3YR Revolving Credit Agreement

EXECUTION COPY


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3-YEAR REVOLVING CREDIT AGREEMENT


dated as of June 26, 2002


among


ARVINMERITOR, INC.,


THE LENDERS FROM TIME TO TIME PARTIES HERETO,


BANK ONE, NA
(Main Office Chicago)
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


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BANC ONE CAPITAL MARKETS, INC.


and


JP MORGAN SECURITIES, INC.


as Joint Lead Arrangers and Joint Book Runners


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SIDLEY AUSTIN BROWN & WOOD
Bank One Plaza
10 South Dearborn Street
Chicago, Illinois 60603


TABLE OF CONTENTS


ARTICLE I
DEFINITIONS 1.1. Defined Terms 1


ARTICLE II
THE CREDITS


2.1. Commitments 15 2.2. [Intentionally Omitted]. 16 2.3. Repayment of Revolving Credit Loans; Evidence of Debt. 16 2.4. Procedures for Revolving Credit Borrowing 16 2.5. Termination or Reduction of Commitment 17 2.6. Facility, Utilization and Agent Fees 17 2.7. Optional and Mandatory Principal Payments on All Loans. 17 2.8. Conversion and Continuation of Outstanding Advances 18 2.9. Interest Rates; Interest Payment Dates; Interest and Fee Basis 19 2.10. Changes in Interest Rate, etc 19 2.11. Rates Applicable After Default 19 2.12. Pro Rata Payment, Method of Payment 20 2.13. Telephonic Notices 20 2.14. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions 20 2.15. Lending Installations 20 2.16. Non-Receipt of Funds by the Administrative Agent 21 2.17. Application of Payments with Respect to Defaulting Lenders 21


ARTICLE III
CHANGE IN CIRCUMSTANCES, TAXES


3.1. Yield Protection 21 3.2. Changes in Capital Adequacy Regulations 22 3.3. Availability of Types of Advances 22 3.4. Funding Indemnification 23 3.5. Lender Statements; Survival of Indemnity 23 3.6. Taxes 23 3.7. Substitution of Lender 25


ARTICLE IV
CONDITIONS PRECEDENT


4.1. Initial Advances 25 4.2. Each Advance 27


ARTICLE V
REPRESENTATIONS AND WARRANTIES


5.1. Corporate Existence and Standing 27 5.2. Authorization and Validity 27 5.3. No Conflict; Government Consent 28 5.4. Financial Statements 28


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5.5. Material Adverse Change 28 5.6. Taxes 28 5.7. Litigation and Contingent Obligations 28 5.8. Subsidiaries 29 5.9. ERISA 29 5.10. Accuracy of Information 29 5.11. Regulation U 29 5.12. Material Agreements 29 5.13. Compliance With Laws 29 5.14. Plan Assets; Prohibited Transactions 29 5.15. Environmental Matters 29 5.16. Investment Company Act 30 5.17. Public Utility Holding Company Act 30


ARTICLE VI
COVENANTS


6.1. Financial Reporting 30 6.2. Use of Proceeds 31 6.3. Notice of Default 31 6.4. Conduct of Business 32 6.5. Taxes 32 6.6. Insurance 32 6.7. Compliance with Laws 32 6.8. Maintenance of Properties 32 6.9. Inspection 32 6.10. Priority Indebtedness 32 6.11. Merger 32 6.12. Sale of Assets 33 6.13. Conduct of Business; Investments and Acquisitions 33 6.14. Liens 34 6.15. Transactions with Affiliates and Joint Ventures 35 6.16. Contingent Obligations 36 6.17. Sale and Leaseback 36 6.18. Subordinated Indebtedness; Restricted Payments 36 6.19. Guarantees 36 6.20. Debt Ratio 36 6.21. Fixed Charge Coverage Ratio 36 6.22. Financial Contracts 36


ARTICLE VII
DEFAULTS


7.1. Defaults 36
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES


8.1. Acceleration 38 8.2. Amendments. 39 8.3. Preservation of Rights 39
ii
ARTICLE IX
GENERAL PROVISIONS


9.1. Survival of Representations 40 9.2. Governmental Regulation 40 9.3. Taxes 40 9.4. Headings 40 9.5. Entire Agreement 40 9.6. Several Obligations; Benefits of this Agreement 40 9.7. Expenses; Indemnification 40 9.8. Numbers of Documents 41 9.9. Accounting 41 9.10. Severability of Provisions 41 9.11. Nonliability of Lenders 41 9.12. Confidentiality 42 9.13. Nonreliance 42


ARTICLE X
THE AGENTS


10.1. Appointment; Nature of Relationship 43 10.2. Powers 43 10.3. General Immunity 43 10.4. No Responsibility for Loans, Recitals, etc 43 10.5. Action on Instructions of Lenders 44 10.6. Employment of Agents and Counsel 44 10.7. Reliance on Documents; Counsel 44 10.8. Agents' Reimbursement and Indemnification 44 10.9. Notice of Default 44 10.10. Rights as a Lender 45 10.11. Lender Credit Decision 45 10.12. Successor Agents 45 10.13. No Duties Imposed Upon Syndication Agent, Documentation Agent or Arranger 45


ARTICLE XI
SETOFF; ADJUSTMENTS AMONG LENDERS; APPOINTED LENDERS


11.1. Setoff 46 11.2. Ratable Payments 46 11.3. Application of Payments 46 11.4. Appointed Lenders 47


ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS


12.1. Successors and Assigns 48 12.2. Participations. 48 12.3. Assignments. 49 12.4. Dissemination of Information 50 12.5. Tax Treatment 50


ARTICLE XIII
NOTICES


iii


13.1. Notices 50 13.2. Change of Address 50


ARTICLE XIV
COUNTERPARTS


14.1. Counterparts 50
ARTICLE XV
CHOICE OF LAW, CONSENT TO JURISDICTION, WAIVER OF JURY TRIAL, JUDGMENT
CURRENCY


15.1. CHOICE OF LAW 51 15.2. WAIVER OF JURY TRIAL 51 15.3. Submission To Jurisdiction; Waivers 51 15.4. Acknowledgments 51
iv Exhibits


EXHIBIT A -- Form of Promissory Note EXHIBIT B -- Form of Compliance Certificate EXHIBIT C -- Form of Borrower's Counsel's Opinion EXHIBIT D -- Form of Written Money Transfer Instructions EXHIBIT E -- Form of Assignment Agreement EXHIBIT F -- List of Closing Documents EXHIBIT G -- Appointment Agreement EXHIBIT H -- Pricing Schedule


SCHEDULES Schedule 1 -- Commitments Schedule 2 -- Litigation Schedule 3 -- Subsidiaries Schedule 4 -- ERISA


v
THIS 3-YEAR REVOLVING CREDIT AGREEMENT (this "AGREEMENT"), dated as of June 26, 2002, among ARVINMERITOR, INC., an Indiana corporation (the "BORROWER"), the lenders from time to time parties hereto (the "Lenders"), BANK ONE, NA, having its principal office in Chicago, Illinois, as administrative agent for the Lenders (the "ADMINISTRATIVE AGENT"), JP MORGAN CHASE BANK, as syndication agent for the Lenders (the "SYNDICATION AGENT"), and Deutsche Bank SECURITIES INC., CITICORP USA, INC. AND UBS WARBURG LLC as documentation agents for the Lenders (the "DOCUMENTATION AGENTS").


NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows:


ARTICLE I
DEFINITIONS


1.1. Defined Terms. As used in this Agreement, the following terms shall have the following meanings:


"Acquisition" means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the Borrower or any of its Subsidiaries (i) acquires any going business or all or substantially all of the assets of any firm, corporation or limited liability company, or division thereof, whether through purchase of assets, merger or otherwise or (ii) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the securities of a corporation which have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or a majority (by percentage or voting power) of the outstanding ownership interests of a partnership or limited liability company.


"Administrative Agent" means Bank One in its capacity as administrative agent for the Lenders pursuant to Article X, and not in its individual capacity as a Lender, and any successor Administrative Agent appointed pursuant to Article X.


"Advance" means a borrowing hereunder (or continuation or conversion thereof) consisting of the several Loans made on the same Borrowing Date (or date of conversion or continuation) by the Lenders to the Borrower of the same Type and, in the case of Eurodollar Advances, for the same Interest Period.


"Affiliate" of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. The term "control" (including the correlative terms "controlled" and "controlling") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting stock, by contract and otherwise; provided that under no circumstance shall the Administrative Agent, the Syndication Agent or any of the Lenders be deemed to be Affiliates of the Borrower or vice versa.


"Agents" shall mean, collectively, the Administrative Agent, the Syndication Agent and the Documentation Agents.


"Aggregate Commitments" means the aggregate amount of the Commitments of all of the Lenders, which amount shall not exceed Four Hundred Million Dollars ($400,000,000), as such number may be reduced pursuant to Section 2.5.
"Aggregate Outstandings" means as at any date of determination with respect to any Lender, the sum of the aggregate unpaid principal amount of such Lender's Loans.


"Agreement" means this credit agreement, as it may be amended, restated, supplemented or otherwise modified and in effect from time to time.


"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 Borrower or any of its Subsidiaries with the agreement of its independent certified public accountants after the Closing 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 Borrower'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 Borrower'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.


"Alternate Base Rate" means, for any day, a rate of interest per annum equal to the higher of (a) the Prime Rate for such day and (b) the sum of the Federal Funds Effective Rate for such day plus 1/2% per annum.


"Applicable Margin" means the amounts set forth in the Pricing Schedule on Exhibit H hereto.


"Appointed Lender" means, with respect to each Appointing Lender, each Eligible Appointee designated by such Appointing Lender pursuant to Section 11.4.


"Appointing Lender" means, with respect to each Appointed Lender, the Lender that designated such Appointed Lender pursuant to Section 11.4.


"Article" means an article of this Agreement unless another document is specifically referenced.


"Arvin" means Arvin Industries, Inc., an Indiana corporation.


"Assignment" is defined in Section 12.3.1.


"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 Borrower or any person designated by any such Person in writing to the Administrative Agent from time to time, acting singly.


"Available Commitment" means at any date of determination with respect to any Lender, an amount in U.S. Dollars equal to the excess, if any, of (a) the amount of such Lender's Commitment in effect on such date over (b) the Aggregate Outstandings of such Lender on such date.


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"Bank Book" means the Confidential Information Memorandum dated May 2002 relating to this Agreement and the concurrent amendment to the 5-Year Revolving Credit Agreement.


"Bank One" means Bank One, NA, having its principal place of business in Chicago, Illinois, in its individual capacity, and its successors.


"Borrower" is defined in the preamble hereto.


"Borrowing Date" means any Business Day specified in a notice pursuant to Section 2.4 as a date on which the Borrower requests the Lenders to make Loans hereunder.


"Business Day" means (a) when such term is used to describe a day on which a borrowing, payment or interest rate determination is to be made in respect of a Eurodollar Loan, such day shall be a London Banking Day; and (b) when such term is used in any context in this Agreement (including as described in the foregoing clause (a)), such term shall mean a day which, in addition to complying with any applicable requirements set forth in the foregoing clause (a), is a day other than a Saturday, Sunday or other day on which commercial banks in Chicago, Illinois are authorized or required by law to close.


"Capital Expenditures" means, for any period, the aggregate of all expenditures by the Borrower and its consolidated Subsidiaries during that period that, in conformity with Agreement Accounting Principles, are required to be included in or reflected by the property, plant, Equipment or similar fixed asset accounts reflected in the consolidated balance sheet of the Borrower and its Subsidiaries (which shall include, without limitation, Capitalized Leases).


"Capitalized Lease" of a Person means any lease of Property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.


"Capitalized Lease Obligations" of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.


"Capital Stock" means (i) in the case of a corporation, corporate stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a limited liability company, membership interests, (iv) in the case of a partnership, partnership interests (whether general or limited) and (v) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person; provided, however, that "Capital Stock" shall not include any debt securities convertible into equity securities prior to such conversion.


"Change in Control" means any event or series of events by which:


(i) any "person" or "group" (within the meaning of Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934, as amended), directly or indirectly, of thirty percent (30%)
or more of the voting power of the then outstanding Capital Stock of the
Borrower entitled to vote generally in the election of the directors of the
Borrower;


(ii) during any period of twelve (12) consecutive calendar months,
the board of directors of the Borrower shall cease to have as a majority of
its members individuals who either: (a) were


3
directors of the Borrower on the first day of such period, or (b) were
elected or nominated for election to the board of directors of the Borrower
at the recommendation of or other approval by at least a majority of the
directors then still in office at the time of such election or nomination
who were directors of the Borrower on the first day of such period, or
whose election or nomination for election was so approved; or


(iii) the Borrower consolidates with or merges into another
corporation or conveys, transfers or leases all or substantially all of its
property to any person, or any corporation consolidates with or merges into
the Borrower, in either event pursuant to a transaction in which the
outstanding Capital Stock of the Borrower is reclassified or changed into
or exchanged for cash, securities or other Property.


"Closing Date" means the date of this Agreement.


"Code" means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.


"Combined Commitment" means the sum of (1) the aggregate of the "Commitments" under the 5-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) and (2) the aggregate of the Commitments hereunder (which, after the Commitments have been terminated shall be based on the aggregate of the Commitments immediately prior to such termination).


"Combined Utilized Amount" means the sum of (1) the Aggregate Outstandings of all the Lenders and (2) the "Aggregate Ratable Outstandings" of all the "Lenders" plus the "Aggregate Non- Pro Rata Outstandings" of all the "Lenders" under and as defined in the 5-Year Revolving Credit Agreement excluding any amounts attributable to outstanding "Multicurrency Swing Line Loans" as defined therein or any of the Lender's funded participations in or obligations to purchase participations in such Multicurrency Swing Line Loans.


"Commitment" means, as to any Lender at any time, its obligation to make Revolving Credit Loans to the Borrower in an aggregate amount not to exceed at any time outstanding the amount set forth opposite such Lender's name in Schedule 1 under the heading "Commitment" or as otherwise established pursuant to Section 12.3, as such amount may be reduced from time to time pursuant to Section 2.5, 1 ...