GUARANTY
EXHIBIT 10.4
GUARANTY
THIS GUARANTY (this “Guaranty”), dated as of April 30, 2009, is made by EACH OF THE
UNDERSIGNED AND EACH OTHER PERSON WHO SHALL BECOME A PARTY HERETO BY EXECUTION OF A GUARANTY
JOINDER AGREEMENT (each a “Guarantor” and collectively the “Guarantors”) to BANK OF
AMERICA, N.A., as administrative agent (in such capacity, the “Administrative Agent”) for
each of the lenders (the “Lenders” now or hereafter party to the Credit Agreement defined
below). All capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to such terms in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Secured Parties have agreed to provide to BORGWARNER INC., a Delaware corporation
(the “Borrower”) certain credit facilities, including a revolving credit facility with
letter of credit and swing line subfacilities pursuant to the terms of that certain Credit
Agreement dated as of July 22, 2004, among the Borrower, the Administrative Agent and the Lenders
(as amended by that certain Amendment No. 1 and Consent Agreement dated as of the date hereof among
the Borrower, the Guarantors, the Administrative Agent and the Lenders, and as otherwise amended,
modified, supplemented or restated from time to time, the “Credit Agreement”); and
WHEREAS, each Guarantor is, directly or indirectly, a Domestic Subsidiary of the Borrower and
will materially benefit from the Loans made and to be made, and the Letters of Credit issued and to
be issued, under the Credit Agreement; and
WHEREAS, each Guarantor is required to enter into this Guaranty pursuant to the terms of the
Credit Agreement; and
WHEREAS, a material part of the consideration given in connection with and as an inducement to
the execution and delivery of the Credit Agreement by the Secured Parties was the obligation of the
Borrower to cause each Guarantor to enter into this Guaranty, and the Secured Parties are unwilling
to extend and maintain the credit facilities provided under the Loan Documents unless the
Guarantors enter into this Guaranty;
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the
parties hereto agree as follows:
1. Guaranty. Each Guarantor hereby jointly and severally, unconditionally,
absolutely, continually and irrevocably guarantees to the Administrative Agent for the benefit of
the Secured Parties the payment and performance in full of the Borrower’s Liabilities (as defined
below). For all purposes of this Guaranty, “Borrower’s Liabilities” means: (a) the Borrower’s
prompt payment in full, when due or declared due and at all such times, of all Obligations and all
other amounts pursuant to the terms of the Credit Agreement and the other Loan Documents
heretofore, now or at any time or times hereafter owing, arising, due or payable from the Borrower
to any one or more of the Secured Parties, including without limitation, principal,
interest, premiums and fees (including, but not limited to, loan fees and charges and
disbursements of counsel); (b) the Borrower’s prompt, full and faithful performance, observance and
discharge of each and every agreement, undertaking, covenant and provision to be performed,
observed or discharged by the Borrower under the Credit Agreement and the other Loan Documents; and
(c) the Borrower’s prompt payment in full, when due or declared due and at all such times, of
Obligations and all other amounts pursuant to the terms of any Secured Hedge Agreement or Secured
Cash Management Agreement heretofore, now or at any time or times hereafter owing, arising, due or
payable from any Loan Party to any one or more of the Secured Parties, including without
limitation, principal, interest, premiums and fees (including, but not limited to, loan fees and
charges and disbursements of counsel). The Guarantors’ obligations to the Secured Parties under
this Guaranty are hereinafter collectively referred to as the “Guarantors’ Obligations” and, with
respect to each Guarantor individually, the “Guarantor’s Obligations”. Notwithstanding the
foregoing, the liability of each Guarantor individually with respect to its Guarantor’s Obligations
shall be limited to an aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance under Section 548 of the United States Bankruptcy Code
or any comparable provisions of any applicable state law.
Each Guarantor agrees that it is jointly and severally, directly and primarily liable (subject
to the limitation in the immediately preceding sentence) for the Borrower’s Liabilities.
The Guarantors’ Obligations are secured by various Collateral Documents referred to in the
Credit Agreement, including without limitation, the Security Agreement and the Pledge Agreements.
2. Payment. If the Borrower shall default in payment or performance of any of the
Borrower’s Liabilities, whether principal, interest, premium, fee (including, but not limited to,
loan fees and reasonable charges and disbursements of counsel), or otherwise, when and as the same
shall become due, and after expiration of any applicable grace period, whether according to the
terms of the Credit Agreement, by acceleration, or otherwise, or upon the occurrence and during the
continuance of any Event of Default under the Credit Agreement, then any or all of the Guarantors
will, upon demand thereof by the Administrative Agent, fully pay to the Administrative Agent, for
the benefit of the Secured Parties, subject to any restriction on each Guarantor’s Obligations set
forth in Section 1 hereof, an amount equal to all the Borrower’s Liabilities then due and
owing.
3. Absolute Rights and Obligations. This is a guaranty of payment and not of
collection. The Guarantors’ Obligations under this Guaranty shall be joint and several, absolute
and unconditional irrespective of, and each Guarantor hereby expressly waives, to the extent
permitted by law, any defense to its obligations under this Guaranty and all Collateral Documents
to which it is a party by reason of:
(a) any lack of legality, validity or enforceability of the Credit Agreement, of any
other Loan Document, or of any other agreement or instrument creating, providing security
for, or otherwise relating to any of the Guarantors’ Obligations, any of the Borrower’s
Liabilities, or any other guaranty of any of the Borrower’s Liabilities (the Loan Documents
and all such other agreements and instruments being collectively
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referred to as the “Related Agreements”);
(b) any action taken under any of the Related Agreements, any exercise of any right or
power therein conferred, any failure or omission to enforce any right conferred thereby, or
any waiver of any covenant or condition therein provided;
(c) any acceleration of the maturity of any of the Borrower’s Liabilities, of the
Guarantor’s Obligations of any other Guarantor, or of any other obligations or liabilities
of any Person under any of the Related Agreements;
(d) any release, exchange, non-perfection, lapse in perfection, disposal, deterioration
in value, or impairment of any security for any of the Borrower’s Liabilities, for any of
the Guarantor’s Obligations of any Guarantor, or for any other obligations or liabilities of
any Person under any of the Related Agreements;
(e) any dissolution of the Borrower or any Guarantor or any other party to a Related
Agreement, or the combination or consolidation of the Borrower or any Guarantor or any other
party to a Related Agreement into or with another entity or any transfer or disposition of
any assets of the Borrower or any Guarantor or any other party to a Related Agreement;
(f) any extension (including without limitation extensions of time for payment),
renewal, amendment, restructuring or restatement of, any acceptance of late or partial
payments under, or any change in the amount of any borrowings or any credit facilities
available under, the Credit Agreement or any other Loan Document or any other Related
Agreement, in whole or in part;
(g) the existence, addition, modification, termination, reduction or impairment of
value, or release of any other guaranty (or security therefor) of the Borrower’s Liabilities
(including without limitation the Guarantor’s Obligations of any other Guarantor and
obligations arising under any other Guaranty now or hereafter in effect);
(h) any waiver of, forbearance or indulgence under, or other consent to any change in
or departure from any term or provision contained in the Credit Agreement, any other Loan
Document or any other Related Agreement, including without limitation any term pertaining to
the payment or performance of any of the Borrower’s Liabilities, any of the Guarantor’s
Obligations of any other Guarantor, or any of the obligations or liabilities of any party to
any other Related Agreement;
(i) any other circumstance whatsoever (with or without notice to or knowledge of any
Guarantor) which may or might in any manner or to any extent vary the risks of such
Guarantor, or might otherwise constitute a legal or equitable defense available to, or
discharge of, a surety or a guarantor, including without limitation any right to require or
claim that resort be had to the Borrower or any other Loan Party or to any collateral in
respect of the Borrower’s Liabilities or Guarantors’ Obligations.
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It is the express purpose and intent of the parties hereto that this Guaranty and the
Guarantors’ Obligations hereunder and under each Guaranty Joinder Agreement (defined below) shall
be absolute and unconditional under any and all circumstances and shall not be discharged except by
payment as herein provided.
4. Currency and Funds of Payment. All Guarantors’ Obligations will be paid in Dollars
and in immediately available funds, regardless of any law, regulation or decree now or hereafter in
effect that might in any manner affect the Borrower’s Liabilities, or the rights of any Secured
Party with respect thereto as against the Borrower, or cause or permit to be invoked any alteration
in the time, amount or manner of payment by the Borrower of any or all of the Borrower’s
Liabilities; provided that any Guarantors’ Obligations with respect to principal and
interest on Loans denominated in an Alternative Currency shall be made in such Alternative Currency
unless, for any reason, a relevant Guarantor is prohibited by law from making any such payment
hereunder in an Alternative Currency, in which case such Guarantor shall make such payment in
Dollars in the Dollar Amount of the Alterative Currency payment amount as determined by the
Administrative Agent as of the time of such payment (such that the Secured Parties shall not suffer
any loss from the conversion of such Alternative Currency to Dollars).
5. Events of Default. Without limiting the provisions of Section 2 hereof, in
the event that there shall occur and be continuing an Event of Default, then notwithstanding any
collateral or other security or credit support for the Borrower’s Liabilities, at the
Administrative Agent’s election and without notice thereof or demand therefor, the Guarantors’
Obligations shall immediately be and become due and payable.
6. Subordination. Until this Guaranty is terminated in accordance with Section
22 hereof, each Guarantor hereby unconditionally subordinates all present and future debts,
liabilities or obligations now or hereafter owing to such Guarantor (i) of the Borrower, to the
payment in full of the Borrower’s Liabilities, (ii) of every other Guarantor (an “obligated
guarantor”), to the payment in full of the Guarantors’ Obligations of such obligated guarantor,
and (iii) of each other Person now or hereafter constituting a Loan Party, to the payment in full
of the obligations of such Loan Party owing to any Secured Party and arising under the Loan
Documents. All amounts due under such subordinated debts, liabilities, or obligations shall, upon
the occurrence and during the continuance of an Event of Default, be collected and, upon request by
the Administrative Agent, paid over forthwith to the Administrative Agent for the benefit of the
Secured Parties on account of the Borrower’s Liabilities, the Guarantors’ Obligations, or such
other obligations, as applicable, and, after such request and pending such payment, shall be held
by such Guarantor as agent and bailee of the Secured Parties separate and apart from all other
funds, property and accounts of such Guarantor.
7. Suits. Each Guarantor from time to time shall pay to the Administrative Agent for
the benefit of the Secured Parties, on demand, at the Administrative Agent’s place of business set
forth in the Credit Agreement or such other address as the Administrative Agent shall give notice
of to such Guarantor, the Guarantors’ Obligations as they become or are declared due, and in the
event such payment is not made forthwith, the Administrative Agent may proceed to suit against any
one or more or all of the Guarantors. At the Administrative Agent’s election, one or more and
successive or concurrent suits may be brought hereon by the
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Administrative Agent against any one or more or all of the Guarantors, whether or not suit has
been commenced against the Borrower, any other Guarantor, or any other Person and whether or not
the Secured Parties have taken or failed to take any other action to collect all or any portion of
the Borrower’s Liabilities or have taken or failed to take any actions against any collateral
securing payment or performance of all or any portion of the Borrower’s Liabilities, and
irrespective of any event, occurrence, or condition described in Section 3 hereof.
8. Set-Off and Waiver. Each Guarantor waives any right to assert against any Secured
Party or any of their respective Affiliates (the “Setoff Parties”) as a defense,
counterclaim, set-off, recoupment or cross claim in respect of its Guarantor’s Obligations, any
defense (legal or equitable) or other claim which such Guarantor may now or at any time hereafter
have against the Borrower or any or all of the Setoff Parties without waiving any additional
defenses, set-offs, counterclaims or other claims otherwise available to such Guarantor. Each
Guarantor agrees that each Setoff Party shall have a lien for all the Guarantor’s Obligations upon
all deposits or deposit accounts, of any kind, or any interest in any deposits or deposit accounts,
now or hereafter pledged, mortgaged, transferred or assigned to such Setoff Party or otherwise in
the possession or control of such Setoff Party for any purpose (other than solely for safekeeping)
for the account or benefit of such Guarantor, including any balance of any deposit account or of
any credit of such Guarantor with the Setoff Party, whether now existing or hereafter established,
and hereby authorizes each Setoff Party from and after the occurrence of an Event of Default at any
time or times with or without prior notice to apply such balances or any part thereof to such of
the Guarantor’s Obligations to the Setoff Parties then due and in such amounts as provided for in
the Credit Agreement or otherwise as they may elect. For the purposes of this Section 8,
all remittances and property shall be deemed to be in the possession of a Setoff Party as soon as
the same may be put in transit to it by mail or carrier or by other bailee.
9. Waiver of Notice; Subrogation.
(a) Each Guarantor hereby waives to the extent permitted by law notice of the following
events or occurrences: (i) acceptance of this Guaranty; (ii) the Secured Parties’
heretofore, now or from time to time hereafter making Loans and issuing Letters of Credit
and otherwise loaning monies or giving or extending credit to or for the benefit of the
Borrower, whether pursuant to the Credit Agreement or any other Loan Document or Related
Agreement or any amendments, modifications, or supplements thereto, or replacements or
extensions thereof; (iii) presentment, demand, default, non-payment, partial payment and
protest; and (iv) any other event, condition, or occurrence described in Section 3
hereof. Each Guarantor agrees that each Secured Party may heretofore, now or at any time
hereafter do any or all of the foregoing in such manner, upon such terms and at such times
as each Secured Party, in its sole and absolute discretion, deems advisable, without in any
way or respect impairing, affecting, reducing or releasing such Guarantor from its
Guarantor’s Obligations, and each Guarantor hereby consents to each and all of the foregoing
events or occurrences.
(b) Each Guarantor hereby agrees that payment or performance by such Guarantor of its
Guarantor’s Obligations under this Guaranty may be enforced by the
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Administrative Agent on behalf of the Secured Parties upon demand by the Administrative
Agent to such Guarantor without the Administrative Agent being required, such Guarantor
expressly waiving to the extent permitted by law any right it may have to require the
Administrative Agent, to (i) prosecute collection or seek to enforce or resort to any
remedies against the Borrower or any other Guarantor or any other guarantor of the
Borrower’s Liabilities, or (ii) seek to enforce or resort to any remedies with respect to
any security interests, Liens or encumbrances granted to the Administrative Agent or any
Lender or other party to a Related Agreement by the Borrower, any other Guarantor or any
other Person on account of the Borrower’s Liabilities or any guaranty thereof, IT BEING
EXPRESSLY UNDERSTOOD, ACKNOWLEDGED AND AGREED TO BY SUCH GUARANTOR THAT DEMAND UNDER THIS
GUARANTY MAY BE MADE BY THE ADMINISTRATIVE AGENT, AND THE PROVISIONS HEREOF ENFORCED BY THE
ADMINISTRATIVE AGENT, EFFECTIVE AS OF THE FIRST DATE ANY EVENT OF DEFAULT OCCURS AND IS
CONTINUING UNDER THE CREDIT AGREEMENT.
(c) Each Guarantor further agrees with respect to this Guaranty that it shall have no
right of subrogation, reimbursement, contribution or indemnity, nor any right of recourse to
security for the Borrower’s Liabilities unless and until 93 days immediately following the
Facility Termination Date (as defined below) shall have elapsed without the filing or
commencement, by or against any Loan Party, of any state or federal action, suit, petition
or proceeding seeking any reorganization, liquidation or other relief or arrangement in
respect of creditors of, or the appointment of a receiver, liquidator, trustee or
conservator in respect to, such Loan Party or its assets. This waiver is expressly intended
to prevent the existence of any claim in respect to such subrogation, reimbursement,
contribution or indemnity by any Guarantor against the estate of any other Loan Party within
the meaning of Section 101 of the Bankruptcy Code, in the event of a subsequent case
involving any other Loan Party. If an amount shall be paid to any Guarantor on account of
such rights at any time prior to termination of this Guaranty in accordance with the
provisions of Section 22 hereof, such amount shall be held in trust for the benefit
of the Secured Parties and shall forthwith be paid to the Administrative Agent, for the
benefit of the Secured Parties, to be credited and applied upon the Guarantors’ Obligations,
whether matured or unmatured, in accordance with the terms of the Credit Agreement or
otherwise as the Secured Parties may elect. The agreements in this subsection shall survive
repayment of all of the Guarantors’ Obligations, the termination or expiration of this
Guaranty in any manner, including but not limited to termination in accordance with
Section 22 hereof, and occurrence of the Facility Termination Date. For purposes of
this Guaranty, “Facility Termination Date” means the date as of which all of the
following shall have occurred: (a) the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees and other Obligations payable hereunder
and under the other Loan Documents shall have been paid in full and all Letters of Credit
shall have expired or terminated and all LC Disbursements shall have been reimbursed, (b)
the obligations and liabilities of the Borrower and each other Loan Party under all Secured
Cash Management Agreements and Secured Hedge Agreements shall have been fully, finally and
irrevocably paid and
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satisfied in full and the Secured Cash Management Agreement and Secured Hedge Agreement
shall have expired or been terminated, or other arrangements satisfactory to the
counterparties shall have been made with respect thereto; and (c) the Borrower and each
other Loan Party shall have fully, finally and irrevocably paid and satisfied in full all of
their respective obligations and liabilities arising under the Loan Documents, including
with respect to the Borrower and the Obligations (except for future obligations consisting
of continuing indemnities and other contingent Obligations of the Borrower or any Loan Party
that may be owing to any Secured Party or any Lender pursuant to the Loan Documents and
expressly survive termination of the Credit Agreement).
10. Effectiveness; Enforceability. This Guaranty shall be effective as of the date
first above written and shall continue in full force and effect until termination in accordance
with Section 22 hereof. Any claim or claims that the Secured Parties may at any time
hereafter have against a Guarantor under this Guaranty may be asserted by the Administrative Agent
on behalf of the Secured Parties by written notice directed to such Guarantor in accordance with
Section 24 hereof.
11. Representations and Warranties. Each Guarantor warrants and represents to the
Administrative Agent, for the benefit of the Secured Parties, that it is duly authorized to execute
and deliver this Guaranty (or the Guaranty Joinder Agreement to which it is a party, as
applicable), and to perform its obligations under this Guaranty, that this Guaranty (or the
Guaranty Joinder Agreement to which it is a party, as applicable) has been duly executed and
delivered on behalf of such Guarantor by its duly authorized representatives; that this Guaranty
(and any Guaranty Joinder Agreement to which such Guarantor is a party) is legal, valid, binding
and enforceable against such Guarantor in accordance with its terms except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles; and that such
Guarantor’s execution, delivery and performance of this Guaranty (and any Guaranty Joinder
Agreement to which such Guarantor is a party) do not violate or constitute a breach of any of its
Organizational Documents, any agreement or instrument to which such Guarantor is a party, or any
law, order, regulation, decree or award of any governmental authority or arbitral body to which it
or its properties or operations is subject.
12. Expenses. Each Guarantor agrees to be jointly and severally liable for the
payment of all reasonable fees and expenses, including all charges and disbursements of counsel,
incurred by any Secured Party in connection with the enforcement of this Guaranty, whether or not
suit be brought.
13. Reinstatement. Each Guarantor agrees that this Guaranty shall continue to be
effective or be reinstated, as the case may be, at any time payment received by any Secured Party
in respect of any Borrower’s Liabilities is rescinded or must be restored for any reason, or is
repaid by any Secured Party in whole or in part in good faith settlement of any pending or
threatened avoidance claim.
14. Attorney-in-Fact. To the extent permitted by law, each Guarantor hereby appoints
the Administrative Agent, for the benefit of the Secured Parties, as such Guarantor’s
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attorney-in-fact for the purposes of carrying out the provisions of this Guaranty and taking
any action and executing any instrument which the Administrative Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment is coupled with an interest and is
irrevocable; provided that the Administrative Agent shall have and may exercise rights
under this power of attorney only upon the occurrence and during the continuance of an Event of
Default.
15. Reliance. Each Guarantor represents and warrants to the Administrative Agent, for
the benefit of the Secured Parties, that: (a) such Guarantor has adequate means to obtain on a
continuing basis (i) from the Borrower, information concerning the Borrower and the Borrower’s
financial condition and affairs and (ii) from other reliable sources, such other information as it
deems material in deciding to provide this Guaranty and any Guaranty Joinder Agreement (“Other
Information”), and has full and complete access to the Borrower’s books and records and to such
Other Information; (b) such Guarantor is not relying on any Secured Party or its or their
employees, directors, agents or other representatives or Affiliates, to provide any such
information, now or in the future; (c) such Guarantor has been furnished with and reviewed the
terms of the Credit Agreement and such other Loan Documents as it has requested, is executing this
Guaranty (or the Guaranty Joinder Agreement to which it is a party, as applicable) freely and
deliberately, and understands the obligations and financial risk undertaken by providing this
Guaranty (and any Guaranty Joinder Agreement); (d) such Guarantor has relied solely on the
Guarantor’s own independent investigation, appraisal and analysis of the Borrower, the Borrower’s
financial condition and affairs, the Other Information, and such other matters as it deems material
in deciding to provide this Guaranty (and any Guaranty Joinder Agreement) and is fully aware of the
same; and (e) such Guarantor has not depended or relied on any Secured Party or its or their
employees, directors, agents or other representatives or Affiliates, for any information whatsoever
concerning the Borrower or the Borrower’s financial condition and affairs or any other matters
material to such Guarantor’s decision to provide this Guaranty (and any Guaranty Joinder
Agreement), or for any counseling, guidance, or special consideration or any promise therefor with
respect to such decision. Each Guarantor agrees that no Secured Party has any duty or
responsibility whatsoever, now or in the future, to provide to such Guarantor any information
concerning the Borrower or the Borrower’s financial condition and affairs, or any Other
Information, other than as expressly provided herein, and that, if such Guarantor receives any such
information from any Secured Party or its or their employees, directors, agents or other
representatives or Affiliates, such Guarantor will independently verify the information and will
not rely on any Secured Party or its or their employees, directors, agents or other representatives
or Affiliates, with respect to such information.
16. Rules of Interpretation. The rules of interpretation contained in Sections
1.2, 1.3 and 1.5 of the Credit Agreement shall be applicable to this Guaranty
and each Guaranty Joinder Agreement and are hereby incorporated by reference. All representations
and warranties contained herein shall survive the delivery of documents and any extension of credit
referred to herein or guaranteed hereby.
17. Entire Agreement. This Guaranty and each Guaranty Joinder Agreement, together
with the Credit Agreement and other Loan Documents, constitutes and expresses the entire
understanding between the parties hereto with respect to the subject matter hereof, and
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supersedes all prior negotiations, agreements, understandings, inducements, commitments or
conditions, express or implied, oral or written, except as herein contained. The express terms
hereof control and supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof. Except as provided in Section 22, neither this Guaranty nor any
Guaranty Joinder Agreement nor any portion or provision hereof or thereof may be changed, altered,
modified, supplemented, discharged, canceled, terminated, or amended orally or in any manner other
than as provided in the Credit Agreement.
18. Binding Agreement; Assignment. This Guaranty, each Guaranty Joinder Agreement and
the terms, covenants and conditions hereof and thereof, shall be binding upon and inure to the
benefit of the parties hereto and thereto, and to their respective heirs, legal representatives,
successors and assigns; provided that no Guarantor shall be permitted to assign any of its
rights, powers, duties or obligations under this Guaranty, any Guaranty Joinder Agreement or any
other interest herein or therein without the prior written consent of the Administrative Agent.
Without limiting the generality of the foregoing sentence of this Section 18, any Lender
may assign to one or more Persons, or grant to one or more Persons participations in or to, all or
any part of its rights and obligations under the Credit Agreement (to the extent permitted by the
Credit Agreement); and to the extent of any such assignment or participation such other Person
shall, to the fullest extent permitted by law, thereupon become vested with all the benefits in
respect thereof granted to such Lender herein or otherwise, subject however, to the provisions of
the Credit Agreement, including Article VIII thereof (concerning the Administrative Agent) and
Section 9.4 thereof concerning assignments and participations. All references herein to
the Administrative Agent shall include any successor thereof.
19. Secured Cash Management Agreements; Secured Hedge Agreements. All obligations of
the Borrower under (a) Secured Cash Management Agreements to which any Cash Management Bank is a
party, or (b) Secured Hedge Agreements to which any Hedge Bank is a party, shall be deemed to be
Borrower’s Liabilities, and each Cash Management Bank and each Hedge Bank shall be deemed to be a
Secured Party hereunder with respect to such Borrower’s Liabilities; provided that such
obligations shall cease to be Borrower’s Liabilities at such time, prior to the Facility
Termination Date, as such Person (or Affiliate of such Person) shall cease to be a “Lender” under
the Credit Agreement.
No Person who obtains the benefit of this Guaranty by virtue of the provisions of this Section
shall have, prior to the Facility Termination Date, any right to notice of any action or to consent
to, direct or object to any action hereunder or under any other Loan Document or otherwise in
respect of the Guarantors’ Obligations (including the release or modification of any Guarantors’
Obligations or security therefor) other than in its capacity as a Lender and only to the extent
expressly provided in the Loan Documents. Each Secured Party not a party to the Credit Agreement
who obtains the benefit of this Guaranty by virtue of the provisions of this Section shall be
deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to
the terms of the Credit Agreement, and that with respect to the actions and omissions of the
Administrative Agent hereunder or otherwise relating hereto that do or may affect such Secured
Party, the Administrative Agent and its Affiliates shall be entitled to all the rights, benefits
and immunities conferred under Article VIII of the Credit Agreement.
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20. Severability. The provisions of this Guaranty are independent of and separable
from each other. If any provision hereof shall for any reason be held invalid or unenforceable,
such invalidity or unenforceability shall not affect the validity or enforceability of any other
provision hereof, but this Guaranty shall be construed as if such invalid or unenforceable
provision had never been contained herein.
21. Counterparts. This Guaranty may be executed in any number of counterparts each of
which when so executed and delivered shall be deemed an original, and it shall not be necessary in
making proof of this Guaranty to produce or account for more than one such counterpart executed by
the Guarantor against whom enforcement is sought. Without limiting the foregoing provisions of
this Section 21, the provisions of Section 9.1 of the Credit Agreement shall be
applicable to this Guaranty.
22. Termination. Subject to reinstatement pursuant to Section 13 hereof, this
Guaranty and each Guaranty Joinder Agreement, and all of the Guarantors’ Obligations hereunder
(excluding those Guarantors’ obligations relating to Borrower’s Liabilities that expressly survive
such termination) shall terminate on the Facility Termination Date.
23. Remedies Cumulative; Late Payments. All remedies hereunder are cumulative and are
not exclusive of any other rights and remedies of the Administrative Agent or any other Secured
Party provided by law or under the Credit Agreement, the other Loan Documents or other applicable
agreements or instruments. The making of the Loans and other credit extensions pursuant to the
Credit Agreement shall be conclusively presumed to have been made or extended, respectively, in
reliance upon each Guarantor’s guaranty of the Borrower’s Liabilities pursuant to the terms hereof.
Any amounts not paid when due under this Guaranty shall bear interest at the rate specified in
Section 2.14(e) of the Credit Agreement.
24. Notices. All notices and communications hereunder or under any Guaranty Joinder
Agreement shall be given to the addresses and otherwise made in accordance with Section 9.1
of the Credit Agreement; provided that notices and communications to the Guarantors shall
be directed to the Guarantors, at the address of the Borrower set forth in Section 9.1 of
the Credit Agreement.
25. Joinder. Each Person who shall at any time execute and deliver to the
Administrative Agent a Guaranty Joinder Agreement substantially in the form attached as Exhibit A
(each, a “Guaranty Joinder Agreement”) hereto shall thereupon irrevocably, absolutely and
unconditionally become a party hereto and obligated hereunder as a Guarantor, and all references
herein and in the other Loan Documents to the Guarantors or to the parties to this Guaranty shall
be deemed to include such Person as a Guarantor hereunder.
26. Governing Law; Jurisdiction; Consent to Service of Process; WAIVER OF JURY TRIAL.
(a) This Guaranty shall be construed in accordance with and governed by the law of the
State of New York.
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(b) Each Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the Southern District
of New York, and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Guaranty, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New York State
or, to the extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Guaranty shall affect any right that the Administrative Agent or any
other Secured Party may otherwise have to bring any action or proceeding relating to this
Guaranty against the any Guarantor or its properties in the courts of any jurisdiction.
(c) Each Guarantor hereby irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating to this
Guaranty in any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Guaranty irrevocably consents to service of process in the
manner provided for notices in Section 9.1 of the Credit Agreement. Nothing in this
Guaranty will affect the right of any party to this Guaranty to serve process in any other
manner permitted by law.
(e) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED
TO ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION.
[Signature page follows]
11
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Guaranty as of
the day and year first written above.
| GUARANTORS: | ||||
| BORGWARNER INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER DIVERSIFIED TRANSMISSION PRODUCTS INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER DIVERSIFIED TRANSMISSION PRODUCTS SERVICES INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER EMISSIONS SYSTEMS HOLDINGS INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER EMISSIONS SYSTEMS INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER EMISSIONS SYSTEMS OF MICHIGAN INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Guaranty]
13
| BORGWARNER EUROPE INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER HOLDING INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER INVESTMENT HOLDING INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER JAPAN INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER XXXXX TEC INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER NW INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER POWDERED METALS INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Guaranty]
13
| BORGWARNER SOUTH ASIA INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER THERMAL SYSTEMS INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER THERMAL SYSTEMS OF MICHIGAN INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER TORQTRANSFER SYSTEMS INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER TRANSMISSION SYSTEMS INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BORGWARNER TURBO SYSTEMS INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Guaranty]
13
| XXXXXXX SPECIALTIES INC., as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BWA RECEIVABLES CORPORATION, as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BWA TURBO SYSTEMS HOLDING CORPORATION, as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXXXXX CORPORATION, as Guarantor | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Guaranty]
13
| ADMINISTRATIVE AGENT: | ||||
| BANK OF AMERICA, N.A., as Administrative Agent | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Guaranty]
13
EXHIBIT A
Form of Guaranty Joinder Agreement
GUARANTY JOINDER AGREEMENT
THIS GUARANTY JOINDER AGREEMENT (the “Guaranty Joinder Agreement”), dated as of
___, 20___ is made by and between
___, a ___ (the “Joining Guarantor”),
and BANK OF AMERICA, N.A., in its capacity as Administrative Agent (the “Administrative
Agent”) under that certain Credit Agreement (as amended, modified, supplemented or restated
from time to time, the “Credit Agreement”), dated as of April 30, 2009 by and among
BORGWARNER INC., a Delaware corporation (the “Borrower”), the Lenders party thereto and the
Administrative Agent. All capitalized terms not otherwise defined herein shall have the meanings
given to such terms in the Credit Agreement.
WHEREAS, the Joining Guarantor is a Subsidiary and required by the terms of the Credit
Agreement to become a “Guarantor” under the Credit Agreement and be joined as a party to the
Guaranty; and
WHEREAS, the Joining Guarantor will materially benefit directly and indirectly from the credit
facilities made available and to be made available to the Borrower by the Lenders under the Credit
Agreement; and
NOW, THEREFORE, the Joining Guarantor hereby agrees as follows with the Administrative Agent,
for the benefit of the Secured Parties:
1. Joinder. The Joining Guarantor hereby irrevocably, absolutely and unconditionally
becomes a party to the Guaranty as a Guarantor and bound by all the terms, conditions, obligations,
liabilities and undertakings of each Guarantor or to which each Guarantor is subject thereunder,
including without limitation the joint and several, unconditional, absolute, continuing and
irrevocable guarantee to the Administrative Agent for the benefit of the Secured Parties of the
payment and performance in full of the Borrower’s Liabilities (as defined in the Guaranty) whether
now existing or hereafter arising, all with the same force and effect as if the Joining Guarantor
were a signatory to the Guaranty.
2. Affirmations. The Joining Guarantor hereby acknowledges and reaffirms as of the
date hereof with respect to itself, its properties and its affairs each of the waivers,
representations, warranties, acknowledgements and certifications applicable to any Guarantor
contained in the Guaranty.
3. Severability. The provisions of this Guaranty Joinder Agreement are independent of
and separable from each other. If any provision hereof shall for any reason be held invalid or
unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability
of any other provision hereof, but this Guaranty Joinder Agreement shall be construed as if such
invalid or unenforceable provision had never been contained herein.
4. Counterparts. This Guaranty Joinder Agreement may be executed in any
number of counterparts each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Guaranty Joinder Agreement to
produce or account for more than one such counterpart executed by the Joining Guarantor. Without
limiting the foregoing provisions of this Section 4, the provisions of Section 9.1
of the Credit Agreement shall be applicable to this Guaranty Joinder Agreement.
5. Delivery. Joining Guarantor hereby irrevocably waives notice of acceptance of this
Guaranty Joinder Agreement and acknowledges that the Borrower’s Liabilities are and shall be deemed
to be incurred, and credit extensions under the Loan Documents made and maintained, in reliance on
this Guaranty Joinder Agreement and the Guarantor’s joinder as a party to the Guaranty as herein
provided.
6. Governing Law; Venue; Waiver of Jury Trial. The provisions of Section 26,
of the Guaranty are hereby incorporated by reference as if fully set forth herein.
[Signature page follows]
IN WITNESS WHEREOF, the Joining Guarantor has duly executed and delivered this Guaranty
Joinder Agreement as of the day and year first written above.
| JOINING GUARANTOR: | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Acknowledged and accepted:
BANK OF AMERICA, N.A.,
as Administrative Agent
as Administrative Agent
By:
|
||||
Name: |
||||
Title: |
||||
