EXHIBIT 4.1
Execution Copy
TRW AUTOMOTIVE INTERMEDIATE HOLDING CORP.
AMENDED AND RESTATED
SELLER SUBORDINATED NOTE
February 28, 2003,
$600,000,000 as amended and restated on
June 23, 2004
FOR VALUE RECEIVED, the undersigned, TRW AUTOMOTIVE INTERMEDIATE HOLDING
CORP. (the "Company"), a Delaware corporation, hereby unconditionally promises
to pay to the order of NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP., a
Delaware corporation, or its assigns (including any assignee or transferee of,
or other permitted holder of, this Note, the "Seller") in lawful money of the
United States of America on February 28, 2018 (the "Maturity Date") the
principal sum of (a) SIX HUNDRED MILLION DOLLARS, plus (b) the PIK Interest
Portion (as defined herein) added to the principal amount of this Note pursuant
to Section 2. The Company further hereby agrees to pay interest in like money on
the unpaid principal amount hereof from time to time outstanding at the rates
and on the dates specified in Section 2. This Note is referred to in, and was
executed and delivered in connection with, that certain Master Purchase
Agreement, dated as of November 18, 2002 (the "Master Purchase Agreement"), by
and between Northrop Grumman Corporation, a Delaware corporation, and BCP
Acquisition Company L.L.C., a Delaware limited liability company ("BCP").
SECTION 1. DEFINITIONS.
Unless otherwise defined herein, terms defined in the Master Purchase
Agreement and used herein shall have the meanings given to them in the Master
Purchase Agreement. The following terms shall have the respective meanings given
to them in this Section 1.
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by or under common control with such
Person.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as codified
under Title 11 of the United States Code, and the Bankruptcy Rules promulgated
thereunder, as the same may be in effect from time to time.
"BCP" is defined in the first paragraph of this Note.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Change of Control" means a "Change of Control" under and as defined in
the Senior Subordinated Note Indentures that occurs at any time when TRW Auto is
Investment Grade.
"Change of Control Offer" is defined in paragraph (b) of Section 3.3 of
this Note.
"Change of Control Purchase Price" is defined in paragraph (a) of Section
3.3 of this Note.
"Company" is defined in the first paragraph of this Note.
"Credit Agreement" means that certain Credit Agreement, dated as of
February 27, 2003, among Parent, the Company, TRW Auto, the lenders from time to
time party thereto, and JPMorgan Chase Bank, as administrative agent, together
with any Guaranties thereof by Parent or any of its subsidiaries, in each case,
as amended, restated, supplemented, waived, replaced (whether or not upon
termination and whether with the original lenders or otherwise), restructured,
refinanced, increased or otherwise modified from time to time.
"Designated Senior Debt" means all payment obligations of the Company
under its guaranty of its subsidiaries obligations under the Credit Agreement,
the Senior Note Indentures, the Senior Subordinated Note Indentures and any
Receivables Financing.
"Default" means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
"Dividend Event" means the date, if any, on which the Company shall pay
any dividend on or make any other distribution in respect of its Capital Stock
whether in cash, property or obligations of the Company, other than (a) a
dividend or other distribution payable solely in the form of its Capital Stock
and (b) any dividend or other distribution that is permitted, or equivalent (in
type, amount and purpose) to those permitted to be made by TRW Auto, under the
terms of the Credit Agreement, the Senior Note Indentures and the Senior
Subordinated Note Indentures.
"Event of Default" is defined in Section 5.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means (a) the government of the United States of
America or any State or other political subdivision thereof, or any jurisdiction
in which the Company conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company, or (b) any entity exercising
executive, legislative, judicial, regulatory or administrative functions of, or
pertaining to, any such government.
2
"Guaranty" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including, without limitation, obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such Indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (1) for the purchase or payment of
such Indebtedness or obligation, or (2) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such Indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of any other Person to make payment of the
Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or obligation
against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the obligor under
any Guaranty, the Indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money;
(b) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account
by banks and other financial institutions (whether or not representing
obligations for borrowed money);
(c) all obligations of such Person under any swap, cap, collar or
similar arrangement providing for protection against fluctuations in
interest rates, currency exchange rates or commodities prices; and
(d) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (e) hereof.
"Insolvency Proceeding" means (a) any case, action, or proceeding before
any court or other Governmental Authority having jurisdiction over the
applicable Person or its assets relating to bankruptcy, reorganization,
insolvency, liquidation, receivership,
3
dissolution, winding-up, or relief of debtors or (b) any general assignment for
the benefit of creditors, composition, marshaling of assets for creditors, or
other similar arrangement in respect of its creditors generally or any
substantial portion of its creditors; in each case whether undertaken under
Federal (including the Bankruptcy Code), state, or foreign law.
"Interest Payment Date" means (a) at any time prior to the occurrence of a
Dividend Event, each December 31 of each year and (b) at any time after the
occurrence of a Dividend Event, each March 31, June 30, September 30 and
December 31 of each year.
"Interest Rate" means (a) for the period from and after the date hereof to
and including the Rating Date, a rate of interest equal to 8.00% per annum, and
(b) for the period after the Rating Date, a rate of interest equal to 10.00% per
annum.
"Investment Grade" means, with respect to TRW Auto, that the then lowest
debt credit rating assigned to any outstanding debt securities of TRW Auto by
Xxxxx'x is at least Baa3 and by S&P is at least BBB-.
"Master Purchase Agreement" is defined in the first paragraph of this
Note.
"Maturity Date" is defined in the first paragraph of this Note.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Permitted Junior Securities" means debt or equity securities of the
Company or any successor corporation issued pursuant to a plan of reorganization
or readjustment of the Company that are subordinated to the payment of all
then-outstanding Senior Debt at least to the same extent that this Note is
subordinated to the payment of all Senior Debt on the Closing Date, so long as
to the extent that any holder of Designated Senior Debt outstanding on the date
of consummation of any such plan of reorganization or readjustment is not
indefeasibly paid in full in cash on such date, the holders of such Designated
Senior Debt not so paid in full in cash have consented to the terms of such plan
of reorganization or readjustment.
"Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
"PIK Interest Portion" is defined in Section 2 of this Note.
"Rating Date" means the first date on or after the fifth anniversary of
the Closing Date on which TRW Auto is Investment Grade.
"Receivables Financing" means any transaction or series of transactions
that may be entered into by TRW Auto or any of its subsidiaries pursuant to
which TRW Auto or any of its subsidiaries may sell, convey or otherwise transfer
to a Person formed for the
4
purpose of engaging in such transaction or series of transactions, or may grant
a security interest in, any accounts receivable (whether now existing or arising
in the future) of TRW Auto or any of its subsidiaries, and any assets related
thereto including, without limitation, all collateral securing such accounts
receivable, all contracts and all guarantees or other obligations in respect of
such accounts receivable, proceeds of such accounts receivable and other assets
which are customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable.
"S&P" means Standard and Poor's Ratings Group.
"Senior Debt" means all payment obligations (whether now outstanding or
hereafter incurred) of the Company in respect of (a) Indebtedness of the Company
(including, without limitation, in respect of any guaranty of any Indebtedness
of any of its subsidiaries) other than (1) this Note and (2) any Indebtedness
that by its terms is expressly subordinated to this Note, (b) interest
(including default interest) and premium on the outstanding Indebtedness
referred to in clause (a) above, (c) the fees and commissions (including
commitment, agency and letter of credit fees and commissions) payable pursuant
to the Senior Debt Agreements, (d) all other payment obligations (including
costs, expenses, penalties, indemnifications, damages, liabilities or otherwise
on the Company or any of its subsidiaries) owing under or arising pursuant to
the Senior Debt Agreements not of the type described in clauses (a) through (c)
above, and (e) post-petition interest on the Indebtedness referred to in clauses
(a) through (d) above accruing subsequent to the commencement of a proceeding
under the Bankruptcy Code (whether or not such interest is allowed as a claim in
such proceeding). Without limiting the foregoing, Senior Debt shall include all
Designated Senior Debt.
"Senior Debt Agreement" means each instrument or agreement evidencing or
governing the Indebtedness referred to in clause (a) of the definition of Senior
Debt.
"Senior Debt Default" means any default or event of default by the Company
or any of its subsidiaries under any Senior Debt Agreement.
"Senior Debt Representatives" means with respect to any Senior Debt
Agreement, the lead agent or trustee for the lenders and/or creditors
thereunder.
"Senior Note Indentures" means each of the Indentures entered into by TRW
Auto and its subsidiaries as of February 18, 2003 in connection with the
issuance of its 9.375% Senior Notes due 2013 and its 10.125% Senior Notes due
2013 and any Guaranties of the foregoing by the Company or any of its
subsidiaries, as amended, restated, supplemented, waived, replaced,
restructured, refinanced or otherwise modified from time to time.
"Senior Subordinated Note Indentures" means each of the Indentures entered
into by TRW Auto and its subsidiaries as of February 18, 2003 in connection with
the issuance of its 11.00% Senior Subordinated Notes due 2013 and its 11.75%
Senior
5
Subordinated Notes due 2013 and any Guaranties thereof by the Company or any of
its subsidiaries, as amended, restated, supplemented, waived, replaced,
restructured, refinanced or otherwise modified from time to time.
"Subordinated Obligation" is defined in the first paragraph of Section 7
of this Note.
"TRW Auto" means TRW Automotive Acquisition Corp., a Delaware corporation.
"Voidable Transfer" is defined in Section 7.8 of this Note.
SECTION 2. INTEREST.
Interest shall accrue on a daily basis from the date hereof until this
Note is paid in full on the unpaid principal amount of this Note outstanding
from time to time at the Interest Rate (computed on the basis of a 365- or
366-day year for the actual number of days elapsed) and shall be payable on each
Interest Payment Date. Notwithstanding the foregoing, at any time prior to a
Dividend Event, at the option of the Company, interest on this Note may be paid
in kind and not in cash or other property. On each Interest Payment Date,
accrued interest that is then unpaid and that has not been previously added to
the principal amount of this Note shall be added to the principal amount of this
Note and amounts so added (the "PIK Interest Portion"); shall thereafter be
deemed to be a part of the principal amount of this Note provided, however, that
interest accruing on and after a Dividend Event shall be payable in cash on each
Interest Payment Date occurring after such Dividend Event to such account (or
other location) as Seller directs the Company in writing (it being understood
that any interest accruing prior to the date of such Dividend Event shall be
added to the principal amount of this Note on the first Interest Payment Date
occurring after such date in accordance with this Section 2).
SECTION 3. PAYMENTS.
Section 3.1 Scheduled Payments.
(a) Except in accordance with the provisions of Section 3.2 and 3.3,
this Note shall not be subject to any required prepayment prior to the
Maturity Date.
(b) On the Maturity Date, the Company shall pay the then outstanding
principal amount of this Note together with accrued interest thereon.
Section 3.2 Investment Grade Prepayment. If, at any time on or after the
date that is five years after the Closing Date, TRW Auto shall become Investment
Grade, the Company shall on February 28, 2015 (or, if later, the date that is
five Business Days after the date that TRW Auto first becomes Investment Grade)
prepay 100% of the principal
6
amount of this Note then outstanding, together with accrued interest thereon but
without any premium or penalty.
Section 3.3 Change of Control Put.
(a) Upon a Change of Control, Seller shall have the right to require
the Company to repurchase this Note at a purchase price in cash equal to
100% of the outstanding principal amount thereof on the date of
repurchase, plus accrued and unpaid interest to the date of repurchase but
without any premium or penalty (the "Change of Control Purchase Price"),
in accordance with the terms contemplated in this Section 3.3. In the
event that at the time of such Change of Control the terms of the
Indebtedness under any Senior Debt Agreement restrict or prohibit the
repurchase of this Note (or a dividend or distribution by TRW Auto to the
Company in an amount sufficient to make such repurchase), then prior to
the mailing of the notice to Seller provided for in paragraph (b) of this
Section 3.3 but in any event within 60 days following any Change of
Control, the Company shall, or shall cause TRW Auto to, (i) repay in full
all Indebtedness under all such Senior Debt Agreements or (ii) obtain the
requisite consent under all such Senior Debt Agreements to permit the
repurchase of this Note (or a dividend or distribution by TRW Auto to the
Company in an amount sufficient to make such repurchase), as provided for
in paragraph (b) of this Section 3.3.
(b) Within 60 days following any Change of Control, the Company
shall mail a notice to Seller (the "Change of Control Offer") stating:
(i) that a Change of Control has occurred and that Seller has
the right to require the Company to purchase this Note at the Change
of Control Purchase Price;
(ii) the circumstances and relevant facts regarding such
Change of Control;
(iii) the repurchase date (which shall be no earlier than 10
days nor later than 30 days from the date such notice is mailed);
and
(iv) the instructions determined by the Company consistent
with this Section, that Seller must follow in order to have this
Note purchased.
(c) If Seller elects to have this Note purchased it shall be
required to inform the Company and surrender this Note at the address
specified in the notice at least three Business Days prior to the purchase
date. Seller shall be entitled to withdraw its election if the Company
receives not later than one Business Day prior to the purchase date a
telegram, telex, facsimile transmission or letter setting forth a
statement that Seller is withdrawing its election to have this Note
purchased.
7
(d) On the purchase date, the Company shall pay the Change of
Control Purchase Price to Seller.
(e) Notwithstanding the foregoing provisions of this Section 3.3,
the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements
set forth in paragraph (b) of this Section 3.3, applicable to a Change of
Control Offer made by the Company and purchases this Note validly tendered
and not withdrawn under such Change of Control Offer.
Section 3.4 Optional Prepayment. Subject to Section 7, the Company may, at
its option, upon notice as provided below, prepay at any time all, or from time
to time any part of, this Note at 100% of the principal amount so prepaid, plus
accrued but unpaid cash interest through the prepayment date with respect to
such principal amount but without any premium or penalty. The Company will give
Seller written notice of each optional prepayment under this Section 3.4 not
less than five Business Days prior to the date fixed for such prepayment. Each
such notice shall specify the date fixed for prepayment, the aggregate principal
amount of this Note to be prepaid on such date, and the interest to be paid on
such date with respect to such principal amount being prepaid.
Section 3.5 Payment Dates. Whenever any payment of interest or principal
under this Note is stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and any such
additional days elapsed shall be reflected in the computation of the interest
payable on such next succeeding Business Day.
Section 3.6 Maturity, Surrender, etc. In the case of each prepayment of
this Note pursuant to this Section 3, the principal amount of this Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such
date. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest, if any, as
aforesaid, interest on such principal amount shall cease to accrue.
SECTION 4. COVENANTS.
The Company covenants that so long as this Note is outstanding:
Section 4.1 Asset Sales. The Company shall not distribute the proceeds of
any sale or other disposition of any of its assets or the assets of any of its
subsidiaries (other than assets sold in the ordinary course of business) to the
holders of its Capital Stock by means of a dividend or other distribution in
respect of such Capital Stock.
8
Section 4.2 Affiliate Transactions. The Company shall not enter into any
contract, arrangement or other transaction with any direct or indirect holders
of its Capital Stock or any of their affiliates (other than its subsidiaries)
without the unanimous approval of the Executive Committee of the Board of
Directors of the Company; provided, however, that the payment of dividends or
other distributions in respect of the Capital Stock of the Company shall not be
subject to the requirements of this Section 4.2. For the avoidance of doubt,
nothing in this Section 4.2 shall be deemed to restrict any direct or indirect
holder of the Capital Stock of the Company or any of their affiliates from
entering into any contract, arrangement or other transaction with any subsidiary
of the Company.
Section 4.3 Financial Statements. (a) Commencing with the first fiscal
year end following Seller's written request, and continuing until maturity,
within 120 days of the end of each fiscal year, the Company shall deliver to
Seller a consolidated balance sheet as of the end of such fiscal year and profit
and loss and retained earnings statements for such year (the "Annual
Statements") without footnote disclosures and without a cash flow statement. The
Annual Statements shall be audited by, and accompanied by the opinion of, the
Company's independent public accountants as to the matters set forth on Exhibit
A.
(b) Within 60 days following the end of the second quarter of each fiscal
year of the Company, the Company shall deliver to Seller an unaudited
consolidated balance sheet as of the end of such second quarter and profit and
loss and retained earnings statements for the six month period then ended,
without footnote disclosures and without a cash flow statement.
SECTION 5. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal on this
Note when the same becomes due and payable, whether at maturity or at a
date fixed for prepayment; or
(b) the Company defaults in the payment of any cash interest on this
Note for more than 30 days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with
any of its agreements in Section 4 and such failure continues for 60 days;
(d) the acceleration of any Designated Senior Debt by the holders
thereof; or
(e) the Company or TRW Auto (1) files, or consents by answer or
otherwise to the filing against it of, a petition for relief or
reorganization or
9
arrangement or any other petition in bankruptcy, seeking to adjudicate it
as a bankrupt or insolvent, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of
any jurisdiction, (2) makes a general assignment for the benefit of its
creditors, or (3) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property; or
(f) a court or Governmental Authority of competent jurisdiction
enters an order appointing, without consent by the Company or TRW Auto, a
custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property, or
constituting an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation or
to take advantage of any bankruptcy or insolvency law of any jurisdiction,
or ordering the dissolution, winding-up or liquidation of the Company or
TRW Auto, or petition for any action (including, without limitation, a
petition in bankruptcy or seeking to adjudicate the Company or TRW Auto as
a bankrupt of insolvent) shall be filed against the Company or TRW Auto
and such petition shall not be dismissed within 60 days.
SECTION 6. REMEDIES ON DEFAULT, ETC.
Section 6.1 Acceleration.
(a) If an Event of Default with respect to the Company described in
paragraph (e) or (f) of Section 5 has occurred, this Note then shall
automatically become immediately due and payable.
(b) If any Event of Default (other than as described in paragraph
(a) of this Section 6.1) has occurred and is continuing, Seller may, at
any time at its option by notice to the Company declare this Note to be
immediately due and payable.
Upon this Note becoming due and payable under this Section 6.1, whether
automatically or by declaration, this Note will forthwith mature and the entire
unpaid principal amount of this Note, plus all accrued and unpaid interest,
shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby waived.
Section 6.2 Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether this Note has become or
has been declared immediately due and payable under Section 6.1, Seller may,
subject to Section 7, proceed to protect and enforce its rights by an action at
law, suit in equity or other appropriate proceeding, whether for the specific
performance of any agreement contained herein, or for an injunction against a
violation of any of the terms hereof, or in aid of the exercise of any power
granted hereby or by law or otherwise.
10
Section 6.3 Rescission. At any time after this Note has been declared due
and payable pursuant to paragraph (b) of Section 6.1, Seller, by written notice
to the Company, may (but in no event shall be obligated to) rescind and annul
any such declaration and its consequences if (a) the Company has paid all
overdue interest on this Note and all principal of this Note that is due and
payable and is unpaid other than by reason of such declaration, (b) all Defaults
and Events of Default, other than non-payment of amounts that have become due
solely by reason of such declaration, have been cured or have been waived
pursuant to Section 8, and (c) no judgment or decree has been entered for the
payment of any monies due pursuant hereto. No rescission and annulment under
this Section 6.3 will extend to or affect any subsequent Default or Event of
Default or impair any right consequent thereon.
Section 6.4 No Waivers or Election of Remedies, Expenses, Etc. No right,
power or remedy conferred by this Note upon Seller shall be exclusive of any
other right, power or remedy referred to herein or now or hereafter available at
law, in equity, by statute or otherwise. The Company will pay to Seller on
demand such further amount as shall be sufficient to cover all reasonable costs
and expenses of Seller incurred in any enforcement or collection under this
Section 6, including, without limitation, reasonable attorneys' fees, expenses
and disbursements.
SECTION 7. SUBORDINATION.
Anything in this Note to the contrary notwithstanding, Seller and each
subsequent holder of this Note by its acceptance hereof covenants and agrees
that the payment of the principal of and interest on this Note and all other
amounts payable by the Company under or in respect of this Note (all of the
foregoing, the "Subordinated Obligations") shall, to the extent set forth in
this Section 7, be subordinate and junior and subject in right of payment to the
prior indefeasible payment in full in cash of all Senior Debt.
Section 7.1 Payments. No payment or distribution (whether directly, by
purchase or redemption by right of set-off or otherwise in respect of this Note,
whether as principal, interest or otherwise, and whether in cash, securities or
property) shall be made by or on behalf of the Company or received and retained,
directly or indirectly, by or on behalf of Seller unless and until all Senior
Debt has been indefeasibly paid in full in cash to the holders of the Senior
Debt. Notwithstanding the immediately preceding sentence, the Company may (a)
make payments of interest in kind under this Note when due and payable pursuant
to Section 2, (b) make any such payment or distribution so long as no Senior
Debt Default exists on the date of such payment or would result from the making
of such payment and (c) make any such payment or distribution without regard to
the foregoing if the Company receives the written consent of the requisite
holders of the Designated Senior Debt (or any duly authorized Senior Debt
Representative).
Section 7.2 Insolvency; Bankruptcy; Etc.
11
(a) In the event of the institution of any Insolvency Proceeding
relative to the Company, then
(i) the holders of Senior Debt shall be entitled to receive
payment in full in cash of all Senior Debt before Seller is entitled
to receive any payment in respect of the Subordinated Obligations;
and
(ii) any payment or distribution of any kind or character,
whether in cash, property or securities, by setoff or otherwise,
which may be payable or deliverable in such proceedings in respect
of the Subordinated Obligations shall (notwithstanding any other
provision of this Note, including Section 7.1) be paid or delivered
by the Person making such payment or distribution, whether a trustee
in bankruptcy, a receiver, a liquidating trustee, or otherwise,
directly to the holders of the Senior Debt to the extent necessary
to make payment in full in cash of all Senior Debt remaining unpaid.
(b) If Seller does not file a proper claim or proof of claim or
other document or amendment thereof in the form required in any Insolvency
Proceeding relative to the Company under applicable law prior to 15 days
before the expiration of time to file such claim or other document or
amendment thereof, then the holders of the Designated Senior Debt shall
have the right (but not the obligation) in such Insolvency Proceeding, and
hereby irrevocably are appointed lawful attorney of Seller for the purpose
of enabling the holders of such Senior Debt, to file and prove all claims
therefor and to execute and deliver all documents in such proceeding in
the name of Seller or in the name of the holders of such Senior Debt or
otherwise in respect of such claims, as the holders of such Senior Debt
reasonably may determine to be necessary or appropriate to effectuate the
foregoing, provided, that the holders of such Senior Debt shall act in a
commercially reasonable manner and shall notify Seller prior to commencing
the first of any such actions.
Section 7.3 Standstill. Until the Senior Debt is paid in full in cash,
Seller shall (notwithstanding the provisions of Section 6) be prohibited from
accelerating this Note and shall be prohibited from enforcing any of its default
remedies with respect thereto (including any right to sue the Company or to file
or participate in the filing of an involuntary bankruptcy petition against the
Company), except that this Section 7.3 shall (a) not prevent automatic
acceleration of this Note under Section 6.1(a) or prohibit the filing of a
proper claim or proof of debt or other document or amendment thereof required in
any Insolvency Proceeding or (b) not prevent Seller from accelerating this Note
pursuant to Section 6.1(b) upon the first to occur of (a) the 270th day after
(i) the due date of the prepayment required pursuant to Section 3.2 or the
Maturity Date, as applicable, has occurred, (ii) the date on which the Senior
Debt Representative with respect to any Designated Senior Debt or any holder of
Designated Senior Debt commences a judicial proceeding to collect any Designated
Senior Debt or commences to realize upon any collateral for any such Designated
Senior Debt pursuant to the exercise
12
of remedies or gives notice of any non-judicial sale of any such collateral or
(iii) the occurrence of an Event of Default, unless such Event of Default has
been cured or waived in accordance herewith, and, in any case, Seller has
delivered notice thereof to each Senior Debt Representative in respect of any
outstanding Designated Senior Debt, or (b) the date on which any payment of any
Designated Senior Debt is accelerated.
Section 7.4 No Impairment. (a) No right of any present or future holder of
Senior Debt to enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company or by any non-compliance by the Company with the terms, provisions and
covenants of this Note, regardless of any knowledge thereof Seller may have or
be otherwise charged with.
(b) Without in any way limiting the generality of the foregoing
paragraph, the holders of the Senior Debt may, at any time and from time
to time, without the consent of or notice to Seller, without incurring
responsibility and without impairing or releasing the subordination
provided in this Section 7, do any one or more of the following: (1)
change the manner, place or terms of payment or extend the time of payment
of, or renew, amend, modify, or alter, any Senior Debt or any Senior Debt
Agreement evidencing the same or evidencing, governing, creating,
guaranteeing or securing any Senior Debt; (2) sell, exchange, release, or
otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Debt; (3) release any Person liable in any manner for the
collection of Senior Debt; (4) fail or delay in the perfection of Liens
securing the Senior Debt, (5) exercise or refrain from exercising any
rights against the Company and any other Person (including, without
limitation, actions with respect to the foreclosure upon, sale, release or
failure to realize upon, any of its collateral, and actions with respect
to the collection of any claim for all or any part of the Senior Debt from
any account debtor or any other Person, regardless of whether any such
actions or omissions may affect the rights of the holders of the Senior
Debt to a deficiency) and (6) from time to time enter into agreements and
settlements with the Company as it may determine, including, without
limitation, any substitution of collateral, any release of any Lien and
any release of the Company.
Section 7.5 Relative Rights. The provisions of this Section 7 are for the
purpose of defining the relative rights of the holders of Senior Debt on the one
hand, and Seller on the other hand, and nothing herein shall impair, as between
the Company and Seller, the obligation of the Company, which is unconditional
and absolute, to pay to Seller the principal hereof and interest hereon in
accordance with the terms and provisions of this Note, subject to the rights, if
any, of holders of Senior Debt under this Section 7. The fact that failure to
make any payment on account of the Subordinated Obligations is caused by reason
of the operation of any provision of this Section 7 shall not be construed as
preventing the occurrence of an Event of Default.
13
Section 7.6 Subrogation. Upon payment in full in cash of all Senior Debt,
Seller shall, to the extent of any payments or distributions paid or delivered
to the holders of the Senior Debt or otherwise applied to the Senior Debt
pursuant to the provisions of this Section 7, be subrogated to the rights of the
holders of the Senior Debt to receive payments or distributions of assets of the
Company made on Senior Debt (and any security therefor) until the Subordinated
Obligations shall be paid in full in cash, and, for the purposes of such
subrogation, no payments to the holders of Senior Debt of any cash, assets,
stock, or obligations to which Seller would be entitled except for the
provisions of this Section 7 shall, as between the Company, its creditors (other
than the holders of the Senior Debt), and Seller, be deemed to be a payment by
the Company to or on account of Senior Debt.
Section 7.7 Turnover of Payments. If, notwithstanding the provisions of
this Section 7, any payment or distribution of any character (whether in cash,
securities or other property) or any security shall be received by Seller in
contravention of this Section 7 and before all Senior Debt shall have been paid
in full in cash, after giving effect to, and application of, all payments and
distributions received by holders of Senior Debt from any other source, such
payment, distribution or security shall be held in trust for the benefit of, and
shall be immediately paid over or delivered or transferred to, the holders of
Senior Debt (or any duly authorized Senior Debt Representative) for application
of payment according to the priorities of such Senior Debt and ratably among the
holders of any class of Senior Debt (except that Seller may receive and retain
Permitted Junior Securities).
Section 7.8 Recoveries; Reinstatement. If a claim is made upon any holder
or holders of Senior Debt for repayment or recovery of any amount (a "Voidable
Transfer") on account of any Senior Debt under any Federal, state or foreign
law, whether by reason of preference, fraudulent conveyance, or otherwise and if
such holder or holders of Senior Debt repay all or a portion of such amounts by
reason of (a) any judgment, decree, or order of any court or administrative body
having jurisdiction over such holder or holders, or (b) any settlement or
compromise of any claim effected by such holder or holders based upon the
reasonable advice of counsel, then, as to the amount that has been repaid, the
provisions of this Section 7 automatically shall be reinstated and restored and
the amount so repaid shall constitute Senior Debt entitled to the benefits of
this Section 7 as if such Voidable Transfer never had been made.
Section 7.9 Reliance by Holders of Senior Debt. The provisions of this
Section 7 shall constitute a continuing offer to all Persons who become holders
of Senior Debt, and such provisions are made for the benefit of, and may be
enforced directly by, holders of Senior Debt, who hereby are expressly stated to
be intended beneficiaries of this Section 7, whether or not they actually relied
thereon. Seller covenants that it will not enter into any amendment or
modification of the provisions of this Section 7 (and the related definitions)
without having obtained the prior written consent of the holders of the
Designated Senior Debt. No right of a holder of Senior Debt to enforce the
provisions of
14
this Section 7 shall be impaired by any act or failure to act by Seller or by
the failure of the Seller to comply with the terms of this Note.
Section 7.10 Payments to Senior Debt Representative. Any payment or
distribution to be paid or delivered to the holders of the Senior Debt under the
provisions of this Section 7 may be paid or delivered to one or more Senior Debt
Representatives for such holders. Seller shall be entitled to rely on the
delivery to it of a written notice purported to be signed on behalf of an
officer or representative of any Senior Debt Representatives believed by it in
good faith to be genuine to establish the identity of such Senior Debt
Representatives, the amount of the outstanding Senior Debt and other matters
relevant to the provisions of this Section 7.
SECTION 8. AMENDMENT AND WAIVER.
Section 8.1 Requirements. Subject to Section 7.9, this Note may be
amended, and the observance of any term hereof may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and Seller.
Section 8.2 Binding Effect, Etc. Any amendment or waiver consented to as
provided in this Section 8 is binding upon Seller, each subsequent holder of
this Note and upon the Company without regard to whether this Note has been
marked to indicate such amendment or waiver. No such amendment or waiver will
extend to or affect any obligation, covenant, agreement, Default or Event of
Default not expressly amended or waived or impair any right consequent thereon.
No course of dealing between the Company and Seller nor any delay in exercising
any rights hereunder shall operate as a waiver of any rights of Seller. As used
herein, the term "this Note" and references hereto shall mean this Note as it
may from time to time be amended or supplemented.
SECTION 9. NOTICES.
All notices and communications provided for hereunder shall be in writing
and sent (a) by facsimile if the sender on the same day sends a confirming copy
of such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid) or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:
(1) if to Seller, to it at 0000 Xxxxxxx Xxxx Xxxx Xxx Xxxxxxx,
Xxxxxxxxxx 00000 (facsimile: 310-556-4558) to the attention of Vice
President and General Counsel, or at such other address as Seller shall
have specified to the Company in writing,
(2) if to any subsequent holder of this Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
15
(3) if to the Company, to the Company, to it at 00000 Xxxx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxxx 00000 (facsimile: 734-266-4590) to the attention
of General Counsel, or at such other address as the Company shall have
specified to Seller in writing.
Notices under this Section 9 will be deemed given only when actually received.
SECTION 10. MISCELLANEOUS.
Section 10.1 Successors and Assigns. All covenants and other agreements
contained in this Note by or on behalf of any of the parties hereto bind and
inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent permitted holder of this Note) whether so
expressed or not. Notwithstanding the foregoing, Seller may not assign all or
any portion of this Note (a) prior to February 28, 2004, or (b) at any time on
or after February 28, 2004, without the prior written consent of the Company
(such consent not to be unreasonably withheld). No such assignment shall be made
to any Person in a principal amount of less than $10,000,000. Any attempted
assignment of all or any portion of the Note in violation of this Section 10.1
shall be null and void.
Section 10.2 Severability. Any provision of this Note that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 10.3 Construction. Each covenant contained in this Note shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision in this Note refers to
action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person.
Section 10.4 Integration. This Note embodies the entire agreement and
understanding between the Company and Seller and supersedes all prior agreements
and understandings relating to the subject matter hereof.
Section 10.5 GOVERNING LAW. THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
16
TRW AUTOMOTIVE INTERMEDIATE
HOLDING CORP.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Secretary
17
EXHIBIT A
We have audited, in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements of TRW Automotive Holdings
Corp. ("Holdings") for the year ended [insert date] (not presented herein), and
have issued our unqualified opinion thereon dated [insert date]. The
accompanying financial information is not intended to present the complete
financial position and results of operations of TRW Automotive Intermediate
Holdings Corp. ("Intermediate"), as footnote disclosures have been omitted, and
thus should be read in conjunction with the consolidated financial statements of
Holdings and our report thereon. The scope of our auditing procedures was not
designed to provide a basis for expressing an opinion on the presentations of
the accounts of Intermediate on a stand-alone basis and, accordingly, we do not
express such opinion. However, the information relating to Intermediate has been
subjected to the auditing procedures applied in our audit of the consolidated
financial statements of Holdings and, in our opinion, is fairly stated in all
material respects in relation to the consolidated financial statements of
Holdings and subsidiaries taken as a whole.
