
<PAGE>   1







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                        BORG-WARNER AUTOMOTIVE, INC.
                          (a Delaware corporation)


                      3,600,000 Shares of Common Stock




                           U.S. PURCHASE AGREEMENT




Dated: July __, 1996
                                                                               
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                                                                       S&S DRAFT
                                                                       07/22/9

                          BORG-WARNER AUTOMOTIVE, INC.
                            (a Delaware corporation)


                        3,600,000 Shares of Common Stock
                           (Par Value $.01 Per Share)


                            U.S. PURCHASE AGREEMENT


                                 July __, 1996



MERRILL LYNCH & CO.
         Merrill Lynch, Pierce, Fenner & Smith
                     Incorporated
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO. INCORPORATED
         As Representatives of the several U.S. Underwriters
c/o Merrill Lynch & Co.
         Merrill Lynch, Pierce, Fenner & Smith
                     Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York  10281-1201

Ladies and Gentlemen:

                 The stockholders of Borg-Warner Automotive, Inc., a Delaware
corporation (the "Company"), named in Schedule A (collectively, the "Selling
Stockholders") propose to sell severally and not jointly to the underwriters
named in Schedule B (collectively, the "U.S. Underwriters", which shall also
include any person substituted for a U.S. Underwriter under Section 11 hereof),
for whom you are acting as representatives (the "U.S. Representatives"), an
aggregate of 3,600,000 outstanding shares of Common Stock of the Company, par
value $.01 per share (shares of which class of stock of the Company are
hereinafter referred to as "Common Stock").  Such shares of Common Stock are to
be sold to each U.S. Underwriter, acting severally and not jointly, in such
amounts as are set forth in Schedule B hereto opposite the name of such U.S.
Underwriter.  The Selling Stockholders also grant to the
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                                      2

U.S. Underwriters, severally and not jointly, the option described in Section 2
to purchase all or any part of 540,000 additional shares of Common Stock to
cover over-allotments.  The aforesaid 3,600,000 shares of Common Stock (the
"Initial U.S. Shares"), together with all or any part of the 540,000 additional
shares of Common Stock subject to the option described in Section 2 (the "U.S.
Option Shares"), are collectively herein called the "U.S. Shares".  The U.S.
Shares are more fully described in the U.S.  Prospectus referred to below.

                 It is understood that the Company is concurrently entering
into an agreement, dated the date hereof (the "International Purchase
Agreement"), providing for the sale by the Selling Stockholders of 900,000
shares of Common Stock (the "Initial International Shares") through
arrangements with certain underwriters outside the United States and Canada
(the "International Underwriters"), for whom Merrill Lynch International,
Morgan Stanley & Co. International Limited and Lehman Brothers International
(Europe) are acting as representatives (the "International Representatives").
It is further understood that the Selling Stockholders are concurrently
granting the International Underwriters an option to purchase all or any part
of 135,000 additional shares of Common Stock (the "International Option
Shares") from the Selling Stockholders to cover over-allotments.  The
International Shares and the International Option Shares are hereinafter
collectively referred to as the "International Shares".  The U.S. Shares and
the International Shares are hereinafter collectively referred to as the
"Shares".

                 The Company understands that the U.S. Underwriters will
simultaneously enter into an agreement with the International Underwriters
dated the date hereof (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the U.S. Underwriters and the
International Underwriters, under the direction of Merrill Lynch, Pierce,
Fenner & Smith Incorporated.

                 You have advised us that you and the other U.S. Underwriters,
acting severally and not jointly, desire to purchase the U.S. Shares and that
you have been authorized by the other U.S. Underwriters to execute this
Agreement and the U.S. Price Determination Agreement referred to below on their
behalf.

                 The price to the public per share for the U.S. Shares and the
purchase price per share for the U.S. Shares shall be agreed upon by the
Selling Stockholders and the U.S. Representatives, acting on behalf of the
several U.S. Underwriters, and such agreement shall be set forth in a separate
written instrument substantially in the form of Exhibit A hereto (the "U.S.
Price Determination Agreement").  The U.S. Price Determination Agreement may
take the form of an exchange of any standard form of written telecommunication
between the Selling Stockholders and the U.S. Representatives and shall specify
such applicable information as is indicated in Exhibit A hereto.  The offering
of the U.S. Shares will be governed by this Agreement, as supplemented by the
U.S.  Price Determination Agreement.  From and after the date of the execution
and delivery of the U.S. Price Determination
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                                       3

Agreement, this Agreement shall be deemed to incorporate, and all reference
herein to "this Agreement" shall be deemed to include, the U.S. Price
Determination Agreement.

                 The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(Registration No. 333-06041) covering the registration of the Shares under the
Securities Act of 1933, as amended (the "1933 Act"), including the related
preliminary prospectuses, and either (A) has prepared and proposes to file,
prior to the effective date of such registration statement, an amendment to
such registration statement, including final prospectuses, or (B) if the
Company has elected to rely upon Rule 430A ("Rule 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations"),
will prepare and file prospectuses, in accordance with the provisions of Rule
430A and Rule 424(b) ("Rule 424(b)") of the 1933 Act Regulations, promptly
after execution and delivery of the U.S. Price Determination Agreement.  Two
forms of prospectus are to be used in connection with the offering and sale of
the Shares:  one relating to the U.S. Shares (the "Form of U.S. Prospectus")
and one relating to the International Shares (the "Form of International
Prospectus").  The Form of International Prospectus is identical to the Form of
U.S. Prospectus, except for the front cover page, inside front cover page, the
sections captioned "Underwriting" and "Available Information" and the back
cover page.  Additionally, if the Company has elected to rely upon Rule 434
("Rule 434") of the 1933 Act Regulations, the Company will prepare and file a
term sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and
Rule 424(b), promptly after execution and delivery of the U.S. Price
Determination Agreement.  The information, if any, included in such
prospectuses that was omitted from any prospectuses included in such
registration statement at the time it becomes effective but that is deemed, (i)
pursuant to paragraph (b) of Rule 430A, to be part of such registration
statement at the time it becomes effective is referred to herein as the "Rule
430A Information", and (ii) pursuant to paragraph (d) of Rule 434, to be part
of such registration statement at the time it becomes effective is referred to
herein as "Rule 434 Information".  Each Form of U.S. Prospectus and Form of
International Prospectus used before the time such registration statement
becomes effective, and any Form of U.S. Prospectus and Form of International
Prospectus that omits the Rule 430A Information or the Rule 434 Information, if
applicable, that is used after such effectiveness and prior to the execution
and delivery of the U.S. Price Determination Agreement or the International
Price Determination Agreement, is herein called a "preliminary prospectus".
Such registration statement, including the exhibits thereto and the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
1933 Act ("Item 12"), as amended, and Rule 412 of the 1933 Act Regulations
("Rule 412") at the time it becomes effective and including, if applicable, the
Rule 430A Information or the Rule 434 Information, is herein called the
"Original Registration Statement".  Any registration statement filed pursuant
to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement", and the Original Registration Statement and any
Rule 462(b) Registration Statement are herein referred to collectively as the
"Registration Statement".  The Form of
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                                       4

U.S. Prospectus and Form of International Prospectus, including the documents
incorporated by reference therein pursuant to Item 12 and Rule 412, included in
the Original Registration Statement at the time it becomes effective, are
herein called the "U.S.  Prospectus" and the "International Prospectus",
respectively, and, collectively, the "Prospectuses", and, individually, a
"Prospectus", except that, (i) if the final U.S. Prospectus or International
Prospectus, as the case may be, first furnished to the U.S. Underwriters or the
International Underwriters after the execution of the U.S. Price Determination
Agreement or the International Price Determination Agreement for use in
connection with the offering of the Shares differs from the prospectuses
included in the Original Registration Statement at the time it becomes
effective (whether or not such prospectus is required to be filed pursuant to
Rule 424(b)), the terms "U.S. Prospectus", "International Prospectus",
"Prospectuses" and "Prospectus" shall refer to the final U.S. Prospectus or
International Prospectus first furnished to the U.S. Underwriters or the
International Underwriters, as the case may be, for such use, and (ii) if Rule
434 is relied upon, the terms "U.S. Prospectus", "International Prospectus",
"Prospectuses" and "Prospectus" shall refer to the preliminary U.S. Prospectus
or International Prospectus last furnished to the U.S. Underwriters or the
International Underwriters, as the case may be, in connection with the offering
of the Shares, in each case together with the Term Sheet.

                 The Company and the Selling Stockholders understand that the
U.S. Underwriters propose to make a public offering of the U.S. Shares as soon
as you deem advisable after the Registration Statement becomes effective and
the U.S. Price Determination Agreement has been executed and delivered.

                 Section 1.  Representations and Warranties.  (a)  The Company
represents and warrants to and agrees with each of the U.S. Underwriters and
each of the Selling Stockholders that:

                 (i) The Company meets the requirements for use of Form S-3
         under the 1933 Act and when the Registration Statement or any
         post-effective amendment thereto shall become effective and at all
         times subsequent thereto up to the Closing Time referred to below
         (and, if any U.S. Option Shares are purchased, up to the Date of
         Delivery referred to below), (A) the Registration Statement and the
         Prospectuses, including any amendments and supplements thereto, will
         comply in all material respects with the requirements of the 1933 Act
         and the 1933 Act Regulations; (B) neither the Registration Statement
         nor any amendment or supplement thereto will contain an untrue
         statement of a material fact or omit to state a material fact required
         to be stated therein or necessary to make the statements therein not
         misleading; (C) neither of the Prospectuses nor any amendment or
         supplement thereto will include an untrue statement of a material fact
         or omit to state a material fact necessary in order to make the
         statements therein, in the light of the circumstances under which they
         were made, not misleading; and (D) if Rule 434 is relied upon, the
         Prospectuses
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                                       5

         shall not be "materially different", as such term is used in Rule 434,
         from the prospectuses included in the Registration Statement at the
         time it becomes effective; except that this representation and
         warranty does not apply to statements or omissions made in reliance
         upon and in conformity with information furnished in writing to the
         Company by or on behalf of any U.S. Underwriter or International
         Underwriter through you or the International Representatives expressly
         for use in the Registration Statement or the Prospectuses or any
         amendment or supplement thereof.

                 (ii)     The documents incorporated by reference in the
         Prospectuses pursuant to Item 12 of Form S-3 under the 1933 Act, at
         the time they were filed with the Commission, complied in all material
         respects with the requirements of the Securities Exchange Act of 1934,
         as amended (the "1934 Act"), and the rules and regulations of the
         Commission thereunder (the "1934 Act Regulations"), and, when read
         together and with the other information in the Prospectus, at the time
         the Registration Statement becomes effective and at all times
         subsequent thereto up to the Closing Time (as hereinafter defined)
         (and, if any Option Shares are purchased, up to the Date of Delivery
         (as hereinafter defined)), will not contain an untrue statement of a
         material fact or omit to state a material fact required to be stated
         therein or necessary in order to make the statements therein not
         misleading.

                 (iii)    (A) Deloitte & Touche LLP, who have certified the
         financial statements of the Company and the schedules included or
         incorporated by reference in the Registration Statement and
         Prospectuses, (B) KPMG Peat Marwick, who have certified the financial
         statements of NSK-Warner K.K. ("NSK-Warner") included or incorporated
         by reference in the Registration Statement and the Prospectuses and
         (C) Arthur Andersen LLP, who have certified the financial statements
         of Holley Automotive Inc, Holley Automotive Group, Ltd., Holley
         Automotive Systems GmbH, Coltec Automotive Inc, and Performance
         Friction Products, a division of Stemco Inc, an indirect, wholly-owned
         subsidiary of Coltec Industries Inc.  (collectively, the "Coltec
         Subsidiaries"), included or incorporated by reference in the
         Registration Statement and the Prospectuses, are independent public
         accountants as required by the 1933 Act and the 1933 Act Regulations.

                 (iv)     The Company has all requisite corporate power and
         authority to execute, deliver and perform its obligations under this
         Agreement; and this Agreement has been duly authorized, executed and
         delivered by the Company.

                 (v) The consolidated financial statements and the related
         notes of the Company and its Subsidiaries (as defined below) (other
         than the Coltec Subsidiaries) included or incorporated by reference in
         the Registration Statement present fairly the consolidated financial
         position of the Company and its Subsidiaries as of the dates indicated
         and the consolidated results of operations and cash flows of the
         Company
<PAGE>   7
                                       6

         and its Subsidiaries for the periods specified.  Such financial
         statements have been prepared in conformity with generally accepted
         accounting principles applied on a consistent basis throughout the
         periods involved (except as set forth in the notes thereto) and
         subject, in the case of any interim statements, to normal year-end
         audit adjustments.  The financial statement schedules, if any,
         included in the Registration Statement present fairly the information
         required to be stated therein.  The selected financial data included
         or incorporated by reference in the Prospectuses present fairly the
         information shown therein and have been compiled on a basis consistent
         with that of the audited consolidated financial statements included or
         incorporated by reference in the Registration Statement.  The pro
         forma financial information included in the Prospectuses present
         fairly the information shown therein, has been prepared in accordance
         with the applicable requirements of Rule 11-02 of Regulation S-X, has
         been properly compiled on the pro forma bases described therein, and,
         in the opinion of the Company, the assumptions used in the preparation
         thereof are reasonable and the adjustments used therein are
         appropriate to give effect to the transactions or circumstances
         referred to therein.

                 (vi)     The Company is a corporation duly organized, validly
         existing and in good standing under the laws of the State of Delaware
         with corporate power and authority under such laws to own, lease and
         operate its properties and conduct its business as described in the
         Prospectuses.  The Company is duly qualified to transact business as a
         foreign corporation and is in good standing in each other jurisdiction
         in which it owns or leases property of a nature, or transacts business
         of a type, that would make such qualification necessary, except to the
         extent that the failure to so qualify or be in good standing would not
         have a material adverse effect on the Company and the Subsidiaries,
         considered as one enterprise.

                 (vii)    The Company's only subsidiaries are set forth in
         Exhibit B hereto (each such corporation is referred to herein as a
         "Subsidiary" and, collectively, the "Subsidiaries").  Each Subsidiary
         is a corporation duly organized, validly existing and in good standing
         under the laws of the jurisdiction of its incorporation with corporate
         power and authority under such laws to own, lease and operate its
         properties and conduct its business; and each Subsidiary is duly
         qualified to transact business as a foreign corporation and is in good
         standing in each other jurisdiction in which it owns or leases
         property of a nature, or transacts business of a type, that would make
         such qualification necessary, except to the extent that the failure to
         so qualify or be in good standing would not have a material adverse
         effect on the Company and the Subsidiaries, considered as one
         enterprise.  All of the outstanding shares of capital stock of each
         Subsidiary have been duly authorized and validly issued and are fully
         paid and non-assessable and are owned by the Company, directly or
         through one or more of the Subsidiaries, in the percentages set forth
         in Exhibit B hereto, free and
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                                       7

         clear of any pledge, lien, security interest, charge, claim, equity or
         encumbrance of any kind.

                 (viii)   The Company had at the date indicated a duly
         authorized and outstanding capitalization as set forth in the
         Prospectuses under the caption "Capitalization".

                 (ix)     The Shares have been duly authorized and validly
         issued and are fully paid and non-assessable; no holder thereof will
         be subject to personal liability by reason of being such a holder; and
         such Shares are not subject to the preemptive rights of any
         stockholder of the Company.

                 (x) All of the other outstanding shares of capital stock of
         the Company have been duly authorized and validly issued and are fully
         paid and non-assessable; no holder thereof is or will be subject to
         personal liability by reason of being such a holder; and none of the
         outstanding shares of capital stock of the Company was issued in
         violation of the preemptive rights of any stockholder of the Company.

                 (xi)     Since the respective dates as of which information is
         given in the Registration Statement and the Prospectuses, except as
         described in the Registration Statement or any amendment or supplement
         thereto, there has not been (A) any material adverse change in the
         condition (financial or otherwise), results of operations, business
         affairs or business prospects of the Company and the Subsidiaries,
         considered as one enterprise, whether or not arising in the ordinary
         course of business, (B) any transaction entered into by the Company or
         any Subsidiary, other than in the ordinary course of business, that is
         material to the Company and the Subsidiaries, considered as one
         enterprise, or (C) any dividend or distribution of any kind declared,
         paid or made by the Company on its capital stock, other than regular
         quarterly cash dividends declared or paid on its Common Stock.

                 (xii)    Neither the Company nor any of its Subsidiaries is in
         violation of its certificate of incorporation or in default in the
         performance or observance of any obligation, agreement, covenant or
         condition contained in any indenture, mortgage, loan agreement, note,
         lease or other agreement or instrument to which it is a party or by
         which it may be bound or to which any of its properties may be
         subject, except for such defaults that would not have a material
         adverse effect on the condition (financial or otherwise), results of
         operations, business affairs or business prospects of the Company and
         the Subsidiaries, considered as one enterprise.  The execution and
         delivery of this Agreement and the International Purchase Agreement by
         the Company, the consummation by the Company of the transactions
         contemplated in this Agreement, the International Purchase Agreement,
         and the Registration Statement and compliance by the Company with the
         terms of this Agreement and the International
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                                       8

         Purchase Agreement have been duly authorized by all necessary
         corporate action on the part of the Company and do not violate and
         will not result in any violation of the certificate of incorporation
         or by-laws of the Company or any Subsidiary, and do not and will not
         conflict with, or result in a breach of any of the terms or provisions
         of, or constitute a default under, or result in the creation or
         imposition of any lien, charge or encumbrance upon any property or
         assets of the Company or any Subsidiary under (A) any indenture,
         mortgage, loan agreement, note, lease or other agreement or instrument
         to which the Company or any Subsidiary is a party or by which any of
         them may be bound or to which any of their properties may be subject,
         except for such conflicts, breaches or defaults or liens, charges or
         encumbrances that in the aggregate would not have a material adverse
         effect on the condition (financial or otherwise), results of
         operations, business affairs or business prospects of the Company and
         the Subsidiaries, considered as one enterprise or (B) any existing
         applicable law, rule, regulation, judgment, order or decree of any
         government, governmental instrumentality or court, domestic or
         foreign, having jurisdiction over the Company or any Subsidiary or any
         of their respective properties, except for such conflicts, breaches or
         defaults or liens, charges or encumbrances that in the aggregate would
         not have a material adverse effect on the condition (financial or
         otherwise), results of operations, business affairs or business
         prospects of the Company and the Subsidiaries, considered as one
         enterprise.

                 (xiii)   No authorization, approval, consent or license of, or
         any material filing with, any government, governmental instrumentality
         or court, domestic or foreign (other than under the 1933 Act and the
         1933 Act Regulations and the securities or Blue Sky laws of the
         various states, the securities laws of Canada and its provinces and
         the securities laws of any jurisdiction outside the United States in
         which International Shares are offered or sold by the International
         Underwriters pursuant to the International Purchase Agreement), is
         legally required for the valid authorization, issuance, sale and
         delivery of the Shares.

                 (xiv)    Except as disclosed or incorporated by reference in
         the Prospectuses, there is no action, suit or proceeding before or by
         any government, governmental instrumentality or court, domestic or
         foreign, now pending or, to the knowledge of the Company, threatened
         against the Company or any Subsidiary that is required to be disclosed
         in the Prospectuses or that could result in any material adverse
         change in the condition (financial or otherwise), results of
         operations, business affairs or business prospects of the Company and
         its Subsidiaries, considered as one enterprise, or that could
         reasonably be expected to adversely affect the consummation of the
         transactions contemplated by this Agreement and the International
         Purchase Agreement.
<PAGE>   10
                                       9

                 (xv)     There are no contracts or documents of a character
         required pursuant to the 1933 Act to be described in the Registration
         Statement or the Prospectuses or to be filed as exhibits to the
         Registration Statement that are not described and filed as required.

                 (xvi)    Each of the Company and the Subsidiaries has good and
         marketable title to all properties and assets described in the
         Prospectuses as owned by it, free and clear of all liens, charges,
         encumbrances or restrictions, except such as (A) are described in the
         Prospectuses or (B) are neither material in amount nor materially
         significant in relation to the business of the Company and the
         Subsidiaries, considered as one enterprise; all of the leases and
         subleases material to the business of the Company and the
         Subsidiaries, considered as one enterprise, and under which the
         Company or any Subsidiary holds properties described in the
         Prospectuses, are in full force and effect, and neither the Company
         nor any Subsidiary has any notice of any material claim of any sort
         that has been asserted by anyone adverse to the rights of the Company
         or any Subsidiary under any of the leases or subleases mentioned
         above, or affecting or questioning the rights of such corporation to
         the continued possession of the leased or subleased premises under any
         such lease or sublease.

                 (xvii)   The Company and the Subsidiaries each owns, possesses
         or has obtained all material governmental licenses, permits,
         certificates, consents, orders, approvals and other authorizations,
         and has made all filings with all governmental authorities, necessary
         to own or lease, as the case may be, and to operate its properties and
         to carry on its business as presently conducted, and neither the
         Company nor any Subsidiary has received any notice of proceedings
         relating to revocation or modification of any such licenses, permits,
         certificates, consents, orders, approvals or authorizations, which,
         singly or in the aggregate, if not so owned, possessed or obtained or
         the subject of an unfavorable ruling, decision or finding, could
         materially adversely affect the condition (financial or otherwise),
         results of operations, business affairs or business prospects of the
         Company and the Subsidiaries, considered as one enterprise.

                 (xviii)  The Company and the Subsidiaries each owns or
         possesses, or can acquire on reasonable terms, adequate patents,
         patent licenses, trademarks, service marks and trade names necessary
         to carry on its business as presently conducted, and neither the
         Company nor any Subsidiary has received any notice of infringement of
         or conflict with asserted rights of others with respect to any
         patents, patent licenses, trademarks, service marks or trade names
         that in the aggregate, if the subject of an unfavorable decision,
         ruling or finding, could reasonably be expected to materially
         adversely affect the condition (financial or otherwise), results of
         operations, business affairs or business prospects of the Company and
         the Subsidiaries, considered as one enterprise.
<PAGE>   11
                                       10


                 (xix)    Except as disclosed in the Prospectuses, to the best
         knowledge of the Company, no labor problem exists with its employees
         or with employees of the Subsidiaries or is imminent that could
         reasonably be expected to materially adversely affect the Company and
         the Subsidiaries, considered as one enterprise and, to the knowledge
         of the Company, except as disclosed in the Prospectuses, the Company
         is not aware of any material existing or imminent labor dispute by the
         employees of any of its or the Subsidiaries' principal customers that
         could be expected to materially adversely affect the Company and the
         Subsidiaries, considered as one enterprise.

                 (xx)     The Company has not taken and will not take, directly
         or indirectly, any action designed to, or that might be reasonably
         expected to, cause or result in stabilization or manipulation of the
         price of the Common Stock.

                 (xxi)    Except as disclosed in the Registration Statement and
         except as would not individually or in the aggregate have a material
         adverse effect on the condition (financial or otherwise), results of
         operations, business affairs or business prospects of the Company and
         the Subsidiaries, considered as one enterprise, (A) the Company and
         the Subsidiaries are each in compliance with all applicable
         Environmental Laws, (B) the Company and the Subsidiaries have all
         permits, authorizations and approvals required under any applicable
         Environmental Laws and are each in compliance with their requirements,
         (C) there are no pending or threatened Environmental Claims against
         the Company or any Subsidiary, and (D) there are no circumstances with
         respect to any property or operations of the Company or the
         Subsidiaries that could reasonably be anticipated to form the basis of
         an Environmental Claim against the Company or the Subsidiaries.

                 For purposes of this Agreement, the following terms shall have
         the following meanings:  "Environmental Law" means any United States
         (or other applicable jurisdiction's) federal, state, local or
         municipal statute, law, rule, regulation, ordinance, code, policy or
         rule of common law and any judicial or administrative interpretation
         thereof including any judicial or administrative order, consent decree
         or judgment, relating to the environment, health, safety or any
         chemical, material or substance, exposure to which is prohibited,
         limited or regulated by any governmental authority.  "Environmental
         Claims" means any and all administrative, regulatory or judicial
         actions, suits, demands, demand letters, claims, liens, notices of
         noncompliance or violation, investigations or proceedings relating in
         any way to any Environmental Law.

                 (xxii)   All United States federal income tax returns of the
         Company (and any of the Subsidiaries, if not included in the Company's
         U.S. consolidated federal income tax return) required by law to be
         filed have been properly prepared and filed, and all taxes shown on
         such returns or otherwise assessed which are due and payable
<PAGE>   12
                                       11

         have been paid.  All of the Company's United States federal tax
         returns (and any of the Subsidiaries' tax returns, if applicable) for
         taxable periods through and including the 1992 federal taxable year
         have been audited by the Internal Revenue Service or the statute of
         limitations for such taxable years has run and thus, all taxes for
         such periods have been finally determined (excluding the effect of any
         net operating loss or credit carryovers to such periods).  All other
         tax returns of the Company and the Subsidiaries required to be filed
         pursuant to applicable foreign, state, local or other law have been
         filed, except insofar as the failure to file such returns would not
         have a material adverse effect on the condition (financial or
         otherwise), earnings, business affairs or business prospects of the
         Company and the Subsidiaries, considered as one enterprise.  The
         Company and the Subsidiaries have paid (or there has been paid on
         their behalf) all taxes which are due and for which no tax return is
         required.  There are no liens on any of the Company's or the
         Subsidiaries' assets for taxes, other than for taxes which have
         accrued but which are not yet due and payable.  Neither the Company
         nor any Subsidiary is liable for any taxes that are imposed on any
         other person or corporation (other than for taxes imposed on the
         Company or the Subsidiaries), except as set forth in Treasury
         Regulation 1.1502-6 with respect to prior consolidated groups of which
         the Company or its subsidiaries were members.

                 (xxiii)  With respect to each employee benefit plan, program
         and arrangement (including, without limitation, any "employee benefit
         plan" as defined in Section 3(3) of the Employee Retirement Income
         Security Act of 1974, as amended ("ERISA")) maintained or contributed
         to by the Company or any Subsidiary, or with respect to which the
         Company or any Subsidiary could incur any liability under ERISA
         (collectively, the "Benefit Plans"), no event has occurred and, to the
         best knowledge of the Company, there exists no condition or set of
         circumstances, in connection with which the Company or any Subsidiary
         could be subject to any liability under the terms of such Benefit
         Plans, applicable law (including, without limitation, ERISA and the
         Internal Revenue Code of 1986, as amended (the "Code")) or any
         applicable agreement (including, without limitation, the agreement
         dated as of January 14, 1993 (the "PBGC Agreement"), among the Pension
         Benefit Guaranty Corporation (the "PBGC"), the Company and Borg-Warner
         Security Corporation ("BWSC")), that could materially adversely affect
         the condition (financial or otherwise), results of operations,
         business affairs or business prospects of the Company and the
         Subsidiaries, considered as one enterprise.  The Company is in
         compliance in all respects with its obligations under the PBGC
         Agreement.

                 (xxiv)   The Company has obtained the written agreement, in
         the form previously furnished to you, of (A) each holder of at least
         1% of the outstanding shares of Common Stock who is a party to the
         Registration Rights Agreement dated as of January 27, 1993 among the
         Company and the Stockholders who are parties thereto (the
         "Registration Rights Agreement") that for a period beginning seven
         days
<PAGE>   13
                                       12

         before, and ending 180 days after, the effective date of the
         Registration Statement, not to effect any public sale or distribution,
         including any sale pursuant to Rule 144 under the 1933 Act, of Common
         Stock or any securities convertible into or exchangeable for Common
         Stock, or any rights or warrants to acquire Common Stock and (B)
         executive officers and directors of the Company that for a period
         beginning seven days before, and ending 180 days after, the effective
         date of the Registration Statement, such holders will not, without
         your prior written consent, directly or indirectly, sell, offer to
         sell, grant any option for the sale of, or otherwise dispose of, any
         Common Stock or securities convertible into or exchangeable or
         exercisable for Common Stock.

                 (xxv)     There are no persons, corporations, partnerships or
         other entities with registration or other similar rights to have any
         securities registered pursuant to the Registration Statement, except
         as disclosed or incorporated by reference in the Prospectuses.

                 (xxvi)    The Shares have been approved for listing on the New
         York Stock Exchange, Inc.

                 (b)       Each of the Selling Stockholders severally
represents and warrants to and agrees with each of the U.S.  Underwriters as
follows:

                 (i)       When the Registration Statement or any
         post-effective amendment thereto shall become effective, and at all
         times subsequent thereto up to the Closing Time (and, if any U.S.
         Option Shares are purchased, at the Date of Delivery), (A) neither the
         Registration Statement nor any amendment or supplement thereto will
         contain an untrue statement of a material fact or omit to state a
         material fact required to be stated therein or necessary to make the
         statements therein not misleading, and (B) neither of the Prospectuses
         nor any amendment or supplement thereto will include an untrue
         statement of a material fact or omit to state a material fact
         necessary in order to make the statements therein, in the light of the
         circumstances under which they were made, not misleading; provided,
         however, that, as to each Selling Stockholder, the representations and
         warranties in this subsection (b)(i) apply only to statements or
         omissions made in reliance upon and in conformity with information
         furnished in writing to the Company by or on behalf of such Selling
         Stockholder, in its capacity as such, expressly for use in the
         Registration Statement or the Prospectuses.

                 (ii)      No authorization, approval, consent or license of,
         or any material filing with, any government, governmental
         instrumentality or court, domestic or foreign (other than under the
         1933 Act and the 1933 Act Regulations and the securities or Blue Sky
         laws of the various states, the securities laws of Canada and its
<PAGE>   14
                                       13

         provinces and the securities laws of any jurisdiction outside the
         United States in which the International Shares are offered and sold
         by the International Underwriters pursuant to the International
         Purchase Agreement), is required for the consummation by such Selling
         Stockholder of the transactions contemplated in this Agreement or  the
         International Purchase Agreement, including, without limitation, the
         sale and delivery of the Shares.

                 (iv)      The execution and delivery of this Agreement and the
         International Purchase Agreement and the consummation of the
         transactions contemplated in this Agreement and the International
         Purchase Agreement will not result in (a) a breach by such Selling
         Stockholder of, or constitute a default by such Selling Stockholder
         under, any agreement or instrument or any decree, judgment or order to
         which such Selling Stockholder is a party or by which such Selling
         Stockholder is bound or the properties of such Selling Stockholder are
         subject or (b) violate (1) any provision of the certificate of
         incorporation, by-law, partnership agreement or comparable governing
         documents of such Selling Stockholder or any law, rule or regulation
         applicable to such Selling Stockholder or (2) to which its properties
         are subject (other than for the securities or Blue Sky laws of the
         various states, the securities laws of Canada and its provinces and
         the securities laws of any jurisdiction outside the United States in
         which the International Shares are offered or sold by the
         International Underwriters pursuant to the International Purchase
         Agreement).

                 (v)       Such Selling Stockholder has good and marketable
         title to the Shares to be sold by such Selling Stockholder pursuant to
         this Agreement and the International Purchase Agreement, free and
         clear of any pledge, lien, security interest, charge, claim, equity or
         encumbrance of any kind, other than pursuant to this Agreement, the
         International Purchase Agreement, the Registration Rights Agreement,
         [the Management Stockholders Agreement, dated January 27, 1993, the
         Investors Stockholders Agreement, dated January 27, 1993, the
         Management Stock Subscription Agreement, dated as of July 27, 1987, as
         amended as of January 1, 1989 and as of January 27, 1993, and the
         Replacement Stock Pledge Agreement, dated as of February 1, 1993]; and
         such Selling Stockholder will at the Closing Time and, if any Option
         Shares are to be purchased on the Date of Delivery, have good and
         marketable title to the Shares to be sold by such Selling Stockholder
         pursuant to this Agreement and the International Purchase Agreement,
         free and clear of any pledge, lien, security interest, charge, claim,
         equity or encumbrance of any kind; such Selling Stockholder has full
         right, power and authority to sell, transfer and deliver such Shares
         pursuant to this Agreement or the International Purchase Agreement;
         and, upon delivery of such Shares and payment of the purchase price
         therefor as contemplated in this Agreement and the International
         Purchase Agreement, each of the U.S. Underwriters and the
         International Underwriters, as the case may be, will receive good and
         marketable title to the Shares purchased by it from such Selling
         Stockholder, free and
<PAGE>   15
                                       14

         clear of any pledge, lien, security interest, charge, claim, equity or
         encumbrance of any kind.

                 (vi)      Certificates for all of the shares of Common Stock,
         or with respect to Selling Stockholders that own shares of the
         Company's Non-Voting Common Stock, par value $.01 per share, (the
         "Non-Voting Stock"), certificates for all of the Shares of Non-Voting
         Stock (accompanied by a written notice requesting conversion of such
         shares, which notice shall comply with Section 2(4)(iii) of the
         Company's Restated Certificate of Incorporation), to be sold by such
         Selling Stockholder pursuant to this Agreement and the International
         Purchase Agreement, in suitable form for transfer by delivery or
         accompanied by duly executed instruments of transfer or assignment
         executed in blank, are available for delivery pursuant to this
         Agreement and the International Purchase Agreement.

                 (vii)     Such Selling Stockholder has not taken and will not
         take, directly or indirectly, any action designed to, or that might be
         reasonably expected to, cause or result in stabilization or
         manipulation of the price of the Common Stock; and such Selling
         Stockholder has not distributed and will not distribute any prospectus
         or other offering material in connection with the offering and sale of
         the Shares other than any preliminary prospectus filed with the
         Commission or the Prospectuses or other material permitted by the 1933
         Act or the 1933 Act Regulations.

                 (viii)    Such Selling Stockholder, if such Selling
         Stockholder is not a natural person, is duly organized, validly
         existing and in good standing under the laws of its jurisdiction of
         incorporation or organization, as the case may be, with all necessary
         power and authority to enter into and perform each of this Agreement
         and the International Purchase Agreement and to sell and deliver the
         Shares to the U.S. Underwriters and the International Underwriters, as
         the case may be, in accordance with each of this Agreement and the
         International Purchase Agreement.

                 (c)       Any certificate signed by any officer of the Company
or any Subsidiary and delivered to you or to counsel for the U.S. Underwriters
shall be deemed a representation and warranty by the Company to each U.S.
Underwriter as to the matters covered thereby; and any certificate signed by or
on behalf of the Selling Stockholders as such and delivered to you or to
counsel for the U.S. Underwriters shall be deemed a representation and warranty
by the Selling Stockholders to each U.S. Underwriter as to the matters covered
thereby.

                 Section 2.  Sale and Delivery to the U.S. Underwriters;
Closing.  (a)  On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, each
Selling Stockholder agrees, severally and not jointly, to sell to each U.S.
Underwriter the number of Initial U.S. Shares set forth opposite the name of
<PAGE>   16
                                       15

such Selling Stockholder on Schedule A, and each U.S. Underwriter agrees,
severally and not jointly, to purchase from each Selling Stockholder, at the
purchase price per share for the Initial U.S. Shares to be agreed upon by the
U.S. Representatives and the Selling Stockholders, in accordance with Section
2(b) or 2(c) hereof, and set forth in the U.S. Price Determination Agreement,
the number of Initial U.S. Shares that bears the same relation to 3,600,000 as
the number of Initial U.S. Shares set forth opposite the name of such U.S.
Underwriter in Schedule B bears to the total number of Initial U.S. Shares
(such proportion is hereinafter referred to as such U.S. Underwriter's
"underwriting obligation proportion"), subject to such adjustments as you in
your discretion, shall make to eliminate any sales or purchases of fractional
shares.  If the Company elects to rely on Rule 430A, Schedules A and B may be
attached to the U.S. Price Determination Agreement.

                 (b)       If the Company has elected not to rely upon Rule
430A, the price to the public per share for the Initial U.S. Shares and the
purchase price per share for the Initial U.S. Shares to be paid by the several
U.S. Underwriters shall be agreed upon and set forth in the U.S. Price
Determination Agreement, dated the date hereof, and an amendment to the
Original Registration Statement containing such per share price information
will be filed before the Original Registration Statement becomes effective.

                 (c)       If the Company has elected to rely upon Rule 430A,
the price to the public per share for the Initial U.S.  Shares and the purchase
price per share for the Initial U.S. Shares to be paid by the several U.S.
Underwriters shall be agreed upon and set forth in the U.S. Price Determination
Agreement.  In the event that the U.S. Price Determination Agreement has not
been executed by the close of business on the fourteenth business day following
the later of the date on which the Original Registration Statement and any Rule
462(b) Registration Statement becomes effective, this Agreement shall terminate
forthwith, without liability of any party to any other party except that
Sections 7, 8 and 9 shall remain in effect.

                 (d)       In addition, on the basis of the representations and
warranties herein contained, and subject to the terms and conditions herein set
forth, the Selling Stockholders hereby grant an option to the U.S.
Underwriters, severally and not jointly, to purchase up to an aggregate of
540,000 additional U.S. Option Shares, as set forth opposite such Selling
Stockholder's name on Schedule A, at the same purchase price per share as shall
be applicable to the Initial U.S. Shares.  The option hereby granted will
expire 30 days after the later of the date upon which the Original Registration
Statement and any Rule 462(b) Registration Statement becomes effective or, if
the Company has elected to rely upon Rule 430A, the date of the U.S. Price
Determination Agreement, and may be exercised, in whole or in part (but not
more than once), only for the purpose of covering over-allotments that may be
made in connection with the offering and distribution of the Initial U.S.
Shares upon notice by the U.S.  Representatives to the Selling Stockholders
setting forth the aggregate number of U.S. Option Shares as to which the
several U.S.  Underwriters are exercising the
<PAGE>   17
                                       16

option, and the time and date of payment and delivery thereof.  Such time and
date of delivery (the "Date of Delivery") shall be determined by the U.S.
Representatives but shall not be later than seven full business days after the
exercise of such option, nor in any event prior to the Closing Time.  If the
option is exercised as to only a portion of the U.S. Option Shares, the Selling
Stockholders will sell their pro rata portion of the U.S. Option Shares to be
purchased by the U.S. Underwriters.  If the option is exercised as to all or
any portion of the U.S. Option Shares, the U.S. Option Shares as to which the
option is exercised shall be purchased by the U.S. Underwriters, severally and
not jointly, in their respective underwriting obligation proportions except as
otherwise provided in the U.S. Price Determination Agreement, subject to such
adjustments as the U.S. Underwriters, in their discretion, shall make to
eliminate any sales or purchases of fractional shares.

                 (e)       Payment of the purchase price for, and delivery of
certificates for, the Initial U.S. Shares shall be made at the offices of
Shearman & Sterling, 599 Lexington Avenue or 153 East 53rd Street, New York,
New York 10022, or at such other place as shall be agreed upon by the Company,
the Selling Stockholders and you, at 10:00 A.M. either (i) on the third full
business day after the later of the effective date of the Original Registration
Statement and any Rule 462(b) Registration Statement (or, if pricing of the
Shares occurs after 4:30 P.M. Eastern time, on the fourth full business day
thereafter), or (ii) if the Company has elected to rely upon Rule 430A, on the
third full business day after execution of the U.S. Price Determination
Agreement (or, if pricing of the Shares occurs after 4:30 P.M. Eastern time, on
the fourth full business day thereafter) (unless, in either case, postponed
pursuant to Section 11 or 12), or at such other time not more than ten full
business days thereafter as you, the Selling Stockholders and the Company shall
determine (such date and time of payment and delivery being herein called the
"Closing Time").  In addition, in the event that any or all of the U.S. Option
Shares are purchased by the U.S. Underwriters, payment of the purchase price
for, and delivery of certificates for, such U.S. Option Shares shall be made at
the offices of Shearman & Sterling, 599 Lexington Avenue or 153 East 53rd
Street, New York, New York 10022, or at such other place as the Company, the
Selling Stockholders and you shall determine, on the Date of Delivery as
specified in the notice from you to the Company.  Payment shall be made to the
Selling Stockholders by wire transfer in immediately available funds against
delivery to you for the respective accounts of the several U.S. Underwriters of
certificates for the U.S. Shares to be purchased by them.

                 (f)       Certificates for the Initial U.S. Shares and U.S.
Option Shares to be purchased by the U.S. Underwriters shall be in such
denominations and registered in such names as you may request in writing at
least two full business days before the Closing Time or the Date of Delivery,
as the case may be.  The certificates for the Initial U.S. Shares and U.S.
Option Shares will be made available in New York City for examination and
packaging by you not later than 10:00 A.M. on the business day prior to the
Closing Time or the Date of Delivery, as the case may be.
<PAGE>   18
                                       17

                 (g)       It is understood that each U.S. Underwriter has
authorized you, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the U.S. Shares that it has agreed to
purchase.  You, individually and not as U.S. Representatives, may (but shall
not be obligated to) make payment of the purchase price for the Initial U.S.
Shares, or U.S.  Option Shares, to be purchased by any U.S. Underwriter whose
check or checks shall not have been received by the Closing Time or the Date of
Delivery, as the case may be.

                 Section 3.  Certain Covenants of the Company.  The Company
covenants with each U.S. Underwriter as follows:

                 (a)       The Company will use its best efforts to cause the
         Registration Statement to become effective and, if the Company elects
         to rely upon Rule 430A and subject to Section 3(b) hereof, will comply
         with the requirements of Rule 430A and will notify the U.S.
         Representatives immediately (i) when the Registration Statement, or
         any post-effective amendment to the Registration Statement, shall have
         become effective, or any supplement to the Prospectuses or any amended
         Prospectuses shall have been filed, (ii) of the receipt of any
         comments from the Commission, (iii) of any request by the Commission
         to amend the Registration Statement or amend or supplement any
         Prospectus or for additional information and (iv) of the issuance by
         the Commission of any stop order suspending the effectiveness of the
         Registration Statement or of any order preventing or suspending the
         use of any preliminary prospectus, or of the suspension of the
         qualification of the Shares for offering or sale in any jurisdiction,
         or of the institution or threatening of any proceedings for any of
         such purposes.  The Company will use every reasonable effort to
         prevent the issuance of any such stop order or of any order preventing
         or suspending such use and, if any such order is issued, to obtain the
         lifting thereof at the earliest possible moment.

                 (b)       The Company will not at any time file or make any
         amendment to the Registration Statement, (including any filing under
         Rule 462(b)), file a Term Sheet or file or make any amendment or
         supplement (i) if the Company has not elected to rely upon Rule
         430(A), to the Prospectuses (including amendments of the documents
         incorporated by reference into the Prospectuses) or (ii) if the
         Company has elected to rely upon Rule 430A, to either the prospectuses
         included in the Original Registration Statement at the time it becomes
         effective or to the Prospectuses (including amendments of the
         documents incorporated by reference into the Prospectuses or to the
         Prospectuses pursuant to Item 12 and Rule 412), of which you shall not
         have previously been advised and furnished a copy, or to which you or
         counsel for the U.S. Underwriters shall reasonably object in writing.

                 (c)       The Company has furnished or will furnish to you and
         counsel for the U.S. Underwriters, without charge, as many copies of
         the Registration Statement as
<PAGE>   19
                                       18

         originally filed and of all amendments thereto, whether filed before
         or after the Registration Statement becomes effective, copies of all
         exhibits and documents filed therewith (including documents
         incorporated by reference into the Prospectuses pursuant to Item 12
         and Rule 412) and signed copies of all consents and certificates of
         experts, as you may reasonably request and has furnished or will
         furnish to you, for each other U.S. Underwriter, one conformed copy of
         the Registration Statement as originally filed and of each amendment
         thereto (including documents incorporated by reference into the
         Prospectus but without exhibits).

                 (d)       The Company will deliver to each U.S. Underwriter,
         without charge, from time to time until the later of the effective
         date of the Original Registration Statement and any Rule 462(b)
         Registration Statement (or, if the Company has elected to rely upon
         Rule 430A, until the time the U.S. Price Determination Agreement is
         executed and delivered), as many copies of each preliminary prospectus
         as such U.S. Underwriter may reasonably request, and the Company
         hereby consents to the use of such copies for purposes permitted by
         the 1933 Act.  The Company will deliver to each U.S. Underwriter,
         without charge, as soon as the Registration Statement shall have
         become effective (or, if the Company has elected to rely upon Rule
         430A, as soon as practicable after the U.S. Price Determination
         Agreement has been executed and delivered) and thereafter from time to
         time as requested during the period when the Prospectus is required to
         be delivered under the 1933 Act, such number of copies of the
         Prospectuses (as supplemented or amended) as such U.S. Underwriter may
         reasonably request.

                 (e)       The Company will comply in all material respects
         with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
         the 1934 Act Regulations so as to permit the completion of the
         distribution of the Shares as contemplated in this Agreement and in
         the Prospectuses.  If at any time when a prospectus is required by the
         1933 Act or the 1933 Act Regulations to be delivered in connection
         with sales of the Shares any event shall occur or condition exist as a
         result of which it is necessary, in the opinion of counsel for the
         U.S. Underwriters or counsel for the Company, to amend the
         Registration Statement or amend or supplement any Prospectus in order
         that the Prospectuses will not include an untrue statement of a
         material fact or omit to state a material fact necessary in order to
         make the statements therein not misleading in the light of the
         circumstances existing at the time it is delivered to a purchaser, or
         if it shall be necessary, in the opinion of either such counsel, at
         any such time to amend the Registration Statement or amend or
         supplement any Prospectus in order to comply with the requirements of
         the 1933 Act or the 1933 Act Regulations, the Company will promptly
         upon becoming aware of such event or condition prepare and file with
         the Commission, subject to Section 3(b) hereof, such amendment or
         supplement as may be necessary to correct such untrue statement or
         omission or to make the Registration Statement or the Prospectuses
         comply with such requirements.
<PAGE>   20
                                       19


                 (f)       The Company will use its best efforts, in
         cooperation with the U.S. Underwriters, to qualify the Shares for
         offering and sale under the applicable securities laws of such states
         and other jurisdictions as you may designate and to maintain such
         qualifications in effect for a period of not less than one year from
         the later of the effective date of the Original Registration Statement
         and any Rule 462(b) Registration Statement; provided, however, that
         the Company shall not be obligated to file any general consent to
         service of process or to qualify as a foreign corporation or as a
         dealer in securities in any jurisdiction in which it is not so
         qualified or to subject itself to taxation in respect of doing
         business in any jurisdiction in which it is not otherwise so subject.
         The Company will file such statements and reports as may be required
         by the laws of each jurisdiction in which the Shares have been
         qualified as above provided.

                 (g)       The Company will make generally available to its
         security holders as soon as practicable, but not later than 90 days
         after the close of the period covered thereby, an earnings statement
         of the Company (in form complying with the provisions of Rule 158 of
         the 1933 Act Regulations), covering a period of 12 months beginning
         after the later of the effective date of the Original Registration
         Statement and any Rule 462(b) Registration Statement and covering a
         period of 12 months beginning after the effective date of any
         post-effective amendment to the Registration Statement but not later
         than the first day of the Company's fiscal quarter next following such
         respective effective dates.

                 (h)       The Company, during the period when the Prospectuses
         are required to be delivered under the 1933 Act, will file promptly
         all documents required to be filed with the Commission pursuant to
         Section 13 or 14 of the 1934 Act subsequent to the time the
         Registration Statement becomes effective.

                 (i)       For a period of two years after the Closing Time,
         the Company will furnish to you and, upon request, to each U.S.
         Underwriter, copies of all annual reports, quarterly reports and
         current reports filed with the Commission on Forms 10-K, 10-Q and 8-K,
         or such other similar forms as may be designated by the Commission,
         and such other documents, reports and information as shall be
         furnished by the Company to its stockholders generally.

                 (j)       For a period of 180 days from the date hereof, the
         Company will not, without your prior written consent, directly or
         indirectly, sell, offer to sell, grant any option for the sale of, or
         otherwise dispose of, any Common Stock or securities convertible into
         Common Stock, other than to the U.S. Underwriters pursuant to this
         Agreement and the International Underwriters pursuant to the
         International Purchase Agreement (except for options to purchase
         shares of Common Stock granted to the Company's officers, directors or
         employees in the ordinary course of business,
<PAGE>   21
                                       20

         consistent with past practice, or the exercise of such options and
         similar options currently outstanding).

                 (k)       If the Company has elected to rely upon Rule 430A,
         it will take such steps as it deems necessary to ascertain promptly
         whether the form of prospectus transmitted for filing under Rule
         424(b) was received for filing by the Commission and, in the event
         that it was not, it will promptly file such prospectus.

                 (l)       If the Company has elected to rely on Rule 434, it
         will comply with the requirements of Rule 434, and the Prospectuses
         will not be "materially different," as such term is used in Rule 434,
         from the prospectus included in the Registration Statement at the time
         it becomes effective.

                 (m)       If the Company elects to rely upon Rule 462(b), the
         Company shall both file a Rule 462(b) Registration Statement with the
         Commission in compliance with Rule 462(b) and pay the applicable fees
         in accordance with Rule 111 of the 1933 Act Regulations by the earlier
         of (i) 10:00 P.M. Eastern time on the date of the U.S. Price
         Determination Agreement and (ii) the time confirmations are sent or
         given, as specified by Rule 462(b).

                 (n)       If applicable, the Company will comply with all the
         provisions of Florida H.B. 1771, codified as Section 517.075 of the
         Florida statutes, and all regulations promulgated thereunder relating
         to issuers doing business in Cuba.

                 Section 4.  Payment of Expenses.  The Company will pay and
bear all costs and expenses incident to the performance of the obligations of
the Company and of the Selling Stockholders under this Agreement, including (a)
the preparation, printing and filing of the Registration Statement (including
financial statements and exhibits), as originally filed and as amended, the
preliminary prospectuses and the Prospectuses and any amendments or supplements
thereto, and the cost of furnishing copies thereof to the U.S. Underwriters,
(b) the preparation, printing and distribution of this Agreement (except for
the U.S. Price Determination Agreement), the Intersyndicate Agreement among the
U.S. Underwriters and International Underwriters, the Agreement Among
International Underwriters and the Blue Sky Survey (which shall not be
typeset), (c) the delivery of the certificates for the U.S.  Shares to the U.S.
Underwriters (except for any stock transfer taxes payable upon the sale of the
U.S. Shares to the U.S.  Underwriters, which shall be paid by the Selling
Stockholders), (d) the fees and disbursements of the Company's counsel and
accountants and the Selling Stockholders' counsel, (e) the qualification of the
U.S. Shares under the applicable securities laws in accordance with Section
3(f) and any filing for review of the offering with the NASD, including filing
fees and reasonable fees and disbursements of Shearman & Sterling as counsel
for the U.S. Underwriters solely in connection therewith, and in connection
with
<PAGE>   22
                                       21

the Blue Sky Survey and (f) the listing fees and expenses incurred in
connection with listing the Shares on the New York Stock Exchange.

                 If this Agreement is terminated by you in accordance with the
provisions of Section 5, 10(a)(i) or 12, the Company shall reimburse the U.S.
Underwriters for all their out-of-pocket expenses, including the reasonable
fees and disbursements of Shearman & Sterling as counsel for the U.S.
Underwriters.

                 Section 5.  Conditions of U.S. Underwriters' Obligations.  In
addition to the execution and delivery of the U.S.  Price Determination
Agreement, the obligations of the several U.S. Underwriters to purchase and pay
for the U.S. Shares that they have respectively agreed to purchase pursuant to
this Agreement (including any U.S. Option Shares as to which the option granted
in Section 2 has been exercised and the Date of Delivery determined by you is
the same as the Closing Time) are subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
contained herein (including those contained in the U.S. Price Determination
Agreement) or in certificates of any officer of the Company or any Subsidiary
or certificates by or on behalf of the Selling Stockholders delivered pursuant
to the provisions hereof, to the performance by the Company and the Selling
Stockholders of their obligations hereunder, and to the following further
conditions:

                 (a)       The Original Registration Statement shall have
         become effective not later than 5:30 P.M. on the date of this
         Agreement or, with your consent, at a later time and date not later,
         however, than 5:30 P.M. on the first business day following the date
         hereof and if the Company has elected to rely upon Rule 462(b), the
         Rule 462(b) Registration Statement shall have become effective not
         later than the earlier of (i) 9:00 A.M. Eastern time on the day
         following the date of the U.S. Price Determination Agreement, and (ii)
         the time confirmations are sent or given, as specified by Rule 462(b),
         or, with respect to the Original Registration Statement, at such later
         time or on such later date as you may agree to in writing with the
         approval of a majority in interest of the several U.S. Underwriters;
         and at the Closing Time no stop order suspending the effectiveness of
         the Registration Statement shall have been issued under the 1933 Act
         and no proceedings for that purpose shall have been instituted or
         shall be pending or, to your knowledge or the knowledge of the
         Company, shall be contemplated by the Commission, and any request made
         to the Company on the part of the Commission for additional
         information with respect to the Registration Statement shall have been
         complied with to the satisfaction of Shearman & Sterling as counsel
         for the U.S. Underwriters.  If the Company has elected to rely upon
         Rule 430A, prospectuses containing the Rule 430A Information shall
         have been filed with the Commission in accordance with Rule 424(b) (or
         a post-effective amendment providing such information shall have been
         filed and declared effective in accordance with the requirements of
         Rule 430A).  If the
<PAGE>   23
                                       22

         Company has elected to rely upon Rule 434, a Term Sheet, which
         together with the preliminary prospectus last furnished to the U.S.
         Underwriters in connection with the offering of the Shares shall not
         be "materially different," as such term is used in Rule 434, from the
         prospectus included in the Original Registration Statement at the time
         it becomes effective, shall have been filed with the Commission in
         accordance with Rule 424(b).

                 (b)       At the Closing Time, you shall have received a
         signed opinion of Wachtell, Lipton, Rosen & Katz, special counsel for
         the Company, dated as of the Closing Time, together with signed or
         reproduced copies of such opinion for each of the other U.S.
         Underwriters, in form and substance reasonably satisfactory to counsel
         for the U.S. Underwriters, in the form set forth in Exhibit C hereto.

                 (c)       At the Closing Time, you shall have received a
         signed opinion of Laurene H. Horiszny, Esq., Vice President, Secretary
         and General Counsel for the Company, dated as of the Closing Time,
         together with signed or reproduced copies of such opinion for each of
         the other U.S. Underwriters, in form and substance reasonably
         satisfactory to counsel for the U.S. Underwriters, in the form set
         forth in Exhibit D hereto.

                 (d)       At the Closing Time, you shall have received a
         signed opinion of NSK-Warner's Japanese counsel, dated as of the
         Closing Time, together with signed or reproduced copies of such
         opinion for each of the other U.S. Underwriters, in form and substance
         reasonably satisfactory to counsel for the U.S. Underwriters, in the
         form set forth in Exhibit E hereto.

                 (e)       At the Closing Time you shall have received a signed
         opinion of the attorneys listed on Schedule C attached hereto for the
         Selling Stockholders specified opposite such attorney's name, each
         dated as of the Closing Time, together with signed or reproduced
         copies of such opinion for each of the other U.S. Underwriters, in
         form and substance reasonably satisfactory to counsel for the U.S.
         Underwriters, each, with respect to the Selling Stockholders that such
         counsel represents, in the form set forth in Exhibit F hereto.

                 (f)       At the Closing Time, you shall have received the
         favorable opinion of Shearman & Sterling, counsel for the U.S.
         Underwriters, dated as of the Closing Time, together with signed or
         reproduced copies of such opinion for each of the other U.S.
         Underwriters, to the effect that the opinions delivered pursuant to
         Sections 5(b), 5(c), 5(d) and 5(e) hereof appear on their face to be
         appropriately responsive to the requirements of this Agreement except,
         specifying the same, to the extent waived by you, and with respect to
         the incorporation and legal existence of the Company, this Agreement,
         the Registration Statement, the Prospectuses and such other related
<PAGE>   24
                                       23

         matters as you may require.  In giving such opinion such counsel may
         rely, as to all matters governed by the laws of jurisdictions other
         than the law of the State of New York, the federal law of the United
         States and the General Corporation Law of the State of Delaware, upon
         the opinions of counsel satisfactory to you.  Such counsel may also
         state that, insofar as such opinion involves factual matters, they
         have relied, to the extent they deem proper, upon certificates of
         officers of the Company and the Subsidiaries and the Selling
         Stockholders and certificates of public officials.

                 (g)       At the Closing Time, (i) the Registration Statement
         and the Prospectuses, as they may then be amended or supplemented,
         shall comply in all material respects with the requirements of the
         1933 Act and the 1933 Act Regulations, the Company shall have complied
         in all material respects with Rule 430A (if it shall have elected to
         rely thereon) and Rule 434 (if it shall have elected to rely thereon)
         and neither the Registration Statement nor the Prospectuses, as they
         may then be amended or supplemented, shall contain an untrue statement
         of a material fact or omit to state a material fact required to be
         stated therein or necessary to make the statements therein not
         misleading, (ii) there shall not have been, since the respective dates
         as of which information is given in the Registration Statement, any
         material adverse change in the condition (financial or otherwise),
         results of operations, business affairs or business prospects of the
         Company and the Subsidiaries, considered as one enterprise, whether or
         not arising in the ordinary course of business, (iii) no action, suit
         or proceeding at law or in equity shall be pending or, to the
         knowledge of the Company, threatened against the Company or any
         Subsidiary that would be required to be set forth in the Prospectuses
         other than as set forth therein and no proceedings shall be pending
         or, to the knowledge of the Company, threatened against the Company or
         any Subsidiary before or by any federal, state or other commission,
         board or administrative agency wherein an unfavorable decision, ruling
         or finding could materially adversely affect the condition (financial
         or otherwise), results of operations, business affairs or business
         prospects of the Company and the Subsidiaries, considered as one
         enterprise, other than as set forth in the Prospectuses, (iv) the
         Company shall have complied with all agreements and satisfied all
         conditions set forth in this Agreement on its part to be performed or
         satisfied at or prior to the Closing Time and (v) the other
         representations and warranties of the Company set forth in Section
         1(a) shall be accurate as though expressly made at and as of the
         Closing Time.  At the Closing Time, you shall have received a
         certificate of the President or a Vice President, and the Treasurer or
         an Assistant Treasurer, of the Company, dated as of the Closing Time,
         to such effect.

                 (h)       At the Closing Time, the representations and
         warranties of each Selling Stockholder set forth in Section 1(b) shall
         be accurate as though expressly made at and as of the Closing Time.
         At the Closing Time, you shall have received a
<PAGE>   25
                                       24

         certificate of or on behalf of each Selling Stockholder, dated as of
         the Closing Time, to such effect with respect to such Selling
         Stockholder.

                 (i)       At the time that this Agreement is executed by the
         Company, you shall have received from Deloitte & Touche LLP a letter,
         dated such date, in form and substance satisfactory to you, together
         with signed or reproduced copies of such letter for each of the other
         U.S. Underwriters, confirming that they are independent public
         accountants with respect to the Company within the meaning of the 1933
         Act and the applicable published 1933 Act Regulations, and stating in
         effect that:

                           (i)    in their opinion, the audited financial
                 statements and the related financial statement schedules
                 included or incorporated by reference in the Registration
                 Statement and the Prospectuses comply as to form in all
                 material respects with the applicable accounting requirements
                 of the 1933 Act and the 1933 Act Regulations;

                           (ii)   on the basis of procedures (but not an
                 examination in accordance with generally accepted auditing
                 standards) consisting of a reading of the unaudited interim
                 consolidated financial statements of the Company included or
                 incorporated by reference in the Registration Statement and
                 the Prospectuses (collectively, the "10-Q Financials"), a
                 reading of the latest available unaudited interim consolidated
                 financial statements of the Company, a reading of the minutes
                 of all meetings of the stockholders and directors of the
                 Company and the Subsidiaries and each Committee of the
                 Company's Board of Directors and of each Committee of the
                 Board of Directors of any Subsidiary since January 1, 1996,
                 inquiries of certain officials of the Company and the
                 Subsidiaries responsible for financial and accounting matters,
                 and such other inquiries and procedures as may be specified in
                 such letter, nothing came to their attention that caused them
                 to believe that:

                                  (A)      the 10-Q Financials incorporated by
                           reference in the Registration Statement and the
                           Prospectuses do not comply as to form in all
                           material respects with the accounting requirements
                           of the 1934 Act and the 1934 Act Regulations
                           applicable to unaudited financial statements
                           included in Form 10-Q or any material modifications
                           should be made to the 10-Q Financials included or
                           incorporated by reference in the Registration
                           Statement and the Prospectuses for them to be in
                           conformity with generally accepted accounting
                           principles;

                                  (B)      at May 31, 1996 and at a specified
                           date not more than five days prior to the date of
                           this Agreement, there was any change in the capital
                           stock of the Company and the Subsidiaries or any
                           decrease
<PAGE>   26
                                       25

                           in the consolidated net current assets or
                           stockholders' equity of the Company and the
                           Subsidiaries or any increase in long-term debt of
                           the Company and the Subsidiaries, in each case as
                           compared with amounts shown in the latest
                           consolidated balance sheet included in the
                           Registration Statement, except in each case for
                           changes, decreases or increases that the
                           Registration Statement discloses have occurred or
                           may occur; or

                                  (C)      for the period from April 1, 1996 to
                           May 31, 1996 and for the period from April 1, 1996
                           to a specified date not more than five days prior to
                           the date of this Agreement, there was any decrease
                           in net sales, equity in affiliate earnings and other
                           income, earnings before interest and finance charges
                           and income taxes or net earnings, in each case as
                           compared with the comparable period in the preceding
                           year;

                           (iii)  based upon the procedures set forth in clause
                 (ii) above and a reading of the Selected Historical Financial
                 Data included in the Registration Statement and a reading of
                 the financial statements from which certain of such data were
                 derived, nothing has come to their attention that gives them
                 reason to believe that the Selected Historical Financial Data
                 included in the Registration Statement do not comply as to
                 form in all material respects with the applicable accounting
                 requirements of the 1933 Act and the 1933 Act Regulations,
                 that the information set forth therein is not fairly stated in
                 relation to the financial statements from which it was derived
                 or that the financial statements not included in the
                 Registration Statement from which certain of such data were
                 derived are not in conformity with generally accepted
                 accounting principles applied on a basis substantially
                 consistent with that of the audited financial statements
                 included in the Registration Statement; and

                           (iv)   they are unable to and do not express any
                 opinion on the Pro Forma Financial Data (the "Pro Forma
                 Statement") included in the Registration Statement or on the
                 pro forma adjustments applied to the historical amounts
                 included in the Pro Forma Statement; however, for purposes of
                 such letter they have:

                                  (A)      read the Pro Forma Statement;

                                  (B)      made inquiries of certain officials
                           of the Company and of the Coltec Subsidiaries who
                           have responsibility for financial and accounting
                           matters about the basis for their determination of
                           the pro forma adjustments and whether the Pro Forma
                           Statement complies as
<PAGE>   27
                                       26

                           to form in all material respects with the applicable
                           accounting requirements of Rule 11-02 of Regulation
                           S-X; and

                                  (C)      proved the arithmetic accuracy of
                           the application of the pro forma adjustments to the
                           historical amounts in the Pro Forma Statement; and

                 on the basis of such procedures, and such other inquiries and
                 procedures as may be specified in such letter, nothing came to
                 their attention that caused them to believe that the Pro Forma
                 Statement included in the Registration Statement does not
                 comply as to form in all material respects with the applicable
                 requirements of Rule 11-02 of Regulation S-X or that the pro
                 forma adjustments have not been properly applied to the
                 historical amounts in the compilation of those statements;

                           (v)    in addition to the procedures referred to in
                 clause (ii) above, they have performed other specified
                 procedures, not constituting an audit, with respect to certain
                 amounts, percentages, numerical data and financial information
                 appearing in the Registration Statement, which have previously
                 been specified by you and which shall be specified in such
                 letter, and have compared certain of such items with, and have
                 found such items to be in agreement with, the accounting and
                 financial records of the Company.

                 (j)       At the time that this Agreement is executed by the
         Company, you shall have received from KPMG Peat Marwick a letter,
         dated such date, in form and substance satisfactory to you, together
         with signed or reproduced copies of such letter for each of the other
         International Underwriters, confirming that they are independent
         public accountants with respect to the NSK-Warner within the meaning
         of the 1933 Act and applicable published 1933 Act Regulations, and
         stating in effect that:

                           (i)    in their opinion, the audited financial
                 statements and the related financial statement schedules for
                 NSK-Warner included or incorporated by reference in the
                 Registration Statement and the Prospectuses comply as to form
                 in all material respects with the applicable accounting
                 requirements of the 1933 Act and the 1933 Act Regulations;

                           (ii)   they have read the latest available unaudited
                 interim consolidated financial statements of NSK-Warner, the
                 minutes of all meetings of the stockholders and directors of
                 NSK-Warner and each Committee of the Board of Directors since
                 April 1, 1996, inquired of certain officials of NSK-Warner
                 responsible for financial and accounting matters, and made
                 such other inquiries
<PAGE>   28
                                       27

                 and performed such other procedures as may be specified in such
                 letter, and officials of NSK-Warner stated that:

                                  (A)      at June 30, 1996 and at a specified
                           date not more than five days prior to the date of
                           this Agreement, there was no change in the common
                           stock of NSK-Warner or decrease in the net current
                           assets or stockholders' equity of NSK-Warner or
                           increase in the notes payable or long-term debt of
                           NSK-Warner, in each case as compared with amounts
                           shown in the latest balance sheet included or
                           incorporated by reference in the Registration
                           Statement; or

                                  (B)      for the period from April 1, 1996 to
                           June 30, 1996 and for the period from June 30, 1996
                           to a specified date not more than five days prior to
                           the date of this Agreement, there was no decrease in
                           sales, earnings before income taxes or net earnings,
                           in each case as compared with the corresponding
                           period in the preceding year.

                 (k)       At the time that this Agreement is executed, you
         shall have received from Arthur Andersen LLP a letter, dated such
         date, in form and substance satisfactory to you, together with signed
         or reproduced copies of such letter for each of the other U.S.
         Underwriters, confirming that they are independent public accountants
         with respect to the Coltec Subsidiaries and the Company within the
         meaning of the 1933 Act and applicable published 1933 Act Regulations,
         and stating in effect that:

                           (i)    in their opinion, the audited financial
                 statements and the related financial statement schedules for
                 the Coltec Subsidiaries included or incorporated by reference
                 in the Registration Statement and the Prospectuses comply as
                 to form in all material respects with the applicable
                 accounting requirements of the 1933 Act, the 1934 Act, the
                 1933 Act Regulations and the 1934 Act Regulations;

                           [(ii)  they have read the latest available unaudited
                 interim consolidated financial statements of the Coltec
                 Subsidiaries, the minutes of all meetings of the stockholders
                 and directors of the Coltec Subsidiaries and each Committee of
                 the Board of Directors since April 1, 1996, inquired of
                 certain officials of the Coltec Subsidiaries responsible for
                 financial and accounting matters, and made such other
                 inquiries and performed such other procedures as may be
                 specified in such letter, and officials of the Coltec
                 Subsidiaries stated that]:

                                  (A)      at June 17, 1996, there was no
                           change in the capital stock of the Coltec
                           Subsidiaries or any decrease in the consolidated net
<PAGE>   29
                                       28

                           current assets or stockholders' equity of the Coltec
                           Subsidiaries or any increase in long-term debt of
                           the Coltec Subsidiaries, in each case as compared
                           with amounts shown in the latest consolidated
                           balance sheet included or incorporated by reference
                           in the Registration Statement, except in each case
                           for changes, decreases or increases that the
                           Registration Statement discloses have occurred or
                           may occur; or

                                  (B)      for the period from April 1, 1996 to
                           May 31, 1996, there was no decrease in net sales,
                           earnings before income taxes or net earnings, in
                           each case as compared with the comparable period in
                           the preceding year, except in each case for any
                           decreases that the Registration Statement discloses
                           have occurred or may occur; and

                           (iii)  based upon the procedures set forth in clause
                 (ii) above, nothing has come to their attention that gives
                 them reason to believe that the information set forth in the
                 latest available unaudited interim consolidated financial
                 statements of the Coltec Subsidiaries is not fairly stated in
                 relation to the financial statements from which it was derived
                 or that the financial statements not included in the
                 Registration Statement from which certain of such data were
                 derived are not in conformity with generally accepted
                 accounting principles applied on a basis substantially
                 consistent with that of the audited financial statements
                 included in the Registration Statement.

                 (l)       At the Closing Time, you shall have received from
         each of Deloitte & Touche LLP, KPMG Peat Marwick and Arthur Andersen
         LLP a letter, in form and substance satisfactory to you and dated as
         of the Closing Time, to the effect that they reaffirm the statements
         made in the letters furnished pursuant to Sections 5(i), 5(j) and
         5(k), respectively, except that the specified date referred to shall
         be a date not more than five days prior to the Closing Time.

                 (m)       At the Closing Time, counsel for the U.S.
         Underwriters shall have been furnished with all such documents,
         certificates and opinions as they may reasonably request for the
         purpose of enabling them to pass upon the sale of the Shares as
         contemplated in this Agreement and the matters referred to in Section
         5(f) and in order to evidence the accuracy and completeness of any of
         the representations, warranties or statements of the Company and the
         Selling Stockholders, the performance of any of the covenants of the
         Company, or the fulfillment of any of the conditions herein contained;
         and all proceedings taken by the Company and the Selling Stockholders
         at or prior to the Closing Time in connection with the sale of the
         Shares as contemplated in this Agreement shall be reasonably
         satisfactory in form and substance to you and to counsel for the U.S.
         Underwriters.
<PAGE>   30
                                       29

                 (n)       The "lock-up" letters which are substantially in the
         form of Exhibit G attached hereto from (a) each executive officer or
         director of the Company and (b) each stockholder of the Company who
         (i) owns at least 1% of the outstanding shares of Common Stock and
         (ii) who is a party to the Registration Rights Agreement have been
         delivered to you on or before the date hereof.

                 If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as required by this Agreement, this Agreement may
be terminated by you on notice to the Company and the Selling Stockholders at
any time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party, except as provided in Section 4
hereof.  Notwithstanding any such termination, the provisions of Sections 7, 8
and 9 herein shall remain in effect.

                 Section 6.  Conditions to Purchase of U.S. Option Shares.  In
the event that the U.S. Underwriters exercise their option granted in Section 2
hereof to purchase all or any of the U.S. Option Shares and the Date of
Delivery determined by you pursuant to Section 2 hereof is later than the
Closing Time, the obligations of the several U.S. Underwriters to purchase and
pay for the U.S. Option Shares that they shall have respectively agreed to
purchase pursuant to this Agreement are subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
herein contained, to the performance by the Company and the Selling
Stockholders of their obligations hereunder and to the following further
conditions:

                 (a)       The Registration Statement shall remain effective at
         the Date of Delivery, and, at the Date of Delivery, no stop order
         suspending the effectiveness of the Registration Statement shall have
         been issued under the 1933 Act and no proceedings for that purpose
         shall have been instituted or shall be pending or, to your knowledge
         or the knowledge of the Company, shall have been threatened by the
         Commission, and any request on the part of the Commission for
         additional information shall have been complied with to the reasonable
         satisfaction of counsel for the U.S. Underwriters.

                 (b)       At the Date of Delivery, the provisions of Sections
         5(g)(i) through 5(g)(v) shall have been complied with at and as of the
         Date of Delivery and, at the Date of Delivery, you shall have received
         a certificate of the President or a Vice President, and the Treasurer
         or an Assistant Treasurer, of the Company, dated as of the Date of
         Delivery, to such effect.

                 (c)       At the Date of Delivery, you shall have received the
         favorable opinions of Wachtell, Lipton, Rosen & Katz, special counsel
         for the Company, Laurene H. Horiszny, General Counsel of the Company,
         NSK-Warner's Japanese counsel and counsel for the Selling
         Stockholders, together with signed or reproduced
<PAGE>   31
                                       30

         copies of such opinions for each of the other U.S. Underwriters, in
         each case in form and substance reasonably satisfactory to counsel for
         the U.S. Underwriters, dated as of the Date of Delivery, relating to
         the U.S. Option Shares and otherwise to the same effect as the
         opinions required by Section 5(b), 5(c), 5(d) and 5(e), respectively.

                 (d)       At the Date of Delivery, you shall have received the
         favorable opinion of Shearman & Sterling, counsel for the U.S.
         Underwriters, dated as of the Date of Delivery, relating to the U.S.
         Option Shares and otherwise to the same effect as the opinion required
         by Section 5(f).

                 (e)       At the Date of Delivery, you shall have received a
         letter from each of  Deloitte & Touche LLP, KPMG Peat Marwick and
         Arthur Andersen LLP, in form and substance satisfactory to you and
         dated as of the Date of Delivery, to the effect that they reaffirm the
         statements made in the letters furnished pursuant to Section 5(i),
         5(j) and 5(k), respectively, except that the specified date referred
         to shall be a date not more than five days prior to the Date of
         Delivery.

                 (f)       At the Date of Delivery, you shall have received
         from each of the Selling Stockholders (or on their behalf)
         certificates substantially in the form of the certificates furnished
         to you pursuant to Section 5(h), except that such certificates shall
         be as of the Date of Delivery.

                 (g)       At the Date of Delivery, the representations and
         warranties of each Selling Stockholder set forth in Section 1(b)
         hereof shall be accurate as though expressly made at and as of the
         Date of Delivery.

                 (h)       At the Date of Delivery, counsel for the U.S.
         Underwriters shall have been furnished with all such documents,
         certificates and opinions as they may reasonably request for the
         purpose of enabling them to pass upon the sale of the U.S. Option
         Shares as contemplated in this Agreement and the matters referred to
         in Section 6(d) and in order to evidence the accuracy and completeness
         of any of the representations, warranties or statements of the Company
         or the Selling Stockholders, the performance of any of the covenants
         of the Company, or the fulfillment of any of the conditions herein
         contained; and all proceedings taken by the Company and the Selling
         Stockholders at or prior to the Date of Delivery in connection with
         the sale of the U.S. Option Shares as contemplated in this Agreement
         shall be reasonably satisfactory in form and substance to you and to
         counsel for the U.S. Underwriters.

                 Section 7.  Indemnification. (a)  The Company agrees to
indemnify and hold harmless each U.S. Underwriter and each person, if any, who
controls any U.S. Underwriter within the meaning of Section 15 of the 1933 Act
to the extent and in the manner set forth in clauses (i), (ii) and (iii) below.
In addition, each Selling Stockholder, severally and not
<PAGE>   32
                                       31

jointly (but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) in reliance upon and in conformity with written information
furnished by such Selling Stockholder, expressly for use in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto), a copy of which written
information shall have been previously delivered to you), agrees to indemnify
and hold harmless each U.S. Underwriter and each person, if any, who controls
any U.S. Underwriter within the meaning of Section 15 of the 1933 Act as
follows:

                 (i)       against any and all loss, liability, claim, damage
         and expense whatsoever, as incurred, arising out of an untrue
         statement or alleged untrue statement of a material fact contained in
         the Registration Statement (or any amendment thereto), including the
         Rule 430A Information and the Rule 434 Information, if applicable, and
         all documents incorporated therein by reference, or the omission or
         alleged omission therefrom of a material fact required to be stated
         therein or necessary to make the statements therein not misleading or
         arising out of an untrue statement or alleged untrue statement of a
         material fact contained in any preliminary prospectus or the
         Prospectuses (or any amendment or supplement thereto) or the omission
         or alleged omission therefrom of a material fact necessary in order to
         make the statements therein, in the light of the circumstances under
         which they were made, not misleading, or if Rule 434 is used, if the
         Prospectus is "materially different", as such term is used in Rule
         434, from the prospectus included in the Original Registration
         Statement at the time it becomes effective;

                 (ii)      against any and all loss, liability, claim, damage
         and expense whatsoever, as incurred, to the extent of the aggregate
         amount paid in settlement of any litigation, or investigation or
         proceeding by any governmental agency or body, commenced or
         threatened, or of any claim whatsoever based upon any such untrue
         statement or omission, or any such alleged untrue statement or
         omission, if such settlement is effected with the written consent of
         the Company and the Selling Stockholders; and

                 (iii)     against any and all expense whatsoever, as incurred
         (including, subject to Section 7(c) hereof, fees and disbursements of
         counsel chosen by you), reasonably incurred in investigating,
         preparing or defending against any litigation, or investigation or
         proceeding by any governmental agency or body, commenced or
         threatened, or any claim whatsoever based upon any such untrue
         statement or omission, or any such alleged untrue statement or
         omission, to the extent that any such expense is not paid under
         subparagraph (i) or (ii) above;

provided, however, that this indemnity agreement does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged
<PAGE>   33
                                       32

untrue statement or omission made in reliance upon and in conformity with
written information furnished to the Company by any U.S.  Underwriter through
you expressly for use in the Registration Statement (or any amendment thereto)
including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectuses (or any amendment
or supplement thereto); provided further that the liability of a Selling
Stockholder pursuant to this Section 7 is limited to the amount of the net
proceeds of the offering of the U.S. Shares (after deducting the underwriting
discount, but before deducting expenses) received by such Selling Stockholder.

                 Insofar as this indemnity agreement may permit indemnification
for liabilities under the 1933 Act of any person who is a partner of a U.S.
Underwriter or who controls a U.S. Underwriter within the meaning of Section 15
of the 1933 Act and who, at the date of this Agreement, is a director, officer
or controlling person of the Company, such indemnity agreement is subject to
the undertaking of the Company in the Registration Statement under Item 17
thereof.

                 (b)       Each U.S. Underwriter severally agrees to indemnify
and hold harmless the Company, its directors, each of its officers who signed
the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act and each Selling Stockholder
and each person, if any, who controls any Selling Stockholder within the
meaning of Section 15 of the 1933 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 7(a),
as incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment thereto) including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto) in reliance upon and in conformity
with written information furnished to the Company by such U.S. Underwriter
through you expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, or such preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto).

                 (c)       The Company agrees to indemnify and hold harmless,
to the extent permitted by law, each Selling Stockholder, its directors and
officers or general and limited partners (and the directors and officers
thereof), and each other person, if any, who controls such Selling Stockholder
within the meaning of the 1933 Act, against any and all losses, claims, damages
or liabilities, joint or several, and expenses (including any amounts paid in
any settlement effected with the Company's consent) to which such Selling
Stockholder, any such director or officer or general or limited partner or
controlling person may become subject under the 1933 Act, common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in
the
<PAGE>   34
                                       33

Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, and all documents
incorporated therein by reference, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, together
with the documents incorporated by reference therein (as amended or
supplemented if the Company shall have filed with Commission any amendment
thereof or supplemented thereto), if used prior to the effective date of the
Registration Statement, or contained in the Prospectus (as amended or
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplemented if the Company shall have filed with the Commission any
amendment thereof or supplement thereto), or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (iii) any violation by the Company of
any federal, state or common law rule or regulation applicable to the Company
and relating to action required of or inaction by the Company in connection
with the offering, and the Company will reimburse each such Selling Stockholder
and each such director, officer, general or limited partner, and controlling
person for any legal or any other expenses reasonably incurred by any of them
in connection with investigating or defending any such loss, claim, liability,
action or proceeding; provided, that the Company shall not be liable to such
Selling Stockholder or any such director, officer, general or limited partner
or controlling person in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in such Registration Statement (or any
amendment or supplement thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or in any such preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company by or on behalf
of such Selling Stockholder or any such director, officer, general or limited
partner or controlling person, specifically stating that it is for use in the
preparation thereof.

                 (d)       Each Selling Stockholder agrees to indemnify and
hold harmless (in the same manner and to the same extent as set forth in
Section 7(c)) the Company and its directors and officers and each person
controlling the Company within the meaning of the 1933 Act and all other
Selling Stockholders and their directors, officers, general and limited
partners and respective controlling persons with respect to any statement or
alleged statement in or omission or alleged omission from the Registration
Statement (or any amendment or supplement thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto), if
such statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company or its representatives by or on behalf of the undersigned specifically
stating that it is for use in the
<PAGE>   35
                                       34

preparation of the Registration Statement (or any amendment or supplement
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, preliminary prospectus or the Prospectuses (or any amendment or
supplement thereto), or a document incorporated by reference into any of the
foregoing; provided, however, that the liability of each Selling Stockholder
pursuant to this Section 7(d) is limited to the proceeds received by such
Selling Stockholder from the sale of the Shares pursuant to this Agreement.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any of the other Selling
Stockholders or any of its respective directors, officers, general or limited
partners or controlling persons and shall survive the transfer of the Shares by
each Selling Stockholder.

                 (e)       Each indemnified party shall give prompt notice to
each indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve it from any liability which it may have otherwise than
on account of this indemnity agreement.  An indemnifying party may participate
at its own expense in the defense of such action.  In no event shall the
indemnifying party or parties be liable for the fees and expenses of more than
one counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.  If it so elects within a
reasonable time after receipt of such notice, an indemnifying party, jointly
with any other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it and approved by the
indemnified parties defendant in such action, unless such indemnified parties
reasonably object to such assumption on the ground that there may be legal
defenses available to them which are different from or are in addition to those
available to such indemnifying party.  If an indemnifying party assumes the
defense of such action, the indemnifying parties shall not be liable for any
fees and expenses of counsel for the indemnified parties incurred thereafter in
connection with such action.

                 Section 8.  Contribution.  In order to provide for just and
equitable contribution in circumstances under which the indemnity provided for
in Section 7 is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, the
Selling Stockholders and the U.S. Underwriters shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by the Company, the Selling
Stockholders and one or more of the U.S. Underwriters, as incurred, in such
proportions that (a) the U.S. Underwriters are responsible for that portion
represented by the percentage that the underwriting discount appearing on the
cover page of the Prospectuses or, if Rule 434 is used, the corresponding
location on the Term Sheet, bears to the offering price appearing thereon and
(b) the Company and the Selling Stockholders are severally responsible for the
balance on the same basis as each of them would have been obligated to provide
indemnification pursuant to Section 7; provided, however, that no person guilty
of fraudulent
<PAGE>   36
                                       35

misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.  For purposes of this Section, each person, if
any, who controls a U.S. Underwriter within the meaning of Section 15 of the
1933 Act shall have the same rights to contribution as such U.S. Underwriter,
and each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or a
Selling Stockholder within the meaning of Section 15 of the 1933 Act shall have
the same rights to contribution as the Company or a Selling Stockholder, as the
case may be.

                 Section 9.  Representations, Warranties and Agreements to
Survive Delivery.  The representations, warranties, indemnities, agreements and
other statements of the Company or its officers or the Selling Stockholders set
forth in or made pursuant to this Agreement will remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
Selling Stockholders, the Company, any U.S. Underwriter or any person who
controls a Selling Stockholder or any U.S.  Underwriter within the meaning of
Section 15 of the 1933 Act, and will survive delivery of and payment for the
U.S. Shares.

                 Section 10.  Termination of Agreement.  (a)  You may terminate
this Agreement, by notice to the Company and the Selling Stockholders, at any
time at or prior to the Closing Time (i) if there has been, since the
respective dates as of which information is given in the Registration
Statement, any material adverse change in the condition (financial or
otherwise), results of operations, business affairs or business prospects of
the Company and the Subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, or any
outbreak of hostilities or escalation thereof or other calamity or crisis the
effect of which on the financial markets of the United States is such as to
make it, in your judgment, impracticable to market the Shares or enforce
contracts for the sale of the Shares or (iii) if trading in any securities of
the Company has been suspended by the Commission, or if trading generally on
the New York Stock Exchange or in the over-the-counter market has been
suspended, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by such exchange or by
order of the Commission, the New York Stock Exchange or any other governmental
authority or (iv) if a banking moratorium has been declared by either federal,
New York or Illinois authorities.

                 (b)       If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party, except to the extent provided in Section 4.  Notwithstanding any such
termination, the provisions of Sections 7 and 8 shall remain in effect.

                 (c)       This Agreement may also terminate pursuant to the
provisions of Section 2(c), with the effect stated in such Section.
<PAGE>   37
                                       36


                 Section 11.  Default by One or More of the U.S. Underwriters.
If one or more of the U.S. Underwriters shall fail at the Closing Time to
purchase the Initial U.S. Shares that it or they are obligated to purchase
pursuant to this Agreement (the "Defaulted U.S. Shares"), you shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting U.S. Underwriters, or any other U.S. Underwriters, to purchase
all, but not less than all, of the Defaulted U.S.  Shares in such amounts as
may be agreed upon and upon the terms set forth in this Agreement; if, however,
you have not completed such arrangements within such 24-hour period, then:

                 (a)       if the number of Defaulted U.S. Shares does not
         exceed 10% of the total number of Initial U.S. Shares, the
         non-defaulting U.S. Underwriters shall be obligated to purchase the
         full amount thereof in the proportions that their respective Initial
         U.S. Share underwriting obligation proportions bear to the
         underwriting obligations of all non-defaulting U.S. Underwriters; or

                 (b)       if the number of Defaulted U.S. Shares exceeds 10%
         of the total number of Initial U.S. Shares, this Agreement shall
         terminate without liability on the part of any non-defaulting U.S.
         Underwriter.

                 No action taken pursuant to this Section shall relieve any
defaulting U.S. Underwriter from liability in respect of its default.

                 In the event of any such default that does not result in a
termination of this Agreement, either you or the Company shall have the right
to postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectuses or in
any other documents or arrangements.  As used herein, the term "U.S.
Underwriter" includes any person substituted for a U.S. Underwriter under this
Section 11.

                 Section 12.  Default by a Selling Stockholder.  If any Selling
Stockholder shall fail at the Closing Time to sell and deliver the number of
Initial U.S. Shares that such Selling Stockholder is obligated to sell, then
the U.S. Underwriters may, at your option, by notice from you to the Company
and the Selling Stockholders, either (a) terminate this Agreement without any
liability on the part of any non-defaulting party, except to the extent
provided in Section 4 and except that the provisions of Sections 7 and 8 shall
remain in effect or (b) elect to purchase the Initial U.S. Shares that the
remaining Selling Stockholders have agreed to sell pursuant to this Agreement.

                 In the event of any such default under this Section that does
not result in a termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required
<PAGE>   38
                                       37

changes in the Registration Statement or Prospectuses or in any other documents
or arrangements.

                 No action taken pursuant to this Section 12 shall relieve any
Selling Stockholder so defaulting from liability, if any, in respect of such
default.

                 Section 13.  Notices.  All notices and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given if delivered, mailed or transmitted by any standard form of
telecommunication.  Notices to you or the U.S. Underwriters shall be directed
to you, c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated, at Merrill
Lynch World Headquarters, North Tower, World Financial Center, New York, New
York 10281, attention of Samuel R. Chapin; notices to the Company shall be
directed to it at 200 South Michigan Avenue, Chicago, Illinois 60604,
Attention:  General Counsel and notices to the Selling Stockholders shall be
directed to James V. Caruso, Merrill Lynch & Co., Inc., South Tower, World
Financial Center, New York, New York 10080-6123.

                 Section 14.  Parties.  This Agreement is made solely for the
benefit of the several U.S. Underwriters, the Company and the Selling
Stockholders and, to the extent expressed, any person controlling the Company,
any Selling Stockholder or any of the U.S. Underwriters, and the directors of
the Company, its officers who have signed the Registration Statement, and their
respective executors, administrators, successors and assigns and, subject to
the provisions of Section 11, no other person shall acquire or have any right
under or by virtue of this Agreement.  The term "successors and assigns" shall
not include any purchaser, as such purchaser, from any of the several U.S.
Underwriters of the U.S. Shares.  All of the obligations of the U.S.
Underwriters hereunder are several and not joint.

                 Section 15.  Representation of U.S. Underwriters.  You will
act for the several U.S. Underwriters in connection with this financing, and
any action under or in respect of this Agreement taken by you as U.S.
Representatives will be binding upon all U.S. Underwriters.

                 Section 16.  Governing Law and Time.  This Agreement shall be
governed by the laws of the State of New York.  Specified times of the day
refer to New York City time.

                 Section 17.  Counterparts.  This Agreement may be executed in
one or more counterparts, and when a counterpart has been executed by each
party, all such counterparts taken together shall constitute one and the same
agreement.
<PAGE>   39
                                       38

                 If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us a counterpart hereof, whereupon
this instrument will become a binding agreement between the Company, the
Selling Stockholders and the several U.S. Underwriters in accordance with its
terms.


                                             Very truly yours,
                                             
                                             
                                             BORG-WARNER AUTOMOTIVE, INC.
                                             
                                             
                                             By:                               
                                                  -----------------------------
                                                  Name:
                                                  Title:
                                             
                                             
                                             SELLING STOCKHOLDERS NAMED IN
                                                  SCHEDULE A
                                             
                                             
                                             By:                               
                                                  -----------------------------
                                                  Name:
                                                  Title:
                                             

Confirmed and accepted as of
  the date first above written:

MERRILL LYNCH & CO.
     Merrill Lynch, Pierce, Fenner & Smith
                  Incorporated
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO. INCORPORATED

     By:    Merrill Lynch & Co.
               Merrill Lynch, Pierce, Fenner & Smith
                            Incorporated
     
       By                                                                   
            -----------------------------------------------
            Name:
            Title:
     
               Investment Banking Group
     
For themselves and as U.S. Representatives of the
  other U.S. Underwriters named in Schedule B.

<PAGE>   40
                                   SCHEDULE A

<TABLE>
<CAPTION>
                                                                            NUMBER OF                     NUMBER OF
                                                                           INITIAL U.S.                  U.S. OPTION
SELLING STOCKHOLDER                                                     SHARES TO BE SOLD             SHARES TO BE SOLD
- -------------------                                                     ------------------            -----------------
<S>                                                                       <C>                               <C>
Merrill Lynch KECALP L.P. 1986
Merrill Lynch KECALP L.P. 1987
Merchant Banking L.P. No. I
ML Venture Partners II, L.P.
Merrill Lynch Capital Appreciation
     Partnership No. VIII, L.P.
ML Offshore LBO Partnership No. VIII
ML Employees LBO Partnership No. I, L.P.
ML IBK Positions, Inc.
                                                                             ________                         _______
                                                                                                                     

Total                                                                     [               ]                 [             ]
                                                                          =================                  ============= 
</TABLE>
<PAGE>   41
                                   SCHEDULE B



<TABLE>
<CAPTION>
                                                                                         NUMBER OF
                                                                                    INITIAL U.S. SHARES
                        U.S. UNDERWRITER                                              TO BE PURCHASED       
                        ----------------                                            -------------------
<S>                                                                                <C>           
Merrill Lynch, Pierce, Fenner & Smith
     Incorporated
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated





                                                                                                  
                                                                                     -----------

Total                                                                              [             ]
                                                                                    ============= 
</TABLE>
<PAGE>   42
                                   SCHEDULE C

<TABLE>
<CAPTION>
ATTORNEY                               SELLING STOCKHOLDER
- --------                               -------------------
<S>                                    <C>   
Marcia L. Tu, Esq.                     o     ML IBK Positions, Inc.
                                       o     Merrill Lynch Capital Appreciation Partnership
                                               No. VIII, L.P.
                                       o     ML Employees LBO Partnership No. I, L.P.
                                       o     ML Venture Partners II, L.P.


Margaret E. Nelson, Esq.               o     Merrill Lynch KECALP L.P. 1986
                                       o     Merrill Lynch KECALP L.P. 1987
                                       o     Merchant Banking L.P. No. I


Carl Ruggiero, Esq.                    o     ML Offshore LBO Partnership No. VIII
</TABLE>
<PAGE>   43
                                                                       Exhibit A




                          BORG-WARNER AUTOMOTIVE, INC.
                            (a Delaware corporation)

                        3,600,000 Shares of Common Stock



                       U.S. PRICE DETERMINATION AGREEMENT


                                 July __, 1996



MERRILL LYNCH & CO.
         Merrill Lynch, Pierce, Fenner & Smith
                     Incorporated
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO. INCORPORATED
         As Representatives of the several U.S. Underwriters
c/o Merrill Lynch & Co.
         Merrill Lynch, Pierce, Fenner & Smith
                     Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York  10281-1201


Ladies and Gentlemen:

                 Reference is made to the U.S. Purchase Agreement dated July
__, 1996 (the "U.S. Purchase Agreement") among Borg-Warner Automotive, Inc.
(the "Company"), the Selling Stockholders named in Schedule A thereto (the
"Selling Stockholders") and the several U.S. Underwriters named in Schedule B
thereto or hereto (the "U.S. Underwriters"), for whom Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Lehman Brothers Inc. and
Morgan Stanley & Co. Incorporated are acting as representatives (the "U.S.
Representatives").  The U.S. Purchase Agreement provides for the purchase by
the U.S. Underwriters from the Selling Stockholders, subject to the terms and
conditions set forth therein, of an aggregate of 3,600,000 shares (the "Initial
U.S. Shares") of the Company's common stock, par value $.01 per share.  This
Agreement is the U.S. Price Determination Agreement referred to in the U.S.
Purchase Agreement.  Terms not defined herein are used herein as defined in the
U.S. Purchase Agreement.
<PAGE>   44
                                      A-2


                 Pursuant to Section 2 of the U.S. Purchase Agreement, the
Company and the Selling Stockholders agree with the U.S.  Representatives as
follows:

                 1.  The price to the public per share for the Initial U.S.
         Shares shall be $[____].

                 2.  The purchase price per share for the Initial U.S. Shares
         to be paid by the several U.S. Underwriters shall be $[_____],
         representing an amount equal to the public offering price set forth
         above, less $[____] per share.

                 The Company represents and warrants to each of the U.S.
Underwriters that the representations and warranties of the Company set forth
in Section 1(a) of the U.S. Purchase Agreement are accurate as though expressly
made at and as of the date hereof.

                 Additionally, if the Company elects to rely on Rule 462(b),
the Company convenants to each of the U.S. Underwriters that:

         (a)     the Company will file a Rule 462(b) Registration Statement in
                 compliance with, and that is effective upon filing pursuant
                 to, Rule 462(b) prior to the time confirmations are sent or
                 given, as specified in Rule 462(b) of the 1933 Act; and

         (b)     the Company will give irrevocable instructions for
                 transmission of the applicable filing fee in connection with
                 the filing of the Rule 462(b) Registration Statement, in
                 compliance with Rule 111 of the 1933 Act Regulations or the
                 Commission will have received payment of such filing fee upon
                 filing of the Rule 462(b) Registration Statement.

                 Each Selling Stockholder represents and warrants to each of
the U.S. Underwriters that the representations and warranties of such Selling
Stockholder set forth in Section 1(b) of the U.S. Purchase Agreement are
accurate as though expressly made at and as of the date hereof.

                 As contemplated by Section 2 of the U.S. Purchase Agreement,
attached as Schedule A is a completed list of the Selling Stockholders and
attached as Schedule B is a complete list of the several U.S. Underwriters,
which shall be a part of this Agreement and the U.S. Purchase Agreement.

                 This Agreement shall be governed by the laws of the State of
New York.

         If the foregoing is in accordance with the understanding of the U.S.
Representatives of the agreement between the U.S.  Underwriters, the Company
and the Selling Stockholders, please sign and return to the Company a
counterpart hereof, whereupon this instrument, along with all counterparts and
together with the U.S. Purchase Agreement, shall be a
<PAGE>   45
                                      A-3

binding agreement between the U.S. Underwriters, the Company and the Selling
Stockholders in accordance with its terms and the terms of the U.S. Purchase
Agreement.


                                           Very truly yours,
                                           
                                           
                                           BORG-WARNER AUTOMOTIVE, INC.
                                           
                                           
                                           By:                                 
                                                -------------------------------
                                                Name:
                                                Title:
                                           
                                           
                                           SELLING STOCKHOLDERS NAMED IN
                                                SCHEDULE A
                                           
                                           
                                           By:                                 
                                                -------------------------------
                                                Name:
                                                Title:
                                           
Confirmed and accepted as of
  the date first above written:

MERRILL LYNCH & CO.
        Merrill Lynch, Pierce, Fenner & Smith
                     Incorporated
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO. INCORPORATED

        By:    Merrill Lynch & Co.
                  Merrill Lynch, Pierce, Fenner & Smith
                               Incorporated
        
          By                                           
               ----------------------------------------
               Name:
               Title:
        
                         Investment Banking Group

For themselves and as U.S. Representatives of the
  other U.S. Underwriters named in Schedule B.


<PAGE>   46
                                                                       Exhibit B


                                  SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                                                Percent of
                                                                                                Capital Stock
                                                                                                Beneficially Owned by
                                                                                                Borg-Warner Automotive,
Name of Subsidiary                                                                              Inc. or the Subsidiaries      
- ------------------                                                                              ------------------------------
<S>                                                                                                          <C>
Borg-Warner Automotive Powertrain Systems Corporation                                                        100
          Borg-Warner Automotive South Asia Corporation                                                      100
              Divgi-Warner Pvt., Ltd.                                                                         60
              Huazhong Warner Transmission Company                                                            60
              Borg-Warner Automotive Powertrain                
                Service Center Corporation                                                                   100
          Borg-Warner Automotive Powdered Metals Corporation                                                 100
          Borg-Warner Automotive Diversified Transmission      
            Products Corporation                                                                             100

Borg-Warner Automotive Air/Fluid Systems Corporation                                                         100
          Borg-Warner Automotive Air/Fluid Systems
            Corporation of Michigan                                                                          100
          Borg-Warner Automotive Control Systems Holding Corporation                                         100
              Borg-Warner Automotive Control Systems Europe S.A.S.                                            90
                Societe de l'Usine de la Marque                                                              100
          
BW Syntelligence Corporation                                                                                 100

Borg-Warner Automotive Morse TEC Corporation                                                                 100
              Borg-Warner Automotive (Canada) Ltd.                                                           100
              Borg-Warner Automotive Japan Corporation                                                       100
                      Borg-Warner Automotive K.K.                                                            100
                      Borg-Warner Automotive Taiwan Co., Ltd.                                                100
              B.W. Componentes Mexicanos de Transmissiones S.A. de C.V.                                       86
              Morse TEC Europe, Sp.A                                                                         100

Borg-Warner Automotive Foreign Sales Corporation                                                             100
</TABLE>
<PAGE>   47
                                      B-2

<TABLE>
<S>                                                                                                          <C> 
Borg-Warner Automotive Automatic Transmission Systems Corporation                                            100 
              Borg-Warner Automotive Europe Corporation                                                      100 
                      Borg-Warner Automotive GmbH                                                            100 
              Borg & Beck Torque Systems, Inc.                                                               100 
              Borg-Warner Automotive-NW Corporation                                                          100 
                      Borg-Warner Automotive Korea, Inc.                                                      60 
                                                                                                                 
Creon Insurance Agency, Ltd.                                                                                 100 
              Creon Trustees, Ltd.                                                                           100 
</TABLE>
<PAGE>   48
                                                                       Exhibit C


                 Pursuant to Section 5(b) of the U.S. Purchase Agreement,
Wachtell, Lipton, Rosen & Katz, special counsel for the Company, shall furnish
to the U.S. Underwriters an opinion to the effect that:

                 (i)      The Company is a corporation duly organized, validly
         existing and in good standing under the laws of the State of Delaware
         with corporate power and authority under such laws to own, lease and
         operate its properties and conduct its business as described in the
         Prospectuses.

                 (ii)     The Shares have been duly authorized and validly
         issued and are fully paid and non-assessable, and no holder thereof is
         or will be subject to personal liability by reason of being such a
         holder; such Shares are not subject to the preemptive rights of any
         stockholder of the Company.

                 (iii)    The Shares conform in all material respects as to
         legal matters to the description thereof contained in the
         Prospectuses.

                 (iv)     This Agreement and the International Purchase
         Agreement have been duly authorized, executed and delivered by the
         Company.

                 (v)      The execution and delivery of this Agreement, the
         International Purchase Agreement, the consummation by the Company of
         the transactions contemplated in this Agreement, in the International
         Purchase Agreement, and in the Registration Statement and compliance
         by the Company with the terms of this Agreement and the International
         Purchase Agreement have been duly authorized by all necessary
         corporate action on the part of the Company and do not violate and
         will not result in any violation of the certificate of incorporation
         or by-laws of the Company.

                 (vi)     The Registration Statement is effective under the
         1933 Act; any required filing of the Prospectuses or any supplement
         thereto pursuant to Rule 424(b) has been made in the manner and within
         the time period required by Rule 424(b); and, to the best of the
         knowledge of such counsel, no stop order suspending the effectiveness
         of the Registration Statement has been issued and no proceedings for
         that purpose have been instituted or are pending or are contemplated
         under the 1933 Act.

                 (vii)    The Registration Statement (including the Rule 430A
         Information and the Rule 434 Information, if applicable) and the
         Prospectuses, excluding the documents incorporated by reference
         therein, and each amendment or supplement thereto (except for the
         financial statements and other financial or statistical data included
         therein or omitted therefrom, as to which such counsel need express no
         opinion), as of their respective effective or issue dates, complied as
         to form in all material respects to the requirements of the 1933 Act
         and the 1933 Act Regulations.
<PAGE>   49
                                      C-2


                 (viii)   The documents incorporated by reference in the
         Prospectus (except for the financial statements and other financial or
         statistical data included therein or omitted therefrom, as to which
         such counsel need express no opinion, and except to the extent that
         any statement therein is modified or superseded in the Prospectuses),
         as of the dates they were filed with the Commission, complied as to
         form in all material respects to the requirements of the 1934 Act and
         the 1934 Act Regulations.

                 (ix)     Assuming that each of the U.S. Underwriters and
         International Underwriters acquires the certificates representing the
         U.S. Shares and the International Shares, respectively, in good faith
         and without notice of any adverse claims, as defined in Section 8-302
         of the Uniform Commercial Code as in effect in the State of New York
         (the "UCC"), upon delivery of the certificates to the person
         designated by the U.S. Underwriters and the International
         Underwriters, respectively, in the State of New York, either
         registered in the name of the U.S. Underwriters or the International
         Underwriters, as the case may be, endorsed to the U.S. Underwriters or
         the International Underwriters, as the case may be, or endorsed in
         blank, the U.S. Underwriters or the International Underwriters, as the
         case may be, will acquire all of the Selling Stockholders' rights in
         the certificates, free of any adverse claims (within the meaning of
         Section 8-302 of the UCC).

                 (x)      Such counsel have participated in the preparation of
         the Registration Statement and Prospectuses except for the documents
         incorporated by reference in the Registration Statement and the
         Prospectuses and in conferences with officers and other
         representatives of the Company, representatives of the independent
         public accountants for the Company, and with your representatives and
         your counsel at which the contents of the Registration Statement, the
         Prospectuses, and related matters were discussed and have reviewed the
         documents incorporated by reference in the Registration Statement and
         Prospectuses and, although such counsel need not pass upon or assume
         any responsibility for the accuracy, completeness or fairness of the
         statements contained in the Registration Statement or the Prospectuses
         and the documents incorporated by reference in the Prospectuses
         (except for the opinions set forth in clause (iii), and based on the
         foregoing, no facts have come to the attention of such counsel to lead
         such counsel to believe (A) that the Registration Statement or any
         amendment thereto (except for the financial statements and other
         financial or statistical data included therein or omitted therefrom,
         as to which such counsel need express no opinion), at the time the
         Registration Statement or any such amendment became effective,
         contained an untrue statement of a material fact or omitted to state a
         material fact required to be stated therein or necessary to make the
         statements therein not misleading or  (B) that the Prospectuses or any
         amendment or supplement thereto (except for the financial statements
         and other financial or statistical data included therein or omitted
         therefrom, as to which such counsel need express no opinion), at the
         time any Prospectus was issued, at the time any such amended or
         supplemented prospectus was issued or at the Closing Time, included or
         includes an untrue statement of a material fact or omitted or omits to
         state a material fact necessary in order to make the statements
         therein, in the light of the circumstances
<PAGE>   50
                                      C-3

         under which they were made, not misleading.  Such opinion shall be to
         such further effect with respect to other legal matters relating to
         this Agreement, the U.S. Price Determination Agreement and the sale of
         the U.S. Shares pursuant to this Agreement as counsel for the U.S.
         Underwriters may reasonably request.  In giving such opinion, such
         counsel may rely, as to all matters governed by the laws of
         jurisdictions other than the law of the State of New York, the federal
         law of the United States and the corporate law of the State of
         Delaware, either upon opinions of other counsel, who shall be counsel
         reasonably satisfactory to counsel for the U.S. Underwriters, in which
         case the opinion shall state that they believe the U.S. Underwriters
         and they are entitled to so rely, or upon unofficial compilations of
         the laws of such jurisdictions.  Such counsel may also state that,
         insofar as such opinion involves factual matters, they have relied, to
         the extent they deem proper, upon certificates of officers of the
         Company and its Subsidiaries and certificates of public officials.
<PAGE>   51
                                                                       Exhibit D


                 Pursuant to Section 5(c) of the U.S. Purchase Agreement,
Laurene H. Horiszny, Esq., Vice President, Secretary and General Counsel for
the Company, shall furnish to the U.S. Underwriters an opinion to the effect
that:

                 (i)      Each Subsidiary listed on Schedule 1 hereto (the
         "Material Subsidiaries") is a corporation duly organized, validly
         existing and in good standing under the laws of the jurisdiction of
         its incorporation with corporate power and authority under such laws
         to own, lease and operate its properties and conduct its business.

                 (ii)     Each of the Company and the Material Subsidiaries is
         duly qualified to transact business as a foreign corporation and is in
         good standing in each other jurisdiction in which it owns or leases
         property of a nature, or transacts business of a type, that would make
         such qualification necessary, except to the extent that the failure to
         so qualify or be in good standing would not have a material adverse
         effect on the Company and the Subsidiaries, considered as one
         enterprise.

                 (iii)    All of the outstanding shares of capital stock of
         each Material Subsidiary have been duly authorized and validly issued
         and are fully paid and non-assessable; all of the shares of capital
         stock of such Material Subsidiary are owned by the Company, directly
         or through one or more of the Subsidiaries, in the percentages set
         forth in Schedule 1 hereto and the shares of capital stock of
         NSK-Warner owned by the Company are owned by the Company directly or
         through one or more of the Subsidiaries, free and clear of any
         consensual pledge, lien, security interest, charge, claim, equity or
         encumbrance of any kind except as provided in or pursuant to the
         Credit Agreement; no holder thereof is subject to personal liability
         by reason of being such a holder and none of such shares was issued in
         violation of the preemptive rights of any stockholder of the Material
         Subsidiaries.

                 (iv)     The Shares have been duly authorized and validly
         issued and are fully paid and non-assessable, and no holder thereof is
         or will be subject to personal liability by reason of being such a
         holder; such Shares are not subject to the preemptive rights of any
         stockholder of the Company.

                 (v)      The authorized, issued and outstanding capital stock
         of the Company is as set forth in the Prospectuses under the heading
         "Capitalization".

                 (vi)     Such counsel does not know of any statutes or
         regulations, or any pending or threatened legal or governmental
         proceedings, required under the 1933 Act to be described in the
         Prospectuses that are not described as so required, nor of any
         contracts or documents of a character required under the 1933 Act or
         1933 Act Regulations to be described or referred to in the
         Registration Statement or
<PAGE>   52
                                      D-2

         Prospectuses or to be filed as exhibits to the Registration Statement
         that are not described, referred to or filed as required.

                 (vii)    Except with respect to financial covenants, (as to
         which such counsel need express no opinion) no default exists in the
         performance or observance of any obligation, agreement, covenant or
         condition contained in any contract, indenture, loan agreement, note,
         lease or other agreement or instrument that is described or referred
         to in the Registration Statement or the Prospectuses or filed as an
         exhibit to the Registration Statement (except for such defaults that
         would not have a material adverse effect on the condition (financial
         or otherwise), results of operations, business affairs or business
         prospects of the Company and its Subsidiaries, considered as one
         enterprise).

                 (viii)   The execution and delivery of this Agreement and the
         International Purchase Agreement and the consummation by the Company
         of the other transactions contemplated in this Agreement, the
         International Purchase Agreement and in the Registration Statement and
         compliance by the Company with the terms of this Agreement and the
         International Purchase Agreement do not violate and will not result in
         any violation of the certificate of incorporation or by-laws of any
         Material Subsidiary and do not and will not conflict with, or result
         in a breach of any of the terms or provisions of, or constitute a
         default under, or result in the creation or imposition of any lien,
         charge or encumbrance upon any property or assets of the Company or
         any Material Subsidiary under (i) any existing applicable law, rule or
         regulation (other than the securities or Blue Sky laws of the various
         states, as to which such counsel is not requested to express an
         opinion), (ii) any judgment, order or decree of any government,
         governmental instrumentality or court, domestic or foreign, having
         jurisdiction over the Company or any Subsidiary or any of its
         properties, or (iii) any indenture, mortgage or loan agreement, or any
         other agreement or instrument known to such counsel, to which the
         Company or any Material Subsidiary is a party or by which it may be
         bound or to which any of its properties may be subject, including the
         Formation Agreement between Borg-Warner Corporation and Nippon Seiko,
         K.K., dated as of April 18, 1964, and any agreements related thereto,
         including but not limited to the Shareholders Agreement Concerning the
         Management of NSK-Warner, dated September 25, 1964, between
         Borg-Warner Corporation and Nippon Seiko, K.K. (except for such
         conflicts, breaches or defaults or liens, charges or encumbrances that
         would not have a material adverse effect on the condition (financial
         or otherwise), results of operations, business affairs or business
         prospects of the Company and its Subsidiaries, considered as one
         enterprise).

                 (ix)     The descriptions in the Prospectuses of the statutes,
         regulations, legal or governmental proceedings, contracts and other
         documents therein described are accurate and fairly summarize the
         information required to be shown.
<PAGE>   53
                                      D-3

                 (x)      No authorization, approval, consent or license of any
         U.S. government, governmental instrumentality or U.S.  court (other
         than under the 1933 Act or 1933 Act Regulations and the securities or
         Blue Sky laws of the various states and the securities laws of any
         jurisdiction outside the United States in which International Shares
         are offered or sold by the International Underwriters pursuant to the
         International Purchase Agreement) is required for the valid
         authorization, issuance, sale and delivery of the Shares.

                 (xi)     To the best knowledge of such counsel, each Selling
         Stockholder is the registered holder of title to the Shares to be sold
         by such Selling Stockholder pursuant to the U.S. Purchase Agreement
         and the International Purchase Agreement.

                          Such counsel has participated in the preparation of
         the Registration Statement and Prospectuses, in the preparation of the
         documents incorporated by reference in the Registration Statement and
         the Prospectuses and in conferences with officers and other
         representatives of the Company, representatives of the independent
         public accountants for the Company, and with your representatives and
         your counsel at which the contents of the Registration Statement, the
         Prospectuses and the documents incorporated by reference in the
         Prospectuses and related matters were discussed and, although such
         counsel need not pass upon or assume any responsibility for the
         accuracy, completeness or fairness of the statements contained in the
         Registration Statement or the Prospectuses and the documents
         incorporated by reference in the Prospectuses (except for the opinion
         set forth in clause (ix)), and based upon the foregoing, no facts have
         come to the attention of such counsel to lead her to believe (A) that
         the Registration Statement (including the Rule 430A Information and
         the Rule 434 Information, if applicable) or any amendment thereto
         (except for the financial statements and other financial or
         statistical data included therein or omitted therefrom, as to which
         such counsel need express no opinion), at the time the Registration
         Statement or any such amendment became effective, contained an untrue
         statement of a material fact or omitted to state a material fact
         required to be stated therein or necessary to make the statements
         therein not misleading, (B) that the Prospectuses or any amendment or
         supplement thereto (except for the financial statements and other
         financial or statistical data included therein or omitted therefrom,
         as to which such counsel need express no opinion), at the time any
         Prospectus was issued, at the time any such amended or supplemented
         prospectus was issued or at the Closing Time, included or includes an
         untrue statement of a material fact or omitted or omits to state a
         material fact necessary in order to make the statements therein, in
         the light of the circumstances under which they were made, not
         misleading, or (C) that the documents incorporated by reference in the
         Prospectuses (except for the financial statements and other financial
         or statistical data included therein or omitted therefrom, as to which
         such counsel need express no opinion, and except to the extent that
         any statement therein is modified or superseded in the Prospectuses),
         as of the dates they were filed with the Commission, contained an
         untrue statement of a material fact or omitted to state a material
         fact.
<PAGE>   54
                                      D-4


                 In giving such opinion, such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the State
of Illinois, the Federal law of the United States and the corporate law of the
State of Delaware, upon opinions of other counsel, who shall be counsel
reasonably satisfactory to counsel for the U.S. Underwriters, in which case the
opinion shall state that they believe the U.S. Underwriters and they are
entitled to so rely.  Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and the Subsidiaries and
certificates of public officials.
<PAGE>   55
                                                                      Schedule 1
                                                                    to Exhibit D


                             Material Subsidiaries


<TABLE>
<CAPTION>
                                                                                         Percent of
                                                                                         Capital Stock
                                                                                         Beneficially
                                                                                         Owned by
                                                                                         Borg-Warner
                                                                                         Automotive,
                                                                                         Inc. or the
                                                                                         Subsidiaries
                                                                                         ------------
Material Subsidiary
- -------------------
<S>                                                                                              <C>
Borg-Warner Automotive Diversified
     Transmission Products Corporation                                                           100

Borg-Warner Automotive Electronic
     & Mechanical Systems Corporation                                                            100

Borg-Warner Automotive Europe
     Corporation                                                                                 100

Borg-Warner Automotive GmbH                                                                      100

Borg-Warner Automotive Japan
     Corporation                                                                                 100

Borg-Warner Automotive K.K.                                                                      100

Borg-Warner Automotive NW Corporation                                                            100

Borg-Warner Automotive Transmission
     & Engine Components Corporation                                                             100
</TABLE>
<PAGE>   56
                                                                       Exhibit E



                 Pursuant to Section 5(d) of the U.S. Purchase Agreement,
NSK-Warner's Japanese counsel shall furnish to the U.S.  Underwriters an
opinion substantially to the effect that:

                 (i)      NSK-Warner is a corporation duly organized, validly
existing and in good standing under the laws of Japan with corporate power and
authority under such laws to own, lease and operate its properties and conduct
its business.

                 (ii)     All of the outstanding shares of capital stock of
NSK-Warner have been duly authorized and validly issued and are fully paid and
non-assessable.
<PAGE>   57
                                                                       Exhibit F


                 Pursuant to Section 5(e) of the U.S. Purchase Agreement, each
of the attorneys listed on Schedule C attached thereto for the Selling
Stockholders specified opposite such attorney's name, shall furnish to the U.S.
Underwriters an opinion to the effect that:

                 (i)      This Agreement and the International Purchase
Agreement have been authorized, duly executed and delivered by each of the
Selling Stockholders.

                 (ii)     No authorization, approval, consent or license of any
government, governmental instrumentality or court is required under the laws of
the United States or the State of New York  (other than under the 1933 Act,
under Blue Sky or state securities law or the securities laws of foreign
jurisdictions) for the consummation by the Selling Stockholders of the
transactions contemplated by this Agreement and the International Purchase
Agreement.

                 (iii)    The execution and delivery of this Agreement and the
International Purchase Agreement by the Selling Stockholders and the compliance
by the Selling Stockholders with the terms thereof do not conflict with or
result in a violation of (a) the certificate of incorporation, the by-laws, the
partnership agreement or similar governing document of any of the Selling
Stockholders or (b) any existing applicable law, rule or regulation (other than
under the 1933 Act, under Blue Sky or state securities law or the securities
laws of foreign jurisdictions or the rules and regulations of the NASD) or any
judgment, order or decree known to such counsel of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Selling Stockholders.

                 (iv)     The Selling Stockholders, as the case may be, have
been duly organized and are validly existing and in good standing as
corporations or partnerships under the laws of the jurisdiction of their
incorporation or organization with all necessary power and authority under such
laws to execute, deliver and perform this Agreement and the International
Purchase Agreement.

                 (v)      Assuming that each of the U.S. Underwriters acquires
the certificates representing the Shares to be sold by the Selling Stockholders
in good faith and without notice of any adverse claims, as defined in Section
8-302 of the Uniform Commercial Code as in effect in the State of New York (the
"UCC"), upon delivery of the certificates representing such Shares to the
person designated by the U.S. Underwriters in the State of New York, registered
in the name of the U.S. Underwriters, endorsed to the U.S. Underwriters, or
endorsed in blank, the U.S. Underwriters will acquire all of the Selling
Stockholders' rights in the certificates representing such Shares free of any
adverse claims (within the meaning of Section 8-302 of the UCC).
<PAGE>   58
                                      F-2

                 Such opinion shall be to such further effect with respect to
other legal matters relating to this Agreement and the sale of the Shares
pursuant to this Agreement as counsel for the U.S. Underwriters may reasonably
request.  In giving such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York, the federal law of the United States and the corporate and partnership
law of the State of Delaware, solely upon opinions of other counsel, who shall
be counsel reasonably satisfactory to counsel for the U.S. Underwriters (it
being understood that in-house counsel of any Selling Stockholder shall be so
satisfactory), in which case the opinion shall also be addressed to the U.S.
Underwriters and state that such other counsel believes you and they are
entitled to so rely.  Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and the Subsidiaries, certificates
of officers or partners, as the case may be, of such Selling Stockholders and
on certificates of public officials.
<PAGE>   59
                                                                       Exhibit G


                        FORM OF LOCK-UP LETTER AGREEMENT




                                 July __, 1996


MERRILL LYNCH & CO.
         Merrill Lynch, Pierce, Fenner & Smith
                     Incorporated
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO. INCORPORATED
      As Representatives of the several U.S. Underwriters
c/o Merrill Lynch & Co.
         Merrill Lynch, Pierce, Fenner & Smith
                     Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York  10281-1201

MERRILL LYNCH INTERNATIONAL
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
      As Representatives of the several International Underwriters
c/o Merrill Lynch International
25 Ropemaker Street
London EC2Y 9LY
England


Ladies and Gentlemen:

                 The undersigned stockholder of Borg-Warner Automotive, Inc., a
Delaware corporation (the "Company"), understands that (i) a U.S. Purchase
Agreement (the "U.S. Purchase Agreement") will be executed by the Company, the
Selling Stockholders named therein (the "Selling Stockholders") and Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Lehman Brothers Inc. and Morgan
Stanley & Co. Incorporated, as representatives (the "U.S. Representatives") of
the several underwriters named therein (the "U.S.  Underwriters"), pursuant to
which the Selling Stockholders will sell to the U.S. Underwriters 3,600,000
shares of the Common Stock, par value $.01 per
<PAGE>   60
                                      G-2

share (the "Common Stock"), of the Company and up to 540,000 additional shares
of Common Stock pursuant to an option granted by the Selling Stockholders,
solely to cover over-allotments as set forth in the U.S. Purchase Agreement and
(ii) an International Purchase Agreement (the "International Purchase
Agreement", and together with the U.S. Purchase Agreement, the "Purchase
Agreements") will be executed by the Company, the Selling Stockholders named
therein (the "Selling Stockholders") and Merrill Lynch International, Lehman
Brothers International (Europe) and Morgan Stanley & Co. International Limited,
as representatives (the "International Representatives", and together with the
U.S. Representatives, the "Representatives") of the several underwriters named
therein (the "International Underwriters", and together with the U.S.
Underwriters, the "Underwriters"), pursuant to which the Selling Stockholders
will sell to the International Underwriters 900,000 shares of the Common Stock
of the Company and up to 135,000 additional shares of Common Stock pursuant to
an option granted by the Selling Stockholders, solely to cover over-allotments
as set forth in the International Purchase Agreement.

                 The undersigned is a party to that certain Registrations
Rights Agreement (the "Registration Rights Agreement"), dated as of January 27,
1993, by and among the Company and the stockholders named therein.  This
Lock-Up Letter Agreement is being entered into in accordance with Section 7(a)
of the Registration Rights Agreement at the request of the Underwriters.

                 The undersigned also understands that the Company has filed
with the Securities and Exchange Commission (the "Commission") a Registration
Statement on Form S-3 (File No. 333-06041, the "Registration Statement") in
connection with the public offering (the "Offering") of shares of its Common
Stock.

                 In consideration of the Underwriters' agreement to purchase
the Common Stock and undertake the Offering, and for other good and valuable
consideration, receipt of which is hereby acknowledged, the undersigned agrees
[that, without the prior written consent of the Representatives, which consent
shall not be unreasonably withheld, the undersigned will] not[,] [to] directly
or indirectly[,] effect any public sale or distribution, including any sale
pursuant to Rule 144 under the Securities Act of 1933, as amended, of any
shares of Common Stock (including, without limitation, shares of Common Stock
which may be deemed to be beneficially owned by such stockholder in accordance
with the rules and regulations of the Commission and shares of Common Stock
which may be issued upon exercise of any option or warrant) or any securities
convertible or exchangeable for shares of Common Stock for a period commencing
7 days prior to the date the Registration Statement is declared effective by
the Commission (the "Effective Date") and ending 180 days after the Effective
Date, other than the Shares sold to the  Underwriters pursuant to the Purchase
Agreements.  The undersigned understands that the Company expects the Effective
Date to occur as early as ______, 1996.  The
<PAGE>   61
                                      G-3

undersigned understands that the Effective Date may, however, be earlier or
later than _____, 1996.

                 In addition, the undersigned agrees that the undersigned will,
promptly following the execution of this Lock-Up Letter Agreement and in any
event prior to the execution of the Purchase Agreements, (i) with respect to
any shares of Common Stock for which the undersigned is the record holder,
cause the transfer agent for the Company to note stop transfer instructions
with respect to such shares of Common Stock on the transfer books and records
of the Company and (ii) with respect to any shares of Common Stock for which
the undersigned is the beneficial holder but not the record holder (other than
the shares of Common Stock owned of record by persons or entities that are not
affiliates of the undersigned and shares of Common Stock which may be issued
upon exercise of any option or warrant), cause the record holder of such shares
to cause the transfer agent for the Company to note stop transfer instructions
with respect to such shares of Common Stock on the transfer books and records
of the Company.

                 The undersigned understands that the Company, the Selling
Stockholders and the Underwriters will proceed with the Offering in reliance on
this Lock-Up Letter Agreement.

                 The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-Up Letter
Agreement and that, upon request, the undersigned will execute any additional
documents necessary or desirable in connection with the enforcement hereof.
Any obligations of the undersigned shall be binding upon the successors and
assigns of the undersigned.
<PAGE>   62
                                      G-4

                 This Lock-Up Letter Agreement has been entered into on the 
date first written above.


                                           
                                       Very truly yours,
                                       
                                       
                                       
                                                                               
                                       ----------------------------------------
                                       Name of Stockholder/Officer/Director
                                       
                                       
                                       
                                       By:                                     
                                          -------------------------------------
                                             Name:
                                             Title:
