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CREDIT AGREEMENT
Dated as of February 27, 2003,
Among
TRW AUTOMOTIVE HOLDINGS CORP.,
TRW AUTOMOTIVE INTERMEDIATE HOLDINGS CORP.,
TRW AUTOMOTIVE ACQUISITION CORP.,
THE FOREIGN SUBSIDIARY BORROWERS PARTY HERETO,
THE LENDERS PARTY HERETO,
JPMORGAN CHASE BANK,
as Administrative Agent,
CREDIT SUISSE FIRST BOSTON,
LEHMAN COMMERCIAL PAPER INC. and
DEUTSCHE BANK SECURITIES INC.
as Co-Syndication Agents
BANK OF AMERICA, N.A.,
as Documentation Agent
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J.P. MORGAN SECURITIES INC.,
CREDIT SUISSE FIRST BOSTON and
LEHMAN BROTHERS INC.,
as Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
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PAGE
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ARTICLE I DEFINITIONS ........................................................6
SECTION 1.01. DEFINED TERMS..........................................6
SECTION 1.02. TERMS GENERALLY.......................................87
SECTION 1.03. EXCHANGE RATES........................................88
SECTION 1.04. REDENOMINATION OF CERTAIN FOREIGN CURRENCIES..........89
SECTION 1.05. EFFECTUATION OF TRANSFERS.............................90
ARTICLE II THE CREDITS ......................................................91
SECTION 2.01. COMMITMENTS...........................................91
SECTION 2.02. LOANS AND BORROWINGS..................................92
SECTION 2.03. REQUESTS FOR BORROWINGS...............................94
SECTION 2.04. SWINGLINE LOANS.......................................96
SECTION 2.05. LETTERS OF CREDIT....................................100
SECTION 2.06. FUNDING OF BORROWINGS................................111
SECTION 2.07. INTEREST ELECTIONS...................................112
SECTION 2.08. TERMINATION AND REDUCTION OF COMMITMENTS.............114
SECTION 2.09. REPAYMENT OF LOANS; EVIDENCE OF DEBT.................116
SECTION 2.10. REPAYMENT OF TERM LOANS AND REVOLVING LOANS..........117
SECTION 2.11. PREPAYMENT OF LOANS..................................121
SECTION 2.12. FEES.................................................124
SECTION 2.13. INTEREST.............................................126
SECTION 2.14. ALTERNATE RATE OF INTEREST...........................127
SECTION 2.15. INCREASED COSTS......................................128
SECTION 2.16. BREAK FUNDING PAYMENTS...............................131
SECTION 2.17. TAXES................................................132
SECTION 2.18. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS.............................................134
SECTION 2.19. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.......137
SECTION 2.20. FOREIGN SUBSIDIARY LOAN PARTIES......................139
SECTION 2.21. ADDITIONAL RESERVE COSTS.............................140
SECTION 1.1. ANCILLARY FACILITIES...................................141
ARTICLE III REPRESENTATIONS AND WARRANTIES..................................147
SECTION 3.01. ORGANIZATION; POWERS.................................148
SECTION 3.02. AUTHORIZATION........................................149
SECTION 3.03. ENFORCEABILITY.......................................150
SECTION 3.04. GOVERNMENTAL APPROVALS...............................150
SECTION 3.05. FINANCIAL STATEMENTS.................................151
SECTION 3.06. NO MATERIAL ADVERSE CHANGE OR MATERIAL ADVERSE
EFFECT...............................................152
SECTION 3.07. TITLE TO PROPERTIES; POSSESSION UNDER LEASES.........152
SECTION 3.08. SUBSIDIARIES.........................................154
SECTION 3.09. LITIGATION; COMPLIANCE WITH LAWS.....................154
SECTION 3.10. FEDERAL RESERVE REGULATIONS..........................155
SECTION 3.11. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT..........................................155
SECTION 3.12. USE OF PROCEEDS......................................156
SECTION 3.13. TAX RETURNS..........................................157
SECTION 3.14. NO MATERIAL MISSTATEMENTS............................158
SECTION 3.15. EMPLOYEE BENEFIT PLANS...............................159
SECTION 3.16. ENVIRONMENTAL MATTERS................................160
SECTION 3.17. SECURITY DOCUMENTS...................................161
SECTION 3.18. LOCATION OF REAL PROPERTY AND LEASED PREMISES........163
SECTION 3.19. SOLVENCY.............................................164
SECTION 3.20. LABOR MATTERS........................................165
SECTION 3.21. INSURANCE............................................165
SECTION 3.22. REPRESENTATIONS AND WARRANTIES IN PURCHASE AGREEMENT.166
ARTICLE IV CONDITIONS OF LENDING............................................166
SECTION 4.01. ALL CREDIT EVENTS....................................166
SECTION 4.02. FIRST CREDIT EVENT...................................167
SECTION 4.03. CREDIT EVENTS RELATING TO FOREIGN SUBSIDIARY
BORROWERS............................................174
ARTICLE V AFFIRMATIVE COVENANTS.............................................175
SECTION 5.01. EXISTENCE; BUSINESSES AND PROPERTIES.................176
SECTION 5.02. INSURANCE............................................177
SECTION 5.03. TAXES................................................180
SECTION 5.04. FINANCIAL STATEMENTS, REPORTS, ETC...................180
SECTION 5.05. LITIGATION AND OTHER NOTICES.........................184
SECTION 5.06. Compliance with Laws.................................185
SECTION 5.07. MAINTAINING RECORDS; ACCESS TO PROPERTIES AND
INSPECTIONS..........................................186
SECTION 5.08. USE OF PROCEEDS......................................186
SECTION 5.09. COMPLIANCE WITH ENVIRONMENTAL LAWS...................187
SECTION 5.10. FURTHER ASSURANCES; ADDITIONAL MORTGAGES.............187
SECTION 5.11. FISCAL YEAR; ACCOUNTING..............................190
SECTION 5.12. INTEREST RATE PROTECTION AGREEMENTS..................191
SECTION 1.2. PROCEEDS OF CERTAIN DISPOSITIONS.......................191
ARTICLE VI NEGATIVE COVENANTS...............................................192
SECTION 6.01. INDEBTEDNESS.........................................192
SECTION 6.02. LIENS................................................197
SECTION 6.03. SALE AND LEASE-BACK TRANSACTIONS.....................202
SECTION 6.04. INVESTMENTS, LOANS AND ADVANCES......................203
SECTION 6.05. MERGERS, CONSOLIDATIONS, SALES OF ASSETS AND
ACQUISITIONS.........................................207
SECTION 6.06. DIVIDENDS AND DISTRIBUTIONS..........................210
SECTION 6.07. TRANSACTIONS WITH AFFILIATES.........................212
SECTION 6.08. BUSINESS OF HOLDINGS, INTERMEDIATE HOLDINGS, THE
U.S. BORROWER AND THE SUBSIDIARIES...................215
SECTION 6.09. LIMITATION ON MODIFICATIONS OF INDEBTEDNESS;
MODIFICATIONS OF CERTIFICATE OF INCORPORATION,
BY-LAWS AND CERTAIN OTHER AGREEMENTS; ETC............216
SECTION 6.10. CAPITAL EXPENDITURES.................................218
SECTION 6.11. INTEREST COVERAGE RATIO..............................219
SECTION 6.12. LEVERAGE RATIO.......................................220
SECTION 6.13. SWAP AGREEMENTS......................................220
ARTICLE VII EVENTS OF DEFAULT...............................................221
SECTION 7.01. EVENTS OF DEFAULT....................................221
SECTION 1.3. Exclusion of Immaterial Subsidiaries...................227
SECTION 7.03. U.S. BORROWER'S RIGHT TO CURE........................227
ARTICLE VIII THE AGENTS ....................................................229
SECTION 8.01. APPOINTMENT..........................................230
SECTION 8.02. NATURE OF DUTIES.....................................232
SECTION 8.03. RESIGNATION BY THE AGENTS............................233
SECTION 8.04. EACH AGENT IN ITS INDIVIDUAL CAPACITY................233
SECTION 8.05. INDEMNIFICATION......................................234
SECTION 8.06. LACK OF RELIANCE ON AGENTS...........................235
SECTION 1.4. DESIGNATION OF AFFILIATES FOR FOREIGN CURRENCY LOANS...235
ARTICLE IX MISCELLANEOUS ...................................................236
SECTION 9.01. NOTICES..............................................236
SECTION 9.02. SURVIVAL OF AGREEMENT................................238
SECTION 9.03. BINDING EFFECT.......................................238
SECTION 9.04. SUCCESSORS AND ASSIGNS...............................239
SECTION 9.05. EXPENSES; INDEMNITY..................................245
SECTION 9.06. RIGHT OF SET-OFF.....................................248
SECTION 9.07. APPLICABLE LAW.......................................248
SECTION 9.08. WAIVERS; AMENDMENT...................................249
SECTION 9.09. INTEREST RATE LIMITATION.............................251
SECTION 9.10. ENTIRE AGREEMENT.....................................251
SECTION 9.11. WAIVER OF JURY TRIAL.................................252
SECTION 9.12. SEVERABILITY.........................................252
SECTION 9.13. COUNTERPARTS.........................................252
SECTION 9.14. HEADINGS.............................................252
SECTION 9.15. JURISDICTION; CONSENT TO SERVICE OF PROCESS..........253
SECTION 9.16. CONFIDENTIALITY......................................254
SECTION 9.17. CONVERSION OF CURRENCIES.............................255
SECTION 1.5. PRE-FUNDING ESCROW ARRANGEMENTS........................256
ARTICLE X ANCILLARY FACILITY ADJUSTMENTS....................................262
SECTION 1.6. EXCHANGE OF INTERESTS IN ANCILLARY FACILITIES..........262
ARTICLE XI COLLECTION ALLOCATION MECHANISM..................................264
SECTION 11.01. IMPLEMENTATION OF CAM...............................265
SECTION 11.02. LETTERS OF CREDIT AND UNFUNDED
ANCILLARY CREDIT EXTENSIONS.........................268
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EXHIBITS AND SCHEDULES
EXHIBIT A FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT B FORM OF ADMINISTRATIVE QUESTIONNAIRE
EXHIBIT C-1 FORM OF BORROWING REQUEST
EXHIBIT C-2 FORM OF SWINGLINE BORROWING REQUEST
EXHIBIT D FORM OF U.S. MORTGAGE
EXHIBIT E FORM OF U.S. COLLATERAL AGREEMENT
EXHIBIT F FORM OF FOREIGN GUARANTEE
EXHIBIT G FORM OF FINCO GUARANTEE
EXHIBIT H FORM OF SELLER NOTE
EXHIBIT I FORM OF FINCO NOTE
EXHIBIT J FORMS OF FOREIGN ACQUIROR NOTES
EXHIBIT K-1 FORM OF FOREIGN SUBSIDIARY BORROWER AGREEMENT
EXHIBIT K-2 FORM OF FOREIGN SUBSIDIARY BORROWER TERMINATION
EXHIBIT L RESERVE COSTS FOR MANDATORY COSTS RATE
EXHIBIT M FORM OF OPINION OF SIMPSON THACHER & BARTLETT
EXHIBIT N FORM OF LOCAL COUNSEL OPINION
EXHIBIT O FORM OF NEWCO UK NOTE
EXHIBIT P FORM OF ACCEPTABLE LETTER OF CREDIT
SCHEDULE 1.01(A) ACQUIRED FOREIGN SUBSIDIARIES
SCHEDULE 1.01(B) FOREIGN ACQUIRORS, FOREIGN ACQUIROR EQUITY CONTRIBUTIONS AND
FOREIGN ACQUIROR LOANS
SCHEDULE 1.01(C) CLOSING DATE ANCILLARY FACILITIES
SCHEDULE 1.01(D) FOREIGN PLEDGE AGREEMENTS
8
SCHEDULE 1.01(E) FOREIGN SUBSIDIARY LOAN PARTIES
SCHEDULE 1.01(F) ANCILLARY FACILITY LIMITS
SCHEDULE 1.01(G) COLLATERAL AND GUARANTEE REQUIREMENT
SCHEDULE 1.01(H) CERTAIN U.S. SUBSIDIARIES
SCHEDULE 1.01(I) CLOSING DATE FOREIGN SUBSIDIARY BORROWER AGREEMENTS
SCHEDULE 2.01 COMMITMENTS
SCHEDULE 2.04(A) SWINGLINE DOLLAR COMMITMENTS
SCHEDULE 2.04(B) SWINGLINE FOREIGN CURRENCY COMMITMENTS
SCHEDULE 2.05(A) EXISTING LETTERS OF CREDIT
SCHEDULE 3.01 ORGANIZATION AND GOOD STANDING
SCHEDULE 3.04 GOVERNMENTAL APPROVALS
SCHEDULE 3.05 SPECIFIED TRANSACTION DOCUMENTS
SCHEDULE 3.08(B) SUBSIDIARIES
SCHEDULE 3.08(C) SUBSCRIPTIONS
SCHEDULE 3.09 LITIGATION
SCHEDULE 3.13 TAXES
SCHEDULE 3.18 MORTGAGED PROPERTIES
SCHEDULE 3.20 LABOR MATTERS
SCHEDULE 3.21 INSURANCE
SCHEDULE 5.10(G) CERTAIN FOREIGN SUBSIDIARIES
SCHEDULE 6.01 INDEBTEDNESS
SCHEDULE 6.02 LIENS
SCHEDULE 6.04 INVESTMENTS
SCHEDULE 6.07 TRANSACTIONS WITH AFFILIATES
CREDIT AGREEMENT dated as of February 27, 2003 (this
"Agreement"), among TRW AUTOMOTIVE HOLDINGS CORP., a Delaware
corporation ("Holdings"), TRW AUTOMOTIVE INTERMEDIATE HOLDINGS
CORP., a Delaware corporation ("Intermediate Holdings"), TRW
AUTOMOTIVE ACQUISITION CORP., a Delaware corporation (the "U.S.
Borrower"), the FOREIGN SUBSIDIARY BORROWERS party hereto, the
LENDERS party hereto from time to time, JPMORGAN CHASE BANK, as
administrative agent (in such capacity, the "Administrative
Agent"), and as collateral agent (in such capacity, the
"Collateral Agent") for the Lenders, CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch, LEHMAN COMMERCIAL PAPER
INC., and DEUTSCHE BANK SECURITIES INC., each as co-syndication
agent (in such capacity, a "Co-Syndication Agent"), and BANK OF
AMERICA, N.A., as documentation agent (in such capacity, the
"Documentation Agent").
Pursuant to or in connection with the Purchase Agreement (with such
term and each other capitalized term used but not defined in this preamble
having the meaning assigned thereto in Article I), (a) the Equity Contributions
will be made, (b) the financing transactions described in this preamble will be
consummated, (c) the Finco Equity Contribution, the Finco Loan, the Newco UK
Equity Contribution, the Newco UK Loan, the Foreign Acquiror Equity
Contributions and the Foreign Acquiror Loans will be consummated, (d) the Stock
Purchases will be consummated, and (e) fees and expenses (the "Transaction
Costs") incurred in connection with the Transactions will be paid.
On the Closing Date, (a) Automotive Investors L.L.C., a Delaware
limited liability company and a Fund
2
Affiliate, the Management Group and the Management Equity Vehicle together, will
contribute not less than $500,000,000 in cash to Holdings in exchange for not
less than 500,000 shares of Holdings Common Stock (the "Holdings Equity
Contribution"), (b) Holdings will contribute (i) the proceeds of the Holdings
Equity Contribution and (ii) a number of shares of Holdings Common Stock (the
"Stock Consideration"), that taken together with the shares issued pursuant to
the Holdings Equity Contribution has an implied value of not less than
$868,000,000, to Intermediate Holdings, in exchange for all the issued and
outstanding Equity Interests of Intermediate Holdings (the "Intermediate
Holdings Equity Contribution"), (c) Intermediate Holdings will contribute to the
U.S. Borrower in exchange for all the issued and outstanding Equity Interests of
the U.S. Borrower (i) the cash proceeds of the Intermediate Holdings Equity
Contribution, (ii) the Stock Consideration and (iii) 62.7% shares of LucasVarity
Holdings purchased by Intermediate Holdings from a subsidiary of Northrop Space
and Mission in exchange for the Seller Note and (d) the U.S. Borrower will
contribute $10,000,000 in cash to Automotive (LV) Corp. in exchange for all the
issued and outstanding Equity Interests of Automotive (LV) Corp. (the steps
described in clauses (a)-(d) of this paragraph together, the "Equity
Contributions").
On February 18, 2003, the U.S. Borrower issued and sold in offerings
pursuant to Rule 144A under the Securities Act of 1933 (the "Securities Act")
and Regulation S under the Securities Act (a) Senior Notes having an aggregate
principal amount of $925,000,000, (b) Senior Notes having an aggregate principal
amount of _200,000,000, (c) Senior Subordinated Notes having an aggregate
principal amount of $300,000,000 and (d) Senior Subordinated Notes having an
aggregate principal amount of _125,000,000.
Simultaneously with the consummation of the Equity Contributions, (a)
the U.S. Borrower will obtain, and make Borrowings in an aggregate amount the
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