE PLUS PROGRAM


         Section 2.01. Eligibility. Subject to Section 2.05, a Participant shall
be eligible to receive a supplemental benefit as provided in this Article II if
the Participant:

         (a)    retires directly from employment with a Participating Employer
(i) on normal or disability retirement under the Retirement Plan, or (ii) with
the approval of the Participating Employer at or after age 55 on early
retirement under the Retirement Plan;

         (b)    will receive a monthly normal, disability or early retirement
benefit under one or more Retirement Plans (other than the Balance Plus
Program);

         (c)    has at least ten (10) years of Credited Service, without
duplication, under all Retirement Plans;

         (d)    has at least five continuous years of Eligibility Service
immediately preceding retirement, unless the eligibility condition set forth in
this subsection (d) is waived by the Chairman of the Board or the President of
the Company; and

         (e)    is not covered by the Balance Plus Program.

         Section 2.02. Additional Definitions. For purposes of this Article II,
the following terms have the meanings indicated below:

         (a)    Final Five Year Average Base Salary: The average of the
Participant's Monthly Base Salary for the five December 31 measurement dates
coincident with or immediately preceding the Participant's retirement.

         (b)    Monthly Base Salary: Subject to Section 2.05, the monthly base
salary paid to a Participant while employed in a Covered Employment
Classification on December 31, prior to giving effect to any salary reduction
agreement to which Section 125 or Section 402(a)(8) of the Code applies, but not
including any other kind of extra or additional compensation. For purposes of
this subsection, base salary paid by Ford Motor Company prior to July 1, 2000
shall be treated as if paid by the Company.



                                      -7-



         Section 2.03. Amount of Supplemental Benefit.

         (a) Subject to Section 2.05, any reductions pursuant to subsections (b)
and (c) below and to any limitations and reductions pursuant to other provisions
of the Plan, the monthly supplemental benefit shall be an amount equal to the
Participant's Final Five Year Average Base Salary multiplied by the
Participant's years of Credited Service at retirement, and further multiplied by
the Applicable Percentage based on the Covered Employment Classification in
which the Participant served immediately prior to his or her retirement, as
follows:



  Covered Employment Classification
  Immediately Prior to Retirement                          Applicable Percentage
  ---------------------------------                        ---------------------
                                                              
         Chairman                                                0.90%

         President                                               0.80%

         Executive Vice President                                0.80%

         Senior Vice President                                   0.75%

         Vice President                                          0.70%

         Executive Leader or Leadership                          0.40%
         Level Two

         Senior Leader, Leadership Level Three, or               0.20%
         Leadership Level Four
 

         (b)    For a Participant who is a Transferred Group I or II Employee as
defined under the Visteon Pension Plan and who is entitled to a benefit under
the Ford Motor Company Supplemental Executive Retirement Plan, the monthly
supplement benefit payable hereunder shall be reduced by the amount of the
supplemental benefit to which the Participant is entitled under the Ford Motor
Company Supplemental Executive Retirement Plan (or to which the Participant
would have been entitled under such plan except for any forfeiture of benefits
attributable to the Participant's conduct). In addition, the Committee may
further adjust the monthly supplemental benefit payable to a Participant who is
a Transferred Group I or II Employee if such action is necessary or desirable as
a result of changes in the Ford Motor Company Supplemental Executive Retirement
Plan or if such action is otherwise necessary or desirable in order to avoid
duplicative benefits or to ensure that the Participant's aggregate


                                      -8-


benefit from this Plan and from the Ford Motor Company Supplemental Executive
Retirement Plan, and the allocation of benefits between such plans, is
consistent with the Employee Transition Agreement dated April 1, 2000 by and
between the Company and Ford Motor Company, and any amendments thereto.

         (c)    For a Participant who shall retire before age 62, the monthly
supplemental benefit payable hereunder shall equal the amount calculated in
accordance with subsections (a) and (b) immediately above, reduced by 5/18 of 1%
multiplied by the number of months from the later of the date the supplemental
benefit commences, or age 55 in the case of earlier receipt by reason of
disability retirement, to the first day of the month after the Participant would
attain age 62.

         Section 2.04. Payments. Subject to the earning-out conditions set forth
in Article VI, supplemental benefits, in the amount determined under Section
2.03, shall be payable out of the Company's general funds monthly beginning with
a payment for the month for which the Participant's retirement benefit under any
Retirement Plan or under the Company's Executive Separation Allowance Plan
begins. Payments to a Participant hereunder shall cease at the end of the month
in which the Participant dies. There is no pre-retirement or post-retirement
death benefit payable this Article II following the death of the Participant.

         Section 2.05. Special Rules for Certain Employees Affected by 2001 Work
Force Restructuring Program. The following rules shall apply to an Employee who
(i) was employed in a Covered Employment Classification immediately prior to the
Company's 2001 Work Force Restructuring (the "Restructuring"), and (ii)
continued to be employed by a Participating Employer following the Restructuring
but, as a result of the Restructuring, ceased to be employed in a Covered
Employment Classification:

         (a)    The Employee will continue as a Participant in the Plan
notwithstanding the Employee's transfer to a non-Covered Employment
Classification.

         (b)    The Employee will continue to accumulate Eligibility Service for
employment with a Participating Employer following the Restructuring, and such
employment shall be treated, for purposes of Section 1.01(j), 2.01(d) and
2.02(b), as if it were employment in an Eligible Employment Classification.



                                      -9-



     (c)   The amount of the Employee's supplemental benefit under Section 2.03
shall be based on the Covered Employment Classification in which the Employee
was employed immediately prior to the Restructuring.




                                      -10-


           ARTICLE III. SUPPLEMENTAL BENEFITS FOR PARTICIPANTS IN THE
                              BALANCE PLUS PROGRAM


         Section 3.01. Eligibility. A Participant shall be eligible to receive a
supplemental benefit as provided in this Article III if the Participant:

         (a)    is covered under and will receive a monthly annuity benefit from
the Balance Plus Program;

         (b)    is employed in a Covered Employment Classification at
termination of employment; and

         (c)    terminates employment after his or her SERP Eligibility Date
with the approval of the Participating Employer.

         Section 3.02. Additional Definitions. For purposes of this Article III,
the following terms have the meanings indicated below:

         (a)    Annual Incentive: The portion of the Visteon Incentive Plan, or
any successor plan, that provides for incentive compensation that is awarded in
the form of a cash bonus and that is based on a performance period of 12 months
or less.

         (b)    Compensation: The Participant's compensation as defined in the
Balance Plus Program for purposes of determining cash balance accruals, plus for
any month after the Participant's SERP Eligibility Date, any Annual Incentive
amounts actually paid to the Participant (or that would have been paid to the
Participant except for the Participant's election to defer all or a portion of
such payment), all as determined without regard to the compensation limitation
of Code Section 401(a)(17).

         (c)    Final Average Compensation: The final average compensation that
would be determined for the Participant under the Balance Plus Program for
purposes of determining pension equity accruals if such final average
compensation were determined without regard to the compensation limitation of
Code Section 401(a)(17), plus the average of the three highest consecutive
Annual Incentive amounts paid to the Participant (or that would have been paid
to the Participant except for the Participant's election to defer all or a
portion of such payment)



                                      -11-


during the 120 month period immediately preceding the Participant's termination
of employment.

         (d)    SERP Eligibility Date: The date on which the Participant has,
for each of at least five years of Eligibility Service prior to the
Participant's termination of the employment with a Participating Employer, been
selected to participate in the Company's Annual Incentive program and has been
granted a target bonus under such program of at least 40% of the Participant's
annual base salary rate in effect on the date the target bonus amount is
established.

         Section 3.03. Amount of Supplemental Benefit.

         (a)    Subject to any limitations and reductions pursuant to other
provisions of the Plan, the monthly supplemental benefit shall be an amount
equal to:

                (i)     The monthly annuity benefit that the Participant would
                        have received under the Balance Plus Program if the
                        Participant's benefit under such program had been
                        calculated in accordance with the modifications
                        described in subsection (b) below; minus

                (ii)    The monthly annuity benefit to which the
                        Participant is actually entitled under the Balance Plus
                        Program; minus

                (iii)   The monthly annuity benefit to which the
                        Participant is actually entitled under the Visteon
                        Corporation Pension Parity Plan (or the monthly annuity
                        benefit to which the Participant would have been
                        entitled under the Visteon Corporation Pension Parity
                        Plan except for the Participant's election of a single
                        sum payment).

        (b)     The monthly annuity benefit for purposes of subsection (a)(i)
above is the monthly annuity benefit to which the Participant would have been
entitled under the Balance Plus Program if the Participant's benefit under such
program were calculated consistent with the following modifications:



                                      -12-


                (i)     Both for purposes of calculating the Participant's
                        cash balance benefit and for purposes of calculating the
                        Participant's pension equity benefit, o the limitations
                        of Code Section 415 are disregarded;

                (ii)    For purposes of calculating a Participant's cash
                        balance benefit, the benefit is calculated by applying
                        the definition of Compensation set forth in Section
                        3.02(b) above in lieu of the definition set forth in the
                        Balance Plus Program; and

                (iii)   For purposes of calculating a Participant's
                        pension equity benefit:

                        (A)   The benefit is calculated by applying a benefit
                              multiplier of 15% in lieu of the 12.5% benefit
                              multiplier specified in the Balance Plus Program;

                        (B)   The benefit is calculated by applying the
                              definition of Final Average Compensation set forth
                              in Section 3.02(c) above in lieu of the definition
                              set forth in the Balance Plus Program; and

                        (C)   The benefit is calculated by applying the
                              following early commencement reduction factors in
                              lieu of the early commencement factors set forth
                              in the Balance Plus Program:



         Applicable Period Preceding Participant's
                 Normal Retirement Date                                            Reduction
         -----------------------------------------                      --------------------------------
                                                                     
                       First 5 Years                                             1.25% Per Year*
         Years in Excess of 5 But Not More Than 20                               3.75% Per Year*
                   Years in Excess of 20                                Actuarially Equivalent Reduction*


* The reduction will be prorated for portions of a year, by multiplying the
applicable reduction for a full year by a fraction, the numerator of which is
the number of full months in such partial year, and the denominator of which is
12. In addition, the reduction is cumulative, e.g., if the Applicable Period is
23 years prior to the Participant's Normal Retirement Date, the reduction is
1.25% for each of years one through five, 3.75% for each of years six through
20, and an Actuarially Equivalent reduction for years 21 through 23.



                                      -13-


        (c)     A Participant who becomes disabled while actively employed will
continue to accrue benefits under this Article III during the period of
disability to the same extent that the Participant accrues benefits under the
Balance Plus Program during the period of such disability.

         Section 3.04. Payment of Supplemental Benefit. The Participant's
monthly supplemental benefit shall be paid by the Participating Employer in the
same form and for the same period the corresponding benefit under the Balance
Plus Program is paid. Accordingly, except as provided in Section 3.05, the
supplemental benefit shall be paid to the person receiving payment of the
corresponding benefit under payable at the same time and in the same form as
paid the Participant's benefit under the Balance Plus Program with each payment
being made, as nearly as practicable, at the same time as the corresponding
benefit from the Balance Plus Plan. The interest rates, mortality factors,
annuity conversion factors, early commencement reductions, assumptions for
converting from one form of benefit to another, and all other actuarial
conversion and adjustment factors, shall be the same as those applicable in
calculating the Participant's actual annuity benefit under the Balance Plus
Program.

         Section 3.05. Death Benefits.

         (a)    If the Participant dies on or after the date on which payment
of the Participant's supplemental benefit has commenced, the only death benefits
payable shall be those (if any) that are payable under the form of annuity
benefit applicable to the Participant.

         (b)    If the Participant dies prior to the Participant's SERP
Eligibility Date, no benefits are payable following the Participant's death.

         (c)    If the Participant dies after the Participant's SERP Eligibility
Date but prior to the date on which payment of the Participant's supplemental
benefit has commenced, a single sum death benefit shall be paid to the
Participant's Beneficiary. The amount of the death benefit will be equal to the
actuarially equivalent single sum value of the monthly annuity benefit that
otherwise would have been payable under Section 3.03. Actuarial equivalence
shall be determined by using the interest rate and mortality table applicable
under the Balance Plus Program.




                                      -14-


                       ARTICLE IV. CONDITIONAL ANNUITIES


         Section 4.01. Eligibility. The Committee, in its discretion, may award
to a Participant who is a Corporate Officer or an employee in Leadership Level
One additional retirement income in the form of a Conditional Annuity, which
shall become payable if the Participant shall retire directly from employment
with a Participating Employer either (i) on normal or disability retirement or
(ii) with the approval of the Participating Employer at or after age 55 on early
retirement. This Article III shall only apply to a Participant whose original
date of hire is prior to January 1, 2002.

         Section 4.02.   Amount of Conditional Annuity.

         (a) In determining the amount of any Conditional Annuity to be
awarded to an eligible Participant for any year, the Committee shall consider
the Company's profit performance and the amount of supplemental compensation
that is awarded to such Participant for such year. Awards shall be made only for
years in which the Committee has decided, for reasons other than individual or
corporate performance or termination of employment, to award supplemental
compensation to an eligible Participant in an amount which is less than would
have been awarded if the historical relationship to awards to other executives
had been followed (including, for this purpose, the historical relationship to
awards made by Ford Motor Company with respect to periods prior to July 1, 2000,
during which time the Company was a wholly-owned subsidiary or division of Ford
Motor Company).

         (b) The aggregate annual amount payable under the Conditional Annuities
awarded to any eligible Participant and the annual amount payable to an eligible
Participant as a conditional annuity under the Ford Motor Company Supplemental
Executive Retirement Plan, shall not exceed an amount equal to the Applicable
Percentage of such Participant's Final Three Year Average Base Salary,
determined in accordance with the following table:




                                      -15-






                                                                     Applicable Percentage
                                                     ------------------------------------------------------
          Number of Years for                                                                 All Other
          Which a Conditional                          Chairman                               Eligible
          Annuity is Awarded                         And President                       Corporate Officers
          ------------------                         -------------                       ------------------

                                                                                             
                   1                                      30%                                      20%
                   2                                      35                                       25
                   3                                      40                                       30
                   4                                      45                                       35
               5 or more                                  50                                       40


         The percentage shall be reduced pro rata to the extent that Credited
Service at retirement is less than 30 years.

         (c)    "Final Three Year Average Base Salary" means the average of the
Participant's Monthly Base Salary (as defined in Section 2.02) for the three
December 31 measurement dates coincident with or immediately preceding the
Participant's retirement.

         Section 4.03. Payments.

         (a)    Subject to the earning-out conditions set forth in Article IV,
Conditional Annuities, in the amount determined under Section 4.02, shall be
payable out of the Company's general funds monthly beginning on the first day of
the month when the Participant's retirement benefit under any Retirement Plan or
under the Company's Executive Separation Allowance Plan begins. Except as
provided in Section 4.04, payments with respect to a Participant hereunder shall
cease at the end of the month in which such Participant dies.

         (b)    For a Participant who retires before age 65, the monthly payment
under any Conditional Annuity awarded to such Participant shall equal the
actuarial equivalent (based on factors determined by the Company's independent
consulting actuary) of the monthly amount payable for retirement at age 65.

         Section 4.04. Death Benefits. Upon death before retirement but at or
after age 55, the Participant's Beneficiary shall be paid a lump sum equal to 30
times (representing 30 months) the aggregate monthly amount payable under such
Participant's Conditional Annuities if the



                                      -16-


Participant had been age 55 at death, increased by one-third of one month for
each full month by which the Participant's age at death shall exceed age 55. If
death occurs within 120 months following retirement, the monthly payments under
the Conditional Annuity shall be continued to the Participant's Beneficiary for
the remaining balance of the 120 month period following retirement.



                                      -17-

                         ARTICLE V. ADDITIONAL BENEFITS


         Section 5.01. Retirement Plan Supplement for Certain Transferred
Employees. A Participant who retired on June 30, 2000 from Ford Motor Company,
and who was employed by the Company as a Corporate Officer on July 1, 2000,
shall, upon retirement from the Company, receive the additional monthly
retirement benefits described in this Section.

         (a)    An eligible Participant shall receive a monthly retirement
benefit equal to the difference between (i) and (ii) below, where:

                (i)    is the aggregate monthly retirement benefit to which
                       the Participant would have been entitled under the
                       General Retirement Plan of Ford Motor Company and the
                       defined benefit component of the Ford Motor Company
                       Benefit Equalization Plan (collectively, the "Ford
                       Pension Plans") if the Participant's employment with the
                       Company on and after July 1, 2000, and the compensation
                       attributable to such employment, had instead been
                       employment with, and compensation from, Ford Motor
                       Company; and

                (ii)   is the aggregate monthly retirement benefit under
                       the Ford Pension Plans, the Retirement Plans, and the
                       Visteon Corporation Pension Parity Plan, to which the
                       Participant is actually entitled.

         (b)    In addition, an eligible Participant shall receive a monthly
retirement benefit equal to the difference between (i) and (ii) below, where:

                (i)    is the monthly retirement benefit to which the
                       Participant would have been entitled under the Ford Motor
                       Company Supplemental Executive Retirement Plan if the
                       Participant's employment with the Company on and after
                       July 1, 2000, and the compensation attributable to such
                       employment, had instead been employment with, and
                       compensation from, Ford Motor Company; and

                (ii)   is the aggregate monthly retirement benefit under
                       the Ford Motor Company Supplemental Executive Retirement
                       Plan and under Article II of



                                      -18-


                       this Plan, to which the Participant is actually entitled;
                       provided that any reduction in the Participant's benefit
                       under the Ford Motor Company Supplemental Executive
                       Retirement Plan for early benefit commencement shall be
                       taken into account only to the extent that such reduction
                       would apply if the Participant's benefit under the Ford
                       Motor Company Supplemental Executive Retirement Plan
                       commenced on the same date as the Participant's benefit
                       under Article II of this Plan commence.

         (c)    The supplemental benefit under subsection (a) above shall be
paid beginning with a payment for the month following the month in which occurs
the Participant's retirement from the Company and all subsidiaries or
affiliates, and shall be paid in the same form and for the same duration as is
paid the Participant's benefit under the General Retirement Plan of Ford Motor
Company. The supplemental benefit under subsection (b) above shall be paid in
accordance with Article II of this Plan as if the benefit had been initially
calculated under that Article.

         (d)     The monthly retirement benefits calculated under subsections
(a)(i) and (b)(I) shall be determined based upon the terms of the applicable
Ford Motor Company plan as in effect on June 30, 2000. The Committee has full
authority and discretion to adjust (including to reduce) the benefit amounts
calculated above to reflect changes in the design of the applicable Ford Motor
Company plan or to take into account such other factors as the Committee, in its
sole discretion, deems relevant.

         (e)    The Committee may adjust the benefit otherwise payable under
this Section 5.01 if such action is necessary or desirable on account of
differences in the form or time of payment under the plans and arrangements
described in this Section 5.01 or on account of such other factors identified by
the Committee as making an adjustment necessary or desirable.

         Section 5.02. Additional Benefits for the Chief Operating Officer.

         (a)    This Section applies to a Participant who was the Company's
Chief Operating Officer on January 1, 2002. Such Participant shall be entitled
to an additional benefit equal to the Participant's basic retirement benefit
under the Visteon Pension Plan and Visteon



                                      -19-


Corporation Pension Parity Plan. For this purpose, the term "basic retirement
benefit" means the Participant's retirement benefit exclusive of any early
retirement supplements, interim supplements or temporary benefits.

         (b)    The additional benefit shall be paid at the same time and in the
same form as the Participant's benefit under the Visteon Pension Plan and the
Visteon Corporation Pension Parity Plan is paid, and shall be subject to all of
the other terms of the conditions of such plans as if the additional benefit
were actually accrued under such plans.



                                      -20-


                       ARTICLE VI. EARNING OUT CONDITIONS


       Section 6.01. Conditions Applicable to Continued Payment of Award.

         (a)    Anything herein contained to the contrary notwithstanding, the
right of any Participant to receive benefit payments hereunder for any month
shall accrue only if, during the entire period from the date of retirement to
the end of such month, the Participant shall have earned out such payment by
refraining from engaging in any activity that is directly or indirectly in
competition with any activity of the Company or any subsidiary or affiliate
thereof. The Committee shall have the sole and absolute discretion to determine
whether a Participant's activities constitute competition with the Company, and
the Committee may promulgate such rules and regulations in this regard as it
deems appropriate.

         (b)    In the event of a Participant's nonfulfillment of the condition
set forth in the immediately preceding paragraph, no further payment shall be
made to the Participant or the Beneficiary; provided, however, that the
nonfulfillment of such condition may at any time (whether before, at the time of
or subsequent to termination of employment) be waived in the following manner:

                (i)    with respect to any such Participant who at any time
                       shall have been a member of the Board of Directors, the
                       President, an Executive Vice President, a Senior Vice
                       President, a Vice President, the Treasurer, the
                       Controller or the Secretary of the Company, such waiver
                       may be granted by the Committee upon its determination
                       that in its sole judgment there shall not have been and
                       will not be any substantial adverse effect upon the
                       Company or any subsidiary or affiliate thereof by reason
                       of the nonfulfillment of such condition; and

                (ii)   with respect to any other such Participant, such
                       waiver may be granted by the Retirement Committee
                       designated under the Visteon Pension Plan upon its
                       determination that in its sole judgment there shall not
                       have been and will not be any such substantial adverse
                       effect.



                                      -21-




         (c)    Anything herein contained to the contrary notwithstanding,
benefit payments shall not be paid to or with respect to any person as to whom
it has been determined that such person at any time (whether before or
subsequent to termination of employment) acted in a manner detrimental to the
best interests of the Company. Any such determination shall be made by (i) the
Committee with respect to any Participant who at any time shall have been a
member of the Board of Directors, an Executive Vice President, a Senior Vice
President, a Vice President, the Treasurer, the Controller or the Secretary of
the Company, and (ii) the Retirement Committee designated under the Visteon
Pension Plan with respect to any other Participant, and shall apply to any
amounts payable after the date of the applicable committee's action hereunder,
regardless of whether the Participant has commenced receiving benefit payments
hereunder. Conduct which constitutes engaging in an activity that is directly or
indirectly in competition with any activity of the Company or any subsidiary or
affiliate thereof shall be governed by subsections (a) and (b) above and shall
not be subject to any determination under this subsection (c).



                                      -22-





                        ARTICLE VII. GENERAL PROVISIONS


         Section 7.01. Administration and Interpretation.

         (a)    Subject to subsection (b) below, the Committee shall administer
and interpret the Plan.

         (b)    Subject to such limits as the Committee may from time to time
prescribe or such additional or contrary delegations of authority as the
Committee may prescribe, the Company's Director of Compensation and Benefits may
exercise any of the authority and discretion granted to the Committee hereunder,
provided that (i) the Director of Compensation and Benefits shall not be
authorized to amend the Plan, and (ii) the Director of Compensation and Benefits
shall not exercise any authority and responsibility with respect to
non-ministerial matters affecting the participation in the Plan by the Director
of Compensation and Benefits. To the extent that the Director of Compensation
and Benefits is authorized to act on behalf of the Committee, any references
herein to the Committee shall be also be deemed references to the Director of
Compensation and Benefits.

         (c)     The Committee may adopt and modify rules and regulations
relating to the Plan as it deems necessary or advisable for the administration
of the Plan. The Committee shall have the discretionary authority to interpret
and construe the Plan, to make benefit determination (and benefit adjustments)
under the Plan, and to take all other actions that may be necessary or
appropriate for the administration of the Plan. Each determination,
interpretation or other action made or taken pursuant to the provisions of the
Plan by the Committee shall be final and shall be binding and conclusive for all
purposes and upon all persons, including, but without limitation thereto, the
Company, its stockholders, the Participating Employers, the directors, officers,
and employees of the Company or a Participating Employer, the Plan participants,
and their respective successors in interest.

         Section 7.02. Restrictions to Comply with Applicable Law.
Notwithstanding any other provision of the Plan, the Company shall have no
liability to make any payment under the Plan unless such delivery or payment
would comply with all applicable laws and the applicable requirements of any
securities exchange or similar entity.



                                      -23-


         Section 7.03. Deductions. Anything contained in the Plan
notwithstanding, a Participating Employer may deduct from any distribution
hereunder all amounts owed to the Company or a Participating Employer by the
Participant for any reason, and all taxes required by law or government
regulation to be deducted or withheld.

         Section 7.04. Claims Procedure.

         (a)    Claim for Benefits. Any Participant or Beneficiary (hereafter
referred to as the "claimant") under this Plan who believes he or she is
entitled to benefits under the Plan in an amount greater than the amount
received may file, or have his or her duly authorized representative file, a
claim with the Committee. Any such claim shall be filed in writing stating the
nature of the claim, and the facts supporting the claim, the amount claimed and
the name and address of the claimant. The Committee shall consider the claim and
answer in writing stating whether the claim is granted or denied. The written
decision shall be within 90 days of receipt of the claim by the Committee (or
180 days if additional time is needed and the claimant is notified of the
extension, the reason therefor and the expected date of determination prior to
commencement of the extension). If the claim is denied in whole or in part, the
claimant shall be furnished with a written notice of such denial containing (i)
the specific reasons for the denial, (ii) a specific reference to the Plan
provisions on which the denial is based, (iii) an explanation of the Plan's
appeal procedures set forth in subsection (b) below, (iv) a description of any
additional material or information which is necessary for the claimant to submit
or perfect an appeal of his or her claim and (v) an explanation of the
Participant's or Beneficiary's right to bring suit under ERISA following an
adverse determination upon appeal.

         (b)    Appeal. If a claimant wishes to appeal the denial of his or her
claim, the claimant or his or her duly authorized representative shall file a
written notice of appeal to the Committee within 90 days of receiving notice of
the claim denial. In order that the Committee may expeditiously decide such
appeal, the written notice of appeal should contain (i) a statement of the
ground(s) for the appeal, (ii) a specific reference to the Plan provisions on
which the appeal is based, (iii) a statement of the arguments and authority (if
any) supporting each ground for appeal, and (iv) any other pertinent documents
or comments which the appellant desires to submit in support of the appeal. The
Committee shall decide the appellant's appeal within 60


                                      -24-


days of its receipt of the appeal (or 120 days if additional time is needed and
the claimant is notified of the extension, the reason therefore and the expected
date of determination prior to commencement of the extension). The Committee's
written decision shall contain the reasons for the decision and reference to the
Plan provisions on which the decision is based. If the claim is denied in whole
or in part, such written decision shall also include notification of the
claimant's right to bring suit for benefits under Section 502(a) of ERISA and
the claimant's right to obtain, upon request and free of charge, reasonable
access to and copies of all documents, records or other information relevant to
the claim for benefits.

         Section 7.05. Participant Rights Unsecured.

         (a)    Unsecured Claim. The right of a Participant or his or her
Beneficiary to receive a distribution hereunder shall be an unsecured claim, and
neither the Participant nor any Beneficiary shall have any rights in or against
any amount credited to his or her Account or any other specific assets of a
Participating Employer. The right of a Participant or Beneficiary to the payment
of benefits under this Plan shall not be assigned, encumbered, or transferred,
except by will or the laws of descent and distribution. The rights of a
Participant hereunder are exercisable during the Participant's lifetime only by
the Participant or the Participant's guardian or legal representative.

         (b)    Contractual Obligation. The Company may authorize the creation
of a trust or other arrangements to assist it in meeting the obligations created
under the Plan. However, any liability to any person with respect to the Plan
shall be based solely upon any contractual obligations that may be created
pursuant to the Plan. No obligation of a Participating Employer shall be deemed
to be secured by any pledge of, or other encumbrance on, any property of a
Participating Employer. Nothing contained in this Plan and no action taken
pursuant to its terms shall create or be construed to create a trust of any
kind, or a fiduciary relationship between a Participating Employer and any
Participant or Beneficiary, or any other person.

         Section 7.06. No Contract of Employment. The Plan is an expression of
the Company's present policy with respect to Company executives who meet the
eligibility requirements set forth herein. The Plan is not a contract of
employment, nor does it provide any Participant with a right to continue in the
employment of the Company or any other entity. No Participant,



                                      -25-


Beneficiary or other person shall have any legal or other right to any benefit
payments except in accordance with the terms of the Plan, and then only while
the Plan is in effect and subject to the Company's right to amend or terminate
the Plan as provided in Section 7.07 below.

         Section 7.07. Amendment or Termination. There shall be no time limit on
the duration of the Plan. However, the Company, by action of the Senior Vice
President - Human Resources, may at any time and for any reason, amend or
terminate the Plan; provided that the Committee shall have the exclusive
amendment authority with respect to any amendment that, if adopted, would
increase the benefit payable to the Senior Vice President - Human Resources by
more than a de minimis amount. Any Plan amendment or termination may reduce or
eliminate a Participant's benefit under the Plan, including, without limitation,
an amendment to eliminate future benefit payments for some or all Participants,
whether or not in pay status at the time such action is taken.

         Section 7.08. Administrative Expenses. Costs of establishing and
administering the Plan will be paid by the Participating Employers.

         Section 7.09. No Assignment of Benefits. No rights or benefits under
the Plan shall, except as otherwise specifically provided by law, be subject to
assignment (except for the designation of beneficiaries pursuant to subsection
(b) of Section 1.01), nor shall such rights or benefits be subject to attachment
or legal process for or against a Participant or his or her Beneficiary.

         Section 7.10. Successors and Assigns. This Plan shall be binding upon
and inure to the benefit of the Participating Employers, their successors and
assigns and the Participants and their heirs, executors, administrators, and
legal representatives.


                                         VISTEON CORPORATION



                                         /s/ Robert H. Marcin
                                         -------------------------------------
                                         ROBERT H. MARCIN
                                         SENIOR VICE PRESIDENT-HUMAN RESOURCES



                                      -26-


                                                                   EXHIBIT 10.21

                                SERVICE AGREEMENT



                                     between



                Visteon International Business Development, Inc.
                            728 PARKLANE TOWERS EAST
                               DEARBORN, MI 48126

                  - hereinafter referred to as the "Company" -



                                       and



                             Dr. Heinz Pfannschmidt



                  - hereinafter referred to as the "Director" -


                - jointly hereinafter referred to as "Parties" -







GENERAL


By resolution of the Board of Directors of Visteon Corporation of Sept. 20, 2001
Dr. Heinz Pfannschmidt has been appointed an officer of Visteon Corporation. The
appointment will become effective on November 1, 2001. With regard to the
advisory services that Dr. Pfannschmidt will render to the Company, the Parties
enter into the following

                               Service Agreement.


SECTION 1 POSITION OF THE DIRECTOR

(1)      The Director has been assigned the title and function of the "President
         Europe and South America". He shall be appointed to the Board of
         Directors and be a statutory representative of the Company.

(2)      The Director will be assigned to Visteon Holdings GmbH, Cologne and
         will render comprehensive management services and other advisory
         services related to the business operations and the entities of Visteon
         Corporation in Europe and South America. He shall render his services
         in accordance with applicable law, the Articles of Incorporation and
         By-laws of the Company and this Advisory Services Agreement, all as
         applicable from time to time.

         The Company may request the Director to assume specific functions and
         positions in entities affiliated with the Company that are incorporated
         in Europe or South America.

(3)      The Director shall always safeguard the interests of the Company. Any
         business relations with suppliers, clients or other business partners
         of the Company must not be used for the personal benefit of the
         Director.

(4)      The Director declares that he is not bound by obligations to provide
         services outside the Visteon group of companies, nor that he is subject
         to non-competition obligations.


SECTION 2 DUTIES AND RESPONSIBILITIES

         The Director shall conduct the business with the diligence of a
         conscientious businessman and shall conscientiously fulfill the
         services pursuant to Section 1 (2) of this Service Agreement.



                                       2


SECTION 3 FREE DETERMINATION OF WORK PLACE AND TIME AND ADDITIONAL ACTIVITIES

(1)      The Director shall be free to determine where and when he conducts the
         work underlying the services. The place and time for the performance of
         the actual advice shall be agreed among the Parties.

(2)      The Company and the Director can agree that the Director shall, without
         additional compensation, also assume assignments to the Board of
         Directors, the Supervisory Board or similar functions in affiliated
         companies. The same shall apply to honorary functions in associations
         and similar organizations in which the Company participates or is a
         member.

(3)      The assumption of any other paid or unpaid additional activity or
         honorary position including appointments to supervisory boards etc.
         require the prior written approval of the Board of Directors of the
         Company. The approval can be revoked at any time, whereby any
         provisions as to notice periods for termination of an assumed office
         must be taken into consideration.


SECTION 4 SALARY AND FULL COMPENSATION

(1)      The annual base salary shall amount to

                                DM 950,000 gross
             (in words: Deutsche Mark nine hundred fifty thousand).

(2)      The annual base salary shall be paid in thirteen equal installments.
         The 13th monthly salary shall be paid together with the salary for the
         month of November. When joining or leaving during the course of the
         calendar year, the 13th monthly salary shall be paid pro rata temporis.
         This compensation shall cover holiday pay, Christmas bonus and the
         like, as well as any overtime worked. The salary is payable at the end
         of each respective month and shall be transferred to the checking
         account indicated by the Director.

(3)      The base salary and the other compensation and benefits agreed in this
         Service Agreement shall constitute the full and entire compensation of
         the Director for the services rendered under this Agreement.


SECTION 5 VARIABLE COMPENSATION

         The Director will be entitled to participate in Visteon Corporation's
         Long Term Incentive Plans (currently in the form of the Visteon
         Corporation 2000 Incentive Plan), as it exists from time to time. The
         amounts named below are gross amounts and will be payable net of all
         applicable taxes and contributions to social security institutions. The
         Director shall be responsible for the payment of all


                                       3


         taxes, in particular income tax and contributions to social security
         institutions. The performance targets will be determined by the Board
         of Directors of the Company in accordance with any available
         compensation plans applicable to the Company. They also require the
         approval of Visteon Corporation.

         (a)    Under the Short Term Incentive Opportunity the Director shall be
                eligible for an amount of sixty percent of the annual base
                salary of the Director if the performance targets are reached in
                all respects.

         (b)    Under the Long Term Incentive Plan the Director shall be
                eligible for an incentive opportunity of two hundred percent of
                the annual base salary of the Director if the performance
                targets are reached in all respects. The performance targets
                shall be determined as the achievement of certain financial and
                operational goals for Visteon Corporation and its affiliates
                over a three year period. Fifty percent of the opportunity shall
                be paid out in cash adjusted for performance, and twenty-five
                percent in Visteon Corporation common stock adjusted for
                performance. Twenty-five percent of the opportunity will be
                delivered in options relating to common stock in Visteon
                Corporation.


SECTION 6 RESTRICTED STOCK, STOCK OPTIONS AND STOCK OWNERSHIP

(1)      The Director will be granted, within three months of the commencement
         of this Advisory Services Agreement, 25,000 shares of common stock of
         Visteon Corporation in the form of restricted stock. The restricted
         stock shall not be salable before the fifth anniversary of the
         commencement of this Service Agreement. Further details are set forth
         in the restricted stock plan of Visteon Corporation (currently in the
         form of the Visteon Corporation 2000 Incentive Plan), as it exists from
         time to time. The Director shall be responsible for all taxes, in
         particular income tax, and contributions payable in connection with the
         receipt and sale of the restricted stock.

(2)      The Director will be granted, within three months of the commencement
         of this Service Agreement, stock options relating to 45,000 shares of
         common stock of Visteon Corporation that will vest ratably over a
         three-year period starting with the commencement of this Service
         Agreement. The strike price for these options shall be the average of
         the high and low prices for shares of common stock in Visteon
         Corporation quoted on the New York Stock Exchange on the date this
         Service Agreement commences or on the next following trading day if
         trading does not occur on the commencement date of this agreement.
         Further details are set forth in the stock option plan of Visteon
         Corporation, as it exists from time to time. The Director shall be
         responsible for all taxes, in particular income tax, and contributions
         payable in connection with the receipt and exercise of the stock
         options and the sale of the shares received upon such exercise.



                                       4



SECTION 7 SIGN-ON BONUS

         The Director will receive, within three months of the commencement of
         this Service Agreement, a sign-on bonus in the amount of the sum of the
         lost bonus from his previous employer and the Visteon target for two
         months of 2001. The amounts named in this Section 7 are gross and will
         be payable net of all applicable taxes and contributions to social
         security institutions. The Director shall be responsible for the
         payment of all taxes, in particular income tax and contributions to
         social security institutions.

         (a)   The lost bonus constitutes the amount that the Director would
               have received as a bonus from his previous employer for the full
               calendar year 2001 had he not terminated his employment with his
               previous employer effective October 31, 2001. The lost bonus for
               the purposes of this Section 7 shall not exceed US$ 350,000
               gross.

         (b)   The Visteon target for the Director for the year 2001 amounts to
               US$ 95,000. For the purposes of this Section 7 the annual target
               is divided by six to obtain the two-months number.


SECTION 8 FLEXIBLE PERQUISITE PLAN

         For each complete calendar year, the Director shall receive
         reimbursement of expenses for financial planning, security, physical
         examination, membership in clubs or for other purposes, and it shall be
         available to the Director during the course of the calendar year as he
         sees fit. Reimbursements will be made up to an amount equivalent to US$
         15,000.00 gross. If the Director either starts or ends his services
         during the course of a calendar year, the amount payable under the
         flexible perquisite plan shall be prorated. The Director shall be
         liable for all taxes, dues and contributions payable for this amount.


SECTION 9 STATUTORY SOCIAL SECURITY CONTRIBUTIONS

         The Company shall pay 50% of the contributions to be made to the
         statutory pension-, unemployment-, health-, and nursing insurance on
         behalf of the Director. To the extent that the Director is not a member
         of a statutory health- or nursing insurance (Pflegeversicherung), the
         Company shall pay the Director 50% of those contributions that would
         otherwise be made to the respective social security carrier.


                                       5




SECTION 10 GROUP ACCIDENT INSURANCE

         Within the scope of a voluntary casualty insurance program, the Company
         shall take out a casualty insurance (in addition to the statutory
         casualty insurance with the vocational league or Berufsgenossenschaft)
         for following amounts:
                                         
         In case of death                            DM 300,000.00
         Invalidity                                  DM 600,000.00
         Per diem allowance from the 43rd day        DM     100.00
         Medical care (Heilkosten) up to             DM   2,000.00 (secondary)
         Recovery costs up to                        DM   5,000.00.


         


         The insurance coverage shall include any business related or private
         accidents of daily life and shall be applicable anywhere in the world
         at land, at sea, or in the air.

         In the event of death the legal heirs shall be the beneficiaries.
         However, the Director shall be entitled to name a different person as
         beneficiary by submitting a respective declaration to the personnel
         department.

         The Company retains the right to revoke at any time the described
         insurance coverage.

         Taxes due in connection with the monetary advantages based on payment
         of premiums shall be paid as a lump sum. The Company shall charge the
         Director the amount of the taxes paid.

         The insurance coverage shall expire upon termination of this Service
         Agreement.


SECTION 11 LIFE INSURANCE

         The Company shall take out a renewable term insurance policy
         (Risikolebensversicherung) for the event of death of the Director in
         the amount of DM 400,000. The beneficiaries of this insurance policy
         shall be the heirs of the Director.


SECTION 12 COMPANY PENSION SCHEME

         The Director shall receive a company pension.  The terms shall be
         subject to a separate agreement

                                       6


SECTION 13 COMPANY CAR

         The use of company cars will be provided by Visteon Holdings GmbH under
         its pertinent terms and conditions.


SECTION 14 SALARY PAYMENT IN THE EVENT OF ILLNESS OR DEATH

(1)      In the event of disability for service due to illness
         (krankheitsbedingte Arbeitsunfahigkeit), the Company shall continue to
         pay the Director the monthly salary pursuant to Section 4 for up to six
         weeks. In addition, the Company shall pay the difference between the
         last net monthly salary pursuant to Section 4 and the amount which the
         statutory health insurance pays, or would pay, if the Director had
         statutory health insurance coverage (company health insurance benefits
         or BKK-Krankengeldsatz) for a total period of up to twelve months.

(2)      To the extent that the Director has damage claims towards third party
         for loss of wages due to disability of service, the Director hereby
         assigns such claim to the Company insofar as the Company continues to
         pay his salary or other benefits in money's worth and to make
         contributions to the social security carrier and other third parties in
         accordance with this Agreement. The Director shall immediately provide
         the Company with the information which is necessary for the assertion
         of the claim.

(3)      In the event of death, the dependants (widow and children entitled to
         support) shall receive the full salary for the month of death and the
         three subsequent months.


SECTION 15 DATA STORAGE

         The Director agrees that his personal data is stored and processed in
         accordance with statutory provisions.


SECTION 16 NON-COMPETE

         During the term of this Service Agreement, the Director shall not be
         allowed to act as a self-employed entrepreneur, an employee or in any
         other way for or on behalf of a direct or indirect competitor of the
         Company. Furthermore, the Director shall not be allowed to establish or
         to acquire such a competitor or to directly or indirectly participate
         in such a competing company.

                                       7


SECTION 17 RETURN OF DOCUMENTS

(1)      At the termination of this Service Agreement, or in the event of a
         release of the Director from his duties, the Director is obliged to
         immediately and fully return to the Company all items of property and
         documents that relate to the Company. This shall apply, in particular,
         to keys, books, data-carriers, printed items of any kind, documentation
         or drafts as well as extracts or copies thereof. The Director shall
         have no right of retention with respect to these items and documents.

(2)      All aforementioned items shall remain, or become at the time of
         creation, the property of the Company.


SECTION 18 INVENTIONS

(1)      The Director transfers to the Company in advance all patentable or
         other inventions, developments, and industrial property rights eligible
         for protection made or acquired by him during the term of this Service
         Agreement. To the extent that such transfer cannot be made in advance,
         the Director is under the obligation to make such transfers as soon as
         possible. These obligations shall apply to domestic, foreign, and
         international rights.

(2)      The Company shall be obliged to register the inventions of the
         Director and to inform the Director of such registration.

(3)      The Director receives no special compensation. The compensation for the
         transfer of these rights pursuant to subsection (1) is included in the
         compensation stipulated in this Agreement.


SECTION 19 TERM

(1)      This Service Agreement shall become effective on November 1, 2001.

(2)      This Service Agreement ends automatically at the respective times
         stated in the cases listed below without requiring a special
         termination notice:

         (a)    upon expiration of the time period for which the Director has
                been appointed an officer of Visteon Corporation;

         (b)    upon resignation from the appointment as an officer of Visteon
                Corporation; and

         (c)    when the Managing Director-Service Agreement between the
                Director and Visteon Holdings GmbH ends.


                                       8


(3)      In addition, the Service Agreement may be terminated by either side (i)
         within the first 12 months of this Agreement with a notice period of 36
         months, and (ii) after expiry of the first 12 months with a notice
         period of 24 months.

         Upon declaration of termination of this Service Agreement or upon
         declaration of termination of the Managing Director-Service Agreement
         between the Director and Visteon Holdings GmbH, the Director may demand
         that the payments payable to him under this Service Agreement during
         the notice period are settled by payment of a singular amount. This
         singular amount shall consist of the sum of all individual amounts
         after they have been discounted. In the event of termination after the
         expiry of the first 12 months of this Agreement, the Managing Director
         may also demand that the payments due to him be distributed evenly over
         a period of 36 months. Such distribution shall not otherwise constitute
         an extension of this Agreement.

(4)      The appointment of the Director as an officer of Visteon Corporation
         can be revoked by Visteon Corporation at any time. The revocation of
         the appointment shall constitute a termination of this Service
         Agreement by the Company with the notice period stated in subsection
         (3) above.


SECTION 20 CONFIDENTIALITY

         For the duration of this Service Agreement and thereafter the Director
         shall be obliged to treat as confidential all information or data
         relating to the Company, or any of its affiliated companies, of which
         he becomes aware and shall not to disclose any documents concerning the
         Companies, or any of its affiliated companies, either himself or
         through third parties. This refers specifically to business and
         operational secrets, know-how, information, designs, manufacturing
         processes, formulas, patents, and improvements as well as financial
         information and customer lists that concern the business activities or
         products of the Company or of its affiliated companies. The same
         obligations shall apply with regard to any predecessors in business,
         suppliers, agents, distributors or customers.


SECTION 21 POST-CONTRACTUAL NON-COMPETE

(1)      For a duration of two years following the termination of the Service
         Agreement, the Director agrees not to work for a company that competes
         with the Company, or a company affiliated with the Company (competing
         company or Konkurrenzunternehmen). Free-lancing or consulting
         activities shall also not be permissible. The non-compete obligation
         shall not apply if the Service Agreement terminates due to permanent
         disability (dauernde Arbeitsunfahigkeit). The Company may, at any time,
         waive the non-compete obligation with a notice period of three months.


                                       9


(2)      The Company shall pay the Director a compensation for the duration of
         the non-compete obligation in the amount of 50% of the salary pursuant
         to Section 4.

(3)      If the non-compete obligation is breached, the Company shall be under
         no obligation to pay the compensation.


SECTION 22 FINAL PROVISIONS

(1)      This Service Agreement is agreed under the condition precedent that the
         Managing Director-Service Agreement between the Director and Visteon
         Holdings GmbH has been duly executed and has come into full force and
         effect.

(2)      Furthermore, the Director agrees to inform the Company without delay of
         any change of residence. In this respect all legal acts of the Company
         shall be deemed as having been validly effected, if they have been made
         under the address last notified by the Director.

(3)      Changes or amendments of this Service Agreement require written form.

(4)      If individual provisions of this Service Agreement or parts of
         provisions of this Service Agreement are or become void, the validity
         of the other provisions of this Agreement shall not be affected
         thereby. The void provision shall be replaced by a legal provision
         which comes as close as possible to the economic and legal rationale of
         the void provision. The same shall apply accordingly to gaps in this
         Agreement.

(5)      Claims arising under this Service Agreement are to be made within a
         period of six months after they become due. Otherwise these claims
         shall be excluded.

(6)      This contract will be exclusively governed by Michigan law.



Dearborn, October 23, 2001                          Bargum, October 23, 2001


For the Company


/s/ Robert Marcin                                   /s/ Dr. Heinz Pfannschmidt
- -----------------                                   --------------------------
Robert Marcin                                       Dr. Heinz Pfannschmidt



                                       10


                                                                   EXHIBIT 10.22












                               VISTEON CORPORATION
                       EXECUTIVE SEPARATION ALLOWANCE PLAN

                      (As amended through December 11, 2002
                    for Separations on or after July 1, 2000)







                               VISTEON CORPORATION
                       EXECUTIVE SEPARATION ALLOWANCE PLAN


         This Plan has been established for the purpose of providing certain
eligible employees with an Executive Separation Allowance in the event of their
separation from employment with the Company under certain circumstances. The
Plan is an expression of the Company's present policy with respect to separation
allowances for employees who meet the eligibility requirements set forth below;
it is not a part of any contract of employment and no employee or other person
shall have any legal or other right to any Executive Separation Allowance. The
Plan is adopted effective July 1, 2000.



                                       2




         Section 1. DEFINITIONS. As used in the Plan, the following terms shall
have the following meanings, respectively:

         "AFFILIATE" shall mean, as applied with respect to any person or legal
         entity specified, a person or legal entity that directly or indirectly,
         through one or more intermediaries, controls or is controlled by, or is
         under common control with the person or legal entity specified.

         "COMMITTEE" shall mean the Organization and Compensation Committee of
         the Board of Directors of Visteon Corporation.

         "COMPANY" shall mean Visteon Corporation and such of the subsidiaries
         of Visteon Corporation as, with the consent of Visteon Corporation,
         shall have adopted this Plan.

         "ELECTED OFFICER" shall mean an officer of the Company elected by the
         Board of Directors of Visteon Corporation.

         "ELIGIBLE SURVIVING SPOUSE" shall mean a spouse to whom an employee has
         been married at least one year at the date of the employee's death.

         "LEADERSHIP LEVEL ONE OR TWO EMPLOYEE" shall mean an employee of the
         Company who is assigned to the Leadership Level One or Two, or its
         equivalent, or for periods prior to January 1, 2000, shall mean an
         Executive Roll Employee.

         "EXECUTIVE LEADER" shall mean an employee who, on or after January 1,
         2002, is classified as an Executive Leader by the Company.

         "PARTICIPANT" shall mean an employee who meets the eligibility criteria
         set forth in Section 2.

         "SERVICE" shall mean an eligible employee's years of service (including
         fractions of years) used in determining eligibility retirement benefits
         under the Visteon Pension Plan.

         "SUBSIDIARY" shall mean, as applied with respect to any person or legal
         entity specified, (i) a person or legal entity a majority of the voting
         stock of which is owned or controlled,


                                       3


         directly or indirectly, by the person or legal entity specified or (ii)
         any other type of business organization in which the person or legal
         entity specified owns or controls, directly or indirectly, a majority
         interest.

         Section 2. ELIGIBILITY. Each Executive Leader or Elected Officer (or,
prior to January 1, 2002, each Leadership Level One or Two Employee) who, on or
before June 30, 2004, is being separated from employment with the approval of
the Company and who

         (1)      was employed by the Company on or before December 31, 2001;

         (2)      has at least five years' service on the Executive Roll, or
                  its equivalent;

         (3)      has at least ten years of contributory membership under the
                  Visteon Pension Plan (which, for purposes of this paragraph 2,
                  shall be deemed to include contributory service under the Ford
                  Motor Company General Retirement Plan);

         (4)      is at least 55 years of age; and

         (5)      has applied for early retirement at the employee's option

shall be eligible to receive an Executive Separation Allowance as provided
herein. The Eligible Surviving Spouse of an employee who (i) has not separated
from employment with the Company, and (ii) meets the eligibility conditions set
forth in subsections (1) through (4) of this Section 2, on or before June 30,
2004 shall be eligible to receive the Executive Separation Allowance that the
deceased employee would have been eligible to receive if such employee had
separated from employment with the approval of the Company and retired on the
date of the employee's death.

         The eligibility conditions set forth in subsections (2) and (3) of
Section 2 may be waived by the Chief Executive Officer or the President.

         Section 3.  CALCULATION OF AMOUNT.

         A. BASE MONTHLY SALARY. For purposes of the Plan, the "Base Monthly
Salary" of a Participant shall be the highest monthly base salary rate of such
employee during the employee's



                                       4



12 months of service immediately preceding separation from employment with the
Company, prior to giving effect to any salary reduction agreement pursuant to an
employee benefit plan, as defined in Section 3(3) of the Employee Retirement
Security Act of 1974, as amended, (i) to which Section 125 or Section 402(e)(3)
of the Internal Revenue Code of 1986, as amended, applies or (ii) which provides
for the elective deferral of compensation. It shall not include supplemental
compensation or any other kind of extra or additional compensation. For purposes
of this subsection, base salary paid by Ford Motor Company prior to July 1, 2000
shall be treated as if paid by the Company.

         B. AMOUNT OF EXECUTIVE SEPARATION ALLOWANCE. Subject to any limitation
in other provisions of the Plan, the gross monthly amount of the Executive
Separation Allowance of a Participant under Section 2 above shall be such
employee's Base Monthly Salary multiplied by a percentage, not to exceed 60%,
equal to the sum of (i) 15%, (ii) five tenths of one percent (.5%) for each
month (or fraction thereof) that such employee's age at separation exceeds 55,
not to exceed thirty percent (30%), and (iii) one percent (1%) for each year of
such employee's service in excess of 15, prorated for fractions of a year.

         The gross amount for any month shall be reduced by any payments paid or
payable for such month to the Participant, the Participant's surviving spouse,
contingent annuitant, or other beneficiary under the Visteon Pension Plan, the
Ford Motor Company General Retirement Plan, the Ford Motor Company Executive
Separation Allowance Plan or any other private retirement plan, other than the
Visteon Corporation Supplemental Retirement Plan or the Ford Motor Company
Supplemental Executive Retirement Plan, to which the Company or its subsidiaries
shall have contributed.

         C. ADDITIONAL ALLOWANCE FOR CERTAIN TRANSFERRED EMPLOYEES. A
Participant who retired on June 30, 2000 from Ford Motor Company, and who was an
Elected Officer on June 28, 2000, shall, upon meeting the eligibility
requirements in Section 2, receive the additional allowance equal to the
difference between (i) and (ii) below, where:

         (i)      is the aggregate monthly amount of Executive
                  Separation Allowance to which the Participant would
                  have been entitled under the Ford Motor Company
                  Executive Separation Allowance Plan if the
                  Participant's



                                       5


                  employment with the Company on and after July 1, 2000, and the
                  Base Monthly Salary attributable to such employment, had
                  instead been employment with, and Base Monthly Salary from,
                  Ford Motor Company; and

         (ii)     is the aggregate monthly amount of Executive
                  Separation Allowance under the Ford Motor Company
                  Executive Separation Allowance Plan and the Visteon
                  Corporation Executive Separation Allowance Plan to
                  which the Participant is actually entitled.

         The additional allowance described in this subsection 3C shall be paid
in accordance with the provisions of Section 4 below and shall be paid at the
same time and for the same duration as the allowance described in subsection 3B
above. The monthly retirement benefits calculated under subsection C. above
shall be determined based upon the terms of the Ford Motor Company Executive
Separation Allowance Plan as in effect on June 30, 2000. The Committee has full
authority and discretion to adjust (including to reduce) the benefit amounts
calculated above to reflect changes in the design of the Ford Motor Company
Executive Separation Allowance Plan or to take into account such other factors
as the Committee, in its sole discretion, deems relevant.

         Section 4. PAYMENTS. Executive Separation Allowance payments, in the
net amount determined in accordance with Section 3B above, shall be made
monthly. Payments to a Participant shall cease at the end of the month in which
such employee attains age 65 or dies, whichever occurs first. In the event of
death of a Participant prior to attaining age 65, or in the event of death of an
employee whose Eligible Surviving Spouse meets the eligibility conditions set
forth in Section 2 for payments hereunder, payments shall be made to such
Participant's or employee's Eligible Surviving Spouse, if any, until the death
of such spouse or, if earlier, until the end of the month in which the
Participant or employee would have attained age 65.

         Anything herein contained to the contrary notwithstanding, the right of
any Participant to receive an installment of Executive Separation Allowance
hereunder for any month shall accrue only if, during the entire period from the
date of such employee's separation to the end of such month, such employee shall
have earned out such installment by refraining from engaging in any



                                       6


activity that is directly or indirectly in competition with any activity of the
Company or any Subsidiary or Affiliate thereof.

         In the event of a Participant's nonfulfillment of the condition set
forth in the immediately preceding paragraph, no further installment shall be
paid to such Participant; provided, however, that the nonfulfillment of such
condition may at any time (whether before, at the time of or subsequent to
termination of the Participant's employment) be waived by the Committee upon its
determination that in its sole judgment there shall have not been and will not
be any substantial adverse effect upon the Company or any Subsidiary or
Affiliate thereof by reason of the nonfulfillment of such condition.

         Anything herein contained to the contrary notwithstanding, Executive
Separation Allowance payments shall not be paid to or with respect to any person
as to whom it has been determined that such person at any time (whether before
or subsequent to termination of the employee's employment) acted in a manner
inimical to the best interests of the Company. Any such determination shall be
made by the Committee, and shall apply to any amounts payable after the date of
the applicable Committee's action hereunder, regardless of whether the person
has commenced receiving Executive Separation Allowance. Conduct which
constitutes engaging in an activity that is directly or indirectly in
competition with any activity of the Company or any Subsidiary or Affiliate
thereof shall be governed by the immediately preceding paragraphs of this
Section 4 and shall not be subject to any determination under this paragraph.

         Any Executive Separation Allowance payments resumed after reemployment
with the Company under Section 6 or employment with a Subsidiary of the Company
under Section 7 shall be paid on the basis of the percentage of Base Monthly
Salary applicable at the time of the initial determination under Section 3B.

         Section 5. DEDUCTIONS. The Company may deduct from any payment of
Executive Separation Allowance to a Participant or such Participant's Eligible
Surviving Spouse all amounts owing to it by such employee for any reason, and
all taxes required by law or government regulation to be deducted or withheld.



                                       7


         Section 6. PERSON REEMPLOYED BY THE COMPANY. In the event an employee
who shall have been separated from employment with the Company under
circumstances that would make the employee eligible to receive an Executive
Separation Allowance shall be reemployed by the Company before the employee
shall have received payment of the full amount of the employee's Executive
Separation Allowance, no further allowance shall be paid during such period of
reemployment.

         Section 7. PERSON EMPLOYED BY A SUBSIDIARY. In the event an employee
who shall have been separated from employment with the Company under
circumstances that would make the employee eligible to receive an Executive
Separation Allowance shall be employed by a Subsidiary of the Company before the
employee shall have received payment of the full amount of the employee's
Executive Separation Allowance, no further allowance shall be paid during such
period of employment.

         Section 8. ADMINISTRATION AND INTERPRETATION. Except as the Committee
and the Chief Executive Officer and the President are authorized to administer
the Plan in certain respects, the Senior Vice-President - Human Resources shall
have full power and authority on behalf of the Company to administer and
interpret the Plan. In the event of a change in a designated officer's title,
the officer or officers with functional responsibility for executive separation
allowance plans shall have the power and authority to administer and interpret
the Plan. All decisions with respect to the administration and interpretation of
the Plan shall be final and shall be binding upon all persons.

         Section 9. RESTRICTIONS TO COMPLY WITH APPLICABLE LAW. Notwithstanding
any other provision of the Plan, the Company shall have no liability to make any
payment under the Plan unless such delivery or payment would comply with all
applicable laws and the applicable requirements of any securities exchange or
similar entity.

         Section 10. DEDUCTIONS. Anything contained in the Plan notwithstanding,
the Company may deduct from any distribution hereunder all amounts owed to the
Company or a Subsidiary or Affiliate by the Participant for any reason, and all
taxes required by law or government regulation to be deducted or withheld.



                                       8


         Section 11.  CLAIMS PROCEDURE.

         A. CLAIM FOR BENEFITS. Any Participant or Eligible Surviving Spouse
(hereafter referred to as the "claimant") under this Plan who believes he or she
is entitled to benefits under the Plan in an amount greater than the amount
received may file, or have his or her duly authorized representative file, a
claim with the Committee. Any such claim shall be filed in writing stating the
nature of the claim, and the facts supporting the claim, the amount claimed and
the name and address of the claimant. The Committee shall consider the claim and
answer in writing stating whether the claim is granted or denied. The written
decision shall be within 90 days of receipt of the claim by the Committee (or
180 days if additional time is needed and the claimant is notified of the
extension, the reason therefor and the expected date of determination prior to
commencement of the extension). If the claim is denied in whole or in part, the
claimant shall be furnished with a written notice of such denial containing (i)
the specific reasons for the denial, (ii) a specific reference to the Plan
provisions on which the denial is based, (iii) an explanation of the Plan's
appeal procedures set forth in subsection (b) below, (iv) a description of any
additional material or information which is necessary for the claimant to submit
or perfect an appeal of his or her claim, and (v) an explanation of the
claimant's right to bring suit under ERISA following an adverse determination
upon appeal.

         B. APPEAL. If a claimant wishes to appeal the denial of his or her
claim, the claimant or his or her duly authorized representative shall file a
written notice of appeal to the Committee within 90 days of receiving notice of
the claim denial. In order that the Committee may expeditiously decide such
appeal, the written notice of appeal should contain (i) a statement of the
ground(s) for the appeal, (ii) a specific reference to the Plan provisions on
which the appeal is based, (iii) a statement of the arguments and authority (if
any) supporting each ground for appeal, and (iv) any other pertinent documents
or comments which the appellant desires to submit in support of the appeal. The
Committee shall decide the appellant's appeal within 60 days of its receipt of
the appeal (or 120 days if additional time is needed and the claimant is
notified of the extension, the reason therefore and the expected date of
determination prior to commencement of the extension). The Committee's written
decision shall contain the reasons for the decision and reference to the Plan
provisions on which the decision is based. If the claim is denied in whole or in
part, such written decision shall also include notification of the



                                       9


claimant's right to bring suit for benefits under Section 502(a) of ERISA and
the claimant's right to obtain, upon request and free of charge, reasonable
access to and copies of all documents, records or other information relevant to
the claim for benefits.

         Section 12.  PARTICIPANT RIGHTS UNSECURED.

         A. UNSECURED CLAIM. The right of a Participant or his or her Eligible
Surviving Spouse to receive a distribution hereunder shall be an unsecured
claim, and neither the Participant nor any Eligible Surviving Spouse shall have
any rights in or against any amount credited to his or her Account or any other
specific assets of the Company or a Subsidiary or Affiliate. The right of a
Participant or Eligible Surviving Spouse to the payment of benefits under this
Plan shall not be assigned, encumbered, or transferred, except by will or the
laws of descent and distribution. The rights of a Participant hereunder are
exercisable during the Participant's lifetime only by the Participant or the
Participant's guardian or legal representative.

         B. CONTRACTUAL OBLIGATION. The Company may authorize the creation of a
trust or other arrangements to assist it in meeting the obligations created
under the Plan. However, any liability to any person with respect to the Plan
shall be based solely upon any contractual obligations that may be created
pursuant to the Plan. No obligation of the Company, a Subsidiary or Affiliate
shall be deemed to be secured by any pledge of, or other encumbrance on, any
property of the Company, or Subsidiary or Affiliate. Nothing contained in this
Plan and no action taken pursuant to its terms shall create or be construed to
create a trust of any kind, or a fiduciary relationship between the Company, or
Subsidiary or Affiliate and any Participant or Eligible Surviving Spouse, or any
other person.

         Section 13. NO CONTRACT OF EMPLOYMENT. The Plan is an expression of the
Company's present policy with respect to Company executives who meet the
eligibility requirements set forth herein. The Plan is not a contract of
employment, nor does it provide any Participant with a right to continue in the
employment of the Company or any other entity. No Participant, Eligible
Surviving Spouse or other person shall have any legal or other right to any
benefit payments except in accordance with the terms of the Plan, and then only
while the Plan is in effect and subject to the Company's right to amend or
terminate the Plan as provided in Section 14 below.



                                       10


         Section 14. AMENDMENT OR TERMINATION. There shall be no time limit on
the duration of the Plan. However, the Company, by action of the Senior Vice
President - Human Resources, may at any time and for any reason, amend or
terminate the Plan; provided that the Committee shall have the exclusive
amendment authority with respect to any amendment that, if adopted, would
increase the benefit payable to the Senior Vice President - Human Resources by
more than a de minimis amount. Any Plan amendment or termination may reduce or
eliminate a Participant's benefit under the Plan, including, without limitation,
an amendment to eliminate future benefit payments for some or all Participants,
whether or not in pay status at the time such action is taken.

         Section 15. ADMINISTRATIVE EXPENSES. Costs of establishing and
administering the Plan will be paid by the Company.

         Section 16. NO ASSIGNMENT OF BENEFITS. No rights or benefits under the
Plan shall, except as otherwise specifically provided by law, be subject to
assignment, nor shall such rights or benefits be subject to attachment or legal
process for or against a Participant or his or her Eligible Surviving Spouse.

         Section 17. SUCCESSORS AND ASSIGNS. This Plan shall be binding upon and
inure to the benefit of the Company, its Subsidiaries and Affiliates, their
successors and assigns and the Participants and their heirs, executors,
administrators, and legal representatives.


                                       VISTEON CORPORATION



                                       /s/ Robert H. Marcin
                                       -------------------------------------
                                       ROBERT H. MARCIN
                                       SENIOR VICE PRESIDENT-HUMAN RESOURCES


                                       11


                                                                  EXHIBIT 10.23


                         VISTEON CORPORATION RABBI TRUST



         This Trust Agreement made this 7th day of February, 2003 by and between
Visteon Corporation ("Visteon") and The Northern Trust Company ("Trustee");

         WHEREAS, Visteon has adopted the non-qualified employee benefit
arrangements as listed in Appendix A (individually referred to as the "Plan" or
collectively referred to as the "Plans") which Visteon may revise from time to
time to add more Plans by delivering to Trustee a new Appendix A without
requiring an amendment of this Trust Agreement.

         WHEREAS, Visteon has incurred or expects to incur liability under the
terms of such the Plans with respect to the individuals participating in the
Plans;

         WHEREAS, Visteon wishes to establish a trust (hereinafter called
"Trust") and to contribute to the Trust assets that shall be held therein,
subject to the claims of Visteon's creditors in the event of Visteon's
Insolvency, as herein defined, until paid to Plan participants and their
beneficiaries in such manner and at such times as specified in the Plans;

         WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plans
as unfunded maintained for the purpose of providing deferred compensation for a
select group of management or highly compensated employees for purposes of Title
I of the Employee Retirement Income Security Act of 1974, as amended;

         WHEREAS, it is the intention of Visteon to contribute to the Trust to
provide itself with a source of funds to assist it in the meeting of its
liabilities under the Plans;

         NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:

         SECTION 1.  ESTABLISHMENT OF TRUST

         (a) Visteon hereby establishes with the Trustee a grantor trust and
deposits with Trustee in trust $100, which shall become the principal of the
Trust, to which shall be added such sums of money and such property acceptable
to the Trustee as shall from time to time be paid or delivered to the Trustee
and the earnings and profits thereon to be held, administered and disposed of by
the Trustee as provided in this Trust Agreement.

         (b) The Trust hereby established is revocable by Visteon; it shall
become irrevocable upon a Change of Control, as defined herein.

         (c) The Trust is intended to be a grantor trust, of which Visteon is
the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended (the "Code"), and
shall be construed accordingly.

         (d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of Visteon and shall be used exclusively for
the uses and purposes of Plan participants and general creditors as herein set
forth. Plan participants and their beneficiaries shall have no preferred claim
on, or any beneficial ownership interest in, any assets of the Trust. Any rights
created under the Plans and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against Visteon.
Any assets held by the Trustee will be subject to the claims of Visteon's
general creditors under federal and state law in the event of Insolvency as
defined in Section 3(a) herein.





         (e) Upon a Change of Control, Visteon shall, as soon as possible, but
in no event longer than 30 days following the Change of Control, as defined
herein, make an irrevocable contribution to the Trust in an amount that is
sufficient to pay each Plan participant or beneficiary the benefits to which
Plan participants or their beneficiaries would be entitled pursuant to the terms
of the Plans as of the date on which the Change of Control occurred. Trustee
shall have no duty to enforce any funding obligations of Visteon, and the duties
of Trustee shall be governed solely by the terms of the Trust without reference
to the terms of the Plans.

         SECTION 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.

         (a) Visteon shall deliver to Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable in respect to each Plan
participant (and his or her beneficiaries), directions to Trustee regarding the
amounts so payable, the form in which such amount is to be paid (as provided for
or available under the Plans), and the time of commencement for payment of such
amounts. Except as otherwise provided herein, Trustee shall make payments to the
Plan participants and their beneficiaries in accordance with such Payment
Schedule. Visteon shall have the sole responsibility for all tax withholding
filings and reports. Trustee shall withhold such amounts from distributions as
Visteon directs and shall follow the instructions of Visteon with respect to
remission of such withheld amounts to appropriate governmental authorities and
related reporting and filings.

         (b) The entitlement of a Plan participant or his or her beneficiaries
to benefits under the Plans shall be determined by Visteon or such party as it
shall designate under the Plans, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plans.

         (c) Visteon may make payment of benefits directly to Plan participants
or their beneficiaries as they become due under the terms of the Plans. Visteon
shall notify Trustee of its decision to make payment of benefits directly prior
to the time amounts are payable to participants or their beneficiaries. In
addition, if the principal of the Trust, and any earnings thereon, are not
sufficient to make payments of benefits in accordance with the terms of the
Plans, Visteon shall make the balance of each such payment as it falls due.
Trustee shall notify Visteon where principal and earnings are not sufficient to
make a payment then due under the Payment Schedule.

         SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN VISTEON IS INSOLVENT.

         (a) Trustee shall cease payment of benefits to Plan participants and
their beneficiaries if the Visteon is Insolvent, subject to the provisions of
Section 3(b) below. Visteon shall be considered "Insolvent" for purposes of this
Trust Agreement if (i) Visteon is unable to pay its debts as they become due, or
(ii) Visteon is subject to a pending proceeding as a debtor under the United
States Bankruptcy Code.

         (b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Visteon under federal and state law as set forth
below.

                  (1) The Treasurer of Visteon shall have the duty to inform
Trustee in writing of Visteon's Insolvency. If a person claiming to be a
creditor of Visteon alleges in writing to Trustee that Visteon has become
Insolvent, Trustee shall determine whether Visteon is Insolvent and, pending
such determination, Trustee shall discontinue payment of benefits to Plan
participants or their beneficiaries.

                  (2) Unless Trustee has actual knowledge of Visteon's
Insolvency, or has received notice from Visteon or a person claiming to be a
creditor alleging that Visteon is Insolvent, Trustee shall have no duty to
inquire whether Visteon is Insolvent. Trustee may in all events rely on such
evidence concerning Visteon's solvency as may be furnished to Trustee and that
provides Trustee with a reasonable basis for making a determination concerning
Visteon's solvency. In no event shall "actual knowledge" be deemed to include
knowledge of Visteon's credit status held by banking officers or banking
employees of



                                       2


The Northern Trust Company which has not been communicated to the trust
department of Trustee. Trustee may appoint an independent accounting, consulting
or law firm to make any determination of solvency required by Trustee under this
Section 3. In such event, Trustee may conclusively rely upon the determination
by such firm and shall be responsible only for the prudent selection of such
firm.

                  (3) If at any time the Treasurer of Visteon notifies Trustee
or Trustee has determined that Visteon is Insolvent, Trustee shall discontinue
payments to Plan participants or their beneficiaries and shall hold the assets
of the Trust for the benefit of Visteon's general creditors. Nothing in this
Trust Agreement shall in any way diminish any rights of Plan participants or
their beneficiaries to pursue their rights as general creditors of Visteon with
respect to benefits due under the Plans or otherwise.

                  (4) Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Section 2 of this Trust
Agreement only after Trustee has determined that Visteon is not Insolvent (or is
no longer Insolvent) or pursuant to an order from the U.S. Bankruptcy Court or
other court of competent jurisdiction.

         (c) Provided that there are sufficient assets, if Trustee discontinues
the payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance, to the extent not inconsistent with an order from the U.S.
Bankruptcy Court or other court of competent jurisdiction, shall include the
aggregate amount of all payments due to Plan participants or their beneficiaries
under the terms of the Plans for the period of such discontinuance, less the
aggregate amount of any payments made to Plan participants or their
beneficiaries by Visteon in lieu of the payments provided for hereunder during
any such period of discontinuance, all in accordance with the Payment Schedule,
which Visteon shall modify as necessary to comply with the provisions of this
paragraph (c).

         SECTION 4. PAYMENTS TO VISTEON.

         Except as provided in Section 3, hereof, after the Trust has become
irrevocable, Visteon shall have no right or power to direct Trustee to return to
Visteon or to divert to others any of the Trust assets before all payments of
benefits have been made to Plan participants and their beneficiaries pursuant to
the terms of the Plans. Trustee shall be entitled to rely conclusively upon
Visteon's written certification that all such payments have been made.

         SECTION 5. INVESTMENT AUTHORITY.

         (a) Subject to such written investment guidelines as may be issued to
Trustee from time to time by Visteon and subject further to paragraphs (b) and
(c) hereof, Trustee may invest and reinvest Trust assets in property of any
kind, provided, however, that in no event may Trustee, in the exercise of any
discretionary investment authority granted to it under this Section 5, invest in
securities (including stock or rights to acquire stock) or obligations issued by
Visteon, other than a de minimis amount held in common investment vehicles in
which Trustee invests. Subject to paragraphs (b) and (c) hereof, all rights
associated with assets of the Trust shall be exercised by Trustee or the person
designated by Trustee, and shall in no event be exercisable by or rest with Plan
participants.

         (b) Visteon shall have the right, at anytime, and from time to time in
its sole discretion, to substitute assets of equal fair market value for any
asset held by the Trust; Trustee shall have no responsibility for determining
whether such right has been properly exercised or for any investment losses that
may result from its exercise.

         (c) Visteon may, by written notice to Trustee, assume investment
responsibility for any portion or all of the Trust assets (and shall be deemed
to have assumed such responsibility with respect to any shares of Visteon stock,
insurance policies or contracts, or other agreed upon assets held in the Trust
for which Trustee does not accept investment responsibility), in which event,
Trustee shall act with respect to such assets only as directed by Visteon and
shall have no investment review responsibility therefor.


                                       3


         (d) Trustee shall not make any investment review of, consider the
propriety of holding or selling, or vote other than as directed by Visteon, any
assets of the Trust Fund for which Visteon shall have investment responsibility
in accordance with this Section 5, except that if Trustee shall not have
received contrary instructions from Visteon, Trustee shall invest for short term
purposes any cash in its custody in bonds, notes and other evidences of
indebtedness having a maturity date not beyond five years from the date of
purchase, United States Treasury bills, commercial paper, bankers' acceptances
and certificates of deposit, and undivided interests or participations therein,
and participations in regulated investment companies for which the Trustee or
its affiliate is the adviser.

         SECTION 6. DISPOSITION OF INCOME.

         During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.

         SECTION 7. ACCOUNTING BY TRUSTEE.

         Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
Visteon and Trustee. Within 90 days following the close of each calendar year
and within 45 days after the removal or resignation of Trustee, Trustee shall
deliver to Visteon a written account of its administration of the Trust during
such year or during the period from the close of the last preceding year to the
date of such removal or resignation, setting forth all investments, receipts,
disbursements and other transactions effected by it, including a description of
all securities and investments purchased and sold with the cost or net proceeds
of such purchases or sales (accrued interest paid or receivable being shown
separately), and showing all cash, securities and other property held in the
Trust at the end of such year or as of the date of such removal or resignation,
as the case may be. In the absence of the filing in writing with Trustee by
Visteon of exceptions or objections to any such account within 90 days, Visteon
shall be deemed to have approved such account; in such case, or upon the written
approval by Visteon of any such account, Trustee shall be released, relieved and
discharged with respect to all matters and things set forth in such account as
though such account had been settled by the decree of a court of competent
jurisdiction. Trustee may conclusively rely on determinations of Visteon of
valuations for assets of the Trust for which Trustee deems there to be no
readily determinable fair market value and on determinations of the issuing
insurance company of valuations for insurance contracts/policies.

         SECTION 8. RESPONSIBILITY OF TRUSTEE.

         (a) Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that
Trustee shall incur no liability to any person for any action taken pursuant to
a direction, request or approval given in writing by Visteon. In the event of a
dispute between Visteon and a party, Trustee may apply to a court of competent
jurisdiction to resolve the dispute.

         (b) If Trustee undertakes or defends any litigation brought by or
against a third party and arising in connection with this Trust, Visteon agrees
to indemnify Trustee against Trustee's costs, expenses and liabilities
(including, without limitation, attorneys' fees and expenses) relating thereto
and to be primarily liable for such payments. If Visteon does not pay such
costs, expenses and liabilities in a reasonably timely manner, Trustee may
obtain payment from the Trust.

         (c) Trustee may consult with legal counsel (who may also be counsel for
Visteon generally) with respect to any of its duties or obligations hereunder.



                                       4



         (d) Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.

         (e) Trustee shall have, without exclusion, all powers conferred on
Trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the Trust,
Trustee shall have no power to name a beneficiary of the policy other than the
Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy and shall act with respect to any
such policy only as directed by Visteon.

         (f) However, notwithstanding the provisions of Section 8(e) above,
where directed by Visteon, Trustee may loan to Visteon the proceeds of any
borrowing against an insurance policy held as an asset of the Trust.

         (g) Notwithstanding any powers granted to Trustee pursuant to this
Trust Agreement or to applicable law, Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Code.

         (h) Visteon (which has the authority to do so under the laws of its
state of incorporation) shall indemnify The Northern Trust Company, and defend
it and hold it harmless from and against any and all liabilities, losses,
claims, suits or expenses (including attorneys' fees) of whatsoever kind and
nature which may be imposed upon, asserted against or incurred by The Northern
Trust Company at any time (1) by reason of its carrying out its responsibilities
or providing services under this Trust Agreement, or its status as Trustee, or
by reason of any act or failure to act under this Trust Agreement, except to the
extent that any such liability, loss, claim, suit or expense arises directly
from Trustee's negligence or willful misconduct in the performance of
responsibilities specifically allocated to it under the Trust Agreement, or (2)
by reason of the Trust's failure to qualify as a grantor trust under the IRS
grantor trust rules or the Plan's failure to qualify as an excess benefit or
top-hat plan exempt from all or Parts 2, 3, and 4 of Title 1 of the ERISA. This
paragraph shall survive the termination of this Trust Agreement.

         (i) Trustee shall not be liable for any delay in performance, or
non-performance, of any obligation hereunder to the extent that the same is due
to forces beyond Trustee's reasonable control, including but not limited to any
industrial, juridical, governmental, civil or military action; acts of
terrorism, insurrection or revolution; nuclear fusion, fission or radiation;
failure or fluctuation in electrical power, heat, light, air conditioning or
telecommunications equipment; or acts of God.

         SECTION 9. COMPENSATION AND EXPENSES OF TRUSTEE.

         Visteon shall pay all administrative and Trustee's fees and expenses.
If not so paid, the fees and expenses shall be paid from the Trust.

         SECTION 10. RESIGNATION AND REMOVAL OF TRUSTEE.

         (a) Trustee may resign at any time by written notice to Visteon, which
shall be effective 60 days after receipt of such notice unless Visteon and
Trustee agree otherwise.

         (b) Trustee may be removed by Visteon at any time by written notice to
Trustee, which shall be effective 60 days after receipt of such notice or upon
shorter notice accepted by Trustee.

         (c) Upon a Change of Control, as defined herein, Trustee may not be
removed by Visteon for one (1) year.



                                       5


         (d) If Trustee resigns within 10 year(s) after a Change of Control, as
defined herein, Visteon shall apply to a court of competent jurisdiction for the
appointment of a successor Trustee or for instructions.

         (e) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The resigning or removed Trustee is authorized, however, to reserve
such amount as may be necessary for the payment of its fees and expenses
incurred prior to resignation or removal. The transfer shall be completed within
180 days after receipt of notice of resignation, removal or transfer, unless
Visteon extends the time limit. Visteon's consent to extension of such time
limit shall not be unreasonably withheld.

         (f) If Trustee resigns or is removed, a successor shall be appointed,
in accordance with Section 11 hereof, by the effective date of resignation or
removal under paragraph(s) (a) or (b) of this section. If no such appointment
has been made, Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses of Trustee in
connection with the proceeding shall be allowed as administrative expenses of
the Trust.

         SECTION 11. APPOINTMENT OF SUCCESSOR.

         (a) If Trustee resigns or is removed in accordance with Section 10(a)
or (b) hereof, Visteon may appoint any third party, such as a bank trust
department or other party that may be granted corporate trustee powers under
state law, as a successor replace Trustee upon resignation or removal. The
appointment shall be effective when accepted in writing by the new Trustee, who
shall have all of the rights and powers of the former Trustee, including
ownership rights in the Trust assets. The former Trustee shall execute any
instrument necessary or reasonably requested by Visteon or the successor Trustee
to evidence the transfer.

         (b) The successor Trustee shall not be responsible for and Visteon
shall indemnify and defend the successor Trustee from any claim or liability
resulting from any action or inaction of any prior Trustee or from any other
past event, or any condition existing at the time it becomes successor Trustee.

         SECTION 12. AMENDMENT OR TERMINATION.

         (a) This Trust Agreement may be amended by a written instrument
executed by Trustee and Visteon. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plans, as certified to in writing
by Visteon (upon which certification Trustee may conclusively rely), or shall
make the Trust revocable after it has become irrevocable in accordance with
Section 1(b) hereof.

         (b) Following a Change of Control, the Trust shall not terminate until
the date on which there are no longer any assets held in the Trust or Plan
participants and their beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plans, as certified to in writing by Visteon (upon which
certification Trustee may conclusively rely). Upon termination of the trust any
assets remaining in the Trust shall be returned to Visteon.

         (c) Upon written approval of Plan participants or beneficiaries
entitled to payment of benefits pursuant to the terms of the Plans, Visteon may
terminate this Trust prior to the time all benefit payments under the Plans have
been made. Such approval shall be obtained and certified to in writing by
Visteon (upon which certification Trustee may conclusively rely), and Trustee
shall have no responsibility therefor. All assets in the Trust at termination
shall be returned to Visteon.

         (d) This Trust Agreement may not be amended by Visteon for 20 year(s)
following a Change of Control, as defined herein.



                                       6



         SECTION 13. MISCELLANEOUS.

         (a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.

         (b) Benefits payable to Plan participants and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process.

         (c) This Trust Agreement shall be governed by and construed in
accordance with the laws of Illinois.

         (d) For purposes of this Trust, Change in Control shall be deemed to
have occurred if the event set forth in any one of the following paragraphs
shall have occurred:

                  (i) any Person is or becomes the Beneficial Owner, directly or
         indirectly, of securities of Visteon (not including in the securities
         beneficially owned by such Person any securities acquired directly from
         Visteon or its affiliates) representing 40% or more of the combined
         voting power of Visteon's then outstanding securities, excluding any
         Person who becomes such a Beneficial Owner in connection with a
         transaction described in clause (a) of paragraph (iii) below;

                  (ii) within any twelve (12) month period, the following
         individuals cease for any reason to constitute a majority of the number
         of directors then serving: individuals who, on the effective date of
         this Trust Agreement, constitute the Board and any new director (other
         than a director whose initial assumption of office is in connection
         with an actual or threatened election contest, including but not
         limited to a consent solicitation, relating to the election of
         directors of Visteon) whose appointment or election by the Board or
         nomination for election by Visteon's shareholders was approved or
         recommended by a vote of at least two-thirds (2/3) of the directors
         then still in office who either were directors on the date hereof or
         whose appointment, election or nomination for election was previously
         so approved or recommended;

                  (iii) there is consummated a merger or consolidation of
         Visteon or any direct or indirect subsidiary of Visteon with any other
         corporation, other than (a) a merger or consolidation which results in
         the directors of Visteon immediately prior to such merger or
         consolidation continuing to constitute at least a majority of the board
         of directors of Visteon, the surviving entity or any parent thereof or
         (b) a merger or consolidation effected to implement a recapitalization
         of Visteon (or similar transaction) in which no Person is or becomes
         the Beneficial Owner, directly or indirectly, of securities of Visteon
         (not including in the securities Beneficially Owned by such Person any
         securities acquired directly from Visteon or its Affiliates)
         representing 40% or more of the combined voting power of Visteon's then
         outstanding securities;

                  (iv) the shareholders of Visteon approve a plan of complete
         liquidation or dissolution of Visteon or there is consummated an
         agreement for the sale or disposition by Visteon of more than 50% of
         Visteon's assets, other than a sale or disposition by Visteon of more
         than 50% of Visteon's assets to an entity, at least 50% of the combined
         voting power of the voting securities of which are owned by
         shareholders of Visteon in substantially the same proportions as their
         ownership of Visteon immediately prior to such sale; or

                  (v) any other event that the Board, in its sole discretion,
         determines to be a Change in Control for purposes of this Agreement.



                                       7


                  (vi) For purposes of this subsection 13(d), the following
         terms shall have the meanings indicated below:

                           (A) "Affiliate(s)" shall have the meaning set forth
                  in Rule 12b-2 promulgated under Section 12 of the Exchange
                  Act.

                           (B) "Beneficial Owner" shall have the meaning set
                  forth in Rule 13d-3 under the Exchange Act.

                           (C) "Board" shall mean the Board of Directors of
                  Visteon.

                           (D) "Exchange Act" shall mean the Securities Exchange
                  Act of 1934, as amended from time to time.

                           (E) "Person" shall have the meaning given in Section
                  3(a)(9) of the Exchange Act, as modified and used in Sections
                  13(d) and 14(d) thereof, except that such term shall not
                  include (i) Visteon or any of its subsidiaries, (ii) a trustee
                  or other fiduciary holding securities under an employee
                  benefit plan of Visteon or any of its Affiliates, (iii) an
                  underwriter temporarily holding securities pursuant to an
                  offering of such securities, or (iv) a corporation owned,
                  directly or indirectly, by the stockholders of Visteon in
                  substantially the same proportions as their ownership of stock
                  of Visteon.

         Notwithstanding the foregoing, a "Change in Control" shall not be
deemed to have occurred by virtue of the consummation of any transaction or
series of integrated transactions immediately following which the record holders
of the common stock of Visteon immediately prior to such transaction or series
of transactions continue to have substantially the same proportionate ownership
in an entity which owns all or substantially all of the assets of Visteon
immediately following such transaction or series of transactions.

         Visteon shall immediately notify Trustee in writing of any Change of
Control. Trustee may conclusively rely upon such notice and shall have no duty
to determine whether a Change of Control has occurred.

         (e) Any action required to be taken by Visteon shall be by resolution
of its Board of Directors or by written direction of one or more of its
Treasurer, Executive Vice President and Chief Financial Officer, Senior Vice
President of Human Resources, Secretary, or Assistant Secretary or anyone
designated by such persons to act on behalf of Visteon. The Trustee may rely
upon a resolution or direction filed with the Trustee and shall have no
responsibility for any action taken by the Trustee in accordance with any such
resolution or direction.

         (f) In making payments to service providers pursuant to authorized
directions, Visteon acknowledges that the Trustee is acting as paying agent, and
not as the payor, for tax information reporting and withholding purposes.

         (g) This Trust Agreement shall inure to the benefit of, and be binding
upon, each of the parties and their respective successors and assigns.



                                       8



         SECTION 14. EFFECTIVE DATE.

         The effective date of this Trust Agreement shall be December 11, 2002.

         IN WITNESS WHEREOF, Visteon and the Trustee have executed this Trust
Agreement effective as of the date set forth above.


                                       VISTEON CORPORATION



                                       By:  /s/ Mary A. Winston
                                          -------------------------------------
                                       Name:    Mary A. Winston
                                            -----------------------------------
                                       Title:   Vice President and Treasurer
                                             ----------------------------------

Attest:


  /s/ Janet G. Witkowski
- -------------------------------
      Janet G. Witkowski




(CORPORATE SEAL)


         The undersigned, Heidi A. Diebol-Hoorn, does hereby certify that she is
the duly elected, qualified and acting Secretary of Visteon Corporation
("Visteon") and further certifies that the person whose signature appears above
is a duly elected, qualified and acting officer of Visteon with full power and
authority to execute this Trust Agreement on behalf of Visteon and to take such
other actions and execute such other documents as may be necessary to effectuate
this Trust Agreement.



  /s/ Heidi A. Diebol-Hoorn
- -------------------------------
      Assistant Secretary
      Visteon Corporation



                                       THE NORTHERN TRUST COMPANY



                                       By:  /s/ Linda L. Thurber
                                          -------------------------------------
                                       Name:    Linda L. Thurber
                                            -----------------------------------
                                       Title:   Vice President
                                             ----------------------------------

Attest:


  /s/ Mark S. Fetters
- -------------------------------



                                       9




                                   APPENDIX A
                       TO VISTEON CORPORATION RABBI TRUST


o        Visteon Corporation Deferred Compensation Plan, effective July 1, 2000

o        Visteon Corporation Pension Parity Plan, effective July 1, 2000

o        Visteon Corporation Savings Parity Plan, effective July 1, 2000

o        Visteon Corporation Supplemental Executive Retirement Plan, effective
         July 1, 2000

o        Visteon Corporation Executive Separation Allowance Plan, effective July
         1, 2000

o        Visteon Corporation Deferred Compensation Plan for Non-Employee
         Directors, effective October 11, 2000

o        Change in Control Agreements with officers of Visteon Corporation



                                                                 EXHIBIT 10.24



                   FIVE-YEAR REVOLVING LOAN CREDIT AGREEMENT



                            DATED AS OF JUNE 20, 2002

                                      AMONG

                        VISTEON CORPORATION, AS BORROWER,

                                THE SEVERAL BANKS
                        FROM TIME TO TIME PARTIES HERETO,

                              JPMORGAN CHASE BANK,
                            AS ADMINISTRATIVE AGENT,

                                       AND

                              BANK OF AMERICA N.A.,
                              AS SYNDICATION AGENT


                              ---------------------


                         J.P. MORGAN SECURITIES INC. AND
                        BANC OF AMERICA SECURITIES, LLC,
                  AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS



                                TABLE OF CONTENTS



                                                                                                               PAGE
                                                                                                            
SECTION 1.   DEFINITIONS.........................................................................................1


SECTION 2.   THE LOANS..........................................................................................14

         2.1   The Commitment; Termination Date; Increase in Commitments........................................14
         2.2   Proceeds of Loans................................................................................15
         2.3   Facility Fee; Utilization Fee....................................................................15
         2.4   Mark-to-Market...................................................................................16
         2.5   Optional Termination or Reduction of Commitments.................................................16
         2.6   Notice of Borrowing; Procedure...................................................................17
         2.7   CAF Advances.....................................................................................18
         2.8   Procedure for CAF Advance Borrowing..............................................................18
         2.9   CAF Advance Payments.............................................................................22
         2.10  Certain Restrictions.............................................................................22
         2.11  Promise to Pay CAF Advances; Evidence of CAF Advances............................................22
         2.12  Extension of Term of Loans; Conversion of Loans..................................................23
         2.13  Register.........................................................................................25
         2.14  Interest Rates...................................................................................26
         2.15  Interest Payment Dates...........................................................................26
         2.16  Overdue Principal and Interest...................................................................27
         2.17  Dates for Payment or Optional Prepayment of Principal............................................27
         2.18  Optional Prepayment on Other Dates; Reimbursement for Certain Costs..............................28
         2.19  Method of Payment................................................................................28
         2.20  Pro Rata Treatment and Payments..................................................................29
         2.21  Limitation on Eurocurrency Tranches..............................................................30
         2.22  Repayment of Bilateral Obligations; Termination of Bilateral Commitments.........................30

SECTION 3.   LETTERS OF CREDIT..................................................................................30

         3.1   L/C Commitment...................................................................................30
         3.2   Procedure for Issuance of Letter of Credit.......................................................31
         3.3   Fees and Other Charges...........................................................................31
         3.4   L/C Participations...............................................................................31
         3.5   Reimbursement Obligation of the Company or Affiliate.............................................32
         3.6   Obligations Absolute.............................................................................33
         3.7   Letter of Credit Payments........................................................................33
         3.8   Applications.....................................................................................34








                                                                                                               PAGE
                                                                                                            
SECTION 4.   GUARANTEE OF LOANS TO AFFILIATES....................................................................34


SECTION 5.   CONDITIONS TO LOANS, CAF ADVANCES AND LETTERS OF CREDIT.............................................35

         5.1   Each Loan or CAF Advance to, or Letter of Credit Issued for the Account of, the Company or any
                  Affiliate......................................................................................35
         5.2   First Loan or CAF Advance to, or Letter of Credit Issued for the Account of, the Company or any
                  Affiliate......................................................................................36

SECTION 6.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................................................38

         6.1   Corporate Authority of the Company, etc...........................................................38
         6.2   Financial Statements..............................................................................38
         6.3   Litigation........................................................................................39
         6.4   Use of Proceeds...................................................................................39
         6.5   Compliance with ERISA.............................................................................39

SECTION 7.   COVENANTS...........................................................................................39

         7.1   Reports; Certificate as to Default................................................................39
         7.2   Further Information...............................................................................40
         7.3   Liens.............................................................................................40
         7.4   Sale-Leasebacks...................................................................................41
         7.5   Mergers and Consolidations........................................................................41
         7.6   Additional Covenants..............................................................................42
         7.7   ERISA.............................................................................................42
         7.8   Notification......................................................................................42
         7.9   Consolidated Leverage Ratio.......................................................................43

SECTION 8.   DEFAULT.............................................................................................43

         8.1   Defaults Relating to the Company..................................................................43
         8.2   Defaults Relating to Affiliates...................................................................44
         8.3   Defaults Relating to Bankruptcy of the Company....................................................46
         8.4   Cash Collateralization of Outstanding Letters of Credit...........................................46

SECTION 9.   ASSIGNMENT; PARTICIPATIONS..........................................................................47

         9.1   Assignment........................................................................................47
         9.2   Participation.....................................................................................48

SECTION 10.   CHANGE IN CIRCUMSTANCES............................................................................49

         10.1   Basis for Determining Interest Rate Inadequate or Unfair.........................................49
         10.2   Illegality.......................................................................................50
         10.3   Increased Cost...................................................................................51
         10.4   Withholding Taxes................................................................................54
         10.5   Replacement of Banks.............................................................................56



                                      -ii-






                                                                                                               PAGE
                                                                                                            
SECTION 11.   THE AGENTS.........................................................................................56

         11.1   Appointment......................................................................................56
         11.2   Delegation of Duties.............................................................................57
         11.3   Exculpatory Provisions...........................................................................57
         11.4   Reliance by Administrative Agent.................................................................57
         11.5   Notice of Default................................................................................58
         11.6   Non-Reliance on Agents and Other Banks...........................................................58
         11.7   Indemnification..................................................................................58
         11.8   Agent in Its Individual Capacity.................................................................59
         11.9   Successor Administrative Agent...................................................................59
         11.10   Syndication Agent...............................................................................60

SECTION 12.   MISCELLANEOUS......................................................................................60

         12.1   Notices..........................................................................................60
         12.2   Term of Agreement................................................................................60
         12.3   No Waivers.......................................................................................60
         12.4   New York Law and Jurisdiction....................................................................61
         12.5   Entire Agreement.................................................................................61
         12.6   Payment of Certain Expenses......................................................................62
         12.7   Judgment Currency................................................................................63
         12.8   Changes, Waivers, etc.; Adjustments..............................................................63
         12.9   Severability.....................................................................................64
         12.10   Successors and Assigns..........................................................................64
         12.11   Counterparts....................................................................................64
         12.12   Third Party Beneficiaries.......................................................................65
         12.13   Electronic Recording............................................................................65
         12.14   Aggregation or Comparison of Amounts in Different Currencies; Calculation of Certain Fees.......65




                                      -iii-




                                                                           1


                   FIVE-YEAR REVOLVING LOAN CREDIT AGREEMENT


         This FIVE-YEAR REVOLVING LOAN CREDIT AGREEMENT, dated as of June 20,
2002, is among VISTEON CORPORATION, a Delaware corporation (the "Company"), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the "Banks"), JPMORGAN CHASE BANK, a New York banking
corporation, as administrative agent (the "Administrative Agent"), and BANK OF
AMERICA N.A., as syndication agent (the "Syndication Agent").

         The Company desires to obtain a five-year revolving credit facility for
itself and its Affiliates in the aggregate amount of U.S. $775,000,000 or the
Equivalent thereof (as hereinafter defined) at any one time outstanding, and the
Banks and Administrative Agent are willing to provide such revolving credit
facility and to make Loans to, and issue Letters of Credit for the account of,
the Company and the Affiliates, subject to the terms and conditions set forth
below.

SECTION 1. DEFINITIONS

         The following terms, as used herein, have the following respective
meanings:

         "Accession Memorandum" means a memorandum of an Affiliate substantially
in the form of Exhibit A hereto evidencing the Affiliate's agreement to be bound
by the terms of this Agreement; provided that such a memorandum shall contain
such changes or additional provisions as may be deemed necessary by mutual
agreement of the Administrative Agent, the Affiliate and the Company.

         "Administrative Agent" has the meaning set forth in the preamble, it
being understood that matters concerning Foreign Currency Loans will be
administered by J.P. Morgan Europe Limited and therefore all notices concerning
such Foreign Currency Loans will be required to be given at the Foreign Currency
Notice Office.

         "Affected Foreign Currency" has the meaning set forth in Section 10.1.

         "Affiliate" means any direct or indirect majority-owned subsidiary of
the Company and any partnership of which the Company or a direct or indirect
majority-owned subsidiary of the Company is a general or unlimited partner. For
purposes of this definition, "majority-owned" means ownership of more than 50%
of the capital stock of or other equity interest in, or more than 50% of the
voting power with respect to, an entity.

         "Affiliate Event of Default" has the meaning set forth in Section 8.2.

         "Agents" means the Administrative Agent and the Syndication Agent
collectively.

         "Aggregate Commitments" means, at any time, the aggregate amount of the
Commitments then in effect. The original amount of the Aggregate Commitments is
$775,000,000.



                                                                               2


         "Aggregate Exposure" means, with respect to any Bank at any time, an
amount equal to the principal amount of such Bank's Commitment then in effect
or, if the Commitments have been terminated, the sum of (i) the principal amount
of the Loans held by such Bank then outstanding and (ii) such Bank's Revolving
Percentage of the L/C Obligations then outstanding.

         "Aggregate Exposure Percentage" means, with respect to any Bank at any
time, the ratio (expressed as a percentage) of such Bank's Aggregate Exposure at
such time to the Aggregate Exposure of all Banks at such time.

         "Aggregate Extensions of Credit" means at any time, the aggregate
amount of Extensions of Credit of the Banks outstanding at such time.

         "Aggregate Loans" means the total principal amount of all outstanding
Loans.

         "Agreement" means this Five-Year Revolving Loan Credit Agreement,
together with the exhibits hereto, as amended from time to time.

         "Annual Report" has the meaning set forth in Section 7.1(a).

         "Application" means an application, in such form as any Issuing Bank
may specify from time to time, requesting such Issuing Bank to open a Letter of
Credit.

         "Assignment and Acceptance" means an Assignment and Acceptance,
substantially in the form of Exhibit G.

         "Augmenting Bank" has the meaning set forth in Section 2.1(c).

         "Available Commitment" means as to any Bank at any time, an amount
equal to the excess, if any, of (a) such Bank's Commitment then in effect over
(b) such Bank's Extensions of Credit then outstanding.

         "Banks" has the meaning provided in the preamble hereto; provided, that
unless the context otherwise requires, each reference herein to the Banks shall
be deemed to include any Conduit Bank.

         "Bank's Actual Reserve Cost" has the meaning set forth in Section
10.3(b).

         "Base Rate" means for any day the greater of (i) an annual rate of
interest equal to that announced generally from time to time by the
Administrative Agent at its Domestic Lending Office as its prime rate, base rate
or equivalent rate and in effect on such day and (ii) the Federal Funds
Effective Rate plus 0.50%.

         "Base Rate Loan" means any loan hereunder denominated in United States
dollars which the Company (on behalf of itself or an Affiliate) specifies
pursuant to Section 2.6 or Section 2.12 as a Base Rate Loan.



                                                                               3


         "Base Rate Margin" means the applicable amount as set forth on the
Pricing Grid; provided, however, that in the event the Commitments are
terminated pursuant to Section 8.1, the Base Rate Margin shall automatically be
increased for any period during which Loans may be outstanding after such
termination by an amount equal to the then applicable Facility Fee (expressed as
a percentage).

         "Benefitted Bank" has the meaning set forth in Section 12.8(b).

         "Bilateral Revolving Credit Agreements" means the bilateral Five-Year
Credit Agreements and the bilateral 364-Day/2-Year Term-Out Credit Agreements
entered into between the Company and certain Banks prior to the Effective Date.

         "Borrowing" means a borrowing hereunder consisting of a Loan made to
the Company or an Affiliate by any Bank. A Borrowing is a "Domestic Borrowing"
if such Loan is a Domestic Loan, a "Eurocurrency Borrowing" if such Loan is a
Eurocurrency Loan or a "Foreign Currency Borrowing" if such Loan is a Foreign
Currency Loan.

         "CAF" means the competitive advance facility contemplated in Section
2.7.

         "CAF Advance" means each CAF Advance made pursuant to Section 2.7.

         "CAF Advance Availability Period" means the period from and including
the Effective Date to and including the date which is 14 days prior to the
Termination Date.

         "CAF Advance Confirmation" means each confirmation by the Company of
its acceptance of CAF Advance Offers, which confirmation shall be substantially
in the form of Exhibit E and shall be delivered to the Administrative Agent by
facsimile transmission.

         "CAF Advance Interest Payment Date" means as to each CAF Advance, each
interest payment date specified by the Company for such CAF Advance in the
related CAF Advance Request.

         "CAF Advance Maturity Date" means as to any CAF Advance, the date
specified by the Company pursuant to Section 2.8(d)(ii) in its acceptance of the
related CAF Advance Offer.

         "CAF Advance Offer" means each offer by a Bank to make CAF Advances
pursuant to a CAF Advance Request, which offer shall contain the information
specified in Exhibit D and shall be delivered to the Administrative Agent by
telephone, immediately confirmed by facsimile transmission.

         "CAF Advance Request" means each request by the Company for Banks to
submit bids to make CAF Advances, which request shall contain the information in
respect of such requested CAF Advances specified in Exhibit C and shall be
delivered to the Administrative Agent in writing, by facsimile transmission, or
by telephone, immediately confirmed by facsimile transmission.



                                                                               4


         "CAF Borrowing Date" means any Domestic Business Day (in the case of
Fixed Rate CAF Advances) or Eurodollar Business Day (in the case of LIBO Rate
CAF Advances) or any Foreign Currency Business Day (in the case of CAF Advances
denominated in a Foreign Currency) specified in a notice pursuant to Section
2.8(a) as a date on which the Company requests the Banks to make CAF Advances
hereunder.

         "Commitment" means, as to any Bank, the obligation of such Bank, if
any, to make Loans and participate in Letters of Credit in an aggregate
principal amount not to exceed the amount set forth under the heading "Revolving
Commitment" opposite such Bank's name on Schedule 1 or in the Assignment and
Acceptance pursuant to which such Bank became a party hereto, as the same may be
changed from time to time pursuant to the terms hereof.

         "Commitment Quarter" means each of the respective three-month periods
during the term of this Agreement ending on September 30, December 31, March 31
and June 30.

         "Conduit Bank" means any special purpose corporation organized and
administered by any Bank for the purpose of making Loans otherwise required to
be made by such Bank and designated by such Bank in a written instrument;
provided, that the designation by any Bank of a Conduit Bank shall not relieve
the designating Bank of any of its obligations to fund a Loan under this
Agreement if, for any reason, its Conduit Bank fails to fund any such Loan, and
the designating Bank (and not the Conduit Bank) shall have the sole right and
responsibility to deliver all consents and waivers required or requested under
this Agreement with respect to its Conduit Bank, and provided, further, that no
Conduit Bank shall (a) be entitled to receive any greater amount pursuant to
Section 2.18, 10.3, 10.4 or 12.6 than the designating Bank would have been
entitled to receive in respect of the extensions of credit made by such Conduit
Bank or (b) be deemed to have any Commitment.

         "Consolidated EBITDA" means for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum of (a)
income tax expense, (b) interest expense, (c) amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans), (d) depreciation and
amortization expense, (e) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (f) any non-recurring expenses or
losses, and (g) with respect to any discontinued operation, any loss resulting
therefrom; and minus, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (i) to the extent included
in the statement of such Consolidated Net Income for such period, any
non-recurring income or gains or (ii) with respect to any discontinued
operation, any gain resulting therefrom, all as determined on a consolidated
basis. For the purposes of calculating Consolidated EBITDA during any four
quarter period in which a Material Acquisition or a Material Disposition has
occurred, Consolidated EBITDA for such period shall be calculated after giving
pro forma effect to such Material Acquisition or Material Disposition as if such
Material Acquisition or Material Disposition occurred on the first day of such
four quarter period.



                                                                               5


         "Consolidated Leverage Ratio" means as of the end of any fiscal
quarter, the ratio of (a) Consolidated Total Debt as of such date to (b)
Consolidated EBITDA for the period of four fiscal quarters ending as of such
date.

         "Consolidated Net Income" means for any period, the consolidated net
income (or loss) of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.

         "Consolidated Total Assets" means, as of the date of determination, all
amounts that would, in conformity with GAAP, be set forth opposite the caption
"total assets" (or any like caption) on a consolidated balance sheet of the
Company and its Subsidiaries at such date.

         "Consolidated Total Debt" means, as of any date and without
duplication, the aggregate principal amount of all Indebtedness of the Company
and its Subsidiaries on a consolidated basis minus Consolidated Total Net Cash
as of such date.

         "Consolidated Total Net Cash" means, as of any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "cash and cash
equivalents" (or any like caption) on a consolidated balance sheet of the
Company and its Subsidiaries at such date.

         "Domestic Business Day" means any day, except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or obligated
by law or regulation to close.

         "Domestic Funding Office" means the office of the Administrative Agent
specified in Exhibit F hereto or such other office as may be specified from time
to time by the Administrative Agent by written notice to the Company and the
Banks as its funding office for the purpose of funding or payment of Domestic
Loans.

         "Domestic Lending Office" means, as to any Bank, the office, branch or
affiliate of such Bank in the continental United States as it may from time to
time designate as the Domestic Lending Office by notice to the Administrative
Agent.

         "Domestic Loan" means any Loan made pursuant to Section 2.1 denominated
in United States dollars which the Company (on behalf of itself or an Affiliate)
specifies pursuant to Section 2.6 or Section 2.12 as a Base Rate Loan.

         "Effective Date" means June 20, 2002.

         "Equivalent" means, in relation to any amount in United States dollars,
at any date, the amount obtained by converting such amount in United States
dollars into a specified Foreign Currency at the Exchange Rate for such Foreign
Currency, or vice versa, as applicable.

         "ERISA" means the Employee Retirement Income Security Act of 1974 of
the United States, as amended.



                                                                               6


         "Euro" means the single currency of participating Member States of the
European Union that adopt a single currency in accordance with the Treaty on
European Union signed on February 7, 1992.

         "Eurocurrencies" means United States dollars and Foreign Currencies.

         "Eurodollar Business Day" means any day, except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or obligated
by law or regulation to close, on which commercial banks in New York City are
open for trading in United States dollar deposits in the interbank eurodollar
market.

         "Eurodollar Funding Office" means the office of the Administrative
Agent specified in Exhibit F hereto or such other office as may be specified
from time to time by the Administrative Agent by written notice to the Company
and the Banks as its funding office for the purpose of funding or payment of
Eurocurrency Loans which are denominated in United States dollars.

         "Eurodollar Lending Office" means, as to any Bank, the office, branch
or affiliate of such Bank as it may from time to time designate as the
Eurodollar Lending Office by notice to the Administrative Agent.

         "Eurocurrency Loan" means any Loan made pursuant to Section 2.1
denominated in any Eurocurrency which the Company (on behalf of itself or an
Affiliate) specifies pursuant to Section 2.6 or Section 2.12 as a Eurocurrency
Loan.

         "Eurocurrency Margin" means the applicable amount as set forth on the
Pricing Grid; provided, however, that in the event the Commitments are
terminated pursuant to Section 8.1, the Eurocurrency Margin shall automatically
be increased for any period during which Loans may be outstanding after such
termination by an amount equal to the then applicable Facility Fee (expressed as
a percentage).

         "Eurocurrency Tranche" means the collective reference to Eurocurrency
Loans the then current Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).

         "Event of Default" has the meaning set forth in Section 8.1.

         "Event of Default - Bankruptcy" has the meaning set forth in Section
8.3.

         "Exchange Rate" means on any day, with respect to any currency, the
rate at which such currency may be exchanged into any other currency, as set
forth at approximately 11:00 a.m., London time, on such date on the Reuters
World Currency Page for such currency. In the event that such rate does not
appear on any Reuters World Currency Page, the Exchange Rate shall be determined
by reference to such other publicly available service for displaying exchange
rates as may be selected by the Administrative Agent, or, in the event no such
service is selected, such Exchange Rate shall instead be the arithmetic average
of the spot rates of exchange of the Administrative Agent in the market where
its foreign currency exchange operations in respect of such currency are then
being conducted, at or about 10:00 a.m., local time, on such date for the



                                                                               7


purchase of the relevant currency for delivery two Foreign Currency Business
Days later; provided that if at the time of any such determination, for any
reason, no such spot rate is being quoted, the Administrative Agent, after
consultation with the Company, may use any reasonable method it deems
appropriate to determine such rate, and such determination shall be presumed
correct absent manifest error.

         "Extensions of Credit" means as to any Bank at any time, an amount
equal to the sum of (a) the aggregate principal amount of all Loans held by such
Bank then outstanding and (b) such Bank's Revolving Percentage of the L/C
Obligations then outstanding.

         "Facility Fee" has the meaning set forth in Section 2.3(a).

         "Federal Funds Effective Rate" means for any day, the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Domestic Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Domestic Business Day, the
average of the quotations for the day of such transactions received by JPMorgan
Chase Bank from three federal funds brokers of recognized standing selected by
it.

         "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System of the United States, or any successor thereto.

         "Fee Payment Date" means each of (a) the tenth Domestic Business Day
following the last day of each Commitment Quarter and (b) the Termination Date.

         "Five-Year Term Loan Agreement" means the $250,000,000 Five-Year Term
Loan Credit Agreement, to be dated on or about June 24, 2002, among Visteon
Corporation, the several banks from time to time parties thereto, JPMorgan Chase
Bank, as administrative agent, and Bank of America N.A., as syndication agent.

         "Fixed Rate CAF Advance" means any CAF Advance made pursuant to a Fixed
Rate CAF Advance Request.

         "Fixed Rate CAF Advance Request" means any CAF Advance Request
requesting the Banks to offer to make CAF Advances at a fixed rate (as opposed
to a rate composed of the LIBO Rate plus (or minus) a margin).

         "Foreign Currency" means (a) with respect to Loans and Letters of
Credit, British Pounds Sterling and the euro and (b) with respect to CAF
Advances, British Pounds Sterling, euros and any other freely-convertible
currency agreed upon by the Company, the Administrative Agent and the Bank
making such CAF Advance.

         "Foreign Currency Business Day" means any day, except a Saturday,
Sunday or other day on which the commercial banks in London, England are
authorized or obligated by law or regulation to close, on which the commercial
banks in London, England are open for international business (including dealings
in deposits in the relevant currency in the interbank eurocurrency market),
provided that when used in connection with (a) Foreign Currency Loans or CAF
Advances



                                                                               8


denominated in euros, the term "Foreign Currency Business Day" shall
also exclude any day on which the Trans-European Automated Real-Time Gross
Settlement Express Transfer System (TARGET) (or, if such clearing system ceases
to be operative, such other clearing system (if any) determined by the
Administrative Agent to be a suitable replacement) is not open for settlement of
payment in euros and (b) CAF Advances denominated in any currency other than
United States dollars, the term "Foreign Currency Business Day" shall also
exclude any day on which banks in (i) the jurisdiction of the account to which
the proceeds of such CAF Advance are to be disbursed, and (ii) the jurisdiction
in which payments of principal of and interest on such CAF Advance are to be
made are authorized or required by law to remain closed.

         "Foreign Currency Funding Office" means the office of the
Administrative Agent specified in Exhibit F hereto or such other office as may
be specified from time to time by the Administrative Agent by written notice to
the Company and the Banks as its funding office for the purpose of funding or
payment of Foreign Currency Loans or CAF Advances denominated in a Foreign
Currency.

         "Foreign Currency Lending Office" means, as to any Bank, the office,
branch or affiliate of such Bank as it may from time to time designate as the
Foreign Currency Lending Office by notice to the Administrative Agent.

         "Foreign Currency Loans" means any Eurocurrency Loan hereunder
denominated in a Foreign Currency.

         "Foreign Currency Notice Office" means the Administrative Agent's
office located at 125 London Wall, London or such other office in London as may
be designated by the Administrative Agent by written notice to the Company and
the Banks.

         "GAAP" means generally accepted accounting principles in the United
States as applied to the Company.

         "Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

         "Gross-up" means the amount payable to the Administrative Agent or any
Bank to account for required deductions for withholding taxes as provided in
Section 10.4.

         "Guarantee" means the guarantee and other obligations of the Company
set forth in Section 4.

         "Guaranteed Obligations" has the meaning set forth in Section 4.

         "Increasing Bank" has the meaning set forth in Section 2.1(c).



                                                                               9


         "Indebtedness" means, as of any date, the amount outstanding on such
date under notes, bonds, debentures, commercial paper, or other similar
evidences of indebtedness for money borrowed.

         "Interest Period" means with respect to each Eurocurrency Loan:

                  (a) initially, the period commencing on the date of Borrowing
         with respect to such Loan (or in the case of a Loan which has been
         converted into a Eurocurrency Loan, on the date specified in Section
         2.12) and ending one, two, three or six months thereafter, as the
         Company (on behalf of itself or an Affiliate) may elect pursuant to
         Section 2.6 or Section 2.12; and

                  (b) thereafter, each period commencing on the last day of the
         next preceding Interest Period for such Borrowing and ending one, two,
         three or six months thereafter, as the Company (on behalf of itself or
         an Affiliate) may elect pursuant to Section 2.12;

         provided, however, that:

                           (i) any such Interest Period which would otherwise
                  end on a day which is not a Eurodollar Business Day (or a
                  Foreign Currency Business Day, in the case of Loans
                  denominated in a Foreign Currency) shall be extended to the
                  next succeeding Eurodollar Business Day or Foreign Currency
                  Business Day, as the case may be, unless such Eurodollar
                  Business Day or Foreign Currency Business Day, as the case may
                  be, falls in another calendar month, in which case such
                  Interest Period shall end on the next preceding Eurodollar
                  Business Day or Foreign Currency Business Day, as the case may
                  be,

                           (ii) any such Interest Period which begins on the
                  last Eurodollar Business Day or Foreign Currency Business Day,
                  as the case may be, of a calendar month (or on a day for which
                  there is no numerically corresponding day in the calendar
                  month at the end of such Interest Period) shall end on a day
                  which is the last Eurodollar Business Day or Foreign Currency
                  Business Day, as the case may be, of the applicable calendar
                  month; and

                           (iii) the Company (on behalf of itself or an
                  Affiliate) may not elect an Interest Period that would end
                  later than the Termination Date.

         "Issuing Bank" means JPMorgan Chase Bank, Bank of America N.A. or any
of up to two other Banks that may become Issuing Banks hereunder from time to
time by entering into separate agreements among such other Banks and the
Company.

         "L/C Commitment" means $100,000,000.

         "L/C Obligations" means at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit that
have not then been reimbursed pursuant to Section 3.5.



                                                                              10


         "L/C Participants" means, with respect to any Letter of Credit, the
collective reference to all the Banks other than the applicable Issuing Bank.

         "Letters of Credit" has the meaning set forth in Section 3.1(a).

         "LIBO Rate" means with respect to any Eurocurrency Loan or LIBO Rate
CAF Advance for any Interest Period, the London interbank offered rate for
deposits in the relevant currency appearing on Telerate Page 3750 (or in the
case of a Foreign Currency Borrowing, the rate appearing on the Page for the
applicable Foreign Currency) as of 11:00 a.m. (London, England time) two
Eurodollar Business Days prior to the beginning of such Interest Period for the
period commencing on the date of such Eurocurrency Loan or LIBO Rate CAF Advance
and ending on a maturity date comparable to that of the applicable Interest
Period. In the event that such rate does not appear on Page 3750 of the Telerate
screen (or, in the case of Foreign Currencies, the applicable Page of the
Telerate screen), the "LIBO Rate" shall be determined by reference to such other
comparable publicly available service for displaying eurocurrency rates as may
be selected by the Administrative Agent or, in the absence of such availability,
by reference to the rate at which the Administrative Agent is offered deposits
in identical currencies at or about 11:00 a.m., local time, two Foreign Currency
Business Days prior to the beginning of such Interest Period in the interbank
eurocurrency market where its eurocurrency and foreign currency and exchange
operations are then being conducted for delivery on the first day of such
Interest Period for the number of days comprised therein.

         "LIBO Rate CAF Advance" means any CAF Advance made pursuant to a LIBO
Rate CAF Advance Request.

         "LIBO Rate CAF Advance Request" means any CAF Advance Request
requesting the Banks to offer to make CAF Advances at an interest rate equal to
the LIBO Rate plus (or minus) a margin.

         "Lien" means any mortgage, pledge, lien, security interest, conditional
sale or other title retention agreement or other similar encumbrance.
         "Loan" means any Domestic Loan or Eurocurrency Loan.

         "Mandatory Cost Rate" has the meaning set forth in Section 10.3.

         "Mark-to-Market Day" has the meaning set forth in Section 2.4.

         "Material Acquisition" means any one or more acquisitions of any
business entity or entities, or of any operating unit or units of any business
entity or entities, that become consolidated with the Company in accordance with
GAAP and that involve the payment of consideration (including, without
limitation, the assumption of debt) by the Company and its Subsidiaries in
excess of $25,000,000 in the aggregate during any Commitment Quarter.

         "Material Disposition" means any one or more dispositions by the
Company or a Subsidiary of any business entity or entities, or of any operating
unit or units of the Company or a Subsidiary, that become unconsolidated with
the Company in accordance with GAAP and that



                                                                              11


involve the receipt of consideration by the Company and its Subsidiaries in
excess of $25,000,000 in the aggregate during any Commitment Quarter.

         "Maturity Date" means (a) for any Base Rate Loan, the Termination Date
or, (b) for any Eurocurrency Loan the last day of the final Interest Period for
such Loan specified by the Company (on behalf of itself or an Affiliate)
pursuant to Section 2.6 or Section 2.12.

         "National Currency Unit" means a non-decimal expression of the euro
based upon a fixed conversion rate between the euro and the former national
currency of a Participating Member State, as contemplated by Council Regulation
(EC) No. 1103/97 dated June 17, 1997.

         "Normal Banking Hours" with respect to the Notice Office of the
Administrative Agent means the period from 9:00 a.m. to 5:00 p.m. in the time
zone in which the Notice Office is located on a Domestic Business Day.

         "Note" means any promissory note evidencing Loans.

         "Notice Office" means the office of the Administrative Agent in the
continental United States specified as such in Exhibit F hereto or such other
office of the Administrative Agent in the continental United States as it may
hereafter designate as the Notice Office by notice to the Company.

         "Obligations" means the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans, CAF Advances and
Reimbursement Obligations and interest accruing after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Company and any Affiliate, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding) the
Loans, CAF Advances and all other obligations and liabilities of the Company
(and its Affiliates) to the Administrative Agent or to any Bank, whether direct
or indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other document made, delivered or given in connection herewith or
any Letter of Credit, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including all fees, charges and
disbursements of counsel to the Administrative Agent or to any Bank that are
required to be paid by the Company pursuant hereto) or otherwise.

         "Participant" has the meaning set forth in Section 9.2.

         "Participating Member State" means a Member State of the European Union
that has adopted, and is at the time of inquiry utilizing, the euro as its
currency.

         "Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.



                                                                              12


         "Plan" means an employee benefit plan or other plan (other than a
multi-employer benefit plan) maintained by the Company for employees of the
Company and certain Affiliates and covered by Title IV of ERISA.

         "Pricing Grid" means the pricing grid set forth below and based on the
Company's long-term senior unsecured non-credit-enhanced debt ratings as
provided by Standard & Poor's Ratings Services, a Division of the McGraw Hill
Companies, Inc. ("S&P") or Moody's Investors Service, Inc. ("Moody's"):



  Long-Term Senior Unsecured
   Non-Credit-Enhanced Debt
            Rating                       Facility                   Eurocurrency                   Base Rate
         (higher of)                        Fee                        Margin                       Margin
         S&P/Moody's                      (bps.)                       (bps.)                       (bps.)
  --------------------------             --------                   ------------                   ---------
                                                                                          
            A-/A3                           10                           25                            0
          BBB+/Baa1                        12.5                         32.5                           0
           BBB/Baa2                         15                          57.5                           0
          BBB-/Baa3                         20                           80                            0
          

         The applicable Facility Fee, Eurocurrency Margin and Base Rate Margin
shall be determined based upon the long-term senior unsecured
non-credit-enhanced debt ratings as provided by the S&P or Moody's. In the event
that S&P and Moody's ratings of the Company are not equivalent, the applicable
Facility Fee, Eurocurrency Margin and Base Rate Margin will be determined by the
higher rating. In the event that either S&P or Moody's ceases to provide a
long-term senior unsecured non-credit-enhanced debt rating for the Company, the
applicable Facility Fee, Eurocurrency Margin and Base Rate Margin will be
determined by reference to the rating issued by the other rating agency. For any
period in which neither S&P nor Moody's provides a long-term senior unsecured
non-credit-enhanced debt rating for the Company, the rating shall for purposes
of this definition be 
                                                                              13


due and payable pursuant to Section 8, and for all purposes after the Loans and
CAF Advances become due and payable pursuant to Section 8 or the Commitments
expire or terminate, the CAF Advances of the Banks shall be included in their
respective Aggregate Exposures in determining the Required Banks.

         "Requirement of Law" means as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

         "Reserves" has the meaning set forth in Section 10.3(b).

         "Revolving Percentage" means, as to any Bank at any time, the
percentage which such Bank's Commitment then constitutes of the Aggregate
Commitments or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such Bank's
Extensions of Credit then outstanding constitutes of the aggregate principal
amount of the Extensions of Credit then outstanding.

         "Sale-Leasebacks" has the meaning set forth in Section 7.4.

         "Senior Debt" has the meaning set forth in Section 7.6.

         "Spot Rate" means, on any day, with respect to two currencies, the
arithmetic mean of the buy and sell spot rates of exchange for the purchase and
sale of such two currencies for each other as publicly or generally quoted by
the Administrative Agent on the date of the determination, or if the
Administrative Agent is not publicly or generally quoting such exchange rates on
such date, then such rate as the Administrative Agent shall determine in good
faith for purposes hereof.

         "Subsidiary" means a corporation, partnership, limited liability
company or other entity which would be consolidated on the balance sheets of the
Company and its Subsidiaries in accordance with GAAP. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Company. For
purposes of the definition of "Consolidated Total Debt", "Subsidiary" shall be
deemed to include the Special Purpose Borrower (as defined in the Five-Year Term
Loan Agreement), if any.

         "10-K Report" has the meaning set forth in Section 7.1(a).

         "10-Q Report" has the meaning set forth in Section 7.1(b).

         "Termination Date" has the meaning set forth in Section 2.1(b).

         "364-Day Credit Agreement" means the 364-Day Revolving Loan Credit
Agreement dated as of June 20, 2002 among Visteon Corporation, the several banks
from time to time parties thereto, JPMorgan Chase Bank, as administrative agent,
and Bank of America N.A., as syndication agent.

         "United States dollars" and "$" mean the lawful currency of the United
States.



                                                                              14


         "Utilization Fee" has the meaning set forth in Section 2.3(b).

SECTION 2. THE LOANS

         2.1 THE COMMITMENT; TERMINATION DATE; INCREASE IN COMMITMENTS

         (a) Subject to the terms and conditions set forth in this Agreement,
each Bank agrees to make Domestic Loans and Eurocurrency Loans to the Company or
any Affiliate, each from time to time during the period from the date hereof to
and including the day prior to the Termination Date in amounts which (i) when
added to such Bank's Revolving Percentage of the L/C Obligations then
outstanding, do not exceed the Bank's Commitment, (ii) do not cause the
aggregate Equivalent principal amount of all Foreign Currency Loans then
outstanding to exceed $400,000,000, and (iii) do not cause the sum of (A) the
aggregate Equivalent principal amount of Loans and CAF Advances then outstanding
plus (B) the aggregate amount of L/C Obligations then outstanding, to exceed the
Aggregate Commitments. Within the conditions specified in this Agreement, the
Company or any Affiliate may borrow under this Section 2.1, repay under Sections
2.17 and 2.18 and reborrow under this Section 2.1.

         (b) The "Termination Date" shall be June 20, 2007.

         (c) The Company may from time to time elect to increase the Aggregate
Commitments so long as, after giving effect thereto, the total amount of the
Aggregate Commitments does not exceed $1,025,000,000. The Company may arrange
for any such increase to be provided by one or more Banks (each Bank so
agreeing, in its sole discretion, to an increase in its Commitment, an
"Increasing Bank"), or by one or more banks, financial institutions or other
entities (each such bank, financial institution or other entity, an "Augmenting
Bank"), to increase their existing Commitments, or extend Commitments, provided
that (i) each Augmenting Bank, shall be subject to the approval of the Company
and the Administrative Agent and (ii) the Company and each applicable Increasing
Bank or Augmenting Bank shall execute all such documentation as the
Administrative Agent shall reasonably specify. Increases and new Commitments
created pursuant to this clause (c) shall become effective on the date agreed by
the Company, the Administrative Agent and the relevant Banks, and the
Administrative Agent shall notify each affected Bank thereof. Notwithstanding
the foregoing, no increase in the Aggregate Commitments (or in the Commitment of
any Bank), shall become effective under this Section 2.1(c) unless, (i) on the
proposed date of the effectiveness of such increase, the conditions set forth in
paragraphs (iii) and (iv) of Section 5.1(a) and paragraphs (i) and (ii) of
Section 5.1(b) shall be satisfied and the Administrative Agent shall have
received a certificate to that effect dated such date and executed by a
responsible officer of the Company and (ii) the Administrative Agent shall have
received (with sufficient copies for each of the Banks) documents consistent
with those delivered on the Effective Date under Section 6.1 as to the corporate
power and authority of the Company and related matters to borrow hereunder after
giving effect to such increase. On the effective date of any increase in the
Aggregate Commitments, (i) each relevant Increasing Bank and Augmenting Bank
shall make available to the Administrative Agent such amounts in immediately
available funds and in the relevant currency or currencies as the Administrative
Agent shall determine, for the benefit of the other relevant Banks, as being
required in order to cause, after giving effect to such increase and the use of
such amounts to



                                                                              15


make payments to such other relevant Banks, each Bank's portion of the
outstanding Loans in each currency to equal its Revolving Percentage of such
outstanding Loans in each such currency and (ii) the Company shall be deemed to
have repaid and reborrowed all outstanding Loans as of the date of any increase
in the relevant Commitments (with such reborrowing to consist of the Loans, with
related Interest Periods if applicable, specified in a notice delivered by the
Company in accordance with the requirements of Section 2.6). The deemed payments
made pursuant to clause (ii) of the immediately preceding sentence in respect of
each Eurocurrency Loan shall be subject to indemnification by the Company
pursuant to the provisions of Section 2.18 if the deemed payment occurs other
than on the last day of the related Interest Periods.

         2.2 PROCEEDS OF LOANS

         The principal amount of each Loan shall be disbursed to the Company or
an Affiliate, as applicable, on the date of Borrowing of such Loan in the
currency in which the Loan is denominated in immediately available funds to the
account of the Company or the Affiliate, as applicable, specified by the Company
or the Affiliate (or the Company on behalf of the Affiliate) to the
Administrative Agent from time to time.

         2.3 FACILITY FEE; UTILIZATION FEE

         (a) The Company shall pay to the Administrative Agent for the account
of the Banks a facility fee (the "Facility Fee") for the period from the
Effective Date to and including the Termination Date at a rate determined in
accordance with the Pricing Grid multiplied by the Bank's Commitment (regardless
of whether any Loans are outstanding). The Facility Fee with respect to each
Commitment Quarter shall be payable in arrears on each Fee Payment Date and
shall be computed on the basis of a year of 365 (or 366) days for the actual
number of days for which due. The Facility Fee shall be payable to the
Administrative Agent and shall be transmitted via the National Automated
Clearing House Association electronic payments network in the United States to
an account in the continental United States specified by the Administrative
Agent from time to time by notice to the Company.

         (b) For any quarter during which

                  (i) the sum of the average principal amount of (A) Aggregate
         Extensions of Credit outstanding hereunder and (B) Aggregate Extensions
         of Credit (as defined in the 364-Day Credit Agreement), exceeds

                  (ii) 33 1/3% of the sum of (A) the Aggregate Commitments
         hereunder and (B) the Aggregate Commitments (as defined in the 364-Day
         Credit Agreement) or, if the Commitments (as defined in the 364-Day
         Credit Agreement) have been terminated pursuant to Section 2.1(b) of
         the 364-Day Credit Agreement, the sum of the Aggregate Extensions of
         Credit (as defined in the 364-Day Credit Agreement),

then the Company shall pay to the Administrative Agent for the account of the
Banks a quarterly utilization fee (the "Utilization Fee") in the amount of
0.125% per annum multiplied by the daily average balance of the Aggregate
Extensions of Credit outstanding hereunder during such quarter; provided, that
if the Utilization Fee is applicable at the time the Commitments are



                                                                             16


terminated pursuant to Section 8.1 or Section 8.3, it shall remain applicable
with respect to the Aggregate Extensions of Credit after the date the
Commitments are so terminated. For any quarter in which the Utilization Fee is
due, the Utilization Fee shall be calculated on a 360-day basis and payable
quarterly in arrears on the date the Facility Fee is paid.

         2.4 MARK-TO-MARKET

         Five Domestic Business Days prior to the end of any Interest Period
applicable to any Loan (or, if there are no Interest Periods for any such Loan,
five Domestic Business Days prior to the next succeeding interest payment date
for such Loan as specified in Section 2.15) (the "Mark-to-Market Day"), the
Administrative Agent shall determine the aggregate amount of all outstanding
Extensions of Credit and CAF Advances in United States dollars, and the
Equivalent in United States dollars of all outstanding Extensions of Credit and
CAF Advances in Foreign Currencies (calculated on the Mark-to-Market Day), and
if such aggregate amount exceeds the Aggregate Commitments (as a result of a
decrease in the value of the United States dollar as measured against the value
of Foreign Currencies in which outstanding Extensions of Credit or CAF Advances
are denominated), the Administrative Agent shall promptly notify the Company
and, in the case of an Affiliate's Loan, the Affiliate, and, at the end of the
applicable Interest Period or on the applicable interest payment date for such
Loan, as the case may be, the Company, or the Affiliate (in the case of an
Affiliate's Loan), shall prepay, in whole or in part, as necessary, the
principal of such Loan in an amount such that after such prepayment such excess
is eliminated; it being understood, however, that if prepayment of the entire
principal amount of such Loan for which the current Interest Period is ending or
for which interest thereon is coming due will not reduce the aggregate amount of
outstanding Extensions of Credit and CAF Advances to the level required above,
then only prepayment of the entire principal amount of such Loan shall be
required. Notwithstanding that only the Loan for which the current Interest
Period is ending or for which interest thereon is coming due will be required to
be prepaid, in whole or in part, as required above, the Company or the
Affiliate, as applicable, shall have the option in its discretion to reduce
Extensions of Credit and CAF Advances to the required level by prepaying other
Loans or causing other Affiliates to prepay other Loans.

         2.5 OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS

         The Company may at any time or from time to time, upon three Domestic
Business Days' written notice to the Administrative Agent at the Notice Office,
(a) terminate the Commitments if no Loans, CAF Advances or Letters of Credit are
then outstanding hereunder or (b) reduce the unused portion of the Commitments;
provided that no such termination or reduction of Commitments shall be permitted
if, after giving effect thereto and to any prepayments of the Loans made on the
effective date thereof, the sum of the Aggregate Extensions of Credit and
outstanding CAF Advances would exceed the Aggregate Commitments. From the
effective date of any such termination or reduction, the Facility Fee specified
in Section 2.3 shall cease to accrue or shall be correspondingly reduced,
provided that no such termination or reduction shall affect the Company's
obligation to pay the Facility Fee to the extent theretofore accrued. If the
Company terminates the Commitments in their entirety, such accrued Facility Fee
shall be payable within 30 days after the effective date of such termination in
the manner provided in Section 2.3. Any termination or reduction of the unused
portion of the Commitments by the Company pursuant to



                                                                              17


this Section 2.5 shall be in an amount equal to $1,000,000, or a whole multiple
thereof, and shall be irrevocable.

         2.6 NOTICE OF BORROWING; PROCEDURE

         With respect to each Domestic Borrowing, the Company (on behalf of
itself or an Affiliate) shall give notice of the Borrowing to the Administrative
Agent at the Notice Office no later than the date of such Borrowing, but not
later than 11:00 a.m. (New York City time) on such date. With respect to each
Eurocurrency Borrowing which is denominated in United States dollars, the
Company (on behalf of itself or an Affiliate) shall give notice of the Borrowing
to the Administrative Agent at the Notice Office no later than three Eurodollar
Business Days prior to the date of such Borrowing, but not later than 11:00 a.m.
(New York City time) on such date. With respect to each Foreign Currency
Borrowing, the Company (on behalf of its Affiliate) shall give notice of the
Borrowing to the Administrative Agent at the Foreign Currency Notice Office no
later than three Foreign Currency Business Days prior to the date of such
Borrowing, but not later than 3:00 p.m. (London, England time) on such date. In
each case, the notice shall be given by telephone (and shall be promptly
confirmed in a writing substantially in the form of Exhibit B hereto) and shall
specify:

                  (a) the borrower;

                  (b) the date of such Borrowing, which shall be a Domestic
         Business Day in the case of a Domestic Borrowing, a Eurodollar Business
         Day in the case of a Eurocurrency Borrowing which is denominated in
         United States dollars, or a Foreign Currency Business Day in the case
         of a Foreign Currency Borrowing;

                  (c) the amount of such Borrowing, which shall be not less than
         $1,000,000 or the Equivalent thereof on the date of notice and, if such
         Loan is to be a Eurocurrency Loan, the currency in which such Loan
         shall be denominated;

                  (d) whether the Loan comprising such Borrowing is to be a Base
         Rate Loan or a Eurocurrency Loan;

                  (e) if such Loan is to be a Eurocurrency Loan, the duration of
         the initial Interest Period; and

                  (f) whether any Bank has requested a Gross-up pursuant to the
         next succeeding sentence.

At the time that the Company (on behalf of itself or an Affiliate) gives a
notice of Borrowing, each Bank shall telephonically notify the Company and the
Administrative Agent whether such Bank will require a Gross-up for withholding
taxes in connection with such Loan (as provided in Section 10.4). A notice of
Borrowing, once given to the Administrative Agent, shall not be revocable by the
Company or an Affiliate, except in the event that any Bank notifies the Company
at the time the Company gives notice of the Borrowing that a Gross-up will be
required, in which case, the Company (on behalf of itself or the Affiliate) may
promptly withdraw the notice of Borrowing.



                                                                              18


Upon receipt of any such notice of Borrowing from the Company, the
Administrative Agent shall promptly notify each Bank thereof. Each Bank will
make the amount of its pro rata share of each Borrowing available to the
Administrative Agent for the account of the Company (or Affiliate) at the
Domestic Funding Office in the case of Domestic Loans, the Eurodollar Funding
Office in the case of Eurocurrency Loans which are denominated in United States
dollars and the Foreign Currency Funding Office in the case of Foreign Currency
Loans, in each case prior to 12:00 Noon, local time, on the date of Borrowing
requested by the Company in funds immediately available to the Administrative
Agent. Such Borrowing will then be made available to the Company (or an
Affiliate) by the Administrative Agent crediting the account of the Company (or
such Affiliate) on the books of such office with the aggregate of the amounts
made available to the Administrative Agent by the Banks and in like funds as
received by the Administrative Agent.

         2.7 CAF ADVANCES

         During the CAF Availability Period and subject to the terms and
conditions of this Agreement, the Company may borrow (a) Fixed Rate CAF Advances
from time to time on any Domestic Business Day or, in the case of CAF Advances
denominated in Foreign Currencies, any Foreign Currency Business Day and (b)
LIBO Rate CAF Advances (to the extent, in the case of currencies other than
United States dollars, the LIBO Rate can be determined pursuant to the first
sentence of the definition thereof) from time to time on any Eurodollar Business
Day or, in the case of CAF Advances denominated in Foreign Currencies, any
Foreign Currency Business Day. CAF Advances may be borrowed in amounts such that
the aggregate amount of Extensions of Credit and CAF Advances outstanding at any
time shall not exceed the Aggregate Commitments at such time. Within the limits
and on the conditions hereinafter set forth with respect to CAF Advances, the
Company from time to time may borrow, repay and reborrow CAF Advances.

         2.8 PROCEDURE FOR CAF ADVANCE BORROWING

         (a) The Company shall request CAF Advances by delivering a CAF Advance
Request to the Administrative Agent, not later than 12:00 Noon (New York City
time) four Eurodollar Business Days prior to the proposed CAF Borrowing Date (in
the case of a LIBO Rate CAF Advance Request), and not later than 10:00 A.M. (New
York City time) one Domestic Business Day prior to the proposed CAF Borrowing
Date (in the case of a Fixed Rate CAF Advance Request). Each CAF Advance Request
in respect of any CAF Borrowing Date may solicit bids for CAF Advances on such
CAF Borrowing Date in an aggregate principal amount of $1,000,000 or an integral
multiple of $1,000,000 in excess thereof and having not more than three
alternative CAF Advance Maturity Dates. The CAF Advance Maturity Date for each
CAF Advance shall be the date set forth therefor in the relevant CAF Advance
Request, which date shall be (i) not less than 7 days nor more than 360 days
after the CAF Borrowing Date therefor, in the case of a Fixed Rate CAF Advance,
(ii) one, two, three or six months after the CAF Borrowing Date therefor, in the
case of a LIBO CAF Advance and (iii) not later than the Termination Date, in the
case of any CAF Advance. The Administrative Agent shall notify each Bank
promptly by facsimile transmission of the contents of each CAF Advance Request
received by the Administrative Agent.



                                                                              19


         (b) In the case of a LIBO Rate CAF Advance Request, upon receipt of
notice from the Administrative Agent of the contents of such CAF Advance
Request, each Bank may elect, in its sole discretion, to offer irrevocably to
make one or more CAF Advances at the applicable LIBO Rate plus (or minus) a
margin determined by such Bank in its sole discretion for each such CAF Advance.
Any such irrevocable offer shall be made by delivering a CAF Advance Offer to
the Administrative Agent, before 10:30 A.M. (New York City time) on the day that
is three Eurodollar Business Days before the proposed CAF Borrowing Date,
setting forth:

                  (i) the maximum amount of CAF Advances for each CAF Advance
         Maturity Date and the aggregate maximum amount of CAF Advances for all
         CAF Advance Maturity Dates which such Bank would be willing to make
         (which amounts may, subject to Section 2.7, exceed such Bank's
         Commitment); and

                  (ii) the margin above or below the applicable LIBO Rate at
         which such Bank is willing to make each such CAF Advance.

The Administrative Agent shall advise the Company before 11:00 A.M. (New York
City time) on the date which is three Eurodollar Business Days before the
proposed CAF Borrowing Date of the contents of each such CAF Advance Offer
received by it. If the Administrative Agent, in its capacity as a Bank, shall
elect, in its sole discretion, to make any such CAF Advance Offer, it shall
advise the Company of the contents of its CAF Advance Offer before 10:15 A.M.
(New York City time) on the date which is three Eurodollar Business Days before
the proposed CAF Borrowing Date.

         (c) In the case of a Fixed Rate CAF Advance Request, upon receipt of
notice from the Administrative Agent of the contents of such CAF Advance
Request, each Bank may elect, in its sole discretion, to offer irrevocably to
make one or more CAF Advances at a rate of interest determined by such Bank in
its sole discretion for each such CAF Advance. Any such irrevocable offer shall
be made by delivering a CAF Advance Offer to the Administrative Agent before
9:30 A.M. (New York City time) on the proposed CAF Borrowing Date, setting
forth:

                  (i) the maximum amount of CAF Advances for each CAF Advance
         Maturity Date, and the aggregate maximum amount for all CAF Advance
         Maturity Dates, which such Bank would be willing to make (which amounts
         may, subject to Section 2.7, exceed such Bank's Commitment); and

                  (ii) the rate of interest at which such Bank is willing to
         make each such CAF Advance.

The Administrative Agent shall advise the Company before 10:00 A.M. (New York
City time) on the proposed CAF Borrowing Date of the contents of each such CAF
Advance Offer received by it. If the Administrative Agent, in its capacity as a
Bank, shall elect, in its sole discretion, to make any such CAF Advance Offer,
it shall advise the Company of the contents of its CAF Advance Offer before 9:15
A.M. (New York City time) on the proposed CAF Borrowing Date.



                                                                              20


         (d) Before 11:30 A.M. (New York City time) three Eurodollar Business
Days before the proposed CAF Borrowing Date (in the case of CAF Advances
requested by a LIBO Rate CAF Advance Request) and before 10:30 A.M. (New York
City time) on the proposed CAF Borrowing Date (in the case of CAF Advances
requested by a Fixed Rate CAF Advance Request), the Company, in its absolute
discretion, shall:

                  (i) cancel such CAF Advance Request by giving the
         Administrative Agent telephone notice to that effect, or

                  (ii) by giving telephone notice to the Administrative Agent
         (immediately confirmed by delivery to the Administrative Agent of a CAF
         Advance Confirmation by facsimile transmission) (A) subject to the
         provisions of Section 2.8(e), accept one or more of the offers made by
         any Bank or Banks pursuant to Section 2.8(b) or Section 2.8(c), as the
         case may be, and (B) reject any remaining offers made by Banks pursuant
         to Section 2.8(b) or Section 2.8(c), as the case may be.

         (e) The Company's acceptance of CAF Advances in response to any CAF
Advance Offers shall be subject to the following limitations:

                  (i) the amount of CAF Advances accepted for each CAF Advance
         Maturity Date specified by any Bank in its CAF Advance Offer shall not
         exceed the maximum amount for such CAF Advance Maturity Date specified
         in such CAF Advance Offer;

                  (ii) the aggregate amount of CAF Advances accepted for all CAF
         Advance Maturity Dates specified by any Bank in its CAF Advance Offer
         shall not exceed the aggregate maximum amount specified in such CAF
         Advance Offer for all such CAF Advance Maturity Dates;

                  (iii) the Company may not accept offers for CAF Advances for
         any CAF Advance Maturity Date in an aggregate principal amount in
         excess of the maximum principal amount requested in the related CAF
         Advance Request; and

                  (iv) if the Company accepts any of such offers, it must accept
         offers based solely upon pricing for each relevant CAF Advance Maturity
         Date and upon no other criteria whatsoever, and if two or more Banks
         submit offers for any CAF Advance Maturity Date at identical pricing
         and the Company accepts any of such offers but does not wish to (or, by
         reason of the limitations set forth in Section 2.7, cannot) borrow the
         total amount offered by such Banks with such identical pricing, the
         Company shall accept offers from all of such Banks in amounts allocated
         among them pro rata according to the amounts offered by such __________
         Banks (with appropriate rounding, in the sole discretion of the
         Company, to assure that each accepted CAF Advance is an integral
         multiple of $1,000,000); provided that if the number of Banks that
         submit __________ offers for any CAF Advance Maturity Date at identical
         pricing is such that, after the Company accepts such offers pro rata in
         accordance with the foregoing provisions of this paragraph, the CAF
         Advance to __________ be made by any such Bank would be less than
         $5,000,000 principal amount, the number of such Banks shall be reduced
         by the Administrative Agent by lot until the CAF Advances to be



                                                                              21


         made by each such remaining Bank would be in a principal amount of
         $5,000,000 or an integral multiple of $1,000,000 in excess thereof.

         (f) If the Company notifies the Administrative Agent that a CAF Advance
Request is cancelled pursuant to Section 2.8(d)(i), the Administrative Agent
shall give prompt telephone notice thereof to the Banks.

         (g) If the Company accepts pursuant to Section 2.8(d)(ii) one or more
of the offers made by any Bank or Banks, the Administrative Agent promptly shall
notify each Bank which has made such an offer of (i) the aggregate amount of
such CAF Advances to be made on such CAF Borrowing Date for each CAF Advance
Maturity Date and (ii) the acceptance or rejection of any offers to make such
CAF Advances made by such Bank. Before 12:00 Noon (New York City time) on the
CAF Borrowing Date specified in the applicable CAF Advance Request, each Bank
whose CAF Advance Offer has been accepted shall make available to the
Administrative Agent at its Domestic Funding Office in the case of Fixed Rate
CAF Advances and its Eurodollar Funding Office in the case of LIBO Rate CAF
Advances the amount of CAF Advances to be made by such Bank, in immediately
available funds. The Administrative Agent will make such funds available to the
Company as soon as practicable on such date at such office of the Administrative
Agent. It shall be a condition to each CAF Advance, and each CAF Advance
accepted by the Company shall be deemed to be a representation and warranty by
the Company, that:

                  (i) the principal amount of such CAF Advance, when added to
         the aggregate principal amount of all Extensions of Credit and other
         CAF Advances then outstanding hereunder, shall not exceed the amount of
         the Aggregate Commitments, each such amount, if applicable, being
         expressed in the United States dollar Equivalent thereof on the date of
         the notice of Borrowing;

                  (ii) after giving effect to the making of such CAF Advance no
         Event of Default nor Event of Default - Bankruptcy and no event which,
         with the giving of notice or lapse of time or both, would become an
         Event of Default or an Event of Default - Bankruptcy shall have
         occurred and be continuing; and

                  (iii) the representations and warranties of the Company
         contained in this Agreement, except those contained in Sections 6.2(b)
         and 6.3, shall be true and correct in all material respects on and as
         of the date of such CAF Advance, except to the extent such
         representations and warranties expressly relate to an earlier date.

As soon as practicable after each CAF Borrowing Date, the Administrative Agent
shall notify each Bank of the aggregate amount of CAF Advances advanced on such
CAF Borrowing Date and the respective CAF Advance Maturity Dates thereof.

         (h) Notwithstanding anything to the contrary in this Section 2.8, in
the case of CAF Advances to be denominated in a Foreign Currency, the Company
and the Administrative Agent shall agree upon such modification to the notice
times, bid times, funding times, minimum amounts and other procedures set forth
above in this Section 2.8 that are appropriate for the



                                                                              22


relevant Foreign Currency; and the Administrative Agent shall advise the Banks
and the Company of such modifications prior to the delivery of any CAF Advance
Request soliciting bids for CAF Advances in such Foreign Currency.

         2.9 CAF ADVANCE PAYMENTS

         (a) The Company shall pay to the Administrative Agent, for the account
of each Bank which has made a CAF Advance, on the applicable CAF Advance
Maturity Date the then unpaid principal amount of such CAF Advance. The Company
shall not have the right to prepay any principal amount of any CAF Advance
without the consent of the Bank to which such CAF Advance is owed.

         (b) The Company shall pay interest on the unpaid principal amount of
each CAF Advance from the CAF Borrowing Date to applicable CAF Advance Maturity
Date at the rate of interest specified in the CAF Advance Offer accepted by the
Company in connection with such CAF Advance (calculated on the basis of a
360-day year for actual days elapsed), payable on each applicable CAF Advance
Interest Payment Date.

         (c) If any principal of, or interest on, any CAF Advance shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such CAF Advance shall, without limiting any rights of any Bank under this
Agreement, bear interest from the date on which such payment was due at a rate
per annum which is 1% above the rate which would otherwise be applicable to such
CAF Advance until the stated CAF Advance Maturity Date of such CAF Advance, and
for each day thereafter at a rate per annum which is 1% above the ABR, in each
case until paid in full (as well after as before judgment). Interest accruing
pursuant to this paragraph (c) shall be payable from time to time on demand.

         2.10 CERTAIN RESTRICTIONS

         A CAF Advance Request may request offers for CAF Advances to be made on
not more than one CAF Borrowing Date and to mature on not more than three CAF
Advance Maturity Dates. No CAF Advance Request may be submitted earlier than
five Domestic Business Days after submission of any other CAF Advance Request.

         2.11 PROMISE TO PAY CAF ADVANCES; EVIDENCE OF CAF ADVANCES

         The Company unconditionally promises to pay to the Administrative
Agent, for the account of each Bank that makes a CAF Advance, on the CAF Advance
Maturity Date with respect thereto, the principal amount of such CAF Advance.
The Company further unconditionally promises to pay interest on each CAF Advance
and each Loan for the period from and including the CAF Borrowing Date of such
CAF Advance on the unpaid principal amount thereof from time to time outstanding
at the applicable rate per annum determined as provided in, and payable as
specified in, Section 2.9(b). Each Bank shall maintain in accordance with its
usual practice appropriate records evidencing indebtedness of the Company to
such Bank resulting from each CAF Advance of such Bank from time to time,
including the amounts of principal and interest payable and paid to such Bank
from time to time in respect of each such CAF Advance.



                                                                              23


         2.12 EXTENSION OF TERM OF LOANS; CONVERSION OF LOANS

         (a) The Company may, at its option, elect (on behalf of itself or any
Affiliate which has borrowed hereunder) (i) to extend any outstanding
Eurocurrency Loan (such extended Eurocurrency Loan to be denominated in the same
currency as that prior to such extension) or (ii) to convert any outstanding
Base Rate Loan into a Eurocurrency Loan denominated in United States dollars, or
any outstanding Eurocurrency Loan denominated in United States dollars into a
Base Rate Loan, in each case, by giving notice to the Administrative Agent at
the Notice Office and, in the case of Loans to be continued in a Foreign
Currency, the Foreign Currency Notice Office of such election; provided,
however, that the borrower must remain the same in connection with any extension
or conversion of a Loan.

         (b) An outstanding Loan may be converted pursuant to Section 2.12(a)
only on a day which meets both of the following requirements:

                  (i) an outstanding Loan may only be converted on a day which
         is (A) if such outstanding Loan is a Domestic Loan, a Domestic Business
         Day or (B) if such outstanding Loan is a Eurocurrency Loan denominated
         in United States dollars, a Eurodollar Business Day; and

                  (ii) an outstanding Loan may only be converted into (A) a
         Domestic Loan on a Domestic Business Day or (B) a Eurocurrency Loan
         which is denominated in United States dollars on a Eurodollar Business
         Day.

Subject to the requirements of this Section 2.12(b), an outstanding Loan may be
converted on the last day of the then-existing Interest Period for such Loan (if
such Loan has an Interest Period) or at any time (if such Loan does not have an
Interest Period), as provided in Section 2.12(b), or, in the case of a Loan
having an Interest Period, at times other than the last day of an Interest
Period, as provided in Section 2.12(f).

         (c) The notice by the Company to the Administrative Agent of an
election pursuant to Section 2.12(a) to extend any outstanding Loan, to convert
any outstanding Loan on the last day of the then-existing Interest Period (if
the outstanding Loan has an Interest Period) or to convert any outstanding Loan
which does not have an Interest Period shall be given by telephone (and shall be
promptly confirmed in a writing substantially in the form of Exhibit B hereto)
as follows:

                  (i) if such outstanding Loan is to be extended and is a
         Eurocurrency Loan denominated in United States dollars, by giving
         notice no later than three Eurodollar Business Days prior to the last
         day of the then-existing Interest Period with respect to such Loan, but
         not later than 11:00 a.m. (New York City time) on such day;

                  (ii) if such outstanding Loan is to be extended and is a
         Foreign Currency Loan, by giving notice no later than three Foreign
         Currency Business Days prior to the last day of the then-existing
         Interest Period with respect to such Loan, but not later than 3:00 p.m.
         (London, England time) on such day;



                                                                              24


                  (iii) if such outstanding Loan is a Eurocurrency Loan
         denominated in United States dollars and is to be converted into a
         Domestic Loan, by giving notice no later than the last day of the
         then-existing Interest Period with respect to such outstanding Loan not
         later than 11:00 a.m. (New York City time) on such day; and

                  (iv) if such outstanding Loan is a Domestic Loan which is to
         be converted into a Eurocurrency Loan denominated in United States
         dollars, by giving notice no later than three Eurodollar Business Days,
         but not later than 11:00 a.m. (New York City time) on such date, prior
         to the day on which the Company or the Affiliate, as applicable,
         desires the conversion of such outstanding Loan to be made effective;
         and

         (d) Each notice given by the Company pursuant to this Section 2.12
shall specify:

                  (i) whether such outstanding Loan is to be extended or
         converted;

                  (ii) if such outstanding Loan is to be converted, the date
         such conversion should be effective;

                  (iii) if such outstanding Loan is to be extended and is a
         Eurocurrency Loan, the Interest Period for the Loan as so extended;

                  (iv) if such outstanding Loan is to be converted, whether such
         Loan is to be converted into a Base Rate Loan or Eurocurrency Loan
         denominated in United States dollars;

                  (v) if such outstanding Loan is to be converted into a
         Eurocurrency Loan denominated in United States dollars, the Interest
         Period therefor; and

                  (vi) whether the Administrative Agent or any Bank has
         requested a Gross-up pursuant to subsection (g) below.

         (e) With respect to each outstanding Loan which shall be extended or
converted pursuant to this Section 2.12:

                  (i) the Company or the Affiliate, whichever shall be the
         borrower, shall pay to the Administrative Agent for the account of each
         Bank all accrued and unpaid interest with respect to such outstanding
         Loan,

                           (A) if such Loan is a Eurocurrency Loan, on the last
                  day of the then-existing Interest Period with respect to such
                  outstanding Loan; or

                           (B) if such Loan is a Base Rate Loan, or if pursuant
                  to Section 2.12(f) the Loan is being converted on a day other
                  than the last day of the then-existing Interest Period, on the
                  day such outstanding Loan is converted;

                  (ii) no repayment of the principal amount of such outstanding
         Loan shall be required; and



                                                                              25


                  (iii) the Loan to be outstanding upon the extension or
         conversion of an outstanding Loan shall not be deemed to be a new Loan
         under Section 5.1 of this Agreement.

         (f) Subject to the requirements of Sections 2.12(a) and 2.12(b), any
outstanding Eurocurrency Loan denominated in United States dollars may be
converted into a Base Rate Loan pursuant to this Section 2.12 at times other
than the last day of an Interest Period; provided, however, that

                  (i) the Company's notice (on behalf of itself or an Affiliate)
         with respect to any such conversion shall be given no later than the
         date of such conversion, but not later than 11:00 a.m. (New York City
         time) on such date; and

                  (ii) the Company or the Affiliate, whichever is the borrower,
         shall reimburse each Bank on demand for any loss incurred by it as a
         result of the timing of any such conversion in an amount determined as
         provided in Section 2.18 with respect to prepayments.

         (g) At the time that the Company (on behalf of itself or an Affiliate)
gives a notice to extend or convert any Loan pursuant to the requirements of
this Section 2.12, each Bank shall telephonically notify the Company and the
Administrative Agent whether such Bank will require a Gross-up for withholding
taxes in connection with such Loan as so extended or converted (as provided in
Section 10.4). A notice to extend or convert any Loan, once given to the
Administrative Agent, shall not be revocable by the Company or an Affiliate,
except in the event that any Bank notifies the Company at the time the Company
gives notice to extend or convert a Loan that a Gross-up will be required, in
which case, the Company (on behalf of itself or the Affiliate) may promptly
withdraw the notice to extend or convert the Loan.

         (h) Notwithstanding anything to the contrary in the foregoing, if after
the date an outstanding Loan is borrowed the country in whose currency the Loan
is denominated becomes a Participating Member State, for so long as it remains a
Participating Member State, the Loan shall remain outstanding in accordance with
its terms but the outstanding amount of the Loan shall automatically be
converted into the equivalent amount of the euro calculated using the fixed
conversion rate established between the euro and the National Currency Unit for
such country's former currency. In addition, for so long as it exists, the
amount of such Loan denominated in the euro shall also be denominated in the
equivalent amount of the National Currency Unit for such country's former
currency, calculated in accordance with the same fixed conversion rate.

         2.13 REGISTER

         The Administrative Agent shall, on behalf of the Company and each
Affiliate, maintain at one of its offices a register for the recordation of the
names and addresses of the Banks and the Commitment of, and the principal amount
of the Loans, CAF Advances and L/C Obligations owing to, each Bank from time to
time (the "Register"). The entries in the Register shall be conclusive, in the
absence of manifest error, and the Company, each Affiliate, the Administrative
Agent and the Banks shall treat each Person whose name is recorded in the
Register as the owner



                                                                              26


of the Loans (and any Notes evidencing the Loans), the CAF Advances and the L/C
Obligations recorded therein for all purposes of this Agreement. Any assignment
of any Loan pursuant to Section 9.1, whether or not evidenced by a Note, shall
be effective only upon appropriate entries with respect thereto being made in
the Register (and any Note evidencing such Loan shall expressly so provide). Any
assignment or transfer of all or part of a Loan shall be registered on the
Register only upon presentation of a duly executed Assignment and Acceptance
and, if such Loan is evidenced by a Note, surrender of such Note for
registration of assignment or transfer.

         2.14 INTEREST RATES

         (a) Each Loan shall bear interest on the outstanding principal amount
thereof, as follows:

                  (i) with respect to each Base Rate Loan, at a fluctuating rate
         per annum equal to the sum of (x) the Base Rate in effect from time to
         time while such Base Rate Loan is outstanding and (y) the Base Rate
         Margin; and

                  (ii) with respect to each Eurocurrency Loan, during each
         Interest Period applicable thereto at a rate per annum equal to the sum
         of (x) the LIBO Rate applicable to such Interest Period and (y) the
         Eurocurrency Margin.

         (b) Interest on Base Rate Loans shall be computed on the basis of a
year of 365 (or 366) days and paid for the actual number of days for which due.
Interest on Eurocurrency Loans shall be computed on the basis of a year of 360
days and paid for the actual number of days for which due, provided that
interest on any Foreign Currency Loan or CAF Advance denominated in British
Pounds Sterling shall be calculated on the basis of a year of 365 (or 366) days
and paid for the actual number of days for which due. Interest for each Interest
Period with respect to a Eurocurrency Loan shall be calculated from and
including the first day thereof to but excluding the last day thereof.

         2.15 INTEREST PAYMENT DATES

         Interest on each Loan shall be payable as follows:

         (a) with respect to each Base Rate Loan, on each March 31, June 30,
September 30 and December 31 that such Loan is outstanding, and upon payment in
full of such Loan; and

         (b) with respect to each Eurocurrency Loan, (i) if the current Interest
Period for such Eurocurrency Loan is one month, two months or three months, on
the last day of such Interest Period or (ii) if the current Interest Period for
such Eurocurrency Loan is six months, on the last day of the third month and on
the last day of the sixth month of such Interest Period, and upon payment in
full of such Loan.



                                                                              27


         2.16 OVERDUE PRINCIPAL AND INTEREST

         Any overdue principal of the Loans or Reimbursement Obligations and, to
the extent permitted by law, overdue interest thereon, shall bear interest
payable on demand for each day from the date payment thereof was due to the date
of actual payment, as follows:

                  (a) with respect to each Base Rate Loan, at a rate per annum
         equal to 1% plus the sum of (x) the Base Rate in effect from time to
         time while such Loan is overdue and (y) the Base Rate Margin;

                  (b) (i) with respect to overdue principal on each Eurocurrency
         Loan, at a daily rate, which shall be calculated by the Administrative
         Agent (whose determination shall be conclusive in the absence of
         manifest error) and shall be a rate per annum equal to the sum of (A)
         1% plus (B) the Eurocurrency Margin plus (C) the LIBO Rate, and (ii)
         with respect to overdue interest on each Eurocurrency Loan, at the rate
         per annum equal to the sum of (X) 1% plus (Y) the Eurocurrency Margin
         plus (Z) the interest rate per annum at which deposits in the amount of
         such overdue interest are offered to the Administrative Agent by other
         leading banks, as determined by the Administrative Agent, in the
         interbank market in which the Eurocurrency is obtained for a period of
         one day, or if no such rate is available, one month (or, if such amount
         remains unpaid more than three Eurocurrency Business Days, then for
         such other period of time not longer than six months as the
         Administrative Agent may elect);

                  (c) with respect to Reimbursement Obligations, at a rate per
         annum applicable to Base Rate Loans pursuant to paragraph (a) above.

         2.17 DATES FOR PAYMENT OR OPTIONAL PREPAYMENT OF PRINCIPAL

         The Company and each Affiliate unconditionally promises to repay the
unpaid principal amount of each Loan made to it on or before the Maturity Date.
The Company or an Affiliate may, at its option, prepay the principal amount of
any Loan, in whole or in part, without penalty or premium, as follows:

                  (a) with respect to any Base Rate Loan, on any Domestic
         Business Day, provided that the Company deliver an irrevocable notice
         of prepayment to the Administrative Agent no later than 11:00 a.m., New
         York City time, on such date, which notice shall specify the date and
         amount of prepayment; and

                  (b) with respect to any Eurocurrency Loan on the last day of
         any Interest Period therefore, provided that the Company deliver an
         irrevocable notice of prepayment to the Administrative Agent no later
         than 3:00 p.m., London, England time, three Eurocurrency Business Days
         prior to such date, which notice shall specify the date and amount of
         prepayment;

in each case together with accrued interest on the amount prepaid to the date of
prepayment. Partial prepayments of any Loans shall be in an aggregate principal
amount of $1,000,000 or a whole multiple thereof.



                                                                              28


         2.18 OPTIONAL PREPAYMENT ON OTHER DATES; REIMBURSEMENT FOR CERTAIN
COSTS

         The Company or an Affiliate, as applicable, may, at its option, prepay
the principal amount of any Eurocurrency Loan, in whole or in part, at times
other than those provided for in Section 2.17(b), in each case together with
accrued interest on the amount prepaid to the date of prepayment; provided,
however, that with respect to any such Loan, the Company or the Affiliate,
whichever is the borrower, shall reimburse each Bank on demand for any loss
incurred by such Bank as a result of the timing of such payment, including
without limitation, any loss incurred in liquidating or re-employing deposits
from third parties but excluding loss of the Eurocurrency Margin or any other
profit for the period after such payment, provided that the amount of such loss
shall in no event exceed the amount of interest that would have accrued from the
date of prepayment to the last day of the then-current Interest Period in the
absence of prepayment, and the relevant Bank shall have delivered to the Company
and, if the borrower is an Affiliate, to such Affiliate, a written statement
setting forth the basis for determining such loss, which written statement shall
be conclusive in the absence of manifest error. Each Bank shall use its
reasonable efforts to mitigate any loss resulting from any prepayment by the
Company or an Affiliate.

         2.19 METHOD OF PAYMENT

         All payments required to be made pursuant to this Agreement shall be
made in immediately available funds (i) with respect to the Facility Fee and the
Utilization Fee, in United States dollars to the account in the continental
United States designated by the Administrative Agent pursuant to Section 2.3,
(ii) with respect to payments relating to Loans (including, without limitation,
principal, interest, any Gross-up or any payments pursuant to Section 2.18 or
10.3) or CAF Advances, in the lawful currency of the country in which the Loan
or CAF Advance is denominated, to the Administrative Agent for the account of
the Banks at (A) the Domestic Funding Office, with respect to each Domestic Loan
and each CAF Advance denominated in United States dollars, (B) the Eurodollar
Funding Office, with respect to each Eurocurrency Loan which is denominated in
United States dollars, (C) the Foreign Currency Funding Office, with respect to
each Foreign Currency Loan or CAF Advance denominated in a Foreign Currency or
(D) in each case, at such other location as may be agreed upon by the
Administrative Agent and the Company and (iii) with respect to any other payment
due hereunder, in such currency and in such place or office as may be required
hereunder or as may otherwise be agreed upon by the Administrative Agent and the
Company. The Administrative Agent shall distribute such payments to the Banks
promptly upon receipt in like funds as received. Whenever any payment of
principal of, or interest on, any Domestic Loan or of the Facility Fee shall be
due on a day which is not a Domestic Business Day, the date for payment thereof
shall be extended to the next succeeding Domestic Business Day and, in the case
of a payment of principal, interest thereon shall be payable for such extended
time. Whenever any payment of principal of, or interest on, any Eurocurrency
Loan which is denominated in United States dollars shall be due on a day which
is not a Eurodollar Business Day, the date for payment thereof shall be extended
to the next succeeding Eurodollar Business Day, unless as a result thereof such
date would fall in the next calendar month, in which case, such date shall be
advanced to the next preceding Eurodollar Business Day, and, in the case of a
payment of principal, interest thereon shall be payable to the date of payment
as extended or advanced as the case may be. Whenever any payment of principal
of, or interest on, any Foreign Currency Loan shall be due on a day which is not
a Foreign Currency Business Day, the date for payment thereof



                                                                              29


shall be extended to the next succeeding Foreign Currency Business Day, unless
as a result thereof such date would fall in the next calendar month, in which
case, such date shall be advanced to the next preceding Foreign Currency
Business Day, and, in the case of a payment of principal, interest thereon shall
be payable to the date of payment as extended or advanced as the case may be.

         2.20 PRO RATA TREATMENT AND PAYMENTS

         (a) Each Borrowing by the Company or any Affiliate from the Banks
hereunder, each payment by the Company or any Affiliate on account of the
Facility Fee or Utilization Fee and any reduction of the Commitments of the
Banks shall be made pro rata according to the respective Revolving Percentages
of the Banks.

         (b) Each payment (including each prepayment) by the Company or any
Affiliate on account of principal of and interest on the Loans shall be made pro
rata according to the respective outstanding amounts of principal and interest
then due and owing to the Banks.

         (c) Unless the Administrative Agent shall have been notified in writing
by any Bank prior to a Borrowing that such Bank will not make the amount that
would constitute its share of such Borrowing available to the Administrative
Agent, the Administrative Agent may assume that such Bank is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Company (or an Affiliate) a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing date such Bank shall pay to the
Administrative Agent, on demand, such amount with interest thereon, at a rate
equal to the greater of (i) the Federal Funds Effective Rate and (ii) a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation, for the period until such Bank makes such amount
immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Bank with respect to any amounts owing
under this paragraph shall be conclusive in the absence of manifest error. If
such Bank's share of such Borrowing is not made available to the Administrative
Agent by such Bank within three Domestic Business Days after such Borrowing
Date, the Administrative Agent shall also be entitled to recover (i) in the case
of amounts denominated in United States dollars, such amount with interest
thereon at the rate per annum applicable to Base Rate Loans, on demand, from the
Company or (ii) in the case of amounts denominated in Foreign Currencies, such
amount with interest thereon at a rate determined by the Administrative Agent to
be the cost to it of funding such amount, on demand, from the Company or the
relevant Affiliate.

         (d) Unless the Administrative Agent shall have been notified in writing
by the Company or any Affiliate prior to the date of any payment due to be made
by the Company or any Affiliate hereunder that the Company or such Affiliate
will not make such payment to the Administrative Agent, the Administrative Agent
may assume that the Company or such Affiliate is making such payment, and the
Administrative Agent may, but shall not be required to, in reliance upon such
assumption, make available to the Banks their respective pro rata shares of a
corresponding amount. If such payment is not made to the Administrative Agent by
the Company or such Affiliate within three Domestic Business Days after such due
date, the Administrative Agent shall be entitled to recover, on demand, from
each Bank to which any amount which was made



                                                                              30


available pursuant to the preceding sentence (i) in the case of amounts
denominated in United States dollars, such amount with interest thereon at the
rate per annum equal to the daily average Federal Funds Effective Rate and (ii)
in the case of amounts denominated in Foreign Currencies, such amount with
interest thereon at a rate per annum determined by the Administrative Agent to
be the cost to it of funding such amount. Nothing herein shall be deemed to
limit the rights of the Administrative Agent or any Bank against the Company or
any Affiliate.

         2.21 LIMITATION ON EUROCURRENCY TRANCHES

         Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions and continuations of Eurocurrency Loans and all
selections of Interest Periods shall be in such amounts and be made pursuant to
such elections so that, no more than fifteen Eurocurrency Tranches in any
currency shall be outstanding at any one time.

         2.22 REPAYMENT OF BILATERAL OBLIGATIONS; TERMINATION OF BILATERAL
COMMITMENTS

         The Commitment of each Bank hereunder and the other agreements
contained herein are conditioned upon receipt by the Administrative Agent of
evidence of repayment by the Company of all amounts of principal and interest
outstanding under the Bilateral Revolving Credit Agreements. Subject to the
foregoing, the Company, the Affiliates and the Banks agree that any commitment
of any Bank to make loans to the Company and any Affiliate pursuant to the terms
of any Bilateral Revolving Credit Agreement shall terminate as of the Effective
Date, and each Bank party to one or more Bilateral Revolving Credit Agreements
agrees to waive any notice required by such Bilateral Revolving Credit Agreement
with regards to the Company's termination of such Bank's commitment. The
termination of each Bank's commitment under its respective Bilateral Revolving
Credit Agreement shall not affect or terminate any outstanding payment
obligations of the Company or any Affiliate owing or arising under such
Bilateral Revolving Credit Agreement, which obligations shall continue until
satisfied in their entirety.

SECTION 3. LETTERS OF CREDIT

         3.1  L/C COMMITMENT

         (a) Subject to the terms and conditions hereof, each Issuing Bank, in
reliance on the agreements of the other Banks set forth in Section 3.4(a),
agrees to issue letters of credit ("Letters of Credit") for the account of the
Company or Affiliate on any Domestic Business Day prior to the fifth Domestic
Business Day preceding the Termination Date in such form as may be approved from
time to time by such Issuing Bank; provided that an Issuing Bank (i) shall have
no obligation to issue any Letter of Credit if, after giving effect to such
issuance, the L/C Obligations would exceed the L/C Commitment and (ii) may not
issue any Letter of Credit if, after giving effect to such issuance, the
aggregate amount of Extensions of Credit and CAF Advances would exceed the
Aggregate Commitments. Each Letter of Credit shall (i) be denominated in United
States dollars or a Foreign Currency and (ii) expire no later than the earlier
of (x) the first anniversary of its date of issuance and (y) the date that is
five Domestic Business Days prior to the Termination Date, provided that any
Letter of Credit with a one-year



                                                                              31


term may provide for the renewal thereof for additional one-year periods (which
shall in no event extend beyond the date referred to in clause (y) above).

         (b) No Issuing Bank shall be obligated to issue any Letter of Credit if
such issuance would conflict with, or cause the Issuing Bank or any L/C
Participant to exceed any limits imposed by, any applicable Requirement of Law.

         3.2 PROCEDURE FOR ISSUANCE OF LETTER OF CREDIT

         The Company or any Affiliate may from time to time request that a
particular Issuing Bank issue a Letter of Credit by delivering to such Issuing
Bank at its Domestic Lending Office (with a copy to the Administrative Agent at
its Domestic Lending Office) an Application therefor, completed to the
satisfaction of such Issuing Bank, and such other certificates, documents and
other papers and information as such Issuing Bank may request. Upon receipt of
any Application, the Issuing Bank will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Bank be required to issue any Letter of Credit earlier than three
Domestic Business Days after its receipt of the Application therefor and all
such other certificates, documents and other papers and information relating
thereto) by issuing the original of such Letter of Credit to the beneficiary
thereof or as otherwise may be agreed to by the Issuing Bank and the Company or
Affiliate. The Issuing Bank shall furnish a copy of such Letter of Credit to the
Company or any Affiliate promptly following the issuance thereof. The Issuing
Bank shall promptly furnish to the Administrative Agent, which shall in turn
promptly furnish to the Banks, notice of the issuance of each Letter of Credit
(including the amount thereof).

         3.3 FEES AND OTHER CHARGES

         (a) The Company or applicable Affiliate will pay a fee on all
outstanding Letters of Credit at a per annum rate equal to the Applicable Margin
then in effect with respect to Eurocurrency Loans, shared ratably among the
Banks and payable quarterly in arrears on each Fee Payment Date after the
issuance date (such fee to be calculated on the basis of a 360-day year for the
actual number of days elapsed). In addition, the Company or applicable Affiliate
shall pay to the Issuing Bank for its own account a fronting fee in the amount
per annum agreed upon between the Company and the Issuing Bank on the undrawn
and unexpired amount of each Letter of Credit, payable quarterly in arrears on
each Fee Payment Date after the issuance date.

         (b) In addition to the foregoing fees, the Company or applicable
Affiliate shall pay or reimburse the Issuing Bank for such normal and customary
costs and expenses as are incurred or charged by such Issuing Bank in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.

         3.4 L/C PARTICIPATIONS

         (a) Each Issuing Bank irrevocably agrees to grant and hereby grants to
each L/C Participant, and, to induce each Issuing Bank to issue Letters of
Credit, each L/C Participant irrevocably agrees to accept and purchase and
hereby accepts and purchases from each Issuing



                                                                              32


Bank, on the terms and conditions set forth below, for such L/C Participant's
own account and risk an undivided interest equal to such L/C Participant's
Revolving Percentage in each Issuing Bank's obligations and rights under and in
respect of each Letter of Credit issued by such Issuing Bank and the amount of
each draft paid by such Issuing Bank thereunder. Each L/C Participant
unconditionally and irrevocably agrees with each Issuing Bank that, if a draft
is paid under any Letter of Credit issued by such Issuing Bank for which such
Issuing Bank is not reimbursed in full by the Company or any Affiliate in
accordance with the terms of this Agreement, (i) if such draft is paid in a
Foreign Currency, such amount shall be converted into United States dollars at
the Exchange Rate then in effect as determined by the Administrative Agent (and
such amount shall thereafter be denominated in United States dollars for all
purposes of this Agreement) and (ii) such L/C Participant shall pay to such
Issuing Bank upon demand at such Issuing Bank's address for notices specified
herein an amount equal to such L/C Participant's Revolving Percentage of the
amount of such draft, or any part thereof, as so converted, that is not so
reimbursed.

         (b) If any amount required to be paid by any L/C Participant to any
Issuing Bank pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by such Issuing Bank under any Letter of Credit is paid to
such Issuing Bank within three Domestic Business Days after the date such
payment is due, such L/C Participant shall pay to such Issuing Bank on demand an
amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to such Issuing Bank, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any L/C Participant pursuant to
Section 3.4(a) is not made available to the Issuing Bank by such L/C Participant
within three Domestic Business Days after the date such payment is due, the
Issuing Bank shall be entitled to recover from such L/C Participant, on demand,
such amount with interest thereon calculated from such due date at the rate per
annum applicable to Base Rate Loans. A certificate of the Issuing Bank submitted
to any L/C Participant with respect to any amounts owing under this Section
shall be conclusive in the absence of manifest error.

         (c) Whenever, at any time after an Issuing Bank has made payment under
any Letter of Credit and has received from any L/C Participant its pro rata
share of such payment in accordance with Section 3.4(a), such Issuing Bank
receives any payment related to such Letter of Credit (whether directly from the
Company or any Affiliate or otherwise, including proceeds of collateral applied
thereto by such Issuing Bank), or any payment of interest on account thereof,
such Issuing Bank will distribute to such L/C Participant its pro rata share
thereof; provided, however, that in the event that any such payment received by
such Issuing Bank shall be required to be returned by such Issuing Bank, such
L/C Participant shall return to such Issuing Bank the portion thereof previously
distributed by the Issuing Bank to it.

         3.5 REIMBURSEMENT OBLIGATION OF THE COMPANY OR AFFILIATE

         If any draft is paid under any Letter of Credit, the Company or any
Affiliate shall reimburse the applicable Issuing Bank for the amount of (a) the
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by the Issuing Bank in connection with such



                                                                              33


payment, not later than 12:00 Noon, New York City time, on (i) the Domestic
Business Day that the Company or any Affiliate receives notice of such draft, if
such notice is received on such day prior to 10:00 A.M., New York City time, or
(ii) if clause (i) above does not apply, the Domestic Business Day immediately
following the day that the Company or Affiliate receives such notice. Each such
payment shall be made to the applicable Issuing Bank at its address for notices
referred to herein in the relevant currency and in immediately available funds.
Interest shall be payable on any such amounts from the date on which the
relevant draft is paid until payment in full at the rate set forth in (x) until
the Domestic Business Day next succeeding the date of the relevant notice,
Section 2.14(a)(i) in the case of amounts denominated in United States dollars,
and at the rate determined by the Issuing Bank to be the cost to it of funding
such amount plus the Eurocurrency Margin in the case of amounts denominated in
Foreign Currencies, and (y) thereafter, Section 2.16(a).

         3.6 OBLIGATIONS ABSOLUTE

         The Company and Affiliate's obligations under this Section 3 shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment that the Company or Affiliate may
have or have had against such Issuing Bank, any beneficiary of a Letter of
Credit or any other Person. The Company and its Affiliates also agree with each
Issuing Bank that such Issuing Bank shall not be responsible for, and neither
the Company's Reimbursement Obligations nor the Affiliate's Reimbursement
Obligations under Section 3.5 shall be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Company and its Affiliates and any beneficiary of
any Letter of Credit or any other party to which such Letter of Credit may be
transferred or any claims whatsoever of the Company or Affiliate against any
beneficiary of such Letter of Credit or any such transferee. No Issuing Bank
shall be liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit, except for errors or omissions found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Issuing Bank.
The Company and its Affiliates agree that any action taken or omitted by an
Issuing Bank under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Company and
its Affiliates and shall not result in any liability of such Issuing Bank to the
Company or its Affiliates.

         3.7 LETTER OF CREDIT PAYMENTS

         If any draft shall be presented for payment under any Letter of Credit,
the applicable Issuing Bank shall promptly notify the Company or Affiliate of
the date and amount thereof. The responsibility of such Issuing Bank to the
Company or Affiliate in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.



                                                                              34


         3.8 APPLICATIONS

         To the extent that any provision of any Application related to any
Letter of Credit is inconsistent with the provisions of this Agreement, the
provisions of this Agreement shall apply.

SECTION 4. GUARANTEE OF LOANS TO AFFILIATES

         (a) The Company hereby guarantees to the Administrative Agent, for the
ratable benefit of the Banks and their affiliates, the due and punctual payment
of the principal of and interest on any Loans made to any Affiliate under this
Agreement and any other Obligations of any Affiliate to the Administrative Agent
or any Bank under this Agreement (including, in respect of any Letter of Credit
issued for the account of such Affiliate, the related Reimbursement Obligations
and any other obligations of such Affiliate related to such Letter of Credit) or
its Accession Memorandum (the "Guaranteed Obligations") when and as the same
shall become due and payable, whether at maturity, upon declaration or
otherwise, according to the terms thereof. Upon the occurrence of an Affiliate
Event of Default with respect to an Affiliate under this Agreement, the Company
shall on behalf of such Affiliate upon demand by the Administrative Agent
punctually make any payment due and payable by such Affiliate under this
Agreement or its Accession Memorandum, whether at maturity, upon declaration or
otherwise; and any such payment shall be treated for the purposes of such
Accession Memorandum and this Agreement (other than Section 10.4) as if such
payment were made by the Affiliate.

         (b) The Company hereby agrees that its obligations under this Section 4
shall be irrevocable and unconditional and that the Company shall not have the
right to assert any defenses based upon the validity, regularity or
enforceability of any Accession Memorandum or this Agreement or any Note, the
absence of any attempt to collect from the defaulting Affiliate or other action
to enforce the same, the waiver or consent by the Administrative Agent or any
Bank with respect to any provisions thereof or hereof (other than with respect
to this Section 4), or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of the Company or of a guarantor.

         (c) With respect to its obligations under this Section 4, the Company
waives filing of claims with a court, trustee or receiver in the event of
receivership or bankruptcy of the defaulting Affiliate, diligence, presentment,
demand of payment, protest or notice with respect to Guaranteed Obligations and
all demands whatsoever (other than that provided for in subsection (a) above),
and covenants that this Guarantee is a continuing guarantee and will not be
discharged except by complete performance of the Guaranteed Obligations of the
defaulting Affiliate and the obligations of the Company under this Guarantee.

         (d) To the extent of any payment by the Company to the Administrative
Agent or any Bank under this Section 4, the Company shall succeed to all
corresponding claims that the Administrative Agent or such Bank may have and
otherwise be subrogated to the rights of the Administrative Agent or such Bank
against the defaulting Affiliate or any other person or security in connection
with the Loans to such Affiliate, and the Administrative Agent and any such Bank
shall use reasonable efforts to cooperate with the Company in seeking recovery
under such claims.



                                                                              35


         (e) The Company's obligations under this Section 4 constitute a
guarantee of payment and not of collection merely and shall remain in full force
and effect with respect to any Affiliate until the Guaranteed Obligations of
such Affiliate shall have been paid in full in accordance with the terms of the
relevant Accession Memorandum and of this Agreement. If at any time any payment
of any of the Guaranteed Obligations of an Affiliate is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of such Affiliate or otherwise, the Company's obligations hereunder with respect
to such payment shall be reinstated at such time as though such payment had not
been made.

         (f) If demand for, or acceleration of the time for, payment by any
Affiliate to the Administrative Agent or any Bank of any Guaranteed Obligations
of such Affiliate is stayed upon the insolvency, bankruptcy, reorganization or
proposed compromise or arrangement with creditors of such Affiliate, all such
Guaranteed Obligations of which payment or performance is stayed that would
otherwise be subject to demand for payment or acceleration shall nonetheless be
payable by the Company under this Section 4 immediately on demand by the
Administrative Agent or such Bank.

SECTION 5. CONDITIONS TO LOANS, CAF ADVANCES AND LETTERS OF CREDIT

         The obligation of each Bank to make each Loan or CAF Advance hereunder,
and to issue or participate in any Letter of Credit, is subject to the
performance by the Company or the Affiliate, whichever is the borrower, of all
its obligations under this Agreement and to the satisfaction of the following
further conditions:

         5.1 EACH LOAN OR CAF ADVANCE TO, OR LETTER OF CREDIT ISSUED FOR THE
ACCOUNT OF, THE COMPANY OR ANY AFFILIATE

         (a) In the case of each Loan or CAF Advance proposed to be made
hereunder to, or Letter of Credit issued for the account of, the Company or any
Affiliate:

                  (i) the Administrative Agent shall have received the notice
         from the Company required by Section 2.6 or Section 2.8, in the case of
         a Loan or CAF Advance, or the Application for such Letter of Credit
         shall have been delivered in accordance with Section 3.2, in the case
         of a Letter of Credit;

                  (ii) the principal amount of such Loan or CAF Advance, or the
         amount of such Letter of Credit, when added to the aggregate principal
         amount of all Loans and CAF Advances then outstanding hereunder and the
         aggregate amount of L/C Obligations then outstanding hereunder, shall
         not exceed the amount of the Aggregate Commitments;

                  (iii) after giving effect to the making of such Loan or CAF
         Advance or the issuance of such Letter of Credit no Event of Default
         nor Event of Default - Bankruptcy and no event which, with the giving
         of notice or lapse of time or both, would become an Event of Default or
         an Event of Default - Bankruptcy shall have occurred and be continuing;
         and



                                                                              36


                  (iv) the representations and warranties of the Company
         contained in this Agreement, except those contained in Sections 6.2(b)
         and 6.3, shall be true and correct in all material respects on and as
         of the date of such Loan or CAF Advance or issuance of such Letter of
         Credit, as the case may be, except to the extent such representations
         and warranties expressly relate to an earlier date.

Each Borrowing by, CAF Advance to or issuance of a Letter of Credit for the
account of, the Company or any Affiliate shall be deemed to be a representation
and warranty by the Company or Affiliate that the conditions specified in
clauses (ii), (iii) and (iv) above are satisfied on and as of the date of such
Borrowing, CAF Advance or Letter of Credit issuance.

         (b) In addition to the conditions stated in Section 5.1(a) above, in
the case of each Loan proposed to be made to, or Letter of Credit to be issued
for the account of, any Affiliate:

                  (i) after giving effect to the making of such Loan or the
         issuance of such Letter of Credit, no Affiliate Event of Default with
         respect to such Affiliate and no event which, with the giving of notice
         or lapse of time or both, would become an Affiliate Event of Default
         with respect to such Affiliate shall have occurred and be continuing;

                  (ii) the representations and warranties of the Affiliate
         contained in its Accession Memorandum shall be true and correct in all
         material respects on and as of the date of such Loan, except to the
         extent such representations and warranties expressly relate to an
         earlier date; and

                  (iii) upon request of the Administrative Agent or any Bank,
         the Administrative Agent or such Bank, as the case may be, shall have
         received the latest available annual and interim financial statements
         for the Affiliate (certified, if available).

Each Borrowing by, or issuance of a Letter of Credit for the account of, any
Affiliate shall be deemed to be a representation and warranty by the Affiliate
that the conditions specified in clauses (i) and (ii) above are satisfied on and
as of the date of such Borrowing or issuance.

         5.2 FIRST LOAN OR CAF ADVANCE TO, OR LETTER OF CREDIT ISSUED FOR THE
ACCOUNT OF, THE COMPANY OR ANY AFFILIATE

         (a) In the case of the first Loan or CAF Advance proposed to be made
hereunder to, or Letter of Credit proposed to be issued for the account of, the
Company or any Affiliate:

                  (i) the Administrative Agent shall have received an opinion of
         the Vice President - General Counsel or an Assistant General Counsel of
         the Company, or, at the Company's option, other counsel (in which case,
         such counsel shall be satisfactory to the Administrative Agent),
         addressed to the Administrative Agent and Banks and in form
         satisfactory to the Administrative Agent in its reasonable judgment, to
         the effect that:

                           (A) the Company has been duly incorporated and is
                  validly existing as a corporation in good standing under the
                  laws of the State of Delaware, with corporate power under the
                  laws of such State to enter into this Agreement, to



                                                                              37


                  borrow money and extend the Guarantee as contemplated by this
                  Agreement, and to carry out the provisions of this
                  Agreement;

                           (B) this Agreement has been duly authorized, executed
                  and delivered by the Company and, assuming due authorization,
                  execution and delivery hereof by the Banks, is a valid and
                  binding agreement of the Company enforceable in accordance
                  with its terms, except as such enforceability may be limited
                  by bankruptcy, insolvency, reorganization or similar laws
                  relating to or affecting creditors' rights generally and by
                  general equitable principles regardless of whether such
                  enforceability is considered in a proceeding in equity or at
                  law;

                           (C) the execution, delivery and performance by the
                  Company of this Agreement will not conflict with or result in
                  a breach of any of the terms or provisions of, or constitute a
                  default under (in each case material to the Company and its
                  subsidiaries considered as a whole), or result in the creation
                  or imposition of any lien, charge or encumbrance (in each case
                  material to the Company and its subsidiaries considered as a
                  whole) upon any of the property or assets of the Company
                  pursuant to the terms of, any indenture, mortgage, deed of
                  trust, loan agreement, guarantee, lease financing agreement or
                  other similar agreement or instrument known to such counsel
                  under which the Company is a debtor or a guarantor, nor will
                  such action result in any violation of the provisions of the
                  Certificate of Incorporation or the By-Laws of the Company;
                  and

                           (D) there is no consent, approval, authorization,
                  order, registration or qualification of or with any
                  Governmental Authority having jurisdiction over the Company
                  which is required for, and the absence of which would
                  materially affect, the execution, delivery and performance of
                  this Agreement; and

                  (ii) the Administrative Agent shall have received such
         additional documents as it may reasonably request relating to the
         existence and good standing of the Company under the laws of the States
         of Delaware and Michigan and to the authorization, execution and
         delivery of this Agreement in form and substance reasonably
         satisfactory to the Administrative Agent.

         The documents referred to in this Section 5.2(a) shall be delivered to
the Administrative Agent no later than the date of the first Loan, CAF Advance
or Letter of Credit hereunder, except that if such Loan is a Eurocurrency Loan,
the documents shall be delivered to the Bank at least two Eurodollar Business
Days before such Loan.

         (b) In addition to the conditions stated in Section 5.2(a) above, in
the case of the first Loan proposed to be made to, or Letter of Credit proposed
to be issued for the account of, any Affiliate, the Administrative Agent shall
have received:

                  (i) a duly executed Accession Memorandum of such Affiliate;
         and



                                                                              38


                  (ii) such additional documents as it may reasonably request
         relating to the existence and good standing of the Affiliate under the
         laws of the jurisdiction of its incorporation or organization and to
         the authorization, execution and delivery of the Accession Memorandum,
         all in form and substance reasonably satisfactory to the Administrative
         Agent.

The documents referred to in this Section 5.2(b) shall be delivered to the
Administrative Agent no later than the date of the first Loan to, or Letter of
Credit issued for the account of, the Affiliate. Such documents, including
executed documents, may be sent to the Administrative Agent by facsimile on the
required date, with the originals to be sent by professional courier.

SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants to the Administrative Agent and
each Bank that:

         6.1 CORPORATE AUTHORITY OF THE COMPANY, ETC.

         (a) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power under the laws of such State to execute and deliver this
Agreement and to perform its obligations hereunder and thereunder, and is duly
qualified and in good standing to do business as a foreign corporation in the
State of Michigan;

         (b) This Agreement has been duly authorized, executed and delivered on
behalf of the Company and, assuming due authorization, execution and delivery by
the Banks, is a valid and legally binding agreement of the Company;

         (c) The execution, delivery and performance by the Company of this
Agreement will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under (in each case material to the
Company and its subsidiaries considered as a whole), or result in the creation
or imposition of any lien, charge or encumbrance (in each case material to the
Company and its subsidiaries considered as a whole) upon any of the property or
assets of the Company pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement, guarantee, lease financing agreement or other similar
agreement or instrument under which the Company is a debtor or a guarantor, nor
will such action result in any violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Company; and

         (d) There is no consent, approval, authorization, order, registration
or qualification of or with any Governmental Authority having jurisdiction over
the Company which is required for, and the absence of which would materially
affect, the execution, delivery and performance of this Agreement.

         6.2 FINANCIAL STATEMENTS

         (a) The Company has furnished the Administrative Agent and each Bank
with, and the Administrative Agent and each Bank hereby acknowledges receipt of,
a copy of the audited consolidated balance sheet and the related consolidated
statements of income, equity and cash



                                                                              39


flows of the Company and its Subsidiaries at December 31, 2001 and 2000, and
such financial statements present fairly in all material respects the financial
position of the Company and Subsidiaries at those dates, in conformity with
GAAP; and

         (b) As of the date of this Agreement there has not occurred any
material adverse change in the financial position of the Company and its
Subsidiaries considered as a whole, since December 31, 2001.

         6.3 LITIGATION

         As of the date of this Agreement there are no legal or governmental
proceedings pending of which the Company or any of its Subsidiaries is the
subject, and no such proceedings are known by the Company to be threatened or
contemplated by Governmental Authorities or threatened by others, other than
such proceedings which the Company believes will not have a material adverse
effect upon the financial position of the Company and its Subsidiaries
considered as a whole.

         6.4 USE OF PROCEEDS

         The proceeds of the Loans and CAF Advances and the Letters of Credit
will be used by the Company and its Affiliates for general corporate purposes
including, without limitation, to support commercial paper issued by the
Company. None of the proceeds of the Loans and CAF Advances will be used,
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any margin stock within the meaning of
Regulation U of the Federal Reserve Board.

         6.5 COMPLIANCE WITH ERISA

         The Company has satisfied the minimum funding standards under ERISA
with respect to its Plans and is in compliance in all material respects with the
currently applicable provisions of ERISA.

SECTION 7. COVENANTS

         During the term of this Agreement, unless compliance shall have been
waived in writing in accordance with the terms of this Agreement, the Company
agrees that:

         7.1 REPORTS; CERTIFICATE AS TO DEFAULT

         It will deliver to the Administrative Agent at the Notice Office:

                  (a) within 120 days after the end of each of its fiscal years
         copies of the Company's consolidated financial statements including
         consolidated results of operations and cash flows of the Company and
         its consolidated subsidiaries all as audited by the Company's
         independent certified public accountants (the "Annual Report"),
         provided that if and when the Company files an Annual Report on Form
         10-K with the Securities and Exchange Commission (the "10-K Report"),
         copies of the 10-K Report will be delivered to the Administrative Agent
         in lieu of the Annual Report;



                                                                              40


                  (b) within 70 days after the end of each of the first three
         quarters of each of its fiscal years, copies of the Company's
         consolidated financial statements including consolidated results of
         operations and cash flows of the Company and its consolidated
         subsidiaries (the "Quarterly Report"), provided that if and when the
         Company files a Quarterly Report on Form 10-Q with the Securities and
         Exchange Commission (the "10-Q Report"), copies of the 10-Q Report will
         be delivered to the Administrative Agent in lieu of the Quarterly
         Report; and

                  (c) simultaneously with the delivery of each Annual Report or
         10-K Report (as applicable) referred to in (a) above, a certificate of
         an authorized officer of the Company (i) stating whether, to the
         knowledge of such officer, there exists on the date of the certificate
         any condition or event which then constitutes, or which after notice or
         lapse of time or both would constitute, an Event of Default or an Event
         of Default - Bankruptcy, and, if any such condition or event exists,
         specifying the nature and period of existence thereof and the action
         the Company is taking and proposes to take with respect thereto, and
         (ii) demonstrating compliance with the Consolidated Leverage Ratio set
         forth in Section 7.9 hereof.

                  (d) simultaneously with the delivery of each Quarterly Report
         or 10-Q Report (as applicable) referred to in (b) above, a certificate
         of an authorized officer of the Company demonstrating compliance with
         the Consolidated Leverage Ratio set forth in Section 7.9 hereof.

         7.2 FURTHER INFORMATION

         (a) From time to time while this Agreement is in effect, upon the
reasonable request of the Administrative Agent or any Bank, officials of the
Company will confer with officials of the Administrative Agent or such Bank and
advise them as to matters bearing on the financial condition of the Company, or
of any Affiliate to which Loans or L/C Obligations are then outstanding.

         (b) The Company shall notify the Administrative Agent and each of the
Banks at least two Foreign Currency Business Days prior to any Loan to any
Affiliate in the event that any Gross-up with respect to such Loan could be
required by any Bank pursuant to the terms of this Agreement.

         7.3 LIENS

         The Company shall not nor shall it permit any Subsidiary to directly or
indirectly, create, incur, assume or suffer to exist any Indebtedness secured by
a Lien upon any of its property or revenues, whether now owned or hereafter
acquired, except Liens at any one time outstanding with respect to which the
aggregate outstanding principal amount of the obligations secured thereby shall
not exceed 15% of Consolidated Total Assets as reflected in the most recent
Annual Report or 10-K Report delivered pursuant to Section 7.1(a); provided,
however, that this Section 7.3 shall not apply to Indebtedness secured by:



                                                                              41


                  (a) Liens on property of, or on any shares of stock of or
         Indebtedness of, any corporation existing at the time such corporation
         becomes a Subsidiary;

                  (b) Liens in favor of the Company or any Subsidiary;

                  (c) Liens in favor of any governmental body to secure
         progress, advance or other payments pursuant to any contract or
         provision of any statute;

                  (d) Liens on property, shares of stock or Indebtedness
         existing at the time of acquisition thereof (including acquisition
         through merger or consolidation) or to secure the payment of all or any
         part of the purchase price thereof or to secure any Indebtedness
         incurred prior to, at the time of, or within 60 days after, the
         acquisition of such property or shares or Indebtedness for the purpose
         of financing all or any part of the purchase price thereof; and

                  (e) any extension, renewal or replacement (or successive
         extensions, renewals or replacements), as a whole or in part, of any
         Lien referred to in the foregoing clauses (a) to (d), inclusive;
         provided, however, that such extension, renewal or replacement Lien
         shall be limited to all or a part of the same property, shares of stock
         or Indebtedness that secured the Lien extended, renewed or replaced
         (plus improvements on such property).

         7.4 SALE-LEASEBACKS

         The Company shall not nor shall it permit any Subsidiary to, directly
or indirectly, enter into any arrangement with any bank, insurance company or
other lender or investor (not including the Company or any Subsidiary) providing
for the leasing by the Company or any Subsidiary of any property owned by the
Company or any Subsidiary (except for leases between the Company and a
Subsidiary or between Subsidiaries), which property has been or is to be sold or
transferred by the Company or such Subsidiary to such bank, insurance company or
other lender or investor (not including the Company or any Subsidiary)
("Sale-Leasebacks"), except for Sale-Leasebacks consummated since the Effective
Date and which are outstanding on the relevant date of determination (other than
Sale-Leasebacks to the extent the proceeds thereof are used to refinance any
Sale-Leaseback which was in existence on the date hereof) in an aggregate
amount, which when combined with (but without duplication) the aggregate
outstanding principal amount of obligations secured by a Lien upon any of the
property or revenues of the Company or any of its Subsidiaries at the time of
entering into any such Sale-Leaseback, shall not exceed 15% of Consolidated
Total Assets as reflected in the most recent Annual Report or 10-K Report
delivered pursuant to Section 7.1(a).

         7.5 MERGERS AND CONSOLIDATIONS

         The Company may consolidate with, or sell or convey all or
substantially all its assets to, or merge with or into any other corporation,
provided that in any such case (i) the successor corporation shall be a
corporation organized and existing under the laws of the United States of
America or a State thereof, (ii) such corporation shall expressly assume the due
and punctual payment of the principal of and interest on all the Loans made to
the Company hereunder, and the due and punctual performance and observance of
all the covenants and conditions of this



                                                                              42


Agreement to be performed by the Company, including, without limitation, the
Guarantee, by an instrument, satisfactory to the Administrative Agent in its
reasonable judgment, executed and delivered to the Administrative Agent by such
corporation, and (iii) such successor corporation shall not, immediately after
such merger or consolidation or such sale or conveyance, be in default in the
performance of any such covenant or condition and shall not immediately
thereafter have outstanding any secured Indebtedness not expressly permitted by
the provisions of Section 7.3.

         7.6 ADDITIONAL COVENANTS

         In the event that, at any time while this Agreement is in effect, the
Company shall issue any indebtedness for borrowed money which is not by its
terms subordinate and junior to other indebtedness of the Company ("Senior
Debt") and such Senior Debt shall include, or be issued pursuant to a trust
indenture or other agreement which includes, financial covenants not
substantially provided for in this Agreement, the Company shall so advise the
Administrative Agent. Thereupon, if the Administrative Agent shall so request by
written notice to the Company, the Company, Administrative Agent and the Banks
shall enter into an amendment to this Agreement providing for substantially the
same financial covenants as those contained in such Senior Debt, trust indenture
or other agreement, mutatis mutandis. Such amendment containing such financial
covenants shall remain in effect so long as such covenants remain in effect with
respect to such Senior Debt. As used in this Section 7.6 the term "financial
covenant" shall mean a covenant on the part of the Company to the general effect
that the Company shall maintain, on a consolidated basis and as of a specified
date or dates, (a) a specified minimum net worth, (b) a ratio of debt to net
worth not in excess of a specified maximum, (c) current assets in an amount not
less than a specified amount in excess of current liabilities or (d) any similar
ratio or amount or similar measure for the same general purpose of stating a
minimum financial condition.

         7.7 ERISA

         The Company will comply with the minimum funding standards under ERISA
with respect to its Plans and will use its best efforts to comply in all
material respects with all other applicable provisions of ERISA and the
regulations and interpretations promulgated thereunder. The Company will deliver
to the Administrative Agent within 30 days after any executive officer of the
Company becomes aware of the occurrence of any Reportable Event (other than a
reduction in active Plan participants) with respect to any Plan, a certificate
signed by the Chief Financial Officer, the Vice President - Finance, the
Controller or the Treasurer of the Company setting forth the details as to such
Reportable Event and the action which the Company is taking and proposes to take
with respect thereto, together with a copy of the notice of such Reportable
Event given to the Pension Benefit Guaranty Corporation.

         7.8 NOTIFICATION

         The Company will notify the Administrative Agent within 30 days after
any executive officer of the Company becomes aware of any failure on the part of
the Company duly to observe or perform any covenant contained in Section 7.3 or
Section 7.4.



                                                                              43


         7.9 CONSOLIDATED LEVERAGE RATIO

         The Company shall not permit the Consolidated Leverage Ratio to exceed
3.5 to 1.0 at the end of any fiscal quarter.

SECTION 8. DEFAULT

         8.1 DEFAULTS RELATING TO THE COMPANY

         In case one or more of the following "Events of Default" shall have
occurred and be continuing, that is to say:

                  (a) default in any payment of principal of any Loan or CAF
         Advance to the Company or Reimbursement Obligation of the Company as
         and when the same shall become due and payable, whether at maturity or
         upon required repayment or upon declaration or otherwise, and the
         continuance of such default for five Domestic Business Days in the case
         of a Domestic Loan, Reimbursement Obligation or CAF Advance or five
         Eurodollar Business Days in the case of a Eurocurrency Loan; or

                  (b) default in the payment of any installment of interest upon
         any Loan or CAF Advance to the Company or Reimbursement Obligation of
         the Company as and when the same shall become due and payable, and
         continuance of such default for a period of five Domestic Business Days
         in the case of a Domestic Loan, Reimbursement Obligation or CAF Advance
         or five Eurodollar Business Days in the case of a Eurocurrency Loan; or

                  (c) failure on the part of the Company duly to observe or
         perform any covenant contained in Section 7.3 or Section 7.4 for 90
         days after the date on which written notice of such failure, requiring
         the Company to remedy the same, shall have been given to the Company by
         the Administrative Agent or the Required Banks; or

                  (d) failure on the part of the Company duly to observe or
         perform any other of the covenants or agreements of this Agreement for
         a period of 30 days after the date on which written notice of such
         failure, requiring the Company to remedy the same, shall have been
         given to the Company by the Administrative Agent or the Required Banks;
         provided, however, that in the case of a default under Section 4, such
         30-day grace period shall run from the date that demand for payment by
         the Administrative Agent was made upon the Company pursuant to Section
         4; or

                  (e) any representation or warranty by the Company in this
         Agreement or in any certificate delivered pursuant hereto shall have
         proven to have been materially false or misleading; or

                  (f) a Reportable Event (other than a reduction in active Plan
         participants) shall have occurred with respect to any Plan and, within
         30 days after the reporting of such Reportable Event to the
         Administrative Agent, the Administrative Agent shall have notified the
         Company in writing that the Administrative Agent has made a reasonable



                                                                              44


         determination that such Reportable Event is likely to have a material
         adverse effect upon the financial position of the Company and its
         subsidiaries considered as a whole; or

                  (g) default in the payment of the principal of (or premium, if
         any, on) or interest on any other borrowing of the Company of
         $5,000,000 or more and such default continues for a period of 30 days,
         or any default with respect to any other borrowing of the Company of
         $5,000,000 or more and such default causes acceleration thereof; or

                  (h) more than 50% in voting power of the voting securities of
         the Company shall be held by (i) any person or persons who "act as a
         partnership, limited partnership, syndicate or other group for the
         purpose of acquiring, holding or disposing of securities" of the
         Company within the meaning of Section 13(d)(3) of the Securities
         Exchange Act of 1934, or (ii) persons whose election to the Board of
         Directors shall not have been recommended by the committee of the Board
         of Directors charged with such recommendations shall constitute a
         majority of the members of the Board of Directors of the Company;

then, and in each and every such case, with the consent of the Required Banks,
the Administrative Agent may, or upon the request of the Required Banks, the
Administrative Agent shall, by notice in writing to the Company, terminate the
Commitments and/or declare the principal of all Loans and CAF Advances to the
Company and Affiliates and all other amounts owing under this Agreement
(including all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived.

         8.2 DEFAULTS RELATING TO AFFILIATES

         In case one or more of the following "Affiliate Events of Default"
shall have occurred and be continuing with respect to an Affiliate, that is to
say:

                  (a) default in any payment of principal of any Loan to such
         Affiliate or Reimbursement Obligation of such Affiliate as and when the
         same shall become due and payable, whether at maturity or upon required
         repayment or upon declaration or otherwise, and the continuance of such
         default for five Domestic Business Days in the case of a Domestic Loan
         or Reimbursement Obligation or five Eurodollar Business Days in the
         case of a Eurocurrency Loan; or

                  (b) default in the payment of any installment of interest upon
         any Loan to such Affiliate or Reimbursement Obligation of such
         Affiliate as and when the same shall become due and payable, and
         continuance of such default for a period of five Domestic Business Days
         in the case of a Domestic Loans, five Eurodollar Business Days in the
         case of a Eurocurrency Loan; or



                                                                              45


                  (c) any representation or warranty by such Affiliate in this
         Agreement, in its Accession Memorandum or in any certificate delivered
         in connection therewith shall have proven to have been materially false
         or misleading; or

                  (d) such Affiliate shall have entered against it by a court
         having jurisdiction in the premises a decree or order for relief in
         respect of the Affiliate in an involuntary case under any applicable
         bankruptcy, insolvency or other similar law now or hereafter in effect,
         or appointing a receiver, liquidator, assignee, custodian, trustee,
         sequestrator (or similar official) of the Affiliate or for any
         substantial part of its property, or ordering the winding-up or
         liquidation of its affairs and such decree or order shall remain
         unstayed and in effect for a period of 90 consecutive days; or

                  (e) such Affiliate shall commence a voluntary case under any
         applicable bankruptcy, insolvency or other similar law now or hereafter
         in effect, or consent to the entry of an order for relief in an
         involuntary case under any such law, or consent to the appointment of
         or taking possession by a receiver, liquidator, assignee, trustee,
         custodian, sequestrator (or similar official) of the Affiliate or for
         any substantial part of its property, or make any general assignment
         for the benefit of creditors, or fail generally to pay its debts as
         they become due, or take any corporate action in furtherance of any of
         the foregoing;

                  (f) an Event of Default under Section 8.1 shall have occurred
         and be continuing; or

                  (g) the Guarantee set forth in Section 4 shall no longer be in
         full force and effect;

then, (i) if such event is an Event of Default specified in clause (d) or (e),
automatically all of the Loans to such Affiliate and all other amounts owing by
the Affiliate under this Agreement (including all amounts of L/C Obligations
with respect to outstanding Letters of Credit issued to such Affiliate, whether
or not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) (but not any Loans to the Company
or any other Affiliate or any L/C Obligations of the Company or any other
Affiliates) shall immediately become due and payable, or (ii) if such event is
any other Event of Default, with the consent of the Required Banks, the
Administrative Agent may, or upon the request of the Required Banks, the
Administrative Agent shall, by notice in writing to the Company and the
defaulting Affiliate, declare the principal of all outstanding Loans to such
Affiliate and all other amounts owing by the Affiliate under this Agreement
(including all amounts of L/C Obligations with respect to outstanding Letters of
Credit issued to such Affiliate, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) (but not any Loans to the Company or any other Affiliate or any L/C
Obligations of the Company or any other Affiliate) to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived.



                                                                              46


         8.3 DEFAULTS RELATING TO BANKRUPTCY OF THE COMPANY

         In case one or more of the following "Events of Default - Bankruptcy"
shall have occurred and be continuing with respect to the Company, that is to
say:

                  (a) the Company shall have entered against it by a court
         having jurisdiction in the premises a decree or order for relief in
         respect of the Company in an involuntary case under any applicable
         bankruptcy, insolvency or other similar law now or hereafter in effect,
         or appointing a receiver, liquidator, assignee, custodian, trustee,
         sequestrator (or similar official) of the Company or for any
         substantial part of its property, or ordering the winding-up or
         liquidation of its affairs and such decree or order shall remain
         unstayed and in effect for a period of 90 consecutive days; or

                  (b) the Company shall commence a voluntary case under any
         applicable bankruptcy, insolvency or other similar law now or hereafter
         in effect, or consent to the entry of an order for relief in an
         involuntary case under any such law, or consent to the appointment of
         or taking possession by a receiver, liquidator, assignee, trustee,
         custodian, sequestrator (or similar official) of the Company or for any
         substantial part of its property, or make any general assignment for
         the benefit of creditors, or fail generally to pay its debts as they
         become due, or take any corporate action in furtherance of any of the
         foregoing;

then if such event is an Event of Default - Bankruptcy specified in either of
section (a) or (b) of this Section 8.3 with respect to the Company,
automatically the Commitments shall immediately terminate and the Loans and CAF
Advances hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement (including all amounts of L/C Obligations with respect to
outstanding Letters of Credit issued hereunder, whether or not the beneficiaries
of the then outstanding Letters of Credit shall have presented the documents
required thereunder) shall immediately become due and payable.

         8.4 CASH COLLATERALIZATION OF OUTSTANDING LETTERS OF CREDIT

         With respect to all Letters of Credit with respect to which presentment
for honor shall not have occurred at the time of an acceleration pursuant to
this Section 8, the Company and/or Affiliate, as the case may be, shall at such
time deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Company or Affiliate, as applicable, hereunder. After all
such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Company and/or Affiliate, as the case may be, hereunder shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Company or Affiliate (or such other Person as may be lawfully entitled
thereto).



                                                                              47


SECTION 9. ASSIGNMENT; PARTICIPATIONS

         9.1 ASSIGNMENT

         (a) No Bank shall, without the consent of the Company and the
Administrative Agent (in each case which consent shall not be unreasonably
withheld; it being understood, however, that any concern that the Company may
have regarding the availability of a currency as a result of exchange controls
or otherwise is a reasonable basis for the Company to withhold its consent),
transfer to any other office, branch or affiliate of the Bank or to any other
financial institution, person or entity, all or any portion of the Extensions of
Credit, CAF Advances or the Commitment or any of the Bank's other rights and
obligations under this Agreement; provided, however, that:

                  (i) without the consent of the Company, a Bank may transfer or
         assign (A) any of its Extensions of Credit or CAF Advances or any
         interest therein as a pledge to any Federal Reserve Bank or other
         similar central bank in another jurisdiction, provided that such pledge
         shall not release the Bank from its obligations hereunder and (B) all
         or any portion of the Extensions of Credit, any CAF Advance, the
         Commitment or any of the Bank's other rights and obligations under this
         Agreement to any one or more assignees that is a Bank immediately prior
         to giving effect to such assignment; and

                  (ii) without the consent of the Company, a Bank may transfer
         or assign all or any portion of the Loans, the Commitment or any of the
         Bank's other rights and obligations under this Agreement to any Person
         (A) five or more days after the occurrence and continuance of an Event
         of Default under Section 8.1(a) or Section 8.1(d) (in respect of
         Section 4) or (B) upon the occurrence and continuance of any Event of
         Default-Bankruptcy under Section 8.3.

         (b) Assignments shall be subject to the following additional
conditions:

                  (i) except in the case of an assignment to a Bank, an
         affiliate of a Bank or an assignment of the entire remaining amount of
         the assigning Bank's Commitments or Extensions of Credit, the amount of
         the Commitments or Extensions of Credit (without duplication) of the
         assigning Bank subject to each such assignment (determined as of the
         date the Assignment and Assumption with respect to such assignment is
         delivered to the Administrative Agent) shall not be less than
         $5,000,000 and, after giving effect thereto, the assigning Bank shall
         have Commitments and Extensions of Credit (without duplication) in an
         aggregate amount of at least $5,000,000, in each case unless the
         Company and the Administrative Agent otherwise consent, provided that
         (1) no such consent of the Company shall be required if an Event of
         Default under Section 8.1(a) or Section 8.1(d) (in respect of
         Section 4) has occurred and is continuing for a period of at least five
         days or an Event of Default-Bankruptcy under Section 8.3 has occurred
         and is continuing and (2) such amounts shall be aggregated in respect
         of each Bank and its affiliates, if any;



                                                                              48


                  (ii) the parties to each assignment shall execute and deliver
         to the Administrative Agent an Assignment and Assumption, together with
         a processing and recordation fee of $3,500;

                  (iii) the assignee, if it shall not be a Bank, shall deliver
         to the Administrative Agent an administrative questionnaire; and

         (c) In the case of any assignment to financial institutions made
without the consent of the Company, any such transferee or assignee of a Bank
shall not be entitled to receive any greater interest or other payment by reason
of Section 10.3 or 10.4 than such Bank would have been entitled to receive with
respect to the rights so transferred or assigned unless such transfer or
assignment is made by reason of the provisions of Section 10.2, 10.3 or 10.4
requiring the Bank to designate a different lending office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.

         (d) Notwithstanding the foregoing, any Conduit Bank may assign any or
all of the Loans or CAF Advance it may have funded hereunder to its designating
Bank without the consent of the Company or the Administrative Agent and without
regard to the limitations set forth in this Section 9.1. Each of the Company,
each Affiliate, each Bank and the Administrative Agent hereby confirms that it
will not institute against a Conduit Bank or join any other Person in
instituting against a Conduit Bank any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding under any state bankruptcy or similar law,
for one year and one day after the payment in full of the latest maturing
commercial paper note issued by such Conduit Bank; provided, however, that each
Bank designating any Conduit Bank hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage or expense arising
out of its inability to institute such a proceeding against such Conduit Bank
during such period of forbearance.

         9.2 PARTICIPATION.

         Each Bank shall have the right to sell to any bank or other financial
institution (a "Participant") a participating interest in such Bank's Extensions
of Credit, CAF Advances or Commitment held by such Bank; provided, however,
that, following any such sale, (a) such Bank's obligations under this Agreement
shall remain unmodified and fully effective and enforceable against such Bank,
(b) such Bank shall remain solely responsible to the Company and its Affiliates
for the performance of such obligations, including, without limitation, its
Commitment and the obligation of such Bank to fund Loans and participate in
Letters of Credit hereunder, (c) the Administrative Agent and the Company and
any Affiliates which have borrowed hereunder shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement, (d) such Bank shall retain the sole right and
responsibility to enforce the obligations of the Company and Affiliates
hereunder, including, without limitation, the sole right to approve of or
consent to any action hereunder or any amendment, modification or waiver hereof,
except that such Bank may grant to a Participant a joint right to approve of or
consent to any action, amendment, modification or waiver that would (i) reduce
the amount or extend the time for payment (other than pursuant to Section 2.12)
of any principal of, or interest on, the Loans or any CAF Advance, (ii) increase
the amount of such Bank's Commitment or (iii)



                                                                              49


reduce the amount of the Facility Fee or the Utilization Fee, in each case, from
that in effect at the time of the sale of the participating interest, provided
that if such Bank so grants to a Participant a right to approve of or consent to
a reduction in the Facility Fee and Utilization Fee, the term of the
participating interest sold to such Participant shall not extend beyond, and
unless earlier terminated such participating interest shall automatically
terminate on, the day immediately prior to the day and month of the Effective
Date next following the sale of such participating interest, and (e) any such
participating interest shall be in a minimum amount of $5,000,000 or the
Equivalent thereof on the date the participating interest is sold. On the month
and day of the Effective Date of each year (or, if any such month and day of the
Effective Date is not a Domestic Business Day, on the next succeeding Domestic
Business Day), each relevant Bank shall furnish to the Administrative Agent and
the Company a written notice disclosing the name of each Participant which held
a participating interest in such Bank's Commitment or any Loan held by such Bank
at any time during the 12-month period ended on the day immediately prior to the
day and month of the Effective Date next preceding such date. A Participant
shall not be entitled to receive any greater payment under Section 10.3 or 10.4
than the applicable Bank would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Company's prior written consent. Any
Participant that is a foreign person (i.e., a person organized or incorporated
under the laws of a country other than that under which the Company is
incorporated, if it is the borrower, or an Affiliate is incorporated or
organized, if such Affiliate is the borrower) shall not be entitled to the
benefits of Section 10.4 unless such Participant complies with Section 10.4(c).

SECTION 10. CHANGE IN CIRCUMSTANCES

         10.1 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR

         The Banks shall have no obligation to make a new Eurocurrency Loan, to
extend an outstanding Eurocurrency Loan or to convert an outstanding Loan into a
Eurocurrency Loan if the Administrative Agent determines that:

         (a) by reason of circumstances generally affecting all interbank
markets for deposits in the currency in which the Eurocurrency Loan has been
requested to be denominated (in the applicable amounts), LIBO Rates for such
deposits are not being offered to the Banks for a term equal to any Interest
Period for which such new Loan, extended Loan or converted Loan shall be
requested by the Company or an Affiliate;

         (b) based on notice received from the Required Banks, the LIBO Rate
will not adequately and fairly reflect the cost to the Banks of maintaining or
funding such new Loan, extended Loan or converted Loan as shall be requested by
the Company or an Affiliate;

         (c) deposits in the applicable currency are not generally available, or
cannot be obtained by the Banks, in the applicable market (any Foreign Currency
affected by the circumstances described in clause (a), (b) or (c) is referred to
as an "Affected Foreign Currency").

Upon any such determination, the Administrative Agent shall give telecopy or
telephonic notice thereof to the Company and the Banks as soon as practicable.
If such notice is given (y) pursuant



                                                                              50


to clause (a) or (b) of this Section 10.1 in respect of Eurocurrency Loans
denominated in United States dollars, then (i) any Eurocurrency Loans
denominated in United States dollars requested to be made on the first day of
such Interest Period shall be made as Base Rate Loans, (ii) any Base Rate Loans
that were to have been converted on the first day of such Interest Period to
Eurocurrency Loans denominated in United States dollars shall be continued as
Base Rate Loans and (iii) any outstanding Eurocurrency Loans denominated in
United States dollars shall be converted, on the last day of the then-current
Interest Period, to Base Rate Loans and (z) in respect of any Foreign Currency
Loans, then (i) any Foreign Currency Loans in an Affected Foreign Currency
requested to be made on the first day of such Interest Period shall not be made
and (ii) any outstanding Foreign Currency Loans in an Affected Foreign Currency
shall be due and payable on the first day of such Interest Period. Until such
relevant notice has been withdrawn by the Administrative Agent, no further
Eurocurrency Loans denominated in United States dollars or Foreign Currency
Loans in an Affected Foreign Currency shall be made or continued as such, nor
shall the Company have the right to convert Base Rate Loans to Eurocurrency
Loans denominated in United States dollars.

         10.2 ILLEGALITY

         (a) If, after the date of this Agreement, the introduction of, or any
change in, any applicable law or regulation or in the interpretation or
administration thereof by any governmental, monetary, or regulatory authority
charged with the interpretation or administration thereof or compliance by any
Bank with any request or directive of any such authority shall make it unlawful
for such Bank to make, maintain or fund any Loan or CAF Advance or issue or
participate in any Letter of Credit, such Bank shall give notice thereof to the
Company and, if the Loan or Letter of Credit is to an Affiliate, to such
Affiliate (in each case with a copy to the Administrative Agent). Before giving
any notice pursuant to this Section 10.2, the relevant Bank shall designate a
different lending office if such designation would avoid the need for giving
such notice and it would not otherwise be disadvantageous to such Bank in its
reasonable judgment. Upon receipt of such notice the Company shall or, if the
Loan or Letter of Credit is to an Affiliate, the Affiliate shall on either (A)
the last day of the then-current Interest Period applicable to such Loan or CAF
Advance or expiration of the Letter of Credit if such Bank may lawfully continue
to maintain and fund such Loan or Letter of Credit to such day or (B) not later
than the last date such Bank may lawfully continue to fund and maintain such
Loan, CAF Advance or Letter of Credit, either (i) prepay in full, without
premium or penalty, the then outstanding principal amount of each affected Loan
or CAF Advance, together with accrued interest thereon, (ii) convert such Loan
into another category of Loan (which would not be unlawful for the relevant
Banks to make) as provided in Section 2.12 or (iii) arrange for termination of
the Letter of Credit.

         (b) Upon any prepayment of a CAF Advance or prepayment or conversion of
a Loan made pursuant to Section 10.2(a) other than at the end of an Interest
Period, the Company or the Affiliate, as applicable, shall reimburse the Bank
upon demand for any loss incurred by it as a result of the timing of such
prepayment or conversion, in the manner provided in Section 2.18.



                                                                              51


         10.3 INCREASED COST

         (a) If (i) Regulation D of the Federal Reserve Board as in effect on
the Effective Date ("Regulation D"), (ii) minimum reserve requirements of the
Bank of England and/or the Financial Services Authority as in effect on the
Effective Date ("Mandatory Cost Rate"), or (iii) after the date hereof, the
adoption of any applicable law or regulation, or any change therein, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank with any request or directive
of any such authority, central bank or comparable agency (a "Regulatory
Change"):

                  (A) shall subject any Bank to any tax, duty or other charge
         with respect to Eurocurrency Loans or LIBO Rate CAF Advances or its
         obligation to make Eurocurrency Loans, or shall change the basis of
         taxation of payments to such Bank of the principal of or interest on
         Eurocurrency Loans or LIBO Rate CAF Advances or any other amounts due
         under this Agreement in respect of Eurocurrency Loans or LIBO Rate CAF
         Advances or its obligation to make Eurocurrency Loans (except for
         changes in the rate of tax on the overall net income of such Bank or
         the Eurodollar Lending Office imposed by the jurisdictions in which
         such Bank's principal executive office or Eurodollar Lending Office are
         located); or

                  (B) shall impose, modify or cause to be applicable any reserve
         (including, without limitation, any imposed by the Federal Reserve
         Board), special deposit or similar requirement against assets of,
         deposits with or for the account of, or credit extended by, such Bank
         or the Eurodollar Lending Office or shall impose on such Bank (or the
         Eurodollar Lending Office) or all interbank markets applicable to such
         Eurocurrency Loans or LIBO Rate CAF Advances any other condition
         affecting the Eurocurrency Loans or LIBO Rate CAF Advances or its
         obligation to make Eurocurrency Loans;

and the result of any of the foregoing is to increase the cost to such Bank (or
the Eurodollar Lending Office) of making or maintaining any Eurocurrency Loans,
LIBO Rate CAF Advances or issuing or participating in Letters of Credit, or to
reduce the amount of any sum received or receivable by such Bank (or the
Eurodollar Lending Office) under this Agreement, by an amount deemed by such
Bank to be material, the Company shall pay or, if such Eurocurrency Loans are to
Affiliates, such Affiliates shall pay to such Bank such additional amount or
amounts as will compensate such Bank for any such increased cost or reduction
incurred or suffered by such Bank from and after the later of (i) the date that
is 15 days prior to receipt of notice from such Bank of such costs and (ii) the
last date preceding receipt of such notice from such Bank on which interest was
due and payable pursuant to Section 2.9 on any such LIBO Rate CAF Advance or
Section 2.15 on any such Eurocurrency Loan. Any Bank which provides notice to
the Company of increased costs pursuant to this Section 10.3(a) shall also
provide a copy of such notice to the Administrative Agent.

         (b) Without limiting the effect of the foregoing, so long as any Bank
shall be required to maintain reserves against "Eurocurrency liabilities" under
Regulation D (or, so long as such Bank may be required, by any Mandatory Cost
Rate or by reason of any Regulatory Change, to



                                                                              52


maintain reserves against any other category of liabilities which includes
deposits by reference to which the interest rate on Eurocurrency Loans or LIBO
Rate CAF Advances is determined as provided in this Agreement or against any
category of extensions of credit or other assets of such Bank which includes any
LIBO Rate CAF Advances or Eurocurrency Loans) (such reserves are collectively
called "Reserves") the Company shall pay or, if such Eurocurrency Loans are to
Affiliates, such Affiliates shall pay to such Bank an amount (reasonably
estimated by such Bank) for each day during each Interest Period for such LIBO
Rate CAF Advances or Eurocurrency Loans equal to the product of the following:

                  (i) the principal amount of each LIBO Rate CAF Advance or
         Eurocurrency Loan to which such Interest Period relates; multiplied by

                  (ii) the difference between (A) a fraction, the numerator of
         which is the LIBO Rate (expressed as a decimal) applicable to such LIBO
         Rate CAF Advance or Eurocurrency Loan and the denominator of which is
         one (1) minus such Bank's Actual Reserve Cost (defined below)
         (expressed as a decimal) and (B) the LIBO Rate; multiplied by

                  (iii) 1/360.

         For the purposes of this Section 10.3(b), the "Bank's Actual Reserve
Cost" (which shall be reasonably estimated by the relevant Bank) shall be equal
to the cost actually incurred by such Bank from time to time during such
Interest Period as a result of the requirement that such Bank maintain Reserves
with respect to such LIBO Rate CAF Advance or Eurocurrency Loan.

         (c) If any Governmental Authority of the jurisdiction of any Foreign
Currency (or any other jurisdiction in which the funding operations of any Bank
shall be conducted with respect to such Foreign Currency) shall have in effect
any reserve, liquid asset or similar requirement with respect to any category of
deposits or liabilities customarily used to fund loans in such Foreign Currency,
or by reference to which interest rates applicable to loans in such Foreign
Currency are determined, and the result of such requirement shall be to increase
the cost to such Bank of making or maintaining any Foreign Currency Loan in such
Foreign Currency, and such Bank shall deliver to the Company a notice requesting
compensation under this paragraph, then the Company will pay or cause the
relevant Affiliate to pay to such Bank on each Interest Payment Date with
respect to each affected Foreign Currency Loan an amount that will compensate
such Bank for such additional cost.

         (d) Notwithstanding any other provision of this Agreement, if, after
the date hereof, there shall have occurred any change in national or
international financial, political or economic conditions (including the
imposition of or any change in exchange controls, but excluding conditions
otherwise covered by this Section 10.3) or currency exchange rates which would
make it impracticable for the Required Banks to make or maintain Foreign
Currency Loans denominated in the relevant currency to, or for the account of,
the Company or any Affiliate, then, by written notice to the Company or such
Affiliate and to the Administrative Agent:



                                                                              53


                  (i) such Bank or Banks may declare that Foreign Currency Loans
         (in the affected currency or currencies) will not thereafter (for the
         duration of such unlawfulness) be made by such Bank or Banks hereunder
         (or be continued for additional Interest Periods), whereupon any
         request for a Foreign Currency Loan (in the affected currency or
         currencies) or to continue a Foreign Currency Loan (in the affected
         currency or currencies), as the case may be, for an additional Interest
         Period) shall, as to such Bank or Banks only, be of no force and
         effect, unless such declaration shall be subsequently withdrawn; and

                  (ii) such Bank may require that all outstanding Foreign
         Currency Loans (in the affected currency or currencies), made by it be
         converted to Base Rate Loans or Loans denominated in United States
         dollars, as the case may be (unless repaid by the Company or the
         relevant Affiliate as described below), in which event all such Foreign
         Currency Loans (in the affected currency or currencies) shall be
         converted to Base Rate Loans or Loans denominated in United States
         dollars, as the case may be, as of the effective date of such notice as
         provided below and at the Exchange Rate on the date of such conversion
         or, at the option of the Company or the Affiliate, repaid on the last
         day of the then current Interest Period with respect thereto or, if
         earlier, the date on which the applicable notice becomes effective.

In the event any Bank shall exercise its rights under this paragraph (d), all
payments and prepayments of principal that would otherwise have been applied to
repay the converted Foreign Currency Loans of such Bank shall instead be applied
to repay the Base Rate Loans or Loans denominated in United States dollars, as
the case may be, made by such Bank resulting from such conversion. For purposes
of Section 10.3(d), a notice to the Company or Affiliate by any Bank shall be
effective as to each Foreign Currency Loan made by such Bank, if lawful, on the
last day of the Interest Period currently applicable to such Foreign Currency
Loan; in all other cases such notice shall be effective on the date of receipt
thereof by the Company or Affiliate.

         (e) Each Bank shall take reasonable steps, including without
limitation, the designation of a different Eurodollar Lending Office or Foreign
Currency Lending Office (unless it would otherwise be disadvantageous to the
Bank in its reasonable judgment) if such steps would avoid the need for or
reduce the amount of any payment that otherwise would be due under Section
10.3(a), 10.3(b) or 10.3(c). Any amounts payable by the Company or any Affiliate
under Sections 10.3(a), 10.3(b) or 10.3(c) shall be remitted after the end of
each Interest Period, within 30 days after submission by the Bank to the Company
and such Affiliate (with a copy to the Administrative Agent) of a written
statement setting forth the amount thereof.

         (f) From time to time during the term of this Agreement, upon the
request of the Company, each Bank shall provide to the Company (with a copy to
the Administrative Agent) its best estimate of such Bank's Actual Reserve Cost
incurred or to be incurred with respect to Eurocurrency Loans in the principal
amounts specified in the Company's request.



                                                                              54


         10.4 WITHHOLDING TAXES

         (a) Each Bank agrees to take reasonable measures, unless it would
otherwise be disadvantageous to such Bank in its reasonable judgment to avoid or
minimize withholding taxes in connection with any payments made to such Bank
hereunder, including without limitation designating another office of the Bank
as the lending office for a Loan.

         (b) If the Company or any Affiliate shall be required by law to deduct
or withhold any taxes from or in respect of any sum payable hereunder to the
Administrative Agent or any Bank, then, subject to Sections 10.4(e) and 10.4(f):

                  (i) the Company or the Affiliate, as applicable, shall make
         such deductions;

                  (ii) the Company or the Affiliate, as applicable, shall pay
         the full amount deducted to the relevant taxation authority in
         accordance with applicable law, and shall provide to the Administrative
         Agent or such Bank upon its request any official receipts or other
         evidence of payment thereof that the Company or such Affiliate may
         obtain or have in its possession; and

                  (iii) if (A) the Administrative Agent or such Bank notifies
         the Company (pursuant to Section 2.6 or 2.12) at the time that the
         Company (on behalf of itself or an Affiliate) gives a notice of
         Borrowing or a notice to extend or convert any Loan that such Bank will
         require a Gross-up for withholding taxes in connection with such Loan,
         as so extended or converted, if applicable, (B) no such notice was
         given by the Administrative Agent or any Bank, but after a notice of
         Borrowing, extension or conversion pursuant to Section 2.6 or 2.12 in
         respect of such Loan was given a change in applicable law or
         regulation, or a change in the interpretation or administration thereof
         by any governmental or comparable authority, occurs that requires the
         Company or any Affiliate to so deduct or withhold taxes from or in
         respect of any sum payable to the Administrative Agent or such Bank or
         (C) payments made with respect to Letters of Credit are subject to
         deduction for withholding taxes, then the sum payable to the
         Administrative Agent or such Bank after the Company or the Affiliate
         makes all required deductions shall be increased by an amount such that
         the Administrative Agent or such Bank receives a total amount equal to
         the sum it would have received had no such deductions been made. If
         neither the Administrative Agent nor the affected Bank notifies the
         Company at or prior to the time that the Company (on behalf of itself
         or an Affiliate) gives a notice of Borrowing or a notice to extend or
         convert a Loan, as applicable, that the Administrative Agent or such
         Bank will require a Gross-up in connection with such Loan, as so
         extended or converted, if applicable, no Gross-up in respect of such
         Loan will be paid to the Administrative Agent or such Bank, except to
         the extent that a subsequent change in applicable law or regulation, or
         a change in the interpretation or administration thereof by any
         governmental or comparable authority, requires the Company or any
         Affiliate to deduct or withhold taxes (or an increased amount thereof)
         from or in respect of any sum payable to the Administrative Agent or
         such Bank in respect of such Loan. Notwithstanding anything contained
         in this Section 10.4, in the event that the Company shall fail to
         comply with its obligations under Section 7.2(b) with respect to a
         Loan, the



                                                                              55


         Company shall pay (or cause its Affiliate to pay) to the Administrative
         Agent or affected Bank an amount such that the Administrative Agent or
         such Bank receives the amount it would have received had no such
         deductions been made with respect to payments in connection with such
         Loan.

         (c) If a Bank or the Bank's lending office is a foreign person (i.e., a
person organized or incorporated under the laws of a country other than that
under which the Company is incorporated, if it is the borrower, or an Affiliate
is incorporated or organized, if such Affiliate is the borrower), such Bank
agrees that:

                  (i) it shall promptly deliver to the Administrative Agent and
         either the Company or the Affiliate such accurate and complete signed
         forms or documentation as may be required from time to time by any
         applicable law, treaty, rule or regulation as a condition to exemption
         or other relief from or reduction of tax for withholding purposes; and

                  (ii) it shall, before or promptly after the occurrence of any
         event (including the passing of time) requiring a change in or renewal
         of the most recent forms or documentation previously delivered by such
         Bank, deliver to the Administrative Agent and either the Company or the
         Affiliate, as applicable, accurate and complete signed copies of such
         forms or documentation.

         (d) To the extent that, as determined in good faith by the
Administrative Agent or any Bank in its sole discretion and without any
obligation to disclose its tax records, taxes withheld and paid in accordance
with this Section 10.4 for which a Gross-up has been paid have been irrevocably
utilized by the Administrative Agent or such Bank (either as credits or
deductions) to reduce its tax liabilities and such utilization is consistent
with its overall tax policies, the Administrative Agent or such Bank shall pay
to the Company or the relevant Affiliate, as the case may be, an amount equal to
such reduction obtained to the extent of such Gross-up paid by the Company or
the Affiliate to the Administrative Agent or such Bank as aforesaid.

         (e) Notwithstanding anything herein to the contrary, the Company and
the Affiliates will not be required to pay any Gross-up in respect of taxes
described below:

                  (i) if the obligation to pay such Gross-up would not have
         arisen but for a failure by a Bank to comply with its obligations under
         Section 10.4(c) in respect of the applicable lending office; or

                  (ii) if a Bank shall have delivered to the Company or an
         Affiliate any form or documentation required by Section 10.4(c)
         pursuant to which the Bank claims exemption from withholding tax by any
         jurisdiction or under any treaty of such jurisdiction, and the Bank
         shall not at any time be entitled to exemption from deduction or
         withholding of taxes by such jurisdiction in respect of payment by the
         Company or any Affiliate hereunder for the account of such lending
         office for any reason other than a change in such jurisdiction's law or
         regulations or any applicable tax treaty or regulations or in the
         official interpretation of any such law, treaty or regulations by any
         Governmental



                                                                              56


         Authority charged with the interpretation or administration thereof
         after the date of delivery of such form or documentation.

         (f) In the event any Bank sells or grants a participation in its rights
under this Agreement or any Loan hereunder, such Bank agrees to undertake sole
responsibility for complying with any withholding tax requirements relating to
the purchaser thereof imposed by any jurisdiction, including, without
limitation, those imposed by Sections 1441 and 1442 of the United States
Internal Revenue Code of 1986, as amended.

         10.5 REPLACEMENT OF BANKS.

         The Company shall be permitted to replace any Bank that (a) requests
reimbursement for amounts owing pursuant to Section 10.3 or 10.4(b) or (b)
defaults in its obligation to make Loans hereunder, with a replacement financial
institution; provided that (i) such replacement does not conflict with any
Requirement of Law, (ii) no Event of Default, Affiliate Event of Default or
Event of Default-Bankruptcy shall have occurred and be continuing at the time of
such replacement, (iii) prior to any such replacement, such Bank shall have
taken no action under Section 10.3(e) or 10.4(a) so as to eliminate the
continued need for payment of amounts owing pursuant to Section 10.3 or 10.4(b),
(iv) the replacement financial institution shall purchase, at par, all Loans and
other amounts owing to such replaced Bank on or prior to the date of
replacement, (v) the Company shall be liable to such replaced Bank under Section
2.18 if any Eurocurrency Loan owing to such replaced Bank shall be purchased
other than on the last day of the Interest Period relating thereto, (vi) the
replacement financial institution, if not already a Bank, shall be reasonably
satisfactory to the Administrative Agent, (vii) the replaced Bank shall be
obligated to make such replacement in accordance with the provisions of Section
9.1 (provided that the Company shall be obligated to pay the registration and
processing fee referred to therein), (viii) until such time as such replacement
shall be consummated, the Company shall pay all additional amounts (if any)
required pursuant to Section 10.3 or 10.4(b), as the case may be, and (ix) any
such replacement shall not be deemed to be a waiver of any rights that the
Company, the Administrative Agent or any other Bank shall have against the
replaced Bank.

SECTION 11. THE AGENTS

         11.1 APPOINTMENT

         Each Bank hereby irrevocably designates and appoints the Administrative
Agent as the agent of such Bank under this Agreement, and each such Bank
irrevocably authorizes the Administrative Agent, in such capacity, to take such
action on its behalf under the provisions of this Agreement and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.



                                                                              57


         11.2 DELEGATION OF DUTIES

         The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care in
consultation with the Company.

         11.3 EXCULPATORY PROVISIONS

         Neither any Agent nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such person under or in
connection with this Agreement (except to the extent that any of the foregoing
are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from its or such person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Banks for
any recitals, statements, representations or warranties made by the Company or
any Affiliate or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or for any failure of the Company or any Affiliate to perform its
obligations hereunder. The Agents shall not be under any obligation to any Bank
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Company or any Affiliate.

         11.4 RELIANCE BY ADMINISTRATIVE AGENT

         The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any instrument, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper person or persons and upon
advice and statements of legal counsel (including counsel to the Company or any
Affiliate), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Banks (or, if so
specified by this Agreement, all Banks) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
in accordance with a request of the Required Banks (or, if so specified by this
Agreement, all Banks), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Banks and all future holders of
the Loans.



                                                                              58


         11.5 NOTICE OF DEFAULT

         The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any default or Event of Default, Affiliate Event of
Default or Event of Default-Bankruptcy unless the Administrative Agent has
received notice from a Bank, the Company or an Affiliate referring to this
Agreement, describing such default or Event of Default, Affiliate Event of
Default or Event of Default-Bankruptcy and stating that such notice is a "notice
of default". In the event that the Administrative Agent receives such a notice,
the Administrative Agent shall give notice thereof to the Banks. The
Administrative Agent shall take such action with respect to such default or
Event of Default, Affiliate Event of Default or Event of Default-Bankruptcy as
shall be reasonably directed by the Required Banks (or, if so specified by this
Agreement, all Banks); provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such default or Event of Default, Affiliate Event of Default or Event
of Default-Bankruptcy as it shall deem advisable in the best interests of the
Banks.

         11.6 NON-RELIANCE ON AGENTS AND OTHER BANKS

         Each Bank expressly acknowledges that neither the Agents nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Agent hereafter taken, including any review of the affairs of the Company or
any Affiliate, shall be deemed to constitute any representation or warranty by
any Agent to any Bank. Each Bank represents to the Agents that it has,
independently and without reliance upon any Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Company and its
Affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Bank also represents that it will, independently and
without reliance upon any Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Company and its Affiliates. Except for
notices, reports and other documents expressly required to be furnished to the
Banks by the Administrative Agent hereunder, the Administrative Agent shall not
have any duty or responsibility to provide any Bank with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Company and its Affiliates
that may come into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.

         11.7 INDEMNIFICATION

         The Banks agree to indemnify each Agent in its capacity as such (to the
extent not reimbursed by the Company and the Affiliates and without limiting the
obligation of the Company and the Affiliates to do so), ratably according to
their respective Aggregate Exposure



                                                                              59


Percentages in effect on the date on which indemnification is sought under this
Section (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with such Aggregate Exposure Percentages immediately prior
to such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever that may at any time (whether before or after the payment
of the Loans) be imposed on, incurred by or asserted against such Agent in any
way relating to or arising out of, the Commitments, the Loans, this Agreement,
any documents contemplated by or referred to herein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Bank shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
that are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from such Agent's gross negligence or willful
misconduct. The agreements in this Section shall survive the payment of the
Loans and all other amounts payable hereunder.

         11.8 AGENT IN ITS INDIVIDUAL CAPACITY

         Each Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Company or an Affiliate as
though such Agent were not an Agent. With respect to Loans made or renewed by
it, each Agent shall have the same rights and powers under this Agreement as any
Bank and may exercise the same as though it were not an Agent, and the terms
"Bank" and "Banks" shall include each Agent in its individual capacity.

         11.9 SUCCESSOR ADMINISTRATIVE AGENT

         The Administrative Agent may resign as Administrative Agent upon 45
days' notice to the Banks and the Company. If the Administrative Agent shall
resign as Administrative Agent under this Agreement, then the Required Banks
shall appoint from among the Banks a successor administrative agent for the
Banks, which successor administrative agent shall (unless an Event of Default
under Section 8.1(a) or Section 8.3 with respect to the Company shall have
occurred and be continuing) be subject to approval by the Company (which
approval shall not be unreasonably withheld or delayed), whereupon such
successor administrative agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent" shall mean such
successor administrative agent effective upon such appointment and approval, and
the former Administrative Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the part
of such former Administrative Agent or any of the parties to this Agreement or
any holders of the Loans. If no successor administrative agent has accepted
appointment as Administrative Agent by the date that is 45 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Banks shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Banks
appoint a successor administrative agent as provided for above. After any
retiring Administrative Agent's resignation as Administrative Agent, the
provisions of this Section 11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement.


                                                                              60


         11.10 SYNDICATION AGENT

         The Syndication Agent shall not have any duties or responsibilities
hereunder in its capacity as such.

SECTION 12. MISCELLANEOUS

         12.1 NOTICES

         Unless otherwise specified herein all notices, requests, demands or
other communications to or from the parties hereto shall be in writing and shall
be deemed to have been duly given and made, in the case of a letter, upon
delivery or three days after deposit in the mail registered first class mail,
postage prepaid; and in the case of a facsimile, when a facsimile is sent and
receipt is telephonically confirmed; provided, however, that notices pursuant to
Section 2.6, 2.8 or 2.12 or any other notices herein which are given by
telephone shall not be effective until received by the party to whom notice is
given. Unless otherwise specified herein, any such notice, request, demand, or
communication shall be delivered or addressed as follows:

                  (a) if to the Company, to it at 5500 Auto Club Drive,
         Dearborn, Michigan 48126 U.S.A., Attention: Treasurer (or facsimile
         number 313-390-3322, Attention: Treasurer);

                  (b) if to an Affiliate, to it at the address or facsimile
         number of the Affiliate designated in the Accession Memorandum of such
         Affiliate;

                  (c) if to the Administrative Agent, to it at the Notice
         Office; and

                  (d) if to the Banks, to each Bank at the address set forth in
         the administrative questionnaire delivered to the Administrative Agent;

or at such other address or facsimile number as either party hereto may
designate by written notice to the other party hereto.

         12.2 TERM OF AGREEMENT

         The term of this Agreement shall be until the termination of the
Commitments or until the payment in full of the Loans, CAF Advances and
Reimbursement Obligations and expiration or termination of all Letters of
Credit, whichever occurs last, provided that the obligations of the Company or
any Affiliate with respect to any payment required to be made by it under this
Agreement shall survive the term of this Agreement.

         12.3 NO WAIVERS

         No failure or delay by the Administrative Agent or any Bank in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.



                                                                              61


         12.4 NEW YORK LAW AND JURISDICTION

         (a) THIS AGREEMENT AND EACH ACCESSION MEMORANDUM SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK.

         (b) THE COMPANY AND THE AFFILIATES AND THE ADMINISTRATIVE AGENT AND THE
BANKS EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE
JURISDICTION AND VENUE OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND THE APPELLATE COURTS FROM ANY
THEREOF, FOR PURPOSES OF ANY ACTION ARISING UNDER THIS AGREEMENT OR ANY
ACCESSION MEMORANDUM, OR REGARDING ANY LOANS MADE HEREUNDER, AND EACH HEREBY
AGREES THAT ANY DISPUTES RELATING TO THIS AGREEMENT OR ANY ACCESSION MEMORANDUM
OR ANY LOANS MADE HEREUNDER SHALL BE RESOLVED ONLY IN THE COURTS OF THE STATE OF
NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK. EACH OF
THE FOREGOING PARTIES HEREBY STIPULATES THAT THE VENUES REFERENCED IN THIS
SECTION 12.4(b) ARE CONVENIENT AND EACH WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE RELATING TO THE VENUE OR CONVENIENCE OF SUCH COURTS. IF FOR ANY
REASON CLAIMS HEREUNDER CANNOT BE PURSUED IN ANY OF THE FOREGOING COURTS OF NEW
YORK, ALL REFERENCES IN THIS SECTION 12.4(b) TO THE COURTS OF NEW YORK SHALL
INSTEAD BE DEEMED TO BE REFERENCES TO THE COURTS OF THE STATE OF MICHIGAN AND OF
THE UNITED STATES FOR THE EASTERN DISTRICT OF MICHIGAN. ENFORCEMENT OF FINAL,
NONAPPEALABLE JUDGMENTS RECEIVED IN ANY OF THE FOREGOING COURTS MAY ALSO BE
SOUGHT IN ANY OTHER APPROPRIATE COURT OR JURISDICTION.

         (c) The Secretary of the Company shall be the agent for service of
process with regard to all claims hereunder by the Administrative Agent or Banks
against any Affiliate.

         12.5 ENTIRE AGREEMENT

         This Agreement, together with any Accession Memoranda, constitutes the
entire understanding between the parties with respect to the subject matter of
this Agreement and supersedes any prior discussions, negotiations, agreements
and understandings. The parties hereto acknowledge that the general banking or
business conditions or any similar bank lending rules or requirements of any
organization not having the force of law, now or hereafter in effect shall not
be applicable to this Agreement, the Accession Memoranda or any Loans made
hereunder to the Company or any Affiliate by the Banks or any other office,
branch or affiliate included in the term "Bank".



                                                                              62


         12.6 PAYMENT OF CERTAIN EXPENSES

         (a) Except to the extent otherwise agreed upon in writing by the
parties hereto, the Company agrees to pay or reimburse the Administrative Agent
for all its out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and any other documents prepared in connection
herewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including the reasonable fees and disbursements
of counsel to the Administrative Agent, with statements with respect to the
foregoing to be submitted to the Company prior to the Effective Date (in the
case of amounts to be paid on the Effective Date) and from time to time
thereafter on a quarterly basis or such other periodic basis as the
Administrative Agent shall deem appropriate.

         (b) The Company, with respect to an Event of Default and Event of
Default - Bankruptcy and Loans to it, or an Affiliate, with respect to an
Affiliate Event of Default by such Affiliate and Loans to such Affiliate, will

                  (i) upon the occurrence of an Event of Default, Event of
         Default - Bankruptcy, or Affiliate Event of Default, as applicable, pay
         all reasonable out-of-pocket expenses incurred by the Administrative
         Agent and the Banks (including counsel fees) in connection with such
         Event of Default, Event of Default - Bankruptcy, or Affiliate Event of
         Default and collection and other enforcement proceedings resulting
         therefrom; and

                  (ii) pay all stamp and other taxes, if any, which may be
         determined to be payable in connection with the execution and delivery
         of this Agreement and any Accession Memoranda, or in connection with
         any modification of any Accession Memoranda or this Agreement or any
         waiver or consent under or in respect of this Agreement or any
         Accession Memoranda, and will save the Administrative Agent and the
         Banks harmless against any loss or liability (including interest and
         penalties) resulting from nonpayment or delay in payment of any such
         taxes.

         (c) If an Affiliate borrows a Foreign Currency Loan denominated in the
euro from a Foreign Currency Lending Office that is not located in the same
Participating Member State as the Affiliate, the Affiliate will pay all
reasonable out-of-pocket expenses incurred by the Banks in making such
cross-border Loan (but limited solely to expenses directly attributable to the
cross-border nature of such Loan, and not including any withholding taxes which
are addressed separately by Section 10.4). Each Bank shall take reasonable
steps, including without limitation, the designation for purposes of such Loan
of a Foreign Currency Lending Office located in a different country (unless it
would otherwise be disadvantageous to such Bank in its reasonable judgment) if
such steps would avoid or reduce such expenses.

         (d) The Company and the Affiliate jointly and severally agree to pay,
indemnify, and hold each Bank and the Administrative Agent and their respective
officers, directors, employees, affiliates, agents and controlling persons
(each, an "Indemnitee") harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution,



                                                                              63


delivery, enforcement, performance and administration of this Agreement,
including any of the foregoing relating to the use of proceeds of the Loans or
the violation of, noncompliance with or liability under, any environmental law
applicable to the operations of the Company or any of its Subsidiaries or any of
their respective owned or leased properties and the reasonable fees and expenses
of legal counsel in connection with claims, actions or proceedings by any
Indemnitee against the Company or any Affiliate (all the foregoing in this
clause (d), collectively, the "Indemnified Liabilities"), provided, that neither
the Company nor any Affiliates shall have any obligation hereunder to any
Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee. Without limiting the foregoing, and to
the extent permitted by applicable law, the Company and its Affiliates agree not
to assert and to cause their Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries to waive all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to environmental laws, that any of them might have by
statute or otherwise against any Indemnitee. All amounts due under this Section
12.6 shall be payable not late than 10 days after written demand therefor.

         (e) The obligations of the Company and the Affiliates under this
Section 12.6 shall survive payment of the Loans.

         12.7 JUDGMENT CURRENCY

         If for the purposes of obtaining judgment in any court it is necessary
to convert a sum due from a party borrowing or making Loans hereunder in the
currency expressed to be payable hereunder (for purposes of this Section 12.7,
the "specified currency") into another currency, the rate of exchange used shall
be the Spot Rate on the day that final, nonappealable judgment is given. The
obligations of such parties hereunder in respect of any sum due to another party
hereunder shall, notwithstanding any judgment in a currency other than the
specified currency, be discharged only to the extent that on the Eurodollar
Business Day following receipt by a party of any sum adjudged to be so due in
such other currency such party may in accordance with normal, reasonable banking
or foreign exchange procedures purchase the specified currency with such other
currency. If the amount of the specified currency so purchased is less than the
sum originally due to such party, in the specified currency, the party which
owed such sum agrees, to the fullest extent that it may effectively do so, as a
separate obligation and notwithstanding any such judgment, to indemnify the
party to which the sum was owed against such loss.

         12.8 CHANGES, WAIVERS, ETC.; ADJUSTMENTS

         (a) Neither this Agreement nor any provision hereof may be amended,
supplemented, changed, waived, discharged or terminated orally, but only by a
statement in writing signed by the Company and the Required Banks or, with the
consent of the Required Banks, the Company and the Administrative Agent;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) forgive the principal amount or extend the final
scheduled date of maturity of any Loan or CAF Advance, reduce the stated rate of
any interest or fee payable hereunder or extend the scheduled date of any
payment thereof, or increase the amount



                                                                              64


or extend the termination date of any Bank's Commitment, in each case without
the written consent of each Bank directly affected thereby; (ii) eliminate or
reduce the voting rights of any Bank under this Section 12.8 without the written
consent of such Bank; (iii) reduce any percentage specified in the definition of
Required Banks, consent to the assignment or transfer by the Company of any of
its rights and obligations under this Agreement, or release the Company from its
guarantee obligations under Section 4 in each case without the written consent
of all Banks; (iv) add currencies as Foreign Currencies under this Agreement
without the written consent of all Banks; (v) amend, modify or waive any
provision of Section 11 without the written consent of each Agent; or (vi)
amend, modify or waive any provision of Section 3 without the written consent of
each Issuing Bank. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Banks and shall be binding upon
the Company, the Affiliates, the Banks, the Agents and all future holders of the
Loans. In the case of any waiver, the Company, the Affiliates, the Banks and the
Administrative Agent shall be restored to their former position and rights
hereunder, and any default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other default or Event of Default, or impair any right consequent thereon.

         (b) Except to the extent that this Agreement expressly provides for
payments to be allocated to a particular Bank, if any Bank (a "Benefitted Bank")
shall receive any payment of all or part of the Obligations owing to it in a
greater proportion than any such payment to any other Bank, if any, in respect
of the Obligations owing to such other Bank, such Benefitted Bank shall purchase
for cash from the other Banks a participating interest in such portion of the
Obligations owing to each such other Bank as shall be necessary to cause such
Benefitted Bank to share the excess payment ratably with each of the Banks;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such Benefitted Bank, such purchase shall be rescinded
and the purchase price returned, to the extent of such recovery, but without
interest.

         12.9 SEVERABILITY

         If any provision of this Agreement or the application thereof to any
person or circumstance shall be invalid or unenforceable to any extent, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected thereby, and each provision of this Agreement shall be valid and
enforceable to the extent permitted by law.

         12.10 SUCCESSORS AND ASSIGNS

         This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

         12.11 COUNTERPARTS

         This Agreement may be signed in any number of counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument. Complete sets of counterparts shall be delivered to the Company, the
Administrative Agent and the Banks.



                                                                              65


         12.12 THIRD PARTY BENEFICIARIES

         Each of the Affiliates of the Company and each office, branch or
affiliate of the Administrative Agent and the Banks which make Loans or CAF
Advances or issues Letters of Credit hereunder shall be a third party
beneficiary of this Agreement.

         12.13 ELECTRONIC RECORDING

         The parties to this Agreement may electronically record any telephone
communications with one another relating to any preliminary or final notices of
any Borrowing, CAF Advance Borrowing, or any extension and conversion of Loans
pursuant to Section 2.6, 2.8 or 2.12. In the event that any electronically
recorded final notice of Borrowing, CAF Advance Borrowing or extension or
conversion differs from the terms of the corresponding written notice of
Borrowing, CAF Advance Borrowing or extension or conversion, the terms of the
electronically recorded notice shall control.

         12.14 AGGREGATION OR COMPARISON OF AMOUNTS IN DIFFERENT CURRENCIES;
CALCULATION OF CERTAIN FEES

         Whenever any provision of this Agreement requires the aggregation of
two or more amounts denominated in different currencies (e.g., the aggregation
of the principal amounts of Loans and CAF Advances outstanding or Letters of
Credit issued in different currencies), or the comparison of two amounts
denominated in different currencies (e.g., the requirement that the principal
amount of Foreign Currency Loans or L/C Obligations not exceed an amount
expressed in United States dollars), such amounts denominated in a Foreign
Currency shall be notionally converted, for purposes of such aggregation or
comparison, to the Equivalent thereof in United States dollars, such that the
result of such aggregation or comparison shall be an amount or amounts expressed
in United States dollars. Similarly, whenever any provision of this Agreement
requires the calculation of a fee as a per annum percentage of a particular
amount (e.g., the Utilization Fee), the amounts upon which such fee is to be
calculated shall be notionally converted to the Equivalent thereof in United
States dollars, so that the result of such calculation shall be a fee amount
expressed in United States dollars.



                     [THIS SPACE INTENTIONALLY LEFT BLANK]


                                                                              66



                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.

                                        VISTEON CORPORATION


                                        By:  /s/ Mary Winston
                                            ------------------------------------
                                               Mary Winston
                                        Title: Vice President & Treasurer


                                        JPMORGAN CHASE BANK, as Administrative
                                        Agent and as a Bank


                                        By:  /s/ Julie S. Long
                                           -------------------------------------
                                               Julie S. Long
                                        Title: Vice President


                                        BANK OF AMERICA, N.A., as Syndication
                                        Agent and as a Bank


                                        By:  /s/ Lynn Stetson
                                           -------------------------------------
                                        Title: Managing Director







SIGNATURE PAGE TO THE
FIVE-YEAR REVOLVING LOAN CREDIT AGREEMENT
JUNE 20, 2002




                                                                   EXHIBIT 10.25

                    364-DAY/1-YEAR TERM-OUT CREDIT AGREEMENT



                            DATED AS OF JUNE 20, 2002

                                      AMONG

                        VISTEON CORPORATION, AS BORROWER,

                                THE SEVERAL BANKS
                        FROM TIME TO TIME PARTIES HERETO,

                              JPMORGAN CHASE BANK,
                            AS ADMINISTRATIVE AGENT,

                                       AND

                              BANK OF AMERICA N.A.,
                              AS SYNDICATION AGENT




                              ---------------------



                         J.P. MORGAN SECURITIES INC. AND
                        BANC OF AMERICA SECURITIES, LLC,
                  AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS



                                TABLE OF CONTENTS



                                                                                                             PAGE
                                                                                                             ----
                                                                                                       
SECTION 1.   DEFINITIONS.......................................................................................1


SECTION 2.   THE LOANS........................................................................................12

       2.1   The Commitment; Termination Date; Increase in Commitments........................................12
       2.2   Proceeds of Loans................................................................................14
       2.3   Facility Fee; Utilization Fee....................................................................14
       2.4   Mark-to-Market...................................................................................15
       2.5   Optional Termination or Reduction of Commitments.................................................15
       2.6   Notice of Borrowing; Procedure...................................................................16
       2.7   CAF Advances.....................................................................................17
       2.8   Procedure for CAF Advance Borrowing..............................................................17
       2.9   CAF Advance Payments.............................................................................21
       2.10  Certain Restrictions.............................................................................21
       2.11  Promise to Pay CAF Advances; Evidence of CAF Advances............................................21
       2.12  Extension of Term of Loans; Conversion of Loans..................................................22
       2.13  Register.........................................................................................24
       2.14  Interest Rates...................................................................................25
       2.15  Interest Payment Dates...........................................................................25
       2.16  Overdue Principal and Interest...................................................................26
       2.17  Dates for Payment or Optional Prepayment of Principal............................................26
       2.18  Optional Prepayment on Other Dates; Reimbursement for Certain Costs..............................27
       2.19  Method of Payment................................................................................27
       2.20  Pro Rata Treatment and Payments..................................................................28
       2.21  Limitation on Eurocurrency Tranches..............................................................29
       2.22  Repayment of Bilateral Obligations; Termination of Bilateral Commitments.........................29

SECTION 3.   [RESERVED].......................................................................................29


SECTION 4.   GUARANTEE OF LOANS TO AFFILIATES.................................................................29


SECTION 5.   CONDITIONS TO LOANS AND CAF ADVANCES.............................................................31

       5.1   Each Loan or CAF Advance to the Company or any Affiliate.........................................31
       5.2   First Loan or CAF Advance to the Company or any Affiliate........................................32

SECTION 6.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................................................33

       6.1   Corporate Authority of the Company, etc..........................................................33
       6.2   Financial Statements.............................................................................34







                                                                                                             PAGE
                                                                                                             ----
                                                                                                       
       6.3   Litigation........................................................................................34
       6.4   Use of Proceeds...................................................................................34
       6.5   Compliance with ERISA.............................................................................35

SECTION 7.   COVENANTS.........................................................................................35

       7.1   Reports; Certificate as to Default................................................................35
       7.2   Further Information...............................................................................36
       7.3   Liens.............................................................................................36
       7.4   Sale-Leasebacks...................................................................................36
       7.5   Mergers and Consolidations........................................................................37
       7.6   Additional Covenants..............................................................................37
       7.7   ERISA.............................................................................................38
       7.8   Notification......................................................................................38
       7.9   Consolidated Leverage Ratio.......................................................................38

SECTION 8.   DEFAULT...........................................................................................38

       8.1   Defaults Relating to the Company..................................................................38
       8.2   Defaults Relating to Affiliates...................................................................40
       8.3   Defaults Relating to Bankruptcy of the Company....................................................41
       8.4   [Reserved]........................................................................................41

SECTION 9.   ASSIGNMENT; PARTICIPATIONS........................................................................41

       9.1   Assignment........................................................................................41
       9.2   Participation.....................................................................................43

SECTION 10.  CHANGE IN CIRCUMSTANCES...........................................................................44

      10.1   Basis for Determining Interest Rate Inadequate or Unfair..........................................44
      10.2   Illegality........................................................................................45
      10.3   Increased Cost....................................................................................45
      10.4   Withholding Taxes.................................................................................48
      10.5   Replacement of Banks..............................................................................50

SECTION 11.  THE AGENTS........................................................................................51

      11.1   Appointment.......................................................................................51
      11.2   Delegation of Duties..............................................................................51
      11.3   Exculpatory Provisions............................................................................51
      11.4   Reliance by Administrative Agent..................................................................52
      11.5   Notice of Default.................................................................................52
      11.6   Non-Reliance on Agents and Other Banks............................................................52
      11.7   Indemnification...................................................................................53
      11.8   Agent in Its Individual Capacity..................................................................53
      11.9   Successor Administrative Agent....................................................................54
     11.10   Syndication Agent.................................................................................54



                                      -ii-





                                                                                                               PAGE
                                                                                                               ----
                                                                                                         
SECTION 12.   MISCELLANEOUS.....................................................................................54

         12.1   Notices.........................................................................................54
         12.2   Term of Agreement...............................................................................55
         12.3   No Waivers......................................................................................55
         12.4   New York Law and Jurisdiction...................................................................55
         12.5   Entire Agreement................................................................................56
         12.6   Payment of Certain Expenses.....................................................................56
         12.7   Judgment Currency...............................................................................57
         12.8   Changes, Waivers, etc.; Adjustments.............................................................58
         12.9   Severability....................................................................................59
         12.10  Successors and Assigns..........................................................................59
         12.11  Counterparts....................................................................................59
         12.12  Third Party Beneficiaries.......................................................................59
         12.13  Electronic Recording............................................................................59
         12.14  Aggregation or Comparison of Amounts in Different Currencies; Calculation of Certain Fees.......59



                                      -iii-


                    364-DAY/1-YEAR TERM-OUT CREDIT AGREEMENT


         This 364-DAY/1-YEAR TERM-OUT CREDIT AGREEMENT, dated as of June 20,
2002, is among VISTEON CORPORATION, a Delaware corporation (the "Company"), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the "Banks"), JPMORGAN CHASE BANK, a New York banking
corporation, as administrative agent (the "Administrative Agent"), and BANK OF
AMERICA N.A., as syndication agent (the "Syndication Agent").

         The Company desires to obtain a revolving credit facility for itself
and its Affiliates in the aggregate amount of U.S. $775,000,000 or the
Equivalent thereof (as hereinafter defined) at any one time outstanding, and the
Banks and Administrative Agent are willing to provide such revolving credit
facility and to make Loans to the Company and the Affiliates, subject to the
terms and conditions set forth below.

SECTION 1. DEFINITIONS

         The following terms, as used herein, have the following respective
meanings:

         "Accession Memorandum" means a memorandum of an Affiliate substantially
in the form of Exhibit A hereto evidencing the Affiliate's agreement to be bound
by the terms of this Agreement; provided that such a memorandum shall contain
such changes or additional provisions as may be deemed necessary by mutual
agreement of the Administrative Agent, the Affiliate and the Company.

         "Administrative Agent" has the meaning set forth in the preamble, it
being understood that matters concerning Foreign Currency Loans will be
administered by J.P. Morgan Europe Limited and therefore all notices concerning
such Foreign Currency Loans will be required to be given at the Foreign Currency
Notice Office.

         "Affected Foreign Currency" has the meaning set forth in Section 10.1.

         "Affiliate" means any direct or indirect majority-owned subsidiary of
the Company and any partnership of which the Company or a direct or indirect
majority-owned subsidiary of the Company is a general or unlimited partner. For
purposes of this definition, "majority-owned" means ownership of more than 50%
of the capital stock of or other equity interest in, or more than 50% of the
voting power with respect to, an entity.

         "Affiliate Event of Default" has the meaning set forth in Section 8.2.

         "Agents" means the Administrative Agent and the Syndication Agent
collectively.

         "Aggregate Commitments" means, at any time, the aggregate amount of the
Commitments then in effect. The original amount of the Aggregate Commitments is
$775,000,000.



                                                                               2


         "Aggregate Exposure" means, with respect to any Bank at any time, an
amount equal to the principal amount of such Bank's Commitment then in effect
or, if the Commitments have been terminated, the principal amount of the Loans
held by such Bank then outstanding.

         "Aggregate Exposure Percentage" means, with respect to any Bank at any
time, the ratio (expressed as a percentage) of such Bank's Aggregate Exposure at
such time to the Aggregate Exposure of all Banks at such time.

         "Aggregate Extensions of Credit" means at any time, the aggregate
amount of Extensions of Credit of the Banks outstanding at such time.

         "Aggregate Loans" means the total principal amount of all outstanding
Loans.

         "Agreement" means this 364-Day/1-Year Term-Out Credit Agreement,
together with the exhibits hereto, as amended from time to time.

         "Annual Report" has the meaning set forth in Section 7.1(a).

         "Assignment and Acceptance" means an Assignment and Acceptance,
substantially in the form of Exhibit G.

         "Augmenting Bank" has the meaning set forth in Section 2.1(c).

         "Available Commitment" means as to any Bank at any time, an amount
equal to the excess, if any, of (a) such Bank's Commitment then in effect over
(b) such Bank's Extensions of Credit then outstanding.

         "Banks" has the meaning provided in the preamble hereto; provided, that
unless the context otherwise requires, each reference herein to the Banks shall
be deemed to include any Conduit Bank.

         "Bank's Actual Reserve Cost" has the meaning set forth in Section
10.3(b).

         "Base Rate" means for any day the greater of (i) an annual rate of
interest equal to that announced generally from time to time by the
Administrative Agent at its Domestic Lending Office as its prime rate, base rate
or equivalent rate and in effect on such day and (ii) the Federal Funds
Effective Rate plus 0.50%.

         "Base Rate Loan" means any loan hereunder denominated in United States
dollars which the Company (on behalf of itself or an Affiliate) specifies
pursuant to Section 2.6 or Section 2.12 as a Base Rate Loan.

         "Base Rate Margin" means 0.00%.

         "Benefitted Bank" has the meaning set forth in Section 12.8(b).



                                                                               3


         "Bilateral Revolving Credit Agreements" means the bilateral Five-Year
Credit Agreements and the bilateral 364-Day/2-Year Term-Out Credit Agreement
entered into between the Company and certain Banks prior to the Effective Date.

         "Borrowing" means a borrowing hereunder consisting of a Loan made to
the Company or an Affiliate by any Bank. A Borrowing is a "Domestic Borrowing"
if such Loan is a Domestic Loan, a "Eurocurrency Borrowing" if such Loan is a
Eurocurrency Loan or a "Foreign Currency Borrowing" if such Loan is a Foreign
Currency Loan.

         "CAF" means the competitive advance facility contemplated in Section
2.7.

         "CAF Advance" means each CAF Advance made pursuant to Section 2.7.

         "CAF Advance Availability Period" means the period from and including
the Effective Date to and including the date which is 14 days prior to the
Termination Date.

         "CAF Advance Confirmation" means each confirmation by the Company of
its acceptance of CAF Advance Offers, which confirmation shall be substantially
in the form of Exhibit E and shall be delivered to the Administrative Agent by
facsimile transmission.

         "CAF Advance Interest Payment Date" means as to each CAF Advance, each
interest payment date specified by the Company for such CAF Advance in the
related CAF Advance Request.

         "CAF Advance Maturity Date" means as to any CAF Advance, the date
specified by the Company pursuant to Section 2.8(d)(ii) in its acceptance of the
related CAF Advance Offer.

         "CAF Advance Offer" means each offer by a Bank to make CAF Advances
pursuant to a CAF Advance Request, which offer shall contain the information
specified in Exhibit D and shall be delivered to the Administrative Agent by
telephone, immediately confirmed by facsimile transmission.

         "CAF Advance Request" means each request by the Company for Banks to
submit bids to make CAF Advances, which request shall contain the information in
respect of such requested CAF Advances specified in Exhibit C and shall be
delivered to the Administrative Agent in writing, by facsimile transmission, or
by telephone, immediately confirmed by facsimile transmission.

         "CAF Borrowing Date" means any Domestic Business Day (in the case of
Fixed Rate CAF Advances) or Eurodollar Business Day (in the case of LIBO Rate
CAF Advances) or any Foreign Currency Business Day (in the case of CAF Advances
denominated in a Foreign Currency) specified in a notice pursuant to Section
2.8(a) as a date on which the Company requests the Banks to make CAF Advances
hereunder.

         "Commitment" means, as to any Bank, the obligation of such Bank, if
any, to make Loans in an aggregate principal amount not to exceed the amount set
forth under the heading "Revolving Commitment" opposite such Bank's name on
Schedule 1 or in the Assignment and


                                                                               4


Acceptance pursuant to which such Bank became a party hereto, as the same
may be changed from time to time pursuant to the terms hereof.

         "Commitment Quarter" means each of the respective three-month periods
during the term of this Agreement ending on September 30, December 31, March 31
and June 30.

         "Conduit Bank" means any special purpose corporation organized and
administered by any Bank for the purpose of making Loans otherwise required to
be made by such Bank and designated by such Bank in a written instrument;
provided, that the designation by any Bank of a Conduit Bank shall not relieve
the designating Bank of any of its obligations to fund a Loan under this
Agreement if, for any reason, its Conduit Bank fails to fund any such Loan, and
the designating Bank (and not the Conduit Bank) shall have the sole right and
responsibility to deliver all consents and waivers required or requested under
this Agreement with respect to its Conduit Bank, and provided, further, that no
Conduit Bank shall (a) be entitled to receive any greater amount pursuant to
Section 2.18, 10.3, 10.4 or 12.6 than the designating Bank would have been
entitled to receive in respect of the extensions of credit made by such Conduit
Bank or (b) be deemed to have any Commitment.

         "Consolidated EBITDA" means for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum of (a)
income tax expense, (b) interest expense, (c) amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans), (d) depreciation and
amortization expense, (e) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (f) any non-recurring expenses or
losses, and (g) with respect to any discontinued operation, any loss resulting
therefrom; and minus, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (i) to the extent included
in the statement of such Consolidated Net Income for such period, any
non-recurring income or gains or (ii) with respect to any discontinued
operation, any gain resulting therefrom, all as determined on a consolidated
basis. For the purposes of calculating Consolidated EBITDA during any four
quarter period in which a Material Acquisition or a Material Disposition has
occurred, Consolidated EBITDA for such period shall be calculated after giving
pro forma effect to such Material Acquisition or Material Disposition as if such
Material Acquisition or Material Disposition occurred on the first day of such
four quarter period.

         "Consolidated Leverage Ratio" means as of the end of any fiscal
quarter, the ratio of (a) Consolidated Total Debt as of such date to (b)
Consolidated EBITDA for the period of four fiscal quarters ending as of such
date.

         "Consolidated Net Income" means for any period, the consolidated net
income (or loss) of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.


                                                                               5


         "Consolidated Total Assets" means, as of the date of determination, all
amounts that would, in conformity with GAAP, be set forth opposite the caption
"total assets" (or any like caption) on a consolidated balance sheet of the
Company and its Subsidiaries at such date.

         "Consolidated Total Debt" means, as of any date and without
duplication, the aggregate principal amount of all Indebtedness of the Company
and its Subsidiaries on a consolidated basis minus Consolidated Total Net Cash
as of such date.

         "Consolidated Total Net Cash" means, as of any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "cash and cash
equivalents" (or any like caption) on a consolidated balance sheet of the
Company and its Subsidiaries at such date.

         "Domestic Business Day" means any day, except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or obligated
by law or regulation to close.

         "Domestic Funding Office" means the office of the Administrative Agent
specified in Exhibit F hereto or such other office as may be specified from time
to time by the Administrative Agent by written notice to the Company and the
Banks as its funding office for the purpose of funding or payment of Domestic
Loans.

         "Domestic Lending Office" means, as to any Bank, the office, branch or
affiliate of such Bank in the continental United States as it may from time to
time designate as the Domestic Lending Office by notice to the Administrative
Agent.

         "Domestic Loan" means any Loan made pursuant to Section 2.1 denominated
in United States dollars which the Company (on behalf of itself or an Affiliate)
specifies pursuant to Section 2.6 or Section 2.12 as a Base Rate Loan.

         "Effective Date" means June 20, 2002.

         "Equivalent" means, in relation to any amount in United States dollars,
at any date, the amount obtained by converting such amount in United States
dollars into a specified Foreign Currency at the Exchange Rate for such Foreign
Currency, or vice versa, as applicable.

         "ERISA" means the Employee Retirement Income Security Act of 1974 of
the United States, as amended.

         "Euro" means the single currency of participating Member States of the
European Union that adopt a single currency in accordance with the Treaty on
European Union signed on February 7, 1992.

         "Eurocurrencies" means United States dollars and Foreign Currencies.

         "Eurodollar Business Day" means any day, except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or obligated
by law or regulation to close, on which commercial banks in New York City are
open for trading in United States dollar deposits in the interbank eurodollar
market.

                                                                               6


         "Eurodollar Funding Office" means the office of the Administrative
Agent specified in Exhibit F hereto or such other office as may be specified
from time to time by the Administrative Agent by written notice to the Company
and the Banks as its funding office for the purpose of funding or payment of
Eurocurrency Loans which are denominated in United States dollars.

         "Eurodollar Lending Office" means, as to any Bank, the office, branch
or affiliate of such Bank as it may from time to time designate as the
Eurodollar Lending Office by notice to the Administrative Agent.

         "Eurocurrency Loan" means any Loan made pursuant to Section 2.1
denominated in any Eurocurrency which the Company (on behalf of itself or an
Affiliate) specifies pursuant to Section 2.6 or Section 2.12 as a Eurocurrency
Loan.

         "Eurocurrency Margin" means (i) prior to and including the Termination
Date, 0.605%, and (ii) after the Termination Date, 0.855%; provided, however,
that in the event the Commitments are terminated pursuant to Section 8.1 or
after the Termination Date Loans remain outstanding hereunder, the Eurocurrency
Margin shall automatically be increased for any period during which Loans may be
outstanding after such termination or the Termination Date, as the case may be,
by an amount equal to 0.12%.

         "Eurocurrency Tranche" means the collective reference to Eurocurrency
Loans the then current Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).

         "Event of Default" has the meaning set forth in Section 8.1.

         "Event of Default - Bankruptcy" has the meaning set forth in Section
8.3.

         "Exchange Rate" means on any day, with respect to any currency, the
rate at which such currency may be exchanged into any other currency, as set
forth at approximately 11:00 a.m., London time, on such date on the Reuters
World Currency Page for such currency. In the event that such rate does not
appear on any Reuters World Currency Page, the Exchange Rate shall be determined
by reference to such other publicly available service for displaying exchange
rates as may be selected by the Administrative Agent, or, in the event no such
service is selected, such Exchange Rate shall instead be the arithmetic average
of the spot rates of exchange of the Administrative Agent in the market where
its foreign currency exchange operations in respect of such currency are then
being conducted, at or about 10:00 a.m., local time, on such date for the
purchase of the relevant currency for delivery two Foreign Currency Business
Days later; provided that if at the time of any such determination, for any
reason, no such spot rate is being quoted, the Administrative Agent, after
consultation with the Company, may use any reasonable method it deems
appropriate to determine such rate, and such determination shall be presumed
correct absent manifest error.

         "Extensions of Credit" means as to any Bank at any time, the aggregate
principal amount of all Loans held by such Bank then outstanding.

         "Facility Fee" has the meaning set forth in Section 2.3(a).


                                                                               7


         "Federal Funds Effective Rate" means for any day, the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Domestic Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Domestic Business Day, the
average of the quotations for the day of such transactions received by JPMorgan
Chase Bank from three federal funds brokers of recognized standing selected by
it.

         "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System of the United States, or any successor thereto.

         "Fee Payment Date" means each of (a) the tenth Domestic Business Day
following the last day of each Commitment Quarter and (b) the Termination Date.

         "Five-Year Revolving Credit Agreement" means the Five-Year Revolving
Loan Credit Agreement dated as of June 20, 2002 among Visteon Corporation, the
several banks from time to time parties thereto, JPMorgan Chase Bank, as
administrative agent, and Bank of America N.A., as syndication agent.

         "Five Year Term Loan Agreement" means the $250,000,000 Five-Year Term
Loan Credit Agreement, to be dated on or about June 24, 2002, among Visteon
Corporation, the several banks from time to time parties thereto, JPMorgan Chase
Bank, as administrative agent, and Bank of America N.A., as syndication agent.

         "Fixed Rate CAF Advance" means any CAF Advance made pursuant to a Fixed
Rate CAF Advance Request.

         "Fixed Rate CAF Advance Request" means any CAF Advance Request
requesting the Banks to offer to make CAF Advances at a fixed rate (as opposed
to a rate composed of the LIBO Rate plus (or minus) a margin).

         "Foreign Currency" means (a) with respect to Loans, British Pounds
Sterling and the euro and (b) with respect to CAF Advances, British Pounds
Sterling, euros and any other freely-convertible currency agreed upon by the
Company, the Administrative Agent and the Bank making such CAF Advance.

         "Foreign Currency Business Day" means any day, except a Saturday,
Sunday or other day on which the commercial banks in London, England are
authorized or obligated by law or regulation to close, on which the commercial
banks in London, England are open for international business (including dealings
in deposits in the relevant currency in the interbank eurocurrency market),
provided that when used in connection with (a) Foreign Currency Loans or CAF
Advances denominated in euros, the term "Foreign Currency Business Day" shall
also exclude any day on which the Trans-European Automated Real-Time Gross
Settlement Express Transfer System (TARGET) (or, if such clearing system ceases
to be operative, such other clearing system (if any) determined by the
Administrative Agent to be a suitable replacement) is not open for settlement of
payment in euros and (b) CAF Advances denominated in any currency other than
United States dollars, the term "Foreign Currency Business Day" shall also
exclude any day on which banks in (i)


                                                                               8


the jurisdiction of the account to which the proceeds of such CAF Advance are to
be disbursed, and (ii) the jurisdiction in which payments of principal of and
interest on such CAF Advance are to be made are authorized or required by law to
remain closed.

         "Foreign Currency Funding Office" means the office of the
Administrative Agent specified in Exhibit F hereto or such other office as may
be specified from time to time by the Administrative Agent by written notice to
the Company and the Banks as its funding office for the purpose of funding or
payment of Foreign Currency Loans or CAF Advances denominated in a Foreign
Currency.

         "Foreign Currency Lending Office" means, as to any Bank, the office,
branch or affiliate of such Bank as it may from time to time designate as the
Foreign Currency Lending Office by notice to the Administrative Agent.

         "Foreign Currency Loans" means any Eurocurrency Loan hereunder
denominated in a Foreign Currency.

         "Foreign Currency Notice Office" means the Administrative Agent's
office located at 125 London Wall, London or such other office in London as may
be designated by the Administrative Agent by written notice to the Company and
the Banks.

         "GAAP" means generally accepted accounting principles in the United
States as applied to the Company.

         "Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

         "Gross-up" means the amount payable to the Administrative Agent or any
Bank to account for required deductions for withholding taxes as provided in
Section 10.4.

         "Guarantee" means the guarantee and other obligations of the Company
set forth in Section 4.

         "Guaranteed Obligations" has the meaning set forth in Section 4.

         "Increasing Bank" has the meaning set forth in Section 2.1(c).

         "Indebtedness" means, as of any date, the amount outstanding on such
date under notes, bonds, debentures, commercial paper, or other similar
evidences of indebtedness for money borrowed.

         "Interest Period" means with respect to each Eurocurrency Loan:


                                                                               9


             (a) initially, the period commencing on the date of Borrowing with
respect to such Loan (or in the case of a Loan which has been converted into a
Eurocurrency Loan, on the date specified in Section 2.12) and ending one, two,
three or six months thereafter, as the Company (on behalf of itself or an
Affiliate) may elect pursuant to Section 2.6 or Section 2.12; and

             (b) thereafter, each period commencing on the last day of the next
preceding Interest Period for such Borrowing and ending one, two, three or six
months thereafter, as the Company (on behalf of itself or an Affiliate) may
elect pursuant to Section 2.12;

         provided, however, that:

                  (i) any such Interest Period which would otherwise end on a
             day which is not a Eurodollar Business Day (or a Foreign Currency
             Business Day, in the case of Loans denominated in a Foreign
             Currency) shall be extended to the next succeeding Eurodollar
             Business Day or Foreign Currency Business Day, as the case may be,
             unless such Eurodollar Business Day or Foreign Currency Business
             Day, as the case may be, falls in another calendar month, in which
             case such Interest Period shall end on the next preceding
             Eurodollar Business Day or Foreign Currency Business Day, as the
             case may be,

                  (ii) any such Interest Period which begins on the last
             Eurodollar Business Day or Foreign Currency Business Day, as the
             case may be, of a calendar month (or on a day for which there is no
             numerically corresponding day in the calendar month at the end of
             such Interest Period) shall end on a day which is the last
             Eurodollar Business Day or Foreign Currency Business Day, as the
             case may be, of the applicable calendar month; and

                  (iii) the Company (on behalf of itself or an Affiliate) may
             not elect an Interest Period that would end later than one year
             less one day after the Termination Date.

         "LIBO Rate" means with respect to any Eurocurrency Loan or LIBO Rate
CAF Advance for any Interest Period, the London interbank offered rate for
deposits in the relevant currency appearing on Telerate Page 3750 (or in the
case of a Foreign Currency Borrowing, the rate appearing on the Page for the
applicable Foreign Currency) as of 11:00 a.m. (London, England time) two
Eurodollar Business Days prior to the beginning of such Interest Period for the
period commencing on the date of such Eurocurrency Loan or LIBO Rate CAF Advance
and ending on a maturity date comparable to that of the applicable Interest
Period. In the event that such rate does not appear on Page 3750 of the Telerate
screen (or, in the case of Foreign Currencies, the applicable Page of the
Telerate screen), the "LIBO Rate" shall be determined by reference to such other
comparable publicly available service for displaying eurocurrency rates as may
be selected by the Administrative Agent or, in the absence of such availability,
by reference to the rate at which the Administrative Agent is offered deposits
in identical currencies at or about 11:00 a.m., local time, two Foreign Currency
Business Days prior to the beginning of such Interest Period in the interbank
eurocurrency market where its eurocurrency and foreign currency


                                                                              10


and exchange operations are then being conducted for delivery on the first day
of such Interest Period for the number of days comprised therein.

         "LIBO Rate CAF Advance" means any CAF Advance made pursuant to a LIBO
Rate CAF Advance Request.

         "LIBO Rate CAF Advance Request" means any CAF Advance Request
requesting the Banks to offer to make CAF Advances at an interest rate equal to
the LIBO Rate plus (or minus) a margin.

         "Lien" means any mortgage, pledge, lien, security interest, conditional
sale or other title retention agreement or other similar encumbrance.

         "Loan" means any Domestic Loan or Eurocurrency Loan.

         "Mandatory Cost Rate" has the meaning set forth in Section 10.3.

         "Mark-to-Market Day" has the meaning set forth in Section 2.4.

         "Material Acquisition" means any one or more acquisitions of any
business entity or entities, or of any operating unit or units of any business
entity or entities, that become consolidated with the Company in accordance with
GAAP and that involve the payment of consideration (including, without
limitation, the assumption of debt) by the Company and its Subsidiaries in
excess of $25,000,000 in the aggregate during any Commitment Quarter.

         "Material Disposition" means any one or more dispositions by the
Company or a Subsidiary of any business entity or entities, or of any operating
unit or units of the Company or a Subsidiary, that become unconsolidated with
the Company in accordance with GAAP and that involve the receipt of
consideration by the Company and its Subsidiaries in excess of $25,000,000 in
the aggregate during any Commitment Quarter.

         "Maturity Date" means (a) for any Base Rate Loan, the date which is one
year less one day after the Termination Date or, (b) for any Eurocurrency Loan
the last day of the final Interest Period for such Loan specified by the Company
(on behalf of itself or an Affiliate) pursuant to Section 2.6 or Section 2.12.

         "National Currency Unit" means a non-decimal expression of the euro
based upon a fixed conversion rate between the euro and the former national
currency of a Participating Member State, as contemplated by Council Regulation
(EC) No. 1103/97 dated June 17, 1997.

         "Normal Banking Hours" with respect to the Notice Office of the
Administrative Agent means the period from 9:00 a.m. to 5:00 p.m. in the time
zone in which the Notice Office is located on a Domestic Business Day.

         "Note" means any promissory note evidencing Loans.


                                                                              11


         "Notice Office" means the office of the Administrative Agent in the
continental United States specified as such in Exhibit F hereto or such other
office of the Administrative Agent in the continental United States as it may
hereafter designate as the Notice Office by notice to the Company.

         "Obligations" means the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and CAF Advances and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Company and
any Affiliate, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans, CAF Advances and all other obligations
and liabilities of the Company (and its Affiliates) to the Administrative Agent
or to any Bank, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement, any other document made, delivered or
given in connection herewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including all
fees, charges and disbursements of counsel to the Administrative Agent or to any
Bank that are required to be paid by the Company pursuant hereto) or otherwise.

         "Participant" has the meaning set forth in Section 9.2.

         "Participating Member State" means a Member State of the European Union
that has adopted, and is at the time of inquiry utilizing, the euro as its
currency.

         "Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

         "Plan" means an employee benefit plan or other plan (other than a
multi-employer benefit plan) maintained by the Company for employees of the
Company and certain Affiliates and covered by Title IV of ERISA.

         "Quarterly Report" has the meaning set forth in Section 7.1(b).

         "Register" has the meaning set forth in Section 2.13.

         "Regulation D" has the meaning set forth in Section 10.3(a).

         "Regulatory Change" has the meaning set forth in Section 10.3(a).

         "Reportable Event" has the meaning set forth in Title IV of ERISA.

         "Required Banks" means, at any time, holders of more than 50% of the
Aggregate Exposures of all Banks then in effect, provided that, for purposes of
declaring the Loans to be due and payable pursuant to Section 8, and for all
purposes after the Loans and CAF Advances become due and payable pursuant to
Section 8 or the Commitments expire or terminate, the CAF Advances of the Banks
shall be included in their respective Aggregate Exposures in determining the
Required Banks.


                                                                              12


         "Requirement of Law" means as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

         "Reserves" has the meaning set forth in Section 10.3(b).

         "Revolving Percentage" means, as to any Bank at any time, the
percentage which such Bank's Commitment then constitutes of the Aggregate
Commitments or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such Bank's
Extensions of Credit then outstanding constitutes of the aggregate principal
amount of the Extensions of Credit then outstanding.

         "Sale-Leasebacks" has the meaning set forth in Section 7.4.

         "Senior Debt" has the meaning set forth in Section 7.6.

         "Spot Rate" means, on any day, with respect to two currencies, the
arithmetic mean of the buy and sell spot rates of exchange for the purchase and
sale of such two currencies for each other as publicly or generally quoted by
the Administrative Agent on the date of the determination, or if the
Administrative Agent is not publicly or generally quoting such exchange rates on
such date, then such rate as the Administrative Agent shall determine in good
faith for purposes hereof.

         "Subsidiary" means a corporation, partnership, limited liability
company or other entity which would be consolidated on the balance sheets of the
Company and its Subsidiaries in accordance with GAAP. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Company. For
purposes of the definition of "Consolidated Total Debt", "Subsidiary" shall be
deemed to include the Special Purpose Borrower (as defined in the Five-Year Term
Loan Agreement), if any.

         "10-K Report" has the meaning set forth in Section 7.1(a).

         "10-Q Report" has the meaning set forth in Section 7.1(b).

         "Termination Date" has the meaning set forth in Section 2.1(b).

         "United states dollars" and "$" mean the lawful currency of the United
         States.

         "Utilization Fee" has the meaning set forth in Section 2.3(b).

SECTION 2.        THE LOANS

         2.1 THE COMMITMENT; TERMINATION DATE; INCREASE IN COMMITMENTS

         (a) Subject to the terms and conditions set forth in this Agreement,
each Bank agrees to make Domestic Loans and Eurocurrency Loans to the Company or
any Affiliate, each from time


                                                                              13


to time during the period from the date hereof to and including the Termination
Date in amounts which (i) do not exceed the Bank's Commitment, (ii) do not cause
the aggregate Equivalent principal amount of all Foreign Currency Loans then
outstanding to exceed $400,000,000, and (iii) do not cause the sum of the
aggregate Equivalent principal amount of Loans and CAF Advances then outstanding
to exceed the Aggregate Commitments. Within the conditions specified in this
Agreement, the Company or any Affiliate may borrow under this Section 2.1, repay
under Sections 2.17 and 2.18 and reborrow under this Section 2.1. The date of
Borrowing of any Loan or advance of any CAF Advance may not be after the
Termination Date. After the Termination Date, the Banks shall not make any new
Loans or CAF Advances to the Company or any Affiliate, however, the Company or
any Affiliate may extend or convert (pursuant to Section 2.12) Loans or CAF
Advances outstanding on the Termination Date.

         (b) The "Termination Date" shall be June 19, 2003.

         (c) The Company may from time to time elect to increase the Aggregate
Commitments so long as, after giving effect thereto, the total amount of the
Aggregate Commitments does not exceed $1,025,000,000. The Company may arrange
for any such increase to be provided by one or more Banks (each Bank so
agreeing, in its sole discretion, to an increase in its Commitment, an
"Increasing Bank"), or by one or more banks, financial institutions or other
entities (each such bank, financial institution or other entity, an "Augmenting
Bank"), to increase their existing Commitments, or extend Commitments, provided
that (i) each Augmenting Bank, shall be subject to the approval of the Company
and the Administrative Agent and (ii) the Company and each applicable Increasing
Bank or Augmenting Bank shall execute all such documentation as the
Administrative Agent shall reasonably specify. Increases and new Commitments
created pursuant to this clause (c) shall become effective on the date agreed by
the Company, the Administrative Agent and the relevant Banks, and the
Administrative Agent shall notify each affected Bank thereof. Notwithstanding
the foregoing, no increase in the Aggregate Commitments (or in the Commitment of
any Bank), shall become effective under this Section 2.1(c) unless, (i) on the
proposed date of the effectiveness of such increase, the conditions set forth in
paragraphs (iii) and (iv) of Section 5.1(a) and paragraphs (i) and (ii) of
Section 5.1(b) shall be satisfied and the Administrative Agent shall have
received a certificate to that effect dated such date and executed by a
responsible officer of the Company and (ii) the Administrative Agent shall have
received (with sufficient copies for each of the Banks) documents consistent
with those delivered on the Effective Date under Section 6.1 as to the corporate
power and authority of the Company and related matters to borrow hereunder after
giving effect to such increase. On the effective date of any increase in the
Aggregate Commitments, (i) each relevant Increasing Bank and Augmenting Bank
shall make available to the Administrative Agent such amounts in immediately
available funds and in the relevant currency or currencies as the Administrative
Agent shall determine, for the benefit of the other relevant Banks, as being
required in order to cause, after giving effect to such increase and the use of
such amounts to make payments to such other relevant Banks, each Bank's portion
of the outstanding Loans in each currency to equal its Revolving Percentage of
such outstanding Loans in each such currency and (ii) the Company shall be
deemed to have repaid and reborrowed all outstanding Loans as of the date of any
increase in the relevant Commitments (with such reborrowing to consist of the
Loans, with related Interest Periods if applicable, specified in a notice
delivered by the Company in accordance with the requirements of Section 2.6).
The deemed payments made pursuant to


                                                                              14


clause (ii) of the immediately preceding sentence in respect of each
Eurocurrency Loan shall be subject to indemnification by the Company pursuant to
the provisions of Section 2.18 if the deemed payment occurs other than on the
last day of the related Interest Periods.

         2.2 PROCEEDS OF LOANS

         The principal amount of each Loan shall be disbursed to the Company or
an Affiliate, as applicable, on the date of Borrowing of such Loan in the
currency in which the Loan is denominated in immediately available funds to the
account of the Company or the Affiliate, as applicable, specified by the Company
or the Affiliate (or the Company on behalf of the Affiliate) to the
Administrative Agent from time to time.

         2.3 FACILITY FEE; UTILIZATION FEE

         (a) The Company shall pay to the Administrative Agent for the account
of the Banks a facility fee (the "Facility Fee") for the period from the
Effective Date to and including the Termination Date at a rate of 0.12% per
annum multiplied by the Aggregate Commitments (regardless of whether any Loans
are outstanding). The Facility Fee with respect to each Commitment Quarter shall
be payable in arrears on each Fee Payment Date and shall be computed on the
basis of a year of 365 (or 366) days for the actual number of days for which
due. The Facility Fee shall be payable to the Administrative Agent and shall be
transmitted via the National Automated Clearing House Association electronic
payments network in the United States to an account in the continental United
States specified by the Administrative Agent from time to time by notice to the
Company.

         (b) For any quarter during which

                  (i) the sum of the average principal amount of (A) Aggregate
         Extensions of Credit outstanding hereunder and (B) Aggregate Extensions
         of Credit (as defined in the Five-Year Revolving Credit Agreement),
         exceeds

                  (ii) 33 1/3% of the sum of (A) the Aggregate Commitments (as
         defined in the Five-Year Revolving Credit Agreement) and (B) the
         Aggregate Commitments hereunder or, if the Commitments have been
         terminated pursuant to Section 2.1(b), the sum of the Aggregate
         Extensions of Credit hereunder,

then the Company shall pay to the Administrative Agent for the account of the
Banks a quarterly utilization fee (the "Utilization Fee") in the amount of
0.125% per annum multiplied by the daily average balance of the Aggregate
Extensions of Credit outstanding hereunder during such quarter; provided, that
if the Utilization Fee is applicable at the time the Commitments are terminated
pursuant to Section 8.1 or Section 8.3, it shall remain applicable with respect
to the Aggregate Extensions of Credit after the date the Commitments are so
terminated. For any quarter in which the Utilization Fee is due, the Utilization
Fee shall be calculated on a 360-day basis and payable quarterly in arrears on
the applicable Fee Payment Date.


                                                                              15


         2.4 MARK-TO-MARKET

Five Domestic Business Days prior to the end of any Interest Period applicable
to any Loan (or, if there are no Interest Periods for any such Loan, five
Domestic Business Days prior to the next succeeding interest payment date for
such Loan as specified in Section 2.15) (the "Mark-to-Market Day"), the
Administrative Agent shall determine the aggregate amount of all outstanding
Extensions of Credit and CAF Advances in United States dollars, and the
Equivalent in United States dollars of all outstanding Extensions of Credit and
CAF Advances in Foreign Currencies (calculated on the Mark-to-Market Day), and
if such aggregate amount exceeds the Aggregate Commitments or, in the case of
any Interest Period ending more than five Domestic Business Days after the
Termination Date, the Aggregate Commitments in effect as of the Termination Date
(as a result of a decrease in the value of the United States dollar as measured
against the value of Foreign Currencies in which outstanding Extensions of
Credit or CAF Advances are denominated), the Administrative Agent shall promptly
notify the Company and, in the case of an Affiliate's Loan, the Affiliate, and,
at the end of the applicable Interest Period or on the applicable interest
payment date for such Loan, as the case may be, the Company, or the Affiliate
(in the case of an Affiliate's Loan), shall prepay, in whole or in part, as
necessary, the principal of such Loan in an amount such that after such
prepayment such excess is eliminated; it being understood, however, that if
prepayment of the entire principal amount of such Loan for which the current
Interest Period is ending or for which interest thereon is coming due will not
reduce the aggregate amount of outstanding Extensions of Credit and CAF Advances
to the level required above, then only prepayment of the entire principal amount
of such Loan shall be required. Notwithstanding that only the Loan for which the
current Interest Period is ending or for which interest thereon is coming due
will be required to be prepaid, in whole or in part, as required above, the
Company or the Affiliate, as applicable, shall have the option in its discretion
to reduce Extensions of Credit and CAF Advances to the required level by
prepaying other Loans or causing other Affiliates to prepay other Loans.

         2.5 OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS

         The Company may at any time or from time to time, upon three Domestic
Business Days' written notice to the Administrative Agent at the Notice Office,
(a) terminate the Commitments if no Loans or CAF Advances are then outstanding
hereunder or (b) reduce the unused portion of the Commitments; provided that no
such termination or reduction of Commitments shall be permitted if, after giving
effect thereto and to any prepayments of the Loans made on the effective date
thereof, the sum of the Aggregate Extensions of Credit and outstanding CAF
Advances would exceed the Aggregate Commitments. From the effective date of any
such termination or reduction, the Facility Fee specified in Section 2.3 shall
cease to accrue or shall be correspondingly reduced, provided that no such
termination or reduction shall affect the Company's obligation to pay the
Facility Fee to the extent theretofore accrued. If the Company terminates the
Commitments in their entirety, such accrued Facility Fee shall be payable within
30 days after the effective date of such termination in the manner provided in
Section 2.3. Any termination or reduction of the unused portion of the
Commitments by the Company pursuant to this Section 2.5 shall be in an amount
equal to $1,000,000, or a whole multiple thereof, and shall be irrevocable.


                                                                              16


         2.6 NOTICE OF BORROWING; PROCEDURE

         With respect to each Domestic Borrowing, the Company (on behalf of
itself or an Affiliate) shall give notice of the Borrowing to the Administrative
Agent at the Notice Office no later than the date of such Borrowing, but not
later than 11:00 a.m. (New York City time) on such date. With respect to each
Eurocurrency Borrowing which is denominated in United States dollars, the
Company (on behalf of itself or an Affiliate) shall give notice of the Borrowing
to the Administrative Agent at the Notice Office no later than three Eurodollar
Business Days prior to the date of such Borrowing, but not later than 11:00 a.m.
(New York City time) on such date. With respect to each Foreign Currency
Borrowing, the Company (on behalf of its Affiliate) shall give notice of the
Borrowing to the Administrative Agent at the Foreign Currency Notice Office no
later than three Foreign Currency Business Days prior to the date of such
Borrowing, but not later than 3:00 p.m. (London, England time) on such date. In
each case, the notice shall be given by telephone (and shall be promptly
confirmed in a writing substantially in the form of Exhibit B hereto) and shall
specify:

                  (a) the borrower;

                  (b) the date of such Borrowing, which shall be a Domestic
         Business Day in the case of a Domestic Borrowing, a Eurodollar Business
         Day in the case of a Eurocurrency Borrowing which is denominated in
         United States dollars, or a Foreign Currency Business Day in the case
         of a Foreign Currency Borrowing;

                  (c) the amount of such Borrowing, which shall be not less than
         $1,000,000 or the Equivalent thereof on the date of notice and, if such
         Loan is to be a Eurocurrency Loan, the currency in which such Loan
         shall be denominated;

                  (d) whether the Loan comprising such Borrowing is to be a Base
         Rate Loan or a Eurocurrency Loan;

                  (e) if such Loan is to be a Eurocurrency Loan, the duration of
         the initial Interest Period; and

                  (f) whether any Bank has requested a Gross-up pursuant to the
         next succeeding sentence.

At the time that the Company (on behalf of itself or an Affiliate) gives a
notice of Borrowing, each Bank shall telephonically notify the Company and the
Administrative Agent whether such Bank will require a Gross-up for withholding
taxes in connection with such Loan (as provided in Section 10.4). A notice of
Borrowing, once given to the Administrative Agent, shall not be revocable by the
Company or an Affiliate, except in the event that any Bank notifies the Company
at the time the Company gives notice of the Borrowing that a Gross-up will be
required, in which case, the Company (on behalf of itself or the Affiliate) may
promptly withdraw the notice of Borrowing.

Upon receipt of any such notice of Borrowing from the Company, the
Administrative Agent shall promptly notify each Bank thereof. Each Bank will
make the amount of its pro rata share of each


                                                                              17


Borrowing available to the Administrative Agent for the account of the Company
(or Affiliate) at the Domestic Funding Office in the case of Domestic Loans, the
Eurodollar Funding Office in the case of Eurocurrency Loans which are
denominated in United States dollars and the Foreign Currency Funding Office in
the case of Foreign Currency Loans, in each case prior to 12:00 Noon, local
time, on the date of Borrowing requested by the Company in funds immediately
available to the Administrative Agent. Such Borrowing will then be made
available to the Company (or an Affiliate) by the Administrative Agent crediting
the account of the Company (or such Affiliate) on the books of such office with
the aggregate of the amounts made available to the Administrative Agent by the
Banks and in like funds as received by the Administrative Agent.

         2.7 CAF ADVANCES

         During the CAF Availability Period and subject to the terms and
conditions of this Agreement, the Company may borrow (a) Fixed Rate CAF Advances
from time to time on any Domestic Business Day or, in the case of CAF Advances
denominated in Foreign Currencies, any Foreign Currency Business Day and (b)
LIBO Rate CAF Advances (to the extent, in the case of currencies other than
United States dollars, the LIBO Rate can be determined pursuant to the first
sentence of the definition thereof) from time to time on any Eurodollar Business
Day or, in the case of CAF Advances denominated in Foreign Currencies, any
Foreign Currency Business Day. CAF Advances may be borrowed in amounts such that
the aggregate amount of Extensions of Credit and CAF Advances outstanding at any
time shall not exceed the Aggregate Commitments at such time. Within the limits
and on the conditions hereinafter set forth with respect to CAF Advances, the
Company from time to time may borrow, repay and reborrow CAF Advances.

         2.8 PROCEDURE FOR CAF ADVANCE BORROWING

         (a) The Company shall request CAF Advances by delivering a CAF Advance
Request to the Administrative Agent, not later than 12:00 Noon (New York City
time) four Eurodollar Business Days prior to the proposed CAF Borrowing Date (in
the case of a LIBO Rate CAF Advance Request), and not later than 10:00 A.M. (New
York City time) one Domestic Business Day prior to the proposed CAF Borrowing
Date (in the case of a Fixed Rate CAF Advance Request). Each CAF Advance Request
in respect of any CAF Borrowing Date may solicit bids for CAF Advances on such
CAF Borrowing Date in an aggregate principal amount of $1,000,000 or an integral
multiple of $1,000,000 in excess thereof and having not more than three
alternative CAF Advance Maturity Dates. The CAF Advance Maturity Date for each
CAF Advance shall be the date set forth therefor in the relevant CAF Advance
Request, which date shall be (i) not less than 7 days nor more than 360 days
after the CAF Borrowing Date therefor, in the case of a Fixed Rate CAF Advance,
(ii) one, two, three or six months after the CAF Borrowing Date therefor, in the
case of a LIBO CAF Advance and (iii) not later than the Termination Date, in the
case of any CAF Advance. The Administrative Agent shall notify each Bank
promptly by facsimile transmission of the contents of each CAF Advance Request
received by the Administrative Agent.


                                                                              18


         (b) In the case of a LIBO Rate CAF Advance Request, upon receipt of
notice from the Administrative Agent of the contents of such CAF Advance
Request, each Bank may elect, in its sole discretion, to offer irrevocably to
make one or more CAF Advances at the applicable LIBO Rate plus (or minus) a
margin determined by such Bank in its sole discretion for each such CAF Advance.
Any such irrevocable offer shall be made by delivering a CAF Advance Offer to
the Administrative Agent, before 10:30 A.M. (New York City time) on the day that
is three Eurodollar Business Days before the proposed CAF Borrowing Date,
setting forth:

                  (i) the maximum amount of CAF Advances for each CAF Advance
         Maturity Date and the aggregate maximum amount of CAF Advances for all
         CAF Advance Maturity Dates which such Bank would be willing to make
         (which amounts may, subject to Section 2.7, exceed such Bank's
         Commitment); and

                  (ii) the margin above or below the applicable LIBO Rate at
         which such Bank is willing to make each such CAF Advance.

The Administrative Agent shall advise the Company before 11:00 A.M. (New York
City time) on the date which is three Eurodollar Business Days before the
proposed CAF Borrowing Date of the contents of each such CAF Advance Offer
received by it. If the Administrative Agent, in its capacity as a Bank, shall
elect, in its sole discretion, to make any such CAF Advance Offer, it shall
advise the Company of the contents of its CAF Advance Offer before 10:15 A.M.
(New York City time) on the date which is three Eurodollar Business Days before
the proposed CAF Borrowing Date.

         (c) In the case of a Fixed Rate CAF Advance Request, upon receipt of
notice from the Administrative Agent of the contents of such CAF Advance
Request, each Bank may elect, in its sole discretion, to offer irrevocably to
make one or more CAF Advances at a rate of interest determined by such Bank in
its sole discretion for each such CAF Advance. Any such irrevocable offer shall
be made by delivering a CAF Advance Offer to the Administrative Agent before
9:30 A.M. (New York City time) on the proposed CAF Borrowing Date, setting
forth:

                  (i) the maximum amount of CAF Advances for each CAF Advance
         Maturity Date, and the aggregate maximum amount for all CAF Advance
         Maturity Dates, which such Bank would be willing to make (which amounts
         may, subject to Section 2.7, exceed such Bank's Commitment); and

                  (ii) the rate of interest at which such Bank is willing to
         make each such CAF Advance.

The Administrative Agent shall advise the Company before 10:00 A.M. (New York
City time) on the proposed CAF Borrowing Date of the contents of each such CAF
Advance Offer received by it. If the Administrative Agent, in its capacity as a
Bank, shall elect, in its sole discretion, to make any such CAF Advance Offer,
it shall advise the Company of the contents of its CAF Advance Offer before 9:15
A.M. (New York City time) on the proposed CAF Borrowing Date.


                                                                              19


         (d) Before 11:30 A.M. (New York City time) three Eurodollar Business
Days before the proposed CAF Borrowing Date (in the case of CAF Advances
requested by a LIBO Rate CAF Advance Request) and before 10:30 A.M. (New York
City time) on the proposed CAF Borrowing Date (in the case of CAF Advances
requested by a Fixed Rate CAF Advance Request), the Company, in its absolute
discretion, shall:

                  (i) cancel such CAF Advance Request by giving the
         Administrative Agent telephone notice to that effect, or

                  (ii) by giving telephone notice to the Administrative Agent
         (immediately confirmed by delivery to the Administrative Agent of a CAF
         Advance Confirmation by facsimile transmission) (A) subject to the
         provisions of Section 2.8(e), accept one or more of the offers made by
         any Bank or Banks pursuant to Section 2.8(b) or Section 2.8(c), as the
         case may be, and (B) reject any remaining offers made by Banks pursuant
         to Section 2.8(b) or Section 2.8(c), as the case may be.

         (e) The Company's acceptance of CAF Advances in response to any CAF
Advance Offers shall be subject to the following limitations:

                  (i) the amount of CAF Advances accepted for each CAF Advance
         Maturity Date specified by any Bank in its CAF Advance Offer shall not
         exceed the maximum amount for such CAF Advance Maturity Date specified
         in such CAF Advance Offer;

                  (ii) the aggregate amount of CAF Advances accepted for all CAF
         Advance Maturity Dates specified by any Bank in its CAF Advance Offer
         shall not exceed the aggregate maximum amount specified in such CAF
         Advance Offer for all such CAF Advance Maturity Dates;

                  (iii) the Company may not accept offers for CAF Advances for
         any CAF Advance Maturity Date in an aggregate principal amount in
         excess of the maximum principal amount requested in the related CAF
         Advance Request; and

                  (iv) if the Company accepts any of such offers, it must accept
         offers based solely upon pricing for each relevant CAF Advance Maturity
         Date and upon no other criteria whatsoever, and if two or more Banks
         submit offers for any CAF Advance Maturity Date at identical pricing
         and the Company accepts any of such offers but does not wish to (or, by
         reason of the limitations set forth in Section 2.7, cannot) borrow the
         total amount offered by such Banks with such identical pricing, the
         Company shall accept offers from all of such Banks in amounts allocated
         among them pro rata according to the amounts offered by such Banks
         (with appropriate rounding, in the sole discretion of the Company, to
         assure that each accepted CAF Advance is an integral multiple of
         $1,000,000); provided that if the number of Banks that submit offers
         for any CAF Advance Maturity Date at identical pricing is such that,
         after the Company accepts such offers pro rata in accordance with the
         foregoing provisions of this paragraph, the CAF Advance to be made by
         any such Bank would be less than $5,000,000 principal amount, the
         number of such Banks shall be reduced by the Administrative Agent by
         lot until the CAF Advances to be


                                                                              20


         made by each such remaining Bank would be in a principal amount of
         $5,000,000 or an integral multiple of $1,000,000 in excess thereof.

         (f) If the Company notifies the Administrative Agent that a CAF Advance
Request is cancelled pursuant to Section 2.8(d)(i), the Administrative Agent
shall give prompt telephone notice thereof to the Banks.

         (g) If the Company accepts pursuant to Section 2.8(d)(ii) one or more
of the offers made by any Bank or Banks, the Administrative Agent promptly shall
notify each Bank which has made such an offer of (i) the aggregate amount of
such CAF Advances to be made on such CAF Borrowing Date for each CAF Advance
Maturity Date and (ii) the acceptance or rejection of any offers to make such
CAF Advances made by such Bank. Before 12:00 Noon (New York City time) on the
CAF Borrowing Date specified in the applicable CAF Advance Request, each Bank
whose CAF Advance Offer has been accepted shall make available to the
Administrative Agent at its Domestic Funding Office in the case of Fixed Rate
CAF Advances and its Eurodollar Funding Office in the case of LIBO Rate CAF
Advances the amount of CAF Advances to be made by such Bank, in immediately
available funds. The Administrative Agent will make such funds available to the
Company as soon as practicable on such date at such office of the Administrative
Agent. It shall be a condition to each CAF Advance, and each CAF Advance
accepted by the Company shall be deemed to be a representation and warranty by
the Company, that:

                  (i) the principal amount of such CAF Advance, when added to
         the aggregate principal amount of all Extensions of Credit and other
         CAF Advances then outstanding hereunder, shall not exceed the amount of
         the Aggregate Commitments, each such amount, if applicable, being
         expressed in the United States dollar Equivalent thereof on the date of
         the notice of Borrowing;

                  (ii) after giving effect to the making of such CAF Advance no
         Event of Default nor Event of Default - Bankruptcy and no event which,
         with the giving of notice or lapse of time or both, would become an
         Event of Default or an Event of Default - Bankruptcy shall have
         occurred and be continuing; and

                  (iii) the representations and warranties of the Company
         contained in this Agreement, except those contained in Sections 6.2(b)
         and 6.3, shall be true and correct in all material respects on and as
         of the date of such CAF Advance, except to the extent such
         representations and warranties expressly relate to an earlier date.

         As soon as practicable after each CAF Borrowing Date, the
Administrative Agent shall notify each Bank of the aggregate amount of CAF
Advances advanced on such CAF Borrowing Date and the respective CAF Advance
Maturity Dates thereof.

         (h) Notwithstanding anything to the contrary in this Section 2.8, in
the case of CAF Advances to be denominated in a Foreign Currency, the Company
and the Administrative Agent shall agree upon such modification to the notice
times, bid times, funding times, minimum amounts and other procedures set forth
above in this Section 2.8 that are appropriate for the


                                                                              21


relevant Foreign Currency; and the Administrative Agent shall advise the Banks
and the Company of such modifications prior to the delivery of any CAF Advance
Request soliciting bids for CAF Advances in such Foreign Currency.

         2.9 CAF ADVANCE PAYMENTS

         (a) The Company shall pay to the Administrative Agent, for the account
of each Bank which has made a CAF Advance, on the applicable CAF Advance
Maturity Date the then unpaid principal amount of such CAF Advance. The Company
shall not have the right to prepay any principal amount of any CAF Advance
without the consent of the Bank to which such CAF Advance is owed.

         (b) The Company shall pay interest on the unpaid principal amount of
each CAF Advance from the CAF Borrowing Date to applicable CAF Advance Maturity
Date at the rate of interest specified in the CAF Advance Offer accepted by the
Company in connection with such CAF Advance (calculated on the basis of a
360-day year for actual days elapsed), payable on each applicable CAF Advance
Interest Payment Date.

         (c) If any principal of, or interest on, any CAF Advance shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such CAF Advance shall, without limiting any rights of any Bank under this
Agreement, bear interest from the date on which such payment was due at a rate
per annum which is 1% above the rate which would otherwise be applicable to such
CAF Advance until the stated CAF Advance Maturity Date of such CAF Advance, and
for each day thereafter at a rate per annum which is 1% above the ABR, in each
case until paid in full (as well after as before judgment). Interest accruing
pursuant to this paragraph (c) shall be payable from time to time on demand.

         2.10 CERTAIN RESTRICTIONS

         A CAF Advance Request may request offers for CAF Advances to be made on
not more than one CAF Borrowing Date and to mature on not more than three CAF
Advance Maturity Dates. No CAF Advance Request may be submitted earlier than
five Domestic Business Days after submission of any other CAF Advance Request.

         2.11 PROMISE TO PAY CAF ADVANCES; EVIDENCE OF CAF ADVANCES

         The Company unconditionally promises to pay to the Administrative
Agent, for the account of each Bank that makes a CAF Advance, on the CAF Advance
Maturity Date with respect thereto, the principal amount of such CAF Advance.
The Company further unconditionally promises to pay interest on each CAF Advance
and each Loan for the period from and including the CAF Borrowing Date of such
CAF Advance on the unpaid principal amount thereof from time to time outstanding
at the applicable rate per annum determined as provided in, and payable as
specified in, Section 2.9(b). Each Bank shall maintain in accordance with its
usual practice appropriate records evidencing indebtedness of the Company to
such Bank resulting from each CAF Advance of such Bank from time to time,
including the amounts of principal and interest payable and paid to such Bank
from time to time in respect of each such CAF Advance.


                                                                              22


         2.12 EXTENSION OF TERM OF LOANS; CONVERSION OF LOANS

         (a) The Company may, at its option, elect (on behalf of itself or any
Affiliate which has borrowed hereunder) (i) to extend any outstanding
Eurocurrency Loan (such extended Eurocurrency Loan to be denominated in the same
currency as that prior to such extension) or (ii) to convert any outstanding
Base Rate Loan into a Eurocurrency Loan denominated in United States dollars, or
any outstanding Eurocurrency Loan denominated in United States dollars into a
Base Rate Loan, in each case, by giving notice to the Administrative Agent at
the Notice Office and, in the case of Loans to be continued in a Foreign
Currency, the Foreign Currency Notice Office of such election; provided,
however, that the borrower must remain the same in connection with any extension
or conversion of a Loan.

         (b) An outstanding Loan may be converted pursuant to Section 2.12(a)
only on a day which meets both of the following requirements:

                  (i) an outstanding Loan may only be converted on a day which
         is (A) if such outstanding Loan is a Domestic Loan, a Domestic Business
         Day or (B) if such outstanding Loan is a Eurocurrency Loan denominated
         in United States dollars, a Eurodollar Business Day; and

                  (ii) an outstanding Loan may only be converted into (A) a
         Domestic Loan on a Domestic Business Day or (B) a Eurocurrency Loan
         which is denominated in United States dollars on a Eurodollar Business
         Day.

Subject to the requirements of this Section 2.12(b), an outstanding Loan may be
converted on the last day of the then-existing Interest Period for such Loan (if
such Loan has an Interest Period) or at any time (if such Loan does not have an
Interest Period), as provided in Section 2.12(b), or, in the case of a Loan
having an Interest Period, at times other than the last day of an Interest
Period, as provided in Section 2.12(f).

         (c) The notice by the Company to the Administrative Agent of an
election pursuant to Section 2.12(a) to extend any outstanding Loan, to convert
any outstanding Loan on the last day of the then-existing Interest Period (if
the outstanding Loan has an Interest Period) or to convert any outstanding Loan
which does not have an Interest Period shall be given by telephone (and shall be
promptly confirmed in a writing substantially in the form of Exhibit B hereto)
as follows:

                  (i) if such outstanding Loan is to be extended and is a
         Eurocurrency Loan denominated in United States dollars, by giving
         notice no later than three Eurodollar Business Days prior to the last
         day of the then-existing Interest Period with respect to such Loan, but
         not later than 11:00 a.m. (New York City time) on such day;

                  (ii) if such outstanding Loan is to be extended and is a
         Foreign Currency Loan, by giving notice no later than three Foreign
         Currency Business Days prior to the last day of the then-existing
         Interest Period with respect to such Loan, but not later than 3:00 p.m.
         (London, England time) on such day;


                                                                              23


         (iii) if such outstanding Loan is a Eurocurrency Loan denominated in
United States dollars and is to be converted into a Domestic Loan, by giving
notice no later than the last day of the then-existing Interest Period with
respect to such outstanding Loan not later than 11:00 a.m. (New York City time)
on such day; and

         (iv) if such outstanding Loan is a Domestic Loan which is to be
converted into a Eurocurrency Loan denominated in United States dollars, by
giving notice no later than three Eurodollar Business Days, but not later than
11:00 a.m. (New York City time) on such date, prior to the day on which the
Company or the Affiliate, as applicable, desires the conversion of such
outstanding Loan to be made effective; and

(d) Each notice given by the Company pursuant to this Section 2.12 shall
specify:

                  (i) whether such outstanding Loan is to be extended or
         converted;

                  (ii) if such outstanding Loan is to be converted, the date
         such conversion should be effective;

                  (iii) if such outstanding Loan is to be extended and is a
         Eurocurrency Loan, the Interest Period for the Loan as so extended;

                  (iv) if such outstanding Loan is to be converted, whether such
         Loan is to be converted into a Base Rate Loan or Eurocurrency Loan
         denominated in United States dollars;

                  (v) if such outstanding Loan is to be converted into a
         Eurocurrency Loan denominated in United States dollars, the Interest
         Period therefor; and

                  (vi) whether the Administrative Agent or any Bank has
         requested a Gross-up pursuant to subsection (g) below.

         (e) With respect to each outstanding Loan which shall be extended or
converted pursuant to this Section 2.12:

                  (i) the Company or the Affiliate, whichever shall be the
         borrower, shall pay to the Administrative Agent for the account of each
         Bank all accrued and unpaid interest with respect to such outstanding
         Loan,

                      (A) if such Loan is a Eurocurrency Loan, on the last day
         of the then-existing Interest Period with respect to such outstanding
         Loan; or

                      (B) if such Loan is a Base Rate Loan, or if pursuant to
         Section 2.12(f) the Loan is being converted on a day other than the
         last day of the then-existing Interest Period, on the day such
         outstanding Loan is converted;

                  (ii) no repayment of the principal amount of such outstanding
         Loan shall be required; and


                                                                              24


                  (iii) the Loan to be outstanding upon the extension or
         conversion of an outstanding Loan shall not be deemed to be a new Loan
         under Section 5.1 of this Agreement.

         (f) Subject to the requirements of Sections 2.12(a) and 2.12(b), any
outstanding Eurocurrency Loan denominated in United States dollars may be
converted into a Base Rate Loan pursuant to this Section 2.12 at times other
than the last day of an Interest Period; provided, however, that

                  (i) the Company's notice (on behalf of itself or an Affiliate)
         with respect to any such conversion shall be given no later than the
         date of such conversion, but not later than 11:00 a.m. (New York City
         time) on such date; and

                  (ii) the Company or the Affiliate, whichever is the borrower,
         shall reimburse each Bank on demand for any loss incurred by it as a
         result of the timing of any such conversion in an amount determined as
         provided in Section 2.18 with respect to prepayments.

         (g) At the time that the Company (on behalf of itself or an Affiliate)
gives a notice to extend or convert any Loan pursuant to the requirements of
this Section 2.12, each Bank shall telephonically notify the Company and the
Administrative Agent whether such Bank will require a Gross-up for withholding
taxes in connection with such Loan as so extended or converted (as provided in
Section 10.4). A notice to extend or convert any Loan, once given to the
Administrative Agent, shall not be revocable by the Company or an Affiliate,
except in the event that any Bank notifies the Company at the time the Company
gives notice to extend or convert a Loan that a Gross-up will be required, in
which case, the Company (on behalf of itself or the Affiliate) may promptly
withdraw the notice to extend or convert the Loan.

         (h) Notwithstanding anything to the contrary in the foregoing, if after
the date an outstanding Loan is borrowed the country in whose currency the Loan
is denominated becomes a Participating Member State, for so long as it remains a
Participating Member State, the Loan shall remain outstanding in accordance with
its terms but the outstanding amount of the Loan shall automatically be
converted into the equivalent amount of the euro calculated using the fixed
conversion rate established between the euro and the National Currency Unit for
such country's former currency. In addition, for so long as it exists, the
amount of such Loan denominated in the euro shall also be denominated in the
equivalent amount of the National Currency Unit for such country's former
currency, calculated in accordance with the same fixed conversion rate.

         2.13 REGISTER

         The Administrative Agent shall, on behalf of the Company and each
Affiliate, maintain at one of its offices a register for the recordation of the
names and addresses of the Banks and the Commitment of, and the principal amount
of the Loans and CAF Advances owing to, each Bank from time to time (the
"Register"). The entries in the Register shall be conclusive, in the absence of
manifest error, and the Company, each Affiliate, the Administrative Agent and
the Banks shall treat each Person whose name is recorded in the Register as the
owner of the Loans (and any


                                                                              25


Notes evidencing the Loans) and the CAF Advances recorded therein for all
purposes of this Agreement. Any assignment of any Loan pursuant to Section 9.1,
whether or not evidenced by a Note, shall be effective only upon appropriate
entries with respect thereto being made in the Register (and any Note evidencing
such Loan shall expressly so provide). Any assignment or transfer of all or part
of a Loan shall be registered on the Register only upon presentation of a duly
executed Assignment and Acceptance and, if such Loan is evidenced by a Note,
surrender of such Note for registration of assignment or transfer.

         2.14 INTEREST RATES

         (a) Each Loan shall bear interest on the outstanding principal amount
thereof, as follows:

                  (i) with respect to each Base Rate Loan, at a fluctuating rate
         per annum equal to the sum of (x) the Base Rate in effect from time to
         time while such Base Rate Loan is outstanding and (y) the Base Rate
         Margin; and

                  (ii) with respect to each Eurocurrency Loan, during each
         Interest Period applicable thereto at a rate per annum equal to the sum
         of (x) the LIBO Rate applicable to such Interest Period and (y) the
         Eurocurrency Margin.

         (b) Interest on Base Rate Loans shall be computed on the basis of a
year of 365 (or 366) days and paid for the actual number of days for which due.
Interest on Eurocurrency Loans shall be computed on the basis of a year of 360
days and paid for the actual number of days for which due, provided that
interest on any Foreign Currency Loan or CAF Advance denominated in British
Pounds Sterling shall be calculated on the basis of a year of 365 (or 366) days
and paid for the actual number of days for which due. Interest for each Interest
Period with respect to a Eurocurrency Loan shall be calculated from and
including the first day thereof to but excluding the last day thereof.

         2.15 INTEREST PAYMENT DATES

         Interest on each Loan shall be payable as follows:

                  (a) with respect to each Base Rate Loan, on each March 31,
         June 30, September 30 and December 31 that such Loan is outstanding,
         and upon payment in full of such Loan; and

                  (b) with respect to each Eurocurrency Loan, (i) if the current
         Interest Period for such Eurocurrency Loan is one month, two months or
         three months, on the last day of such Interest Period or (ii) if the
         current Interest Period for such Eurocurrency Loan is six months, on
         the last day of the third month and on the last day of the sixth month
         of such Interest Period, and upon payment in full of such Loan.


                                                                              26


         2.16 OVERDUE PRINCIPAL AND INTEREST

         Any overdue principal of the Loans and, to the extent permitted by law,
overdue interest thereon, shall bear interest payable on demand for each day
from the date payment thereof was due to the date of actual payment, as follows:

                  (a) with respect to each Base Rate Loan, at a rate per annum
         equal to 1% plus the sum of (x) the Base Rate in effect from time to
         time while such Loan is overdue and (y) the Base Rate Margin; and

                  (b) (i) with respect to overdue principal on each Eurocurrency
         Loan, at a daily rate, which shall be calculated by the Administrative
         Agent (whose determination shall be conclusive in the absence of
         manifest error) and shall be a rate per annum equal to the sum of (A)
         1% plus (B) the Eurocurrency Margin plus (C) the LIBO Rate, and (ii)
         with respect to overdue interest on each Eurocurrency Loan, at the rate
         per annum equal to the sum of (X) 1% plus (Y) the Eurocurrency Margin
         plus (Z) the interest rate per annum at which deposits in the amount of
         such overdue interest are offered to the Administrative Agent by other
         leading banks, as determined by the Administrative Agent, in the
         interbank market in which the Eurocurrency is obtained for a period of
         one day, or if no such rate is available, one month (or, if such amount
         remains unpaid more than three Eurocurrency Business Days, then for
         such other period of time not longer than six months as the
         Administrative Agent may elect).

         2.17 DATES FOR PAYMENT OR OPTIONAL PREPAYMENT OF PRINCIPAL

         The Company and each Affiliate unconditionally promises to repay the
unpaid principal amount of each Loan made to it on or before the Maturity Date.
The Company or an Affiliate may, at its option, prepay the principal amount of
any Loan, in whole or in part, without penalty or premium, as follows:

                  (a) with respect to any Base Rate Loan, on any Domestic
         Business Day, provided that the Company deliver an irrevocable notice
         of prepayment to the Administrative Agent no later than 11:00 a.m., New
         York City time, on such date, which notice shall specify the date and
         amount of prepayment; and

                  (b) with respect to any Eurocurrency Loan on the last day of
         any Interest Period therefore, provided that the Company deliver an
         irrevocable notice of prepayment to the Administrative Agent no later
         than 3:00 p.m., London, England time, three Eurocurrency Business Days
         prior to such date, which notice shall specify the date and amount of
         prepayment;

in each case together with accrued interest on the amount prepaid to the date of
prepayment. Partial prepayments of any Loans shall be in an aggregate principal
amount of $1,000,000 or a whole multiple thereof.


                                                                              27


         2.18 OPTIONAL PREPAYMENT ON OTHER DATES; REIMBURSEMENT FOR CERTAIN
         COSTS

         The Company or an Affiliate, as applicable, may, at its option, prepay
the principal amount of any Eurocurrency Loan, in whole or in part, at times
other than those provided for in Section 2.17(b), in each case together with
accrued interest on the amount prepaid to the date of prepayment; provided,
however, that with respect to any such Loan, the Company or the Affiliate,
whichever is the borrower, shall reimburse each Bank on demand for any loss
incurred by such Bank as a result of the timing of such payment, including
without limitation, any loss incurred in liquidating or re-employing deposits
from third parties but excluding loss of the Eurocurrency Margin or any other
profit for the period after such payment, provided that the amount of such loss
shall in no event exceed the amount of interest that would have accrued from the
date of prepayment to the last day of the then-current Interest Period in the
absence of prepayment, and the relevant Bank shall have delivered to the Company
and, if the borrower is an Affiliate, to such Affiliate, a written statement
setting forth the basis for determining such loss, which written statement shall
be conclusive in the absence of manifest error. Each Bank shall use its
reasonable efforts to mitigate any loss resulting from any prepayment by the
Company or an Affiliate.

         2.19 METHOD OF PAYMENT

         All payments required to be made pursuant to this Agreement shall be
made in immediately available funds (i) with respect to the Facility Fee and the
Utilization Fee, in United States dollars to the account in the continental
United States designated by the Administrative Agent pursuant to Section 2.3,
(ii) with respect to payments relating to Loans (including, without limitation,
principal, interest, any Gross-up or any payments pursuant to Section 2.18 or
10.3) or CAF Advances, in the lawful currency of the country in which the Loan
or CAF Advance is denominated, to the Administrative Agent for the account of
the Banks at (A) the Domestic Funding Office, with respect to each Domestic Loan
and each CAF Advance denominated in United States dollars, (B) the Eurodollar
Funding Office, with respect to each Eurocurrency Loan which is denominated in
United States dollars, (C) the Foreign Currency Funding Office, with respect to
each Foreign Currency Loan or CAF Advance denominated in a Foreign Currency or
(D) in each case, at such other location as may be agreed upon by the
Administrative Agent and the Company and (iii) with respect to any other payment
due hereunder, in such currency and in such place or office as may be required
hereunder or as may otherwise be agreed upon by the Administrative Agent and the
Company. The Administrative Agent shall distribute such payments to the Banks
promptly upon receipt in like funds as received. Whenever any payment of
principal of, or interest on, any Domestic Loan or of the Facility Fee shall be
due on a day which is not a Domestic Business Day, the date for payment thereof
shall be extended to the next succeeding Domestic Business Day and, in the case
of a payment of principal, interest thereon shall be payable for such extended
time. Whenever any payment of principal of, or interest on, any Eurocurrency
Loan which is denominated in United States dollars shall be due on a day which
is not a Eurodollar Business Day, the date for payment thereof shall be extended
to the next succeeding Eurodollar Business Day, unless as a result thereof such
date would fall in the next calendar month, in which case, such date shall be
advanced to the next preceding Eurodollar Business Day, and, in the case of a
payment of principal, interest thereon shall be payable to the date of payment
as extended or advanced as the case may be. Whenever any payment of principal
of, or interest on, any Foreign Currency Loan shall be due on a day which is not
a Foreign Currency Business Day, the date for payment thereof


                                                                              28


shall be extended to the next succeeding Foreign Currency Business Day, unless
as a result thereof such date would fall in the next calendar month, in which
case, such date shall be advanced to the next preceding Foreign Currency
Business Day, and, in the case of a payment of principal, interest thereon shall
be payable to the date of payment as extended or advanced as the case may be.

         2.20 PRO RATA TREATMENT AND PAYMENTS

         (a) Each Borrowing by the Company or any Affiliate from the Banks
hereunder, each payment by the Company or any Affiliate on account of the
Facility Fee or Utilization Fee and any reduction of the Commitments of the
Banks shall be made pro rata according to the respective Revolving Percentages
of the Banks.

         (b) Each payment (including each prepayment) by the Company or any
Affiliate on account of principal of and interest on the Loans shall be made pro
rata according to the respective outstanding amounts of principal and interest
then due and owing to the Banks.

         (c) Unless the Administrative Agent shall have been notified in writing
by any Bank prior to a Borrowing that such Bank will not make the amount that
would constitute its share of such Borrowing available to the Administrative
Agent, the Administrative Agent may assume that such Bank is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Company (or an Affiliate) a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing date such Bank shall pay to the
Administrative Agent, on demand, such amount with interest thereon, at a rate
equal to the greater of (i) the Federal Funds Effective Rate and (ii) a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation, for the period until such Bank makes such amount
immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Bank with respect to any amounts owing
under this paragraph shall be conclusive in the absence of manifest error. If
such Bank's share of such Borrowing is not made available to the Administrative
Agent by such Bank within three Domestic Business Days after such Borrowing
Date, the Administrative Agent shall also be entitled to recover (i) in the case
of amounts denominated in United States dollars, such amount with interest
thereon at the rate per annum applicable to Base Rate Loans, on demand, from the
Company or (ii) in the case of amounts denominated in Foreign Currencies, such
amount with interest thereon at a rate determined by the Administrative Agent to
be the cost to it of funding such amount, on demand, from the Company or the
relevant Affiliate.

         (d) Unless the Administrative Agent shall have been notified in writing
by the Company or any Affiliate prior to the date of any payment due to be made
by the Company or any Affiliate hereunder that the Company or such Affiliate
will not make such payment to the Administrative Agent, the Administrative Agent
may assume that the Company or such Affiliate is making such payment, and the
Administrative Agent may, but shall not be required to, in reliance upon such
assumption, make available to the Banks their respective pro rata shares of a
corresponding amount. If such payment is not made to the Administrative Agent by
the Company or such Affiliate within three Domestic Business Days after such due
date, the Administrative Agent shall be entitled to recover, on demand, from
each Bank to which any amount which was made


                                                                              29


available pursuant to the preceding sentence (i) in the case of amounts
denominated in United States dollars, such amount with interest thereon at the
rate per annum equal to the daily average Federal Funds Effective Rate and (ii)
in the case of amounts denominated in Foreign Currencies, such amount with
interest thereon at a rate per annum determined by the Administrative Agent to
be the cost to it of funding such amount. Nothing herein shall be deemed to
limit the rights of the Administrative Agent or any Bank against the Company or
any Affiliate.

         2.21 LIMITATION ON EUROCURRENCY TRANCHES

         Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions and continuations of Eurocurrency Loans and all
selections of Interest Periods shall be in such amounts and be made pursuant to
such elections so that, no more than fifteen Eurocurrency Tranches in any
currency shall be outstanding at any one time.

         2.22 REPAYMENT OF BILATERAL OBLIGATIONS; TERMINATION OF BILATERAL
COMMITMENTS

         The Commitment of each Bank hereunder and the other agreements
contained herein are conditioned upon receipt by the Administrative Agent of
evidence of repayment by the Company of all amounts of principal and interest
outstanding under the Bilateral Revolving Credit Agreements. Subject to the
foregoing, the Company, the Affiliates and the Banks agree that any commitment
of any Bank to make loans to the Company and any Affiliate pursuant to the terms
of any Bilateral Revolving Credit Agreement shall terminate as of the Effective
Date, and each Bank party to one or more Bilateral Revolving Credit Agreements
agrees to waive any notice required by such Bilateral Revolving Credit Agreement
with regards to the Company's termination of such Bank's commitment. The
termination of each Bank's commitment under its respective Bilateral Revolving
Credit Agreement shall not affect or terminate any outstanding payment
obligations of the Company or any Affiliate owing or arising under such
Bilateral Revolving Credit Agreement, which obligations shall continue until
satisfied in their entirety.


SECTION 3. [RESERVED]

SECTION 4. GUARANTEE OF LOANS TO AFFILIATES

         (a) The Company hereby guarantees to the Administrative Agent, for the
ratable benefit of the Banks and their affiliates, the due and punctual payment
of the principal of and interest on any Loans made to any Affiliate under this
Agreement and any other Obligations of any Affiliate to the Administrative Agent
or any Bank under this Agreement or its Accession Memorandum (the "Guaranteed
Obligations") when and as the same shall become due and payable, whether at
maturity, upon declaration or otherwise, according to the terms thereof. Upon
the occurrence of an Affiliate Event of Default with respect to an Affiliate
under this Agreement, the Company shall on behalf of such Affiliate upon demand
by the Administrative Agent punctually make any payment due and payable by such
Affiliate under this Agreement or its Accession Memorandum, whether at maturity,
upon declaration or otherwise; and any such payment shall be treated for the
purposes of such Accession Memorandum and this Agreement (other than Section
10.4) as if such payment were made by the Affiliate.


                                                                              30


         (b) The Company hereby agrees that its obligations under this Section 4
shall be irrevocable and unconditional and that the Company shall not have the
right to assert any defenses based upon the validity, regularity or
enforceability of any Accession Memorandum or this Agreement or any Note, the
absence of any attempt to collect from the defaulting Affiliate or other action
to enforce the same, the waiver or consent by the Administrative Agent or any
Bank with respect to any provisions thereof or hereof (other than with respect
to this Section 4), or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of the Company or of a guarantor.

         (c) With respect to its obligations under this Section 4, the Company
waives filing of claims with a court, trustee or receiver in the event of
receivership or bankruptcy of the defaulting Affiliate, diligence, presentment,
demand of payment, protest or notice with respect to Guaranteed Obligations and
all demands whatsoever (other than that provided for in subsection (a) above),
and covenants that this Guarantee is a continuing guarantee and will not be
discharged except by complete performance of the Guaranteed Obligations of the
defaulting Affiliate and the obligations of the Company under this Guarantee.

         (d) To the extent of any payment by the Company to the Administrative
Agent or any Bank under this Section 4, the Company shall succeed to all
corresponding claims that the Administrative Agent or such Bank may have and
otherwise be subrogated to the rights of the Administrative Agent or such Bank
against the defaulting Affiliate or any other person or security in connection
with the Loans to such Affiliate, and the Administrative Agent and any such Bank
shall use reasonable efforts to cooperate with the Company in seeking recovery
under such claims.

         (e) The Company's obligations under this Section 4 constitute a
guarantee of payment and not of collection merely and shall remain in full force
and effect with respect to any Affiliate until the Guaranteed Obligations of
such Affiliate shall have been paid in full in accordance with the terms of the
relevant Accession Memorandum and of this Agreement. If at any time any payment
of any of the Guaranteed Obligations of an Affiliate is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of such Affiliate or otherwise, the Company's obligations hereunder with respect
to such payment shall be reinstated at such time as though such payment had not
been made.

         (f) If demand for, or acceleration of the time for, payment by any
Affiliate to the Administrative Agent or any Bank of any Guaranteed Obligations
of such Affiliate is stayed upon the insolvency, bankruptcy, reorganization or
proposed compromise or arrangement with creditors of such Affiliate, all such
Guaranteed Obligations of which payment or performance is stayed that would
otherwise be subject to demand for payment or acceleration shall nonetheless be
payable by the Company under this Section 4 immediately on demand by the
Administrative Agent or such Bank.


                                                                              31


SECTION 5. CONDITIONS TO LOANS AND CAF ADVANCES

         The obligation of each Bank to make each Loan or CAF Advance hereunder
is subject to the performance by the Company or the Affiliate, whichever is the
borrower, of all its obligations under this Agreement and to the satisfaction of
the following further conditions:

         5.1 EACH LOAN OR CAF ADVANCE TO THE COMPANY OR ANY AFFILIATE

         (a) In the case of each Loan or CAF Advance proposed to be made
hereunder to the Company or any Affiliate:

                  (i) the Administrative Agent shall have received the notice
         from the Company required by Section 2.6 or Section 2.8;

                  (ii) the principal amount of such Loan or CAF Advance, when
         added to the aggregate principal amount of all Loans and CAF Advances
         then outstanding hereunder, shall not exceed the amount of the
         Aggregate Commitments;

                  (iii) after giving effect to the making of such Loan or CAF
         Advance no Event of Default nor Event of Default - Bankruptcy and no
         event which, with the giving of notice or lapse of time or both, would
         become an Event of Default or an Event of Default - Bankruptcy shall
         have occurred and be continuing; and

                  (iv) the representations and warranties of the Company
         contained in this Agreement, except those contained in Sections 6.2(b)
         and 6.3, shall be true and correct in all material respects on and as
         of the date of such Loan or CAF Advance, as the case may be, except to
         the extent such representations and warranties expressly relate to an
         earlier date.

Each Borrowing by or CAF Advance to the Company or any Affiliate shall be deemed
to be a representation and warranty by the Company or Affiliate that the
conditions specified in clauses (ii), (iii) and (iv) above are satisfied on and
as of the date of such Borrowing or CAF Advance.

         (b) In addition to the conditions stated in Section 5.1(a) above, in
the case of each Loan proposed to be made to any Affiliate:

                  (i) after giving effect to the making of such Loan, no
         Affiliate Event of Default with respect to such Affiliate and no event
         which, with the giving of notice or lapse of time or both, would become
         an Affiliate Event of Default with respect to such Affiliate shall have
         occurred and be continuing;

                  (ii) the representations and warranties of the Affiliate
         contained in its Accession Memorandum shall be true and correct in all
         material respects on and as of the date of such Loan, except to the
         extent such representations and warranties expressly relate to an
         earlier date; and


                                                                              32


                  (iii) upon request of the Administrative Agent or any Bank,
         the Administrative Agent or such Bank, as the case may be, shall have
         received the latest available annual and interim financial statements
         for the Affiliate (certified, if available).

Each Borrowing by any Affiliate shall be deemed to be a representation and
warranty by the Affiliate that the conditions specified in clauses (i) and (ii)
above are satisfied on and as of the date of such Borrowing or issuance.

         5.2 FIRST LOAN OR CAF ADVANCE TO THE COMPANY OR ANY AFFILIATE

         (a) In the case of the first Loan or CAF Advance proposed to be made
hereunder to the Company or any Affiliate:

                  (i) the Administrative Agent shall have received an opinion of
         the Vice President - General Counsel or an Assistant General Counsel of
         the Company, or, at the Company's option, other counsel (in which case,
         such counsel shall be satisfactory to the Administrative Agent),
         addressed to the Administrative Agent and Banks and in form
         satisfactory to the Administrative Agent in its reasonable judgment, to
         the effect that:

                       (A) the Company has been duly incorporated and is validly
         existing as a corporation in good standing under the laws of the State
         of Delaware, with corporate power under the laws of such State to enter
         into this Agreement, to borrow money and extend the Guarantee as
         contemplated by this Agreement, and to carry out the provisions of this
         Agreement;

                       (B) this Agreement has been duly authorized, executed and
         delivered by the Company and, assuming due authorization, execution and
         delivery hereof by the Banks, is a valid and binding agreement of the
         Company enforceable in accordance with its terms, except as such
         enforceability may be limited by bankruptcy, insolvency, reorganization
         or similar laws relating to or affecting creditors' rights generally
         and by general equitable principles regardless of whether such
         enforceability is considered in a proceeding in equity or at law;

                       (C) the execution, delivery and performance by the
         Company of this Agreement will not conflict with or result in a breach
         of any of the terms or provisions of, or constitute a default under (in
         each case material to the Company and its subsidiaries considered as a
         whole), or result in the creation or imposition of any lien, charge or
         encumbrance (in each case material to the Company and its subsidiaries
         considered as a whole) upon any of the property or assets of the
         Company pursuant to the terms of, any indenture, mortgage, deed of
         trust, loan agreement, guarantee, lease financing agreement or other
         similar agreement or instrument known to such counsel under which the
         Company is a debtor or a guarantor, nor will such action result in any
         violation of the provisions of the Certificate of Incorporation or the
         By-Laws of the Company; and

                       (D) there is no consent, approval, authorization, order,
         registration or qualification of or with any Governmental Authority
         having jurisdiction over the


                                                                              33


                  Company which is required for, and the absence of which would
                  materially affect, the execution, delivery and performance of
                  this Agreement; and

                  (ii) the Administrative Agent shall have received such
         additional documents as it may reasonably request relating to the
         existence and good standing of the Company under the laws of the States
         of Delaware and Michigan and to the authorization, execution and
         delivery of this Agreement in form and substance reasonably
         satisfactory to the Administrative Agent.

         The documents referred to in this Section 5.2(a) shall be delivered to
the Administrative Agent no later than the date of the first Loan or CAF Advance
hereunder, except that if such Loan is a Eurocurrency Loan, the documents shall
be delivered to the Bank at least two Eurodollar Business Days before such Loan.

         (b) In addition to the conditions stated in Section 5.2(a) above, in
the case of the first Loan proposed to be made to any Affiliate, the
Administrative Agent shall have received:

                  (i) a duly executed Accession Memorandum of such Affiliate;
         and

                  (ii) such additional documents as it may reasonably request
         relating to the existence and good standing of the Affiliate under the
         laws of the jurisdiction of its incorporation or organization and to
         the authorization, execution and delivery of the Accession Memorandum,
         all in form and substance reasonably satisfactory to the Administrative
         Agent.

The documents referred to in this Section 5.2(b) shall be delivered to the
Administrative Agent no later than the date of the first Loan to the Affiliate.
Such documents, including executed documents, may be sent to the Administrative
Agent by facsimile on the required date, with the originals to be sent by
professional courier.

SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants to the Administrative Agent and
each Bank that:

         6.1 CORPORATE AUTHORITY OF THE COMPANY, ETC.

         (a) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power under the laws of such State to execute and deliver this
Agreement and to perform its obligations hereunder and thereunder, and is duly
qualified and in good standing to do business as a foreign corporation in the
State of Michigan;

         (b) This Agreement has been duly authorized, executed and delivered on
behalf of the Company and, assuming due authorization, execution and delivery by
the Banks, is a valid and legally binding agreement of the Company;


                                                                              34


         (c) The execution, delivery and performance by the Company of this
Agreement will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under (in each case material to the
Company and its subsidiaries considered as a whole), or result in the creation
or imposition of any lien, charge or encumbrance (in each case material to the
Company and its subsidiaries considered as a whole) upon any of the property or
assets of the Company pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement, guarantee, lease financing agreement or other similar
agreement or instrument under which the Company is a debtor or a guarantor, nor
will such action result in any violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Company; and

         (d) There is no consent, approval, authorization, order, registration
or qualification of or with any Governmental Authority having jurisdiction over
the Company which is required for, and the absence of which would materially
affect, the execution, delivery and performance of this Agreement.

         6.2 FINANCIAL STATEMENTS

         (a) The Company has furnished the Administrative Agent and each Bank
with, and the Administrative Agent and each Bank hereby acknowledges receipt of,
a copy of the audited consolidated balance sheet and the related consolidated
statements of income, equity and cash flows of the Company and its Subsidiaries
at December 31, 2001 and 2000, and such financial statements present fairly in
all material respects the financial position of the Company and Subsidiaries at
those dates, in conformity with GAAP; and

         (b) As of the date of this Agreement there has not occurred any
material adverse change in the financial position of the Company and its
Subsidiaries considered as a whole, since December 31, 2001.

         6.3 LITIGATION

         As of the date of this Agreement there are no legal or governmental
proceedings pending of which the Company or any of its Subsidiaries is the
subject, and no such proceedings are known by the Company to be threatened or
contemplated by Governmental Authorities or threatened by others, other than
such proceedings which the Company believes will not have a material adverse
effect upon the financial position of the Company and its Subsidiaries
considered as a whole.

         6.4 USE OF PROCEEDS

         The proceeds of the Loans and CAF Advances will be used by the Company
and its Affiliates for general corporate purposes including, without limitation,
to support commercial paper issued by the Company. None of the proceeds of the
Loans and CAF Advances will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any margin
stock within the meaning of Regulation U of the Federal Reserve Board.


                                                                              35


         6.5 COMPLIANCE WITH ERISA

         The Company has satisfied the minimum funding standards under ERISA
with respect to its Plans and is in compliance in all material respects with the
currently applicable provisions of ERISA.

SECTION 7. COVENANTS

         During the term of this Agreement, unless compliance shall have been
waived in writing in accordance with the terms of this Agreement, the Company
agrees that:

         7.1 REPORTS; CERTIFICATE AS TO DEFAULT

         It will deliver to the Administrative Agent at the Notice Office:

                  (a) within 120 days after the end of each of its fiscal years
         copies of the Company's consolidated financial statements including
         consolidated results of operations and cash flows of the Company and
         its consolidated subsidiaries all as audited by the Company's
         independent certified public accountants (the "Annual Report"),
         provided that if and when the Company files an Annual Report on Form
         10-K with the Securities and Exchange Commission (the "10-K Report"),
         copies of the 10-K Report will be delivered to the Administrative Agent
         in lieu of the Annual Report;

                  (b) within 70 days after the end of each of the first three
         quarters of each of its fiscal years, copies of the Company's
         consolidated financial statements including consolidated results of
         operations and cash flows of the Company and its consolidated
         subsidiaries (the "Quarterly Report"), provided that if and when the
         Company files a Quarterly Report on Form 10-Q with the Securities and
         Exchange Commission (the "10-Q Report"), copies of the 10-Q Report will
         be delivered to the Administrative Agent in lieu of the Quarterly
         Report; and

                  (c) simultaneously with the delivery of each Annual Report or
         10-K Report (as applicable) referred to in (a) above, a certificate of
         an authorized officer of the Company (i) stating whether, to the
         knowledge of such officer, there exists on the date of the certificate
         any condition or event which then constitutes, or which after notice or
         lapse of time or both would constitute, an Event of Default or an Event
         of Default - Bankruptcy, and, if any such condition or event exists,
         specifying the nature and period of existence thereof and the action
         the Company is taking and proposes to take with respect thereto, and
         (ii) demonstrating compliance with the Consolidated Leverage Ratio set
         forth in Section 7.9 hereof.

                  (d) simultaneously with the delivery of each Quarterly Report
         or 10-Q Report (as applicable) referred to in (b) above, a certificate
         of an authorized officer of the Company demonstrating compliance with
         the Consolidated Leverage Ratio set forth in Section 7.9 hereof.


                                                                              36


         7.2 FURTHER INFORMATION

         (a) From time to time while this Agreement is in effect, upon the
reasonable request of the Administrative Agent or any Bank, officials of the
Company will confer with officials of the Administrative Agent or such Bank and
advise them as to matters bearing on the financial condition of the Company, or
of any Affiliate to which Loans are then outstanding.

         (b) The Company shall notify the Administrative Agent and each of the
Banks at least two Foreign Currency Business Days prior to any Loan to any
Affiliate in the event that any Gross-up with respect to such Loan could be
required by any Bank pursuant to the terms of this Agreement.

         7.3 LIENS

         The Company shall not nor shall it permit any Subsidiary to directly or
indirectly, create, incur, assume or suffer to exist any Indebtedness secured by
a Lien upon any of its property or revenues, whether now owned or hereafter
acquired, except Liens at any one time outstanding with respect to which the
aggregate outstanding principal amount of the obligations secured thereby shall
not exceed 15% of Consolidated Total Assets as reflected in the most recent
Annual Report or 10-K Report delivered pursuant to Section 7.1(a); provided,
however, that this Section 7.3 shall not apply to Indebtedness secured by:

                  (a) Liens on property of, or on any shares of stock of or
         Indebtedness of, any corporation existing at the time such corporation
         becomes a Subsidiary;

                  (b) Liens in favor of the Company or any Subsidiary;

                  (c) Liens in favor of any governmental body to secure
         progress, advance or other payments pursuant to any contract or
         provision of any statute;

                  (d) Liens on property, shares of stock or Indebtedness
         existing at the time of acquisition thereof (including acquisition
         through merger or consolidation) or to secure the payment of all or any
         part of the purchase price thereof or to secure any Indebtedness
         incurred prior to, at the time of, or within 60 days after, the
         acquisition of such property or shares or Indebtedness for the purpose
         of financing all or any part of the purchase price thereof; and

                  (e) any extension, renewal or replacement (or successive
         extensions, renewals or replacements), as a whole or in part, of any
         Lien referred to in the foregoing clauses (a) to (d), inclusive;
         provided, however, that such extension, renewal or replacement Lien
         shall be limited to all or a part of the same property, shares of stock
         or Indebtedness that secured the Lien extended, renewed or replaced
         (plus improvements on such property).

         7.4 SALE-LEASEBACKS

         The Company shall not nor shall it permit any Subsidiary to, directly
or indirectly, enter into any arrangement with any bank, insurance company or
other lender or investor (not


                                                                              37


including the Company or any Subsidiary) providing for the leasing by the
Company or any Subsidiary of any property owned by the Company or any Subsidiary
(except for leases between the Company and a Subsidiary or between
Subsidiaries), which property has been or is to be sold or transferred by the
Company or such Subsidiary to such bank, insurance company or other lender or
investor (not including the Company or any Subsidiary) ("Sale-Leasebacks"),
except for Sale-Leasebacks consummated since the Effective Date and which are
outstanding on the relevant date of determination (other than Sale-Leasebacks to
the extent the proceeds thereof are used to refinance any Sale-Leaseback which
was in existence on the date hereof) in an aggregate amount, which when combined
with (but without duplication) the aggregate outstanding principal amount of
obligations secured by a Lien upon any of the property or revenues of the
Company or any of its Subsidiaries at the time of entering into any such
Sale-Leaseback, shall not exceed 15% of Consolidated Total Assets as reflected
in the most recent Annual Report or 10-K Report delivered pursuant to Section
7.1(a).

         7.5 MERGERS AND CONSOLIDATIONS

         The Company may consolidate with, or sell or convey all or
substantially all its assets to, or merge with or into any other corporation,
provided that in any such case (i) the successor corporation shall be a
corporation organized and existing under the laws of the United States of
America or a State thereof, (ii) such corporation shall expressly assume the due
and punctual payment of the principal of and interest on all the Loans made to
the Company hereunder, and the due and punctual performance and observance of
all the covenants and conditions of this Agreement to be performed by the
Company, including, without limitation, the Guarantee, by an instrument,
satisfactory to the Administrative Agent in its reasonable judgment, executed
and delivered to the Administrative Agent by such corporation, and (iii) such
successor corporation shall not, immediately after such merger or consolidation
or such sale or conveyance, be in default in the performance of any such
covenant or condition and shall not immediately thereafter have outstanding any
secured Indebtedness not expressly permitted by the provisions of Section 7.3.

         7.6 ADDITIONAL COVENANTS

         In the event that, at any time while this Agreement is in effect, the
Company shall issue any indebtedness for borrowed money which is not by its
terms subordinate and junior to other indebtedness of the Company ("Senior
Debt") and such Senior Debt shall include, or be issued pursuant to a trust
indenture or other agreement which includes, financial covenants not
substantially provided for in this Agreement, the Company shall so advise the
Administrative Agent. Thereupon, if the Administrative Agent shall so request by
written notice to the Company, the Company, Administrative Agent and the Banks
shall enter into an amendment to this Agreement providing for substantially the
same financial covenants as those contained in such Senior Debt, trust indenture
or other agreement, mutatis mutandis. Such amendment containing such financial
covenants shall remain in effect so long as such covenants remain in effect with
respect to such Senior Debt. As used in this Section 7.6 the term "financial
covenant" shall mean a covenant on the part of the Company to the general effect
that the Company shall maintain, on a consolidated basis and as of a specified
date or dates, (a) a specified minimum net worth, (b) a ratio of debt to net
worth not in excess of a specified maximum, (c) current assets in an amount not
less


                                                                              38


than a specified amount in excess of current liabilities or (d) any similar
ratio or amount or similar measure for the same general purpose of stating a
minimum financial condition.

         7.7 ERISA

         The Company will comply with the minimum funding standards under ERISA
with respect to its Plans and will use its best efforts to comply in all
material respects with all other applicable provisions of ERISA and the
regulations and interpretations promulgated thereunder. The Company will deliver
to the Administrative Agent within 30 days after any executive officer of the
Company becomes aware of the occurrence of any Reportable Event (other than a
reduction in active Plan participants) with respect to any Plan, a certificate
signed by the Chief Financial Officer, the Vice President - Finance, the
Controller or the Treasurer of the Company setting forth the details as to such
Reportable Event and the action which the Company is taking and proposes to take
with respect thereto, together with a copy of the notice of such Reportable
Event given to the Pension Benefit Guaranty Corporation.

         7.8 NOTIFICATION

         The Company will notify the Administrative Agent within 30 days after
any executive officer of the Company becomes aware of any failure on the part of
the Company duly to observe or perform any covenant contained in Section 7.3 or
Section 7.4.

         7.9 CONSOLIDATED LEVERAGE RATIO

         The Company shall not permit the Consolidated Leverage Ratio to exceed
3.5 to 1.0 at the end of any fiscal quarter.

SECTION 8. DEFAULT

         8.1 DEFAULTS RELATING TO THE COMPANY

         In case one or more of the following "Events of Default" shall have
occurred and be continuing, that is to say:

                  (a) default in any payment of principal of any Loan or CAF
         Advance to the Company as and when the same shall become due and
         payable, whether at maturity or upon required repayment or upon
         declaration or otherwise, and the continuance of such default for five
         Domestic Business Days in the case of a Domestic Loan or CAF Advance or
         five Eurodollar Business Days in the case of a Eurocurrency Loan; or

                  (b) default in the payment of any installment of interest upon
         any Loan or CAF Advance to the Company as and when the same shall
         become due and payable, and continuance of such default for a period of
         five Domestic Business Days in the case of a Domestic Loan or CAF
         Advance or five Eurodollar Business Days in the case of a Eurocurrency
         Loan; or


                                                                              39


                  (c) failure on the part of the Company duly to observe or
         perform any covenant contained in Section 7.3 or Section 7.4 for 90
         days after the date on which written notice of such failure, requiring
         the Company to remedy the same, shall have been given to the Company by
         the Administrative Agent or the Required Banks; or

                  (d) failure on the part of the Company duly to observe or
         perform any other of the covenants or agreements of this Agreement for
         a period of 30 days after the date on which written notice of such
         failure, requiring the Company to remedy the same, shall have been
         given to the Company by the Administrative Agent or the Required Banks;
         provided, however, that in the case of a default under Section 4, such
         30-day grace period shall run from the date that demand for payment by
         the Administrative Agent was made upon the Company pursuant to Section
         4; or

                  (e) any representation or warranty by the Company in this
         Agreement or in any certificate delivered pursuant hereto shall have
         proven to have been materially false or misleading; or

                  (f) a Reportable Event (other than a reduction in active Plan
         participants) shall have occurred with respect to any Plan and, within
         30 days after the reporting of such Reportable Event to the
         Administrative Agent, the Administrative Agent shall have notified the
         Company in writing that the Administrative Agent has made a reasonable
         determination that such Reportable Event is likely to have a material
         adverse effect upon the financial position of the Company and its
         subsidiaries considered as a whole; or

                  (g) default in the payment of the principal of (or premium, if
         any, on) or interest on any other borrowing of the Company of
         $5,000,000 or more and such default continues for a period of 30 days,
         or any default with respect to any other borrowing of the Company of
         $5,000,000 or more and such default causes acceleration thereof; or

                  (h) more than 50% in voting power of the voting securities of
         the Company shall be held by (i) any person or persons who "act as a
         partnership, limited partnership, syndicate or other group for the
         purpose of acquiring, holding or disposing of securities" of the
         Company within the meaning of Section 13(d)(3) of the Securities
         Exchange Act of 1934, or (ii) persons whose election to the Board of
         Directors shall not have been recommended by the committee of the Board
         of Directors charged with such recommendations shall constitute a
         majority of the members of the Board of Directors of the Company;

then, and in each and every such case, with the consent of the Required Banks,
the Administrative Agent may, or upon the request of the Required Banks, the
Administrative Agent shall, by notice in writing to the Company, terminate the
Commitments and/or declare the principal of all Loans and CAF Advances to the
Company and Affiliates and all other amounts owing under this Agreement to be
due and payable immediately, and upon any such declaration the same shall become
and shall be immediately due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived.


                                                                              40


         8.2 DEFAULTS RELATING TO AFFILIATES

         In case one or more of the following "Affiliate Events of Default"
shall have occurred and be continuing with respect to an Affiliate, that is to
say:

                  (a) default in any payment of principal of any Loan to such
         Affiliate as and when the same shall become due and payable, whether at
         maturity or upon required repayment or upon declaration or otherwise,
         and the continuance of such default for five Domestic Business Days in
         the case of a Domestic Loan or five Eurodollar Business Days in the
         case of a Eurocurrency Loan; or

                  (b) default in the payment of any installment of interest upon
         any Loan to such Affiliate as and when the same shall become due and
         payable, and continuance of such default for a period of five Domestic
         Business Days in the case of a Domestic Loans, five Eurodollar Business
         Days in the case of a Eurocurrency Loan; or

                  (c) any representation or warranty by such Affiliate in this
         Agreement, in its Accession Memorandum or in any certificate delivered
         in connection therewith shall have proven to have been materially false
         or misleading; or

                  (d) such Affiliate shall have entered against it by a court
         having jurisdiction in the premises a decree or order for relief in
         respect of the Affiliate in an involuntary case under any applicable
         bankruptcy, insolvency or other similar law now or hereafter in effect,
         or appointing a receiver, liquidator, assignee, custodian, trustee,
         sequestrator (or similar official) of the Affiliate or for any
         substantial part of its property, or ordering the winding-up or
         liquidation of its affairs and such decree or order shall remain
         unstayed and in effect for a period of 90 consecutive days; or

                  (e) such Affiliate shall commence a voluntary case under any
         applicable bankruptcy, insolvency or other similar law now or hereafter
         in effect, or consent to the entry of an order for relief in an
         involuntary case under any such law, or consent to the appointment of
         or taking possession by a receiver, liquidator, assignee, trustee,
         custodian, sequestrator (or similar official) of the Affiliate or for
         any substantial part of its property, or make any general assignment
         for the benefit of creditors, or fail generally to pay its debts as
         they become due, or take any corporate action in furtherance of any of
         the foregoing;

                  (f) an Event of Default under Section 8.1 shall have occurred
         and be continuing; or

                  (g) the Guarantee set forth in Section 4 shall no longer be in
         full force and effect;

then, (i) if such event is an Event of Default specified in clause (d) or (e),
automatically all of the Loans to such Affiliate and all other amounts owing by
the Affiliate under this Agreement (but not any Loans to the Company or any
other Affiliate) shall immediately become due and payable, or (ii) if such event
is any other Event of Default, with the consent of the Required Banks, the
Administrative Agent may, or upon the request of the Required Banks, the
Administrative Agent


                                                                              41


shall, by notice in writing to the Company and the defaulting Affiliate, declare
the principal of all outstanding Loans to such Affiliate and all other amounts
owing by the Affiliate under this Agreement (but not any Loans to the Company or
any other Affiliate) to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived.

         8.3 DEFAULTS RELATING TO BANKRUPTCY OF THE COMPANY

         In case one or more of the following "Events of Default - Bankruptcy"
shall have occurred and be continuing with respect to the Company, that is to
say:

                  (a) the Company shall have entered against it by a court
         having jurisdiction in the premises a decree or order for relief in
         respect of the Company in an involuntary case under any applicable
         bankruptcy, insolvency or other similar law now or hereafter in effect,
         or appointing a receiver, liquidator, assignee, custodian, trustee,
         sequestrator (or similar official) of the Company or for any
         substantial part of its property, or ordering the winding-up or
         liquidation of its affairs and such decree or order shall remain
         unstayed and in effect for a period of 90 consecutive days; or

                  (b) the Company shall commence a voluntary case under any
         applicable bankruptcy, insolvency or other similar law now or hereafter
         in effect, or consent to the entry of an order for relief in an
         involuntary case under any such law, or consent to the appointment of
         or taking possession by a receiver, liquidator, assignee, trustee,
         custodian, sequestrator (or similar official) of the Company or for any
         substantial part of its property, or make any general assignment for
         the benefit of creditors, or fail generally to pay its debts as they
         become due, or take any corporate action in furtherance of any of the
         foregoing;

then if such event is an Event of Default - Bankruptcy specified in either of
section (a) or (b) of this Section 8.3 with respect to the Company,
automatically the Commitments shall immediately terminate and the Loans and CAF
Advances hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable.

         8.4 [RESERVED]

SECTION 9. ASSIGNMENT; PARTICIPATIONS

         9.1 ASSIGNMENT

         (a) No Bank shall, without the consent of the Company and the
Administrative Agent (in each case which consent shall not be unreasonably
withheld; it being understood, however, that any concern that the Company may
have regarding the availability of a currency as a result of exchange controls
or otherwise is a reasonable basis for the Company to withhold its consent),
transfer to any other office, branch or affiliate of the Bank or to any other
financial institution, person or entity, all or any portion of the Extensions of
Credit, CAF Advances or the


                                                                              42


Commitment or any of the Bank's other rights and obligations under this
Agreement; provided, however, that:

                  (i) without the consent of the Company, a Bank may transfer or
         assign (A) any of its Extensions of Credit or CAF Advances or any
         interest therein as a pledge to any Federal Reserve Bank or other
         similar central bank in another jurisdiction, provided that such pledge
         shall not release the Bank from its obligations hereunder and (B) all
         or any portion of the Extensions of Credit, any CAF Advance, the
         Commitment or any of the Bank's other rights and obligations under this
         Agreement to any one or more assignees that is a Bank immediately prior
         to giving effect to such assignment; and

                  (ii) without the consent of the Company, a Bank may transfer
         or assign all or any portion of the Loans, the Commitment or any of the
         Bank's other rights and obligations under this Agreement to any Person
         (A) five or more days after the occurrence and continuance of an Event
         of Default under Section 8.1(a) or Section 8.1(d) (in respect of
         Section 4) or (B) upon the occurrence and continuance of any Event of
         Default-Bankruptcy under Section 8.3.

         (b) Assignments shall be subject to the following additional
conditions:

                  (i) except in the case of an assignment to a Bank, an
         affiliate of a Bank or an assignment of the entire remaining amount of
         the assigning Bank's Commitments or Extensions of Credit, the amount of
         the Commitments or Extensions of Credit (without duplication) of the
         assigning Bank subject to each such assignment (determined as of the
         date the Assignment and Assumption with respect to such assignment is
         delivered to the Administrative Agent) shall not be less than
         $5,000,000 and, after giving effect thereto, the assigning Bank shall
         have Commitments and Extensions of Credit (without duplication) in an
         aggregate amount of at least $5,000,000, in each case unless the
         Company and the Administrative Agent otherwise consent, provided that
         (1) no such consent of the Company shall be required if an Event of
         Default under Section 8.1(a) or Section 8.1(d) (in respect of Section
         4) has occurred and is continuing for a period of at least five days or
         an Event of Default-Bankruptcy under Section 8.3 has occurred and is
         continuing and (2) such amounts shall be aggregated in respect of each
         Bank and its affiliates, if any;

                  (ii) the parties to each assignment shall execute and deliver
         to the Administrative Agent an Assignment and Assumption, together with
         a processing and recordation fee of $3,500;

                  (iii) the assignee, if it shall not be a Bank, shall deliver
         to the Administrative Agent an administrative questionnaire; and

         (c) In the case of any assignment to financial institutions made
without the consent of the Company, any such transferee or assignee of a Bank
shall not be entitled to receive any greater interest or other payment by reason
of Section 10.3 or 10.4 than such Bank would have been entitled to receive with
respect to the rights so transferred or assigned unless such transfer


                                                                              43


or assignment is made by reason of the provisions of Section 10.2, 10.3 or 10.4
requiring the Bank to designate a different lending office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.

         (d) Notwithstanding the foregoing, any Conduit Bank may assign any or
all of the Loans or CAF Advance it may have funded hereunder to its designating
Bank without the consent of the Company or the Administrative Agent and without
regard to the limitations set forth in this Section 9.1. Each of the Company,
each Affiliate, each Bank and the Administrative Agent hereby confirms that it
will not institute against a Conduit Bank or join any other Person in
instituting against a Conduit Bank any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding under any state bankruptcy or similar law,
for one year and one day after the payment in full of the latest maturing
commercial paper note issued by such Conduit Bank; provided, however, that each
Bank designating any Conduit Bank hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage or expense arising
out of its inability to institute such a proceeding against such Conduit Bank
during such period of forbearance.

         9.2 PARTICIPATION.

         Each Bank shall have the right to sell to any bank or other financial
institution (a "Participant") a participating interest in such Bank's Extensions
of Credit, CAF Advances or Commitment held by such Bank; provided, however,
that, following any such sale, (a) such Bank's obligations under this Agreement
shall remain unmodified and fully effective and enforceable against such Bank,
(b) such Bank shall remain solely responsible to the Company and its Affiliates
for the performance of such obligations, including, without limitation, its
Commitment and the obligation of such Bank to fund Loans hereunder, (c) the
Administrative Agent and the Company and any Affiliates which have borrowed
hereunder shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement, (d)
such Bank shall retain the sole right and responsibility to enforce the
obligations of the Company and Affiliates hereunder, including, without
limitation, the sole right to approve of or consent to any action hereunder or
any amendment, modification or waiver hereof, except that such Bank may grant to
a Participant a joint right to approve of or consent to any action, amendment,
modification or waiver that would (i) reduce the amount or extend the time for
payment (other than pursuant to Section 2.12) of any principal of, or interest
on, the Loans or any CAF Advance, (ii) increase the amount of such Bank's
Commitment or (iii) reduce the amount of the Facility Fee or the Utilization
Fee, in each case, from that in effect at the time of the sale of the
participating interest, provided that if such Bank so grants to a Participant a
right to approve of or consent to a reduction in the Facility Fee and
Utilization Fee, the term of the participating interest sold to such Participant
shall not extend beyond, and unless earlier terminated such participating
interest shall automatically terminate on, the day immediately prior to the day
and month of the Effective Date next following the sale of such participating
interest, and (e) any such participating interest shall be in a minimum amount
of $5,000,000 or the Equivalent thereof on the date the participating interest
is sold. On the month and day of the Effective Date of each year (or, if any
such month and day of the Effective Date is not a Domestic Business Day, on the
next succeeding Domestic Business Day), each relevant Bank shall furnish to the
Administrative Agent and the Company a written notice disclosing the name of
each Participant which held a participating interest in such Bank's


                                                                              44


Commitment or any Loan held by such Bank at any time during the 12-month period
ended on the day immediately prior to the day and month of the Effective Date
next preceding such date. A Participant shall not be entitled to receive any
greater payment under Section 10.3 or 10.4 than the applicable Bank would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Company's prior written consent. Any Participant that is a foreign
person (i.e., a person organized or incorporated under the laws of a country
other than that under which the Company is incorporated, if it is the borrower,
or an Affiliate is incorporated or organized, if such Affiliate is the borrower)
shall not be entitled to the benefits of Section 10.4 unless such Participant
complies with Section 10.4(c).

SECTION 10. CHANGE IN CIRCUMSTANCES

         10.1 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR

         The Banks shall have no obligation to make a new Eurocurrency Loan, to
extend an outstanding Eurocurrency Loan or to convert an outstanding Loan into a
Eurocurrency Loan if the Administrative Agent determines that:

         (a) by reason of circumstances generally affecting all interbank
markets for deposits in the currency in which the Eurocurrency Loan has been
requested to be denominated (in the applicable amounts), LIBO Rates for such
deposits are not being offered to the Banks for a term equal to any Interest
Period for which such new Loan, extended Loan or converted Loan shall be
requested by the Company or an Affiliate;

         (b) based on notice received from the Required Banks, the LIBO Rate
will not adequately and fairly reflect the cost to the Banks of maintaining or
funding such new Loan, extended Loan or converted Loan as shall be requested by
the Company or an Affiliate;

         (c) deposits in the applicable currency are not generally available, or
cannot be obtained by the Banks, in the applicable market (any Foreign Currency
affected by the circumstances described in clause (a), (b) or (c) is referred to
as an "Affected Foreign Currency").

Upon any such determination, the Administrative Agent shall give telecopy or
telephonic notice thereof to the Company and the Banks as soon as practicable.
If such notice is given (y) pursuant to clause (a) or (b) of this Section 10.1
in respect of Eurocurrency Loans denominated in United States dollars, then (i)
any Eurocurrency Loans denominated in United States dollars requested to be made
on the first day of such Interest Period shall be made as Base Rate Loans, (ii)
any Base Rate Loans that were to have been converted on the first day of such
Interest Period to Eurocurrency Loans denominated in United States dollars shall
be continued as Base Rate Loans and (iii) any outstanding Eurocurrency Loans
denominated in United States dollars shall be converted, on the last day of the
then-current Interest Period, to Base Rate Loans and (z) in respect of any
Foreign Currency Loans, then (i) any Foreign Currency Loans in an Affected
Foreign Currency requested to be made on the first day of such Interest Period
shall not be made and (ii) any outstanding Foreign Currency Loans in an Affected
Foreign Currency shall be due and payable on the first day of such Interest
Period. Until such relevant notice has been withdrawn by the Administrative
Agent, no further Eurocurrency Loans denominated in United


                                                                              45


States dollars or Foreign Currency Loans in an Affected Foreign Currency shall
be made or continued as such, nor shall the Company have the right to convert
Base Rate Loans to Eurocurrency Loans denominated in United States dollars.

         10.2 ILLEGALITY

         (a) If, after the date of this Agreement, the introduction of, or any
change in, any applicable law or regulation or in the interpretation or
administration thereof by any governmental, monetary, or regulatory authority
charged with the interpretation or administration thereof or compliance by any
Bank with any request or directive of any such authority shall make it unlawful
for such Bank to make, maintain or fund any Loan or CAF Advance, such Bank shall
give notice thereof to the Company and, if the Loan is to an Affiliate, to such
Affiliate (in each case with a copy to the Administrative Agent). Before giving
any notice pursuant to this Section 10.2, the relevant Bank shall designate a
different lending office if such designation would avoid the need for giving
such notice and it would not otherwise be disadvantageous to such Bank in its
reasonable judgment. Upon receipt of such notice the Company shall or, if the
Loan is to an Affiliate, the Affiliate shall on either (A) the last day of the
then-current Interest Period applicable to such Loan or CAF Advance if such Bank
may lawfully continue to maintain and fund such Loan to such day or (B) not
later than the last date such Bank may lawfully continue to fund and maintain
such Loan or CAF Advance, either (i) prepay in full, without premium or penalty,
the then outstanding principal amount of each affected Loan or CAF Advance,
together with accrued interest thereon, or (ii) convert such Loan into another
category of Loan (which would not be unlawful for the relevant Banks to make) as
provided in Section 2.12.

         (b) Upon any prepayment of a CAF Advance or prepayment or conversion of
a Loan made pursuant to Section 10.2(a) other than at the end of an Interest
Period, the Company or the Affiliate, as applicable, shall reimburse the Bank
upon demand for any loss incurred by it as a result of the timing of such
prepayment or conversion, in the manner provided in Section 2.18.

         10.3 INCREASED COST

         (a) If (i) Regulation D of the Federal Reserve Board as in effect on
the Effective Date ("Regulation D"), (ii) minimum reserve requirements of the
Bank of England and/or the Financial Services Authority as in effect on the
Effective Date ("Mandatory Cost Rate"), or (iii) after the date hereof, the
adoption of any applicable law or regulation, or any change therein, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank with any request or directive
of any such authority, central bank or comparable agency (a "Regulatory
Change"):

                  (A) shall subject any Bank to any tax, duty or other charge
         with respect to Eurocurrency Loans or LIBO Rate CAF Advances or its
         obligation to make Eurocurrency Loans, or shall change the basis of
         taxation of payments to such Bank of the principal of or interest on
         Eurocurrency Loans or LIBO Rate CAF Advances or any other amounts due
         under this Agreement in respect of Eurocurrency Loans or LIBO Rate CAF
         Advances or its obligation to make Eurocurrency Loans (except for
         changes in the rate of tax on the


                                                                              46


         overall net income of such Bank or the Eurodollar Lending Office
         imposed by the jurisdictions in which such Bank's principal executive
         office or Eurodollar Lending Office are located); or

                  (B) shall impose, modify or cause to be applicable any reserve
         (including, without limitation, any imposed by the Federal Reserve
         Board), special deposit or similar requirement against assets of,
         deposits with or for the account of, or credit extended by, such Bank
         or the Eurodollar Lending Office or shall impose on such Bank (or the
         Eurodollar Lending Office) or all interbank markets applicable to such
         Eurocurrency Loans or LIBO Rate CAF Advances any other condition
         affecting the Eurocurrency Loans or LIBO Rate CAF Advances or its
         obligation to make Eurocurrency Loans;

and the result of any of the foregoing is to increase the cost to such Bank (or
the Eurodollar Lending Office) of making or maintaining any Eurocurrency Loans
or LIBO Rate CAF Advances, or to reduce the amount of any sum received or
receivable by such Bank (or the Eurodollar Lending Office) under this Agreement,
by an amount deemed by such Bank to be material, the Company shall pay or, if
such Eurocurrency Loans are to Affiliates, such Affiliates shall pay to such
Bank such additional amount or amounts as will compensate such Bank for any such
increased cost or reduction incurred or suffered by such Bank from and after the
later of (i) the date that is 15 days prior to receipt of notice from such Bank
of such costs and (ii) the last date preceding receipt of such notice from such
Bank on which interest was due and payable pursuant to Section 2.9 on any such
LIBO Rate CAF Advance or Section 2.15 on any such Eurocurrency Loan. Any Bank
which provides notice to the Company of increased costs pursuant to this Section
10.3(a) shall also provide a copy of such notice to the Administrative Agent.

         (b) Without limiting the effect of the foregoing, so long as any Bank
shall be required to maintain reserves against "Eurocurrency liabilities" under
Regulation D (or, so long as such Bank may be required, by any Mandatory Cost
Rate or by reason of any Regulatory Change, to maintain reserves against any
other category of liabilities which includes deposits by reference to which the
interest rate on Eurocurrency Loans or LIBO Rate CAF Advances is determined as
provided in this Agreement or against any category of extensions of credit or
other assets of such Bank which includes any LIBO Rate CAF Advances or
Eurocurrency Loans) (such reserves are collectively called "Reserves") the
Company shall pay or, if such Eurocurrency Loans are to Affiliates, such
Affiliates shall pay to such Bank an amount (reasonably estimated by such Bank)
for each day during each Interest Period for such LIBO Rate CAF Advances or
Eurocurrency Loans equal to the product of the following:

                  (i) the principal amount of each LIBO Rate CAF Advance or
         Eurocurrency Loan to which such Interest Period relates; multiplied by

                  (ii) the difference between (A) a fraction, the numerator of
         which is the LIBO Rate (expressed as a decimal) applicable to such LIBO
         Rate CAF Advance or Eurocurrency Loan and the denominator of which is
         one (1) minus such Bank's Actual Reserve Cost (defined below)
         (expressed as a decimal) and (B) the LIBO Rate; multiplied by


                                                                              47


                  (iii) 1/360.

         For the purposes of this Section 10.3(b), the "Bank's Actual Reserve
Cost" (which shall be reasonably estimated by the relevant Bank) shall be equal
to the cost actually incurred by such Bank from time to time during such
Interest Period as a result of the requirement that such Bank maintain Reserves
with respect to such LIBO Rate CAF Advance or Eurocurrency Loan.

         (c) If any Governmental Authority of the jurisdiction of any Foreign
Currency (or any other jurisdiction in which the funding operations of any Bank
shall be conducted with respect to such Foreign Currency) shall have in effect
any reserve, liquid asset or similar requirement with respect to any category of
deposits or liabilities customarily used to fund loans in such Foreign Currency,
or by reference to which interest rates applicable to loans in such Foreign
Currency are determined, and the result of such requirement shall be to increase
the cost to such Bank of making or maintaining any Foreign Currency Loan in such
Foreign Currency, and such Bank shall deliver to the Company a notice requesting
compensation under this paragraph, then the Company will pay or cause the
relevant Affiliate to pay to such Bank on each Interest Payment Date with
respect to each affected Foreign Currency Loan an amount that will compensate
such Bank for such additional cost.

         (d) Notwithstanding any other provision of this Agreement, if, after
the date hereof, there shall have occurred any change in national or
international financial, political or economic conditions (including the
imposition of or any change in exchange controls, but excluding conditions
otherwise covered by this Section 10.3) or currency exchange rates which would
make it impracticable for the Required Banks to make or maintain Foreign
Currency Loans denominated in the relevant currency to, or for the account of,
the Company or any Affiliate, then, by written notice to the Company or such
Affiliate and to the Administrative Agent:

                  (i) such Bank or Banks may declare that Foreign Currency Loans
         (in the affected currency or currencies) will not thereafter (for the
         duration of such unlawfulness) be made by such Bank or Banks hereunder
         (or be continued for additional Interest Periods), whereupon any
         request for a Foreign Currency Loan (in the affected currency or
         currencies) or to continue a Foreign Currency Loan (in the affected
         currency or currencies), as the case may be, for an additional Interest
         Period) shall, as to such Bank or Banks only, be of no force and
         effect, unless such declaration shall be subsequently withdrawn; and

                  (ii) such Bank may require that all outstanding Foreign
         Currency Loans (in the affected currency or currencies), made by it be
         converted to Base Rate Loans or Loans denominated in United States
         dollars, as the case may be (unless repaid by the Company or the
         relevant Affiliate as described below), in which event all such Foreign
         Currency Loans (in the affected currency or currencies) shall be
         converted to Base Rate Loans or Loans denominated in United States
         dollars, as the case may be, as of the effective date of such notice as
         provided below and at the Exchange Rate on the date of such conversion
         or, at the option of the Company or the Affiliate, repaid on the last
         day of the then current Interest Period with respect thereto or, if
         earlier, the date on which the applicable notice becomes effective.


                                                                              48


In the event any Bank shall exercise its rights under this paragraph (d), all
payments and prepayments of principal that would otherwise have been applied to
repay the converted Foreign Currency Loans of such Bank shall instead be applied
to repay the Base Rate Loans or Loans denominated in United States dollars, as
the case may be, made by such Bank resulting from such conversion. For purposes
of Section 10.3(d), a notice to the Company or Affiliate by any Bank shall be
effective as to each Foreign Currency Loan made by such Bank, if lawful, on the
last day of the Interest Period currently applicable to such Foreign Currency
Loan; in all other cases such notice shall be effective on the date of receipt
thereof by the Company or Affiliate.

         (e) Each Bank shall take reasonable steps, including without
limitation, the designation of a different Eurodollar Lending Office or Foreign
Currency Lending Office (unless it would otherwise be disadvantageous to the
Bank in its reasonable judgment) if such steps would avoid the need for or
reduce the amount of any payment that otherwise would be due under Section
10.3(a), 10.3(b) or 10.3(c). Any amounts payable by the Company or any Affiliate
under Sections 10.3(a), 10.3(b) or 10.3(c) shall be remitted after the end of
each Interest Period, within 30 days after submission by the Bank to the Company
and such Affiliate (with a copy to the Administrative Agent) of a written
statement setting forth the amount thereof.

         (f) From time to time during the term of this Agreement, upon the
request of the Company, each Bank shall provide to the Company (with a copy to
the Administrative Agent) its best estimate of such Bank's Actual Reserve Cost
incurred or to be incurred with respect to Eurocurrency Loans in the principal
amounts specified in the Company's request.

         10.4 WITHHOLDING TAXES

         (a) Each Bank agrees to take reasonable measures, unless it would
otherwise be disadvantageous to such Bank in its reasonable judgment to avoid or
minimize withholding taxes in connection with any payments made to such Bank
hereunder, including without limitation designating another office of the Bank
as the lending office for a Loan.

         (b) If the Company or any Affiliate shall be required by law to deduct
or withhold any taxes from or in respect of any sum payable hereunder to the
Administrative Agent or any Bank, then, subject to Sections 10.4(e) and 10.4(f):

                  (i) the Company or the Affiliate, as applicable, shall make
         such deductions;

                  (ii) the Company or the Affiliate, as applicable, shall pay
         the full amount deducted to the relevant taxation authority in
         accordance with applicable law, and shall provide to the Administrative
         Agent or such Bank upon its request any official receipts or other
         evidence of payment thereof that the Company or such Affiliate may
         obtain or have in its possession; and

                  (iii) if (A) the Administrative Agent or such Bank notifies
         the Company (pursuant to Section 2.6 or 2.12) at the time that the
         Company (on behalf of itself or an Affiliate) gives a notice of
         Borrowing or a notice to extend or convert any Loan that such Bank will
         require a Gross-up for withholding taxes in connection with such Loan,
         as so extended or converted, if applicable, or (B) no such notice was
         given by the


                                                                              49


         Administrative Agent or any Bank, but after a notice of Borrowing,
         extension or conversion pursuant to Section 2.6 or 2.12 in respect of
         such Loan was given a change in applicable law or regulation, or a
         change in the interpretation or administration thereof by any
         governmental or comparable authority, occurs that requires the Company
         or any Affiliate to so deduct or withhold taxes from or in respect of
         any sum payable to the Administrative Agent or such Bank, then the sum
         payable to the Administrative Agent or such Bank after the Company or
         the Affiliate makes all required deductions shall be increased by an
         amount such that the Administrative Agent or such Bank receives a total
         amount equal to the sum it would have received had no such deductions
         been made. If neither the Administrative Agent nor the affected Bank
         notifies the Company at or prior to the time that the Company (on
         behalf of itself or an Affiliate) gives a notice of Borrowing or a
         notice to extend or convert a Loan, as applicable, that the
         Administrative Agent or such Bank will require a Gross-up in connection
         with such Loan, as so extended or converted, if applicable, no Gross-up
         in respect of such Loan will be paid to the Administrative Agent or
         such Bank, except to the extent that a subsequent change in applicable
         law or regulation, or a change in the interpretation or administration
         thereof by any governmental or comparable authority, requires the
         Company or any Affiliate to deduct or withhold taxes (or an increased
         amount thereof) from or in respect of any sum payable to the
         Administrative Agent or such Bank in respect of such Loan.
         Notwithstanding anything contained in this Section 10.4, in the event
         that the Company shall fail to comply with its obligations under
         Section 7.2(b) with respect to a Loan, the Company shall pay (or cause
         its Affiliate to pay) to the Administrative Agent or affected Bank an
         amount such that the Administrative Agent or such Bank receives the
         amount it would have received had no such deductions been made with
         respect to payments in connection with such Loan.

         (c) If a Bank or the Bank's lending office is a foreign person (i.e., a
person organized or incorporated under the laws of a country other than that
under which the Company is incorporated, if it is the borrower, or an Affiliate
is incorporated or organized, if such Affiliate is the borrower), such Bank
agrees that:

                  (i) it shall promptly deliver to the Administrative Agent and
         either the Company or the Affiliate such accurate and complete signed
         forms or documentation as may be required from time to time by any
         applicable law, treaty, rule or regulation as a condition to exemption
         or other relief from or reduction of tax for withholding purposes; and

                  (ii) it shall, before or promptly after the occurrence of any
         event (including the passing of time) requiring a change in or renewal
         of the most recent forms or documentation previously delivered by such
         Bank, deliver to the Administrative Agent and either the Company or the
         Affiliate, as applicable, accurate and complete signed copies of such
         forms or documentation.

         (d) To the extent that, as determined in good faith by the
Administrative Agent or any Bank in its sole discretion and without any
obligation to disclose its tax records, taxes withheld and paid in accordance
with this Section 10.4 for which a Gross-up has been paid have been irrevocably
utilized by the Administrative Agent or such Bank (either as credits or
deductions) to


                                                                              50


reduce its tax liabilities and such utilization is consistent with its overall
tax policies, the Administrative Agent or such Bank shall pay to the Company or
the relevant Affiliate, as the case may be, an amount equal to such reduction
obtained to the extent of such Gross-up paid by the Company or the Affiliate to
the Administrative Agent or such Bank as aforesaid.

         (e) Notwithstanding anything herein to the contrary, the Company and
the Affiliates will not be required to pay any Gross-up in respect of taxes
described below:

                  (i) if the obligation to pay such Gross-up would not have
         arisen but for a failure by a Bank to comply with its obligations under
         Section 10.4(c) in respect of the applicable lending office; or

                  (ii) if a Bank shall have delivered to the Company or an
         Affiliate any form or documentation required by Section 10.4(c)
         pursuant to which the Bank claims exemption from withholding tax by any
         jurisdiction or under any treaty of such jurisdiction, and the Bank
         shall not at any time be entitled to exemption from deduction or
         withholding of taxes by such jurisdiction in respect of payment by the
         Company or any Affiliate hereunder for the account of such lending
         office for any reason other than a change in such jurisdiction's law or
         regulations or any applicable tax treaty or regulations or in the
         official interpretation of any such law, treaty or regulations by any
         Governmental Authority charged with the interpretation or
         administration thereof after the date of delivery of such form or
         documentation.

         (f) In the event any Bank sells or grants a participation in its rights
under this Agreement or any Loan hereunder, such Bank agrees to undertake sole
responsibility for complying with any withholding tax requirements relating to
the purchaser thereof imposed by any jurisdiction, including, without
limitation, those imposed by Sections 1441 and 1442 of the United States
Internal Revenue Code of 1986, as amended.

         10.5 REPLACEMENT OF BANKS. The Company shall be permitted to replace
any Bank that (a) requests reimbursement for amounts owing pursuant to Section
10.3 or 10.4(b) or (b) defaults in its obligation to make Loans hereunder, with
a replacement financial institution; provided that (i) such replacement does not
conflict with any Requirement of Law, (ii) no Event of Default, Affiliate Event
of Default or Event of Default-Bankruptcy shall have occurred and be continuing
at the time of such replacement, (iii) prior to any such replacement, such Bank
shall have taken no action under Section 10.3(e) or 10.4(a) so as to eliminate
the continued need for payment of amounts owing pursuant to Section 10.3 or
10.4(b), (iv) the replacement financial institution shall purchase, at par, all
Loans and other amounts owing to such replaced Bank on or prior to the date of
replacement, (v) the Company shall be liable to such replaced Bank under Section
2.18 if any Eurocurrency Loan owing to such replaced Bank shall be purchased
other than on the last day of the Interest Period relating thereto, (vi) the
replacement financial institution, if not already a Bank, shall be reasonably
satisfactory to the Administrative Agent, (vii) the replaced Bank shall be
obligated to make such replacement in accordance with the provisions of Section
9.1 (provided that the Company shall be obligated to pay the registration and
processing fee referred to therein), (viii) until such time as such replacement
shall be consummated, the Company shall pay all additional amounts (if any)
required pursuant to Section 10.3 or 10.4(b),


                                                                              51


as the case may be, and (ix) any such replacement shall not be deemed to be a
waiver of any rights that the Company, the Administrative Agent or any other
Bank shall have against the replaced Bank.

SECTION 11. THE AGENTS

         11.1 APPOINTMENT

         Each Bank hereby irrevocably designates and appoints the Administrative
Agent as the agent of such Bank under this Agreement, and each such Bank
irrevocably authorizes the Administrative Agent, in such capacity, to take such
action on its behalf under the provisions of this Agreement and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.

         11.2 DELEGATION OF DUTIES

         The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care in
consultation with the Company.

         11.3 EXCULPATORY PROVISIONS

         Neither any Agent nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such person under or in
connection with this Agreement (except to the extent that any of the foregoing
are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from its or such person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Banks for
any recitals, statements, representations or warranties made by the Company or
any Affiliate or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or for any failure of the Company or any Affiliate to perform its
obligations hereunder. The Agents shall not be under any obligation to any Bank
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Company or any Affiliate.


                                                                              52


         11.4 RELIANCE BY ADMINISTRATIVE AGENT

         The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any instrument, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper person or persons and upon
advice and statements of legal counsel (including counsel to the Company or any
Affiliate), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Banks (or, if so
specified by this Agreement, all Banks) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
in accordance with a request of the Required Banks (or, if so specified by this
Agreement, all Banks), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Banks and all future holders of
the Loans.

         11.5 NOTICE OF DEFAULT

         The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any default or Event of Default, Affiliate Event of
Default or Event of Default-Bankruptcy unless the Administrative Agent has
received notice from a Bank, the Company or an Affiliate referring to this
Agreement, describing such default or Event of Default, Affiliate Event of
Default or Event of Default-Bankruptcy and stating that such notice is a "notice
of default". In the event that the Administrative Agent receives such a notice,
the Administrative Agent shall give notice thereof to the Banks. The
Administrative Agent shall take such action with respect to such default or
Event of Default, Affiliate Event of Default or Event of Default-Bankruptcy as
shall be reasonably directed by the Required Banks (or, if so specified by this
Agreement, all Banks); provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such default or Event of Default, Affiliate Event of Default or Event
of Default-Bankruptcy as it shall deem advisable in the best interests of the
Banks.

         11.6 NON-RELIANCE ON AGENTS AND OTHER BANKS

         Each Bank expressly acknowledges that neither the Agents nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Agent hereafter taken, including any review of the affairs of the Company or
any Affiliate, shall be deemed to constitute any representation or warranty by
any Agent to any Bank. Each Bank represents to the Agents that it has,
independently and without reliance upon any Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and


                                                                              53


investigation into the business, operations, property, financial and other
condition and creditworthiness of the Company and its Affiliates and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Bank also represents that it will, independently and without reliance upon any
Agent or any other Bank, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Company and its Affiliates. Except for notices, reports
and other documents expressly required to be furnished to the Banks by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Company and its Affiliates that
may come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.

         11.7 INDEMNIFICATION

         The Banks agree to indemnify each Agent in its capacity as such (to the
extent not reimbursed by the Company and the Affiliates and without limiting the
obligation of the Company and the Affiliates to do so), ratably according to
their respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, the Loans, this Agreement, any documents contemplated by or
referred to herein or the transactions contemplated hereby or thereby or any
action taken or omitted by such Agent under or in connection with any of the
foregoing; provided that no Bank shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent's gross negligence or willful misconduct. The agreements in this
Section shall survive the payment of the Loans and all other amounts payable
hereunder.

         11.8 AGENT IN ITS INDIVIDUAL CAPACITY

         Each Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Company or an Affiliate as
though such Agent were not an Agent. With respect to Loans made or renewed by
it, each Agent shall have the same rights and powers under this Agreement as any
Bank and may exercise the same as though it were not an Agent, and the terms
"Bank" and "Banks" shall include each Agent in its individual capacity.


                                                                              54


         11.9 SUCCESSOR ADMINISTRATIVE AGENT

         The Administrative Agent may resign as Administrative Agent upon 45
days' notice to the Banks and the Company. If the Administrative Agent shall
resign as Administrative Agent under this Agreement, then the Required Banks
shall appoint from among the Banks a successor administrative agent for the
Banks, which successor administrative agent shall (unless an Event of Default
under Section 8.1(a) or Section 8.3 with respect to the Company shall have
occurred and be continuing) be subject to approval by the Company (which
approval shall not be unreasonably withheld or delayed), whereupon such
successor administrative agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent" shall mean such
successor administrative agent effective upon such appointment and approval, and
the former Administrative Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the part
of such former Administrative Agent or any of the parties to this Agreement or
any holders of the Loans. If no successor administrative agent has accepted
appointment as Administrative Agent by the date that is 45 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Banks shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Banks
appoint a successor administrative agent as provided for above. After any
retiring Administrative Agent's resignation as Administrative Agent, the
provisions of this Section 11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement.

         11.10 SYNDICATION AGENT

         The Syndication Agent shall not have any duties or responsibilities
hereunder in its capacity as such.

SECTION 12. MISCELLANEOUS

         12.1 NOTICES

         Unless otherwise specified herein all notices, requests, demands or
other communications to or from the parties hereto shall be in writing and shall
be deemed to have been duly given and made, in the case of a letter, upon
delivery or three days after deposit in the mail registered first class mail,
postage prepaid; and in the case of a facsimile, when a facsimile is sent and
receipt is telephonically confirmed; provided, however, that notices pursuant to
Section 2.6, 2.8 or 2.12 or any other notices herein which are given by
telephone shall not be effective until received by the party to whom notice is
given. Unless otherwise specified herein, any such notice, request, demand, or
communication shall be delivered or addressed as follows:

                  (a) if to the Company, to it at 5500 Auto Club Drive,
         Dearborn, Michigan 48126 U.S.A., Attention: Treasurer (or facsimile
         number 313-390-3322, Attention: Treasurer);

                  (b) if to an Affiliate, to it at the address or facsimile
         number of the Affiliate designated in the Accession Memorandum of such
         Affiliate;


                                                                              55


                  (c) if to the Administrative Agent, to it at the Notice
         Office; and

                  (d) if to the Banks, to each Bank at the address set forth in
         the administrative questionnaire delivered to the Administrative Agent;

or at such other address or facsimile number as either party hereto may
designate by written notice to the other party hereto.

         12.2 TERM OF AGREEMENT

         The term of this Agreement shall be until the termination of the
Commitments or until the payment in full of the Loans and CAF Advances,
whichever occurs last, provided that the obligations of the Company or any
Affiliate with respect to any payment required to be made by it under this
Agreement shall survive the term of this Agreement.

         12.3 NO WAIVERS

         No failure or delay by the Administrative Agent or any Bank in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.

         12.4 NEW YORK LAW AND JURISDICTION

         (a) THIS AGREEMENT AND EACH ACCESSION MEMORANDUM SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK.

         (b) THE COMPANY AND THE AFFILIATES AND THE ADMINISTRATIVE AGENT AND THE
BANKS EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE
JURISDICTION AND VENUE OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND THE APPELLATE COURTS FROM ANY
THEREOF, FOR PURPOSES OF ANY ACTION ARISING UNDER THIS AGREEMENT OR ANY
ACCESSION MEMORANDUM, OR REGARDING ANY LOANS MADE HEREUNDER, AND EACH HEREBY
AGREES THAT ANY DISPUTES RELATING TO THIS AGREEMENT OR ANY ACCESSION MEMORANDUM
OR ANY LOANS MADE HEREUNDER SHALL BE RESOLVED ONLY IN THE COURTS OF THE STATE OF
NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK. EACH OF
THE FOREGOING PARTIES HEREBY STIPULATES THAT THE VENUES REFERENCED IN THIS
SECTION 12.4(b) ARE CONVENIENT AND EACH WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE RELATING TO THE VENUE OR CONVENIENCE OF SUCH COURTS. IF FOR ANY
REASON CLAIMS HEREUNDER CANNOT BE PURSUED IN ANY OF THE FOREGOING COURTS OF NEW
YORK, ALL REFERENCES IN THIS SECTION 12.4(b) TO THE COURTS OF NEW YORK SHALL
INSTEAD BE DEEMED TO BE REFERENCES TO THE COURTS OF THE STATE OF


                                                                              56


MICHIGAN AND OF THE UNITED STATES FOR THE EASTERN DISTRICT OF MICHIGAN.
ENFORCEMENT OF FINAL, NONAPPEALABLE JUDGMENTS RECEIVED IN ANY OF THE FOREGOING
COURTS MAY ALSO BE SOUGHT IN ANY OTHER APPROPRIATE COURT OR JURISDICTION.

         (c) The Secretary of the Company shall be the agent for service of
process with regard to all claims hereunder by the Administrative Agent or Banks
against any Affiliate.

         12.5 ENTIRE AGREEMENT

         This Agreement, together with any Accession Memoranda, constitutes the
entire understanding between the parties with respect to the subject matter of
this Agreement and supersedes any prior discussions, negotiations, agreements
and understandings. The parties hereto acknowledge that the general banking or
business conditions or any similar bank lending rules or requirements of any
organization not having the force of law, now or hereafter in effect shall not
be applicable to this Agreement, the Accession Memoranda or any Loans made
hereunder to the Company or any Affiliate by the Banks.

         12.6 PAYMENT OF CERTAIN EXPENSES

         (a) Except to the extent otherwise agreed upon in writing by the
parties hereto, the Company agrees to pay or reimburse the Administrative Agent
for all its out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and any other documents prepared in connection
herewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including the reasonable fees and disbursements
of counsel to the Administrative Agent, with statements with respect to the
foregoing to be submitted to the Company prior to the Effective Date (in the
case of amounts to be paid on the Effective Date) and from time to time
thereafter on a quarterly basis or such other periodic basis as the
Administrative Agent shall deem appropriate.

         (b) The Company, with respect to an Event of Default and Event of
Default - Bankruptcy and Loans to it, or an Affiliate, with respect to an
Affiliate Event of Default by such Affiliate and Loans to such Affiliate, will

                  (i) upon the occurrence of an Event of Default, Event of
         Default - Bankruptcy, or Affiliate Event of Default, as applicable, pay
         all reasonable out-of-pocket expenses incurred by the Administrative
         Agent and the Banks (including counsel fees) in connection with such
         Event of Default, Event of Default - Bankruptcy, or Affiliate Event of
         Default and collection and other enforcement proceedings resulting
         therefrom; and

                  (ii) pay all stamp and other taxes, if any, which may be
         determined to be payable in connection with the execution and delivery
         of this Agreement and any Accession Memoranda, or in connection with
         any modification of any Accession Memoranda or this Agreement or any
         waiver or consent under or in respect of this Agreement or any
         Accession Memoranda, and will save the Administrative Agent and the
         Banks harmless


                                                                              57


         against any loss or liability (including interest and penalties)
         resulting from nonpayment or delay in payment of any such taxes.

         (c) If an Affiliate borrows a Foreign Currency Loan denominated in the
euro from a Foreign Currency Lending Office that is not located in the same
Participating Member State as the Affiliate, the Affiliate will pay all
reasonable out-of-pocket expenses incurred by the Banks in making such
cross-border Loan (but limited solely to expenses directly attributable to the
cross-border nature of such Loan, and not including any withholding taxes which
are addressed separately by Section 10.4). Each Bank shall take reasonable
steps, including without limitation, the designation for purposes of such Loan
of a Foreign Currency Lending Office located in a different country (unless it
would otherwise be disadvantageous to such Bank in its reasonable judgment) if
such steps would avoid or reduce such expenses.

         (d) The Company and the Affiliate jointly and severally agree to pay,
indemnify, and hold each Bank and the Administrative Agent and their respective
officers, directors, employees, affiliates, agents and controlling persons
(each, an "Indemnitee") harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, including any of the foregoing relating to the use of proceeds of the
Loans or the violation of, noncompliance with or liability under, any
environmental law applicable to the operations of the Company or any of its
Subsidiaries or any of their respective owned or leased properties and the
reasonable fees and expenses of legal counsel in connection with claims, actions
or proceedings by any Indemnitee against the Company or any Affiliate (all the
foregoing in this clause (d), collectively, the "Indemnified Liabilities"),
provided, that neither the Company nor any Affiliates shall have any obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee. Without limiting the
foregoing, and to the extent permitted by applicable law, the Company and its
Affiliates agree not to assert and to cause their Subsidiaries not to assert,
and hereby waives and agrees to cause its Subsidiaries to waive all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to environmental laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due
under this Section 12.6 shall be payable not late than 10 days after written
demand therefor.

         (e) The obligations of the Company and the Affiliates under this
Section 12.6 shall survive payment of the Loans.

         12.7 JUDGMENT CURRENCY

         If for the purposes of obtaining judgment in any court it is necessary
to convert a sum due from a party borrowing or making Loans hereunder in the
currency expressed to be payable hereunder (for purposes of this Section 12.7,
the "specified currency") into another currency, the rate of exchange used shall
be the Spot Rate on the day that final, nonappealable judgment is given. The
obligations of such parties hereunder in respect of any sum due to another party
hereunder


                                                                              58


shall, notwithstanding any judgment in a currency other than the specified
currency, be discharged only to the extent that on the Eurodollar Business Day
following receipt by a party of any sum adjudged to be so due in such other
currency such party may in accordance with normal, reasonable banking or foreign
exchange procedures purchase the specified currency with such other currency. If
the amount of the specified currency so purchased is less than the sum
originally due to such party, in the specified currency, the party which owed
such sum agrees, to the fullest extent that it may effectively do so, as a
separate obligation and notwithstanding any such judgment, to indemnify the
party to which the sum was owed against such loss.

         12.8 CHANGES, WAIVERS, ETC.; ADJUSTMENTS

         (a) Neither this Agreement nor any provision hereof may be amended,
supplemented, changed, waived, discharged or terminated orally, but only by a
statement in writing signed by the Company and the Required Banks or, with the
consent of the Required Banks, the Company and the Administrative Agent;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) forgive the principal amount or extend the final
scheduled date of maturity of any Loan or CAF Advance, reduce the stated rate of
any interest or fee payable hereunder or extend the scheduled date of any
payment thereof, or increase the amount or extend the termination date of any
Bank's Commitment, in each case without the written consent of each Bank
directly affected thereby; (ii) eliminate or reduce the voting rights of any
Bank under this Section 12.8 without the written consent of such Bank; (iii)
reduce any percentage specified in the definition of Required Banks, consent to
the assignment or transfer by the Company of any of its rights and obligations
under this Agreement, or release the Company from its guarantee obligations
under Section 4 in each case without the written consent of all Banks; (iv) add
currencies as Foreign Currencies under this Agreement without the written
consent of all Banks; or (v) amend, modify or waive any provision of Section 11
without the written consent of each Agent. Any such waiver and any such
amendment, supplement or modification shall apply equally to each of the Banks
and shall be binding upon the Company, the Affiliates, the Banks, the Agents and
all future holders of the Loans. In the case of any waiver, the Company, the
Affiliates, the Banks and the Administrative Agent shall be restored to their
former position and rights hereunder, and any default or Event of Default waived
shall be deemed to be cured and not continuing; but no such waiver shall extend
to any subsequent or other default or Event of Default, or impair any right
consequent thereon.

         (b) Except to the extent that this Agreement expressly provides for
payments to be allocated to a particular Bank, if any Bank (a "Benefitted Bank")
shall receive any payment of all or part of the Obligations owing to it in a
greater proportion than any such payment to any other Bank, if any, in respect
of the Obligations owing to such other Bank, such Benefitted Bank shall purchase
for cash from the other Banks a participating interest in such portion of the
Obligations owing to each such other Bank as shall be necessary to cause such
Benefitted Bank to share the excess payment ratably with each of the Banks;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such Benefitted Bank, such purchase shall be rescinded
and the purchase price returned, to the extent of such recovery, but without
interest.


                                                                              59


         12.9 SEVERABILITY

         If any provision of this Agreement or the application thereof to any
person or circumstance shall be invalid or unenforceable to any extent, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected thereby, and each provision of this Agreement shall be valid and
enforceable to the extent permitted by law.

         12.10 SUCCESSORS AND ASSIGNS

         This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

         12.11 COUNTERPARTS

         This Agreement may be signed in any number of counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument. Complete sets of counterparts shall be delivered to the Company, the
Administrative Agent and the Banks.

         12.12 THIRD PARTY BENEFICIARIES

         Each of the Affiliates of the Company and each office, branch or
affiliate of the Administrative Agent and the Banks which make Loans or CAF
Advances hereunder shall be a third party beneficiary of this Agreement.

         12.13 ELECTRONIC RECORDING

         The parties to this Agreement may electronically record any telephone
communications with one another relating to any preliminary or final notices of
any Borrowing, CAF Advance Borrowing, or any extension and conversion of Loans
pursuant to Section 2.6, 2.8 or 2.12. In the event that any electronically
recorded final notice of Borrowing, CAF Advance Borrowing or extension or
conversion differs from the terms of the corresponding written notice of
Borrowing, CAF Advance Borrowing or extension or conversion, the terms of the
electronically recorded notice shall control.

         12.14 AGGREGATION OR COMPARISON OF AMOUNTS IN DIFFERENT CURRENCIES;
CALCULATION OF CERTAIN FEES

         Whenever any provision of this Agreement requires the aggregation of
two or more amounts denominated in different currencies (e.g., the aggregation
of the principal amounts of Loans and CAF Advances outstanding in different
currencies), or the comparison of two amounts denominated in different
currencies (e.g., the requirement that the principal amount of Foreign Currency
Loans not exceed an amount expressed in United States dollars), such amounts
denominated in a Foreign Currency shall be notionally converted, for purposes of
such aggregation or comparison, to the Equivalent thereof in United States
dollars, such that the result of such aggregation or comparison shall be an
amount or amounts expressed in United States dollars. Similarly, whenever any
provision of this Agreement requires the calculation of a fee as


                                                                              60


a per annum percentage of a particular amount (e.g., the Utilization Fee), the
amounts upon which such fee is to be calculated shall be notionally converted to
the Equivalent thereof in United States dollars, so that the result of such
calculation shall be a fee amount expressed in United States dollars.


                     [THIS SPACE INTENTIONALLY LEFT BLANK]

                                                                              66


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                                 VISTEON CORPORATION
                                 By: /s/ Mary Winston
                                    -------------------------------------------
                                        Mary Winston
                                 Title: Vice President & Treasurer

                                 JPMORGAN CHASE BANK, as Administrative Agent
                                 and as a Bank

                                 By: /s/ Julie S. Long
                                    -------------------------------------------
                                        Julie S. Long
                                 Title: Vice President


                                 BANK OF AMERICA, N.A., as Syndication Agent
                                 and as a Bank

                                 By: /s/ Lynn Stetson
                                    -------------------------------------------
                                 Title: Managing Director


SIGNATURE PAGE TO THE
364-DAY/1-YEAR TERM-OUT CREDIT AGREEMENT
JUNE 20, 2002




                                                                   EXHIBIT 10.26

                      FIVE-YEAR TERM LOAN CREDIT AGREEMENT



                            DATED AS OF JUNE 25, 2002

                                      AMONG

                        VISTEON CORPORATION, AS BORROWER,

                                THE SEVERAL BANKS
                        FROM TIME TO TIME PARTIES HERETO,

                              JPMORGAN CHASE BANK,
                            AS ADMINISTRATIVE AGENT,

                                       AND

                              BANK OF AMERICA N.A.,
                              AS SYNDICATION AGENT




                              ---------------------



                         J.P. MORGAN SECURITIES INC. AND
                        BANC OF AMERICA SECURITIES, LLC,
                  AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS







                                TABLE OF CONTENTS



                                                                                     PAGE
                                                                                     ----
                                                                                   
SECTION 1.    DEFINITIONS...............................................................1


SECTION 2.    THE LOANS.................................................................9

        2.1   The Commitment; Commitment Termination Date...............................9
        2.2   Proceeds of Loans........................................................10
        2.3   Commitment Fee...........................................................10
        2.4   [Reserved]...............................................................10
        2.5   Optional Termination or Reduction of Commitments.........................10
        2.6   Notice of Borrowing; Procedure...........................................10
        2.7   [Reserved]...............................................................12
        2.8   [Reserved]...............................................................12
        2.9   [Reserved]...............................................................12
        2.10  [Reserved]...............................................................12
        2.11  [Reserved]...............................................................12
        2.12  Extension of Term of Loans; Conversion of Loans..........................12
        2.13  Register.................................................................14
        2.14  Interest Rates...........................................................15
        2.15  Interest Payment Dates...................................................15
        2.16  Overdue Principal and Interest...........................................15
        2.17  Dates for Payment or Optional Prepayment of Principal....................16
        2.18  Optional Prepayment on Other Dates; Reimbursement for Certain Costs......16
        2.19  Method of Payment........................................................17
        2.20  Pro Rata Treatment and Payments..........................................17

SECTION 3.    [RESERVED]...............................................................19


SECTION 4.    GUARANTEE OF LOANS TO AFFILIATES AND THE SPECIAL PURPOSE BORROWER........19


SECTION 5.    CONDITIONS TO LOANS......................................................20

        5.1   Each Loan to the Company, an Affiliate or the Special Purpose Borrower...20
        5.2   First Loan to the Company, an Affiliate or the Special Purpose Borrower..22

SECTION 6.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................24

        6.1   Corporate Authority of the Company.......................................24
        6.2   Financial Statements.....................................................24
        6.3   Litigation...............................................................25
        6.4   Use of Proceeds..........................................................25
        6.5   Compliance with ERISA....................................................25








                                                                                     PAGE
                                                                                     ----
                                                                                   
SECTION 7.     COVENANTS...............................................................25

        7.1    Reports; Certificate as to Default......................................25
        7.2    Further Information.....................................................26
        7.3    Liens...................................................................26
        7.4    Sale-Leasebacks.........................................................27
        7.5    Mergers and Consolidations..............................................27
        7.6    Additional Covenants....................................................28
        7.7    ERISA...................................................................28
        7.8    Notification............................................................28
        7.9    Consolidated Leverage Ratio.............................................28

SECTION 8.     DEFAULT.................................................................29

        8.1    Defaults Relating to the Company........................................29
        8.2    Defaults Relating to the Affiliates and the Special Purpose Borrower....30
        8.3    Defaults Relating to Bankruptcy of the Company..........................32
        8.4    [Reserved]..............................................................33

SECTION 9.     ASSIGNMENT; PARTICIPATIONS..............................................33

        9.1    Assignment by Banks.....................................................33
        9.2    Participation in Loans..................................................34
        9.3    Assignment by the Company, Affiliates or Special Purpose Borrower.......35

SECTION 10.    CHANGE IN CIRCUMSTANCES.................................................35

        10.1   Basis for Determining Interest Rate Inadequate or Unfair................35
        10.2   Illegality..............................................................36
        10.3   Increased Cost..........................................................37
        10.4   Withholding Taxes.......................................................38
        10.5   Replacement of Banks....................................................40

SECTION 11.    THE AGENTS..............................................................41

        11.1   Appointment.............................................................41
        11.2   Delegation of Duties....................................................41
        11.3   Exculpatory Provisions..................................................42
        11.4   Reliance by Administrative Agent........................................42
        11.5   Notice of Default.......................................................42
        11.6   Non-Reliance on Agents and Other Banks..................................43
        11.7   Indemnification.........................................................43
        11.8   Agent in Its Individual Capacity........................................44
        11.9   Successor Administrative Agent..........................................44
        11.10  Syndication Agent.......................................................44








                                                                                     PAGE
                                                                                     ----
                                                                                  
SECTION 12.    MISCELLANEOUS...........................................................45

        12.1   Notices.................................................................45
        12.2   Term of Agreement.......................................................45
        12.3   No Waivers..............................................................45
        12.4   New York Law and Jurisdiction...........................................45
        12.5   Entire Agreement........................................................46
        12.6   Payment of Certain Expenses.............................................46
        12.7   [Reserved]..............................................................48
        12.8   Changes, Waivers, etc.; Adjustments.....................................48
        12.9   Severability............................................................49
        12.10  Successors and Assigns..................................................49
        12.11  Counterparts............................................................49
        12.12  Third Party Beneficiaries...............................................49
        12.13  Electronic Recording....................................................49








                      FIVE-YEAR TERM LOAN CREDIT AGREEMENT


         This FIVE-YEAR TERM LOAN CREDIT AGREEMENT, dated as of June 25, 2002,
is among VISTEON CORPORATION, a Delaware corporation (the "Company"), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the "Banks"), JPMORGAN CHASE BANK, a New York banking
corporation, as administrative agent (the "Administrative Agent"), and BANK OF
AMERICA N.A., as syndication agent (the "Syndication Agent").

         The Company desires to obtain a five-year term loan facility for itself
in the aggregate amount of U.S. $250,000,000, and the Banks and Administrative
Agent are willing to provide such term loan facility and to make Loans to the
Company, subject to the terms and conditions set forth below.

SECTION 1. DEFINITIONS

         The following terms, as used herein, have the following respective
meanings:

         "Accession Memorandum" means a memorandum of any Affiliate or a Special
Purpose Borrower substantially in the form of Exhibit D hereto evidencing the
agreement of the Affiliate or Special Purpose Borrower to be bound by the terms
of this Agreement; provided that such a memorandum shall contain such changes or
additional provisions as may be deemed necessary by mutual agreement of the
Administrative Agent, Company, and the Affiliate or Special Purpose Borrower, as
applicable, other than any changes to the interest rate applicable to any Loan,
the Pricing Grid, any changes to or requests for additional financial covenants,
any changes to or requests for collateral or other support for any Loan or any
changes to the items described in Section 12.8(a).

         "Affiliate" means any direct or indirect majority-owned subsidiary of
the Company and any partnership of which the Company or a direct or indirect
majority-owned subsidiary of the Company is a general or unlimited partner. For
purposes of this definition, "majority-owned" means ownership of more than 50%
of the capital stock of or other equity interest in, or more than 50% of the
voting power with respect to, an entity.

         "Affiliate Event of Default" has the meaning set forth in Section 8.2.

         "Agents" means the Administrative Agent and the Syndication Agent
collectively.

         "Aggregate Exposure" means, with respect to any Bank at any time, an
amount equal to the principal amount of such Bank's Loans then outstanding plus
the amount of such Bank's Available Commitment then in effect or, if the
Commitments have been terminated, the principal amount of such Bank's Loans.

         "Aggregate Exposure Percentage" means, with respect to any Bank at any
time, the ratio (expressed as a percentage) of such Bank's Aggregate Exposure at
such time to the Aggregate Exposure of all Banks at such time.



                                                                               2


         "Aggregate Loans" means the total principal amount of all outstanding
Loans.

         "Agreement" means this Five-Year Term Loan Credit Agreement, together
with the exhibits hereto, as amended from time to time.

         "Annual Report" has the meaning set forth in Section 7.1(a).

         "Assignment and Acceptance" means an Assignment and Acceptance,
substantially in the form of Exhibit C.

         "Availability Period" means the period from and including the Effective
Date to the Commitment Termination Date.

         "Available Commitment" means as to any Bank at any time during the
Availability Period, an amount equal to the excess, if any, of (a) such Bank's
Commitment then in effect over (b) the aggregate principal amount of such Bank's
Loans then outstanding.

         "Banks" has the meaning provided in the preamble hereto; provided, that
unless the context otherwise requires, each reference herein to the Banks shall
be deemed to include any Conduit Bank.

         "Bank's Actual Reserve Cost" has the meaning set forth in Section
10.3(b).

         "Base Rate" means for any day the greater of (i) an annual rate of
interest equal to that announced generally from time to time by the
Administrative Agent at its Domestic Lending Office as its prime rate, base rate
or equivalent rate and in effect on such day and (ii) the Federal Funds
Effective Rate plus 0.50%.

         "Base Rate Loan" means any Loan hereunder denominated in United States
dollars which the Company (on behalf of itself or an Affiliate) or the Special
Purpose Borrower specifies pursuant to Section 2.6 or Section 2.12 as a Base
Rate Loan.

         "Base Rate Margin" means the applicable amount as set forth on the
Pricing Grid.

         "Benefitted Bank" has the meaning set forth in Section 12.8(b).

         "Bilateral Revolving Credit Agreements" means the bilateral Five-Year
Credit Agreements and the bilateral 364-Day/2-Year Term-Out Credit Agreements
entered into between the Company and certain Banks prior to June 20, 2002.

         "Borrowing" means a borrowing hereunder consisting of a Loan made to
the Company, any Affiliate or the Special Purpose Borrower by any Bank. A
Borrowing is a "Domestic Borrowing" if such Loan is a Domestic Loan or a
"Eurodollar Borrowing" if such Loan is a Eurodollar Loan.

         "Commitment" means, as to any Bank, the obligation of such Bank, if
any, to make Loans during the Availability Period in an aggregate principal
amount not to exceed the amount set forth under the heading "Commitment"
opposite such Bank's name on Schedule 1 or in the



                                                                               3


Assignment and Acceptance pursuant to which such Bank became a party hereto, as
the same may be changed from time to time pursuant to the terms hereof.

         "Commitment Fee" has the meaning set forth in Section 2.3(a).

         "Commitment Quarter" means each three-month period ending on September
30, December 31, March 31 and June 30 which falls (in whole or in part) within
the Availability Period.

         "Commitment Termination Date" has the meaning set forth in Section
2.1(b).

         "Conduit Bank" means any special purpose corporation organized and
administered by any Bank for the purpose of making Loans otherwise required to
be made by such Bank and designated by such Bank in a written instrument;
provided, that the designation by any Bank of a Conduit Bank shall not relieve
the designating Bank of any of its obligations to fund a Loan under this
Agreement if, for any reason, its Conduit Bank fails to fund any such Loan, and
the designating Bank (and not the Conduit Bank) shall have the sole right and
responsibility to deliver all consents and waivers required or requested under
this Agreement with respect to its Conduit Bank, and provided, further, that no
Conduit Bank shall (a) be entitled to receive any greater amount pursuant to
Section 2.18, 10.3, 10.4 or 12.6 than the designating Bank would have been
entitled to receive in respect of the extensions of credit made by such Conduit
Bank or (b) be deemed to have any Commitment.

         "Consolidated EBITDA" means for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum of (a)
income tax expense, (b) interest expense, (c) amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans), (d) depreciation and
amortization expense, (e) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (f) any non-recurring expenses or
losses, and (g) with respect to any discontinued operation, any loss resulting
therefrom; and minus, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (i) to the extent included
in the statement of such Consolidated Net Income for such period, any
non-recurring income or gains or (ii) with respect to any discontinued
operation, any gain resulting therefrom, all as determined on a consolidated
basis. For the purposes of calculating Consolidated EBITDA during any four
quarter period in which a Material Acquisition or a Material Disposition has
occurred, Consolidated EBITDA for such period shall be calculated after giving
pro forma effect to such Material Acquisition or Material Disposition as if such
Material Acquisition or Material Disposition occurred on the first day of such
four quarter period.

         "Consolidated Leverage Ratio" means as of the end of any fiscal
quarter, the ratio of (a) Consolidated Total Debt as of such date to (b)
Consolidated EBITDA for the period of four fiscal quarters ending as of such
date.

                                                                               4


         "Consolidated Net Income" means for any period, the consolidated net
income (or loss) of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.

         "Consolidated Total Assets" means, as of the date of determination, all
amounts that would, in conformity with GAAP, be set forth opposite the caption
"total assets" (or any like caption) on a consolidated balance sheet of the
Company and its Subsidiaries at such date.

         "Consolidated Total Debt" means, as of any date and without
duplication, the aggregate principal amount of all Indebtedness of the Company
and its Subsidiaries on a consolidated basis minus Consolidated Total Net Cash
as of such date.

         "Consolidated Total Net Cash" means, as of any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "cash and cash
equivalents" (or any like caption) on a consolidated balance sheet of the
Company and its Subsidiaries at such date.

         "Domestic Business Day" means any day, except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or obligated
by law or regulation to close.

         "Domestic Funding Office" means the office of the Administrative Agent
specified in Exhibit B hereto or such other office as may be specified from time
to time by the Administrative Agent by written notice to the Company, the
Special Purpose Borrower and the Banks as its funding office for the purpose of
funding or payment of Domestic Loans.

         "Domestic Lending Office" means, as to any Bank, the office, branch or
affiliate of such Bank in the continental United States specified as such in
Exhibit B hereto or such other office, branch or affiliate of such Bank in the
continental United States as it may hereafter designate as the Domestic Lending
Office by notice to the Administrative Agent.

         "Domestic Loan" means any Loan made pursuant to Section 2.1 which the
Company (on behalf of itself or an Affiliate) or the Special Purpose Borrower
specifies pursuant to Section 2.6 or Section 2.12 as a Base Rate Loan.

         "Effective Date" means June 25, 2002.

         "ERISA" means the Employee Retirement Income Security Act of 1974 of
the United States, as amended.

         "Eurodollar Business Day" means any day, except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or obligated
by law or regulation to close, on which commercial banks in New York City are
open for trading in United States dollar deposits in the interbank eurodollar
market.

         "Eurodollar Funding Office" means the office of the Administrative
Agent specified in Exhibit B hereto or such other office as may be specified
from time to time by the Administrative Agent by written notice to the Company,
the Special Purpose Borrower and the Banks as its funding office for the purpose
of funding or payment of Eurodollar Loans.

                                                                               5


         "Eurodollar Lending Office" means, as to any Bank, the office, branch
or affiliate of such Bank specified as such in Exhibit B hereto or such other
office, branch or affiliate of such Bank as it may hereafter designate as the
Eurodollar Lending Office by notice to the Administrative Agent.

         "Eurodollar Loan" means any Loan made pursuant to Section 2.1 which the
Company (on behalf of itself or an Affiliate) or the Special Purpose Borrower
specifies pursuant to Section 2.6 or Section 2.12 as a Eurodollar Loan.

         "Eurodollar Margin" means the applicable amount as set forth on the
Pricing Grid.

         "Event of Default" has the meaning set forth in Section 8.1.

         "Event of Default - Bankruptcy" has the meaning set forth in Section
8.3.

         "Federal Funds Effective Rate" means for any day, the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Domestic Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Domestic Business Day, the
average of the quotations for the day of such transactions received by JPMorgan
Chase Bank from three federal funds brokers of recognized standing selected by
it.

         "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System of the United States, or any successor thereto.

         "Fee Payment Date" means each of (a) the tenth Domestic Business Day
following the last day of each Commitment Quarter and (b) the Commitment
Termination Date.

         "GAAP" means generally accepted accounting principles in the United
States as applied to the Company.

         "Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

         "Gross-up" means the amount payable to the Administrative Agent or any
Bank to account for required deductions for withholding taxes as provided in
Section 10.4.

         "Guarantee" means the guarantee and other obligations of the Company
set forth in Section 4.

         "Guaranteed Obligations" has the meaning set forth in Section 4.

         "Indebtedness" means, as of any date, the amount outstanding on such
date under notes, bonds, debentures, commercial paper, or other similar
evidences of indebtedness for money borrowed.

                                                                               6


         "Interest Period" means with respect to each Eurodollar Loan:

         (a)      initially, the period commencing on the date of Borrowing with
                  respect to such Loan (or in the case of a Loan which has been
                  converted into a Eurodollar Loan, on the date specified in
                  Section 2.12) and ending one, two, three or six months
                  thereafter, as the Company (on behalf of itself or an
                  Affiliate) or the Special Purpose Borrower may elect pursuant
                  to Section 2.6 or Section 2.12; and

         (b)      thereafter, each period commencing on the last day of the next
                  preceding Interest Period for such Borrowing and ending one,
                  two, three or six months thereafter, as the Company (on behalf
                  of itself or an Affiliate) or the Special Purpose Borrower may
                  elect pursuant to Section 2.12;

         provided, however, that:

                           (i) any such Interest Period which would otherwise
                  end on a day which is not a Eurodollar Business Day shall be
                  extended to the next succeeding Eurodollar Business Day unless
                  such Eurodollar Business Day falls in another calendar month,
                  in which case such Interest Period shall end on the next
                  preceding Eurodollar Business Day;

                           (ii) any such Interest Period which begins on the
                  last Eurodollar Business Day of a calendar month (or on a day
                  for which there is no numerically corresponding day in the
                  calendar month at the end of such Interest Period) shall end
                  on a day which is the last Eurodollar Business Day of the
                  applicable calendar month; and

                           (iii) neither the Company (on behalf of itself or an
                  Affiliate) nor the Special Purpose Borrower may elect an
                  Interest Period that would end later than the Maturity Date.

         "LIBO Rate" means with respect to any Eurodollar Loan for any Interest
Period, the London interbank offered rate for deposits in United States dollars
appearing on Telerate Page 3750 as of 11:00 a.m. (London, England time) two
Eurodollar Business Days prior to the beginning of such Interest Period for the
period commencing on the date of such Eurodollar Loan and ending on a maturity
date comparable to that of the applicable Interest Period. In the event that
such rate does not appear on Page 3750 of the Telerate screen, the "LIBO Rate"
shall be determined by reference to such other comparable publicly available
service for displaying eurocurrency rates as may be selected by the
Administrative Agent or, in the absence of such availability, by reference to
the rate at which the Administrative Agent is offered deposits in identical
currencies at or about 11:00 a.m., New York City time, two Eurodollar Business
Days prior to the beginning of such Interest Period in the interbank
eurocurrency market where its eurocurrency and foreign currency and exchange
operations are then being conducted for delivery on the first day of such
Interest Period for the number of days comprised therein.

                                                                               7


         "Lien" means any mortgage, pledge, lien, security interest, conditional
sale or other title retention agreement or other similar encumbrance.

         "Loan" means any Domestic Loan or Eurodollar Loan.

         "Mandatory Cost Rate" has the meaning set forth in Section 10.3.

         "Material Acquisition" means any one or more acquisitions of any
business entity or entities, or of any operating unit or units of any business
entity or entities, that become consolidated with the Company in accordance with
GAAP and that involve the payment of consideration (including, without
limitation, the assumption of debt) by the Company and its Subsidiaries in
excess of $25,000,000 in the aggregate during any fiscal quarter of the Company.

         "Material Disposition" means any one or more dispositions by the
Company or a Subsidiary of any business entity or entities, or of any operating
unit or units of the Company or a Subsidiary, that become unconsolidated with
the Company in accordance with GAAP and that involve the receipt of
consideration by the Company and its Subsidiaries in excess of $25,000,000 in
the aggregate during any fiscal quarter of the Company.

         "Maturity Date" means June 25, 2007.

         "New Corporate Offices" has the meaning set forth in Section 6.4.

         "Normal Banking Hours" with respect to the Notice Office of the
Administrative Agent means the period from 9:00 a.m. to 5:00 p.m. in the time
zone in which the Notice Office is located on a Domestic Business Day.

         "Note" means any promissory note evidencing Loans.

         "Notice Office" means the office of the Administrative Agent in the
continental United States specified as such in Exhibit B hereto or such other
office of the Administrative Agent in the continental United States as it may
hereafter designate as the Notice Office by notice to the Company, the
Affiliates and the Special Purpose Borrower.

         "Obligations" means the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Company, any Affiliate or the
Special Purpose Borrower whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Company, each Affiliate and the Special Purpose Borrower to
the Administrative Agent or to any Bank, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement, any other
document made, delivered or given in connection herewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including all fees, charges and disbursements of counsel to the
Administrative Agent or to any Bank that are required to be paid by the Company
pursuant hereto) or otherwise.


                                                                               8


         "Operative Agreement" has the meaning set forth in the definition of
Special Purpose Borrower.

         "Participant" has the meaning set forth in Section 9.2.

         "Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

         "Plan" means an employee benefit plan or other plan (other than a
multi-employer benefit plan) maintained by the Company or its Subsidiaries
(including the Company) for employees of the Company and its Subsidiaries
(including the Company) and covered by Title IV of ERISA.

         "Pricing Grid" means the pricing grid set forth below and based on the
Company's long-term senior unsecured non-credit-enhanced debt ratings as
provided by Standard & Poor's Ratings Services, a Division of the McGraw Hill
Companies, Inc. ("S&P") or Moody's Investors Service, Inc. ("Moody's"):



  Long-Term Senior Unsecured
   Non-Credit-Enhanced Debt
            Rating                      Eurodollar                    Base Rate
         (higher of)                      Margin                       Margin
         S&P/Moody's                      (bps.)                       (bps.)
  --------------------------            ----------                    ---------
                                                                
        >BBB/Baa2                         100.0                         0.0
         BBB/Baa2                         112.5                        12.5
        

         The applicable Eurodollar Margin and Base Rate Margin shall be
determined based upon the long-term senior unsecured non-credit-enhanced debt
ratings as provided by the S&P or Moody's. In the event that the S&P and Moody's
ratings of the Company are not equivalent, the applicable Eurodollar Margin and
Base Rate Margin will be determined by the higher rating. In the event that
either S&P or Moody's ceases to provide a long-term senior unsecured
non-credit-enhanced debt rating for the Company, the applicable Eurodollar
Margin and Base Rate Margin will be determined by reference to the rating issued
by the other rating agency. For any period in which neither S&P nor Moody's
provides a long-term senior unsecured non-credit-enhanced debt rating for the
Company, the rating shall for purposes of this definition be 
                                                                               9


         "Required Banks" means, at any time, holders of more than 50% of the
Aggregate Exposures of all Banks then in effect.

         "Reserves" has the meaning set forth in Section 10.3(b).

         "Sale-Leasebacks" has the meaning set forth in Section 7.4.

         "Senior Debt" has the meaning set forth in Section 7.6.

"Special Purpose Borrower" means any domestic special purpose entity which (i)
owns the New Corporate Offices and the real estate incidental thereto and (ii)
leases or otherwise conveys to the Company or any of its Subsidiaries the right
to own, occupy or use the New Corporate Offices pursuant to the terms and
conditions of an agreement (the "Operative Agreement") in form and substance
reasonably acceptable to the Administrative Agent; provided, that the Company
may not designate more than one Special Purpose Borrower hereunder during the
term of this Agreement. The provisions of this Agreement applicable to a Special
Purpose Borrower and any special purpose entity pursuant to the last paragraph
of Section 8.2 shall only apply to any Special Purpose Borrower or any such
special purpose entity from and after the date on which the Company designates a
Special Purpose Borrower hereunder.

         "Subsidiary" means a corporation, partnership, limited liability
company or other entity which would be consolidated on the balance sheets of the
Company and its Subsidiaries in accordance with GAAP. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Company. For
purposes of the definition of "Consolidated Total Debt", "Subsidiary" shall be
deemed to include the Special Purpose Borrower, if any.

         "10-K Report" has the meaning set forth in Section 7.1(a).

         "10-Q Report" has the meaning set forth in Section 7.1(b).

         "United States dollars" and "$" mean the lawful currency of the United
States.

SECTION 2. THE LOANS

         2.1 THE COMMITMENT; COMMITMENT TERMINATION DATE

              (a) Subject to the terms and conditions set forth in this
Agreement, each Bank agrees to make up to an aggregate of twenty (20) Loans to
the Company, the Affiliates and the Special Purpose Borrower from time to time
during the Availability Period in an aggregate principal amount not exceeding
the amount of such Bank's Commitment. The Loans may from time to time be
Eurodollar Loans or Base Rate Loans, as determined by the Company (on behalf of
itself or an Affiliate) or the Special Purpose Borrower and notified to the
Administrative Agent in accordance with Sections 2.6 and 2.12. The Commitments
shall automatically be reduced on the date of any Borrowing (after giving effect
to such Borrowing) by the amount of any such Borrowing.


                                                                              10


              (b) The "Commitment Termination Date" shall be December 31, 2005.
The unused portion of the Commitment of each Bank, if any, shall automatically
terminate on the Commitment Termination Date.

         2.2 PROCEEDS OF LOANS

         The principal amount of each Loan shall be disbursed to the Company, an
Affiliate or the Special Purpose Borrower, as applicable, on the date of
Borrowing of such Loan in United States dollars in immediately available funds
to the account of the Company, the Affiliate or the Special Purpose Borrower, as
applicable, specified by the Company (on behalf of itself or an Affiliate) or
the Special Purpose Borrower to the Administrative Agent from time to time.

         2.3 COMMITMENT FEE

         The Company shall pay to the Administrative Agent for the account of
each Bank a commitment fee (the "Commitment Fee") during the Availability Period
at a rate per annum of 0.15% on the daily average undrawn amount of the
Commitment of such Bank during the Commitment Quarter for which the Commitment
Fee is being paid. The Commitment Fee with respect to each Commitment Quarter
shall be payable in arrears on each Fee Payment Date and shall be computed on
the basis of a year of 365 (or 366) days for the actual number of days for which
due. The Commitment Fee shall be payable to the Administrative Agent and shall
be transmitted via the National Automated Clearing House Association electronic
payments network in the United States to an account in the continental United
States specified by the Administrative Agent from time to time by notice to the
Company.

         2.4 [RESERVED]

         2.5 OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS

         The Company may at any time or from time to time during the
Availability Period, upon three Domestic Business Days' written notice to the
Administrative Agent at the Notice Office, (a) terminate the Commitments or (b)
reduce the unused portion of the Commitments. From the effective date of any
such termination or reduction, the Commitment Fee specified in Section 2.3 shall
cease to accrue or shall be correspondingly reduced, provided that no such
termination or reduction shall affect the Company's obligation to pay the
Commitment Fee to the extent theretofore accrued. If the Company terminates the
Commitments in their entirety, such accrued Commitment Fee shall be payable
within 30 days after the effective date of such termination in the manner
provided in Section 2.3. Any termination or reduction of the unused portion of
the Commitments by the Company pursuant to this Section 2.5 shall be in an
amount equal to $1,000,000, or a whole multiple thereof, and shall be
irrevocable.

         2.6 NOTICE OF BORROWING; PROCEDURE

         With respect to each Domestic Borrowing, the Company (on behalf of
itself or an Affiliate) or the Special Purpose Borrower, as applicable, shall
give notice of the Borrowing to the Administrative Agent at the Notice Office no
later than the date of such Borrowing, but not later than 11:00 a.m. (New York
City time) on such date. With respect to each Eurodollar Borrowing,



                                                                              11

the Company (on behalf of itself or an Affiliate) or the Special Purpose
Borrower shall give notice of the Borrowing to the Administrative Agent at the
Notice Office no later than three Eurodollar Business Days prior to the date of
such Borrowing, but not later than 11:00 a.m. (New York City time) on such date.
In each case, the notice shall be given by telephone (and shall be promptly
confirmed in a writing substantially in the form of Exhibit A-1, in the case of
a Loan to the Company or an Affiliate, or Exhibit A-2, in the case of a Loan to
the Special Purpose Borrower) and shall specify:

                  (a) The borrower;

                  (b) the date of such Borrowing, which shall be a Domestic
         Business Day in the case of a Domestic Borrowing or a Eurodollar
         Business Day in the case of a Eurodollar Borrowing;

                  (c) the amount of such Borrowing, which shall be not less than
         $5,000,000;

                  (d) whether the Loan comprising such Borrowing is to be a Base
         Rate Loan or a Eurodollar Loan;

                  (e) if such Loan is to be a Eurodollar Loan, the duration of
         the initial Interest Period; and

                  (f) whether any Bank has requested a Gross-up pursuant to the
         next succeeding sentence.

At the time that the Company (on behalf of itself or an Affiliate) or the
Special Purpose Borrower gives a notice of Borrowing, each Bank shall
telephonically notify the Company or the Special Purpose Borrower, as
applicable, and the Administrative Agent whether such Bank will require a
Gross-up for withholding taxes in connection with such Loan (as provided in
Section 10.4). A notice of Borrowing, once given to the Administrative Agent,
shall not be revocable by the Company (on behalf of itself or an Affiliate) or
Special Purpose Borrower, except in the event that any Bank notifies the Company
or Special Purpose Borrower at the time the it gives notice of the Borrowing
that a Gross-up will be required, in which case, the Company (on behalf of
itself or an Affiliate) may promptly withdraw the notice of Borrowing.

Upon receipt of any such notice of Borrowing from the Company or the Special
Purpose Borrower, the Administrative Agent shall promptly notify each Bank
thereof. Each Bank will make the amount of its pro rata share of each Borrowing
available to the Administrative Agent for the account of the Company, an
Affiliate or the Special Purpose Borrower at the Domestic Funding Office in the
case of Domestic Loans or the Eurodollar Funding Office in the case of
Eurodollar Loans in each case prior to 12:00 Noon, local time, on the date of
Borrowing requested by the Company or Special Purpose Borrower in funds
immediately available to the Administrative Agent. Such Borrowing will then be
made available to the Company, the Affiliate or the Special Purpose Borrower,
whichever is the borrower, by the Administrative Agent crediting the account of
the Company, the Affiliate or the Special Purpose Borrower on


                                                                              12


the books of such office with the aggregate of the amounts made available to the
Administrative Agent by the Banks and in like funds as received by the
Administrative Agent.

         2.7 [RESERVED]

         2.8 [RESERVED]

         2.9 [RESERVED]

         2.10 [RESERVED]

         2.11 [RESERVED]

         2.12 EXTENSION OF TERM OF LOANS; CONVERSION OF LOANS

         (a) The Company (on behalf of itself or any Affiliate which has
borrowed hereunder) or Special Purpose Borrower may, at its option, elect (i) to
extend any outstanding Eurodollar Loan or (ii) to convert any outstanding Base
Rate Loan into a Eurodollar Loan or any outstanding Eurodollar Loan into a Base
Rate Loan, in each case, by giving notice to the Administrative Agent at the
Notice Office.

         (b) An outstanding Loan may be converted pursuant to Section 2.12(a)
only on a day which meets both of the following requirements:

         (i) an outstanding Loan may only be converted on a day which is (A) if
     such outstanding Loan is a Domestic Loan, a Domestic Business Day or (B) if
     such outstanding Loan is a Eurodollar Loan, a Eurodollar Business Day; and

         (ii) an outstanding Loan may only be converted into (A) a Domestic Loan
     on a Domestic Business Day or (B) a Eurodollar Loan on a Eurodollar
     Business Day.

Subject to the requirements of this Section 2.12(b), an outstanding Loan may be
converted on the last day of the then-existing Interest Period for such Loan (if
such Loan has an Interest Period) or at any time (if such Loan does not have an
Interest Period), as provided in Section 2.12(b), or, in the case of a Loan
having an Interest Period, at times other than the last day of an Interest
Period, as provided in Section 2.12(f).

         (c) The notice by the Company or Special Purpose Borrower to the
Administrative Agent of an election pursuant to Section 2.12(a) to extend any
outstanding Loan, to convert any outstanding Loan on the last day of the
then-existing Interest Period (if the outstanding Loan has an Interest Period)
or to convert any outstanding Loan which does not have an Interest Period shall
be given by telephone (and shall be promptly confirmed in a writing
substantially in the form of Exhibit A hereto) as follows:

         (i) if such outstanding Loan is a Eurodollar Loan to be extended as
     such, by giving notice no later than three Eurodollar Business Days prior
     to the last day of the



                                                                              13


         then-existing Interest Period with respect to such Loan, but not later
         than 11:00 a.m. (New York City time) on such day;

                  (ii) if such outstanding Loan is a Eurodollar Loan which is to
         be converted into a Domestic Loan, by giving notice not later than
         11:00 a.m. (New York City time) on the last day of the then-existing
         Interest Period with respect to such outstanding Loan; and

                  (iii) if such outstanding Loan is a Domestic Loan which is to
         be converted into a Eurodollar Loan, by giving notice no later than
         three Eurodollar Business Days, but not later than 11:00 a.m. (New York
         City time) on such date, prior to the day on which the Company,
         Affiliate or Special Purpose Borrower, as applicable, desires the
         conversion of such outstanding Loan to be made effective.

                  (d) Each notice given by the Company or Special Purpose
Borrower pursuant to this Section 2.12 shall specify:

                  (i) whether such outstanding Loan is to be extended or
         converted;

                  (ii) if such outstanding Loan is to be converted, the date
         such conversion should be effective;

                  (iii) if such outstanding Loan is to be extended and is a
         Eurodollar Loan, the Interest Period for the Loan as so extended;

                  (iv) if such outstanding Loan is to be converted, whether such
         Loan is to be converted into a Base Rate Loan or Eurodollar Loan;

                  (v) if such outstanding Loan is to be converted into a
         Eurodollar Loan, the Interest Period therefor; and

                  (vi) whether the Administrative Agent or any Bank has
         requested a Gross-up pursuant to subsection (g) below.

                  (e) With respect to each outstanding Loan which shall be
extended or converted pursuant to this Section 2.12:

                  (i) the Company, the Affiliate or Special Purpose Borrower,
         whichever is the borrower, shall pay to the Administrative Agent for
         the account of each Bank all accrued and unpaid interest with respect
         to such outstanding Loan,

                           (A) if such Loan is a Eurodollar Loan, on the last
                  day of the then-existing Interest Period with respect to such
                  outstanding Loan; or

                           (B) if such Loan is a Base Rate Loan, or if pursuant
                  to Section 2.12(f) the Loan is being converted on a day other
                  than the last day of the then-existing Interest Period, on the
                  day such outstanding Loan is converted;

                                                                              14


                  (ii) no repayment of the principal amount of such outstanding
         Loan shall be required; and

                  (iii) the Loan to be outstanding upon the extension or
         conversion of an outstanding Loan shall not be deemed to be a new Loan
         under Section 5.1 of this Agreement.

                  (f) Subject to the requirements of Sections 2.12(a) and
2.12(b), any outstanding, Eurodollar Loan may be converted pursuant to this
Section 2.12 at times other than the last day of an Interest Period; provided,
however, that

                  (i) the Company's or Special Purpose Borrower's notice with
         respect to any such conversion shall be given no later than in the case
         of a conversion of an outstanding Eurodollar Loan into a Domestic Loan,
         the date of such conversion, but not later than 11:00 a.m. (New York
         City time) on such date; and

                  (ii) the Company, the Affiliate or the Special Purpose
         Borrower, whichever is the borrower, shall reimburse the Bank on demand
         for any loss incurred by it as a result of the timing of any such
         conversion in an amount determined as provided in Section 2.18 with
         respect to prepayments.

                  (g) At the time that the Company (on behalf of itself or an
Affiliate) or Special Purpose Borrower gives a notice to extend or convert any
Loan pursuant to the requirements of this Section 2.12, each Bank shall
telephonically notify the Company or the Special Purpose Borrower, as
applicable, and the Administrative Agent whether such Bank will require a
Gross-up for withholding taxes in connection with such Loan as so extended or
converted (as provided in Section 10.4). A notice to extend or convert any Loan,
once given to the Administrative Agent, shall not be revocable by the Company or
Special Purpose Borrower, except in the event that any Bank notifies the Company
or Special Purpose Borrower, as applicable, at the time it gives notice to
extend or convert a Loan that a Gross-up will be required, in which case, the
Company (on behalf of itself or the Affiliate) or Special Purpose Borrower, as
applicable, may promptly withdraw the notice to extend or convert the Loan.

         2.13 REGISTER

         The Administrative Agent shall, on behalf of the Company, the
Affiliates and the Special Purpose Borrower, maintain at one of its offices a
register for the recordation of the names and addresses of the Banks and the
Commitment of, and the principal amount of the Loans owing to each Bank from
time to time (the "Register"). The entries in the Register shall be conclusive,
in the absence of manifest error, and the Company, the Affiliates, the Special
Purpose Borrower, the Administrative Agent and the Banks shall treat each Person
whose name is recorded in the Register as the owner of the Loans (and any Notes
evidencing the Loans) recorded therein for all purposes of this Agreement. Any
assignment of any Loan pursuant to Section 9.1, whether or not evidenced by a
Note, shall be effective only upon appropriate entries with respect thereto
being made in the Register (and any Note evidencing such Loan shall expressly so
provide). Any assignment or transfer of all or part of a Loan shall be
registered on the Register only upon



                                                                              15


presentation of a duly executed Assignment and Acceptance and, if such Loan is
evidenced by a Note, surrender of such Note for registration of assignment or
transfer.

         2.14 INTEREST RATES

         (a) Each Loan shall bear interest on the outstanding principal amount
thereof, as follows:

         (i) with respect to each Base Rate Loan, at a fluctuating rate per
     annum equal to the sum of (x) the Base Rate in effect from time to time
     while such Base Rate Loan is outstanding and (y) the Base Rate Margin; and

         (ii) with respect to each Eurodollar Loan, during each Interest Period
     applicable thereto at a rate per annum equal to the sum of (x) the LIBO
     Rate applicable to such Interest Period and (y) the Eurodollar Margin.

         (b) Interest on Base Rate Loans shall be computed on the basis of a
year of 365 (or 366) days and paid for the actual number of days for which due.
Interest on Eurodollar Loans shall be computed on the basis of a year of 360
days and paid for the actual number of days for which due. Interest for each
Interest Period with respect to a Eurodollar Loan shall be calculated from and
including the first day thereof to but excluding the last day thereof.

         2.15 INTEREST PAYMENT DATES

         Interest on each Loan shall be payable as follows:

         (a) with respect to each Base Rate Loan, on each March 31, June 30,
September 30 and December 31 that such Loan is outstanding, and upon payment in
full of such Loan; and

         (b) with respect to each Eurodollar Loan, (i) if the current Interest
Period for such Eurodollar Loan is one month, two months or three months, on the
last day of such Interest Period or (ii) if the current Interest Period for such
Eurodollar Loan is six months, on the last day of the third month and on the
last day of the sixth month of such Interest Period, and upon payment in full of
such Loan.

         2.16 OVERDUE PRINCIPAL AND INTEREST

         Any overdue principal of the Loans and, to the extent permitted by law,
overdue interest thereon, shall bear interest payable on demand for each day
from the date payment thereof was due to the date of actual payment, as follows:

         (a) with respect to each Base Rate Loan, at a rate per annum equal to
1% plus the sum of (x) the Base Rate in effect from time to time while such Loan
is overdue and (y) the Base Rate Margin; and

         (b) (i) with respect to overdue principal on each Eurodollar Loan, at a
daily rate, which shall be calculated by the Administrative Agent (whose
determination shall be conclusive


                                                                              16


in the absence of manifest error) and shall be a rate per annum equal to the sum
of (A) 1% plus (B) the Eurodollar Margin plus (C) the LIBO Rate, and (ii) with
respect to overdue interest on each Eurodollar Loan, at the rate per annum equal
to the sum of (X) 1% plus (Y) the Eurodollar Margin plus (Z) the interest rate
per annum at which deposits in the amount of such overdue interest are offered
to the Administrative Agent by other leading banks, as determined by the
Administrative Agent, in the London interbank market for a period of one day, or
if no such rate is available, one month (or, if such amount remains unpaid more
than three Eurodollar Business Days, then for such other period of time not
longer than six months as the Administrative Agent may elect).

         2.17 DATES FOR PAYMENT OR OPTIONAL PREPAYMENT OF PRINCIPAL

         Each of the Company, each Affiliate and the Special Purpose Borrower
unconditionally promises to repay the unpaid principal amount of each Loan made
to it on the Maturity Date. Each of the Company, each Affiliate and the Special
Purpose Borrower may, at its option, prepay the principal amount of any Loan
made to it, in whole or in part, without penalty or premium, as follows:

              (a) with respect to any Base Rate Loan, on any Domestic Business
Day, provided that the Company (on behalf of itself or an Affiliate) or the
Special Purpose Borrower, as applicable, deliver an irrevocable notice of
prepayment to the Administrative Agent no later than 11:00 a.m., New York City
time, on such date, which notice shall specify the date and amount of
prepayment; and

              (b) with respect to any Eurodollar Loan on the last day of any
Interest Period therefor, provided that the Company (on behalf of itself or an
Affiliate) or the Special Purpose Borrower, as applicable, deliver an
irrevocable notice of prepayment to the Administrative Agent no later than 11:00
a.m., New York City time, three Eurodollar Business Days prior to such date,
which notice shall specify the date and amount of prepayment;

in each case together with accrued interest on the amount prepaid to the date of
prepayment. Amounts prepaid on account of the Loans may not be reborrowed.
Partial prepayments of any Loans shall be in an aggregate principal amount of
$1,000,000 or a whole multiple thereof

         2.18 OPTIONAL PREPAYMENT ON OTHER DATES; REIMBURSEMENT FOR CERTAIN
COSTS

         The Company, an Affiliate or the Special Purpose Borrower, may, at its
option, prepay the principal amount of any Eurodollar Loan made to it, in whole
or in part, at times other than those provided for in Section 2.17(b), in each
case together with accrued interest on the amount prepaid to the date of
prepayment; provided, however, that with respect to any such Loan the Company,
the Affiliate or the Special Purpose Borrower, whichever is the borrower, shall
reimburse each Bank on demand for any loss incurred by such Bank as a result of
the timing of such payment, including without limitation, any loss incurred in
liquidating or re-employing deposits from third parties but excluding loss of
the Eurodollar Margin or any other profit for the period after such payment,
provided that the amount of such loss shall in no event exceed the amount of
interest that would have accrued from the date of prepayment to the last day of
the then-current Interest Period in the



                                                                              17


absence of prepayment, and the relevant Bank shall have delivered to the Company
and, if the Company is not the borrower, the Affiliate or the Special Purpose
Borrower, as applicable, a written statement setting forth the basis for
determining such loss, which written statement shall be conclusive in the
absence of manifest error. The Bank shall use its reasonable efforts to mitigate
any loss resulting from any prepayment by the Company, the Affiliate or the
Special Purpose Borrower.

         2.19 METHOD OF PAYMENT

         All payments required to be made pursuant to this Agreement shall be
made in immediately available funds (i) with respect to the Commitment Fee, in
United States dollars to the account in the continental United States designated
by the Administrative Agent pursuant to Section 2.3, (ii) with respect to
payments relating to Loans (including, without limitation, principal, interest,
any Gross-up or any payments pursuant to Section 2.18 or 10.3), in United States
dollars to the Administrative Agent for the account of the Banks at (A) the
Domestic Funding Office, with respect to each Domestic Loan, (B) the Eurodollar
Funding Office, with respect to each Eurodollar Loan or (C) at such other
location as may be agreed upon by the Administrative Agent and the Company, the
Affiliate or the Special Purpose Borrower, as applicable, and (iii) with respect
to any other payment due hereunder, in such currency and in such place or office
as may be required hereunder or as may be agreed upon by the Administrative
Agent and the Company, an Affiliate or the Special Purpose Borrower, as
applicable. The Administrative Agent shall distribute such payments to the Banks
promptly upon receipt in like funds as received. Whenever any payment of
principal of, or interest on, any Domestic Loan or of the Commitment Fee shall
be due on a day which is not a Domestic Business Day, the date for payment
thereof shall be extended to the next succeeding Domestic Business Day and, in
the case of a payment of principal, interest thereon shall be payable for such
extended time. Whenever any payment of principal of, or interest on, any
Eurodollar Loan shall be due on a day which is not a Eurodollar Business Day,
the date for payment thereof shall be extended to the next succeeding Eurodollar
Business Day, unless as a result thereof such date would fall in the next
calendar month, in which case, such date shall be advanced to the next preceding
Eurodollar Business Day, and, in the case of a payment of principal, interest
thereon shall be payable to the date of payment as extended or advanced as the
case may be.

         2.20 PRO RATA TREATMENT AND PAYMENTS

              (a) Each Borrowing by the Company, any Affiliate or the Special
Purpose Borrower from the Banks hereunder, each payment by the Company, an
Affiliate or the Special Purpose Borrower on account of the Commitment Fee and
any reduction of the Commitments of the Banks shall be made pro rata according
to the respective undrawn Commitments of the Banks.

              (b) Each payment (including each prepayment) by the Company on
account of principal of and interest on the Loans shall be made pro rata
according to the respective outstanding amounts of principal and interest then
due and owing to the Banks.

              (c) Unless the Administrative Agent shall have been notified in
writing by any Bank prior to a Borrowing that such Bank will not make the amount
that would constitute its



                                                                              18

share of such Borrowing available to the Administrative Agent, the
Administrative Agent may assume that such Bank is making such amount available
to the Administrative Agent, and the Administrative Agent may, in reliance upon
such assumption, make available to the Company a corresponding amount. If such
amount is not made available to the Administrative Agent by the required time on
the Borrowing date, such Bank shall pay to the Administrative Agent, on demand,
such amount with interest thereon, at a rate equal to the greater of (i) the
Federal Funds Effective Rate and (ii) a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation, for
the period until such Bank makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent submitted to any
Bank with respect to any amounts owing under this paragraph shall be conclusive
in the absence of manifest error. If such Bank's share of such Borrowing is not
made available to the Administrative Agent by such Bank within three Domestic
Business Days after such Borrowing date, the Administrative Agent shall also be
entitled to recover such amount with interest thereon at the rate per annum
applicable to Base Rate Loans, on demand, from the Company, the Affiliate or the
Special Purpose Borrower, as applicable.

              (d) Unless the Administrative Agent shall have been notified in
writing by the Company, the Affiliate or the Special Purpose Borrower, as
applicable, prior to the date of any payment due to be made by it hereunder that
the Company, the Affiliate or the Special Purpose Borrower, as applicable, will
not make such payment to the Administrative Agent, such Administrative Agent may
assume that the Company, the Affiliate or the Special Purpose Borrower, as
applicable, is making such payment, and the Administrative Agent may, but shall
not be required to, in reliance upon such assumption, make available to the
Banks their respective pro rata shares of a corresponding amount. If such
payment is not made to the Administrative Agent by the Company, the Affiliate or
the Special Purpose Borrower within three Domestic Business Days after such due
date, the Administrative Agent shall be entitled to recover, on demand, from
each Bank to which any amount which was made available pursuant to the preceding
sentence, such amount with interest thereon at the rate per annum equal to the
daily average Federal Funds Effective Rate. Nothing herein shall be deemed to
limit the rights of the Administrative Agent or any Bank against the Company,
any Affiliate or the Special Purpose Borrower, as applicable.

         2.21 REPAYMENT OF BILATERAL OBLIGATIONS; TERMINATION OF BILATERAL
COMMITMENTS

         The Commitment of each Bank hereunder and the other agreements
contained herein are conditioned upon receipt by the Administrative Agent of
evidence of repayment by the Company of all amounts of principal and interest
outstanding under those Bilateral Revolving Credit Agreements which have not
been previously terminated. Subject to the foregoing, the Company, the
Affiliates and the Banks agree that any commitment of any Bank to make loans to
the Company and any Affiliate pursuant to the terms of any Bilateral Revolving
Credit Agreement, to the extent not previously terminated, shall terminate as of
the Effective Date, and each Bank party to one or more Bilateral Revolving
Credit Agreements whose commitment has not been previously terminated agrees to
waive any notice required by such Bilateral Revolving Credit Agreement with
regards to the Company's termination of such Bank's commitment. The termination
of each such Bank's commitment under its respective Bilateral Revolving Credit
Agreement shall not affect or terminate any outstanding payment obligations of
the Company or



                                                                              19


any Affiliate owing or arising under such Bilateral Revolving Credit Agreement,
which obligations shall continue until satisfied in their entirety.

SECTION 3. [RESERVED]

SECTION 4. GUARANTEE OF LOANS TO AFFILIATES AND THE SPECIAL PURPOSE BORROWER

              (a) The Company hereby guarantees to the Administrative Agent, for
the ratable benefit of the Banks and their affiliates, the due and punctual
payment of the principal of and interest on any Loans made to any Affiliate or
Special Purpose Borrower under this Agreement and any other Obligations of any
Affiliate or Special Purpose Borrower to the Administrative Agent or any Bank
under this Agreement or its Accession Memorandum (the "Guaranteed Obligations")
when and as the same shall become due and payable, whether at maturity, upon
declaration or otherwise, according to the terms thereof. Upon the occurrence of
an Affiliate Event of Default with respect to an Affiliate or Special Purpose
Borrower hereunder, the Company shall on behalf of the Affiliate or Special
Purpose Borrower, as applicable, upon demand by the Administrative Agent
punctually make any payment due and payable by the Affiliate or Special Purpose
Borrower under this Agreement or its Accession Memorandum, whether at maturity,
upon declaration or otherwise; and any such payment shall be treated for the
purposes of such Accession Memorandum and this Agreement (other than Section
10.4) as if such payment were made by the Affiliate or Special Purpose Borrower,
as applicable.

              (b) The Company hereby agrees that its obligations under this
Section 4 shall be irrevocable and unconditional and that the Company shall not
have the right to assert any defenses based upon (i) the validity, regularity or
enforceability of any Accession Memorandum or this Agreement or any Note, (ii)
the absence of any attempt to collect from the defaulting Affiliate or Special
Purpose Borrower, as applicable, or other action to enforce the same, (iii) any
dispute between the Company and the Affiliate or Special Purpose Borrower or any
Person holding an ownership interest in the Special Purpose Borrower, including
any claim by the Company against the Special Purpose Borrower or Person holding
an ownership interest in the Special Purpose Borrower in connection with the
Special Purpose Borrower's conduct in respect to the New Corporate Offices, (iv)
the waiver or consent by the Administrative Agent or any Bank with respect to
any provisions thereof or hereof (other than with respect to this Section 4), or
(v) any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of the Company or of a guarantor.

              (c) With respect to its obligations under this Section 4, the
Company waives filing of claims with a court, trustee or receiver in the event
of receivership or bankruptcy of the defaulting Affiliate or Special Purpose
Borrower, diligence, presentment, demand of payment, protest or notice with
respect to Guaranteed Obligations and all demands whatsoever (other than that
provided for in subsection (a) above), and covenants that this Guarantee is a
continuing guarantee and will not be discharged except by complete performance
of the Guaranteed



                                                                              20


Obligations of the defaulting Affiliate or the Special Purpose Borrower and the
obligations of the Company under this Guarantee.

              (d) To the extent of any payment by the Company to the
Administrative Agent or any Bank under this Section 4, the Company shall succeed
to all corresponding claims that the Administrative Agent or such Bank may have
and otherwise be subrogated to the rights of the Administrative Agent or such
Bank against the defaulting Affiliate or Special Purpose Borrower or any other
person or security in connection with the Loans to the defaulting Affiliate or
Special Purpose Borrower, and the Administrative Agent and any such Bank shall
use reasonable efforts to cooperate with the Company in seeking recovery under
such claims.

              (e) The Company's obligations under this Section 4 constitute a
guarantee of payment and not of collection merely and shall remain in full force
and effect with respect to each Affiliate and Special Purpose Borrower until the
Guaranteed Obligations of such Affiliates and Special Purpose Borrower shall
have been paid in full in accordance with the terms of the relevant Accession
Memorandum and of this Agreement. If at any time any payment of any of the
Guaranteed Obligations of an Affiliate or the Special Purpose Borrower is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of the Affiliate or Special Purpose Borrower or
otherwise, the Company's obligations hereunder with respect to such payment
shall be reinstated at such time as though such payment had not been made.

              (f) If demand for, or acceleration of the time for, payment by the
Affiliate or Special Purpose Borrower to the Administrative Agent or any Bank of
any Guaranteed Obligations of the Affiliate or Special Purpose Borrower is
stayed upon the insolvency, bankruptcy, reorganization or proposed compromise or
arrangement with creditors of the Affiliate or Special Purpose Borrower, all
such Guaranteed Obligations of which payment or performance is stayed that would
otherwise be subject to demand for payment or acceleration shall nonetheless be
payable by the Company under this Section 4 immediately on demand by the
Administrative Agent or such Bank.

SECTION 5. CONDITIONS TO LOANS

         The obligation of each Bank to make each Loan hereunder is subject to
the performance by the Company, the Affiliate or the Special Purpose Borrower,
whichever is the borrower, of all its obligations under this Agreement and to
the satisfaction of the following further conditions:

      5.1 EACH LOAN TO THE COMPANY, AN AFFILIATE OR THE SPECIAL PURPOSE BORROWER

              (a) In the case of each Loan proposed to be made hereunder to the
Company, an Affiliate or the Special Purpose Borrower:

              (i) the Administrative Agent shall have received the notice from
         the Company (on behalf of itself or an Affiliate) or the Special
         Purpose Borrower required by Section 2.6;


                                                                              21


                  (ii) the principal amount of such Loan, when added to the
         aggregate principal amount of all Loans then outstanding hereunder,
         shall not exceed the aggregate undrawn amount of the Commitments;

                  (iii) after giving effect to the making of such Loan no Event
         of Default nor Event of Default - Bankruptcy and no event which, with
         the giving of notice or lapse of time or both, would become an Event of
         Default or an Event of Default - Bankruptcy shall have occurred and be
         continuing; and

                  (iv) the representations and warranties of the Company
         contained in this Agreement, except those contained in Sections 6.2(b)
         and 6.3, shall be true and correct in all material respects on and as
         of the date of such Loan, except to the extent such representations and
         warranties expressly relate to an earlier date.

Each Borrowing by the Company, an Affiliate or the Special Purpose Borrower
shall be deemed to be a representation and warranty by the Company that the
conditions specified in clauses (ii), (iii) and (iv) above are satisfied on and
as of the date of such Borrowing.

                  (b) In addition to the conditions stated in Section 5.1(a)
above, in the case of each Loan proposed to be made to any Affiliate or the
Special Purpose Borrower:

                  (i) after giving effect to the making of such Loan, no
         Affiliate Event of Default with respect to such Affiliate or Special
         Purpose Borrower and no event which, with the giving of notice or lapse
         of time or both, would become an Affiliate Event of Default with
         respect to such Affiliate or Special Purpose Borrower shall have
         occurred and be continuing;

                  (ii) the representations and warranties of the Affiliate or
         Special Purpose Borrower, as applicable, contained in its Accession
         Memorandum shall be true and correct in all material respects on and as
         of the date of such Loan, except to the extent such representations and
         warranties expressly relate to an earlier date;

                  (iii) in the case of Loans to the Special Purpose Borrower,
         the Company and the Special Purpose Borrower shall have delivered
         certificates of an authorized officer of the Company and Special
         Purpose Borrower representing:

                           (A) in the case of the Company, that the Guarantee
                  contained in Section 4 constitutes the valid and legally
                  binding agreement of the Company enforceable against the
                  Company in accordance with its terms;

                           (B) in the case of the Special Purpose Borrower, that
                  such entity (i) owns the New Corporate Offices and the real
                  estate incidental thereto, (ii) leases or otherwise conveys to
                  the Company or any of the Company's Subsidiaries the right to
                  occupy and use the New Corporate Offices pursuant to an
                  agreement under which no default (or event which with the
                  passage of time could constitute a default) exists and is
                  continuing, (iii) conducts no business or operations and owns
                  no assets other than those operations and assets incidental to
                  the development and


                                                                              22


                  ownership of the New Corporate Offices and (iv) has no
                  Indebtedness other than obligations imposed by operation of
                  law, obligations with respect to its capital stock, Loans
                  outstanding hereunder and Indebtedness to the Company or any
                  Subsidiary thereof;

                           (C) the matters contained in clauses (i) and (ii)
                  above; and

                  (iv) upon request of the Administrative Agent or any Bank, the
         Administrative Agent or such Bank, as the case may be, shall have
         received the latest available annual and interim financial statements
         for the Affiliate or Special Purpose Borrower (certified, if
         available).

Each Borrowing by any Affiliate or the Special Purpose Borrower shall be deemed
to be a representation and warranty by such Affiliate or Special Purpose
Borrower that the conditions specified in clauses (i) and (ii) above are
satisfied on and as of the date of such Borrowing.

         5.2 FIRST LOAN TO THE COMPANY, AN AFFILIATE OR THE SPECIAL PURPOSE
BORROWER

                  (a) In the case of the first Loan proposed to be made
hereunder to the Company:

                  (i) the Administrative Agent shall have received an opinion of
         the Vice President - General Counsel or an Assistant General Counsel of
         the Company or, at the Company's option, other counsel (in which case,
         such counsel shall be satisfactory to the Administrative Agent),
         addressed to the Administrative Agent and Banks and in form
         satisfactory to the Administrative Agent in its reasonable judgment, to
         the effect that:

                           (A) the Company has been duly incorporated and is
                  validly existing as a corporation in good standing under the
                  laws of the State of Delaware, with corporate power under the
                  laws of such State to enter into this Agreement, to borrow
                  money and extend the Guarantee as contemplated by this
                  Agreement, and to carry out the provisions of this Agreement;

                           (B) this Agreement has been duly authorized, executed
                  and delivered by the Company and, assuming due authorization,
                  execution and delivery hereof by the Banks, is a valid and
                  binding agreement of the Company enforceable in accordance
                  with its terms, except as such enforceability may be limited
                  by bankruptcy, insolvency, reorganization or similar laws
                  relating to or affecting creditors' rights generally and by
                  general equitable principles regardless of whether such
                  enforceability is considered in a proceeding in equity or at
                  law;

                           (C) the execution, delivery and performance by the
                  Company of this Agreement will not conflict with or result in
                  a breach of any of the terms or provisions of, or constitute a
                  default under (in each case material to the Company and its
                  Subsidiaries considered as a whole), or result in the creation
                  or imposition of any lien, charge or encumbrance (in each case
                  material to the Company and its respective Subsidiaries
                  considered as a whole) upon any of the property or assets of
                  the Company pursuant to the terms of, any indenture, mortgage,
                  deed of trust,


                                                                              23


                  loan agreement, guarantee, lease financing agreement or other
                  similar agreement or instrument known to such counsel under
                  which the Company is a debtor or a guarantor, nor will such
                  action result in any violation of the provisions of the
                  Certificate of Incorporation or the By-Laws of the Company;
                  and

                           (D) there is no consent, approval, authorization,
                  order, registration or qualification of or with any
                  Governmental Authority having jurisdiction over the Company
                  which is required for, and the absence of which would
                  materially affect, the execution, delivery and performance of
                  this Agreement; and

                  (ii) the Administrative Agent shall have received such
         additional documents as it may reasonably request relating to the
         existence and good standing of the Company under the laws of the States
         of Delaware and Michigan and to the authorization, execution and
         delivery of this Agreement by the Company in form and substance
         reasonably satisfactory to the Administrative Agent.

         The documents referred to in this Section 5.2(a) shall be delivered to
the Administrative Agent no later than the date of the first Loan hereunder,
except that if such Loan is a Eurodollar Loan, the documents shall be delivered
to the Bank at least two Eurodollar Business Days before such Loan.

                  (b) In addition to the conditions stated in Section 5.2(a)
above, in the case of the first Loan proposed to be made to any Affiliate or the
Special Purpose Borrower, the Administrative Agent shall have received:

                  (i) a duly executed Accession Memorandum of such Affiliate or
         the Special Purpose Borrower;

                  (ii) in the case of a Loan to the Special Purpose Borrower, an
         opinion of counsel with respect to the Special Purpose Borrower in form
         and substance substantially similar to the opinion delivered with
         respect to the Company pursuant to Section 5.2(a)(i);

                  (iii) in the case of a Loan to the Special Purpose Borrower, a
         copy of the Operative Agreement in form and substance reasonably
         acceptable to the Administrative Agent;

                  (iv) in the case of a Loan to the Special Purpose Borrower,
         information regarding the ownership structure of the Special Purpose
         Borrower; and

                  (v) such additional documents as it may reasonably request
         relating to the existence and good standing of the Affiliate or Special
         Purpose Borrower under the laws of the jurisdiction of its
         incorporation or organization and to the authorization, execution and
         delivery of the Accession Memorandum, all in form and substance
         reasonably satisfactory to the Administrative Agent.

                  (c) The documents referred to in this Section 5.2(b) shall be
delivered to the Administrative Agent no later than the date of the first Loan
to the Affiliate or Special Purpose

                                                                              24

Borrower, as applicable, except (i) that if such Loan is a Eurodollar Loan, the
documents shall be delivered to the Bank at least three Eurodollar Business Days
before the date of Borrowing of such Loan and (ii) the Operative Agreement shall
be provided to the Administrative Agent at least fifteen Domestic Business Days
prior to the date of the first Loan to the Special Purpose Borrower.

SECTION 6.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants to the Administrative Agent and
each Bank that:

         6.1 CORPORATE AUTHORITY OF THE COMPANY

              (a) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware, with
corporate power under the laws of such State to execute and deliver this
Agreement and to perform its obligations hereunder and thereunder, and is duly
qualified and in good standing to do business as a foreign corporation in the
State of Michigan;

              (b) This Agreement has been duly authorized, executed and
delivered on behalf of the Company and, assuming due authorization, execution
and delivery by the Banks, is a valid and legally binding agreement of the
Company;

              (c) The execution, delivery and performance by the Company of this
Agreement will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under (in each case material to the
Company and its Subsidiaries considered as a whole), or result in the creation
or imposition of any lien, charge or encumbrance (in each case material to the
Company and its Subsidiaries considered as a whole) upon any of the property or
assets of the Company pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement, guarantee, lease financing agreement or other similar
agreement or instrument under which the Company is a debtor or a guarantor, nor
will such action result in any violation of the provisions of the Certificate of
Incorporation or By-Laws of the Company; and

              (d) There is no consent, approval, authorization, order,
registration or qualification of or with any Governmental Authority having
jurisdiction over the Company which is required for, and the absence of which
would materially affect, the execution, delivery and performance of this
Agreement.

         6.2 FINANCIAL STATEMENTS

              (a) The Company has furnished the Administrative Agent and each
Bank with, and the Administrative Agent and each Bank hereby acknowledges
receipt of, a copy of the audited consolidated balance sheet and the related
consolidated statements of income, equity and cash flows of the Company and its
Subsidiaries at December 31, 2001 and 2000, and such financial statements
present fairly in all material respects the financial position of the Company
and Subsidiaries at those dates, in conformity with GAAP; and

                                                                              25


              (b) As of the date of this Agreement there has not occurred any
material adverse change in the financial position of the Company and its
Subsidiaries considered as a whole, since December 31, 2001.

         6.3 LITIGATION

         As of the date of this Agreement there are no legal or governmental
proceedings pending of which the Company or any of its Subsidiaries is the
subject, and no such proceedings are known by the Company to be threatened or
contemplated by Governmental Authorities or threatened by others, other than
such proceedings which the Company believes will not have a material adverse
effect upon the financial position of the Company and its Subsidiaries
considered as a whole.

         6.4 USE OF PROCEEDS

         The proceeds of the Loans to the Company, the Affiliates and the
Special Purpose Borrower will be used by such borrower primarily to finance the
construction of the Company's new corporate headquarters in southeastern
Michigan (the "New Corporate Offices") or, in the case of Loans to the Company,
for the purpose of making investments in or a loan to an Affiliate or the
Special Purpose Borrower for the purpose of financing construction of the New
Corporate Offices. None of the proceeds of the Loans will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any margin stock within the meaning of Regulation U of
the Federal Reserve Board.

         6.5 COMPLIANCE WITH ERISA

         The Company has satisfied the minimum funding standards under ERISA
with respect to its Plans and is in compliance in all material respects with the
currently applicable provisions of ERISA.

SECTION 7. COVENANTS

         During the term of this Agreement, unless compliance shall have been
waived in writing in accordance with the terms of this Agreement, the Company
agrees that:

         7.1 REPORTS; CERTIFICATE AS TO DEFAULT

         It will deliver to the Administrative Agent at the Notice Office:

              (a) within 120 days after the end of each of the Company's fiscal
years copies of the Company's consolidated financial statements including
consolidated results of operations and cash flows of the Company and its
consolidated Subsidiaries all as audited by the Company's independent certified
public accountants (the "Annual Report"), provided that if and when the Company
files an Annual Report on Form 10-K with the Securities and Exchange Commission
(the "10-K Report"), copies of the 10-K Report will be delivered to the
Administrative Agent in lieu of the Annual Report;



                                                                              26


               (b) within 70 days after the end of each of the first three
quarters of each of the Company's fiscal years, copies of the Company's
consolidated financial statements including consolidated results of operations
and cash flows of the Company and its consolidated Subsidiaries (the "Quarterly
Report"), provided that if and when the Company files a Quarterly Report on Form
10-Q with the Securities and Exchange Commission (the "10-Q Report"), copies of
the 10-Q Report will be delivered to the Administrative Agent in lieu of the
Quarterly Report; and

               (c) simultaneously with the delivery of each Annual Report or
10-K Report (as applicable) referred to in (a) above, a certificate of an
authorized officer the Company (i) stating whether, to the knowledge of such
officer, there exists on the date of the certificate any condition or event
which then constitutes, or which after notice or lapse of time or both would
constitute an Event of Default, Affiliate Event of Default or an Event of
Default - Bankruptcy, and if any such condition or event exists, specifying the
nature and period of existence thereof and the action the Company is taking and
proposes to take with respect thereto, and (ii) demonstrating compliance with
the Consolidated Leverage Ratio set forth in Section 7.9 hereof.

               (d) simultaneously with the delivery of each Quarterly Report or
10-Q Report (as applicable) referred to in (b) above, a certificate of an
authorized officer of the Company demonstrating compliance with the Consolidated
Leverage Ratio set forth in Section 7.9 hereof.

         7.2 FURTHER INFORMATION

               (a) From time to time while this Agreement is in effect, upon the
reasonable request of the Administrative Agent or any Bank, officials of the
Company will confer with officials of the Administrative Agent or such Bank and
advise them as to matters bearing on the financial condition of the Company or
any Affiliate or the Special Purpose Borrower to which Loans are then
outstanding.

               (b) The Company, the Affiliate or the Special Purpose Borrower,
whichever is the borrower, shall notify the Administrative Agent and each of the
Banks at least two Eurodollar Business Days prior to any Loan to any borrower in
the event that any Gross-up with respect to such Loan could be required by any
Bank pursuant to the terms of this Agreement.

         7.3 LIENS

         The Company shall not, nor shall it permit any Subsidiary to, directly
or indirectly, create, incur, assume or suffer to exist any Indebtedness secured
by a Lien upon any of its property or revenues, whether now owned or hereafter
acquired, except Liens at any one time outstanding with respect to which the
aggregate outstanding principal amount of the obligations secured thereby shall
not exceed 15% of Consolidated Total Assets as reflected in the most recent
Annual Report or 10-K Report delivered pursuant to Section 7.1(a); provided,
however, that this Section 7.3 shall not apply to Indebtedness secured by:

               (a) Liens on property of, or on any shares of stock of or
Indebtedness of, any corporation existing at the time such corporation becomes a
Subsidiary;


                                                                              27


               (b) Liens in favor of the Company or any Subsidiary;

               (c) Liens in favor of any governmental body to secure progress,
advance or other payments pursuant to any contract or provision of any statute;

               (d) Liens on property, shares of stock or Indebtedness existing
at the time of acquisition thereof (including acquisition through merger or
consolidation) or to secure the payment of all or any part of the purchase price
thereof or to secure any Indebtedness incurred prior to, at the time of, or
within 60 days after, the acquisition of such property or shares or Indebtedness
for the purpose of financing all or any part of the purchase price thereof; and

               (e) any extension, renewal or replacement (or successive
extensions, renewals or replacements), as a whole or in part, of any Lien
referred to in the foregoing clauses (a) to (d), inclusive; provided, however,
that such extension, renewal or replacement Lien shall be limited to all or a
part of the same property, shares of stock or Indebtedness that secured the Lien
extended, renewed or replaced (plus improvements on such property).

         7.4 SALE-LEASEBACKS

         The Company shall not, nor shall it permit any Subsidiary to, directly
or indirectly, enter into any arrangement with any bank, insurance company or
other lender or investor (not including the Company or any Subsidiary) providing
for the leasing by the Company or any Subsidiary of any property owned by the
Company or any Subsidiary (except for leases between the Company and a
Subsidiary or between Subsidiaries), which property has been or is to be sold or
transferred by the Company or such Subsidiary to such bank, insurance company or
other lender or investor (not including the Company or any Subsidiary)
("Sale-Leasebacks"), except for Sale-Leasebacks consummated since the Effective
Date and which are outstanding on the relevant date of determination (other than
Sale-Leasebacks to the extent the proceeds thereof are used to refinance any
Sale-Leaseback which was in existence on the date hereof) in an aggregate
amount, which when combined with (but without duplication) the aggregate
outstanding principal amount of obligations secured by a Lien upon any of the
property or revenues of the Company or any of its Subsidiaries at the time of
entering into any such Sale-Leaseback shall not exceed 15% of Consolidated Total
Assets as reflected in the most recent Annual Report or 10-K Report delivered
pursuant to Section 7.1(a).

         7.5 MERGERS AND CONSOLIDATIONS

         The Company may consolidate with, or sell or convey all or
substantially all its assets to, or merge with or into any other corporation,
provided that in any such case (i) the successor corporation shall be a
corporation organized and existing under the laws of the United States of
America or a State thereof, (ii) such corporation shall expressly assume the due
and punctual payment of the principal of and interest on all the Loans made to
the Company hereunder, and the due and punctual performance and observance of
all the covenants and conditions of this Agreement to be performed by the
Company, including, without limitation, the Guarantee, by an instrument,
satisfactory to the Administrative Agent in its reasonable judgment, executed
and delivered to the Administrative Agent by such corporation, and (iii) such
successor corporation

                                                                              28


shall not, immediately after such merger or consolidation or such sale or
conveyance, be in default in the performance of any such covenant or condition
and shall not immediately thereafter have outstanding any secured Indebtedness
not expressly permitted by the provisions of Section 7.3.

         7.6 ADDITIONAL COVENANTS In the event that, at any time while this
Agreement is in effect, the Company shall issue any indebtedness for borrowed
money which is not by its terms subordinate and junior to other indebtedness of
the Company ("Senior Debt") and such Senior Debt shall include, or be issued
pursuant to a trust indenture or other agreement which includes, financial
covenants not substantially provided for in this Agreement, the Company shall so
advise the Administrative Agent. Thereupon, if the Administrative Agent shall so
request by written notice to the Company, the Company, the Administrative Agent
and the Banks shall enter into an amendment to this Agreement providing for
substantially the same financial covenants as those contained in such Senior
Debt, trust indenture or other agreement, mutatis mutandis. Such amendment
containing such financial covenants shall remain in effect so long as such
covenants remain in effect with respect to such Senior Debt. As used in this
Section 7.6 the term "financial covenant" shall mean a covenant on the part of
the Company to the general effect that the Company shall maintain, on a
consolidated basis and as of a specified date or dates, (a) a specified minimum
net worth, (b) a ratio of debt to net worth not in excess of a specified
maximum, (c) current assets in an amount not less than a specified amount in
excess of current liabilities or (d) any similar ratio or amount or similar
measure for the same general purpose of stating a minimum financial condition.

         7.7 ERISA

         The Company will comply with the minimum funding standards under ERISA
with respect to its Plans and will use its best efforts to comply in all
material respects with all other applicable provisions of ERISA and the
regulations and interpretations promulgated thereunder. The Company will deliver
to the Administrative Agent within 30 days after any executive officer of the
Company becomes aware of the occurrence of any Reportable Event (other than a
reduction in active Plan participants) with respect to any Plan, a certificate
signed by the Chief Financial Officer, the Vice President - Finance, the
Controller or the Treasurer of the Company setting forth the details as to such
Reportable Event and the action which the Company is taking and proposes to take
with respect thereto, together with a copy of the notice of such Reportable
Event given to the Pension Benefit Guaranty Corporation.

         7.8 NOTIFICATION

         The Company will notify the Administrative Agent within 30 days after
any executive officer of the Company becomes aware of any failure on the part of
the Company duly to observe or perform any covenant contained in Section 7.3 or
Section 7.4.

         7.9 CONSOLIDATED LEVERAGE RATIO

         The Company shall not permit the Consolidated Leverage Ratio to exceed
3.5 to 1.0 at the end of any fiscal quarter.


                                                                              29


         7.10 AMENDMENTS TO THE OPERATIVE AGREEMENT

         The Company shall not amend the material terms of the Operative
Agreement without the prior written consent of the Administrative Agent (such
consent not to be unreasonably withheld).

SECTION 8. DEFAULT

         8.1 DEFAULTS RELATING TO THE COMPANY

         In case one or more of the following "Events of Default" shall have
occurred and be continuing, that is to say:

               (a) default in any payment of principal of any Loan as and when
the same shall become due and payable in accordance with the terms hereof, and
the continuance of such default for five Domestic Business Days in the case of a
Domestic Loan or five Eurodollar Business Days in the case of a Eurodollar Loan;
or

               (b) default in the payment of any installment of interest upon
any Loan as and when the same shall become due and payable, and continuance of
such default for a period of five Domestic Business Days in the case of a
Domestic Loan or five Eurodollar Business Days in the case of a Eurodollar Loan;
or

               (c) failure on the part of the Company duly to observe or perform
any covenant contained in Section 7.3 or Section 7.4 for 90 days after the date
on which written notice of such failure, requiring the Company to remedy the
same, shall have been given to the Company by the Administrative Agent or the
Required Banks; or

               (d) failure on the part of the Company duly to observe or perform
any other of the covenants or agreements of this Agreement for a period of 30
days after the date on which written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company by the
Administrative Agent or the Required Banks; provided, however, that in the case
of a default under Section 4, such 30-day grace period shall run from the date
that demand for payment by the Administrative Agent was made upon the Company
pursuant to Section 4; or

               (e) any representation or warranty by the Company in this
Agreement or in any certificate delivered pursuant hereto shall have proven to
have been materially false or misleading; or

               (f) a Reportable Event (other than a reduction in active Plan
participants) shall have occurred with respect to any Plan and, within 30 days
after the reporting of such Reportable Event to the Administrative Agent, the
Administrative Agent shall have notified the Company in writing that the
Administrative Agent has made a reasonable determination that such Reportable
Event is likely to have a material adverse effect upon the financial position of
the Company and its subsidiaries considered as a whole; or


                                                                              30


               (g) default in the payment of the principal of (or premium, if
any, on) or interest on any other borrowing of the Company of $5,000,000 or more
and such default continues for a period of 30 days, or any default with respect
to any other borrowing of the Company of $5,000,000 or more and such default
causes acceleration thereof; or

               (h) more than 50% in voting power of the voting securities of the
Company shall be held by (i) any person or persons who "act as a partnership,
limited partnership, syndicate or other group for the purpose of acquiring,
holding or disposing of securities" of the Company within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, or (ii) persons whose election
to the Board of Directors shall not have been recommended by the committee of
the Board of Directors charged with such recommendations shall constitute a
majority of the members of the Board of Directors of the Company;

then, and in each and every such case, with the consent of the Required Banks,
the Administrative Agent may, or upon the request of the Required Banks, the
Administrative Agent shall, by notice in writing to the Company and the Special
Purpose Borrower, terminate the Commitments and/or declare the principal of all
Loans to the Company, any Affiliate and the Special Purpose Borrower and all
other amounts owing under this Agreement to be due and payable immediately, and
upon any such declaration the same shall become and shall be immediately due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived.

         8.2 DEFAULTS RELATING TO THE AFFILIATES AND THE SPECIAL PURPOSE
BORROWER

         In case one or more of the following "Affiliate Events of Default"
shall have occurred and be continuing with respect to an Affiliate or the
Special Purpose Borrower, that is to say:

               (a) default in any payment of principal of any Loan to such
Affiliate or Special Purpose Borrower as and when the same shall become due and
payable, whether at maturity or upon required repayment or upon declaration or
otherwise, and the continuance of such default for five Domestic Business Days
in the case of a Domestic Loan or five Eurodollar Business Days in the case of a
Eurodollar Loan; or

               (b) default in the payment of any installment of interest upon
any Loan to such Affiliate or Special Purpose Borrower as and when the same
shall become due and payable, and continuance of such default for a period of
five Domestic Business Days in the case of a Domestic Loans or five Eurodollar
Business Days in the case of a Eurodollar Loan; or

               (c) any representation or warranty by such Affiliate or Special
Purpose Borrower in this Agreement, in its Accession Memorandum or in any
certificate delivered in connection therewith shall have proven to have been
materially false or misleading; or

               (d) such Affiliate or Special Purpose Borrower shall have entered
against it by a court having jurisdiction in the premises a decree or order for
relief in respect of the Affiliate or Special Purpose Borrower in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Affiliate or for any
substantial part of


                                                                              31


its property, or ordering the winding-up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or

         (e) such Affiliate or Special Purpose Borrower shall commence a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
(or similar official) of the Affiliate or Special Purpose Borrower or for any
substantial part of its property, or make any general assignment for the benefit
of creditors, or fail generally to pay its debts as they become due, or take any
corporate action in furtherance of any of the foregoing; or

         (f) an Event of Default under Section 8.1 shall have occurred and be
continuing; or

         (g) the Guarantee set forth in Section 4 shall no longer be in full
force and effect; or

         (h) with respect to the Special Purpose Borrower, the Special Purpose
Borrower shall (i) conduct, transact or otherwise engage in, or commit to
conduct, transact or otherwise engage in, any business or operations other than
those incidental to its development and ownership of the New Corporate Offices,
(ii) incur, create, assume or suffer to exist any Indebtedness or other
liabilities or financial obligations, except nonconsensual obligations imposed
by operation of law, Loans outstanding hereunder, obligations with respect to
its capital stock and Indebtedness to the Company or any Subsidiary thereof,
(iii) own, lease, manage or otherwise operate any properties or assets other
than the ownership, leasing, management and operation of the New Corporate
Offices and the land related thereto, or (iv) fail to own the New Corporate
Offices and the real estate incidental thereto; or

         (i) with respect to the Special Purpose Borrower, a default shall exist
in respect to the Operative Agreement, such default continues for a period of 30
days or more and either the Special Purpose Borrower, the Company or any
Affiliate party thereto shall take any action to exercise any right or remedy
available to it due to such default;

then, (i) if such event is an Event of Default specified in clause (d) or (e),
automatically all of the Loans to such Affiliate or Special Purpose Borrower and
all other amounts owing by such Affiliate or Special Purpose Borrower under this
Agreement shall immediately become due and payable, or (ii) if such event is any
other Event of Default, with the consent of the Required Banks, the
Administrative Agent may, or upon the request of the Required Banks, the
Administrative Agent shall, by notice in writing to the Company and the
defaulting Affiliate or Special Purpose Borrower, declare the principal of all
outstanding Loans to such Affiliate or Special Purpose Borrower and all other
amounts owing by such Affiliate or Special Purpose Borrower under this Agreement
(but not any Loans to the Company or any other Affiliate or, it is not the
defaulting borrower, the Special Purpose Borrower) to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived.


                                                                              32


Notwithstanding anything to the contrary in this Agreement or in any Accession
Memorandum, the parties hereto acknowledge and agree that a special purpose
entity (other than the Special Purpose Borrower) may own either the New
Corporate Offices or the real estate upon which the New Corporate Offices are
constructed and that such ownership shall be permitted under this Agreement and
any Accession Memoranda subject to the following conditions: (a) such special
purpose entity shall be subject to the same restrictions and requirements
contained herein which are applicable to the Special Purpose Borrower (other
than provisions relating solely to its role as a borrower under this Agreement)
and shall confirm the same by executing and delivering to the Administrative
Agent an agreement in form and substance reasonably satisfactory to the
Administrative Agent (it being understood that, (i) such agreement shall be
deemed to be an Accession Memorandum for purposes of Section 8.2, (ii) such
special purpose entity shall be deemed to be a Special Purpose Borrower for
purposes of Sections 4, 5.1, 5.2, 8.2 (other than 8.2(a), 8.2(b) and 8.2(i)) and
11 (other than 11.1, 11.5, 11.7, 11.8. 11.9 and 11.10) and (iii) notwithstanding
clause (ii) or anything else contained herein, such special purpose entity shall
be permitted to incur up to $40,000,000 in Indebtedness to purchase the land on
which the New Corporate Offices are built or to refinance existing Indebtedness
with respect to such land), and (b) the arrangements and agreements between such
special purpose entity and the Special Purpose Borrower, the Company and the
Company's Affiliates shall be reasonably satisfactory in all material respects
to the Administrative Agent.


         8.3 DEFAULTS RELATING TO BANKRUPTCY OF THE COMPANY

         In case one or more of the following "Events of Default - Bankruptcy"
shall have occurred and be continuing with respect to the Company, that is to
say:

               (a) the Company shall have entered against it by a court having
jurisdiction in the premises a decree or order for relief in respect of the
Company in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Company or for any substantial part of its property, or ordering the
winding-up or liquidation of its affairs and such decree or order shall remain
unstayed and in effect for a period of 90 consecutive days; or

               (b) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary case
under any such law, or consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or similar
official) of the Company or for any substantial part of its property, or make
any general assignment for the benefit of creditors, or fail generally to pay
its debts as they become due, or take any corporate action in furtherance of any
of the foregoing;

then automatically the Commitments, if any, shall immediately terminate and all
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable.


                                                                              33


         8.4 [RESERVED]

SECTION 9. ASSIGNMENT; PARTICIPATIONS

         9.1 ASSIGNMENT BY BANKS

               (a) No Bank shall, without the consent of the Company and the
Administrative Agent (in each case which consent shall not be unreasonably
withheld), transfer to any other office, branch or affiliate of the Bank or to
any other financial institution, person or entity, all or any portion of the
Loans, the Commitment or any of the Bank's other rights and obligations under
this Agreement; provided, however, that:

               (i) without the consent of the Company, a Bank may transfer or
     assign (A) any of the Loans or any interest therein as a pledge to any
     Federal Reserve Bank or other similar central bank in another jurisdiction,
     provided that such pledge shall not release the Bank from its obligations
     hereunder and (B) all or any portion of the Loans, the Commitment or any of
     the Bank's other rights and obligations under this Agreement to any one or
     more assignees that is a Bank immediately prior to giving effect to such
     assignment; and

               (ii) without the consent of the Company, a Bank may transfer or
     assign all or any portion of the Loans, the Commitment or any of the Bank's
     other rights and obligations under this Agreement to any Person (A) five or
     more days after the occurrence and continuance of any Event of Default
     under Section 8.1(a) or Section 8.1(d) (in respect of Section 4) or (B)
     upon the occurrence and continuance of any Event of Default-Bankruptcy
     under Section 8.3.

               (b) Assignments shall be subject to the following additional
conditions:

               (i) except in the case of an assignment to a Bank, an affiliate
     of a Bank or an assignment of the entire remaining amount of the assigning
     Bank's Commitments or Loans, the amount of the Commitments or Loans of the
     assigning Bank subject to each such assignment (determined as of the date
     the Assignment and Assumption with respect to such assignment is delivered
     to the Administrative Agent) shall not be less than $5,000,000 and, after
     giving effect thereto, the assigning Bank shall have Commitments and Loans
     in an aggregate amount of at least $5,000,000, in each case unless the
     Company and the Administrative Agent otherwise consent, provided that (A)
     no such consent of the Company shall be required if an Event of Default
     under Section 8.1(a) or 8.1(d) (in respect of Section 4) has occurred and
     is continuing for a period of at least five days or an Event of
     Default-Bankruptcy under Section 8.3 has occurred and is continuing and
     (B) such amounts shall be aggregated in respect of each Bank and its
     affiliates, if any;

               (ii) the parties to each assignment shall execute and deliver to
     the Administrative Agent an Assignment and Assumption, together with a
     processing and recordation fee of $3,500;

                                                                              34


               (iii) the assignee, if it shall not be a Bank, shall deliver to
     the Administrative Agent an administrative questionnaire; and

               (c) In the case of any assignment to financial institutions made
without the consent of the Company, any such transferee or assignee of a Bank
shall not be entitled to receive any greater interest or other payment by reason
of Section 10.3 or 10.4 than such Bank would have been entitled to receive with
respect to the rights so transferred or assigned unless such transfer or
assignment is made by reason of the provisions of Section 10.2, 10.3 or 10.4
requiring the Bank to designate a different lending office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.

               (d) Notwithstanding the foregoing, any Conduit Bank may assign
any or all of the Loans it may have funded hereunder to its designating Bank
without the consent of the Company or the Administrative Agent and without
regard to the limitations set forth in this Section 9.1. Each of the Company,
each Bank and the Administrative Agent hereby confirms that it will not
institute against a Conduit Bank or join any other Person in instituting against
a Conduit Bank any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding under any state bankruptcy or similar law, for one year
and one day after the payment in full of the latest maturing commercial paper
note issued by such Conduit Bank; provided, however, that each Bank designating
any Conduit Bank hereby agrees to indemnify, save and hold harmless each other
party hereto for any loss, cost, damage or expense arising out of its inability
to institute such a proceeding against such Conduit Bank during such period of
forbearance.

         9.2 PARTICIPATION IN LOANS

         Each Bank shall have the right to sell to any bank or other financial
institution (a "Participant") a participating interest in such Bank's Commitment
or in the Loans held by such Bank; provided, however, that, following any such
sale, (a) such Bank's obligations under this Agreement shall remain unmodified
and fully effective and enforceable against such Bank, (b) such Bank shall
remain solely responsible to the Company, the Affiliates and the Special Purpose
Borrower for the performance of such obligations, including, without limitation,
its Commitment and the obligation of such Bank to fund Loans hereunder, (c) the
Administrative Agent and the Company, the Affiliates and the Special Purpose
Borrower shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement, (d) such Bank
shall retain the sole right and responsibility to enforce the obligations of the
Company, the Affiliates and the Special Purpose Borrower hereunder, including,
without limitation, the sole right to approve of or consent to any action
hereunder or any amendment, modification or waiver hereof, except that such Bank
may grant to a Participant a joint right to approve of or consent to any action,
amendment, modification or waiver that would (i) reduce the amount or extend the
time for payment (other than pursuant to Section 2.12) of any principal of, or
interest on, the Loans, (ii) increase the amount of such Bank's Commitment or
(iii) reduce the amount of the Commitment Fee, in each case, from that in effect
at the time of the sale of the participating interest, provided that if such
Bank so grants to a Participant a right to approve of or consent to a reduction
in the Commitment Fee, the term of the participating interest sold to such
Participant shall not extend beyond, and unless earlier terminated such
participating interest shall automatically terminate on, the day immediately
prior to the day and month of the Effective Date next following the sale of


                                                                              35


such participating interest, and (e) any such participating interest shall be in
a minimum amount of $5,000,000 on the date the participating interest is sold.
On the month and day of the Effective Date of each year (or, if any such month
and day of the Effective Date is not a Domestic Business Day, on the next
succeeding Domestic Business Day), each relevant Bank shall furnish to the
Administrative Agent and the Company a written notice disclosing the name of
each Participant which held a participating interest in such Bank's Commitment
or any Loan held by such Bank at any time during the 12-month period ended on
the day immediately prior to the day and month of the Effective Date next
preceding such date. A Participant shall not be entitled to receive any greater
payment under Section 10.3 or 10.4 than the applicable Bank would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Company's prior written consent. Any Participant that is a foreign person (i.e.,
a person organized or incorporated under the laws of a country other than the
United States of America) shall not be entitled to the benefits of Section 10.4
unless such Participant complies with Section 10.4(c).

         9.3 ASSIGNMENT BY THE COMPANY, AFFILIATES OR SPECIAL PURPOSE BORROWER

         None of the Company, the Affiliates or the Special Purpose Borrower may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Bank, provided that (a) the Company and any
Affiliate may transfer existing Loans and obligations with respect thereto to
the Special Purpose Borrower by written notice to the Administrative Agent at
the time the Special Purpose Borrower delivers its Accession Memorandum to the
Administrative Agent and complies with the other conditions set forth in Section
5.2(b) and (b) the Special Purpose Borrower may assign any Loans made or
assigned to it to the Company or any Affiliate at any time upon written notice
to the Administrative Agent. In the event of any assignment of Loans pursuant to
this Section, the Administrative Agent make appropriate entries in the Register
to reflect such transfer and the assignee shall be treated as the borrower of
the assigned Loans for all purposes of this Agreement. In no event shall any
assignment of Loans from the Company or an Affiliate to the Special Purpose
Borrower, or from the Special Purpose Borrower to an Affiliate, pursuant to the
terms of this Section 9.1(c) release the Company or the Affiliates from its
other obligations under this Agreement including, in the case of the Company,
its guarantee obligations under Section 4 with respect to the assigned Loans.

SECTION 10. CHANGE IN CIRCUMSTANCES

         10.1 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR

         The Banks shall have no obligation to make a new Eurodollar Loan, to
extend an outstanding Eurodollar Loan or to convert an outstanding Loan into a
Eurodollar Loan if the Administrative Agent determines that:

               (a) by reason of circumstances generally affecting all interbank
markets for deposits in United States dollars (in the applicable amounts), LIBO
Rates for such deposits are not being offered to the Banks for a term equal to
any Interest Period for which such new Loan, extended Loan or converted Loan
shall be requested by the Company, an Affiliate or the Special Purpose Borrower;
or

                                                                              36


               (b) based on notice received from the Required Banks, the LIBO
Rate will not adequately and fairly reflect the cost to the Banks of maintaining
or funding such new Loan, extended Loan or converted Loan as shall be requested
by the Company, an Affiliate or the Special Purpose Borrower.

Upon any such determination, the Administrative Agent shall give telecopy or
telephonic notice thereof to the Company, the Affiliate or the Special Purpose
Borrower and the Banks as soon as practicable. If such notice is given pursuant
to this Section 10.1, then (i) any Eurodollar Loans requested to be made on the
first day of such Interest Period shall be made as Base Rate Loans, (ii) any
Base Rate Loans that were to have been converted on the first day of such
Interest Period to Eurodollar Loans shall be continued as Base Rate Loans and
(iii) any outstanding Eurodollar Loans shall be converted, on the last day of
the then-current Interest Period, to Base Rate Loans. Until such relevant notice
has been withdrawn by the Administrative Agent, no further Eurodollar Loans
shall be made or continued as such, nor shall the Company, the Affiliates or the
Special Purpose Borrower have the right to convert Base Rate Loans to Eurodollar
Loans.

         10.2 ILLEGALITY

               (a) If, after the date of this Agreement, the introduction of, or
any change in, any applicable law or regulation or in the interpretation or
administration thereof by any governmental, monetary, or regulatory authority
charged with the interpretation or administration thereof or compliance by any
Bank with any request or directive of any such authority shall make it unlawful
for such Bank to make, maintain or fund any Loan, such Bank shall give notice
thereof to the Company and, if the Loan is to an Affiliate of the Special
Purpose Borrower, to such Affiliate or Special Purpose Borrower (in each case
with a copy to the Administrative Agent). Before giving any notice pursuant to
this Section 10.2, the relevant Bank shall designate a different lending office
if such designation would avoid the need for giving such notice and it would not
otherwise be disadvantageous to such Bank in its reasonable judgment. Upon
receipt of such notice the Company shall or, if the Loan is to an Affiliate or
the Special Purpose Borrower, such Affiliate or Special Purpose Borrower shall
on either (A) the last day of the then-current Interest Period applicable to
such Loan if such Bank may lawfully continue to maintain and fund such Loan to
such day or (B) not later than the last date such Bank may lawfully continue to
fund and maintain such Loan, either (i) prepay in full, without premium or
penalty, the then outstanding principal amount of each affected Loan, together
with accrued interest thereon or (ii) convert such Loan into another category of
Loan (which would not be unlawful for the relevant Banks to make) as provided in
Section 2.12.

               (b) Upon any prepayment or conversion of a Loan made pursuant to
Section 10.2(a) other than at the end of an Interest Period, the Company or the
Affiliate or Special Purpose Borrower, as applicable, shall reimburse the Bank
upon demand for any loss incurred by it as a result of the timing of such
prepayment or conversion, in the manner provided in Section 2.18.

                                                                              37


         10.3 INCREASED COST

              (a) If (i) Regulation D of the Federal Reserve Board as in effect
on the Effective Date ("Regulation D"), (ii) minimum reserve requirements of the
Bank of England and/or the Financial Services Authority as in effect on the
Effective Date ("Mandatory Cost Rate"), or (iii) after the date hereof, the
adoption of any applicable law or regulation, or any change therein, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank with any request or directive
of any such authority, central bank or comparable agency (a "Regulatory
Change"):

              (A) shall subject any Bank to any tax, duty or other charge with
         respect to Eurodollar Loans or its obligation to make Eurodollar Loans,
         or shall change the basis of taxation of payments to such Bank of the
         principal of or interest on Eurodollar Loans or any other amounts due
         under this Agreement in respect of Eurodollar Loans or its obligation
         to make Eurodollar Loans (except for changes in the rate of tax on the
         overall net income of such Bank or the Eurodollar Lending Office
         imposed by the jurisdictions in which such Bank's principal executive
         office or Eurodollar Lending Office are located); or

              (B) shall impose, modify or cause to be applicable any reserve
         (including, without limitation, any imposed by the Federal Reserve
         Board), special deposit or similar requirement against assets of,
         deposits with or for the account of, or credit extended by, such Bank
         or the Eurodollar Lending Office or shall impose on such Bank (or the
         Eurodollar Lending Office) or all interbank markets applicable to such
         Eurodollar Loans any other condition affecting the Eurodollar Loans or
         its obligation to make Eurodollar Loans;

and the result of any of the foregoing is to increase the cost to such Bank (or
the Eurodollar Lending Office) of making or maintaining any Eurodollar Loans, or
to reduce the amount of any sum received or receivable by such Bank (or the
Eurodollar Lending Office) under this Agreement, by an amount deemed by such
Bank to be material, the Company, the Affiliate or the Special Purpose Borrower,
as applicable, shall pay to such Bank such additional amount or amounts as will
compensate such Bank for any such increased cost or reduction incurred or
suffered by such Bank from and after the later of (i) the date that is 15 days
prior to receipt of notice from such Bank of such costs and (ii) the last date
preceding receipt of such notice from such Bank on which interest was due and
payable pursuant to Section 2.15 on any such Eurodollar Loan. Any Bank which
provides notice to the Company, an Affiliate or the Special Purpose Borrower of
increased costs pursuant to this Section 10.3(a) shall also provide a copy of
such notice to the Administrative Agent.

              (b) Without limiting the effect of the foregoing, so long as any
Bank shall be required to maintain reserves against "Eurodollar liabilities"
under Regulation D (or, so long as such Bank may be required, by any Mandatory
Cost Rate or by reason of any Regulatory Change, to maintain reserves against
any other category of liabilities which includes deposits by reference to which
the interest rate on Eurodollar Loans is determined as provided in this
Agreement or



                                                                              38


against any category of extensions of credit or other assets of
such Bank which includes any Eurodollar Loans) (such reserves are collectively
called "Reserves") the Company, an Affiliate or the Special Purpose Borrower, as
applicable, shall pay to such Bank an amount (reasonably estimated by such Bank)
for each day during each Interest Period for such Eurodollar Loans equal to the
product of the following:

               (i) the principal amount of each Eurodollar Loan to which such
         Interest Period relates; multiplied by

               (ii) the difference between (A) a fraction, the numerator of
         which is the LIBO Rate (expressed as a decimal) applicable to such
         Eurodollar Loan and the denominator of which is one (1) minus such
         Bank's Actual Reserve Cost (defined below) (expressed as a decimal) and
         (B) the LIBO Rate; multiplied by

               (iii) 1/360.

         For the purposes of this Section 10.3(b), the "Bank's Actual Reserve
Cost" (which shall be reasonably estimated by the relevant Bank) shall be equal
to the cost actually incurred by such Bank from time to time during such
Interest Period as a result of the requirement that such Bank maintain Reserves
with respect to such Eurodollar Loan.

               (c) Each Bank shall take reasonable steps, including without
limitation, the designation of a different Eurodollar Lending Office (unless it
would otherwise be disadvantageous to the Bank in its reasonable judgment) if
such steps would avoid the need for or reduce the amount of any payment that
otherwise would be due under Section 10.3(a) or 10.3(b). Any amounts payable by
the Company, an Affiliate or the Special Purpose Borrower under Sections 10.3(a)
or 10.3(b) shall be remitted after the end of each Interest Period, within 30
days after submission by the Bank to the Company, the Affiliate or the Special
Purpose Borrower, as applicable (with a copy to the Administrative Agent) of a
written statement setting forth the amount thereof.

               (d) From time to time during the term of this Agreement, upon the
request of the Company, each Bank shall provide to the Company (with a copy to
the Administrative Agent) its best estimate of such Bank's Actual Reserve Cost
incurred or to be incurred with respect to Eurodollar Loans in the principal
amounts specified in the Company's request.

         10.4 WITHHOLDING TAXES

               (a) Each Bank agrees to take reasonable measures, unless it would
otherwise be disadvantageous to such Bank in its reasonable judgment to avoid or
minimize withholding taxes in connection with any payments made to such Bank
hereunder, including without limitation designating another office of the Bank
as the lending office for a Loan.

               (b) If the Company, an Affiliate or the Special Purpose Borrower
shall be required by law to deduct or withhold any taxes from or in respect of
any sum payable hereunder to the Administrative Agent or any Bank, then, subject
to Sections 10.4(e) and 10.4(f):



                                                                              39


                  (i) the Company, Affiliate or Special Purpose Borrower, as
         applicable, shall make such deductions;

                  (ii) the Company, Affiliate or Special Purpose Borrower, shall
         pay the full amount deducted to the relevant taxation authority in
         accordance with applicable law, and shall provide to the Administrative
         Agent or such Bank upon its request any official receipts or other
         evidence of payment thereof that the Company, Affiliate or Special
         Purpose Borrower, as applicable, may obtain or have in its possession;
         and

                  (iii) if (A) the Administrative Agent or such Bank notifies
         the Company or Special Purpose Borrower (pursuant to Section 2.6 or
         2.12) at the time that the Company (on behalf of itself or an
         Affiliate) or the Special Purpose Borrower gives a notice of Borrowing
         or a notice to extend or convert any Loan that such Bank will require a
         Gross-up for withholding taxes in connection with such Loan, as so
         extended or converted, if applicable, or (B) no such notice was given
         by the Administrative Agent or any Bank, but after a notice of
         Borrowing, extension or conversion pursuant to Section 2.6 or 2.12 in
         respect of such Loan was given a change in applicable law or
         regulation, or a change in the interpretation or administration thereof
         by any governmental or comparable authority, occurs that requires the
         Company, an Affiliate or the Special Purpose Borrower to so deduct or
         withhold taxes from or in respect of any sum payable to the
         Administrative Agent or such Bank, then the sum payable to the
         Administrative Agent or such Bank after the Company, the Affiliate or
         the Special Purpose Borrower, as applicable, makes all required
         deductions shall be increased by an amount such that the Administrative
         Agent or such Bank receives a total amount equal to the sum it would
         have received had no such deductions been made. If neither the
         Administrative Agent nor the affected Bank notifies the Company or
         Special Purpose Borrower at or prior to the time that the Company or
         Special Purpose Borrower gives a notice of Borrowing or a notice to
         extend or convert a Loan, as applicable, that the Administrative Agent
         or such Bank will require a Gross-up in connection with such Loan, as
         so extended or converted, if applicable, no Gross-up in respect of such
         Loan will be paid to the Administrative Agent or such Bank, except to
         the extent that a subsequent change in applicable law or regulation, or
         a change in the interpretation or administration thereof by any
         governmental or comparable authority, requires the Company, the
         Affiliate or the Special Purpose Borrower to deduct or withhold taxes
         (or an increased amount thereof) from or in respect of any sum payable
         to the Administrative Agent or such Bank in respect of such Loan.

                  (c) If a Bank or the Bank's lending office is a foreign person
(i.e., a person organized or incorporated under the laws of a country other than
that under which the Company, the Affiliates or the Special Purpose Borrower is
incorporated), such Bank agrees that:

                  (i) it shall promptly deliver to the Administrative Agent and
         the Company, each Affiliate and the Special Purpose Borrower such
         accurate and complete signed forms or documentation as may be required
         from time to time by any applicable law, treaty, rule or regulation as
         a condition to exemption or other relief from or reduction of tax for
         withholding purposes; and


                                                                              40


                  (ii) it shall, before or promptly after the occurrence of any
         event (including the passing of time) requiring a change in or renewal
         of the most recent forms or documentation previously delivered by such
         Bank, deliver to the Administrative Agent and the Company, each
         Affiliate and the Special Purpose Borrower accurate and complete signed
         copies of such forms or documentation.

                  (d) To the extent that, as determined in good faith by the
Administrative Agent or any Bank in its sole discretion and without any
obligation to disclose its tax records, taxes withheld and paid in accordance
with this Section 10.4 for which a Gross-up has been paid have been irrevocably
utilized by the Administrative Agent or such Bank (either as credits or
deductions) to reduce its tax liabilities and such utilization is consistent
with its overall tax policies, the Administrative Agent or such Bank shall pay
to the Company, the Affiliate or the Special Purpose Borrower, as applicable, an
amount equal to such reduction obtained to the extent of such Gross-up paid by
the Company, Affiliate or Special Purpose Borrower, as applicable, to the
Administrative Agent or such Bank as aforesaid.

                  (e) Notwithstanding anything herein to the contrary, none of
the Company, any Affiliate or the Special Purpose Borrower will be required to
pay any Gross-up in respect of taxes described below:

                  (i) if the obligation to pay such Gross-up would not have
         arisen but for a failure by a Bank to comply with its obligations under
         Section 10.4(c) in respect of the applicable lending office; or

                  (ii) if a Bank shall have delivered to the Company, the
         Affiliate or the Special Purpose Borrower, as applicable, any form or
         documentation required by Section 10.4(c) pursuant to which the Bank
         claims exemption from withholding tax by any jurisdiction or under any
         treaty of such jurisdiction, and the Bank shall not at any time be
         entitled to exemption from deduction or withholding of taxes by such
         jurisdiction in respect of payment by the Company, Affiliate or Special
         Purpose Borrower, as applicable, hereunder for the account of such
         lending office for any reason other than a change in such
         jurisdiction's law or regulations or any applicable tax treaty or
         regulations or in the official interpretation of any such law, treaty
         or regulations by any Governmental Authority charged with the
         interpretation or administration thereof after the date of delivery of
         such form or documentation.

                  (f) In the event any Bank sells or grants a participation in
its rights under this Agreement or any Loan hereunder, such Bank agrees to
undertake sole responsibility for complying with any withholding tax
requirements relating to the purchaser thereof imposed by any jurisdiction,
including, without limitation, those imposed by Sections 1441 and 1442 of the
United States Internal Revenue Code of 1986, as amended.

         10.5 REPLACEMENT OF BANKS.

                  The Company or Special Purpose Borrower shall be permitted to
replace any Bank that (a) requests reimbursement from it for amounts owing
pursuant to Section 10.3 or



                                                                              41


10.4(b) or (b) defaults in its obligation to make Loans to it hereunder, with a
replacement financial institution; provided that (i) such replacement does not
conflict with any Requirement of Law, (ii) no Event of Default, Affiliate Event
of Default or Event of Default-Bankruptcy shall have occurred and be continuing
at the time of such replacement, (iii) prior to any such replacement, such Bank
shall have taken no action under Section 10.3(e) or 10.4(a) so as to eliminate
the continued need for payment of amounts owing pursuant to Section 10.3 or
10.4(b), (iv) the replacement financial institution shall purchase, at par, all
Loans and other amounts owing to such replaced Bank on or prior to the date of
replacement, (v) the Company or Special Purpose Borrower shall be liable to such
replaced Bank under Section 2.18 if any Eurocurrency Loan owing to such replaced
Bank shall be purchased other than on the last day of the Interest Period
relating thereto, (vi) the replacement financial institution, if not already a
Bank, shall be reasonably satisfactory to the Administrative Agent, (vii) the
replaced Bank shall be obligated to make such replacement in accordance with the
provisions of Section 9.1 (provided that the Company or Special Purpose
Borrower, as applicable, shall be obligated to pay the registration and
processing fee referred to therein), (viii) until such time as such replacement
shall be consummated, the Company or Special Purpose Borrower shall pay all
additional amounts (if any) required pursuant to Section 10.3 or 10.4(b), as the
case may be, and (ix) any such replacement shall not be deemed to be a waiver of
any rights that the Company, the Special Purpose Borrower, the Administrative
Agent or any other Bank shall have against the replaced Bank.

SECTION 11. THE AGENTS

         11.1 APPOINTMENT

         Each Bank hereby irrevocably designates and appoints the Administrative
Agent as the agent of such Bank under this Agreement, and each such Bank
irrevocably authorizes the Administrative Agent, in such capacity, to take such
action on its behalf under the provisions of this Agreement and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.

         11.2 DELEGATION OF DUTIES

         The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care in
consultation with the Company.


                                                                              42

         11.3 EXCULPATORY PROVISIONS

         Neither any Agent nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such person under or in
connection with this Agreement (except to the extent that any of the foregoing
are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from its or such person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Banks for
any recitals, statements, representations or warranties made by the Company, any
Affiliate or the Special Purpose Borrower or any officer thereof contained in
this Agreement or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agents under or in connection
with, this Agreement or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or for any failure of the
Company to perform its obligations hereunder. The Agents shall not be under any
obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement, or to inspect the properties, books or records of the Company, any
Affiliate or the Special Purpose Borrower.

         11.4 RELIANCE BY ADMINISTRATIVE AGENT

         The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any instrument, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper person or persons and upon
advice and statements of legal counsel (including counsel to the Company, any
Affiliate or the Special Purpose Borrower), independent accountants and other
experts selected by the Administrative Agent. The Administrative Agent may deem
and treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement unless
it shall first receive such advice or concurrence of the Required Banks (or, if
so specified by this Agreement, all Banks) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
in accordance with a request of the Required Banks (or, if so specified by this
Agreement, all Banks), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Banks and all future holders of
the Loans.

         11.5 NOTICE OF DEFAULT

         The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any default or Event of Default, Affiliate Event of
Default or Event of Default-Bankruptcy unless the Administrative Agent has
received notice from a Bank, the Company, an Affiliate or the Special Purpose
Borrower referring to this Agreement, describing such default or Event of
Default, Affiliate Event of Default or Event of Default-Bankruptcy and stating
that such



                                                                              43

notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Banks. The Administrative Agent shall take such action with respect to such
default or Event of Default, Affiliate Event of Default or Event of
Default-Bankruptcy as shall be reasonably directed by the Required Banks (or, if
so specified by this Agreement, all Banks); provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such default or Event of Default, Affiliate
Event of Default or Event of Default-Bankruptcy as it shall deem advisable in
the best interests of the Banks.

         11.6 NON-RELIANCE ON AGENTS AND OTHER BANKS

         Each Bank expressly acknowledges that neither the Agents nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Agent hereafter taken, including any review of the affairs of the Company,
any Affiliate or the Special Purpose Borrower shall be deemed to constitute any
representation or warranty by any Agent to any Bank. Each Bank represents to the
Agents that it has, independently and without reliance upon any Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Company and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Bank also represents that it will, independently and
without reliance upon any Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Company. Except for notices, reports and
other documents expressly required to be furnished to the Banks by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Company and its Affiliates or
the Special Purpose Borrower that may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.

         11.7 INDEMNIFICATION

         The Banks agree to indemnify each Agent in its capacity as such (to the
extent not reimbursed by the Company, the Affiliates or the Special Purpose
Borrower and without limiting the obligation of the Company, the Affiliates and
the Special Purpose Borrower to do so), ratably according to their respective
Aggregate Exposure Percentages in effect on the date on which indemnification is
sought under this Section (or, if indemnification is sought after the date upon
which the Loans shall have been paid in full, ratably in accordance with such
Aggregate Exposure Percentages immediately prior to such date), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever that
may at any time (whether before or after the payment


                                                                              44


of the Loans) be imposed on, incurred by or asserted against such Agent in any
way relating to or arising out of, the Commitments, the Loans, this Agreement,
any documents contemplated by or referred to herein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Bank shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
that are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from such Agent's gross negligence or willful
misconduct. The agreements in this Section shall survive the payment of the
Loans and all other amounts payable hereunder.

         11.8 AGENT IN ITS INDIVIDUAL CAPACITY

         Each Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Company or an Affiliate as
though such Agent were not an Agent. With respect to Loans made or renewed by
it, each Agent shall have the same rights and powers under this Agreement as any
Bank and may exercise the same as though it were not an Agent, and the terms
"Bank" and "Banks" shall include each Agent in its individual capacity.

         11.9 SUCCESSOR ADMINISTRATIVE AGENT

         The Administrative Agent may resign as Administrative Agent upon 45
days' notice to the Banks and the Company. If the Administrative Agent shall
resign as Administrative Agent under this Agreement, then the Required Banks
shall appoint from among the Banks a successor administrative agent for the
Banks, which successor administrative agent shall (unless an Event of Default
under Section 8.1(a) or Section 8.3 with respect to the Company shall have
occurred and be continuing) be subject to approval by the Company (which
approval shall not be unreasonably withheld or delayed), whereupon such
successor administrative agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent" shall mean such
successor administrative agent effective upon such appointment and approval, and
the former Administrative Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the part
of such former Administrative Agent or any of the parties to this Agreement or
any holders of the Loans. If no successor administrative agent has accepted
appointment as Administrative Agent by the date that is 45 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Banks shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Banks
appoint a successor administrative agent as provided for above. After any
retiring Administrative Agent's resignation as Administrative Agent, the
provisions of this Section 11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement.

         11.10 SYNDICATION AGENT

         The Syndication Agent shall not have any duties or responsibilities
hereunder in its capacity as such.


                                                                              45


SECTION 12. MISCELLANEOUS

         12.1 NOTICES

         Unless otherwise specified herein all notices, requests, demands or
other communications to or from the parties hereto shall be in writing and shall
be deemed to have been duly given and made, in the case of a letter, upon
delivery or three days after deposit in the mail registered first class mail,
postage prepaid; and in the case of a facsimile, when a facsimile is sent and
receipt is telephonically confirmed; provided, however, that notices pursuant to
Section 2.6, 2.8 or 2.12 or any other notices herein which are given by
telephone shall not be effective until received by the party to whom notice is
given. Unless otherwise specified herein, any such notice, request, demand, or
communication shall be delivered or addressed as follows:

                  (a) if to the Company, to it at 5500 Auto Club Drive,
         Dearborn, Michigan 48126 U.S.A., Attention: Treasurer (or facsimile
         number 313-390-3322, Attention: Treasurer);

                  (b) if to an Affiliate or the Special Purpose Borrower, to it
         at the address or facsimile number designated in its Accession
         Memorandum;

                  (c) if to the Administrative Agent, to it at the Notice
         Office; and

                  (d) if to the Banks, to each Bank at the address set forth in
         the administrative questionnaire delivered to the Administrative Agent;

or at such other address or facsimile number as either party hereto may
designate by written notice to the other party hereto.

         12.2 TERM OF AGREEMENT

         The term of this Agreement shall be until the payment in full of the
Loans, provided that the obligations of the Company, the Affiliates and the
Special Purpose Borrower with respect to any payment required to be made by it
under this Agreement shall survive the term of this Agreement.

         12.3 NO WAIVERS

         No failure or delay by the Administrative Agent or any Bank in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.

         12.4 NEW YORK LAW AND JURISDICTION

              (a) THIS AGREEMENT AND EACH ACCESSION MEMORANDUM SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW
YORK.


                                                                              46


              (b) THE COMPANY, THE AFFILIATES, THE SPECIAL PURPOSE BORROWER, THE
ADMINISTRATIVE AGENT AND THE BANKS EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE COURTS OF THE STATE OF
NEW YORK AND OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND THE
APPELLATE COURTS FROM ANY THEREOF, FOR PURPOSES OF ANY ACTION ARISING UNDER THIS
AGREEMENT OR ANY ACCESSION MEMORANDUM, OR REGARDING ANY LOANS MADE HEREUNDER,
AND EACH HEREBY AGREES THAT ANY DISPUTES RELATING TO THIS AGREEMENT OR ANY
ACCESSION MEMORANDUM OR ANY LOANS MADE HEREUNDER SHALL BE RESOLVED ONLY IN THE
COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK. EACH OF THE FOREGOING PARTIES HEREBY STIPULATES THAT THE
VENUES REFERENCED IN THIS SECTION 12.4(b) ARE CONVENIENT AND EACH WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE RELATING TO THE VENUE OR CONVENIENCE
OF SUCH COURTS. IF FOR ANY REASON CLAIMS HEREUNDER CANNOT BE PURSUED IN ANY OF
THE FOREGOING COURTS OF NEW YORK, ALL REFERENCES IN THIS SECTION 12.4(b) TO THE
COURTS OF NEW YORK SHALL INSTEAD BE DEEMED TO BE REFERENCES TO THE COURTS OF THE
STATE OF MICHIGAN AND OF THE UNITED STATES FOR THE EASTERN DISTRICT OF MICHIGAN.
ENFORCEMENT OF FINAL, NONAPPEALABLE JUDGMENTS RECEIVED IN ANY OF THE FOREGOING
COURTS MAY ALSO BE SOUGHT IN ANY OTHER APPROPRIATE COURT OR JURISDICTION.

              (c) The Secretary of the Company shall be the agent for service of
process with regard to all claims hereunder by the Administrative Agent or Banks
against the Special Purpose Borrower or any Affiliate.

         12.5 ENTIRE AGREEMENT

         This Agreement, together with any Accession Memoranda, constitutes the
entire understanding between the parties with respect to the subject matter of
this Agreement and supersedes any prior discussions, negotiations, agreements
and understandings. The parties hereto acknowledge that the general banking or
business conditions or any similar bank lending rules or requirements of any
organization not having the force of law, now or hereafter in effect shall not
be applicable to this Agreement, the Accession Memoranda or any Loans made
hereunder to the Company, an Affiliate or the Special Purpose Borrower by the
Banks.

         12.6 PAYMENT OF CERTAIN EXPENSES

              (a) Except to the extent otherwise agreed upon in writing by the
parties hereto, the Company agrees to pay or reimburse the Administrative Agent
for all its out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and any other documents prepared in connection
herewith, and the consummation and administration of the transactions
contemplated



                                                                              47

hereby and thereby, including the reasonable fees and disbursements of counsel
to the Administrative Agent, with statements with respect to the foregoing to be
submitted to the Company prior to the Effective Date (in the case of amounts to
be paid on the Effective Date) and from time to time thereafter on a quarterly
basis or such other periodic basis as the Administrative Agent shall deem
appropriate.

              (b) The Company, with respect to an Event of Default and Event of
Default - Bankruptcy and Loans to it, or an Affiliate or the Special Purpose
Borrower with respect to an Affiliate Event of Default by such entity and Loans
to it, will

              (i) upon the occurrence of an Event of Default, Affiliate Event
         of Default or Event of Default - Bankruptcy, as applicable, pay all
         reasonable out-of-pocket expenses incurred by the Administrative Agent
         and the Banks (including counsel fees) in connection with such Event
         of Default, Affiliate Event of Default or Event of Default - Bankruptcy
         and collection and other enforcement proceedings resulting therefrom;
         and

              (ii) pay all stamp and other taxes, if any, which may be
         determined to be payable in connection with the execution and delivery
         of this Agreement and any Accession Memoranda, or in connection with
         any modification of this Agreement or any Accession Memoranda or any
         waiver or consent under or in respect of this Agreement or any
         Accession Memoranda, and will save the Administrative Agent and the
         Banks harmless against any loss or liability (including interest and
         penalties) resulting from nonpayment or delay in payment of any such
         taxes.

              (c) The Company, the Affiliate and the Special Purpose Borrower
jointly and severally agree to pay, indemnify, and hold each Bank and the
Administrative Agent and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an "Indemnitee") harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, including any of the foregoing
relating to the use of proceeds of the Loans or the violation of, noncompliance
with or liability under, any environmental law applicable to the operations of
the Company, the Affiliates, the Special Purpose Borrower or any of their
Subsidiaries or any of their respective owned or leased properties and the
reasonable fees and expenses of legal counsel in connection with claims, actions
or proceedings by any Indemnitee against the Company, any Affiliate or the
Special Purpose Borrower (all the foregoing in this clause (c), collectively,
the "Indemnified Liabilities"), provided, that the Company, the Affiliates and
the Special Purpose Borrower shall not have any obligation hereunder to any
Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee. Without limiting the foregoing, and to
the extent permitted by applicable law, each of the Company, each Affiliate and
the Special Purpose Borrower agrees not to assert and to cause its Subsidiaries
not to assert, and hereby waives and agrees to cause its Subsidiaries to waive
all rights for contribution or any other rights of recovery with respect to all
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature,

                                                                              48


under or related to environmental laws, that any of them might have by statute
or otherwise against any Indemnitee. All amounts due under this Section 12.6
shall be payable not late than 10 days after written demand therefor.

              (d) The obligations of the Company, the Affiliates and the Special
Purpose Borrower under this Section 12.6 shall survive payment of the Loans.

         12.7 [RESERVED]

         12.8 CHANGES, WAIVERS, ETC.; ADJUSTMENTS

              (a) Neither this Agreement nor any provision hereof may be
amended, supplemented, changed, waived, discharged or terminated orally, but
only by a statement in writing signed by the Company and the Required Banks or,
with the consent of the Required Banks, the Company and the Administrative
Agent, it being agreed by the Company that in no event shall the Company enter
into an agreement with the Special Purpose Borrower which subjects the Company's
approval to an amendment of any part of this Agreement to the consent of the
Special Purpose Borrower; provided, however, that no such waiver and no such
amendment, supplement or modification shall (i) forgive the principal amount or
extend the final scheduled date of maturity of any Loan, reduce the stated rate
of any interest or fee payable hereunder or extend the scheduled date of any
payment thereof, or increase the amount or extend the termination date of any
Bank's Commitment, in each case without the written consent of each Bank
directly affected thereby; (ii) eliminate or reduce the voting rights of any
Bank under this Section 12.8 without the written consent of such Bank; (iii)
reduce any percentage specified in the definition of Required Banks, consent to
the assignment or transfer by the Company of any of its rights and obligations
under this Agreement (other than in accordance with and to the extent permitted
by Section 9.3), or release the Company from its guarantee obligations under
Section 4 in each case without the written consent of all Banks; (iv) amend,
modify or waive any provision of Section 11 without the written consent of each
Agent or (v) amend or modify the interest rate, maturity, amortization or
principal amount outstanding on any Loan made or assigned to the Special Purpose
Borrower without the Special Purpose Borrower's consent. Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Banks and shall be binding upon the Company, the Affiliates, the Special Purpose
Borrower, the Banks, the Agents and all future holders of the Loans. In the case
of any waiver, the Company, the Affiliates, the Special Purpose Borrower, the
Banks and the Administrative Agent shall be restored to their former position
and rights hereunder, and any default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any
subsequent or other default or Event of Default, or impair any right consequent
thereon.

              (b) Except to the extent that this Agreement expressly provides
for payments to be allocated to a particular Bank, if any Bank (a "Benefitted
Bank") shall receive any payment of all or part of the Obligations owing to it
in a greater proportion than any such payment to any other Bank, if any, in
respect of the Obligations owing to such other Bank, such Benefitted Bank shall
purchase for cash from the other Banks a participating interest in such portion
of the Obligations owing to each such other Bank as shall be necessary to cause
such Benefitted Bank to share the excess payment ratably with each of the Banks;
provided, however, that if all or any



                                                                              49

portion of such excess payment is thereafter recovered from such Benefitted
Bank, such purchase shall be rescinded and the purchase price returned, to the
extent of such recovery, but without interest.

         12.9 SEVERABILITY

         If any provision of this Agreement or the application thereof to any
person or circumstance shall be invalid or unenforceable to any extent, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected thereby, and each provision of this Agreement shall be valid and
enforceable to the extent permitted by law.

         12.10 SUCCESSORS AND ASSIGNS

         This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

         12.11 COUNTERPARTS

         This Agreement may be signed in any number of counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument. Complete sets of counterparts shall be delivered to the Company, the
Administrative Agent and the Banks.

         12.12 THIRD PARTY BENEFICIARIES

         Any Special Purpose Borrower, each of the Affiliates of the Company and
any office, branch or affiliate of the Administrative Agent and the Banks which
make Loans hereunder shall be a third party beneficiary of this Agreement.

         12.13 ELECTRONIC RECORDING

         The parties to this Agreement may electronically record any telephone
communications with one another relating to any preliminary or final notices of
any Borrowing or any extension and conversion of Loans pursuant to Section 2.6
or 2.12. In the event that any electronically recorded final notice of Borrowing
or extension or conversion differs from the terms of the corresponding written
notice of Borrowing or extension or conversion, the terms of the electronically
recorded notice shall control.

                     [THIS SPACE INTENTIONALLY LEFT BLANK]


                                                                              50



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                                    VISTEON CORPORATION, as Company


                                    By:   /s/ Mary Winston
                                        ----------------------------------------
                                           Mary Winston
                                    Title: Vice President & Treasurer


                                    JPMORGAN CHASE BANK, as Administrative Agent
                                    and Bank


                                    By:   /s/ Julie S. Long
                                        ----------------------------------------
                                           Julie S. Long
                                    Title: Vice President

                                    BANK OF AMERICA, N.A., as Syndication Agent
                                    and as a Bank


                                    By:   /s/ Matthew J. Ruly
                                        ----------------------------------------
                                    Title: Vice President





SIGNATURE PAGE TO THE
FIVE-YEAR TERM LOAN CREDIT AGREEMENT



                                                                    EXHIBIT 12.1




                                                                             Visteon Corporation and Subsidiaries
                                                                      COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                                                                      -------------------------------------------------
                                                                                       (in millions)

                                                                               For the Years Ended December 31,
                                                           -----------------------------------------------------------------------
                                                              2002            2001          2000            1999           1998
                                                           -----------    -----------    -----------    -----------    -----------
                                                                                                        
Earnings
Income/(loss) before income taxes, minority interest and   $      (117)   $      (169)   $       439    $     1,172    $     1,116
     change in accounting
Earnings of non-consolidated affiliates                            (44)           (24)           (56)           (47)           (26)
Cash dividends received from non-consolidated affiliates            16             12             17             24             17
Fixed charges                                                      139            174            215            173            103
Capitalized interest, net of amortization                            1             (2)            (3)            (1)             1
                                                           -----------    -----------    -----------    -----------    -----------
     Earnings                                              $        (5)   $        (9)   $       612    $     1,321    $     1,211
                                                           ===========    ===========    ===========    ===========    ===========

Fixed Charges
Interest and related charges on debt                       $       109    $       139    $       176    $       149    $        86
Portion of rental expense deemed to be interest                     30             35             39             24             17
                                                           -----------    -----------    -----------    -----------    -----------
     Fixed charges                                         $       139    $       174    $       215    $       173    $       103
                                                           ===========    ===========    ===========    ===========    ===========

Ratios
Ratio of earnings to fixed charges*                                N/A            N/A            2.8            7.6           11.8


- ----------
* For the year ended December 31, 2002 and 2001 fixed charges exceeded earnings
by $144 million and $183 million, respectively, resulting in a ratio of less
than one.



                                                                   EXHIBIT 21.1


             SUBSIDIARIES OF VISTEON CORPORATION AS OF DECEMBER 31, 2002 *




Organization                                                           Jurisdiction
- ------------                                                           ------------
                                                                    
Atlantic Automotive Components, L.L.C.                                 Michigan, U.S.A.
Visteon Climate Control Systems Limited                                Delaware, U.S.A
Visteon Domestic Holdings, LLC                                         Delaware, U.S.A.
     LTD Parts, Incorporated                                           Tennessee, U.S.A.
Visteon Export Services, Inc.                                          Barbados
Visteon Global Technologies, Inc.                                      Delaware, U.S.A.
     Visteon Holdings GmbH                                             Germany
         Visteon Deutschland GmbH                                      Germany
Infinitive Speech Systems Corp.                                        Delaware, U.S.A
     Infinitive Speech Systems, U.K.                                   England
VC Regional Assembly & Manufacturing                                   Delaware, U.S.A.
Visteon International Holdings, Inc.                                   Delaware, U.S.A.
     Autopal s.r.o.                                                    Czech Republic
     Brasil Holdings Ltda                                              Brazil
         Visteon Sistemas Automotivos Ltda.                            Brazil
     Duck Yang Industy Co., Ltd                                        Korea
     Halla Climate Control Corporation                                 Korea
     Visteon Korea Limited                                             Korea
     Visteon International Trading (Shanghai) Co., Ltd                 China
     Jiangxi Fuchang Climate Systems, Ltd.                             China
     Visteon Climate Control (Beijing) Co. Ltd.                        China
     Visteon Amazonas Ltda.                                            Brazil
     Visteon Ardennes Industries SAS                                   France
     Visteon S.A.                                                      Argentina
     Visteon Asia Holdings, Inc.                                       Delaware, U.S.A.
     Visteon Asia Pacific, Inc.                                        Japan
     Visteon Automotive Holdings, LLC                                  Delaware, U.S.A.
         Grupo Visteon, S. de R.L. de C.V.                             Mexico
              Altec Electronica Chihuahua S.A. de C.V.                 Mexico
              Autovidrio S.A. de C.V.                                  Mexico
              Carplastic S.A. de C.V.                                  Mexico
              Climate Systems Mexicana, S.A. de C.V.                   Mexico
              Coclisa S.A. de C.V.                                     Mexico
              Lamosa S.A. de C.V.                                      Mexico
     Visteon Automotive Systems India Private Limited                  India
     Visteon Powertrain Control Systems India PL                       India
     Visteon Canada, Inc.                                              Canada
     Halla Climate Control Canada Inc.                                 Canada
     Halla Climate Control (Portugal) Ar Condicinado, LDA              Portugal
     Visteon Caribbean, Inc.                                           Puerto Rico
     Visteon European Holdings Corporation                             Delaware, U.S.A.
         Visteon Holdings Espana SI                                    Spain
              Cadiz Electronica, S.A.                                  Spain
         Visteon Sistemas Interiors Espana, S.L.                       Spain
         Visteon Holdings France SAS                                   France
              Visteon Holdings Italia, s.r.l.                          Italy
                         Visteon Interior Systems Italia SpA           Italy
              Visteon Interior Holdings France SAS                     France
                  Visteon Systemes Interieur France, SA                France
     Visteon Hungary Kft                                               Hungary
     Visteon Philippines, Inc.                                         Philippines
     Visteon Poland S.A.                                               Poland
     Visteon Portugesa, Ltd.                                           Bermuda
     Visteon South Africa Pty. Ltd.                                    South Africa
     Visteon (Thailand) Co., Ltd.                                      Thailand
     Halla Climate Control (Thailand) Company Limited                  Thailand
     Visteon UK Limited                                                England

Visteon Global Treasury, Inc.                                          Delaware, U.S.A.
Visteon LA Holdings Corp.                                              Delaware, U.S.A.
Visteon Systems, LLC                                                   Delaware, U.S.A.
     Visteon AC Holdings Corp.                                         Delaware, U.S.A.



 8 Other U.S. Subsidiaries
11 Other Non-U.S. Subsidiaries
*  Subsidiaries not shown by name in the above list, if considered in the
   aggregate as a single subsidiary, would not constitute a significant
   subsidiary.



                                                                    EXHIBIT 23.1


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Registration
Statements on Form S-3 (No. 333-85406) and Form S-8 (Nos. 333-39756, 333-39758
and 333-40202) of Visteon Corporation of our report dated January 17, 2003,
except for Note 18, as to which the date is January 27, 2003, relating to the
financial statements, which appears in this Form 10-K.



PricewaterhouseCoopers LLP
Detroit, Michigan
February 10, 2003



                                                                    EXHIBIT 24.1


                               VISTEON CORPORATION

                       Certificate of Assistant Secretary


         The undersigned, Heidi A. Diebol-Hoorn, an Assistant Secretary of
VISTEON CORPORATION, a Delaware corporation (the "Company"), DOES HEREBY CERTIFY
that the following resolutions were adopted at a duly called meeting of the
Board of Directors of the Company on February 12, 2003 and that the same are in
full force and effect:

        RESOLVED, that preparation of an Annual Report of the Company on Form
10-K for the year ended December 31, 2002 (the "10-K Report"), including
exhibits and other documents, to be filed with the Securities and Exchange
Commission (the "Commission") under the Securities Exchange Act of 1934, as
amended, be and hereby is in all respects authorized and approved; that the
draft 10-K Report be and hereby is approved in all respects; that the directors
and appropriate officers of the Company, and each of them, be and hereby are
authorized to sign and execute in their own behalf, or in the name and on behalf
of the Company, or both, as the case may be, the 10-K Report, and any and all
amendments thereto, with such changes therein as such directors and officers may
deem necessary, appropriate or desirable, as conclusively evidenced by their
execution thereof; and that the appropriate officers of the Company, and each of
them, be and hereby are authorized to cause the 10-K Report and any such
amendments, so executed, to be filed with the Commission.

        RESOLVED, that each officer and director who may be required to sign and
execute the 10-K Report or any amendment thereto or document in connection
therewith (whether in the name and on behalf of the Company, or as an officer or
director of the Company, or otherwise), be and hereby is authorized to execute a
power of attorney appointing D. R. Coulson, P. G. Pfefferle, and S. L. Fox, and
each of them, severally, his or her true and lawful attorney or attorneys to
sign in his or her name, place and stead in any such capacity the 10-K Report
and any and all amendments thereto and documents in connection therewith, and to
file the same with the Commission, each of said attorneys to have power to act
with or without the other, and to have full power and authority to do and
perform in the name and on behalf of each of said officers and directors who
shall have executed such power of attorney, every act whatsoever which such
attorneys, or any of them, may deem necessary, appropriate or desirable to be
done in connection therewith as fully and to all intents and purposes as such
officers or directors might or could do in person.


         WITNESS my hand as of this 14th day of February, 2003.



                                             /s/ Heidi A. Diebol-Hoorn
                                             -----------------------------------
                                             Heidi A. Diebol-Hoorn
                                             Assistant Secretary

(SEAL)






                        POWER OF ATTORNEY WITH RESPECT TO
                     ANNUAL REPORT OF VISTEON CORPORATION ON
                 FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2002


         Each of the undersigned, a director or officer of VISTEON CORPORATION,
appoints each of D. R. Coulson, P. G. Pfefferle, and S. L. Fox as his or her
true and lawful attorney and agent to do any and all acts and things and execute
any and all instruments which the attorney and agent may deem necessary or
advisable in order to enable VISTEON CORPORATION to comply with the Securities
Exchange Act of 1934, and any requirements of the Securities and Exchange
Commission, in connection with the Annual Report of VISTEON CORPORATION on Form
10-K for the year ended December 31, 2002 and any and all amendments thereto,
including, but not limited to, power and authority to sign his or her name
(whether on behalf of VISTEON CORPORATION, or as a director or officer of
VISTEON CORPORATION, or by attesting the seal of VISTEON CORPORATION, or
otherwise) to such instruments and to such Annual Report and any amendments
thereto, and to file them with the Securities and Exchange Commission. The
undersigned ratifies and confirms all that any of the attorneys and agents shall
do or cause to be done by virtue hereof. Any one of the attorneys and agents
shall have, and may exercise, all the powers conferred by this instrument.

         Each of the undersigned has signed his or her name as of the 12th day
of February 2003.


                                                      
       /s/ Peter J. Pestillo                                    /s/ Charles L. Schaffer
- ---------------------------------------                  ---------------------------------------
Peter J. Pestillo                                        Charles L. Schaffer


       /s/ William H. Gray, III                                 /s/ Thomas T. Stallkamp
- ---------------------------------------                  ---------------------------------------
William H. Gray, III                                     Thomas T. Stallkamp


       /s/ Steven K. Hamp                                       /s/ Robert M. Teeter
- ---------------------------------------                  ---------------------------------------
Steven K. Hamp                                           Robert M. Teeter


       /s/ Kathleen J. Hempel                                   /s/ Danierl R. Coulson
- ---------------------------------------                  ---------------------------------------
Kathleen J. Hempel                                       Daniel R. Coulson


       /s/ Robert H. Jenkins                                    /s/ Philip G. Pfefferle
- ---------------------------------------                  ---------------------------------------
Robert H. Jenkins                                        Philip G. Pfefferle


       /s/ Michael F. Johnston
- ---------------------------------------
Michael F. Johnston





                                                                    EXHIBIT 99.1


                                  RISK FACTORS

         Visteon Corporation hereby avails itself of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995.

         Visteon may, from time to time, make forward-looking statements,
including statements projecting, forecasting or estimating company performance
and industry trends. Visteon's forward-looking statements are not guarantees of
future results and conditions but rather are subject to risks and uncertainties,
including the following:

         o        Weak economic conditions in the United States, resulting in
                  the current, cyclical decline in the vehicle production rate.

         o        Changes in the operations (including products, product
                  planning and part sourcing), financial condition, results of
                  operations or market share of Visteon's customers,
                  particularly its largest customer, Ford Motor Company, which
                  is undergoing a comprehensive "revitalization plan."

         o        Visteon's ability to increase sales to customers other than
                  Ford; to maintain current business with, and to win future
                  business from, Ford; to generate cost savings to offset agreed
                  upon price reductions or price reductions to win additional
                  business and, in general, to maintain and improve its
                  operating performance; to recover engineering and tooling
                  costs; to streamline and focus its product portfolio; to
                  sustain technological competitiveness; to compete favorably
                  with automotive parts suppliers with lower cost structures and
                  greater ability to rationalize operations; and to exit
                  non-performing businesses on satisfactory terms, particularly
                  due to limited flexibility under existing labor agreements.

         o        Significant changes in the competitive environment in the
                  major markets where Visteon procures materials, components or
                  supplies or where its products are manufactured, distributed
                  or sold, including the implementation of Internet-based
                  purchasing initiatives.

         o        Legal and administrative proceedings, investigations and
                  claims, including product liability, warranty, environmental
                  and safety claims, and any recalls of products manufactured or
                  sold by Visteon.

         o        Changes in economic conditions, currency exchange rates or
                  political stability in foreign countries where Visteon
                  procures materials, components or supplies or where its
                  products are manufactured, distributed or sold.

         o        Shortages of materials or interruptions in transportation
                  systems, labor strikes, work stoppages or other interruptions
                  to or difficulties in the employment of labor in the major
                  markets where Visteon purchases materials, components or
                  supplies to manufacture its products or where its products are
                  manufactured, distributed or sold.







         o        Changes in laws, regulations, policies or other activities of
                  governments, agencies and similar organizations, domestic and
                  foreign, that may tax or otherwise increase the cost of, or
                  otherwise affect, the manufacture, licensing, distribution,
                  sale, ownership or use of Visteon's products or assets.

         o        Visteon's access to financial resources sufficient in order to
                  make payments related to pensions and other postretirement
                  employee benefits, retirement of outstanding debt and other
                  contractual commitments, all at the levels and at the times
                  planned by management.

         o        Possible terrorist attacks or acts of war, which could
                  exacerbate other risks such as slowed vehicle production or
                  interruptions in the transportation system, or fuel prices and
                  supply.

         o        Other risks and uncertainties detailed from time to time in
                  Visteon's Securities and Exchange Commission filings.

         These risks and uncertainties are not the only ones facing Visteon.
Additional risks and uncertainties not presently known to Visteon or currently
believed to be immaterial also may adversely affect Visteon's business. Any
risks and uncertainties that develop into actual events could have material
adverse effects on Visteon's business, financial condition and results of
operations. For these reasons, do not place undue reliance on forward-looking
statements.





                                                                    EXHIBIT 99.2



                Written Statement of the Chief Executive Officer
                          Pursuant to 18 U.S.C. ss.1350


         Solely for the purposes of complying with 18 U.S.C. ss.1350, I, the
undersigned Chairman and Chief Executive Officer of Visteon Corporation (the
"Company"), hereby certify, based on my knowledge, that Annual Report on Form
10-K of the Company for the year ended December 31, 2002 (the "Report") fully
complies with the requirements of Section 13(a) of the Securities Exchange Act
of 1934 and that information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.



   /s/Peter J. Pestillo
- -----------------------------
Peter J. Pestillo
February 14, 2003




                                                                    EXHIBIT 99.3



                Written Statement of the Chief FINANCIAL Officer
                          Pursuant to 18 U.S.C. ss.1350



         Solely for the purposes of complying with 18 U.S.C. ss.1350, I, the
undersigned Executive Vice President and Chief Financial Officer of Visteon
Corporation (the "Company"), hereby certify, based on my knowledge, that Annual
Report on Form 10-K of the Company for the year ended December 31, 2002 (the
"Report") fully complies with the requirements of Section 13(a) of the
Securities Exchange Act of 1934 and that information contained in the Report
fairly presents, in all material respects, the financial condition and results
of operations of the Company.



    /s/Daniel R. Coulson
- ---------------------------
Daniel R. Coulson
February 14, 2003