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,

 

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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.

10

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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

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     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

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              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 MORSE 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

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              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

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              BRONSON 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:    
 
       
 
            KUHLMAN CORPORATION, as Guarantor
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       

[Guaranty]

13

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              ADMINISTRATIVE AGENT:
 
            BANK OF AMERICA, N.A., as Administrative Agent
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       

[Guaranty]

13

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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

 

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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]

 

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     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

         
By:
       
 
       
Name:
       
 
       
Title: