Amended & Restated 5YR Revolving Credit Agrmnt

EXECUTION COPY


AMENDMENT NO. 3
TO
AMENDED AND RESTATED 5-YEAR REVOLVING CREDIT AGREEMENT


This AMENDMENT NO. 3 TO AMENDED AND RESTATED 5-YEAR REVOLVING CREDIT AGREEMENT (the "AMENDMENT") dated as of June 26, 2002 is among ArvinMeritor, Inc., an Indiana corporation (the "COMPANY"), Meritor Automotive Canada, Inc., a company organized under the laws of Canada, Arvin Finance Ireland, a company organized under the laws of Ireland, Meritor Heavy Vehicle Systems Limited, a company organized under the laws of the United Kingdom (collectively with the Company referred to as the "BORROWERS") and the "Lenders" and the "Agents" signatory hereto (each as defined in the "Credit Agreement" referred to below). Defined terms used herein and not otherwise defined herein shall have the meanings given to them in the Credit Agreement.


WHEREAS, the Borrowers, the Lenders and the Agents are parties to that certain Amended and Restated 5-Year Revolving Credit Agreement dated as of June 27, 2001 (as amended by Amendment No. 1 thereto dated as of September 30, 2001 and by Amendment No. 2 thereto dated as of February 1, 2002, the "CREDIT AGREEMENT") among the Borrowers, the other Foreign Subsidiary Borrowers from time to time party thereto, the Lenders from time to time party thereto, Bank One, NA, in its capacity as administrative agent for itself and the other "Lenders" under the "Credit Agreement" (each as hereinafter defined) (the "ADMINISTRATIVE AGENT"), JP Morgan Chase Bank (successor to The Chase Manhattan Bank), in its capacity as syndication agent for itself and the other Lenders under the Credit Agreement (the "SYNDICATION AGENT") and Citicorp USA, Inc. and Bank of America, N.A. (collectively, the "DOCUMENTATION AGENTS"; the Administrative Agent, the Syndication Agent and the Documentation Agents being referred to collectively as the "AGENTS");


WHEREAS, the Borrowers have requested that the Agents and the Lenders amend certain provisions of the Credit Agreement; and


WHEREAS, the Borrowers, the Agents and the Lenders have agreed to enter into this Amendment on the terms and conditions set forth herein.


NOW, THEREFORE, in consideration of the premises set forth above, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrowers, the Lender and the Agents agree as follows:


1. Amendments. Effective as of the date first above written and subject to the satisfaction of the conditions precedent set forth in Section 2 below, the Credit Agreement shall be and hereby is amended as follows:


1.1. To the extent not otherwise specifically set forth herein, (i)
each reference to "The Chase Manhattan Bank" in the Credit Agreement shall
be replaced with a reference to "JP Morgan Chase Bank (successor to The
Chase Manhattan Bank)" and (ii) each reference to "Chase" shall be replaced
with a reference to "JP Morgan".
1.2. Section 1.1 of the Credit Agreement is hereby amended to delete
the definitions for "Chase" and "364-Day Revolving Credit Agreement" in
their entirety.


1.3. Section 1.1 of the Credit Agreement is hereby amended to add the
following new definitions in the appropriate alphabetical location:


"JP Morgan" means JP Morgan Chase Bank, in its individual
capacity, and its successors.


"3-Year Revolving Credit Agreement" means that certain 3-Year
Revolving Credit Agreement, dated as of June 26, 2002, among the
Company, the lenders from time to time parties thereto, Bank One, NA,
having its principal office in Chicago, Illinois, as Administrative
Agent, JP Morgan Chase Bank, as Syndication Agent, and Deutsche Bank
Securities Inc., Citicorp USA, Inc. and UBS Warburg LLC , as
Documentation Agents, as the same may be amended, restated,
supplemented or otherwise modified and as in effect from time to time.


"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" within the meaning of Rule 1-02 of the
Security Exchange Commission's Regulation S-X, as amended and in
effect from time to time.


"Synthetic Lease" means a financing structure that qualifies as
an operating lease for financial reporting purposes under Agreement
Accounting Principles, but is considered a loan for tax purposes.


"Synthetic Lease Obligations" means any liabilities under any
Synthetic Lease.


"Third Amendment Effective Date" means June 26, 2002.


1.4. The following definitions in Section 1.1 of the Credit Agreement
are hereby amended and restated in their entirety as follows:


"Agreement Accounting Principles" means generally accepted
accounting principles as in effect on June 1, 2001 in the United
States; provided that, if any changes in generally accepted accounting
principles are required or permitted and are adopted by the Company or
any of its Subsidiaries with the agreement of its independent
certified public accountants after the Third Amendment Effective Date
and such changes result in a change in the method of calculation of
any of the financial covenants, tests, restrictions or standards
herein or in the related definitions or terms used therein
("Accounting Changes"), the parties hereto agree, at the Company's
request, to enter into negotiations, in good faith, in order to amend
such provisions in a credit neutral manner so as to reflect equitably
such Accounting Changes with the desired result that the criteria for
evaluating the Company's and its Subsidiaries' financial condition
shall be the same after such changes as if such changes had not been
made; provided, however, until such provisions are amended in a manner
reasonably satisfactory to the
Administrative Agent and the Required Lenders, no Accounting Change
shall be given effect in such calculations and all financial
statements and reports required to be delivered hereunder shall be
prepared in accordance with Agreement Accounting Principles without
taking into account such Accounting Changes. In the event such
amendment is entered into, all references in this Agreement to
Agreement Accounting Principles shall mean generally accepted
accounting principles as in effect on June 1, 2001, but giving effect
to the Accounting Changes addressed in such amendment.


"Authorized Officer" means any of the Chairman and Chief
Executive Officer, President and Chief Operating Officer, Senior Vice
President and Chief Financial Officer, Vice President and Treasurer
and any Assistant Treasurer of the Company or any person designated by
any such Person in writing to the Administrative Agent from time to
time, acting singly.


"Combined Commitment" means the sum of (1) the aggregate of the
Commitments hereunder (which, after the Commitments have been
terminated, shall be based on the aggregate Commitments immediately
prior to such termination) and (2) the aggregate "Commitments" under
and as defined in the 3-Year Revolving Credit Agreement (which, after
such "Commitments" have been terminated, shall be based on the
aggregate of such "Commitments" immediately prior to such
termination).


"Combined Utilized Amount" means the sum of (1) the Aggregate
Ratable Outstandings of all the Lenders plus the Aggregate Non-Pro
Rata Multicurrency Outstandings of all the Lenders hereunder excluding
any amounts attributable to outstanding Multicurrency Swing Line Loans
or any Lender's funded participations in or obligations to purchase
participations in Multicurrency Swing Line Loans, and (2) the
"Aggregate Outstandings" of all the "Lenders" under and as defined in
the 3-Year Revolving Credit Agreement.


"Indebtedness" of a Person means, without duplication, such
Person's (a) obligations for borrowed money, (b) obligations
representing the deferred purchase price of Property or services
(other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade), (c)
obligations, whether or not assumed, secured by Liens on property now
or hereafter owned or acquired by such Person, (d) obligations which
are evidenced by notes, acceptances, or other instruments (other than
Financial Contracts), to the extent of the amounts actually borrowed,
due, payable or drawn, as the case may be, (e) Capitalized Lease
Obligations, (f) all obligations in respect of standby Letters of
Credit, whether drawn or undrawn, contingent or otherwise, (g)
Receivables Facility Attributed Indebtedness in excess of $300,000,000
(it being understood, that notwithstanding the characterization of
Receivables Facility Attributed Indebtedness as on-balance sheet
Indebtedness or as an Off-Balance Sheet Liability, Receivables
Facility Attributed Indebtedness shall only constitute "Indebtedness"
hereunder to the extent that it exceeds $300,000,000), (h) Synthetic
Lease Obligations in excess of $200,000,000 (it
being understood, that notwithstanding the characterization of
Synthetic Lease Obligations as on-balance sheet Indebtedness or as an
Off-Balance Sheet Liability, Synthetic Lease Obligations shall only
constitute "Indebtedness" hereunder to the extent that they exceed
$200,000,000), (i) with respect to Indebtedness of the Company, the
Company-obligated mandatorily redeemable preferred capital securities
and (j) Contingent Obligations with respect to any of the foregoing to
the extent (and only to the extent) that (1) such Contingent
Obligation relates to other Indebtedness that is not consolidated
Indebtedness of the Company and its Subsidiaries and (2) the other
Indebtedness to which such Contingent Obligation relates is
outstanding and then only as to principal or like amounts actually
borrowed, due, payable or drawn, as the case may be; provided, that
for purposes of this definition and this Agreement, Indebtedness of
the Company and its Subsidiaries (i) shall not be increased or
decreased as a result of any change in the Company's liabilities
pursuant to Statement of Financial Accounting Standards No. 133,
promulgated by the Financial Accounting Standards Board of the
Financial Accounting Foundation and (ii) shall exclude Indebtedness of
the SPV owing to the Originators representing the purchase price
payable for Receivables and Related Security purchased by the SPV in
connection with a Receivables Purchase Facility.


"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, the interest of a vendor or lessor under any conditional
sale, Capitalized Lease, Synthetic Lease or other title retention
agreement).


"Notice of Assignment" is defined in Section 13.3.2.


"Off-Balance Sheet Liabilities" of a Person means, without
duplication, (a) any Receivables Facility Attributed Indebtedness and
repurchase obligation or liability of such Person or any of its
Subsidiaries with respect to Receivables or notes receivable sold by
such Person or any of its Subsidiaries to the extent such Receivables
Facility Attributed Indebtedness, obligation or liability does not
appear on the consolidated balance sheet of such Person and its
Subsidiaries (calculated to include the unrecovered investment of
purchasers or transferees of Receivables or notes receivable or any
other obligation of the Company or such transferor to
purchasers/transferees of interests in Receivables or notes
receivables or the agent for such purchasers/transferees), (b) any
liability under any sale and leaseback transactions which do not
create a liability on the consolidated balance sheet of such Person,
(c) any Synthetic Lease Obligations or (d) any obligations arising
with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheets of such
Person and its Subsidiaries.
"Priority Indebtedness" means, collectively, and without
duplication, (a) any and all Indebtedness of any Subsidiary of the
Company, (b) any and all Indebtedness of the Company and its
Subsidiaries that is secured by any Lien, (c) Receivables Facility
Attributed Indebtedness in excess of $300,000,000 and (d) Synthetic
Lease Obligations in excess of $200,000,000; provided, that, (x) there
shall be excluded from the calculation of Priority Indebtedness (i)
Indebtedness of the Foreign Subsidiary Borrowers under this Agreement
(ii) Indebtedness of any Subsidiary of the Company owing to any of the
Borrowers and (iii) intercompany Indebtedness owing from a Subsidiary
of the Company to another Subsidiary of the Company disclosed from
time to time to the Agents to the extent that such intercompany
Indebtedness is evidenced by one or more promissory notes which shall
contain terms subordinating such Indebtedness to the Obligations in a
manner satisfactory to the Agents, and (y) for purposes of
clarification, each reference to "Indebtedness" in this definition
shall include both intercompany and third-party Indebtedness.


"Rate Hedging Agreement" means any agreement with respect to any
swap, forward, future or derivative transaction or option or similar
agreement involving, or settled by reference to, one or more rates,
currencies, commodities, equity or debt instruments or securities, or
economic, financial or pricing indices or measures of economic,
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