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
---------------------
X.X. XXXXXX SECURITIES INC. AND
BANC OF AMERICA SECURITIES, LLC,
AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS
TABLE OF CONTENTS
PAGE
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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
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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
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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 Xxxxx'x 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
