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                                                                    EXHIBIT 10.1

                       AMENDMENT NO. 3 TO CREDIT AGREEMENT


         THIS AMENDMENT, dated as of December 26, 2002, by and between
PRESTOLITE ELECTRIC INCORPORATED, a Delaware corporation, of Ann Arbor, Michigan
(herein called "Company"), and COMERICA BANK, a Michigan banking corporation, of
Detroit, Michigan (herein called "Bank").

                              W I T N E S S E T H:

         WHEREAS, said parties desire to amend that certain Credit Agreement
dated as of October 31, 2001, entered into by and between Company and Bank, as
amended by Amendment No. 1 thereto dated as of December 31, 2001 and Amendment
No. 2 thereto dated as of June 28, 2002 (as so amended, herein called
"Agreement"), to modify a definition;

         NOW, THEREFORE, IT IS AGREED as follows:

         1. The definition of "EBITDA" set forth in Section 1 of the Agreement
is hereby amended in its entirety as follows:

                  "EBITDA" shall mean for any period the sum of Consolidated Net
         Income for such period plus Consolidated Income Taxes, Consolidated
         Interest Expense and Consolidated depreciation, amortization and other
         non-cash charges for such period, plus the following charges to the
         extent they are taken during such period: (a) severance charges
         incurred in 2001, (b) special charges associated with actual or
         anticipated debt losses in Argentina recorded in 2001, (c) charges
         related to the Thermadyne and/or AMETEK transactions recorded in 2001,
         (d) any write-down associated with the sale of the manufacturing
         facility in Decatur, Alabama and/or the manufacturing facility located
         in San Lorenzo, Argentina, (e) foreign exchange gains or losses, (f)
         gains or losses (net of taxes) incurred in connection with the
         repurchase by the Company of Senior Notes, and (g) worldwide severance
         and special charges associated with plant rearrangements in Argentina
         in 2002 not to exceed $2,500,000.

         2. This Amendment shall be effective as of the date hereof. Except as
modified hereby, all of the terms and conditions of the Agreement and the
Revolving Credit Note shall remain in full force and effect. Company hereby
represents and warrants that, after giving effect to the amendments contained
herein, (a) the execution, delivery and performance of this Amendment and any
other documents and instruments required under this Amendment or the Agreement
are within Company's corporate powers, have been duly authorized, are not in
contravention of law or the terms of Company's certificate of incorporation or
bylaws, and do not require the consent or approval of any governmental body,
agency or authority, and this Amendment, and any other documents and instruments
required under this Amendment or the Agreement, are valid and binding in
accordance with their terms; (b) the continuing representations and


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warranties of Company set forth in Sections 9.1 through 9.5 and 9.8 through 9.16
of the Agreement are true and correct on and as of the date hereof, and the
continuing representations and warranties of Company set forth in Section 9.6 of
the Agreement are true and correct as of the date hereof with respect to the
most recent financial statements furnished to Bank by Company in accordance with
the Agreement; and (c) no Default or Event of Default has occurred and is
continuing as of the date hereof.

         WITNESS the execution hereof as of the date and year first above
written.


COMERICA BANK                               PRESTOLITE ELECTRIC
                                            INCORPORATED


By:______________________                   By:________________________

Its:______________________                  Its:________________________


                              CONSENT OF GUARANTOR

         The undersigned guarantor hereby consents to the foregoing Amendment as
of the date thereof and reaffirms and ratifies all of its existing obligations
to Bank under the guaranty of the obligations of Company previously executed and
delivered by it.


                                            PRESTOLITE ELECTRIC
                                            HOLDING INC.


                                            By:________________________

                                            Its:________________________