DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

DISTRIBUTION AND INDEMNITY AGREEMENT

TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1

ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4

ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5

Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5

ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11

ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12

ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15
    
DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.
BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.
ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a "claims made" rather than "occurrence"
basis may not provide coverage to Automotive and Automotive Subsidiaries for
incidents occurring prior to the Distribution Date but which are first reported
after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of any Loss and
shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Loss, then such Indemnitee shall pay to such Indemnifying Party
a sum equal to the amount of such Insurance Proceeds or other amounts actually
received (up to but not in excess of the amount of any indemnity payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 4.04(b), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(b)) seek to compromise or settle
such Third Party Claim. Notwithstanding the foregoing, neither an Indemnifying
Party nor an Indemnitee may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall not
be unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third Party
Claim which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the
applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.

ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by Automotive) shall be paid by BWC to
the extent that appropriate documentation concerning such costs and expenses
shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.

EXHIBIT 10.25

DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

--------------------------------------------------------------------------------

DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

DISTRIBUTION AND INDEMNITY AGREEMENT

TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1

ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4

ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5

Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5

ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11

ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12

ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15
    
DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.
BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.
ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a "claims made" rather than "occurrence"
basis may not provide coverage to Automotive and Automotive Subsidiaries for
incidents occurring prior to the Distribution Date but which are first reported
after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of any Loss and
shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Loss, then such Indemnitee shall pay to such Indemnifying Party
a sum equal to the amount of such Insurance Proceeds or other amounts actually
received (up to but not in excess of the amount of any indemnity payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 4.04(b), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(b)) seek to compromise or settle
such Third Party Claim. Notwithstanding the foregoing, neither an Indemnifying
Party nor an Indemnitee may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall not
be unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third Party
Claim which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the
applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.

ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by Automotive) shall be paid by BWC to
the extent that appropriate documentation concerning such costs and expenses
shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.

DISTRIBUTION AND INDEMNITY AGREEMENT
TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1
ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4
ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5
Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5
ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11
ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12
ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15

--------------------------------------------------------------------------------

DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

DISTRIBUTION AND INDEMNITY AGREEMENT

TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1

ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4

ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5

Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5

ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11

ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12

ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15
    
DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.
BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.
ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a "claims made" rather than "occurrence"
basis may not provide coverage to Automotive and Automotive Subsidiaries for
incidents occurring prior to the Distribution Date but which are first reported
after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of any Loss and
shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Loss, then such Indemnitee shall pay to such Indemnifying Party
a sum equal to the amount of such Insurance Proceeds or other amounts actually
received (up to but not in excess of the amount of any indemnity payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 4.04(b), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(b)) seek to compromise or settle
such Third Party Claim. Notwithstanding the foregoing, neither an Indemnifying
Party nor an Indemnitee may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall not
be unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third Party
Claim which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the
applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.

ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by Automotive) shall be paid by BWC to
the extent that appropriate documentation concerning such costs and expenses
shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.

DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.

--------------------------------------------------------------------------------

DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

DISTRIBUTION AND INDEMNITY AGREEMENT

TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1

ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4

ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5

Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5

ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11

ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12

ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15
    
DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.
BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.
ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a "claims made" rather than "occurrence"
basis may not provide coverage to Automotive and Automotive Subsidiaries for
incidents occurring prior to the Distribution Date but which are first reported
after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of any Loss and
shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Loss, then such Indemnitee shall pay to such Indemnifying Party
a sum equal to the amount of such Insurance Proceeds or other amounts actually
received (up to but not in excess of the amount of any indemnity payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 4.04(b), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(b)) seek to compromise or settle
such Third Party Claim. Notwithstanding the foregoing, neither an Indemnifying
Party nor an Indemnitee may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall not
be unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third Party
Claim which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the
applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.

ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by Automotive) shall be paid by BWC to
the extent that appropriate documentation concerning such costs and expenses
shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.

BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.

--------------------------------------------------------------------------------

DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

DISTRIBUTION AND INDEMNITY AGREEMENT

TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1

ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4

ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5

Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5

ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11

ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12

ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15
    
DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.
BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.
ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a "claims made" rather than "occurrence"
basis may not provide coverage to Automotive and Automotive Subsidiaries for
incidents occurring prior to the Distribution Date but which are first reported
after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of any Loss and
shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Loss, then such Indemnitee shall pay to such Indemnifying Party
a sum equal to the amount of such Insurance Proceeds or other amounts actually
received (up to but not in excess of the amount of any indemnity payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 4.04(b), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(b)) seek to compromise or settle
such Third Party Claim. Notwithstanding the foregoing, neither an Indemnifying
Party nor an Indemnitee may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall not
be unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third Party
Claim which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the
applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.

ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by Automotive) shall be paid by BWC to
the extent that appropriate documentation concerning such costs and expenses
shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.

ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION

--------------------------------------------------------------------------------

DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

DISTRIBUTION AND INDEMNITY AGREEMENT

TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1

ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4

ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5

Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5

ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11

ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12

ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15
    
DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.
BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.
ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a "claims made" rather than "occurrence"
basis may not provide coverage to Automotive and Automotive Subsidiaries for
incidents occurring prior to the Distribution Date but which are first reported
after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of any Loss and
shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Loss, then such Indemnitee shall pay to such Indemnifying Party
a sum equal to the amount of such Insurance Proceeds or other amounts actually
received (up to but not in excess of the amount of any indemnity payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 4.04(b), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(b)) seek to compromise or settle
such Third Party Claim. Notwithstanding the foregoing, neither an Indemnifying
Party nor an Indemnitee may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall not
be unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third Party
Claim which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the
applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.

ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by Automotive) shall be paid by BWC to
the extent that appropriate documentation concerning such costs and expenses
shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.

Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a

--------------------------------------------------------------------------------

DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

DISTRIBUTION AND INDEMNITY AGREEMENT

TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1

ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4

ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5

Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5

ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11

ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12

ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15
    
DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.
BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.
ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a "claims made" rather than "occurrence"
basis may not provide coverage to Automotive and Automotive Subsidiaries for
incidents occurring prior to the Distribution Date but which are first reported
after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of any Loss and
shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Loss, then such Indemnitee shall pay to such Indemnifying Party
a sum equal to the amount of such Insurance Proceeds or other amounts actually
received (up to but not in excess of the amount of any indemnity payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 4.04(b), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(b)) seek to compromise or settle
such Third Party Claim. Notwithstanding the foregoing, neither an Indemnifying
Party nor an Indemnitee may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall not
be unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third Party
Claim which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the
applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.

ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by Automotive) shall be paid by BWC to
the extent that appropriate documentation concerning such costs and expenses
shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.

"claims made" rather than "occurrence" basis may not provide coverage to
Automotive and Automotive Subsidiaries for incidents occurring prior to the
Distribution Date but which are first reported after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received

--------------------------------------------------------------------------------

DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

DISTRIBUTION AND INDEMNITY AGREEMENT

TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1

ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4

ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5

Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5

ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11

ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12

ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15
    
DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.
BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.
ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a "claims made" rather than "occurrence"
basis may not provide coverage to Automotive and Automotive Subsidiaries for
incidents occurring prior to the Distribution Date but which are first reported
after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of any Loss and
shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Loss, then such Indemnitee shall pay to such Indemnifying Party
a sum equal to the amount of such Insurance Proceeds or other amounts actually
received (up to but not in excess of the amount of any indemnity payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 4.04(b), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(b)) seek to compromise or settle
such Third Party Claim. Notwithstanding the foregoing, neither an Indemnifying
Party nor an Indemnitee may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall not
be unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third Party
Claim which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the
applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.

ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by Automotive) shall be paid by BWC to
the extent that appropriate documentation concerning such costs and expenses
shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.

the payment required by this Agreement from an Indemnifying Party in respect of
any Loss and shall subsequently actually receive Insurance Proceeds or other
amounts in respect of such Loss, then such Indemnitee shall pay to such
Indemnifying Party a sum equal to the amount of such Insurance Proceeds or other
amounts actually received (up to but not in excess of the amount of any
indemnity payment made hereunder). An insurer who would otherwise be obligated
to pay any claim shall not be relieved of the responsibility with respect
thereto, or, solely by virtue of the indemnification provisions hereof, have any
subrogation rights with respect thereto, it being expressly understood and
agreed that no insurer or any other third party shall be entitled to a
"windfall" (i.e., a benefit they would not be entitled to receive in the absence
of the indemnification provisions) by virtue of the indemnification provisions
hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided

--------------------------------------------------------------------------------

DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

DISTRIBUTION AND INDEMNITY AGREEMENT

TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1

ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4

ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5

Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5

ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11

ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12

ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15
    
DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.
BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.
ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a "claims made" rather than "occurrence"
basis may not provide coverage to Automotive and Automotive Subsidiaries for
incidents occurring prior to the Distribution Date but which are first reported
after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of any Loss and
shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Loss, then such Indemnitee shall pay to such Indemnifying Party
a sum equal to the amount of such Insurance Proceeds or other amounts actually
received (up to but not in excess of the amount of any indemnity payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 4.04(b), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(b)) seek to compromise or settle
such Third Party Claim. Notwithstanding the foregoing, neither an Indemnifying
Party nor an Indemnitee may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall not
be unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third Party
Claim which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the
applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.

ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by Automotive) shall be paid by BWC to
the extent that appropriate documentation concerning such costs and expenses
shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.

in this Section 4.04(b), such Indemnitee may defend or (subject to the remainder
of this Section 4.04(b)) seek to compromise or settle such Third Party Claim.
Notwithstanding the foregoing, neither an Indemnifying Party nor an Indemnitee
may settle or compromise any claim over the objection of the other; provided,
however, that consent to settlement or compromise shall not be unreasonably
withheld. Neither an Indemnifying Party nor an Indemnitee shall consent to entry
of any judgment or enter into any settlement of any Third Party Claim which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnitee, in the case of a consent or settlement by an
Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.

--------------------------------------------------------------------------------

DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

DISTRIBUTION AND INDEMNITY AGREEMENT

TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1

ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4

ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5

Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5

ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11

ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12

ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15
    
DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.
BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.
ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a "claims made" rather than "occurrence"
basis may not provide coverage to Automotive and Automotive Subsidiaries for
incidents occurring prior to the Distribution Date but which are first reported
after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of any Loss and
shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Loss, then such Indemnitee shall pay to such Indemnifying Party
a sum equal to the amount of such Insurance Proceeds or other amounts actually
received (up to but not in excess of the amount of any indemnity payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 4.04(b), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(b)) seek to compromise or settle
such Third Party Claim. Notwithstanding the foregoing, neither an Indemnifying
Party nor an Indemnitee may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall not
be unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third Party
Claim which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the
applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.

ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by Automotive) shall be paid by BWC to
the extent that appropriate documentation concerning such costs and expenses
shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.

(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the

--------------------------------------------------------------------------------

DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

DISTRIBUTION AND INDEMNITY AGREEMENT

TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1

ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4

ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5

Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5

ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11

ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12

ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15
    
DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.
BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.
ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a "claims made" rather than "occurrence"
basis may not provide coverage to Automotive and Automotive Subsidiaries for
incidents occurring prior to the Distribution Date but which are first reported
after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of any Loss and
shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Loss, then such Indemnitee shall pay to such Indemnifying Party
a sum equal to the amount of such Insurance Proceeds or other amounts actually
received (up to but not in excess of the amount of any indemnity payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 4.04(b), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(b)) seek to compromise or settle
such Third Party Claim. Notwithstanding the foregoing, neither an Indemnifying
Party nor an Indemnitee may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall not
be unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third Party
Claim which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the
applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.

ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by Automotive) shall be paid by BWC to
the extent that appropriate documentation concerning such costs and expenses
shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.

applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.
ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by

--------------------------------------------------------------------------------

DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

DISTRIBUTION AND INDEMNITY AGREEMENT

TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1

ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4

ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5

Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5

ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11

ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12

ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15
    
DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.
BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.
ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a "claims made" rather than "occurrence"
basis may not provide coverage to Automotive and Automotive Subsidiaries for
incidents occurring prior to the Distribution Date but which are first reported
after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of any Loss and
shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Loss, then such Indemnitee shall pay to such Indemnifying Party
a sum equal to the amount of such Insurance Proceeds or other amounts actually
received (up to but not in excess of the amount of any indemnity payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 4.04(b), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(b)) seek to compromise or settle
such Third Party Claim. Notwithstanding the foregoing, neither an Indemnifying
Party nor an Indemnitee may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall not
be unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third Party
Claim which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the
applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.

ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by Automotive) shall be paid by BWC to
the extent that appropriate documentation concerning such costs and expenses
shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.

Automotive) shall be paid by BWC to the extent that appropriate documentation
concerning such costs and expenses shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed

--------------------------------------------------------------------------------

DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

DISTRIBUTION AND INDEMNITY AGREEMENT

TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1

ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4

ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5

Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5

ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11

ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12

ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15
    
DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.
BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.
ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a "claims made" rather than "occurrence"
basis may not provide coverage to Automotive and Automotive Subsidiaries for
incidents occurring prior to the Distribution Date but which are first reported
after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of any Loss and
shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Loss, then such Indemnitee shall pay to such Indemnifying Party
a sum equal to the amount of such Insurance Proceeds or other amounts actually
received (up to but not in excess of the amount of any indemnity payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 4.04(b), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(b)) seek to compromise or settle
such Third Party Claim. Notwithstanding the foregoing, neither an Indemnifying
Party nor an Indemnitee may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall not
be unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third Party
Claim which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the
applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.

ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by Automotive) shall be paid by BWC to
the extent that appropriate documentation concerning such costs and expenses
shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.

to confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

--------------------------------------------------------------------------------

DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

DISTRIBUTION AND INDEMNITY AGREEMENT

TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1

ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4

ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5

Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5

ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11

ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12

ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15
    
DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.
BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.
ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a "claims made" rather than "occurrence"
basis may not provide coverage to Automotive and Automotive Subsidiaries for
incidents occurring prior to the Distribution Date but which are first reported
after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of any Loss and
shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Loss, then such Indemnitee shall pay to such Indemnifying Party
a sum equal to the amount of such Insurance Proceeds or other amounts actually
received (up to but not in excess of the amount of any indemnity payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 4.04(b), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(b)) seek to compromise or settle
such Third Party Claim. Notwithstanding the foregoing, neither an Indemnifying
Party nor an Indemnitee may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall not
be unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third Party
Claim which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the
applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.

ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by Automotive) shall be paid by BWC to
the extent that appropriate documentation concerning such costs and expenses
shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

--------------------------------------------------------------------------------

DISTRIBUTION AND INDEMNITY AGREEMENT
BETWEEN
BORG-WARNER SECURITY CORPORATION
and
BORG-WARNER AUTOMOTIVE, INC.

DISTRIBUTION AND INDEMNITY AGREEMENT

TABLE OF CONTENTS

ARTICLE I.    DEFINITIONS…..……………………………………………………        1
Section 1.01    General…………………………………………………….…        1

ARTICLE II.     THE DISTRIBUTION…………………………………………………        3
Section 2.01    The Distribution ....……………………………………………    3
Section 2.02     Cooperation Prior to the Distribution .………………………     4
Section 2.03     Conditions to the Distribution ………………………………..     4

ARTICLE III.    TRANSACTIONS RELATING TO
THE DISTRIBUTION………………………………………………        5

Section 3.01    Intercorporate Reorganization…………………………..…….    5
Section    3.02     Intercompany Indebtedness……………………………………    5
Section    3.03     Other Agreements……………………………………………...    5
Section 3.04     Automotive Charter and Bylaws……………………………....    5
Section 3.05     Insurance………………………………………………………..    5

ARTICLE IV.    INDEMNIFICATION…………………………………………………..        6
Section 4.01     Indemnification by BWC………………………………………     6
Section 4.02     Indemnification by Automotive……………………………….    7
Section 4.03     Limitations on Indemnification
Obligations……………………………………………………    7
Section 4.04     Procedures for Indemnification…………………………………    8
Section 4.05     Remedies Cumulative…………………………………………..    11
Section 4.06    Survival of Indemnities…………………………………………    11

ARTICLE V.    ACCESS TO INFORMATION………………………………………….    11
Section 5.01     Access to Information……………………………………………    11
Section 5.02     Production of Witnesses…………………………………………    12
Section 5.03     Retention of Records…………………………………………….    12
Section 5.04     Confidentiality……………………………………………………    12

ARTICLE VI.    MISCELLANEOUS………………………………………………………    13
Section 6.01     Complete Agreement; Construction…….………………………     13
Section 6.02    Survival of Agreements…………………………………………    13
Section    6.03    Expenses……..………………………………………………….    13
Section    6.04     Governing Law…………………………………………………..    13
    Section    6.05    Notices……………………………………………………………    14
Section    6.06    Amendments……………………………………………………..    14
Section    6.07    Successors and Assigns…………………………………………    14
Section    6.08    Termination………………………………………………………    14
Section    6.09    No Third-Party Beneficiaries……………………………………    14
Section    6.10    Titles and Headings………………………………………………    15
Section 6.11     Legal Enforceability……………………………………………    15
    
DISTRIBUTION AND INDEMNITY AGREEMENT

DISTRIBUTION AND INDEMNITY AGREEMENT (this "Agreement"), dated as of January 27,
1993, between BORG-WARNER SECURITY CORPORATION, a Delaware corporation ("BWC"),
and BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation and, as of the date
hereof, a wholly owned subsidiary of BWC ("Automotive").
WHEREAS, the Board of Directors of BWC has determined that it is appropriate and
desirable to spin off its holdings of Automotive by distributing all outstanding
shares of Automotive Common Stock on a pro rata basis to the holders of the
common stock of BWC; and
WHEREAS, BWC and Automotive have determined that it is appropriate and desirable
to set forth the principal corporate transactions required to effect such
distribution and certain other agreements that will govern certain matters
relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01     General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, suit, arbitration, inquiry, proceeding or investigation by
or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended, including with respect to BWC any BWC Subsidiary and with respect to
Automotive any Automotive Subsidiary.
Automotive Common Stock: the Class A Common Stock, $.01 par value, of
Automotive.
Automotive Financing: as defined in Section 2.02(a) hereof.
Automotive Subsidiary: Any subsidiary of Automotive that will remain a
subsidiary of Automotive immediately following the Distribution Date, and any
other subsidiary of Automotive which thereafter may be organized or acquired.
BWC Board: the Board of Directors of BWC.
BWC Non-Voting Stock: the Series I Non-Voting Common Stock, $.01 par value, of
BWC.
BWC Subsidiary: any subsidiary of BWC other than Automotive or any Automotive
Subsidiary.
BWC Voting Stock: the Common Stock, $.01 par value, of BWC.
Benefits Agreement: the Benefits Agreement between BWC and Automotive, the form
of which is attached as Annex A.
Code: the Internal Revenue Code of 1986, as amended.
Distribution: the distribution to holders of BWC Voting Stock and BWC Non-Voting
Stock of the shares of Automotive Common Stock owned by BWC on the Distribution
Date.
Distribution Date: the date determined by the BWC Board on which the
Distribution shall be effected.
Insurance Proceeds: those monies (i) received by an insured from an insurance
carrier or (ii) paid by an insurance carrier on behalf of the insured, in either
case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, or costs
paid by such insured.
Liabilities: any and all debts, liabilities and obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating there¬to, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations, payments,
costs and expenses, matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened
Actions).
Record Date: the close of business on the date to be determined by the BWC Board
as the record date for the Distribution.
Service Agreement: the Service Agreement between BWC and Automotive, the form of
which is attached hereto as Annex B.
Subsidiaries: the term "subsidiaries" as used herein with respect to any entity
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
Tax Sharing Agreement: the Tax Sharing Agreement between BWC and Automotive, the
form of which is attached hereto as Annex C.
Trademark Agreement: the Trademark and Trade Name License Agreement between BWC
and Automotive, the form of which is attached hereto as Annex D.
ARTICLE II
THE DISTRIBUTION
Section 2.01     The Distribution. Subject to Section 2.03 hereof, on the
Distribution Date, BWC will cause Automotive to issue to the holders of record
of BWC Voting Stock and BWC Non-Voting Stock on the Record Date, stock
certificates representing in the aggregate all of the then outstanding shares of
Automotive Common Stock, and shall distribute such certificates as soon as
practicable thereafter to such holders or their designated transferees. The
Distribution shall be effective as of 5:00 P.M., New York City time, on the
Distribution Date. Automotive will provide to BWC all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Automotive Common Stock for each share of BWC Voting Stock and BWC
Non-Voting Stock outstanding on the Record Date.
Section 2.02     Cooperation Prior to the Distribution.
(a)    BWC and Automotive shall cooperate in arranging for a bank credit
facility or other financing for Automotive in the amount of $350 million, a
portion of the proceeds of which will be used for the repayment of
intercorporate indebtedness as provided in Section 3.02 hereof (the "Automotive
Financing") and which will serve as a source of funding for Automotive's working
capital needs.
(b)    BWC and Automotive shall cooperate in preparing any agreements or other
documents which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans contemplated by this Agreement or the
Benefits Agreement.
Section 2.03     Conditions to the Distribution. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the BWC Board. The BWC Board shall in its discretion establish the
Record Date and the Distribution Date and all appropriate procedures in
connection with the Distribution, but in no event shall the Distribution Date
occur prior to such time as each of the following has occurred or has been
waived by the BWC Board in its sole discretion: (i) the consent to the
Distribution of the lenders under BWC's existing bank credit agreement shall
have been obtained or BWC shall have obtained an appropriate substitute line of
credit; (ii) any required regulatory approvals and all other material consents
required to effect the Distribution shall have been received; (iii) the BWC
Board shall have formally approved the Distribution; (iv) the Automotive
Financing shall have been completed; (v) BWC shall have received an opinion of
counsel in form satisfactory to BWC that the Distribution will be a distribution
described in Section 355(a) of the Code; and (vi) the transactions contemplated
by Sections 3.01, 3.02 and 3.03 shall have been consummated in all material
respects; provided that the satisfaction of such conditions shall not create any
obligation on the part of BWC or any other party hereto to effect the
Distribution or in any way limit BWC's power of termination set forth in Section
6.08 or alter the consequences of any such termination from those specified in
such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01     Intercorporate Reorganization. Prior to the Distribution Date,
BWC and Automotive shall take all steps necessary to increase the outstanding
shares of Automotive Common Stock so that immediately prior to the Distribution,
BWC will hold a number of shares of Automotive Common Stock equal to the sum of
the number of shares of BWC Voting Stock and the number of shares of BWC
Non-Voting Stock outstanding on the Record Date. Such shares of Automotive
Common Stock shall be the only capital stock of Automotive outstanding
immediately prior to the Distribution.
Section 3.02     Intercompany Indebtedness. Immediately prior to the
Distribution, Automotive shall pay $156,119,770.12 to BWC to reduce the
intercompany indebtedness owed to BWC by Automotive and the Automotive
Subsidiaries. Any intercompany indebtedness owed to BWC after such reduction
shall be cancelled as a contribution to the capital of Automotive.
Section 3.03     Other Agreements. On or prior to the Distribution Date, BWC and
Automotive shall execute and deliver the Tax Sharing Agreement, the Trademark
Agreement, the Service Agreement and the Benefits Agreement.
Section 3.04     Automotive Charter and Bylaws. Prior to the Distribution Date,
BWC shall cause the Amended and Restated Certificate of Incorporation of
Automotive, substantially in the form attached hereto as Annex E, to be filed
with the Secretary of State of Delaware and to be in effect on the Distribution
Date, and the Board of Directors of Automotive shall adopt the Bylaws of
Automotive substantially in the form attached hereto as Annex F.
Section 3.05 Insurance.
(a)     BWC has provided insurance coverage to Automotive through various
policies maintained by BWC for the benefit of itself and its subsidiaries for
workers' compensation, general liability, fire and other types of losses.
Automotive has paid premiums to BWC to provide such insurance, with deductibles,
and for varying limits of liability. BWC will continue to provide such coverage
to Automotive and Automotive Subsidiaries for all insured incidents occurring
from the date such coverage first commenced until 12:00 midnight on the
Distribution Date or such later date as may be agreed to in writing by BWC and
Automotive, and Automotive shall pay BWC the premiums for such coverage in
accordance with the past practice established by BWC and Automotive.
(b)    BWC shall use reasonable efforts to assist Automotive and Automotive
Subsidiaries in obtaining initial insurance coverage for Automotive and
Automotive Subsidiaries from and after the Distribution Date in such amounts as
are agreed upon by the parties; provided, however, that the foregoing shall not
require BWC to provide financial assistance of any kind. Following the
Distribution Date, each of the parties shall cooperate with and assist the other
party in the prevention of conflicts or gaps in insurance coverage and/or
collection of proceeds.
(c)    BWC and Automotive agree that Automotive shall have the right to present
claims to BWC or BWC's insurers under all policies of insurance placed by BWC on
Automotive's and Automotive Subsidiaries' behalf, or which include Automotive or
Automotive Subsidiaries within them, for insured incidents occurring from the
date said coverage first commenced until the Distribution Date. The parties
agree that any such policies written on a "claims made" rather than "occurrence"
basis may not provide coverage to Automotive and Automotive Subsidiaries for
incidents occurring prior to the Distribution Date but which are first reported
after the Distribution Date.
(d)    With respect to any insured Losses or retroactive premium adjustments
relating to assets and/or operations of Automotive and/or Automotive
Subsidiaries prior to the Distribution Date or such later date as may be agreed
to pursuant to Section 3.05(a) hereof: (i) BWC shall pay over to Automotive any
Insurance Proceeds it receives on account of such Losses and any such
retroactive premium reductions; and (ii) Automotive and Automotive Subsidiaries
shall reimburse BWC for all costs, expenses or payments made by BWC after the
Distribution Date to insurers on account of such Losses (including, without
limitation, any self-insured retention payments) and any such retroactive
premium increases.
ARTICLE IV
INDEMNIFICATION
Section 4.01     Indemnification by BWC. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insurance claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, BWC shall indemnify, defend and
hold harmless Automotive, each Affiliate of Automotive and each of their
respective directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "Automotive Indemnitees")
from and against any and all Losses of the Automotive Indemnitees arising out of
or due to the failure of BWC or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule A. Anything in
this Section 4.01 to the contrary notwithstanding, neither BWC nor any BWC
Subsidiary shall have any liability whatsoever to either Automotive or any
Automotive Subsidiary in respect of any Tax (as such term is defined in the Tax
Sharing Agreement), except as otherwise provided in Schedule A hereto, in the
Benefits Agreement or in the Tax Sharing Agreement.
Section 4.02     Indemnification by Automotive. Except with respect to employee
benefits or other Liabilities to employees, which shall be governed by the
Benefits Agreement, and except with respect to insured claims, which shall be
governed by Sections 3.05(d) and 4.03 hereof, Automotive shall indemnify, defend
and hold harmless BWC, each Affiliate of BWC and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "BWC Indemnitees") from and against any
and all Losses of the BWC Indemnitees arising out of or due to the failure or
alleged failure of Automotive or any of its Affiliates to pay, perform or
otherwise discharge in due course any item set forth on Schedule B. Anything in
this Section 4.02 to the contrary notwithstanding, neither Automotive nor any
Automotive Subsidiary shall have any liability whatsoever to either BWC or any
BWC Subsidiary in respect of any Tax, except as otherwise provided in Schedule B
hereto, in the Benefits Agreement or in the Tax Sharing Agreement.
Section 4.03     Limitations on Indemnification Obligations. The amount which
any party (an "Indemnifying Party") is or may be required to pay to any other
party (an "Indemnitee") pursuant to Section 4.01 or Section 4.02 shall be
reduced (including, without limitation, retroactively) by any Insurance Proceeds
or other amounts actually recovered by or on behalf of such Indemnitee, in
reduction of the related Loss. If an Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of any Loss and
shall subsequently actually receive Insurance Proceeds or other amounts in
respect of such Loss, then such Indemnitee shall pay to such Indemnifying Party
a sum equal to the amount of such Insurance Proceeds or other amounts actually
received (up to but not in excess of the amount of any indemnity payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit they would
not be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.
Section 4.04     Procedures for Indemnification.
Procedures for Indemnification of Third Party Claims. Procedures for
Indemnification of Third Party Claims shall be as follows:
(a)    If an Indemnitee shall receive notice or otherwise learn of the assertion
by a person (including, without limitation, any governmental entity) who is not
a party to this Agreement or to the Tax Sharing Agreement of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 4.01, 4.02 or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third Party Claim; provided that
the failure of any Indemnitee to give notice as provided in this Section 4.04(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article IV, except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b)    An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 4.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that if the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and in any
Indemnitee's reasonable judgment a conflict of interest between one or more of
such Indemnitees and such Indemnifying Party exists in respect of such claim or
if the Indemnifying Party shall have assumed responsibility for such claim with
any reservations or exceptions, such Indemnitees shall have the right to employ
separate counsel to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one separate
counsel reasonably satisfactory to the Indemnifying Party) shall be paid by such
Indemnifying Party. If an Indemnifying Party elects not to assume responsibility
for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 4.04(b), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(b)) seek to compromise or settle
such Third Party Claim. Notwithstanding the foregoing, neither an Indemnifying
Party nor an Indemnitee may settle or compromise any claim over the objection of
the other; provided, however, that consent to settlement or compromise shall not
be unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee shall
consent to entry of any judgment or enter into any settlement of any Third Party
Claim which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee, in the case of a consent or settlement
by an Indemnifying Party, or the Indemnifying Party, in the case of a consent or
settlement by the Indemnitee, of a written release from all liability in respect
to such Third Party Claim.
(c)    If an Indemnifying Party chooses to defend or to seek to compromise or
settle any Third Party Claim, the related Indemnitee shall make available to
such Indemnifying Party any personnel or any books, records or other documents
within its control or which it otherwise has the ability to make available that
are necessary or appropriate for such defense, settlement or compromise, and
shall otherwise cooperate in the defense, settlement or compromise of such Third
Party Claims.
(d)    Notwithstanding anything else in this Section 4.04 to the contrary, if an
Indemnifying Party notifies the related Indemnitee in writing of such
Indemnifying Party's desire to settle or compromise a Third Party Claim on the
basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all liability in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) plus (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(e)    Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the related
Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after
the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such 30 day period, such Indemnifying Party shall
be deemed to have refused to accept responsibility to make payment. If such
Indemnifying Party does not respond within such 30 day period or rejects such
claim in whole or in part, such Indemnitee shall be free to pursue such remedies
as may be available to such party under this Agreement or under applicable law.
(f)    In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by this
Agreement, be reduced by recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith, shall promptly be
repaid by the Indemnitee to the Indemnifying Party.
(g)    In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and at the cost
and expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
Section 4.05     Remedies Cumulative. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06     Survival of Indemnities. The obligations of BWC and Automotive
under this Article IV shall survive the sale or other transfer by it of any
assets or businesses or the assignment by it of any Liabilities, with respect to
any Loss of the other related to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01     Access to Information. From and after the Distribution Date,
BWC shall afford to Automotive and its authorized accountants, counsel and other
designated representatives (collectively, "Representatives") reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
all records, books, contracts, instruments, computer data and other data and
information (collectively, "Information") within BWC's possession relating to
Automotive or any Automotive Subsidiary, insofar as such access is reasonably
required by Automotive or any Automotive Subsidiary. Similarly, Automotive shall
afford to BWC and its Representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to Information within
Automotive's possession relating to BWC or any BWC Subsidiary and insofar as
such access is reasonably required by BWC or any BWC Subsidiary. Information may
be requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02     Production of Witnesses. After the Distribution Date, each of
BWC and Automotive and its respective subsidiaries shall use reasonable efforts
to make available to the other party and its subsidiaries, upon written request,
its directors, officers, employees and agents as witnesses to the extent that
any such person may reasonably be required (giving consideration to business
demands of such Representatives) in connection with any legal, administrative or
other proceedings in which the requesting party may from time to time be
involved.
Section 5.03     Retention of Records. Except as otherwise required by law or
agreed to in writing, each of BWC and Automotive shall retain, and shall cause
its subsidiaries to retain following the Distribution Date, for a period
consistent with the document retention policies in effect at BWC and Automotive,
respectively, all significant Information relating to the business of the other
and the other's subsidiaries. In addition, after the expiration of the
applicable periods, such Information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose of such Information shall
provide no less than 30 days' prior written notice to the other, specifying in
reasonable detail the Information proposed to be destroyed or disposed of and
(b) if a recipient of such notice shall request in writing prior to the
scheduled date for such destruction or disposal that any of the Information
proposed to be destroyed or disposed of be delivered to such requesting party,
the party proposing the destruction or disposal shall promptly arrange for the
delivery of such of the Information as was requested at the expense of the party
requesting such Information.
Section 5.04     Confidentiality. Each of BWC and the BWC Subsidiaries on the
one hand, and Automotive and the Automotive Subsidiaries on the other hand,
shall hold, and shall cause its Representatives to hold, in strict confidence,
all Information concerning the other in its possession or furnished by the other
or the other's Representatives pursuant to either this Agreement or the Tax
Sharing Agreement (except to the extent that such Information has been (a) in
the public domain through no fault of such party or (b) later lawfully acquired
from other sources by such party), and each party shall not release or disclose
such Information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors, unless compelled to
disclose by judicial or administrative process or, as advised by its counsel, by
other requirements of law.

ARTICLE VI
MISCELLANEOUS
Section 6.01     Complete Agreement: Construction. This Agreement, the Benefits
Agreement, the Service Agreement and the Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of the Tax Sharing Agreement or the Benefits
Agreement, the provisions of the Tax Sharing Agreement or the Benefits
Agreement, as the case maybe, shall control.
Section 6.02     Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03     Expenses. Except as otherwise set forth in this Agreement, the
Benefits Agreement or the Tax Sharing Agreement, all costs and expenses arising
on or prior to the Distribution Date (whether or not then payable) in connection
with the Distribution (other than (i) costs incurred in connection with any
financing arrangements entered into by Automotive or any of its subsidiaries,
(ii) any fees charged by the rating agencies for rating Automotive securities,
(iii) the fees and expenses of any outside consultant or counsel retained by
Automotive, (iv) costs incurred in engraving and printing the stock certificates
of Automotive, (v) costs (including attorneys' fees) of establishing any new
employee benefit or compensation plans of Automotive, and (vi) expenses,
including any lenders' or agents' fees, incurred in connection with the
Automotive Financing, which shall be paid by Automotive) shall be paid by BWC to
the extent that appropriate documentation concerning such costs and expenses
shall be provided to BWC.
Section 6.04     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05     Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to BWC:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

if to Automotive:
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel

Section 6.06     Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
Section 6.07     Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 6.08     Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the BWC Board without the approval of Automotive or BWC's
shareholders. In the event of such termination, no party shall have any
liability of any kind to any other party on account of such termination except
that expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in Section 6.03.
Section 6.09     No Third-Party Beneficiaries. Except for the provisions of
Article IV relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of BWC or Automotive or any
BWC or Automotive Subsidiary) any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference to this Agreement.
Section 6.10     Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
Section 6.11     Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

BORG-WARNER SECURITY CORPORATION
By:          /s/             

BORG-WARNER AUTOMOTIVE, INC.
By:         /s/ Robin J. Adams            
                    

SCHEDULE A

Items with respect to which BWC will indemnify the Automotive Indemnitees in
accordance with Section 4.01 of the Agreement:
All Losses arising out of the businesses conducted or to be conducted by BWC or
any BWC Subsidiary, whether such Losses relate to events occurring, or whether
such Losses are asserted, before or after the Distribution Date, excluding (i)
the businesses conducted (formerly or currently) or to be conducted by
Automotive (whether directly or through a subsidiary or Affiliate of
Automotive), the Automotive Subsidiaries and any previously owned division,
subsidiary or Affiliate of Automotive and (ii) any businesses related to the
design, manufacture or marketing of parts, assemblies or components used in, or
designed for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.

SCHEDULE B
Items with respect to which Automotive will indemnify the BWC Indemnitees in
accordance with Section 4.02 of the Agreement:
(1)    All Losses arising out of any guarantees or obligations to third parties
of BWC or any BWC Subsidiary with respect to any obligations of Automotive or
any Automotive Subsidiary to third parties.
(2)    All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Automotive (whether directly or through a
subsidiary or Affiliate of Automotive), the Automotive Subsidiaries and any
previously owned division, subsidiary or Affiliate of Automotive, whether such
Losses relate to events occurring, or whether such Losses are asserted, before
or after the Distribution Date, including without limitation any Losses that any
BWC Indemnitee may incur under environmental laws or regulations relating to the
operations of BWC's Automotive Group and any Losses arising out of the
Automotive Financing.
(3)    All Losses arising out of any businesses related to the design,
manufacture or marketing of parts, assemblies or components used in, or designed
for use in, cars, trucks, boats, tractors or other vehicles.