Attached files
10-Q
EXECUTION
COPY
SETTLEMENT
AND
COMMERCIAL
AGREEMENT
This
Settlement and Commercial Agreement (this “Agreement”) is
entered into as of September 16, 2009 (the “Effective Date”), by
and among General Motors Company (“GM”), a Delaware
corporation, American Axle & Manufacturing Holdings, Inc., a Delaware
corporation (“AAM
Holdings”), and American Axle & Manufacturing, Inc., a Delaware
corporation, on behalf of itself and its subsidiaries and affiliates (“AAM”). GM,
AAM Holdings or AAM may be individually referred to herein as a “Party” or
collectively, as the “Parties”.
Recitals
WHEREAS,
on June 1, 2009 Motors Liquidation Company (f/k/a General Motors
Corporation) (“Liquidation Company”)
and certain of its subsidiaries commenced Case No. 09-50026 currently
pending before the United States Bankruptcy Court for the Southern District of
New York (the “Bankruptcy
Court”);
WHEREAS,
on July 5, 2009 the Bankruptcy Court entered an order (the “Sale Order”)
approving the sale of substantially all of Liquidation Company’s assets to GM
pursuant to 11 U.S.C. § 363 (the “363 Transaction”);
and
WHEREAS,
in connection with the 363 Transaction and the assumption of certain executory
contracts between AAM and Liquidation Company by Liquidation Company and
subsequent assignment of such contracts to GM, the Parties desire to resolve and
settle certain outstanding commercial issues and modify the supply relationship
among the Parties in accordance with the terms and conditions set forth in this
Agreement.
NOW,
THEREFORE, for good and valuable consideration the receipt and sufficiency of
which the Parties acknowledge, GM, AAM Holdings and AAM agree as
follows:
1. ACCOMMODATIONS
1.1 Second Lien Term Loan
Financing.
GM shall
make available to AAM a delayed draw term loan facility in a maximum principal
amount of up to $100,000,000.00 (the “Second Lien Term
Loan”), pursuant to the terms and conditions of a loan agreement to be
entered into among GM, AAM Holdings and AAM in the form of the attached Exhibit 1.1 (the
“Second Lien Term Loan
Agreement”), and certain ancillary agreements and documents as described
in the Second Lien Term Loan Agreement (collectively, with the Second Lien Term
Loan Agreement, the “Second Lien Term Loan
Documents”).
AAM
agrees that (i) on the Effective Date, it will execute the Second Lien Term
Loan Documents, (ii) AAM may not terminate the Second Lien Term Loan
facility until June 30, 2011, and (iii) if AAM requires additional
liquidity that cannot be satisfied utilizing (a) expedited payments
provided under Section 1.5(g),
(b) the proceeds from sales of common equity, (c) the proceeds from
the issuance of equity linked securities if not prohibited under
Section 6.01 of the Second Lien Term Loan Agreement, (d) cash flow
generated by AAM from its ordinary course business operations, (e) the
availability existing from time to time under the revolving credit agreement
governing the Revolving Debt (the “Revolving Credit
Agreement”), (f) the incurrence of indebtedness permitted under
Section(s) 6.01(a)(vii) and/or 6.01(a)(v) of the Second Lien Term Loan
Agreement, or (g) any Permitted Refinancing Indebtedness (as defined in the
Second Lien Term Loan Agreement) in an amount incurred to refinance any of the
Senior Debt, AAM will fully borrow all amounts under the Second Lien Term Loan
Documents before borrowing any additional amounts (assuming availability exists
under the Second Lien Term Loan Documents); provided, however that AAM may
only seek liquidity from a source permitted under (c), (e) or (f) above, if, at
the time, the sum of (i) AAM’s indebtedness outstanding under the Revolving
Debt and Term Debt, plus (ii) any amounts provided as a result of AAM’s
utilization of (c), (e) or (f) above, does not exceed, in the aggregate, the
Senior Debt Cap (as defined below), plus the aggregate principal amount of the
indebtedness outstanding as of the Effective Date as set forth on
Schedule 6.01 to the Second Lien Term Loan Agreement. If AAM
borrows under the Second Lien Term Loan facility, AAM may not prepay the amounts
outstanding thereunder until June 30, 2011 unless the source of such
prepayment is proceeds in respect of sub-section (d) above.
AAM
further agrees that for the period commencing on the Effective Date and
continuing through AAM’s termination of the Second Lien Term Loan facility in
accordance with the terms of this Agreement:
(a) it will
not increase the aggregate principal amount of the Revolving Debt and Term Debt
(as each are defined below) (collectively, the “Senior Debt”) in
excess of the Senior Debt Cap (defined below); provided, that the foregoing
will not prohibit the capitalization of interest or other fees. The
following terms shall have the indicated meanings: (i) “Senior Debt Cap”
means $726.9 million, (ii) “Revolving Debt” means
the amounts outstanding under the Amended and Restated Credit Agreement, dated
as of January 9, 2004, as amended and restated as of November 7, 2008,
and as further amended and restated as of September 16, 2009, among AAM,
AAM Holdings, the Lenders party thereto, JPMorgan Chase Bank, N.A., J.P. Morgan
Securities Inc. and Banc of America Securities LLC, and (iii) “Term Debt” means the
amounts outstanding under the Credit Agreement, dated as of June 14, 2009,
as amended and restated as of September 16, 2009, among AAM, AAM Holdings,
the Lenders party thereto, JPMorgan Chase Bank, N.A., J.P. Morgan Securities
Inc. and Banc of America Securities LLC; and
(b) if any
Senior Debt is refinanced prior to its scheduled maturity, such refinanced debt
and any other Senior Debt will not exceed, in the aggregate, the Senior Debt
Cap.
1.2 Commercial Accommodation
Payment; Release.
(a) On the
Effective Date, GM shall make a one-time payment to AAM of $110,000,000.00 (the
“Commercial
Accommodation Payment”) via wire transfer of immediately available funds
to an account designated in writing by AAM in consideration of (i) AAM’s
agreement to GM’s decision not to source to AAM the […***…] program and
(ii) any and all
*** CONFIDENTIAL TREATMENT
REQUESTED
1
payments
associated with (a) the assumption of the Assumed Agreements and the
Modified Assumed Agreements (as each are defined below), in each case, as are
required to “cure” any defaults under 11 U.S.C. § 365,
(b) the termination of the Terminated Agreements (as defined below), and
(c) the acknowledgement of performance of the Performed Agreements (as
defined below) and the release in subsection (b) below.
(b) On the
Effective Date, AAM hereby fully and forever releases and discharges GM,
Liquidation Company, GM’s and Liquidation Company’s respective subsidiaries and
affiliates, and each of their respective officers, directors, employees, agents,
successors and assigns (the “Released Parties”),
from all manner of action and causes of action, suits, damages and rights
whatsoever, in law or in equity, existing or accrued as of the date hereof,
whether known or unknown, by reason of, or arising out of or in any way related
or connected to the agreements or programs referenced in Sections 1.2(a)(i)
and (ii)
above. AAM hereby covenants that AAM will refrain from commencing any
suit, prosecuting any pending action or suit, or participating or assisting in
any manner in the commencement or prosecution of any action or suit, in law or
in equity, against any of the Released Parties on account of any action or cause
of action released hereby.
1.3 OPEB
Obligations.
AAM and
GM will negotiate in good faith for the settlement of GM’s reimbursement and
other obligations to AAM for any post-retirement health care, life insurance and
other post-retirement welfare benefits of any kind for UAW represented and
non-UAW represented current and former AAM employees and their spouses,
dependents and beneficiaries (collectively, the “OPEB”) arising out of
or relating to that certain Asset Purchase Agreement, dated as February 8,
1994 by and between Liquidation Company and AAM, and that certain Agreement,
dated May 3, 2008, as amended May 16, 2008 by and between Liquidation
Company and AAM or any other existing agreement between Liquidation Company and
AAM (the “OPEB
Obligations”).
1.4 Warrants.
(a) As of the
Effective Date, AAM Holdings shall issue to GM warrants (the “Warrants”) to
purchase 4,093,729 shares of common stock, representing 7.4% of the outstanding
common stock of AAM Holdings (the “Initial Warrants”),
as described in the warrant agreement dated as of the Effective Date (the “Warrant Agreement”)
which shall include registration rights and standstill provisions, in the form
of the attached Exhibit 1.4(a).
(b) In the
event that AAM elects to make a draw pursuant to the terms and conditions of
Second Lien Term Loan Agreement, AAM Holdings shall, as a condition precedent to
each draw, issue Warrants to GM to purchase a pro rata portion of an additional
6,915,083 shares of common stock of AAM Holdings based upon the amount of each
Second Lien Term Loan drawn (the “Potential Subsequent
Warrants”), in the form of the attached Exhibit 1.4(a). For
clarification, if AAM makes a draw of $25,000,000 on the Second Lien Term Loan,
AAM will issue Warrants to GM representing 1,728,771 shares of common stock of
AAM Holdings (25% of 6,915,083 shares).
1.5 Commercial
Agreements.
(a) Agreements.
(1) Assumed
Agreements. GM shall promptly cause the agreements between
Liquidation Company and AAM set forth on Schedule 1
(collectively, the “Assumed Agreements”)
to be assumed by Liquidation Company according to their respective terms without
modification and assigned to GM as of the Effective Date. Upon
receipt of the Commercial Accommodation Payment, the foregoing assumption and
assignment of the Assumed Agreements shall be deemed in full and final
satisfaction of all of the requirements of 11 U.S.C. § 365,
including, without limitation, the requirement to effect any further “cure”
within the meaning of 11 U.S.C. § 365. On the
Effective Date, GM shall cause the GM contracts website to update the status of
the Assumed Agreements to “Assumed” and no further act or requirement shall be
necessary to evidence the assignment and assumption of the Assumed Agreements to
GM.
(2) Terminated
Agreements. The Parties agree that the agreements between
Liquidation Company and AAM set forth on Schedule 2
(collectively, the “Terminated
Agreements”) shall be deemed terminated and of no further force and
effect and all parties’ obligations thereunder, if any, will be deemed fully and
finally satisfied as of the Effective Date.
(3) Modified Assumed
Agreements. GM shall promptly cause the agreements between
Liquidation Company and AAM set forth on Schedule 3
(collectively, the “Modified Assumed
Agreements”) to be assumed by Liquidation Company according to their
respective terms, except that, upon assumption, the Modified Assumed Agreements
shall be deemed modified by the parties’ agreements set forth in this Section 1.5, and
assigned to GM. Upon AAM’s receipt of the Commercial Accommodation
Payment, the foregoing modification and assignment of the Modified Assumed
Agreements shall be deemed in full and final satisfaction of all of the
requirements of 11 U.S.C. § 365, including, without limitation,
the requirement to effect any further “cure” under
11 U.S.C. § 365.
(4) Reservation of
Rights. The Parties agree that AAM’s entry into this Agreement
shall not be deemed to constitute a waiver of any of AAM’s rights against
Liquidation Company other than with respect to the Assumed Agreements, the
Terminated Agreements and the Modified Assumed Agreements; provided, that
nothing in this Agreement shall be deemed to modify, alter or amend Liquidation
Company’s rights, claims and defenses in respect thereof.
(5) Treatment of Existing,
Future and New Business.
[…***…]
*** CONFIDENTIAL TREATMENT
REQUESTED
2
(E) Past
Performance. The Parties agree that the agreements set forth
on Schedule 6
(collectively, the “Performed
Agreements”) have been fully performed by each of the respective parties
to the Performed Agreements as of the Effective Date and, in the case of each
of, AAM, AAM Holdings or GM, no Party has any rights, claims or obligations
arising out of or relating to the Performed Agreements.
[…***…]
(c) Cost
Transparency. AAM shall complete to GM’s reasonable
satisfaction all 1804 and 1810 forms that relate to all business subject to a GM
New Lifetime Program Contract, and GM shall have the right to audit to confirm
the components of the 1804/1810 forms in accordance with GM’s standard “Right to
Audit” clause contained on GM’s standard form purchase order
contracts. A representative copy of a fully completed 1804/1810 form
is attached as Exhibit 1.5(c)
hereto and any 1804/1810 form submitted by AAM containing less detail than as
set forth on the attached example will not be deemed to comport with the
requirements of this Section 1.5(c).
[…***…]
(e) Cost
Reduction. AAM shall participate in GM’s standard technical
cost reduction program (including, without limitation, the program’s existing
allocations) for future cost reductions proposed by either AAM or GM, as the
case may be, after the Effective Date.
[…***…]
(g) Payment
Terms. For component and service parts received by GM on or
after August 1, 2009, and continuing through December 31, 2013, AAM shall
have the option, upon written notice to GM, to receive payment terms of “net 10
days” or approximately equivalent expedited basis for shipments of component and
service parts following receipt in exchange for a 1.0% early payment discount;
[…***…].
[…***…]
*** CONFIDENTIAL TREATMENT
REQUESTED
3
1.6 Access and Security
Agreement.
AAM and
GM shall enter into an Access and Security Agreement in the form of the attached
Exhibit 1.6 (the
“Access and Security
Agreement”) on or prior to the date on which AAM invokes the expedited
payment terms provided in Section 1.5(g)
of this Agreement and, in any event, on or before the Effective
Date. Notwithstanding anything to the contrary contained herein, on
March 31, 2011, the Term of the Access and Security Agreement shall be
automatically extended through March 31, 2012 if AAM Holdings fails to
achieve a Secured Debt Leverage Ratio (as defined in the Revolving Credit
Agreement) of the lesser of (i) 3.5 to 1.0 and (ii) such lower ratio
on which AAM Holdings and the Revolving Lenders agree in the amendment to the
Revolving Credit Agreement entered into as of the Effective Date, measured as of
March 31, 2011 (without regard to any subsequent waiver, amendment,
forbearance or modification to such covenant granted by the Revolving
Lenders).
1.7 Executive
Compensation.
Beginning
with the 2009 calendar year and continuing until 90 days following the later to
occur of (a) the repayment and termination of the Second Lien Term Loan in
accordance with the terms of the Second Lien Term Loan Agreement and
(b) the termination of the expedited payment terms provided in Section 1.5(g)
of this Agreement, AAM and its affiliates shall limit the total compensation of
each current or former employee of, current or former non-employee director of,
and current or former non-employee service provider to, AAM or any affiliate,
pursuant to any base salary, bonus, incentive, stock option, stock appreciation
right, restricted stock, excess benefit, SERP-type or other type of deferred
compensation (whether or not subject to Internal Revenue Code section 409A),
severance, employment, consulting, life insurance, or other type of formal or
informal, written or unwritten, agreement, policy, program, employee benefit
plan, or like arrangement, to $3,000,000 for each full calendar year, determined
on a paid basis with respect to base salary or with respect to annual bonus or
other annual compensation, or using the grant date fair value or the target
payment value, as applicable, of long-term incentive or other equity-based or
similar awards granted during the calendar year, or using the present value
determined in accordance with GAAP of any other amount with respect to which a
legally binding right is created in the calendar
year. Notwithstanding the foregoing, the payment, in accordance with
the current terms of the applicable plan, contract or arrangement, of any amount
of deferred compensation or other compensation that was earned and vested prior
to 2009 and the payment or accrual during and after 2009, in accordance with a
legally binding right created prior to 2009 pursuant to the current terms of any
plan, contract or arrangement in effect on the date hereof, shall be excluded
from the calculation of amounts counting against the foregoing $3,000,000
limitation and shall not otherwise be subject to the payment restrictions
contained herein.
1.8 Golden
Parachutes.
AAM and
each affiliate shall terminate all existing “golden parachute”, change of
control, retention, and similar types of agreements or arrangements with any
employee of, non-employee director of, or non-employee service provider to, AAM
or any affiliate of AAM (“Golden Parachute
Arrangements”). Continuing until 90 days following the later
to occur of (a) the repayment and termination of the Second Lien Term Loan
in accordance with the terms of the Second Lien Term Loan Agreement and
(b) the termination of expedited payment terms provided in Section 1.5(g)
of this Agreement, AAM and each affiliate shall not enter into any Golden
Parachute Arrangements with any current or former employee of, current or former
non-employee director of, and current or former non-employee service provider
to, AAM or any affiliate of AAM.
2. DELIVERIES
The
Parties shall, in addition to other items specified elsewhere in this Agreement,
take the following actions on the Effective Date, the satisfaction of each of
which is a condition precedent to the effectiveness of this
Agreement:
(a) GM, AAM
and AAM Holdings shall execute and deliver the Second Lien Term Loan Documents
to which each is a party and AAM shall cause its subsidiaries and affiliates to
execute and deliver to GM any Second Lien Term Loan Documents to which such
subsidiary or affiliate is a party;
(b) GM shall
make the Commercial Accommodation Payment;
(c) AAM
Holdings shall execute and deliver to GM the Initial Warrants;
(d) GM and
AAM shall execute and deliver the Warrant Agreement;
(e) GM and
AAM shall execute and deliver the Access and Security Agreement and all
acknowledgments required thereunder; and
(f) AAM and
AAM Holdings shall deliver fully executed copies of the amendments to the
Revolving Debt and Term Debt credit facility documents.
3. EVENTS OF
DEFAULT
The
occurrence of one or more of the following shall be “Events of Default”,
or individually, an “Event of Default”
hereunder, unless a waiver or deferral is agreed to in writing, in each
instance, by the Party having the right to exercise remedies pursuant to Section 4 of
this Agreement as a result of such Event of Default:
(a) AAM or
AAM Holdings, as the case may be, becomes the subject of a voluntary or
involuntary petition in bankruptcy or any proceeding relating to insolvency,
receivership, liquidation, or composition for the benefit of creditors, which
petition or proceeding is not dismissed with prejudice within sixty (60) days
after filing;
(b) AAM or
AAM Holdings breaches or fails to perform any express agreement, covenant, term
or condition of this Agreement or any Related Agreement (as defined in Section 6(a)
below) (except for the Second Lien Term Loan Agreement and the Access and
Security Agreement) and fails to cure that breach within 5 days after receiving
written notice of the breach;
(c) an “Event
of Default” occurs under the Second Lien Term Loan Agreement (without regard to
any “standstill period” provided for under any Intercreditor Agreement (or
related agreement) among any one or more of AAM Holdings, AAM, any secured
lender(s) to AAM Holdings and/or AAM, as the case may be, and GM) or the Access
and Security Agreement;
(d) One or
more of AAM’s or AAM Holding’s loan facilities in respect of which the
indebtedness outstanding thereunder exceeds $5,000,000 USD (other than the
Second Lien Loan Agreement) expire or are terminated without AAM or AAM Holding
providing to GM written evidence of a binding substitute financing commitment
relating to such expired or terminated loan facility, which written evidence of
binding substitute financing commitment has not expired or been terminated, and
the consequence of such expiration or termination of the loan facility(ies) and
failure to provide a written substitute financing commitment is the substantial
likelihood that GM’s production at any one or more of GM’s assembly plants
worldwide may be imminently interrupted; or
(e) GM
breaches or fails to perform any express agreement, covenant, term or condition
of this Agreement or any Related Agreement (except for the Second Lien Term Loan
Agreement and the Access and Security Agreement), and fails to cure that breach
within 5 days after receiving written notice of the breach.
4
4. REMEDIES
(a) Upon an
Event of Default pursuant to Sections 3(a),
3(b), 3(c) or 3(d), GM shall be
entitled to exercise all rights and remedies available to it under this
Agreement, applicable law, or at equity. All of GM’s rights and
remedies under this Agreement are cumulative and not exclusive of any rights and
remedies under any other agreement, including, without limitation, the Related
Agreements, the New GM Lifetime Program Contracts, and the GM Long-Term
Contracts, or under applicable law or at equity all of which rights and
remedies, in each case, are expressly reserved.
(b) Upon an
Event of Default pursuant to Section 3(e) of
this Agreement, AAM shall be entitled to exercise all rights and remedies
available to it under applicable law or at equity; provided that, with respect to
an Event of Default resulting from a breach of the expedited payment terms in
accordance with Section 1.5(g)
above, if such breach has not been cured within the cure period set forth in
Section 3(e), GM
and AAM shall promptly arrange a meeting between a representative of AAM and
GM’s Chief Financial Officer of Global Purchasing and Supply Chain, and the
Parties shall attempt to resolve such dispute in good faith prior to AAM
exercising any other remedy available to it under this Agreement, the New GM
Lifetime Program Contracts, or under applicable law or at equity.
5. TOOLING
ACKNOWLEDGEMENT
5.1 AAM
acknowledges and agrees that exclusive of AAM Owned Tooling (as defined below)
and Unpaid Tooling (as defined below), all tooling, dies, test and assembly
fixtures, jigs, gauges, patterns, casting patterns, cavities, molds, and
documentation, including engineering specifications, PPAP books, and test
reports together with any accessions, attachments, parts, accessories,
substitutions, replacements, and appurtenances thereto (collectively, “Tooling”) used by AAM
in connection with its manufacture of Component Parts (collectively, the “GM Owned Tooling”)
are owned by GM and are being held by AAM or, to the extent AAM has transferred
the GM Owned Tooling to third parties, by such third parties, as bailees at
will. Upon payment in full of the applicable purchase order price for
any item of Unpaid Tooling, such item shall thereafter be included in the
definition of the GM Owned Tooling under this Agreement; provided, however, that nothing
in this Section 5 is
intended to modify any of GM’s obligations to AAM on account of Unpaid
Tooling. For the purposes of this Section 5, the
term (i) “Unpaid
Tooling” means Tooling for which GM has not paid the applicable purchase
order price for such Tooling to AAM, any of its predecessor(s)-in-interest, or
to any third party on account or for the benefit of AAM, and (ii) “AAM Owned Tooling”
means any Tooling that is neither Unpaid Tooling nor GM Owned
Tooling.
5.2 AAM will
provide to GM, within sixty (60) days after the Effective Date, a list of AAM
Owned Tooling and Unpaid Tooling relating to that GM’s Component Parts (“Tooling
Lists”). AAM will have a period of 45 days thereafter within
which to supplement the Tooling Lists regarding AAM Owned Tooling or Unpaid
Tooling inadvertently omitted from the Tooling Lists, after which the Tooling
Lists will become final. GM will provide assistance to AAM in
preparing the Tooling Lists as reasonably requested by AAM. GM
reserves the right to dispute any Tooling List provided by AAM. If a
GM disagrees with a Tooling List, AAM and GM will meet and attempt, in good
faith, to resolve the dispute. If the dispute cannot be resolved by
AAM and GM within thirty (30) days after GM’s receipt of the Tooling List, the
matter will be jointly submitted to a neutral third party on whom AAM and GM
agree for expedited resolution. The costs of the neutral third party
shall be shared equally by AAM and GM. Any Tooling used to
manufacture Component Parts not included in the Tooling List will be subject to
the dispute resolution mechanics set forth in Section 5.4. If
AAM fails to timely provide a Tooling List or seek GM’s consent to extend the
date by which AAM must provide the Tooling Lists, which consent will not be
unreasonably withheld, all Tooling will be deemed GM Owned Tooling.
5.3 Neither
AAM nor any other person or entity other than GM has any right, title, or
interest in the GM Owned Tooling other than AAM’s obligation, subject to GM’s
unfettered discretion, to use the GM Owned Tooling in the manufacture of GM’s
component and service parts in accordance with the GM purchase
orders. GM and its designee(s) shall have the right to take immediate
possession of the GM Owned Tooling at any time at GM’s expense, without payment
of any kind from GM to AAM, provided, that, GM shall promptly repair, at GM’s
expense, physical damage to AAM’s equipment or AAM’s facilities directly and
proximately caused by any removal of the GM Owned Tooling from AAM’s equipment
or AAM’s facilities. Should GM elect to exercise such right, AAM
shall cooperate fully with GM in its taking possession of its GM Owned Tooling,
including, without limitation, by allowing access to AAM’s
facilities. GM shall, within 10 business days of removal of any
Tooling, provide to AAM and Lenders a detailed list of all items removed from
any AAM facility. The rights and obligations contained in this Section 5 shall
continue notwithstanding the expiration or termination of this
Agreement.
5.4 In the
event of a dispute between AAM and GM over whether any Tooling is GM Owned
Tooling, AAM Owned Tooling or Unpaid Tooling, the Tooling subject to the dispute
will be presumed to be GM Owned Tooling pending resolution of the dispute, and
GM will have the right to immediate possession of the applicable Tooling pending
resolution of the dispute (and AAM may not withhold delivery of possession of
the Tooling to GM pending such resolution), but the Tooling will remain subject
to any lien of AAM, or any claim or right to payment of AAM for the disputed
amounts (despite AAM’s relinquishment of possession). The rights and
obligations contained in this Section 5 are in
addition to (and not in lieu of) the rights of GM arising out of its purchase
orders, including GM’s T’s&C’s, and other agreements with AAM, and will
continue in effect notwithstanding the expiration or termination of this
Agreement. In the event of a conflict between the GM’s T’s&C’s
and conditions and this Section 5, the
terms and conditions of this Section 5 will control.
6. REPRESENTATIONS AND
WARRANTIES
As of the
date of this Agreement, each Party represents and warrants to the other Party
the following:
(a) Organization; Authority
Relative to this Agreement. Such Party is duly formed, validly
existing, and in good standing under the laws of its state of organization, and
has the requisite power and authority to execute, deliver, and perform its
obligations under this Agreement, the Warrant Agreement, and the Access and
Security Agreement (collectively, the “Related Agreements”)
and to consummate the transactions contemplated by this Agreement and the
Related Agreements. Such Party’s execution, delivery, and performance
of this Agreement and the Related Agreements have been duly authorized by all
necessary corporate or similar governing authority. No other action
on the part of such Party or any other individual, person or entity is necessary
to authorize this Agreement or the Related Agreements or the consummation of the
transactions contemplated by this Agreement or the Related
Agreements. Such Party has duly and validly executed and delivered
this Agreement and the Related Agreements, and this Agreement and the Related
Agreements, upon execution, will constitute a valid and binding obligation of
such party enforceable against such Party in accordance with its terms, except
as they may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors’ rights generally, and
except as they may be limited by general principles of equity, regardless of
whether such enforceability is considered in a proceeding at law or in
equity.
5
(b) Consents and Approvals; No
Violation. Neither such Party’s execution nor delivery of this
Agreement or the Related Agreements, nor such Party’s consummation of the
transactions contemplated by this Agreement and the Related Agreements, except
for such consents and approvals required in connection with AAM’s Amended and
Restated Revolving Credit Facility, dated January 9, 2004, as amended and
restated on November 7, 2008 and Credit Agreement dated as of June 14,
2007, nor such Party’s compliance with the terms and provisions of this
Agreement and the Related Agreements (a) requires any authorization,
consent or approval of any governmental or regulatory authority or of any other
person or entity; (b) will accelerate any obligation under, violate or
breach any provision of, constitute a default under, result in the creation of
any lien or security interest under, result in the termination of, require the
consent, authorization or approval of any third party under, or in connection
with, any of the terms, covenants, provisions or conditions of any note, bond,
mortgage, indenture, deed of trust, license, franchise, lease, contract,
agreement or other instrument, commitment or obligation to which such party is a
party; or (c) will violate any order, writ, injunction, decree, judgment or
arbitration award, or any statute, rule, regulation or ruling of any court or
governmental authority, United States or foreign, applicable to such
party.
7. MISCELLANEOUS
7.1 Assignment.
This
Agreement will be binding upon and inure to the benefit of the Parties and their
respective successors and assigns. No Party may assign its rights,
privileges or obligations under this Agreement without the prior written consent
of the other Party, and any attempted assignment without the written consent of
the other Party will be void, except that GM may assign or otherwise transfer
this Agreement and its rights or obligations under this Agreement to any
affiliated or successor company or to any purchaser of a substantial part of
GM’s business to which this Agreement relates. In addition, GM may
delegate, in whole or in part, this Agreement and its rights and obligations
under this Agreement to any such affiliate, successor or
purchaser. GM will provide AAM written notice of any such assignment,
transfer or other delegation.
7.2 Notice.
Any
notice or communication under this Agreement will be in writing and either
delivered personally, sent by certified or registered mail, postage prepaid,
delivered by a recognized overnight courier service, or transmitted via
facsimile with confirmation receipt of such notice, addressed as
follows:
|
|
If
to GM:
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General
Motors Company
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|
|
30009
Van Dyke Road
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|
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P.O.
Box 9025
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|
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Mail
Code 480-206-116
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|
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Warren,
Michigan 48090-9025
|
|
|
Attention: Christopher
F. Dubay
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|
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Group
Counsel, Global Purchasing &
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Supply
Chain
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Facsimile: (586)
575-1887
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|
|
With
a copy to:
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Honigman
Miller Schwartz and Cohn LLP
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2290
First National Building
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660
Woodward Avenue
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Detroit,
Michigan 48226
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|
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Attention: Robert
B. Weiss
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|
|
Facsimile: (313)
465-7597
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|
|
If
to AAM:
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American
Axle & Manufacturing, Inc.
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|
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One
Dauch Drive
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Detroit,
Michigan 48211
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|
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Attention: Patrick
S. Lancaster
|
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|
Facsimile: (313)
758-4262
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|
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And
to:
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General
Counsel
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|
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American
Axle & Manufacturing, Inc.
|
|
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One
Dauch Drive
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|
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Detroit,
Michigan 48211
|
|
|
Facsimile: (313)
758-3897
|
|
|
Attn: Richard
Raymond
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|
|
With
a copy to:
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Shearman
& Sterling LLP
|
|
|
599
Lexington Avenue
|
|
|
New
York, NY 10022
|
|
|
Attention: Peter
D. Lyons
|
|
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Facsimile: (646)
848-7666
|
or to
such other address as may be furnished in writing by either party in the
preceding manner.
6
7.3 Entire
Agreement.
This
Agreement together with all exhibits and schedules hereto constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement. No waiver, amendment or other modification of this
Agreement will be valid unless evidenced by a writing signed by the Party or
Parties whose rights or obligations are affected by such waiver, amendment or
modification. All rights and remedies granted in this Agreement to
either Party shall be cumulative and nonexclusive of all other rights and
remedies that such Party may have.
7.4 Press Releases and Public
Announcements; Confidentiality. The Parties shall mutually
agree in advance the substance of any press release to be issued by either Party
with respect to this Agreement and the Related Agreements. Prior to
the issuance of any such press release, no Party shall issue any other press
release or make any other public announcement relating to the subject matter of
this Agreement or the Related Agreements without the prior written consent of
the Parties. There shall be no restrictions on the Parties in
commenting regarding this Agreement other than the initial press release
referenced above and the confidentiality provisions set forth in this Section 7.4. Without
limiting the other provisions of this Section 7.4, the
Parties acknowledge that the specific terms of this Agreement are of a
confidential nature and no Party shall make, and each will direct its respective
representatives not to make, directly or indirectly, any disclosure, whether
written or oral, of the specific terms of this Agreement without the prior
written approval of each other Party. Notwithstanding the foregoing,
following the issuance by AAM of the press release referred to above, any Party
may make any public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its publicly
traded securities; provided that any
such Party shall use commercially reasonable efforts to provide the other
Parties a minimum of 24 hours prior notice of any such public
disclosure.
7.5 Interpretation.
(a) This
Agreement is being entered into among competent and experienced business
persons, represented by counsel, and have been reviewed by the parties and their
counsel. Therefore, any ambiguous language in this Agreement will not
necessarily be construed against any particular Party as the drafter of such
language.
(b) The
captions and headings contained in this Agreement are solely for convenience of
reference and will not affect the interpretation of any provision of this
Agreement.
(c) All
references in this Agreement to section numbers, schedules or exhibits are
references to the sections in, or schedules or exhibits to, as applicable, this
Agreement.
7.6 Severability.
If any
provision of this Agreement is determined to be contrary to law or unenforceable
by any court of law, the provision will be reformed to provide the maximum
expression of the intent of the parties permissible under law.
7.7 Counterparts and
Effectiveness.
This
Agreement may be executed in counterparts (each of which shall be deemed an
original, but all of which take together shall constitute one and the same
agreement) and shall become effective when one or more counterparts have been
signed by each of the Parties and delivered to the other Parties. The
exchange of copies of this Agreement and of signature pages by facsimile or
electronic transmissions shall constitute effective execution and delivery of
this Agreement as to the Parties and may be used in lieu of the original
Agreement for all purposes. Signatures of the Parties transmitted by
facsimile or electronic transmission shall be deemed to be their original
signatures for all purposes.
7.8 Applicable Law;
Forum.
This
Agreement is made in the State of Michigan and will be governed by, and
construed and enforced in accordance with, the laws of the State of Michigan,
without regard to principles of conflicts of laws. The Parties agree
that the federal and state courts sitting in Wayne County, Michigan, have
personal jurisdiction over the Parties and that proper jurisdiction and venue
for any dispute arising from or under this Agreement will be in the federal or
state courts sitting in Wayne County, Michigan.
7.9 Third Party
Beneficiary.
Except
for Liquidation Company, which is an express third party beneficiary of the
terms and conditions of this Agreement, including, without limitation, the
provisions of Section 1.2,
this Agreement is for the sole benefit of the Parties hereto, and nothing herein
expressed or implied shall give or be construed to give any person other then
the Parties hereto any legal or equitable rights hereunder.
7.10 JURY
TRIAL WAIVER.
THE
PARTIES HERETO ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL
RIGHT, BUT THAT THIS RIGHT MAY BE WAIVED. THE PARTIES HEREBY
KNOWINGLY, VOLUNTARILY AND WITHOUT DURESS, INTIMIDATION, OR COERCION, WAIVE ALL
RIGHTS TO A TRIAL BY JURY OF ALL DISPUTES ARISING OUT OF OR IN RELATION TO THIS
AGREEMENT OR ANY OTHER AGREEMENTS BETWEEN THE PARTIES EXECUTED IN CONNECTION
WITH THIS AGREEMENT. NO PARTY SHALL BE DEEMED TO HAVE RELINQUISHED
THE BENEFIT OF THIS WAIVER OF JURY TRIAL UNLESS SUCH RELINQUISHMENT IS IN A
WRITTEN INSTRUMENT SIGNED BY THE PARTY TO WHICH SUCH RELINQUISHMENT WILL BE
CHARGED.
7.11 Treatment of Certain
Agreements in Potential Subsequent Chapter 11
.
AAM and
AAM Holdings irrevocably covenant and agree that in the event that either were
to commence proceedings (a “Chapter 11 Case”)
under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”)
following the Effective Date, AAM and/or AAM Holdings, as the case may be, will
move in the Chapter 11 Case, under section 365(a) of the Bankruptcy
Code, to assume this Agreement and the Access and Security
Agreement.
{Signatures
on following page.}
7
IN
WITNESS WHEREOF, the parties have executed this Settlement and Commercial
Agreement as of the date first written above.
GENERAL
MOTORS COMPANY
By: /s/ MW
Fischer
Name: M W
Fischer
Its:
Director, Supply Risk MGT
AMERICAN
AXLE & MANUFACTURING, INC., on behalf of itself and its subsidiaries and
affiliates
By: /s/ David C.
Dauch
Name:
David C. Dauch
Its:
President & Chief Operating Officer
AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC.
By: /s/
David C.
Dauch
Name: David C. Dauch
Its: President & Chief Operating Officer
8
Schedules
|
Schedule 1
|
Assumed
Agreements
|
|
Schedule 2
|
[…***…]
|
|
Schedule 3
|
[…***…]
|
|
Schedule 4
|
[…***…]
|
|
Schedule 5
|
[…***…]
|
|
Schedule 6
|
Performed
Agreements
|
|
Schedule 7
|
[…***…]
|
|
Schedule 8(1)
|
[…***…]
|
|
Schedule 8(2)
|
[…***…]
|
|
Schedule 9
|
[…***…]
|
|
Schedule 10
|
[…***…]
|
|
Schedule 11
|
[…***…]
|
Exhibits
|
Exhibit 1.1
|
Second
Lien Term Loan Agreement
|
|
Exhibit 1.4(a)
|
Warrant
Agreement
|
|
Exhibit 1.5(a)(5)(1)
|
GM
Standard Lifetime Contract
|
|
Exhibit 1.5(a)(5)(2)
|
GM
Terms and Conditions
|
|
Exhibit 1.5(a)(5)(3)
|
GM
Long-Term Contract
|
|
Exhibit 1.5(c)
|
Form
1804 / 1810
|
|
Exhibit 1.6
|
Access
and Security Agreement
|
*** CONFIDENTIAL TREATMENT
REQUESTED
NYDOCS01/1215580.2
9