SECOND AMENDMENT, dated as of January 16, 1996 (the "Amendment"), to the Credit Agreement, dated as of December 7, 1994 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"; terms not otherwise defined herein shall be used herein as therein defined), among: (i) BORG-WARNER AUTOMOTIVE, INC., a Delaware corporation (the "Borrower"); (ii) the several banks and other financial institutions from time to time parties to the Credit Agreement (the "Lenders"); (iii) BANK OF MONTREAL, CREDIT LYONNAIS, CHICAGO AND CAYMAN ISLAND BRANCHES, THE INDUSTRIAL BANK OF JAPAN, LTD., THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED, NATIONSBANK OF NORTH CAROLINA, N.A., THE SUMITOMO BANK, LIMITED, CHICAGO BRANCH, BANK OF AMERICA ILLINOIS, and THE FUJI BANK, LIMITED, as lead managers thereunder (the "Lead Managers"); (iv) CHEMICAL BANK, a New York banking corporation (the "Chemical"), and THE BANK OF NOVA SCOTIA, a Canadian chartered bank ("Scotiabank"), as co-arrangers thereunder (in such capacity, the "Co-Arrangers"); (v) SCOTIABANK, as documentation agent for the Lenders thereunder (in such capacity, the "Documentation Agent"); and (vi) CHEMICAL, as administrative agent for the Lenders thereunder (in such capacity, the "Administrative Agent"). W I T N E S S E T H : WHEREAS, the Borrower has requested that the Credit Agreement be amended to allow for projections of the operating budget and cash flow budget of the Borrower and its Subsidiaries to be delivered no later than 90 days after the beginning of the Borrower's fiscal year; WHEREAS, the Borrower, the Administrative Agent and the Majority Lenders have agreed to so amend the Credit Agreement on the terms set forth below; NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: 1. Amendment to Subsection 9.2 of the Credit Agreement. Subsection 9.2(c) of the Credit Agreement is hereby amended by deleting the paragraph in its entirety and replacing it with the following paragraph (c): (c) as soon as available, but in any event no later than 90 days after the beginning of each fiscal year of the Borrower, a copy of the projections by the Borrower of the operating budget and cash flow budget of the Borrower and its Subsidiaries (the "Projections") for such fiscal year; provided, however, that the Borrower shall not be obligated to furnish any such Projections unless the board of directors of the Borrower has reviewed and approved them; 2. Representations; No Default. On and as of the date hereof, and after giving effect to this Amendment, the Borrower confirms, reaffirms and restates that the representations and warranties set forth in Section 7 of the Credit Agreement and in the other Loan Documents are true and correct in all material respects, provided that the references to the Credit Agreement therein shall be deemed to be references to this Amendment and to the Credit Agreement as amended by this Amendment. 3. Conditions to Effectiveness. This Amendment shall become effective on and as of the date (the "Amendment Effective Date") that the Administrative Agent shall have received counterparts of this Amendment, duly executed and delivered by a duly authorized officer of each of the Borrower, the Administrative Agent, and the Majority Lenders, along with the written consent of each Subsidiary Guarantor in the form attached hereto. 4. Scope. The Amendment is to be narrowly construed. Except as expressly amended and waived herein, all of the covenants and provisions of the Credit Agreement are and shall continue to be in full force and effect. 5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 6. Counterparts. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned have caused this Amendment to be dully executed and delivered as of the date first above written. BORG-WARNER AUTOMOTIVE, INC. By: Borg-Warner Automotive, Inc. Title: CHEMICAL BANK, as Administrative Agent, as a Co-Arranger and as a Lender By: Chemical Bank Title: THE BANK OF NOVA SCOTIA, as a Co-Arranger, as Documentation Agent and as a Lender By: The Bank of Nova Scotia Title: BANK OF MONTREAL, as a Lead Manager and as a Lender By: Bank of Montreal Title: CREDIT LYONNAIS, CHICAGO BRANCH, as a Lead Manager and as a Lender By: Credit Lyonnais, Chicago Branch Title: CREDIT LYONNAIS, CAYMAN ISLAND BRANCH, as a Lead Manager and as a Lender By: Credit Lyonnais, Cayman Island Branch Title: THE INDUSTRIAL BANK OF JAPAN, LIMITED, as a Lead Manager and as a Lender By: The Industrial Bank of Japan Title: THE LONG-TERM CREDIT BANK OF JAPAN, LTD., as a Lead Manager and as a Lender By: The Long-Term Credit Bank of Japan Title: NATIONSBANK, N.A., as a Lead Manager and as a Lender By: Nationsbank Title: THE SUMITOMO BANK, LIMITED, CHICAGO BRANCH, as a Lead Manager and as a Lender By: The Sumitomo Bank Title: BANK OF AMERICA ILLINOIS, as a Lead Manager and as a Lender By: Bank of America Illinois Title: THE FUJI BANK, LIMITED, as a Lead Manager and as a Lender By: The Fuji Bank Title: THE BANK OF NEW YORK By:THE BANK OF NEW YORK Title: THE FIRST NATIONAL BANK OF CHICAGO By: THE FIRST NATIONAL BANK OF CHICAGO Title: MELLON BANK, N.A. By:MELLON BANK, N.A. Title: NATIONAL BANK OF DETROIT By: NATIONAL BANK OF DETROIT Title: TORONTO DOMINION (TEXAS), INC. By:TORONTO DOMINION (TEXAS), INC. Title: BANK OF HAWAII By:BANK OF HAWAII Title: BANK OF TOKYO, LTD., CHICAGO BRANCH By:BANK OF TOKYO, LTD., CHICAGO BRANCH Title: BARCLAYS BANK PLC By:BARCLAYS BANK PLC Title: CAISSE NATIONALE DE CREDIT AGRICOLE By:CAISSE NATIONALE DE CREDIT AGRICOLE Title: THE NORTHERN TRUST COMPANY By:THE NORTHERN TRUST COMPANY Title: THE SANWA BANK, LIMITED, CHICAGO BRANCH By:THE SANWA BANK, LIMITED, CHICAGO BRANCH Title: CONSENT Each of the undersigned Subsidiary Guarantors hereby consents and agrees to the provisions of the foregoing Amendment, and hereby affirms that upon the effectiveness of the foregoing Amendment, each Loan Document to which it is a party shall continue to be, and shall remain, in full force and effect. BORG-WARNER AUTOMOTIVE DIVERSIFIED TRANSMISSION PRODUCTS CORPORATION By:BORG-WARNER AUTOMOTIVE DIVERSIFIED TRANSMISSION PRODUCTS CORPORATION Title: Vice President BORG-WARNER AUTOMOTIVE POWERTRAIN SYSTEMS CORPORATION By:BORG-WARNER AUTOMOTIVE POWERTRAIN SYSTEMS CORPORATION Title: Vice President BORG-WARNER AUTOMOTIVE JAPAN CORPORATION By:BORG-WARNER AUTOMOTIVE JAPAN CORPORATION Title: Vice President BORG-WARNER AUTOMOTIVE POWDERED METALS CORPORATION By: BORG-WARNER AUTOMOTIVE POWDERED METALS CORPORATION Title: Vice President BORG-WARNER AUTOMOTIVE AUTOMATIC TRANSMISSION SYSTEMS CORPORATION By: BORG-WARNER AUTOMOTIVE AUTOMATIC TRANSMISSION SYSTEMS CORPORATION Title: Vice President BORG-WARNER AUTOMOTIVE CONTROL SYSTEMS CORPORATION By:BORG-WARNER AUTOMOTIVE CONTROL SYSTEMS CORPORATION Title: Vice President BORG-WARNER AUTOMOTIVE MORSE TEC CORPORATION By:BORG-WARNER AUTOMOTIVE MORSE TEC CORPORATION Title: Vice President