Execution Copy
CREDIT AGREEMENT
dated as of
November 23, 2004
among
BORGWARNER INC.
and
BORGWARNER GERMANY GMBH,
as Borrowers
The Lenders Party Hereto
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Administrative Agent
and Syndication Agent
E700,000,000 SENIOR BRIDGE TERM CREDIT FACILITY
______________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Lead Arranger and Book Runner
TABLE OF CONTENTS
Page
ARTICLE 1
Definitions
Section 1.01. Defined Terms 1
Section 1.02. Terms Generally 16
Section 1.03. Accounting Terms; GAAP 16
ARTICLE 2
The Credits
Section 2.01. Commitments 17
Section 2.02. Requests For Borrowings 17
Section 2.03. Funding Of Borrowings 18
Section 2.04. Interest Elections 18
Section 2.05. Termination And Reduction Of Commitments 19
Section 2.06. Repayment Of Loans; Evidence Of Debt. 19
Section 2.07. Prepayment Of Loans 20
Section 2.08. Fees 21
Section 2.09. Interest 21
Section 2.10. Alternate Rate Of Interest. 22
Section 2.11. Increased Costs 22
Section 2.12. Break Funding Payments 23
Section 2.13. Taxes 24
Section 2.14. Payments Generally; Pro Rata Treatment;
Sharing Of Set-offs 24
Section 2.15. Mitigation Obligations; Replacement Of Lenders 26
Section 2.16. Escrow Account 26
ARTICLE 3
Representations And Warranties
Section 3.01. Organization; Powers 27
Section 3.02. Authorization; Enforceability 27
Section 3.03. Governmental Approvals; No Conflicts 27
Section 3.04. Financial Condition; No Material Adverse Effect 27
Section 3.05. Properties 28
Section 3.06. Litigation And Environmental Matters 28
Section 3.07. Compliance With Laws And Agreements 28
Section 3.08. Investment And Holding Company Status. 29
Section 3.09. Taxes 29
Section 3.10. ERISA 29
Section 3.11. Federal Regulations 29
Section 3.12. Disclosure 29
ARTICLE 4
Conditions
Section 4.01. Effective Date 30
Section 4.02. Initial Borrowing
31
Section 4.03. Subsequent Borrowing 32
ARTICLE 5
Affirmative Covenants
Section 5.01. Financial Statements And Other Information 32
Section 5.02. Notices Of Material Events 33
Section 5.03. Existence; Conduct Of Business 34
Section 5.04. Payment Of Obligations 34
Section 5.05. Maintenance Of Properties; Insurance 34
Section 5.06. Books And Records; Inspection Rights 34
Section 5.07. Compliance With Laws 35
Section 5.08. Use Of Proceeds 35
Section 5.09. Conduct Of Tender Offer 35
Section 5.10. Prepayment Of Loans 35
ARTICLE 6
Negative Covenants
Section 6.01. Financial Covenants 35
Section 6.02. Liens. 36
Section 6.03. Fundamental Changes 37
Section 6.04. Indebtedness 37
Section 6.05. Acquisitions 38
Section 6.06. Restricted Payments 38
Section 6.07. Transactions With Affiliates 38
Section 6.08. Restrictive Agreements 39
Section 6.09. Tender Offer Documentation 39
ARTICLE 7
Events Of Default
ARTICLE 8
The Administrative Agent
ARTICLE 9
Guarantee
Section 9.01. The Guarantee 44
Section 9.02. Guarantee Unconditional 44
Section 9.03. Discharge Only Upon Payment In Full; Reinstatement
In Certain Circumstances 44
Section 9.04. Waiver By BorgWarner 45
Section 9.05. Subrogation 45
Section 9.06. Stay Of Acceleration 45
ARTICLE 10
Miscellaneous
Section 10.01. Notices
45
Section 10.02. Waivers; Amendments 46
Section 10.03. Expenses; Indemnity; Damage Waiver 46
Section 10.04. Successors And Assigns 47
Section 10.05. Survival
49
Section 10.06. Counterparts; Integration; Effectiveness
50
Section 10.07. Severability 50
Section 10.08. Right Of Setoff
50
Section 10.09. Governing Law; Jurisdiction; Consent To Service
Of Process 51
Section 10.10. WAIVER OF JURY TRIAL 51
Section 10.11. Headings 51
Section 10.12. Confidentiality
52
Section 10.13. Judgment Currency 52
Section 10.14. USA PATRIOT Act 53
SCHEDULES:
Schedule 2.1 Commitments
Schedule 3.6 Disclosed Matters
Schedule 6.2 Existing Liens
Schedule 6.4 Indebtedness
Schedule 6.8 Restrictive Agreements
EXHIBITS:
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Opinion of BorgWarner's Counsel
CREDIT AGREEMENT, dated
as of November 23, 2004, among
BORGWARNER INC., a Delaware
corporation ("BorgWarner"), and
BorgWarner Germany GmbH, a
German limited liability company
("BorgWarner Germany" and,
together with BorgWarner, the
"Borrowers"), the several banks
and other financial institutions
from time to time parties hereto
(the "Lenders"), and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ SENIOR FUNDING, INC., as
syndication agent (in such
capacity, the "Syndication
Agent") and as administrative
agent for the Lenders (in such
capacity, the "Administrative
Agent").
The parties hereto agree
as follows:
ARTICLE 1
Definitions
Section 1.01 Defined Terms.
As used in this Agreement, the
following terms have the
meanings specified below:
"ABR", when used in
reference to any Loan or
Borrowing, refers to whether
such Loan, or the Loans
comprising such Borrowing, are
bearing interest at a rate
determined by reference to the
Alternate Base Rate.
"Acquisition" means the
acquisition by BorgWarner
Germany of the outstanding
capital shares of Target through
the Private Sale and the Tender
Offer.
"Adjusted Eurocurrency
Rate" means, with respect to any
Borrowing for any Interest
Period, an interest rate per
annum (rounded upwards, if
necessary, to the next 1/16 of
1%) equal to (a) the
Eurocurrency Rate for such
Interest Period multiplied by
(b) the Statutory Reserve Rate.
"Administrative Agent"
has the meaning assigned to such
term in the preamble.
"Administrative
Questionnaire" means an
Administrative Questionnaire in
a form supplied by the
Administrative Agent.
"Affiliate" means, with
respect to a specified Person,
another Person that directly, or
indirectly through one or more
intermediaries, Controls or is
Controlled by or is under common
Control with the Person specified.
"Agents" means the
collective reference to the
Administrative Agent, the
Syndication Agent and the
Documentation Agents.
"Agreement" means this
Credit Agreement, as amended,
supplemented or otherwise
modified from time to time.
"Alternate Base Rate"
means, for any day, a rate per
annum equal to the higher of (a)
the Prime Rate in effect on such
day and (b) the Federal Funds
Effective Rate in effect on such
day plus 1/2 of 1%. Any change
in the Alternate Base Rate due
to a change in the Prime Rate or
the Federal Funds Effective Rate
shall be effective from and
including the effective date of
such change in the Prime Rate or
the Federal Funds Effective
Rate, respectively.
"Applicable Percentage"
means, with respect to any
Lender, the percentage of the
total Commitments represented by
such Lender's Commitment. If
the Commitments have terminated
or expired, the Applicable
Percentages shall be determined
based upon the Commitments most
recently in effect, giving
effect to any assignments.
"Applicable Rate" means,
for any day, with respect to any
Eurocurrency Loan, or with
respect to the facility fees
payable hereunder, as the case
may be, the applicable rate per
annum set forth below under the
caption "Eurocurrency Margin" or
"Facility Fee Rate", as the case
may be, based upon the ratings
by ▇▇▇▇▇'▇ and S&P,
respectively, applicable on such
date to the Index Debt:
Index Debt Ratings:
Eurocurrency Margin Facility
Fee Rate
Category 1
A/A2 or higher 0.295%
0.080%
Category 2
A-/A3 0.385%
0.090%
Category 3
BBB+/Baa1 0.515%
0.110%
Category 4
BBB/Baa2 0.735%
0.140%
Category 5
BBB-/Baa3 or lower 0.825%
0.175%
For purposes of the
foregoing, (i) if either ▇▇▇▇▇'▇
or S&P shall not have in effect
a rating for the Index Debt
(other than by reason of the
circumstances referred to in the
last sentence of this
definition), then such rating
agency shall be deemed to have
established a rating in Category
5; (ii) the rating of Index Debt
on any day shall be deemed to be
the rating in effect at the
close of business on such day;
(iii) if the ratings established
or deemed to have been
established by ▇▇▇▇▇'▇ and S&P
for the Index Debt shall fall
within different Categories, the
Applicable Rate shall be based
on the higher of the two ratings
(e.g., A-/Baa1 results in
Category 2 status) unless one of
the two ratings is two or more
Categories lower than the other,
in which case the Applicable
Rate shall be determined by
reference to the Category next
below that of the higher of the
two ratings (e.g., A-/Baa2
results in Category 3 status);
and (iv) if the ratings
established or deemed to have
been established by ▇▇▇▇▇'▇ and
S&P for the Index Debt shall be
changed (other than as a result
of a change in the rating system
of ▇▇▇▇▇'▇ or S&P), such change
shall be effective as of the
date on which it is first
announced by the applicable
rating agency. Each change in
the Applicable Rate shall apply
during the period commencing on
the effective date of such
change and ending on the date
immediately preceding the
effective date of the next such
change. If the rating system of
▇▇▇▇▇'▇ or S&P shall change, or
if either such rating agency
shall cease to be in the
business of rating corporate
debt obligations, BorgWarner and
the Lenders shall negotiate in
good faith to amend this
definition to reflect such
changed rating system or the
unavailability of ratings from
such rating agency and, pending
the effectiveness of any such
amendment, the Applicable Rate
shall be determined by reference
to the rating most recently in
effect prior to such change or
cessation.
"Assignment and
Acceptance" means an assignment
and acceptance entered into by a
Lender and an assignee (with the
consent of any party whose
consent is required by Section
10.04), and accepted by the
Administrative Agent, in the
form of Exhibit A or any other
form approved by the
Administrative Agent.
"Availability Period"
means the period from and
including the Funding Date to
but excluding the earlier of the
date on which the Certain Funds
Period ends and the date of
termination of the Commitments.
"Board" means the Board
of Governors of the Federal
Reserve System of the United
States of America.
"BorgWarner" has the
meaning assigned to such term in
the preamble.
"BorgWarner Germany" has
the meaning assigned to such
term in the preamble.
"Borrowers" has the
meaning assigned to such term in
the preamble and "Borrower"
means either of the Borrowers,
as the context may require.
"Borrowing" means Loans
made on the same date and as to
which a single Interest Period
is in effect.
"Borrowing Request"
means a request by a Borrower
for a Borrowing in accordance
with Section 2.03.
"Business Day" means any
day that is not a Saturday,
Sunday or other day on which
commercial banks in New York
City are authorized or required
by law to remain closed;
provided that when used in
connection with a Loan "Business
Day" shall also exclude any day
which is not a TARGET Day.
"Capital Lease
Obligations" of any Person means
the obligations of such Person
to pay rent or other amounts
under any lease of (or other
arrangement conveying the right
to use) real or personal
property, or a combination
thereof, which obligations are
required to be classified and
accounted for as capital leases
on a balance sheet of such
Person under GAAP, and the
amount of such obligations shall
be the capitalized amount
thereof determined in accordance
with GAAP.
"Capital Stock" means
any and all shares, interests,
participations or other
equivalents (however designated)
of capital stock of a
corporation, any and all
equivalent ownership interests
in a Person (other than a
corporation) and any and all
warrants or options to purchase
any of the foregoing.
"Certain Funds Period"
means the period beginning on
the Publication Date and ending
on the earliest of (i) the
fifth Business Day following the
date of expiry of the period for
the Tender Offer pursuant to the
German Takeover Act (including
any extension of the Tender
Offer permitted under applicable
law and the subsequent offer
period (weitere Annahmefrist)),
(ii) the date of termination of
the Commitments by BorgWarner,
and (iii) the date that is 120
days after the Publication Date.
"Change in Control"
means (a) the acquisition of
ownership, directly or
indirectly, beneficially or of
record, by any Person or group
(within the meaning of the
Exchange Act and the rules of
the Securities and Exchange
Commission thereunder as in
effect on the date hereof), of
shares representing more than
30% of the aggregate ordinary
voting power represented by the
issued and outstanding capital
stock of BorgWarner; (b)
occupation of a majority of the
seats (other than vacant seats)
on the board of directors of
BorgWarner by Persons who were
neither (i) nominated by the
board of directors of BorgWarner
nor (ii) appointed by directors
so nominated; or (c) the
acquisition of direct or
indirect Control of BorgWarner
by any Person or group.
"Change in Law" means
(a) the adoption of any law,
rule or regulation after the
date of this Agreement, (b) any
change in any law, rule or
regulation or in the
interpretation or application
thereof by any Governmental
Authority after the date of this
Agreement or (c) compliance by
any Lender (or, for purposes of
Section 2.11(b), by any lending
office of such Lender or by such
Lender's holding company, if
any) with any request, guideline
or directive (whether or not
having the force of law) of any
Governmental Authority made or
issued after the date of this
Agreement.
"Code" means the
Internal Revenue Code of 1986,
as amended from time to time.
"Commitment" means, with
respect to each Lender, the
commitment of such Lender to
make Loans, as such commitment
may be (a) reduced from time to
time pursuant to Section 2.05,
or (b) reduced or increased from
time to time pursuant to
assignments by or to such Lender
pursuant to Section 10.04. The
initial amount of each Lender's
Commitment is set forth on
Schedule 2.1, or in the
Assignment and Acceptance
pursuant to which such Lender
shall have assumed its
Commitment, as applicable. The
initial aggregate amount of the
Commitments is E700,000,000.
"Consolidated EBITDA"
means, for any period,
Consolidated Net Income for such
period plus, without duplication
and to the extent reflected as a
charge in the statement of such
Consolidated Net Income for such
period, the sum of (a) income
tax expense, (b) interest
expense, amortization or
writeoff of debt discount and
debt issuance costs and
commissions, discounts and other
fees and charges associated with
Indebtedness (including the
Loans), (c) depreciation and
amortization expense, (d)
amortization of intangibles
(including, but not limited to,
goodwill) and organization
costs, (e) any extraordinary,
unusual or non-recurring
non-cash expenses or losses
(including, whether or not
otherwise includable as a
separate item in the statement
of such Consolidated Net Income
for such period, non-cash losses
on sales of assets outside of
the ordinary course of
business), and (f) minority
interest charges and any other
non-cash charges, and minus, to
the extent included in the
statement of such Consolidated
Net Income for such period, the
sum of (a) interest income, (b)
any extraordinary, unusual or
non-recurring income or gains
(including, whether or not
otherwise includable as a
separate item in the statement
of such Consolidated Net Income
for such period, gains on the
sales of assets outside of the
ordinary course of business) and
(c) minority interest credits
and any other non-cash income
(except for all amounts that
would, in conformity with GAAP,
be set forth opposite the
caption "equity in affiliate
earnings and other income" (or
any like caption) on a
consolidated income statement of
BorgWarner and its
Subsidiaries), all as determined
on a consolidated basis. For
the purposes of calculating
Consolidated EBITDA for any
period of four consecutive
fiscal quarters (each, a
"Reference Period") pursuant to
any determination of the
Leverage Ratio, (i) if at any
time during such Reference
Period BorgWarner or any
Subsidiary shall have made any
Material Disposition, the
Consolidated EBITDA for such
Reference Period shall be
reduced by an amount equal to
the Consolidated EBITDA (if
positive) attributable to the
property that is the subject of
such Material Disposition for
such Reference Period or
increased by an amount equal to
the Consolidated EBITDA (if
negative) attributable thereto
for such Reference Period and
(ii) if during such Reference
Period BorgWarner or any
Subsidiary shall have made a
Material Acquisition,
Consolidated EBITDA for such
Reference Period shall be
calculated after giving pro
forma effect thereto as if such
Material Acquisition occurred on
the first day of such Reference
Period. As used in this
definition, "Material
Acquisition" means any
acquisition of property or
series of related acquisitions
of property that (a) constitutes
assets comprising all or
substantially all of an
operating unit of a business or
constitutes all or substantially
all of the common stock of a
Person and (b) involves the
payment of consideration by
BorgWarner and its Subsidiaries
in excess of $50,000,000; and
"Material Disposition" means any
disposition of property or
series of related dispositions
of property that yields gross
proceeds to BorgWarner or any of
its Subsidiaries in excess of
$50,000,000.
"Consolidated Net
Income" means, for any period,
the consolidated net income (or
loss) of BorgWarner and its
Subsidiaries, determined on a
consolidated basis in accordance
with GAAP.
"Consolidated Net Worth"
means, at any date, all amounts
that would, in conformity with
GAAP, be set forth opposite the
captions "minority interest" (or
any like caption) and "total
stockholders' equity" (or any
like caption) on a consolidated
balance sheet of BorgWarner and
its Subsidiaries at such date.
"Consolidated Total
Assets" means at any date, all
amounts that would, in
conformity with GAAP, be set
forth opposite the caption
"total assets" (or any like
caption) on a consolidated
balance sheet of BorgWarner and
its Subsidiaries at such date.
"Consolidated Total
Debt" means, at any date, the
aggregate principal amount of
all Indebtedness of BorgWarner
and its Subsidiaries at such
date, determined on a
consolidated basis in accordance
with GAAP.
"Control" means the
possession, directly or
indirectly, of the power to
direct or cause the direction of
the management or policies of a
Person, whether through the
ability to exercise voting
power, by contract or otherwise.
"Controlling" and "Controlled"
have meanings correlative
thereto."Default" means any
event or condition which
constitutes an Event of Default
or which upon notice, lapse of
time or both would, unless cured
or waived, become an Event of
Default.
"Disclosed Matters"
means the actions, suits and
proceedings and the
environmental matters disclosed
in Schedule 3.6.
"Documentation Agents"
has the meaning assigned to such
term in the preamble.
"Domestic Subsidiary"
means any Subsidiary of
BorgWarner organized under the
laws of any jurisdiction within
the United States.
"Effective Date" means
the date on which the conditions
specified in Section 4.01 are
satisfied (or waived in
accordance with Section 10.02).
"EMU" means the economic
and monetary union in accordance
with the Treaty of Rome 1957, as
amended by the Single ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, the Maastricht Treaty
of 1992 and the Amsterdam Treaty
of 1998.
"EMU Legislation" means
the legislative measures of the
European Council for the
introduction of, changeover to
or operation of a single or
unified European currency.
"Environmental Laws"
means all laws, rules,
regulations, codes, ordinances,
orders, decrees, judgments,
injunctions, notices or binding
agreements issued, promulgated
or entered into by any
Governmental Authority, relating
in any way to the environment,
preservation or reclamation of
natural resources, the
management, release or
threatened release of any
Hazardous Material or to health
and safety matters.
"Environmental
Liability" means any liability,
contingent or otherwise
(including any liability for
damages, costs of environmental
remediation, fines, penalties or
indemnities), of BorgWarner or
any Subsidiary directly or
indirectly resulting from or
based upon (a) violation of any
Environmental Law, (b) the
generation, use, handling,
transportation, storage,
treatment or disposal of any
Hazardous Materials, (c)
exposure to any Hazardous
Materials, (d) the release or
threatened release of any
Hazardous Materials into the
environment or (e) any contract,
agreement or other consensual
arrangement pursuant to which
liability is assumed or imposed
with respect to any of the
foregoing.
"ERISA" means the
Employee Retirement Income
Security Act of 1974, as amended
from time to time.
"ERISA Affiliate" means
any trade or business (whether
or not incorporated) that,
together with BorgWarner, is
treated as a single employer
under Section 414(b) or (c) of
the Code or, solely for purposes
of Section 302 of ERISA and
Section 412 of the Code, is
treated as a single employer
under Section 414 of the Code.
"ERISA Event" means (a)
any "reportable event", as
defined in Section 4043 of ERISA
or the regulations issued
thereunder with respect to a
Plan (other than an event for
which the 30-day notice period
is waived); (b) the existence
with respect to any Plan of an
"accumulated funding deficiency"
(as defined in Section 412 of
the Code or Section 302 of
ERISA), whether or not waived;
(c) the filing pursuant to
Section 412(d) of the Code or
Section 303(d) of ERISA of an
application for a waiver of the
minimum funding standard with
respect to any Plan; (d) the
incurrence by BorgWarner or any
of its ERISA Affiliates of any
liability under Title IV of
ERISA with respect to the
termination of any Plan; (e) the
receipt by a BorgWarner or any
ERISA Affiliate from the PBGC or
a plan administrator of any
notice relating to an intention
to terminate any Plan or Plans
or to appoint a trustee to
administer any Plan; (f) the
incurrence by BorgWarner or any
of its ERISA Affiliates of any
liability with respect to the
withdrawal or partial withdrawal
from any Plan or Multiemployer
Plan; or (g) the receipt by
BorgWarner or any ERISA
Affiliate of any notice, or the
receipt by any Multiemployer
Plan from BorgWarner or any
ERISA Affiliate of any notice,
concerning the imposition of
Withdrawal Liability or a
determination that a
Multiemployer Plan is, or is
expected to be, insolvent or in
reorganization, within the
meaning of Title IV of ERISA.
"Escrow Account" means
an escrow account established on
the books of the Administrative
Agent or another financial
institution satisfactory to the
Administrative Agent and in the
name of BorgWarner Germany, and
subject to terms and conditions
satisfactory to the
Administrative Agent.
"Euro Equivalent" means,
with respect to any amount not
denominated in Euros (an "Other
Currency"), such amount
converted to Euros at the spot
rate at which such Other
Currency is offered for sale
against Euros as shown on
Reuters page FX, WRLD at a time
determined by the Administrative
Agent on the day on which any
relevant action is to be taken.
"Euro" and "EUR" means
the lawful currency of the
Participating Member States
introduced in accordance with
EMU Legislation.
"Eurocurrency Rate"
means, for any Interest Period
with respect to any Loan:
(a) the rate per annum
equal to the rate
determined by the
Administrative Agent to
be the offered rate that
is quoted on the Reuters
Telerate screen for
deposits in Euro (for
delivery on the first
day of such Interest
Period) with a term
equivalent to such
Interest Period,
determined as of
approximately 11:00
a.m., London time, two
(2) TARGET Days prior to
the first day of such
Interest Period, or
(b) in the event that
such rate does not
appear on the Reuters
Telerate screen (or
otherwise on such
screen), the
"Eurocurrency Rate"
shall be determined by
reference to such other
comparable publicly
available service for
displaying eurocurrency
rates as may be selected
by the Administrative
Agent or, in the absence
of such availability, by
reference to the rate at
which the Administrative
Agent is offered
deposits in the
applicable currency at
or about 11:00 a.m.,
London time, two TARGET
Days prior to the
beginning of such
Interest Period in the
interbank eurocurrency
market where its
eurocurrency and foreign
currency and exchange
operations are then
being conducted for
delivery on the first
day of such Interest
Period for the number of
days comprised therein.
"Event of Default" has
the meaning assigned to such
term in Article 7.
"Exchange Act" means the
Securities Exchange Act of 1934,
as amended from time to time.
"Exchange Rate" shall
mean, with respect to any
currency on a particular date,
the rate at which such currency
may be exchanged into Euro, as
set forth on such date on the
applicable Reuters currency page
with respect to such currency.
In the event that such rate does
not appear on the applicable
Reuters currency page, the
Exchange Rate with respect to
such currency shall be
determined by reference to such
other publicly available service
for displaying exchange rates as
may be agreed upon by the
Administrative Agent and
BorgWarner or, in the absence of
such agreement, such Exchange
Rate shall instead be JPMorgan
Chase Bank, N.A.'s spot rate of
exchange in the London interbank
or other market where its
foreign currency exchange
operations in respect of such
currency are then being
conducted, at or about 10:00
a.m., local time, at such date
for the purchase of Euro with
such currency for delivery two
Business Days later; provided,
however, that if at the time of
any such determination, for any
reason, no such spot rate is
being quoted, the Administrative
Agent may use any reasonable
method it deems appropriate to
determine such rate, and such
determination shall be
conclusive absent manifest error.
"Excluded Taxes" means,
with respect to the
Administrative Agent, any
Lender, or any other recipient
of any payment to be made by or
on account of any obligation of
a Borrower hereunder, (a) income
or franchise taxes imposed on
(or measured by) its net income
by the United States of America,
or by the jurisdiction under the
laws of which such recipient is
organized or in which its
principal office is located or,
in the case of any Lender, in
which its applicable lending
office is located, (b) any
branch profits taxes imposed by
the United States of America or
any similar tax imposed by any
other jurisdiction in which such
Borrower is located and (c) in
the case of a Foreign Lender
(other than an assignee pursuant
to a request by a Borrower under
Section 2.15(b)), any
withholding tax that is imposed
on amounts payable to such
Foreign Lender at the time such
Foreign Lender becomes a party
to this Agreement or is
attributable to such Foreign
Lender's failure to comply with
Section 2.13(e), except to the
extent that such Foreign
Lender's assignor (if any) was
entitled, at the time of
assignment, to receive
additional amounts from a
Borrower with respect to such
withholding tax pursuant to
Section Section 2.13(a).
"Federal Funds Effective
Rate" means, for any day, the
weighted average (rounded
upwards, if necessary, to the
next 1/100 of 1%) of the rates
on overnight Federal funds
transactions with members of the
Federal Reserve System arranged
by Federal funds brokers, as
published on the next succeeding
Business Day by the Federal
Reserve Bank of New York, or, if
such rate is not so published
for any day that is a Business
Day, the average (rounded
upwards, if necessary, to the
next 1/100 of 1%) of the
quotations for such day for such
transactions received by the
Administrative Agent from three
Federal funds brokers of
recognized standing selected by it.
"Financial Officer"
means the chief financial
officer, principal accounting
officer, treasurer or assistant
treasurer of BorgWarner.
"Foreign Lender" means
any Lender that is organized
under the laws of a jurisdiction
other than that in which the
applicable Borrower is located.
For purposes of this definition,
the United States of America,
each State thereof and the
District of Columbia shall be
deemed to constitute a single
jurisdiction.
"Foreign Subsidiary"
means any Subsidiary of
BorgWarner that is not a
Domestic Subsidiary.
"Funding Date" means the
date on which the conditions
specified in Sections 4.01 and
4.02 are satisfied (or waived in
accordance with Section 10.02).
"GAAP" means generally
accepted accounting principles
in the United States of America.
"German FSA" means the
German Federal Supervisory
Authority for Financial Services.
"German Takeover Act"
means the German Securities
Acquisition and Takeover Act
(Wertpapiererwerbs-und
UEbernahmegesetz) of December
20, 2001, as amended.
"German Stock
Corporation Act" means the
German Stock Corporation Act
(Aktiengesetz) of September 16,
1965, as amended.
"Governmental Authority"
means any government or nation
or any political subdivision
thereof, whether state or local,
and any agency, authority,
instrumentality, regulatory
body, court, central bank or
other entity exercising
executive, legislative,
judicial, taxing, regulatory or
administrative powers or
functions of or pertaining to
government.
"Guarantee" of or by any
Person (the "guarantor") means
any obligation, contingent or
otherwise, of the guarantor
guaranteeing or having the
economic effect of guaranteeing
any Indebtedness or other
obligation of any other Person
(the "primary obligor") in any
manner, whether directly or
indirectly, and including any
obligation of the guarantor,
direct or indirect, (a) to
purchase or pay (or advance or
supply funds for the purchase or
payment of) such Indebtedness or
other obligation or to purchase
(or to advance or supply funds
for the purchase of) any
security for the payment
thereof, (b) to purchase or
lease property, securities or
services for the purpose of
assuring the owner of such
Indebtedness or other obligation
of the payment thereof, (c) to
maintain working capital, equity
capital or any other financial
statement condition or liquidity
of the primary obligor so as to
enable the primary obligor to
pay such Indebtedness or other
obligation or (d) as an account
party in respect of any letter
of credit or letter of guaranty
issued to support such
Indebtedness or obligation;
provided, that the term
Guarantee shall not include
endorsements for collection or
deposit in the ordinary course
of business.
"Hazardous Materials"
means all explosive or
radioactive substances or wastes
and all hazardous or toxic
substances, wastes or other
pollutants, including petroleum
or petroleum distillates,
asbestos or asbestos containing
materials, polychlorinated
biphenyls, radon gas, infectious
or medical wastes and all other
substances or wastes of any
nature regulated pursuant to any
Environmental Law.
"Hedging Agreement"
means any interest rate
protection agreement, foreign
currency exchange agreement,
commodity price protection
agreement or other interest or
currency exchange rate or
commodity price hedging
arrangement.
"Indebtedness" of any
Person means, without
duplication, (a) all obligations
of such Person for borrowed
money or with respect to
deposits or advances of any
kind, (b) all obligations of
such Person evidenced by bonds,
debentures, notes or similar
instruments, (c) all obligations
of such Person upon which
interest charges are customarily
paid, (d) all obligations of
such Person under conditional
sale or other title retention
agreements relating to property
acquired by such Person, (e) all
obligations of such Person in
respect of the deferred purchase
price of property or services
(excluding current accounts
payable incurred in the ordinary
course of business), (f) all
Indebtedness of others secured
by (or for which the holder of
such Indebtedness has an
existing right, contingent or
otherwise, to be secured by) any
Lien on property owned or
acquired by such Person, whether
or not the Indebtedness secured
thereby has been assumed, (g)
all Guarantees by such Person of
Indebtedness of others, (h) all
Capital Lease Obligations of
such Person, (i) all
obligations, contingent or
otherwise, of such Person as an
account party in respect of
letters of credit and letters of
guaranty and (j) all
obligations, contingent or
otherwise, of such Person in
respect of bankers' acceptances.
The Indebtedness of any Person
shall include the Indebtedness
of any other entity (including
any partnership in which such
Person is a general partner) to
the extent such Person is liable
therefor as a result of such
Person's ownership interest in
or other relationship with such
entity, except to the extent the
terms of such Indebtedness
provide that such Person is not
liable therefor.
"Indemnified Taxes"
means Taxes other than Excluded
Taxes.
"Index Debt" means (i)
senior, unsecured, long-term
indebtedness for borrowed money
of BorgWarner that is not
guaranteed by any other Person
or subject to any other credit
enhancement or (ii) if no
indebtedness of the type
described in clause (i) is
outstanding, all senior,
unsecured, long-term
indebtedness of BorgWarner (that
is not guaranteed by any other
Person or subject to any other
credit enhancement) registered
under an effective shelf
registration under Rule 415 of
the Securities Act of 1933, as
amended.
"Interest Election
Notice" means a notice by a
Borrower specifying the duration
of an Interest Period in
accordance with Section 2.04.
"Interest Payment Date"
means the last day of the
Interest Period applicable to
the Borrowing of which such Loan
is a part and, in the case of a
Borrowing with an Interest
Period of more than three
months' duration, each day prior
to the last day of such Interest
Period that occurs at intervals
of three months' duration after
the first day of such Interest
Period.
"Interest Period" means
(a) with respect to any
Borrowing, the period commencing
on the date of such Borrowing
and ending on the numerically
corresponding day in the
calendar month that is one, two,
three or six months thereafter,
as the applicable Borrower may
elect; provided, that (i) if any
Interest Period would end on a
day other than a Business Day,
such Interest Period shall be
extended to the next succeeding
Business Day unless such next
succeeding Business Day would
fall in the next calendar month,
in which case such Interest
Period shall end on the next
preceding Business Day and (ii)
any Interest Period pertaining
to a Borrowing that commences on
the last Business Day of a
calendar month (or on a day for
which there is no numerically
corresponding day in the last
calendar month of such Interest
Period) shall end on the last
Business Day of the last
calendar month of such Interest
Period.
"July Credit Agreement"
means the Credit Agreement dated
as of July 22, 2004 among
BorgWarner, as borrower, the
lenders from time to time party
thereto, JPMorgan Chase Bank, as
administrative agent, and the
other agents from time to time
party thereto.
"Lead Arranger" means
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding,
Inc., as lead arranger and book
runner for this Agreement.
"Lenders" means the
Persons listed on Schedule 2.1
and any other Person that shall
have become a party hereto
pursuant to an Assignment and
Acceptance, other than any such
Person that ceases to be a party
hereto pursuant to an Assignment
and Acceptance.
"Leverage Ratio" means,
as at the last day of any
period, the ratio of (a)
Consolidated Total Debt on such
day to (b) Consolidated EBITDA
for such period.
"Lien" means, with
respect to any asset, (a) any
mortgage, deed of trust, lien,
pledge, hypothecation,
encumbrance, charge or security
interest in, on or of such
asset, (b) the interest of a
vendor or a lessor under any
conditional sale agreement,
capital lease or title retention
agreement (or any financing
lease having substantially the
same economic effect as any of
the foregoing) relating to such
asset and (c) in the case of
securities, any purchase option,
call or similar right of a third
party with respect to such
securities.
"Loans" means the loans
made by the Lenders to the
Borrowers pursuant to this
Agreement.
"Major Default" means
(i) any of the Events of Default
enumerated in clauses (a), (b)
(without giving effect to any
grace period that would
otherwise apply), (f), (h) (i),
and (j) of Article 7 (but, in
the case of (h), (i), and (j),
only with respect to either
Borrower or any Subsidiary that
would meet the definition of
"significant subsidiary"
contained as of the date hereof
in Regulation S-X of the U.S.
Securities and Exchange
Commission), (ii) the
invalidity, unlawfulness or
repudiation of this Agreement
and any Notes or other related
documents, and (iii)
BorgWarner's failure to observe
or perform any covenant
condition or agreement in
Sections 6.02, 6.04, and 6.09.
"Material Adverse
Effect" means a material adverse
effect on (a) the business,
assets, operations, prospects or
condition, financial or
otherwise, of BorgWarner and the
Subsidiaries taken as a whole,
(b) the ability of a Borrower to
perform any of its obligations
under this Agreement or (c) the
rights of or benefits available
to the Lenders under this
Agreement.
"Material Indebtedness"
means Indebtedness (other than
the Loans and Letters of
Credit), or obligations in
respect of one or more Hedging
Agreements, of any one or more
of BorgWarner and the
Subsidiaries in an aggregate
principal amount exceeding
$50,000,000. For purposes of
determining Material
Indebtedness, the "principal
amount" of the obligations of
BorgWarner or any Subsidiary in
respect of any Hedging Agreement
at any time shall be the maximum
aggregate amount (giving effect
to any netting agreements) that
BorgWarner or such Subsidiary
would be required to pay if such
Hedging Agreement were
terminated at such time.
"Maturity Date" means
the earlier of November 22, 2005
and the fifth Business Day
following the date the Tender
Offer lapses or terminates;
provided that if the Tender
Offer is consummated prior to
the consummation of the Private
Sale, then the Maturity Date
shall be the Business Day
following the date on which the
Tender Offer is consummated.
"Moody's" means ▇▇▇▇▇'▇
Investors Service, Inc.
"Multiemployer Plan"
means a multiemployer plan as
defined in Section 4001(a)(3) of
ERISA.
"Net Cash Proceeds"
means, with respect to any
Reduction Event, (a) an amount
equal to the cash proceeds
received by BorgWarner or any of
its Subsidiaries in respect of
such Reduction Event, including
any cash received in respect of
any non-cash proceeds, but only
as and when received, in each
case net of (b) the sum of (i)
all reasonable fees and
out-of-pocket expenses paid by
such Person to third parties
(other than Affiliates) in
connection with such event, (ii)
in the case of a Reduction Event
arising from the disposition of
property (an "Asset Sale"), the
amount of all payments required
to be made by such Person as a
result of such event to repay or
redeem (x) Indebtedness (other
than Loans) secured by such
asset or otherwise subject to
mandatory prepayment as a result
of such event and (y) minority
interests in such asset, and
(iii) in the case of an Asset
Sale, the amount of all taxes
paid (or reasonably estimated to
be payable) by such Person, and
the amount of any reserves
established by such Person to
fund contingent liabilities
reasonably estimated to be
payable, in each case during the
year that such Reduction Event
occurred or the next succeeding
year and that are directly
attributable to such Reduction
Event (as determined reasonably
and in good faith by a Financial
Officer).
"Notes" means promissory
notes of a Borrower evidencing
such Borrower's obligation to
repay the Loans made to it, and
"Note" means any one of such
promissory notes issued hereunder.
"Other Taxes" means any
and all present or future stamp
or documentary taxes or any
other excise or property taxes,
charges or similar levies
arising from any payment made
hereunder or from the execution,
delivery or enforcement of, or
otherwise with respect to, this
Agreement.
"Overnight Rate" means,
for any day, the rate of
interest per annum at which
overnight deposits in Euro, in
an amount approximately equal to
the amount with respect to which
such rate is being determined,
would be offered for such day by
a branch or Affiliate of
JPMorgan Chase Bank, N.A. in the
London interbank market or other
market for such currency to
major banks in such interbank
market.
"Participating Member
State" means any member state of
the EMU which has the Euro as
its lawful currency.
"PBGC" means the Pension
Benefit Guaranty Corporation
referred to and defined in ERISA
and any successor entity
performing similar functions.
"Permitted Encumbrances"
means:
(a) Liens for taxes not yet due
or which are being contested in
good faith by appropriate
proceedings, provided that
adequate reserves with respect
thereto are maintained on the
books of BorgWarner or its
Subsidiaries, as the case may
be, in conformity with GAAP (or,
in the case of Foreign
Subsidiaries, generally accepted
accounting principles in effect
from time to time in their
respective jurisdictions of
incorporation;
(b) carriers', warehousemen's,
mechanics', materialmen's,
repairmen's and other like Liens
imposed by law, arising in the
ordinary course of business and
securing obligations that are
not overdue by more than 60 days
or are being contested in
compliance with Section 5.04;
(c) pledges and deposits made in
the ordinary course of business
in compliance with workers'
compensation, unemployment
insurance and other social
security laws or regulations;
(d) deposits to secure the
performance of bids, trade
contracts, leases, statutory
obligations, surety and appeal
bonds, performance bonds and
other obligations of a like
nature, in each case in the
ordinary course of business; and
(e) easements, zoning
restrictions, rights-of-way and
similar encumbrances on real
property imposed by law or
arising in the ordinary course
of business that do not secure
any monetary obligations and do
not materially detract from the
value of the affected property
or interfere with the ordinary
conduct of business of
BorgWarner or any Subsidiary;
provided that the term
"Permitted Encumbrances" shall
not include any Lien securing
Indebtedness.
"Person" means any
natural person, corporation,
limited liability company,
trust, joint venture,
association, company,
partnership, Governmental
Authority or other entity.
"Plan" means any
employee pension benefit plan
(other than a Multiemployer
Plan) subject to the provisions
of Title IV of ERISA or Section
412 of the Code or Section 302
of ERISA, and in respect of
which BorgWarner or any ERISA
Affiliate is (or, if such plan
were terminated, would under
Section 4069 of ERISA be deemed
to be) an "employer" as defined
in Section 3(5) of ERISA.
"Prime Rate" means the
rate of interest per annum
publicly announced from time to
time by JPMorgan Chase Bank,
N.A., as its prime rate in
effect at its principal office
in New York City; each change in
the Prime Rate shall be
effective from and including the
date such change is publicly
announced as being effective.
"Private Sale" means the
acquisition by BorgWarner
Germany of up to 63% of the
capital shares of Target
pursuant to the Sale and
Purchase Documentation.
"Publication Date" means
the date on which the Tender
Offer Documentation is published
in accordance with the German
Takeover Act.
"Reduction Event" means
any of the following occurring
on or after the date hereof:
(i) any sale, transfer
or other disposition (including
pursuant to a sale and leaseback
transaction) of any property of
BorgWarner or any Subsidiary,
except dispositions of assets in
the ordinary course resulting in
aggregate Net Cash Proceeds not
exceeding $2,500,000 for any
disposition transaction or
$50,000,000 for all qualifying
dispositions; and
(ii) the incurrence by
BorgWarner or any Subsidiary of
any Indebtedness, including
without limitation pursuant to a
public offering, a private
placement or a syndicated bank
financing, except (w)
Indebtedness incurred under this
Agreement, (x) Indebtedness
incurred under the July Credit
Agreement in an aggregate amount
of up to $100,000,000; provided
that such Indebtedness is not
used directly or indirectly to
finance the Acquisition, (y)
Indebtedness incurred under any
Receivables Facility in the
ordinary course of business, and
(z) bilateral lines of credit
existing on the Effective Date
and refinancings and renewals
thereof in the ordinary course
of business that do not
materially increase the
aggregate principal amount
outstanding thereunder; and
(iii) the issuance by
BorgWarner or any Subsidiary of
any equity security, including
without limitation any
equity-linked security, or the
receipt by BorgWarner or any
Subsidiary of any capital
contribution, except (x) any
such issuance of any equity
security to, or receipt of any
such capital contribution from,
BorgWarner or any Subsidiary,
and (y) any such issuance in
connection with the exercise of
employee stock options.
"Receivables Facility"
means receivables financings of
BorgWarner and its Subsidiaries
in an aggregate principal amount
not to exceed $200,000,000 at
any one time outstanding for
BorgWarner and its Domestic
Subsidiaries, $200,000,000 at
any one time outstanding for its
Foreign Subsidiaries, or
$300,000,000 at any one time
outstanding for BorgWarner and
its Subsidiaries, which
receivables financings shall be
upon terms and subject to
conditions reasonably
satisfactory to the Required
Lenders, but in any event no
less restrictive to BorgWarner
and its Subsidiaries than those
for any such receivables
financings in effect on the date
hereof.
"Register" has the
meaning set forth in Section 10.04.
"Related Parties" means,
with respect to any specified
Person, such Person's Affiliates
and the respective directors,
officers, employees, agents and
advisors of such Person and such
Person's Affiliates. With
respect to each Lender (other
than the Administrative Agent)
and for the purpose of Section
10.03, it is hereby understood
that such Lender's "agents" (as
such term is used in the
preceding sentence) shall not
include the Administrative Agent
or agents of the Administrative
Agent.
"Required Lenders"
means, at any time, Lenders
having Commitments and Loans
outstanding representing more
than 50% of the total
Commitments and Loans
outstanding at such time.
"S&P" means Standard &
Poor's Ratings Services, a
division of the McGraw Hill
Companies, Inc.
"Sale and Purchase
Agreement" means the Sale and
Purchase Agreement dated October
30, 2004 by and between
BorgWarner Germany and the
holders of shares of Target
representing approximately 63%
of the registered capital of
Target.
"Sale and Purchase
Documentation" means the Sale
and Purchase Agreement and any
related agreements, instruments
or documents.
"Settlement Account"
means account no. 636-0758,
Bankleitzahl 512 209 00, BIC:
▇▇▇▇▇▇▇▇, confirmed by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Bank AG as being the
account into which the payments
relating to Target shares
accepted in the Tender Offer are
to be made.
"Statutory Reserve Rate"
means a fraction (expressed as a
decimal), the numerator of which
is the number one and the
denominator of which is the
number one minus the aggregate
of the maximum reserve
percentages (including any
marginal, special, emergency or
supplemental reserves) expressed
as a decimal established by the
Board to which the
Administrative Agent is subject,
for eurocurrency funding
(currently referred to as
"Eurocurrency Liabilities" in
Regulation D of the Board).
Such reserve percentages shall
include those imposed pursuant
to such Regulation D. The Loans
shall be deemed to constitute
eurocurrency funding and to be
subject to such reserve
requirements without benefit of
or credit for proration,
exemptions or offsets that may
be available from time to time
to any Lender under such
Regulation D or any comparable
regulation. The Statutory
Reserve Rate shall be adjusted
automatically on and as of the
effective date of any change in
any reserve percentage.
"subsidiary" means, with
respect to any Person (the
"parent") at any date, any
corporation, limited liability
company, partnership,
association or other entity the
accounts of which would be
consolidated with those of the
parent in the parent's
consolidated financial
statements if such financial
statements were prepared in
accordance with GAAP as of such
date, as well as any other
corporation, limited liability
company, partnership,
association or other entity (a)
of which securities or other
ownership interests representing
more than 50% of the equity or
more than 50% of the ordinary
voting power or, in the case of
a partnership, more than 50% of
the general partnership
interests are, as of such date,
owned, controlled or held, or
(b) that is, as of such date,
otherwise Controlled, by the
parent or one or more
subsidiaries of the parent or by
the parent and one or more
subsidiaries of the parent.
"Subsidiary" means any
subsidiary of BorgWarner.
"Syndication Agent" has
the meaning assigned to such
term in the preamble.
"Target" means Beru AG,
an aktiengesellschaft organized
under the laws of Germany.
"TARGET Day" means any
day on which the Trans-European
Automated Real-time Gross
Settlement Express Transfer
(TARGET) payment system (or if
such payment system ceases to be
operative, such other payment
system (if any) determined by
the Administrative Agent to be a
suitable replacement) is open
for the settlement of payments
in Euro.
"Taxes" means any and
all present or future taxes,
levies, imposts, duties,
deductions, charges or
withholdings imposed by any
Governmental Authority.
"Tender Offer" means a
tender offer by BorgWarner
Germany for those shares of
Target that have not been
purchased in the Private Sale;
provided that the term "Tender
Offer" shall not include any
offer to the shareholders of the
Target under Section 35 of the
German Takeover Act.
"Tender Offer
Documentation" means the tender
offer document
(Angebotsunterlage) relating to
the Tender Offer, substantially
in the form filed with the
German FSA on the Effective Date
and as amended or modified
thereafter from time to time
until approved by the German FSA
and published by BorgWarner
Germany pursuant to section 14
of the German Takover Act on the
Publication Date.
"Transactions" means the
execution, delivery and
performance by the Borrowers of
this Agreement, the borrowing of
Loans, the use of the proceeds
thereof and the consummation of
the Acquisition.
"Withdrawal Liability"
means liability to a
Multiemployer Plan as a result
of a complete or partial
withdrawal from such
Multiemployer Plan, as such
terms are defined in Part I of
Subtitle E of Title IV of ERISA.
Section 1.02 . Terms
Generally. The definitions of
terms herein shall apply equally
to the singular and plural forms
of the terms defined. Whenever
the context may require, any
pronoun shall include the
corresponding masculine,
feminine and neuter forms. The
words "include", "includes" and
"including" shall be deemed to
be followed by the phrase
"without limitation". The word
"will" shall be construed to
have the same meaning and effect
as the word "shall". Unless the
context requires otherwise (a)
any definition of or reference
to any agreement, instrument or
other document herein shall be
construed as referring to such
agreement, instrument or other
document as from time to time
amended, supplemented or
otherwise modified (subject to
any restrictions on such
amendments, supplements or
modifications set forth herein),
(b) any reference herein to any
Person shall be construed to
include such Person's successors
and assigns, (c) the words
"herein", "hereof" and
"hereunder", and words of
similar import, shall be
construed to refer to this
Agreement in its entirety and
not to any particular provision
hereof, (d) all references
herein to Articles, Sections,
Exhibits and Schedules shall be
construed to refer to Articles
and Sections of, and Exhibits
and Schedules to, this Agreement
and (e) the words "asset" and
"property" shall be construed to
have the same meaning and effect
and to refer to any and all
tangible and intangible assets
and properties, including cash,
securities, accounts and
contract rights.
Section 1.03 . Accounting
Terms; GAAP. Except as
otherwise expressly provided
herein, all terms of an
accounting or financial nature
shall be construed in accordance
with GAAP, as in effect from
time to time; provided that, if
BorgWarner notifies the
Administrative Agent that
BorgWarner requests an amendment
to any provision hereof to
eliminate the effect of any
change occurring after the date
hereof in GAAP or in the
application thereof on the
operation of such provision (or
if the Administrative Agent
notifies BorgWarner that the
Required Lenders request an
amendment to any provision
hereof for such purpose),
regardless of whether any such
notice is given before or after
such change in GAAP or in the
application thereof, then such
provision shall be interpreted
on the basis of GAAP as in
effect and applied immediately
before such change shall have
become effective until such
notice shall have been withdrawn
or such provision amended in
accordance herewith.
ARTICLE 2
The Credits
Section 2.01 . Commitments.
(a) Loans each Lender severally
agrees, on the terms and
conditions set forth in this
Agreement, to make one or more
loans to the Borrowers pursuant
to this subsection from time to
time during the Availability
Period, in an aggregate amount
not to exceed such Lender's
Commitment as in effect at such
time. Each Borrowing shall be
made from the several Lenders
ratably in proportion to their
respective Commitments. The
Commitments are not revolving in
nature, and Loans that are
prepaid or repaid may not be
reborrowed. Loans may be used
for the purposes set forth in
Section 5.08.
(b) Currency and
Amount of Each Borrowing. Each
Borrowing shall be denominated
in Euros. Each Borrowing shall
be in an aggregate amount of
E5,000,000 or any larger
integral multiple of E5,000,000;
provided that any Borrowing may
be in an aggregate amount equal
to the maximum aggregate amount
then available for borrowing
under the Commitments.
Section 2.02 . Requests For
Borrowings. To request a
Borrowing, the relevant Borrower
shall notify the Administrative
Agent of such request by
telephone not later than 12:00
noon New York City time, three
Business Days before the date of
the proposed Borrowing. Each
such telephonic Borrowing
Request shall be irrevocable and
shall be confirmed promptly by
hand delivery or telecopy (or
transmitted by electronic
communication, if arrangements
for doing so have been approved
by the Administrative Agent) to
the Administrative Agent of a
written Borrowing Request in a
form approved by the
Administrative Agent and signed
by the applicable Borrower.
Each such telephonic and written
Borrowing Request shall specify
the following information:
(i) the
aggregate amount of the
requested Borrowing;
(ii) the date
of such Borrowing, which
shall be a Business Day;
(iii) the
initial Interest Period
to be applicable
thereto, which shall be
a period contemplated by
the definition of the
term "Interest Period"; and
(iv) unless
the proceeds of such
Borrowing are to be used
to consummate the Tender
Offer, the location and
number of such
Borrower's account to
which funds are to be
disbursed, which shall
comply with the
requirements of Section
2.03.
If no Interest Period is
specified with respect to any
requested Borrowing, then the
applicable Borrower shall be
deemed to have selected an
Interest Period of one month's
duration. Promptly following
receipt of a Borrowing Request
in accordance with this Section,
the Administrative Agent shall
advise each Lender of the
details thereof and of the
amount of such Lender's Loan to
be made as part of the requested
Borrowing.
Section 2.03 . Funding Of
Borrowings. (a) Each Lender
shall make each Loan to be made
by it hereunder on the proposed
date thereof by wire transfer in
same day funds by the time
specified by the Administrative
Agent, to the account of the
Administrative Agent most
recently designated by it for
such purpose by notice to the
Lenders. The Administrative
Agent will make such Loans
available to the applicable
Borrower by promptly crediting
the amounts so received, in like
funds, to an account of such
Borrower designated by such
Borrower in the applicable
Borrowing Request, provided that
if the proceeds of the Loans are
to be used to consummate the
Tender Offer, the Administrative
Agent shall wire such funds
directly to the Settlement Account.
(b) Unless the
Administrative Agent shall have
received notice from a Lender
prior to the proposed date of
any Borrowing that such Lender
will not make available to the
Administrative Agent such
Lender's share of such
Borrowing, the Administrative
Agent may assume that such
Lender has made such share
available on such date in
accordance with paragraph [a] of
this Section and may, in
reliance upon such assumption,
make available to the Borrower a
corresponding amount. In such
event, if a Lender has not in
fact made its share of the
applicable Borrowing available
to the Administrative Agent,
then the applicable Lender and
the applicable Borrower
severally agree to pay to the
Administrative Agent forthwith
on demand such corresponding
amount with interest thereon,
for each day from and including
the date such amount is made
available to such Borrower to
but excluding the date of
payment to the Administrative
Agent, at (i) in the case of
such Lender, the applicable
Overnight Rate from time to time
in effect and (ii) in the case
of the Borrower, the interest
rate on the applicable
Borrowing. If such Lender pays
such amount to the
Administrative Agent, then such
amount shall constitute such
Lender's Loan included in such
Borrowing.
Section 2.04 . Interest
Elections. (a) The initial
Interest Period for each
Borrowing shall be specified by
the relevant Borrower in the
applicable Borrowing Request.
The relevant Borrower may
specify the duration of each
subsequent Interest Period
applicable to such Borrowing by
delivering to the Administrative
Agent, not later that 12:00 noon
New York City time on the third
Business Day before the end of
the immediately preceding
Interest Period, a notice by
telephone or electronic
communication (if arrangements
for doing so have been approved
by the Administrative Agent)
specifying the Borrowing to
which such notice applies and
the duration of such subsequent
Interest Period (which shall
comply with the provisions of
the definition of Interest
Period). Such notice may, if it
so specifies, apply to only a
portion of the aggregate
principal amount of the affected
Borrowing in which case each
such portion shall be allocated
ratably among the Lenders
holding the Loans comprising
such Borrowing, and the Loans
comprising each such portion
shall be considered a separate
Borrowing. Each such telephonic
Interest Election Notice shall
be irrevocable and shall be
confirmed promptly by hand
delivery or telecopy or by
electronic communication (if
arrangements for doing so have
been approved by the
Administrative Agent) to the
Administrative Agent of a
written Interest Election Notice
in a form approved by the
Administrative Agent and signed
by the Borrower.
(b) Promptly
following receipt of an Interest
Election Notice, the
Administrative Agent shall
advise each applicable Lender of
the details thereof and of such
Lender's portion of each
resulting Borrowing.
(c) If a Borrower
fails to deliver a timely
Interest Election Notice with
respect to a Borrowing prior to
the end of the Interest Period
applicable thereto, then, unless
such Borrowing is repaid as
provided herein, at the end of
such Interest Period the
subsequent Interest Period for
such Borrowing shall be deemed
to have a duration of one month.
Notwithstanding any contrary
provision hereof, if an Event of
Default has occurred and is
continuing and the
Administrative Agent, at the
request of the Required Lenders,
so notifies the Borrower, then,
so long as an Event of Default
is continuing, each subsequent
Interest Period for each
Borrowing shall be deemed to
have a duration of one month.
Section 2.05 . Termination
And Reduction Of Commitments.
(a) Unless previously
terminated, the Commitments
shall terminate on the earlier
of the date on which the Certain
Funds Period ends and the date
the Tender Offer lapses or
terminates.
(b) BorgWarner may
at any time terminate, or from
time to time reduce, the unused
Commitments; provided that (i)
each reduction of the
Commitments shall be in an
amount that is an integral
multiple of E5,000,000 and not
less than E25,000,000 and (ii)
BorgWarner may not reduce the
Commitments on any date prior to
or during the Certain Funds
Period without the consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bank AG unless
contemporaneously with any such
reduction BorgWarner shall have
deposited into the Escrow
Account the Euro Equivalent (as
reasonably determined by the
Administrative Agent) of such
reduction.
(c) The Commitments
shall be automatically reduced
by the amount of cash and cash
equivalents (other than the
proceeds of Loans) used to
consummate the Acquisition.
(d) On any Business
Day prior to or during the
Certain Funds Period on which
any Net Cash Proceeds are
received by BorgWarner or any
Subsidiary in respect of any
Reduction Event, the Commitments
shall be automatically reduced
by an amount equal to the Euro
Equivalent of such Net Cash
Proceeds, and BorgWarner or such
Subsidiary shall immediately
deposit such Net Cash Proceeds
in the Escrow Account in
accordance with Section 2.16.
(e) BorgWarner shall
notify the Administrative Agent
of any election to terminate or
reduce the Commitments under
paragraph of this Section at
least three Business Days prior
to the effective date of such
termination or reduction,
specifying such election and the
effective date thereof.
Promptly following receipt of
any notice, the Administrative
Agent shall advise the
applicable Lenders of the
contents thereof. Each notice
delivered by BorgWarner pursuant
to this Section shall be
irrevocable; provided that a
notice of termination of any
Commitments delivered by
BorgWarner may state that such
notice is conditioned upon the
effectiveness of other credit
facilities, in which case such
notice may be revoked by
BorgWarner (by notice to the
Administrative Agent on or prior
to the specified effective date)
if such condition is not
satisfied. Any termination or
reduction of the Commitments
shall be permanent. Each
reduction of any Commitments
shall be made ratably among the
applicable Lenders in accordance
with their respective applicable
Commitments.
Section 2.06 . Repayment Of
Loans; Evidence Of Debt.
(a) Each Borrower
hereby unconditionally promises
to pay to the Administrative
Agent for the account of each
Lender the then unpaid principal
amount of each Loan of such
Borrower on the Maturity Date.
(b) Each Lender
shall maintain in accordance
with its usual practice an
account or accounts evidencing
the indebtedness of each
Borrower to such Lender
resulting from each Loan made by
such Lender, including the
amounts of principal and
interest payable and paid to
such Lender from time to time
hereunder.
(c) The
Administrative Agent shall
maintain accounts in which it
shall record (i) the amount of
each Loan made hereunder and the
Interest Period applicable
thereto, (ii) the amount of any
principal or interest due and
payable or to become due and
payable from each Borrower to
each Lender hereunder and (iii)
the amount of any sum received
by the Administrative Agent
hereunder for the account of the
Lenders and each Lender's share
thereof.
(d) The entries made
in the accounts maintained
pursuant to paragraph (b) or [c]
of this Section shall be prima
facie evidence of the existence
and amounts of the obligations
recorded therein; provided that
the failure of any Lender or the
Administrative Agent to maintain
such accounts or any error
therein shall not in any manner
affect the obligation of the
Borrowers to repay the Loans in
accordance with the terms of
this Agreement.
(e) Any Lender may
request that Loans made by it be
evidenced by a Note. In such
event, each Borrower shall
prepare, execute and deliver to
such Lender a Note payable to
the order of such Lender (or, if
requested by such Lender, to
such Lender and its registered
assigns) and in a form approved
by the Administrative Agent.
Thereafter, the Loans evidenced
by such Note and interest
thereon shall at all times
(including after assignment
pursuant to Section 10.04) be
represented by one or more Notes
in such form payable to the
order of the payee named therein
(or, if such Note is a
registered Note, to such payee
and its registered assigns).
Section 2.07 . Prepayment Of
Loans. (a) A Borrower shall
have the right at any time and
from time to time to prepay any
Borrowing in whole or in part,
subject to prior notice in
accordance with paragraph [b] of
this Section.
(b) The Borrower
shall notify the Administrative
Agent by telephone (confirmed by
telecopy or by electronic
communication (if arrangements
for doing so have been approved
by the Administrative Agent) of
any prepayment hereunder not
later than 9:00 a.m., New York
City time, three Business Days
before the date of prepayment.
Each such notice shall be
irrevocable and shall specify
the prepayment date and the
principal amount of each
Borrowing or portion thereof to
be prepaid; provided that, if a
notice of prepayment is given in
connection with a conditional
notice of termination of any
Commitments as contemplated by
Section 2.05, then such notice
of prepayment may be revoked if
such notice of termination is
revoked in accordance with
Section 2.05. Promptly
following receipt of any such
notice relating to a Borrowing,
the Administrative Agent shall
advise the applicable Lenders of
the contents thereof. Each
partial prepayment of any
Borrowing shall be in a minimum
amount of E25,000,000 or any
larger integral multiple of
E5,000,000. Each prepayment of
a Borrowing shall be applied
ratably to the Loans included in
the prepaid Borrowing.
Prepayments shall be accompanied
by accrued interest to the
extent required by Section 2.09.
(c) On any date
after the end of the Certain
Funds Period on which any Net
Cash Proceeds are received by or
on behalf of BorgWarner or any
of the Subsidiaries in respect
of any Reduction Event, the
Borrowers shall prepay Loans in
an aggregate principal amount
equal to the Euro Equivalent of
the amount of such Net Cash
Proceeds.
Section 2.08 . Fees. (a)
BorgWarner agrees to pay to the
Administrative Agent for the
account of each Lender a
facility fee, which shall accrue
at the Applicable Rate on the
daily amount of the Commitment
of such Lender (whether used or
unused) during the period from
and including the Effective Date
to but excluding the date on
which such Commitment
terminates; provided that, if
such Lender continues to have
any Loans outstanding after its
Commitment terminates, then such
facility fee shall continue to
accrue on the daily aggregate
amount of such Lender's
outstanding Loans from and
including the date on which its
Commitment terminates to but
excluding the date on which such
Loans cease to be outstanding.
Accrued facility fees shall be
payable in arrears on the last
day of March, June, September
and December of each year and on
the date on which the
Commitments terminate,
commencing on the first such
date to occur after the date
hereof; provided that any
facility fees accruing after the
date on which the Commitments
terminate shall be payable on
demand. All facility fees shall
be computed on the basis of a
year of 365 days (or 366 days in
a leap year) and shall be
payable for the actual number of
days elapsed (including the
first day but excluding the last
day).
(b) BorgWarner
agrees to pay to the
Administrative Agent, for its
own account, fees payable in the
amounts and at the times
separately agreed upon between
BorgWarner and the
Administrative Agent.
(c) All fees payable
hereunder shall be paid on the
dates due, in immediately
available funds, to the
Administrative Agent for
distribution, in the case of
facility fees, to the Lenders.
Fees paid shall not be
refundable under any circumstances.
Section 2.09 . Interest.
(a) The Loans shall bear
interest at a rate per annum
equal to the Adjusted
Eurocurrency Rate for the
Interest Period in effect for
such Borrowing plus the
Applicable Rate.
(b) Notwithstanding
the foregoing, if any principal
of or interest on any Loan or
any fee or other amount payable
by a Borrower hereunder is not
paid when due, whether at stated
maturity, upon acceleration or
otherwise, such overdue amount
shall bear interest, after as
well as before judgment, at a
rate per annum equal to (i) in
the case of overdue principal of
any Loan, 2% plus the rate
otherwise applicable to such
Loan as provided above or (ii)
in the case of any other amount,
2% plus the Alternate Base Rate.
(c) Accrued interest
on each Loan shall be payable in
arrears on each Interest Payment
Date for such Loan; provided
that (i) in the event of any
repayment or prepayment of any
Loan, accrued interest on the
principal amount repaid or
prepaid shall be payable on the
date of such repayment or
prepayment and (ii) all accrued
interest shall be payable upon
termination of the Commitments.
(d) All interest
hereunder shall be computed on
the basis of a year of 360 days,
except that interest computed by
reference to the Alternate Base
Rate at times when the Alternate
Base Rate is based on the Prime
Rate and Overnight Rates (except
the Federal Funds Effective
Rate, which shall be computed on
the basis of a year of 360 days)
shall be computed on the basis
of a year of 365 days (or 366
days in a leap year), and in
each case shall be payable for
the actual number of days
elapsed (including the first day
but excluding the last day).
The applicable Alternate Base
Rate, Adjusted Eurocurrency
Rate, Eurocurrency Rate and
Overnight Rate shall be
determined by the Administrative
Agent, and such determination
shall be conclusive absent
manifest error.
Section 2.10 . Alternate
Rate Of Interest.
If prior to the commencement of
any Interest Period for a
Borrowing:
(a) the
Administrative Agent determines
(which determination shall be
conclusive absent manifest
error) that adequate and
reasonable means do not exist
for ascertaining the Adjusted
Eurocurrency Rate or the
Eurocurrency Rate, as
applicable, for the relevant
currency for such Interest
Period; or
(b) the
Administrative Agent is advised
by the Required Lenders or by
the holders of at least a
majority of the Commitments that
the Adjusted Eurocurrency Rate
or the Eurocurrency Rate, as
applicable, for such Interest
Period will not adequately and
fairly reflect the cost to such
Lenders of making or maintaining
their Loans included in such
Borrowing for such Interest Period;
then the Administrative Agent
shall give notice thereof to
BorgWarner and the Lenders by
telephone or telecopy as
promptly as practicable
thereafter and, until the
Administrative Agent notifies
BorgWarner and the Lenders that
the circumstances giving rise to
such notice no longer exist,
each Borrowing shall bear
interest at an interest rate
reasonably determined by the
Administrative Agent, after
consultation with BorgWarner and
the applicable Lenders, to
compensate the applicable
Lenders for such Borrowing for
the applicable period.
Section 2.11 . Increased
Costs. (a) If any Change in
Law shall:
(i) impose,
modify or deem
applicable any reserve,
special deposit or
similar requirement
against assets of,
deposits with or for the
account of, or credit
extended by, any Lender
(except any such reserve
requirement reflected in
the Adjusted
Eurocurrency Rate); or
(ii) impose
on any Lender or the
London interbank market
any other condition
affecting this Agreement
or Loans made by such
Lender;
and the result of any of the
foregoing shall be to increase
the cost to such Lender of
making or maintaining any Loan
(or of maintaining its
obligation to make any such
Loan) or to reduce the amount of
any sum received or receivable
by such Lender hereunder
(whether of principal, interest
or otherwise), then the
Borrowers will pay (without
duplication) to such Lender such
additional amount or amounts as
will compensate such Lender for
such additional costs incurred
or reduction suffered.
(b) If any Lender
determines that any Change in
Law regarding capital
requirements has or would have
the effect of reducing the rate
of return on such Lender's
capital or on the capital of
such Lender's holding company,
if any, as a consequence of this
Agreement or the Loans made by
such Lender, to a level below
that which such Lender or such
Lender's holding company could
have achieved but for such
Change in Law (taking into
consideration such Lender's
policies and the policies of
such Lender's holding company
with respect to capital
adequacy), then from time to
time the Borrowers will pay
(without duplication) to such
Lender such additional amount or
amounts as will compensate such
Lender or such Lender's holding
company for any such reduction
suffered.
(c) A certificate of
a Lender setting forth the
amount or amounts necessary to
compensate such Lender or its
holding company, as the case may
be, as specified in paragraph
[a] or[b] of this Section shall
be delivered to BorgWarner and
shall be conclusive absent
manifest error. The Borrowers
shall pay such Lender in total
the amount shown as due on any
such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the
part of any Lender to demand
compensation pursuant to this
Section shall not constitute a
waiver of such Lender's right to
demand such compensation;
provided that the Borrowers
shall not be required to
compensate a Lender pursuant to
this Section for any increased
costs or reductions incurred
more than six months prior to
the date that such Lender
notifies the Borrowers of the
Change in Law giving rise to
such increased costs or
reductions and of such Lender's
intention to claim compensation
therefor; provided further that,
if the Change in Law giving rise
to such increased costs or
reductions is retroactive, then
the six-month period referred to
above shall be extended to
include the period of
retroactive effect thereof.
Section 2.12 . Break Funding
Payments. In the event of (a)
the payment of any principal of
any Loan other than on the last
day of an Interest Period
applicable thereto (including as
a result of an Event of
Default), (b) the failure to
borrow or prepay any Loan on the
date specified in any notice
delivered pursuant hereto
(regardless of whether such
notice is permitted to be
revocable under Section 2.07(b)
and is revoked in accordance
herewith), or (c) the assignment
of any Loan other than on the
last day of the Interest Period
applicable thereto as a result
of a request by the Borrower
pursuant to Section 2.15, then,
in any such event, the
applicable Borrower shall
compensate each Lender for the
loss, cost and expense
attributable to such event. The
loss to any Lender attributable
to any such event shall be
deemed to include an amount
determined by such Lender to be
equal to the excess, if any, of
(i) the amount of interest that
such Lender would pay for a
deposit equal to the principal
amount of such Loan for the
period from the date of such
payment, failure or assignment
to the last day of the then
current Interest Period for such
Loan (or, in the case of a
failure to borrow, the duration
of the Interest Period that
would have resulted from such
borrowing) if the interest rate
payable on such deposit were
equal to the Adjusted
Eurocurrency Rate for such
Interest Period, over (ii) the
amount of interest that such
Lender would earn on such
principal amount for such period
if such Lender were to invest
such principal amount for such
period at the interest rate that
would be bid by such Lender (or
an affiliate of such Lender) for
dollar deposits from other banks
in the Eurocurrency market at
the commencement of such period.
A certificate of any Lender
setting forth (i) any amount or
amounts that such Lender is
entitled to receive pursuant to
this Section and (ii) the
calculations used to arrive at
such amount shall be delivered
to the applicable Borrower and
shall be conclusive absent
manifest error. The Borrower
shall pay such Lender the amount
shown as due on any such
certificate within 10 days after
receipt thereof.
Section 2.13 . Taxes. (a)
Any and all payments by or on
account of any obligation of
either Borrower hereunder shall
be made free and clear of and
without deduction for any
Indemnified Taxes or Other
Taxes; provided that if such
Borrower shall be required to
deduct any Indemnified Taxes or
Other Taxes from such payments,
then (i) the sum payable shall
be increased as necessary so
that after making all required
deductions (including deductions
applicable to additional sums
payable under this Section) the
Administrative Agent or Lender
(as the case may be) receives an
amount equal to the sum it would
have received had no such
deductions been made, (ii) such
Borrower shall make such
deductions and (iii) such
Borrower shall pay the full
amount deducted to the relevant
Governmental Authority in
accordance with applicable law.
(b) In addition,
such Borrower shall pay any
Other Taxes to the relevant
Governmental Authority in
accordance with applicable law.
(c) Each Borrower
shall indemnify the
Administrative Agent and each
Lender within 10 days after
written demand therefor, for the
full amount of any Indemnified
Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes
imposed or asserted on or
attributable to amounts payable
under this Section) paid by the
Administrative Agent or such
Lender, as the case may be, and
any penalties, interest and
reasonable expenses arising
therefrom or with respect
thereto in relation to such
Borrower, whether or not such
Indemnified Taxes or Other Taxes
were correctly or legally
imposed or asserted by the
relevant Governmental Authority.
A certificate as to the amount
of such payment or liability
delivered to a Borrower by a
Lender, or by the Administrative
Agent on its own behalf or on
behalf of a Lender, shall be
conclusive absent manifest
error.
(d) As soon as
practicable after any payment of
Indemnified Taxes or Other Taxes
by either Borrower to a
Governmental Authority, such
Borrower shall deliver (or cause
to be delivered) to the
Administrative Agent the
original or a certified copy of
a receipt issued by such
Governmental Authority
evidencing such payment, a copy
of the return reporting such
payment or other evidence of
such payment reasonably
satisfactory to the
Administrative Agent.
(e) Any Foreign
Lender that is entitled to an
exemption from or reduction of
withholding tax under the law of
the jurisdiction in which either
Borrower is located, or any
treaty to which such
jurisdiction is a party, with
respect to payments under this
Agreement shall deliver to such
Borrower (with a copy to the
Administrative Agent), at the
time or times prescribed by
applicable law or reasonably
requested by such Borrower, such
properly completed and executed
documentation prescribed by
applicable law as will permit
such payments to be made without
withholding or at a reduced rate.
Section 2.14 . Payments
Generally; Pro Rata Treatment;
Sharing Of Set-offs. (a)
Except as otherwise expressly
provided herein, each Borrower
shall make each payment required
to be made by it hereunder
(whether of principal, interest,
or fees, or under Section 2.11,
2.12, or 2.13, or otherwise) on
the dates specified herein for
the account of the respective
Lenders to which such payment is
owed, in same day funds not
later than 9:00 a.m., New York
City time. All payments
received by the Administrative
Agent after such time may, in
the discretion of the
Administrative Agent, be deemed
to have been received on the
next succeeding Business Day for
purposes of calculating interest
thereon. All such payments
shall be made to the
Administrative Agent at its
offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ and except that
payments pursuant to Sections
2.11, 2.12, or 2.13 and 10.03
shall be made directly to the
Persons entitled thereto. The
Administrative Agent shall
distribute any such payments
received by it for the account
of any other Person to the
appropriate recipient promptly
following receipt thereof. If
any payment hereunder shall be
due on a day that is not a
Business Day, the date for
payment shall be extended to the
next succeeding Business Day,
and, in the case of any payment
accruing interest, interest
thereon shall be payable for the
period of such extension.
(b) If at any time
insufficient funds are received
by and available to the
Administrative Agent to pay
fully all amounts of principal,
interest and fees then due
hereunder, such funds shall be
applied (i) first, to pay
interest and fees then due
hereunder, ratably among the
parties entitled thereto in
accordance with the amounts of
interest and fees then due to
such parties, and (ii) second,
to pay principal then due
hereunder, ratably among the
parties entitled thereto in
accordance with the amounts of
principal then due to such parties.
(c) Except to the
extent that this Agreement
provides for payments to be
allocated to a particular
Lender, if any Lender shall, by
exercising any right of set-off
or counterclaim or otherwise,
obtain payment in respect of any
principal of or interest on any
of its Loans resulting in such
Lender receiving payment of a
greater proportion of the
aggregate amount of its Loans
and accrued interest thereon
than the proportion received by
any other Lender, then the
Lender receiving such greater
proportion shall purchase (for
cash at face value)
participations in the Loans of
other Lenders to the extent
necessary so that the benefit of
all such payments shall be
shared by the Lenders ratably in
accordance with the aggregate
amount of principal of and
accrued interest on their
respective Loans; provided that
(i) if any such participations
are purchased and all or any
portion of the payment giving
rise thereto is recovered, such
participations shall be
rescinded and the purchase price
restored to the extent of such
recovery, without interest, and
(ii) the provisions of this
paragraph shall not be construed
to apply to any payment made by
either Borrower pursuant to and
in accordance with the express
terms of this Agreement or any
payment obtained by a Lender as
consideration for the assignment
of or sale of a participation in
any of its Loans to any assignee
or participant, other than to
either Borrower or any
subsidiary or Affiliate thereof
(as to which the provisions of
this paragraph shall apply).
Each Borrower consents to the
foregoing and agrees, to the
extent it may effectively do so
under applicable law, that any
Lender acquiring a participation
pursuant to the foregoing
arrangements may exercise
against such Borrower rights of
set-off and counterclaim with
respect to such participation as
fully as if such Lender were a
direct creditor of such Borrower
in the amount of such
participation.
(d) Unless the
Administrative Agent shall have
received notice from the
applicable Borrower prior to the
date on which any payment is due
to the Administrative Agent for
the account of the Lenders
hereunder that such Borrower
will not make such payment, the
Administrative Agent may assume
that such Borrower has made such
payment on such date in
accordance herewith and may, in
reliance upon such assumption,
distribute to the applicable
Lenders the amount due. In such
event, if the relevant Borrower
has not in fact made such
payment, then each of the
applicable Lenders severally
agrees to repay to the
Administrative Agent forthwith
on demand the amount so
distributed to such Lender with
interest thereon, for each day
from and including the date such
amount is distributed to it to
but excluding the date of
payment to the Administrative
Agent, at the applicable
Overnight Rate from time to time
in effect.
(e) If any Lender
shall fail to make any payment
required to be made by it
pursuant to Section 2.03(b) or
2.14(d), then the Administrative
Agent may, in its discretion
(notwithstanding any contrary
provision hereof), apply any
amounts thereafter received by
the Administrative Agent for the
account of such Lender to
satisfy such Lender's
obligations under such Sections
until all such unsatisfied
obligations are fully paid.
Section 2.15 . Mitigation
Obligations; Replacement Of
Lenders. (a) If any Lender
requests compensation under
Section 2.11, or if either
Borrower is required to pay any
additional amount to any Lender
or any Governmental Authority
for the account of any Lender
pursuant to Section 2.13, then
such Lender shall use reasonable
efforts to designate a different
lending office for funding or
booking its Loans hereunder or
to assign its rights and
obligations hereunder to another
of its offices, branches or
affiliates, if, in the judgment
of such Lender, such designation
or assignment (i) would
eliminate or reduce amounts
payable pursuant to Section 2.11
or 2.13, asthe case may be, in
the future and (ii) would not
subject such Lender to any
unreimbursed cost or expense and
would not otherwise be
disadvantageous to such Lender.
The Borrowers hereby agree to
pay all reasonable costs and
expenses incurred by any Lender
in connection with any such
designation or assignment.
(b) If any Lender
requests compensation under
Section 2.11, or if either
Borrower is required to pay any
additional amount to any Lender
or any Governmental Authority
for the account of any Lender
pursuant to Section Section
2.13, or if any Lender defaults
in its obligation to fund Loans
hereunder, then BorgWarner may,
at its sole expense and effort,
upon notice to such Lender and
the Administrative Agent,
require such Lender to assign
and delegate, without recourse
(in accordance with and subject
to the restrictions contained in
Section 10.04), all its
interests, rights and
obligations under this Agreement
to an assignee that shall assume
such obligations (which assignee
may be another Lender, if a
Lender accepts such assignment);
provided that (i) BorgWarner
shall have received the prior
written consent of the
Administrative Agent, which
consent shall not unreasonably
be withheld, (ii) such Lender
shall have received payment of
an amount equal to the
outstanding principal of its
Loans, accrued interest thereon,
accrued fees and all other
amounts payable to it hereunder,
from the assignee (to the extent
of such outstanding principal
and accrued interest and fees)
or the applicable Borrower (in
the case of all other amounts)
and (iii) in the case of any
such assignment resulting from a
claim for compensation under
Section 2.11 or payments
required to be made pursuant to
Section 2.13, such assignment
will result in a reduction in
such compensation or payments.
A Lender shall not be required
to make any such assignment and
delegation if, prior thereto, as
a result of a waiver by such
Lender or otherwise, the
circumstances entitling
BorgWarner to require such
assignment and delegation cease
to apply.
Section 2.16 . Escrow
Account. The following amounts
shall be deposited in the Escrow
Account from time to time: (i)
the Euro Equivalent (as
reasonably determined by the
Administrative Agent) of the Net
Proceeds of any Reduction Event
consummated prior to or during
the Certain Funds Period and
(ii) any amount to be deposited
therein pursuant to clause [ii]
of the proviso to Section
2.05(b). The Administrative
Agent will invest any amounts on
deposit from time to time in the
Escrow Account for the account
of the Borrowers and at the
direction of BorgWarner (subject
to the consent of the
Administrative Agent, not to be
unreasonably withheld or
delayed). The Borrowers shall
have the right to withdraw
amounts on deposit in the Escrow
Account from time to time, so
long as (x) the Borrowers shall
have provided the Administrative
Agent with at least three prior
Business Days' notice and (y)
the Borrowers shall apply such
amounts immediately upon receipt
thereof solely for the purchase
of securities of Target in the
Acquisition. After consummation
of the Acquisition, all amounts
on deposit in the Escrow Account
will be applied by the
Administrative Agent first, to
the prepayment of any
outstanding Loans pursuant to
Section 2.07, and second, as
instructed by BorgWarner.
ARTICLE 3
Representations And Warranties
BorgWarner represents and
warrants to the Lenders that:
Section 3.01 . Organization;
Powers. Each of BorgWarner and
its Subsidiaries is duly
organized, validly existing and
in good standing under the laws
of the jurisdiction of its
organization, has all requisite
power and authority to carry on
its business as now conducted
and, except where the failure to
do so, individually or in the
aggregate, could not reasonably
be expected to result in a
Material Adverse Effect, is
qualified to do business in, and
is in good standing in, every
jurisdiction where such
qualification is required.
Section 3.02 .
Authorization; Enforceability.
The Transactions are within each
Borrower's corporate powers and
have been duly authorized by all
necessary corporate and, if
required, stockholder action.
This Agreement has been duly
executed and delivered by each
Borrower and constitutes a
legal, valid and binding
obligation of each Borrower,
enforceable in accordance with
its terms, subject to applicable
bankruptcy, insolvency,
reorganization, moratorium or
other laws affecting creditors'
rights generally and subject to
general principles of equity,
regardless of whether considered
in a proceeding in equity or at
law.
Section 3.03 . Governmental
Approvals; No Conflicts. The
Transactions (a) do not require
any consent or approval of,
registration or filing with, or
any other action by, any
Governmental Authority, except
such as have been obtained or
made and are in full force and
effect, (b)) will not violate
any applicable law or regulation
or the charter, by-laws or other
organizational documents of
BorgWarner or any of its
Subsidiaries or any order of any
Governmental Authority, (c) will
not violate or result in a
default under any indenture,
agreement or other instrument
binding upon BorgWarner or any
of its Subsidiaries or its
assets, or give rise to a right
thereunder to require any
payment to be made by such
Borrower or any of its
Subsidiaries, and (d) will not
result in the creation or
imposition of any Lien on any
asset of BorgWarner or any of
its Subsidiaries.
Section 3.04 . Financial
Condition; No Material Adverse
Effect. (a) BorgWarner has
heretofore furnished to the
Lenders its consolidated balance
sheet and statements of income,
stockholders equity and cash
flows (i) as of and for the year
ended December 31, 2003,
reported on by Deloitte & Touche
LLP, independent public
accountants, and (ii) as of and
for the quarters ended March 31,
2004, June 30, 2004 and
September 30, 2004, certified by
its principal accounting
officer. Such financial
statements present fairly, in
all material respects, the
financial position and results
of operations and cash flows of
BorgWarner and its consolidated
Subsidiaries as of such dates
and for such periods in
accordance with GAAP, subject to
year-end audit adjustments and
the absence of footnotes in the
case of the statements referred
to in clause [ii] above.
(b) Since September
30, 2004, there has been no
development or event which has
had or could reasonably be
expected to have a Material
Adverse Effect except as
disclosed on or prior to the
Effective Date (i) in writing to
the Lenders, or (ii) in any
public filing with the
Securities and Exchange Commission.
Section 3.05 . Properties.
(a) Each of BorgWarner and its
Subsidiaries has good title to,
or valid leasehold interests in,
all its real and personal
property material to its
business, except for minor
defects in title that do not
interfere with its ability to
conduct its business as
currently conducted or to
utilize such properties for
their intended purposes.
(b) Each of
BorgWarner and its Subsidiaries
owns, or is licensed to use, all
trademarks, tradenames,
copyrights, patents and other
intellectual property material
to its business, and the use
thereof by BorgWarner and its
Subsidiaries does not infringe
upon the rights of any other
Person, except for any such
infringements that, individually
or in the aggregate, could not
reasonably be expected to result
in a Material Adverse Effect.
Section 3.06 . Litigation
And Environmental Matters. (a)
There are no actions, suits,
investigations or proceedings by
or before any arbitrator or
Governmental Authority pending
against or, to the knowledge of
BorgWarner, threatened against
or affecting BorgWarner or any
of its Subsidiaries (i) as to
which there is a reasonable
possibility of an adverse
determination and that, if
adversely determined, could
reasonably be expected,
individually or in the
aggregate, to result in a
Material Adverse Effect (other
than the Disclosed Matters) or
(ii) that involve this Agreement
or the Transactions.
(b) Except for the
Disclosed Matters and except
with respect to any other
matters that, individually or in
the aggregate, could not
reasonably be expected to result
in a Material Adverse Effect,
neither BorgWarner nor any of
its Subsidiaries (i) has failed
to comply with any Environmental
Law or to obtain, maintain or
comply with any permit, license
or other approval required under
any Environmental Law, (ii) has
become subject to any
Environmental Liability, (iii)
has received notice of any claim
with respect to any
Environmental Liability or (iv)
knows of any basis for any
Environmental Liability.
(c) Since the date
of this Agreement, there has
been no change in the status of
the Disclosed Matters that,
individually or in the
aggregate, has resulted in, or
materially increased the
likelihood of, a Material
Adverse Effect.
Section 3.07 . Compliance
With Laws And Agreements.
Each of BorgWarner and its
Subsidiaries is in compliance
with all laws, regulations and
orders of any Governmental
Authority applicable to it or
its property and all indentures,
agreements and other instruments
binding upon it or its property,
except where the failure to do
so, individually or in the
aggregate, could not reasonably
be expected to result in a
Material Adverse Effect. No
Default has occurred and is
continuing.
Section 3.08 . Investment
And Holding Company Status.
Neither BorgWarner nor any of
its Subsidiaries is (a) an
"investment company" as defined
in, or subject to regulation
under, the Investment Company
Act of 1940 or (b) a "holding
company" as defined in, or
subject to regulation under, the
Public Utility Holding Company
Act of 1935.
Section 3.09 . Taxes. Each
of BorgWarner and its
Subsidiaries has timely filed or
caused to be filed all Tax
returns and reports required to
have been filed and has paid or
caused to be paid all Taxes
required to have been paid by
it, except (a) Taxes that are
being contested in good faith by
appropriate proceedings and for
which BorgWarner or such
Subsidiary, as applicable, has
set aside on its books adequate
reserves or (b) to the extent
that the failure to do so could
not reasonably be expected to
result in a Material Adverse
Effect.
Section 3.10 . ERISA. No
ERISA Event has occurred or is
reasonably expected to occur
that, when taken together with
all other such ERISA Events for
which liability is reasonably
expected to occur, could
reasonably be expected to result
in a Material Adverse Effect.
The present value of all
accumulated benefit obligations
under each Plan (based on the
assumptions used for purposes of
Statements of Financial
Accounting Standards No. 87 and
No. 132) did not, as of the date
of the most recent financial
statements reflecting such
amounts, exceed by more than
$90,000,000 the fair market
value of the assets of such
Plan, and the present value of
all accumulated benefit
obligations of all underfunded
Plans (based on the assumptions
used for purposes of Statements
of Financial Accounting
Standards No. 87 and No. 132)
did not, as of the date of the
most recent financial statements
reflecting such amounts, exceed
by more than $90,000,000 the
fair market value of the assets
of all such underfunded Plans.
Section 3.11 . Federal
Regulations. No part of the
proceeds of any Loans hereunder
will be used, directly or
indirectly, for "buying" or
"carrying" any "margin stock"
within the respective meanings
of each of the quoted terms
under Regulation U of the Board
as now and from time to time
hereafter in effect which
violates, or which would be
inconsistent with, the
provisions of the Regulations of
such Board.
Section 3.12 . Disclosure.
BorgWarner has disclosed to the
Lenders all agreements,
instruments and corporate or
other restrictions to which it
or any of its Subsidiaries is
subject, and all other matters
known to it, that, individually
or in the aggregate, could
reasonably be expected to result
in a Material Adverse Effect.
None of the reports, financial
statements, certificates or
other information furnished by
or on behalf of BorgWarner to
the Administrative Agent or any
Lender in connection with the
negotiation of this Agreement or
delivered hereunder (as modified
or supplemented by other
information so furnished)
contains any material
misstatement of fact or omits to
state any material fact
necessary to make the statements
therein, in the light of the
circumstances under which they
were made, not misleading;
provided that, with respect to
projected financial information,
BorgWarner represents only that
such information was prepared in
good faith based upon
assumptions believed to be
reasonable at the time.
ARTICLE 4
Conditions
Section 4.01 . Effective
Date. The obligations of the
Lenders to make Loans hereunder
shall not become effective until
the date on which each of the
following conditions is
satisfied (or waived in
accordance with Section 10.02):
(a) The
Administrative Agent (or its
counsel) shall have received
from each party hereto either
(i) a counterpart of this
Agreement signed on behalf of
such party or (ii) written
evidence satisfactory to the
Administrative Agent (which may
include telecopy transmission of
a signed signature page of this
Agreement) that such party has
signed a counterpart of this
Agreement.
(b) The
Administrative Agent shall have
received a favorable written
opinion (addressed to the
Administrative Agent and the
Lenders and dated the Effective
Date) of the general counsel for
BorgWarner, substantially in the
form of Exhibit B, and covering
such other matters relating to
BorgWarner, this Agreement or
the Transactions as the Required
Lenders shall reasonably
request. BorgWarner hereby
requests such counsel to deliver
such opinion.
(c) The
Administrative Agent shall have
received such documents and
certificates as the
Administrative Agent or its
counsel may reasonably request
relating to the organization,
existence and good standing of
each Borrower, the authorization
of the Transactions and any
other legal matters relating to
each Borrower, this Agreement or
the Transactions, all in form
and substance satisfactory to
the Administrative Agent and its
counsel.
(d) The
Administrative Agent shall have
received a certificate, dated
the Effective Date and signed by
the President, a Vice President
or a Financial Officer of
BorgWarner, confirming
compliance with the conditions
set forth in paragraphs [a] and
[b] of Section 4.03.
(e) The Lenders, the
Administrative Agent and the
Lead Arranger shall have
received all fees and other
amounts due and payable on or
prior to the Effective Date,
including, to the extent
invoiced, reimbursement or
payment of all out-of-pocket
expenses required to be
reimbursed or paid by the
Borrowers hereunder.
(f) The structure of
the Acquisition (including
without limitation the
corporate, capital,
organizational and tax structure
thereof, and the plans and
sources of funds for the
refinancing of certain existing
indebtedness of the Target and
its subsidiaries that (i) could
become due and payable as a
result of the consummation of
the Private Sale or the Tender
Offer, or (ii) is otherwise not
on terms and conditions
acceptable to the Lead Arranger)
and all the definitive
documentation related thereto
(including the Sale and Purchase
Documentation and the Tender
Offer Documentation) will be in
full force and effect and in
form and substance satisfactory
to the Lead Arranger subject, in
the case of the Tender Offer
Documentation, to review by the
German FSA.
(g) The July Credit
Agreement shall be available for
borrowing in full.
(h) There shall not
have occurred or become known to
the Lenders any material adverse
condition or material adverse
change in or affecting the
business, operations, assets,
condition (financial or
otherwise) or prospects of
BorgWarner and its Subsidiaries,
taken as a whole, or of the
Target and its subsidiaries,
taken as a whole.
(i) There shall be
no pending or threatened
litigation, proceeding or
investigation which (i) could
reasonably be expected to have a
material adverse effect on the
business, operations, assets,
condition (financial or
otherwise) or prospects of
BorgWarner and its Subsidiaries
(including the Target and its
subsidiaries) or (ii) in any
manner calls into question or
challenges this Agreement or the
making of the Loans.
(j) The
Administrative Agent shall have
received evidence satisfactory
to it that the initial filing of
the Tender Offer Documentation
with the German FSA shall occur
on the Effective Date.
The Administrative Agent shall
notify the Borrowers and the
Lenders of the Effective Date,
and such notice shall be
conclusive and binding.
Notwithstanding the foregoing,
the obligations of the Lenders
to make Loans hereunder shall
not become effective unless each
of the foregoing conditions is
satisfied (or waived pursuant to
Section 10.02) at or prior to
3:00 p.m., New York City time,
on December 1, 2004 (and, in the
event such conditions are not so
satisfied or waived, the
Commitments shall terminate at
such time).
Section 4.02 . Initial
Borrowing. The obligation of
each Lender to make a Loan on
the occasion of the initial
Borrowing hereunder is subject
to the satisfaction of the
following conditions:
(a) Except as
otherwise agreed by the Lenders,
BorgWarner Germany shall have
(i) obtained evidence reasonably
satisfactory to the Lead
Arranger that the Acquisition
shall have been cleared by the
European Commission, or, due to
the expiry of the relevant time
periods, shall have been deemed
to be approved, (ii) obtained
prior authorization of the
Tender Offer Documentation from
the German FSA, (iii) obtained
all such other regulatory
approvals required for the
consummation of the Acquisition
except such approvals the
absence of which will not, in
the aggregate, have a material
adverse effect on the
consummation of the Acquisition,
and (iv) delivered to the
Administrative Agent a
certificate of an executive
officer of BorgWarner certifying
as to the matters set forth in
clauses (i) through (iii).
(b) In the case of a
Borrowing for the purpose of
financing the acquisition of
shares in the Private Sale, the
obligations of BorgWarner
Germany to purchase shares of
the Target pursuant to the
Private Sale shall have become
unconditional without any
amendment or waiver to the Sale
and Purchase Documentation not
permitted hereunder.
(c) In the case of a
Borrowing for the purpose of
financing the acquisition of
shares in the Tender Offer, the
obligations of BorgWarner
Germany to purchase shares of
the Target pursuant to the
Tender Offer shall have become
unconditional without any
amendment or waiver to the
Tender Offer Documentation not
permitted hereunder.
(d) The
Administrative Agent will have
received from the Borrowers such
other certificates, agreements
and documents usual and
customary for transactions of
this type as the Lead Arranger
may have reasonably requested
relating to matters relevant to
the Acquisition and the
transactions contemplated
hereby, all in form and
substance satisfactory to the
Lead Arranger.
Section 4.03 . Subsequent
Borrowing. (a) The obligation
of each Lender to make a Loan on
the occasion of any Borrowing
for the purpose of financing the
acquisition of shares in the
Private Sale is subject to the
satisfaction of the following
conditions:
(i) The
representations and warranties
of BorgWarner set forth in this
Agreement shall be true and
correct on and as of the date of
such Borrowing.
(ii) At the time of
and immediately after giving
effect to such Borrowing, no
Default shall have occurred and
be continuing.
Each Borrowing for the purpose
of financing the acquisition of
shares in the Private Sale shall
be deemed to constitute a
representation and warranty by
BorgWarner on the date thereof
as to the matters specified in
subparagraphs [i] and [ii] of
this clause [a].
(b) The obligation
of each Lender to make a Loan on
the occasion of any Borrowing
for the purpose of financing the
acquisition of shares in the
Tender Offer is subject to the
satisfaction of the following
conditions:
(i) the
representations of BorgWarner
set forth in Sections 3.01,
3.02, 3.03 and 3.11 herein shall
be true and correct on and as of
the date of such Borrowing.
(ii) At the time of
and immediately after giving
effect to such Borrowing, no
Major Default shall have
occurred and be continuing.
Each Borrowing for the purpose
of financing the acquisition of
shares in the Tender Offer shall
be deemed to constitute a
representation and warranty by
BorgWarner on the date thereof
as to the matters specified in
subparagraphs [i] and [ii] of
this clause [b].
ARTICLE 5
Affirmative Covenants
Until the Commitments have
expired or been terminated and
the principal of and interest on
each Loan and all fees payable
hereunder shall have been paid
in full, BorgWarner covenants
and agrees with the Lenders that:
Section 5.01 . Financial
Statements And Other
Information. BorgWarner will
furnish to the Administrative
Agent and each Lender:
(a) within 90 days
after the end of each fiscal
year of BorgWarner, its audited
consolidated balance sheet and
related statements of
operations, stockholders' equity
and cash flows as of the end of
and for such year, setting forth
in each case in comparative form
the figures for the previous
fiscal year, all reported on by
Deloitte & Touche LLP or other
independent public accountants
of recognized national standing
(without a "going concern" or
like qualification or exception
and without any qualification or
exception as to the scope of
such audit) to the effect that
such consolidated financial
statements present fairly in all
material respects the financial
condition and results of
operations of BorgWarner and its
consolidated Subsidiaries on a
consolidated basis in accordance
with GAAP consistently applied;
(b) within 45 days
after the end of each of the
first three fiscal quarters of
each fiscal year of BorgWarner,
its consolidated balance sheet
and related statements of
operations, stockholders' equity
and cash flows as of the end of
and for such fiscal quarter and
the then elapsed portion of the
fiscal year, setting forth in
each case in comparative form
the figures for the
corresponding period or periods
of (or, in the case of the
balance sheet, as of the end of)
the previous fiscal year, all
certified by one of its
Financial Officers as presenting
fairly in all material respects
the financial condition and
results of operations of
BorgWarner and its consolidated
Subsidiaries on a consolidated
basis in accordance with GAAP
consistently applied, subject to
normal year-end audit
adjustments and the absence of
footnotes;
(c) concurrently
with any delivery of financial
statements under clause [a] or
[b] above, a certificate of a
Financial Officer of BorgWarner
(i) certifying as to whether a
Default has occurred and, if a
Default has occurred, specifying
the details thereof and any
action taken or proposed to be
taken with respect thereto, (ii)
setting forth reasonably
detailed calculations
demonstrating compliance with
Section 6.01 and (iii) stating
whether any change in GAAP or in
the application thereof has
occurred since the date of the
audited financial statements
referred to in Section 3.04 and,
if any such change has occurred,
specifying the effect of such
change on the financial
statements accompanying such
certificate;
(d) concurrently
with any delivery of financial
statements under [a] above, a
certificate of the accounting
firm that reported on such
financial statements stating
whether they obtained knowledge
during the course of their
examination of such financial
statements of any Default (which
certificate may be limited to
the extent required by
accounting rules or guidelines);
(e) promptly after
the same become publicly
available, copies of all
periodic and other financial
reports, proxy statements and
other financial materials filed
by BorgWarner or any Subsidiary
with the Securities and Exchange
Commission, or any Governmental
Authority succeeding to any or
all of the functions of said
Commission, or with any national
securities exchange, or
distributed by BorgWarner to its
shareholders generally, as the
case may be; and
(f) promptly
following any request therefor,
such other information regarding
the operations, business affairs
and financial condition of
BorgWarner or any Subsidiary, or
compliance with the terms of
this Agreement, as the
Administrative Agent or any
Lender may reasonably request.
The requirements of Sections
5.01(a), [b] and [e] shall be
deemed to be satisfied if
BorgWarner shall have made such
materials available to the
Lenders and the Administrative
Agent, including by electronic
transmission, within the time
periods specified therefor, in
which case "delivery" of such
statements for purposes of
Section 5.01(c) and [d] shall
mean making such statements
available in such fashion.
Section 5.02 . Notices Of
Material Events. BorgWarner
will furnish to the
Administrative Agent and each
Lender prompt written notice of
the following:
(a) the occurrence
of any Default;
(b) the filing or
commencement of any action, suit
or proceeding by or before any
arbitrator or Governmental
Authority against or affecting
BorgWarner or any Affiliate
thereof that could reasonably be
expected to result in a Material
Adverse Effect;
(c) the occurrence
of any ERISA Event that, alone
or together with any other ERISA
Events that have occurred, could
reasonably be expected to result
in a Material Adverse Effect; and
(d) any other
development that results in, or
could reasonably be expected to
result in, a Material Adverse
Effect.
Each notice delivered under this
Section shall be accompanied by
a statement of a Financial
Officer or other executive
officer of BorgWarner setting
forth the details of the event
or development requiring such
notice and any action taken or
proposed to be taken with
respect thereto.
Section 5.03 . Existence;
Conduct Of Business. BorgWarner
will, and will cause each of its
Subsidiaries to, do or cause to
be done all things necessary to
preserve, renew and keep in full
force and effect its legal
existence and the rights,
licenses, permits, privileges
and franchises material to the
conduct of its business;
provided that the foregoing
shall not prohibit any merger,
consolidation, liquidation or
dissolution permitted under
Section 6.04.
Section 5.04 . Payment Of
Obligations. BorgWarner will,
and will cause each of its
Subsidiaries to, pay its
obligations, including Tax
liabilities, that, if not paid,
could result in a Material
Adverse Effect before the same
shall become delinquent or in
default, except where (a) the
validity or amount thereof is
being contested in good faith by
appropriate proceedings, (b)
BorgWarner or such Subsidiary
has set aside on its books
adequate reserves with respect
thereto in accordance with GAAP
and (c) the failure to make
payment pending such contest
could not reasonably be expected
to result in a Material Adverse
Effect.
Section 5.05 . Maintenance
Of Properties; Insurance.
BorgWarner will, and will cause
each of its Subsidiaries to, (a)
keep and maintain all property
material to the conduct of its
business in good working order
and condition, ordinary wear and
tear excepted, and (b) maintain,
with financially sound and
reputable insurance companies,
insurance in such amounts and
against such risks as are
customarily maintained by
companies engaged in the same or
similar businesses operating in
the same or similar locations.
Section 5.06 . Books And
Records; Inspection Rights.
BorgWarner will, and will cause
each of its Subsidiaries to,
keep proper books of record and
account in which full, true and
correct entries are made of all
dealings and transactions in
relation to its business and
activities. BorgWarner will,
and will cause each of its
Subsidiaries to, permit any
representatives designated by
the Administrative Agent or any
Lender, upon reasonable prior
notice, to visit and inspect its
properties, to examine and make
extracts from its books and
records, and to discuss its
affairs, finances and condition
with its officers and
independent accountants, all at
such reasonable times and as
often as reasonably requested.
Section 5.07 . Compliance
With Laws. BorgWarner will, and
will cause each of its
Subsidiaries to, comply with all
laws, rules, regulations and
orders of any Governmental
Authority applicable to it or
its property, except where the
failure to do so, individually
or in the aggregate, could not
reasonably be expected to result
in a Material Adverse Effect.
Section 5.08 . Use Of
Proceeds. The proceeds of the
Loans will be used to purchase
the outstanding capital shares
of Target in the Acquisition.
No part of the proceeds of any
Loan will be used, whether
directly or indirectly, for any
purpose that entails a violation
of any of the Regulations of the
Board, including Regulations U
and X.
Section 5.09 . Conduct Of
Tender Offer. (a) BorgWarner
will, and will cause BorgWarner
Germany to, take all action
necessary to ensure that both
the conduct of the Tender Offer
and the Tender Offer
Documentation are in accordance
with, and at all times conform
to and satisfy in all material
respects, the applicable
requirements of, all material
consents, laws, rules,
regulations and orders of any
Governmental Authority
applicable thereto (including,
without limitation, the German
Takeover Act and the ordinances
enacted thereunder (except to
the extent any provisions of
such Act and ordinances are
waived by the German FSA), the
German Stock Corporation Act,
the Exchange Act, and other
applicable securities laws).
(b) BorgWarner will
furnish to the Administrative
Agent periodic reports on the
then current status and progress
of all material matters relating
to the Tender Offer.
(c) BorgWarner will
deliver notice to the
Administrative Agent of any
event or circumstance that would
entitle BorgWarner Germany to
withdraw the Tender Offer. Such
notice shall be given promptly
upon the occurrence of such
event or circumstance and shall
specify the nature of such event
or circumstance and the action
(if any) proposed to be taken
with respect thereto.
Section 5.10 . Prepayment Of
Loans. BorgWarner will, and
will cause each of its
Subsidiaries to, use all
reasonable efforts to effect one
or more transactions in the
capital markets as promptly as
practicable after the Funding
Date in order to prepay the
Loans hereunder.
ARTICLE 6
Negative Covenants
Until the Commitments
have expired or terminated and
the principal of and interest on
each Loan and all fees payable
hereunder have been paid in
full, BorgWarner covenants and
agrees with the Lenders that:
Section 6.01 . Financial
Covenants. (a) Leverage Ratio.
BorgWarner will not permit its
Leverage Ratio as at the last
day of any period of four
consecutive fiscal quarters of
BorgWarner to exceed 3.25 to 1.00.
(b) Consolidated Net
Worth. BorgWarner will not
permit its Consolidated Net
Worth at any time to be less
than the sum of (i)
$800,000,000, (ii) 25% of its
cumulative Consolidated Net
Income for each fiscal quarter
of BorgWarner (beginning with
the fiscal quarter ending
September 30, 2004) for which
its Consolidated Net Income is
positive and (iii) 100% of the
Net Cash Proceeds of any common
equity issued by BorgWarner
after the Effective Date. For
the purposes of this Section
6.01(b) only, the term "Net Cash
Proceeds" means the cash
proceeds received from any
issuance of common equity by
BorgWarner, net of attorneys'
fees, investment banking fees,
accountants' fees, underwriting
discounts and commissions and
other customary fees and
expenses actually incurred in
connection therewith.
Section 6.02 . Liens.
BorgWarner will not, and will
not permit any Subsidiary to,
create, incur, assume or permit
to exist any Lien on any
property or asset now owned or
hereafter acquired by it, or
assign or sell any income or
revenues (including accounts
receivable) or rights in respect
of any thereof, except:
(a) Permitted
Encumbrances;
(b) any Lien on any
property or asset of BorgWarner
or any Subsidiary existing on
the date hereof and set forth in
Schedule 6.2; provided that (i)
such Lien shall not apply to any
other property or asset of
BorgWarner or any Subsidiary and
(ii) such Lien shall secure only
those obligations which it
secures on the date hereof and
extensions, renewals and
replacements thereof that do not
increase the outstanding
principal amount thereof;
(c) any Lien
existing on any property or
asset prior to the acquisition
thereof by BorgWarner or any
Subsidiary or existing on any
property or asset of any Person
that becomes a Subsidiary after
the date hereof prior to the
time such Person becomes a
Subsidiary; provided that (i)
such Lien is not created in
contemplation of or in
connection with such acquisition
or such Person becoming a
Subsidiary, as the case may be,
(ii) such Lien shall not apply
to any other property or assets
of BorgWarner or any Subsidiary
and (iii) such Lien shall secure
only those obligations which it
secures on the date of such
acquisition or the date such
Person becomes a Subsidiary, as
the case may be and extensions,
renewals and replacements
thereof that do not increase the
outstanding principal amount
thereof;
(d) Liens on fixed
or capital assets acquired,
constructed or improved by
BorgWarner or any Subsidiary;
provided that (i) such security
interests secure Indebtedness
having an aggregate principal
amount not exceeding $50,000,000
at any time outstanding, (ii)
such security interests and the
Indebtedness secured thereby are
incurred prior to or within 90
days after such acquisition or
the completion of such
construction or improvement,
(iii) the Indebtedness secured
thereby does not exceed 100% of
the cost of acquiring,
constructing or improving such
fixed or capital assets and (iv)
such security interests shall
not apply to any other property
or assets of BorgWarner or any
Subsidiary;
(e) Liens (not otherwise
permitted hereunder) which
secure Indebtedness of
BorgWarner; provided that the
aggregate outstanding principal
amount of Indebtedness secured
by such Liens shall not exceed
10% of Consolidated Total Assets
as reflected in the most recent
annual audited or quarterly
consolidated financial
statements of BorgWarner
delivered pursuant to Section
5.01 at the time of the creation
of such Liens;
(f) Liens on assets
of Foreign Subsidiaries (not
otherwise permitted hereunder)
which secure Indebtedness of
Foreign Subsidiaries which is
not guaranteed by BorgWarner; and
(g) Liens which may
arise in connection with the
Receivables Facility.
Section 6.03 . Fundamental
Changes. BorgWarner will not,
and will not permit any
Subsidiary to, merge into or
consolidate with any other
Person, or permit any other
Person to merge into or
consolidate with it, or sell,
transfer, lease or otherwise
dispose of (in one transaction
or in a series of transactions)
all or substantially all of its
assets, or all or substantially
all of the stock of any of its
Subsidiaries (in each case,
whether now owned or hereafter
acquired), or liquidate or
dissolve, except that, if at the
time thereof and immediately
after giving effect thereto no
Default shall have occurred and
be continuing (a) any Subsidiary
may merge into BorgWarner in a
transaction in which BorgWarner
is the surviving corporation,
(b) any Subsidiary may merge
into any wholly-owned Subsidiary
in a transaction in which the
surviving entity is a
Subsidiary, (c) any Subsidiary
may sell, transfer, lease or
otherwise dispose of its assets
to BorgWarner or to another
wholly-owned Subsidiary and (d)
any Subsidiary may liquidate or
dissolve if BorgWarner
determines in good faith that
such liquidation or dissolution
is in the best interests of
BorgWarner and is not materially
disadvantageous to the Lenders.
Section 6.04 . Indebtedness.
BorgWarner will not, and will
not permit any of its
Subsidiaries to, create, incur,
assume or permit to exist any
Indebtedness, except:
(a) Indebtedness
created hereunder;
(b) Indebtedness
under the July Credit Agreement
or the Receivables Facility or
as otherwise set forth in
Schedule 6.4, and extensions,
renewals and replacements of any
such Indebtedness that do not
increase the maximum principal
amount available thereunder;
(c) Indebtedness of
BorgWarner to any Subsidiary and
of any Subsidiary to BorgWarner
or any other Subsidiary;
(d) Guarantees by
BorgWarner of Indebtedness of
any Subsidiary and by any
Subsidiary of Indebtedness of
BorgWarner or any other Subsidiary;
(e) Indebtedness of
BorgWarner or any Subsidiary
incurred to finance the
acquisition, construction or
improvement of any fixed or
capital assets, including
Capital Lease Obligations and
any Indebtedness assumed in
connection with the acquisition
of any such assets or secured by
a Lien on any such assets prior
to the acquisition thereof, and
extensions, renewals and
replacements of any such
Indebtedness that do not
increase the outstanding
principal amount thereof;
provided that such Indebtedness
is incurred prior to or within
180 days after such acquisition
or the completion of such
construction or improvement and
the aggregate principal amount
of Indebtedness permitted by
this clause (e) shall not exceed
$50,000,000 at any time
outstanding;
(f) Indebtedness of
any Person that becomes a
Subsidiary after the date
hereof; provided that (i) such
Indebtedness exists at the time
such Person becomes a Subsidiary
and is not created in
contemplation of or in
connection with such Person
becoming a Subsidiary and (ii)
the aggregate principal amount
of Indebtedness permitted by
this clause [f] shall not exceed
$10,000,000 at any time
outstanding;
(g) Indebtedness of
BorgWarner or any Subsidiary as
an account party in respect of
trade letters of credit;
(h) unsecured
Indebtedness, the incurrence of
which constitutes a Reduction
Event;
(i) other unsecured
Indebtedness in an aggregate
principal amount not exceeding
$50,000,000 at any time
outstanding; provided that the
aggregate principal amount of
Indebtedness of the Subsidiaries
permitted by this clause [i] and
not guaranteed by BorgWarner
shall not exceed $25,000,000 at
any time outstanding; and
(j) Guarantees in
respect of obligations of
unconsolidated joint ventures
and other Persons not
constituting Subsidiaries in an
aggregate amount not exceeding
$50,000,000 at any time.
Section 6.05 . Acquisitions.
BorgWarner will not, and will
not permit any of its
Subsidiaries to, purchase, hold
or acquire (including pursuant
to any merger with any Person
that was not a wholly owned
Subsidiary prior to such merger)
any capital stock or other
securities (including any
option, warrant or other right
to acquire any of the foregoing)
of, or purchase or otherwise
acquire (in one transaction or
series of transactions) any
assets of any other person
constituting a business unit,
except in connection with the
Acquisition.
Section 6.06 . Restricted
Payments. BorgWarner will not,
and will not permit any of its
Subsidiaries to, declare or
make, or agree to pay or make,
directly or indirectly, any
Restricted Payment, except (a)
BorgWarner may declare and pay
dividends with respect to its
Equity Interests in amounts per
share that are consistent with
its dividend policy in effect on
the Effective Date or that are
payable solely in additional
shares of its common stock, (b)
Subsidiaries may declare and pay
dividends ratably with respect
to their Equity Interests, and
(c) BorgWarner may make
Restricted Payments pursuant to
and in accordance with stock
option plans or other benefit
plans for management or
employees of BorgWarner and its
Subsidiaries.
For purposes of this Section
6.06, "Equity Interests" means
shares of capital stock,
partnership interests,
membership interests in a
limited liability company,
beneficial interests in a trust
or other equity ownership
interests in a Person, and any
warrants, options or other
rights entitling the holder
thereof to purchase or acquire
any such equity interest; and
"Restricted Payment" means any
dividend or other distribution
(whether in cash, securities or
other property) with respect to
any Equity Interests in
BorgWarner or any Subsidiary, or
any payment (whether in cash,
securities or other property),
including any sinking fund or
similar deposit, on account of
the purchase, redemption,
retirement, acquisition,
cancellation or termination of
any such Equity Interests in
BorgWarner or any option,
warrant or other right to
acquire any such Equity
Interests in BorgWarner.
Section 6.07 . Transactions
With Affiliates. BorgWarner
will not, and will not permit
any of its Subsidiaries to,
sell, lease or otherwise
transfer any property or assets
to, or purchase, lease or
otherwise acquire any property
or assets from, or otherwise
engage in any other transactions
with, any of its Affiliates,
except (a) in the ordinary
course of business at prices and
on terms and conditions not less
favorable to BorgWarner or such
Subsidiary than could be
obtained on an arm's-length
basis from unrelated third
parties, (b) transactions
between or among BorgWarner and
its wholly owned Subsidiaries
not involving any other
Affiliate and (c) any Restricted
Payment permitted by Section
6.06..
Section 6.08 . Restrictive
Agreements. BorgWarner will
not, and will not permit any of
its Subsidiaries to, directly or
indirectly, enter into, incur or
permit to exist any agreement or
other arrangement that
prohibits, restricts or imposes
any condition upon (a) the
ability of BorgWarner or any
Subsidiary to create, incur or
permit to exist any Lien upon
any of its property or assets,
or (b) the ability of any
Subsidiary to pay dividends or
other distributions with respect
to any shares of its capital
stock or to make or repay loans
or advances to BorgWarner or any
other Subsidiary or to Guarantee
Indebtedness of BorgWarner or
any other Subsidiary; provided
that (i) the foregoing shall not
apply to restrictions and
conditions imposed by law or by
this Agreement, (ii) the
foregoing shall not apply to
restrictions and conditions
existing on the date hereof
under the July Credit Agreement
or the Receivables Facility or
otherwise identified on Schedule
6.8 (but shall apply to any
amendment or modification
expanding the scope of, any such
restriction or condition), (iii)
the foregoing shall not apply to
customary restrictions and
conditions contained in
agreements relating to the sale
of a Subsidiary pending such
sale, provided such restrictions
and conditions apply only to the
Subsidiary that is to be sold
and such sale is permitted
hereunder, (iv) clause [a] of
the foregoing shall not apply to
restrictions or conditions
imposed by any agreement
relating to secured Indebtedness
permitted by this Agreement if
such restrictions or conditions
apply only to the property or
assets securing such
Indebtedness and (v) clause [a]
of the foregoing shall not apply
to customary provisions in
leases and other contracts
restricting the assignment thereof.
Section 6.09 . Tender Offer
Documentation. BorgWarner shall
not without the consent of the
Lead Arranger (acting on the
instructions of the Required
Lenders):
(i) increase (and
shall ensure that nothing is
done or omitted by or on behalf
of it or any of its Subsidiaries
that would require an increase
in) the total cash consideration
payable for the capital shares
of Target above the level set
forth in the Tender Offer
Documentation as filed with the
German FSA on the Effective
Date;
(ii) extend the
Tender Offer (other than as
required under the German
Takeover Act) or waive, amend,
revise or agree or decide not to
enforce, in whole or in part,
any other material term of the
Tender Offer set forth in the
Tender Offer Documentation filed
with the German FSA on the
Effective Date, except that
either Borrower may waive the
Public Offer MAC, as that term
is defined in Section 4.1.3 of
the Sale and Purchase Agreement,
without prior consent of the
Lead Arranger or the Lenders, at
any time after the closing of
the Private Sale; or
(iii) except for the
description thereof contained in
the Tender Offer Documentation
on the Effective Date, issue or
allow to be issued on its behalf
or on behalf of any of its
Subsidiaries any press release
or other publicity which refers
to this Agreement, the
Commitments, the Loans, any of
the Agents or any Lender without
the consent of the Lead
Arranger, unless the publicity
is required by law, the German
FSA, or any stock exchange, in
which case, BorgWarner shall, to
the extent possible in the
circumstances, notify the Lead
Arranger as soon as is
practicable upon becoming aware
of the requirement, shall
consult with the Lead Arranger
on the terms of the reference
and shall have regard to any
timely comments of the Lead
Arranger.
ARTICLE 7
Events Of Default
If any of the following
events ("Events of Default")
shall occur:
(a) a Borrower shall
fail to pay any principal of any
Loan when and as the same shall
become due and payable, whether
at the due date thereof or at a
date fixed for prepayment
thereof or otherwise;
(b) a Borrower shall
fail to pay any interest on any
Loan or any fee or any other
amount (other than an amount
referred to in clause [a] of
this Article) payable under this
Agreement, when and as the same
shall become due and payable,
and such failure shall continue
unremedied for a period of five
days;
(c) any
representation or warranty made
or deemed made by or on behalf
of BorgWarner or any Subsidiary
in or in connection with this
Agreement or any amendment or
modification hereof, or in any
report, certificate, financial
statement or other document
furnished pursuant to or in
connection with this Agreement
or any amendment or modification
hereof, shall prove to have been
incorrect when made or deemed made;
(d) BorgWarner shall
fail to observe or perform any
covenant, condition or agreement
contained in Section 5.02, 5.03
(with respect to a Borrower's
existence) or 5.08 or in Article 6;
(e) a Borrower shall
fail to observe or perform any
covenant, condition or agreement
contained in this Agreement
(other than those specified in
clause [a] , [b] or [d] of this
Article), and such failure shall
continue unremedied for a period
of 30 days after notice thereof
from the Administrative Agent
(given at the request of any
Lender) to such Borrower;
(f) BorgWarner or
any Subsidiary shall fail to
make any payment (whether of
principal or interest and
regardless of amount) in respect
of any Material Indebtedness,
when and as the same shall
become due and payable;
(g) any event or
condition occurs that results in
any Material Indebtedness
becoming due prior to its
scheduled maturity or that
enables or permits (with or
without the giving of notice,
the lapse of time or both) the
holder or holders of any
Material Indebtedness or any
trustee or agent on its or their
behalf to cause any Material
Indebtedness to become due, or
to require the prepayment,
repurchase, redemption or
defeasance thereof, prior to its
scheduled maturity; provided
that this clause [g] shall not
apply to secured Indebtedness
that becomes due as a result of
the voluntary sale or transfer
of the property or assets
securing such Indebtedness;
(h) an involuntary
proceeding shall be commenced or
an involuntary petition shall be
filed seeking (i) liquidation,
reorganization or other relief
in respect of a Borrower or any
Subsidiary or its debts, or of a
substantial part of its assets,
under any Federal, state or
foreign bankruptcy, insolvency,
receivership or similar law now
or hereafter in effect or ((ii)
the appointment of a receiver,
trustee, custodian,
sequestrator, conservator or
similar official for a Borrower
or any Subsidiary or for a
substantial part of its assets,
and, in any such case, such
proceeding or petition shall
continue undismissed for 60 days
or an order or decree approving
or ordering any of the foregoing
shall be entered;
(i) a Borrower or
any Subsidiary shall (i)
voluntarily commence any
proceeding or file any petition
seeking liquidation,
reorganization or other relief
under any Federal, state or
foreign bankruptcy, insolvency,
receivership or similar law now
or hereafter in effect, (ii)
consent to the institution of,
or fail to contest in a timely
and appropriate manner, any
proceeding or petition described
in clause [h] of this Article,
(iii) apply for or consent to
the appointment of a receiver,
trustee, custodian,
sequestrator, conservator or
similar official for a Borrower
or any Subsidiary or for a
substantial part of its assets,
(iv) file an answer admitting
the material allegations of a
petition filed against it in any
such proceeding, (v) make a
general assignment for the
benefit of creditors or (vi)
take any action for the purpose
of effecting any of the foregoing;
(j) a Borrower or
any Subsidiary shall become
unable, admit in writing or fail
generally to pay its debts as
they become due;
(k) one or more
judgments for the payment of
money in an aggregate amount in
excess of $50,000,000 shall be
rendered against a Borrower, any
Subsidiary or any combination
thereof and the same shall
remain undischarged for a period
of 30 consecutive days during
which execution shall not be
effectively stayed, or any
action shall be legally taken by
a judgment creditor to attach or
levy upon any assets of a
Borrower or any Subsidiary to
enforce any such judgment;
(l) an ERISA Event
shall have occurred that, in the
opinion of the Required Lenders,
when taken together with all
other ERISA Events that have
occurred, could reasonably be
expected to result in a Material
Adverse Effect; or
(m) a Change in
Control shall occur;
then, and in every such event
(other than an event with
respect to a Borrower described
in clause [h] or[i] of this
Article), and at any time
thereafter during the
continuance of such event, the
Administrative Agent may, and at
the request of the Required
Lenders shall, by notice to
BorgWarner, take either or both
of the following actions, at the
same or different times:
(i)terminate the Commitments,
and thereupon the Commitments
shall terminate immediately, and
(ii) declare the Loans then
outstanding to be due and
payable in whole (or in part, in
which case any principal not so
declared to be due and payable
may thereafter be declared to be
due and payable), and thereupon
the principal of the Loans so
declared to be due and payable,
together with accrued interest
thereon and all fees and other
obligations of each Borrower
accrued hereunder, shall become
due and payable immediately,
without presentment, demand,
protest or other notice of any
kind, all of which are hereby
waived by each Borrower; and in
case of any event with respect
to a Borrower described in
clause [h] or[i] of this
Article, the Commitments shall
automatically terminate and the
principal of the Loans then
outstanding, together with
accrued interest thereon and all
fees and other obligations of
each Borrower accrued hereunder,
shall automatically become due
and payable, without
presentment, demand, protest or
other notice of any kind, all of
which are hereby waived by each
Borrower; provided that the
Administrative Agent shall not
have the right or obligation to
take any of the actions set
forth in clause [i] or [ii], and
no Lender shall have the right
to request the Administrative
Agent to do so, at any time
prior to the end of the Certain
Funds Period.
ARTICLE 8
The Administrative Agent
Each of the Lenders
hereby irrevocably appoints the
Administrative Agent as its
agent and authorizes the
Administrative Agent to take
such actions on its behalf and
to exercise such powers as are
delegated to the Administrative
Agent by the terms hereof,
together with such actions and
powers as are reasonably
incidental thereto.
The bank serving as the
Administrative Agent hereunder
shall have the same rights and
powers in its capacity as a
Lender as any other Lender and
may exercise the same as though
it were not the Administrative
Agent, and such bank and its
Affiliates may accept deposits
from, lend money to and
generally engage in any kind of
business with BorgWarner or any
Subsidiary or other Affiliate
thereof as if it were not the
Administrative Agent hereunder.
The Administrative Agent
shall not have any duties or
obligations except those
expressly set forth herein.
Without limiting the generality
of the foregoing, (a) the
Administrative Agent shall not
be subject to any fiduciary or
other implied duties, regardless
of whether a Default has
occurred and is continuing, (b)
the Administrative Agent shall
not have any duty to take any
discretionary action or exercise
any discretionary powers, except
discretionary rights and powers
expressly contemplated hereby
that the Administrative Agent is
required to exercise in writing
by the Required Lenders, and (c)
except as expressly set forth
herein, the Administrative Agent
shall not have any duty to
disclose, and shall not be
liable for the failure to
disclose, any information
relating to BorgWarner or any of
its Subsidiaries that is
communicated to or obtained by
the bank serving as
Administrative Agent or any of
its Affiliates in any capacity.
The Administrative Agent shall
not be liable for any action
taken or not taken by it with
the consent or at the request of
the Required Lenders or in the
absence of its own gross
negligence or willful
misconduct. The Administrative
Agent shall be deemed not to
have knowledge of any Default
unless and until written notice
thereof is given to the
Administrative Agent by a
Borrower or a Lender, and the
Administrative Agent shall not
be responsible for or have any
duty to ascertain or inquire
into (i) any statement, warranty
or representation made in or in
connection with this Agreement,
(ii) the contents of any
certificate, report or other
document delivered hereunder or
in connection herewith, (iii)
the performance or observance of
any of the covenants, agreements
or other terms or conditions set
forth herein, (iv) the validity,
enforceability, effectiveness or
genuineness of this Agreement or
any other agreement, instrument
or document, or (v) the
satisfaction of any condition
set forth in Article 6 or
elsewhere herein, other than to
confirm receipt of items
expressly required to be
delivered to the Administrative
Agent.
The Administrative Agent
shall be entitled to rely upon,
and shall not incur any
liability for relying upon, any
notice, request, certificate,
consent, statement, instrument,
document or other writing
believed by it to be genuine and
to have been signed or sent by
the proper Person. The
Administrative Agent also may
rely upon any statement made to
it orally or by telephone and
believed by it to be made by the
proper Person, and shall not
incur any liability for relying
thereon. The Administrative
Agent may consult with legal
counsel (who may be counsel for
a Borrower), independent
accountants and other experts
selected by it, and shall not be
liable for any action taken or
not taken by it in accordance
with the advice of any such
counsel, accountants or experts.
The Administrative Agent
may perform any and all its
duties and exercise its rights
and powers by or through any one
or more sub-agents appointed by
the Administrative Agent. The
Administrative Agent and any
such sub-agent may perform any
and all its duties and exercise
its rights and powers through
their respective Related
Parties. The exculpatory
provisions of the preceding
paragraphs shall apply to any
such sub-agent and to the
Related Parties of the
Administrative Agent and any
such sub-agent, and shall apply
to their respective activities
in connection with the
syndication of the credit
facilities provided for herein
as well as activities as
Administrative Agent.
Subject to the
appointment and acceptance of a
successor Administrative Agent
as provided in this paragraph,
the Administrative Agent may
resign at any time by notifying
the Lenders, and BorgWarner.
Upon any such resignation, the
Required Lenders shall have the
right, in consultation with
BorgWarner, to appoint a
successor. If no successor
shall have been so appointed by
the Required Lenders and shall
have accepted such appointment
within 30 days after the
retiring Administrative Agent
gives notice of its resignation,
then the retiring Administrative
Agent may, on behalf of the
Lenders, appoint a successor
Administrative Agent which shall
be a bank with an office in New
York, New York, or an Affiliate
of any such bank. Upon the
acceptance of its appointment as
Administrative Agent hereunder
by a successor, such successor
shall succeed to and become
vested with all the rights,
powers, privileges and duties of
the retiring Administrative
Agent, and the retiring
Administrative Agent shall be
discharged from its duties and
obligations hereunder. The fees
payable by each Borrower to a
successor Administrative Agent
shall be the same as those
payable to its predecessor
unless otherwise agreed between
BorgWarner and such successor.
After the Administrative Agent's
resignation hereunder, the
provisions of this Article and
Section 10.03 shall continue in
effect for its benefit in
respect of any actions taken or
omitted to be taken by it while
it was acting as Administrative
Agent.
Each Lender acknowledges
that it has, independently and
without reliance upon the
Administrative Agent or any
other Lender and based on such
documents and information as it
has deemed appropriate, made its
own credit analysis and decision
to enter into this Agreement.
Each Lender also acknowledges
that it will, independently and
without reliance upon the
Administrative Agent or any
other Lender and based on such
documents and information as it
shall from time to time deem
appropriate, continue to make
its own decisions in taking or
not taking action under or based
upon this Agreement, any related
agreement or any document
furnished hereunder or thereunder.
The Syndication Agent
shall have no rights,
liabilities or obligations in
its capacity as such.
ARTICLE 9
Guarantee
Section 9.01 . The
Guarantee. BorgWarner hereby
unconditionally guarantees the
full and punctual payment
(whether at stated maturity,
upon acceleration or otherwise)
of the principal of and interest
on each Loan made to BorgWarner
Germany pursuant to this
Agreement, and the full and
punctual payment of all other
amounts payable by BorgWarner
Germany under this Agreement and
its Notes. Upon failure by
BorgWarner Germany to pay
punctually any such amount,
BorgWarner shall forthwith on
demand pay the amount not so
paid at the place and in the
manner specified in this Agreement.
Section 9.02 . Guarantee
Unconditional. The obligations
of BorgWarner under this Article
9 shall be unconditional and
absolute and, without limiting
the generality of the foregoing,
shall not be released,
discharged or otherwise affected
by:
(a) any extension,
renewal, settlement, compromise,
waiver or release in respect of
any obligation of BorgWarner
Germany under this Agreement or
any of its Notes, by operation
of law or otherwise;
(b) any modification
or amendment of or supplement to
this Agreement or any Note;
(c) any release,
impairment, non-perfection or
invalidity of any direct or
indirect security for any
obligation of BorgWarner Germany
under this Agreement or any of
its Notes;
(d) any change in
the corporate existence,
structure or ownership of
BorgWarner Germany, or any
bankruptcy, insolvency,
reorganization or other similar
proceeding affecting BorgWarner
Germany or its assets or any
resulting release or discharge
of any obligation of BorgWarner
Germany contained in this
Agreement or any of its Notes;
(e) the existence of
any claim, set-off or other
rights which BorgWarner may have
at any time against BorgWarner
Germany, the Administrative
Agent, any Lender or any other
Person, whether in connection
with this Agreement or any
unrelated transactions, provided
that nothing herein shall
prevent the assertion of any
such claim by separate suit or
compulsory counterclaim;
(f) any invalidity
or unenforceability relating to
or against BorgWarner Germany
for any reason of this Agreement
or any of its Notes, or any
provision of applicable law or
regulation purporting to
prohibit the payment by
BorgWarner Germany of the
principal of or interest on any
of its Notes or any other amount
payable by it under this
Agreement; or
(g) any other act or
omission to act or delay of any
kind by BorgWarner Germany, the
Administrative Agent, any Lender
or any other Person or any other
circumstance whatsoever which
might, but for the provisions of
this Section, constitute a legal
or equitable discharge of
BorgWarner's obligations hereunder.
Section 9.03 . Discharge
Only Upon Payment In Full;
Reinstatement In Certain
Circumstances. BorgWarner's
obligations under this Article 9
shall remain in full force and
effect until the Commitments
shall have terminated and the
principal of and interest on the
Loans made to BorgWarner Germany
and all other amounts payable by
BorgWarner Germany under this
Agreement shall have been paid
in full. If at any time any
payment of the principal of or
interest on any Loan made to
BorgWarner Germany or any other
amount payable by BorgWarner
Germany under this Agreement is
rescinded or must be otherwise
restored or returned upon the
bankruptcy, insolvency or
reorganization of BorgWarner
Germany or otherwise,
BorgWarner's obligations
hereunder with respect to such
payment shall be reinstated at
such time as though such payment
had been due but not made at
such time.
Section 9.04 . Waiver By
BorgWarner. BorgWarner
irrevocably waives acceptance
hereof, presentment, demand,
protest and any notice not
provided for herein, as well as
any requirement that at any time
any action be taken by any
Person against BorgWarner
Germany or any other Person.
Section 9.05 . Subrogation.
Upon making full payment with
respect to any obligation of
BorgWarner Germany under this
Article 9, BorgWarner shall be
subrogated to the rights of the
payee against BorgWarner Germany
with respect to such obligation;
provided that BorgWarner shall
not enforce any payment by way
of subrogation against
BorgWarner Germany so long as
(i) any Lender has any
Commitment hereunder or (ii) any
amount payable by BorgWarner
Germany hereunder remains unpaid
after giving effect to any
payments by BorgWarner under
this Article 9.
Section 9.06 . Stay Of
Acceleration. If acceleration
of the time for payment of any
amount payable by BorgWarner
Germany under this Agreement or
its Notes is stayed upon any
bankruptcy, insolvency or
reorganization of BorgWarner
Germany or otherwise, all such
amounts otherwise subject to
acceleration under the terms of
this Agreement shall nonetheless
be payable by BorgWarner Germany
hereunder for the purposes of
this Article 9 forthwith on
demand by the Administrative
Agent made at the request of the
Required Lenders.
ARTICLE 10
Miscellaneous
Section 10.01 . Notices.
Except in the case of notices
and other communications
expressly permitted to be given
by telephone or electronic
communication, all notices and
other communications provided
for herein shall be in writing
and shall be delivered by hand
or overnight courier service,
mailed by certified or
registered mail or sent by
telecopy, as follows:
(a) if to a
Borrower, to it at BorgWarner
Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇,
Attention of Vice President and
Treasurer (Telecopy No.
312-322-8712)
(▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇);
(b) if to the
Administrative Agent, to it at
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇, Attention of ▇▇▇▇
Dell'Aquila (Telecopy No.
212-761-0322);
(c) if to any other
Lender, to it at its address (or
telecopy number) set forth in
its Administrative Questionnaire.
Any party hereto may change its
address or telecopy number for
notices and other communications
hereunder by notice to the other
parties hereto (or, in the case
of any Lender, by notice to the
Administrative Agent and
BorgWarner). All notices and
other communications given to
any party hereto in accordance
with the provisions of this
Agreement shall be deemed to
have been given on the date of
receipt.
Section 10.02 . Waivers;
Amendments. (a) No failure or
delay by the Administrative
Agent or any Lender in
exercising any right or power
hereunder shall operate as a
waiver thereof, nor shall any
single or partial exercise of
any such right or power, or any
abandonment or discontinuance of
steps to enforce such a right or
power, preclude any other or
further exercise thereof or the
exercise of any other right or
power. The rights and remedies
of the Administrative Agent and
the Lenders hereunder are
cumulative and are not exclusive
of any rights or remedies that
they would otherwise have. No
waiver of any provision of this
Agreement or consent to any
departure by a Borrower
therefrom shall in any event be
effective unless the same shall
be permitted by paragraph [b] of
this Section, and then such
waiver or consent shall be
effective only in the specific
instance and for the purpose for
which given. Without limiting
the generality of the foregoing,
the making of a Loan shall not
be construed as a waiver of any
Default, regardless of whether
the Administrative Agent or any
Lender may have had notice or
knowledge of such Default at the
time.
(b) Neither this
Agreement nor any provision
hereof may be waived, amended or
modified except pursuant to an
agreement or agreements in
writing entered into by each
Borrower and the Required
Lenders or by each Borrower and
the Administrative Agent with
the consent of the Required
Lenders; provided that no such
agreement shall (i) increase the
Commitment of any Lender without
the written consent of each
Lender directly and adversely
affected thereby, (ii) reduce
the principal amount of any Loan
or reduce the rate of interest
thereon, or reduce any fees
payable hereunder, without the
written consent of each Lender
directly and adversely affected
thereby, (iii) postpone the
scheduled date of payment of the
principal amount of any Loan or
any interest thereon, or any
fees payable hereunder, or
reduce the amount of, waive or
excuse any such payment, or
postpone the scheduled date of
expiration of any Commitment,
without the written consent of
each Lender affected thereby,
(iv) change Section 2.14(b) or
2.14(c) in a manner that would
alter the pro rata sharing of
payments required thereby,
without the written consent of
each Lender directly and
adversely affected thereby, or
(v) change any of the provisions
of this Section or any other
provision hereof specifying the
number or percentage of Lenders
required to waive, amend or
modify any rights hereunder or
make any determination or grant
any consent hereunder, without
the written consent of each
Lender; provided further that no
such agreement shall amend,
modify or otherwise affect the
rights or duties of the
Administrative Agent hereunder
without the prior written
consent of the Administrative
Agent.
Section 10.03 . Expenses;
Indemnity; Damage Waiver. (a)
BorgWarner shall pay (i) all
reasonable out-of-pocket
expenses incurred by the
Administrative Agent, the Lead
Arranger and their Affiliates,
including the reasonable fees,
charges and disbursements of
counsel for the Administrative
Agent and the Lead Arranger, in
connection with the syndication
of the credit facilities
provided for herein, the
preparation and administration
of this Agreement or any
amendments, modifications or
waivers of the provisions hereof
(whether or not the transactions
contemplated hereby or thereby
shall be consummated) and (ii)
all reasonable out-of-pocket
expenses incurred by the
Administrative Agent or any
Lender, including the fees,
charges and disbursements of one
counsel for the Administrative
Agent and the Lenders (unless
using such counsel would present
a conflict of interest, in which
case BorgWarner shall pay the
reasonable fees, charges and
disbursements of one additional
counsel), in connection with the
enforcement or protection of
their rights in connection with
this Agreement, including their
rights under this Section, or in
connection with the Loans made
hereunder, including in
connection with any workout,
restructuring or negotiations in
respect thereof.
(b) BorgWarner shall
indemnify the Administrative
Agent, the Lead Arranger and
each Lender, and each Related
Party of any of the foregoing
Persons (each such Person being
called an "Indemnitee") against,
and hold each Indemnitee
harmless from, any and all
losses, claims, damages,
liabilities and related
expenses, including the
reasonable fees, charges and
disbursements of any counsel for
any Indemnitee (notwithstanding
any limitation in Section
10.03(a)(ii)), incurred by or
asserted against any Indemnitee
arising out of, in connection
with, or as a result of (i) the
execution or delivery of this
Agreement or any agreement or
instrument contemplated hereby,
the performance by the parties
hereto of their respective
obligations hereunder or the
consummation of the Transactions
or any other transactions
contemplated hereby, (ii) any
Loan or the use of the proceeds
therefrom, (iii) any actual or
alleged presence or release of
Hazardous Materials on or from
any property owned or operated
by BorgWarner or any of its
Subsidiaries, or any
Environmental Liability related
in any way to BorgWarner or any
of its Subsidiaries, or (iv) any
actual or prospective claim,
litigation, investigation or
proceeding relating to any of
the foregoing, whether based on
contract, tort or any other
theory and regardless of whether
any Indemnitee is a party
thereto; provided that such
indemnity shall not, as to any
Indemnitee or its Related
Parties, be available to the
extent that such losses, claims,
damages, liabilities or related
expenses are determined by a
court of competent jurisdiction
by final and nonappealable
judgment to have resulted from
the gross negligence or willful
misconduct of such Indemnitee or
its Related Parties.
(c) To the extent
that a Borrower fails to pay any
amount required to be paid by it
to the Administrative Agent or
Lead Arranger under paragraph
[a] or [b] of this Section, each
Lender severally agrees to pay
to the Administrative Agent or
the Lead Arranger, as the case
may be, such Lender's Applicable
Percentage (determined as of the
time that the applicable
unreimbursed expense or
indemnity payment is sought) of
such unpaid amount; provided
that the unreimbursed expense or
indemnified loss, claim, damage,
liability or related expense, as
the case may be, was incurred by
or asserted against the
Administrative Agent or the Lead
Arranger in its capacity as such.
(d) To the extent permitted
by applicable law, BorgWarner
shall not assert, and hereby
waives, any claim against any
Indemnitee, on any theory of
liability, for special,
indirect, consequential or
punitive damages (as opposed to
direct or actual damages)
arising out of, in connection
with, or as a result of, this
Agreement or any agreement or
instrument contemplated hereby,
the Transactions, any Loan or
the use of the proceeds thereof.
Section 10.04 . Successors
And Assigns. (a) The
provisions of this Agreement
shall be binding upon and inure
to the benefit of the parties
hereto and their respective
successors and assigns permitted
hereby, except that a Borrower
may not assign or otherwise
transfer any of its rights or
obligations hereunder without
the prior written consent of
each Lender (and any attempted
assignment or transfer by a
Borrower without such consent
shall be null and void).
Nothing in this Agreement,
expressed or implied, shall be
construed to confer upon any
Person (other than the parties
hereto, their respective
successors and assigns permitted
hereby and, to the extent
expressly contemplated hereby,
the Related Parties of each of
the Administrative Agent and the
Lenders) any legal or equitable
right, remedy or claim under or
by reason of this Agreement.
(b) Any Lender may
assign to one or more assignees
all or a portion of its rights
and obligations under this
Agreement (including all or a
portion of its Commitments and
the Loans at the time owing to
it); provided that (i) each of
BorgWarner (except in the case
of an assignment to a Lender or
an Affiliate of a Lender) and
the Administrative Agent must
give their prior written consent
to such assignment (which
consent shall not be
unreasonably withheld), (ii)
except in the case of an
assignment to a Lender or an
Affiliate of a Lender or an
assignment of the entire
remaining amount of the
assigning Lender's Commitment,
the amount of any Commitment of
the assigning Lender subject to
each such assignment (determined
as of the date the Assignment
and Acceptance with respect to
such assignment is delivered to
the Administrative Agent) shall
not be less than _5,000,000
(except in the case of an
assignment to the entire
remaining amount of the
assigning Lender's Commitment),
unless each of BorgWarner and
the Administrative Agent
otherwise consent, (iii) each
partial assignment of a
Commitment shall be made as an
assignment of a proportionate
part of all the assigning
Lender's rights and obligations
under the assigned Commitment,
(iv) the parties to each
assignment shall execute and
deliver to the Administrative
Agent an Assignment and
Acceptance, together with a
processing and recordation fee
of $3,500, and (v) the assignee,
if it shall not be a Lender,
shall deliver to the
Administrative Agent an
Administrative Questionnaire;
provided further that any
consent of BorgWarner otherwise
required under this paragraph
shall not be required if an
Event of Default has occurred
and is continuing. Upon
acceptance and recording
pursuant to paragraph [d] of
this Section, from and after the
effective date specified in each
Assignment and Acceptance, the
assignee thereunder shall be a
party hereto and, to the extent
of the interest assigned by such
Assignment and Acceptance, have
the rights and obligations of a
Lender under this Agreement, and
the assigning Lender thereunder
shall, to the extent of the
interest assigned by such
Assignment and Acceptance, be
released from its obligations
under this Agreement (and, in
the case of an Assignment and
Acceptance covering all of the
assigning Lender's rights and
obligations under this
Agreement, such Lender shall
cease to be a party hereto but
shall continue to be entitled to
the benefits of Sections 2.11,
2.12, 2.13 and 10.03). Any
assignment or transfer by a
Lender of rights or obligations
under this Agreement that does
not comply with this paragraph
shall be treated for purposes of
this Agreement as a sale by such
Lender of a participation in
such rights and obligations in
accordance with paragraph (e) of
this Section.
(c) The Administrative
Agent, acting for this purpose
as an agent of the applicable
Borrower, shall maintain at one
of its offices in The City of
New York a copy of each
Assignment and Acceptance
delivered to it and a register
for the recordation of the names
and addresses of the Lenders,
and the Commitments of, and
principal amount of the Loans
owing to, each Lender pursuant
to the terms hereof from time to
time (the "Register"). The
entries in the Register shall be
conclusive, and the applicable
Borrower, the Administrative
Agent and the Lenders may treat
each Person whose name is
recorded in the Register
pursuant to the terms hereof as
a Lender hereunder for all
purposes of this Agreement,
notwithstanding notice to the
contrary. The Register shall be
available for inspection by
either Borrower and any Lender
at any reasonable time and from
time to time upon reasonable
prior notice.
(d) Upon its receipt of a
duly completed Assignment and
Acceptance executed by an
assigning Lender and an
assignee, the assignee's
completed Administrative
Questionnaire (unless the
assignee shall already be a
Lender hereunder), the
processing and recordation fee
referred to in paragraph (b) of
this Section and any written
consent to such assignment
required by paragraph (b) of
this Section, the Administrative
Agent shall accept such
Assignment and Acceptance and
record the information contained
therein in the Register. No
assignment shall be effective
for purposes of this Agreement
unless it has been recorded in
the Register as provided in this
paragraph.
(e) Any Lender may,
without the consent of either
Borrower or the Administrative
Agent, sell participations to
one or more banks or other
entities (a "Participant") in
all or a portion of such
Lender's rights and obligations
under this Agreement (including
all or a portion of its
Commitment and the Loans owing
to it); provided that (i) such
Lender's obligations under this
Agreement shall remain
unchanged, (ii) such Lender
shall remain solely responsible
to the other parties hereto for
the performance of such
obligations and (iii) each
Borrower, the Administrative
Agent, and the other Lenders
shall continue to deal solely
and directly with such Lender in
connection with such Lender's
rights and obligations under
this Agreement. Any agreement
or instrument pursuant to which
a Lender sells such a
participation shall provide that
such Lender shall retain the
sole right to enforce this
Agreement and to approve any
amendment, modification or
waiver of any provision of this
Agreement; provided that such
agreement or instrument may
provide that such Lender will
not, without the consent of the
Participant, agree to any
amendment, modification or
waiver described in the first
proviso to Section 10.02(b) that
affects such Participant.
Subject to paragraph [f] of this
Section, the Borrowers agree
that each Participant shall be
entitled to the benefits of
Sections 2.11, 2.12, and 2.13 to
the same extent as if it were a
Lender and had acquired its
interest by assignment pursuant
to paragraph [b] of this Section.
(f) A Participant
shall not be entitled to receive
any greater payment under
Section 2.11 or 2.13 than the
applicable Lender would have
been entitled to receive with
respect to the participation
sold to such Participant, unless
the sale of the participation to
such Participant is made with
BorgWarner's prior written
consent. A Participant that
would be a Foreign Lender if it
were a Lender shall not be
entitled to the benefits of
Section 2.13 unless BorgWarner
is notified of the participation
sold to such Participant and
such Participant agrees, for the
benefit of the Borrowers, to
comply with Section 2.13(e) as
though it were a Lender.
(g) Any Lender may
at any time pledge or assign a
security interest in all or any
portion of its rights under this
Agreement to secure obligations
of such Lender, including any
such pledge or assignment to a
Federal Reserve Bank, and this
Section shall not apply to any
such pledge or assignment of a
security interest; provided that
no such pledge or assignment of
a security interest shall
release a Lender from any of its
obligations hereunder or
substitute any such assignee for
such Lender as a party hereto.
Section 10.05 . Survival.
All covenants, agreements,
representations and warranties
made by each Borrower herein and
in the certificates or other
instruments delivered in
connection with or pursuant to
this Agreement shall be
considered to have been relied
upon by the other parties hereto
and shall survive the execution
and delivery of this Agreement
and the making of any Loans,
regardless of any investigation
made by any such other party or
on its behalf and
notwithstanding that the
Administrative Agent or any
Lender may have had notice or
knowledge of any Default or
incorrect representation or
warranty at the time any credit
is extended hereunder, and shall
continue in full force and
effect as long as the principal
of or any accrued interest on
any Loan or any fee or any other
amount payable under this
Agreement is outstanding and
unpaid and so long as the
Commitments have not expired or
terminated. The provisions of
Sections 2.11 2.12, 2.13 and
Section 10.03 and Article 8
shall survive and remain in full
force and effect regardless of
the consummation of the
transactions contemplated
hereby, the repayment of the
Loans, the expiration or
termination of the Commitments
or the termination of this
Agreement or any provision
hereof.
Section 10.06 . Counterparts;
Integration; Effectiveness.
This Agreement may be executed
in counterparts (and by
different parties hereto on
different counterparts), each of
which shall constitute an
original, but all of which when
taken together shall constitute
a single contract. This
Agreement and any separate
letter agreements with respect
to fees payable to the
Administrative Agent constitute
the entire contract among the
parties relating to the subject
matter hereof and supersede any
and all previous agreements and
understandings, oral or written,
relating to the subject matter
hereof. Except as provided in
Section 4.01, this Agreement
shall become effective when it
shall have been executed by the
Administrative Agent and when
the Administrative Agent shall
have received counterparts
hereof which, when taken
together, bear the signatures of
each of the other parties
hereto, and thereafter shall be
binding upon and inure to the
benefit of the parties hereto
and their respective successors
and assigns. Delivery of an
executed counterpart of a
signature page of this Agreement
by telecopy shall be effective
as delivery of a manually
executed counterpart of this
Agreement.
Section 10.07 . Severability.
Any provision of this Agreement
held to be invalid, illegal or
unenforceable in any
jurisdiction shall, as to such
jurisdiction, be ineffective to
the extent of such invalidity,
illegality or unenforceability
without affecting the validity,
legality and enforceability of
the remaining provisions hereof;
and the invalidity of a
particular provision in a
particular jurisdiction shall
not invalidate such provision in
any other jurisdiction.
Section 10.08 . Right Of
Setoff. If an Event of Default
shall have occurred and be
continuing, each Lender is
hereby authorized at any time
and from time to time, to the
fullest extent permitted by law,
to set off and apply any and all
deposits (general or special,
time or demand, provisional or
final) at any time held and
other indebtedness at any time
owing by such Lender to or for
the credit or the account of
either Borrower against any of
and all the obligations of such
Borrower now or hereafter
existing under this Agreement
held by such Lender,
irrespective of whether or not
such Lender shall have made any
demand under this Agreement and
although such obligations may be
unmatured. In the event that
amounts set off in one currency
are applied to obligations in a
different currency, the rate of
exchange shall be the Exchange
Rate as in effect at the time of
application. The rights of each
Lender under this Section are in
addition to other rights and
remedies (including other rights
of setoff) which such Lender may
have.
Section 10.09 . Governing
Law; Jurisdiction; Consent To
Service Of Process. (a) This
Agreement shall be construed in
accordance with and governed by
the law of the State of New York.
(b) Each Borrower
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 Agreement, 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 Agreement shall affect
any right that the
Administrative Agent or any
Lender may otherwise have to
bring any action or proceeding
relating to this Agreement
against each Borrower or its
properties in the courts of any
jurisdiction.
(c) Each Borrower
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 Agreement 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 Agreement irrevocably
consents to service of process
in the manner provided for
notices in Section 10.01.
Nothing in this Agreement will
affect the right of any party to
this Agreement to serve process
in any other manner permitted by
law.
Section 10.10 . WAIVER OF
JURY TRIAL. 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 AGREEMENT 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
AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
Section 10.11 . Headings.
Article and Section headings and
the Table of Contents used
herein are for convenience of
reference only, are not part of
this Agreement and shall not
affect the construction of, or
be taken into consideration in
interpreting, this Agreement.
Section 10.12 .
Confidentiality. Each of the
Administrative Agent and the
Lenders agrees to maintain the
confidentiality of the
Information (as defined below),
except that Information may be
disclosed (a) to its and its
Affiliates' directors, officers,
employees and agents, including
accountants, legal counsel and
other advisors (it being
understood that the Persons to
whom such disclosure is made
will be informed of the
confidential nature of such
Information and instructed to
keep such Information
confidential), (b) to the extent
requested by any regulatory
authority, (c) to the extent
required by applicable laws or
regulations or by any subpoena
or similar legal process, (d) to
any other party to this
Agreement, (e) in connection
with the exercise of any
remedies hereunder or any suit,
action or proceeding relating to
this Agreement or the
enforcement of rights hereunder,
(f) subject to an agreement
containing provisions
substantially the same as those
of this Section, to (i) any
assignee of or Participant in,
or any prospective assignee of
or Participant in, any of its
rights or obligations under this
Agreement or (ii) any actual or
prospective counterparty (or its
advisors) to any swap or
derivative transaction relating
to each Borrower and its
obligations, (g) with the
consent of such Borrower or (h)
to the extent such Information
(i) becomes publicly available
other than as a result of a
breach of this Section or (ii)
becomes available to the
Administrative Agent or any
Lender on a nonconfidential
basis from a source other than a
Borrower, provided that, if
Information is disclosed
pursuant to clause [b] or [c]
above, the Administrative Agent
or such Lender, as the case may
be, shall use its best efforts
to promptly notify BorgWarner
prior to such disclosure unless
it is legally prohibited from
doing so or unless such
disclosure is in connection with
customary reviews by bank
examiners. For the purposes of
this Section, "Information"
means all information received
from a Borrower relating to such
Borrower or its business, other
than any such information that
is available to the
Administrative Agent or any
Lender on a nonconfidential
basis prior to disclosure by
such Borrower; provided that, in
the case of information received
from a Borrower after the date
hereof, such information is
clearly identified at the time
of delivery as confidential.
Any Person required to maintain
the confidentiality of
Information as provided in this
Section shall be considered to
have complied with its
obligation to do so if such
Person has exercised the same
degree of care to maintain the
confidentiality of such
Information as such Person would
accord to its own confidential
information.
Section 10.13 . Judgment
Currency. If, for the purposes
of obtaining judgment or filing
a claim in any court, it is
necessary to convert a sum due
hereunder or claim in one
currency into another currency,
the rate of exchange used shall
be that at which in accordance
with normal banking procedures
the Administrative Agent could
purchase the first currency with
such other currency on the
Business Day preceding that on
which final judgment is given.
The obligation of each Borrower
in respect of any such sum due
from it to the Administrative
Agent or the Lenders hereunder
shall, notwithstanding any
judgment in a currency (the
"Judgment Currency") other than
that in which such sum is
denominated in accordance with
the applicable provisions of
this Agreement (the "Agreement
Currency"), be discharged only
to the extent that on the
Business Day following receipt
by the Administrative Agent of
any sum adjudged to be so due in
the Judgment Currency, the
Administrative Agent may in
accordance with normal banking
procedures purchase the
Agreement Currency with the
Judgment Currency. If the
amount of the Agreement Currency
so purchased is less than the
sum originally due to the
Administrative Agent from a
Borrower in the Agreement
Currency, such Borrower agrees,
as a separate obligation and
notwithstanding any such
judgment, to indemnify the
Administrative Agent or the
Person to whom such obligation
was owing against such loss. If
the amount of the Agreement
Currency so purchased is greater
than the sum originally due to
the Administrative Agent in such
currency, the Administrative
Agent agrees to return the
amount of any excess to the
applicable Borrower (or to any
other Person who may be entitled
thereto under applicable law).
Section 10.14 . USA PATRIOT
Act. Each Lender hereby
notifies each Borrower that
pursuant to the requirements of
the USA Patriot Act (Title III
of Pub. L. 107-56 (signed into
law October 26, 2001)) (the
"Act"), it is required to
obtain, verify and record
information that identifies such
Borrower, which information
includes the name and address of
such Borrower and other
information that will allow such
Lender to identify such Borrower
in accordance with the Act.
IN WITNESS WHEREOF, the parties
hereto have caused this
Agreement to be duly executed by
their respective authorized
officers as of the day and year
first above written.
BORGWARNER INC.,
By _________________________
Name:
Title:
BORGWARNER GERMANY GMBH,
By _________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING,
INC., individually and as
Administrative Agent and
Syndication Agent,
By _________________________
Name:
Title:
SCHEDULE 2.1
COMMITMENTS
Lender
Commitments
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding,
Inc. E700,000,000
Exhibit A
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit
Agreement, dated as of November
23, 2004 (as amended,
supplemented or otherwise
modified from time to time, the
"Credit Agreement"), among
BorgWarner Inc. (the
"BorgWarner"), BorgWarner
Germany GmbH, the Lenders party
thereto, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Funding, Inc., as
administrative agent for the
Lenders (in such capacity, the
"Administrative Agent") and as
syndication agent for the
Lenders (in such capacity, the
"Syndication Agent"). Unless
otherwise defined herein, terms
defined in the Credit Agreement
and used herein shall have the
meanings given to them in the
Credit Agreement.
The Assignor identified
on Schedule l hereto (the
"Assignor") and the Assignee
identified on Schedule l hereto
(the "Assignee") agree as follows:
1. The Assignor hereby
irrevocably sells and assigns to
the Assignee without recourse to
the Assignor, and the Assignee
hereby irrevocably purchases and
assumes from the Assignor
without recourse to the
Assignor, as of the Effective
Date (as defined below), the
interest described in Schedule 1
hereto (the "Assigned Interest")
in and to the Assignor's rights
and obligations under the Credit
Agreement to the extent related
to the principal amount and
percentage interest set forth on
Schedule 1 hereto.
2. The Assignor (a) makes
no representation or warranty
and assumes no responsibility
with respect to any statements,
warranties or representations
made in or in connection with
the Credit Agreement or with
respect to the execution,
legality, validity,
enforceability, genuineness,
sufficiency or value of the
Credit Agreement or any other
instrument or document furnished
pursuant thereto, other than
that the Assignor has not
created any adverse claim upon
the interest being assigned by
it hereunder and that such
interest is free and clear of
any such adverse claim and (b)
makes no representation or
warranty and assumes no
responsibility with respect to
the financial condition of
either Borrower, any of their
Affiliates or any other obligor
or the performance or observance
by either Borrower, any of their
Affiliates or any other obligor
of any of their respective
obligations under the Credit
Agreement or any other
instrument or document furnished
pursuant hereto or thereto.
3. The Assignee (a)
represents and warrants that it
is legally authorized to enter
into this Assignment and
Assumption; (b) confirms that it
has received a copy of the
Credit Agreement, together with
copies of the financial
statements delivered pursuant to
Sections 3.04 and 5.01 thereof
and such other documents and
information as it has deemed
appropriate to make its own
credit analysis and decision to
enter into this Assignment and
Acceptance; (c) agrees that it
will, independently and without
reliance upon the Assignor, the
Syndication Agent, the
Administrative Agent or any
Lender and based on such
documents and information as it
shall deem appropriate at the
time, continue to make its own
credit decisions in taking or
not taking action under the
Credit Agreement or any other
instrument or document furnished
pursuant hereto or thereto; (d)
appoints and authorizes the
Administrative Agent to take
such action as agent on its
behalf and to exercise such
powers and discretion under the
Credit Agreement, or any other
instrument or document furnished
pursuant hereto or thereto as
are delegated to the
Administrative Agent by the
terms thereof, together with
such powers as are incidental
thereto; and (e) agrees that it
will be bound by the provisions
of the Credit Agreement and will
perform in accordance with its
terms all the obligations which
by the terms of the Credit
Agreement are required to be
performed by it as a Lender
including, if it is organized
under the laws of a jurisdiction
outside the United States, its
obligation pursuant to Section
2.13(e) of the Credit Agreement.
4. The effective date of
this Assignment and Acceptance
shall be the Effective Date of
Assignment described in Schedule
1 hereto (the "Effective Date").
Following the execution of this
Assignment and Acceptance, it
will be delivered to the
Administrative Agent for
acceptance by it and recording
by the Administrative Agent
pursuant to the Credit
Agreement, effective as of the
Effective Date (which shall not,
unless otherwise agreed to by
the Administrative Agent, be
earlier than five Business Days
after the date of such
acceptance and recording by the
Administrative Agent).
5. Upon such acceptance and
recording, from and after the
Effective Date, the
Administrative Agent shall make
all payments in respect of the
Assigned Interest (including
payments of principal, interest,
fees and other amounts) to the
Assignor for amounts which have
accrued to the Effective Date
and to the Assignee for amounts
which have accrued subsequent to
the Effective Date.
6. From and after the
Effective Date, (a) the Assignee
shall be a party to the Credit
Agreement and, to the extent
provided in this Assignment and
Acceptance, have the rights and
obligations of a Lender
thereunder and shall be bound by
the provisions thereof and (b)
the Assignor shall, to the
extent provided in this
Assignment and Acceptance,
relinquish its rights and be
released from its obligations
under the Credit Agreement.
7. This Assignment and
Acceptance shall be governed by
and construed in accordance with
the laws of the State of New York.
IN WITNESS WHEREOF, the parties
hereto have caused this
Assignment and Acceptance to be
executed as of the date first
above written by their
respective duly authorized
officers on Schedule 1 hereto.
Schedule 1
to Assignment and Acceptance
with respect to
the Credit Agreement, dated as
of November 23, 2004,
among BorgWarner Inc.,
BorgWarner Germany GmbH,
the Lenders party thereto,
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior
Funding, Inc.,
as Administrative Agent and
Syndication Agent
Name of Assignor:
_______________________
Name of Assignee:
_______________________
Effective Date of Assignment:
_________________
Commitment/Loan Amount Assigned Commitment/Loan Percentage Assigned
$_______ ___ .______ %
[Name of Assignee]
[Name of Assignor]
By:______________________________
Title:
By:______________________________
Title:
Accepted for Recordation in the
Register:
Required Consents (if any):
_________________________________,
as
Administrative Agent
BorgWarner Inc.
By:______________________________
Title:
By:______________________________
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding,
Inc., as
Administrative Agent
By:______________________________
Title:
Exhibit B
November 23, 2004
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding,
Inc., as Administrative Agent
under the Credit Agreement, as
hereinafter defined (the "Agent")
and
The Lenders under the Credit
Agreement as of the date hereof
Re: Credit Agreement dated
as of November 23, 2004 (the
"Credit Agreement") among
BorgWarner Inc. (the "Company"),
BorgWarner Germany GmbH, the
lending institutions identified
in the Credit Agreement (the
"Lenders"), the Agent, and the
Syndication Agent party thereto.
Ladies and Gentlemen:
I am the Vice President and
General Counsel of the Company
and, as such, have acted as
counsel to the Company in
connection with the preparation,
execution and delivery of the
Credit Agreement. Unless
otherwise indicated, capitalized
terms used but not defined
herein shall have the respective
meanings set forth in the Credit
Agreement. This opinion is
furnished to you pursuant to
Section 4.01(b) of the Credit
Agreement.
In connection with this opinion,
I, or attorneys acting under my
supervision and control, have
examined the Credit Agreement,
signed by the parties thereto,
and also have examined the
originals, or duplicates or
certified or conformed copies,
of such records, agreements,
instruments and other documents
and have made such other
investigations as we have deemed
relevant and necessary in
connection with the opinions
expressed herein. As to
questions of fact material to
this opinion, I have relied upon
certificates of public officials
and of officers and
representatives of the Company.
In addition, I have examined,
and have relied as to matters of
fact upon, the representations
made in the Credit Agreement.
In rendering the opinions set
forth below, I have assumed the
genuineness of all signatures,
the legal capacity of natural
persons, the authenticity of all
documents submitted to me as
originals, the conformity to
original documents of all
documents submitted to me as
duplicates or certified or
conformed copies, and the
authenticity of the originals of
such latter documents.
Based upon and subject to the
foregoing, and subject to the
qualifications and limitations
set forth herein, I am of the
opinion that:
1. The Company (a) has been
duly incorporated and is validly
existing and in good standing as
a corporation under the laws of
the State of Delaware, (b) has
the corporate power and
authority to execute and deliver
the Credit Agreement and to
borrow and perform its
obligations thereunder,
including, without limitation,
its Guarantee and (c) has duly
authorized, executed and
delivered the Credit Agreement.
2. The execution and
delivery by the Company of the
Credit Agreement, its borrowings
in accordance with the terms
thereof and performance of its
obligations thereunder
including, without limitation,
its Guarantee (a) will not
result in any violation of (1)
the Certificate of Incorporation
or By-Laws of the Company or (2)
assuming that proceeds of
borrowings will be used in
accordance with the terms of the
Credit Agreement, any Federal or
New York statute or the Delaware
General Corporation Law or any
rule or regulation issued
pursuant to any New York or
Federal statute or the Delaware
General Corporation Law or any
existing order applicable to the
Company or any Subsidiary issued
by any court or governmental
agency or body having
jurisdiction over the Company,
any Subsidiary or any of their
respective properties and (b)
will not (1) result in the
creation of any lien upon or
security interest in the
Company's properties pursuant
to, or (2) to the best of my
knowledge, breach or result in a
default under, the terms of any
material agreement or instrument
to which the Company or any
Subsidiary is a party or by
which they or any of their
respective properties is bound.
3. No consent, approval,
authorization, order, filing,
registration or qualification of
or with any Federal or New York
governmental agency or body or
any Delaware governmental agency
or body acting pursuant to the
Delaware General Corporation Law
is required for the execution
and delivery by the Company of
the Credit Agreement, the
borrowings by the Company in
accordance with the terms of the
Credit Agreement or the
performance by the Company of
its obligations under the Credit
Agreement including, without
limitation, its Guarantee.
4. The Credit Agreement
constitutes the valid and
legally binding obligation of
the Company, enforceable against
the Company in accordance with
its terms.
5. To my knowledge and
other than as identified in the
Credit Agreement there is no
action, suit or proceeding
before or by any court,
arbitrator or governmental
agency, body or official, now
pending, to which the Company is
a party or to which the
business, assets or property of
the Company is subject and, to
the best of my knowledge, no
such action, suit or proceeding
is threatened to which the
Company or the business, assets
or property of the Company would
be subject that in either case
(a) questions the validity of
the Credit Agreement or (b)
could reasonably expected to
have a Material Adverse Effect.
6. The Company is not is an
"investment company" within the
meaning of and subject to
regulation under the Investment
Company Act of 1940, as amended,
or a "holding company," or a
"subsidiary company" of a
"holding company," within the
meaning of the Public Utility
Holding Company Act of 1935, as
amended.
7. Assuming that the
Company will comply with the
provisions of the Credit
Agreement relating to the use of
proceeds, the making of the
Loans under the Credit Agreement
will not violate Regulation U or
X of the Board of Governors of
the Federal Reserve System.
My opinion in paragraph 4 above
is subject to (i) the effects of
bankruptcy, insolvency,
fraudulent conveyance,
reorganization, moratorium and
other similar laws relating to
or affecting creditors' rights
generally, (ii) general
equitable principles (whether
considered in a proceeding in
equity or at law) and (iii) an
implied covenant of good faith
and fair dealing.
The opinions expressed
herein are subject to the
following further qualifications:
(a) I express no opinion as
to the validity, binding effect
or enforceability of cumulative
remedies to the extent such
cumulative remedies purport to
or would have the effect of
compensating the party entitled
to the benefits thereof in
amounts in excess of the actual
loss suffered by such party.
(b) Requirements in the
Credit Agreement specifying that
provisions thereof may only be
waived in writing may not be
valid, binding or enforceable to
the extent that an oral
agreement or an implied
agreement by trade practice or
course of conduct has been
created modifying any provision
thereof.
(c) I express no opinion as
to the purported right under
Section 10.08 of the Credit
Agreement to set off against
deposits made by the Company
with any of you acting in a
fiduciary capacity.
(d) I express no opinion as
to the validity, binding effect
or enforceability of Sections
10.03(d) and 10.10 of the Credit
Agreement.
(e) I express no opinion
with respect to indemnification
or contribution obligations
which contravene public policy.
This opinion is limited to the
specific issues addressed and is
limited in all respects to laws
and facts existing on the date
hereof. By rendering this
opinion, I do not undertake to
advise you of any changes in
such laws or facts which may
occur after the date hereof.
As used in this opinion,
references "to the best of my
knowledge" mean to my actual
knowledge, or the actual
knowledge of the attorneys
working under my supervision and
control.
I am a member of the
Bars of the States of Illinois
and Michigan, and I do not
express any opinion herein
concerning any law other than
the law of the State of New York
(which for purposes of this
opinion I have assumed to be
identical to the law of the
State of Illinois), the Federal
law of the United States and the
Delaware General Corporation Law.
This opinion letter is
rendered to you in connection
with the above described
transactions. This opinion
letter may not be relied upon by
you for any other purpose, or
relied upon by, or furnished to,
any other person, firm or
corporation without my prior
written consent.
Very truly yours,