Investor Overview | Meritor, Inc.

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UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended July 1, 2012

Commission File No. 1-15983

MERITOR, INC.

(Exact name of registrant as specified in its charter)

Indiana 38-3354643 (State or other jurisdiction of incorporation or (I.R.S. Employer Identification organization) No.) 2135 West Maple Road, Troy, Michigan 48084-7186 (Address of principal executive offices) (Zip Code)

(248) 435-1000(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of RegistrationS-T during the preceding twelve months (or for such shorter period that the registrant was required to submit and post such files).

Yes X No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and“smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer X Accelerated filer Non-accelerated filer Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes No X

96,524,635 shares of Common Stock, $1.00 par value, of Meritor, Inc. were outstanding on July 1, 2012.

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PART I. FINANCIAL INFORMATION: Item 1. Financial Statements: Consolidated Statement of Income - - Three and Nine Months Ended June 30, 2012 and 2011 3 Condensed Consolidated Balance Sheet - - June 30, 2012 and September 30, 2011 4 Condensed Consolidated Statement of Cash Flows - - Nine Months Ended June 30, 2012 and 2011 5 Condensed Consolidated Statement of Equity (Deficit) - - Nine Months Ended June 30, 2012 and 2011 6 Notes to Consolidated Financial Statements 7 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 36 Item 3. Quantitative and Qualitative Disclosures About Market Risk 54 Item 4. Controls and Procedures 56 PART II. OTHER INFORMATION: Item 1. Legal Proceedings 57 Item 1A. Risk Factors 57 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 57 Item 5. Other Information 57 Item 6. Exhibits 59 Signatures 60

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MERITOR, INC.

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

CONSOLIDATED STATEMENT OF INCOME(in millions, except per share amounts)

Three Months Ended

June 30, Nine Months Ended

June 30,

2012 2011 2012 2011

(Unaudited)

Sales $ 1,113 $ 1,272 $ 3,432 $ 3,405Cost of sales (981) (1,137) (3,060) (3,047)GROSS MARGIN 132 135 372 358

Selling, general and administrative (68) (72) (205) (212)Restructuring costs (3) (7) (30) (15)Gain on sale of property 16 — 16 —Other operating expense (1) — (3) (2)

OPERATING INCOME 76 56 150 129 Other income, net 1 5 6 3

Equity in earnings of affiliates 12 21 41 51Interest expense, net (25) (22) (72) (73)

INCOME BEFORE INCOME TAXES 64 60 125 110Provision for income taxes (12) (28) (49) (69)

INCOME FROM CONTINUING OPERATIONS 52 32 76 41INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax (1) (10) (19) 5NET INCOME 51 22 57 46Less: Income attributable to noncontrolling interests (2) (5) (10) (14)

NET INCOME ATTRIBUTABLE TO MERITOR, INC. $ 49 $ 17 $ 47 $ 32

NET INCOME (LOSS) ATTRIBUTABLE TO MERITOR, INC. Net income from continuing operations $ 50 $ 27 $ 66 $ 27Income (loss) from discontinued operations (1) (10) (19) 5

Net income $ 49 $ 17 $ 47 $ 32

BASIC EARNINGS (LOSS) PER SHARE Continuing operations $ 0.51 $ 0.28 $ 0.69 $ 0.29Discontinued operations (0.01) (0.10) (0.20) 0.05

Basic earnings per share $ 0.50 $ 0.18 $ 0.49 $ 0.34

DILUTED EARNINGS (LOSS) PER SHARE Continuing operations $ 0.51 $ 0.28 $ 0.68 $ 0.28Discontinued operations (0.01) (0.10) (0.20) 0.05

Diluted earnings per share $ 0.50 $ 0.18 $ 0.48 $ 0.33

Basic average common shares outstanding 96.4 94.3 95.7 94.0

Diluted average common shares outstanding 97.2 96.8 97.2 96.9

See notes to consolidated financial statements. Amounts for prior period have been recast for discontinued operations.

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MERITOR, INC.

CONDENSED CONSOLIDATED BALANCE SHEET(in millions)

June 30,

2012 September 30,

2011

(Unaudited)

ASSETS CURRENT ASSETS:

Cash and cash equivalents $ 226 $ 217Receivables, trade and other, net 642 712Inventories 463 460Other current assets 56 70

TOTAL CURRENT ASSETS 1,387 1,459NET PROPERTY 399 421GOODWILL 426 431OTHER ASSETS 343 352

TOTAL ASSETS $ 2,555 $ 2,663

LIABILITIES AND EQUITY (DEFICIT) CURRENT LIABILITIES:

Short-term debt $ 9 $ 84 Accounts payable 775 841

Other current liabilities 324 328TOTAL CURRENT LIABILITIES 1,108 1,253

LONG-TERM DEBT 1,048 950RETIREMENT BENEFITS 1,017 1,096OTHER LIABILITIES 315 325EQUITY (DEFICIT):

Common stock (June 30, 2012 and September 30, 2011, 96.5 and 94.6 shares issued and outstanding, respectively) 96 94Additional paid-in capital 900 897Accumulated deficit (1,110) (1,157)Accumulated other comprehensive loss (861) (829)

Total deficit attributable to Meritor, Inc. (975) (995)Noncontrolling interests 42 34

TOTAL DEFICIT (933) (961)

TOTAL LIABILITIES AND DEFICIT $ 2,555 $ 2,663

See notes to consolidated financial statements.

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MERITOR, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS(in millions)

Nine Months Ended June 30,

2012 2011

(Unaudited)

OPERATING ACTIVITIES CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (See Note 10) $ 22 $ (19)

INVESTING ACTIVITIES Capital expenditures (65) (68)

Proceeds from sale of property 18 —Other investing activities 3 1

Net investing cash flows used for continuing operations (44) (67)Net investing cash flows provided by (used for) discontinued operations 28 (66)

CASH USED FOR INVESTING ACTIVITIES (16) (133)FINANCING ACTIVITIES

Repayment of notes and term loan (85) —Proceeds from term loan 100 —Debt issuance costs (12) —Other financing activities — 6

CASH PROVIDED BY FINANCING ACTIVITIES 3 6EFFECT OF CHANGES IN FOREIGN CURRENCY EXCHANGERATES ON CASH AND CASH EQUIVALENTS — 4

CHANGE IN CASH AND CASH EQUIVALENTS 9 (142)CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 217 343

CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 226 $ 201

See notes to consolidated financial statements. Amounts for prior period have been recast for discontinued operations.

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MERITOR, INC.

CONDENSED CONSOLIDATED STATEMENT OFEQUITY (DEFICIT)

(In millions)(unaudited)

Common

Stock Additional

Paid-inCapital

AccumulatedDeficit

AccumulatedOther

ComprehensiveLoss

Total DeficitAttributable toMeritor, Inc.

NoncontrollingInterests Total

Beginning balance at September 30, 2011 $ 94 $ 897 $ (1,157) $ (829) $ (995) $ 34 $ (961)

Net income — — 47 — 47 10 57

Foreign currency translation adjustments — — — (31) (31) — (31)

Employee benefit related adjustment — — — 2 2 — 2

Other — — — (3) (3) — (3)

Comprehensive income 15 10 25

Issuance of restricted stock 2 (2) — — — — —

Equity based compensation expense — 5 — — 5 — 5

Non-controlling interest dividends — — — — — (2) (2)

Ending Balance at June 30, 2012 $ 96 $ 900 $ (1,110) $ (861) $ (975) $ 42 $ (933)

Beginning balance at September 30, 2010 $ 92 $ 886 $ (1,220) $ (812) $ (1,054) $ 31 $ (1,023)

Net income — — 32 — 32 14 46

Foreign currency translation adjustments — — — 56 56 2 58

Impact of sale of business (62) (62) (62)

Employee benefit related adjustment — — — 9 9 9

Other — — — (2) (2) — (2)

Comprehensive income 33 16 49

Equity based compensation expense — 6 — — 6 — 6

Exercise of stock options 1 5 — — 6 — 6

Non-controlling interest dividends — — — — — (1) (1)

Ending Balance at June 30, 2011 $ 93 $ 897 $ (1,188) $ (811) $ (1,009) $ 46 $ (963)

See notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)

1. Basis of Presentation

Meritor, Inc., (the "company" or "Meritor"), headquartered in Troy, Michigan, is a premier global supplier of a broad range of integrated systems, modules and components to original equipment manufacturers(“OEMs”) and the aftermarket for the commercial vehicle, transportation and industrial sectors. The company serves commercial truck, trailer, off-highway, military, bus and coach and other industrial OEMs and certainaftermarkets. The consolidated financial statements are those of the company and its consolidated subsidiaries.

Certain businesses are reported in discontinued operations in the consolidated statement of income, statement of cash flows and related notes for all periods presented. Additional information regarding discontinuedoperations is discussed in Note 4.

In the opinion of the company, the unaudited financial statements contain all adjustments, consisting solely of adjustments of a normal, recurring nature, necessary to present fairly the financial position, results ofoperations and cash flows for the periods presented. These statements should be read in conjunction with the company’s audited consolidated financial statements and notes thereto included in the Annual Report on Form10-K, for the fiscal year ended September 30, 2011. The results of operations for the nine months ended June 30, 2012, are not necessarily indicative of the results for the full year.

The company’s fiscal year ends on the Sunday nearest September 30. The third quarter of fiscal years 2012 and 2011 ended on July 1, 2012 and July 3, 2011, respectively. All year and quarter references relate to thecompany’s fiscal year and fiscal quarters, unless otherwise stated. For ease of presentation, September 30 and June 30 are used consistently throughout this report to represent the fiscal year end and third quarter end,respectively.

The company has evaluated subsequent events through the date that the consolidated financial statements were issued.

2. Earnings per Share

Basic earnings per share is calculated using the weighted average number of shares outstanding during each period. Diluted earnings per share calculation includes the impact of dilutive common stock options,restricted stock, performance share awards and convertible securities, if applicable.

A reconciliation of basic average common shares outstanding to diluted average common shares outstanding is as follows (in millions):

Three Months Ended


June 30,

2012 2011 2012 2011

Basic average common shares outstanding 96.4 94.3 95.7 94.0Impact of stock options — 0.1 — 0.1Impact of restricted shares and share units 0.8 2.4 1.5 2.8

Diluted average common shares outstanding 97.2 96.8 97.2 96.9

For the three and nine months ended June 30, 2012 and June 30, 2011, options to purchase 0.7 million and 0.6 million shares of common stock, respectively, were not included in the computation of diluted earningsper share because their exercise price exceeded the average market price for the period and thus their inclusion would be anti-dilutive. The company’s convertible senior unsecured notes are excluded from thecomputation of diluted earnings per share, as the stock price at the end of the quarter is less than the conversion price.

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3. New Accounting Standards

Accounting standards implemented during fiscal year 2012

In September 2011, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) No. 2011-08: Testing Goodwill for Impairment. Under the revised guidance, entities testing forgoodwill impairment have an option of performing a qualitative assessment before calculating the fair value for the reporting unit, i.e., Step 1 of the goodwill impairment test. If an entity determines, on the basis ofqualitative factors, that the fair value of the reporting unit is more-likely-than-not less than the carrying amount, the first step of the two-step impairment test would be required. If it is not more-likely-than-not that the fairvalue of the reporting unit is less than the carrying value, then goodwill is not considered to be impaired. ASU No. 2011-08 does not change how goodwill is calculated or assigned to reporting units, nor does it revise therequirement to test goodwill at least annually for impairment. This ASU is effective for interim and annual periods beginning after December 15, 2011 with early adoption permitted. The company has adopted the revisedguidance provided in this ASU effective with its second quarter of fiscal year 2012 and has started applying it accordingly. The adoption of this new guidance did not have any significant effect on the company's goodwillimpairment assessments.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. generally acceptedaccounting principles (GAAP) and International Financial Reporting Standards (IFRS). This ASU is intended to result in convergence between U.S. GAAP and IFRS requirements for measurement of and disclosuresabout fair value. The guidance amends current fair value measurement and disclosure guidance to include increased transparency around valuation inputs and investment categorization. This new guidance is effective forfiscal years and interim periods beginning after December 15, 2011. The company has adopted this new guidance effective with its second quarter of fiscal year 2012 and has provided required disclosures in Note 18 tothe consolidated financial statements.

Accounting standard to be implemented

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The new guidance allows an entity to present components of net income and othercomprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. The guidance eliminates the current option to report othercomprehensive income and its components in the statement of changes in equity. While the new guidance changes the presentation of comprehensive income, there are no changes to the components that are recognized innet income or other comprehensive income under current accounting guidance. This new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The companydoes not believe the adoption of the new guidance will have a significant impact on the company’s consolidated financial statements.

4. Discontinued Operations

Results of discontinued operations are summarized as follows (in millions):

Three Months Ended


June 30,

2012 2011 2012 2011

Sales $ — $ 18 $ 2 $ 354

Operating income (loss), net $ — $ (1) $ — $ 12Gain (loss) on sale of businesses, net — — (1) 19Restructuring costs — — (1) (7)Charge for legal contingency (see Note 20) — — (9) —Environmental remediation charges — — (2) (1)Other, net (3) (7) (9) (14)

Income (loss) before income taxes (3) (8) (22) 9Benefit (provision) for income taxes 2 (2) 3 (4)

Income (loss) from discontinued operations attributable to Meritor, Inc. $ (1) $ (10) $ (19) $ 5

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In conjunction with the company’s long-term strategic objective to focus on supplying the commercial vehicle on- and off-highway markets for original equipment manufacturers, aftermarket and industrial customers,the company divested its Light Vehicle Systems (LVS) business groups in various transactions. In November 2011, the company sold its damper business located in Leicester, England. With the sale of this business, thecompany has completed the divestiture of its LVS businesses. Results of the company's LVS businesses are reflected in discontinued operations for all periods presented.

In the second quarter of fiscal year 2011, the company announced the planned closure of its European Trailer (EU Trailer) business which was part of the company’s Aftermarket & Trailer segment. All manufacturingoperations and use of productive assets ceased prior to September 30, 2011. The company sold certain long-lived and current assets of the business to a third party during the fourth quarter of fiscal year 2011. Results ofthe EU Trailer business are presented in discontinued operations for all periods presented.

The following summarizes significant items included in income (loss) from discontinued operations in the consolidated statement of income for the three- and nine-month periods ended June 30, 2012 and 2011:

Sales from discontinued operations in the three month period ended June 30, 2011 were $18 million, which were primarily related to the company’s EU Trailer business. Sales in the nine month period ended June 30,2011 were $354 million, which included $298 million in Body Systems and $45 million in EU Trailer.

Operating income (loss), net from discontinued operations in the three month period ended June 30, 2011 represents loss from normal operating activities of businesses, primarily EU Trailer, included in discontinuedoperations. Operating income, net from discontinued operations in the nine month period ended June 30, 2011 includes $17 million of operating income from Body Systems and a loss of approximately $6 million fromEU Trailer business. The remaining amount was related to the damper business, which as noted above, was sold in November 2011.

Net gain (loss) on sale of businesses: The loss on sale of business in the nine month period ended June 30, 2012 relates to the sale of the company’s damper business located in Leicester, England during the firstquarter of fiscal year 2012. In the second quarter of fiscal year 2011, the company recognized a pre-tax gain of $32 million ($32 million after tax) on the sale of the Body Systems business and a pre-tax loss of $13million ($13 million after tax) on the sale of its Gabriel Europe business.

Restructuring costs: The company recognized $1 million and $6 million of restructuring charges associated with the closure of its EU Trailer business in the first nine months of fiscal year 2012 and 2011, respectively.

Other: These charges primarily relate to changes in estimates and adjustments for certain assets and liabilities retained from previously sold businesses and indemnities provided at the time of sale, and costs associatedwith the divestiture actions.

5. Goodwill

A summary of the changes in the carrying value of goodwill are presented below (in millions):

Commercial

Truck Industrial Aftermarket

& Trailer Total

Balance at September 30, 2011 $ 150 $ 109 $ 172 $ 431Foreign currency translation (2) — (3) (5)

Balance at June 30, 2012 $ 148 $ 109 $ 169 $ 426

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6. Restructuring Costs

At June 30, 2012 and September 30, 2011, $12 million and $19 million, respectively, of restructuring reserves primarily related to unpaid employee termination benefits remained in the consolidated balance sheet. Thechanges in restructuring reserves for the nine months ended June 30, 2012 and 2011 are as follows (in millions):

Employee

TerminationBenefits

AssetImpairment

PlantShutdown& Other Total

Balance at September 30, 2011 $ 19 $ — $ — $ 19Activity during the period:

Charges to continuing operations 9 19 2 30Charges to discontinued operations(1) — — 1 1Asset impairments and other (1) (19) — (20)Cash payments – continuing operations (14) — (1) (15)Cash payments – discontinued operations (2) — (1) (3)

Total restructuring reserves at June 30, 2012 11 — 1 12Less: non-current restructuring reserves (5) — — (5)

Restructuring reserves – current, at June 30, 2012 $ 6 $ — $ 1 $ 7

Balance at September 30, 2010 $ 11 $ — $ — $ 11Activity during the period:

Charges to continuing operations 14 1 — 15Charges to discontinued operations(1) 6 — — 6Asset impairments — (1) — (1)Cash payments - continuing operations (10) — — (10)Cash payments – discontinued operations (3) — — (3)

Total restructuring reserves at June 30, 2011 $ 18 $ — $ — $ 18

(1) Charges to discontinued operations are included in income (loss) from discontinued operations in the consolidated statement of income.

Performance Plus: During fiscal year 2007, the company launched a long-term profit improvement and cost reduction initiative called “Performance Plus.” As part of this program, the company identified significantrestructuring actions which would eliminate up to 2,800 positions in North America and Europe and consolidate and combine certain global facilities. The company’s continuing operations recognized restructuring costsin its Commercial Truck business segment of $24 million in the first nine months of fiscal year 2012 related to Performance Plus. These costs include $19 million of non-cash charges, including an impairment charge of$17 million for assets held for sale at December 31, 2011. In connection with the then planned sale of St. Priest, France manufacturing facility to Renault Trucks SAS, the company classified certain assets and associatedliabilities as held for sale (collectively the “Disposal Group”) at December 31, 2011. Upon comparing the carrying value of the Disposal Group to its fair value less cost to sell, an impairment was identified. The sale ofDisposal Group was completed on January 2, 2012. In addition, other restructuring charges of approximately $5 million associated with employee headcount reduction and plant rationalization costs were recognized inconnection with the sale of St. Priest facility. The company recognized $13 million of restructuring costs under the Performance Plus program in the first nine months of fiscal year 2011 in its Commercial Truck segment.These charges primarily consisted of employee headcount reductions at the company's St. Priest, France manufacturing facility.

Cumulative restructuring costs recorded for this program as of June 30, 2012 are $186 million, including $93 million reported in discontinued operations in the consolidated statement of income. These costsprimarily relate to employee severance and related costs of $117 million, asset impairment charges of $41 million and $28 million primarily associated with pension termination benefits. The company’s CommercialTruck segment has recognized cumulative restructuring costs associated with Performance Plus of $82 million. Cumulative restructuring costs of $11 million were recognized by corporate locations and the company’sAftermarket & Trailer segment. Substantially all restructuring actions associated with Performance Plus were complete as of March 31, 2012.

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Fiscal Year 2012 European Action: During the second quarter of fiscal year 2012, the company approved a European headcount reduction plan in response to the ongoing economic weakness and uncertainty in thatregion. In the first nine months of fiscal year 2012, the company recognized approximately $4 million (including $3 million in the third quarter of fiscal year 2012) of restructuring costs associated with this plan in itsCommercial Truck segment. Remaining anticipated costs under this plan are approximately $2 million and are expected to be incurred during the remainder for fiscal year 2012.

Other: In the third quarter of fiscal year 2011, the company recorded approximately $2 million of restructuring costs at its corporate locations associated with certain executive headcount reductions.

7. Gain on Sale of Property and Other Income, Net

The company recognized a gain on sale of property of $16 million during the third quarter of fiscal year 2012. This gain is associated with the sale of excess land at the company's facility at Cwmbran, Wales.

Other income, net for the nine months ended June 30, 2012 includes a $3 million non-operating gain related to the sale of the company’s remaining ownership interest in Gabriel India, Ltd during the first quarter offiscal year 2012. The company’s ownership interest in Gabriel India, Ltd was a legacy investment accounted for under the cost method that the company deemed non-core upon the completion of the sale of its lightvehicle businesses.

Other income, net for the nine months ended June 30, 2011 includes a $5 million non-operating gain, recognized in the third quarter of fiscal year 2011, on the collection of a note receivable related to a previouslydivested business. The gain represented a change in fair value of the note from the time of receipt of the note to the date of final payment in the third quarter of fiscal year 2011. The gain was classified in income fromcontinuing operations in the consolidated statement of income.

8. Income Taxes

For each interim reporting period, the company makes an estimate of the effective tax rate expected to be applicable for the full fiscal year pursuant to FASB Accounting Standards Codification (ASC) Topic 740-270,“Accounting for Income Taxes in Interim Periods.” The rate so determined is used in providing for income taxes on a year-to-date basis. Jurisdictions with a projected loss for the year or an actual year-to-date loss whereno tax benefit can be recognized are excluded from the estimated annual effective tax rate. The impact of including these jurisdictions on the quarterly effective rate calculation could result in a higher or lower effectivetax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections.

Income tax expense (benefit) is allocated between continuing operations, discontinued operations and other comprehensive income (OCI). Such allocation is applied by tax jurisdiction, and in periods in which there isa pre-tax loss from continuing operations and pre-tax income in another category, such as discontinued operations or OCI, income tax expense is allocated to the other sources of income, with a related benefit recorded incontinuing operations.

For the first nine months of fiscal years 2012 and 2011, the company had approximately $31 million and $110 million, respectively, of net pre-tax losses in tax jurisdictions in which a tax benefit is not recorded.Losses arising from these jurisdictions resulted in increasing the valuation allowance, rather than reducing income tax expense.

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9. Accounts Receivable Factoring

Off-balance sheet arrangements

Swedish Factoring Facility: The company has an arrangement to sell trade receivables due from AB Volvo through one of its European subsidiaries. Under this arrangement, which was renewed on June 19, 2012 andwhich now terminates on June 28, 2013, the company can sell up to, at any point in time, €150 million of eligible trade receivables. The receivables under this program are sold at face value and are excluded from theconsolidated balance sheet. The company had utilized €143 million ($178 million) and €107 million ($146 million) of this accounts receivable factoring facility as of June 30, 2012 and September 30, 2011, respectively.

French Factoring Facility: The company has an arrangement to sell trade receivables through one of its French subsidiaries. Under this arrangement, the company could sell up to, at any point in time, €125 million ofeligible trade receivables. The receivables under this program are sold at face value and are excluded from the consolidated balance sheet. The company had no receivable balances sold under this arrangement at June 30,2012. The company had utilized €47 million ($63 million) of this accounts receivable factoring facility as of September 30, 2011. In January 2012, the company sold its manufacturing facility located at St. Priest, Franceto Renault Trucks SAS. As a result, utilization under this facility ramped down over the course of fiscal year 2012. During the second quarter of fiscal year 2012, the company entered into new arrangements to sell tradereceivables from AB Volvo and its European subsidiaries through its United Kingdom and Italian subsidiaries as more fully described below.

U.S. Factoring Facility: In October 2010, the company entered into a two-year arrangement to sell trade receivables from AB Volvo and its subsidiaries. Under this arrangement, the company can sell up to, at anypoint in time, €60 million ($75 million) of eligible trade receivables. The receivables under this program are sold at face value and are excluded from the consolidated balance sheet. The company had utilized €58 million($73 million) and €46 million ($62 million) of this accounts receivable factoring facility as of June 30, 2012 and September 30, 2011, respectively. It is anticipated that the facility will be extended upon maturity.

The above facilities are backed by 364-day liquidity commitments from Nordea Bank which were renewed through April 2013 for the Swedish and French facilities and October 2012 for the U.S. facility. Thecommitments are subject to standard terms and conditions for these types of arrangements (including, in the case of the French commitment, a sole discretion clause whereby the bank retains the right to not purchasereceivables, which to the company’s knowledge has never been invoked).

United Kingdom Factoring Facility: On February 2, 2012, the company entered into an arrangement to sell trade receivables from AB Volvo and its European subsidiaries through one of its United Kingdomsubsidiaries. Under this arrangement, which expires in February 2013, the company can sell up to, at any point in time, €25 million of eligible trade receivables. The receivables under this program are sold at face valueand are excluded from the consolidated balance sheet. The company had utilized €12 million ($15 million) of this accounts receivable factoring facility as of June 30, 2012. The commitment is subject to standard termsand conditions for these types of arrangements including a sole discretion clause whereby the bank retains the right to not purchase receivables, which has not been invoked since the inception of the program.

Italy Factoring Facility: On March 15, 2012, the company entered into an arrangement to sell trade receivables from AB Volvo and its European subsidiaries through one of its Italian subsidiaries. In order to make atechnical change relating to the identity of the purchaser under the facility, this agreement was terminated on June 18, 2012 and the company entered into an identical agreement (except for the identity of the purchaser) tosell trade receivables from AB Volvo and its European subsidiaries through one of its Italian subsidiaries. Under this arrangement, which expires in June 2017, the company can sell up to, at any point in time, €30 millionof eligible trade receivables. The receivables under this program are sold at face value and are excluded from the consolidated balance sheet. The company had utilized €13 million ($17 million) of this accountsreceivable factoring facility as of June 30, 2012. The commitment is subject to standard terms and conditions for these types of arrangements including a sole discretion clause whereby the bank retains the right to notpurchase receivables, which has not been invoked since the inception of the program.

In addition, several of the company’s subsidiaries, primarily in Europe, factor eligible accounts receivable with financial institutions. Certain receivables are factored without recourse to the company and are excludedfrom accounts receivable in the consolidated balance sheet. The amount of factored receivables excluded from accounts receivable was $12 million and $8 million at June 30, 2012 and September 30, 2011, respectively.

Total costs associated with these off-balance sheet arrangements were $7 million and $6 million in the nine month periods ended June 30, 2012 and 2011, respectively, and are included in selling, general andadministrative expenses in the consolidated statement of income.

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On-balance sheet arrangements

On June 18, 2012, the company entered into a new $100 million U.S. accounts receivables securitization facility, which expires on June 18, 2015. This program is provided by PNC Bank, National Association (PNC),as Administrator, Market Street Funding, LLC, and the other Purchasers and Purchaser Agents from time to time (participating lenders), which are party to the agreement. Under this program, the company has the abilityto sell an undivided percentage ownership interest in substantially all of its trade receivables (excluding the receivables due from AB Volvo and subsidiaries eligible for sale under the U.S. Factoring Facility and certainother receivables) of certain U.S. subsidiaries to ArvinMeritor Receivables Corporation (ARC), a wholly-owned, special purpose subsidiary. ARC funds these purchases with borrowings from participating lenders undera loan agreement. This program also includes a letter of credit facility pursuant to which ARC may request the issuance of letters of credit issued for the company's U.S. subsidiaries (originators) or their designees, whichwhen issued will constitute a utilization of the facility for the amount of letters of credit issued. Amounts outstanding under this agreement are collateralized by eligible receivables purchased by ARC and are reported asshort-term debt in the consolidated balance sheet. At June 30, 2012, no amounts, including letters of credit, were outstanding under this program. This program contains a financial covenant related to the company'spriority-debt-to-EBITDA ratio, which is the same as the corresponding covenant in the company's revolving credit facility as it exists on the date of the agreement and a cross default to the revolving credit facility.

At March 31, 2012, the company had a $125 million U.S. accounts receivables financing arrangement which was provided on a committed basis by a syndicate of financial institutions led by Ally Commercial FinanceLLC and was due to expire in October 2013. In connection with entering into the new U.S. Securitization Program discussed above, the company terminated this receivables financing arrangement. No amount wereoutstanding under this program at June 30, 2012 and September 30, 2011.

10. Operating Cash Flow

The reconciliation of net income to cash flows provided by (used for) operating activities is as follows (in millions):

Nine Months Ended

June 30,

2012 2011

OPERATING ACTIVITIES Net income $ 57 $ 46Less: Income (loss) from discontinued operations, net of tax (19) 5

Income from continuing operations 76 41Adjustments to income from continuing operations to arrive at cash provided by (used for) operating activities:

Depreciation and amortization 48 49Restructuring costs 30 15Equity in earnings of affiliates (41) (51)Pension and retiree medical expense 40 53Gain on sale of property (16) —Other adjustments to income from continuing operations 11 12

Dividends received from affiliates 35 30Pension and retiree medical contributions (104) (54)Restructuring payments (15) (10)Changes in off-balance sheet accounts receivable factoring 16 134Changes in assets and liabilities, excluding effects of acquisitions, divestitures, foreign currency adjustments and discontinued operations (45) (182)Operating cash flows provided by continuing operations 35 37Operating cash flows used for discontinued operations (13) (56)

CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES $ 22 $ (19)

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Index

11. Inventories

Inventories are stated at the lower of cost (using FIFO or average methods) or market (determined on the basis of estimated realizable values) and are summarized as follows (in millions):

June 30,

2012 September 30,

2011

Finished goods $ 191 $ 183Work in process 47 63Raw materials, parts and supplies 225 214

Total $ 463 $ 460

12. Other Current Assets

Other current assets are summarized as follows (in millions):

June 30,

2012 September 30,

2011

Current deferred income tax assets, net $ 26 $ 28Asbestos-related recoveries (see Note 20) 9 9Deposits and collateral 3 11Prepaid and other 18 18Assets of discontinued operations — 4

Other current assets $ 56 $ 70

13. Net Property

Net property is summarized as follows (in millions):

June 30,

2012 September 30,

2011

Property at cost: Land and land improvements $ 39 $ 47Buildings 245 264Machinery and equipment 889 897Company-owned tooling 152 153Construction in progress 61 74

Total 1,386 1,435Less accumulated depreciation (987) (1,014)

Net property $ 399 $ 421

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14. Other Assets

Other assets are summarized as follows (in millions):

June 30,

2012 September 30,

2011

Investments in non-consolidated joint ventures $ 164 $ 174Asbestos-related recoveries (see Note 20) 65 67Non-current deferred income tax assets, net 12 12Unamortized debt issuance costs 31 25Capitalized software costs, net 27 23Prepaid pension costs 10 9Other 34 42

Other assets $ 343 $ 352

In accordance with FASB ASC Topic 350-40, costs relating to internally developed or purchased software in the preliminary project stage and the post-implementation stage are expensed as incurred. Costs in theapplication development stage that meet the criteria for capitalization are capitalized and amortized using the straight-line basis over the estimated economic useful life of the software.

The company holds a variable interest in a joint venture accounted for under the equity method of accounting. The joint venture manufactures components for commercial vehicle applications primarily on behalf ofthe company. The variable interest relates to a supply arrangement between the company and the joint venture whereby the company supplies certain components to the joint venture on a cost-plus basis. The company isnot the primary beneficiary of the joint venture, as the joint venture partner has shared or absolute control over key manufacturing operations, labor relationships, financing activities and certain other functions of the jointventure. Therefore, the company does not consolidate the joint venture. At June 30, 2012, the company’s investment in the joint venture was $34 million representing the company’s maximum exposure to loss. Thisamount is included in investments in non-consolidated joint ventures in the table above.

15. Other Current Liabilities

Other current liabilities are summarized as follows (in millions):

June 30,

2012 September 30,

2011

Compensation and benefits $ 139 $ 148Income taxes 15 23Taxes other than income taxes 34 38Accrued interest 22 5Product warranties 16 19Restructuring (see Note 6) 7 16Asbestos-related liabilities (see Note 20) 19 18Other 72 61

Other current liabilities $ 324 $ 328

The company records estimated product warranty costs at the time of shipment of products to customers. Warranty reserves are primarily based on factors that include past claims experience, sales history, productmanufacturing and engineering changes and industry developments. Liabilities for product recall campaigns are recorded at the time the company’s obligation is known and can be reasonably estimated. Productwarranties, including recall campaigns, not expected to be paid within one year are recorded as a non-current liability.

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A summary of the changes in product warranties is as follows (in millions):

Nine Months Ended

June 30,

2012 2011

Total product warranties – beginning of period $ 48 $ 54Accruals for product warranties 17 16Payments (14) (15)Change in estimates and other (7) (4)

Total product warranties – end of period 44 51Less: Non-current product warranties (see Note 16) (28) (25)

Product warranties – current $ 16 $ 26

16. Other Liabilities

Other liabilities are summarized as follows (in millions):

June 30,

2012 September 30,

2011

Asbestos-related liabilities (see Note 20) $ 77 $ 78Non-current deferred income tax liabilities 96 92Liabilities for uncertain tax positions 30 35Product warranties (see Note 15) 28 29Environmental 8 9Indemnity obligations 36 41Other 40 41

Other liabilities $ 315 $ 325

17. Long-Term Debt

Long-Term Debt, net of discounts where applicable, is summarized as follows (in millions):

June 30,

2012 September 30,

2011

8-3/4 percent notes due 2012(1) $ — $ 848-1/8 percent notes due 2015 250 25010-5/8 percent notes due 2018 246 2464.625 percent convertible notes due 2026(2) 300 3004.0 percent convertible notes due 2027(2) 200 200Term loan 99 —Lines of credit and other 12 8Unamortized gain on interest rate swap termination 10 14Unamortized discount on convertible notes (60) (68)Subtotal 1,057 1,034Less: current maturities (9) (84)

Long-term debt $ 1,048 $ 950

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(1) During the quarter ended March 31, 2012, the company retired its $84 million 8-3/4 percent notes due 2012 at par value.

(2) The 4.625 percent and 4.0 percent convertible notes contain a put and call feature, which allows for earlier redemption beginning in 2016 and 2019, respectively.

Revolving Credit Facility

At March 31, 2012, the company had a revolving credit facility of $441 million which was slated to mature in January 2014. The availability under this facility was dependent upon various factors, includingprincipally performance against certain financial covenants. The $441 million revolving credit facility included $100 million of availability for the issuance of letters of credit.

On April 23, 2012, the company amended and restated its revolving credit facility. Pursuant to the revolving credit facility agreement as amended, the company has a $429 million revolving credit facility, $14 millionof which matures in January 2014 for a bank not electing to extend its commitments under the revolving credit facility existing at March 31, 2012 and the remaining $415 million of which matures in April 2017. TheApril 2017 maturity date is also subject to the following springing maturity conditions: if on June 1, 2015, the outstanding principal amount of the company's $250 million bonds due 2015 is greater than $100 million, thematurity date becomes June 10, 2015 and if on November 1, 2015, the outstanding principal amount of the company's $300 million 4.625 percent convertibles notes due 2026 is greater than $100 million and theconversion price of $20.98 is greater than the then current Meritor common stock price, the maturity date becomes November 15, 2015. The availability under this facility is dependent upon various factors, includingprincipally performance against certain financial covenants as highlighted below.

Availability under the amended and extended revolving credit facility is subject to a collateral test, pursuant to which borrowings on the revolving credit facility cannot exceed 1.0x the collateral test value. Thecollateral test is performed on a quarterly basis. The availability under the revolving credit facility is also subject to certain financial covenants based on (i) the ratio of the company's priority debt (consisting principallyof amounts outstanding under the revolving credit facility, U.S. accounts receivable securitization and factoring programs, and third-party non-working capital foreign debt) to EBITDA and (ii) the amount of annualcapital expenditures. The company is required to maintain a total priority-debt-to-EBITDA ratio, as defined in the agreement, of (i) 2.50 to 1.00 as of the last day of the fiscal quarter commencing with the fiscal quarterending on or about March 31, 2012 through and including the fiscal quarter ending on or about September 30, 2012, (ii) 2.25 to 1.00 as of the last day of each fiscal quarter commencing with the fiscal quarter ending onor about December 31, 2012 through and including the fiscal quarter ending on or about September 30, 2013, and (iii) 2.00 to 1.00 as of the last day of each fiscal quarter thereafter. At June 30, 2012, the company was incompliance with all covenants under its credit agreement with a ratio of approximately 0.54x for the priority debt-to-EBITDA covenant.

Borrowings under the revolving credit facility are collateralized by approximately $645 million of the company's assets, primarily consisting of eligible domestic U.S. accounts receivable, inventory, plant, propertyand equipment, intellectual property and the company's investment in all or a portion of certain of its wholly-owned subsidiaries.

Borrowings under the revolving credit facility are subject to interest based on quoted LIBOR rates plus a margin, and there is a commitment fee on undrawn amounts, both of which are based upon the company'scurrent corporate credit rating for senior secured facilities. At June 30, 2012, the margin over LIBOR rate was 425 basis points and the commitment fee was 50 basis points. Although a majority of our revolving creditloans are LIBOR based, overnight revolving credit loans are at the prime rate plus a margin of 325 basis points.

Certain of the company's subsidiaries, as defined in the credit agreement, irrevocably and unconditionally guarantee amounts outstanding under the revolving credit facility. Similar subsidiary guarantees are providedfor the benefit of the holders of the publicly-held notes outstanding under the company's indentures (see Note 23).

No borrowings were outstanding under the revolving credit facility at June 30, 2012 and September 30, 2011. The amended and extended revolving credit facility includes $100 million of availability for the issuanceof letters of credit. At June 30, 2012, $1 million of letters of credit were outstanding under the revolving credit facility. No letters of credit were outstanding on September 30, 2011.

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IndexMERITOR, INC.


Term Loan

As part of the amendment and restatement of the revolving credit facility, on April 23, 2012 the company entered into a $100 million term loan agreement with a maturity date of April 23, 2017. The maturity date ofApril 23, 2017 is also subject to springing maturity conditions discussed under "Revolving Credit Facility" above. The term loan will amortize over a period of 5 years from the effective date as follows: $5 millionprincipal to be repaid during year one, $10 million principal to be repaid in each of the years two, three and four; and the remaining principal balance to be paid in year five. Payments will be made on a quarterly basis forthe duration of the term loan. As of the effective date of the term loan, the margin over LIBOR rate was 425 basis points. The company has the ability to prepay the term loan at any time without penalty or premium. AtJune 30, 2012, the outstanding balance on the term loan was $99 million.

Capital Leases

On March 20, 2012, the company entered into an arrangement to finance equipment acquisitions for various U.S. locations. Under this arrangement, the company can request financing from GE Capital Commercial,Inc. (GE Capital) for progress payments for equipment under construction, not to exceed $10 million at any point in time. The financing rate is equal to the 30-day LIBOR plus 575 basis points per annum. Under thisarrangement, the company can also enter into lease arrangements with GE Capital for completed equipment. The lease term is 60 months and the lease interest rate is equal to the 5-year Swap Rate published by theFederal Reserve Board plus 564 basis points. As of June 30, 2012, the company had $4 million outstanding under these arrangements.

Letter of Credit Facilities

The company entered into a five-year credit agreement dated as of November 18, 2010 with Citicorp USA, Inc., as administrative agent and issuing bank, the other lenders party thereto and the Bank of New YorkMellon, as paying agent. Under the terms of this credit agreement, as amended, the company has the right to obtain the issuance, renewal, extension and increase of letters of credit up to an aggregate availability of $30million. This facility contains covenants and events of default generally similar to those existing in our public debt indentures. At each of June 30, 2012 and September 30, 2011, $30 million of letters of credit wereoutstanding under this facility. In addition, the company had another $17 million and $2 million of letters of credit outstanding through other letters of credit facilities at June 30, 2012 and September 30, 2011,respectively.

18. Financial Instruments

Fair values of financial instruments are summarized as follows (in millions):

June 30,

2012 September 30,

2011

Carrying

Value Fair

Value Carrying

Value Fair

Value

Cash and cash equivalents $ 226 $ 226 $ 217 $ 217Short-term debt 9 9 84 83Long-term debt 1,048 1,033 950 844Foreign exchange forward contracts (asset) 3 3 — —

Fair Value

The current FASB guidance provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in activemarkets for identical instruments (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

• Level 1 inputs use quoted prices in active markets for identical instruments.

• Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar instruments in active markets, and other inputs such as interest rates andyield curves that are observable at commonly quoted intervals.

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IndexMERITOR, INC.


• Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related instrument.

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significantto the valuation. The company's assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

Fair value of financial instruments by the valuation hierarchy at June 30, 2012 is as follows (in millions):

Level 1 Level 2 Level 3

Short-term debt $ — $ 3 $ 6Long-term debt — 946 87Foreign exchange forward contracts (asset) — 3 —

Cash and cash equivalents — All highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents. The carrying value approximates fair value because of theshort maturity of these instruments. The company did not have any cash equivalents at June 30, 2012 or September 30, 2011.

Short- and Long-term debt — Fair values are based on interest rates that would be currently available to the company for issuance of similar types of debt instruments with similar terms and remaining maturities.

Foreign exchange forward contracts — The company uses foreign exchange forward purchase and sale contracts with terms of one year or less to hedge its exposure to changes in foreign currency exchange rates. Thefair value of foreign exchange forward contracts is based on a model which incorporates observable inputs including quoted spot rates, forward exchange rates and discounted future expected cash flows utilizing marketinterest rates with similar quality and maturity characteristics.

19. Retirement Benefit Liabilities

Retirement benefit liabilities consisted of the following (in millions):

June 30,

2012 September 30,

2011

Retiree medical liability $ 552 $ 550Pension liability 492 565Other 25 33

Subtotal 1,069 1,148Less: current portion (included in compensation and benefits, Note 15) (52) (52)

Retirement benefit liabilities $ 1,017 $ 1,096

The components of net periodic pension and retiree medical expense included in continuing operations for the three months ended June 30 are as follows:

2012 2011

Pension Retiree Medical Pension Retiree Medical

Service cost $ 1 $ — $ 2 $ 1Interest cost 23 6 23 7Assumed return on plan assets (27) — (29) —Amortization of prior service costs — (2) — (3)Recognized actuarial loss 6 7 10 7

Total expense $ 3 $ 11 $ 6 $ 12

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IndexMERITOR, INC.


The components of net periodic pension and retiree medical expense included in continuing operations for the nine months ended June 30 are as follows:

2012 2011

Pension Retiree Medical Pension Retiree Medical

Service cost $ 2 $ — $ 6 $ 1Interest cost 69 18 69 20Assumed return on plan assets (79) — (87) —Amortization of prior service costs — (6) — (7)Recognized actuarial loss 16 20 29 22

Total expense $ 8 $ 32 $ 17 $ 36

20. Contingencies

Environmental

Federal, state and local requirements relating to the discharge of substances into the environment, the disposal of hazardous wastes and other activities affecting the environment have, and will continue to have, animpact on the operations of the company. The process of estimating environmental liabilities is complex and dependent upon evolving physical and scientific data at the sites, uncertainties as to remedies and technologiesto be used and the outcome of discussions with regulatory agencies. The company records liabilities for environmental issues in the accounting period in which they are considered to be probable and the cost can bereasonably estimated. At environmental sites in which more than one potentially responsible party has been identified, the company records a liability for its allocable share of costs related to its involvement with the site,as well as an allocable share of costs related to insolvent parties or unidentified shares. At environmental sites in which Meritor is the only potentially responsible party, the company records a liability for the totalprobable and estimable costs of remediation before consideration of recovery from insurers or other third parties.

The company has been designated as a potentially responsible party at nine Superfund sites, excluding sites as to which the company’s records disclose no involvement or as to which the company’s liability has beenfinally determined. Management estimates the total reasonably possible costs the company could incur for the remediation of Superfund sites at June 30, 2012 to be approximately $19 million, of which $3 million isrecorded as a liability. Included in reasonably possible amounts are estimates for certain remediation actions that may be required if current actions are deemed inadequate by the regulators.

In addition to the Superfund sites, various other lawsuits, claims and proceedings have been asserted against the company, alleging violations of federal, state and local environmental protection requirements, orseeking remediation of alleged environmental impairments, principally at previously disposed-of properties. For these matters, management has estimated the total reasonably possible costs the company could incur atJune 30, 2012 to be approximately $38 million, of which $15 million is recorded as a liability.

Included in the company’s environmental liabilities are costs for on-going operation, maintenance and monitoring at environmental sites in which remediation has been put into place. This liability is discounted usinga discount rate of 5 percent and is approximately $8 million at June 30, 2012. The undiscounted estimate of these costs is approximately $11 million.

Following are the components of the Superfund and non-Superfund environmental reserves (in millions):

Superfund Sites Non-Superfund Sites Total

Balance at September 30, 2011 $ 2 $ 15 $ 17Payments and other — (4) (4)Accruals(1) 1 4 5

Balance at June 30, 2012 $ 3 $ 15 $ 18

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IndexMERITOR, INC.


(1) Includes $2 million recognized in loss from discontinued operations in the consolidated statement of income.

Environmental reserves are included in Other Current Liabilities (see Note 15) and Other Liabilities (see Note 16) in the consolidated balance sheet.

The actual amount of costs or damages for which the company may be held responsible could materially exceed the foregoing estimates because of uncertainties, including the financial condition of other potentiallyresponsible parties, the success of the remediation, discovery of new contamination and other factors that make it difficult to predict actual costs accurately. However, based on management’s assessment, after consultingwith outside advisors that specialize in environmental matters, and subject to the difficulties inherent in estimating these future costs, the company believes that its expenditures for environmental capital investment andremediation necessary to comply with present regulations governing environmental protection and other expenditures for the resolution of environmental claims will not have a material effect on the company’s business,financial condition or results of operations. In addition, in future periods, new laws and regulations, changes in remediation plans, advances in technology and additional information about the ultimate clean-up remediescould significantly change the company’s estimates. Management cannot assess the possible effect of compliance with future requirements.

Asset Retirement Obligations

The company has identified conditional asset retirement obligations for which a reasonable estimate of fair value could not be made because the potential settlement dates cannot be determined at this time. Due to thelong term, productive nature of the company’s manufacturing operations, absent plans or expectations of plans to initiate asset retirement activities, the company was not able to reasonably estimate the settlement date forthe related obligations. Therefore, the company has not recognized conditional asset retirement obligations for which there are no plans or expectations of plans to retire the asset.

Asbestos

Maremont Corporation (“Maremont”), a subsidiary of Meritor, manufactured friction products containing asbestos from 1953 through 1977, when it sold its friction product business. Arvin Industries, Inc., apredecessor of the company, acquired Maremont in 1986. Maremont and many other companies are defendants in suits brought by individuals claiming personal injuries as a result of exposure to asbestos-containingproducts. Maremont had approximately 21,000 pending asbestos-related claims at June 30, 2012 and September 30, 2011. Although Maremont has been named in these cases, in the cases where actual injury has beenalleged, very few claimants have established that a Maremont product caused their injuries. Plaintiffs’ lawyers often sue dozens or even hundreds of defendants in individual lawsuits on behalf of hundreds or thousands ofclaimants, seeking damages against all named defendants irrespective of the disease or injury and irrespective of any causal connection with a particular product. For these reasons, Maremont does not consider thenumber of claims filed or the damages alleged to be a meaningful factor in determining its asbestos-related liability.

Maremont’s asbestos-related reserves and corresponding asbestos-related recoveries are summarized as follows (in millions):

June 30,

2012 September 30,

2011

Pending and future claims $ 75 $ 77Asbestos-related insurance recoveries 67 67

A portion of the asbestos-related recoveries and reserves are included in Other Current Assets and Liabilities, with the majority of the amounts recorded in Other Assets and Liabilities (see Notes 12, 14, 15 and 16).

Prior to February 2001, Maremont participated in the Center for Claims Resolution (“CCR”) and shared with other CCR members in the payment of defense and indemnity costs for asbestos-related claims. The CCRhandled the resolution and processing of asbestos claims on behalf of its members until February 2001, when it was reorganized and discontinued negotiating shared settlements. Since the CCR was reorganized in 2001,Maremont has handled asbestos-related claims through its own defense counsel and has taken a more aggressive defensive approach that involves examining the merits of each asbestos-related claim. Although thecompany expects legal defense costs to continue at higher levels than when it participated in the CCR, the company believes its litigation strategy has reduced the average indemnity cost per claim.

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IndexMERITOR, INC.


Pending and Future Claims: Maremont engages Bates White LLC (Bates White), a consulting firm with extensive experience estimating costs associated with asbestos litigation, to assist with determining theestimated cost of resolving pending and future asbestos-related claims that have been, and could reasonably be expected to be, filed against Maremont. Bates White prepares these cost estimates on a semi-annual basis inMarch and September each year. Although it is not possible to estimate the full range of costs because of various uncertainties, Bates White advised Maremont that it would be possible to determine an estimate of areasonable forecast of the cost of the probable settlement and defense costs of resolving pending and future asbestos-related claims, based on historical data and certain assumptions with respect to events that may occurin the future.

Bates White provided an estimate of the reasonably possible range of Maremont’s obligation for asbestos personal injury claims over the next ten years of $75 million to $85 million. After consultation with BatesWhite, Maremont determined that as of March 31, 2012, the most likely and probable liability for pending and future claims over the next ten years is $75 million. The ultimate cost of resolving pending and future claimsis estimated based on the history of claims and expenses for plaintiffs represented by law firms in jurisdictions with an established history with Maremont.

Assumptions: The following assumptions were made by Maremont after consultation with Bates White and are included in their study:

• Pending and future claims were estimated for a ten-year period ending in fiscal year 2022. The ten-year assumption is considered appropriate as Maremont has reached certain longer-term agreements with keyplaintiff law firms and filings of mesothelioma claims have been relatively stable over the last few years resulting in an improvement in the reliability of future projections over a longer time period;

• Maremont believes that the litigation environment will change significantly beyond ten years and that the reliability of estimates of future probable expenditures in connection with asbestos-related personalinjury claims will decline for each year further in the future. As a result, estimating a probable liability beyond ten years is difficult and uncertain;

• The ultimate cost of resolving pending and future claims filed in Madison County, Illinois, a jurisdiction where a substantial amount of Maremont’s claims are filed, will decline to reflect average outcomesthroughout the United States;

• Defense and processing costs for pending and future claims filed outside of Madison County, Illinois will be at the level consistent with Maremont’s prior experience; and

• The ultimate indemnity cost of resolving nonmalignant claims with plaintiffs’ law firms in jurisdictions without an established history with Maremont cannot be reasonably estimated. Recent changes in tort lawand insufficient settlement history make estimating a liability for these nonmalignant claims difficult and uncertain.

Recoveries: Maremont has insurance that reimburses a substantial portion of the costs incurred defending against asbestos-related claims. The coverage also reimburses Maremont for any indemnity paid on thoseclaims. The coverage is provided by several insurance carriers based on insurance agreements in place. Incorporating historical information with respect to buy-outs and settlements of coverage, and excluding anypolicies in dispute, the insurance receivable related to asbestos-related liabilities is $67 million as of June 30, 2012. The difference between the estimated liability and insurance receivable is primarily related to proceedsreceived from settled insurance policies. Certain insurance policies have been settled in cash prior to the ultimate settlement of the related asbestos liabilities. Amounts received from insurance settlements generallyreduce recorded insurance receivables. Receivables for policies in dispute are not recorded.

The amounts recorded for the asbestos-related reserves and recoveries from insurance companies are based upon assumptions and estimates derived from currently known facts. All such estimates of liabilities andrecoveries for asbestos-related claims are subject to considerable uncertainty because such liabilities and recoveries are influenced by variables that are difficult to predict. The future litigation environment for Maremontcould change significantly from its past experience, due, for example, to changes in the mix of claims filed against Maremont in terms of plaintiffs’ law firm, jurisdiction and disease; legislative or regulatorydevelopments; Maremont’s approach to defending claims; or payments to plaintiffs from other defendants. Estimated recoveries are influenced by coverage issues among insurers and the continuing solvency of variousinsurance companies. If the assumptions with respect to the estimation period, nature of pending and future claims, the cost to resolve claims and the amount of available insurance prove to be incorrect, the actual amountof liability for Maremont’s asbestos-related claims, and the effect on the company, could differ materially from current estimates and, therefore, could have a material impact on the company’s financial condition andresults of operations.

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IndexMERITOR, INC.


Rockwell International (Rockwell) — ArvinMeritor, Inc. (AM), a subsidiary of Meritor, along with many other companies, has also been named as a defendant in lawsuits alleging personal injury as a result ofexposure to asbestos used in certain components of Rockwell products many years ago. Liability for these claims was transferred at the time of the spin-off of the automotive business from Rockwell in 1997. Currentlythere are thousands of claimants in lawsuits that name AM, together with many other companies, as defendants. However, the company does not consider the number of claims filed or the damages alleged to be ameaningful factor in determining asbestos-related liabilities. A significant portion of the claims do not identify any of Rockwell’s products or specify which of the claimants, if any, were exposed to asbestos attributableto Rockwell’s products, and past experience has shown that the vast majority of the claimants will likely never identify any of Rockwell’s products. For those claimants who do show that they worked with Rockwell’sproducts, management nevertheless believes it has meritorious defenses, in substantial part due to the integrity of the products involved and the lack of any impairing medical condition on the part of many claimants. Thecompany defends these cases vigorously. Historically, AM has been dismissed from the vast majority of similar claims filed in the past with no payment to claimants.

The company engages Bates White to assist with determining whether it would be possible to estimate the cost of resolving pending and future Rockwell legacy asbestos-related claims that have been, and couldreasonably be expected to be, filed against the company. Although it is not possible to estimate the full range of costs because of various uncertainties, Bates White advised the company that it would be able to determinean estimate of probable defense and indemnity costs which could be incurred to resolve pending and future Rockwell legacy asbestos-related claims. After consultation with Bates White, the company determined that asof June 30, 2012 and September 30, 2011 the probable liability for pending and future claims over the next four years is $21 million and $19 million, respectively. The accrual estimates are based on historical data andcertain assumptions with respect to events that may occur in the future. The uncertainties of asbestos claim litigation and resolution of the litigation with the insurance companies make it difficult to predict accurately theultimate resolution of asbestos claims beyond four years. That uncertainty is increased by the possibility of adverse rulings or new legislation affecting asbestos claim litigation or the settlement process.

Rockwell maintained insurance coverage that management believes covers indemnity and defense costs, over and above self-insurance retentions, for most of these claims. The company has initiated claims againstcertain of these carriers to enforce the insurance policies, which are currently being disputed. The company expects to recover some portion of defense and indemnity costs it has incurred to date, over and above self-insured retentions, and some portion of the costs for defending asbestos claims going forward. Based on consultation with advisors and underlying analysis performed by management, the company has recorded aninsurance receivable related to Rockwell legacy asbestos-related liabilities of $7 million and $9 million at June 30, 2012 and September 30, 2011, respectively. If the assumptions with respect to the estimation period,nature of pending claims, the cost to resolve claims and the amount of available insurance prove to be incorrect, the actual amount of liability for Rockwell asbestos-related claims, and the effect on the company, coulddiffer materially from current estimates and, therefore, could have a material impact on the company’s financial condition and results of operations.

On March 4, 2010, Gordon Bankhead and his spouse filed suit in Superior Court for Alameda County, California, against more than 40 defendants that Mr. Bankhead claims manufactured or supplied asbestos-containing products he allegedly was exposed to during his career as a janitor; as an ordnance specialist in the National Guard; and as an automotive parts-man. By the time trial began on October 27, 2010, Mr. and Mrs.Bankhead had settled with all defendants except for AM and three other defendants. The claims against these four defendants were limited to Mr. Bankhead’s work as an automotive parts-man. On December 23, 2010,the jury ruled against all four defendants, including AM. AM was assessed $375,000 in compensatory damages for which it recorded a liability in fiscal year 2011. Additionally, AM was assessed $4.5 million in punitivedamages. AM filed an appeal on the punitive damages award to the California Court of Appeals. On April 19, 2012, the California Court of Appeals affirmed the trial court judgment in its entirety. Given this, AMincreased its liability for this matter to $5.6 million at March 31, 2012. On May 29, 2012, AM requested that the California Supreme Court hear arguments on the points of law raised in the courts below, but that courtdeclined to do so on July 11, 2012. Given the foregoing developments as well as the filing of a separate wrongful death action by Mr. Bankhead's spouse, AM increased its liability for this matter to $6.4 million at June30, 2012.

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IndexMERITOR, INC.


Indemnifications

In December 2005, the company guaranteed a third party’s obligation to reimburse another party for payment of health and prescription drug benefits to a group of retired employees. The retirees were formeremployees of a wholly-owned subsidiary of the company prior to it being acquired by the company. The wholly-owned subsidiary, which was part of the company’s light vehicle aftermarket business, was sold by thecompany in fiscal year 2006. Prior to May 2009, except as set forth hereinafter, the third party met its obligations to reimburse the other party. In May 2009, the third party filed for bankruptcy protection under Chapter 11of the U.S. Bankruptcy Code requiring the company to recognize its obligations under the guarantee. The company recorded a $28 million liability in fiscal year 2009 for this matter. During the second quarter of fiscalyear 2011, the company recorded a $4 million charge in income from discontinued operations to increase the liability based on changes in demographic data. At June 30, 2012 and September 30, 2011, the remainingestimated liability for this matter was approximately $21 million and $23 million, respectively.

The company has recorded indemnity liabilities of $5 million related to the sale of its Body Systems business, primarily associated with income tax matters and $15 million related to the sale of its 57 percent interestin Meritor Suspension Systems Company related to its share of potential obligations related to taxes, pension funding shortfall, environmental and other contingencies. These amounts are included in other currentliabilities and other liabilities in the accompanying consolidated balance sheet.

The company has provided indemnifications in conjunction with certain transactions, primarily divestitures. These indemnities address a variety of matters, which may include environmental, tax, asbestos andemployment-related matters, and the periods of indemnification vary in duration. The company’s maximum obligations under these indemnifications cannot be reasonably estimated. The company is not aware of anyvalid claims or other information that would give rise to material payments under such indemnifications.

Other

On March 31, 2008, S&E Quick Lube, a filter distributor, filed suit in U.S. District Court for the District of Connecticut alleging that several filter manufacturers and their affiliated corporate entities, including a priorsubsidiary of the company, engaged in a conspiracy to fix prices, rig bids and allocate U.S. customers for aftermarket automotive filters. This suit is a purported class action on behalf of direct purchasers of filters fromthe defendants. Several parallel purported class actions, including on behalf of indirect purchasers of filters, have been filed by other plaintiffs in a variety of jurisdictions in the United States and Canada. The cases havebeen consolidated into a multi-district litigation proceeding in Federal court for the Northern District of Illinois. On April 16, 2009, the Attorney General of the State of Florida filed a complaint with the U.S. DistrictCourt for the Northern District of Illinois based on these same allegations. On May 25, 2010, the Office of the Attorney General for the State of Washington informed the company that it also was investigating theallegations raised in these suits. On August 9, 2010, the County of Suffolk, New York, filed a complaint in the Eastern District of New York based on the same allegations. The case was transferred to the multi-districtlitigation proceeding in Illinois, but has been dismissed without prejudice pursuant to a tolling agreement that continues until thirty days after the claims by the indirect purchasers in the multi-district litigation areterminated, settled, or dismissed. On April 14, 2011, the judge in that multi-district litigation granted a stay on discovery and depositions until July 25, 2011. The stay was subsequently extended until August 23, 2011and, on October 12, 2011, was further extended pending the court’s ruling on various motions. On January 19, 2012, counsel for the defendants and counsel for all purported class plaintiffs participated in a settlementconference that was facilitated by the magistrate for the judge in the multi-district litigation. None of the parties were able to reach any agreement at that conference and, on January 20, 2012, the court ruled on the above-referenced motions and vacated the stay on discovery and depositions. In February 2012 the other remaining defendants reached preliminary settlement with all plaintiffs for $13 million, leaving the company as the soleremaining defendant. These preliminary settlements were allocated 65 percent to the direct purchasers and 35 percent to the remaining plaintiffs (indirect purchasers). In April 2012, the company settled with indirectpurchasers for $3.1 million.

Based on management’s assessment, the company has recognized a $5.8 million liability in discontinued operations at June 30, 2012 for the direct purchasers' portion of this matter. The company believes it hasmeritorious defenses against the claims raised in all of these actions and intends to vigorously defend itself. However, there is considerable uncertainty around the potential outcomes in a jury trial, and if this matter wereto proceed to trial and were ultimately decided by a jury in favor of plaintiffs, it is possible that awarded damages could materially exceed the recorded liability by an amount that the company is unable to reasonablyestimate at this time.

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IndexMERITOR, INC.


The company is evaluating certain sale transactions to determine if value added tax was required to be remitted to certain tax jurisdictions for the tax years 2007 through 2012. The company's estimated reasonablypossible exposure for this matter is $0 to $10 million.

In addition, various lawsuits, claims and proceedings, other than those specifically disclosed in the consolidated financial statements, have been or may be instituted or asserted against the company, relating to theconduct of the company’s business, including those pertaining to product liability, warranty or recall claims, intellectual property, safety and health, contract and employment matters. Although the outcome of otherlitigation cannot be predicted with certainty, and some lawsuits, claims or proceedings may be disposed of unfavorably to the company, management believes the disposition of matters that are pending will not have amaterial effect on the company’s business, financial condition or results of operations.

21. Accumulated Other Comprehensive Loss (AOCL)

The components of AOCL as reported in the consolidated balance sheet are as follows (in millions):

June 30,

2012 September 30,

2011

Foreign currency translation $ 79 $ 110Employee benefit related adjustments (940) (942)Unrealized gains, net — 3

Accumulated Other Comprehensive Loss $ (861) $ (829)

22. Business Segment Information

The company defines its operating segments as components of its business where separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocateresources and in assessing performance. The company’s chief operating decision maker (CODM) is the Chief Executive Officer.

The company has three reportable segments at June 30, 2012, as follows:

• The Commercial Truck segment supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems, primarily for medium- and heavy-duty trucks in North America,South America and Europe;

• The Industrial segment supplies drivetrain systems including axles, brakes, drivelines and suspensions for off-highway, military, construction, bus and coach, fire and emergency and other industrialapplications. This segment also includes the company’s OE businesses in Asia Pacific, including all on- and off-highway activities; and

• The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension parts and other replacement and remanufactured parts, including transmissions, to commercial vehicle aftermarket customers.This segment also supplies a wide variety of undercarriage products and systems for trailer applications in North America.

Segment EBITDA is defined as income (loss) from continuing operations before interest expense, income taxes, depreciation and amortization, non-controlling interests in consolidated joint ventures, loss on sale ofreceivables, restructuring costs and asset impairment charges. The company uses Segment EBITDA as the primary basis for the Chief Operating Decision Maker (CODM) to evaluate the performance of each of itsreportable segments.

The accounting policies of the segments are the same as those applied in the Consolidated Financial Statements, except for the use of Segment EBITDA. The company may allocate certain common costs, primarilycorporate functions, between the segments differently than the company would for stand alone financial information prepared in accordance with GAAP. These allocated costs include expenses for shared services such asinformation technology, finance, communications, legal and human resources. The company does not allocate interest expense and certain legacy and other corporate costs not directly associated with the Segments’EBITDA.

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IndexMERITOR, INC.


Segment information is summarized as follows (in millions):

Commercial


& Trailer Eliminations Total

Three Months Ended June 30, 2012 External Sales $ 628 $ 224 $ 261 $ — $ 1,113Intersegment Sales 62 18 4 (84) —

Total Sales $ 690 242 265 $ (84) $ 1,113

Three Months Ended June 30, 2011 External Sales $ 711 $ 286 $ 275 $ — $ 1,272Intersegment Sales 59 22 3 (84) —

Total Sales $ 770 $ 308 $ 278 $ (84) $ 1,272

Commercial

Truck Industrial Aftermarket &

Trailer Eliminations Total

Nine Months Ended June 30, 2012 External Sales $ 1,957 $ 724 $ 751 $ — $ 3,432Intersegment Sales 177 55 12 (244) —

Total Sales $ 2,134 $ 779 $ 763 $ (244) $ 3,432

Nine Months Ended June 30, 2011 External Sales $ 1,877 $ 792 $ 736 $ — $ 3,405Intersegment Sales 161 52 10 (223) —

Total Sales $ 2,038 $ 844 $ 746 $ (223) $ 3,405

Three Months Ended


June 30,

2012 2011 2012 2011

Segment EBITDA: Commercial Truck $ 48 $ 49 $ 144 $ 122Industrial 20 21 53 56Aftermarket & Trailer 25 36 73 81

Segment EBITDA 93 106 270 259Unallocated legacy and corporate costs (1) (1) (3) (4) (9)Interest expense, net (25) (22) (72) (73)Provision for income taxes (12) (28) (49) (69)Depreciation and amortization (15) (16) (48) (49)Loss on sale of receivables (1) (3) (7) (6)Restructuring costs (3) (7) (30) (15)Gain on sale of property 16 — 16 —Other, net — 5 — 3Noncontrolling interests (2) (5) (10) (14)

Income from continuing operations attributable to Meritor, Inc. $ 50 $ 27 $ 66 $ 27(1) Unallocated legacy and corporate costs represent items that are not directly related to our business segments and include pension and retiree medical costs associated with sold businesses and other legacy costs

for environmental and product liability matters.

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IndexMERITOR, INC.


Segment Assets:June 30,

2012 September 30,

2011

Commercial Truck $ 1,442 $ 1,482Industrial 453 470Aftermarket & Trailer 503 504

Total segment assets 2,398 2,456Corporate(1) 452 483Discontinued operations — 4Less: Accounts receivable sold under off-balance sheet factoring programs(2) (295) (280)

Total assets $ 2,555 $ 2,663(1) Corporate assets consist primarily of cash, deferred income taxes and prepaid pension costs.(2) At June 30, 2012 and September 30, 2011 segment assets include $295 million and $280 million, respectively, of accounts receivable sold under off-balance sheet accounts receivable factoring programs (See

Note 9). These sold receivables are included in segment assets as the CODM reviews segment assets inclusive of these balances.

23. Supplemental Guarantor Condensed Consolidating Financial Statements

Certain of the company’s wholly-owned subsidiaries, as defined in the credit agreement (the Guarantors) irrevocably and unconditionally provide joint and several guarantee for the amounts outstanding under the seniorsecured revolving credit facility. Similar subsidiary guarantees were provided for the benefit of the holders of the publicly-held notes outstanding under the company’s indentures (see Note 17). In lieu of providing separate financial statements for the Guarantors, the company has included the accompanying condensed consolidating financial statements. These condensed consolidating financial statements arepresented on the equity method. Under this method, the investments in subsidiaries are recorded at cost and adjusted for the parent’s share of the subsidiary’s cumulative results of operations, capital contributions anddistributions and other equity changes. The Guarantor subsidiaries are combined in the condensed consolidating financial statements.

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Index MERITOR, INC.

CONDENSED CONSOLIDATING STATEMENT OF INCOME(In millions)(Unaudited)

Three Months Ended June 30, 2012

Parent Guarantors Non-

Guarantors Elims Consolidated

Sales External $ — $ 452 $ 661 $ — $ 1,113Subsidiaries — 40 23 (63) —

Total sales — 492 684 (63) 1,113Cost of sales (13) (421) (610) 63 (981)GROSS MARGIN (13) 71 74 — 132

Selling, general and administrative (23) (20) (25) — (68)Restructuring costs — — (3) — (3)Gain on sale of property — — 16 — 16Other operating expense — — (1) — (1)

OPERATING INCOME (LOSS) (36) 51 61 — 76 Other income (loss), net 13 (8) (4) — 1

Equity in earnings of affiliates — 8 4 — 12Interest income (expense), net (30) 5 — — (25)

INCOME (LOSS) BEFORE INCOME TAXES (53) 56 61 — 64Provision for income taxes — (3) (9) — (12)Equity income from continuing operations of subsidiaries 103 45 — (148) —

INCOME FROM CONTINUING OPERATIONS 50 98 52 (148) 52LOSS FROM DISCONTINUED OPERATIONS, net of tax (1) $ (2) $ (2) $ 4 $ (1)Net income 49 96 50 (144) 51Less: Income attributable to noncontrolling interests — — (2) — (2)

NET INCOME ATTRIBUTABLE TO MERITOR, INC. $ 49 $ 96 $ 48 $ (144) $ 49

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Index MERITOR, INC.


Three Months Ended June 30, 2011



Sales External $ — $ 404 $ 868 $ — $ 1,272Subsidiaries — 37 21 (58) —

Total sales — 441 889 (58) 1,272Cost of sales (15) (398) (782) 58 (1,137)GROSS MARGIN (15) 43 107 — 135

Selling, general and administrative (26) (19) (27) — (72)Restructuring costs (2) — (5) — (7)

OPERATING INCOME (LOSS) (43) 24 75 — 56 Other income (loss), net 15 — (10) — 5

Equity in earnings of affiliates — 12 9 — 21Interest income (expense), net (30) 6 2 — (22)

INCOME (LOSS) BEFORE INCOME TAXES (58) 42 76 — 60Provision for income taxes (1) (3) (24) — (28)Equity income from continuing operations of subsidiaries 86 44 — (130) —

INCOME FROM CONTINUING OPERATIONS 27 83 52 (130) 32LOSS FROM DISCONTINUED OPERATIONS, net of tax (10) $ (13) $ (12) $ 25 $ (10)NET INCOME 17 70 40 (105) 22Less: Income attributable to noncontrolling interests — — (5) — (5)


Amounts have been recast for discontinued operations.

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Index MERITOR, INC.


Nine Months Ended June 30, 2012



Sales External $ — $ 1,271 $ 2,161 $ — $ 3,432Subsidiaries — 112 70 (182) —

Total sales — 1,383 2,231 (182) 3,432Cost of sales (38) (1,205) (1,999) 182 (3,060)GROSS MARGIN (38) 178 232 — 372

Selling, general and administrative (66) (63) (76) — (205)Restructuring costs — — (30) — (30)Gain on sale of property — — 16 — 16Other operating expense (1) — (2) — (3)


Equity in earnings of affiliates — 27 14 — 41Interest income (expense), net (91) 17 2 — (72)

INCOME (LOSS) BEFORE INCOME TAXES (142) 143 124 — 125Provision for income taxes (1) (8) (40) — (49)Equity income from continuing operations of subsidiaries 209 62 — (271) —

INCOME FROM CONTINUING OPERATIONS 66 197 84 (271) 76LOSS FROM DISCONTINUED OPERATIONS, net of tax (19) $ (9) $ (5) $ 14 $ (19)NET INCOME 47 188 79 (257) 57Less: Income attributable to noncontrolling interests — — (10) — (10)


30

Index MERITOR, INC.





Sales External $ — $ 1,102 $ 2,303 $ — $ 3,405Subsidiaries — 108 58 (166) —

Total sales — 1,210 2,361 (166) 3,405Cost of sales (44) (1,103) (2,066) 166 (3,047)GROSS MARGIN (44) 107 295 — 358

Selling, general and administrative (80) (62) (70) — (212)Restructuring costs (2) — (13) — (15)Other operating expense (2) — — — (2)


Equity in earnings of affiliates — 28 23 — 51Interest income (expense), net (91) 21 (3) — (73)

INCOME (LOSS) BEFORE INCOME TAXES (180) 86 204 — 110Provision for income taxes — (9) (60) — (69)Equity income from continuing operations of subsidiaries 207 120 — (327) —

INCOME FROM CONTINUING OPERATIONS 27 197 144 (327) 41INCOME FROM DISCONTINUED OPERATIONS, net of tax 5 $ 33 $ 37 $ (70) $ 5NET INCOME 32 230 181 (397) 46Less: Income attributable to noncontrolling interests — — (14) — (14)



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IndexMERITOR, INC.

CONDENSED CONSOLIDATING BALANCE SHEET(In millions)(Unaudited)

June 30, 2012



CURRENT ASSETS Cash and cash equivalents $ 86 $ 4 $ 136 $ — $ 226Receivables trade and other, net 1 30 611 — 642Inventories — 193 270 — 463Other current assets 5 18 33 — 56

TOTAL CURRENT ASSETS 92 245 1,050 — 1,387NET PROPERTY 12 140 247 — 399GOODWILL — 275 151 — 426OTHER ASSETS 60 171 112 — 343INVESTMENTS IN SUBSIDIARIES 1,415 298 — (1,713) —

TOTAL ASSETS $ 1,579 $ 1,129 $ 1,560 $ (1,713) $ 2,555

CURRENT LIABILITIES Short-term debt $ 9 $ — $ — $ — $ 9Accounts payable 35 222 518 — 775Other current liabilities 131 58 135 — 324

TOTAL CURRENT LIABILITIES 175 280 653 — 1,108LONG-TERM DEBT 1,039 1 8 — 1,048RETIREMENT BENEFITS 917 — 100 — 1,017INTERCOMPANY PAYABLE (RECEIVABLE) 363 (796) 433 — —OTHER LIABILITIES 60 168 87 — 315EQUITY (DEFICIT) ATTRIBUTABLE TO MERITOR, INC. (975) 1,476 237 (1,713) (975)NONCONTROLLING INTERESTS — — 42 — 42

TOTAL LIABILITIES AND EQUITY (DEFICIT) $ 1,579 $ 1,129 $ 1,560 $ (1,713) $ 2,555

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IndexMERITOR, INC.

CONDENSED CONSOLIDATING BALANCE SHEET(In millions)(Unaudited)

September 30, 2011



CURRENT ASSETS Cash and cash equivalents $ 92 $ 4 $ 121 $ — $ 217Receivables trade and other, net 1 24 687 — 712Inventories — 181 279 — 460Other current assets 6 17 47 — 70

TOTAL CURRENT ASSETS 99 226 1,134 — 1,459NET PROPERTY 9 138 274 — 421GOODWILL — 275 156 — 431OTHER ASSETS 44 179 129 — 352INVESTMENTS IN SUBSIDIARIES 1,265 154 — (1,419) —

TOTAL ASSETS $ 1,417 $ 972 $ 1,693 $ (1,419) $ 2,663

CURRENT LIABILITIES Short-term debt $ 84 $ — $ — $ — $ 84Accounts payable 52 225 564 — 841Other current liabilities 92 67 169 — 328

TOTAL CURRENT LIABILITIES 228 292 733 — 1,253LONG-TERM DEBT 942 — 8 — 950RETIREMENT BENEFITS 953 — 143 — 1,096INTERCOMPANY PAYABLE (RECEIVABLE) 202 (820) 618 — —OTHER LIABILITIES 87 165 73 — 325EQUITY (DEFICIT) ATTRIBUTABLE TO MERITOR, INC. (995) 1,335 84 (1,419) (995)NONCONTROLLING INTERESTS — — 34 — 34

TOTAL LIABILITIES AND EQUITY (DEFICIT) $ 1,417 $ 972 $ 1,693 $ (1,419) $ 2,663

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IndexMERITOR, INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS(In millions)(Unaudited)




CASH FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES $ (24) $ 22 $ 24 $ — $ 22INVESTING ACTIVITIES Capital expenditures (3) (23) (39) — (65)Proceeds from sale of property — — 18 — 18Other investing activities — 1 2 — 3Net cash flows provided by discontinued operations — — 28 — 28CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES (3) (22) 9 — (16)FINANCING ACTIVITIES Repayment of notes and term loan (85) — — — (85)Proceeds from term loan 100 — — — 100Debt issuance costs (12) — — — (12)Intercompany advances 18 — (18) — —CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 21 — (18) — 3EFFECT OF FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS — — — — —CHANGE IN CASH AND CASH EQUIVALENTS (6) — 15 — 9CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 92 4 121 — 217CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 86 $ 4 $ 136 $ — $ 226

34

IndexMERITOR, INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS(In millions)(Unaudited)




CASH FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES $ 146 $ 17 $ (182) $ — $ (19)INVESTING ACTIVITIES Capital expenditures (2) (23) (43) — (68)Other investing activities — 2 (1) — 1Net cash flows provided by (used for) discontinued operations (15) 5 (56) — (66)CASH USED FOR INVESTING ACTIVITIES (17) (16) (100) — (133)FINANCING ACTIVITIES Intercompany advances (146) — 146 — —Other financing activities 6 — — — 6CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES (140) — 146 — 6EFFECT OF FOREIGN CURRENCY EXCHANGE RATES ON CASH AND CASH EQUIVALENTS — — 4 — 4CHANGE IN CASH AND CASH EQUIVALENTS (11) 1 (132) — (142)CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 47 6 290 — 343CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 36 $ 7 $ 158 $ — $ 201


35

MERITOR, INC.

Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations

OVERVIEW

Meritor, Inc. (the "company" or "Meritor"), headquartered in Troy, Michigan, is a premier global supplier of a broad range of integrated systems, modules and components to original equipment manufacturers(“OEMs”) and the aftermarket for the commercial vehicle, transportation and industrial sectors. The company serves commercial truck, trailer, off-highway, military, bus and coach and other industrial OEMs and certainaftermarkets. Meritor common stock is traded on the New York Stock Exchange under the ticker symbol MTOR.

Our sales for the third quarter of fiscal year 2012 were $1,113 million, down compared to $1,272 million in the prior year. We experienced a slowdown in sales volumes in all regions in which we operate compared toprior year third quarter volumes, other than in North America where the market has been strong through the current quarter. Our results from continuing operations for the quarter ended June 30, 2012 were significantlyimproved compared to the same quarter in the prior year. Income from continuing operations in the third quarter of fiscal year 2012 was $50 million, or $0.51 per diluted share, compared to income of $27 million, or$0.28 per diluted share, in the prior year. Net income for the third quarter of fiscal year 2012 was $49 million compared to net income of $17 million in the prior year. Our income from continuing operations and netincome for the third quarter ended June 30, 2012 include a $16 million gain associated with the sale of excess land at our facility at Cwmbran, Wales.

Adjusted EBITDA (see Non-GAAP Financial Measures below) for the third quarter of fiscal year 2012 was $92 million compared to $103 million in the third quarter of fiscal year 2011. Our Adjusted EBITDAmargin in the third quarter of fiscal year 2012 was 8.3 percent compared to 8.1 percent in the same period a year ago. Total Adjusted EBITDA decreased compared to the prior year primarily as a result of lower sales inthird quarter of fiscal year 2012. The improvement in Adjusted EBITDA margin is due to key initiatives executed by the company during fiscal year 2012 including improved pricing and sale of our St. Priest, Francemanufacturing facility.

On January 2, 2012, we completed the sale of our Commercial Truck manufacturing facility located in St. Priest, France to Renault Trucks SAS, an affiliate of AB Volvo. This transaction did not have a significantimpact on our sales as production was absorbed by our remaining manufacturing facilities in Europe. During the first quarter of fiscal year 2012, we recognized non-cash charges of $19 million, including an assetimpairment charge of $17 million for the disposal group, in connection with the then anticipated sale. In addition, other restructuring charges of approximately $5 million associated with employee headcount reductionand plant rationalization costs were recorded during the first nine months of fiscal year 2012.

Cash flows provided by operating activities were $68 million in the third quarter of fiscal year 2012 compared to cash provided by operating activities of $25 million in the third quarter of the prior fiscal year. Theincrease in cash flows from operations is due to improvements in working capital and lower usage of cash by discontinued operations compared to the prior year, partially offset by higher pension contributions.

Trends and Uncertainties

Production Volumes

The following table reflects estimated commercial vehicle production volumes for selected original equipment (OE) markets for the three months ended June 30, 2012 and 2011 based on available sources andmanagement’s estimates.

Three Months Ended June 30, Percent

2012 2011 Change

Commercial Vehicles (in thousands) North America, Heavy-Duty Trucks 75 61 23 %North America, Medium-Duty Trucks 45 45 — %United States, Trailers 62 52 19 %Western Europe, Heavy- and Medium-Duty Trucks 91 104 (13)%South America, Heavy- and Medium-Duty Trucks 42 51 (18)%

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MERITOR, INC.

We expect production volumes in North America to continue to remain at levels experienced since the second half of fiscal year 2011 (which were higher than they were during the first half of fiscal year 2011) andproduction volumes in Europe to continue to be at lower levels than those in fiscal year 2011. Beginning in second quarter of fiscal year 2012, production volumes in South America declined significantly as the industrytransitioned to tighter emission standard requirements for commercial vehicles. The recovery of production volumes has been slower than previously expected, and we do not expect production volumes in South Americato return to 2011 levels during fiscal year 2012. Production volumes in the Asia-Pacific region, more specifically China and India, have decreased compared to levels experienced in fiscal year 2011, and there is nocertainty as to when these volumes will return to the levels previously experienced.

Sales for our primary military program were at their peak during the third quarter of fiscal year 2012. This program is expected to wind down over the next few years. We are working to secure our participation in newmilitary programs with various OEMs. However, failure to secure new military contracts could have a longer-term negative impact on our Industrial Segment. In addition, even if sales of our military programs do returnto historic levels, the levels of profitability on these sales could be lower than what we have recognized in recent periods.

Industry-Wide Issues

Our business continues to address a number of other challenging industry-wide issues including the following:

• Continued strong demand for commercial truck production in North America and impact on the ability to support customer demand;• Uncertainty around the market outlook in South America, Europe, China and India;• Volatility in price and availability of steel, components and other commodities;• Disruptions in the financial markets and their impact on the availability and cost of credit;• Higher energy and transportation costs;• Consolidation and globalization of OEMs and their suppliers; and• Significant pension and retiree medical health care costs.

Other

Other significant factors that could affect our results and liquidity in fiscal year 2012 include:

• Ability to manage possible adverse effects on our European operations, or financing arrangements related thereto, in the event one or more countries exit the European monetary union;• Ability to work with our commercial truck customers to manage rapidly changing production volumes;• Ability to recover and timing of recovery of steel price and other cost increases from our customers;• Any unplanned extended shutdowns or production interruptions by us, our customers or our suppliers;• A significant deterioration or slowdown in economic activity in the key markets in which we operate;• Higher than planned price reductions to our customers;• Potential price increases from our suppliers;• Additional restructuring actions and the timing and recognition of restructuring charges;• Higher than planned warranty expenses, including the outcome of known or potential recall campaigns;• Our ability to implement planned productivity, cost reduction, and other margin improvement initiatives;• Significant contract awards or losses of existing contracts or failure to negotiate acceptable terms in contract renewal negotiations;• Impact of currency exchange rate volatility in the markets in which we operate;• Restrictive government actions by foreign countries (such as restrictions on transfer of funds and trade protection measures, including export duties and quotas and customs duties and tariffs).

NON-GAAP FINANCIAL MEASURES

In addition to the results reported in accordance with accounting principles generally accepted in the United States (GAAP), we have provided information regarding non-GAAP financial measures. These non-GAAPfinancial measures include Adjusted income (loss) from continuing operations and Adjusted diluted earnings (loss) per share from continuing operations, Adjusted EBITDA, Adjusted EBITDA margin, Free cash flowand Free cash flow from continuing operations before restructuring payments.

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MERITOR, INC.

Adjusted income (loss) from continuing operations and Adjusted diluted earnings (loss) per share from continuing operations are defined as reported income or loss from continuing operations and reported dilutedearnings or loss per share from continuing operations before restructuring expenses, asset impairment charges and other special items as determined by management. Adjusted EBITDA is defined as income (loss) fromcontinuing operations before interest, income taxes, depreciation and amortization, non-controlling interests in consolidated joint ventures, loss on sale of receivables, restructuring expenses, asset impairment charges andother special items as determined by management. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by consolidated sales. Free cash flow is defined as cash flows provided by (used for) operatingactivities less capital expenditures.

Management believes Adjusted EBITDA and Adjusted income (loss) from continuing operations are meaningful measures of performance as they are commonly utilized by management and investors to analyzeongoing operating performance and entity valuation. Management, the investment community and banking institutions routinely use Adjusted EBITDA, together with other measures, to measure operating performance inour industry. Further, management uses Adjusted EBITDA for planning and forecasting future periods. In addition, we use Segment EBITDA as the primary basis to evaluate the performance of each of our reportablesegments. Management believes that Free cash flow is useful in analyzing our ability to service and repay debt.

Adjusted income (loss) from continuing operations and Adjusted diluted earnings (loss) per share from continuing operations and Adjusted EBITDA should not be considered a substitute for the reported resultsprepared in accordance with GAAP and should not be considered as an alternative to net income as an indicator of our operating performance or to cash flows as a measure of liquidity. Free cash flow should not beconsidered a substitute for cash provided by (used for) operating activities, or other cash flow statement data prepared in accordance with GAAP, or as a measure of financial position or liquidity. In addition, these non-GAAP cash flow measures do not reflect cash used to service debt or cash received from the divestitures of businesses or sales of other assets and thus do not reflect funds available for investment or other discretionaryuses. These non-GAAP financial measures, as determined and presented by the company, may not be comparable to related or similarly titled measures reported by other companies. Set forth below are reconciliations ofthese non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.

Adjusted income from continuing operations and Adjusted diluted earnings per share are reconciled to income from continuing operations and diluted earnings per share below (in millions, except per share amounts).

Three Months Ended


June 30,

2012 2011 2012 2011

Adjusted income from continuing operations $ 37 $ 29 $ 80 $ 39Restructuring costs (3) (7) (30) (15)Gain on the sale of property 16 — 16 —Other loss related to LVS divestitures — — — (2)Gain on settlement of note receivable — 5 — 5

Income from continuing operations $ 50 $ 27 $ 66 $ 27

Adjusted diluted earnings per share from continuing operations $ 0.38 $ 0.30 $ 0.82 $ 0.41Impact of adjustments on diluted earnings per share 0.13 (0.02) (0.14) (0.13)

Diluted earnings per share from continuing operations $ 0.51 $ 0.28 $ 0.68 $ 0.28

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MERITOR, INC.

Free cash flow and Free cash flow from continuing operations before restructuring payments are reconciled to cash flows provided by (used for) operating activities below (in millions).

Three Months Ended


June 30,

2012 2011 2012 2011

Cash provided by operating activities – continuing operations $ 73 $ 44 $ 35 $ 37Capital expenditures – continuing operations (22) (26) (65) (68)Free cash flow – continuing operations 51 18 (30) (31)Cash used for operating activities – discontinued operations (5) (19) (13) (56)Capital expenditures – discontinued operations — — — (6)

Free cash flow – discontinued operations (5) (19) (13) (62)

Free cash flow – total company $ 46 $ (1) $ (43) $ (93)

Free cash flow – continuing operations $ 51 $ 18 $ (30) $ (31)Restructuring payments – continuing operations 5 3 15 10

Free cash flow from continuing operations before restructuring payments $ 56 $ 21 $ (15) $ (21)

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MERITOR, INC.

Adjusted EBITDA is reconciled to net income attributable to Meritor, Inc. in “Results of Operations” below.

Results of Operations

The following is a summary of our financial results is (in millions, except per share amounts):

Three Months Ended


June 30,

2012 2011 2012 2011

SALES: Commercial Truck $ 690 $ 770 $ 2,134 $ 2,038Industrial 242 308 779 844Aftermarket & Trailer 265 278 763 746Intersegment Sales (84) (84) (244) (223)

SALES $ 1,113 $ 1,272 $ 3,432 $ 3,405

SEGMENT EBITDA: Commercial Truck $ 48 $ 49 $ 144 $ 122Industrial 20 21 53 56Aftermarket & Trailer 25 36 73 81

SEGMENT EBITDA 93 106 270 259Unallocated legacy and corporate costs (1) (1) (3) (4) (9)

ADJUSTED EBITDA 92 103 266 250Interest expense, net (25) (22) (72) (73)Provision for income taxes (12) (28) (49) (69)Depreciation and amortization (15) (16) (48) (49)Restructuring costs (3) (7) (30) (15)Loss on sale of receivables (1) (3) (7) (6)Gain on the sale of property 16 — 16 —Other, net — 5 — 3Noncontrolling interests (2) (5) (10) (14)

INCOME FROM CONTINUING OPERATIONS, attributable to Meritor, Inc. $ 50 $ 27 $ 66 $ 27INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax, attributable to Meritor,

Inc. (1) (10) (19) 5

NET INCOME attributable to Meritor, Inc. $ 49 $ 17 $ 47 $ 32

DILUTED EARNINGS (LOSS) PER SHARE Attributable to Meritor, Inc. Continuing operations $ 0.51 $ 0.28 $ 0.68 $ 0.28Discontinued operations (0.01) (0.10) (0.20) 0.05

Diluted earnings per share $ 0.50 $ 0.18 $ 0.48 $ 0.33

DILUTED AVERAGE COMMON SHARES OUTSTANDING 97.2 96.8 97.2 96.9

(1) Unallocated legacy and corporate costs represent items that are not directly related to our business segments and include pension and retiree medical costs associated with sold businesses and other legacy costs forenvironmental and product liability matters.

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MERITOR, INC.

Three Months Ended June 30, 2012 Compared to Three Months Ended June 30, 2011

Sales

The following table reflects total company and business segment sales for the three months ended June 30, 2012 and 2011. The reconciliation is intended to reflect the trend in business segment sales and to illustratethe impact that changes in foreign currency exchange rates, volumes and other factors had on sales. Business segment sales include intersegment sales (in millions).

Dollar Change Due To

June 30, Dollar % Volume /

2012 2011 Change Change Currency Other

Sales: Commercial Truck $ 690 $ 770 $ (80) (10)% $ (47) $ (33)Industrial 242 308 (66) (21)% (8) (58)Aftermarket & Trailer 265 278 (13) (5)% (10) (3)Intersegment Sales (84) (84) — — % 8 (8)

TOTAL SALES $ 1,113 $ 1,272 $ (159) (13)% $ (57) $ (102)

Commercial Truck sales were $690 million in the third quarter of fiscal year 2012, down 10 percent compared to the third quarter of fiscal year 2011. North American industry-wide production volumes for heavy-duty trucks increased 23 percent in the third quarter of fiscal year 2012 as compared to the same period a year ago. However, the increase in sales in North America associated with the higher production volumes waslargely offset by lower sales in South America and Europe as industry-wide production volumes in these regions were down 18 percent and 13 percent, respectively. In South America, the industry transitioned to tighteremission standard requirements for commercial vehicles resulting in lower production volumes beginning in our second quarter of fiscal year 2012. The recovery of production volumes has been slower than previouslyexpected, and we do not expect production volumes in South America to return to 2011 levels during fiscal year 2012. The effects of foreign currency exchange rates decreased sales by $47 million compared to the sameperiod a year ago as the U.S. dollar strengthened against other currencies compared to the prior year.

Industrial sales were $242 million in the third quarter of fiscal year 2012, a decrease of $66 million compared to the third quarter of fiscal year 2011. The decrease in sales is primarily due to lower sales in our Asia-Pacific region, primarily in China and India.

Aftermarket & Trailer sales were $265 million in the third quarter of fiscal year 2012, slightly down from $278 million in the third quarter of fiscal year 2011. The decrease in sales is primarily due to the impact offoreign currency translation, which decreased sales by $10 million compared to the prior year. In addition, sales of our core aftermarket replacement products in the North American and European markets were lower,which were partially offset by higher sales of our products for trailer applications.

Cost of Sales and Gross Profit

Cost of sales primarily represents materials, labor and overhead production costs associated with the company’s products and production facilities. Cost of sales for the three months ended June 30, 2012 was $981million compared to $1,137 million in the prior year, representing a decrease of 14 percent. The decrease in costs of sales is primarily due to lower sales, which decreased by 13 percent, and the lower fixed costs resultingfrom the rationalization of our European manufacturing footprint as well as improvements in our operations. Total cost of sales was approximately 88 percent and 89 percent of sales for the three month periods endedJune 30, 2012 and 2011, respectively.

The following table summarizes significant factors contributing to the changes in costs of sales during third quarter of fiscal year 2012 compared to the same quarter in the prior year (in millions):

Cost of Sales

Quarter ended June 30, 2011 $ 1,137Volume, mix and other, net (105)Foreign exchange (51)

Quarter ended June 30, 2012 $ 981

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MERITOR, INC.

Changes in the components of cost of sales year over year are summarized as follows (in millions):

Lower material costs $ (123)Lower labor and overhead costs (34)Other, net 1

Total decrease in costs of sales $ (156)

Material costs represent the majority of our cost of sales and include raw materials, composed primarily of steel and purchased components. Material costs for the three months ended June 30, 2012 decreased byapproximately $123 million compared to the same period last year primarily as a result of lower sales. Global steel prices were relatively stable in the third quarter of fiscal year 2012 as compared to the third quarter offiscal year 2011.

Labor and overhead costs decreased by $34 million compared to the same period in the prior year. The decrease was primarily due to lower sales in the third quarter of fiscal year 2012. In addition, savings associatedwith the rationalization of our European manufacturing operations, including the sale of the St. Priest, France facility, as well as continuous improvement initiatives contributed to the decrease in labor and overhead costs.

Gross profit for the three months ended June 30, 2012 was $132 million compared to $135 million in the same period last year. Gross profit, as a percentage of sales, for the quarter ended June 30, 2012 was 11.9percent compared to 10.6 percent for the three months ended June 30, 2011. Gross margins improved in the third quarter of fiscal year 2012 primarily due to improvements in Commercial Truck pricing andrationalization of the European manufacturing footprint.

Other Income Statement Items

Selling, general and administrative expenses for the three months ended June 30, 2012 and 2011 are summarized as follows (in millions):

Three Months Ended Three Months Ended June 30, 2012 June 30, 2011 Increase (Decrease)

SG&A Amount % of sales Amount % of sales Loss on sale of receivables $ (1) (0.1)% $ (3) (0.2)% $ (2) (0.1)ptsShort- and long-term variable

compensation (5) (0.5)% (7) (0.6)% (2) (0.1)ptsAll other SG&A (62) (5.5)% (62) (4.9)% — 0.6pts

Total SG&A $ (68) (6.1)% $ (72) (5.7)% $ (4) 0.4pts

All other SG&A represents normal selling, general and administrative expense and was relatively flat in total. The increase in all other SG&A as a percentage of sales compared to the third quarter of fiscal year 2011was due to lower sales in the current year.

Restructuring costs of $3 million were recorded during the quarter ended June 30, 2012 compared to $7 million a year ago. Restructuring costs recognized in the third quarter of fiscal year 2012 were associated withthe European headcount reduction plan, which was approved in the second quarter of fiscal year 2012 in response to ongoing economic weakness and uncertainty in the European region. Remaining anticipated costsunder this plan are approximately $2 million and are expected to be incurred during the remainder of fiscal year 2012. Restructuring costs recognized in the third quarter of fiscal year 2011 were primarily associated withemployee headcount reductions at our St. Priest, France manufacturing facility.

Gain on sale of property of $16 million was recognized during the third quarter of fiscal year 2012. This gain is associated with the sale of excess land at our facility at Cwmbran, Wales.

Operating income for the third quarter of fiscal year 2012 was $76 million, compared to $56 million in the prior year. Key items impacting operating income are discussed above.

Equity in earnings of affiliates was $12 million in the third quarter of fiscal year 2012, compared to $21 million in the same period in the prior year. The decrease is primarily due to lower earnings from our affiliatesin South America resulting from the impact of the commercial vehicle industry transitioning to tighter emission standard requirements and the impact of foreign currency translations, partially offset by higher earningsfrom our affiliate in the United States.

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MERITOR, INC.

Interest expense, net for the third quarter of fiscal year 2012 was $25 million, compared to $22 million in the prior year. The increase in interest expense is due to amortization of incremental fees associated with therenewal of our revolving credit facility during the third quarter of fiscal year 2012 and write-off of previously deferred fees in connection with the termination of our existing U.S. accounts receivable securitizationprogram. In conjunction with entering into a new $100 million U.S. accounts receivables securitization facility, the company terminated its existing U.S. accounts receivable securitization program provided by Ally Bankduring the third quarter (see Note 9 to the consolidated financial statements).

Provision for income taxes was $12 million in the third quarter of fiscal year 2012 compared to $28 million in the third quarter of fiscal year 2011. In the third quarter of fiscal year 2012, our effective tax rate was 19percent compared to 47 percent in the prior year. Favorably impacting our effective tax rate in the three months ended June 30, 2012 were lower losses in jurisdictions where no tax expense is recognized and lowerearnings in jurisdictions in which we recognize tax expense. We expect our effective tax rate to continue to be at more normalized levels through the remainder of fiscal year 2012.

Income from continuing operations (before noncontrolling interests) for the third quarter of fiscal year 2012 was $52 million, compared to income of $32 million, in the prior year. The reasons for the improvementare discussed above.

Loss from discontinued operations was $1 million in the third quarter of fiscal year 2012, compared to $10 million in the same period in the prior year. Significant items included in results from discontinuedoperations in the third quarter of fiscal year 2012 and 2011 include the following:

Three Months Ended

June 30,

2012 2011

Operating loss $ — $ (1)Other, net (3) (7)

Loss before income taxes (3) (8)Provision for income taxes 2 (2)

Loss from discontinued operations attributable to Meritor, Inc. $ (1) $ (10)

Operating loss from discontinued operations represents operating activities of the businesses included in discontinued operations.

Other: Other primarily relates to charges for changes in estimates and adjustments related to certain assets and liabilities retained from previously sold businesses and indemnities provided at the time of sale.

Net income attributable to Meritor, Inc. was $49 million for the third quarter of fiscal year 2012 compared to income of $17 million in the third quarter of fiscal year 2011. Various factors impacting the net incomeare previously discussed.

Segment EBITDA and EBITDA Margins

Segment EBITDA is defined as income (loss) from continuing operations before interest expense, income taxes, depreciation and amortization, noncontrolling interests in consolidated joint ventures, loss on sale ofreceivables, restructuring expense and asset impairment charges. We use Segment EBITDA as the primary basis for the Chief Operating Decision Maker (CODM) to evaluate the performance of each of our reportablesegments.

The following table reflects Segment EBITDA and Segment EBITDA margins for the three months ended June 30, 2012 and 2011 (dollars in millions).

Segment EBITDA Segment EBITDA Margins

June 30, June 30, 2012 2011 $ Change 2012 2011 Change

Commercial Truck $ 48 $ 49 $ (1) 7.0% 6.4% 0.6ptsIndustrial 20 21 (1) 8.3% 6.8% 1.5ptsAftermarket & Trailer 25 36 (11) 9.4% 12.9% (3.5)pts

Segment EBITDA $ 93 $ 106 $ (13) 8.4% 8.3% 0.1pts

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MERITOR, INC.

Significant items impacting year-over-year Segment EBITDA include the following:

Commercial


& Trailer TOTAL

Segment EBITDA– Quarter ended June 30, 2011 $ 49 $ 21 $ 36 $ 106Lower earnings from unconsolidated affiliates (5) (1) (3) (9)Lower pension and retiree medical costs 2 1 — 3Foreign exchange - transaction and translation (14) (2) (3) (19)Volume, mix, pricing and other, net 16 1 (5) 12

Segment EBITDA – Quarter ended June 30, 2012 $ 48 $ 20 $ 25 $ 93

Commercial Truck Segment EBITDA was $48 million in the third quarter of fiscal year 2012, down $1 million compared to the same period in the prior year. Segment EBITDA margin increased to 7.0 percentcompared to 6.4 percent in the prior year. The increase in Segment EBITDA margin reflects improvements in pricing and lower fixed costs resulting from the rationalization of our European manufacturing footprint,primarily the sale of our St. Priest, France manufacturing facility in the second quarter of fiscal year 2012. The favorable impact of these items was partially offset by the adverse impact of geographic sales mix, includinglower sales in South America due to the impact of commercial vehicle industry transitioning to tighter emission standards, unfavorable foreign currency translation and lower earnings from our unconsolidated jointventure in South America as compared to the same period a year ago.

Industrial Segment EBITDA was $20 million in the third quarter of fiscal year 2012, down $1 million compared to the prior year. The impact of lower sales in the Asia-Pacific region, primarily China and India, andlower sales associated with the Caiman defense program, was more than offset by higher FMTV sales and higher pricing on products associated with certain military and non-military programs. These changes resulted insignificant improvements in our Segment EBITDA margins which increased to 8.3 percent in the third quarter of fiscal year 2012 compared to 6.8 percent in the prior year.

Aftermarket & Trailer Segment EBITDA was $25 million in the third quarter of fiscal year 2012, down $11 million compared to the same period in the prior year. The decrease in Segment EBITDA is due to lowerearnings from our core aftermarket products in all regions primarily related to higher material costs, lower earnings from our unconsolidated trailer joint venture in Brazil and the impact of foreign currency translation.

Nine Months Ended June 30, 2012 Compared to Nine Months Ended June 30, 2011

Sales

The following table reflects total company and business segment sales for the nine months ended June 30, 2012 and 2011. The reconciliation is intended to reflect the trend in business segment sales and to illustratethe impact that changes in foreign currency exchange rates, volumes and other factors had on sales (in millions).

Dollar Change Due To

June 30, Dollar % Volume

2012 2011 Change Change Currency / Other

Sales: Commercial Truck $ 2,134 $ 2,038 $ 96 5 % $ (83) $ 179Industrial 779 844 (65) (8)% (17) (48)Aftermarket & Trailer 763 746 17 2 % (14) 31Intersegment Sales (244) (223) (21) (9)% 15 (36)

TOTAL SALES $ 3,432 $ 3,405 $ 27 1 % $ (99) $ 126

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MERITOR, INC.

Commercial Truck sales were $2,134 million in the first nine months of fiscal year 2012, up 5 percent from the same period of fiscal year 2011. The effects of foreign currency exchange rates decreased sales by $83million compared to the same period a year ago. Excluding the effects of foreign currency, sales increased by $179 million or 9 percent. North American industry-wide production volumes for heavy- and medium-dutytrucks increased 33 percent in the first nine months of fiscal year 2012 as compared to the same period a year ago. However, the increase in sales in North America associated with the higher production volumes waspartially offset by lower sales in South America and Europe as industry-wide production volumes in these regions decreased compared to the same period in the prior year. In South America, the industry transitioned totighter emission standard requirements for commercial vehicles resulting in lower production volumes beginning in our second quarter of fiscal year 2012. The recovery of production volumes in South America has beenslower than previously expected, and we do not expect these production volumes to return to 2011 levels during fiscal year 2012.

Industrial sales were $779 million in the first nine months of fiscal year 2012, down from $844 million in the first nine months of fiscal year 2011. The decrease in sales was due to lower sales in the Asia-Pacificregion, primarily China, and lower sales from Caiman and other non-FMTV defense programs as compared to the same period in the prior year, partially offset by higher sales in our FMTV defense program.

Aftermarket & Trailer sales were $763 million in the first nine months of fiscal year 2012, up 2 percent from the same period of fiscal year 2011. The increase in sales is primarily due to higher sales of our coreaftermarket replacement products and products for trailer applications in North America, partially offset by lower sales of core aftermarket replacement products in Europe.

Cost of Sales and Gross Profit

Cost of sales primarily represents materials, labor and overhead production costs associated with the company’s products and production facilities. Cost of sales for the nine months ended June 31, 2012 was $3,060million compared to $3,047 million in the prior year. Total cost of sales were approximately 89.2 percent of sales in the nine months periods ended June 30, 2012 compared to 89.5 percent in the same period a year ago.

The following table summarizes significant factors contributing to the changes in costs of sales for the nine months ended June 30, 2012 compared to the same period in the prior year (in millions):

Cost of Sales

Nine months ended June, 2011 $ 3,047Volume, mix and other, net 97Foreign exchange (84)

Nine months ended June 30, 2012 $ 3,060

Changes in the components of cost of sales year over year are summarized as follows:

Higher material costs $ 22Lower labor and overhead costs (12)Other 3

Total increase in costs of sales $ 13

Material costs represent the majority of our cost of sales and include raw materials, composed primarily of steel and purchased components. Material costs for the nine months ended June 30, 2012 increased byapproximately $22 million compared to the same period last year, primarily as a result of rising steel prices after the first quarter of fiscal year 2011.

Labor and overhead costs decreased by $12 million compared to the same period in the prior year. The decrease was primarily due to the savings associated with the rationalization of our European manufacturingoperations, including the sale of the St. Priest, France facility, as well as continuous improvement initiatives.

As a result of the above, gross profit for the nine months ended June 30, 2012 was $372 million compared to $358 million in the same period last year. Gross margins increased to 10.8 percent for nine months endedJune 30, 2012 compared to 10.5 percent in the same period a year ago.

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MERITOR, INC.

Other Income Statement Items

Selling, general and administrative expenses for the nine months ended June 30, 2012 and 2011 are summarized as follows (in millions):

Nine Months Ended Nine Months Ended June 30, 2012 June 30, 2011 Increase (Decrease)

SG&A Amount % of sales Amount % of sales Loss on sale of receivables $ (7) (0.2)% $ (6) (0.2)% $ 1 —ptsShort- and long-term variable compensation (14) (0.4)% (20) (0.6)% (6) (0.2)ptsCharge for legal contingency (6) (0.2)% — — % 6 0.2ptsAll other SG&A (178) (5.2)% (186) (5.4)% (8) (0.2)pts

Total SG&A $ (205) (6.0)% $ (212) (6.2)% $ (7) (0.2)pts

Included in selling, general and administrative expenses in the first nine months of fiscal year 2012 are $6 million of charges for a legal contingency (see Note 20 of the Notes to Consolidated Financial Statementsunder Item 1. Financial Statements). All other SG&A represents normal selling, general and administrative expenses. The overall decrease in all other SG&A expense, as well as the decrease as a percentage of sales,compared to the first nine months of fiscal year 2011 is a result of our continuing efforts to control costs.

Restructuring costs of $30 million were recognized during the nine months ended June 30, 2012 compared to $15 million in the prior year. Restructuring costs in the first nine months of fiscal year 2012 include $24million recognized in our Commercial Truck segment in connection with the January 2012 sale of our St. Priest, France manufacturing facility to Renault Trucks SAS. These costs included non-cash charges of $19million recognized in the first quarter of fiscal year 2012, of which $17 million relate to impairments of assets held for sale at December 31, 2011. In addition, we recognized $5 million of costs associated with employeeheadcount reductions and facility rationalization actions. During the second quarter of fiscal year 2012, we approved a European headcount reduction plan in response to the ongoing economic weakness and uncertaintyin that region and recognized approximately $4 million of restructuring costs associated with this plan in the first nine months of fiscal year 2012. The remaining restructuring costs incurred during the first nine months offiscal year 2012 were associated with the company’s previously announced executive headcount reduction. Restructuring costs recognized in the first nine months of fiscal year 2011 were primarily associated withemployee headcount reductions at our St. Priest, France manufacturing facility.

Gain on sale of property of $16 million was recognized during the first nine months of fiscal year 2012. This gain is associated with the sale of excess land at our facility in Cwmbran, Wales.

Operating income for the first nine months of fiscal year 2012 was $150 million compared to $129 million in the prior year. Key items impacting operating income are previously discussed.

Equity in earnings of affiliates was $41 million in the first nine months of fiscal year 2012, compared to $51 million in the same period in the prior year. The decrease is due to lower earnings from our affiliates inSouth America as the industry transitioned to tighter emission standard requirements for commercial vehicles resulting in lower sales, partially offset by higher earnings from our affiliates in the United States andMexico.

Interest expense, net for the first nine months of fiscal year 2012 was $72 million, compared to $73 million in the prior fiscal year’s first nine months.

Provision for income taxes in the first nine months of fiscal year 2012 was $49 million compared to $69 million in the same period in the prior year. In the first nine months of fiscal year 2012, our effective tax ratewas 39 percent compared to 63 percent in the prior year. Favorably impacting our effective tax rate in the nine months ended June 30, 2012 were lower losses in jurisdictions where no tax expense is recognized. Weexpect our effective tax rate to decline to more normalized levels during fiscal year 2012. We are recognizing valuation allowances against our deferred tax assets in certain jurisdictions, primarily the United States andEurope until we can generate sufficient income to support such deferred tax assets.

Income from continuing operations (before noncontrolling interests) for the first nine months of fiscal year 2012 was $76 million, compared to $41 million in the prior year. The reasons for the improvement arepreviously discussed.

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MERITOR, INC.

Loss from discontinued operations was $19 million in the first nine months of fiscal year 2012, compared to income of $5 million in the same period in the prior year. Significant items included in results fromdiscontinued operations in the first nine months of fiscal years 2012 and 2011 include the following:

Nine Months Ended

June 30,

2012 2011

Operating income, net $ — $ 12Gain (loss) on sale of business, net (1) 19Restructuring costs (1) (7)Charge for legal contingency (9) —Environmental remediation charges (2) (1)Other, net (9) (14)

Income (loss) before income taxes (22) 9Benefit (provision) for income taxes 3 (4)

Net income (loss) from discontinued operations attributable to Meritor, Inc. $ (19) $ 5

Operating income from discontinued operations represents income from normal operating activities of the businesses included in discontinued operations.

Gain on sale of businesses, net: On January 3, 2011, we completed the sale of our Body Systems business to an affiliate of Inteva Products, LLC, and recognized a pre-tax gain of $32 million ($32 million after-tax)during the second quarter of fiscal year 2011 associated with this transaction. During the second quarter of fiscal year 2011, we also completed the sale of our chassis operations in Bonneval, France and recognized a pre-tax loss of $13 million ($13 million after-tax).

Restructuring costs: In the second quarter of fiscal year 2011, we announced our planned closure of our European trailer business and recognized approximately $6 million of restructuring costs associated withemployee termination benefits.

Charge for legal contingency: On March 31, 2008, S&E Quick Lube, a filter distributor, filed suit in U.S. District Court for the District of Connecticut alleging that several filter manufacturers and their affiliatedcorporate entities, including a prior subsidiary of the company, engaged in a conspiracy to fix prices, rig bids and allocate U.S. customers for aftermarket automotive filters. This suit is a purported class action on behalfof direct purchasers of filters from the defendants. Several parallel purported class actions, including on behalf of indirect purchasers of filters, have been filed by other plaintiffs in a variety of jurisdictions in the UnitedStates and Canada. The cases have been consolidated into a multi-district litigation proceeding in Federal court for the Northern District of Illinois. On April 16, 2009, the Attorney General of the State of Florida filed acomplaint with the U.S. District Court for the Northern District of Illinois based on these same allegations. On January 19, 2012, counsel for the defendants and counsel for all purported class plaintiffs participated in asettlement conference that was facilitated by the magistrate for the judge in the multi-district litigation. None of the parties were able to reach any agreement at that conference. In February 2012 the other remainingdefendants reached preliminary settlement with all plaintiffs for $13 million, leaving the company as the sole remaining defendant. These preliminary settlements were allocated 65 percent to the direct purchasers and 35percent to the remaining plaintiffs. Based on management’s assessment, the company recognized a $9 million liability in discontinued operations at March 31, 2012 for this matter. In April 2012, the company settled withindirect purchasers for $3.1 million. The company believes it has meritorious defenses against the claims raised in all of these actions and intends to vigorously defend itself. However, there is considerable uncertaintyaround the potential outcomes in a jury trial, and if this matter were to proceed to trial and were ultimately decided by a jury in favor of plaintiffs, it is possible that awarded damages could materially exceed the recordedliability by an amount that the company is unable to reasonably estimate at this time.

Other: Other primarily relates to charges for changes in estimates and adjustments related to certain assets and liabilities retained from previously sold businesses and indemnities provided at the time of sale. Alsoincluded in the other charges are LVS divestiture costs related to actions in connection with the separation of the LVS businesses from the company.

Net income attributable to noncontrolling interests for the first nine months of fiscal year 2012 was $10 million compared to $14 million for the same period of fiscal year 2011. Noncontrolling interests representour minority partners’ share of income or loss associated with our less than 100 percent owned consolidated joint ventures.

Net income attributable to Meritor, Inc. was $47 million for the nine month period ended June 30, 2012 compared to $32 million for the nine month period ended June 30, 2011. The reasons for the change arepreviously discussed.

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MERITOR, INC.

Segment EBITDA and EBITDA Margins

Segment EBITDA is defined as income (loss) from continuing operations before interest expense, income taxes, depreciation and amortization, noncontrolling interests in consolidated joint ventures, loss on sale ofreceivables, restructuring costs and asset impairment charges. We use Segment EBITDA as the primary basis for the Chief Operating Decision Maker (CODM) to evaluate the performance of each of our reportablesegments.

The following table reflects Segment EBITDA and EBITDA margins for the nine months ended June 30, 2012 and 2011 (dollars in millions).

Segment EBITDA Segment EBITDA Margins

June 30, June 30, 2012 2011 $ Change 2012 2011 Change

Commercial Truck $ 144 $ 122 $ 22 6.7% 6.0% 0.7 %Industrial 53 56 (3) 6.8% 6.6% 0.2 %Aftermarket & Trailer 73 81 (8) 9.6% 10.9% (1.3)%

Segment EBITDA $ 270 $ 259 $ 11 7.9% 7.6% 0.3 %

Significant items impacting year over year Segment EBITDA include the following:

Commercial


& Trailer TOTAL

Segment EBITDA– Nine months ended June 30, 2011 $ 122 $ 56 $ 81 $ 259Lower earnings from unconsolidated affiliates (5) — (5) (10)Lower pension and retiree medical costs 4 3 1 8Foreign exchange - transaction and translation (23) (4) (5) (32)Volume, mix, pricing and other, net 46 (2) 1 45

Segment EBITDA – Nine months ended June 30, 2012 $ 144 53 73 270

Commercial Truck Segment EBITDA was $144 million in the first nine months of fiscal year 2012, up $22 million compared to the same period in the prior year. Segment EBITDA margin increased to 6.7 percentcompared to 6.0 percent in the prior year. The increase in Segment EBITDA and Segment EBITDA margin is primarily attributable to improvements in pricing and lower fixed costs resulting from the rationalization ofour European manufacturing footprint, primarily the sale of our St. Priest, France manufacturing facility, in the second quarter of fiscal year 2012. In addition, North American industry-wide production volumes forheavy- and medium-duty trucks increased 33 percent in the first nine months of fiscal year 2012 as compared to the same period a year ago resulting in improvement in Segment EBITDA. The increase in SegmentEBITDA and Segment EBITDA margin attributable to these items was partially offset by the adverse impact of geographic sales mix, including lower sales in South America due to the impact of commercial vehicleindustry transitioning to tighter emission standards, lower earnings from our unconsolidated joint ventures and unfavorable foreign currency translation (primarily associated with the Brazilian Real).

Industrial Segment EBITDA was $53 million in the first nine months of fiscal year 2012, down $3 million compared to the prior year. The favorable impact of pricing adjustments related to products associated withcertain military and non-military programs, and higher sales for the FMTV defense program was more than fully offset by the decrease in sales for the Caiman and other military programs and lower sales in the Asia-Pacific region during the first nine months of fiscal year 2012.

Aftermarket & Trailer Segment EBITDA was $73 million in the first nine months of fiscal year 2012, down $8 million compared to the same period in the prior year. The decrease in Segment EBITDA is due tolower earnings from our core aftermarket products primarily related to higher material costs, lower earnings from our unconsolidated trailer joint venture in Brazil and the impact of foreign currency translation.

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MERITOR, INC.

Financial Condition

Cash Flows (in millions)


2012 2011

OPERATING CASH FLOWS Income from continuing operations $ 76 $ 41Depreciation and amortization 48 49Restructuring costs 30 15Pension and retiree medical expense 40 53Equity in earnings of affiliates (41) (51)Gain on sale of property (16) —Dividends received from equity method investments 35 30Pension and retiree medical contributions (104) (54)Restructuring payments (15) (10)Increase in working capital (54) (204)Changes in sale of receivables 16 134Other, net 20 34

Cash flows provided by continuing operations 35 37Cash flows used for discontinued operations (13) (56)

CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES $ 22 $ (19)

Cash provided by operating activities for the first nine months of fiscal year 2012 was $22 million, compared to cash used of $19 million in the same period of fiscal year 2011. The increase in cash provided byoperations was a result of higher earnings, improvements in working capital and lower utilization of cash flows used by discontinued operations. This impact was partially offset by higher pension and retiree medicalcontributions in the first nine months of fiscal year 2012 compared to the same period a year ago.


2012 2011

INVESTING CASH FLOWS Capital expenditures $ (65) $ (68)Proceeds from sale of property 18 —Other investing activities, net 3 1Net investing cash flows provided by (used for) discontinued operations 28 (66)

CASH USED FOR INVESTING ACTIVITIES $ (16) $ (133)

Cash used by investing activities was $16 million in the first nine months of fiscal year 2012 compared to cash used by investing activities of $133 million in the the same period a year ago. Proceeds from sale ofproperty are related to the sale of excess land at our Commercial Truck facility at Cwmbran, Wales. Investing cash flows provided by discontinued operations in the first nine months of fiscal year 2012 include $27million of cash received from the purchaser of our Body Systems business. We received $24 million, net of tax withholdings, of cash balances which were held at Body Systems entities in China and Brazil at the time ofsale, and which the company was entitled to receive as these balances became available for distribution from those jurisdictions. We also received $3 million for the first installment on the note receivable, which wasissued at the time of sale as part of the purchase consideration.

Net investing cash flows used for discontinued operations in the prior year include $50 million related to the divestiture of our Body Systems business, including the cash outflow of $33 million of cash held at the timeof sale in China and Brazil and $15 million of transaction costs. Also included in net investing cash flows used by discontinued operations in the prior year was a $15 million capital contribution made prior to the sale ofour chassis operations in Bonneval, France and $6 million capital expenditures in our Body Systems business in the first quarter of fiscal year 2011.

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MERITOR, INC.


2012 2011

FINANCING CASH FLOWS Repayment of notes and term loan $ (85) $ —Proceeds from term loan 100 —Debt issuance costs (12) —Other financing activities — 6

CASH PROVIDED BY FINANCING ACTIVITIES $ 3 $ 6

Cash provided by financing activities was $3 million for the first nine months of fiscal year 2012 compared to $6 million in the first nine months of fiscal year 2011. In the second quarter of fiscal year 2012, weretired the remaining $84 million of outstanding 8-3/4 percent notes due 2012 at par value. In the third quarter of fiscal year 2012, we entered into a new five-year term loan agreement as part of the amendment andextension of our revolving credit facility and borrowed $100 million under the term loan. During the third quarter of fiscal year 2012, we made the first repayment under the new term loan in the amount of $1 million.Further information about the term loan is discussed in "Liquidity" below. Debt issuance costs of $12 million in the first nine months of fiscal year 2012 were related to fees associated with the amendment and extensionof our revolving credit facility and the new term loan agreement.

Liquidity

Our outstanding debt, net of discounts where applicable, is summarized as follows (in millions).

June 30, September 30,

2012 2011

Fixed-rate debt securities $ 496 $ 580Fixed-rate convertible notes 500 500Term loan 99 —Unamortized discount on convertible notes (60) (68)Unamortized gain on interest rate swap termination 10 14Lines of credit and other 12 8

Total debt $ 1,057 $ 1,034

Overview – Our principal operating and capital requirements are for working capital needs, capital expenditure requirements, debt service requirements, funding of pension and retiree medical costs, restructuring andproduct development programs. We expect fiscal year 2012 capital expenditures for our business segments to be in the range of $90 million to $100 million. In addition, we currently expect restructuring cash costs to beapproximately $20 million in fiscal year 2012, although we will continue to evaluate the performance of our global operations and may enact further restructuring if conditions warrant such actions.

We generally fund our operating and capital needs with cash on hand, cash flow from operations, our various accounts receivable securitization and factoring arrangements and availability under our revolving creditfacility. Cash in excess of local operating needs is generally used to reduce amounts outstanding, if any, under our revolving credit facility or U.S. accounts receivable securitization program. Our ability to accessadditional capital in the long term will depend on availability of capital markets and pricing on commercially reasonable terms as well as our credit profile at the time we are seeking funds. We continuously evaluate ourcapital structure to ensure the most appropriate and optimal structure and may, from time to time, retire, repurchase, exchange or redeem outstanding indebtedness, issue new equity or debt securities or enter into newlending arrangements if conditions warrant.

In February 2012, we filed a shelf registration statement with the Securities and Exchange Commission, which was effective immediately, registering debt and/or equity securities that may be offered in one or moreseries on terms to be determined at the time of sale.

We believe our current financing arrangements provide us with the financial flexibility required to maintain our operations and fund future growth, including actions required to improve our market share and furtherdiversify our global operations, through the term of our revolving credit facility, which matures in April 2017 (see further discussion below related to amendment and extension of our Revolving Credit Facility maturingin April 2017).

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Sources of liquidity as of June 30, 2012, in addition to cash on hand, are as follows:

Total Facility

Size Unused as of

6/30/12 Current Expiration

On-balance sheet arrangements: Revolving credit facility(1) $ 429 $ 428 April 2017(1)

Committed U.S. accounts receivable securitization(2) 100 100 June 2015Total on-balance sheet arrangements 529 528

Off-balance sheet arrangements:(2) (3) Swedish Factoring Facility 187 9 June 2013U.S. Factoring Facility 75 2 October 2012U.K. Factoring Facility 31 16 February 2013Italy Factoring Facility 37 20 June 2017Other uncommitted factoring facilities 25 13 VariousLetter of credit facility 30 — November 2015

Total off-balance sheet arrangements 385 60

Total available sources $ 914 $ 588

(1) The availability under the revolving credit facility is subject to a collateral test as discussed under “Revolving Credit Facility” below. On April 23, 2012, we entered into an agreement to amend and extend the revolving credit facilitythrough April 2017 (with a springing maturity date of 2015 under certain circumstances). See further discussion below under “Revolving Credit Facility”.

(2) Availability subject to adequate eligible accounts receivable available for sale.(3) Off-balance sheet arrangements exclude availability under our French Factoring Facility, which has ramped down after the sale of our St. Priest, France manufacturing facility.

Cash and Liquidity Needs – Our cash and liquidity needs have been impacted by the level, variability and timing of our customers’ worldwide vehicle production and other factors outside of our control. At June 30,2012, we had $226 million in cash and cash equivalents.

Our availability under the revolving credit facility is subject to a collateral test and a priority debt to EBITDA ratio covenant, as defined in the agreement, which may limit our borrowings under the agreement as ofeach quarter end. As long as we are in compliance with this covenant as of the quarter end, we have full availability under the revolving credit facility every other day during the quarter. Our future liquidity is subject to anumber of factors, including access to adequate funding under our revolving credit facility, vehicle production schedules and customer demand and access to other borrowing arrangements such as factoring orsecuritization facilities. Even taking into account these and other factors, management expects to have sufficient liquidity to fund our operating requirements through the term of our revolving credit facility.

Debt Repurchase Program – On April 26, 2012, our Board of Directors approved a repurchase program for up to $150 million of any of our public debt securities (including without limitation convertible debtsecurities) from time to time through open market purchases or privately negotiated transactions or otherwise, subject to necessary approvals, including further approval by a specified committee of the Board. On May24, 2012, such committee of the Board approved repurchases of up to $50 million under this program from time to time until December 15, 2012.

Revolving Credit Facility – At March 31, 2012, we had a revolving credit facility of $441 million which was slated to mature in January 2014. The availability under this facility was dependent upon various factors,including principally performance against certain financial covenants. The $441 million revolving credit facility included $100 million of availability for the issuance of letters of credit.

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On April 23, 2012, we amended and restated our revolving credit facility. Pursuant to the revolving credit facility agreement as amended, we have a $429 million revolving credit facility, $14 million of which maturesin January 2014 for a bank not electing to extend its commitments under the revolving credit facility existing at March 31, 2012 and the remaining $415 million of which matures in April 2017. The April 2017 maturitydate is also subject to the following springing maturity conditions: if on June 1, 2015, the outstanding principal amount of our $250 million bonds due 2015 is greater than $100 million, the maturity date becomes June10, 2015, and if on November 1, 2015, the outstanding principal amount of our $300 million 4.625 percent convertibles notes due 2026 is greater than $100 million and the conversion price of $20.98 is greater than thethen current Meritor common stock price, the maturity date becomes November 15, 2015. The availability under this facility is dependent upon various factors, including principally performance against certain financialcovenants.

No borrowings were outstanding under the revolving credit facility at June 30, 2012 and September 30, 2011. The amended and extended revolving credit facility includes $100 million of availability for the issuanceof letters of credit. At June 30, 2012, $1 million of letters of credit were outstanding under the revolving credit facility. No letters of credit were outstanding on September 30, 2011. At certain times during any givenmonth, we could draw on our revolving credit facility to fund intra-month working capital needs. In such months, we would then typically utilize the cash we receive from our customers throughout the month to repayborrowing under the facility. Accordingly, during any given month, we may draw down on this facility in amounts exceeding the amounts shown as outstanding at fiscal quarter ends.

Availability under the amended and extended revolving credit facility is subject to a collateral test, pursuant to which borrowings on the revolving credit facility cannot exceed 1.0x the collateral test value. Thecollateral test is performed on a quarterly basis. The availability under the revolving credit facility is also subject to certain financial covenants based on (i) the ratio of our priority debt (consisting principally of amountsoutstanding under the revolving credit facility, U.S. accounts receivable securitization and factoring programs, and third-party non-working capital foreign debt) to EBITDA and (ii) the amount of annual capitalexpenditures. We are required to maintain a total priority-debt-to-EBITDA ratio, as defined in the agreement, of (i) 2.50 to 1.00 as of the last day of the fiscal quarter commencing with the fiscal quarter ending on orabout March 31, 2012 through and including the fiscal quarter ending on or about September 30, 2012, (ii) 2.25 to 1.00 as of the last day of each fiscal quarter commencing with the fiscal quarter ending on or aboutDecember 31, 2012 through and including the fiscal quarter ending on or about September 30, 2013, and (iii) 2.00 to 1.00 as of the last day of each fiscal quarter thereafter. At June 30, 2012, we were in compliance withall covenants under our credit agreement with a ratio of approximately 0.54x for the priority debt-to-EBITDA covenant.

Borrowings under the revolving credit facility are collateralized by approximately $645 million of the company's assets, primarily consisting of eligible domestic U.S. accounts receivable, inventory, plant, propertyand equipment, intellectual property and the company's investment in all or a portion of certain of its wholly-owned subsidiaries.

Borrowings under the revolving credit facility are subject to interest based on quoted LIBOR rates plus a margin, and a commitment fee on undrawn amounts, both of which are based upon our current corporate creditrating for the senior secured facilities. At June 30, 2012, the margin over LIBOR rate was 425 basis points and the commitment fee was 50 basis points. Although a majority of our revolving credit loans are LIBORbased, overnight revolving credit loans are at the prime rate plus a margin of 325 basis points.

Certain of the company's subsidiaries, as defined in the credit agreement, irrevocably and unconditionally guarantee amounts outstanding under the revolving credit facility. Similar subsidiary guarantees are providedfor the benefit of the holders of the publicly-held notes outstanding under the company's indentures (see Note 23 to the consolidated financial statements).

Term Loan – As part of the amendment and restatement of our revolving credit facility, on April 23, 2012, we also entered into a $100 million term loan agreement with a maturity date of April 23, 2017. Thematurity date of April 23, 2017 is also subject to springing maturity conditions discussed under "Revolving Credit Facility" above. The term loan will amortize over a period of 5 years from the effective date as follows:$5 million principal to be repaid during year one; $10 million principal to be repaid in each of the years two, three and four; and the remaining principal balance to be paid in year five. Payments will be made on aquarterly basis for the duration of the term loan. As of the effective date of the term loan, the margin over LIBOR rate was 425 basis points. We have the ability to prepay the term loan at any time without penalty orpremium. At June 30, 2012, the outstanding balance of the term loan was $99 million.

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New U.S. Securitization Program – On June 18, 2012, we entered into a new $100 million U.S. accounts receivables securitization facility, which expires on June 18, 2015. This program is provided by PNC Bank,National Association (PNC), as Administrator, Market Street Funding, LLC, and the other Purchasers and Purchaser Agents from time to time (participating lenders), which are party to the agreement. Under thisprogram, we have the ability to sell an undivided percentage ownership interest in substantially all of our trade receivables (excluding the receivables due from AB Volvo and subsidiaries eligible for sale under the U.S.Factoring Facility and certain other receivables) of certain U.S. subsidiaries to ArvinMeritor Receivables Corporation (ARC), a wholly-owned, special purpose subsidiary. ARC funds these purchases with borrowingsfrom participating lenders under a loan agreement. This program also includes a letter of credit facility pursuant to which ARC may request the issuance of letters of credit issued for our U.S. subsidiaries (originators) ortheir designees, which when issued will constitute a utilization of the facility for the amount of letters of credit issued. Amounts outstanding under this agreement are collateralized by eligible receivables purchased byARC and are reported as short-term debt in the consolidated balance sheet. At June 30, 2012, no amounts, including letters of credit, were outstanding under this program. This program contains a financial covenantrelated to our priority-debt-to-EBITDA ratio, which is same as the corresponding covenant in our revolving credit facility as it exists on the date of the agreement and a cross default to our revolving credit facility. Atcertain times during any given month, we may sell eligible accounts receivable under this program to fund intra-month working capital needs. In such months, we would then typically utilize the cash we receive from ourcustomers throughout the month to repay the borrowings under the program. Accordingly, during any given month, we may borrow under this program in amounts exceeding the amounts shown as outstanding at fiscalquarter ends.

At March 31, 2012, we had a $125 million U.S. accounts receivables financing arrangement which was provided on a committed basis by a syndicate of financial institutions led by Ally Commercial Finance LLC,which was due to expire in October 2013. In connection with entering into the new U.S. Securitization Program discussed above, we terminated this receivables financing arrangement on June 18, 2012. No amount wereoutstanding under this program at June 30, 2012 and September 30, 2011.

Capital Leases – On March 20, 2012, we entered into an arrangement to finance equipment acquisitions at our various U.S. locations. Under this arrangement, we can request financing from GE Capital Commercial,Inc. (GE Capital) for progress payments for equipment under construction, not to exceed $10 million at any point in time. The financing rate is equal to the 30-day LIBOR plus 575 basis points per annum. Under thisarrangement, we can also enter into lease arrangements with GE Capital for completed equipment. The lease term is 60 months and the lease interest rate is equal to the 5-year Swap Rate published by the Federal ReserveBoard plus 564 basis points. As of June 30, 2012, we had $4 million outstanding under these arrangements.

Letter of Credit Facilities – We have a five-year credit agreement dated as of November 18, 2010 with Citicorp USA, Inc., as administrative agent and issuing bank, the other lenders party thereto and the Bank ofNew York Mellon, as paying agent. Under the terms of this credit agreement, as amended, we have the right to obtain the issuance, renewal, extension and increase of letters of credit up to an aggregate availability of $30million. This facility contains covenants and events of default generally similar to those existing in our public debt indentures. At June 30, 2012 and September 30, 2011, we had $30 million of letters of credit outstandingunder this facility. In addition, we had another $17 million and $2 million of letters of credit outstanding through other letters of credit facilities at June 30, 2012 and September 30, 2011, respectively.

Other – One of our consolidated joint ventures in China participates in a bills of exchange program to settle its obligations with its trade suppliers. These programs are common in China and generally require theparticipation of local banks. Under these programs, our joint venture issues notes payable through the participating banks to its trade suppliers. If the issued notes payable remain unpaid on their respective due dates, thiscould constitute an event of default under the company’s revolving credit facility if the defaulted amount were to exceed $35 million.

Credit Ratings – At June 30, 2012, Standard & Poor’s corporate credit rating, senior secured credit rating, and senior unsecured credit rating for our company are B, BB- and B-, respectively. Moody’s InvestorsService corporate credit rating, senior secured credit rating, and senior unsecured credit rating for our company are B2, Ba2 and B3, respectively. Any lowering of our credit ratings could increase our cost of futureborrowings and could reduce our access to capital markets and result in lower trading prices for our securities.

Off-Balance Sheet Arrangements

Accounts Receivable Factoring Arrangements – We participate in accounts receivable factoring programs with total amounts utilized at June 30, 2012, of approximately $295 million, of which $283 was attributableto committed factoring facilities involving the sale of AB Volvo accounts receivables. The remaining amount of $12 million was related to factoring by certain of our European subsidiaries under uncommitted factoringfacilities with financial institutions. The receivables under these programs are sold at face value and are excluded from the consolidated balance sheet. Total facility size, unused amounts and expiration dates for each ofthese programs are shown in the table above under "Overview."

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The Swedish, French and U.S. factoring facilities are backed by 364-day liquidity commitments from Nordea Bank which were renewed through April 2013 for the Swedish and French facilities and October 2012 forthe U.S. facility. We expect to renew the U.S. facility prior to its October 2012 maturity. The U.K and Italy factoring facilities mature in February 2013 and June 2017, respectively. The commitments under all of ourfactoring facilities are subject to standard terms and conditions for these types of arrangements (including, in case of the French, the U.K. and Italy commitments, a sole discretion clause whereby the bank retains the rightto not purchase receivables, which has not been invoked since the inception of the respective programs).

Since many of our accounts receivable factoring programs support our working capital requirements in Europe, we are monitoring developments with respect to the European monetary union. If the Europeanmonetary union were to dissolve and we were unable to renegotiate our European factoring agreements it could have a material adverse effect on our liquidity.

Contingencies

Contingencies related to environmental, asbestos and other matters are discussed in Note 20 of the Notes to Condensed Consolidated Financial Statements.

New Accounting Pronouncements

Accounting standards implemented during fiscal year 2012

In September 2011, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) No. 2011-08: Testing Goodwill for Impairment. Under the revised guidance, entities testing forgoodwill impairment have an option of performing a qualitative assessment before calculating the fair value for the reporting unit, i.e., Step 1 of the goodwill impairment test. If an entity determines, on the basis ofqualitative factors, that the fair value of the reporting unit is more-likely-than-not less than the carrying amount, the first step of the two-step impairment test would be required. If it is not more-likely-than-not that the fairvalue of the reporting unit is less than the carrying value, then goodwill is not considered to be impaired. ASU No. 2011-08 does not change how goodwill is calculated or assigned to reporting units, nor does it revise therequirement to test goodwill at least annually for impairment. This ASU is effective for interim and annual periods beginning after December 15, 2011 with early adoption permitted. We have adopted the revisedguidance provided in this ASU effective with the second quarter of fiscal year 2012 and have started applying it accordingly. The adoption of this new guidance did not have any significant effect on our goodwillimpairment assessments.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. generally acceptedaccounting principles (GAAP) and International Financial Reporting Standards (IFRS). This ASU is intended to result in convergence between U.S. GAAP and IFRS requirements for measurement of and disclosuresabout fair value. The guidance amends current fair value measurement and disclosure guidance to include increased transparency around valuation inputs and investment categorization. This new guidance is effective forfiscal years and interim periods beginning after December 15, 2011. We have adopted this new guidance effective with the second quarter of fiscal year 2012 and have provided required disclosures in Note 18 to theconsolidated financial statements.

Accounting standard to be implemented

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The new guidance allows an entity to present components of net income and othercomprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. The guidance eliminates the current option to report othercomprehensive income and its components in the statement of changes in equity. While the new guidance changes the presentation of comprehensive income, there are no changes to the components that are recognized innet income or other comprehensive income under current accounting guidance. This new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We do notbelieve the adoption of the new guidance will have a significant impact on our consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to certain global market risks, including foreign currency exchange risk and interest rate risk associated with our debt.

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As a result of our substantial international operations, we are exposed to foreign currency risks that arise from our normal business operations, including in connection with our transactions that are denominated inforeign currencies. In addition, we translate sales and financial results denominated in foreign currencies into U.S. dollars for purposes of our consolidated financial statements. As a result, appreciation of the U.S. dollaragainst these foreign currencies generally will have a negative impact on our reported revenues and operating income while depreciation of the U.S. dollar against these foreign currencies will generally have a positiveeffect on reported revenues and operating income. For the third quarter of fiscal year 2012, our reported financial results have been adversely affected by the appreciation of the U.S. dollar against foreign currencieswhereas for fiscal year 2011, our reported financial results benefited from depreciation of the U.S. dollar against foreign currencies.

We use foreign currency forward contracts to mitigate the earnings exposures arising from foreign currency exchange risk on foreign currency purchases and sales. Gains and losses on the underlying foreign currencyexposures are partially offset with gains and losses on the foreign currency forward contracts. Under this cash flow hedging program, we designate the foreign currency contracts (the contracts) as cash flow hedges ofunderlying foreign currency forecasted purchases and sales. The effective portion of changes in the fair value of the contracts is recorded in Accumulated Other Comprehensive Loss (AOCL) in the statement ofshareowners’ equity and is recognized in operating income when the underlying forecasted transaction impacts earnings. The contracts generally mature within 12 months.

We generally have not hedged against our foreign currency exposure related to translations to U.S. dollars of our financial results denominated in foreign currencies. However, in the first quarter of fiscal year 2012 andfourth quarters of fiscal years 2011 and 2010, due to the volatility of the Brazilian real as compared to the U.S. dollar, we entered into foreign currency option contracts to reduce volatility in the translation of Brazilianreal earnings to U.S. dollars. Gains and losses on these option contracts are recorded in other income (expense), net, in the consolidated statement of income, generally reducing the exposure to translation volatility duringa full-year period. The impact of these option contracts was not significant to our results of operations or financial position at June 30, 2012.

Interest rate risk relates to the gain/increase or loss/decrease we could incur in our debt balances and interest expense. To manage this risk, we enter into interest rate swaps from time to time to economically convertportions of our fixed-rate debt into floating rate exposure, ensuring that the sensitivity of the economic value of debt falls within our corporate risk tolerances. It is our policy not to enter into derivative instruments forspeculative purposes, and therefore, we hold no derivative instruments for trading purposes.

Included below is a sensitivity analyses to measure the potential gain (loss) in the fair value of financial instruments with exposure to market risk. The model assumes a 10 percent hypothetical change (increase ordecrease) in exchange rates and instantaneous, parallel shifts of 50 basis points in interest rates.

Market Risk

Assuming a

10% Increasein Rates

Assuming a10% Decrease

in Rates Increase (Decrease) in

Foreign Currency Sensitivity: Forward contracts in USD(1) $ (2.4) $ 2.4 Fair ValueForward contracts in Euro(1) (2.3) 2.3 Fair ValueForeign currency denominated debt 0.7 (0.7) Fair Value

Assuming a 50BPS Increase

in Rates Assuming a 50 BPS Decrease

in Rates Increase (Decrease) in

Interest Rate Sensitivity: Debt - fixed rate $ (29.0) $ 30.5 Fair ValueDebt – variable rate(2) (0.5) 0.5 Cash flow

(1) Includes only the risk related to the derivative instruments and does not include the risk related to the underlying exposure. The analysis assumes overall derivative instruments and debt levels remain unchanged foreach hypothetical scenario.

At June 30, 2012 a 10% decrease in quoted currency exchange rates would result in a potential loss of approximately $1 million in foreign currency denominated debt.

At June 30, 2012 the fair value of outstanding debt was approximately $1,042 million. A 50 basis points decrease in quoted interest rates would result in an increase in the fair value of fixed rate debt byapproximately $31 million.

(2) Includes domestic and foreign debt.

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Index

Item 4. Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”), management, with the participation of the chief executive officer and chief financial officer, evaluated the effectiveness ofour disclosure controls and procedures as of June 30, 2012. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that, as of June 30, 2012, our disclosure controls andprocedures were effective to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified inthe SEC’s rules and forms and to ensure that information required to be disclosed by us in the reports we file or submit is accumulated and communicated to management, including the Chief Executive Officer and ChiefFinancial Officer, as appropriate to allow timely decisions regarding required disclosure.

There have been no changes in the company’s internal control over financial reporting that occurred during the quarter ended June 30, 2012 that materially affected, or are reasonably likely to materially affect, thecompany’s internal control over financial reporting.

In connection with the rule, the company continues to review and document its disclosure controls and procedures, including the company’s internal control over financial reporting, and may from time to time makechanges aimed at enhancing their effectiveness and ensuring that the company’s systems evolve with the business.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Except as set forth below and as set forth in this Quarterly Report under Note 20 “Contingencies”, there have been no material developments in legal proceedings involving the company or its subsidiaries since thosereported in the company’s Annual Report on Form 10-K, for the fiscal year ended September 30, 2011 and those reported in the Quarterly Reports on Form 10-Q for the fiscal quarters ended December 31, 2011 andMarch 31, 2012.

On October 5, 2006, Meritor Transmission Corporation and ZF Meritor LLC, a joint venture between a Meritor, Inc. subsidiary and ZF Friedrichshafen AG filed a lawsuit against Eaton Corporation in the UnitedStates District Court for the District of Delaware, alleging that Eaton had engaged in exclusionary, anticompetitive conduct in the markets for heavy-duty truck transmissions, in violation of the U.S. antitrust laws andseeking an injunction prohibiting Eaton from engaging in such anticompetitive conduct and monetary damages. On October 8, 2009, the jury found that Eaton engaged in conduct that violated the Sherman and Claytonantitrust acts in the sale and marketing of heavy-duty truck transmissions. The jury did not address the amount of damages. The district court denied Eaton’s motion to overturn the jury verdict on March 10, 2011,awarded ZF Meritor zero dollars in damages on August 4, 2011, and issued a limited injunction, stayed pending appeal, against Eaton on August 19, 2011. The jury verdict, the district court’s October 20, 2009 entry ofjudgment on the verdict, and other district court orders are now the subject of consolidated appeals before the Third Circuit Court of Appeals. On June 26, 2012, the Third Circuit Court of Appeals heard oral argument onthe appeals and the parties are awaiting the court’s rulings.

Item 1A. Risk Factors

There have been no material changes in risk factors involving the company or its subsidiaries from those previously disclosed in the company’s Quarterly Reports on Form 10-Q for the fiscal quarters ended December31, 2011 and March 31, 2012 and the Annual Report on Form 10-K, for the fiscal year ended September 30, 2011.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer repurchases

The independent trustee of our 401(k) plans purchases shares in the open market to fund investments by employees in our common stock, one of the investment options available under such plans, and any matchingcontributions in company stock we provide under certain of such plans. In addition, our stock incentive plans permit payment of an option exercise price by means of cashless exercise through a broker and permit thesatisfaction of the minimum statutory tax obligations upon exercise of options and the vesting of restricted stock units through stock withholding. However, the company does not believe such purchases or transactionsare issuer repurchases for the purposes of this Item 2 of Part II of this Report on Form 10-Q. In addition, our stock incentive plans also permit the satisfaction of tax obligations upon the vesting of restricted stock throughstock withholding. There were no shares withheld in the third quarter of 2012.

Item 5. Other Information

As previously disclosed, on March 15, 2012, a subsidiary of the the company, Meritor Heavy Vehicle Systems Cameri S.P.A. (the "Italian Subsidiary"), entered into an arrangement to sell the Italian Subsidiary's tradereceivables from AB Volvo and AB Volvo's European subsidiaries (the"March Facility"). Under this arrangement, the Italian Subsidiary may sell, at any point in time, up to €30 million of eligible trade receivables.

On June 18, 2012, in order to achieve a technical amendment to the above facility which would change the purchaser of the receivables, the March facility was terminated and the Italian Subsidiary entered into a newfacility with the same terms as the March facility except for the technical change described above, which was not material. Except as so revised, the facility entered into on June 18, 2012 and filed with this Form 10-Q isas previously described in the company's Form 8-K filed on March 15, 2012 and as described in subsequent 10-Qs.

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Cautionary Statement

This Quarterly Report on Form 10-Q contains statements relating to future results of the company (including certain projections and business trends) that are “forward-looking statements” as defined in the PrivateSecurities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “estimate,” “should,” “are likely to be,” “will” and similarexpressions. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to our ability to manage possible adverse effects on our European operations, orfinancing arrangements related thereto, in the event one or more countries exit the European monetary union; our ability to successfully manage rapidly changing volumes in the commercial truck markets and work withour customers to adjust their demands in view of rapid changes in production levels; availability and sharply rising costs of raw materials, including steel, and our ability to manage or recover such costs; reducedproduction for certain military programs as compared to levels in prior years and the return of volumes of selected long-term military contracts to more normalized levels; our ability to secure new military programs toreplace those that will wind down by design in future years; global economic and market cycles and conditions, including a slower than anticipated recovery from the recent global economic crisis; risks inherent inoperating abroad (including foreign currency exchange rates, implications of foreign regulations relating to pensions and potential disruption of production and supply due to terrorist attacks or acts of aggression); risingcosts of pension and other postretirement benefits; the ability to achieve the expected benefits of restructuring actions; the demand for commercial and specialty vehicles for which we supply products; whether theliquidity of the company will be affected by declining vehicle productions in the future; OEM program delays; demand for and market acceptance of new and existing products; successful development of new products;reliance on major OEM customers and possible negative outcomes from contract negotiations with our major customers; labor relations of the company, its suppliers and customers, including potential disruptions insupply of parts to our facilities; or demand for our products due to work stoppages; the financial condition of the company's suppliers and customers, including potential bankruptcies; possible adverse effects of anyfuture suspension of normal trade credit terms by our suppliers; potential difficulties competing with companies that have avoided their existing contracts in bankruptcy and reorganization proceedings; potentialimpairment of long-lived assets, including goodwill; potential adjustment of the value of deferred tax assets; competitive product and pricing pressures; the amount of the company's debt; the ability of the company tocontinue to comply with covenants in its financing agreements; the ability of the company to access capital markets; credit ratings of the company's debt; the outcome of existing and any future legal proceedings,including any litigation with respect to environmental or asbestos-related matters; the outcome of actual and potential product liability, warranty and recall claims; and possible changes in accounting rules; as well asother substantial costs, risks and uncertainties, including but not limited to those detailed herein and from time to time in other filings of the company with the SEC. See also the following portions of our Annual Reporton Form 10-K, as amended, for the year ending October 2, 2011: Item 1. Business, “Customers; Sales and Marketing” “Competition” “Raw Materials and Suppliers” “Employees” “Environmental Matters” “InternationalOperations” and “Seasonality; Cyclicality”; Item 1A. Risk Factors; Item 3. Legal Proceedings; and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and see also“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures about Market Risk” “Legal Proceedings” and “Risk Factors” herein. Theseforward-looking statements are made only as of the respective dates on which they were made, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of newinformation, future events or otherwise, except as otherwise required by law.

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Item 6. Exhibits

3-a Restated Articles of Incorporation of Meritor, filed as Exhibit 4.01 to Meritor’s Registration Statement on Form S-4, as amended (Registration Statement No. 333-36448) ("Form S-4"), is incorporated byreference.

3-a-1 Articles of Amendment of Restated Articles of Incorporation of Meritor filed as exhibit 3-a-1 to Meritor’s Quarterly Report on Form 10-Q for the quarterly period ended April 3, 2011, is incorporated byreference.

3-b By-laws of Meritor, filed as Exhibit 3 to Meritor's Quarterly Report on Form 10-Q for the quarterly period ended June 29, 2003 (File No. 1-15983), is incorporated by reference.10-a Fourth Amended and Restated Purchase and Sale Agreement dated June 18, 2012 among Meritor Heavy Vehicle Braking Systems (USA), LLC, and Meritor Heavy Vehicle Systems, LLC, as originators,

Meritor, Inc., as initial servicer, and ArvinMeritor Receivables Corporation, as Buyer.*10-b Receivables Purchase Agreement dated June 18, 2012 among ArvinMeritor Receivables Corporation, as Seller, Meritor, Inc., as initial servicer, the various Conduit Purchasers, Related Committed

Purchasers, LC Participants and Purchaser Agents from time to time party thereto, and PNC Bank, National Association, as issuers of Letters of Credit and as Administrator.*10-c Termination of Receivables Purchase Agreement dated June 18, 2012 between Meritor Heavy Vehicle Systems Cameri S.P.A., as Seller, and Viking Asset Purchaser No. 7IC, an incorporated cell of Viking

Global Finance ICC, as Purchaser, and Citicorp Trustee Company Limited, as Programme Trustee.*10-d Receivables Purchase Agreement dated June 18, 2012 between Meritor Heavy Vehicle Systems Cameri S.P.A., a company incorporated under the laws of Italy (the "Seller") and Nordea Bank AB (pbl), a

company incorporated under the laws of Sweden (the "Purchaser").*12 Computation of ratio of earnings to fixed charges*23 Consent of Bates White LLC*31-a Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended (Exchange Act)*31-b Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Exchange Act*32-a Certification of the Chief Executive Officer pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350*32-b Certification of the Chief Financial Officer pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350*

* Filed herewith.

59

MERITOR, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MERITOR, INC.

Date: August 3, 2012 By: /s/ V. G. Baker, II V. G. Baker, II Senior Vice President and General Counsel (For the registrant)

Date: August 3, 2012 By: /s/ J.A. Craig J.A. Craig Senior Vice President and Chief Financial Officer

60

FOURTH AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT

dated as of June 18, 2012

among

MERITOR HEAVY VEHICLE BRAKING SYSTEMS (USA), LLCand

MERITOR HEAVY VEHICLE SYSTEMS, LLC,as Originators,

THE OTHER ORIGINATORS FROM TIME TO TIME PARTY HERETO

MERITOR, INC.,as Servicer,

and

ARVINMERITOR RECEIVABLES CORPORATION,as Buyer

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CONTENTS

Page

ARTICLE IAGREEMENT TO PURCHASE AND SELL

2

SECTION 1.1 Agreement To Purchase and Sell 2SECTION 1.2 Timing of Purchases; Purchases under the Existing Agreement 3SECTION 1.3 Consideration for Purchases 3SECTION 1.4 Purchase and Sale Termination Date 3SECTION 1.5 Intention of the Parties 4

ARTICLE II PURCHASE REPORT; CALCULATION OF PURCHASE PRICE

4

SECTION 2.1 Purchase Report 4SECTION 2.2 Calculation of Purchase Price 5

ARTICLE III PAYMENT OF PURCHASE PRICE

5

SECTION 3.1 Initial Purchase Price Payment 5SECTION 3.2 Subsequent Purchase Price Payments 5SECTION 3.3 Letters of Credit 6SECTION 3.4 Settlement as to Specific Receivables and Dilution 7SECTION 3.5 Reconveyance of Receivables 8

ARTICLE IV CONDITIONS OF PURCHASES

8

SECTION 4.1 Conditions Precedent to this Agreement 8SECTION 4.2 Certification as to Representations and Warranties 9SECTION 4.3 Additional Originators 10

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE ORIGINATORS

10

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CONTENTS

Page

SECTION 5.1 Existence and Power 10SECTION 5.2 Company and Governmental Authorization, Contravention 10SECTION 5.3 Binding Effect of Agreement 11SECTION 5.4 Accuracy of Information 11SECTION 5.5 Actions, Suits 11SECTION 5.6 No Material Adverse Effect 11SECTION 5.7 Credit and Collection Policy 11SECTION 5.8 Investment Company Act 11SECTION 5.9 No Sanctions 11SECTION 5.10 Transaction Information 11SECTION 5.11 Taxes 12SECTION 5.12 Compliance with Applicable Laws 12SECTION 5.13 Reliance on Separate Legal Identity 12SECTION 5.14 Perfection 12SECTION 5.15 Creation of Receivables 12SECTION 5.16 Enforceability of Contracts 12SECTION 5.17 Location and Offices 13SECTION 5.18 [Intentionally omitted.] 13SECTION 5.19 Names 13SECTION 5.20 Eligible Receivables 13SECTION 5.21 Bulk Sales, Margin Regulations, No Fraudulent Conveyance, Investment Buyer 13SECTION 5.22 Licenses, Contingent Liabilities, and Labor Controversies 13SECTION 5.23 Ordinary Course of Business 13SECTION 5.24 Purchase Price 13SECTION 5.25 Reaffirmation of Representations and Warranties by each Originator 14

ARTICLE VI COVENANTS OF THE ORIGINATORS

14

SECTION 6.1 Affirmative Covenants 14SECTION 6.2 Reporting Requirements 15SECTION 6.3 Negative Covenants 16SECTION 6.4 Substantive Consolidation 17

ARTICLE VII ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF RECEIVABLES

19

SECTION 7.1 Rights of the Buyer 19SECTION 7.2 Responsibilities of the Originators 19SECTION 7.3 Further Action Evidencing Purchases 20SECTION 7.4 Application of Collections 20

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CONTENTS

Page

ARTICLE VIII PURCHASE AND SALE TERMINATION EVENTS

21

SECTION 8.1 Purchase and Sale Termination Events 21SECTION 8.2 Remedies 21

ARTICLE IX INDEMNIFICATION

22

SECTION 9.1 Indemnities by the Originators 22

ARTICLE X MISCELLANEOUS

23

SECTION 10.1 Amendments, etc 23SECTION 10.2 Notices, etc 24SECTION 10.3 No Waiver; Cumulative Remedies 24SECTION 10.4 Binding Effect; Assignability 24SECTION 10.5 Governing Law 24SECTION 10.6 Costs, Expenses and Taxes 25SECTION 10.7 SUBMISSION TO JURISDICTION 25SECTION 10.8 WAIVER OF JURY TRIAL 25SECTION 10.9 Captions and Cross References; Incorporation by Reference 26SECTION 10.10 Execution in Counterparts 26SECTION 10.11 Acknowledgment and Agreement 26SECTION 10.12 No Proceeding 26SECTION 10.13 Limited Recourse 27

SECTION 10.14Amendment and Restatement of Existing Agreement

27

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SCHEDULES

Schedule I Location of Each OriginatorSchedule II Location of Books and Records of OriginatorsSchedule III Trade NamesSchedule IV Actions/Suits

EXHIBITS

Exhibit A Form of Purchase ReportExhibit B Form of Subordinated NoteExhibit C Form of Joinder Agreement

This FOURTH AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”),dated as of June 18, 2012, is entered into by and among MERITOR HEAVY VEHICLE BRAKING SYSTEMS (USA), LLC, a Delaware limited liability company, and MERITOR HEAVY VEHICLESYSTEMS, LLC, a Delaware limited liability company (together with the other Persons that from time to time become parties hereto as originators, the “Originators” and each, an “Originator”),MERITOR, INC., an Indiana corporation (“Meritor”), as initial Servicer (as defined below), and ARVINMERITOR RECEIVABLES CORPORATION, a Delaware corporation (the “Buyer”).

DEFINITIONS

Unless otherwise indicated herein, capitalized terms used and not otherwise defined in this Agreement are defined in Exhibit I to the Receivables Purchase Agreement, dated as of the datehereof (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Receivables Purchase Agreement”), among the Buyer, as seller, Meritor, as initial servicer(in such capacity, the “Servicer”), the various Purchasers and Purchaser Agents from time to time party thereto, and PNC Bank, National Association, as Administrator.

BACKGROUND:

1. The Originators generate Receivables in the ordinary course of their businesses. The Originators wish to sell such Receivables to the Buyer, and the Buyer is willing to purchase suchReceivables from the Originators, on the terms and subject to the conditions set forth herein.

2. The Buyer and the Originators are parties to a Third Amended and Restated Purchase and Sale Agreement, dated as of September 8, 2009, as amended prior to the date hereof (the“Existing Agreement”). As contemplated by the Existing Agreement, the Buyer previously entering into a financing arrangement evidenced by a Loan and Security Agreement, dated as of September8, 2009, among the Buyer, as borrower, Ally Commercial Finance LLC (f/k/a GMAC Commercial Finance LLC) as agent and lender, and the lenders and other parties from time to time party thereto(such financing arrangement, the “Ally Securitization”). On or about the date hereof, the Buyer has terminated the Ally Securitization and paid all its obligations thereunder in full.

3. Concurrently herewith, the Buyer is entering into the Receivables Purchase Agreement.

4. In connection with the termination of the Ally Securitization and the Buyer’s entry into the Receivables Purchase Agreement, the parties hereto desire to amend and restate the ExistingAgreement on the terms and subject to the conditions set forth herein.

5. The Buyer previously issued to each Originator a “Subordinated Note” defined in, and pursuant to the terms of, the Existing Agreement (each, an “Existing Subordinated Note”). Inconnection with this Agreement, each Existing Subordinated Note is being amended, restated and superseded in its entirety by the Subordinated Notes being issued by the Buyer to the Originatorshereunder.

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intendingto be legally bound, agree as follows:

ARTICLE I AGREEMENT TO PURCHASE AND SELL

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SECTION 1.1 Agreement To Purchase and Sell. On the terms and subject to the conditions set forth in this Agreement, each Originator, severally and for itself, agrees to sell to the Buyer,and the Buyer agrees to purchase from such Originator, from time to time on or after the Closing Date, but before the Purchase and Sale Termination Date (as defined in Section 1.4), all of suchOriginator’s right, title and interest in and to:

(a) each Receivable of such Originator that existed and was owing to such Originator at the closing of such Originator’s business on the Cut-off Date (as defined below) if suchReceivable has not been sold to Buyer under the Existing Agreement;

(b) each Receivable generated by such Originator from and including the Cut-off Date to but excluding the Purchase and Sale Termination Date;

(c) all rights to, but not the obligations of, such Originator under all Related Security with respect to any of the foregoing Receivables;

(d) all monies due or to become due to such Originator with respect to any of the foregoing;

(e) all books and records of such Originator to the extent related to any of the foregoing;

(f) all Collections and other proceeds and products of any of the foregoing (each as defined in the UCC) that are or were received by such Originator on or after the Cut-off Date,including, without limitation, all funds which either are received by such Originator, the Buyer or the Servicer from or on behalf of the Obligors in payment of any amounts owed (including,without limitation, invoice price, finance charges, interest and all other charges) in respect of any of the above Receivables or are applied to such amounts owed by the Obligors (including, withoutlimitation, any insurance payments that such Originator, the Buyer or the Servicer applies in the ordinary course of its business to amounts owed in respect of any of the above Receivables, and netproceeds of sale or other disposition of repossessed goods or other collateral or property of the Obligors in respect of any of the above Receivables or any other parties directly or indirectly liablefor payment of such Receivables); and

(g) all rights, remedies, powers, privileges, title and interest (but not obligations) in and to each lock-box address and all Lock-Box Accounts, into which any Collections or otherproceeds with respect to such Receivables may be deposited, and any related investment property acquired with any such Collections or other proceeds (as such term is defined in the applicableUCC).

All purchases hereunder shall be made without recourse, but shall be made pursuant to, and in reliance upon, the representations, warranties and covenants of the Originators set forth in thisAgreement. No obligation or liability to any Obligor on any Receivable is intended to be assumed by the Buyer hereunder, and any such assumption is expressly disclaimed. The Buyer’s foregoingcommitment to purchase Receivables and the property, proceeds and rights described in clauses (c) through (g) (collectively, the “Related Rights”) is herein called the “Purchase Facility.”

As used herein, “Cut-Off Date” means (a) with respect to each Originator party hereto on the date hereof, June 15, 2012, and (b) with respect to any Originator that first becomes a party heretoafter the date hereof, the calendar day prior to the date on which such Originator becomes a party hereto or such other date as the Buyer and such Originator agree to in writing.

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For the avoidance of doubt, the parties acknowledge and agree that the Receivables sold and purchased hereunder do not include Excluded Receivables.

SECTION 1.2 Timing of Purchases; Purchases under the Existing Agreement.

(a) Closing Date Purchases. Each Originator’s entire right, title and interest in each Receivable that existed and was owing to such Originator at the Cut-off Date and all RelatedRights with respect thereto automatically shall be deemed to have been sold by such Originator to the Buyer on the Closing Date.

(b) Subsequent Purchases. After the Closing Date, until the Purchase and Sale Termination Date, each Receivable and the Related Rights generated by each Originator shall be, andshall be deemed to have been sold by such Originator to the Buyer immediately (and without further action) upon the creation of such Receivable.

(c) Purchases under the Existing Agreement. Each of the Buyer and the Originators hereby ratifies and confirms each of the purchases and sales of “Accounts”, “Related Security”,“Lock-Box Accounts” and proceeds thereof (in each case, as defined in the Existing Agreement) made from time to time prior to the effectiveness of this Agreement under the Existing Agreement.From and after the effectiveness of this Agreement, each such prior purchase and sale, and the rights and obligations of the Buyer and the Originators in respect thereof, shall be subject to the terms ofthis Agreement.

SECTION 1.3 Consideration for Purchases. On the terms and subject to the conditions set forth in this Agreement, the Buyer agrees to make Purchase Price payments to the Originators inaccordance with Article III.

SECTION 1.4 Purchase and Sale Termination Date. The “Purchase and Sale Termination Date” shall be the earliest to occur of (a) the date the Purchase Facility is terminated pursuant toSection 8.2 and (b) the Payment Date immediately following the day on which the Originators shall have given written notice to the Buyer, the Administrator and each Purchaser Agent at or prior to10:00 a.m. (New York City time) that the Originators desire to terminate this Agreement.

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SECTION 1.5 Intention of the Parties. It is the express intent of each Originator and the Buyer that each conveyance by such Originator to the Buyer pursuant to this Agreement (or theExisting Agreement) of the Receivables and Related Rights, including without limitation, all Receivables, if any, constituting general intangibles as defined in the UCC, and all Related Rights beconstrued as a valid and perfected sale and absolute assignment (without recourse except as provided herein) of such Receivables and Related Rights by such Originator to the Buyer (rather than thegrant of a security interest to secure a debt or other obligation of such Originator) and that the right, title and interest in and to such Receivables and Related Rights conveyed to the Buyer be prior tothe rights of and enforceable against all other Persons at any time, including, without limitation, lien creditors, secured lenders, purchasers and any Person claiming through such Originator. However,if, contrary to the mutual intent of the parties, any conveyance of Receivables and Related Rights, including without limitation any Receivables constituting general intangibles, is not construed to beboth a valid and perfected sale and absolute assignment of such Receivables and Related Rights, and a conveyance of such Receivables and Related Rights that is prior to the rights of and enforceableagainst all other Persons at any time, including without limitation lien creditors, secured lenders, purchasers and any Person claiming through such Originator, then, it is the intent of such Originatorand the Buyer that (i) this Agreement also shall be deemed to be, and hereby is, a security agreement within the meaning of the UCC; and (ii) such Originator shall be deemed to have granted to theBuyer as of the date of this Agreement, and such Originator hereby grants to the Buyer a security interest in, to and under all of such Originator’s right, title and interest in and to: (A) the Receivablesand the Related Rights now existing and hereafter created by such Originator transferred or purported to be transferred hereunder or under the Existing Agreement, (B) all monies due or to become dueand all amounts received with respect thereto, (C) all books and records of such Originator to the extent related to any of the foregoing, (D) all rights, remedies, powers, privileges, title and interest(but not obligations) of such Originator in and to each lock-box address and account (including, without limitation, all related Lock-Box Accounts) to which Collections or other proceeds with respectto such Receivables are sent, all amounts on deposit therein, and any related investment property acquired with any such collections or other proceeds (as such term is defined in the applicable UCC)and (E) all proceeds and products of any of the foregoing to secure all of such Originator’s obligations hereunder.

ARTICLE II

PURCHASE REPORT; CALCULATION OF PURCHASE PRICE

SECTION 2.1 Purchase Report. On the Closing Date and on each date when a Monthly Information Package is due to be delivered under the Receivables Purchase Agreement (each suchdate, a “Monthly Purchase Report Date”), the Servicer shall deliver to the Buyer and each Originator a report in substantially the form of Exhibit A (each such report being herein called a “PurchaseReport”) setting forth, among other things:

(a) Receivables purchased by the Buyer from each Originator on the Closing Date (in the case of the Purchase Report to be delivered on the Closing Date);

(b) Receivables purchased by the Buyer from each Originator during the Fiscal Month immediately preceding such Monthly Purchase Report Date (in the case of each subsequentPurchase Report); and

(c) the calculations of reductions of the Purchase Price for any Receivables as provided in Section 3.4(a) and (b).

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SECTION 2.2 Calculation of Purchase Price. The “Purchase Price” to be paid to each Originator for the Receivables that are purchased hereunder from such Originator shall be determinedin accordance with the following formula:

PP = OB x FMVD

where:

PP = Purchase Price for each Receivable as calculated on the relevant Payment Date.

OB = The Outstanding Balance of such Receivable on the relevant Payment Date.

FMVD = 98.25% representing a 175 basis point fair market value discount for uncertainty of payment and the time valueof money.

“Payment Date” means (i) the Closing Date and (ii) each Business Day thereafter that the Originators are open for business.

ARTICLE III

PAYMENT OF PURCHASE PRICE

SECTION 3.1 Initial Purchase Price Payment. On the terms and subject to the conditions set forth in this Agreement, the Buyer agrees to pay to each Originator the Purchase Price for thepurchase to be made from such Originator on the Closing Date partially in cash (in an amount to be agreed between the Buyer and such Originator and set forth in the initial Purchase Report) andpartially by issuing a promissory note in the form of Exhibit B to such Originator (each such promissory note, as it may be amended, supplemented, endorsed or otherwise modified from time to time,together with all promissory notes issued from time to time in substitution therefor or renewal thereof in accordance with the Transaction Documents, each being herein called a “Subordinated Note”)with an initial principal balance equal to the remaining Purchase Price payable to such Originator plus the outstanding principal balance, if any, of such Originator’s Existing Subordinated Note. Forthe avoidance of doubt, the foregoing Purchase Price shall be payable by the Buyer to the Originators only to the extent that it has not previously been paid by the Buyer pursuant to the ExistingAgreement.

SECTION 3.2 Subsequent Purchase Price Payments. On each Payment Date subsequent to the Closing Date, on the terms and subject to the conditions set forth in this Agreement, theBuyer shall pay to each Originator the Purchase Price for the Receivables generated by such Originator on such Payment Date:

(a) First, in cash to the extent the Buyer has cash available therefor (and such payment is not prohibited under the Receivables Purchase Agreement) and/or, if requested by suchOriginator, by causing the LC Bank to issue one or more Letters of Credit in accordance with Section 3.3 and on the terms and subject to the conditions of this Article III and the ReceivablesPurchase Agreement;

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(b) Second, to the extent any portion of the Purchase Price remains unpaid (for the avoidance of doubt, no portion of the Purchase Price as to which a Letter of Credit has beenissued in accordance with Section 3.3 and on the terms and subject to the conditions of this Article III and the Receivables Purchase Agreement shall be deemed to remain unpaid), the principalamount outstanding under the applicable Subordinated Note shall be automatically increased by an amount equal to such remaining Purchase Price.

The Servicer shall make all appropriate record keeping entries with respect to each of the Subordinated Notes to reflect the foregoing payments and reductions made pursuant to Section 3.3,and the Servicer’s books and records shall constitute rebuttable presumptive evidence of the principal amount of, and accrued interest on, each of the Subordinated Notes at any time. Each Originatorhereby irrevocably authorizes the Servicer to mark the Subordinated Notes “CANCELED” and to return such Subordinated Notes to the Buyer upon the final payment thereof after the occurrence ofthe Purchase and Sale Termination Date.

SECTION 3.3 Letters of Credit.

(a) An Originator may request that the Purchase Price for Receivables sold on a Payment Date be paid by the Buyer procuring the issuance of a Letter of Credit by the LC Bank.Upon the request of an Originator, and on the terms and conditions for issuing Letters of Credit under the Receivables Purchase Agreement (including any limitations therein on the amount of any suchissuance), the Buyer agrees to cause the LC Bank to issue, on the Payment Dates specified by such Originator, Letters of Credit in favor of the beneficiaries specified by such Originator. The aggregatestated amount of the Letters of Credit being issued on any Payment Date on behalf of any Originator shall constitute a credit against the aggregate Purchase Price payable by the Buyer to suchOriginator on such Payment Date pursuant to Section 3.2. To the extent that the aggregate stated amount of the Letters of Credit being issued on any Payment Date exceeds the aggregate PurchasePrice payable by the Buyer to an Originator on such Payment Date, such excess shall be deemed to be a (i) reduction in the outstanding principal balance of (and, to the extent necessary, the accruedbut unpaid interest on) the Subordinated Note payable to such Originator and/or (ii) a reduction in the Purchase Price payable on the Payment Dates immediately following the date any such Letter ofCredit is issued. In the event that any such Letter of Credit issued pursuant to this Section 3.3 (i) expires or is cancelled or otherwise terminated with all or any portion of its stated amount undrawn,(ii) has its stated amount decreased (for a reason other than a drawing having been made thereunder) or (iii) the Buyer’s Reimbursement Obligation in respect thereof is reduced for any reason otherthan by virtue of a payment made in respect of a drawing thereunder, then an amount equal to such undrawn amount or such reduction, as the case may be, shall either be paid in cash to suchOriginator on the next Payment Date or, if the Buyer does not then have cash available therefor, shall be deemed to be added to the outstanding principal balance of the Subordinated Note issued tosuch Originator. Under no circumstances shall the Originator (or any Affiliate thereof (other than the Buyer)) have any reimbursement or recourse obligations in respect of any Letter of Credit.

(b) In the event that any Originator requests that any purchases be paid for by the issuance of a Letter of Credit hereunder, such Originator shall on a timely basis provide the Buyerwith such information as is necessary for the Buyer to obtain such Letter of Credit from the LC Bank, and shall notify the Buyer, the Servicer, and the Administrator of the allocations described inclause (a) above. Such allocations shall be binding on the Buyer and the Originator, absent manifest error.

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(c) Each Originator agrees to be bound by the terms of each Letter of Credit Application referenced in the Receivables Purchase Agreement and that the Letter of Credit shall besubject either to the Uniform Customs and Practice for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600, and any amendments or revisions thereofadhered to by the LC Bank or the International Standby Practices (ISP98-International Chamber of Commerce Publication Number 590), and any amendments or revisions thereof adhered to by theLC Bank, as determined by the LC Bank, in each case subject to the terms and conditions set forth in the Receivables Purchase Agreement.

SECTION 3.4 Settlement as to Specific Receivables and Dilution.

(a) If, (i) on the day of purchase of any Receivable from an Originator hereunder, any of the representations or warranties set forth in Sections 5.14 and 5.20 are not true with respectto such Receivable or (ii) as a result of any action or inaction (other than solely as a result of the failure to collect such Receivable due to a discharge in bankruptcy or similar insolvency proceeding orother credit related reasons with respect to the relevant Obligor) of such Originator, on any subsequent day, any of such representations or warranties set forth in Sections 5.14 or 5.20 is not true withrespect to such Receivable, then the Purchase Price for such Receivable shall be reduced by an amount equal to the Outstanding Balance of such Receivable and shall be accounted to such Originatoras provided in clause (c) below; provided, that if the Buyer thereafter receives payment on account of the Outstanding Balance of such Receivable, the Buyer promptly shall deliver such funds to suchOriginator.

(b) If, on any day, the Outstanding Balance of any Receivable purchased hereunder is reduced or adjusted as a result of any defective, rejected or returned goods or services, or anyrevision, cancellation, allowance, rebate, discount or other adjustment made by any Originator, the Buyer or the Servicer (of any Affiliate thereof) or any setoff or dispute between any Originator or theServicer and an Obligor as indicated on the books of the Buyer, then the Purchase Price with respect to such Receivable shall be reduced by the amount of such net reduction and shall be accounted tosuch Originator as provided in clause (c) below.

(c) Any reduction in the Purchase Price of any Receivable pursuant to clause (a) or (b) above shall be applied as a credit for the account of the Buyer against the Purchase Price ofReceivables subsequently purchased by the Buyer from such Originator hereunder; provided, however if there have been no purchases of Receivables from such Originator (or insufficiently largepurchases of Receivables) to create a Purchase Price sufficient to so apply such credit against, the amount of such credit:

(i) to the extent of any outstanding principal balance under the Subordinated Note payable to such Originator, shall be deemed to be a payment under, and shall be deducted from the principal amountoutstanding under, the Subordinated Note payable to such Originator; and

(ii) after making any deduction pursuant to clause (i) above, shall be paid in cash to the Buyer by such Originator in the manner and for application as described in the following proviso;

provided, further, that at any time (y) when a Termination Event or an Unmatured Termination Event exists under the Receivables Purchase Agreement or (z) on or after the Purchase and SaleTermination Date, the amount of any such credit shall be paid by such Originator to the Buyer by deposit in immediately available funds into a Lock-Box Account for application by the Servicer to thesame extent as if Collections of the applicable Receivable in such amount had actually been received on such date.

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SECTION 3.5 Reconveyance of Receivables. In the event that the Purchase Price of a Receivable has been reduced to zero, and the credit for such reduction has been applied pursuant toSection 3.4, the Buyer shall reconvey such Receivable to such Originator, without representation or warranty, but free and clear of all liens, security interests, charges, and encumbrances created by theBuyer.

ARTICLE IV

CONDITIONS OF PURCHASES

SECTION 4.1 Conditions Precedent to this Agreement. The effectiveness of this Agreement is subject to the condition precedent that the Buyer and the Administrator (as the Buyer’sassignee) shall have received, on or before the Closing Date, the following, each (unless otherwise indicated) dated the Closing Date, and each in form and substance satisfactory to the Buyer and theAdministrator (as the Buyer’s assignee):

(a) A copy of the resolutions of the board of directors or managers of each Originator approving this Agreement and the other Transaction Documents to be executed and deliveredby it and the transactions contemplated hereby and thereby, certified by the Secretary or Assistant Secretary of such Originator;

(b) Good standing certificates for each Originator issued as of a recent date acceptable to the Buyer and the Administrator (as the Buyer’s assignee) by the Secretary of State (orsimilar official) of the jurisdiction of such Originator’s organization and each jurisdiction where such Originator is qualified to transact business;

(c) A certificate of the Secretary or Assistant Secretary of each Originator certifying the names and true signatures of the officers authorized on such Person’s behalf to sign thisAgreement and the other Transaction Documents to be executed and delivered by it (on which certificate the Servicer, the Buyer and the Administrator (as the Buyer’s assignee) may conclusively relyuntil such time as the Servicer, the Buyer and the Administrator (as the Buyer’s assignee) shall receive from such Person a revised certificate meeting the requirements of this clause (c));

(d) The certificate or articles of incorporation or other organizational document of each Originator (including all amendments and modifications thereto) duly certified by theSecretary of State of the jurisdiction of such Originator’s organization as of a recent date acceptable to the Administrator, together with a copy of the by-laws or limited liability company agreement ofsuch Originator (including all amendments and modifications thereto), as applicable, each duly certified by the Secretary or an Assistant Secretary of such Originator;

(e) Proper financing statements (Form UCC-1) that have been duly authorized and name each Originator as the debtor/seller and the Buyer as the buyer/assignor (and theAdministrator, for the benefit of the Purchasers, as secured party/assignee) of the Receivables generated by such Originator as may be necessary or, in the Buyer’s or the Administrator’s opinion,desirable under the UCC of all appropriate jurisdictions to perfect the Buyer’s ownership interest in such Receivables and such other rights, accounts, instruments and moneys (including, withoutlimitation, Related Security) in which an ownership or security interest has been assigned to it hereunder;

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(f) A written search report from a Person satisfactory to the Buyer and the Administrator (as the Buyer’s assignee) listing all effective financing statements that name the Originatorsas debtors or sellers and that are filed in all jurisdictions in which filings may be made against such Person pursuant to the applicable UCC, together with copies of such financing statements (none ofwhich, except for those described in the foregoing clause (e) (and/or released or terminated as the case may be prior to the date hereof), shall cover any Receivable or any Related Rights which are tobe sold to the Buyer hereunder), and tax and judgment lien search reports (including, without limitation, liens of the Pension Benefit Guaranty Corporation) from a Person satisfactory to the Buyer andthe Administrator (as the Buyer’s assignee) showing no evidence of such liens filed against any Originator;

(g) Favorable opinions of counsel to the Originators, in form and substance satisfactory to the Buyer and the Administrator;

(h) Copies of a Subordinated Note in favor of each Originator, duly executed by the Buyer; and

(i) Evidence (i) of the execution and delivery by each of the parties thereto of each of the other Transaction Documents to be executed and delivered by it in connection herewith and(ii) that each of the conditions precedent to the execution, delivery and effectiveness of such other Transaction Documents has been satisfied to the Buyer’s and the Administrator’s (as the Buyer’sassignee) satisfaction.

SECTION 4.2 Certification as to Representations and Warranties. Each Originator, by accepting the Purchase Price related to each purchase of Receivables generated by such Originator,shall be deemed to have certified that the representations and warranties contained in Article V, as from time to time amended in accordance with the terms hereof, are true and correct on and as ofsuch day, with the same effect as though made on and as of such day (except for representations and warranties which apply to an earlier date, in which case such representations and warranties shallbe true and correct as of such earlier date).

SECTION 4.3 Additional Originators. Additional Persons may be added as Originators hereunder, with the prior written consent of the Buyer and the Administrator (which consents may begranted or withheld in their sole discretion); provided that the following conditions are satisfied on or before the date of such addition:

(a) the Servicer shall have given the Buyer and the Administrator at least thirty days’ prior written notice of such proposed addition and the identity of the proposed additionalOriginator and shall have provided such other information with respect to such proposed additional Originator as the Administrator may reasonably request;

(b) such proposed additional Originator has executed and delivered to the Buyer and the Administrator an agreement substantially in the form attached hereto as Exhibit C (a“Joinder Agreement”);

(c) such proposed additional Originator has delivered to the Buyer and the Administrator (as the Buyer’s assignee) each of the documents with respect to such Originator described inSections 4.1 and 4.2, in each case in form and substance satisfactory to the Buyer, the Administrator (as the Buyer’s assignee); and

(d) no Purchase and Sale Termination Date or Unmatured Purchase and Sale Termination Date shall have occurred and be continuing.

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ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE ORIGINATORS

In order to induce the Buyer to enter into this Agreement and to make purchases hereunder, each Originator hereby represents and warrants with respect to itself that each representation andwarranty concerning it or the Receivables sold by it hereunder, that is contained in the Receivables Purchase Agreement is true and correct, and hereby makes the representations and warranties setforth in this Article V:

SECTION 5.1 Existence and Power. Such Originator is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and has all power andauthority and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted, except where failure to havesuch licenses, authorizations, consents or approvals would not be reasonably expected to have a Material Adverse Effect.

SECTION 5.2 Company and Governmental Authorization, Contravention. The execution, delivery and performance by such Originator of this Agreement are within such Originator’scompany powers, have been duly authorized by all necessary company action, require no action by or in respect of, or filing with (other than the filing of the UCC financing statements andcontinuation statements contemplated hereunder and disclosures and filings under applicable securities laws), any governmental body, agency or official, and, do not contravene, or constitute a defaultunder, any provision of applicable law or regulation or of the organizational documents of such Originator or of any agreement, judgment, injunction, order, decree or other instrument binding uponsuch Originator or result in the creation or imposition of any lien (other than liens in favor of the Buyer and Administrator under the Transaction Documents) on assets of such Originator or any of itsSubsidiaries.

SECTION 5.3 Binding Effect of Agreement. This Agreement and each of the other Transaction Documents to which it is a party constitutes the legal, valid and binding obligation of suchOriginator enforceable against such Originator in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting theenforcement of creditors’ rights generally and by general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law.

SECTION 5.4 Accuracy of Information. All information heretofore furnished by such Originator to the Buyer, the Administrator, any Purchaser Agent or any Purchaser pursuant to or inconnection with this Agreement or any other Transaction Document or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by such Originator to the Buyer,the Administrator, any Purchaser Agent or any Purchaser in writing pursuant to this Agreement or any Transaction Document will be, true and accurate in all material respects on the date suchinformation is stated or certified.

SECTION 5.5 Actions, Suits. Except as described on Schedule IV hereto, there are no actions, suits or proceedings pending or, to the best of such Originator’s knowledge, threatenedagainst or affecting such Originator or any of its Affiliates or their respective properties, in or before any court, arbitrator or other body, which could reasonably be expected to have a Material AdverseEffect.

SECTION 5.6 No Material Adverse Effect. Since April 30, 2012 there has been no Material Adverse Effect on such Originator.

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SECTION 5.7 Credit and Collection Policy. Such Originator has complied in all material respects with its Credit and Collection Policy with regard to each Receivable originated by suchOriginator.

SECTION 5.8 Investment Company Act. Such Originator is not an “investment company,” or a company “controlled” by an “investment company” within the meaning of the InvestmentCompany Act of 1940, as amended.

SECTION 5.9 No Sanctions. Such Originator is not a Sanctioned Person. To such Originator’s knowledge, no Obligor was a Sanctioned Person at the time of origination of any Receivableowing by such Obligor. Such Originator and its Affiliates: (i) have less than 15% of their assets in Sanctioned Countries; and (ii) derive less than 15% of their operating income from investments in,or transactions with Sanctioned Persons or Sanctioned Countries. Neither such Originator nor any of its Subsidiaries engages in activities related to Sanctioned Countries except for such activities asare (A) specifically or generally licensed by OFAC, or (B) otherwise in compliance with OFAC’s sanctions regulations.

SECTION 5.10 Transaction Information. None of such Originator, any Affiliate of such Originator or any third party with which such originator or any Affiliate thereof has contracted, hasdelivered, in writing or orally, to any Rating Agency providing or proposing to provide a rating to, or monitoring a rating of, any Notes, any Transaction Information without providing suchTransaction Information to the applicable Purchaser Agent prior to delivery to such Rating Agency and has not participated in any oral communications with respect to Transaction information withany Rating Agency without the participation of such Purchaser Agent.

SECTION 5.11 Taxes. Such Originator has filed or caused to be filed all U.S. federal income tax returns and all other material returns, statements, forms and reports for taxes, domestic orforeign, required to be filed by it and has paid all taxes payable by it which have become due or any assessments made against it or any of its property and all other taxes, fees or other charges imposedon it or any of its property by any Governmental Authority, except any taxes, fees or other charges that are being contested in good faith by appropriate proceedings and for which the such Originatorhas set aside on its books adequate reserves.

SECTION 5.12 Compliance with Applicable Laws. Such Originator is in compliance with the requirements of all applicable laws, rules, regulations and orders of all governmentalauthorities except to the extent that the failure to comply would not be reasonably expected to have a Material Adverse Effect. In addition, no Receivable sold hereunder contravenes any laws, rules orregulations applicable thereto or to such Originator.

SECTION 5.13 Reliance on Separate Legal Identity. Such Originator acknowledges that each of the Purchasers, the Purchaser Agents and the Administrator are entering into theTransaction Documents to which they are parties in reliance upon the Buyer’s identity as a legal entity separate from such Originator.

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SECTION 5.14 Perfection. Immediately preceding its sale of each Receivable hereunder, such Originator was the owner of such Receivable sold or purported to be sold, as the case may be,free and clear of any Adverse Claims (after giving effect to the Intercreditor Agreement), and each such sale hereunder constitutes a valid sale, transfer and assignment of all of such Originator’s right,title and interest in, to and under the Receivables sold by it, free and clear of any Adverse Claims. On or before the date hereof and before the generation by such Originator of any new Receivable tobe sold or otherwise conveyed hereunder, all financing statements and other documents, if any, required to be recorded or filed in order to perfect and protect the Buyer’s ownership interest in suchReceivable against all creditors of and purchasers from such Originator will have been duly filed in each filing office necessary for such purpose, and all filing fees and taxes, if any, payable inconnection with such filings shall have been paid in full.

SECTION 5.15 Creation of Receivables. Such Originator has exercised at least the same degree of care and diligence in the creation of the Receivables sold or otherwise transferredhereunder as it has exercised in connection with the creation of receivables originated by it and not so transferred hereunder.

SECTION 5.16 Enforceability of Contracts. Each Contract related to any Receivable sold by such Originator hereunder is effective to create, and has created, a legal, valid and bindingobligation of the related Obligor to pay the outstanding balance of such Receivable, enforceable against the Obligor in accordance with its terms, without being subject to any defense, deduction, offsetor counterclaim and such Originator has fully performed its obligations under such Contract.

SECTION 5.17 Location and Offices. As of the date hereof, such Originator’s location (as such term is defined in the applicable UCC) is as set forth on Schedule I hereto, and such locationhas not been changed for at least four months before the date hereof. The offices where such Originator keeps all records concerning the Receivables are located at the addresses set forth on ScheduleII hereto or such other locations of which the Buyer and the Administrator (as the Buyer’s assignee) has been given written notice in accordance with the terms hereof.

SECTION 5.18 [Intentionally omitted.]

SECTION 5.19 Names. Except as described in Schedule III, such Originator has not used any corporate or company names, tradenames or assumed names other than its name set forth onthe signature pages of this Agreement.

SECTION 5.20 Eligible Receivables. Each Receivable listed as an Eligible Receivable or included as an “Eligible Receivable” in the calculation of the Net Receivables Pool Balance in anyInformation Package delivered to the Administrator is an Eligible Receivable as of the effective date of the information reported in such Information Package.

SECTION 5.21 Bulk Sales, Margin Regulations, No Fraudulent Conveyance, Investment Buyer. No transaction contemplated hereby requires compliance with or will become subject toavoidance under any bulk sales act or similar law. No use of funds obtained by such Originator hereunder will conflict with or contravene Regulation T, U or X of the Federal Reserve Board.No purchase hereunder constitutes a fraudulent transfer or conveyance under any United States federal or applicable state bankruptcy or insolvency laws or is otherwise void or voidable under such orsimilar laws or principles or for any other reason.

SECTION 5.22 Licenses, Contingent Liabilities, and Labor Controversies.

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(a) Such Originator has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of itsbusiness to the extent material to the operation of such Originator’s business.

(b) There are no labor controversies pending against such Originator that have had (or could be reasonably expected to have) a Material Adverse Effect.

SECTION 5.23 Ordinary Course of Business. If notwithstanding the stated intentions of the parties, the transactions contemplated hereby are characterized as loans secured by theReceivables and Related Rights, then each remittance of Collections to the Buyer under this Agreement will have been (i) in payment of a debt incurred by such Originator in the ordinary course ofbusiness or financial affairs of such Originator and the Buyer and (ii) made in the ordinary course of business or financial affairs of such Originator and the Buyer.

SECTION 5.24 Purchase Price. Each sale by such Originator to Buyer of an interest in Receivables has been made for “reasonably equivalent value” (as such term is used in Section 548of the Bankruptcy Code) and not for or on account of “antecedent debt” (as such term is used in Section 547 of the Bankruptcy Code) owed by such Originator to Buyer.

SECTION 5.25 Reaffirmation of Representations and Warranties by each Originator. On each day that a new Receivable is created, and when sold to the Buyer hereunder, such Originatorshall be deemed to have certified that all representations and warranties set forth in this Article V are true and correct on and as of such day (except for representations and warranties which apply as toan earlier date (in which case such representations and warranties shall be true and correct as of such earlier date)).

ARTICLE VI

COVENANTS OF THE ORIGINATORS

SECTION 6.1 Affirmative Covenants. From the date hereof until the first day following the Purchase and Sale Termination Date, each Originator will, unless the Administrator and theBuyer shall otherwise consent in writing:

(a) General Information. Such Originator shall furnish to the Buyer and the Administrator such information as such Person may from time to time reasonably request.

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(b) Furnishing of Information and Inspection of Records. Such Originator will furnish to the Buyer and the Administrator from time to time such information with respect to theReceivables as such Person may reasonably request. Such Originator will at any time and from time to time during regular business hours with reasonable prior written notice (i) permit the Buyer andthe Administrator, or their respective agents or representatives, (A) to examine and make copies of and abstracts from all books and records relating to the Receivables or other Pool Assets and (B) tovisit the offices and properties of such Originator for the purpose of examining such books and records, and to discuss matters relating to the Receivables, other Related Rights or such Originator’sperformance hereunder or under the other Transaction Documents to which it is a party with any of the officers, directors, employees or independent public accountants of such Originator (providedthat representatives of such Originator are present during such discussions) having knowledge of such matters and (ii) without limiting the provisions of clause (i) above, from time to time duringregular business hours, upon reasonable prior written notice from the Buyer or the Administrator, permit certified public accountants or other auditors acceptable to the Administrator to conduct, areview of its books and records with respect to the Receivables.

(c) Keeping of Records and Books. Such Originator will have and maintain (i) administrative and operating procedures (including an ability to recreate records if originals aredestroyed), (ii) adequate facilities, personnel and equipment and (iii) all records and other information reasonably necessary for collection of the Receivables originated by such Originator (includingrecords adequate to permit the daily identification of each new such Receivable and all Collections of, and adjustments to, each existing such Receivable). Such Originator will give the Buyer and theAdministrator at least 30 days’ prior written notice of any change in such administrative and operating procedures that causes them to be materially different from the procedures described to theBuyer and the Administrator on or before the date hereof as such Originator’s then existing or planned administrative and operating procedures for collecting Receivables.

(d) Performance and Compliance with Receivables and Contracts. Such Originator will at its expense timely and fully perform and comply with all material provisions, covenantsand other promises required to be observed by it under all Contracts or other documents or agreements related to the Receivables.

(e) Credit and Collection Policy. Such Originator will comply in all material respects with its Credit and Collection Policy in regard to each Receivable originated by it and anyrelated Contract or other related document or agreement.

(f) Receivable Purchase Agreement. Such Originator will perform and comply with each covenant and other undertaking in the Receivables Purchase Agreement that the Buyerundertakes to cause such Originator to perform, subject to any grace periods for such performance provided for in the Receivables Purchase Agreement.

(g) Preservation of Existence. Such Originator shall preserve and maintain its existence as a corporation, partnership or limited liability company, as applicable, and all rights,franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing as a foreign corporation, partnership or limited liability company, as applicable, ineach jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification would be reasonably expected to have a Material Adverse Effect.

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(h) Location of Records. Such Originator will keep its location (as such term is defined in the applicable UCC), and the offices where it keeps its records concerning or related toReceivables, at the address(es) referred to in Schedule I or Schedule II, respectively, or, upon 30 days’ prior written notice to the Buyer and the Administrator (as the Buyer’s assignee), at such otherlocations in jurisdictions where all action required by Section 7.3 shall have been taken and completed.

(i) Post Office Boxes. On or prior to the date hereof, if requested by the Servicer such Originator will deliver to the Servicer (on behalf of the Buyer) a certificate from an authorizedofficer of such Originator to the effect that (i) the name of the renter of all post office boxes into which Collections may from time to time be mailed are in the name of the Buyer (unless such postoffice boxes are in the name of the relevant Lock-Box Banks) and (ii) all relevant postmasters have been notified that each of the Servicer and the Administrator are authorized to collect mail deliveredto such post office boxes (unless such post office boxes are in the name of the relevant Lock-Box Banks).

(j) Preservation of Security Interest. Such Originator will take (and cause the Servicer to take) any and all action as the Administrator may require to preserve and maintain theperfection and priority of the security interest of the Administrator (on behalf of the Purchasers and as assignee of the Buyer) in the Receivables and Related Rights.

SECTION 6.2 Reporting Requirements. From the date hereof until the first day following the Purchase and Sale Termination Date, each Originator will, unless the Buyer and theAdministrator shall otherwise consent in writing, furnish to the Buyer and the Administrator:

(a) Purchase and Sale Termination Events. As soon as possible, and in any event within two (2) Business Days after such Originator becomes aware of the occurrence of eachPurchase and Sale Termination Event or each event which with notice or the passage of time or both would become a Purchase and Sale Termination Event (an “Unmatured Purchase and SaleTermination Event”), a written statement of the chief financial officer, chief executive officer or president of such Originator describing such Purchase and Sale Termination Event or UnmaturedPurchase and Sale Termination Event and the action that such Originator proposes to take with respect thereto, in each case in reasonable detail;

(b) Proceedings. As soon as possible and in any event within five (5) BusinessDays after such Originator becomes aware thereof, written notice of (i) litigation, investigation orproceeding of the type described in Section 5.5 not previously disclosed to the Buyer or the Administrator which could be expected to have a Material Adverse Effect, and (ii) all material adversedevelopments that have occurred with respect to any previously disclosed litigation, proceedings and investigations; and

(c) Other. Promptly, from time to time, such other information, documents, records or reports respecting the Receivables or the conditions or operations, financial or otherwise, ofsuch Originator as the Buyer and the Administrator may from time to time reasonably request in order to protect the interests of the Buyer, the Purchasers, the Purchaser Agents or the Administratorunder or as contemplated by the Transaction Documents.

SECTION 6.3 Negative Covenants. From the date hereof until the first date following the Purchase and Sale Termination Date when no Aggregate Capital or Discount with respect to thePurchased Interest remains outstanding and all obligations of such Originator to the Buyer and its assigns have been satisfied in full, each Originator agrees that, unless the Buyer and the Administratorshall otherwise consent in writing, it shall not:

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(a) Sales, Liens, Etc. Except as otherwise provided herein or in any other Transaction Document, sell, assign (by operation of law or otherwise) or otherwise dispose of, or create orsuffer to exist any Adverse Claim upon or with respect to, any Receivable sold or otherwise conveyed or purported to be sold or otherwise conveyed hereunder or related Contract or Related Security,or any interest therein, or any Collections thereon, or assign any right to receive income in respect thereof, except to the extent such Receivable has been reconveyed to the Originator under Section3.5.

(b) Extension or Amendment of Receivables. Except as otherwise permitted in Section 4.2(a) of the Receivables Purchase Agreement and the applicable Credit and CollectionPolicy, make any modification with respect to the terms of any Receivable in any material respect generated by it that is sold or otherwise conveyed hereunder, or amend, modify or waive, in anymaterial respect, the provisions of any Contract related thereto.

(c) Change in Business or Credit and Collection Policy. (i) Make any change in the character of its business, which change could impair the collectibility of any Pool Receivable or(ii) make any change in its Credit and Collection Policy that would reasonably be expected to materially adversely affect the collectibility of the Receivables, the enforceability of any related Contractor its ability to perform its obligations under the related Contract or the Transaction Documents, in the case of either (i) or (ii) above, without the prior written consent of the Administrator. NoOriginator shall make any written change in any Credit and Collection Policy without giving prior written notice thereof to the Administrator.

(d) Receivables Not to be Evidenced by Promissory Notes or Chattel Paper. Except as otherwise provided in the Receivables Purchase Agreement in regard to servicing, take anyaction to cause or permit any Receivable generated by it that is sold by it hereunder to become evidenced by any “instrument” or “chattel paper” (as defined in the applicable UCC).

(e) Mergers, Acquisitions, Sales, etc. (i) Be a party to any merger, consolidation or other restructuring, except a merger, consolidation or other restructuring where the Buyer and theAdministrator have each (A) received 30 days’ prior notice thereof, (B) consented in writing thereto if the resulting entity following such merger, consolidation or other restructuring is any Personother than an Originator, (C) received executed copies of all documents, certificates and opinions (including, without limitation, opinions relating to bankruptcy and UCC matters) as the Buyer or theAdministrator shall request and (D) been satisfied that all other action to perfect and protect the interests of the Buyer and the Administrator, on behalf of the Purchasers, in and to the Receivables to besold by it hereunder and other Related Rights, as requested by the Buyer or the Administrator shall have been taken by, and at the expense of such Originator (including the filing of any UCCfinancing statements, the receipt of certificates and other requested documents from public officials and all such other actions required pursuant to Section 7.3) or (ii) directly or indirectly sell, transfer,assign, convey or lease (A) whether in one or a series of transactions, all or substantially all of its assets or (B) any Receivables or any interest therein (other than pursuant to this Agreement).

(f) Lock-Box Banks. Make any changes in its instructions to Obligors regarding Collections on Receivables sold or otherwise conveyed by it hereunder or add or terminate any bankas a Lock-Box Bank unless the requirements of Section 1(f) of Exhibit IV to the Receivables Purchase Agreement have been met.

(g) Accounting for Purchases. Account for or treat (whether in financial statements or otherwise) the transactions contemplated hereby in any manner other than as sales of theReceivables and Related Rights by such Originator to the Buyer.

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(h) Transaction Documents. Enter into, execute, deliver or otherwise become bound after the Closing Date by any agreement, instrument, document or other arrangement thatrestricts the right of such Originator to amend, supplement, amend and restate or otherwise modify, or to extend or renew, or to waive any right under, this Agreement or any other TransactionDocument.

SECTION 6.4 Substantive Consolidation. Each Originator hereby acknowledges that this Agreement and the other Transaction Documents are being entered into in reliance upon theBuyer’s identity as a legal entity separate from such Originator and its Affiliates. Therefore, from and after the date hereof, each Originator shall take all reasonable steps necessary to make it apparentto third Persons that the Buyer is an entity with assets and liabilities distinct from those of such Originator and any other Person, and is not a division of such Originator, its Affiliates or any otherPerson. Without limiting the generality of the foregoing and in addition to and consistent with the other covenants set forth herein, such Originator shall take such actions as shall be required in orderthat:

(a) such Originator shall not be involved in the day to day management of the Buyer;

(b) such Originator shall maintain separate corporate records and books of account from the Buyer and otherwise will observe corporate formalities and, to the extent that it andthe Buyer have offices in the same location, there shall be a fair and appropriate allocation of overhead costs between them, and each shall bear its fair share of such expenses);

(c) the financial statements and books and records of such Originator shall be prepared to reflect and shall reflect the separate existence of the Buyer; provided, that the Buyer’sassets and liabilities may be included in a consolidated financial statement issued by an affiliate of the Buyer; provided, however, that any such consolidated financial statement or the notes theretoshall make clear that the Buyer’s assets are not available to satisfy the obligations of such affiliate;

(d) except as permitted by the Receivables Purchase Agreement, (i) such Originator shall maintain its assets (including, without limitation, deposit accounts) separately from theassets (including, without limitation, deposit accounts) of the Buyer and (ii) the Buyer’s assets, and records relating thereto, have not been, are not, and shall not be, commingled with those of theBuyer;

(e) all of the Buyer’s business correspondence and other communications that are not conducted on its behalf by the Servicer or any Originator as Sub-Servicer shall beconducted in the Buyer’s own name and on its own stationery;

(f) such Originator shall not act as an agent for the Buyer;

(g) such Originator shall not conduct any of the business of the Buyer in its own name (except in the capacity of Sub-Servicer);

(h) such Originator shall not pay any liabilities of the Buyer out of its own funds or assets;

(i) such Originator shall maintain an arm’s-length relationship with the Buyer;

(j) such Originator shall not assume or guarantee or become obligated for the debts of the Buyer or hold out its credit as being available to satisfy the obligations of the Buyer;

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(k) such Originator shall not acquire obligations of the Buyer;

(l) such Originator shall allocate fairly and reasonably overhead or other expenses that are properly shared with the Buyer, including, without limitation, shared office space;

(m) such Originator shall identify and hold itself out as a separate and distinct entity from the Buyer;

(n) such Originator shall correct any known misunderstanding respecting its separate identity from the Buyer;

(o) such Originator shall not enter into, or be a party to, any transaction with the Buyer, except in the ordinary course of its business and on terms which are intrinsically fair andnot less favorable to it than would be obtained in a comparable arm’s-length transaction with an unrelated third party;

(p) such Originator shall not pay the salaries of the Buyer’s employees, if any; and

(q) to the extent not already covered in paragraphs (a) through (p) above, such Originator shall comply and/or act in accordance with all of the other separateness covenants setforth in Section 3 of Exhibit IV to the Receivables Purchase Agreement.

ARTICLE VII

ADDITIONAL RIGHTS AND OBLIGATIONS

IN RESPECT OF RECEIVABLES

SECTION 7.1 Rights of the Buyer. Each Originator hereby authorizes the Buyer, the Servicer or their respective designees or assignees under the Receivables Purchase Agreement(including, without limitation, the Administrator) to take any and all steps in such Originator’s name necessary or desirable, in their respective determination, to collect all amounts due under any andall Receivables sold or otherwise conveyed or purported to be conveyed by it hereunder, including, without limitation, endorsing the name of such Originator on checks and other instrumentsrepresenting Collections and enforcing such Receivables and the provisions of the related Contracts that concern payment and/or enforcement of rights to payment.

SECTION 7.2 Responsibilities of the Originators. Anything herein to the contrary notwithstanding:

(a) Collection Procedures. Each Originator agrees to direct its respective Obligors to make payments of Receivables sold or otherwise conveyed or purported to be conveyed by ithereunder, directly to, or directly to a post office box related to, the relevant Lock-Box Account at a Lock-Box Bank. Each Originator further agrees to transfer any Collections of Receivables sold orconveyed by it hereunder that it receives directly to a Lock-Box Account within two (2) Business Days of receipt thereof, and agrees that all such Collections shall be deemed to be received in trust forthe Buyer and the Administrator (for the benefit of the Purchasers).

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(b) Each Originator shall perform its obligations hereunder, and the exercise by the Buyer or its designee of its rights hereunder shall not relieve such Originator from suchobligations.

(c) None of the Buyer, the Servicer, the Purchasers, the Purchaser Agents or the Administrator shall have any obligation or liability to any Obligor or any other third Person withrespect to any Receivables, Contracts related thereto or any other related agreements, nor shall the Buyer, the Servicer, the Purchasers, the Purchaser Agents or the Administrator be obligated toperform any of the obligations of such Originator thereunder.

(d) Each Originator hereby grants to the Administrator an irrevocable power of attorney, with full power of substitution, coupled with an interest, during the occurrence andcontinuation of a Purchase and Sale Termination Event to take in the name of such Originator all steps necessary or advisable to endorse, negotiate or otherwise realize on any writing or other right ofany kind held or transmitted by such Originator or transmitted or received by the Buyer (whether or not from such Originator) in connection with any Receivable sold or otherwise conveyed orpurported to be conveyed by it hereunder or Related Right.

SECTION 7.3 Further Action Evidencing Purchases. On or prior to the Closing Date, each Originator shall mark its master data processing records evidencing Pool Receivables andContracts with a legend, acceptable to Buyer, evidencing that the Pool Receivables have been transferred in accordance with this Agreement and none of the Originators or Servicer shall change orremove such notation without the consent of Buyer. Each Originator agrees that from time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and takeall further action that the Buyer, the Servicer, or the Administrator may reasonably request in order to perfect, protect or more fully evidence the Receivables and Related Rights purchased by theBuyer hereunder, or to enable the Buyer to exercise or enforce any of its rights hereunder or under any other Transaction Document. Without limiting the generality of the foregoing, upon the requestof the Buyer or the Administrator, such Originator will execute (if applicable), authorize and file such financing or continuation statements, or amendments thereto or assignments thereof, and suchother instruments or notices, as may be necessary or appropriate.

Each Originator hereby authorizes the Buyer or its designee (including, without limitation, the Administrator) to file one or more financing or continuation statements, and amendments theretoand assignments thereof, without the signature of such Originator, relative to all or any of the Receivables sold or otherwise conveyed or purported to be conveyed by it hereunder and Related Rightsnow existing or hereafter generated by such Originator. If any Originator fails to perform any of its agreements or obligations under this Agreement, the Buyer or its designee (including, withoutlimitation, the Administrator) may (but shall not be required to) itself perform, or cause the performance of, such agreement or obligation, and the expenses of the Buyer or its designee (including,without limitation, the Administrator) incurred in connection therewith shall be payable by such Originator.

SECTION 7.4 Application of Collections. Any payment by an Obligor in respect of any indebtedness owed by it to any Originator shall, except as otherwise specified by such Obligor orrequired by applicable law and unless otherwise instructed by the Servicer (with the prior written consent of the Administrator) or the Administrator, be applied as a Collection of any Receivable orReceivables of such Obligor to the extent of any amounts then due and payable thereunder before being applied to any other indebtedness of such Obligor.

ARTICLE VIII

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PURCHASE AND SALE TERMINATION EVENTS

SECTION 8.1 Purchase and Sale Termination Events. Each of the following events or occurrences described in this Section 8.1 shall constitute a “Purchase and Sale Termination Event”:

(a) The Facility Termination Date (as defined in the Receivables Purchase Agreement) shall have occurred; or

(b) Any Originator shall fail to make when due any payment or deposit to be made by it under this Agreement or any other Transaction Document to which it is a party and suchfailure shall remain unremedied for two (2) Business Days; or

(c) Any representation or warranty made or deemed to be made by any Originator (or any of its officers) under or in connection with this Agreement, any other TransactionDocuments to which it is a party, or any other information or report delivered pursuant hereto or thereto shall prove to have been incorrect or untrue in any material respect when made or deemedmade or delivered, provided that such circumstance shall not constitute a Purchase and Sale Termination Event if such representation or warranty, or such information or report, is part of anInformation Package, and is corrected promptly (but not later than fifteen (15) days) after the Originator has knowledge or receives notice thereof; and provided further that no breach of arepresentation or warranty set forth in Section 5.14 or 5.20 shall constitute a Purchase and Sale Termination Event pursuant to this clause (c) if credit has been given for a reduction of the PurchasePrice, the outstanding principal balance of the applicable Subordinated Note has been reduced or the applicable Originator has made a cash payment to the Buyer, in any case, as required pursuantto Section 3.4(c) with respect to such breach; or

(d) Any Originator shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or any other Transaction Document to which it is a partyon its part to be performed or observed and such failure shall continue for fifteen (15) days after the earlier of such Originator’s knowledge or notice thereof.

SECTION 8.2 Remedies.

(a) Optional Termination. Upon the occurrence and during the continuation of a Purchase and Sale Termination Event, the Buyer (and not the Servicer), with the prior written consentof the Administrator, shall have the option, by notice to the Originators (with a copy to the Administrator), to declare the Purchase Facility to be terminated.

(b) Remedies Cumulative. Upon any termination of the Purchase Facility pursuant to Section 8.2(a), the Buyer shall have, in addition to all other rights and remedies under thisAgreement, all other rights and remedies provided under the UCC of each applicable jurisdiction and other applicable laws, which rights shall be cumulative.

ARTICLE IX

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INDEMNIFICATION

SECTION 9.1 Indemnities by the Originators. Without limiting any other rights which the Buyer may have hereunder or under applicable law, each Originator, severally and for itself alone,and Meritor, jointly and severally with each Originator, hereby agrees to indemnify the Buyer and each of its officers, directors, employees and agents (each of the foregoing Persons being individuallycalled a “Purchase and Sale Indemnified Party”), forthwith on demand, from and against any and all damages, losses, claims, judgments, liabilities and related costs and expenses, including reasonableattorneys’ fees and disbursements (all of the foregoing being collectively called “Purchase and Sale Indemnified Amounts”) awarded against or incurred by any of them arising out of or as a result ofthe failure of such Originator to perform its obligations under this Agreement or any other Transaction Document, or arising out of the claims asserted against a Purchase and Sale Indemnified Partyrelating to the transactions contemplated herein or therein or the use of proceeds thereof or therefrom; excluding, however, (i) Purchase and Sale Indemnified Amounts to the extent resulting fromgross negligence or willful misconduct on the part of such Purchase and Sale Indemnified Party, (ii) any indemnification which has the effect of recourse for non-payment of the Receivables due to adischarge in bankruptcy or similar insolvency proceeding or other credit related reasons with respect to the relevant Obligor and (iii) any overall income or franchise taxes, in either case, imposed onthe applicable Purchase and Sale Indemnified Party by the jurisdiction under whose laws such Purchase and Sale Indemnified Party is organized, operates or where its principal executive office islocated or any political subdivision thereof. Without limiting the foregoing, and subject to the exclusions set forth in the preceding sentence, each Originator, severally for itself alone, and Meritor,jointly and severally with each Originator, shall indemnify each Purchase and Sale Indemnified Party for Purchase and Sale Indemnified Amounts relating to or resulting from:

(a) the transfer by such Originator of an interest in any Receivable to any Person other than the Buyer;

(b) the breach of any representation or warranty made by such Originator (or any of its officers) under or in connection with this Agreement or any other Transaction Document,or any information or report delivered by Originator pursuant hereto or thereto, which shall have been false or incorrect when made or deemed made;

(c) the failure by such Originator to comply with any applicable law, rule or regulation with respect to any Receivable generated by such Originator sold or otherwise transferredor purported to be transferred hereunder or the related Contract, or the nonconformity of any Receivable generated by such Originator sold or otherwise transferred or purported to be transferredhereunder or the related Contract with any such applicable law, rule or regulation;

(d) the failure by such Originator to vest and maintain vested in the Buyer an ownership interest in the Receivables generated by such Originator sold or otherwise transferred orpurported to be transferred hereunder (and not reconveyed hereunder) free and clear of any Adverse Claim;

(e) the failure to file, or any delay in filing, by such Originator financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction orother applicable laws with respect to any Receivables or purported Receivables generated by such Originator sold or otherwise transferred or purported to be transferred hereunder, whether at thetime of any purchase or at any subsequent time to the extent required hereunder;

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(f) any dispute, claim, offset or defense (other than discharge in bankruptcy or similar insolvency proceeding of an Obligor or other credit related reasons) of the Obligor to thepayment of any Receivable or purported Receivable generated by such Originator sold or otherwise transferred or purported to be transferred hereunder (including, without limitation, a defensebased on such Receivable’s or the related Contract’s not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resultingfrom the services related to any such Receivable or the furnishing of or failure to furnish such services;

(g) any product liability claim arising out of or in connection with services that are the subject of any Receivable generated by such Originator;

(h) any Taxes which are required to be paid by reason of the purchase or ownership of the Receivables generated by such Originator or any Related Security connected with anysuch Receivables; and

(i) any indemnification claim made pursuant to Section 1.19 of the Receivables Purchase Agreement to the extent such claim arises (directly or indirectly)from the issuance of any Letter of Credit at the request of such Originator (or, in the case of Meritor, at the request of any Originator) pursuant to Section 3.3; provided,however, that the Originators and Meritor shall not have any obligation to reimburse any drawing on any such Letter of Credit or to indemnify any Purchase and SaleIndemnified Party for any such reimbursement.

ARTICLE X

MISCELLANEOUS

SECTION 10.1 Amendments, etc.

(a) The provisions of this Agreement may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and executed by the Buyerand each Originator, with the prior written consent of the Administrator and the Majority Purchaser Agents.

(b) No failure or delay on the part of the Buyer, the Servicer, any Originator or any third-party beneficiary in exercising any power or right hereunder shall operate as a waiverthereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or demand on theBuyer, the Servicer or any Originator in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval by the Buyer or the Servicer under this Agreementshall, except as may otherwise be stated in such waiver or approval, be applicable to subsequent transactions. No waiver or approval under this Agreement shall require any similar or dissimilar waiveror approval thereafter to be granted hereunder.

(c) The Transaction Documents contain a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter thereof and shall constitute theentire agreement among the parties hereto with respect to the subject matter thereof, superseding all prior oral or written understandings.

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SECTION 10.2 Notices, etc. All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including facsimile communication) and shallbe delivered or sent by facsimile, or by overnight mail, to the intended party at the mailing address or facsimile number of such party set forth under its name on its signature page hereto or at suchother address or facsimile number as shall be designated by such party in a written notice to the other parties hereto or in the case of the Administrator or any Purchaser Agent, at their respectiveaddress for notices pursuant to the Receivables Purchase Agreement. All such notices and communications shall be effective (i) if delivered by overnight mail, when received, and (ii) if transmitted byfacsimile, when sent, receipt confirmed by telephone or electronic means.

SECTION 10.3 No Waiver; Cumulative Remedies. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. Without limiting the foregoing, eachOriginator hereby authorizes the Buyer, at any time and from time to time, to the fullest extent permitted by law, to set off, against any obligations of such Originator to the Buyer arising in connectionwith the Transaction Documents (including, without limitation, amounts payable pursuant to Section 9.1) that are then due and payable or that are not then due and payable but have accrued, any andall indebtedness at any time owing by the Buyer to or for the credit or the account of such Originator.

SECTION 10.4 Binding Effect; Assignability. This Agreement shall be binding upon and inure to the benefit of the Buyer and each Originator and their respective successors and permittedassigns. No Originator may assign any of its rights hereunder or any interest herein without the prior written consent of the Buyer and the Administrator, except as otherwise herein specificallyprovided. This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms, and shall remain in full force and effect until such time as the partieshereto shall agree. The rights and remedies with respect to any breach of any representation and warranty made by any Originator pursuant to Article V and the indemnification and payment provisionsof Article IX and Section 10.6 shall be continuing and shall survive any termination of this Agreement.

SECTION 10.5 Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATEOF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) EXCEPT TO THEEXTENT THAT THE VALIDITY OR PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNEDBY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

SECTION 10.6 Costs, Expenses and Taxes. In addition to the obligations of the Originators under Article IX, each Originator, severally and for itself alone, and Meritor, jointly andseverally with each Originator, agrees to pay on demand:

(a) to the Buyer (and any successor and permitted assigns thereof) and any third-party beneficiary of the Buyer’s rights hereunder all reasonable costs and expenses incurred bysuch Person in connection with the enforcement of this Agreement and the other Transaction Documents; and

(b) all stamp, franchise and other taxes and fees payable in connection with the execution, delivery, filing and recording of this Agreement or the other Transaction Documents tobe delivered hereunder, and agrees to indemnify each Purchase and Sale Indemnified Party against any liabilities with respect to or resulting from any delay in paying or omitting to pay such taxesand fees.

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SECTION 10.7 SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTSOF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK; AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THEPARTIES HERETO IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE ORBASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCHJURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANYSUMMONS, COMPLAINT OR OTHER PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.

SECTION 10.8 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OFACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY ACTION, PROCEEDING OROTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORTCLAIMS OR OTHERWISE. EACH OF THE PARTIES HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATIONOF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY ORENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS ORMODIFICATIONS TO THIS AGREEMENT.

SECTION 10.9 Captions and Cross References; Incorporation by Reference. The various captions (including, without limitation, the table of contents) in this Agreement are included forconvenience only and shall not affect the meaning or interpretation of any provision of this Agreement. References in this Agreement to any underscored Section or Exhibit are to such Section orExhibit of this Agreement, as the case may be. The Exhibits hereto are hereby incorporated by reference into and made a part of this Agreement.

SECTION 10.10 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when soexecuted shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement.

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SECTION 10.11 Acknowledgment and Agreement. By execution below, each Originator expressly acknowledges and agrees that all of the Buyer’s rights, title, and interests in, to, andunder this Agreement (but not its obligations), shall be assigned by the Buyer to the Administrator (for the benefit of the Purchasers) pursuant to the Receivables Purchase Agreement, and eachOriginator consents to such assignment. Each of the parties hereto acknowledges and agrees that the Purchasers, the Purchaser Agents and the Administrator are third-party beneficiaries of the rightsof the Buyer arising hereunder and under the other Transaction Documents to which any Originator is a party, and notwithstanding anything to the contrary contained herein or in any other TransactionDocument, during the occurrence and continuation of a Termination Event under the Receivables Purchase Agreement, the Administrator, and not the Buyer, shall have the sole right to exercise allsuch rights and related remedies.

SECTION 10.12 No Proceeding. Each Originator hereby agrees that it will not institute, or join any other Person in instituting, against the Buyer any Insolvency Proceeding so long as anyof the Subordinated Notes remains outstanding and for at least one year and one day following the day on which all amounts owed by the Buyer under this Agreement and the other TransactionDocuments are paid in full. Each Originator further agrees that notwithstanding any provisions contained in this Agreement to the contrary, the Buyer shall not, and shall not be obligated to, pay anyamount in respect of any Subordinated Note or otherwise to such Originator pursuant to this Agreement unless the Buyer has received funds which may, subject to Section 1.4 of the ReceivablesPurchase Agreement, be used to make such payment. Any amount which the Buyer does not pay pursuant to the operation of the preceding sentence shall not constitute a claim (as defined in §101 ofthe Bankruptcy Code) against or corporate obligation of the Buyer by such Originator for any such insufficiency unless and until the provisions of the foregoing sentence are satisfied. The agreementsin this Section 10.12 shall survive any termination of this Agreement.

SECTION 10.13 Limited Recourse. Except as explicitly set forth herein, the obligations of the Buyer under this Agreement or any other Transaction Documents to which it is a party aresolely the obligations of the Buyer. No recourse under any Transaction Document shall be had against, and no liability shall attach to, any officer, employee, director, or beneficiary, whether directly orindirectly, of the Buyer. The agreements in this Section 10.13 shall survive any termination of this Agreement.

SECTION 10.14 Amendment and Restatement of Existing Agreement. This Agreement amends and restates in its entirety, as of the date hereof, the Existing Agreement. Upon theeffectiveness of this Agreement in accordance with its terms, the terms and provisions of the Existing Agreement shall, subject to this paragraph, be superseded hereby in their entirety.Notwithstanding the foregoing and for the avoidance of doubt, (a) all indemnification obligations of the Originators under the Existing Agreement shall survive this Agreement, (b) all purchases andsales under the Existing Agreement by the Originators to the Company are ratified and confirmed as set forth in Section 1.2(c) and shall survive this Agreement and (c) the security interests granted bythe Originators pursuant to Section 2.4 of the Existing Agreement shall remain in full force and effect and shall survive this Agreement as security for all obligations of the Originators under theExisting Agreement until such obligations have been finally and fully paid and performed. Upon the effectiveness of this Agreement, each reference to the Existing Agreement in any other document,instrument or agreement shall mean and be a reference to this Agreement. Nothing contained herein, unless expressly herein stated to the contrary, is intended to amend, modify or otherwise affect anyother instrument, document or agreement executed and or delivered in connection with the Existing Agreement.

[Signature Pages Follow]

701741768 12403015

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first above written.

MERITOR HEAVY VEHICLE BRAKING SYSTEMS (USA), LLC, as an Originator

By:/s/ Carl D. Anderson II

Name: Carl D. Anderson II

Title: Treasurer

Address: Meritor Heavy Vehicle Braking Systems (USA), LLC 2135 West Maple Road Troy, MI48084-7186Attention: TreasurerTelephone: 248-435-1588email: [email protected]

701741768 12403015 S-4Fourth Amended and RestatedPurchase and Sale Agreement

MERITOR HEAVY VEHICLE SYSTEMS, LLC, as an Originator



Title: Treasurer

Address: Meritor Heavy Vehicle Systems, LLC 2135 West Maple Road Troy, MI48084-7186Attention: TreasurerTelephone: 248-435-1588Email: [email protected]


MERITOR, INC.,

as Servicer



Title: President and Treasurer

Address: Meritor, Inc. 2135 West Maple Road Troy, MI48084-7186Attention: TreasurerTelephone: 248-435-1588email: [email protected]


ARVINMERITOR RECEIVABLES CORPORATION, as Buyer


Name:Carl D. Anderson II


Address: ArvinMeritor Receivables Corporation 2135 West Maple Road Troy, MI48084-7186Attention: TreasurerTelephone: 248-435-1588email: [email protected]


Schedule I

LOCATION OF EACH ORIGINATOR

Originator LocationMeritor Heavy Vehicle Braking Systems (USA), LLC DelawareMeritor Heavy Vehicle Systems, LLC Delaware

Schedule II

LOCATION OF BOOKS AND RECORDS OF ORIGINATORS

Originator Location of Books and Records

Meritor Heavy Vehicle Braking Systems (USA), LLC 2135 West Maple RoadTroy, MI48084-7186

Meritor Heavy Vehicle Systems, LLC 2135 West Maple RoadTroy, MI48084-7186

Schedule III

TRADE NAMES

Legal Name Trade NamesMeritor Heavy Vehicle Braking Systems (USA), LLC •Meritor Heavy Vehicle Braking Systems

•MeritorMeritor Heavy Vehicle Systems, LLC •Meritor Heavy Vehicle Systems

•Meritor

Schedule IV

ACTIONS/SUITS

None.

Exhibit A

FORM OF PURCHASE REPORT

Originator: [Name of Originator]

Purchaser: ArvinMeritor Receivables Corporation

Date: [_________________]

1. Outstanding Balance of Receivables Purchased:

2. 98.25% (representing a 175 basis point fair market value discount for uncertainty of payment and the time valueof money)

3. Purchase Price (1 x 2) = $ __________

4. Reductions of the Purchase Price pursuant to Section 3.4(a) and (b): [______]

Exhibit B

SUBORDINATED NOTE

New York, New York

[__________] [__], 20[__]

FOR VALUE RECEIVED, the undersigned, ARVINMERITOR RECEIVABLES CORPORATION, a Delaware corporation (the “Buyer”), promises to pay to [________________], a[______________] (“Originator”), on the terms and subject to the conditions set forth herein and in the Purchase and Sale Agreement referred to below, the aggregate unpaid Purchase Price of allReceivables purchased by the Buyer from Originator pursuant to such Purchase and Sale Agreement, as such unpaid Purchase Price is shown in the records of Servicer.

This Subordinated Note amends, restates, and replaces that certain Amended and Restated Revolving Subordinated Promissory Note, dated as of September 8, 2009, made by the Buyer infavor of the Originator pursuant to the Existing Agreement, as defined in the Purchase and Sale Agreement described below (the “Replaced Note”). This Subordinated Note is not intended to be, norshall it be deemed to be, a repayment of the Replaced Note.

1. Purchase and Sale Agreement. This Subordinated Note is one of the Subordinated Notes described in, and is subject to the terms and conditions set forth in, that certain FourthAmended and Restated Purchase and Sale Agreement, dated as of June 18, 2012 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Purchase and SaleAgreement”), among the Buyer, the Originator, and the various entities listed thereto as Originators. Reference is hereby made to the Purchase and Sale Agreement for a statement of certain otherrights and obligations of the Buyer and the Originator.

2. Definitions. Capitalized terms used (but not defined) herein have the meanings assigned thereto in the Purchase and Sale Agreement and in Exhibit I to the Receivables PurchaseAgreement (as defined in the Purchase and Sale Agreement). In addition, as used herein, the following terms have the following meanings:

“Bankruptcy Proceedings” has the meaning set forth in clause (b) of paragraph 9 hereof.

“Final Maturity Date” means the Payment Date immediately following the date that falls one year and one day after the Facility Termination Date.

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“Senior Interests” means, collectively, (i) all accrued Discount on the Purchased Interest, (ii) the fees referred to in Section 1.5 of the Receivables Purchase Agreement, (iii) allamounts payable pursuant to Sections 1.7, 1.8, 1.10, 1.14, 1.19, 3.1 or 5.4 of the Receivables Purchase Agreement, (iv) the Aggregate Capital and (v) all other obligations of the Buyer and theServicer that are due and payable, to (a) the Purchasers, the Purchaser Agents, the Administrator and their respective successors, permitted transferees and assigns arising in connection withthe Transaction Documents and (b) any Indemnified Party or Affected Person arising in connection with the Receivables Purchase Agreement, in each case, howsoever created, arising orevidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, together with any and all interest and Discount accruing on any such amountafter the commencement of any Bankruptcy Proceedings, notwithstanding any provision or rule of law that might restrict the rights of any Senior Interest Holder, as against the Buyer oranyone else, to collect such interest.

“Senior Interest Holders” means, collectively, the Purchasers, the Administrator, the Purchaser Agents and the Indemnified Parties and Affected Persons.

“Subordination Provisions” means, collectively, clauses (a) through (l) of paragraph 9 hereof.

3. Interest. Subject to the Subordination Provisions set forth below, the Buyer promises to pay interest on this Subordinated Note as follows: to (but excluding) the date on which the entireaggregate unpaid Purchase Price is fully paid, the aggregate unpaid Purchase Price from time to time outstanding shall bear interest at a rate perannum equal to the rate of interest publicly announcedfrom time to time by PNC Bank, National Association, as its “base rate”, “reference rate” or other comparable rate, as determined by the Servicer.

4. Interest Payment Dates. Subject to the Subordination Provisions set forth below, the Buyer shall pay accrued interest on this Subordinated Note on each Monthly Settlement Date, and shallpay accrued interest on the amount of each principal payment made in cash on a date other than a Monthly Settlement Date at the time of such principal payment.

5. Basis of Computation. Interest accrued hereunder shall be computed for the actual number of days elapsed on the basis of a 365- or 366-day year.

6. Principal Payment Dates. Subject to the Subordination Provisions set forth below, payments of the principal amount of this Subordinated Note shall be made as follows:

(a) The principal amount of this Subordinated Note shall be reduced by an amount equal to each payment deemed made pursuant to Sections 3.3 or 3.4 of the Purchase and SaleAgreement; and

(b) The entire remaining unpaid Purchase Price of all Receivables purchased by the Buyer from Originator pursuant to the Purchase and Sale Agreement shall be paid on the FinalMaturity Date.

Subject to the Subordination Provisions set forth below, the principal amount of and accrued interest on this Subordinated Note may be prepaid by, and in the sole discretion of the Buyer, on anyBusiness Day without premium or penalty.

701741768 12403015 Exhibit B

7. Payment Mechanics. All payments of principal and interest hereunder are to be made in lawful money of the United States of America in the manner specified in Article III of the Purchaseand Sale Agreement.

8. Enforcement Expenses. In addition to and not in limitation of the foregoing, but subject to the Subordination Provisions set forth below and to any limitation imposed by applicable law,the Buyer agrees to pay all expenses, including reasonable attorneys’ fees and legal expenses, incurred by Originator in seeking to collect any amounts payable hereunder which are not paid when due.

9. Subordination Provisions. The Buyer covenants and agrees, and Originator and any other holder of this Subordinated Note (collectively, Originator and any such other holder are called the“Holder”), by its acceptance of this Subordinated Note, likewise covenants and agrees on behalf of itself and any holder of this Subordinated Note, that the payment of the principal amount of andinterest on this Subordinated Note is hereby expressly subordinated in right of payment to the payment and performance of the Senior Interests to the extent and in the manner set forth in the followingclauses of this paragraph 9:

(a) No payment or other distribution of the Buyer’s assets of any kind or character, whether in cash, securities, or other rights or property, shall be made on account of thisSubordinated Note except to the extent such payment or other distribution is (i) permitted under Section 1(n) of Exhibit IV to the Receivables Purchase Agreement or (ii) made pursuant toclause (a) or (b) of paragraph 6 of this Subordinated Note;

(b) In the event of any dissolution, winding up, liquidation, readjustment, reorganization or other similar event relating to the Buyer, whether voluntary or involuntary, partial orcomplete, and whether in bankruptcy, insolvency or receivership proceedings, or upon an assignment for the benefit of creditors, or any other marshalling of the assets and liabilities of theBuyer or any sale of all or substantially all of the assets of the Buyer other than as permitted by the Purchase and Sale Agreement (such proceedings being herein collectively called“Bankruptcy Proceedings”), the Senior Interests shall first be paid and performed in full and in cash before Originator shall be entitled to receive and to retain any payment or distribution inrespect of this Subordinated Note. In order to implement the foregoing: (i) all payments and distributions of any kind or character in respect of this Subordinated Note to which Holder wouldbe entitled except for this clause (b) shall be made directly to the Administrator (for the benefit of the Senior Interest Holders); (ii) Holder shall promptly file a claim or claims, in the formrequired in any Bankruptcy Proceedings, for the full outstanding amount of this Subordinated Note, and shall use commercially reasonable efforts to cause said claim or claims to be approvedand all payments and other distributions in respect thereof to be made directly to the Administrator (for the benefit of the Senior Interest Holders) until the Senior Interests shall have been paidand performed in full and in cash; and (iii) Holder hereby irrevocably agrees that Administrator (acting on behalf of the Purchasers), may in the name of Holder or otherwise, demand, sue for,collect, receive and receipt for any and all such payments or distributions, and file, prove and vote or consent in any such Bankruptcy Proceedings with respect to any and all claims of Holderrelating to this Subordinated Note, in each case until the Senior Interests shall have been paid and performed in full and in cash;

701741768 12403015 Exhibit B

(c) In the event that Holder receives any payment or other distribution of any kind or character from the Buyer or from any other source whatsoever, in respect of this SubordinatedNote, other than as expressly permitted by the terms of this Subordinated Note, such payment or other distribution shall be received in trust for the Senior Interest Holders and shall be turnedover by Holder to the Administrator (for the benefit of the Senior Interest Holders) forthwith. Holder will mark its books and records so as clearly to indicate that this Subordinated Note issubordinated in accordance with the terms hereof. All payments and distributions received by the Administrator in respect of this Subordinated Note, to the extent received in or converted intocash, may be applied by the Administrator (for the benefit of the Senior Interest Holders) first to the payment of any and all expenses (including reasonable attorneys’ fees and legal expenses)paid or incurred by the Senior Interest Holders in enforcing these Subordination Provisions, or in endeavoring to collect or realize upon this Subordinated Note, and any balance thereof shall,solely as between Originator and the Senior Interest Holders, be applied by the Administrator (in the order of application set forth in Section 1.4(d) of the Receivables Purchase Agreement)toward the payment of the Senior Interests; but as between the Buyer and its creditors, no such payments or distributions of any kind or character shall be deemed to be payments ordistributions in respect of the Senior Interests;

(d) Notwithstanding any payments or distributions received by the Senior Interest Holders in respect of this Subordinated Note, while any Bankruptcy Proceedings are pendingHolder shall not be subrogated to the then existing rights of the Senior Interest Holders in respect of the Senior Interests until the Senior Interests have been paid and performed in full and incash. If no Bankruptcy Proceedings are pending, Holder shall only be entitled to exercise any subrogation rights that it may acquire (by reason of a payment or distribution to the SeniorInterest Holders in respect of this Subordinated Note) to the extent that any payment arising out of the exercise of such rights would be permitted under Section 1(n) of Exhibit IV to theReceivables Purchase Agreement;

(e) These Subordination Provisions are intended solely for the purpose of defining the relative rights of Holder, on the one hand, and the Senior Interest Holders on the other hand.Nothing contained in these Subordination Provisions or elsewhere in this Subordinated Note is intended to or shall impair, as between the Buyer, its creditors (other than the Senior InterestHolders) and Holder, the Buyer’s obligation, which is unconditional and absolute, to pay Holder the principal of and interest on this Subordinated Note as and when the same shall become dueand payable in accordance with the terms hereof or to affect the relative rights of Holder and creditors of the Buyer (other than the Senior Interest Holders);

(f) Holder shall not, until the Senior Interests have been paid and performed in full and in cash, (i) cancel, waive, forgive, transfer or assign, or commence legal proceedings toenforce or collect, or subordinate to any obligation of the Buyer, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or now or hereafter existing, or dueor to become due, other than the Senior Interests, this Subordinated Note or any rights in respect hereof or (ii) convert this Subordinated Note into an equity interest in the Buyer, unless Holdershall, in either case, have received the prior written consent of the Administrator;

(g) Holder shall not, without the advance written consent of the Administrator and Purchaser, commence, or join with any other Person in commencing, any Bankruptcy Proceedingswith respect to the Buyer until at least one year and one day shall have passed since the Senior Interests shall have been paid and performed in full and in cash;

701741768 12403015 Exhibit B

(h) If, at any time, any payment (in whole or in part) of any Senior Interest is rescinded or must be restored or returned by a Senior Interest Holder (whether in connection withBankruptcy Proceedings or otherwise), these Subordination Provisions shall continue to be effective or shall be reinstated, as the case may be, as though such payment had not been made;

(i) Each of the Senior Interest Holders may, from time to time, at its sole discretion, without notice to Holder, and without waiving any of its rights under these SubordinationProvisions, take any or all of the following actions: (i) retain or obtain an interest in any property to secure any of the Senior Interests; (ii) retain or obtain the primary or secondary obligationsof any other obligor or obligors with respect to any of the Senior Interests; (iii) extend or renew for one or more periods (whether or not longer than the original period), alter or exchange anyof the Senior Interests, or release or compromise any obligation of any nature with respect to any of the Senior Interests; (iv) amend, supplement, amend and restate, or otherwise modify anyTransaction Document; and (v) release its security interest in, or surrender, release or permit any substitution or exchange for all or any part of any rights or property securing any of the SeniorInterests, or extend or renew for one or more periods (whether or not longer than the original period), or release, compromise, alter or exchange any obligations of any nature of any obligorwith respect to any such rights or property;

(j) Holder hereby waives: (i) notice of acceptance of these Subordination Provisions by any of the Senior Interest Holders; (ii) notice of the existence, creation, non-payment or non-performance of all or any of the Senior Interests; and (iii) all diligence in enforcement, collection or protection of, or realization upon, the Senior Interests, or any thereof, or any securitytherefor;

(k) Each of the Senior Interest Holders may, from time to time, on the terms and subject to the conditions set forth in the Transaction Documents to which such Persons are party, butwithout notice to Holder, assign or transfer any or all of the Senior Interests, or any interest therein; and, notwithstanding any such assignment or transfer or any subsequent assignment ortransfer thereof, such Senior Interests shall be and remain Senior Interests for the purposes of these Subordination Provisions, and every immediate and successive assignee or transferee of anyof the Senior Interests or of any interest of such assignee or transferee in the Senior Interests shall be entitled to the benefits of these Subordination Provisions to the same extent as if suchassignee or transferee were the assignor or transferor; and

(l) These Subordination Provisions constitute a continuing offer from the holder of this Subordinated Note to all Persons who become the holders of, or who continue to hold, SeniorInterests; and these Subordination Provisions are made for the benefit of the Senior Interest Holders, and the Administrator may proceed to enforce such provisions on behalf of each of suchPersons.

10. General. No failure or delay on the part of Originator in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any suchpower or right preclude any other or further exercise thereof or the exercise of any other power or right. No amendment, modification or waiver of, or consent with respect to, any provision of thisSubordinated Note shall in any event be effective unless (i) the same shall be in writing and signed and delivered by the Buyer and Holder and (ii) all consents required for such actions under theTransaction Documents shall have been received by the appropriate Persons.

701741768 12403015 Exhibit B

11. Maximum Interest. Notwithstanding anything in this Subordinated Note to the contrary, the Buyer shall never be required to pay unearned interest on any amount outstanding hereunderand shall never be required to pay interest on the principal amount outstanding hereunder at a rate in excess of the maximum nonusurious interest rate that may be contracted for, charged or receivedunder applicable federal or state law (such maximum rate being herein called the “Highest Lawful Rate”). If the effective rate of interest which would otherwise be payable under this SubordinatedNote would exceed the Highest Lawful Rate, or if the holder of this Subordinated Note shall receive any unearned interest or shall receive monies that are deemed to constitute interest which wouldincrease the effective rate of interest payable by the Buyer under this Subordinated Note to a rate in excess of the Highest Lawful Rate, then (i) the amount of interest which would otherwise bepayable by the Buyer under this Subordinated Note shall be reduced to the amount allowed by applicable law, and (ii) any unearned interest paid by the Buyer or any interest paid by the Buyer inexcess of the Highest Lawful Rate shall be refunded to the Buyer. Without limitation of the foregoing, all calculations of the rate of interest contracted for, charged or received by Originator under thisSubordinated Note that are made for the purpose of determining whether such rate exceeds the Highest Lawful Rate applicable to Originator (such Highest Lawful Rate being herein called the“Originator’s Maximum Permissible Rate”) shall be made, to the extent permitted by usury laws applicable to Originator (now or hereafter enacted), by amortizing, prorating and spreading in equalparts during the actual period during which any amount has been outstanding hereunder all interest at any time contracted for, charged or received by Originator in connection herewith. If at any timeand from time to time (i) the amount of interest payable to Originator on any date shall be computed at Originator’s Maximum Permissible Rate pursuant to the provisions of the foregoing sentenceand (ii) in respect of any subsequent interest computation period the amount of interest otherwise payable to Originator would be less than the amount of interest payable to Originator computed atOriginator’s Maximum Permissible Rate, then the amount of interest payable to Originator in respect of such subsequent interest computation period shall continue to be computed at Originator’sMaximum Permissible Rate until the total amount of interest payable to Originator shall equal the total amount of interest which would have been payable to Originator if the total amount of interesthad been computed without giving effect to the provisions of the foregoing sentence.

SECTION 1. Governing Law. THIS SUBORDINATED NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OFNEW YORK WITHOUT REGARD TO ANY OTHERWISE APPLICABLE CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERALOBLIGATIONS LAW OF THE STATE OF NEW YORK).

12. Captions. Paragraph captions used in this Subordinated Note are for convenience only and shall not affect the meaning or interpretation of any provision of this Subordinated Note.

701741768 12403015 Exhibit B

IN WITNESS WHEREOF, the Buyer has caused this Subordinated Note to be executed as of the date first written above.

ARVINMERITOR RECEIVABLES CORPORATION

By: Name:

Title:

701741768 12403015 Exhibit B

Exhibit C

FORM OF JOINDER AGREEMENT

THIS JOINDER AGREEMENT, dated as of ___________, 20___ (this “Agreement”) is executed by__________, a [corporation] organized under the laws of __________ (the “AdditionalOriginator”), with its principal place of business located at __________.

BACKGROUND:

A. ArvinMeritor Receivables Corporation, a Delaware corporation (the “Buyer”) and the various entities from time to time party thereto, as Originators (collectively, the “Originators”), haveentered into that certain Fourth Amended and Restated Purchase and Sale Agreement, dated as of June 18, 2012 (as amended, restated, supplemented or otherwise modified through the date hereof,and as it may be further amended, restated, supplemented or otherwise modified from time to time, the “Purchase and Sale Agreement”).

B. The Additional Originator desires to become a Originator pursuant to Section 4.3 of the Purchase and Sale Agreement.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Additional Originatorhereby agrees as follows:

SECTION 1. Definitions. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned thereto in the Purchase and Sale Agreement or in theReceivables Purchase Agreement (as defined in the Purchase and Sale Agreement).

SECTION 2. Transaction Documents. The Additional Originator hereby agrees that it shall be bound by all of the terms, conditions and provisions of, and shall be deemed to be a party to(as if it were an original signatory to), the Purchase and Sale Agreement and each of the other relevant Transaction Documents. From and after the later of the date hereof and the date that theAdditional Originator has complied with all of the requirements of Section 4.3 of the Purchase and Sale Agreement, the Additional Originator shall be an Originator for all purposes of the Purchaseand Sale Agreement and all other Transaction Documents. The Additional Originator hereby acknowledges that it has received copies of the Purchase and Sale Agreement and the other TransactionDocuments.

SECTION 3. Representations and Warranties. The Additional Originator hereby makes all of the representations and warranties set forth in Article V (to the extent applicable) of thePurchase and Sale Agreement as of the date hereof (unless such representations or warranties relate to an earlier date, in which case as of such earlier date), as if such representations and warrantieswere fully set forth herein. The Additional Originator hereby represents and warrants that its location (as defined in the applicable UCC) is [____________________], and the offices where theAdditional Originator keeps all of its Records and Related Security is as follows:

701741768 12403015 Exhibit C

SECTION 4. Miscellaneous. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to any otherwise applicable conflictsof law principles (other than Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York). This Agreement is executed by the Additional Originator for the benefit of theBuyer, and its assigns, and each of the foregoing parties may rely hereon. This Agreement shall be binding upon, and shall inure to the benefit of, the Additional Originator and its successors andpermitted assigns.

[Signature Pages Follow]

701741768 12403015 Exhibit C

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed by its duly authorized officer as of the date and year first above written.

[NAME OF ADDITIONAL ORIGINATOR]

By: Name:

Title:

Consented to:


By: Name:

Title:

Acknowledged by:

PNC BANK, NATIONAL ASSOCIATION,

as Administrator

By: Name:

Title:

701741768 12403015 Exhibit C

[PURCHASER AGENTS]

By: Name:

Title:

MERITOR, INC.,

as Performance Guarantor

By: Name:

Title:

701741768 12403015 Exhibit C

RECEIVABLES PURCHASE AGREEMENT

DATED AS OF JUNE 18, 2012

BY AND AMONG

ARVINMERITOR RECEIVABLES CORPORATION,

as Seller,

MERITOR, INC.

as initial Servicer,

THE VARIOUS CONDUIT PURCHASERS, RELATED COMMITTED PURCHASERS, LC PARTICIPANTS AND PURCHASER AGENTS FROM TIME TO TIME PARTY HERETO,


as LC Bank,

AND


as Administrator

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TABLE OF CONTENTS(continued)

Page

ARTICLE I. AMOUNTS AND TERMS OF THE PURCHASES 1Section 1.1 Purchase Facility 1Section 1.2 Making Purchases 3Section 1.3 Purchased Interest Computation 5Section 1.4 Settlement Procedures 6Section 1.5 Fees 10Section 1.6 Payments and Computations, Etc. 10Section 1.7 Increased Costs 11Section 1.8 Requirements of Law 12Section 1.9 Inability to Determine the Euro-Rate 13Section 1.10 Taxes 14Section 1.11 Letters of Credit 15Section 1.12 Issuance of Letters of Credit; Participations 15Section 1.13 Requirements For Issuance of Letters of Credit. 17Section 1.14 Disbursements, Reimbursement 17Section 1.15 Repayment of Participation Advances 18Section 1.16 Documentation 19Section 1.17 Determination to Honor Drawing Request 19Section 1.18 Nature of Participation and Reimbursement Obligations 19Section 1.19 Indemnity 21Section 1.20 Liability for Acts and Omissions 21Section 1.21 Intended Tax Treatment 22Section 1.22 Mitigation of Obligations; Replacement of Purchasers 22

ARTICLE II. REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS 24Section 2.1 Representations and Warranties; Covenants 24Section 2.2 Termination Events 24

ARTICLE III. INDEMNIFICATION 24Section 3.1 Indemnities by the Seller 24Section 3.2 Indemnities by the Servicer 26

ARTICLE IV. ADMINISTRATION AND COLLECTIONS 27Section 4.1 Appointment of the Servicer 27Section 4.2 Duties of the Servicer 28Section 4.3 Account Arrangements 29Section 4.4 Enforcement Rights 29Section 4.5 Responsibilities of the Seller 30Section 4.6 Servicing Fee 30Section 4.7 Authorization and Action of the Administrator and Purchaser Agents 31Section 4.8 Nature of Administrator's Duties; Delegation of Administrator's Duties; Exculpatory Duties 32Section 4.9 UCC Filings 33Section 4.10 Agent's Reliance, Etc 33Section 4.11 Administrator and Affiliates 34Section 4.12 Notice of Termination Events 35

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TABLE OF CONTENTS(continued)

Page

Section 4.13 Non-Reliance on Administrator, Purchaser Agents and other Purchasers; Administrators and Affiliates 35Section 4.14 Indemnification 36Section 4.15 Successor Administrator 36

ARTICLE V. MISCELLANEOUS 37Section 5.1 Amendments, Etc 37Section 5.2 Notices, Etc 37Section 5.3 Successors and Assigns; Assignability; Participations 38Section 5.4 Costs and Expenses 40Section 5.5 No Proceedings; Limitation on Payments 41Section 5.6 Confidentiality 41Section 5.7 GOVERNING LAW AND JURISDICTION 42Section 5.8 Execution in Counterparts 43Section 5.9 Survival of Termination 43Section 5.10 WAIVER OF JURY TRIAL 43Section 5.11 Entire Agreement 43Section 5.12 Headings 43Section 5.13 Right of Setoff 44Section 5.14 Purchaser Groups' Liabilities 44Section 5.15 Sharing of Recoveries 44Section 5.16 USA Patriot Act 44

EXHIBIT I DEFINITIONSEXHIBIT II CONDITIONS OF PURCHASESEXHIBIT III REPRESENTATIONS AND WARRANTIESEXHIBIT IV COVENANTSEXHIBIT V TERMINATION EVENTS

SCHEDULE I CREDIT AND COLLECTION POLICYSCHEDULE II LOCK-BOX BANKS, LOCK-BOXES AND LOCK-BOX ACCOUNTSSCHEDULE III ACTIONS AND PROCEEDINGSSCHEDULE IV PURCHASER GROUPS AND MAXIMUM COMMITMENTSSCHEDULE V PAYMENT INSTRUCTIONSSCHEDULE VI EXCLUDED OBLIGORS

ANNEX A FORMS OF INFORMATION PACKAGEANNEX B FORM OF PURCHASE NOTICEANNEX C FORM OF PAYDOWN NOTICEANNEX D FORM OF COMPLIANCE CERTIFICATEANNEX E FORM OF LETTER OF CREDIT APPLICATIONANNEX F FORM OF TRANSFER SUPPLEMENT

701648899 12403015

This RECEIVABLES PURCHASE AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”) is entered into as of June 18, 2012 by andamong ARVINMERITOR RECEIVABLES CORPORATION, a Delaware corporation, as seller (the “Seller”), MERITOR, INC., an Indiana corporation (“Meritor”), as initial servicer (in suchcapacity, together with its successors and permitted assigns in such capacity, the “Servicer”), the various CONDUIT PURCHASERS, RELATED COMMITTED PURCHASERS, LC PARTICIPANTSand PURCHASER AGENTS from time to time party hereto, PNC BANK, NATIONAL ASSOCIATION, a national banking association (“PNC”), as issuer of Letters of Credit (in such capacity,together with its successors and assigns in such capacity, the “LC Bank”) and as administrator (in such capacity, together with its successors and assigns in such capacity, the “Administrator”).

PRELIMINARY STATEMENTS. Certain terms that are capitalized and used throughout this Agreement are defined in Exhibit I. References in the Exhibits hereto to the “Agreement” refer tothis Agreement, as amended, supplemented or otherwise modified from time to time.

The Seller (i) desires to sell, transfer and assign an undivided percentage interest in a pool of receivables, and the Purchasers desire to acquire such undivided percentage interest, as suchpercentage interest shall be adjusted from time to time based upon, in part, reinvestment payments that are made by such Purchasers and (ii) may, subject to the terms and conditions hereof, requestthat the LC Bank issue or cause the issuance of one or more Letters of Credit.

In consideration of the mutual agreements, provisions and covenants contained herein, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I. AMOUNTS AND TERMS OF THE PURCHASES

Section 1.1 Purchase Facility.

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(a) On the terms and subject to the conditions hereof, the Seller may, from time to time before the Facility Termination Date, (i) request that (x) the Conduit Purchasers ratably (based on theaggregate Commitments of the Related Committed Purchasers in their respective Purchaser Groups) make purchases (and deemed purchases) of and reinvestments in, or (y) only if a ConduitPurchaser denies such request or is unable to fund (and provides notice of such denial or inability to the Seller, the Administrator and its Purchaser Agent), the Related Committed Purchasers ratably(based on their respective Commitments) make purchases (and deemed purchases) of and reinvestments in, undivided percentage ownership interests with regard to the Purchased Interest from theSeller and (ii) request that the LC Bank issue or cause the issuance of Letters of Credit, in each case subject to the terms hereof (each such purchase, deemed purchase, reinvestment or issuance isreferred to herein as a “Purchase”). Subject to Section 1.4(b) concerning reinvestments, at no time will a Conduit Purchaser have any obligation to make a Purchase. Each Related CommittedPurchaser severally hereby agrees, on the terms and subject to the conditions hereof, to make purchases of and reinvestments in undivided percentage ownership interests with regard to the PurchasedInterest from the Seller from time to time from the Closing Date to the Facility Termination Date, based on the applicable Purchaser Group’s Ratable Share of each Purchase requested pursuant toSection 1.2(a) (and, in the case of each Related Committed Purchaser, its Commitment Percentage of its Purchaser Group’s Ratable Share of such Purchase) and, on the terms of and subject to theconditions of this Agreement, the LC Bank hereby agrees to issue Letters of Credit in return for (and each LC Participant hereby severally agrees to make Participation Advances in connection withany draws under such Letters of Credit equal to such LC Participant’s Pro Rata Share of such draws), undivided percentage ownership interests with regard to the Purchased Interest from the Sellerfrom time to time from the Closing Date to the Facility Termination Date. Notwithstanding anything set forth in this paragraph (a) or otherwise herein to the contrary, under no circumstances shall anyPurchaser make any purchase or reinvestment (including, without limitation, any Purchases deemed to have been requested by Seller pursuant to Section 1.1(b)) or issue any Letters of Credithereunder, as applicable, if, after giving effect to such Purchase:

(i) any event has occurred and is continuing, or would result from such Purchase, issuance or reinvestment, that constitutes a Termination Event or an Unmatured Termination Event;

(ii) the aggregate outstanding Capital of such Purchaser, when added to all other Capital of all other Purchasers in such Purchaser’s Purchaser Group would exceed (A) its PurchaserGroup’s Group Commitment minus (B) the related LC Participant’s Pro Rata Share of the LC Participation Amount;

(iii) the Aggregate Capital plus the LC Participation Amount would exceed the Purchase Limit; or

(iv) the LC Participation Amount would exceed the aggregate of the Commitments of the LC Participants.

(v) the Purchased Interest would exceed 100%.

The Seller may, subject to this paragraph (a) and the other requirements and conditions herein, use the proceeds of any purchase by the Purchasers hereunder to satisfy its ReimbursementObligation to the LC Bank and the LC Participants (ratably, based on the outstanding amounts funded by the LC Bank and each such LC Participant) pursuant to Section 1.14 below.

701648899 12403015

(b) In the event the Seller fails to reimburse the LC Bank for the full amount of any drawing under any Letter of Credit on the applicable Drawing Date (out of its own funds availabletherefor) pursuant to Section 1.14(b), then the Seller shall, automatically (and without the requirement of any further action on the part of any Person hereunder), be deemed to have requested a newpurchase from the Conduit Purchasers (and if any Conduit Purchaser is unable or unwilling to fund, the applicable Related Committed Purchaser), on such date, on the terms and subject to theconditions hereof, in an amount equal to the amount of such Reimbursement Obligation at such time. Subject to the limitations on funding set forth in paragraph (a)above (and the other requirementsand conditions herein), the Conduit Purchasers or Related Committed Purchasers, as applicable, shall fund such deemed purchase request and deliver the proceeds thereof directly to the Administratorto be immediately distributed (ratably) to the LC Bank and the applicable LC Participants in satisfaction of the Seller’s Reimbursement Obligation pursuant to Section 1.14(b), below, to the extent ofthe amounts permitted to be funded by the Conduit Purchasers or Related Committed Purchasers, as applicable, at such time, hereunder.

(c) The Seller may, upon at least 60 days’ written notice to the Administrator (except as otherwise provided below), terminate the Purchase Facility in whole or, upon at least 30 days’ writtennotice to the Administrator, from time to time, irrevocably reduce in part the unused portion of the Purchase Limit (but not below the amount that would cause the Aggregate Capital plus the LCParticipation Amount to exceed the Purchase Limit or would cause the Group Capital of any Purchaser Group to exceed its Group Commitment, in each case after giving effect to such reduction);provided, that each partial reduction shall be in the amount of at least $5,000,000, or an integral multiple of $1,000,000 in excess thereof, and that, unless terminated in whole, the Purchase Limit shallin no event be reduced below $50,000,000. In connection with each such reduction of the Purchase Limit, the Commitment of each Purchaser and the Group Commitment of each Purchaser Groupshall automatically be ratably reduced by a proportionate amount. The Seller may terminate the Purchase Facility in whole upon two (2) Business Days’ written notice to the Administrator in the eventthat (i) the covenant of Meritor to maintain its Priority Debt Ratio as set forth in the Meritor Credit Agreement is amended or modified in any respect (including by amendment or modification of thedefinition of such term, or any component defined term), (ii) Seller requests that the covenant in Section 2(n) of Exhibit IV to this Agreement be amended or modified to conform to the Meritor CreditAgreement, effective as of the date of the corresponding amendment or modification of the Meritor Credit Agreement, and (iii) such an amendment or modification is not effected within a reasonabletime. The Administrator shall promptly advise the Purchaser Agents of any notice received by it pursuant to this Section 1.1(c). In addition to and without limiting any other requirements fortermination, prepayment and/or the funding of the LC Collateral Account hereunder, no such termination or reduction shall be effective unless and until (i) in the case of a termination of the PurchaseFacility in whole, the amount on deposit in the LC Collateral Account is at least equal to the then outstanding LC Participation Amount and (ii) in the case of a partial reduction, the amount on depositin the LC Collateral Account is at least equal to the positive difference between the then outstanding LC Participation Amount and the Purchase Limit as so reduced by such partial reduction.

Section 1.2 Making Purchases.

701648899 12403015

(a) Seller may request a purchase (but not reinvestment) of undivided percentage ownership interests with regard to the Purchased Interest hereunder to be made in cash on any day upon theSeller’s irrevocable written notice in the form of Annex B (each, a “Purchase Notice”) delivered to the Administrator and each Purchaser Agent in accordance with Section 5.2, which notice must bereceived by the Administrator and each Purchaser Agent before 1:00 p.m. New York timeat least one Business Daybefore the requested Purchase Date (or, solely in the case of a purchase in anaggregate amount not exceeding $20,000,000, before 11:00 a.m. New York time on the requested Purchase Date), and which notice shall specify, (A) the amount requested to be paid to the Seller (suchamount, which shall not be less than $1,000,000 (or such lesser amount as agreed to by the Administrator and each Purchaser Agent) and shall be in integral multiples of $100,000 in excess thereof,being the Capital relating to the undivided percentage ownership interest then being purchased with respect to each Purchaser Group), (B) the date of such purchase (which shall be a Business Day),and (C) the pro forma calculation of the Purchased Interest after giving effect to the increase in the Aggregate Capital resulting from such purchase.

(b) On the date of each purchase requested by Seller pursuant to Section 1.2(a), each applicable Conduit Purchaser or Related Committed Purchaser, as the case may be, shall, uponsatisfaction of the applicable conditions set forth in Exhibit II, make available to the Seller in same day funds, at the Purchase Account (or such other account as may be designated in writing by theSeller to the Administrator and each Purchaser Agent), an amount equal to the portion of Capital relating to the undivided percentage ownership interest then being purchased by such Purchaser.

(c) Effective on the date of each Purchase pursuant to this Agreement, the Seller hereby sells and assigns to the Administrator for the benefit of the Purchasers (ratably, based on theAggregate Capital plus the LC Participation Amount outstanding at such time for each such Purchaser’s Capital) an undivided percentage ownership interest, in: (i) each Pool Receivable then existing,(ii) all Related Security with respect to such Pool Receivables, and (iii) all Collections with respect to, and other proceeds of, such Pool Receivables and Related Security.

(d) To secure all of the Seller’s obligations (monetary or otherwise) under this Agreement and the other Transaction Documents to which it is a party, whether now or hereafter existing orarising, due or to become due, direct or indirect, absolute or contingent (the “Obligations”), the Seller hereby grants to the Administrator (for the benefit of the Purchasers, the Purchaser Agents andtheir respective assigns) a security interest in all of the Seller’s right, title and interest (including any undivided interest of the Seller) in, to and under all of the following, whether now or hereafterowned, existing or arising: (i) all Pool Receivables, (ii) all Related Security with respect to such Pool Receivables, (iii) all Collections with respect to such Pool Receivables, (iv) the Lock-BoxAccounts and all amounts on deposit therein, and all certificates and instruments, if any, from time to time evidencing such Lock-Box Accounts and amounts on deposit therein, (v) all rights (but noneof the obligations) of the Seller under the Purchase and Sale Agreement and (vi) all proceeds of, and all amounts received or receivable under any or all of, the foregoing (collectively, the “PoolAssets”). The Seller hereby authorizes the Administrator to file financing statements describing the collateral covered thereby as “all of the debtor’s personal property or assets” or words to that effect,notwithstanding that such wording may be broader in scope than the collateral described in this Agreement. The Administrator (on behalf of the Purchasers and their assigns) shall have, with respect tothe Pool Assets, and in addition to all the other rights and remedies available to the Administrator and the Purchasers, all the rights and remedies of a secured party under any applicable UCC.

701648899 12403015

In the event that an Originator has paid to the Seller the full Outstanding Balance of any Receivable pursuant to, and in accordance with, Section 3.4 of the Purchase and Sale Agreement andsuch payment has been applied as a Collection in accordance with Section 1.4 hereof, such Receivable shall be automatically reconveyed to the Seller and released from the security interest granted tothe Administrator hereunder without representation or warranty by the Administrator, any Purchaser Agent or any Purchaser.

(e) Provided that no Termination Event or Unmatured Termination Event shall have occurred and be continuing, the Seller may request the extension of the Scheduled Facility TerminationDate by providing written notice to the Administrator and each Purchaser Agent; provided such request is made not more than 180 days prior to, and not less than 90 days prior to, the then currentScheduled Facility Termination Date. In the event that the Purchasers are all agreeable to such extension, the Administrator shall so notify the Seller and the Servicer in writing (it being understoodthat any Purchaser may accept or decline such a request in its sole and absolute discretion and on such terms as they may elect) not less than 60 days prior to the then current Scheduled FacilityTermination Date, and the Seller, the Servicer, the Administrator, the Purchaser Agents and the Purchasers shall enter into such documents as the Administrator, the Purchaser Agents and thePurchasers may deem necessary or appropriate to reflect such extension, and all reasonable costs and expenses incurred by the Purchasers, the Purchaser Agents and the Administrator in connectiontherewith (including reasonable Attorney Costs) shall be paid by the Seller. In the event any Purchaser declines the request for such extension, such Purchaser (or its Purchaser Agent) shall so notifythe Administrator and the Administrator shall so notify the Seller of such determination; provided, that the failure of the Administrator to notify the Seller of the determination to decline suchextension shall not affect the understanding and agreement that the applicable Purchasers shall be deemed to have refused to grant the requested extension in the event the Administrator fails toaffirmatively notify the Seller, in writing, of their agreement to accept the requested extension. If the Facility Termination Date is extended with respect to one or more, but less than all Purchasers,then the Purchase Limit shall be reduced by an amount equal to the Commitment(s) of the Exiting Purchaser(s) and the Commitment Percentages and Commitments shall be appropriately adjusted(after giving effect to any increase to the Maximum Commitment of any Related Committed Purchaser that agrees to increase its Maximum Commitment in connection with such Exiting Purchaser).

(f) Each Related Committed Purchaser’s and related LC Participant’s obligations hereunder shall be several, such that the failure of any Related Committed Purchaser or related LCParticipant to make a payment in connection with any purchase hereunder, or drawing under a Letter of Credit hereunder, as the case may be, shall not relieve any other Related Committed Purchaseror related LC Participant of its obligations hereunder to make payment for any Funded Purchase or such drawing.

Section 1.3 Purchased Interest Computation.

The Purchased Interest shall be initially computed on the Closing Date. Thereafter, until the Facility Termination Date, the Purchased Interest shall be automatically recomputed (ordeemed to be recomputed) on each Business Day other than a Termination Day. From and after the occurrence of any Termination Day, the Purchased Interest shall (until the event(s) giving rise tosuch Termination Day are satisfied or are waived by the Administrator in accordance with Section 2.2) be deemed to be 100%. The Purchased Interest shall become zero on the Final Payout Date.

Section 1.4 Settlement Procedures.

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(a) The collection of the Pool Receivables shall be administered by the Servicer in accordance with this Agreement. The Seller shall provide to the Servicer on a timely basis all informationneeded for such administration, including notice of the occurrence of any Termination Day and current computations of the Purchased Interest.

(b) The Servicer shall, on each day on which Collections of Pool Receivables are received (or deemed received) by the Seller or the Servicer:

(i) set aside and hold in trust (and shall, at the request of the Administrator, segregate in a separate account approved by the Administrator) for the benefit of the Purchasers, out of suchCollections, first, an amount equal to the Aggregate Discount accrued through such day for each Portion of Capital and not previously set aside, second, an amount equal to the fees set forth in eachFee Letter accrued and unpaid through such day, and third, to the extent funds are available therefor, an amount equal to the aggregate of the Purchasers’ Share of the Servicing Fee accrued throughsuch day and not previously set aside;

(ii) subject to Section 1.4(f), if such day is not a Termination Day, remit to the Seller, ratably, on behalf of the Purchasers, the remainder of such Collections. Such remainder shall, to theextent representing a return of the Aggregate Capital, be automatically reinvested, ratably, according to each Purchaser’s Capital, in Pool Receivables and in the Related Security, Collections and otherproceeds with respect thereto; provided, however, that if, after giving effect to any such reinvestment, (x) the Purchased Interest would exceed 100%, or (y) the Aggregate Capital plus the Adjusted LCParticipation Amount would exceed the Purchase Limit then in effect, then the Servicer shall not remit such remainder to the Seller or reinvest, but shall set aside and hold in trust for the Administrator(for the benefit of the Purchasers) (and shall, at the request of the Administrator, segregate in a separate account approved by the Administrator) a portion of such Collections that, together with theother Collections set aside pursuant to this paragraph, shall equal the amount necessary to reduce the Purchased Interest to 100% or cause the Aggregate Capital plus the Adjusted LC ParticipationAmount to not exceed such Purchase Limit, as the case may be, (determined as if such Collections set aside had been applied to reduce the Aggregate Capital and/or the Adjusted LC ParticipationAmount at such time), which amount shall be deposited ratably to each Purchaser Agent’s account (for the benefit of its related Purchasers) for distribution and application on the next Settlement Datein accordance with Section 1.4(d); provided, however, that in the case of any Purchaser that has provided notice (an “Exiting Notice”) to its Purchaser Agent and the Administrator of its refusal,following any request by the Seller to extend the then Scheduled Commitment Termination Date, to extend its Commitment hereunder (an “Exiting Purchaser”), then such Purchaser’s ratable share(determined according to outstanding Capital and Pro Rate Share of the Adjusted LC Participation Amount) of Collections shall not be reinvested or remitted to the Seller and shall instead be held intrust for the benefit of such Purchaser and applied in accordance with clause (iii) below;

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(iii) if such day is a Termination Day (or any day following the provision of an Exiting Notice), set aside, segregate and hold in trust for the benefit of the Purchasers or Exiting Purchasers,as applicable, (and shall, at the request of the Administrator, segregate in a separate account approved by the Administrator), the entire remainder of such Collections (or in the case of a day followingthe provision of an Exiting Notice that is not also a Termination Day, an amount equal to the Exiting Purchasers’ ratable share of such Collections based on their respective Capital; provided, however,that solely for purposes of determining such Exiting Purchasers’ ratable share of such Collections, such Exiting Purchasers’ Capital shall be deemed to remain constant from the date of the provisionof an Exiting Notice until the date such Exiting Purchasers’ Capital has been paid in full; itbeingunderstood that if a Termination Day occurs after the provision of such Exiting Notice, such ExitingPurchasers’ Capital shall be recalculated taking into account amounts received by such Exiting Purchasers in respect of this parenthetical and, thereafter, Collections shall be set aside for all Purchasersratably in respect of their respective Capital (as recalculated)); and

(iv) release to the Seller (subject to Section 1.4(f)) for its own account any Collections in excess of: (w) amounts required to be reinvested in accordance with clause (ii)plus (x) the amountsthat are required to be set aside pursuant to clause (i) above, pursuant to the proviso to clause (ii) above and pursuant to clause (iii) above, plus (y) the Seller’s Share of the Servicing Fee accrued andunpaid through such day and all reasonable and appropriate out-of-pocket costs and expenses of the Servicer for servicing, collecting and administering the Pool Receivables plus (z) all other amountsthen due and payable by the Seller under this Agreement to the Purchasers, the Purchaser Agents, the Administrator, and any other Indemnified Party or Affected Person.

(c) The Servicer shall, in accordance with the priorities set forth in Section 1.4(d), deposit into the account specified by each Purchaser Agent on each Settlement Date, Collections held forsuch Purchaser Agent (for the benefit of its related Purchasers) pursuant to clause (b)(i) or (f)plus the amount of Collections then held for such Purchaser Agent (for the benefit of its relatedPurchasers) pursuant to clauses (b)(ii) and (iii) of Section 1.4; provided, that if Meritor or an Affiliate thereof is the Servicer, such day is not a Termination Day and the Administrator has not notifiedMeritor (or such Affiliate) that such right is revoked, Meritor (or such Affiliate) may retain the portion of the Collections set aside pursuant to clause (b)(i) that represents the aggregate of eachPurchasers’ Share of the Servicing Fee. On or prior to the last day of each Settlement Period, each Purchaser Agent will notify the Servicer telephonically, by electronic mail or by facsimile of theamount of Discount accrued with respect to each Portion of Capital during such related Settlement Period.

(d) The Servicer shall distribute the amounts described in clause (c) above as follows:

(i) if such distribution occurs on a day that is not a Termination Day:

(A) first to each Purchaser Agent ratably according to the Discount and Fees accrued during such Settlement Period (for the benefit of the relevant Purchasers within such Purchaser Agent’sPurchaser Group) in payment in full of all such accrued Discount with respect to each Portion of Capital maintained by such Purchasers and all such accrued Fees; it being understood that eachPurchaser Agent shall distribute such amounts to the Purchasers within such Purchaser Agent’s Purchaser Group ratably according to Discount and Fees, respectively; and

(B) second, if the Servicer has set aside amounts in respect of the Servicing Fee pursuant to clause (b)(i) and has not retained such amounts pursuant to clause (c), to the Servicer (payable inarrears on each Settlement Date) in payment in full of the aggregate of the Purchasers’ Share of accrued Servicing Fees so set aside; and

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(ii) if such distribution occurs on a Termination Day:

(A) first, if Meritor or an Affiliate thereof is not the Servicer, to the Servicer in payment in full of the Purchasers’ Share of all accrued Servicing Fees;

(B) second, to each Purchaser Agent ratably (based on the aggregate accrued and unpaid Discount and Fees payable to all Purchasers at such time) (for the benefit of the relevant Purchasersin such Purchaser Agent’s Purchaser Group) in payment in full of all accrued Discount with respect to each Portion of Capital funded or maintained by the Purchasers within such Purchaser Agent’sPurchaser Group and all accrued Fees;

(C) third, to each Purchaser Agent ratably according to the aggregate of the Capital of each Purchaser in each such Purchaser Agent’s Purchaser Group (for the benefit of the relevantPurchasers in such Purchaser Agent’s Purchaser Group) in payment in full of each Purchaser’s Capital; itbeingunderstoodthat each Purchaser Agent shall distribute the amounts described in the first,second and third clauses of this Section 1.4(d)(ii) to the Purchasers within such Purchaser Agent’s Purchaser Group ratably according to Discount, Fees and Capital, respectively;

(D) fourth, to the LC Collateral Account for the benefit of the LC Bank and the LC Participants, the amount necessary to cash collateralize the LC Participation Amount until the amount ofcash collateral held in suchLC Collateral Account equals 100% of the LC Participation Amount plus the amount of all LC Fees (as defined in the Fee Letter) to accrue thereon through the scheduledexpiration of the related Letters of Credit;

(E) fifth, if the Aggregate Capital and accrued Aggregate Discount with respect to each Portion of Capital for all Purchaser Groups have been reduced to zero, and the aggregate of thePurchasers’ Share of all accrued Servicing Fees payable to the Servicer (if other than Meritor or an Affiliate thereof) have been paid in full, to each Purchaser Agent ratably, based on the amountspayable to each Purchaser in such Purchaser Agent’s Purchaser Group (for the benefit of the relevant Purchasers in such Purchaser Agent’s Purchaser Group), the Administrator and any otherIndemnified Party or Affected Person in payment in full of any other amounts owed thereto by the Seller or the Servicer hereunder, and

(F) sixth, to the Servicer (if the Servicer is Meritor or an Affiliate thereof) in payment in full of the aggregate of the Purchasers’ Share of all accrued Servicing Fees.

After the Aggregate Capital, Aggregate Discount, fees payable pursuant to the Fee Letters and Servicing Fees with respect to the Purchased Interest, and any other amounts payable bythe Seller and the Servicer to each Purchaser Group, the Administrator or any other Indemnified Party or Affected Person hereunder, have been paid in full, and (on and after a Termination Day) afteran amount equal to 100% of the LC Participation Amount is on deposit in the LC Collateral Account, all additional Collections with respect to the Purchased Interest shall be paid to the Seller for itsown account.

(e) For the purposes of this Section 1.4:

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(i) if on any day the Outstanding Balance of any Pool Receivable is reduced or adjusted as a result of any defective, rejected or returned goods or services, or any revision, cancellation,allowance, rebate, discount or other adjustment made by the Seller or any Affiliate of the Seller or the Servicer or any Affiliate of the Servicer, or any setoff or dispute between the Seller or anyAffiliate of the Seller or the Servicer or any Affiliate of the Servicer and an Obligor, the Seller shall be deemed to have received on such day a Collection of such Pool Receivable in the amount ofsuch reduction or adjustment and (i) prior to the Facility Termination Date, hold any and all such amounts in trust for the benefit of the Purchasers and their assigns and, on the following SettlementDate, apply such amounts in accordance with this Section 1.4 or (ii) on or after the Facility Termination Date, immediately pay any and all such amounts in respect thereof to a Lock-Box Account forthe benefit of the Purchasers and their assigns and for application pursuant to Section 1.4;

(ii) if the representation and warranty in Section l(j) of Exhibit III is not true on the day such representation and warranty is made or deemed made, or if any of the representations orwarranties in Section3(a) of Exhibit III is not true with respect to any Pool Receivable, the Seller shall be deemed to have received a Collection of such Pool Receivable in full and, shall immediatelypay the amount of such deemed Collection to a Lock-Box Account (or as otherwise directed by the Administrator at such time) for the benefit of the Purchasers and their assigns and for applicationpursuant to Section 1.4;

(iii) except as otherwise required by applicable law or the relevant Contract, all Collections received from an Obligor of any Receivable shall be applied to the Receivables of such Obligor inthe order of the age of such Receivables, starting with the oldest such Receivable, unless such Obligor designates its payment for application to specific Receivables; and

(iv) if and to the extent the Administrator, any Purchaser Agent or any Purchaser shall be required for any reason to pay over to an Obligor (or any trustee, receiver, custodian or similarofficial in any Insolvency Proceeding) any amount received by it hereunder, such amount shall be deemed not to have been so received by such Person but rather to have been retained by the Sellerand, accordingly, such Person shall have a claim against the Seller for such amount, payable when and to the extent that any distribution from or on behalf of such Obligor is made in respect thereof.

(f) If at any time the Seller shall wish to cause the reduction of Aggregate Capital (but not to commence the liquidation, or reduction to zero, of the entire Aggregate Capital), the Seller maydo so as follows:

(i) the Seller shall give the Administrator, each Purchaser Agent and the Servicer written notice in substantially the form of Annex C (each, a “Paydown Notice”) at least one BusinessDayprior to the date of such reduction, such Paydown Notice shall include, among other things, the amount of such proposed reduction and the proposed date on which such reduction will commence;

(ii) (A) on the proposed date of the commencement of such reduction and on each day thereafter, the Servicer shall cause Collections not to be reinvested until the amount thereof not soreinvested shall equal the desired amount of reduction or (B) the Seller shall remit to each Purchaser Agent’s account (for the benefit of the related Purchasers in such Purchaser Agent’s Purchasergroup), no later than 1:00 p.m. (New York time), in immediately available funds, an amount equal to the desired amount of such reduction together with accrued and unpaid Aggregate Discount, andAggregate Discount to accrue through the next Settlement Date, with respect to such Aggregate Capital, ratably based on such Purchaser Agent’s Purchasers’ portion of the Aggregate Capital reducedthereby and portion of the related Aggregate Discount; and

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(iii) the Servicer shall hold such Collections in trust for the benefit of the Purchasers ratably (based on their respective Portions of Capital funded thereby) for payment to such PurchaserAgent (for the benefit of the relevant Purchasers in such Purchaser Agent’s Purchaser Group) on the next Settlement Date immediately following the current Settlement Period or such other dateapproved by the Administrator and each such Purchaser Agent, and the Aggregate Capital (together with the Capital of any related Purchaser) shall be deemed reduced in the amount to be paid to eachsuch Purchaser Agent (on behalf of its related Purchasers) only when in fact finally so paid; and

(iv) provided, that the amount of any such reduction shall be not less than $500,000 and shall be an integral multiple of $100,000 in excess thereof.

Section 1.5 Fees.

The Seller shall pay to the Administrator, Purchaser Agents and Purchasers certain fees in the amounts and on the dates set forth in one or more fee letter agreements, in each caseentered into from time to time by and among the Seller, (the Servicer if applicable) and the applicable Purchaser Agent and/or the Administrator (as any such fee letter agreement may be amended,restated, supplemented or otherwise modified from time to time, each, a “Fee Letter”).

Section 1.6 Payments and Computations, Etc.

(a) All amounts to be paid or deposited by the Seller or the Servicer hereunder or under any other Transaction Document shall be made without reduction for offset or counterclaim and shallbe paid or deposited no later than noon (New York time)on the day when due in immediately available funds to each account designated by each applicable Purchaser Agent (for the benefit of thePurchasers in such Purchaser Agent’s Purchaser Group) and/or the Administration Account, as applicable. All amounts received after noon (New York time) will be deemed to have been received onthe next Business Day. Except as expressly set forth herein (including, without limitation, as set forth in Sections 1.4(b)(ii) or (iii) with respect to Collections held in trust for Exiting Purchasers), eachPurchaser Agent shall distribute the amounts paid to it hereunder for the benefit of the Purchasers in its Purchaser Group to the Purchasers within its Purchaser Group ratably (x) in the case of suchamounts paid in respect of Discount and Fees, according to the Discount and Fees payable to such Purchasers and (y) in the case of such amounts paid in respect of Capital (or in respect of any otherobligations other than Discount and Fees), according to the outstanding Capital funded by such Purchasers.

(b) The Seller or the Servicer, as the case may be, shall, to the extent permitted by law, pay interest on any amount not paid or deposited by the Seller or the Servicer, as the case may be,when due hereunder, at an interest rate equal to 2.0% per annum above the Base Rate, payable on demand.

(c) All computations of interest under clause (b) and all computations of Discount, fees and other amounts hereunder shall be made on the basis of a year of 360 (or 365 or 366, as applicable,with respect to Discount or other amounts calculated by reference to the Base Rate (other than pursuant to clause (c) of the definition thereof)) days for the actual number of days elapsed. Wheneverany payment or deposit to be made hereunder shall be due on a day other than a Business Day, such payment or deposit shall be made on the next Business Day and such extension of time shall beincluded in the computation of such payment or deposit.

Section 1.7 Increased Costs.

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(a) If after the Closing Date the Administrator, any Purchaser Agent, any Purchaser, any Liquidity Provider or any other Program Support Provider or any of their respective Affiliates (eachan “Affected Person”) reasonably determines that any Change in Law affects or would affect the amount of capital required or expected to be maintained by such Affected Person, and such AffectedPerson determines that the amount of such capital is increased by or based upon the existence of any commitment to make purchases of (or otherwise to maintain the investment in) Pool Receivablesor issue any Letter of Credit related to this Agreement or any related liquidity facility, credit enhancement facility and other commitments of the same type, then, upon demand by such Affected Personor its related Purchaser Agent (with a copy to the Administrator), the Seller shall promptly pay to the related Purchaser Agent, for the account of such Affected Person, from time to time as specifiedby such Affected Person or its related Purchaser Agent, additional amounts sufficient to compensate such Affected Person for such increased costs in the light of such circumstances, to the extent thatsuch Affected Person reasonably determines such increase in capital to be allocable to the existence of any of such commitments.

(b) If due to any Change in Law, there shall be any increase after the Closing Date in the cost (other than Taxes, which shall be governed by Section 1.10) to any Affected Person of agreeingto purchase or purchasing, or maintaining the ownership of, the Purchased Interest (or its portion thereof and including, without limitation, funding or maintaining its Capital or issuing or participatingin any Letter of Credit), then, upon demand by such Affected Person, the Seller shall promptly pay to such Affected Person, from time to time as specified by such Affected Person, additional amountssufficient to compensate such Affected Person for such increased costs.

(c) A certificate of an Affected Person (or its related Purchaser Agent) setting forth the amount or amounts necessary to compensate such Affected Person as specified in clause (a) or (b) ofthis Section and delivered to the Seller and the Administrator, shall be conclusive absent manifest error. The Seller shall pay such Affected Person’s related Purchaser Agent (for the account of suchAffected Person) the amount shown as due on the first Settlement Date occurring after the Seller’s receipt of such certificate.

(d) Notwithstanding anything in this Section 1.7 to the contrary, (i) if any Affected Person fails to give demand for amounts or losses incurred in connection with this Section 1.7 within onehundred and eighty (180) days after it obtains knowledge that it is subject to increased capital requirements or has incurred other increased costs, such Affected Person shall, with respect to amountspayable pursuant to this Section 1.7, only be entitled to payment under this Section 1.7 for amounts or losses incurred from and after the date one hundred and eighty (180) days prior to the date thatsuch Affected Person does give such demand, and (ii) the Seller shall not be required under this Section 1.7 to pay to any Affected Person (x) any amount that has been fully and finally paid in cash tosuch Affected Person pursuant to the other provisions of this Agreement or any other Transaction Document, (y) any amount if the payment of such amount is expressly excluded from the Seller’spayment obligations hereunder by any provision of this Agreement, or (z) any amount, if such amount constitutes Taxes, which shall be governed by Section 1.10.

Section 1.8 Requirements of Law.

(a) If any Affected Person reasonably determines that any Change in Law:

(i) does or shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, or deposits or other liabilitiesin or for the account of, purchases, advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Affected Person that are not otherwiseincluded in the determination of the Euro-Rate or the Base Rate hereunder; or

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(ii) does or shall impose on such Affected Person any other condition or requirement;

and the result of any of the foregoing is: (A) to increase the cost to such Affected Person of acting as Administrator, or of agreeing to purchase or purchasing or maintaining the ownership ofundivided percentage ownership interests with regard to, or issuing any Letter of Credit in respect of, the Purchased Interest (or interests therein) or any Portion of Capital, or (B) to reduce any amountreceivable hereunder (whether directly or indirectly), then, in any such case, upon demand therefor by such Affected Person, the Seller shall pay to such Affected Person additional amounts necessaryto compensate such Affected Person for such additional cost or reduced amount receivable. All such amounts shall be payable as incurred.

(b) A certificate of an Affected Person (or its related Purchaser Agent) setting forth the amount or amounts necessary to compensate such Affected Person as specified in clause (a) ofthis Section and delivered to the Seller and the Administrator, shall be conclusive absent manifest error. The Seller shall pay such Affected Person’s related Purchaser Agent (for the account of suchAffected Person) the amount shown as due on each Settlement Date occurring after the Seller’s receipt of such certificate.

(c) Notwithstanding anything in this Section 1.8 to the contrary, (i) if any Affected Person fails to give demand for amounts or losses incurred in connection with this Section 1.8 withinone hundred and eighty (180) days after it obtains knowledge that it has suffered additional costs or reduced amounts receivable, such Affected Person shall, with respect to amounts payable pursuantto this Section 1.8, only be entitled to payment under this Section 1.8 for amounts or losses incurred from and after the date one hundred and eighty (180) days prior to the date that such AffectedPerson does give such demand, and (ii) the Seller shall not be required under this Section 1.8 to pay to any Affected Person (x) any amount that has been fully and finally paid in cash to such AffectedPerson pursuant to the other provisions of this Agreement or any other Transaction Document, (y) any amount if the payment of such amount is expressly excluded from the Seller’s paymentobligations hereunder by any provision of this Agreement, or (z) any amount, if such amount constitutes Taxes, which shall be governed by Section 1.10.

Section 1.9 Inability to Determine the Euro-Rate.

(a) If the Administrator (or any Purchaser Agent) determines on any day (which determination shall be final and conclusive absent manifest error) that, by reason of circumstances affectingthe interbank eurodollar market generally, (i) deposits in dollars are not being offered to banks in the interbank eurodollar market for such day, (ii) adequate means do not exist for ascertaining theEuro-Rate for such day or (iii) the Euro-Rate does not accurately reflect the cost to any Purchaser (as determined by such Purchaser or such Purchaser’s Purchaser Agent) of maintaining any Portion ofCapital during any Settlement Period (or portion thereof), then the Administrator (or any Purchaser Agent) shall give notice thereof to the Seller. Thereafter, until the Administrator or such PurchaserAgent notifies the Seller that the circumstances giving rise to such suspension no longer exist, (A) no Portion of Capital shall be funded at the Alternate Rate determined by reference to the Euro-Rate,(B) the Discount for any outstanding Portions of Capital then funded at the Alternate Rate determined by reference to the Euro-Rate shall, be converted to the Alternate Rate determined by reference tothe Base Rate without reference to clause (c) of the definition thereof and (C) the Discount for any outstanding Portions of Capital then funded at the Base Rate determined by reference to the Euro-Rate shall, be converted to the Base Rate determined without reference to clause (c) of the definition thereof.

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(b) If, on any day, the Administrator shall have been notified by any Affected Person that such Affected Person has determined (which determination shall be final and conclusive) that, anyChange in Law, or compliance by such Affected Person with any Change in Law shall make it unlawful or impossible for such Affected Person to fund or maintain any Portion of Capital at theAlternate Rate and based upon the Euro-Rate, the Administrator shall notify the Seller thereof. Upon receipt of such notice, until the Administrator notifies the Seller that the circumstances giving riseto such determination no longer apply, (A) no Portion of Capital shall be funded at the Alternate Rate determined by reference to the Euro-Rate and (B) the Discount for any outstanding Portions ofCapital then funded at the Alternate Rate determined by reference to the Euro-Rate shall be converted to the Alternate Rate determined by reference to the Base Rate either (i) on the last day of thethen current Settlement Period (or solely with respect to the Euro-Rate, immediately) if such Affected Person may lawfully continue to maintain such Portion of Capital at the Alternate Ratedetermined by reference to the Euro-Rate to such day, or (ii) immediately, if such Affected Person may not lawfully continue to maintain such Portion of Capital at the Alternate Rate determined byreference to the Euro-Rate to such day.

Section 1.10 Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Seller hereunder shall be made free and clear of and without reduction or withholding for anyIndemnified Taxes; provided that if the Seller shall be required by Applicable Law to deduct any Indemnified Taxes from such payments, then (i) the sum payable shall be increased as necessary sothat after making all required deductions for Indemnified Taxes (including any Other Taxes) (including deductions applicable to additional sums payable under this Section) each Affected Personreceives an amount equal to the sum it would have received had no such deductions for Indemnified Taxes (including any Other Taxes) been made, (ii) the Seller shall make such deductions and(iii) the Seller shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law.

(b) Payment of Other Taxes by the Seller. Without limiting the provisions of paragraph (a) above, the Seller shall timely pay any Other Taxes to the relevant Governmental Authority inaccordance with Applicable Law.

(c) Indemnification by the Seller. The Seller shall indemnify the Administrator, any Purchaser, and any Purchaser Agent within ten (10) Business Days after demand therefor, for the fullamount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) described in this Section1.10 that are paid by the Administrator, such Purchaser, or such Purchaser Agent, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto,whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liabilitydelivered to the Seller by the Administrator, such Purchaser, or such Purchaser Agent (with a copy to the Administrator), shall be conclusive absent manifest error.

(d) Evidence of Payments. As soon as practicable (but not later than 30 days) after any payment of Indemnified Taxes or Other Taxes by the Seller to a Governmental Authority, the Sellershall deliver to the Administrator and the applicable Affected Person (or its related Purchaser Agent) the original or a certified copy of a receipt issued by such Governmental Authority evidencingsuch payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrator and the applicable Purchaser Agent.

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(e) Treatment of Certain Refunds. If an Affected Person determines, in its sole discretion, that it has received a refund or credit of any Taxes as to which it has been reimbursed orindemnified by the Seller, it shall pay over such refund or credit to the Seller (but only to the extent of indemnity payments made, or additional amounts paid, by the Seller under this Section 1.10 withrespect to the Taxes giving rise to such refund), net of all out-of-pocket expenses as such Affected Person and without interest (other than any interest paid by the relevant Governmental Authority withrespect to such refund net of any applicable Taxes payable in respect of such interest); provided that, the Seller upon the request of such Affected Person, agrees to repay the amount paid over to theSeller (plus any penalties, interest, or other charges imposed by the relevant Governmental Authority) to such Affected Person in the event such Affected Person is required to repay such refund tosuch Governmental Authority. This Section 1.10 shall not be construed to require any Affected Person to make available its tax returns or any other information relating to its Taxes which it deemsconfidential) to the Seller or any other Person.

(f) Exclusions. Notwithstanding anything in this Section 1.10 to the contrary, the Seller shall not be required to pay to an Affected Person any amount pursuant to this Section 1.10 to theextent (i) such amount has been fully and finally paid in cash to such Affected Person pursuant to the other provisions of this Agreement or (ii) the payment of such amount is expressly excluded fromthe Seller’s payment obligations hereunder by any provision of this Agreement (excluding, for the avoidance of doubt, any provision of this Agreement stating that Taxes are to be governed by thisSection 1.10).

Section 1.11 Letters of Credit.

Subject to the terms and conditions hereof, the LC Bank shall issue or cause the issuance of Letters of Credit (“Letters of Credit”) on behalf of Seller (and, if applicable, on behalf of,or for the account of, such Originator or an Affiliate of such Originator in favor of such beneficiaries as such Originator or an Affiliate of such Originator may elect with the consent of the Seller);provided, however, that the LC Bank will not be required to issue or cause to be issued any Letters of Credit to the extent that after giving effect thereto the issuance of such Letters of Credit wouldthen cause (a) the sum of (i) the Aggregate Capital plus (ii) the LC Participation Amount to exceed the Purchase Limit or (b) the LC Participation Amount to exceed the aggregate of the Commitmentsof the LC Participants (other than Defaulting Purchasers). All amounts drawn upon Letters of Credit shall accrue Discount for each day such drawn amounts shall have not been reimbursed.

Section 1.12 Issuance of Letters of Credit; Participations.

(a) The Seller may request the LC Bank, upon two Business Days’ prior written notice submitted on or before 1:00 p.m., New York time, to issue a Letter of Credit by delivering to theAdministrator, the LC Bank’s form of Letter of Credit Application (the “Letter of Credit Application”), substantially in the form of Annex E attached hereto and a Purchase Notice, substantially in theform of Annex B hereto, in each case completed to the satisfaction of the Administrator and the LC Bank; and, such other certificates, documents and other papers and information as the Administratoror the LC Bank may reasonably request. The Seller also has the right to give instructions and make agreements with respect to any Letter of Credit Application and the disposition of documents, and toagree with the Administrator or the LC Bank upon any amendment, extension or renewal of any Letter of Credit.

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(b) Each Letter of Credit shall, among other things, (i) provide for the payment of sight drafts or other written demands for payment when presented for honor thereunder in accordance withthe terms thereof and when accompanied by the documents described therein and (ii) have an expiry date not later than twelve (12) months after such Letter of Credit’s date of issuance, extension orrenewal, as the case may be, and in no event later than twelve (12) months after the Facility Termination Date. The terms of each Letter of Credit may include customary “evergreen” provisionsproviding that such Letter of Credit’s expiry date shall automatically be extended for additional periods not to exceed twelve (12) months unless, not less than thirty (30) days (or such longer period asmay be specified in such Letter of Credit) (the “Notice Date”) prior to the applicable expiry date, the LC Bank delivers written notice to the beneficiary thereof declining such extension; provided,however, that if (x) any such extension would cause the expiry date of such Letter of Credit to occur after the date that is twelve (12) months after the Facility Termination Date or (y) the LC Bankdetermines that any condition precedent (including, without limitation, those set forth in Section 1.1(a) or Exhibit II) to issuing such Letter of Credit hereunder (as if such Letter of Credit were thenbeing first issued) are not satisfied (other than any such condition requiring the Seller to submit a Purchase Notice or Letter of Credit Application in respect thereof), then the LC Bank, in the case ofclause (x) above, may (or, at the written direction of any LC Participant, shall) or, in the case of clause (y) above, shall, use reasonable efforts in accordance with (and to the extent permitted by) theterms of such Letter of Credit to prevent the extension of such expiry date (including notifying the Seller and the beneficiary of such Letter of Credit in writing prior to the Notice Date that such expirydate will not be so extended). Each Letter of Credit shall be subject either to the Uniform Customs and Practice for Documentary Credits (2007 Revision), International Chamber of CommercePublication No. 600, and any amendments or revisions thereof adhered to by the LC Bank or the International Standby Practices (ISP98-International Chamber of Commerce Publication Number 590),and any amendments or revisions thereof adhered to by the LC Bank, as determined by the LC Bank.

(c) The Administrator shall promptly notify the LC Bank and each LC Participant, at such Person’s address for notices hereunder, of the request by the Seller for a Letter of Credit hereunder,and shall provide the LC Bank and LC Participants with the Letter of Credit Application and Purchase Notice delivered to the Administrator by the Seller pursuant to paragraph (a), above, by the closeof business on the day received or if received on a day that is not a Business Day or on any Business Day after 1:00 p.m., New York time, on such day, on the next Business Day.

(d) Immediately upon the issuance by the LC Bank of any Letter of Credit (or any amendment to a Letter of Credit increasing the amount thereof), the LC Bank shall be deemed to have soldand transferred to each LC Participant, and each LC Participant shall be deemed irrevocably and unconditionally to have purchased and received from the LC Bank, without recourse or warranty, anundivided interest and participation, to the extent of such LC Participant’s Pro Rata Share, in such Letter of Credit, each drawing made thereunder and the obligations of the Seller hereunder withrespect thereto, and any security therefor or guaranty pertaining thereto. Upon any change in the Commitments or Pro Rata Shares of the LC Participants pursuant to this Agreement, it is hereby agreedthat, with respect to all outstanding Letters of Credit and unreimbursed drawings thereunder, there shall be an automatic adjustment to the participations pursuant to this clause (d) to reflect the newPro Rata Shares of the assignor and assignee LC Participant or of all LC Participants with Commitments, as the case may be. In the event that the LC Bank makes any payment under any Letter ofCredit and the Seller shall not have reimbursed such amount in full to the LC Bank pursuant to Section 1.14(b), each LC Participant shall be obligated to make Participation Advances with respect tosuch Letter of Credit in accordance with Section 1.14(c).

Section 1.13 Requirements For Issuance of Letters of Credit.

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The Seller shall authorize and direct the LC Bank to name the Seller, an Originator or an Affiliate of an Originator as the “Applicant” or “Account Party” of each Letter ofCredit.

Section 1.14 Disbursements, Reimbursement.

(a) Immediately upon the issuance of each Letter of Credit, each LC Participant shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the LC Bank aparticipation in such Letter of Credit and each drawing thereunder in an amount equal to such LC Participant’s Pro Rata Share of the face amount of such Letter of Credit and the amount of suchdrawing, respectively.

(b) In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, the LC Bank will promptly notify the Administrator and the Seller of suchrequest. Provided that it shall have received such notice, the Seller shall reimburse (such obligation to reimburse the LC Bank shall sometimes be referred to as a “Reimbursement Obligation”) the LCBank prior to noon, New York time, on each date that an amount is paid by the LC Bank under any Letter of Credit (each such date, a “Drawing Date”) in an amount equal to the amount so paid by theLC Bank. In the event the Seller fails to reimburse the LC Bank for the full amount of any drawing under any Letter of Credit by noon, New York time, on the Drawing Date (including because theconditions precedent to a Funded Purchase deemed to have been requested by Seller pursuant to Section 1.1(b) to reimburse the LC Bank shall not have been satisfied), the LC Bank will promptlynotify each LC Participant thereof. Any notice given by the LC Bank pursuant to this Section may be oral if immediately confirmed in writing; provided that the lack of such an immediate writtenconfirmation shall not affect the conclusiveness or binding effect of such oral notice.

(c) Each LC Participant shall upon any notice pursuant to subclause (b) above make available to the LC Bank an amount in immediately available funds equal to its Pro Rata Share of theamount of the drawing (a “Participation Advance”), whereupon the LC Participants shall each be deemed to have made a Funded Purchase in that amount. If any LC Participant so notified fails tomake available to the LC Bank the amount of such LC Participant’s Pro Rata Share of such amount by no later than 2:00 p.m., New York time on the Drawing Date, then interest shall accrue on suchLC Participant’s obligation to make such payment, from the Drawing Date to the date on which such LC Participant makes such payment (i) at a rate per annum equal to the Federal Funds Rate duringthe first three days following the Drawing Date and (ii) at a rate per annum equal to the rate applicable to Capital on and after the fourth day following the Drawing Date. The LC Bank will promptlygive notice of the occurrence of the Drawing Date, but failure of the LC Bank to give any such notice on the Drawing Date or in sufficient time to enable any LC Participant to effect such payment onsuch date shall not relieve such LC Participant from its obligation under this subclause (c), provided that such LC Participant shall not be obligated to pay interest as provided in subclauses (i) and (ii)above until and commencing from the date of receipt of notice from the LC Bank or the Administrator of a drawing. Each LC Participant’s Commitment shall continue until the last to occur of any ofthe following events: (A) the LC Bank ceases to be obligated to issue or cause to be issued Letters of Credit hereunder; (B) no Letter of Credit issued hereunder remains outstanding and uncancelled or(C) all Persons (other than the Seller) have been fully reimbursed for all payments made under or relating to Letters of Credit.

Section 1.15 Repayment of Participation Advances.

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(a) Upon (and only upon) receipt by the LC Bank for its account of immediately available funds from or for the account of the Seller (i) in reimbursement of any payment made by the LCBank under a Letter of Credit with respect to which any LC Participant has made a Participation Advance to the LC Bank, or (ii) in payment of Discount on the Funded Purchases made or deemed tohave been made in connection with any such draw, the LC Bank will pay to each LC Participant, ratably (based on the outstanding drawn amounts funded by each such LC Participant in respect ofsuch Letter of Credit), in the same funds as those received by the LC Bank; itbeingunderstood, that the LC Bank shall retain a ratable amount of such funds that were not the subject of any payment inrespect of such Letter of Credit by any LC Participant.

(b) If the LC Bank is required at any time to return to the Seller, or to a trustee, receiver, liquidator, custodian, or any official in any insolvency proceeding, any portion of the payments madeby the Seller to the LC Bank pursuant to this Agreement in reimbursement of a payment made under the Letter of Credit or interest or fee thereon, each LC Participant shall, on demand of the LCBank, forthwith return to the LC Bank the amount of its Pro Rata Share of any amounts so returned by the LC Bank plus interest at the Federal Funds Rate, from the date the payment was first made tosuch LC Participant through, but not including, the date the payment is returned by such LC Participant.

Section 1.16 Documentation.

The Seller agrees to be bound by the terms of the Letter of Credit Application and by the LC Bank’s interpretations of any Letter of Credit issued for the Seller and by the LC Bank’swritten regulations and customary practices relating to letters of credit, though the LC Bank’s interpretation of such regulations and practices may be different from the Seller’s own. In the event of aconflict between the Letter of Credit Application and this Agreement, this Agreement shall govern. It is understood and agreed that, except in the case of gross negligence or willful misconduct by theLC Bank, the LC Bank shall not be liable for any error, negligence and/or mistakes, whether of omission or commission, in following the Seller’s instructions or those contained in the Letters of Creditor any modifications, amendments or supplements thereto.

Section 1.17 Determination to Honor Drawing Request.

In determining whether to honor any request for drawing under any Letter of Credit by the beneficiary thereof, the LC Bank shall be responsible only to determine that the documentsand certificates required to be delivered under such Letter of Credit have been delivered and that they comply on their face with the requirements of such Letter of Credit and that any other drawingcondition appearing on the face of such Letter of Credit has been satisfied in the manner so set forth.

Section 1.18 Nature of Participation and Reimbursement Obligations.

Each LC Participant’s obligation in accordance with this Agreement to make Participation Advances as a result of a drawing under a Letter of Credit, and the obligations of the Sellerto reimburse the LC Bank upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Article I under allcircumstances, including the following circumstances:

(i) any set-off, counterclaim, recoupment, defense or other right which such LC Participant may have against the LC Bank, the Administrator, the Purchaser Agents, the Purchasers, the Selleror any other Person for any reason whatsoever;

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(ii) the failure of the Seller or any other Person to comply with the conditions set forth in this Agreement for the making of a purchase, reinvestments, requests for Letters of Credit orotherwise, it being acknowledged that such conditions are not required for the making of Participation Advances hereunder;

(iii) any lack of validity or enforceability of any Letter of Credit or any set-off, counterclaim, recoupment, defense or other right which Seller, an Originator or any Affiliate thereof on behalfof which a Letter of Credit has been issued may have against the LC Bank, the Administrator, any Purchaser, any Purchaser Agent or any other Person for any reason whatsoever;

(iv) any claim of breach of warranty that might be made by the Seller, the LC Bank or any LC Participant against the beneficiary of a Letter of Credit, or the existence of any claim, set-off,defense or other right which the Seller, the LC Bank or any LC Participant may have at any time against a beneficiary, any successor beneficiary or any transferee of any Letter of Credit or theproceeds thereof (or any Persons for whom any such transferee may be acting), the LC Bank, any LC Participant, the Administrator, any Purchaser or any Purchaser Agent or any other Person,whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between the Seller or any Subsidiaries of the Selleror any Affiliates of the Seller and the beneficiary for which any Letter of Credit was procured);

(v) the lack of power or authority of any signer of, or lack of validity, sufficiency, accuracy, enforceability or genuineness of, any draft, demand, instrument, certificate or other documentpresented under any Letter of Credit, or any such draft, demand, instrument, certificate or other document proving to be forged, fraudulent, invalid, defective or insufficient in any respect or anystatement therein being untrue or inaccurate in any respect, even if the Administrator or the LC Bank has been notified thereof;

(vi) payment by the LC Bank under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter ofCredit other than as a result of the gross negligence or willful misconduct of the LC Bank;

(vii) the solvency of, or any acts or omissions by, any beneficiary of any Letter of Credit, or any other Person having a role in any transaction or obligation relating to a Letter of Credit, orthe existence, nature, quality, quantity, condition, value or other characteristic of any property or services relating to a Letter of Credit;

(viii) any failure by the LC Bank or any of the LC Bank’s Affiliates to issue any Letter of Credit in the form requested by the Seller, unless the LC Bank has received written notice from theSeller of such failure within three Business Days after the LC Bank shall have furnished the Seller a copy of such Letter of Credit and such error is material and no drawing has been made thereonprior to receipt of such notice;

(ix) any Material Adverse Effect;

(x) any breach of this Agreement or any Transaction Document by any party thereto;

(xi) the occurrence or continuance of an Insolvency Proceeding with respect to the Seller, any Originator or any Affiliate thereof;

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(xii) the fact that a Termination Event or an Unmatured Termination Event shall have occurred and be continuing;

(xiii) the fact that this Agreement or the obligations of Seller or Servicer hereunder shall have been terminated; and

(xiv) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

Section 1.19 Indemnity.

In addition to other amounts payable hereunder, the Seller hereby agrees to protect, indemnify, pay and save harmless the Administrator, the LC Bank, each LC Participant and any ofthe LC Bank’s Affiliates that have issued a Letter of Credit from and against any and all claims, demands, liabilities, damages, taxes, penalties, interest, judgments, losses, costs, charges and expenses(including reasonable Attorney Costs) which the Administrator, the LC Bank, any LC Participant or any of their respective Affiliates may incur or be subject to as a consequence, direct or indirect, ofthe issuance of any Letter of Credit, except to the extent resulting from (a) the gross negligence or willful misconduct of the party to be indemnified as determined by a final non-appealable judgmentof a court of competent jurisdiction or (b) the wrongful dishonor by the LC Bank of a proper demand for payment made under any Letter of Credit, except if such dishonor resulted from any act oromission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Authority (all such acts or omissions herein called “Governmental Acts”).

Section 1.20 Liability for Acts and Omissions.

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As between the Seller, on the one hand, and the Administrator, the LC Bank, the LC Participants, the Purchaser Agents and the Purchasers, on the other, the Seller assumes all risks ofthe acts and omissions of, or misuse of any Letter of Credit by, the respective beneficiaries of such Letter of Credit. In furtherance and not in limitation of the foregoing, none of the Administrator, theLC Bank, the LC Participants, the Purchaser Agents or the Purchasers shall be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted byany party in connection with the application for an issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged(even if the LC Bank or any LC Participant shall have been notified thereof); (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any suchLetter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) the failure of the beneficiary of any suchLetter of Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with any conditions required in order to draw upon such Letter of Credit or any other claim of theSeller against any beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among the Seller and any beneficiary of any Letter of Credit or any such transferee; (iv) errors,omissions, interruptions or delays in transmission or delivery of any messages, by mail, electronic mail, cable, telegraph, telex, facsimile or otherwise, whether or not they be in cipher; (v) errors ininterpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof;(vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control ofthe Administrator, the LC Bank, the LC Participants, the Purchaser Agents and the Purchasers, including any Governmental Acts, and none of the above shall affect or impair, or prevent the vesting of,any of the LC Bank’s rights or powers hereunder. In no event shall the Administrator, the LC Bank, the LC Participants, the Purchaser Agents or the Purchasers or their respective Affiliates, be liableto the Seller or any other Person for any indirect, consequential, incidental, punitive, exemplary or special damages or expenses (including without limitation attorneys’ fees), or for any damagesresulting from any change in the value of any property relating to a Letter of Credit.

Without limiting the generality of the foregoing, the Administrator, the LC Bank, the LC Participants, the Purchaser Agents and the Purchasers and each of its Affiliates (i) may rely onany written communication believed in good faith by such Person to have been authorized or given by or on behalf of the applicant for a Letter of Credit; (ii) may honor any presentation if thedocuments presented appear on their face to comply with the terms and conditions of the relevant Letter of Credit; (iii) may honor a previously dishonored presentation under a Letter of Credit,whether such dishonor was pursuant to a court order, to settle or compromise any claim of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the same extent as if suchpresentation had initially been honored, together with any interest paid by the LC Bank or its Affiliates; (iv) may honor any drawing that is payable upon presentation of a statement advisingnegotiation or payment, upon receipt of such statement (even if such statement indicates that a draft or other document is being delivered separately), and shall not be liable for any failure of any suchdraft or other document to arrive, or to conform in any way with the relevant Letter of Credit; (v) may pay any paying or negotiating bank claiming that it rightfully honored under the laws or practicesof the place where such bank is located; and (vi) may settle or adjust any claim or demand made on the Administrator, the LC Bank, the LC Participants, the Purchaser Agents or the Purchasers or theirrespective Affiliates, in any way related to any order issued at the applicant’s request to an air carrier, a letter of guarantee or of indemnity issued to a carrier or any similar document (each an “Order”)and may honor any drawing in connection with any Letter of Credit that is the subject of such Order, notwithstanding that any drafts or other documents presented in connection with such Letter ofCredit fail to conform in any way with such Letter of Credit.

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In furtherance and extension and not in limitation of the specific provisions set forth above, any action taken or omitted by the LC Bank under or in connection with any Letter ofCredit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith and without gross negligence or willful misconduct, as determined by a final non-appealablejudgment of a court of competent jurisdiction, shall not put the LC Bank under any resulting liability to the Seller, any LC Participant or any other Person.

Section 1.21 Intended Tax Treatment.

All parties to this Agreement covenant and agree to treat any Purchase and any drawing on a Letter of Credit under this Agreement as debt for all federal income taxpurposes (the “Intended Tax Treatment”). All parties to this Agreement agree not to take any position on any tax return inconsistent with the Intended Tax Treatment

Section 1.22 Mitigation of Obligations; Replacement of Purchasers.

(a) If any Affected Person requests compensation under Section 1.7 or Section 1.8, or if the Seller is required to pay any additional amount to any Affected Person or any GovernmentalAuthority for the account of any Affected Person pursuant to Section 1.10, then such Affected Person or its related Purchaser(s) shall (at the request of the Seller) use reasonable efforts to designate adifferent office for funding or booking its interests hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Affected Personor Purchaser, as applicable, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 1.7, 1.8 or 1.10, as the case may be, in the future, and (ii) would notsubject any such Affected Person or Purchaser to any unreimbursed cost or expense and would not otherwise be disadvantageous to any such Affected Person or Purchaser. The Borrower herebyagrees to pay all reasonable costs and expenses incurred by any Affected Person and its related Purchaser(s) in connection with any such designation or assignment.

(b) At any time when there is more than one Purchaser Group, the Seller shall be permitted to replace any Purchaser (and the related Purchaser Group) who has (or whose Liquidity Provideror Program Support Provider has) requested compensation under Section 1.7 or Section 1.8, or has give notice under Section 1.9(b), or if the Seller is required to pay any additional amount to suchPurchaser, or its Purchaser Agent or any Governmental Authority for the account of such Purchaser pursuant to Section 1.10; provided,however, that the Seller shall be permitted to replace (i) thePurchaser Group of which the Administrator is a member, or (ii) any Purchaser which is administered by the Administrator or an Affiliate thereof only if, in either case, the Administrator is alsoreplaced contemporaneously, pursuant to documents reasonable satisfactory to the Administrator; provided that (i) the replacement financial institution shall purchase, at par, all Capital, Discount andother amounts owing to such replaced Purchaser on or prior to the date of replacement, (ii) the replacement financial institution, if not already a member of an existing Purchaser Group, shall bereasonably satisfactory to the Administrator and the LC Bank, (iii) until such time as replacement shall be consummated, the Seller shall pay all additional amounts requested under Section 1.7, 1.8, or1.10, subject to the terms of this Agreement, and (iv) any such replacement shall not be deemed to be a waiver of any right that the Seller, the Administrator, any Purchaser Agent or any otherPurchaser shall have against the replaced Purchaser or any member of its Purchaser Group. No Purchaser or Purchaser Group may be replaced pursuant to this clause (b) at any time when there is onlyone Purchaser Group.

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ARTICLE II.

REPRESENTATIONS AND WARRANTIES; COVENANTS;

TERMINATION EVENTS

Section 2.1 Representations and Warranties; Covenants.

Each of the Seller and the Servicer hereby makes the representations and warranties, and hereby agrees to perform and observe the covenants, applicable to it as set forth in Exhibits IIIand IV, respectively.

Section 2.2 Termination Events.

If any of the Termination Events set forth in Exhibit V shall occur and while it is continuing, the Administrator may (with the consent of the Majority Purchaser Agents) and shall (atthe direction of the Majority Purchaser Agents), by notice to the Seller, declare the Facility Termination Date to have occurred (in which case the Facility Termination Date shall be deemed to haveoccurred); provided, that automatically upon the occurrence of any event (without any requirement for the passage of time or the giving of notice) described in paragraph (e) of Exhibit V, the FacilityTermination Date shall occur. Upon any such declaration, occurrence or deemed occurrence of the Facility Termination Date, the Purchasers, the Purchaser Agents and the Administrator shall have, inaddition to the rights and remedies that they may have under this Agreement, all other rights and remedies provided to secured parties after default under the UCC and under other applicable law,which rights and remedies shall be cumulative.

ARTICLE III.

INDEMNIFICATION

Section 3.1 Indemnities by the Seller.

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Without limiting any other rights that the Administrator, the Purchasers, the Purchaser Agents, the Liquidity Providers, any Program Support Provider or any of their respectiveAffiliates, employees, officers, directors, agents, counsel, successors, transferees or permitted assigns (each, an “Indemnified Party”) may have hereunder or under applicable law, the Seller herebyagrees to indemnify each Indemnified Party from and against any and all claims, damages, expenses, costs, losses, liabilities and penalties (including reasonable Attorney Costs) (all of the foregoingbeing collectively referred to as “Indemnified Amounts”) at any time imposed on or incurred by any Indemnified Party arising out of or otherwise relating to any Transaction Document, thetransactions contemplated thereby or the acquisition of any portion of the Purchased Interest, or any action taken or omitted by any of the Indemnified Parties (including any action taken by theAdministrator as attorney-in-fact for the Seller or any Originator hereunder or under any other Transaction Document) whether arising by reason of the acts to be performed by the Seller hereunder orotherwise, excluding only Indemnified Amounts to the extent: (a) a final non-appealable judgment of a court of competent jurisdiction holds that such Indemnified Amounts resulted from grossnegligence or willful misconduct of the Indemnified Party seeking indemnification or (b) due to the credit risk of the Obligor, and for which reimbursement would constitute recourse to any Originator,the Seller or the Servicer for uncollectible Receivables or (c) such Indemnified Amounts include Taxes (which shall be governed by Section 1.10); provided, however, that nothing contained in thissentence shall limit the liability of the Seller or the Servicer or limit the recourse of any Indemnified Party to the Seller or the Servicer for any amounts otherwise specifically provided to be paid by theSeller or the Servicer hereunder. Without limiting the foregoing indemnification, and subject to the exclusions in the preceding sentence, the Seller shall indemnify each Indemnified Party forIndemnified Amounts (including losses in respect of uncollectible Receivables regardless for purposes of these specific matters whether reimbursement therefor would constitute recourse to the Selleror the Servicer, except as set forth in subclause (viii) below) relating to or resulting from any of the following:

(i) the failure of any Receivable included in the calculation of the Net Receivables Pool Balance as an Eligible Receivable to be an Eligible Receivable as of the date of such calculation, thefailure of any information contained in any Information Package to be true and correct, or the failure of any other information provided to any Purchaser or the Administrator with respect to theReceivables or this Agreement to be true and correct;

(ii) the failure of any representation, warranty or statement made or deemed made by the Seller (or any employee, officer or agent of the Seller) under or in connection with this Agreement,any other Transaction Document, any Information Package or any other information or report delivered by or on behalf of the Seller pursuant hereto to have been true and correct as of the date madeor deemed made when made;

(iii) the failure by the Seller to comply with any applicable law, rule or regulation related to any Receivable or the related Contract or the non-conformity of any Receivable or the relatedContract with any such applicable law, rule or regulation;

(iv) the failure of the Seller to vest and maintain vested in the Administrator (on behalf of the Purchasers) a first priority perfected ownership interest or security interest in the PurchasedInterest and the property conveyed hereunder, free and clear of any Adverse Claim;

(v) any commingling of funds to which the Administrator, any Purchaser Agent or any Purchaser is entitled hereunder with any other funds except as expressly permitted hereunder;

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(vi) the failure to have filed, in accordance with the requirements of this Agreement or any other Transaction Document, financing statements or other similar instruments or documentsunder the UCC of each applicable jurisdiction or other applicable laws with respect to any Receivables in, or purporting to be in, the Receivables Pool and the other Pool Assets, whether at the time ofany Purchase or at any subsequent time;

(vii) any failure of a Lock-Box Bank to comply with the terms of the applicable Lock-Box Agreement;

(viii) any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Receivable (including without limitation a defense basedon such Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the saleor lease of goods or the rendering of services related to such Receivable or the furnishing or failure to furnish any such goods or services or other similar claim or defense not arising from the financialinability of any Obligor to pay undisputed indebtedness;

(ix) any failure of the Seller to perform its duties or obligations in accordance with the provisions of this Agreement or any other Transaction Document to which it is a party;

(x) any action taken by the Administrator as attorney-in-fact for the Seller or any Originator pursuant to this Agreement or any other Transaction Document;

(xi) any environmental liability claim or products liability claim or other claim, investigation, litigation or proceeding, arising out of or in connection with merchandise, insurance or servicesthat are the subject of any Contract related to any Receivable;

(xii) the use of proceeds of purchases or reinvestments or the issuance of any Letter of Credit; or

(xiii) any reduction in Capital as a result of the distribution of Collections pursuant to Section 1.4(d), if all or a portion of such distributions shall thereafter be rescinded or otherwise must bereturned for any reason.

Section 3.2 Indemnities by the Servicer.

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Without limiting any other rights that any Indemnified Party may have hereunder or under applicable law, the Servicer hereby agrees to indemnify each Indemnified Party from andagainst any and all Indemnified Amounts arising out of or resulting from (whether directly or indirectly): (a) the failure of any information contained in an Information Package to be true and correct,or the failure of any other information provided to any such Indemnified Party by, or on behalf of, the Servicer to be true and correct, (b) the failure of any representation, warranty or statement madeor deemed made by the Servicer (or any of its officers) under or in connection with this Agreement or any other Transaction Document to which it is a party to have been true and correct as of the datemade or deemed made when made, (c) the failure by the Servicer to comply with any applicable law, rule or regulation with respect to any Pool Receivable or the related Contract, (d) any dispute,claim, offset or defense of the Obligor (other than as a result of discharge in bankruptcy with respect to such Obligor) to the payment of any Receivable in, or purporting to be in, the Receivables Poolresulting from or related to the Servicer’s collection activities with respect to such Receivable, or (e) any failure of the Servicer to perform its duties or obligations in accordance with the provisionshereof or any other Transaction Document to which it is a party.

ARTICLE IV.

ADMINISTRATION AND COLLECTIONS

Section 4.1 Appointment of the Servicer.

(a) The servicing, administering and collection of the Pool Receivables shall be conducted by the Person so designated from time to time as the Servicer in accordance with this Section.Until the Administrator gives notice to Meritor in accordance with this Section of the designation of a new Servicer, Meritor is hereby designated as, and hereby agrees to perform the duties andobligations of, the Servicer pursuant to the terms hereof. Upon the occurrence and during the continuation of a Termination Event, the Administrator may (with the consent of the Majority PurchaserAgents) and shall (at the direction of the Majority Purchaser Agents) designate as Servicer any Person (including itself) to succeed Meritor or any successor Servicer, on the condition in each case thatany such Person so designated shall agree to perform the duties and obligations of the Servicer pursuant to the terms hereof.

(b) Upon the designation of a successor Servicer as set forth in clause (a), Meritor agrees that it will terminate its activities as Servicer hereunder in a manner that the Administratordetermines will facilitate the transition of the performance of such activities to the new Servicer, and Meritor shall cooperate with and assist such new Servicer. Such cooperation shall include access toand transfer of records (including Contracts) related to Pool Receivables and use by the new Servicer of all licenses, hardware or software necessary or desirable to collect the Pool Receivables and theRelated Security.

(c) Meritor acknowledges that, in making their decision to execute and deliver this Agreement, the Administrator, the Purchaser Agents and the Purchasers have relied on Meritor’sagreement to act as Servicer hereunder. Accordingly, Meritor agrees that it will not voluntarily resign as Servicer without the prior written consent of the Administrator and the Purchasers.

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(d) The Servicer may delegate its duties and obligations hereunder to any subservicer (each a “Sub-Servicer”); provided, that, in each such delegation: (i) each such Sub-Servicer shall agreein writing to perform the delegated duties and obligations of the Servicer pursuant to the terms hereof, (ii) the Servicer shall remain liable for the performance of the duties and obligations sodelegated, (iii) the Seller, the Administrator, the Purchaser Agents and the Purchasers shall have the right to look solely to the Servicer for performance, and (iv) the terms of any agreement with anySub-Servicer shall provide that the Administrator may terminate such agreement upon the termination of the Servicer hereunder by giving notice of its desire to terminate such agreement to theServicer (and the Servicer shall provide appropriate notice to each such Sub-Servicer); provided, however, that if any such delegation is to any Person other than an Originator or another Affiliate ofMeritor, the Administrator and the Majority Purchaser Agents shall have consented in writing in advance to such delegation.

Section 4.2 Duties of the Servicer.

(a) The Servicer shall take or cause to be taken all such action as may be necessary or advisable to administer and collect each Pool Receivable from time to time, all in accordance with thisAgreement and all applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy. The Servicer shall set aside, for the accounts ofthe Seller and the Purchasers, the amount of the Collections to which each is entitled in accordance with Article I. The Servicer may, in accordance with the applicable Credit and Collection Policy,take such action, including modifications, waivers or restructurings of Pool Receivables and the related Contracts as the Servicer may determine to be appropriate to maximize Collections thereof orreflect adjustments permitted under the Credit and Collection Policy or required under applicable laws, rules or regulations or the applicable Contract; provided, however, that for the purposes of thisAgreement (i) such action shall not change the number of days such Pool Receivable has remained unpaid from the date of the original due date related to such Pool Receivable, (ii) such action shallnot alter the status of such Pool Receivable as a Delinquent Receivable or a Defaulted Receivable under this Agreement or limit the rights of any of the Purchasers, Purchaser Agents or theAdministrator under this Agreement or any other Transaction Document and (iii) if a Termination Event has occurred and is continuing and Meritor or an Affiliate thereof is serving as the Servicer,Meritor or such Affiliate may take such action only upon the prior approval of the Administrator. The Seller shall deliver to the Servicer and the Servicer shall hold for the benefit of the Seller and theAdministrator (individually and for the benefit of the Purchasers), in accordance with their respective interests, all records and documents (including computer tapes or disks) with respect to each PoolReceivable. Notwithstanding anything to the contrary contained herein, if a Termination Event has occurred and is continuing, the Administrator may direct the Servicer (whether the Servicer isMeritor or any other Person) to commence or settle any legal action to enforce collection of any Pool Receivable that is a Defaulted Receivable or to foreclose upon or repossess, if applicable, anyRelated Security with respect to any such Defaulted Receivable.

(b) The Servicer shall, as soon as practicable following actual receipt of collected funds, turn over to the Seller the collections of any indebtedness that is not a Pool Receivable, less, ifMeritor or an Affiliate thereof is not the Servicer, all reasonable and appropriate out-of-pocket costs and expenses of such Servicer of servicing, collecting and administering such collections. TheServicer, if other than Meritor or an Affiliate thereof, shall, as soon as practicable upon demand, deliver to the Seller all records in its possession that evidence or relate to any indebtedness that is not aPool Receivable, and copies of records in its possession that evidence or relate to any indebtedness that is a Pool Receivable.

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(c) The Servicer’s obligations hereunder shall terminate on the Final Payout Date. After such termination, if Meritor or an Affiliate thereof was not the Servicer on the date of suchtermination, the Servicer shall promptly deliver to the Seller all books, records and related materials that the Seller previously provided to the Servicer, or that have been obtained by the Servicer, inconnection with this Agreement.

Section 4.3 Account Arrangements.

Prior to the Closing Date, the Seller shall have entered into Lock-Box Agreements with all of the Lock-Box Banks and in each case delivered original counterparts thereof to theAdministrator. Upon the occurrence of a Termination Event and during the continuance thereof, the Administrator may (and shall, at the direction of the Majority Purchaser Agents) give notice to eachLock-Box Bank, the Seller and the Servicer that the Administrator is exercising its rights under the Lock-Box Agreements to do any or all of the following: (a) to have the exclusive control of theLock-Box Accounts (and any funds therein) transferred to the Administrator (for the benefit of the Purchasers) and to exercise exclusive dominion and control over the funds deposited therein, (b) tohave the proceeds that are sent to the respective Lock-Box Accounts redirected pursuant to the Administrator’s instructions rather than deposited in the applicable Lock-Box Account, and (c) to takeany or all other actions permitted under the applicable Lock-Box Agreement. The Seller hereby agrees that if the Administrator at any time takes any action set forth in the preceding sentence, theAdministrator shall have exclusive control (for the benefit of the Purchasers) of the proceeds (including Collections) of all Pool Receivables and the Seller hereby further agrees to take any otheraction that the Administrator may reasonably request to transfer such control. Any proceeds of Pool Receivables received by the Seller or the Servicer thereafter other than through a Lock-BoxAccount shall be sent immediately to, or as otherwise instructed by, the Administrator. The parties hereto hereby acknowledge that if at any time the Administrator takes control of any Lock-BoxAccount, the Administrator shall not have any rights to the funds therein in excess of the unpaid amounts due to the Administrator, the Purchaser Agents, the Purchasers, any Indemnified Party, anyAffected Person or any other Person hereunder or under any other Transaction Document, and the Administrator shall distribute or cause to be distributed such funds in accordance with Section 4.2(b)and Article I (in each case as if such funds were held by the Servicer thereunder).

Section 4.4 Enforcement Rights.

(a) At any time following the occurrence and during the continuation of a Termination Event and upon notice to the Seller and the Servicer:

(i) the Administrator may direct the Obligors that payment of all amounts payable under any Pool Receivable is to be made directly to the Administrator or its designee;

(ii) the Administrator may instruct the Seller or the Servicer to give notice of the Purchasers’ interest in Pool Receivables to each Obligor, which notice shall direct that payments be madedirectly to the Administrator or its designee (on behalf of the Purchasers), and the Seller or the Servicer, as the case may be, shall give such notice at the expense of the Seller or the Servicer, as thecase may be; provided, that if the Seller or the Servicer, as the case may be, fails to so notify each Obligor, the Administrator (at the Seller’s or the Servicer’s, as the case may be, expense) may sonotify the Obligors; and

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(iii) the Administrator may request the Servicer to, and upon such request the Servicer shall: (A) assemble all of the records necessary or desirable to collect the Pool Receivables and theRelated Security, and transfer or license to a successor Servicer the use of all software necessary or desirable to collect the Pool Receivables and the Related Security, and make the same available tothe Administrator or its designee (for the benefit of the Purchasers) at a place selected by the Administrator, and (B) segregate all cash, checks and other instruments received by it from time to timeconstituting Collections in a manner acceptable to the Administrator and, promptly upon receipt, remit all such cash, checks and instruments, duly endorsed or with duly executed instruments oftransfer, to the Administrator or its designee.

(b) The Seller hereby authorizes the Administrator (on behalf of each Purchaser Group), and irrevocably appoints the Administrator as its attorney-in-fact with full power of substitution andwith full authority in the place and stead of the Seller, which appointment is coupled with an interest, to take any and all steps in the name of the Seller and on behalf of the Seller necessary ordesirable, in the determination of the Administrator, following the occurrence and during the continuation of a Termination Event, to collect any and all amounts or portions thereof due under any andall Pool Assets, including endorsing the name of the Seller on checks and other instruments representing Collections and enforcing such Pool Assets. Notwithstanding anything to the contrarycontained in this subsection, none of the powers conferred upon such attorney-in-fact pursuant to the preceding sentence shall subject such attorney-in-fact to any liability if any action taken by it shallprove to be inadequate or invalid, nor shall they confer any obligations upon such attorney-in-fact in any manner whatsoever.

Section 4.5 Responsibilities of the Seller.

(a) Anything herein to the contrary notwithstanding, the Seller shall: (i) perform all of its obligations, if any, under the Contracts related to the Pool Receivables to the same extent as ifinterests in such Pool Receivables had not been transferred hereunder, and the exercise by the Administrator, any Purchaser Agent or any Purchaser of their respective rights hereunder shall not relievethe Seller from such obligations, and (ii) pay when due any taxes, including any sales taxes payable in connection with the Pool Receivables and their creation and satisfaction. None of theAdministrator, the Purchaser Agents and the Purchasers shall have any obligation or liability with respect to any Pool Asset, nor shall any of them be obligated to perform any of the obligations of theSeller or any Originator thereunder.

(b) Meritor hereby irrevocably agrees that if at any time it shall cease to be the Servicer hereunder, it shall act (if the then-current Servicer so requests) as the data-processing agent of theServicer and, in such capacity, Meritor shall conduct the data-processing functions of the administration of the Receivables and the Collections thereon in substantially the same way that Meritorconducted such data-processing functions while it acted as the Servicer.

Section 4.6 Servicing Fee.

(a) Subject to clause (b), the Servicer shall be paid a fee (the “Servicing Fee”) equal to 1.00% per annum (the “Servicing Fee Rate”) of the daily average aggregate Outstanding Balance ofthe Pool Receivables. The Purchasers’ Share of such fee shall be paid through the distributions contemplated by Section 1.4(d), and the Seller’s Share of such fee shall be paid by the Seller on eachSettlement Date.

(b) If the Servicer ceases to be Meritor or an Affiliate thereof, the servicing fee shall be the greater of: (i) the amount calculated pursuant to clause (a), and (ii) an alternative amount specifiedby the successor Servicer not to exceed 110% of the aggregate reasonable costs and expenses incurred by such successor Servicer in connection with the performance of its obligations as Servicer.

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Section 4.7 Authorization and Action of the Administrator and Purchaser Agents.

(a) Each Purchaser and Purchaser Agent hereby accepts the appointment of and irrevocably authorizes the Administrator to take such actions as agent on its behalf and to exercise suchpowers as are delegated to the Administrator hereby and to exercise such other powers as are reasonably incidental thereto. The Administrator shall hold, in its name, for the benefit of each Purchaser,ratably, the Purchased Interest. The Administrator shall not have any duties other than those expressly set forth herein or any fiduciary relationship with any Purchaser or Purchaser Agent, and noimplied obligations or liabilities shall be read into this Agreement, or otherwise exist, against the Administrator. The Administrator does not assume, nor shall it be deemed to have assumed, anyobligation to, or relationship of trust or agency with, the Seller or Servicer. Notwithstanding any provision of this Agreement or any other Transaction Document to the contrary, in no event shall theAdministrator ever be required to take any action which exposes the Administrator to personal liability or which is contrary to the provisions of this Agreement, any other Transaction Document orapplicable law. The appointment and authority of the Administrator hereunder shall terminate on the Final Payout Date.

(b) Each Purchaser hereby accepts the appointment of the respective institution identified as the Purchaser Agent for such Purchaser’s Purchaser Group on Schedule IV hereto or in theTransfer Supplement or other agreement pursuant to which such Purchaser becomes a party hereto, and irrevocably authorizes such Purchaser Agent to take such action on its behalf under theprovisions of this Agreement and to exercise such powers and perform such duties as are expressly delegated to such Purchaser Agent by the terms of this Agreement, if any, together with such otherpowers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, no Purchaser Agent shall have any duties or responsibilities, except thoseexpressly set forth herein, or any fiduciary relationship with any Purchaser or other Purchaser Agent or the Administrator, and no implied obligations or liabilities shall be read into this Agreement, orotherwise exist, against any Purchaser Agent.

(c) Except as otherwise specifically provided in this Agreement, the provisions of this Section 4.7 are solely for the benefit of the Administrator, the Purchaser Agents and the Purchasers,and none of the Seller or the Servicer shall have any rights as a third-party beneficiary or otherwise under any of the provisions of this Section 4.7, except that this Section 4.7 shall not affect anyobligations which the Administrator, any Purchaser Agent or any Purchaser may have to the Seller or the Servicer under the other provisions of this Agreement. Furthermore, no Purchaser shall haveany rights as a third-party beneficiary or otherwise under any of the provisions hereof in respect of a Purchaser Agent that is not the Purchaser Agent for such Purchaser.

(d) In performing its functions and duties hereunder, the Administrator shall act solely as the agent of the Purchasers and the Purchaser Agents and does not assume nor shall be deemed tohave assumed any obligation or relationship of trust or agency with or for the Seller or Servicer or any of their successors and assigns. In performing its functions and duties hereunder, each PurchaserAgent shall act solely as the agent of its respective Purchasers and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for the Seller, theServicer, any Purchaser not in such Purchaser Agent’s Purchaser Group, any other Purchaser Agent or the Administrator, or any of their respective successors and assigns.

Section 4.8 Nature of Administrator’s Duties; Delegation of Administrator’s Duties; Exculpatory Duties.

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(a) The Administrator shall have no duties or responsibilities except those expressly set forth in this Agreement or in the other Transaction Documents. The duties of the Administrator shallbe mechanical and administrative in nature. At no time shall the Administrator have any duty or responsibility to any Person to investigate or confirm the correctness or accuracy of any information ordocuments delivered to it in its role as Administrator hereunder or any obligation in respect of the failure of any Person (other than the Administrator) to perform any obligation hereunder or under anyother Transaction Document. The Administrator shall not have, by reason of this Agreement, a fiduciary relationship in respect of any Purchaser. Nothing in this Agreement or any of the TransactionDocuments, express or implied, is intended to or shall be construed to impose upon the Administrator any obligations in respect of this Agreement or any of the Transaction Documents except asexpressly set forth herein or therein. The Administrator shall not have any duty or responsibility, either initially or on a continuing basis, to provide any Purchaser or Purchaser Agent with any credit orother information with respect to the Seller, any Originator, Meritor, any Sub-Servicer or the Servicer, whether coming into its possession before the Closing Date or at any time or times thereafter. Ifthe Administrator seeks the consent or approval of the Purchasers or the Purchaser Agents to the taking or refraining from taking any action hereunder, the Administrator shall send notice thereof toeach Purchaser (or such Purchaser’s Purchaser Agent, on its behalf) or each Purchaser Agent, as applicable. The Administrator shall promptly notify each Purchaser Agent any time that the Purchasersand/or Purchaser Agents, as the case may be, have instructed the Administrator to act or refrain from acting pursuant hereto.

(b) The Administrator may execute any of its duties through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. TheAdministrator shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

(c) None of the Administrator and the Purchaser Agent, nor any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted (i) with the consentor at the direction of the Majority Purchaser Agents (or, in the case of any Purchaser Agent, the Purchasers within such Purchaser Agent’s Purchaser Group that have a majority of the aggregateCommitments of such Purchaser Group) or (ii) in the absence of such Person’s gross negligence or willful misconduct. The Administrator shall not be responsible to any Purchaser, Purchaser Agent orother Person for (i) any recitals, representations, warranties or other statements made by the Seller, any Sub-Servicer, the Servicer, Meritor, any Originator or any of their Affiliates, (ii) the value,validity, effectiveness, genuineness, enforceability or sufficiency of any Transaction Document, (iii) any failure of the Seller, any Sub-Servicer, the Servicer, Meritor, any Originator or any of theirAffiliates to perform any obligation hereunder or under the other Transaction Documents to which it is a party (or under any Contract), or (iv) the satisfaction of any condition specified in Exhibit II.The Administrator shall not have any obligation to any Purchaser Agent or Purchaser to ascertain or inquire about the observance or performance of any agreement contained in any TransactionDocument or to inspect the properties, books or records of the Seller, the Servicer, any Originator or any of their respective Affiliates.

Section 4.9 UCC Filings.

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Each of the Seller and the Purchasers expressly recognizes and agrees that the Administrator may be listed as the assignee or secured party of record on the various UCC filingsrequired to be made hereunder in order to perfect the transfer of the Purchased Interest from the Seller to the Purchasers, that such listing shall be for administrative convenience only in creating arecord or nominee owner to take certain actions hereunder on behalf of the Purchasers and that such listing will not affect in any way the status of the Purchasers as the beneficial owners of thePurchased Interest. In addition, such listing shall impose no duties on the Administrator other than those expressly and specifically undertaken in accordance with this Section 4.9.

Section 4.10 Agent’s Reliance, Etc.

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None of the Administrator and the Purchaser Agents, nor any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by itas Administrator or as Purchaser Agent, as the case may be, under or in connection with this Agreement except for such Person’s own gross negligence or willful misconduct. Each of theAdministrator and each Purchaser Agent: (i) may consult with legal counsel (including counsel for the Seller), independent public accountants and other experts selected by the Administrator and shallnot be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to anyPurchaser or Purchaser Agent and shall not be responsible to any Purchaser or Purchaser Agent for any statements, warranties or representations made in or in connection with this Agreement; (iii)shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement on the part of the Seller, the Servicer, any Sub-Servicer, Meritor or any Originator or to inspect the property (including the books and records) of the Seller, the Servicer, any Sub-Servicer, Meritor or any Originator; (iv) shall not be responsible toany Purchaser or Purchaser Agent for the due execution, legality, validity, enforceability, genuineness, sufficiency, or value of this Agreement, or any other instrument or document furnished pursuanthereto; and (v) shall incur no liability under or in respect of this Agreement or any other Transaction Document by acting upon any notice (including notice by telephone), consent, certificate or otherinstrument or writing (which may be by facsimile) believed by it to be genuine and signed or sent by the proper party or parties. The Administrator may at any time request instructions from thePurchasers and/or Purchaser Agents, and the Purchaser Agents may at any time request instructions from the Purchasers in their Purchaser Groups, with respect to any actions or approvals which bythe terms of this Agreement or of any of the other Transaction Documents the Administrator or such Purchaser Agent is permitted or required to take or to grant, and if such instructions are promptlyrequested, the Administrator and/or such Purchaser Agent shall be absolutely entitled to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever toany Person for refraining from any action or withholding any approval under any of the Transaction Documents until it shall have received such instructions from the Majority Purchaser Agents, in thecase of the Administrator or Purchasers holding the majority of the aggregate of the Commitments in such Purchaser Agent’s Purchaser Group, in the case of any Purchaser Agent (or, in either case,where expressly required hereunder, from the Majority LC Participants, the LC Bank, all of the Purchasers and/or all of the LC Participants). Without limiting the foregoing, (x) none of the Purchasersand the Purchaser Agents shall have any right of action whatsoever against the Administrator as a result of the Administrator acting or refraining from acting under this Agreement or any of the otherTransaction Documents in accordance with the instructions of the Majority Purchaser Agent and (y) none of the Purchasers in a Purchaser Agent’s Purchaser Group shall have any right of actionwhatsoever against such Purchaser Agent as a result of such Purchaser Agent acting or refraining from acting under this Agreement or any of the other Transaction Documents in accordance with theinstructions of the Purchasers within such Purchaser Agent’s Purchaser Group with a majority of the Commitments of such Purchaser Group. The Administrator shall in all cases be fully protected inacting, or in refraining from acting, under this Agreement in accordance with a request of the required Purchasers or required Purchaser Agents, and such request and any action taken or failure to actpursuant thereto shall be binding upon all Purchasers, all Purchaser Agents and the Administrator. Each Purchaser Agent shall in all cases be fully protected in acting, or in refraining from acting,under this Agreement in accordance with a request of the Purchasers in such Purchaser Agent’s Purchaser Group with a majority of the Commitments of such Purchaser Group, and any such requestand any action taken or failure to act pursuant thereto shall be binding upon all the Purchasers in such Purchaser Agent’s Purchaser Group and such Purchaser Agent.

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Section 4.11 Administrator and Affiliates.

To the extent that the Administrator or any of its Affiliates is or shall become an LC Participant hereunder, the Administrator or such Affiliate, in such capacity, shall have the samerights and powers under this Agreement as would any other LC Participant hereunder and may exercise the same as though it were not the Administrator. The Administrator and its Affiliates maygenerally engage in any kind of business with the Seller, any Originator, Meritor, any Sub-Servicer or the Servicer, any of their respective Affiliates and any Person who may do business with or ownsecurities of the Seller, any Originator, Meritor, any Sub-Servicer or the Servicer or any of their respective Affiliates, all as if it were not the Administrator hereunder and without any duty to accounttherefor to any Purchaser Agent, or Purchaser.

Section 4.12 Notice of Termination Events.

Neither the Administrator nor any Purchaser Agent shall be deemed to have knowledge or notice of the occurrence of any Termination Event or Unmatured Termination Event unless ithas received notice from, in the case of the Administrator, any Purchaser Agent, any Purchaser, the Servicer or the Seller and, in the case of any Purchaser Agent, the Administrator, any otherPurchaser Agent, any Purchaser, the Servicer or the Seller, in each case stating that a Termination Event or an Unmatured Termination Event has occurred hereunder and describing such TerminationEvent or Unmatured Termination Event. In the event that the Administrator receives such a notice, it shall promptly give notice thereof to each Purchaser Agent. In the event that a Purchaser Agentreceives such a notice, it shall promptly give notice thereof to the Administrator (unless such Purchaser Agent first received notice of such Termination Event or Unmatured Termination Event fromthe Administrator) and to each of its related Purchasers. The Administrator shall take such action concerning a Termination Event or an Unmatured Termination Event as may be directed by theMajority Purchaser Agents (unless such action otherwise requires the consent of the required Purchasers, all Purchaser Agents or the LC Bank), but until the Administrator receives such directions, theAdministrator may (but shall not be obligated to) take such action, or refrain from taking such action, as the Administrator deems advisable and in the best interests of the Purchasers and PurchaserAgents.

Section 4.13 Non-Reliance on Administrator, Purchaser Agents and other Purchasers; Administrators and Affiliates.

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(a) Each Purchaser and Purchaser Agent expressly acknowledges that none of the Administrator and the Purchaser Agents, in the case of such Purchaser, and none of the Administrator orany other Purchaser Agent, in the case of such Purchaser Agent, nor in either case any of their respective officers, directors, employees, agents, attorneys-in-fact or Affiliates has made anyrepresentations or warranties to it and that no act by the Administrator or any Purchaser Agent hereafter taken, including any review of the affairs of the Seller, Meritor, the Servicer or any Originator,shall be deemed to constitute any representation or warranty by the Administrator or such Purchaser Agent. Each Purchaser and Purchaser Agent represents and warrants to the Administrator and suchPurchaser’s Purchaser Agent, in the case of such Purchaser, and Administrator, in the case of such Purchaser Agent, that it has, independently and without reliance upon the Administrator, the LCBank, any Purchaser Agent or any Purchaser and based on such documents and information as it has deemed appropriate, made and will continue to make its own appraisal of any investigation into thebusiness, operations, property, prospects, financial and other conditions and creditworthiness of the Seller, Meritor, the Servicer or the Originators, and made its own evaluation and decision to enterinto this Agreement. Except for terms specifically required to be delivered hereunder, the Administrator shall not have any duty or responsibility to provide any Purchaser or Purchaser Agent, and noPurchaser Agent have any duty or responsibility to provide any Purchaser, with any information concerning the Seller, Meritor, the Servicer or the Originators or any of their Affiliates that comes intothe possession of the Administrator or such Purchaser Agent, respectively, or any of their respective officers, directors, employees, agents, attorneys-in-fact or Affiliates.

(b) Each of the Purchasers, the Purchaser Agents and the Administrator and any of their respective Affiliates may extend credit to, accept deposits from and generally engage in any kind ofbanking, trust, debt, entity or other business with the Seller, Meritor, the Servicer or any Originator or any of their Affiliates. With respect to the acquisition of the Eligible Receivables pursuant to thisAgreement, each of the Purchaser Agents and the Administrator shall have the same rights and powers under this Agreement as any Purchaser and may exercise the same as though it were not such anagent, and the terms “Purchaser” and “Purchasers” shall include, to the extent applicable, each of the Purchaser Agents and the Administrator in their individual capacities.

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Section 4.14 Indemnification.

Each LC Participant and Related Committed Purchaser agrees to indemnify and hold harmless the Administrator and its officers, directors, employees, representatives and agents andthe LC Bank (to the extent not reimbursed by the Seller, the Servicer or any Originator and without limiting the obligation of the Seller, the Servicer, or any Originator to do so), ratably according to itsPro Rata Share, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, settlements, costs, expenses and, or disbursements of any kind or nature whatsoever(including, in connection with any investigative or threatened proceeding, whether or not the Administrator, the LC Bank or such Person shall be designated a party thereto) that may at any time beimposed on, incurred by, or asserted against the Administrator, LC Bank or such Person as a result of, or related to, any of the transactions contemplated by the Transaction Documents or theexecution, delivery or performance of the Transaction Documents or any other document furnished in connection therewith; provided, however, that no LC Participant or Related Committed Purchasershall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, or disbursements resulting from the Administrator’s or the LC Bank’sgross negligence or willful misconduct, as determined by a final non-appealable judgment of a court of competent jurisdiction. Without limiting the generality of the foregoing, each LC Participantagrees to reimburse the Administrator and the LC Bank, ratably according to their Pro Rata Shares, promptly upon demand, for any out-of-pocket expenses (including reasonable Attorney Costs)incurred by the Administrator or the LC Bank in connection with the administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, orlegal advice in respect of its rights or responsibilities under, this Agreement.

Section 4.15 Successor Administrator.

The Administrator may, upon at least thirty (30) days’ notice to the Seller, the Purchaser Agents and the Servicer, resign as Administrator. Such resignation shall not become effectiveuntil a successor Administrator is appointed by the Majority Purchaser Agents and the LC Bank and has accepted such appointment. Upon such acceptance of its appointment as Administratorhereunder by a successor Administrator, such successor Administrator shall succeed to and become vested with all the rights and duties of the retiring Administrator, and the retiring Administratorshall be discharged from its duties and obligations under the Transaction Documents. After any retiring Administrator’s resignation hereunder, the provisions of Sections 3.1 and 3.2 and this Article IVshall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrator.

ARTICLE V.

MISCELLANEOUS

Section 5.1 Amendments, Etc.

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No amendment or waiver of any provision of this Agreement or any other Transaction Document, or consent to any departure by the Seller or the Servicer therefrom, shall be effectiveunless in a writing signed by the Administrator, the Majority Purchaser Agents, the LC Bank and, in the case of an amendment, by the other parties thereto; provided, however, that no suchamendment shall, (a) without the consent of each affected Purchaser, (i) extend the date of any payment or deposit of Collections by the Seller or the Servicer or decrease the outstanding amount of orrate of Discount or extend the repayment of or any scheduled payment date for the payment of any Discount in respect of any Portion of Capital or any fees owed to a Purchaser; (ii) reduce any feespayable pursuant to the applicable Fee Letter, (iii) forgive or waive or otherwise excuse any repayment of Capital or change either the amount of Capital of any Purchaser or any Purchaser’s pro ratashare of the Purchased Interest; (iv) increase the Commitment of any Purchaser; (v) amend or modify the Pro Rata Share of any LC Participant; (vi) amend or modify the provisions of this Section 5.1or the definition of “Capital”, “Eligible Receivables”, “Majority LC Participants”, “Majority Purchaser Agents”, “Net Receivables Pool Balance”, “Purchased Interest”, “Scheduled CommitmentTermination Date” (other than pursuant to an extension thereof in accordance with Article I hereof), “Termination Day” or “Total Reserves” or (vii) amend or modify any defined term (or any termused directly or indirectly in such defined term) used in clauses (i) through (vi) above in a manner that would circumvent the intention of the restrictions set forth in such clauses and (b) without theconsent of the Majority Purchaser Agents and/or Majority LC Participants, as applicable, amend, waive or modify any provision expressly requiring the consent of such Majority Purchaser Agentsand/or Majority LC Participant. Each such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. No failure on the part ofany Purchaser Agent, any Purchaser or the Administrator to exercise, and no delay in exercising any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of anyright hereunder preclude any other or further exercise thereof or the exercise of any other right.

Section 5.2 Notices, Etc.

All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including facsimile or electronic mail communication) and shall bepersonally delivered or sent by facsimile, or by overnight mail, to the intended party at the mailing address or facsimile number of such party set forth under its name on the signature pages hereof (orin any other document or agreement pursuant to which it is or became a party hereto), or at such other address or facsimile number as shall be designated by such party in a written notice to the otherparties hereto. All such notices and communications shall be effective (i) if delivered by overnight mail, when received, and (ii) if transmitted by facsimile or electronic mail, when sent, receiptconfirmed by telephone or electronic means.

Section 5.3 Successors and Assigns; Assignability; Participations.

(a) Successors and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party; allcovenants, promises and agreements by or on behalf of any parties hereto that are contained in this Agreement shall bind and inure to the benefit of the parties hereto and their respective successorsand assigns. Except as otherwise provided in Section 4.1(d), neither the Seller nor the Servicer may assign or transfer any of its rights or delegate any of its duties hereunder or under any TransactionDocument without the prior written consent of the Administrator, each Purchaser Agent and the LC Bank.

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(b) Participations. Except as otherwise specifically provided herein, any Purchaser may sell to one or more Persons (each a “Participant”) participating interests in the interests of suchPurchaser hereunder; provided, that no Purchaser shall grant any participation under which the Participant shall have rights to approve any amendment to or waiver of this Agreement or any otherTransaction Document. Such Purchaser shall remain solely responsible for performing its obligations hereunder, and the Seller, the Servicer, each Purchaser Agent and the Administrator shall continueto deal solely and directly with such Purchaser in connection with such Purchaser’s rights and obligations hereunder. A Purchaser shall not agree with a Participant to restrict such Purchaser’s right toagree to any amendment, waiver or modification hereto.

(c) Assignments by Related Committed Purchasers. Any Related Committed Purchaser may, with the prior written consent of the Seller (which the Seller may grant or withhold in its solediscretion) assign to one or more Persons (each a “Purchasing Related Committed Purchaser”), acceptable to each of the Administrator, the LC Bank and the related Purchaser Agent, in each suchPerson’s sole discretion, its rights and obligations herein (including its Commitment(which shall be inclusive of its Commitment as an LC Participant)) in whole or in part, pursuant to a supplementhereto, substantially in the form of Annex G with any changes as have been approved by the parties thereto (each, a “Transfer Supplement”), executed by each such Purchasing Related CommittedPurchaser, such selling Related Committed Purchaser, such related Purchaser Agent and the Administrator; provided, that the consent of the Seller shall not be required if (i) a Termination Event hasoccurred and is continuing or (ii) such assignment is made by any Related Committed Purchaser to (A) the Administrator, (B) any other Related Committed Purchaser, (C) any Affiliate of theAdministrator or any Related Committed Purchaser, (D) any commercial paper conduit or similar financing vehicle sponsored or administered by such Purchaser and for whom such Purchaser acts asa program support provider or through which (directly or indirectly) such Purchaser does or may fund Purchases hereunder, (E) any Liquidity Provider, (F) any Program Support Provideror (G) anyPerson that (1) is in the business of issuing commercial paper notes and (2) is associated with or administered by the Administrator or such Related Committed Purchaser or any Affiliate of theAdministrator or such Related Committed Purchaser). Upon (i) the execution of the Transfer Supplement, (ii) delivery of an executed copy thereof to the Seller, the Servicer, such related PurchaserAgent and the Administrator and (iii) payment by the Purchasing Related Committed Purchaser to the selling Related Committed Purchaser of the agreed purchase price, if any, such selling RelatedCommitted Purchaser shall be released from its obligations hereunder to the extent of such assignment and such Purchasing Related Committed Purchaser shall for all purposes be a RelatedCommitted Purchaser party hereto and shall have all the rights and obligations of a Related Committed Purchaser hereunder to the same extent as if it were an original party hereto. The amount of theCommitment of the selling Related Committed Purchaser allocable to such Purchasing Related Committed Purchaser shall be equal to the amount of the Commitment of the selling Related CommittedPurchaser transferred regardless of the purchase price, if any, paid therefor. The Transfer Supplement shall be an amendment hereof only to the extent necessary to reflect the addition of suchPurchasing Related Committed Purchaser as a “Related Committed Purchaser” and a related “LC Participant” and any resulting adjustment of the selling Related Committed Purchaser’s Commitmentand, if applicable, selling related LC Participant’s Pro Rata Share of the LC Participation Amount.

(d) Assignments to Liquidity Providers and other Program Support Providers. Any Conduit Purchaser may at any time grant to one or more of its Liquidity Providers or other ProgramSupport Providers participating interests in its portion of the Purchased Interest. In the event of any such grant by such Conduit Purchaser of a participating interest to a Liquidity Provider or otherProgram Support Provider, such Conduit Purchaser shall remain responsible for the performance of its obligations hereunder. The Seller agrees that each Liquidity Provider and Program SupportProvider shall be entitled to the benefits of Sections 1.7 and 1.8.

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(e) Other Assignment by Conduit Purchasers. Each party hereto agrees and consents (i) to any Conduit Purchaser’s assignment, participation, grant of security interests in or other transfers ofany portion of, or any of its beneficial interest in, the Purchased Interest (or portion thereof), including without limitation to any collateral agent in connection with its commercial paper program and(ii) to the complete assignment by any Conduit Purchaser of all of its rights and obligations hereunder to any Liquidity Provider or Related Committed Purchaser for such Conduit Purchaser or to anyother Person; provided, that such Conduit Purchaser may not, without the prior consent of its Related Committed Purchasers and, so long as no Termination Event is continuing, of the Seller (whichconsent the Seller may grant or withhold in its sole discretion), make any such assignment of its rights hereunder unless the assignee (x) is a commercial paper conduit that (i) is principally engaged inthe purchase of assets similar to the assets being purchased hereunder, (ii) has as its Purchaser Agent the Purchaser Agent of the assigning Conduit Purchaser and (iii) issues commercial paper or otherNotes with credit ratings substantially comparable to the ratings of the assigning Conduit Purchaser or (y) is a Related Committed Purchaser or Liquidity Provider for such Conduit Purchaser. Anyassigning Conduit Purchaser shall deliver to any assignee a Transfer Supplement with any changes as have been approved by the parties thereto, duly executed by such Conduit Purchaser, assigningany portion of its interest in the Purchased Interest to its assignee. Such Conduit Purchaser shall promptly (i) notify each of the other parties hereto of such assignment and (ii) take all further actionthat the assignee reasonably requests in order to evidence the assignee’s right, title and interest in such interest in the Purchased Interest and to enable the assignee to exercise or enforce any rights ofsuch Conduit Purchaser hereunder. Upon the assignment of any portion of its interest in the Purchased Interest, the assignee shall have all of the rights hereunder with respect to such interest (exceptthat the Discount therefor shall thereafter accrue at the rate, determined with respect to the assigning Conduit Purchaser unless the Seller, the related Purchaser Agent and the assignee shall have agreedupon a different Discount).

(f) Certain Pledges. Without limiting the right of any Purchaser to sell or grant interests, security interests or participations to any Person as otherwise described in this Article V, above, anyPurchaser may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure its obligations as a Purchaser hereunder, including any pledge orassignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Purchaser from any of its obligations hereunder or substitute any suchpledge or assignee for such Purchaser as a party hereto.

(g) Assignment by Administrator. This Agreement and the rights and obligations of the Administrator hereunder shall be assignable, in whole or in part, by the Administrator and itssuccessors and assigns; provided, that unless: (i) such assignment is to an Affiliate of PNC, (ii) it becomes unlawful for PNC to serve as the Administrator or (iii) a Termination Event has occurred andis continuing, the Seller has given prior written consent to such assignment, which consent the Seller may grant or withhold in its sole discretion.

(h) Agents. Without limiting any other rights that may be available under applicable law, the rights of the Purchasers and each Liquidity Provider may be enforced through it or by its agents.

(i) Disclosure; Notice. Each assignor may, in connection with an assignment permitted hereunder, disclose to the applicable assignee (that shall have agreed to be bound by Section 5.6) anyinformation relating to the Servicer, the Seller or the Pool Receivables furnished to such assignor by or on behalf of the Servicer, the Seller, any Purchaser, any Purchaser Agent or the Administrator.Such assignor shall give prior written notice to Seller of any assignment of such assignor’s rights and obligations (including ownership of the Purchased Interest) to any Person other than a ProgramSupport Provider.

Section 5.4 Costs and Expenses.

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Without limiting any of the Seller’s other obligations hereunder or under any other Transaction Document (including, without limitation, its obligations under Sections 1.5, 1.7, 1.8, 1.10, 1.19,3.1 or Section 1(e) of Exhibit IV of this Agreement), the Seller shall pay to the Administrator, the Purchaser Agents, the Purchasers, the Indemnified Parties and the Affected Persons on demand alltheir respective costs and expenses in connection with (i) the preparation, negotiation, execution, delivery and administration (including amendments, waivers or renewals of any provision) of thisAgreement and the other Transaction Documents, including, without limitation, costs and expenses incurred in connection with the perfection (and continuation) of the Administrator’s rights (onbehalf of the Purchasers) in the Receivables, Collections and the other Pool Assets, (ii) without limiting the generality of clause (i) above, such Persons’ responses to the occurrence of any TerminationEvent or Unmatured Termination Event and the enforcement of the obligations of the Seller, the Servicer or the Originators under the Transaction Documents or of any Obligor under a Receivable, (iii)if applicable, the maintenance by the Administrator of the Lock-Box Accounts (and any related Lock-Boxes), including without limitation, following the Administrator’s assumption of exclusivecontrol thereof in accordance with this Agreement and (iv) reasonable Attorney Costs incurred by the Administrator, the Purchaser Agents, the Purchasers, the Indemnified Parties and the AffectedPersons in connection with any of the foregoing.

Section 5.5 No Proceedings; Limitation on Payments.

(a) Each of the Seller, the Servicer, the Administrator, the LC Bank, the Purchaser Agents and the Purchasers and each assignee of the Purchased Interest or any interest therein, and eachPerson that enters into a commitment to purchase the Purchased Interest or interests therein, hereby covenants and agrees that it will not institute against, or join any other Person in instituting against,any Conduit Purchaser any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other proceeding under any federal or state bankruptcy or similar law, for one year andone day after the latest maturing Note issued by such Conduit Purchaser is paid in full. The provisions of this paragraph shall survive any termination of this Agreement.

(b) Each of the Servicer, the Administrator, the LC Bank, the Purchaser Agents and the Purchasers and each assignee of the Purchased Interest or any interest therein, and each Person thatenters into a commitment to purchase the Purchased Interest or interests therein, hereby covenants and agrees that it will not institute against, or join any other Person in instituting against, the Sellerany bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other proceeding under any federal or state bankruptcy or similar law, for one year and one day after the FinalPayout Date; provided, that the Administrator may take any such action with the prior written consent of the Majority Purchaser Agents and the LC Bank. The provisions of this paragraph shallsurvive any termination of this Agreement.

(c) Notwithstanding any provisions contained in this Agreement to the contrary, no Conduit Purchaser shall, or shall be obligated to, pay any amount, if any, payable by it pursuant to thisAgreement or any other Transaction Document unless (i) such Conduit Purchaser has received funds which may be used to make such payment and which funds are not required to repay such ConduitPurchaser’s Notes when due and (ii) after giving effect to such payment, either (x) such Conduit Purchaser could issue Notes to refinance all of its outstanding Notes (assuming such outstanding Notesmatured at such time) in accordance with the program documents governing such Conduit Purchaser’s securitization program or (y) all such Conduit Purchaser’s Notes are paid in full. Any amountwhich a Conduit Purchaser does not pay pursuant to the operation of the preceding sentence shall not constitute a claim (as defined in §101 of the Bankruptcy Code) against or company obligation ofsuch Conduit Purchaser for any such insufficiency unless and until such Conduit Purchaser satisfies the provisions of clauses (i) and (ii) above. The provisions of this paragraph shall survive anytermination of this Agreement.

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Section 5.6 Confidentiality.

Unless otherwise required by applicable law, each of the Seller and the Servicer agrees to maintain the confidentiality of this Agreement and the other Transaction Documents(and all drafts thereof) in communications with third parties and otherwise; provided, that this Agreement may be disclosed: (a) to third parties to the extent such disclosure is madepursuant to a written agreement of confidentiality in form and substance reasonably satisfactory to the Administrator and each Purchaser Agent, (b) to the Seller’s legal counsel,financial advisors and auditors if they agree to hold it confidential, subject to applicable law, (c) in connection with any legal proceeding arising out of or in connection with thisAgreement or any other Transaction Document or the preservation or maintenance of that party’s rights hereunder or thereunder, (d) if required to do so by a court of competentjurisdiction whether in pursuance of any procedure for discovering documents or otherwise, (e) pursuant to any law in accordance with which that party is required or accustomed toact (including applicable SEC requirements) and (f) to any Governmental Authority having jurisdiction over the Seller or the Servicer. The restrictions in the preceding sentence shallnot apply to disclosures to any party to this Agreement by any other party hereto, information already known to a recipient otherwise than in breach of this Section, information alsoreceived from another source on terms not requiring it to be kept confidential, or information that is or becomes publicly available otherwise than in breach of this Section. Unlessotherwise required by applicable law, each of the Administrator, the Purchaser Agents and the Purchasers agrees to maintain the confidentiality of non-public financial informationregarding Meritor, the Seller and the Originators; provided, that such information may be disclosed to: (i) third parties to the extent such disclosure is made pursuant to a writtenagreement of confidentiality in form and substance reasonably satisfactory to Meritor, (ii) legal counsel and auditors of the Purchasers, the Purchaser Agents or the Administrator ifthey agree to hold it confidential, (iii) any nationally recognized statistical rating organization, (iv) any Program Support Provider or potential Program Support Provider (if they agreeto hold it confidential), and (v) any placement agency placing the Notes and (vi) any Governmental Authority having jurisdiction over the Administrator, any Purchaser Agent, anyPurchaser, any Program Support Provider or any Liquidity Provider.

Section 5.7 GOVERNING LAW AND JURISDICTION.

(a) THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK(INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) EXCEPT TO THE EXTENT THAT THEVALIDITY OR PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF AJURISDICTION OTHER THAN THE STATE OF NEW YORK.

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(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THEUNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK; AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS,FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TOTHE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NONCONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENTOR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICHSERVICE MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.

Section 5.8 Execution in Counterparts.

This Agreement may be executed in any number of counterparts, each of which, when so executed, shall be deemed to be an original, and all of which, when taken together, shallconstitute one and the same agreement.

Section 5.9 Survival of Termination.

The provisions of Sections 1.7, 1.8, 1.10, 1.18, 1.19, 1.20, 1.21, 3.1, 3.2, 4.14, 5.4, 5.5, 5.6, 5.7, 5.9, 5.10 and 5.14 shall survive any termination of this Agreement.

Section 5.10 WAIVER OF JURY TRIAL.

EACH OF THE PARTIES HERETO WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUTOF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHTBY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. EACH OF THEPARTIES HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING,EACH OF THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANYPROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

Section 5.11 Entire Agreement.

This Agreement and the other Transaction Documents embody the entire agreement and understanding between the parties hereto, and supersede all prior or contemporaneousagreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof.

Section 5.12 Headings.

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The captions and headings of this Agreement and any Exhibit, Schedule or Annex hereto are for convenience of reference only and shall not affect the interpretation hereof or thereof.

Section 5.13 Right of Setoff.

Each Purchaser is hereby authorized (in addition to any other rights it may have) to setoff, appropriate and apply (without presentment, demand, protest or other notice which arehereby expressly waived) any deposits and any other indebtedness held or owing by such Purchaser (including by any branches or agencies of such Purchaser) to, or for the account of, the Selleragainst amounts owing by the Seller hereunder (even if contingent or unmatured); provided that such Purchaser shall notify Seller concurrently with such setoff.

Section 5.14 Purchaser Groups’ Liabilities.

The obligations of the Administrator, each Purchaser Agent and each Purchaser under the Transaction Documents are solely the corporate obligations of such Person. No recourse shallbe had for any obligation or claim arising out of or based upon any Transaction Document against any member, employee, officer, director or incorporator of any such Person.

Section 5.15 Sharing of Recoveries.

Each Purchaser agrees that if it receives any recovery, through set-off, judicial action or otherwise, on any amount payable or recoverable hereunder in a greater proportion than shouldhave been received hereunder or otherwise inconsistent with the provisions hereof, then the recipient of such recovery shall purchase for cash an interest in amounts owing to the other Purchasers (asreturn of Capital or otherwise), without representation or warranty except for the representation and warranty that such interest is being sold by each such other Purchaser free and clear of any AdverseClaim created or granted by such other Purchaser, in the amount necessary to create proportional participation by the Purchaser in such recovery. If all or any portion of such amount is thereafterrecovered from the recipient, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

Section 5.16 USA Patriot Act.

Each of the Administrator and each of the Purchasers hereby notifies the Seller and the Servicer that pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56(signed into law October 26, 2001) (the “PATRIOT Act”), the Administrator and the Purchasers may be required to obtain, verify and record information that identifies the Seller, the Servicer and thePerformance Guarantor, which information includes the name, address, tax identification number and other information regarding the Seller, the Servicer, the Originators and the PerformanceGuarantor that will allow the Administrator and the Purchasers to identify the Seller, the Servicer, the Originators and the Performance Guarantor in accordance with the PATRIOT Act. This notice isgiven in accordance with the requirements of the PATRIOT Act. Each of the Seller, Meritor and the Servicer agrees to provide the Administrator and the Purchasers, from time to time, with alldocumentation and other information required by bank regulatory authorities under “know your customer” and anti-money laundering rules and regulations, including, without limitation, thePATRIOT Act.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective signatories thereunto duly authorized, as of the date first above written.

ARVINMERITOR RECEIVABLES CORPORATION, as Seller

By /s/ Carl D. Anderson II



Address: ArvinMeritor ReceivablesCorporation

2135 West Maple RoadTroy, MI 48084-7186

Attention: Treasurer

Telephone: 248-435-1588email: [email protected]

701648899 12403015 S Receivables Purchase Agreement(Meritor, Inc. / ArvinMeritor Receivables Corporation)

MERITOR, INC.,

as Initial ServicerBy: /s/ Carl. D. Anderson II Name: Carl D. Anderson II Title: Treasurer

Address: Meritor, Inc.2135 West Maple RoadTroy, MI 48084-7186

Attention: Treasurer

Telephone: 248-435-1588email: [email protected]


PNC BANK, NATIONAL ASSOCIATION, as a Related Committed Purchaser and as an LC ParticipantBy: /s/ Mark Falcione Name: Mark FalcioneTitle: Senior Vice President

Address: PNC Bank, National AssociationThree PNC Plaza225 Fifth AvenuePittsburgh, PA 15222-2707

Attention: Mark FalcioneTelephone: 412-762-7325Facsimile: 412-762-9184email: [email protected] /[email protected]


PNC BANK, NATIONAL ASSOCIATION, as LC Bank By: /s/ Mark Falcione Name: Mark FalcioneTitle: Senior Vice President


Attention: Mark FalcioneTelephone: 412-762-7325Facsimile: 412-762-9184email: [email protected]/[email protected]


PNC BANK, NATIONAL ASSOCIATION, as a Purchaser Agent

By: /s/ Mark Falcione Name: Mark FalcioneTitle: Senior Vice President


Attention: Mark FalcioneTelephone: 412-762-7325Facsimile: 412-762-9184email: [email protected]/[email protected]


PNC BANK, NATIONAL ASSOCIATION,as Administrator

By: /s/ Mark Falcione___________Name: Mark FalcioneTitle: Senior Vice President

Address: PNC Bank, National Association Three PNC Plaza225 Fifth AvenuePittsburgh, PA 15222-2707

Attention: Mark FalcioneTelephone: 412-762-5327Facsimile: 412-762-9184email: [email protected]/

[email protected]


MARKET STREET FUNDING LLC, as a Conduit Purchaser

By: /s/ Doris J Hearn_____________Name: Doris J HearnTitle: Vice President

Address: Market Street Funding LLCc/o AMACAR Group, LLC6525 Morrison Blvd. Ste. 318Charlotte, NC 28211

Attention: Doris HearnTelephone: 704-365-0569Facsimile: 704-365-1362e-mail: [email protected]

With a copy to its Purchaser Agent


EXHIBIT I

DEFINITIONS

As used in the Agreement (including its Exhibits, Schedules and Annexes), the following terms shall have the following meanings (such meanings to be equally applicable to both the singularand plural forms of the terms defined). Unless otherwise indicated, all Section, Annex, Exhibit and Schedule references in this Exhibit are to Sections of and Annexes, Exhibits and Schedules to theAgreement.

“Adjusted LC Participation Amount” means, at any time, the LC Participation Amount less the amount of cash collateral held in the LC Collateral Account at such time.

“Administrator” has the meaning set forth in the preamble to the Agreement.

“Adverse Claim” means a lien, security interest or other charge or encumbrance, or any other type of preferential arrangement (including, without limitation, any lien of the Internal RevenueService or any lien relating to a Pension Plan); it being understood that any thereof in favor of, or assigned to, the Administrator (for the benefit of the Purchasers) shall not constitute an AdverseClaim.

“Affected Person” has the meaning set forth in Section 1.7(a) of the Agreement.

“Affiliate” means, as to any Person: (a) any Person that, directly or indirectly, is in control of, is controlled by or is under common control with such Person, or (b) who is a director or officer:(i) of such Person or (ii) of any Person described in clause (a), except that, in the case of each Conduit Purchaser, Affiliate shall mean the holder(s) of its capital stock or membership interests, as thecase may be. For purposes of this definition, control of a Person shall mean the power, direct or indirect: (x) to vote 25% or more of the securities having ordinary voting power for the election ofdirectors or managers of such Person, or (y) to direct or cause the direction of the management and policies of such Person, in either case whether by ownership of securities, contract, proxy orotherwise.

“Aggregate Capital” means at any time the aggregate outstanding Capital of all Purchasers at such time.

“Aggregate Discount” means, at any time, the sum of the aggregate for each Purchaser of the accrued and unpaid Discount with respect to each such Purchaser’s Capital at such time.

“Agreement” has the meaning set forth in the preamble to the Receivables Purchase Agreement to which this Exhibit I is attached and made a part.

“Ally Payoff Agreement” means that certain letter agreement, between the Seller and Ally Commercial Finance, LLC, providing for the repayment and termination of the credit facilityevidenced by that certain Loan and Security Agreement, dated as of September 8, 2009, among the Seller, as borrower, Meritor, the lenders from time to time party thereto and Ally CommercialFinance, LLC, as agent.

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“Alternate Rate” for any Settlement Period for any Capital (or portion thereof) funded by any Purchaser other than through the issuance of Notes means an interest rate per annum equal to thegreater of: (a) the sum of the Applicable Margin plus the Euro-Rate for such Settlement Period and (b) the daily average Base Rate for such Settlement Period; provided, however, that the “AlternateRate” for any day while a Termination Event has occurred and is continuing shall be an interest rate equal to the Base Rate plus 2.0% per annum; and provided, further that clause (a) above shall notapply at any time when the Base Rate is applicable to such Settlement Period, Portion of Capital or Purchaser pursuant to Section 1.9.

“Applicable Law” shall mean all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders of courts orGovernmental Authorities and all orders and decrees of all courts and arbitrators.

“Applicable Margin” has the meaning set forth in the Fee Letter.

“Attorney Costs” means and includes all reasonable fees, costs, expenses and disbursements of any law firm or other external counsel and all reasonable disbursements of internal counsel.

“Bankruptcy Code” means the United States Bankruptcy Reform Act of 1978 (11 U.S.C. § 101, et seq.), as amended from time to time.

“Base Rate” means, for any day and any Purchaser Group, a fluctuating interest rate per annum as shall be in effect from time to time, which rate shall be at all times equal to the highest of:

(a) the rate of interest in effect for such day as publicly announced from time to time by the applicable Purchaser Agent or its Affiliate as its “reference rate” or “prime rate”, asapplicable. Such “reference rate” or “prime rate” is set by the applicable Purchaser Agent or its Affiliate based upon various factors, including such Person’s costs and desired return, generaleconomic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such announced rate, and is not necessarily the lowestrate charged to any customer;

(b) 0.50% per annum above the latest Federal Funds Rate; and

(c) the sum of the Applicable Margin plus the Euro-Rate applicable to the Settlement Period for which the Base Rate is then being determined; provided, however, that this clause (c)shall not apply at any time when the Base Rate is applicable pursuant to Section 1.9.

“Business Day” means any day (other than a Saturday or Sunday) on which: (a) banks are not authorized or required to close in Troy, MI, New York, NY or Pittsburgh, PA; and (b) if thisdefinition of “Business Day” is utilized in connection with the Euro-Rate, dealings are carried out in the London interbank market.

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“Capital” means, with respect to any Purchaser, without duplication, the aggregate amounts (i) paid to, or on behalf of, the Seller in connection with all Funded Purchases made by suchPurchaser pursuant to Sections 1.2(b) and 1.1(b) of the Agreement, (ii) paid by such Purchaser, as an LC Participant, to the LC Bank in respect of a Participation Advance made by such Purchaser toLC Bank pursuant to Section 1.14(c) of the Agreement and (iii) with respect to the Purchaser that is the LC Bank, paid by the LC Bank with respect to all drawings under the Letter of Credit to theextent such drawings have not been reimbursed by the Seller or funded by Participation Advances, as reduced from time to time by Collections distributed and applied on account of such Capitalpursuant to Section 1.4(d) of the Agreement; provided, that if such Capital shall have been reduced by any distribution and thereafter all or a portion of such distribution is rescinded or must otherwisebe returned for any reason, such Capital shall be increased by the amount of such rescinded or returned distribution as though it had not been made.

“Capital Stock” means, with respect to any Person, any and all common shares, preferred shares, interests, participations, rights in or other equivalents (however designated) of such Person’scapital stock, partnership interests, limited liability company interests, membership interests or other equivalent interests and any rights (other than debt securities convertible into or exchangeable forcapital stock), warrants or options exchangeable for or convertible into such capital stock or other equity interests.

“Change in Control” means the occurrence of any of the following:

(a) Meritor ceases to own, directly, 100% of the issued and outstanding capital stock and all other equity interests of the Seller free and clear of all Adverse Claims;

(b) Meritor ceases to own, directly or indirectly, 100% of the issued and outstanding capital stock, membership interests or other equity interests of any Originator free and clear ofall Adverse Claims; or

(c) with respect to Meritor:

(i) any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3under the Securities Exchange Act), directly or indirectly, of thirty-five percent (35%) or more of the voting power of the then outstanding capital stock of Meritor entitled to votegenerally in the election of the directors of Meritor;

(ii) during any period of twelve (12) consecutive calendar months, the board of directors of Meritor shall cease to have as a majority of its members individuals who either:(i) were directors of Meritor on the first day of such period, or (ii) were elected or nominated for election to the board of directors of Meritor at the recommendation of or otherapproval by at least a majority of the directors then still in office at the time of such election or nomination who were directors of Meritor on the first day of such period, or whoseelection or nomination for election was so approved; or

(iii) Meritor consolidates with or merges into another corporation (other than a Subsidiary of Meritor) or conveys, transfers or leases all or substantially all of its property toany person (other than a Subsidiary of Meritor), or any corporation (other than a Subsidiary of Meritor) consolidates with or merges into Meritor, in either event pursuant to atransaction in which the outstanding capital stock of Meritor is reclassified or changed into or exchanged for cash, securities or other property;

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provided, that no pledge of the outstanding capital stock, membership interest or other equity interests of the Seller or any Originator under the Meritor Credit Agreement shall constitute a Change inControl.

“Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule,regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline ordirective (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform andConsumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank forInternational Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III,shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Closing Date” means June 18, 2012.

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

“Collections” means, with respect to any Pool Receivable: (a) all funds that are received by any Originator, the Seller, the Servicer or any other Person in payment of any amounts owed inrespect of such Receivable (including purchase price, finance charges, interest and all other charges), or applied to amounts owed in respect of such Receivable (including insurance payments and netproceeds of the sale or other disposition of repossessed goods or other collateral or property of the related Obligor or any other Person directly or indirectly liable for the payment of such PoolReceivable and available to be applied thereon), (b) all amounts deemed to have been received pursuant to Section 1.4(e) of the Agreement and (c) all other proceeds of such Pool Receivable.

“Commitment” means, with respect to any Related Committed Purchaser, LC Participant or LC Bank, as applicable, the maximum aggregate amount which such Purchaser is obligated to payhereunder on account of all Funded Purchases and all drawings under all Letters of Credit, on a combined basis, as set forth on Schedule IV or in the Transfer Supplement or other agreement pursuantto which it became a Purchaser, as such amount may be modified in connection with any subsequent assignment pursuant to Section 5.3 or in connection with a reduction in the Maximum PurchaseLimit pursuant to Section 1.1(c) of the Agreement. If the context so requires, “Commitment” also refers to a Purchaser’s obligation to make Purchases, make Participation Advances and/or issueLetters of Credit hereunder.

“Commitment Percentage” means, for each Related Committed Purchaser or related LC Participant in a Purchaser Group, the Commitment of such Related Committed Purchaser or related LCParticipant, as the case may be, dividedby the total of all Commitments of all Related Committed Purchasers or related LC Participants, as the case may be, in such Purchaser Group.

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“Concentration Percentage” means (a) except as provided in clause (b) below, (i) for any Group A Obligor, 15.00%, (ii) for any Group B Obligor, 12.50%, (iii) for any Group C Obligor, 7.50%and (iv) for any Group D Obligor, 5.00% and (b) for each of Oshkosh Corporation and Daimler Trucks North America LLC (each, a “Special Obligor”), 20.00% (the “Special Concentration Limit”);provided, however, that the Administrator (with the prior written consent of each Purchaser Agent) may (to the extent the Rating Agency Condition has been satisfied with respect thereto if requiredby the securitization program of any Conduit Purchaser) approve higher “Concentration Percentages” for selected Obligors; provided, further, that the Administrator may, upon not less than five (5)Business Days’ notice to Seller, cancel or reduce the Special Concentration Limit with respect to any or all Special Obligors, in which case the Concentration Percentage for such Special Obligor(s)shall be determined pursuant to clause (a) above. In the event that any other Obligor is or becomes an Affiliate of a Special Obligor, the Special Concentration Limit shall apply to both such Obligorand such Special Obligor and shall be calculated as if such Obligor and such Special Obligor were a single Obligor.

“Concentration Reserve” means, on any date, an amount equal to: (a) the sum of the Aggregate Capital plus the Adjusted LC Participation Amount on such date multipliedby (b)(i) theConcentration Reserve Percentage on such date, dividedby (ii) 100%, minus the Concentration Reserve Percentage on such date.

“Concentration Reserve Percentage” means, at any time, the largest of: (a) the sum of the four (4) largest Obligor Percentages of the Group D Obligors, (b) the sum of the two (2) largestObligor Percentages of the Group C Obligors, (c) the largest Obligor Percentage of the Group B Obligors and (d) the largest Obligor Percentage of the Group A Obligors.

“Conduit Purchaser” means Market Street Funding LLC and each other commercial paper conduit that is or becomes a party to this Agreement as a “Conduit Purchaser.”

“Contract” means, with respect to any Receivable or Excluded Receivable, any and all contracts, instruments, agreements, leases, invoices, notes or other writings pursuant to which suchReceivable or Excluded Receivables arises or that evidence such Receivable or Excluded Receivable or under which an Obligor becomes or is obligated to make payment in respect of such Receivableor Excluded Receivable.

“Controlled Group” means all members of a controlled group of corporations or other business entities and all trades or businesses (whether or not incorporated) under common control which,together with Meritor or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code.

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“CP Rate” means, for any Conduit Purchaser and for any Settlement Period for any Portion of Capital (a) the perannum rate equivalent to the weighted average cost (as determined by theapplicable Purchaser Agent and which shall include commissions of placement agents and dealers, incremental carrying costs incurred with respect to Notes of such Person maturing on dates otherthan those on which corresponding funds are received by such Conduit Purchaser, other borrowings by such Conduit Purchaser (other than under any Program Support Agreement) and any other costsassociated with the issuance of Notes) of or related to the issuance of Notes that are allocated, in whole or in part, by the applicable Conduit Purchaser to fund or maintain such Portion of Capital (andwhich may be also allocated in part to the funding of other assets of such Conduit Purchaser); provided, however, that if any component of such rate is a discount rate, in calculating the “CP Rate” forsuch Portion of Capital for such Settlement Period, the applicable Purchaser Agent shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalentrate perannum; provided, further, that notwithstanding anything in this Agreement or the other Transaction Documents to the contrary, the Seller agrees that any amounts payable to Conduit Purchasersin respect of Discount for any Settlement Period with respect to any Portion of Capital funded by such Conduit Purchasers at the CP Rate shall include an amount equal to the portion of the faceamount of the outstanding Notes issued to fund or maintain such Portion of Capital that corresponds to the portion of the proceeds of such Notes that was used to pay the interest component ofmaturing Notes issued to fund or maintain such Portion of Capital, to the extent that such Conduit Purchaser had not received payments of interest in respect of such interest component prior to thematurity date of such maturing Notes (for purposes of the foregoing, the “interest component” of Notes equals the excess of the face amount thereof over the net proceeds received by such ConduitPurchaser from the issuance of Notes, except that if such Notes are issued on an interest-bearing basis its “interest component” will equal the amount of interest accruing on such Notes throughmaturity) or (b) any other rate designated as the “CP Rate” for such Conduit Purchaser in the Transfer Supplement or other document pursuant to which such Person becomes a party as a ConduitPurchaser to this Agreement, or any other writing or agreement provided by such Conduit Purchaser to the Seller, the Servicer and the applicable Purchaser Agent from time to time. The “CP Rate” forany Conduit Purchaser for any day while a Termination Event has occurred and is continuing shall be an interest rate equal to 2.0% per annum above the Base Rate.

“Credit and Collection Policy” means, as the context may require, those receivables credit and collection policies and practices of the Originators in effect on the Closing Date and described inSchedule I to the Agreement, as modified in compliance with the Agreement.

“Days’ Sales Outstanding” means, for any Fiscal Month, an amount computed as of the last day of such Fiscal Month equal to: (a) the average of the Outstanding Balance of all PoolReceivables as of the last day of each of the three most recent Fiscal Months ended on the last day of such Fiscal Month,dividedby (b) (i) the aggregate initial Outstanding Balance of all PoolReceivables originated by the Originators during the three most recent Fiscal Months ended on the last day of such Fiscal Month, dividedby (ii) 90.

“Debt” means, as to any Person at any time, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute orcontingent, or joint or several) of such Person for or in respect of: (i) borrowed money, (ii) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility,(iii) reimbursement obligations (contingent or otherwise) under any letter of credit, (iv) any other transaction (including production payments (excluding royalties), installment purchase agreements,forward sale or purchase agreements, capitalized leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operationsor capital requirements (but not including accounts payable incurred in the ordinary course of such Person's business payable on terms customary in the trade), or (v) any Guaranty of any suchIndebtedness.

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“Default Ratio” means the ratio (expressed as a percentage and rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the last day of each Fiscal Month bydividing: (a) the aggregate Outstanding Balance of all Pool Receivables that became Defaulted Receivables during such month, by (b) the Outstanding Balance of all Pool Receivables generated by theOriginators during the month that is three Fiscal Months before such month.

“Defaulted Receivable” means a Receivable:

(a) as to which any payment, or part thereof, remains unpaid for more than 60 daysfrom the original due date for such payment, or

(b) (i) as to which an Insolvency Proceeding shall have occurred with respect to the Obligor thereof or any other Person obligated thereon or owning any Related Security withrespect thereto or (ii) that has been written off the applicable Originator’s or Seller’s books as uncollectible.

“Delinquency Ratio” means the ratio (expressed as a percentage and rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the last day of each FiscalMonth by dividing: (a) the aggregate Outstanding Balance of all Pool Receivables that were Delinquent Receivables on such day by (b) the aggregate Outstanding Balance of all Pool Receivables onsuch day.

“Delinquent Receivable” means a Receivable as to which any payment, or part thereof, remains unpaid for more than 30 days from the original due for such payment.

“Dilution Horizon Ratio” means, for any Fiscal Month, the ratio (expressed as a percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward) computed as ofthe last day of such Fiscal Month of: (a) the sum of (i) the aggregate initial Outstanding Balance of all Pool Receivables generated by the Originators during such Fiscal Month, plus (ii) 25.00% of theaggregate initial Outstanding Balance of all Pool Receivables generated by the Originators during the preceding Fiscal Month, to (b) the Net Receivables Pool Balance at the last day of such FiscalMonth.

“Dilution Ratio” means the ratio (expressed as a percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward), computed as of the last day of each Fiscal Monthby dividing: (a) the aggregate amount deemed to have been received by the Seller pursuant to Section 1.4(e)(i) of the Agreement during such Fiscal Month by (b) the product of (i) the aggregate initialOutstanding Balance of all Pool Receivables generated by the Originators during the Fiscal Month that is one month prior to such Fiscal Month, times (ii) (x) if the Fiscal Month for which such ratio isbeing calculated is February, May, August or November, 1.00, (y) if the Fiscal Month for which such ratio is being calculated is March, June, September or December, 1.25, or (z) if such ratio is beingcalculated for any other Fiscal Month, 0.80.

“Dilution Reserve” means, on any day, an amount equal to: (a) the Aggregate Capital plus the Adjusted LC Participation Amount at the close of business of the Servicer on such daymultipliedby (b) (i) the Dilution Reserve Percentage on such day, dividedby (ii) 100% minus the Dilution Reserve Percentage on such day.

“Dilution Reserve Percentage” means, on any day, the product of (a) the Dilution Horizon Ratio multipliedby (b) the sum of (i) 2.25 times the average of the Dilution Ratios for the twelvemost recent Fiscal Monthsand (ii) the Dilution Volatility Component.

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“Dilution Volatility Component” means, for any Fiscal Month, (a) the positive difference, if any, between: (i) the highest average of the Dilution Ratio for any two consecutive Fiscal Monthsduring the twelve most recent Fiscal Months and (ii) the arithmetic average of the Dilution Ratios for such twelve months times (b) (i) the highest average of the Dilution Ratio for any two consecutiveFiscal Months during the twelve most recent Fiscal Months dividedby (ii) the arithmetic average of the Dilution Ratios for such twelve months.

“Discount” means, with respect to any Purchaser:

(a) for any Portion of Capital for any Settlement Period with respect to any Purchaser to the extent such Portion of Capital will be funded by such Purchaser during such SettlementPeriod through the issuance of Notes:

CPR x C x ED/360

(b) for any Portion of Capital for any Settlement Period with respect to any Purchaser to the extent such Portion of Capital will not be funded by such Purchaser during suchSettlement Period through the issuance of Notes or, if the LC Bank has made, or has deemed to have made, a Funded Purchase in connection with any drawing under a Letter of Credit that hasnot been reimbursed pursuant to Section 1.14 of the Agreement:

AR x C x ED/Year

where:

AR = the Alternate Rate for such Portion of Capital for such Settlement Period with respect to such Purchaser,

C = the Portion of Capital during such Settlement Period with respect to such Purchaser,

CPR = the CP Rate for the Portion of Capital for such Settlement Period with respect to such Purchaser,

ED = the actual number of days during such Settlement Period, and

Year = if such Portion of Capital is funded based upon: (i) the Euro-Rate, 360 days, and (ii) the Base Rate (other than pursuant to clause (c) of the definition thereof), 365 or 366days, as applicable;

provided, that no provision of the Agreement shall require the payment or permit the collection of Discount in excess of the maximum permitted by applicable law; andprovidedfurther, that Discount for the Portion of Capital shall not be considered paid by any distribution to the extent that at any time all or a portion of such distribution is rescindedor must otherwise be returned for any reason.

“Drawing Date” has the meaning set forth in Section 1.14 of the Agreement.

“Eligible Receivable” means, at any time, a Pool Receivable:

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(a) the Obligor of which is: (i) a resident of the United States of America or another country with long-term sovereign debt ratings of at least “A” by Standard & Poor’s and “A2” byMoody’s; (ii) not a government or a governmental subdivision, affiliate or agency; (iii) not subject to any Insolvency Proceeding; (iv) not an Affiliate of Meritor, the Seller, the Servicer or anyOriginator; and (v) not the Obligor with respect to Delinquent Receivables with an aggregate Outstanding Balance exceeding 50% of the aggregate Outstanding Balance of all such Obligor’sPool Receivables;

(b) that is denominated and payable only in U.S. dollars in the United States of America, and the Obligor with respect to which has been instructed to remit Collections in respectthereof to a Lock-Box or Lock-Box Account in the United States of America;

(c) that does not have a due date which is more than 180 days after the original invoice date of such Receivable;

(d) that arises under a duly authorized Contract for the sale and delivery of goods or services in the ordinary course of the applicable Originator’s business;

(e) that arises under a duly authorized Contract that is in full force and effect and that is a legal, valid and binding obligation of the related Obligor, enforceable against such Obligorin accordance with its terms;

(f) that conforms in all material respects with all applicable laws, rulings and regulations in effect;

(g) that is not subject to any right of rescission, set-off (including, without limitation, any such right arising from an Obligor making a deposit or similar payment to an Originator),counterclaim, any other defense against the applicable Originator (as its assignee) or Adverse Claim, and the Obligor of which holds no right as against the applicable Originator to cause suchOriginator to repurchase the goods or merchandise, the sale of which shall have given right to such Receivable;

(h) that satisfies all applicable requirements of the applicable Credit and Collection Policy;

(i) that has not been modified, waived or restructured since its creation, except as permitted pursuant to Section 4.2 of the Agreement;

(j) in which the Seller owns good and marketable title, free and clear of any Adverse Claims, and that is freely assignable by the Seller (including without any consent of the relatedObligor);

(k) for which the Administrator (on behalf of the Purchasers) shall have a valid and enforceable undivided percentage ownership or security interest, to the extent of the PurchasedInterest, and a valid and enforceable first priority perfected security interest therein and in the Related Security and Collections with respect thereto, in each case free and clear of any AdverseClaim;

(l) that constitutes an “account” as defined in the UCC, and that is not evidenced by instruments or chattel paper;

(m) that is neither a Defaulted Receivable nor a Delinquent Receivable;

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(n) for which none of the Originator thereof, the Seller or the Servicer has established any offset or netting arrangements with the related Obligor in connection with the ordinarycourse of payment of such Receivable;

(o) that represents amounts earned and payable by the Obligor that are not subject to the performance of additional services by the Originator thereof or by the Seller and suchReceivable shall have been billed or invoiced by the Servicer; and

(p) that is not an Existing Navistar Receivable.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any rule or regulation issued thereunder.

“Euro-Rate” means with respect to any Settlement Period the interest rate per annum determined by the Administrator (which determination shall be conclusive absent manifest error) bydividing (the resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the average of the London interbank market offered rates for U.S. dollars quoted by theBritish Bankers’ Association (“BBA”) as set forth on Dow Jones Markets Service display page 3750 (or on any successor or substitute page of such service, or any successor to or substitute for suchservice, in either case, providing rate quotations comparable to those currently provided on such page of such service, as selected by the Administrator for purposes of providing quotations of interestrates applicable to U.S. dollar deposits in the London interbank market) at or about 11:00 a.m. (London time) on the Business Day which is two (2) Business Days prior to the first day of suchSettlement Period for an amount comparable to the Portion of Capital to be funded at the Alternate Rate and based upon the Euro-Rate during such Settlement Period by (ii) a number equal to 1.00minus the Euro-Rate Reserve Percentage. The Euro-Rate may also be expressed by the following formula:

Average of London interbank offered rates quoted by BBA

as shown on Dow Jones Markets Service display page 3750

or appropriate successor

Euro-Rate =

1.00 - Euro-Rate Reserve Percentage

where “Euro-Rate Reserve Percentage” means, the maximum effective percentage in effect on such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) fordetermining the reserve requirements (including without limitation, supplemental, marginal, and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as“Eurocurrency Liabilities”). The Euro-Rate shall be adjusted with respect to any Portion of Capital funded at the Alternate Rate and based upon the Euro-Rate that is outstanding on the effective dateof any change in the Euro-Rate Reserve Percentage as of such effective date. The Administrator shall give prompt notice to the Seller of the Euro-Rate as determined or adjusted in accordanceherewith (which determination shall be conclusive absent manifest error).

“Excess Concentration” means, without duplication, the sum of the following amounts:

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(a) the sum of the amounts calculated for each of the Obligors equal to the excess (if any) of (i) aggregate Outstanding Balance of the Eligible Receivables of such Obligor, over (ii)the product of (x) such Obligor’s Concentration Percentage, multipliedby (y) the aggregate Outstanding Balance of all Eligible Receivables; plus

(b) the amount by which (i) the aggregate Outstanding Balance of all Eligible Receivables, the Obligors of which are residents of countries other than the United States of America,exceeds (ii) 8.00% of the aggregate Outstanding Balance of all Eligible Receivables.

“Excluded Obligor” means each of the Persons identified on Schedule VI to this Agreement, as such Schedule may be amended by the Seller from time to time by written notice to theAdministrator identifying one or more other Persons who purchase goods or services from an Originator for use in the business of Volvo or Mack or their Affiliates, and who are "Permitted Obligors,"as such term is defined in the Receivables Purchase Agreement, dated as of October 29, 2010, between the Originators, as Sellers, Viking Asset Purchaser No 7 IC, as Initial Purchaser, and the otherPersons from time to time parties thereto as purchasers (as amended, modified, supplemented, restated, refinanced, refunded or replaced and in effect from time to time), and specifying the effectivedate of such designation; provided that if a Person so identified as a Permitted Obligor has been, after the Closing Date, an Obligor of a Pool Receivable, then such designation shall not be effective,and Schedule VI shall not be amended, until the Administrator consents thereto in writing.

“Excluded Receivable” means any Receivable (as defined without giving effect to the proviso in the definition thereof regarding Excluded Receivables) that (i) is owed to an Originator by anAffiliate of the Originator, (ii) arises from the sale to an Obligor of steel inventory acquired by an Originator solely for the purpose of reselling the steel or other raw materials inventory to suchObligor to be used by such Obligor to manufacture goods for the Originator, (iii) arises from the sale of goods or the provision of services by an Originator to an Excluded Obligor in respect of whichan invoice was or is issued for the first time after the later of October 28, 2010, or the effective date of such Person's designation as an Excluded Obligor in accordance with the terms hereof, (iv) arisesfrom the sale of goods or the provision of services by an Originator to Sistemas Automotrices de Mexico S.A. de C.V. in respect of which an invoice is issued for the first time on or after the ClosingDate or (v) arises from the sale of goods or the provision of services by an Originator to Navistar, Inc., IC Bus, LLC, SST Truck Company, LLC, or Navistar Diesel of Alabama, LLC in respect ofwhich an invoice is issued for the first time on or after the Closing Date.

“Excluded Taxes” shall mean, with respect to the Administrator, a Purchaser, a Purchaser Agent or any other recipient of any payment to be made by or on account of any obligation of theSeller hereunder, taxes imposed on, or measured by, net income or net profits, overall capital or net worth, franchise or branch profits taxes or any similar taxes, and any taxes on doing businessimposed by the jurisdiction (i) under the Applicable Laws of which such recipient is incorporated or organized, (ii) in which an applicable office or branch of such recipient is located or (iii) in whichsuch recipient has a present or former connection (other than a connection arising solely from such recipient having executed, delivered, enforced, become a party to, performed its obligations,received payments, received or perfected a security interest under, or engaged in any other transaction in accordance with the terms of this Agreement) that causes the imposition of such tax.

“Existing Navistar Receivable” means any Receivable arising from the sale of goods or the provision of services by an Originator to Navistar, Inc., IC Bus, LLC, SST Truck Company, LLC, orNavistar Diesel of Alabama, LLC in respect of which an invoice is issued for the first time prior to the Closing Date.

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“Exiting Notice” has the meaning set forth in Section 1.4(b)(ii) of this Agreement.

“Exiting Purchaser” has the meaning set forth in Section 1.4(b)(ii) of this Agreement.

“Facility Termination Date” means with respect to any Purchaser, the earliest to occur of: (a) the Scheduled Commitment Termination Date with respect to such Purchaser (b) the datedetermined pursuant to Section 2.2 of the Agreement, and (c) the date which is 60 days after the date on which the Administrator has received written notice from the Seller of its election to terminatethe Purchase Facility pursuant to Section 1.1(c).

“Federal Funds Rate” means, for any day, the per annum rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the Federal ReserveBoard (including any such successor, “H.15(519)”) for such day opposite the caption “Federal Funds (Effective).” If on any relevant day such rate is not yet published in H. 15(519), the rate for suchday will be the rate set forth in the daily statistical release designated as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or any successor publication, published by the FederalReserve Bank of New York (including any such successor, the “Composite 3:30 p.m. Quotations”) for such day under the caption “Federal Funds Effective Rate.” If on any relevant day the appropriaterate is not yet published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will be the arithmetic mean as determined by the Administrator of the rates for the lasttransaction in overnight Federal funds arranged before 9:00 a.m. (New York time) on that day by each of three leading brokers of Federal funds transactions in New York City selected by theAdministrator.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System, or any entity succeeding to any of its principal functions.

“Fee Letter” has the meaning set forth in Section 1.5 of the Agreement.

“Fees” means the fees payable by the Seller pursuant to the applicable Fee Letter.

“Final Payout Date” means the date on or after the Facility Termination Date when (i) the Aggregate Capital and Aggregate Discount have been paid in full, (ii) the LC Participation Amounthas been reduced to zero ($0) and no Letters of Credit issued hereunder remain outstanding, (iii) all other amounts owing to the Purchasers, the Purchaser Agents, the Administrator and any otherIndemnified Party or Affected Person hereunder and under the other Transaction Documents have been paid in full and (iv) all accrued Servicing Fees have been paid in full.

“Fiscal Month” means each calendar month.

“Fitch” means Fitch, Inc. and any successor thereto that is a nationally recognized statistical rating organization.

“Funded Purchase” shall mean (a) a Purchase that (i) is made pursuant to Section 1.2(b) or (ii) deemed to have been requested by Seller pursuant to Section 1.1(b), the proceeds of which areused to reimburse the LC Bank on behalf of Seller for a drawing under a Letter of Credit by the Seller and (b) a Participation Advance made by an LC Participant pursuant to Section 1.14(c).

“Governmental Acts” has the meaning set forth in Section 1.19 of the Agreement.

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“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority,instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government(including any supra-national bodies such as the European Union or the European Central Bank).

“Group A Obligor” means any Obligor (or its parent or majority owner, as applicable, if such Obligor is not rated) with a short-term rating of at least: (a) “A-1” by Standard & Poor’s, or ifsuch Obligor does not have a short-term rating from Standard & Poor’s, a rating of “A+” or better by Standard & Poor’s on such Obligor’s, its parent’s, or its majority owner’s (as applicable) long-term senior unsecured and uncredit-enhanced debt securities, and (b) “P‑1” by Moody’s, or if such Obligor does not have a short-term rating from Moody’s, “Al” or better by Moody’s on suchObligor’s, its parent’s or its majority owner’s (as applicable) long-term senior unsecured and uncredit-enhanced debt securities; provided, that if an Obligor (or its parent or majority owner, asapplicable, if such Obligor is not rated) receives a split rating from Standard & Poor’s and Moody’s, then such Obligor (or its parent or majority owner, as applicable) shall be deemed to have therating from each of Standard & Poor’s and Moody’s as determined in accordance with the rules of construction found in the final paragraph of this Exhibit I, and such deemed rating shall be used forthe purposes of whether such rating satisfies clauses (a) and (b) above.Notwithstanding the foregoing, any Obligor that is a Subsidiary of an Obligor that satisfies the definition of “Group A Obligor”shall be deemed to be a Group A Obligor and shall be aggregated with the Obligor that satisfies such definition for the purposes of determining the “Concentration Reserve Percentage”, the“Concentration Reserve” and clause (i) of the definition of “Excess Concentration” for such Obligors, unless such deemed Obligor separately satisfies the definition of “Group A Obligor”, “Group BObligor”, or “Group C Obligor”, in which case such Obligor shall be separately treated as a Group A Obligor, a Group B Obligor or a Group C Obligor, as the case may be, and shall be aggregated andcombined for such purposes with any of its Subsidiaries that are Obligors.

“Group B Obligor” means an Obligor (or its parent or majority owner, as applicable, if such Obligor is not rated) that is not a Group A Obligor, with a short-term rating of at least: (a) “A‑2” byStandard & Poor’s, or if such Obligor does not have a short-term rating from Standard & Poor’s, a rating of “BBB+” to “A” by Standard & Poor’s on such Obligor’s, its parent’s or its majority owner’s(as applicable) long-term senior unsecured and uncredit-enhanced debt securities, and (b) “P‑2” by Moody’s, or if such Obligor does not have a short-term rating from Moody’s, “Baal” to “A2” byMoody’s on such Obligor’s, its parent’s or its majority owner’s (as applicable) long-term senior unsecured and uncredit-enhanced debt securities; provided, that if an Obligor (or its parent or majorityowner, as applicable, if such Obligor is not rated) receives a split rating from Standard & Poor’s and Moody’s, then such Obligor (or its parent or majority owner, as applicable) shall be deemed tohave the rating from each of Standard & Poor’s and Moody’s as determined in accordance with the rules of construction found in the final paragraph of this Exhibit I, and such deemed rating shall beused for the purposes of whether such rating satisfies clauses (a) and (b) above.Notwithstanding the foregoing, any Obligor that is a Subsidiary of an Obligor that satisfies the definition of “Group BObligor” shall be deemed to be a Group B Obligor and shall be aggregated with the Obligor that satisfies such definition for the purposes of determining the “Concentration Reserve Percentage”, the“Concentration Reserve” and clause (i) of the definition of “Excess Concentration” for such Obligors, unless such deemed Obligor separately satisfies the definition of “Group A Obligor”, “Group BObligor”, or “Group C Obligor”, in which case such Obligor shall be separately treated as a Group A Obligor, a Group B Obligor or a Group C Obligor, as the case may be, and shall be aggregated andcombined for such purposes with any of its Subsidiaries that are Obligors.

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“Group C Obligor” means an Obligor (or its parent or majority owner, as applicable, if such Obligor is not rated) that is not a Group A Obligor or a Group B Obligor, with a short-term ratingof at least: (a) “A‑3” by Standard & Poor’s, or if such Obligor does not have a short-term rating from Standard & Poor’s, a rating of “BBB-” to “BBB” by Standard & Poor’s on such Obligor’s, itsparent’s or it’s majority owner’s (as applicable) long-term senior unsecured and uncredit-enhanced debt securities, and (b) “P‑3” by Moody’s, or if such Obligor does not have a short-term rating fromMoody’s, “Baa3” to “Baa2” by Moody’s on such Obligor’s, its parent’s or its majority owner’s (as applicable) long-term senior unsecured and uncredit-enhanced debt securities; provided, that if anObligor (or its parent or majority owner, as applicable, if such Obligor is not rated) receives a split rating from Standard & Poor’s and Moody’s, then such Obligor (or its parent or majority owner, asapplicable) shall be deemed to have the rating from each of Standard & Poor’s and Moody’s as determined in accordance with the rules of construction found in the final paragraph of this Exhibit I,and such deemed rating shall be used for the purposes of whether such rating satisfies clauses (a) and (b) above.Notwithstanding the foregoing, any Obligor that is a Subsidiary of an Obligor thatsatisfies the definition of “Group C Obligor” shall be deemed to be a Group C Obligor and shall be aggregated with the Obligor that satisfies such definition for the purposes of determining the“Concentration Reserve Percentage”, the “Concentration Reserve” and clause (i) of the definition of “Excess Concentration” for such Obligors, unless such deemed Obligor separately satisfies thedefinition of “Group A Obligor”, “Group B Obligor”, or “Group C Obligor”, in which case such Obligor shall be separately treated as a Group A Obligor, a Group B Obligor or a Group C Obligor, asthe case may be, and shall be aggregated and combined for such purposes with any of its Subsidiaries that are Obligors.

“Group Capital” means, with respect to any Purchaser Group, an amount equal to the aggregate outstanding Capital of all Purchasers within such Purchaser Group.

“Group Commitment” means, with respect to any Purchaser Group at any time, the aggregate Commitments of all Related Committed Purchasers within such Purchaser Group.

“Group D Obligor” means any Obligor that is not a Group A Obligor, Group B Obligor or Group C Obligor; provided, that any Obligor (or its parent or majority owner, as applicable, if suchObligor is unrated) that is not rated by both Moody’s and Standard & Poor’s shall be a Group D Obligor.

“Guaranty” of any Person means any obligation of such Person guarantying or in effect guarantying any liability or obligation of any other Person in any manner, whether directly or indirectly,including any such liability arising by virtue of partnership agreements, including any agreement to indemnify or hold harmless any other Person, any performance bond or other suretyshiparrangement and any other form of assurance against loss, except endorsement of negotiable or other instruments for deposit or collection in the ordinary course of business.

“Indemnified Amounts” has the meaning set forth in Section 3.1 of the Agreement.

“Indemnified Party” has the meaning set forth in Section 3.1 of the Agreement.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Independent Director” has the meaning set forth in paragraph 3(c) of Exhibit IV to the Agreement.

“Information Package” means each Monthly Information Package and each Weekly Information Package.

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“Insolvency Proceeding” means (a) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation,receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors of a Person, composition, marshaling of assets for creditors of a Person, or other,similar arrangement in respect of its creditors generally or any substantial portion of its creditors, in each of cases (a) and (b) undertaken under U.S. Federal, state or foreign law, including theBankruptcy Code.

“Intended Tax Treatment” has the meaning set forth in Section 1.21.

“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the Closing Date, among JPMorgan Chase Bank, N.A., the Administrator, Viking Asset Purchaser No 7 andthe other Persons from time to time party thereto, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“LC Bank” has the meaning set forth in the preamble to the Agreement.

“LC Collateral Account” means the account at any time designated as the LC Collateral Account established and maintained by the Administrator (for the benefit of the LC Bank and the LCParticipants), or such other account as may be so designated as such by the Administrator.

“LC Participant” means each Person listed as such (and its respective Commitment) for each Purchaser Group as set forth on the signature pages of this Agreement or in anyTransfer Supplement.

“LC Participation Amount” means at any time, the sum of the amounts then available to be drawn under all outstanding Letters of Credit.

“Letter of Credit” means any stand-by letter of credit issued by the LC Bank at the request of the Seller pursuant to the Agreement.

“Letter of Credit Application” has the meaning set forth in Section 1.12 of the Agreement.

“Liquidity Agent” means any bank or other financial institution acting as agent for the various Liquidity Providers under each Liquidity Agreement.

“Liquidity Agreement” means any agreement entered into in connection with this Agreement pursuant to which a Liquidity Provider agrees to make purchases or advances to, or purchaseassets from, any Conduit Purchaser in order to provide liquidity for such Conduit Purchaser’s Purchases.

“Liquidity Provider” means each bank or other financial institution that provides liquidity support to any Conduit Purchaser pursuant to the terms of a Liquidity Agreement.

“Lock-Box” means each locked postal box with respect to which a Lock-Box Bank who has executed a Lock-Box Agreement pursuant to which it has been granted exclusive access for thepurpose of retrieving and processing payments made on the Receivables and which is listed on Schedule II (as such schedule may be modified from time to time in connection with the addition orremoval of any Lock-Box in accordance with the terms hereof).

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“Lock-Box Account” means each account listed on Schedule II to this Agreement (as such schedule may be modified from time to time in connection with the closing or opening of any Lock-Box Account in accordance with the terms hereof) (in each case, in the name of the Seller) and maintained at a bank or other financial institution acting as a Lock-Box Bank pursuant to a Lock-BoxAgreement for the purpose of receiving Collections.

“Lock-Box Agreement” means each agreement, in form and substance satisfactory to the Administrator, among the Seller, the Servicer (if applicable), the Administrator and a Lock-Box Bank,governing the terms of the related Lock-Box Accounts, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Lock-Box Bank” means any of the banks or other financial institutions holding one or more Lock-Box Accounts.

“Loss Horizon Ratio” means, on any date, the ratio (expressed as a percentage and rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed by dividing: (a) thesum of (i) the aggregate initial Outstanding Balance of all Pool Receivables generated by the Originators during the two (2) most recent Fiscal Months, plus (ii) the product of (x) the aggregate initialOutstanding Balance of all Pool Receivables generated by the Originators during the third most recently ended Fiscal Month, times (y) 25.00%, plus (iii) the product of (x) the aggregate initialOutstanding Balance of all Pool Receivables generated by the Originators during the fourth most recently ended Fiscal Month, times (y) the quotient of (A) the Weighted Average Credit Term Factor,dividedby (B) 30, by (b) the Net Receivables Pool Balance as of such date.

“Loss Reserve” means, on any date, an amount equal to: (a) the sum of the Aggregate Capital plus the Adjusted LC Participation Amount at the close of business of the Servicer on such datemultipliedby (b) (i) the Loss Reserve Percentage on such date dividedby (ii) 100% minus the Loss Reserve Percentage on such date.

“Loss Reserve Percentage” means, on any date, the product of (a) 2.25, times (b) the highest average of the Default Ratios for any three consecutive Fiscal Months during the twelve mostrecent Fiscal Months, times (c) the Loss Horizon Ratio.

“Majority LC Participants” means, at any time, the LC Participants whose Commitments aggregate more than 50% of the Commitments of all LC Participants at such time.

“Majority Purchaser Agents” means, at any time, the Purchaser Agents for the Purchaser Groups with Related Committed Purchasers whose Commitments aggregate more than 50% of theaggregate of all Group Commitments.

“Material Adverse Effect” means relative to any Person (provided that if no particular Person is specified, “Material Adverse Effect” shall be deemed to be relative to the Seller, the Servicer,Meritor and the Originators, individually and in the aggregate) with respect to any event or circumstance, a material adverse effect on:

(a) the assets, operations, business or financial condition of such Person,

(b) the ability of any such Person to perform its obligations under the Agreement or any other Transaction Document to which it is a party,

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(c) the validity or enforceability of the Agreement or any other Transaction Document, or the validity, enforceability or collectibility of any material portion of the Pool Receivables,or

(d) the status, perfection, enforceability or priority of the Administrator’s, any Purchaser’s or the Seller’s interest in the Pool Assets.

“Material Debt” means (a) any Debt of the Performance Guarantor or any of its Subsidiaries under the Meritor Credit Agreement and (b) any other Debt of the Performance Guarantor or anyof its Subsidiaries that is outstanding in a principal amount of at least $35,000,000 in the aggregate.

“Material Debt Agreement” means the Meritor Credit Agreement and any other agreement under which any Material Debt was created or is governed or which provides for the incurrence ofDebt in an amount which would constitute Material Debt (whether or not an amount of Debt constituting Material Debt is outstanding thereunder).

“Meritor” has the meaning set forth in the preamble to the Agreement.

“Meritor Credit Agreement” means (a) the Amended and Restated Credit Agreement dated as of April 23, 2012, among Meritor and ArvinMeritor Finance Ireland, as borrowers, the lendersfrom time to time parties thereto, and JPMorgan Chase Bank, N.A., as administrative agent, and (b) any credit agreement or loan agreement in which Meritor is a borrower and which provides creditfacilities that replace or refinance the credit facilities provided under the Credit Agreement described in clause (a), in both cases as amended, restated, or otherwise modified from time to time.

“Minimum Dilution Reserve” means, on any day, an amount equal to (a) the Aggregate Capital plus the Adjusted LC Participation Amount at the close of business of the Servicer on such datemultipliedby (b) (i) the Minimum Dilution Reserve Percentage dividedby (ii) 100% minus the Minimum Dilution Reserve Percentage on such day.

“Minimum Dilution Reserve Percentage” means, on any day, the product of (a) the average of the Dilution Ratios for the twelve most recent Fiscal Months multipliedby (b) the DilutionHorizon Ratio.

“Monthly Information Package” means a report, in substantially the form of Annex A1 to the Agreement, furnished to the Administrator pursuant to the Agreement, reflective of theReceivables Pool as of the end of the most recent Fiscal Month.

“Monthly Settlement Date” means the 25th day of each calendar month (or if such day is not a Business Day, the next occurring Business Day).

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that is a nationally recognized statistical rating organization.

“Net Receivables Pool Balance” means, at any time: (a) the Outstanding Balance of Eligible Receivables then in the Receivables Pool, minus (b) the Excess Concentration.

“Notes” means short-term promissory notes issued, or to be issued, by any Conduit Purchaser to fund its investments in accounts receivable or other financial assets.

“Notice Date” has the meaning set forth in Section 1.12(b).

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“Obligations” has the meaning set forth in Section 1.2(d).

“Obligor” means, with respect to any Receivable or Excluded Receivable, the Person obligated to make payments pursuant to the Contract relating to such Receivable or Excluded Receivable,as the case may be.

“Obligor Percentage” means, at any time, for each Obligor, a fraction, expressed as a percentage, (a) the numerator of which is the aggregate Outstanding Balance of the Eligible Receivablesof such Obligor less the amount (if any) then included in the calculation of the Excess Concentration pursuant to clause (i) of the definition thereof with respect to such Obligor, and (b) thedenominator of which is the aggregate Outstanding Balance of all Eligible Receivables at such time; provided, however, that Oshkosh Corporation’s Obligor Percentage shall not be deemed to exceed15.00% for so long as Oshkosh Corporation remains a Special Obligor pursuant to the definition of “Concentration Percentage”.

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

“Order” has the meaning set forth in Section 1.20 of the Agreement.

“Originator” and “Originators” have the meaning set forth in the Purchase and Sale Agreement, as the same may be modified from time to time by adding new Originators or removingOriginators, in each case with the prior written consent of the Administrator. As of the Closing Date, the Originators are Meritor Heavy Vehicle Braking Systems (U.S.A.), LLC, a Delaware limitedliability company, and Meritor Heavy Vehicle Systems, LLC, a Delaware limited liability company.

“Other Navistar Collections” means funds that are received in payment of any amounts owed in respect of an Excluded Receivable of the type described in clause (v) of the definition thereof.

“Other Taxes” means any and all present or future stamp or documentary Taxes or any other excise or property Taxes, charges or similar levies or fees arising from any payment madehereunder or from the execution, delivery, filing, recording or enforcement of, or otherwise in respect of, this Agreement, the other Transaction Documents and the other documents or agreements tobe delivered hereunder or thereunder.

“Outstanding Balance” of any Receivable at any time means the then outstanding principal balance thereof.

“Participant” has the meaning set forth in Section 5.3(b) of this Agreement.

“Participation Advance” has the meaning set forth in Section 1.14(c).

“Paydown Notice” has the meaning set forth in Section 1.4(f)(i) of the Agreement.

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

“Pension Plan” means a pension plan as defined in Section 3(2) of ERISA that is subject to Title IV of ERISA with respect to which Meritor, any Originator, the Seller or any other member ofthe Controlled Group may have any liability, contingent or otherwise.

“Performance Guarantor” means Meritor, Inc.

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“Performance Guaranty” means the Performance Guaranty, dated as of the Closing Date, by the Performance Guarantor in favor of the Administrator for the benefit of the Purchasers and thePurchaser Agents, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Permitted 2026 Put” means the exercise by the holders of 2026 Convertible Notes of their option to require Meritor to repurchase such notes on March 1, 2016 under and in accordance withthe terms of the 2006 Senior Note Indenture. As used in this definition, “2026 Convertible Notes” and “2006 Senior Note Indenture” have the respective meanings set forth in the Meritor CreditAgreement as in effect on the Closing Date.

“Person” means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture, limited liability company or otherentity, or a government or any political subdivision or agency thereof.

“PNC” has the meaning set forth in the preamble to the Agreement.

“Pool Assets” has the meaning set forth in Section 1.2(d) of the Agreement.

“Pool Receivable” means a Receivable in the Receivables Pool.

“Portion of Capital” means, with respect to any Purchaser and its related Capital, the portion of such Capital being funded or maintained by such Purchaser by reference to a particular interestrate basis.

“Priority Debt Ratio” has the meaning assigned to such term in the Meritor Credit Agreement as in effect on the Closing Date (without giving effect to any subsequent amendment or othermodification thereof).

“Pro Rata Share” shall mean, as to any LC Participant, a fraction, the numerator of which equals the Commitment of such LC Participant at such time and the denominator of which equals theaggregate of the Commitments of all LC Participants at such time.

“Program Support Agreement” means and includes any Liquidity Agreement and any other agreement entered into by any Program Support Provider providing for: (a) the issuance of one ormore letters of credit for the account of any Conduit Purchaser, (b) the issuance of one or more surety bonds for which any Conduit Purchaser is obligated to reimburse the applicable Program SupportProvider for any drawings thereunder, (c) the sale by any Conduit Purchaser to any Program Support Provider of the Purchased Interest (or portions thereof) maintained by such Conduit Purchaserand/or (d) the making of loans and/or other extensions of credit to any Conduit Purchaser in connection with such Conduit Purchaser’s receivables-securitization program contemplated in theAgreement, together with any letter of credit, surety bond or other instrument issued thereunder.

“Program Support Provider” means and includes, with respect to any Conduit Purchaser, any Liquidity Provider and any other Person (other than any customer of such Conduit Purchaser) nowor hereafter extending credit or having a commitment to extend credit to or for the account of, or to make purchases from, such Conduit Purchaser pursuant to any Program Support Agreement.

“Purchase” has the meaning set forth in Section 1.1(a) of this Agreement.

“Purchase Account” means the account identified as such on Schedule V of this Agreement.

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“Purchase and Sale Agreement” means the Fourth Amended and Restated Purchase and Sale Agreement, dated as of the Closing Date, among the Servicer, the Originators and the Seller, assuch agreement may be amended, supplemented or otherwise modified from time to time.

“Purchase Date” means the date on which a Funded Purchase or a reinvestment is made pursuant to this Agreement.

“Purchase Facility” means the receivables purchase facility evidenced by this Agreement.

“Purchase Limit” means $100,000,000 as reduced from time to time pursuant to Section 1.1(c). References to the unused portion of the Purchase Limit shall mean, at any time, an amountequal to (x) the Purchase Limit at such time, minus (y) the sum of the Aggregate Capital plus the LC Participation Amount.

“Purchase Notice” has the meaning set forth in Section 1.2(a) of the Agreement.

“Purchased Interest” means, at any time, the undivided percentage ownership interest in: (a) each and every Pool Receivable now existing or hereafter arising, (b) all Related Security withrespect to such Pool Receivables and (c) all Collections with respect to, and other proceeds of, such Pool Receivables and Related Security. Such undivided percentage interest shall be computed as:

Aggregate Capital + Adjusted LC Participation Amount + Total ReservesNet Receivables Pool Balance

The Purchased Interest shall be determined from time to time pursuant to Section 1.3 of the Agreement.

“Purchaser” means each Conduit Purchaser, Related Committed Purchaser, LC Participant and the LC Bank.

“Purchaser Agent” means each Person acting as agent on behalf of a Purchaser Group and designated as a Purchaser Agent for such Purchaser Group on the signature pages to this Agreementor any other Person who becomes a party to this Agreement as a Purchaser Agent pursuant to a Transfer Supplement or otherwise in accordance with this Agreement.

“Purchaser Group” means, (i) for any Conduit Purchaser, such Conduit Purchaser, together with such Conduit Purchaser’s Related Committed Purchasers, related Purchaser Agent and relatedLC Participants and (ii) for any other Purchaser that does not have a related Conduit Purchaser, such Purchaser, together with its Purchaser Agent and each other Purchaser for which such PurchaserAgent acts as a Purchaser Agent hereunder. The sole Purchaser Group party to the Agreement as of the Closing Date is identified on Schedule IV.

“Purchasers’ Share” of any amount, at any time, means such amount multipliedby the Purchased Interest at such time.

“Purchasing Related Committed Purchaser” has the meaning set forth in Section 5.3(c) of this Agreement.

“Ratable Share” means, for each Purchaser Group, such Purchaser Group’s Group Commitment dividedby the aggregate Group Commitments of all Purchaser Groups.

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“Rating Agency” mean each of Standard & Poor’s, Fitch and Moody’s (and/or each other rating agency then rating the Notes of any Conduit Purchaser).

“Rating Agency Condition” means, when applicable, with respect to any Conduit Purchaser and any event or occurrence, receipt by the Administrator (or the applicable Purchaser Agent) ofwritten confirmation from each Rating Agency then rating the Notes of such Conduit Purchaser that such event or occurrence shall not cause the rating on the then outstanding Notes of such ConduitPurchaser to be downgraded or withdrawn.

“Receivable” means any indebtedness and other obligations owed to any Originator or the Seller (as assignee of an Originator), or any right of the Seller or any Originator to payment from oron behalf of, an Obligor, whether constituting an account, chattel paper, payment intangible, instrument or general intangible, in each instance arising in connection with the sale of goods or therendering of services, and includes, without limitation, the obligation to pay any finance charges, fees and other charges with respect thereto; provided, however, that “Receivable” does not include anyExcluded Receivable. Indebtedness and other obligations arising from any one transaction, including, without limitation, indebtedness and other obligations represented by an individual invoice oragreement, shall constitute a Receivable separate from a Receivable consisting of the indebtedness and other obligations arising from any other transaction.

“Receivables Pool” means, at any time, all of the then outstanding Receivables transferred (or purported to be transferred) to the Seller pursuant to the Purchase and Sale Agreement prior tothe Facility Termination Date.

“Reimbursement Obligation” has the meaning set forth in Section 1.14 of the Agreement.

“Related Committed Purchaser” means each Person listed as such for each Conduit Purchaser as set forth on the signature pages of this Agreement or in any or Transfer Supplement.

“Related Rights” has the meaning set forth in Section 1.1 of the Purchase and Sale Agreement.

“Related Security” means, with respect to any Receivable:

(a) all of the Seller’s and each Originator’s interest in any goods (including returned goods), and documentation of title evidencing the shipment or storage of any goods (includingreturned goods), the sale of which gave rise to such Receivable;

(b) all instruments and chattel paper that may evidence such Receivable;

(c) all other security interests or liens and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract related tosuch Receivable or otherwise, together with all UCC financing statements or similar filings relating thereto;

(d) all of the Seller’s and each Originator’s rights, interests and claims under the related Contracts and all guaranties, indemnities, insurance and other agreements (including therelated Contract) or arrangements of whatever character from time to time supporting or securing payment of such Receivable or otherwise relating to such Receivable, whether pursuant to theContract related to such Receivable or otherwise; and

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(e) all of the Seller’s rights, interests and claims under the Purchase and Sale Agreement and the other Transaction Documents.

“Required Capital Amount” means $18,000,000.

“Restricted Payments” has the meaning set forth in Section 1(n) of Exhibit IV of the Agreement.

“Sanctioned Country” means a country subject to a sanctions program identified on the list maintained by OFAC and available at: http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx, or as otherwise published from time to time.

“Sanctioned Person” means (i) A person named on the list of “Specially Designated Nationals” or “Blocked Persons” maintained by OFAC available at:

http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx, or as otherwise published from time to time or (ii) (A) an agency of the government of a Sanctioned Country, (B) anorganization controlled by a Sanctioned Country, or (C) a person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.

“Scheduled Commitment Termination Date” means with respect to any Purchaser, June 18, 2015, as such date may be extended from time to time in the sole discretion of Purchaser inaccordance with Section 1.2(e).

“SEC” shall mean the Securities and Exchange Commission or any governmental agencies substituted therefor.

“Seller” has the meaning set forth in the preamble to the Agreement.

“Seller’s Net Worth” means, at any time, an amount equal to (i) the Outstanding Balance of all Receivables then in the Receivables Pool at such time, minus (ii) the sum of (A) AggregateCapital at such time, plus (B) the Adjusted LC Participation Amount, plus (C) the aggregate accrued and unpaid Discount and Fees at such time, plus (D) the aggregate outstanding principal balance ofall Subordinated Notes at such time, plus (E) the aggregate accrued and unpaid interest on the Subordinated Notes at such time.

“Seller’s Share” of any amount means the greater of: (a) $0 and (b) such amount minus the Purchasers’ Share.

“Servicer” has the meaning set forth in the preamble to the Agreement.

“Servicing Fee” shall mean the fee referred to in Section 4.6 of the Agreement.

“Servicing Fee Rate” shall mean the rate referred to in Section 4.6 of the Agreement.

“Settlement Date” means with respect to any Portion of Capital for any Settlement Period, (i) prior to the Facility Termination Date, the Monthly Settlement Date and (ii) on and after theFacility Termination Date, each day selected from time to time by the Administrator (with the consent or at the direction of the Majority Purchaser Agents) (it being understood that the Administrator(with the consent or at the direction of the Majority Purchaser Agents) may select such Settlement Date to occur as frequently as daily), or, in the absence of such selection, the Monthly SettlementDate.

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“Settlement Period” means: (a) before the Facility Termination Date: (i) initially the period commencing on the date of the initial purchase pursuant to Section 1.2 of the Agreement (or in thecase of any fees payable hereunder, commencing on the Closing Date) and ending on (but not including) the next Monthly Settlement Date, and (ii) thereafter, each period commencing on suchMonthly Settlement Date and ending on (but not including) the next Monthly Settlement Date, and (b) on and after the Facility Termination Date, such period (including a period of one day) as shallbe selected from time to time by the Administrator (with the consent or at the direction of the Majority Purchaser Agents) or, in the absence of any such selection, each period of 30 days from the lastday of the preceding Settlement Period.

“Standard & Poor’s” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business and any successor thereto that is a nationally recognized statisticalrating organization.

“Subordinated Note” has the meaning set forth in the Purchase and Sale Agreement.

“Sub-Servicer” has the meaning set forth in Section 4.1(d) of this Agreement.

“Subsidiary” means, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock of each class or other interests having ordinary voting power(other than stock or other interests having such power only by reason of the happening of a contingency) to elect a majority of the Board of Directors or other managers of such entity are at the timeowned, or management of which is otherwise controlled: (a) by such Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and one or more Subsidiaries of such Person.

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority and all interest, penalties, additions totax and any similar liabilities with respect thereto.

“Termination Day” means: (a) each day on which any of the conditions set forth in Section 2 of Exhibit II to the Agreement are not satisfied or (b) each day that occurs on or after the FacilityTermination Date.

“Termination Event” has the meaning specified in Exhibit V to the Agreement. For the avoidance of doubt, any Termination Event that occurs shall be deemed to be continuing unless and untilsuch Termination Event has been waived in accordance with the terms of the Agreement.

“Total Reserves” means, at any time, the sum of: (a) the Yield Reserve, plus (b) the greater of (i) the sum of the Concentration Reserve plus the Minimum Dilution Reserve and (ii) the sum ofthe Loss Reserve plus the Dilution Reserve.

“Transaction Documents” means the Agreement, the Lock-Box Agreements, the Fee Letter, the Purchase and Sale Agreement, each Subordinated Note, the Performance Guaranty, theIntercreditor Agreement and all other certificates, instruments, UCC financing statements, reports, notices, agreements and documents executed or delivered under or in connection with theAgreement, in each case as the same may be amended, supplemented or otherwise modified from time to time in accordance with the Agreement.

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“Transaction Information” shall mean any information provided to any Rating Agency, in each case, to the extent related to such Rating Agency providing or proposing to provide a rating ofany Notes or monitoring such rating including, without limitation, information in connection with the Seller, the Originator, the Servicer or the Receivables; provided that, for the avoidance of doubt,“Transaction Information” shall not include any information provided by Meritor or any of its Affiliates to any nationally recognized statistical rating organization (other than information solelyrelated to the Receivables subject to this Agreement) in connection with such rating organization providing a rating or proposing to provide a rating to, or monitoring an existing rating of Meritor orany of its Affiliates or any debt securities of any of the foregoing.

“Transfer Supplement” has the meaning set forth in Section 5.3(c) of this Agreement.

“UCC” means the Uniform Commercial Code as from time to time in effect in the applicable jurisdiction.

“Unmatured Termination Event” means an event that, with the giving of notice or lapse of time, or both, would constitute a Termination Event.

“Weekly Information Package” means a report, in substantially the form of Annex A2 to the Agreement, furnished to the Administrator pursuant to this Agreement, reflective of theReceivables Pool as of the end of business on the most recent Wednesday.

“Weighted Average Credit Term Factor” means, on any date, the Weighted Average Credit Terms on such date, minus:

(a) if the Weighted Average Credit Terms on such date is less than or equal to 30, then the Weighted Average Credit Terms (it being understood that if determined pursuant to thisclause (a), the Weighted Average Credit Term Factor will be zero);

(b) if the Weighted Average Credit Terms on such date is greater than 30 but less than or equal to 60, then 30;

(c) if the Weighted Average Credit Terms on such date is greater than 60 but less than or equal to 90, then 60; or

(d) if the Weighted Average Credit Terms on such date is greater than 90, then 90.

“Weighted Average Credit Terms” means, on any date, the weighted average payment terms (computed in days and calculated based on the difference between the original invoice date and thestated maturity date) of invoices for Receivables originated during the current Fiscal Month; provided that such weighting shall be based on the Outstanding Balance of such Receivables on such date.

“Yield Reserve” means, on any date, an amount equal to the product of (i) the sum of the Aggregate Capital plus the LC Participation Amount at the close of business of the Servicer on suchdate multipliedby (ii) (x) the Yield Reserve Percentage on such date dividedby (y) 100% minus the Yield Reserve Percentage on such date.

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“Yield Reserve Percentage” means at any time:

1.50 x DSO x (BR + SFR)

360

where:

BR = the daily average Base Rate computed for the most recent Settlement Period,

DSO = Days’ Sales Outstanding for the Fiscal Month most recently ended, and

SFR = the Servicing Fee Rate.

Other Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles. All terms used in Article 9 of the UCC in theState of New York, and not specifically defined herein, are used herein as defined in such Article 9. Unless the context otherwise requires, “or” means “and/or,” and “including” (and with correlativemeaning “include” and “includes”) means including without limiting the generality of any description preceding such term.

Rating Levels. For purposes of the definitions of “Group A Obligor”, “Group B Obligor” and “Group C Obligor”, if an Obligor is rated at different levels by Standard & Poor’s and Moody’s,then: (i) if such ratings are one level apart, then the lower of the two ratings shall apply, (ii) if such ratings are more than one level apart, then the rating level exactly halfway between the two ratingsshall apply and (iii) if such ratings are more than one level apart, and no rating level that is exactly halfway between the two ratings can be determined, then the rating level immediately below therating level that would be exactly halfway between such rating levels shall apply.

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EXHIBIT II

CONDITIONS OF PURCHASES

1. Conditions Precedent to Effectiveness. The effectiveness of this Agreement is subject to the condition precedent that the Administrator shall have received, on or before the Closing Date,each of the following, each in form and substance (including the date thereof) satisfactory to the Administrator and each Purchaser Agent:

(c) Counterparts of (i) this Agreement, duly executed by the parties hereto, and (ii) the Lock-Box Agreements, the Fee Letter, the Purchase and Sale Agreement, the Ally Payoff Agreement,the Intercreditor Agreement and the Performance Guaranty, duly executed by the parties thereto.

(d) Certified copies of: (i) the resolutions or unanimous written consents of the board of directors (or the equivalent thereof) of each of the Seller, the Servicer and the Originators authorizingthe execution, delivery and performance by the Seller, the Servicer and the Originators, as the case may be, of this Agreement and the other Transaction Documents to which it is a party; (ii) alldocuments evidencing other necessary corporate or organizational action and governmental approvals, if any, with respect to this Agreement and the other Transaction Documents and (iii) thecertificate of incorporation (or certificate of formation) and by-laws or limited liability company agreement, as applicable, of the Seller, the Originators and the Servicer.

(e) A certificate of the Secretary or Assistant Secretary of each of the Seller, the Servicer and the Originators certifying the names and true signatures of its officers who are authorized to signthis Agreement and the other Transaction Documents to which it is a party. Until the Administrator receives a subsequent incumbency certificate from the Seller, the Servicer or such Originators, asthe case may be, the Administrator shall be entitled to rely on the last such certificate delivered to it by the Seller, the Servicer or such Originators, as the case may be.

(f) Proper financing statements (Form UCC‑1), duly authorized and suitable for filing under the UCC of all jurisdictions that the Administrator may deem necessary or desirable in order toperfect the interests of the Seller and the Administrator (for the benefit of the Purchasers) contemplated by the Purchase and Sale Agreement and this Agreement, as applicable.

(g) Proper financing statement amendments (Form UCC‑3), duly authorized and suitable for filing under the UCC of all jurisdictions that the Administrator may deem necessary or desirableto release all security interests and other rights of any Person in the Receivables, Contracts or Related Security previously granted by the Originators or the Seller.

(h) Completed UCC search reports, dated on or shortly before the Closing Date, listing the financing statements filed in all applicable jurisdictions that name the Originators or the Seller asdebtor, together with copies of such other financing statements, and similar search reports with respect to judgment liens, federal tax liens and liens of the PBGC in such jurisdictions, as theAdministrator may request, showing no Adverse Claims on any Pool Assets other than any security interests that are released as of the Closing Date.

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(i) Favorable opinions, addressed to the Administrator, each Purchaser Agent and each Purchaser, in form and substance reasonably satisfactory to the Administrator, from Faegre BakerDaniels LLP, counsel for the Seller, the Originator and the Servicer, and internal counsel for the Seller, the Originators and the Servicer, covering such matters as the Administrator may reasonablyrequest, including, without limitation, certain organizational and New York enforceability matters, certain bankruptcy matters and certain UCC matters.

(j) A pro forma Monthly Information Package representing the performance of the Receivables Pool for the calendar month before closing and pro forma Weekly Information Packagerepresenting the performance of the Receivables Pool for the week before closing.

(k) Evidence of payment by the Seller of all accrued and unpaid fees (including those contemplated by the Fee Letters), costs and expenses to the extent then due and payable on the datethereof, including any such costs, fees and expenses arising under or referenced in Section 5.4 of the Agreement and the Fee Letters.

(l) certificates of existence or good standing with respect to each of the Seller, the Originators and the Servicer issued by the Secretary of State (or similar official) of the state of each suchPerson’s organization or formation.

(m) All information with respect to the Receivables as the Administrator or the Purchasers may reasonably request.

(n) Such other approvals, opinions or documents as the Administrator or the Purchasers may reasonably request.

2. Conditions Precedent to All Funded Purchases, Issuances of Letters of Credit and Reinvestments. Each Funded Purchase (including the initial Funded Purchase) and the issuance of anyLetters of Credit and each reinvestment shall be subject to the further conditions precedent that:

(a) in the case of each Funded Purchase and the issuance of any Letters of Credit, the Servicer shall have delivered to the Administrator and each Purchaser Agent on or before such purchaseor issuance, as the case may be, in form and substance reasonably satisfactory to the Administrator and each Purchaser Agent, a completed pro forma Weekly Information Package to reflect the levelof Aggregate Capital, the LC Participation Amount and related reserves and the calculation of the Purchased Interest after such purchase or issuance, as the case may be, and a completed PurchaseNotice in the form of Annex B; and

(b) on the date of such Funded Purchase, issuance of any Letters of Credit or reinvestment, as the case may be, the following statements shall be true (and acceptance of the proceeds of suchFunded Purchase, issuance or reinvestment shall be deemed a representation and warranty by the Seller that such statements are then true):

(i) the representations and warranties contained in Exhibit III to the Agreement are true and correct in all material respects on and as of the date of such Funded Purchase, issuance orreinvestment as though made on and as of such date except for representations and warranties which apply as to an earlier date (in which case such representations and warranties shall be trueand correct as of such earlier date);

(ii) no event has occurred and is continuing, or would result from such Funded Purchase, issuance or reinvestment, that constitutes a Termination Event or an Unmatured Termination Event;

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(iii) the Aggregate Capital plus the LC Participation Amount, after giving effect to any such Funded Purchase, issuance or reinvestment, as the case may be, does not exceed the PurchaseLimit;

(iv) the LC Participation Amount does not exceed the aggregate of the Commitments of the LC Participants;

(v) the Purchased Interest does not exceed 100%; and

(vi) the Facility Termination Date has not occurred.

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EXHIBIT III

REPRESENTATIONS AND WARRANTIES

1. Representations and Warranties of the Seller. The Seller represents and warrants to the Administrator, each Purchaser Agent and each Purchaser that:

(o) Existence and Power. The Seller is a corporation duly organized, validly existing and in good standing under the laws of Delaware, and has all corporate power and all governmentallicenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted except if failure to have such licenses, authorizations, consentsor approvals could not reasonably be expected to have a Material Adverse Effect.

(p) Company and Governmental Authorization, Contravention. The execution, delivery and performance by the Seller of this Agreement and each other Transaction Document to which it isa party are within the Seller’s corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with (other than the filing of UCC financingstatements and continuation statements), any governmental body, agency or official, and, do not contravene, or constitute a default under, any provision of applicable law or regulation or of theoperating agreement of the Seller or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Seller or result in the creation or imposition of any lien (other than liensin favor of the Administrator) on assets of the Seller.

(q) Binding Effect of Agreement. This Agreement and each other Transaction Document to which it is a party constitute the legal, valid and binding obligation of the Seller enforceableagainst the Seller in accordance with its respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement ofcreditors’ rights generally and by general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law.

(r) Accuracy of Information. Each Information Package and all information heretofore furnished by or on behalf of the Seller (or, in the case of any Information Package, by or on behalf ofthe Servicer) to the Administrator, any Purchaser Agent or any Purchaser pursuant to or in connection with this Agreement or any other Transaction Document is, and each Information Package and allsuch other information hereafter furnished by or on behalf of the Seller (or, in the case of any Information Package, by or on behalf of the Servicer) to the Administrator, any Purchaser Agent or anyPurchaser in writing pursuant to this Agreement or any Transaction Document will be, true and accurate in all material respects on the date such information is stated or certified.

(s) Actions, Suits. There are no actions, suits or proceedings pending or, to the best of the Seller’s knowledge, threatened against or affecting the Seller or its properties, in or before anycourt, arbitrator or other body, which could reasonably be expected to have a Material Adverse Effect.

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(t) Accuracy of Exhibits; Account Arrangements. The names and addresses of all the Lock-Box Banks together with the account numbers of the Lock-Box Accounts and Lock-Boxes at suchLock-Box Banks, are specified in Schedule II to this Agreement (or at such other Lock-Box Banks and/or with such other Lock-Box Accounts and Lock-Boxes as have been notified to theAdministrator), and each Lock-Box Account and Lock-Box is subject to a Lock-Box Agreement. All information on each Exhibit, Schedule or Annex to this Agreement or the other TransactionDocuments (as updated by the Seller from time to time) is true and complete. The Seller has not granted any interest in any Lock-Box Account (or any related Lock-Box) to any Person other than theAdministrator and, upon delivery to a Lock-Box Bank of the related Lock-Box Agreement, the Administrator will have control (within the meaning of Section 9-104 of the UCC) of the Lock-BoxAccount at such Lock-Box Bank.

(u) No Material Adverse Effect. Since the date of formation of Seller as set forth in its certificate of formation, there has been no Material Adverse Effect with respect to the Seller.

(v) Names and Location. The Seller has not used any corporate names, trade names or assumed names other than its name set forth on the signature pages of this Agreement. The Seller is“located” (as such term is defined in the applicable UCC) in Delaware. The office where the Seller keeps its records concerning the Receivables is at the address set forth below its signature to thisAgreement.

(w) Margin Stock. The Seller is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T, U and X, asissued by the Board of Governors of the Federal Reserve System), and no proceeds of any purchase or reinvestment hereunder will be used to purchase or carry any margin stock or to extend credit toothers for the purpose of purchasing or carrying any margin stock.

(x) Eligible Receivables. Each Pool Receivable listed as an Eligible Receivable or included as an “Eligible Receivable” in the calculation of the Net Receivables Pool Balance in anyInformation Package delivered by Seller or the Servicer is an Eligible Receivable as of the effective date of the information reported in such Information Package.

(y) Credit and Collection Policy. The Seller has complied in all material respects with the Credit and Collection Policy with regard to each Receivable originated by such Originator.

(z) Investment Company Act. The Seller is not an “investment company,” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of1940, as amended.

(aa) No Sanctions. The Seller is not a Sanctioned Person. To the Seller’s knowledge, no Obligor was a Sanctioned Person at the time of origination of any Pool Receivable owing by suchObligor. The Seller and its Affiliates: (i) have less than 15% of their assets in Sanctioned Countries; and (ii) derive less than 15% of their operating income from investments in, or transactions withSanctioned Persons or Sanctioned Countries. Neither the Seller nor any of its Subsidiaries engages in activities related to Sanctioned Countries except for such activities as are (A) specifically orgenerally licensed by OFAC, or (B) otherwise in compliance with OFAC’s sanctions regulations.

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(bb) Transaction Information. None of the Seller, any Affiliate of the Seller or any third party with which the Seller or any Affiliate thereof has contracted, has delivered, in writing or orally,to any Rating Agency, any Transaction Information without providing such Transaction Information to the applicable Purchaser Agent prior to delivery to such Rating Agency and has not participatedin any oral communications with respect to Transaction Information with any Rating Agency without the participation of such Purchaser Agent.

2. Representations and Warranties of the Servicer. The Servicer represents and warrants to the Administrator, each Purchaser Agent and each Purchaser that:

(c) Existence and Power. The Servicer is a corporation, duly organized and validly existing under the laws of the State of Indiana, has filed its most recent biennial report required to be filedin the State of Indiana, and has all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business isconducted, except where failure to have such licenses, authorizations, consents or approvals would not be reasonably expected to have a Material Adverse Effect.

(d) Company and Governmental Authorization, Contravention. The execution, delivery and performance by the Servicer of this Agreement and each other Transaction Document to which itis a party are within the Servicer’s corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency orofficial, and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or bylaws of the Servicer or of any judgment, injunction,order or decree or agreement or other material instrument binding upon the Servicer or result in the creation or imposition of any lien on assets of the Servicer (other than in favor of the Administratorunder the Transaction Documents) or any of its Subsidiaries.

(e) Binding Effect of Agreement. This Agreement and each other Transaction Document to which it is a party constitute the legal, valid and binding obligation of the Servicer enforceableagainst the Servicer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’rights generally and by general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law.

(f) Accuracy of Information. Each Information Package and all information heretofore furnished by (or on behalf of) the Servicer to the Administrator, any Purchaser Agent or any Purchaserpursuant to or in connection with this Agreement or any other Transaction Document is, and each Information Package and all such other information hereafter furnished by (or on behalf of) theServicer to the Administrator, any Purchaser Agent or any Purchaser in writing pursuant to this Agreement or any other Transaction Document will be, true and accurate in all material respects on thedate such information is stated or certified.

(g) Actions, Suits. Except as set forth in Schedule III, there are no actions, suits or proceedings pending or, to the best of the Servicer’s knowledge, threatened against or affecting theServicer or any of its Affiliates or their respective properties, in or before any court, arbitrator or other body, which could reasonably be expected to have a Material Adverse Effect.

(h) No Material Adverse Effect. Since April 30, 2012, there has been no Material Adverse Effect on the Servicer.

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(i) Credit and Collection Policy. The Servicer has complied in all material respects with the Credit and Collection Policy with regard to each Receivable.

(j) Investment Company Act. The Servicer is not an “investment company,” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of1940, as amended.

(k) No Sanctions. The Servicer is not a Sanctioned Person. To the Servicer’s knowledge, no Obligor was a Sanctioned Person at the time of origination of any Pool Receivable owing by suchObligor. The Servicer and its Affiliates: (i) have less than 15% of their assets in Sanctioned Countries; and (ii) derive less than 15% of their operating income from investments in, or transactions withSanctioned Persons or Sanctioned Countries. Neither the Servicer nor any of its Subsidiaries engages in activities related to Sanctioned Countries except for such activities as are (A) specifically orgenerally licensed by OFAC, or (B) otherwise in compliance with OFAC’s sanctions regulations.

(l) Transaction Information. None of the Servicer, any Affiliate of the Servicer or any third party with which the Servicer or any Affiliate thereof has contracted, has delivered, in writing ororally, to any Rating Agency providing or proposing to provide a rating to, or monitoring a rating of, any Notes, any Transaction Information without providing such Transaction Information to theapplicable Purchaser Agent prior to delivery to such Rating Agency and has not participated in any oral communications with respect to Transaction information with any Rating Agency without theparticipation of such Purchaser Agent.

(m) Financial Condition. The consolidated balance sheets of Servicer and its consolidated subsidiaries as of March 31, 2012and the related statements of income and shareholders’ equity ofMeritor and its consolidated subsidiaries for the fiscal quarter then ended, copies of which have been furnished to the Administrator, present fairly in all material respects the consolidated financialposition of Meritor and its consolidated subsidiaries for the period ended on such date, all in accordance with GAAP consistently applied; and since such date no event has occurred that has had, orcould reasonably be expected to have, a Material Adverse Effect.

3. Representations, Warranties and Agreements Relating to the Security Interest. The Seller hereby makes the following representations, warranties and agreements with respect to theReceivables and Related Security:

(a) The Receivables.

(i) Creation. This Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Receivables included in the Receivables Pool in favor of theAdministrator (for the benefit of the Purchasers), which security interest is prior to all other Adverse Claims and is enforceable as such as against creditors of and purchasers from the Seller.

(ii) Ownership of Receivables. The Seller owns and has good and marketable title to the Receivables included in the Receivables Pool and Related Security free and clear of any AdverseClaim.

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(iii) Perfection and Related Security. All appropriate financing statements have been filed in the proper filing office in the appropriate jurisdictions under applicable law in order to perfectthe sale of the Receivables and Related Security from such Originator to the Seller pursuant to the Purchase and Sale Agreement, and the sale and security interest therein from the Seller to theAdministrator under this Agreement.

(b) The Lock-Box Accounts.

(i) Nature of Lock-Box Accounts. Each Lock-Box Account constitutes a “deposit account” within the meaning of the applicable UCC.

(ii) Ownership. Each Lock-Box Account is in the name of the Seller, and Seller owns and has good and marketable title to the Lock-Box Accounts free and clear of any Adverse Claim (otherthan the interest of the Lock-Box Bank as set forth in the applicable Lock-Box Agreement).

(iii) Perfection. The Seller has delivered to the Administrator a fully executed Lock-Box Agreement relating to each Lock-Box Account, pursuant to which each applicable Lock-Box Bankhas agreed, after the “Effective Time” (as defined therein), to comply only with all instructions originated by the Administrator (on behalf of the Purchasers) directing the disposition of funds in suchLock-Box Account without further consent by the Seller or the Servicer.

(c) Priority.

(i) Other than the transfer of the Receivables to the Seller under the Purchase and Sale Agreement, and by the Seller under this Agreement and/or the security interest granted to theAdministrator pursuant to this Agreement, neither the Seller nor any Originator has pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Receivables transferred orpurported to be transferred under the Transaction Documents, the Lock-Box Accounts or any subaccount thereof. Neither the Seller, nor any Originator has authorized the filing of, or is aware of anyfinancing statements against any of the Seller or such Originator that (after giving effect to the Intercreditor Agreement and the filing of financing statement amendments described in Section (e) ofExhibit II) purport to perfect a security interest in Receivables include a description of Receivables transferred or purported to be transferred under the Transaction Documents, the Lock-Box Accountsor any subaccount thereof, other than any financing statement (i) relating to the sale thereof by such Originator to the Seller under the Purchase and Sale Agreement or (ii) relating to the securityinterest granted to the Administrator under this Agreement.

(ii) The Lock-Box Accounts are not in the name of any person other than the Seller. Neither the Seller nor the Servicer has consented to any bank maintaining such account to comply withinstructions of any person other than the Company, the Servicer and the Administrator.

(d) Survival of Supplemental Representations. Notwithstanding any other provision of this Agreement or any other Transaction Document, the representations contained in this Section shallbe continuing, and remain in full force and effect until such time as the Purchased Interest and all other obligations under this Agreement have been finally and fully paid and performed.

4. Ordinary Course of Business. Seller represents and warrants that each remittance of Collections by or on behalf of the Seller to the Purchasers under this Agreement will have been (i) inpayment of a debt incurred by the Seller in the ordinary course of business or financial affairs of the Seller and (ii) made in the ordinary course of business or financial affairs of the Seller.

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5. Reaffirmation of Representations and Warranties. On the date of each purchase and/or reinvestment and issuance of a Letter of Credit hereunder, and on the date each Information Packageor other report is delivered to the Administrator, any Purchaser Agent or any Purchaser hereunder, the Seller and the Servicer, by accepting the proceeds of such purchase, reinvestment or Letter ofCredit, as applicable and/or the provision of such information or report, shall each be deemed to have certified that (i) all representations and warranties of the Seller and the Servicer, as applicable,described in this Exhibit III, as from time to time amended in accordance with the terms hereof, are correct in all material respects on and as of such day as though made on and as of such day, exceptfor representations and warranties which apply as to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such date), and (ii) noTermination Event or an Unmatured Termination Event has occurred and is continuing or will result from such purchase, reinvestment or issuance.

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EXHIBIT IV

COVENANTS

1. Covenants of the Seller. At all times from the Closing Date until the Final Payout Date:

(cc) Financial Reporting. The Seller will maintain a system of accounting established and administered in accordance with generally accepted accounting principles as in effect in the UnitedStates, and the Seller (or the Servicer on its behalf) shall furnish to the Administrator and each Purchaser Agent:

(i) Annual Financial Statements of the Seller. Promptly upon completion and in no event later than 120 days after the close of each fiscal year of the Seller, annual unaudited financialstatements of the Seller certified by a designated financial or other officer of the Seller.

(ii) Information Packages. (A) As soon as available and in any event not later than 2 Business Days prior to each Monthly Settlement Date, a Monthly Information Package as of the mostrecently completed Fiscal Month, and (B) on each Friday of each week (or, if such day is not a Business Day, on the following Business Day), a Weekly Information Package.

(iii) Other Information. Such other information (including non-financial information) as the Administrator or any Purchaser Agent may from time to time reasonably request.

(iv) Quarterly Financial Statements of Meritor, Inc.. As soon as available and in no event later than 45 days following the end of each of the first three fiscal quarters in each of Meritor’sfiscal years, (i) the unaudited consolidated balance sheet and statements of income of Meritor and its Subsidiaries as at the end of such fiscal quarter and the related unaudited consolidated statementsof earnings and cash flows for such fiscal quarter and for the elapsed portion of the fiscal year ended with the last day of such fiscal quarter, in each case setting forth comparative figures for thecorresponding fiscal quarter in the prior fiscal year, all of which shall be certified by the chief financial officer, the treasurer or any financial officer (including a controller) of Meritor that they fairlypresent in all material respects, in accordance with generally accepted accounting principles as in effect in the United States consistently applied, the financial condition of Meritor and its consolidatedSubsidiaries as of the dates indicated and the results of their operations for the periods indicated, subject to normal year-end audit adjustments and the absence of footnotes, and (ii) management’sdiscussion and analysis of the important operational and financial developments during such fiscal quarter.

(v) Annual Financial Statements of Meritor, Inc.. Within 90 days after the close of each of Meritor’s fiscal years, the consolidated balance sheet of Meritor and its consolidated Subsidiariesas at the end of such fiscal year and the related consolidated statements of earnings and cash flows for such fiscal year setting forth comparative figures for the preceding fiscal year, all reported on byindependent certified public accountants of recognized national standing (without a “going concern” or like qualification or exception) to the effect that such consolidated financial statements presentfairly in all material respects the financial condition and results of operations of Meritor and its Subsidiaries on a consolidated basis in accordance with generally accepted accounting principals as ineffect in the United States consistently applied.

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(vi) Other Reports and Filings. Promptly (but in any event within ten days) after the filing or delivery thereof, copies of all financial information, proxy materials and reports, if any, whichMeritor or any of its consolidated Subsidiaries shall publicly file with the SEC or deliver to holders (or any trustee, agent or other representative therefor) of any of its material Indebtedness pursuant tothe terms of the documentation governing the same.

(vii) Notwithstanding anything herein to the contrary, any financial information, proxy statements or other material required to be delivered pursuant to this paragraph (a) shall be deemed tohave been furnished to each of the Administrator and each Purchaser Agent on the date that such report, proxy statement or other material is posted on the SEC’s website at www.sec.gov or onMeritor’s website at www.meritor.com.

(dd) Notices. The Seller (or the Servicer on its behalf) will notify the Administrator and each Purchaser Agent in writing of any of the following events promptly upon (but in no event laterthan three Business Days after) a financial or other officer learning of the occurrence thereof, with such notice describing the same, and if applicable, the steps being taken by the Person(s) affectedwith respect thereto:

(i) Notice of Termination Events or Unmatured Termination Events. A statement of the chief financial officer or chief accounting officer of the Seller setting forth details of any TerminationEvent or Unmatured Termination Event that is continuing and the action which the Seller proposes to take with respect thereto.

(ii) Representations and Warranties. The failure of any representation or warranty with respect to the Receivables included in the Receivables Pool to be true in any material respect whenmade.

(iii) Litigation. The institution of any litigation, arbitration proceeding or governmental proceeding which have a Material Adverse Effect on the Seller.

(iv) Adverse Claim. (A) Any Person shall obtain an Adverse Claim upon the Pool Receivables or Collections with respect thereto, (B) any Person other than the Seller, the Servicer or theAdministrator shall obtain any rights or direct any action with respect to any Lock-Box Account (or related Lock-Box) or (C) any Obligor shall receive any change in payment instructions with respectto Pool Receivable(s) from a Person other than the Servicer or the Administrator.

(v) Material Adverse Change. Promptly after the occurrence thereof, notice of a material adverse change in the business, operations, property or financial or other condition of the Seller, theServicer or any Originator.

(ee) Conduct of Business. The Seller will carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted andwill do all things necessary to remain duly organized, validly existing and in good standing as a domestic organization in its jurisdiction of organization and maintain all requisite authority to conductits business in each jurisdiction in which its business is conducted.

(ff) Compliance with Laws. The Seller will comply with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject if the failure tocomply could reasonably be expected to have a Material Adverse Effect.

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(gg) Furnishing of Information and Inspection of Receivables. The Seller will furnish or cause to be furnished to the Administrator from time to time such information with respect to thePool Receivables as the Administrator may reasonably request. The Seller will, at the Seller’s expense, during regular business hours with prior written notice (i) permit the Administrator or its agentsor representatives to (A) examine and make copies of and abstracts from all books and records relating to the Pool Receivables or other Pool Assets and (B) visit the offices and properties of the Sellerfor the purpose of examining such books and records, and (C) discuss matters relating to the Pool Receivables, other Pool Assets or the Seller’s performance hereunder or under the other TransactionDocuments to which it is a party with any of the officers, directors, employees or independent public accountants of the Seller (provided that representatives of the Seller are present during suchdiscussions) having knowledge of such matters and (ii) without limiting the provisions of clause (i) above, during regular business hours, at the Seller’s expense, upon prior written notice from theAdministrator, permit certified public accountants or other auditors acceptable to the Administrator to conduct a review of its books and records with respect to such Receivables; provided, that theSeller shall be required to reimburse the Administrator for only one (1) such audit in any twelve-month period, unless a Termination Event has occurred and is continuing.

(hh) Payments on Receivables, Lock-Box Accounts. The Seller (or the Servicer on its behalf) will, and will cause each Originator to, at all times, instruct all Obligors to deliver payments onthe Pool Receivables to a Lock-Box Account or a Lock-Box. The Seller (or the Servicer on its behalf) will, and will cause each Originator to, at all times, maintain such books and records necessary toidentify Collections received from time to time on Receivables and to segregate such Collections from other property of the Servicer and the Originators (including without limitation Other NavistarCollections). If any payments on the Pool Receivables or other Collections are received by the Seller, the Servicer or an Originator, it shall hold such payments in trust for the benefit of theAdministrator, the Purchaser Agents and the Purchasers and promptly (but in any event within one Business Day after receipt) remit such funds into a Lock-Box Account. The Seller (or the Serviceron its behalf) will cause each Lock-Box Bank to comply with the terms of each applicable Lock-Box Agreement. Except for Other Navistar Collections, the Seller shall not permit funds other thanCollections on Pool Receivables and other Pool Assets to be deposited into any Lock-Box Account. If such funds are nevertheless deposited into any Lock-Box Account, the Seller (or the Servicer onits behalf) will within two Business Days identify and transfer such funds, and all Funds constituting Other Navistar Collections to the appropriate Person entitled to such funds. Except with respect toOther Navistar Collections, the Seller will not, and will not permit the Servicer, any Originator or other Person to commingle Collections or other funds to which the Administrator, any PurchaserAgent or any Purchaser is entitled with any other funds, except cash concentration accounts maintained by Meritor, prior to segregation pursuant to Section 1.4 of the Agreement. The Seller shall onlyadd a Lock-Box Account (or the related Lock-Box), or a Lock-Box Bank to those listed on Schedule II to this Agreement, if the Administrator has received notice of such addition and an executed andacknowledged copy of a Lock-Box Agreement in form and substance acceptable to the Administrator from any such new Lock-Box Bank. The Seller shall only terminate a Lock-Box Bank or close aLock-Box Account (or the related Lock-Box) with the prior written consent of the Administrator.

(ii) Sales, Liens, etc. Except as otherwise provided herein, the Seller will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any AdverseClaim upon (including, without limitation, the filing of any financing statement) or with respect to, any Pool Receivable or other Pool Asset, or assign any right to receive income in respect thereof.

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(jj) Extension or Amendment of Pool Receivables. Except as otherwise permitted in Section 4.2 of this Agreement, the Seller will not, and will not permit the Servicer to, alter thedelinquency status or adjust the Outstanding Balance or otherwise modify the terms of any Pool Receivable in any material respect, or amend, modify or waive, in any material respect, any term orcondition of any related Contract. The Seller shall at its expense, timely and fully perform and comply in all material respects with all provisions, covenants and other promises required to be observedby it under the Contracts related to the Pool Receivables, and timely and fully comply with the Credit and Collection Policy with regard to each Pool Receivable and the related Contract.

(kk) Change in Credit and Collection Policy. The Seller will not make any material change in the Credit and Collection Policy without the prior written consent of the Administrator and theMajority Purchaser Agents.

(ll) Fundamental Changes. The Seller shall not, without the prior written consent of the Administrator and the Majority Purchaser Agents, permit itself (i) to merge or consolidate with orinto, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to, anyPerson or (ii) to be owned by any Person other than Meritor. The Seller shall provide the Administrator with at least 30 days’ prior written notice before making any change in the Seller’s name,location or making any other change in the Seller’s identity or corporate structure that could impair or otherwise render any UCC financing statement filed in connection with this Agreement“seriously misleading” as such term (or similar term) is used in the applicable UCC; each notice to the Administrator and the Purchaser Agents pursuant to this sentence shall set forth the applicablechange and the proposed effective date thereof. The Seller will also maintain and implement (or cause the Servicer to maintain and implement) administrative and operating procedures (including anability to recreate records evidencing Pool Receivables and related Contracts in the event of the destruction of the originals thereof), and keep and maintain (or cause the Servicer to keep and maintain)all documents, books, records, computer tapes and disks and other information reasonably necessary or advisable for the collection of all Pool Receivables (including records adequate to permit thedaily identification of each Pool Receivable and all Collections of and adjustments to each existing Pool Receivable).

(mm) Change in Payment Instructions to Obligors. The Seller shall not (and shall not permit the Servicer or any Sub-Servicer to) add, replace or terminate any Lock-Box Account (or anyrelated Lock-Box) or make any change in its (or their) instructions to the Obligors regarding payments to be made to the Lock-Box Accounts (or any related Lock-Box), other than any instruction toremit payments to a different Lock-Box Account (or any related Lock-Box) unless the Administrator shall have received (i) prior written notice of such addition, termination or change and (ii) signedand acknowledged Lock Box Agreements with respect to such new Lock Box Accounts (or any related lock box or post office box), and the Administrator shall have consented to such change inwriting.

(nn) Ownership Interest, Etc. The Seller shall (and shall cause the Servicer to), at its expense, take all action necessary or reasonably desirable to establish and maintain a valid andenforceable undivided percentage ownership or security interest, to the extent of the Purchased Interest, in the Pool Receivables, the Related Security and Collections with respect thereto, and a firstpriority perfected security interest in the Pool Assets, in each case free and clear of any Adverse Claim, in favor of the Administrator (on behalf of the Purchasers), including taking such action toperfect, protect or more fully evidence the interest of the Administrator (on behalf of the Purchasers) as the Administrator or any Purchaser may reasonably request.

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(oo) Certain Agreements. Without the prior written consent of the Administrator and the Majority Purchaser Agents, the Seller will not (and will not permit the Originators to) amend,modify, waive, revoke or terminate any Transaction Document to which it is a party or any provision of the Seller’s organizational documents which requires the consent of the “Independent Director”(as such term is used in the Seller’s Certificate of Incorporation and By-Laws).

(pp) Restricted Payments. (I) Except pursuant to clause (ii) below, the Seller will not: (A) purchase or redeem any shares of its capital stock, (B) declare or pay any dividend or set aside anyfunds for any such purpose, (C) prepay, purchase or redeem any Debt, (D) lend or advance any funds or (E) repay any loans or advances to, for or from any of its Affiliates (the amounts described inclauses (A) through (E) being referred to as “Restricted Payments”).

(i) Subject to the limitations set forth in clause (iii) below, the Seller may make Restricted Payments so long as such Restricted Payments are made only in one or more of the following ways:(A) the Seller may make cash payments (including prepayments) on the Subordinated Notes in accordance with their respective terms (it being understood that the foregoing shall not restrict anyadjustment to the balance of any Subordinated Note pursuant to Sections 3.2 or 3.3 of the Purchase and Sale Agreement as a result of the issuance or expiration of any Letter of Credit), and (B) theSeller may declare and pay dividends if, both immediately before and immediately after giving effect thereto, the Seller’s Net Worth is equal to or greater than the Required Capital Amount.

(ii) The Seller may make Restricted Payments only out of the funds, if any, it receives pursuant to Sections 1.4(b)(ii) and (iv) and 1.4(d) of this Agreement. Furthermore, the Seller shall notpay, make or declare any Restricted Payment (including any dividend) if, after giving effect thereto, any Termination Event or Unmatured Termination Event shall have occurred and be continuing.

(qq) Other Business. The Seller will not: (i) engage in any business other than the transactions contemplated by the Transaction Documents, (ii) create, incur or permit to exist any Debt ofany kind (or cause or permit to be issued for its account any letters of credit (excluding, for the avoidance of doubt, Letters of Credit issued hereunder) or bankers’ acceptances) other than pursuant tothis Agreement or the Subordinated Notes, or (iii) form any Subsidiary or make any investments in any other Person.

(rr) Use of Seller’s Share of Collections. The Seller shall apply the Seller’s Share of Collections to make payments in the following order of priority: (i) the payment of its expenses(including all obligations payable to the Purchasers, Purchaser Agents and the Administrator under this Agreement and under the Fee Letter), (ii) the payment of accrued and unpaid interest on theSubordinated Notes and (iii) other legal and valid purposes.

(ss) Further Assurances; Change in Name or Jurisdiction of Origination, etc. (i) The Seller hereby authorizes and hereby agrees from time to time, at its own expense, promptly to execute (ifnecessary) and deliver all further instruments and documents, and to take all further actions, that may be necessary or desirable, or that the Administrator may reasonably request, to perfect, protect ormore fully evidence the purchases or issuances made under this Agreement and/or security interest granted pursuant to this Agreement or any other Transaction Document, or to enable theAdministrator (on behalf of the Purchasers) to exercise and enforce the Purchasers’ rights and remedies under this Agreement and any other Transaction Document. Without limiting the foregoing, theSeller hereby authorizes, and will, upon the request of the Administrator, at the Seller’s own expense, execute (if necessary) and file such financing or continuation statements, or amendments thereto,and such other instruments and documents, that may be necessary or desirable, or that the Administrator may reasonably request, to perfect, protect or evidence any of the foregoing.

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(i) The Seller authorizes the Administrator to file financing or continuation statements, and amendments thereto and assignments thereof, relating to the Receivables and the Related Security,the related Contracts and the Collections with respect thereto and the other collateral subject to a lien under any Transaction Document without the signature of the Seller. A photocopy or otherreproduction of this Agreement shall be sufficient as a financing statement where permitted by law.

(ii) The Seller shall at all times be organized under the laws of the State of Delaware and shall not take any action to change its jurisdiction of organization.

(iii) The Seller will not change its name, location, identity or corporate structure unless (x) the Seller, at its own expense, shall have taken all action necessary or appropriate to perfect ormaintain the perfection of the lien under this Agreement (including, without limitation, the filing of all financing statements and the taking of such other action as the Administrator may request inconnection with such change or relocation), and (y) if requested by the Administrator, the Seller shall cause to be delivered to the Administrator, an opinion, in form and substance satisfactory to theAdministrator as to such UCC perfection and priority matters as such Person may request at such time.

(tt) OFAC. The Seller has not used and will not use the proceeds of any Receivable or any Purchase hereunder to fund any operations in, finance any investments or activities in or make anypayments to, a Sanctioned Person or a Sanctioned Country.

(uu) Transaction Information. None of the Seller, any Affiliate of the Seller or any third party with which the Seller or any Affiliate thereof has contracted, shall deliver, in writing or orally,to any Rating Agency, any Transaction Information without providing such Transaction Information to the applicable Purchaser Agent prior to delivery to such Rating Agency and will not participatein any oral communications with respect to Transaction Information with any Rating Agency without the participation of such Purchaser Agent.

(vv) Seller’s Net Worth. The Seller shall not permit the Seller’s Net Worth to be less than the Required Capital Amount.

2. Covenants of the Servicer. At all times from the Closing Date until the Final Payout Date:

(n) Financial Reporting. The Servicer will maintain a system of accounting established and administered in accordance with generally accepted accounting principles as in effect in theappropriate jurisdiction, and the Servicer shall furnish to the Administrator and each Purchaser Agent:

(i) Compliance Certificates.(a) A compliance certificate promptly upon completion of the annual report of Meritor and in no event later than 105 days after the close of Meritor’s fiscal year,in form and substance substantially similar to Annex D signed by its chief accounting officer or treasurer solely in their capacities as officers of Meritor stating that no Termination Event or UnmaturedTermination Event has occurred and is continuing, or if any Termination Event or Unmatured Termination Event has occurred and is continuing, stating the nature and status thereof, and (b) within 55days after the close of each fiscal quarter of Meritor, a compliance certificate in form and substance substantially similar to Annex D.

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(ii) Information Packages. (A) As soon as available and in any event not later than two (2) Business Days prior to each Monthly Settlement Date, a Monthly Information Package as of themost recently completed Fiscal Month, and (B) on each Friday of each week (or, if such day is not a Business Day, on the following Business Day), a Weekly Information Package.

(iii) Other Information. Such other information (including non-financial information) as the Administrator or any Purchaser Agent may from time to time reasonably request, including anyinformation available to the Seller, Servicer or Originator as the Administrator or any Purchaser Agent may reasonably request.

(o) Notices. The Servicer will notify the Administrator and each Purchaser Agent in writing of any of the following events promptly upon (but in no event later than three (3) Business Daysafter) a financial or other officer learning of the occurrence thereof, with such notice describing the same, and if applicable, the steps being taken by the Person(s) affected with respect thereto:

(i) Notice of Termination Events or Unmatured Termination Events. A statement of the chief financial officer or chief accounting officer of the Servicer setting forth details of anyTermination Event or Unmatured Termination Event that is continuing and the action which the Servicer proposes to take with respect thereto.

(ii) Representations and Warranties. The failure of any representation or warranty with respect to the Pool Receivables to be true in any material respect when made.

(iii) Litigation. The institution of any litigation, arbitration proceeding or governmental proceeding which could reasonably be expected to have a Material Adverse Effect.

(iv) Adverse Claim. (A) Any Person shall obtain an Adverse Claim upon the Pool Receivables or Collections with respect thereto, (B) any Person other than the Seller, the Servicer or theAdministrator shall obtain any rights or direct any action with respect to any Lock-Box Account (or related Lock-Box) or (C) any Obligor shall receive any change in payment instructions with respectto Pool Receivable(s) from a Person other than the Servicer or the Administrator.

(v) Name Changes. At least thirty (30) days before any change in any Originator’s or the Seller’s name or any other change requiring the amendment of UCC financing statements, a noticesetting forth such changes and the effective date thereof.

(vi) Material Adverse Change. A material adverse change in the business, operations, property or financial or other condition of any Originator, the Servicer or the Seller.

(p) Conduct of Business. The Servicer will carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted(provided that the foregoing shall not prohibit any change in the Servicer’s business that could not reasonably be expected to have a Material Adverse Effect), and will do all things necessary to remainduly incorporated, validly existing and in good standing as a domestic corporation in its jurisdiction of incorporation and maintain all requisite authority to conduct its business in each jurisdiction inwhich its business is conducted if the failure to have such authority could reasonably be expected to have a Material Adverse Effect.

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(q) Compliance with Laws. The Servicer will comply with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject if the failure tocomply could reasonably be expected to have a Material Adverse Effect.

(r) Furnishing of Information and Inspection of Receivables. The Servicer will furnish to the Administrator from time to time such information with respect to the Pool Receivables as theAdministrator may reasonably request. The Servicer will, at the Servicer’s expense, during regular business hours with prior written notice, (i) permit the Administrator or its agents or representativesto (A) examine and make copies of and abstracts from all books and records relating to the Pool Receivables or other Pool Assets, (B) to visit the offices and properties of the Servicer for the purposeof examining such books and records, and (C) discuss matters relating to the Pool Receivables, other Pool Assets or the Servicer’s performance hereunder or under the other Transaction Documents towhich it is a party with any of the officers, directors, employees or independent public accountants of the Servicer (provided that representatives of the Servicer are present during such discussions)having knowledge of such matters and (ii) without limiting the provisions of clause (i) above, during regular business hours, at the Servicer’s expense, upon prior written notice from the Administrator,permit certified public accountants or other auditors acceptable to the Administrator to conduct, a review of its books and records with respect to such Receivables; provided, that the Servicer shall berequired to reimburse the Administrator for only one (1) such audit in any twelve-month period unless a Termination Event has occurred and is continuing.

(s) Payments on Receivables, Lock-Box Accounts. The Servicer will at all times, instruct all Obligors to deliver payments on the Pool Receivables to a Lock-Box Account or a Lock-Box.The Servicer will, at all times, maintain such books and records necessary to identify Collections received from time to time on Receivables and to segregate such Collections from other property ofthe Servicer and the Originators (including without limitation Other Navistar Collections). If any payments on the Pool Receivables or other Collections are received by the Seller, the Servicer or anOriginator, it shall hold such payments in trust for the benefit of the Administrator, the Purchaser Agents and the Purchasers and promptly (but in any event within one Business Day after receipt)remit such funds into a Lock-Box Account. The Servicer will cause each Lock-Box Bank to comply with the terms of each applicable Lock-Box Agreement. Except for Other Navistar Collections, theServicer shall not permit funds other than Collections on Pool Receivables and other Pool Assets to be deposited into any Lock-Box Account. If such funds are nevertheless deposited into any Lock-Box Account, the Servicer will within two Business Days identify and transfer such funds, and all funds constituting Other Navistar Collections to the appropriate Person entitled to such funds. Exceptwith respect to Other Navistar Collections, the Servicer will not, and will not permit any other Person to commingle Collections or other funds to which the Administrator, any Purchaser Agent or anyPurchaser is entitled with any other funds, except cash concentration accounts maintained by Meritor, prior to segregation pursuant to Section 1.4 of the Agreement. The Servicer shall only add, aLock-Box Account (or the related Lock-Box), or a Lock-Box Bank to those listed on Schedule II to this Agreement, if the Administrator has received notice of such addition and an executed andacknowledged copy of a Lock-Box Agreement in form and substance acceptable to the Administrator from any such new Lock-Box Bank. The Servicer shall only terminate a Lock-Box Bank or closea Lock-Box Account (or the related Lock-Box) with the prior written consent of the Administrator.

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(t) Extension or Amendment of Pool Receivables. Except as otherwise permitted in Section 4.2 of this Agreement, the Servicer will not alter the delinquency status or adjust the OutstandingBalance or otherwise modify the terms of any Pool Receivable in any material respect, or amend, modify or waive, in any material respect any term or condition of any related Contract (which term orcondition relates to payments under, or the enforcement of, such Contract). The Servicer shall at its expense, timely and fully perform and comply with all provisions, covenants and other promisesrequired to be observed by it under the Contracts related to the Pool Receivables, and timely and fully comply with the Credit and Collection Policy with regard to each Pool Receivable and the relatedContract (which term or condition relates to payments under, or the enforcement of, such Contract).

(u) Change in Credit and Collection Policy. The Servicer will not make any material change in the Credit and Collection Policy without the prior written consent of the Administrator and theMajority Purchaser Agents.

(v) Records. The Servicer will maintain and implement administrative and operating procedures (including an ability to recreate records evidencing Pool Receivables and related Contracts inthe event of the destruction of the originals thereof), and keep and maintain all documents, books, records, computer tapes and disks and other information reasonably necessary or advisable for thecollection of all Pool Receivables (including records adequate to permit the daily identification of each Pool Receivable and all Collections of and adjustments to each existing Pool Receivable).

(w) Change in Payment Instructions to Obligors. The Servicer shall not add, replace or terminate any of the Lock-Box Accounts (or any related Lock-Box) listed in Schedule II hereto ormake any change in its instructions to the Obligors regarding payments to be made to the Lock-Box Accounts (or any related Lock-Box), unless the Administrator shall have received (i) prior writtennotice of such addition, termination or change and (ii) signed and acknowledged Lock Box Agreements with respect to such new Lock-Box Accounts (or any related Lock-Box) and the Administratorshall have consented to such change in writing.

(x) Ownership Interest, Etc. The Servicer shall, at its expense, take all action necessary or reasonably desirable to establish and maintain a valid and enforceable undivided percentageownership or security interest, to the extent of the Purchased Interest, in the Pool Receivables, the Related Security and Collections with respect thereto, and a first priority perfected security interest inthe Pool Assets, in each case free and clear of any Adverse Claim in favor of the Administrator (on behalf of the Purchasers), including taking such action to perfect, protect or more fully evidence theinterest of the Administrator (on behalf of the Purchasers) as the Administrator may reasonably request. In order to evidence the interests of the Administrator under this Agreement, the Servicer shall,from time to time take such action, or execute and deliver such instruments as may be necessary (including, without limitation, such actions as are reasonably requested by the Administrator) tomaintain and perfect, as a first-priority interest, the Administrator’s security interest in the Receivables, Related Security and Collections. The Servicer shall, from time to time and within the timelimits established by law, prepare and present to the Administrator for the Administrator’s authorization and approval, all financing statements, amendments, continuations or initial financingstatements in lieu of a continuation statement, or other filings necessary to continue, maintain and perfect the Administrator’s security interest as a first-priority interest. The Administrator’s approvalof such filings shall authorize the Servicer to file such financing statements under the UCC without the signature of the Seller, any Originator or the Administrator where allowed by applicable law.Notwithstanding anything else in the Transaction Documents to the contrary, the Servicer shall not have any authority to file a termination, partial termination, release, partial release, or anyamendment that deletes the name of a debtor or excludes collateral of any such financing statements filed in connection with the Transaction Documents, without the prior written consent of theAdministrator.

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(y) Further Assurances; Change in Name or Jurisdiction of Origination, etc. The Servicer hereby authorizes and hereby agrees from time to time, at its own expense, promptly to execute (ifnecessary) and deliver all further instruments and documents, and to take all further actions, that may be necessary or desirable, or that the Administrator may reasonably request, to perfect, protect ormore fully evidence the purchases or issuances made under this Agreement and/or security interest granted pursuant to this Agreement or any other Transaction Document, or to enable theAdministrator (on behalf of the Purchasers) to exercise and enforce their respective rights and remedies under this Agreement or any other Transaction Document. Without limiting the foregoing, theServicer hereby authorizes, and will, upon the request of the Administrator, at the Servicer’s own expense, execute (if necessary) and file such financing or continuation statements, or amendmentsthereto, and such other instruments and documents, that may be necessary or desirable, or that the Administrator may reasonably request, to perfect, protect or evidence any of the foregoing.

(z) Transaction Information. None of the Servicer, any Affiliate of the Servicer or any third party contracted by the Servicer or any Affiliate thereof, shall deliver, in writing or orally, to anyRating Agency, any Transaction Information without providing such Transaction Information to the applicable Purchaser Agent prior to delivery to such Rating Agency and will not participate in anyoral communications with respect to Transaction Information with any Rating Agency without the participation of such Purchaser Agent.

(aa) Priority Debt Ratio. Meritor shall not permit its Priority Debt Ratio, calculated on a consolidated basis for Meritor and its Subsidiaries, to exceed (i) 2.50 to 1.00 as of the last day of anyfiscal quarter commencing with the first fiscal quarter ending on or after the Closing Date through and including the fiscal quarter ending on or about September 30, 2012, (ii) 2.25 to 1.00 as of the lastday of any fiscal quarter commencing with the fiscal quarter ending on or about December 31, 2012 through and including the fiscal quarter ending on or about September 30, 2013, and (iii) 2.00 to1.00 as of the last day of each fiscal quarter thereafter.

3. Separate Existence. Each of the Seller and the Servicer hereby acknowledges that the Purchasers, the Purchaser Agents and the Administrator are entering into the transactionscontemplated by this Agreement and the other Transaction Documents in reliance upon the Seller’s identity as a legal entity separate from any Originator, the Servicer, Meritor and their Affiliates.Therefore, from and after the Closing Date, each of the Seller and Servicer shall take all steps specifically required by this Agreement or reasonably required by the Administrator, any Purchaser Agentor any Purchaser to continue the Seller’s identity as a separate legal entity and to make it apparent to third Persons that the Seller is an entity with assets and liabilities distinct from those of Meritor,the Originators, the Servicer and any other Person, and is not a division of Meritor, the Originators, the Servicer, its Affiliates or any other Person. Without limiting the generality of the foregoing andin addition to and consistent with the other covenants set forth herein, each of the Seller and Meritor shall take such actions as shall be required in order that:

(e) The Seller will be a special purpose corporation whose primary activities are restricted in its Certificate of Incorporation to: (i) purchasing or otherwise acquiring from the Originators,owning, holding, granting security interests or selling interests in Pool Assets, (ii) entering into agreements for the selling, servicing and financing of the Receivables Pool (including the TransactionDocuments), and (iii) conducting such other activities as it deems necessary or appropriate to carry out its primary activities;

(f) The Seller shall not engage in any business or activity except as set forth in this Agreement nor, incur any indebtedness or liability other than as expressly permitted by the TransactionDocuments;

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(g) Not fewer than one member of the Seller’s board of directors (the “Independent Director”) shall be a natural person who has never been, and shall at no time be, an equityholder, director,officer, manager, employee or associate, or any relative of the foregoing, of any member of the Parent Group (as hereinafter defined) (other than the corporation and any other bankruptcy-remotespecial purpose entity formed for the sole purpose of securitizing, or facilitating the securitization of, financial assets of any member or members of the Parent Group). For purposes of this clause (c),“Parent Group” shall mean (i) Meritor, (ii) each person that directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, five percent (5%) or more of themembership interests in Meritor, (iii) each person that controls, is controlled by or is under common control with Meritor, and (iv) each of such person’s officers, directors, managers, joint venturersand partners. For the purposes of this definition, “control” of a person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of aperson or entity, whether through the ownership of voting securities, by contract or otherwise. A person shall be deemed to be an “associate” of (A) a corporation or organization of which such personis an officer, director, partner or manager or is, directly or indirectly, the beneficial owner of ten percent (10%) or more of any class of equity securities, (B) any trust or other estate in which suchperson serves as trustee or in a similar capacity, and (C) any relative or spouse of a person described in clause (A) or (B) of this sentence, or any relative of such spouse.

In addition to the foregoing requirements, the director designated as the Seller’s Independent Director shall (A) have prior experience as an independent director for a corporation orlimited liability company whose charter documents required the unanimous consent of all independent directors thereof before such corporation or limited liability company could consent to theinstitution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy; and (B) have at least three years ofemployment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization orstructured finance instruments, agreements or securities.

The Seller shall (A) give written notice to the Administrator of the election or appointment, or proposed election or appointment, of a new Independent Director of the Seller, whichnotice shall be given not later than 5 days prior to the date such appointment or election would be effective (except when such election or appointment is necessary to fill a vacancy caused by thedeath, disability, or incapacity of the existing Independent Director, or the failure of such Independent Director to satisfy the criteria for an Independent Director set forth in this clause (c), in whichcase the Seller shall provide written notice of such election or appointment within one business day), and (B) with any such written notice, certify to the Administrator that the Independent Directorsatisfies the criteria for an Independent Director set forth in this clause (c).

The Seller’s Certificate of Incorporation shall provide that: (A) the Seller’s board of directors shall not approve, or take any other action to cause the filing of, a voluntary bankruptcypetition with respect to the Seller unless the Independent Director shall approve the taking of such action in writing before the taking of such action, and (B) such provision and each other provisionrequiring an Independent Director cannot be amended without the prior written consent of the Independent Director;

(h) The Independent Director shall not at any time serve as a trustee in bankruptcy for the Seller, Meritor, any Originator, the Servicer or any of their respective Affiliates;

701648899 12403015 IV

(i) The Seller shall maintain its organizational documents in conformity with this Agreement, such that it does not amend, restate, supplement or otherwise modify its ability to comply withthe terms and provisions of any of the Transaction Documents, including, without limitation, paragraph (k) of Exhibit V;

(j) The Seller shall conduct its affairs strictly in accordance with its organizational documents and observe all necessary, appropriate and customary company formalities, including, but notlimited to, holding all regular and special members’ and board of directors’ meetings appropriate to authorize all corporate action, keeping separate and accurate minutes of its meetings, passing allresolutions or consents necessary to authorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts, including, but not limited to, payroll and intercompanytransaction accounts;

(k) Any employee, consultant or agent of the Seller will be compensated from the Seller’s funds for services provided to the Seller, and to the extent that Seller shares the same officers orother employees as Meritor (or any other Affiliate thereof), the salaries and expenses relating to providing benefits to such officers and other employees shall be fairly allocated among such entities,and each such entity shall bear its fair share of the salary and benefit costs associated with such common officers and employees. The Seller will not engage any agents other than its attorneys, auditorsand other professionals, and a servicer and any other agent contemplated by the Transaction Documents for the Receivables Pool, which servicer will be fully compensated for its services by paymentof the Servicing Fee;

(l) The Seller will contract with the Servicer to perform for the Seller all operations required on a daily basis to service the Receivables Pool. The Seller will not incur any indirect oroverhead expenses for items shared with Meritor (or any other Affiliate thereof) that are not reflected in the Servicing Fee. To the extent, if any, that the Seller (or any Affiliate thereof) shares items ofexpenses not reflected in the Servicing Fee, such as legal, auditing and other professional services, such expenses will be allocated to the extent practical on the basis of actual use or the value ofservices rendered, and otherwise on a basis reasonably related to the actual use or the value of services rendered; it being understood that Meritor shall pay all expenses relating to the preparation,negotiation, execution and delivery of the Transaction Documents, including legal, agency and other fees;

(m) The Seller’s operating expenses will not be paid by Meritor, any Originator or any Affiliate thereof;

(n) The Seller will have its own separate stationery;

(o) The Seller’s books and records will be maintained separately from those of Meritor and any other Affiliate thereof and in a manner such that it will not be difficult or costly to segregate,ascertain or otherwise identify the assets and liabilities of Seller;

(p) All financial statements of Meritor or any Affiliate thereof that are consolidated to include the Seller will disclose that (i) the Seller’s sole business consists of the purchase or acceptancethrough capital contributions of the Receivables and Related Rights from the Originators and the subsequent retransfer of or granting of a security interest in such Receivables and Related Rights tocertain purchasers party to this Agreement, (ii) the Seller is a separate legal entity with its own separate creditors who will be entitled, upon its liquidation, to be satisfied out of the Seller’s assets priorto any assets or value in the Seller becoming available to the Seller’s equity holders and (iii) the assets of the Seller are not available to pay creditors of Meritor or any other Affiliates of Meritor or theOriginators;

701648899 12403015 IV

(q) The Seller’s assets will be maintained in a manner that facilitates their identification and segregation from those of Meritor or any Affiliates thereof;

(r) The Seller will strictly observe corporate formalities in its dealings with Meritor or any Affiliates thereof, and funds or other assets of the Seller will not be commingled with those ofMeritor or any Affiliates thereof except as permitted by this Agreement in connection with servicing the Pool Receivables. The Seller shall not maintain joint bank accounts or other depositoryaccounts to which Meritor or any Affiliate thereof (other than Meritor in its capacity as the Servicer) has independent access. The Seller is not named, and has not entered into any agreement to benamed, directly or indirectly, as a direct or contingent beneficiary or loss payee on any insurance policy with respect to any loss relating to the property of Meritor or any Subsidiaries or otherAffiliates thereof. The Seller will pay to the appropriate Affiliate the marginal increase or, in the absence of such increase, the market amount of its portion of the premium payable with respect to anyinsurance policy that covers the Seller and such Affiliate;

(s) The Seller will maintain arm’s-length relationships with Meritor (and any Affiliates thereof). Any Person that renders or otherwise furnishes services to the Seller will be compensated bythe Seller at market rates for such services it renders or otherwise furnishes to the Seller. Neither the Seller on the one hand, nor Meritor, on the other hand, will be or will hold itself out to beresponsible for the debts of the other or the decisions or actions respecting the daily business and affairs of the other. The Seller and Meritor will immediately correct any known misrepresentation withrespect to the foregoing, and they will not operate or purport to operate as an integrated single economic unit with respect to each other or in their dealing with any other entity; and

(t) To the extent that Seller and Meritor have offices in the same location, there shall be a fair and appropriate allocation of overhead costs between them, and Seller shall bear its fair share ofsuch expenses, which may be paid through the Servicing Fee or otherwise.

701648899 12403015 IV

EXHIBIT V

TERMINATION EVENTS

Each of the following shall be a “Termination Event”:

(a) (i) the Seller, any Originator, the Performance Guarantor or the Servicer shall fail to perform or observe any term, covenant or agreement under the Agreement or any other TransactionDocument (other than any such failure which would constitute a Termination Event under clause (ii) of this paragraph (a) or which is specifically dealt with in any of paragraphs (b) through (o)below), and such failure, solely to the extent capable of cure, shall continue for fifteen (15) Business Days, (ii) the Seller, any Originator, the Performance Guarantor or the Servicer shall fail to makewhen due (x) any payment or deposit to be made by it under the Agreement any other Transaction Document and such failure shall continue unremedied for two (2) Business Days or (iii) Meritor shallresign as Servicer, and no successor Servicer reasonably satisfactory to the Administrator shall have been appointed;

(b) any representation or warranty made or deemed made by the Seller, the Performance Guarantor, any Originator or the Servicer (or any of their respective officers) under or in connectionwith the Agreement or any other Transaction Document or any information or report delivered by the Seller, any Originator or the Servicer pursuant to the Agreement or any other TransactionDocument, shall prove to have been incorrect or untrue in any material respect when made or deemed made or delivered; provided that such circumstance shall not constitute a Termination Event ifsuch representation or warranty, or such information or report, is part of an Information Package, and is corrected promptly (but not later than fifteen (15) days) after the Seller, the PerformanceGuarantor, any Originator or the Servicer has knowledge or receives notice thereof; and provided further that no breach of a representation or warranty set forth in Section 1(j) or 3(a) of Exhibit III tothis Agreement shall constitute a Termination Event pursuant to this clause (b) if the Seller has paid the amount required to be paid under Section 1.4(e)(ii) in respect thereof;

(c) the Seller or the Servicer shall fail to deliver the Information Package pursuant to the Agreement, and such failure shall remain unremedied for two (2) Business Days;

(d) the Agreement or any purchase or reinvestment pursuant to the Agreement shall for any reason: (i) cease to create, or the Purchased Interest shall for any reason cease to be, a valid andenforceable first priority perfected undivided percentage ownership or security interest to the extent of the Purchased Interest in each Pool Receivable, the Related Security and Collections with respectthereto, free and clear of any Adverse Claim, or (ii) cease to create with respect to the Pool Assets, or the interest of the Administrator with respect to such Pool Assets shall cease to be, a valid andenforceable first priority perfected security interest, free and clear of any Adverse Claim;

701648899 12403015 V

(e) the Seller, the Performance Guarantor, the Servicer or any Originator shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debtsgenerally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Seller, the Performance Guarantor, the Servicer or any Originatorseeking to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relatingto bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for anysubstantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 60 days,or any of the actions sought in such proceeding (including the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantialpart of its property) shall occur; or the Seller, the Performance Guarantor, the Servicer or any Originator shall take any corporate or organizational action to authorize any of the actions set forth abovein this paragraph;

(f) (i) the average for three consecutive Fiscal Months of: (A) the Default Ratio shall exceed 3.00%, (B) the Delinquency Ratio shall exceed 6.00% or (C) the Dilution Ratio shall exceed8.50% or (ii) the Days’ Sales Outstanding shall exceed 45 days;

(g) a Change in Control shall occur;

(h) (i) the sum of (A) the Aggregate Capital, plus the Adjusted LC Participation Amount, plus (B) the Total Reserves exceeds (ii) the sum of (A) Net Receivables Pool Balance at such time,plus (B) the Purchasers’ Share of the amount of Collections then on deposit in the Lock-Box Accounts (other than amounts set aside therein representing Discount and fees), and such circumstanceshall not have been cured within two (2) Business Days;

(i) (A) the Performance Guarantor or any of its Subsidiaries fail to pay any principal of or premium or interest on any Material Debt when the same becomes due and payable (whether byscheduled maturity, required prepayment, acceleration, demand or otherwise), which failure continues after the applicable grace period, if any, specified in the related Material Debt Agreement(whether or not such failure is waived under any related Material Debt Agreement);

(B) any other event or condition (other than the Permitted 2026 Put or an event described in paragraph (o) below) occurs or exists under, and continues to exist after the applicablegrace period, in any, specified in, any Material Debt Agreement, (x) which event or condition gives the applicable debtholders, lenders or counterparties the right (whether or not acted upon) to(I) accelerate the maturity of the related Material Debt or (II) cause the early termination of any commitment of any such debtholder, lender or counterparty under the related Material DebtAgreements or the transactions contemplated by the related Material Debt Agreements, and (y) solely in the case of an event or condition arising and continuing under the Meritor CreditAgreement while PNC is a party thereto, which event or condition does not cease to exist, or is not cured or waived in accordance with the terms of the Meritor Credit Agreement within aperiod of thirty (30) days after the later of the date on which such event or condition occurs or the expiration of the applicable grade period (if any);

701648899 12403015 V

(C) any Material Debt is declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment or pursuant to the Permitted 2026 Put),redeemed, purchased or defeased (except as a result of the exercise of any right or option of the Performance Guarantor or the Subsidiary, as applicable), or an offer to repay, redeem, purchaseor defease such Material Debt is required to be made (except as a result of the exercise of any right or option of the Performance Guarantor or the Subsidiary, as applicable), in each case beforethe stated maturity thereof; or

(D) any commitment of any debtholder, lender or counterparty under a Material Debt Agreement or any transaction contemplated by a Material Debt Agreement is, in either case,terminated by the debtholder, lender or counterparty prior to the scheduled termination thereof (except as a result of (i) breach or default by such debtholder, lender, or counterparty, or (ii) theexercise of any right or option of the Performance Guarantor or the Subsidiary, as applicable);

(j) the Performance Guarantor shall fail to perform any of its obligations under the Performance Guaranty;

(k) the Seller shall fail (x) at any time (other than for fifteen (15) Business Days following notice of the death or resignation of any Independent Director) to have an Independent Directorwho satisfies each requirement and qualification specified in Section 3(c) of Exhibit IV to the Agreement for Independent Directors, on the Seller’s board of directors or (y) to timely notify theAdministrator of any replacement or appointment of any director that is to serve as an Independent Director on the Seller’s board of directors as required pursuant to such Section 3(c);

(l) any Letter of Credit is drawn upon and is not fully reimbursed by the Seller, or funded by Participation Advances as required pursuant to Section 1.14;

(m) any material provision of this Agreement or any other Transaction Document shall cease to be in full force and effect or any of the Seller, the Servicer, Meritor or any Originator shall sostate in writing;

(n) one or more judgments or decrees shall be entered against the Seller, Meritor or any Subsidiary of Meritor involving in the aggregate a liability (not paid or to the extent not covered by areputable and solvent insurance company) and such judgments and decrees either shall be final and non-appealable or shall not be vacated, discharged or stayed or bonded pending appeal for anyperiod of 30 consecutive days, and the aggregate amount of all such judgments equals or exceeds $35,000,000 (or solely with respect to the Seller, $12,500); or

(o) Meritor fails to perform the covenant set forth in Section 2(n) of Exhibit IV; provided, however, such event or circumstance shall not constitute a Termination Event if the followingconditions are met with respect thereto: (A) at the time when such event occurs, the Meritor Credit Agreement requires Meritor to cause its Priority Debt Ratio (as defined herein) not to exceed theratios set forth in Section 2(n) of Exhibit IV and an event of default occurs under the Meritor Credit Agreement as a result of Meritor's failure to perform such covenant, (B) such event of default iswaived under the Meritor Credit Agreement in accordance with the terms thereof within 30 days of the occurrence of such event of default, and (C) at the time such waiver is granted under the MeritorCredit Agreement, PNC is a party to the Meritor Credit Agreement.

701648899 12403015 V

SCHEDULE I

CREDIT AND COLLECTION POLICY

(Attached)

701648899 12403015 Schedule I

SCHEDULE II

LOCK-BOX BANKS, LOCK-BOXES, COLLECTIONACCOUNT BANKS AND ACCOUNTS

Lock-Box Banks Lock-Boxes Lock-Box Accounts

JPMorgan Chase Bank, N.A. [Redacted] [Redacted]

701648899 12403015 Schedule II

SCHEDULE III

ACTIONS AND PROCEEDINGS

None.

701648899 12403015 Schedule III

SCHEDULE IV

PURCHASER GROUPS AND MAXIMUM COMMITMENTS

(as of the Closing Date)

Purchaser Group of Market Street Funding LLCParty Capacity Maximum CommitmentMarket Street Funding LLC Conduit Purchaser N/APNC Bank, National Association Related Committed Purchaser $100,000,000PNC Bank, National Association LC Participant $100,000,000PNC Bank, National Association LC Bank N/APNC Bank, National Association Purchaser Agent N/A

701648899 12403015 Schedule IV

SCHEDULE V

PAYMENT INSTRUCTIONS

Purchase Account

Beneficiary: ArvinMeritor Receivables CorporationBank: JPMorgan Chase bankAccount Number: [Redacted]ABA Number: [Redacted]

701648899 12403015 Schedule V

SCHEDULE VIEXCLUDED OBLIGORS

Mack Trucks, Inc.

Volvo Group North America, Inc.

Volvo Construction Equipment N.A.

701648899 12403015 Schedule VI

ANNEX A

to Receivables Purchase Agreement

FORMS OF INFORMATION PACKAGES

With respect to Monthly Information Packages, see Annex A1.

With respect to Weekly Information Packages, see Annex A2.

701648899 12403015 Annex A

ANNEX A1


FORM OF MONTHLY INFORMATION PACKAGE

(Attached)

701648899 12403015 Annex A1

ANNEX A2


FORM OF WEEKLY INFORMATION PACKAGE

(Attached)

701648899 12403015 Annex A2

ANNEX B


FORM OF PURCHASE NOTICE

____________________, 2011

PNC Bank, National AssociationOne PNC Plaza, 26th Floor249 Fifth AvenuePittsburgh, PA 15222-2707

[Each other Purchaser Agent]

Ladies and Gentlemen:

Reference is hereby made to the Receivables Purchase Agreement, dated as of June 18, 2012 (as amended, restated, supplemented or otherwise modified, the “Receivables PurchaseAgreement”), among ArvinMeritor Receivables Corporation, (“Seller”), Meritor, Inc., as Servicer, the various Conduit Purchasers, Related Committed Purchasers, LC Participants and PurchaserAgents from time to time parties thereto, PNC Bank, National Association, as the issuer of letters of credit thereunder (in such capacity, the “LC Bank”), and PNC Bank, National Association, asadministrator (in such capacity, the “Administrator”). Capitalized terms used in this Purchase Notice and not otherwise defined herein shall have the meanings assigned thereto in the ReceivablesPurchase Agreement.

[This letter constitutes a Purchase Notice pursuant to Section 1.2(a) of the Receivables Purchase Agreement. Seller desires to sell an undivided percentage interest in a pool of receivables on____________________, [201_____], for a purchase price of $____________________ (of which $_______ will be funded by Market Street Funding LLC’s Purchaser Group. Subsequent to thisPurchase, the Aggregate Capital will be $____________________.]

[This letter constitutes a notice pursuant to Section 1.12(a) of the Receivables Purchase Agreement. Seller desires that LC Bank issue a Letter of Credit with a face amount of $_____.Subsequent to this purchase, the LC Participation Amount will be $_______ and the Aggregate Capital will be $_____.]

Seller hereby represents and warrants as of the date hereof, and as of the date of such Purchase, as follows:

(i) the representations and warranties contained in Exhibit III of the Receivables Purchase Agreement are true and correct in all material respects on and as of such dates as though made on andas of such dates and shall be deemed to have been made on such dates (except for representations and warranties that apply solely to an earlier date, in which case such representations and warrantiesshall be true and correct in all material respects as of such earlier date);

701648899 12403015 Annex B

(ii) no Termination Event or Unmatured Termination Event has occurred and is continuing, or would result from such purchase;

(iii) after giving effect to the purchase proposed hereby, the Aggregate Capital plus the LC Participation Amount shall not exceed the Purchase Limit, and the Purchased Interest shall notexceed 100%; and

(iv) the Facility Termination Date shall not have occurred.

701648899 12403015 Annex B

IN WITNESS WHEREOF, the undersigned has caused this Purchase Notice to be executed by its duly authorized officer as of the date first above written.


By:

Name:

Title:

701648899 12403015 Annex B

ANNEX C


FORM OF PAYDOWN NOTICE

____________________, 20_____

PNC Bank, National AssociationOne PNC Plaza, 26th Floor249 Fifth AvenuePittsburgh, PA 15222-2707

[Each other Purchaser Agent]

Ladies and Gentlemen:

Reference is hereby made to the Receivables Purchase Agreement, dated as of June 18, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “ReceivablesPurchase Agreement”), among ArvinMeritor Receivables Corporation, as Seller, Meritor, Inc., as Servicer, the various Conduit Purchasers, Related Committed Purchasers, LC Participants andPurchaser Agents from time to time parties thereto, PNC Bank, National Association, as the issuer of letters of credit thereunder (in such capacity, the “LC Bank”), and PNC Bank, NationalAssociation, as Administrator. Capitalized terms used in this paydown notice and not otherwise defined herein shall have the meanings assigned thereto in the Receivables Purchase Agreement.

This letter constitutes a Paydown Notice pursuant to Section 1.4(f)(i) of the Receivables Purchase Agreement. The Seller desires to reduce the Aggregate Capital on________________________, _____ by the application of $____________________ (of which $________ will reduce Capital funded by Market Street Funding LLC’s Purchaser Group in cash toreduce Aggregate Capital by such amount. Subsequent to this paydown, the Aggregate Capital will be $________________.

IN WITNESS WHEREOF, the undersigned has caused this paydown notice to be executed by its duly authorized officer as of the date first above written.


By:

Name:

Title:

701648899 12403015 Annex C

ANNEX D


FORM OF COMPLIANCE CERTIFICATE

To: PNC Bank, National Association, as Administrator

[Each Purchaser Agent]

This Compliance Certificate is furnished pursuant to that certain Receivables Purchase Agreement, dated as of June 18, 2012 by and among ArvinMeritor Receivables Corporation(“Seller”), Meritor, Inc. (the “Servicer”), the various Conduit Purchasers, Related Committed Purchasers, LC Participants and Purchaser Agents from time to time parties thereto, PNC Bank, NationalAssociation, as the issuer of letters of credit thereunder (in such capacity, the “LC Bank”), and PNC Bank, National Association (the “Administrator”) (as amended, restated, supplemented orotherwise modified from time to time, the “Agreement”). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1. I am the duly elected ____________________ of the Servicer.

2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and condition of Seller duringthe accounting period covered by the attached financial statements.

3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Termination Event or anUnmatured Termination Event, as each such term is defined under the Agreement, during or at the end of the accounting period covered by the attached financial statements or as of the date of thisCertificate, except as set forth in paragraph 4 below.

4. Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action whichSeller or the Servicer has taken, is taking, or proposes to take with respect to each such condition or event:

701648899 12403015 Annex D

The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this _____ day of ____________________, 20___.

MERITOR, INC.

By:

Name:

Title:

701648899 12403015 Annex D

ANNEX E


FORM OF LETTER OF CREDIT APPLICATION

(Attached)

701648899 12403015 Annex E

ANNEX F

FORM OF TRANSFER SUPPLEMENT

Dated as of [_______ __, 20__]

Section 1.Commitment assigned: $_________Assignor’s remaining Commitment: $_________Capital allocable to Commitment assigned: $_________Assignor’s remaining Capital: $_________Discount (if any) allocable toCapital assigned: $_________Discount(if any) allocable to Assignor’sremaining Capital: $_________

Section 2.Effective Date of this Transfer Supplement: [__________]

Upon execution and delivery of this Transfer Supplement by transferee and [Seller] and the satisfaction of the other conditions to assignment specified inSection 5.3(c) of the Receivables Purchase Agreement (as defined below), from and after the effective date specified above, the transferee shall become a party to, and have the rightsand obligations of a Related Committed Purchaser under, the Receivables Purchase Agreement, dated as of August __, 2011 (as amended, restated, supplemented or otherwisemodified through the date hereof, the “Receivables Purchase Agreement”), among ArvinMeritor Receivables Corporation, as Seller, Meritor, Inc., as initial Servicer, the variousConduit Purchasers, Related Committed Purchasers, Purchaser Agents and LC Participants from time to time parties thereto, PNC Bank, National Association, as LC Bank, and PNCBank, National Association, as Administrator.

701648899 12403015 Annex F

ASSIGNOR: [_________], as a Related Committed Purchaser

By:______________________Name:Title:

ASSIGNEE: [_________], as a Purchasing Related Committed Purchaser

By:___________________Name:Title:

[Address]

Accepted as of date first abovewritten:

[___________], as Purchaser Agent forthe [______] Purchaser Group

By:_________________________ Name: Title:

[Consented to as of date first above written:

MERITOR, INC.

By:_________________________ Name: Title: ]

701648899 12403015 Annex F

TERMINATION OF RECEIVABLES PURCHASE AGREEMENT

This agreement (the “Agreement”) is entered into on 18 June2012 between

(1) Meritor Heavy Vehicle Systems Cameri S.P.A., a company incorporated under the laws of Italy (reg. no. 03788210015) having its registered office at Strada Provinciale Cameri Bellinzago KM 528062 Cameri, Italy (“Meritor”);

(2) Viking Asset Purchaser No 7 IC, (registration no. 92607), an incorporated cell ofViking Global Finance ICC, an incorporated cell company incorporated under the laws of Jersey having its registeredoffice at Ogier House, The Esplanade, St Helier , Jersey JE4 (“VAP”);

(3) Nordea Bank AB (publ), a company authorised to conduct banking business and incorporated under the laws of Sweden (reg. no. 516406-0120) having its registered office at SE-105 71 Stockholm,Sweden (“Nordea”);

(4) Citicorp Trustee Company Limited, acting through its office at 14th Floor, Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB (“Citicorp”)

The parties listed in (1) to (4) above are hereinafter jointly referred to as the (“Parties”).

WHEREAS:

(A) On 15 March 2012 Meritor, VAP and Citicorp entered into a receivables purchase agreement under which Meritor may sell receivables it has towards certain entities within the Volvo groupto VAP through an electronic platform provided by PrimeRevenue (the “RPA”).

(B) On 15 March Nordea acceded to the RPA as an additional purchaser.

(C) The Parties wish to replace the RPA with a new receivables purchase agreement and thus wish to terminate the RPA on the terms set out in this Agreement.

IT IS THEREFORE AGREED THAT:

1. With effect from the date hereof, each of the parties hereto agrees that the RPA shall be terminated. Accordingly each of the Parties releases and discharge the other Parties from itsrespective covenants, undertakings, obligations, duties and liabilities to the each of the other Parties under or pursuant to the RPA, except to the extent that; (i) any of the Parties’ covenants,undertakings, obligations, duties and liabilities to the other Parties arise out of an event occurring prior to the date hereof; or (ii) such obligations or liabilities are expressed under the termsof the RPA to survive the termination of the RPA.

2. The construction, validity and performance of this Agreement shall be governed and construed in accordance with the laws of Sweden. The courts of Sweden shall have non-exclusivejurisdiction over matters arising out of or in connection with this Agreement. The city court of Stockholm shall be court of first instance.

_________________

This agreement has been duly executed in four (4) original copies, of which each of the parties has taken one (1) copy.

Meritor Heavy Vehicle Systems Cameri S.P.A.

/s/Scott McGregor

Director

/s/Gian Luca Alberti

Director

___________________________

Viking Asset Purchaser no 7 IC

/s/Cheryl Heslop

Alternate Director

___________________________

Citicorp Trustee Company Limited

/s/David Manes

Director

___________________________

Nordea Bank AB (publ)

/s/Andreas Elm

/s/Fredrik Dahlstrom

Director

___________________________

EXECUTION VERSION

RECEIVABLES PURCHASE AGREEMENT

dated 18 June 2012

between

MERITOR HEAVY VEHICLE SYSTEMS CAMERI S.P.A.as Seller

and

NORDEA BANK AB (PUBL)as Purchaser

Table of Contents

1. DEFINITIONS AND CONSTRUCTION 22. PURCHASE AND SALE 23. CONDITIONS PRECEDENT 24. PAYMENTS TO THE PURCHASER, ETC. 25. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS 26. REMEDIES FOR UNTRUE REPRESENTATION, ETC. 27. SPECIFIC INDEMNITIES 28. FURTHER ASSURANCE 29. NOTICES 210. ASSIGNMENTS, TRANSFERS AND SUPPLEMENTS 211. AMENDMENTS AND MODIFICATIONS 212. RIGHTS CUMULATIVE, WAIVERS 213. APPORTIONMENT 214. PARTIAL INVALIDITY 215. CONFIDENTIALITY 216. NO LIABILITY AND NO PETITION 217. GOVERNING LAW AND JURISDICTION 218. TERMINATION 2

SCHEDULE 1 Eligibility Criteria SCHEDULE 2 Conclusion of purchase - offer and acceptance, purchase price and perfection SCHEDULE 3 Representations, warranties and undertakings SCHEDULE 4 Form of solvency certificate

5724536-v18

EXECUTION VERSION

This receivables purchase agreement (the “Agreement”) is made on 18June2012 between:

(1) MERITOR HEAVY VEHICLES SYSTEMS CAMERI S.P.A., a company incorporated under the laws of Italy (reg. no. 03788210015) having its registered office at Strada Provinciale Cameri BellinzagoKM 5 28062 Cameri, Italy (the “Seller”); and

(2) NORDEA BANK AB (publ), a company incorporated under the laws of Sweden (reg. no. 516406-0120) having its registered office at 105 71 Stockholm, Sweden (the “Purchaser”).

EXECUTION VERSION

1. DEFINITIONS AND CONSTRUCTION

1.1 Definitions

In this Agreement the following terms have the following meanings:

“Acceptance” means an acceptance issued by the Purchaser to the Seller through the PrimeRevenue System or in any other form acceptable to the Purchaser in response to an Offer.

“Business Day” means a day on which banks are open in Copenhagen, Stockholm, Jersey and London, for the transaction of business of the nature required by the Transaction Documents.

“Calculation Date” means the Purchase Date provided that if such day is not a Business Day it shall be the next Business Day following such day.

“CMSAs” means the Renault CMSA and any other Customer Managed Service Agreement entered into between a Permitted Obligor and PrimeRevenue, and “CMSA” means any of them.

“Collections” means the aggregate of all amounts paid by the relevant obligors in respect of any and all Purchased Receivables relating to the Purchaser plus any amounts payable to the Purchaser by theSeller but not yet paid to the Purchaser following settlement of the final amount of any claim under any of the warranties, covenants and indemnities contained in this Agreement.

“Defaulted Receivable” means a Purchased Receivable in respect of which there is a Permitted Obligor Default.

“Delinquent Receivable” means, at any time, a Receivable in respect of which all or any part of the Outstanding Amount is not paid on its due date.

“Eligibility Criteria” means the eligibility criteria in respect of the Purchased Receivables set outin Schedule 1 of this Agreement.

“EURIBOR” means: (a) the rate per annum which appears on Page EURIBOR01 on the Reuters Screen; or (b) if no such rate appears, the arithmetic mean (rounded upward to four decimal places) of therelevant offered rates which appear on the relevant page (if any) on the Telerate Screen; or (c) if no such rate appears on the Telerate Screen and one only or no offered rate appears on the relevant page ofthe Reuters Screen or there is no relevant page on the Reuters Screen, the arithmetic mean (rounded upward to four decimal places) of the rates quoted by the Reference Banks to leading banks in theEuropean interbank market, at or about 11.00 a.m. Copenhagen time on the applicable Calculation Date for the offering of euro deposits for the relevant period.

“euro” or “EUR” ormeans the single currency of any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the EuropeanCommunity relating to Economic and Monetary Union.

“Euro Outstanding Amount” means, in relation to any Purchased Receivable, the Outstanding Amount of such Purchased Receivable converted into euro at the Foreign Exchange Rate in respect of suchPurchased Receivable.

“Face Amount” means the face amount in respect of the Notes or the Receivables, as the case may be.

“FI Agreement” means the financial institution agreement dated 11 January 2012 and entered into between the Purchaser and PrimeRevenue.

EXECUTION VERSION

“Financial Indebtedness” means (i) moneys borrowed, (ii) finance or capital leases, (iii) receivables sold or discounted (other than on a non-recourse basis), (iv) other transactions having the commercialeffect of a borrowing, (v) the marked to market value of derivative transactions entered into in connection with protection against or benefit from fluctuation in any rate or price, (vi) counter-indemnityobligations in respect of guarantees or other instruments issued by a bank or financial institution, and (vii) liabilities under guarantees or indemnities for any of the obligations referred to in items (i) to (vi).

“Foreign Exchange Rate” means for any Purchased Receivable, the rate at which any relevant currency is to be exchanged into euro pursuant to any foreign exchange agreement entered into in respect ofsuch Purchased Receivable on or about the Purchase Date in respect of such Purchased Receivable.

“Margin” shall be as set out in the fee letter entered into between the Purchaser and the Seller on or about the date hereof.

“Non-Defaulted Receivables” means Purchased Receivables in relation to the Purchaser for which there has not been any default in payment from the relevant Permitted Obligors.

“Offer” means an irrevocable offer from the Seller to the Purchaser for the sale of Receivables and given by the Seller to the Purchaser through the PrimeRevenue System or in any other form acceptable tothe Purchaser and “to Offer” and “Offered” shall have the corresponding meaning.

“Outstanding Amount” means at any time in respect of any Receivable or Purchased Receivable, the total amount due and owing by the relevant Permitted Obligor at that time in respect of the relevantReceivable or Purchased Receivable. For the avoidance of doubt, the Outstanding Amount for any Purchased Receivable shall not be reduced by virtue of any set off or counterclaim which reduces theamount recoverable in respect of the that Purchased Receivable.

“Permitted Currency” means EUR.

“Permitted Obligors” meansRenault Trucks SAS and any other company within the Volvo group that has entered into a Customer Managed Service Agreement (in all material respects corresponding tothe CMSAs) with PrimeRevenue and that has been approved in writing by the Purchaser.

“Permitted Obligor Default” means, at any time, when a Permitted Obligor is unable to pay its debts as they fall due or against whom any administration, insolvency, bankruptcy or liquidation or similarprocedures have been instituted.

“PrimeRevenue”means PrimeRevenue, Inc. a company incorporated under the laws of the state of Delaware having its registered office at 1349 West Peachtree St., Suite 900, Atlanta, GA, USA.

“PrimeRevenue System” means the system for the sale and transfer of receivables as more particularly described in the CMSAs, the Supplier Agreement and the FI Agreement.

“Presidential Decree” means the Italian presidential decree no. 131 dated 26 April 1986 and any subsequent amendment thereto.

“Purchase Date” means each date upon which a sale and purchase of Receivables is concluded pursuant to Clause 2.2 of this Agreement.

“Purchase Price” means the aggregate Receivables Purchase Price paid or to be paid by the Purchaser to the Seller in respect of Purchased Receivables on a particular Settlement Date.

EXECUTION VERSION

“Purchased Receivables” means all Receivables which are the subject of any sale and purchase (or any purported sale and purchase) pursuant to Clause 2.2 of this Agreement and any other Receivables inrespect of which the Receivables Purchase Price has been paid or will be paid by the Purchaser to the Seller.

“Purchaser” means Nordea BankAB (publ).

“Receivable” means any receivable (inclusive of VAT applied thereon) owed to the Seller in the ordinary course of business by any Permitted Obligor including all rights of the Seller pertaining to suchReceivable (defined as “Payment Obligation” in the respective CMSA) in accordance with the respective CMSA, including but not limited to all the Seller’s rights under Section 18(f) of the respectiveCMSA.

“Receivables Purchase Price” shall be calculated as follows: CA - (CA x IR / (360/DM)); whereCA = the Certified Amount (as defined in the Supplier Agreement) of the Receivable

DM= actual number of days to and including the relevant maturity dateIR = means the applicable interest rate being EURIBOR three (3) months plus the Margin and the Risk Default Remuneration.

“Records” means: (a) all files, correspondence, notes of dealing and other documents, books, books of account, registers, records and other information; and (b) all computer tapes, discs, computerprogrammes, data processing software and related property rights, owned by or under the control and disposition of the Seller, in each case only to the extent relating to the Purchased Receivables.

“Reference Banks” means a minimum of four of the banks (including, in each case, Nordea Bank AB (publ)) which quote rates for the offering of deposits in euro to leading banks in the Europeaninterbank market for the relevant period immediately prior to the time set out in the definition of EURIBOR on the applicable Calculation Date.

“Renault CMSA” means the Customer Managed Service Agreement entered or to be entered into between Renault Trucks SAS and PrimeRevenue, pursuant to which the Seller is defined as a Supplier.

“Risk Default Remuneration” reflects the risk connected in an investment in the Receivables and shall be as set out in the fee letter entered into between the Purchaser and the Seller on or about the datehereof.

“Security Interest” means any mortgage, charge, floating charge, assignment or assignation by way of security, lien, pledge, hypothecation, right of set-off (or analogous right), retention of title, flawedasset or blocked-deposit arrangement or any other encumbrance or security interest or security arrangement whatsoever created or arising under any relevant law or any agreement or arrangement having theeffect of or performing the economic function of conferring security howsoever created or arising.

“Seller” means Meritor Heavy Vehicle Systems Cameri S.P.A., in its capacity as seller under this Agreement and not in any other capacity.

“Seller Potential Suspension Event” means any event which, with the giving of notice and/or lapse of time and/or making of any determination and/or any certification, would constitute a SellerSuspension Event.

EXECUTION VERSION

“Seller SuspensionEvent” means any of the following events:(a) Failure to pay: The Seller fails to pay any amount due under this Agreement or the Supplier Agreement on the due date or on demand in writing, if so payable, unless payment is made

within three (3) Business Days of such due date or demand.(b) Failure to perform other obligations: The Seller fails to observe or perform any of its other material obligations under this Agreement or the Supplier Agreement or under any

undertaking or arrangement entered into in connection therewith and, in the case of a failure capable of being remedied, within ten (10) days after receipt by the Seller of a request in writing from thePurchaser, that the same be remedied, it has not been remedied to the Purchaser’s reasonable satisfaction.

(c) Representations, warranties or statements proving to be incorrect: Any representation, warranty or statement which is made (or deemed or acknowledged to have been made) by theSeller under this Agreement or the Supplier Agreement or which is contained in any certificate, statement or notice provided by the Seller under or in connection with this Agreement or the SupplierAgreement proves to be incorrect to an extent which, in the reasonable opinion of the Purchaser, is likely to affect the ability of the Seller to perform its obligations under any of the TransactionDocuments to which it is a party in a manner which is material and adverse in the context of the Transaction or which is likely materially and adversely to affect the collectability of the PurchasedReceivables or any of them.

(d) Provisions becoming unenforceable: Any provision of any of the Transaction Documents to which the Seller is a party is or becomes, for any reason, invalid or unenforceable and for solong as such provision remains invalid and unenforceable to an extent which, in the reasonable opinion of the Purchaser, is likely materially and adversely to affect the ability of the Seller (acting inany capacity under any of the Transaction Documents to which it is a party) to perform its obligations under any of the Transaction Documents to which it is a party in a manner which is material andadverse in the context of the Transaction or which is likely to materially and adversely affect the collectability of the Purchased Receivables or any of them.

(e) Suspension or expropriation of business operations: The Seller changes, suspends or threatens to suspend a substantial part of the present business operations which it now conductsdirectly or indirectly, or any governmental authority expropriates all or a substantial part of its assets and the result of any of the foregoing is, in the reasonable opinion of the Purchaser, likely toaffect the ability of the Seller to observe or perform its obligations under any of the Transaction Documents to which it is a party in a manner which is material and adverse in the context of theTransaction or which is likely to materially and adversely affect the collectability of the Purchased Receivables or any of them.

(f) Enforcement by creditors: Any form of execution or arrest is levied or enforced upon or sued out against all and any of the Seller’s assets and is not discharged within twenty (20) days ofbeing levied, or any Security Interest which may for the time being affect any material part of its assets becomes enforceable and steps are lawfully taken by the creditor to enforce the same. NoSeller Suspension Event will occur under this paragraph (f) if the aggregate amount of the claim enforced is less than EUR 1,000,000 or the equivalent in any other currency.

(g) Arrangement with Creditors: The Seller proposes or makes any arrangement or composition with, or any assignment or trust for the benefit of, its creditors generally involving (notnecessarily exclusively) indebtedness which the Seller would not otherwise be able to repay or service in accordance with the terms thereof.

(h) Winding-up:A petition is presented (unless contested in good faith and discharged or stayed within twenty (20) days) or a meeting is convened for the purpose of considering a resolutionor other steps are taken for the winding up of the Seller (other than for the purposes of and followed by a solvent reconstruction previously approved in writing by the Purchaser (such approval not tobe unreasonably withheld or delayed), unless during or following such reconstruction the Seller becomes or is declared to be insolvent).

“Settlement Date” means, in respect of a Purchased Receivable, the first (1st) Business Day after the relevant Calculation Date.

EXECUTION VERSION

“Supplier Agreement” means the supplier agreement entered or to be entered into between the Seller and PrimeRevenue, pursuant to which each of the Permitted Obligors is defined as a Customer.

“Tax” or “tax” includes all forms of tax, duty or charge on gross or net income, profits or gains, distributions, receipts, sales, use, occupation, franchise, value added, personal property, documents andinstruments, and any levy, impost, duty, charge or withholding of any nature whatsoever chargeable by any authority, whether in Sweden, Jersey or elsewhere, together with all penalties, charges and interestrelating to any of the foregoing.

“Termination Date” means the earliest date on which a Termination Event occurs.

“Termination Event” means the occurrence of any of the following:(a) five (5) years having elapsed from the date of this Agreement;(b) a failure by the Seller to perform any of its material obligations within thirty (30) Business Days after notification in writing of such failure to perform;(c) in relation to the Seller, any corporate action being taken or becoming pending, any other steps being taken or any legal proceedings being commenced or threatened or becoming pending

for (i) the bankruptcy, liquidation, dissolution, administration or reorganisation of the Seller (other than for the purposes of and followed by a solvent reconstruction previously approved in writing bythe Purchaser (such approval not to be unreasonably withheld or delayed) unless during or following such reconstruction the Seller becomes or is declared to be insolvent) and which is not beingcontested in good faith or which is not dismissed or withdrawn within thirty (30) days, (ii) the Seller to enter into any composition or arrangement with its creditors generally, or (iii) the appointmentof a receiver, administrative receiver, trustee or similar officer in respect of the Seller or substantially all of the property, undertaking or assets of the Seller;

(d) a refusal of the Seller to pay any increased costs incurred by the Purchaser in connection with the Transaction, such increased costs being outside the control of the Purchaser;(e) any CMSA and/or the Supplier Agreement being amended to the detriment of the Purchaser or if any CMSA, the FI Agreement and/or the Supplier Agreement is terminated for whatever

reason or if any third party right in any CMSA or the Supplier Agreement in relation to which the Purchaser is a beneficiary becomes invalid or unenforceable;(f) a Seller Suspension Event is outstanding for sixty (60) days or longer, subject to written notice being given by the Purchaser; and(g) cross default; (i) any Financial Indebtedness of the Seller is not paid when due nor within any originally applicable grace period, or is declared to be or otherwise becomes due and

payable prior to its specified maturity as a result of an event of default (however described); (ii) any commitment for any Financial Indebtedness of the Seller is cancelled or suspended by a creditoras a result of an event of default (however described); (iii) Any creditor of the Seller becomes entitled to declare any Financial Indebtedness of the Seller due and payable prior to its specifiedmaturity as a result of an event of default (however described); (iv) no Termination Event will occur under this paragraph (h) if the aggregate amount of Financial Indebtedness or commitment forFinancial Indebtedness falling within paragraphs (i) to (iii) above is less than EUR 10,000,000 or the equivalent in any other currency.

“Transaction” means the transaction relating to this Agreement envisaged by the Transaction Documents whereby the Seller may sell certain Receivables to the Purchaser and the Purchaser may purchasesuch Receivables, and all related arrangements provided for in the Transaction Documents.

“Transaction Documents” means the documents relating to the Transaction, including this Agreement, the FI Agreement, the CMSAs and the Supplier Agreement, and any agreement or documentexecuted pursuant to or in connection with any of these documents.

1.2 Construction

1.2.1 References in this Agreement to any person shall include references to his successors, transferees and assignees and any person deriving title under or through him.

EXECUTION VERSION

1.2.2 References in this Agreement to any statutory provision shall be deemed also to refer to any statutory modification or re-enactment thereof or any statutory instrument, order or regulation made thereunderor under any such re-enactment.

1.2.3 References in this Agreement to any agreement or other document shall be deemed also to refer to such agreement or document as amended, varied, supplemented, replaced or novated from time to time.

1.2.4 All references in this Agreement to the Purchaser shall be construed as a reference also to the Purchaser's successors and assignees.

2. PURCHASE AND SALE

2.1 Purchase of ReceivablesSubject to the terms and conditions of this Agreement, the Purchaser agrees that it may (at its sole discretion) elect to purchase Receivables from the Seller on a regular basis from the date

hereof until the Termination Date.

2.2 Conclusion of purchase - offer and acceptanceSale and purchase of Receivables will in each case be concluded as more particularly set out in Part 1 of Schedule 2.

2.3 Purchase PriceThe Purchase Price shall be paid and calculated as more particularly set out in Part 2 of Schedule 2.

2.4 VATAny VAT refund collected from the VAT authorities by the Seller following credit losses on a Purchased Receivable shall be for the benefit of the Purchaser and be paid by the Seller to the

Purchaser. The Seller undertakes to take any action permissible, and required by the Purchaser, to assist in collecting any such VAT refund for the benefit of the Purchaser, including but not limited toacquiring the Purchased Receivable at a price equal to any VAT refund available for collection and any amounts recoverable from the Permitted Obligor (if any) and to pay such purchase price upon and tothe extent of receipt of the VAT refund and any amounts recovered from the Permitted Obligor.

2.5 PerfectionEach sale and purchase pursuant to Clause 2.2 above shall be implemented through the actions more particularly described in Part 3 of Schedule 2.

2.6 Seller’s receipt of payment in respect of Purchased ReceivablesIn the event that, notwithstanding the notification referred to in Clause 2.5, the Seller receives from the Permitted Obligors any payment in respect of Purchased Receivables, the Seller shall

pay to the Purchaser promptly following such a receipt, all such Collections received by it in respect of the Purchased Receivables to the account as notified by the Purchaser pursuant to Clause 4.2.

3. CONDITIONS PRECEDENT

3.1 The obligations of the Purchaser under or pursuant to this Agreement are subject to the satisfaction (as determined in the reasonable opinion of the Purchaser) of the following conditions precedent:

(a) each of the Transaction Documents (including the CMSA(s) relating to the relevant Permitted Obligor(s)) has been validly executed by all parties thereto;

EXECUTION VERSION

(b) all actions that pursuant to Part 3 of Schedule 2 shall be taken prior to or upon any purchase of the relevant Receivables have been completed;

(c) the Purchaser has received a solvency certificate from the Seller substantially in the form of Schedule 5;and

(d) the Purchaser has received in form and substance satisfactory to it legal opinion(s) issued by reputable law firm(s) approved by it, as to the laws of the jurisdiction(s) it deemrelevant.

4. PAYMENTS TO THE PURCHASER, ETC.

4.1 All amounts to be paid to the Purchaser under this Agreement shall be paid when due to the relevant account and at the times specified below.

4.2 Any amounts payable to the Purchaser under this Agreement shall be remitted to the accounts notified in writing to the Seller by the Purchaser no later than the time indicated in such notice.

4.3 All payments made by the Seller under this Agreement shall be made without set-off, counterclaim or withholding. If the Seller is compelled by law or otherwise to make any deduction, the Seller shall payany additional amount as will result in the net amount received by the Purchaser being equal to the full amount which would have been received had there been no deduction or withholding.

5. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

5.1 Warranties relating to the SellerAs at each Purchase Date, the Seller shall make the representations and warranties to the Purchaser in the terms set out in Part 1 of Schedule 3 in relation to the Seller and with reference to the

facts and circumstances subsisting on such Purchase Date.

5.2 Warranties relating to Purchased ReceivablesAs at each Purchase Date, the Seller shall make the representations and warranties severally to the Purchaser in the terms set out in Part 2 of Schedule 3 with respect to the Receivables to be

sold by it and purchased by the Purchaser on such Purchase Date with reference to the facts and circumstances subsisting on such Purchase Date.

5.3 Obligation to notify in case of incorrect representations, etc.The Seller shall forthwith notify the Purchaser if any of the representations and warranties referred to in this Clause 5 were incorrect when made promptly upon becoming aware thereof.

EXECUTION VERSION

5.4 Covenants and undertakingsThe Seller covenants and undertakes with and to the Purchaser as follows:

(a) Indemnity against claims: the Purchaser shall have no obligation nor liability with respect to any Purchased Receivables nor will the Purchaser be required to perform any of theobligations of the Seller (or any of its agents) under any such contracts save, in each case, as specifically provided in this Agreement. The Seller will on demand indemnify and keep indemnifiedthe Purchaser against any cost, claim, loss, expense, liability or damages (including legal costs and out-of-pocket expenses) (save to the extent that such cost, claim, loss, expense, liability ordamage shall not have arisen as a consequence of any breach of this Agreement by, or as a result of the wilful misconduct or negligence of the Purchaser) reasonably and properly incurred orsuffered by the Purchaser as a consequence of any claim or counterclaim or action of whatsoever nature made or taken by a Permitted Obligor or any third party arising out of or in connectionwith any Purchased Receivables or any services which are the subject of such Purchased Receivables;

(b) Indemnity against breach: the Seller will on demand indemnify and keep indemnified the Purchaser against any cost, claim, loss, expense, liability or damages (including legalcosts and out-of-pocket expenses) reasonably and properly incurred or suffered by the Purchaser as a consequence of any breach by the Seller of this Agreement or any other TransactionDocument (to which the Seller is a party) (save to the extent that such cost, claim, loss, expense, liability or damages shall not have arisen as a consequence of any breach of this Agreement by, oras a result of the wilful misconduct or negligence of the Purchaser);

(c) Indemnity on termination: the Seller shall on demand indemnify the Purchaser against all additional costs incurred by the Purchaser as a result of such termination, which, forthe avoidance of doubt, include additional costs which are incurred on or after the Termination Date;

(d) No set-off: the Seller shall not take any action which would cause any set-off, counterclaim, credit, discount, allowance, right of retention or compensation, right to make anydeduction, equity or any other justification for the non-payment of any of the amounts payable under any Purchased Receivable (whether by the relevant Permitted Obligor or otherwise) withoutthe prior written consent of the Purchaser;

(e) Authorisations, approvals, licences, consents etc.: the Seller shall obtain, comply with the terms of, and maintain in full force and effect, all authorisations, approvals, licencesand consents required in or by the laws and regulations of Italy and any other applicable law to enable it to perform its obligations under this Agreement;

(f) No other dealing: the Seller will not dispose, sell, transfer or assign, create any interest in (including Security Interest), or deal with any of the Purchased Receivables in anymanner whatsoever or purport to do so except as permitted by this Agreement;

(g) No other action: the Seller will not knowingly take any action which may prejudice the validity or recoverability of any Purchased Receivable or which may otherwiseadversely affect the benefit which the Purchaser may derive from such Purchased Receivable pursuant to this Agreement;

(h) Tax payments: the Seller will pay or procure the payment (as required by law) of all federal, state, local, and foreign sales, use, excise, utility, gross receipts, VAT or other taxes,including but not limited to any withholding tax, imposed by any authority in relation to the Purchased Receivables, the FI Agreements or this Agreement (but excluding for the avoidance ofdoubt such corporate income tax as referred to in Section 7.1) and shall make all relevant returns in respect of VAT in relation to the Purchased Receivables.

(i) Notice of default: the Seller shall promptly upon becoming aware of the same inform the Purchaser of any occurrence which might adversely affect its ability to perform itsobligations under this Agreement and from time to time, if so requested by the Purchaser, confirm to the Purchaser in writing that, save as otherwise stated in such confirmation, no suchoccurrence has occurred and is continuing;

EXECUTION VERSION

(j) Delivery of reports: the Seller shall deliver to the Purchaser, sufficient copies of each of the following documents, in each case at the time of issue thereof:

(i) every report, circular, notice or like document issued by the Seller to its creditors generally; and

(ii) (if the Purchaser so requires) a certificate from its CFO stating that the Seller as at the date of its latest consolidated audited accounts was in compliance with thecovenants and undertakings in this Agreement (or if it was not in compliance indicating the extent of the breach).

(k) Provision of further information: subject to applicable legislation, the Seller shall provide the Purchaser with such financial and other information concerning the Seller and itsaffairs as the Purchaser may from time to time reasonably require and which is available to the Seller.

(l)Notice of misrepresentation: the Seller shall promptly upon becoming aware of the same notify the Purchaser of any misrepresentation by the Seller under or in connection with any Transaction Documentto which it is a party.

5.5 Representations and Warranties relating to the Purchaser

5.5.1 As at each Purchase Date and each Calculation Date, the Purchaser shall make the representations and warranties to the Seller in the terms set out in Part 3 of Schedule 3 with reference to the facts andcircumstances subsisting on each such Purchase Date and Calculation Date.

5.5.2 The Seller shall have the option to terminate this Agreement in respect of the Purchaser upon any material breach of the representations and warranties referred to in this Clause 5.5 by the Purchaser,provided such material breach have a material adverse effect on the Seller.

6. REMEDIES FOR UNTRUE REPRESENTATION, ETC.

6.1 If at any time after the Settlement Date in respect of any Purchased Receivable it shall become apparent that any of the representations and warranties set out in Part 2 of Schedule 3 relating to or otherwiseaffecting such Purchased Receivable was untrue or incorrect when made by reference to the facts and circumstances subsisting at the date on which such representations and warranties were given, the Sellershall, within five (5) Business Days of receipt of written notice thereof from the Purchaser, remedy or procure the remedy of the matter giving rise thereto if such matter is capable of remedy and, if suchmatter is not capable of remedy or is not remedied within the said period of five (5) Business Days, then following the expiry of such five (5) Business Day period the Seller shall pay to the Purchaser anamount equal to the difference (if any) between (i) the amount due for payment in respect of such Purchased Receivable on such due date and (ii) the amount of Collections received in respect of suchPurchased Receivable on or before such due date, to the extent such difference was caused by, or has any connection with, the breach of the relevant representation and warranty. If the Seller shall otherwisebecome aware of such untrue or incorrect representation and warranty other than by written notification from the Purchaser, it shall immediately notify the Purchaser of such untrue or incorrectrepresentation and warranty. In the event the Transaction is terminated prior to the date on which an amount under this Clause 6 would have been payable by the Seller, the Seller shall pay such amountfollowing receipt of the said written notice from the Purchaser on or before the date the Transaction is terminated or promptly thereafter.

EXECUTION VERSION

6.2 Notwithstanding Clause 6.1, if at any time after the Purchase Date but prior to collection of payments in full in relation to any Purchased Receivables it shall become apparent that the representation andwarranty set out in paragraph (d) of Part 2 of Schedule 3 relating to or otherwise affecting such Purchased Receivable was untrue or incorrect when made by reference to the facts and circumstancessubsisting at the date on which such representations and warranties were given, then the Seller shall repurchase such Purchased Receivable for a price equal to the sum of (i) the Purchase Price for suchPurchased Receivable (taking into account any Collections received in respect of such Purchased Receivable prior to the repurchase), and (ii) the funding costs attributable to such Purchased Receivable, andsee to it that notice of such repurchase is given to the relevant Permitted Obligor. Any Collections received by the Purchaser in respect of such repurchased Purchased Receivables after the Seller has paid theprice for such repurchase shall be paid to the Seller promptly upon receipt.

6.3 With respect to any event where, under this Clause 6 or any other provision of this Agreement, the Seller is required to repurchase any of the Receivables or if any of such Receivables are to be transferredback to the Seller, such assignment and transfer shall be performed pursuant to and in compliance with the provisions of article 1689 and seq of the French civil code.

7. SPECIFIC INDEMNITIES

7.1 The Seller shall indemnify and hold the Purchaser harmless from any obligation, liability or assessment imposed upon the Purchaser as a result of this Agreement or the transactions contemplated herein topay any tax (other than corporate income tax levied on the Purchaser as tax resident in any jurisdiction but without prejudice to the provisions of Sections 4.3 and 5.4.(h), including registration tax (imposta diregistro) under the Presidential Decree arising out of the execution, delivery, performance and/or the perfection of the arrangements contemplated under this Agreement, including, without limitation, in the socalled “case of use”(caso d’'uso) as such term is defined in Article 6 of the Presidential Decree.

7.2 The Seller shall further indemnify and hold the Purchaser harmless from any cost or loss incurred or suffered by the Purchaser in relation to a failure by the Seller to perform its obligations under Part 3 ofSchedule 2.

8. FURTHER ASSURANCE

8.1 The Seller hereby undertakes not to take any steps or cause any steps to be taken in respect of the Purchased Receivables or the services supplied thereunder.

8.2 For the avoidance of doubt, this undertaking shall apply (without limitation) to the following:

(a) any termination, waiver, amendment or variation in relation to any Purchased Receivables;

(b) any assignment or sale of any Purchased Receivables; and

(c) any disposal of its right, title, interest, benefit or power in any Purchased Receivables.

8.3 In addition to any records or information available through the PrimeRevenue System, the Seller undertakes at the request of the Purchaser to produce and deliver Records concerning the PurchasedReceivables as the Purchaser may reasonably request for enforcement or accounting purposes.

EXECUTION VERSION

8.4 In the event that such Records as referred to in Clause 8.3 are not produced reasonably promptly, the Seller shall permit any persons nominated by the Purchaser at any time during normal business hoursupon five (5) Business Days written notice to enter any premises owned or occupied by it or its agents where the Records and other information concerning Purchased Receivables are kept to have access(subject to appropriate supervision provided by the Seller and provided that the Seller shall not unreasonably delay the provision of such supervision) to, examine and make copies of all Records relating tothe Purchased Receivables and the performance by the Seller of its obligations hereunder. Such access shall include the right to have access to and use (subject to appropriate supervision provided by theSeller and provided that the Seller shall not unreasonably delay the provision of such supervision) all computer passwords necessary to gain access to the relevant computer records.

9. NOTICES

Any notices to be given pursuant to this Agreement to any of the parties hereto shall be sufficiently served or given if delivered by hand or sent by prepaid first-class post or by facsimiletransmission and shall be deemed to be given (in case of notice delivered by hand or post) when delivered or (in the case of any notice by facsimile transmission) upon receipt in legible form and shall bedelivered or sent:

The Purchaser: Nordea Bank AB (publ)c/o Nordea Bank Danmark A/SChristiansbro, Strandgade 3DK-1401 Copenhagen KDenmarkAttention: Pernille Dammand Facsimile No.: +45 3333 2697

The Seller: Meritor Heavy Vehicle Systems Cameri S.P.AStrada Provinciale Cameri Bellinzago KM 5,28062 Cameri,ItalyAttention: Gianluca Alberti Facsimile No: +39 0321 423 424

or to such other address or facsimile number or for the attention of such other person as may from time to time be notified by any party to each of the other parties by written notice inaccordance with the provisions of this Clause 9.

10. ASSIGNMENTS, TRANSFERS AND SUPPLEMENTS

The Purchaser may transfer Purchased Receivables to anincorporated cell of Viking Global Finance IC (a “Transferee”). The Seller hereby acknowledges and agrees that all rights of the Purchaserhereunder, including but not limited to in relation to the Seller’s representations and warranties, shall be for the benefit of a Transferee as though such Transferee had been party to this Agreement.Notwithstanding such transfer, the Purchaser shall have the same rights vis-à-vis the Seller as if such transfer had not occurred. For the avoidance of doubt, the Seller shall never be liable vis-à-vis both thePurchaser and the Transferee in relation to a claim relating to the same Receivable(s).

11. AMENDMENTS AND MODIFICATIONS

EXECUTION VERSION

No amendment, modification, variation or waiver of this Agreement shall be effective unless it is in writing and signed by (or by some person duly authorised by) each of the parties hereto.

12. RIGHTS CUMULATIVE, WAIVERS

The respective rights of each party under or pursuant to this Agreement are cumulative, and are in addition to their respective rights under the general law. The respective rights of each partyunder or pursuant to this Agreement shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing; and, in particular, any failure to exercise or any delay inexercising any of such rights shall not operate as a waiver or variation of that or any other such right.

13. APPORTIONMENT

The parties agree that if a Permitted Obligor, owing a payment obligation which is due in respect of one or more Purchased Receivables, submits an incomplete or inaccurate informationregarding the Receivable to the PrimeRevenue System or otherwise makes a general payment to the Purchaser (or the Seller) and makes no apportionment between them as to which Purchased Receivablessuch payment relates, then such payment shall be treated as though the Permitted Obligor had appropriated the same as payment of Purchased Receivables in relation to the Purchaser in order of maturity(starting with the Purchased Receivables in relation to the Purchaser having the earliest maturity date).

14. PARTIAL INVALIDITY

If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect in any jurisdiction, such invalidity, illegality or unenforceability in such jurisdiction shall notrender invalid, illegal or unenforceable such provisions in any other jurisdiction or affect the remaining provisions of this Agreement. Such invalid, illegal or unenforceable provision shall be replaced by theparties with a provision which comes as close as reasonably possible to the commercial intentions of the invalid, illegal or unenforceable provision.

15. CONFIDENTIALITY

None of the parties shall disclose to any person, firm or company whatsoever, or make use of (other than in accordance with the Transaction Documents) any information relating to thebusiness, finances or other matters of a confidential nature of any other party to this Agreement of which it may in the course of its duties under this Agreement or otherwise have become possessed(including, without limitation and without prejudice to the generality of the foregoing any information concerning the identity or creditworthiness of any Permitted Obligor (all and any of the foregoingbeing “Confidential Information”)) and all the parties shall use all reasonable endeavours to prevent any such disclosure or use provided however that the provisions of this Clause 15 shall not apply:

(a) Permitted parties: to the disclosure of any information to any person who is a party to any of the Transaction Documents (to the extent such Transaction Documents relates tothe Transaction as contemplated by this Agreement);

(b) Known information: to the disclosure of any information already known to the recipient otherwise than as a result of entering into any of the Transaction Documents (to theextent such Transaction Documents relates to the Transaction as contemplated by this Agreement);

(c) Public knowledge: to the disclosure of any information which is or becomes public knowledge otherwise than as a result of the conduct of the recipient;

EXECUTION VERSION

(d) Legal requirement: to the extent that the recipient is required to disclose the same pursuant to any law or order of any court of competent jurisdiction or pursuant to anydirection or requirement (whether or not having the force of law) of any central bank or any governmental or other regulatory or taxation authority in any part of the world (including, withoutlimitation, any official bank examiners or regulators);

(e) Rights and duties: to the extent that the recipient needs to disclose the same for the exercise, protection or enforcement of any of its rights under any of the TransactionDocuments or, for the purpose of discharging, in such manner as it reasonably thinks fit, its duties or obligations under or in connection with the Transaction Documents in each case to suchpersons as require to be informed of such information for such purposes (including for these purposes, without limitation, disclosure to any rating agency);

(f) Professional advisers: to the disclosure of any information to professional advisers or auditors of the relevant party in relation to, and for the purpose of, advising such party orcomplying with their duties as auditors;

(g) Financial institutions: to the disclosure in general terms of any information to financial institutions servicing the relevant party in relation to finances, insurance, pensionschemes and other financial services;

(h) Written consent: to the disclosure of any information with the written consent of all of the parties hereto;

(i) Viking:to the disclosure of any information to Viking Asset Purchaser No. 7 IC and any of its affiliates;

(j) Group companies: to the disclosure of information to companies belonging to the same group of companies as the Seller and the Purchaser, respectively; and

(k) Permitted Obligors: to the disclosure of information to Permitted Obligors necessary for the performance of the Seller’s obligations hereunder, or reasonably incidental thereto.

16. NO LIABILITY AND NO PETITION

16.1 No recourse under any obligation, covenant, or agreement of any party contained in this Agreement shall be had against any shareholder, officer or director of the relevant party as such, by the enforcementof any assessment or by any proceeding, by virtue of any statute or otherwise, it being expressly agreed and understood that this Agreement is a corporate obligation of the relevant party and no personalliability shall attach to or be incurred by the shareholders, officers, agents or directors of the relevant party as such, or any of them, under or by reason of any of the obligations, covenants or agreements ofsuch relevant party contained in this Agreement, or implied therefrom, and that any and all personal liability for breaches by such party of any of such obligations, covenants or agreements, either at law orby statute or constitution, of every shareholder, officer, agent or director is hereby expressly waived by the other parties as a condition of and consideration for the execution of this Agreement.

17. GOVERNING LAW AND JURISDICTION

17.1 This Agreement is governed by and shall be construed in accordance with Swedish law. The simplified assignment form in Appendix 2 to Schedule 2 shall be governed by French law.

17.2 The courts of Sweden shall have non-exclusive jurisdiction over matters arising out of or in connection with this Agreement. The City Court of Stockholm shall be court of first instance.

EXECUTION VERSION

18. TERMINATION

This Agreement shall remain in full force and effect until the Termination Date, provided, however, that the rights and remedies of a party with respect to any breach of any warranty made byanother party in or pursuant to this Agreement, the provisions of Clause 15, Clause 167 and Clause 18 and the indemnification and payment provisions of this Agreement shall be continuing and shallsurvive any termination of this Agreement.

____________________

EXECUTION VERSION

This Agreement has been entered into on the date stated at the beginning of this Agreement.

For and on behalf ofMERITOR HEAVY VEHICLE SYSTEMS CAMERI S.P.ABy:/s/ Scott McGregorTitle: Chairman

By:/s/ Gian Luca AlbertiTitle: Managing Director

For and on behalf ofNORDEA BANK AB (PUBL)

By:/s/ Andreas Elm

By:/s/Fredrik DahlstromTitle: Director

EXECUTION VERSION

SCHEDULE 1

ELIGIBILITY CRITERIA

Each Receivable must satisfy the following Eligibility Criteria on the relevant Purchase Date:

1. The terms of the Receivable provide for payment in full by the Permitted Obligor not later than 120 days after the date of creation of such Receivable or as otherwise approved by the Purchaser.

2. The Receivable is neither a Defaulted Receivable nor a Delinquent Receivable.

3. The Receivable is denominated and payable in a Permitted Currency and is fully identified as such in the PrimeRevenue System and in the records of the Seller.

4. An invoice relating to the Receivable has been issued and has been approved by the relevant Permitted Obligor.

5. The Receivable is segregated and identifiable and can be validly transferred without the consent of the Permitted Obligor by the Seller to the Purchaser.

6. The Receivable is not subject to set-off, counterclaim (other than in accordance with the respective CMSA) or withholding taxes other than as generally provided for under French law (as applicable) and isa legally enforceable obligation of the Permitted Obligor.

7. The Receivable is owed by a Permitted Obligor who as at the Purchase Date to the knowledge of the Seller is not bankrupt or in liquidation, has not filed for a suspension of payments or petitioned for theopening of procedures for a compulsory composition of debts or is subject to similar or analogous proceedings or as otherwise approved by the Purchaser.

8. The governing law of the Receivables is French law.

9. The Receivable is a non-interest bearing (other than default or penalty interest) trade receivable arising in the ordinary course of the Seller’s business, the Outstanding Amount of which remains as debt.

10. The delivery of the goods and/or services giving rise to the Receivable has been made and invoiced, has not been cancelled or rejected by the Permitted Obligor and the invoice provides for full payment bythe Permitted Obligor.

11. The Receivable has been created in accordance with all applicable laws and all consents, approvals and authorisations required of or to be maintained by the Seller have been obtained and are in full forceand effect and are not subject to any restriction that would be material to the origination, enforceability or assignability of such Receivable.

12. The Receivable has not been, in whole or in part, pledged, mortgaged, charged, assigned, discounted, subrogated or attached or transferred in any way and is otherwise free and clear of any liens orencumbrances, other than those arising by operation of law, exercisable against the Seller by any party.

13. The Receivable constitutes the legal, valid, binding and enforceable obligation of the Permitted Obligor to pay on the due date the Outstanding Amount of the Receivable as at the Purchase Date and is notsubject to any defence, dispute, lien, right of rescission, set-off or counterclaim (other than in accordance with the respective CMSA) or enforcement order.

14. The Receivable has been owned exclusively by the Seller since its origination and until the relevant Purchase Date.

15. Collections in respect of the Receivable can be identified as being attributable to the Receivable as soon as practically possible following their receipt and in any event not later than three (3) Business Daysfollowing their receipt.

EXECUTION VERSION

SCHEDULE 2

CONCLUSION OF PURCHASE – OFFER AND ACCEPTANCE, PURCHASE PRICE AND PERFECTION

Part 1

Conclusion of Purchase – offer and acceptance

1. The Seller may from time to time make an Offer to the Purchaser and the Purchaser may from time to time (but shall, for the avoidance of doubt, have no obligation to) accept such Offer by an Acceptance.On the date of Acceptance the Purchaser shall complete the simplified assignment form (acte de cession de créances professionnelles) subject to articles L.313-23 à L.313-34 of the French monetary andfinancial code (Code monétaire et financier), signed by the Seller by dating the simplified assignment form with the date for Acceptance.

2. Any Acceptance by a Purchaser shall always be subject to all of the following conditions being satisfied or, if possible, waived:

(a) any Acceptance must be made before the Termination Date and no Acceptance which is communicated or generated on or after the Termination Date shall be valid;

(b) no Seller Potential Suspension Event or Seller Suspension Event having occurred and being continuing; (f) the relevant Receivable shall meet all of the Eligibility Criteria;

(g) the Purchaser having received from the Seller a letter of confirmation substantially in the form set out in Appendix 4 hereto duly signed, but not dated, on separate copies by theSeller and the Permitted Obligor; and

(h) the Purchaser having received from the Seller a duly completed simplified assignment form (acte de cession de créances professionnelles) subject to articles L.313-23 à L.313-34 of the French monetary and financial code (Code monétaire et financier), in the form appended as Appendix 2 to this Schedule 2, duly signed, but not dated, by the Seller.

EXECUTION VERSION

Part 2

Purchase Price

1. The Purchase Price shall be paid by or on behalf of the Purchaser to the Seller on the relevant Settlement Date. Payment shall be made (subject to deductions, including for the settlement of fees, as agreedby the Seller in any Transaction Document) to bank account number as set out below or as otherwise agreed from time to time between the Purchaser, and the Seller and notified to PrimeRevenue.

Bank: Banco PopolareIBAN: [REDACTED]Swift: [REDACTED]

2. The Receivables Purchase Price shall be calculated by the PrimeRevenue System on behalf of the Purchaser on the Calculation Date and PrimeRevenue shall inform the Seller and the Purchaser of theReceivables Purchase Price through the PrimeRevenue System on such Calculation Date.

EXECUTION VERSION

Part 3

Perfection

1. Prior to the transfer and acquisition of any Receivables the Purchaser and the Seller shall send a notice letter to (each of) the Permitted Obligor(s) that is/are the debtor(s) of the relevant Receivables, with thefollowing content:

To: [PERMITTED OBLIGOR]

RE: NOTICE OF SALE AND TRANSFER OF RECEIVABLES AND RIGHTS UNDER A CUSTOMER MANAGED SERVICES AGREEMENT

A.Pursuant to a Receivables Purchase Agreement (the “RPA”) Meritor Heavy Vehicle Systems Cameri S.P.A. as seller (the “Seller”) and Nordea Bank AB (publ) (the “Purchaser”), dated [ ] [2012], the Seller hasagreed to sell and the Purchaser has agreed to purchase receivables (the “Receivables”) owed by [name of Permitted Obligor] (“Obligor”) to the Seller (in its capacity as supplier to Obligor).

B.Offer and acceptance will be made through a system (the “System”) provided by PrimeRevenue, Inc (“PrimeRevenue”). Obligor has on 2 May 2006 entered into a Customer Managed Services Agreement (the“CMSA”) with PrimeRevenue regarding the use of the System. Through the CMSA (Section 18(f)) Obligor has made certain undertakings, covenants, representations and warranties to the Seller (the“Seller CMSA Rights”) as regards inter alia the Receivables and the use of the System.

C.In connection with a sale of Receivable(s) under the RPA through the System, the System will generate a notice of transfer (the “Transfer Notice”) that will be sent to Obligor. A specimen of such Transfer Noticeis attached hereto as Appendix 1.

D.In accordance with and without limiting, expanding or otherwise amending the terms and conditions of the CMSA, this is to notify Obligor that each Transfer Notice shall have the following meanings;

(i)the Receivable(s) defined therein (as clarified in Appendix 1) (the “Purchased Receivables”) has/have been sold and transferred to the Purchaser identified in the Transfer Notice (see Appendix 1);

(ii) consequently, all payments attributable to the Purchased Receivables shall be made to the Purchaser in its capacity as owner of such receivables (as set forth in the CMSA and in particularSection 2(b)(v) thereof);

(iii)all payments to the Purchaser referred to in this notice shall (until otherwise instructed) be made to the bank account numbers set out below with Nordea Bank AB (publ);

EXECUTION VERSION

In respect of payments in EUR by Permitted Obligors domiciled in Sweden:

Bank: Nordea Bank AB (publ)Address: Hamngatan 10, 105 71 Stockholm, Sweden

Swift: [REDACTED]

Account No.: [REDACTED]

In respect of payments in EUR by Permitted Obligors domiciled in any other jurisdiction than Sweden:

Bank: Nordea Bank AB (publ)Address: Hamngatan 10, 105 71 Stockholm, SwedenSwift: NDEASESS


IBAN: [REDACTED]

(iv)all Seller CMSA Rights attributable to the Purchased Receivables are pursuant to the RPA included in and an integral part of the Purchased Receivables and thus also sold and transferred to thePurchaser (the “Transferred Seller CMSA Rights”).

Place/date:____________________

MERITOR HEAVY VEHICLE SYSTEMS CAMERI S.P.A

_______________________

NORDEA BANK AB (publ)

_______________________

We hereby confirm;

(i)receipt of the above notice;

(ii)that we will act in accordance therewith;

(iii)our agreement as regards the meaning of the Transfer Notice; and (iv)our obligations vis-à-vis the Purchaser as regards the Transferred Seller CMSA Rights.

EXECUTION VERSION

______________________________

Place/date:____________________

[PERMITTED OBLIGOR]

and the Seller shall procure that each such Permitted Obligor acknowledge and counter sign the notice letter as anticipated therein, on a separate copy.

2. The Seller shall procure that simultaneously (or as soon thereafter as is technically possible) with the issuance of the Acceptance, a Transfer Notice (as defined in the above notice) is issued by the PrimeRevenueSystem to the relevant Permitted Obligor.

3. For the perfection of the transfer of Receivables owed by any Permitted Obligor domiciled in France, the Seller shall procure that (i) a simplified form of assignment (acte de cession de créancesprofessionnelles) in the form of Appendix 2 to this Schedule 2 is delivered by the Seller to the Purchaser after being properly filled out and completed, but not dated, and duly signed by the Seller. Upon thePurchaser’s request a notification properly filled out and completed and duly signed by all relevant parties shall be sent to the Permitted Obligor, such notification being in the form of Appendix 3 to thisSchedule 2.

To enable the Purchaser to fulfil date certain at law (data certa) in Italy, the Seller shall further procure that a letter of confirmation in the form set out in Appendix 4 hereto is properly filled out but notdated, duly signed by the Seller and the Permitted Obligor, is delivered to the Purchaser. . For the avoidance of doubt, neither Acceptance nor the Purchaser’s obligation to pay the Purchase Price shall besubject to attainment of date certain at law (data certa) of the relevant assignments in Italy

4. The Seller shall procure that at such time(s) as the Purchaser determines all other actions the Purchaser in its reasonable opinion deems necessary or desirable in order for the transfer and acquisition of theReceivables to be perfected in all respects, is/are taken.

EXECUTION VERSION

APPENDIX 2 TO SCHEDULE 2Form of simplified Assignment Form

[Acte de cession de créances professionnelles soumis

aux dispositions des articles L.313-23 à L.313-34 du Code monétaire et financier.

Entreprise cédante : Meritor Heavy Vehicle Systems Cameri S.P.A, immatriculée sous le numéro [insert registration number and body of registration], dont le siège social est sis [please insert details of address], Italie.

Etablissement de crédit cessionnaire : [insert the name of the EU licensed bank] [please insert details of address, registration, etc...].

Date : [ ] (apposée par [insert the name of the EU licensed bank]

Débiteurs et créances cédées : Conformément à l’article L.313-23 alinéa 3 du Code monétaire et financier, la transmission des créances cédées est effectuée par un procédé informatique permettant de les identifier.

L'ENTREPRISE CEDANTE EXCLUT TOUTE GARANTIE DE PAIEMENT POUR LES CREANCES CEDEES ET MENTIONNEES CI-DESSOUS, EN APPLICATION DU SECOND ALINEA DE L'ARTICLEL.313-24 DU CODE MONETAIRE ET FINANCIER. EN ACCEPTANT LA CESSION DES CREANCES MATERIALISEE PAR LE PRESENT BORDEREAU, L'ETABLISSEMENT DE CREDIT CESSIONNAIREACCEPTE IRREVOCABLEMENT LADITE EXCLUSION DE GARANTIE DE L'ENTREPRISE CEDANTE POUR LE PAIEMENT DES CREANCES CEDES, SANS RECOURS CONTRE L'ENTREPRISECEDANTE.

Moyen par lequel les créances sont cédées Nombre de créances cédées Montant total des créancescédées

Transmission des créances cédées par un procédé télématique géré par la sociétéPrimeRevenue Inc., permettant de les identifier (l’indication pour chacune des créancescédées du débiteur cédé, de son lieu de paiement, de son montant et/ou de son échéancefigure sur les "Payment Obligation Notification Reports" générés par ce système entrele [date] et le [date]

[ ] [ ]

Le présent Bordereau est soumis à l'ensemble des stipulations du contrat cadre de cession de créances professionnelles en date du [ ] [2012] intitulé "Receivables Purchase Agreement" entre, notamment, MERITORHEAVY VEHICLE SYSTEMS CAMERI S.P.A., et [insert the name of the EU licensed bank ].

[Le présent Bordereau est stipulé à ordre, transmissible par endos au profit d’un autre établissement de crédit.]

Signature et cachet du représentant de

MERITOR HEAVY VEHICLE SYSTEMS CAMERI S.P.A.

Signature et cachet du représentant de [ ]

EXECUTION VERSION

_______________________________________

EXECUTION VERSION

[English translation for information purposes]

Form of simplified Assignment Form

Assignment of receivables in accordance with the provisions L. 313-23 to L.313-34 of the Code Monétaire et Financier

AssignorMeritor Heavy Vehicle Systems Cameri S.P.A. (reg. no. [ ]) having its registered office [ ], Italy.

Assignee bank: [ ] [please insert details of address, registration, etc...].

Date: [ [to be affixed by[ ]

Assigned debtor and assigned receivables: Pursuant to article L. 313-23 alinea 3 of the Monetary and Financial Code, the assignment of the assigned receivables is effected by a computerised process permitting theiridentification.

The Seller expressly and irrevocably waives any joint and several liability with the Obligor with respect to the Purchased Receivables listed herein, as permitted under the second paragraph of Article L.313-24 of theCMF. The Purchaser expressly accepts such waiver by accepting this Assignment, without recourse against the Seller.

Means of assignment of the receivables Number of assigned receivables Total amount of assigned receivables

Assignment of the receivables using a computerised processoperated by PrimeRevenue Inc. enabling their identification(the indication for each assigned receivable of the assigneddebtor, its invoice number, the invoice date, its amount and itsdue date appears on the "Payment Obligation NotificationReports" generated by the above system between [date] and[date]).

[ ] [ ]

This Bordereau is governed by all the provisions of the Receivables Purchase Agreement dated [ ] [2012] between MERITOR HEAVY VEHICLE SYSTEMS CAMERI S.P.A., and [ ].

[This Bordereau is to the order of the Assignee Bank and may be assigned by endorsement in favour of another bank.]

Signature of the representative of MERITOR HEAVY VEHICLE SYSTEMS CAMERIS.P.A.

Signature of the representative of [ ]

EXECUTION VERSION

APPENDIX 3 TO SCHEDULE 2

Form of Notification addressed to the Permitted Obligor

(French and English language)

[ON [ ] LETTER HEAD]

(Décret n° 81-862 of 9 September 1981, as

amended by Décret n° 85-1288 of 3rd December 1985, codified as articles R.313-15 to R.313-18 of the Monetary and Financial Code)

Dans les conditions prévues par les articles L.313-23 à L.313-35 du Code monétaire et financier (anciennement loi n°81-1 du 2 janvier 1981 facilitant le crédit aux entreprises), la société Meritor Heavy Vehicle SystemsCameri S.P.A. (reg. no. [ ]) having its registered office at [ ], [ ] nous a cédé, par bordereau de cession de créances professionnelles en date du [insert date of relevant assignment form] les créances dont vous êtes débiteurenvers elle dont les caractéristiques figurent ci-dessous:

[ ]

Conformément aux dispositions de l'article L.313-28 du Code monétaire et financier, nous vous demandons de cesser, à compter de la présente notification, tout paiement au titre des créances susvisées à Meritor HeavyVehicle Systems Cameri S.P.A..

En conséquence, le règlement de vos dettes au titre desdites créances devra être effectué à [ ] par virement au compte dont les références sont les suivantes :

[INSERT REFERENCES OF ACCOUNT]]

[ ]

Par:

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

Translation for information purpose

Pursuant to the provisions of Articles L.313-23 to L.313-35 of the Code monétaire et financier (formerly law n° 81-1 of 2nd January 1981 facilitating credit to businesses Meritor Heavy Vehicle Systems Cameri S.P.A .(reg. no. [ ]) having its registered office at [ ], Italy has assigned to us pursuant to an Assignment Form dated [insert date of relevant assignment form] the receivables in respect of which you are the debtor and which areidentified below:

[ ]

Pursuant to the provisions of Article L.313-28 of the Code monétaire et financier, it is hereby requested that you cease, as of the date hereof, to make any payment in respect of such receivables to Meritor Heavy VehicleSystems Cameri S.P.A..

Consequently, any payment in respect of such receivables should henceforth be made to the benefit of [ ] by way of bank draft or transfer to the following account :

[INSERT REFERENCES OF ACCOUNT]

EXECUTION VERSION

APPENDIX 4 TO SCHEDULE 2

RE: SALE AND TRANSFER OF RECEIVABLES AND RIGHTS UNDER A CUSTOMER MANAGED SERVICES AGREEMENT

A.Pursuant to a Receivables Purchase Agreement (the “RPA”) Meritor Heavy Vehicle Systems Cameri S.P.A. as seller (the “Seller”) and Nordea Bank AB (publ) (the “Purchaser”), dated [ ] [2012], the Seller hasagreed to sell and the Purchaser has agreed to purchase receivables (the “Receivables”) owed by [name of Permitted Obligor] (“Obligor”) to the Seller (in its capacity as supplier to Obligor).

B.Offer and acceptance will be made through a system (the “System”) provided by PrimeRevenue, Inc (“PrimeRevenue”). Obligor has on 2 May 2006 entered into a Customer Managed Services Agreement (the“CMSA”) with PrimeRevenue regarding the use of the System. Through the CMSA (Section 18(f)) Obligor has made certain undertakings, covenants, representations and warranties to the Seller (the“Seller CMSA Rights”) as regards inter alia the Receivables and the use of the System.

C.In accordance with and without limiting, expanding or otherwise amending the terms and conditions of the CMSA, this is to confirm that;

(i) the Receivable(s) defined in Exhibit [1] hereto (the “Purchased Receivables”) has/have been sold and transferred to the Purchaser identified in the Exhibit [1];

(ii) consequently, all payments attributable to the Purchased Receivables shall be made to the Purchaser in its capacity as owner of such receivables (as set forth in the CMSA and in particular Section 2(b)(v)thereof);

(iii) all payments to the Purchaser referred to in this notice shall (until otherwise instructed) be made to the bank account numbers set out below with Nordea Bank AB (publ);In respect of payments in EUR by Permitted Obligors domiciled in Sweden:


Swift:[REDACTED]Account No.: [REDACTED]

In respect of payments in EUR by Permitted Obligors domiciled in any other jurisdiction than Sweden:


Swift: [REDACTED]


IBAN: [REDACTED]

EXECUTION VERSION

all Seller CMSA Rights attributable to the Purchased Receivables are pursuant to the RPA included in and an integral part of the Purchased Recievables and thus also sold and transferred to the Purchaser(the “Transferred Seller CMSA Rights”).

Place/date:____________________

MERITOR HEAVY VEHICLE NORDEA BANK AB (publ)SYSTEMS CAMERI S.P.A

_______________________ __________________________

RENAULT TRUCK SAS

_______________________

EXECUTION VERSION

SCHEDULE 3

REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

Part 1

Representations and Warranties relating to the Seller

The following representations and warranties are given by the Seller:

(a) Status: The Seller is duly incorporated, with limited liability, under the laws of Italy.

(b) Powers and authorisations: The Seller has the requisite power and authority under its articles of association and otherwise, and all necessary corporate authority has been obtained and action taken, for it tosign and deliver, and perform the transactions contemplated in this Agreement.

(c) Legal validity: The obligations of the Seller under this Agreement constitute, or when executed by it will constitute, the legal, valid and binding obligations of the Seller and are enforceable against it,subject to the qualifications set forth in the Legal Opinions.

(d) Non-violation: The execution, signing and delivery of this Agreement and the performance of any of the transactions contemplated herein do not and will not contravene or breach or constitute a defaultunder or conflict or be inconsistent with or cause to be exceeded any limitation on it or the powers of its officers imposed by or contained in:

(i) any law, statute or regulation to which it or any of its assets or revenues is subject or any order, judgment, injunction, decree, resolution, or award of any court or anyadministrative authority or organisation which applies to it or any of its assets or revenues; or

(ii) any agreement or any other document or obligation to which it is a party or by which any of its assets or revenues is bound or affected if this may have a material adverse effecton the rights of the Purchaser; or

(iii) any document which contains or establishes or regulates its constitution.

(e) Consents: The Seller has duly obtained, made or taken each authorisation, approval, consent, registration, recording, filing, deliveries or notarisation which it is required to obtain (or make) in connectionwith the entry into, or performance of the transactions contemplated in, the Transaction Documents to which it is a party.

(f) Litigation: No litigation, arbitration or administrative proceeding or claim of or before any court, tribunal or governmental body which, if adversely determined, would materially and adversely affect theability of the Seller to observe or perform its obligations under the Transaction Documents to which it is a party, is presently in progress or pending.

(g) Accounts: The latest audited financial statements of the Seller then available have been prepared on a basis consistently applied in accordance with accounting principles generally accepted in Italy and givea true and fair view of the results of its operations for that year and the state of its affairs at that date.

(h) Solvency: The Seller is able to pay its debts as they fall due and it will not be unable to pay its debts as they fall due in consequence of any obligation or transaction contemplated in this Agreement.

(i) Material adverse change to the Seller: There has been no change in the financial condition or operations of the Seller since [31 December 2010] so as to have a material and adverse effect on the ability ofthe Seller to perform its obligations under the Transaction Documents to which it is a party.

EXECUTION VERSION

(j) No misleading information: Any factual information in writing provided by the Seller in connection with the entry into any of the transactions envisaged by the Transaction Documents was true and accuratein all material respects as at the date it was provided or as at the date (if any) at which it was stated.

(k) Insolvency and other procedures: No corporate action has been taken or is pending, no other steps have been taken and no legal proceedings have been commenced (in each case by the Seller or, so far as theSeller is aware, by any other person) for (i) the bankruptcy, liquidation, administration or reorganisation of the Seller, or (ii) the Seller to enter into any composition or arrangement with its creditorsgenerally, or (iii) the appointment of a receiver, supervisor, trustee or similar officer in respect of the Seller or substantially all of its property, undertaking or assets.

(l) Pari passu ranking: Each of the payment obligations of the Seller under this Agreement will rank at least pari passu with its unsecured payment obligations to all its other unsecured creditors save thosewhose claims are preferred solely by any bankruptcy, insolvency or similar laws of general application.

(m) No default: No event has occurred which constitutes, or which with the giving of notice and/or the lapse of time and/or a relevant determination would constitute, a contravention of, or default under, anysuch law, statute, decree, rule, regulation, order, judgment, injunction, resolution, determination or award or any agreement, document or instrument by which the Seller or any of its assets is bound, being acontravention or default which would have a material adverse effect on the business, assets or condition (financial or other) of the Seller or materially and adversely affect its ability to observe or perform itsobligations under this Agreement.

EXECUTION VERSION

Part 2

Representations and Warranties relating to the Purchased Receivables

The following representations and warranties are given by the Seller:

(a) Particulars correct: The particulars of the Purchased Receivables set out in the Offers and in the PrimeRevenue System (to the extent submitted by the Seller) are true and accurate in all material respects, asof the date thereof.

(b) No default: The Seller is not aware of any default, breach or violation in respect of any Purchased Receivable (other than any default relating to lateness in payment) or of any event, which with the giving ofnotice and/or the expiration of any applicable grace period, would constitute such a default, breach or violation, such default, breach or violation being of a nature that (i) is material and (ii) affects the valueof the Purchased Receivable or its collectability.

(c) Obligation performed: The Seller has performed all its obligations under or in connection with the Purchased Receivable unless any such obligation is not material and does not affect the value of thePurchased Receivable or its collectability.

(d) Compliance with Eligibility Criteria: Each Purchased Receivable complies, as at the relevant Purchase Date, in all respects with the Eligibility Criteria.

(e) Maintenance of records: In addition to any records relating to the Purchased Receivables maintained in the PrimeRevenue System, the Seller has maintained records relating to each Purchased Receivablewhich are accurate and complete in all material respects, are sufficient to enable such Purchased Receivables to be identified and enforced against the relevant Permitted Obligor and such records are held byor to the order of the Seller.

(f) Accounting: In addition to any records relating to the Purchased Receivables maintained in the PrimeRevenue System, the Seller shall maintain an accounting system which separates the PurchasedReceivables and accounting for collections related thereto from other receivables or assets of the Seller so that the Purchaser at any time can verify the Outstanding Amount of the Purchased Receivablesand the Seller’s compliance with this Agreement.

(g) No waiver: The Seller has not waived any of its rights in relation to the Purchased Receivables.

(h) Perfection: The Seller has performed all its actions as set out in Clause 2.5 of this Agreement as of the Purchase Date.

EXECUTION VERSION

Part 3

Representations and Warranties relating to the Purchaser

The following representations and warranties are given by the Purchaser:

(a) Status: The Purchaser is duly incorporated and validly existing under the laws of Sweden and is a duly licensed as a credit institution (établissement de credit) in Sweden (or in any other country within theEuropean Union), is authorised to operateand to perform credit transactions (opérations de crédit) in France and in Italyon the basis of its European Passport and has the capacity and is allowed underFrench law to purchase receivables pursuant to the provisions of article L.313-23 of the French monetary and financial code and Art. 16(3) of Legislative Decree Nr. 385 of 1993 of the Republic of Italy.

(b) Powers and authorisations: The Purchaser has the requisite power and authority and all necessary corporate and constitutional authority has been obtained and action taken, for it to sign and deliver, andperform the transactions contemplated in, this Agreement.

(c) Legal validity: The obligations of the Purchaser under this Agreement constitute, or when executed by it will constitute, the legal, valid and binding obligations of the Purchaser and, subject to any laws orother procedures affecting generally the enforcement of creditors’ rights and principles of equity are enforceable against it.

(d) Non-violation: The execution, signing and delivery of this Agreement and the performance of any of the transactions contemplated in this Agreement do not and will not contravene or breach or constitute adefault under or conflict or be inconsistent with or cause to be exceeded any limitation on it or the powers of its officers imposed by or contained in:

(i) any law, statute, decree, rule or regulation to which it or any of its assets or revenues is subject or of any order, judgment, injunction, decree, resolution, determination, or awardof any court or any judicial, administrative, or governmental authority or organisation which applies to it or any of its assets or revenues; or

(ii) any agreement, indenture, mortgage, deed of trust, bond, or any other document, instrument or obligation to which it is a party or by which any of its assets or revenues isbound or affected; or

(iii) any document which contains or establishes or regulates its constitution.

(e) Consents: The Purchaser has duly obtained, made or taken each authorisation, approval, consent, licence, exemption, registration, recording, filing or notarisation which it is required to obtain (or make) inconnection with the entry into, or performance of the transactions contemplated in, this Agreement. The Purchaser is not aware of any circumstances which indicate that any such authorisation, approval,consent, licence, exemption, registration, recording, filing or notarisation which has been obtained (or made) is likely to be terminated, revoked or not renewed. No authorisation, approval, consent, licence,exemption, registration, recording, filing or notarisation and no payment of any duty or tax and no other action whatsoever which has not been duly and unconditionally obtained, made or taken is necessaryor desirable to ensure the validity, legality, enforceability or priority of the liabilities and obligations of the Purchaser under this Agreement.

(f) No default: No event has occurred which constitutes, or which with the giving of notice and/or the lapse of time and/or a relevant determination would constitute, a contravention of, or default under, anysuch law, statute, decree, rule, regulation, order, judgment, injunction, resolution, determination or award or any agreement, document or instrument by which the Purchaser or any of its assets is bound,being a contravention or default which would have a material adverse effect on the business, assets or condition (financial or other) of the Purchaser or materially and adversely affect its ability to observe orperform its obligations under this Agreement.

EXECUTION VERSION

(g) Litigation: No litigation, arbitration or administrative proceeding or claim of or before any court, tribunal or governmental body which, if adversely determined, would materially and adversely affect theability of the Purchaser to observe or perform its obligations under this Agreement, is presently in progress or pending or, to the knowledge of the Purchaser, threatened against the Purchaser or any of itsassets.

(h) Insolvency procedures: No corporate action has been taken or is pending, no other steps have been taken and no legal proceedings have been commenced (in each case by the Purchaser or, so far as thePurchaser is aware, by any other person) or (so far as the Purchaser is aware) are threatened or are pending for (i) the winding-up, liquidation, dissolution, administration or reorganisation of the Purchaser(other than for the purposes of and followed by a solvent reconstruction previously notified to the Seller); or (ii) the Purchaser to enter into any composition or arrangement with its creditors generally; or(iii) the appointment of a receiver, administrative receiver, trustee or similar officer in respect of the Purchaser or substantially all of its property, undertaking or assets.

EXECUTION VERSION

SCHEDULE 4

FORM OF SOLVENCY CERTIFICATE

To: Nordea Bank AB (publ) Date:

From: Meritor Heavy Vehicle Systems Cameri S.P.A.

Dear Sirs

Reference is made to the Receivables Purchase Agreement entered into between Meritor Heavy Vehicle Systems Cameri S.P.A. and Nordea Bank AB (publ) dated 18 June 2012.

Meritor Heavy Vehicle Systems Cameri S.P.A.hereby certifies that it is able to pay its debts as they fall due and it will not be unable to pay its debts as they fall due in consequence of any obligation or transactioncontemplated in the Receivables Purchase Agreement.

Very truly yours

On behalf ofMERITOR HEAVY VEHICLE SYSTEMS CAMERI S.P.A.By: Name: Title:

Exhibit 12

Meritor, Inc.Computation of Ratio of Earnings to Fixed Charges

Nine Months Ended June 30, 2012(Amounts in millions, except the ratio)

Earnings Available for Fixed Charges (A):

Pre-tax income from continuing operations $ 125

Less: Equity in earnings of affiliates, net of dividends (6) 119 Add: fixed charges included in earnings: Interest expense 73 Interest element of rentals 5 Total 78

Total earnings available for fixed charges: $ 197

Fixed Charges (B): Fixed charges included in earnings $ 78 Capitalized interest — Total fixed charges $ 78

Ratio of Earnings to Fixed Charges 2.53

(A) “Earnings” are defined as pre-tax income from continuing operations, adjusted for undistributed earnings of less than majority owned subsidiaries and fixed charges excluding capitalized interest.

(B) “Fixed charges” are defined as interest on borrowings (whether expensed or capitalized), the portion of rental expense applicable to interest, and amortization of debt issuance costs.

Exhibit 23

CONSENT OF EXPERT

We consent to the references to our firm and to our reports with respect to estimation of the liability for pending and reasonably estimable unasserted future asbestos-related claims, which are included in Note 20of the Notes to Consolidated Financial Statements in the Quarterly Report on Form 10-Q of Meritor, Inc. (“Meritor”) for the fiscal quarter ended July 1, 2012 and to the incorporation by reference of such reference intothe following Registration Statements of Meritor:

Form Registrations No. PurposeS-3 333-179405 Registration of common stock, preferred stock, warrants and guarantees of debt securitiesS-8 333-171713 Amended 2010 Long-Term Incentive PlanS-8 333-164333 2010 Long-Term Incentive PlanS-3 333-163233 Registration of common stock, preferred stock, warrants and guarantees of debt securitiesS-8 333-141186 2007 Long-Term Incentive PlanS-3 333-143615 Registration of convertible notes, guarantees and common stockS-3 333-134409 Registration of convertible notes, guarantees and common stockS-8 333-107913 Meritor, Inc. Savings PlanS-8 333-123103 Meritor, Inc. Hourly Employees Savings PlanS-3 333-58760 Registration of debt securitiesS-8 333-49610 1997 Long-Term Incentives PlanS-3 333-43118 Meritor, Inc. 1988 Stock Benefit PlanS-3 333-43116 Meritor, Inc. 1998 Stock Benefit PlanS-3 333-43112 Meritor, Inc. Employee Stock Benefit PlanS-8 333-42012 Employee Stock Benefit Plan, 1988 Stock Benefit Plan and 1998 Employee Stock Benefit Plan

BATES WHITE LLC By: /s/ Charles E. Bates Charles E. Bates, Ph.D. President and CEO

Date: August 1, 2012

Exhibit 31-a

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO

RULE 13a-14(a) UNDER THE EXCHANGE ACT

I, Charles G. McClure, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Meritor, Inc. for the quarterly period ended July 1, 2012;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such

statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the

registrant as of, and for, the periods presented in this report;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control

over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,

including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the

end of the period covered by this report based on such evaluation; andd. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the

case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's

board of directors (or persons performing the equivalent functions):a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record,

process, summarize and report financial information; andb. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


/s/ Charles G. McClure, Jr. Charles G. McClure, Jr., Chairman of the Board, Chief Executive Officer and President

Exhibit 31-b

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO

RULE 13a-14(a) UNDER THE EXCHANGE ACT

I, Jeffrey A. Craig, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Meritor, Inc. for the quarterly period ended July 1, 2012;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such

statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the

registrant as of, and for, the periods presented in this report;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control

over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,

including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the

end of the period covered by this report based on such evaluation; andd. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the

case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's

board of directors (or persons performing the equivalent functions):a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record,

process, summarize and report financial information; andb. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


/s/ Jeffrey A. Craig Jeffrey A. Craig Senior Vice President and Chief Financial Officer

Exhibit 32-aCERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO RULE

13a-14(b) UNDER THE EXCHANGE ACT AND 18 U.S.C. SECTION 1350(as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

As required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, I, Charles G. McClure, Jr., hereby certify that:

1. The Quarterly Report of Meritor, Inc. on Form 10-Q for the quarterly period ended July 1, 2012 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, and

2. The information contained in that report fairly presents, in all material respects, the financial condition and results of operations of Meritor, Inc.

/s/ Charles G. McClure, Jr.Charles G. McClure, Jr.Chairman of the Board, ChiefExecutive Officer and President


Exhibit 32-bCERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

RULE 13a-14(b) UNDER THE EXCHANGE ACT AND 18 U.S.C. SECTION 1350(as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

As required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, I, Jeffrey A. Craig, hereby certify that:

1. The Quarterly Report of Meritor, Inc. on Form 10-Q for the quarterly period ended July 1, 2012 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, and

2. The information contained in that report fairly presents, in all material respects, the financial condition and results of operations of Meritor, Inc.

/s/ Jeffrey A. Craig Jeffrey A. Craig Senior Vice President and Chief Financial Officer
