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EXECUTION
COPY
ACCESS AND SECURITY
AGREEMENT
American
Axle & Manufacturing, Inc. on behalf of itself and its subsidiaries and
affiliates now existing and to be formed (“Supplier”), and
General Motors Company, on behalf of itself and its subsidiaries and affiliates
(“GM” or “Customer”), enter
into this Access and Security Agreement (this “Agreement”) on
September 16, 2009.
RECITALS
A. Supplier,
on the one hand, and Customer, or Customer’s affiliates and subsidiaries, on the
other hand, are parties to, or may become parties to the Settlement Agreement
(defined below), and certain purchase orders, releases, and/or other supply
agreements or contracts (as now existing or hereafter entered into, each an
“Access Facilities
Supply Contract,” and, collectively, the “Access Facilities Supply
Contracts”) for the sale by Supplier to Customer of certain component
parts, service parts, assemblies, and/or finished goods (each a “Component Part,” and,
collectively, the “Component Parts”) at
the “Access Facilities” (defined below).
B. To ensure
continuity of supply by Supplier to Customer, Supplier and Customer have entered
into (i) the Settlement and Commercial Agreement (the “Settlement
Agreement”), under which Customer will provide Supplier with certain
financial and other accommodations , and (ii) a Second Lien Loan Agreement (the
“Second Lien Loan
Agreement”), under which Customer will provide certain lines of credit on
which Supplier may elect to draw.
C. Supplier
is entering into this Agreement for the benefit of Customer to afford Customer
the right to use certain of Supplier’s assets as provided below if an “Event of
Default” (defined below) occurs and the security interests in the “Operating
Assets” (defined below) and mortgages on “Owned Real Estate” (defined below)
granted hereby are solely as collateral security for “Supplier’s Obligations”
(defined below) hereunder.
D. Supplier
acknowledges that Supplier’s failure to allow Customer to exercise its “Right of
Access” (defined below) in accordance with the terms of this Agreement will
cause Customer irreparable harm.
BASED ON
THE FOREGOING RECITALS, which are incorporated as representations and warranties
of the parties, and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Supplier and Customer agree as
follows:
TERMS AND
CONDITIONS
1. Defined
Terms. In
addition to those terms defined elsewhere in this Agreement, the following terms
have the indicated meanings, unless the context otherwise requires:
“Access Facilities”
means those facilities set forth on Schedule 1.
“Accounts” means any
“account” or “chattel paper,” as defined in Sections 9-102(a)(2) and
9-102(a)(11), respectively, of the “Code” (defined below), owned now or
hereafter by Supplier, and also means and includes (i) all accounts
receivable, contract rights, book debts, notes, drafts, instruments, documents,
acceptances, payments under leases, and other forms of obligations, now owned or
hereafter received or acquired by or belonging or owing to Supplier (including
under any trade name, styles, or division thereof) whether arising out of goods
sold or leased or services rendered by Supplier or from any other transaction,
whether or not the same involves the sale of goods or services by Supplier
(including, without limitation, any such payment obligation or right to payment
which might be characterized as an account, contract right, general intangible,
or chattel paper under the Code in effect in any jurisdiction); (ii) all
monies due to or to become due to Supplier under all contracts for the sale or
lease of goods or the performance of services by Supplier (whether or not yet
earned by performance on the part of Supplier) now in existence or hereafter
arising; and (iii) deposit accounts, insurance refunds, tax refunds, tax refund
claims, and related cash and cash equivalents, now owned or hereafter received
or acquired by or belonging or owing to Supplier.
“Agent” means JPMorgan
Chase Bank, N.A., in its capacity as agent under certain of the Loan Agreements
(defined below).
“Authorized
Representative” means each officer of the Supplier, acting as an
authorized signatory in connection with this Agreement or as a duly authorized
agent of Supplier in connection with other actions taken as described in this
Agreement.
“Code” means the
Uniform Commercial Code as in effect in the State of Michigan as of the date of
this Agreement.
“Component Parts” has
the meaning set forth in Recital A
above.
“Conditions to Return of
Possession” means, in each case, Supplier’s timely fulfillment of each of
the following conditions: (i) Supplier provides written evidence, in
form and content reasonably satisfactory to the Customer, within 30 days after
the Customer invokes the Right of Access that Supplier has obtained long term
financing to replace such terminated financing, which financing has been funded
and is adequate to fund the performance of Supplier's obligations to the
Customer under the Access Facilities Supply Contracts; (ii) Supplier is
otherwise performing under the terms of the Access Facilities Supply Contracts
between Supplier and Customer; (iii) Supplier has reimbursed Customer for all
costs incurred by Customer in invoking the Right of Access, including all such
costs that the Customer incurs or that it will incur through and including the
termination of the Right of Access; and (iv) indemnifies Customer, in such form
and content satisfactory to Customer in its discretion, from any and all
liabilities arising out of or related to the Customer's exercise of the Right of
Access.
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“Contract Rights”
means all rights of Supplier (excluding the right to payment and items described
in the definition of Accounts) under each “Contract” (defined
below).
“Contracts” or
individually, a “Contract,” means any
licensing agreements and any and all other contracts, supply agreements,
accepted purchase orders, or other agreements used in and necessary for the
manufacture, production or assembly of Component Parts and in or under which
Supplier may now or hereafter have any right, title, or interest and which
pertain to the lease, sale, or other disposition by Supplier of “Equipment”
(defined below), “Inventory” (defined below), fixtures, real property, or the
right to use or acquire personal property, as any of the same may from time to
time be amended, supplemented, or otherwise modified.
“Designee” means one
or more duly authorized agents of Customer, (a) the identity of which is made
known to Supplier in writing and is reasonably acceptable to Supplier, or (b) is
one of the following: BBK, Ltd., AlixPartners, PriceWaterhouseCoopers, and the
Whitehall Group.
“Documents” means all
“documents” as defined in Section 9-102(a)(30) of the Code.
“Effective Date” means
the earlier to occur of (a) the date on which GM first makes payment to Supplier
on account of receivables on “net 10 days” payment terms (the “Expedited Payment
Terms”) for shipments of Component Parts to Supplier or (b) the date on
which Supplier and GM enter into the Settlement Agreement.
“Equipment” means any
“equipment,” as that term is defined in Section 9-102(a)(33) of the Code,
now or hereafter owned by Supplier, which is used in and necessary for the
manufacture, production or assembly of Component Parts, and will also mean and
include all such machinery, equipment, vehicles, furnishings, and fixtures (as
such terms are defined in Section 9-102(a)(41) of the Code) now owned or
hereafter acquired by Supplier, including, without limitation, all items of
machinery and equipment of any kind, nature, and description, whether affixed to
real property or not, as well as all additions to, substitutions for,
replacements of or accessions to any of the foregoing items and all attachments,
components, parts (including spare parts), and accessories whether installed
thereon or affixed thereto in each case only if and to the extent used in and
necessary for the manufacture of Component Parts.
“Event of Default”
will mean any of the following events, only upon written notice thereof being
provided by Customer to Supplier:
(a) Any event
or circumstance shall occur or condition shall exist under the Loan Agreement
(other than the Second Lien Loan Agreement) if the effect of such event,
circumstance, or condition is to accelerate or permit the acceleration of the
Loan Agreement, and (i) Lender has prohibited or limited the supplier from
drawing on its revolving line of credit and (ii) Supplier does not demonstrate
to GM’s reasonable satisfaction that it has adequate liquidity to meet its
obligations to GM for a rolling 60-day period, unless such event, circumstance,
or condition is timely waived or cured;
(b) Supplier
refuses to perform its obligation to supply Component Parts under an unexpired
Access Facilities Supply Contract (such written refusal, a “Repudiation”), other
than arising from a material breach by Customer of this Agreement or an Access
Facilities Supply Contract, and such Repudiation is not rescinded in writing
within twenty-four (24) hours after delivery and receipt of a written demand
from GM to Supplier’s notice recipients as set forth in Section 21 of this
Agreement; provided, however, that such
twenty-four (24) hour period will no longer apply if GM’s production at any one
or more of GM’s assembly plants worldwide is actually interrupted; and provided, further, that such
Repudiation will not be an Event of Default if the event causing such
Repudiation is a Force Majeure Event that lasts no more than 30 days (and, if
such Force Majeure Event lasts more than 30 days, such Repudiation shall be an
Event of Default).
(c) Exclusive
of breaches by Supplier that are the result of a material breach by Customer of
this Agreement, Supplier materially breaches its obligations to supply Component
Parts under an unexpired Access Facilities Supply Contract, the consequence of
which is the substantial likelihood that GM’s production at any one or more of
GM’s assembly plants worldwide may be imminently interrupted; provided, however that with
respect to any unintentional breach (e.g., a quality spill), Supplier shall have
a twenty-four (24) hour cure period; provided, further, that such
twenty-four (24) hour period will no longer apply if GM’s production at any one
or more of GM’s assembly plants worldwide is actually interrupted; and provided, further, that such
material breach will not be an Event of Default if the event causing such breach
is a Force Majeure Event that lasts no more than 30 days (and, if such Force
Majeure Event lasts more than 30 days, such breach shall be an Event of
Default).
(d) One or
more of Supplier’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 Supplier providing to GM written
evidence of a binding substitute financing commitment relating to such expired
or terminated loan facility, provided that such written evidence of binding
substitute financing commitment has not expired or been terminated, the
consequence of which is the substantial likelihood that GM’s production at any
one or more of GM’s assembly plants worldwide may be imminently
interrupted; provided, further,
however, in the case of an Event of Default under this sub-section (d)
only and in the event that Supplier has complied fully with the Conditions to
Return of Possession (as defined below) on or within 30 days after the
occurrence of the Event of Default, Customer shall return possession of the
applicable Operating Assets and Real Estate to Supplier on or before ten (10)
business days following the satisfaction of all of the Conditions to Return of
Possession.
(e) An
Authorized Representative acknowledges in writing that Supplier is unable to
continue to produce the Component Parts for GM in accordance with the terms of
an unexpired Access Facilities Supply Contract; provided, however, it will not
be an Event of Default if the inability to produce is a result of a Force
Majeure Event that lasts no more than 30 days (and, if such Force Majeure Event
lasts more than 30 days, such inability to produce shall be an Event of
Default).
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(f) As to a
specific Access Facility, any Lender (other than GM) or lien creditor commences
any foreclosure or other enforcement action against a material portion of the
Operating Assets at that Access Facility and such foreclosure or other
enforcement action is not stayed within ten (10) business days and does not
remain stayed thereafter, the consequence of which is the substantial likelihood
that GM’s production at any one or more of GM’s assembly plants worldwide may be
imminently interrupted; provided, however, if such
action does not actually interfere with Supplier’s use of the Operating Assets,
the commencement of such action will not constitute an Event of
Default.
(g) Supplier
demands financial or other accommodations, other than a demand that GM perform
its obligations under any Access Facilities Supply Contract, the Settlement
Agreement, or this Agreement, from GM or a GM affiliate that are in addition to
GM or such affiliate’s obligations under an Access Facilities Supply Contract or
other agreement between the parties and threatens to cease supplying Component
Parts to GM in accordance with the terms of an unexpired Access Facilities
Supply Contract if such demands are not met and such threat is not withdrawn in
writing within forty-eight (48) hours after receipt of written notice from
GM.
“Force Majeure Event”
means an event or occurrence beyond the control of Supplier and without its
fault or negligence, including, but not limited to: acts of God; actions taken
by any governmental authority; fires; floods; storms; explosions; riots; natural
disasters; wars; strikes; lock-outs or other labor work stoppages; acts of
terrorism; inability to obtain power, material, labor, equipment, or
transportation; or court injunction or order.
“General Intangibles”
means all “general intangibles,” as such term is defined in Section 9-102(a)(42)
of the Code, now or hereafter owned by Supplier, which are used in or necessary
for the manufacture, production or assembly of Component Parts, including,
without limitation, customer lists, rights in intellectual property, goodwill,
trade names, service marks, trade secrets, patents, trademarks, copyrights,
applications therefore or for any registrable rights listed in this definition,
permits, licenses, now owned or hereafter acquired by Supplier, but excluding
items described in the definition of Accounts.
“Instruments” means
all “instruments,” as defined in Section 9-102(a)(47) of the Code.
“Intellectual
Property” means all now existing or hereafter acquired patents,
trademarks, copyrights, inventions, licenses, discoveries, processes, know-how,
techniques, trade secrets, designs, specifications, and the like (regardless of
whether such items are now patented or registered, or registrable, or patentable
in the future), and all technical, engineering, or other information and
knowledge, product and production data and drawings, which are used in or
necessary for the manufacture, production or assembly of Component Parts
including, without limitation, all items, rights, and property defined as
“intellectual property” under 11 U.S.C. Section 101, as amended from time to
time, which are used in or necessary for the manufacture, production, or
assembly of Component Parts.
“Inventory” means any
“inventory,” as that term is defined in Section 9-102(a)(48) of the Code,
wherever located, now owned or hereafter acquired by Supplier or in which
Supplier now has or hereafter may acquire any right, title or interest
including, without limitation, all goods and other personal property now or
hereafter owned by Supplier which are leased or held for sale or lease or are
furnished or are to be furnished under a contract of service or which constitute
raw materials, work in process or materials used or consumed or to be used or
consumed in the manufacture of Component Parts, or in the processing, packaging
or shipping of the same, and all finished goods that are Component
Parts.
“Leased Real Estate”
means the real property associated with the Access Facilities located at Oxford,
Michigan.
“Lenders” means any of
Supplier’s current or future secured lenders or any agents under a Loan
Agreement or any successor thereto or replacement or substitute thereof to whom
the indebtedness outstanding exceeds $5,000,000 USD, including, without
limitation, General Motors Company, to the extent that any commitment to fund
remains under the Second Lien Loan Agreement or any amount remains outstanding
thereunder.
“Loan Agreement” means
any agreement entered into by Supplier and one or more of the “Lenders” (defined
above), including, without limitation, the Second Lien Loan Agreement, to the
extent that any commitment to fund remains thereunder or any amount remains
outstanding thereunder.
“Obligations” means
the obligation to provide Customer or its Designee the Right of
Access.
“Operating Assets”
means all of Supplier’s interest in the assets used in or necessary for the
production, assembly, sub-assembly, testing, and validation of Component Parts,
whether located at an Access Facility or at a sub-supplier’s facility, including
Equipment, Real Estate, Contract Rights, and General Intangibles, but specifically
excluding any Accounts, Inventory, Documents, Instruments, chattel paper,
and “Proceeds” (defined below) of such excluded items and “Proceeds” of General
Intangibles.
“Owned Real Estate”
means real property associated with the Access Facilities and owned by
Supplier.
“Proceeds” has the
meaning provided it under Section 9-102(a)(64) of the Code and, in any event,
will include, but not be limited to: (i) any and all proceeds of any
insurance, indemnity, warranty, or guaranty payable to Supplier from time to
time with respect to any of the Operating Assets or Real Estate; (ii) any
and all payments (in any form whatsoever) made or due and payable to Supplier
from time to time in connection with any requisition, confiscation,
condemnation, seizure, or forfeiture of all or any part of the Operating Assets
or Real Estate by any governmental body, authority, bureau, or agency (or any
Person acting under color of governmental authority); and (iii) any and all
other amounts from time to time paid or payable under or in connection with any
of the Operating Assets or Real Estate.
“Real Estate” means
the real property associated with the Access Facilities, including the Owned
Real Estate and the Leased Real Estate.
“Senior Lenders” means
each of the Lenders other than GM in its capacity as a Lender.
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2. Grant of
Liens and Security Interests. Solely as
collateral security for the Obligations (and not for any other Obligations of
the Supplier under this or any other agreement), Supplier hereby grants to
Customer (i) a continuing lien and security interest in the Operating Assets and
mortgage on the Owned Real Estate, whether now owned or hereafter acquired by
Supplier, or in which Supplier now has or at any time in the future may acquire
any right, title, or interest, and (ii) a security interest and lien on the
Intellectual Property used in, and necessary for the production of Component
Parts (collectively, the “Collateral”). Further,
Supplier hereby grants to Customer permission to file any financing statements,
security interests, and/or mortgages deemed necessary by Customer to perfect its
security interest and mortgage granted hereby. The security interests
and mortgages granted to Customer pursuant to this Agreement to secure the
Obligations are junior and subordinate to the liens, security interests, and
mortgages granted to the Lenders in all respects but in all cases the Lenders’
exercise of their rights and remedies with respect to their liens and security
interests against the Operating Assets and mortgages on the Owned Real Estate
are subject to the terms of this Agreement. The Lenders may take any
necessary action to protect their rights in the Collateral, including but not
limited to, preparing for a sale and selling, transferring, or liquidating any
asset not included as Operating Assets or Owned Real Estate, or to list the
Operating Assets or Owned Real Estate for sale provided any closing would occur
no sooner than the expiration of the Term of this Agreement, and preparing all
of the Collateral for liquidation (including the Operating Assets and Owned Real
Estate); provided, however, Lender’s
actions will not impair Customer’s Right of Access until the expiration of the
Term of this Agreement. Customer’s rights as a secured creditor under
this Agreement will be strictly limited to enforcing the Right of
Access. The security interest and liens in the Operating Assets and
Owned Real Estate granted to GM pursuant to this paragraph or the mortgages, as
applicable, shall terminate and become of no further force and effect, without
any action or document of any kind, upon expiration of the Term of this
Agreement. GM hereby grants Supplier and Senior Lenders the right,
effective upon the termination of the security interest granted by this
paragraph, to file any termination statement or mortgage discharge with respect
to any financing statement or release or satisfaction of mortgage with respect
to any mortgage filing or any other release of lien documentation necessary in
connection with any lien filed by GM in connection with the Operating Assets or
Owned Real Estate and agrees to execute any documents deemed by Supplier or the
Senior Lenders to be necessary or desirable in connection
therewith.
3. Right of
Access
(a) General. Upon
the occurrence of an Event of Default and, if such Event of Default relates only
to some limited subset of the Access Facilities then solely with respect to
those Access Facilities (but in any event as to every plant at such Access
Facilities that, as of the Effective Date of this Agreement, is producing
Component Parts) at which the Component Parts that are subject to the Event of
Default are manufactured, Customer or its Designee will have a right, but not
the obligation, to use and have access to the Operating Assets and Real Estate
to manufacture, process, and/or ship Component Parts manufactured at such Access
Facilities (the “Right
of Access”) for a period of up to three hundred sixty (360) days from the
date Customer provides the written notice referenced below (the “Access
Period”). Customer may invoke the Right of Access at any one
or more Access Facility at any time after the occurrence of an Event of Default
with respect to Component Parts manufactured at such Access Facility, provided
that it if it invokes the Right of Access it shall be done by delivering written
notice to Supplier and Agent, as set forth in Section 21 of this Agreement, indicating its intention to
invoke the Right of Access at least twenty-four (24) hours before taking any
action pursuant thereto. Customer will have no right to sell,
transfer, or dispose of the Operating Assets or the Real Estate as part of the
Right of Access. If the Right of Access is not invoked as to all of
the Access Facilities, subject to the terms of this Agreement, it may be invoked
thereafter as to additional Access Facilities.
(b) Customer’s
Obligations. If Customer invokes the Right of Access for
itself or its Designee, in lieu of payment for Component Parts produced after
exercise of the Right of Access, Customer will, as to each Access Facility at
which Customer has exercised the Right of Access:
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(i)
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use
such reasonable care to preserve the Operating Assets and Real Estate as a
prudent owner would use in connection with the custody and preservation of
its own assets, and indemnify, defend, and hold harmless Supplier and
Lenders, and their respective, officers, directors, employees, and agents
of, from, and against any and all costs, expenses (including all court
costs and reasonable, documented attorneys’ fees), losses, damages, and
liabilities relating to property damage (including, without limitation,
any physical damage to the Operating Assets and Real Estate) or physical
injury suffered by any persons (including, without limitation, employees,
contractors, agents, and other third parties), in each case, proximately
caused by or arising out or accruing as a result of (a) Customer’s or its
Designee’s activities or operations within any Access Facility or use of
the Operating Assets and Real Estate during the Access Period, (b)
Customer’s production of products for Supplier’s other customers as
permitted in Section 3(b)(vi), and (c)
Customer’s or its sublicensee’s improper or unauthorized use of Supplier’s
Intellectual Property; provided, however, the
foregoing indemnity obligations will not apply to claims arising out of or
related to conditions that existed or events that occurred before the
Access Period. Customer’s indemnity obligation will survive the
expiration or any earlier termination of this
Agreement;
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(ii)
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insure
with comparable coverage and maintain the Operating Assets and Real Estate
in the same condition as existed on the date Customer exercised the Right
of Access, ordinary wear and tear excepted, naming Agent as a loss payee
and additional insured on all insurance policies obtained with respect to
the Operating Assets and the Real
Estate;
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(iii)
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pay
the actual costs and expenses incurred in connection with the
manufacturing of Component Parts during the Access Period, including,
without limitation, inventory, gross wages (including overtime and
benefits), supplier premiums, hostage payments, rent, utilities and other
overhead expenses, royalty payments under licenses to third parties,
prorated real and property taxes and assessments attributable to the
Operating Assets and Real Estate;
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(iv)
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purchase
Supplier’s Inventory according to the terms of this
Agreement;
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(v)
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subject
to Customer’s or its Designee’s right to use and have access to the
Operating Assets and Real Estate during the Access Period, afford
Supplier’s representatives (and representatives of the Lenders, secured
creditors and mortgagees or lessors of the Operating Assets and/or Real
Estate) reasonable access to inspect the Operating Assets and the Real
Estate being utilized by Customer;
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(vi)
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subject
to (a) Supplier’s other customers consenting to Customer’s production of
their parts and agreeing to make payment to Customer or its Designee, as
applicable, on account of its allocable share of overhead and related
expenses and all direct expenses related to such other customer’s
production; (b) Supplier making the necessary tangible personal property
available for use during the Access Period, and (c) Supplier or Supplier’s
other customers providing GM or its Designee an appropriate license for
any intellectual property necessary for the production of parts for such
customer, Customer agrees, for itself and its Designee, to produce parts
for such other customers during the Access
Period;
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(vii)
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observe
in all respects all applicable laws, rules, regulations, and ordinances
relating to the use and occupancy of the Operating Assets and the Real
Estate, and to the manufacturing, processing, and shipping of the
Component Parts, including, without limitation, all relevant employment
laws, collective-bargaining agreements pertaining to “Employees” (defined
below), and Supplier employment policies during the Access Period;
and
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(viii)
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pay
on a monthly basis in arrears, and prorated for any partial months, to the
Senior Lenders for Supplier’s account, an access fee (the “Access Fee”)
for the Access Facilities where the Right of Access is exercised in
accordance with Schedule 3(b)(vii).
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Customer’s
obligations under this Section 3(b) shall not be
subject to setoff, recoupment, or deduction of any kind. In the
event, however, that Supplier fails to comply with the terms of this Agreement,
Customer's obligations to Lenders under Sections 3(b)(ii) and 3(b)(viii)
shall be enforceable by Lenders against Customer provided that (i) Lenders have
not impaired the Customer’s Right of Access, (ii) are forbearing from exercising
their respective rights and remedies under the Loan Agreements to foreclose on
the Operating Assets and Real Estate pursuant to the terms hereof and (iii)
Lenders reasonably cooperate with Customer in any proceedings against the
Supplier to enforce the terms of this Agreement.
(c) Supplier’s
Obligations. If Customer invokes its Right of Access, Supplier
will comply with the following:
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(i)
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At
Customer’s election and in its sole discretion, Supplier will use its
reasonable best efforts to continue to employ those of its active
employees that Customer reasonably determines are necessary to maintain
production of the Component Parts (the “Employees”) and
in turn subcontract the Employees to Customer or its Designee at an amount
equal to Supplier’s costs with respect to such Employees; provided that
nothing in this Section 3(c)(i) will require
Supplier to hire any new employees or employ any employees of Customer,
nor shall Supplier be obligated to increase the salary or other
compensation of any Employee, or otherwise incur any expenses, in order to
comply with this Section 3(c)(i). Customer or its Designee
will fund all costs and expenses relating to Supplier’s employment of the
Employees incurred during the Access Period. Without limiting
the generality of the foregoing, Customer or its Designee will fund all
amounts incurred by Supplier to meet its regular payroll obligations,
including salaries, wages, payroll taxes, workers’ compensation,
unemployment insurance, disability insurance, welfare, pension
contributions, and other payments and contributions required to be made by
Supplier with respect to the Employees, which are incurred during the
Access Period, but in no event will Customer be liable under this
Agreement for any costs for unfunded pension liability, actuarial
liability, past service unfunded actuarial liability or solvency or other
deficiency relating to any pension plan, retiree medical plan, OPEB
obligation, or other obligations relating to service prior to the time
Customer exercised the Right of Access. Notwithstanding the
foregoing, under no circumstances will Customer be responsible for
reimbursing Supplier for costs and expenses relating to Supplier’s
employment of the Employees to the extent the Employees are performing
services unrelated to the production of the Component
Parts;
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(ii)
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Supplier
will not increase compensation or benefits of the Employees without the
consent of Customer, except as may be required by applicable law or
pre-existing contract;
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(iii)
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Supplier
and its subsidiaries and affiliates will continue, as requested by
Customer or its Designee, to provide any and all services provided by
Supplier and its subsidiaries and affiliates to the Access Facilities
subject to the Right of Access prior to the exercise of such Right of
Access to the extent necessary to allow for production of the Component
Parts for Customer or its Designee at the applicable Access Facilities to
continue without interruption. The above obligation is
independent of, and not conditioned upon, a written agreement being in
force between Supplier and any of its affiliates or
subsidiaries. Customer or its Designee will reimburse Supplier
and its subsidiaries or affiliates as applicable, on “net 10 days” payment
terms for such services for a price equivalent to Supplier’s its
subsidiary’s or affiliate’s, as applicable, cost in providing such
services (i.e., all direct and indirect costs, including SG&A,
engineering, and other overhead charges). In addition, during
the Access Period, Supplier and its subsidiaries and affiliates will
continue to supply component parts or assemblies used in manufacturing or
assembling the Component Parts, as reasonably requested by GM or its
Designee and to the extent necessary to allow for production of the
Component Parts for GM or its Designee at the applicable Access Facilities
to continue without interruption. To the extent that Supplier
is a party to a contract with an affiliate or subsidiary for the supply of
component parts or assemblies used in manufacturing or assembling the
Component Parts, at the request of GM or its Designee, Supplier will use
its best efforts to provide GM or its Designee with the benefit of such
contracts during the Access Period. Customer or its Designee
will reimburse Supplier or its subsidiaries or affiliates, as applicable,
on “net 10 days” payment terms for such supply at piece prices equivalent
to Supplier’s or its subsidiary’s or affiliate’s, as applicable, actual
cost (i.e., all direct and indirect costs, including SG&A,
engineering, interest expense, and other overhead charges) plus
10%. Supplier or its affiliate or subsidiary, as applicable,
will provide Customer or its Designee with appropriate financial data and
backup information to determine the validity of any such piece price
proposed by Supplier. In the event of any dispute over the cost
of the services or the piece prices to be paid for such component parts
during the Access Period, the parties will submit such dispute to
expedited binding arbitration. In any case, Supplier and its
subsidiaries and affiliates will provide such services and supply such
component parts without interruption and GM will pay the undisputed cost
and piece prices to Supplier or its subsidiaries or affiliates, as
applicable, during the pendency of any such arbitration proceedings, with
the differential being placed in escrow subject to the decision of the
arbitrator.
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(iv)
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Supplier
will indemnify, defend and hold Customer, its Designee and its employees
and agents harmless of, from and against any and all costs, expenses
(including all court costs and reasonable, documented attorneys’ fees),
losses, damages, liabilities or injury arising from claims or liabilities
arising or accruing as a result of Supplier’s activities and operations
prior to the date of Customer’s exercise of the Right of Access,
regardless of when such claims are asserted. Supplier’s
indemnity obligations under this Section 3(c)(iv) will survive the expiration or any
earlier termination of this Agreement;
and
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(v)
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Supplier
agrees that Customer and its Designee and representatives will have
reasonable access to Supplier’s books and records for the sole purposes of
confirming and calculating the amounts due, if any, from Customer under
this Agreement.
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5
(d) Right to
Terminate. Customer will have the right to terminate the Right
of Access as to any facility upon ten (10) business days’ written notice to
Supplier and Agent. Upon expiration of such notice period, the Access
Period will terminate as to such facility and, except for Customer’s obligation
under Section 3(b)(i) and to pay amounts payable
under this Agreement not paid as of the termination of the Access Period to
satisfy its then-existing obligations under this Agreement, Customer will have
no further obligations or liabilities (other than its indemnification
obligations) to Supplier on account of the Right of Access as to such
facility.
(e) Indemnification. To
the extent a party (“Indemnitee”) makes a
claim against the other party (“Indemnifying Party”)
for indemnification in accordance with this Agreement, Indemnitee agrees the
following will apply:
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(i)
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The
Indemnifying Party’s indemnity obligations will be secondary to any
applicable insurance coverage or indemnities from third
parties. In addition, the Indemnifying Party’s indemnity does
not include any losses, liabilities, claims or damages or expenses to the
extent the same are determined in a final, non-appealable judgment of a
court of competent jurisdiction to have arisen from the gross negligence
or willful misconduct of
Indemnitee.
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(ii)
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If
Indemnitee becomes aware of any claims, demands, actions or proceedings
for which it will be seeking indemnification, it must use its reasonable
best efforts in good faith to promptly notify the Indemnifying Party in
writing of same; failure to provide such notice will only affect the
Indemnifying Party’s liability to the extent that the Indemnifying Party
suffers damage or injury as a result of the failure to give such prompt
notice. The Indemnifying Party will have the right, at its
expense, to assume the defense thereof (retaining counsel of its
choosing). The Indemnifying Party will not agree to any
settlement of, or the entry of any judgment arising from, any third-party
action without the prior written consent of the applicable Indemnitee,
which consent shall not be unreasonably withheld, conditioned, or delayed;
provided, however, that if such settlement (1) includes a written,
unconditional release of such Indemnitee from any and all liability
relating to or arising out of such third-party action, (2) relates solely
to monetary damages for which Indemnifying Party has agreed in writing to
indemnify in its entirety, and (3) does not involve any finding or
admission of any violation of legal requirements, then no such consent
shall be required. Indemnitee may, but is not required to
engage a single firm of separate counsel of its choice in connection with
any matters to which the Indemnifying Party’s indemnification relates,
provided that Indemnifying Party will at no time be obligated to pay for
more than one firm on behalf of
Indemnitee.
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(iii)
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Indemnitee
agrees that it must: (1) refrain from taking action that has a material
adverse impact on the defense of such claim; (2) cooperate fully with the
defense of any claims made hereunder at the Indemnifying Party’s cost and
expense; and (3) upon the Indemnifying Party’s request, provide reasonable
assistance to the Indemnifying Party (at the Indemnifying Party’s cost and
expense) in the defense of such
claim.
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(f) Specific
Performance. IN CONNECTION WITH ANY ACTION OR PROCEEDING TO
ENFORCE THE RIGHT OF ACCESS, SUPPLIER ACKNOWLEDGES THAT CUSTOMER WILL NOT HAVE
AN ADEQUATE REMEDY AT LAW, THAT THE OPERATING ASSETS AND REAL ESTATE ARE UNIQUE
AND THAT CUSTOMER WILL BE ENTITLED TO SPECIFIC PERFORMANCE OF SUPPLIER’S
OBLIGATIONS TO AFFORD CUSTOMER ITS RIGHT OF ACCESS UNDER THIS
AGREEMENT.
(g) Irreparable Harm; Limitation of
Notice. SUPPLIER ACKNOWLEDGES THAT CUSTOMER WILL SUFFER
IRREPARABLE HARM IF CUSTOMER INVOKES THE RIGHT OF ACCESS AND SUPPLIER FAILS TO
COOPERATE WITH CUSTOMER IN ALLOWING CUSTOMER TO EXERCISE THE RIGHT OF ACCESS
UNDER THIS AGREEMENT. ACCORDINGLY, PROVIDED THAT SUPPLIER RECEIVES
TWENTY-FOUR (24) HOURS’ ACTUAL NOTICE OF ANY REQUEST FOR HEARINGS IN CONNECTION
WITH PROCEEDINGS INSTITUTED BY CUSTOMER, SUPPLIER WAIVES, TO THE FULLEST EXTENT
POSSIBLE UNDER APPLICABLE LAW, THE RIGHT TO NOTICE IN EXCESS OF TWENTY-FOUR (24)
HOURS IN CONNECTION WITH ANY JUDICIAL PROCEEDINGS INSTITUTED BY CUSTOMER TO
ENFORCE THE RIGHT OF ACCESS.
4. Cooperation
in Resourcing. Upon the occurrence of an Event of Default and
GM’s exercise of its Right of Access, GM will have the right to resource any or
all Component Part production that is the subject of the Event of Default to
alternative suppliers (the “Resourcing”). Supplier
will fully cooperate with GM in connection with such Resourcing including,
without limitation, by providing Customer copies of tool line-ups, tool
processing sheets, repair logs, bill of materials, PPAP packages, tool drawings,
names and locations of vendors and sub-suppliers of tooling, raw materials,
components, and outside processing, and by providing Customer and its agents,
representatives, Designees, consultants, officers, employees, and potential
successor suppliers immediate access to the Access Facilities for the purpose of
inspecting and removing Tooling, viewing current production processes and taking
any other reasonable actions in connection with Resourcing.
5. Obligation
to Purchase Inventory. If Customer elects to exercise the
Right of Access, Customer must purchase all Inventory, including raw materials,
work in process, and finished goods inventory, in each case, that specifically
relates to the Component Parts manufactured at the Access Facility(ies) at which
Customer exercised the Right of Access and which inventory is both “usable” by Customer
and in a “merchantable”
condition (collectively, the “Purchased
Inventory”). For purposes of this Agreement, (a) the term
“usable” means not obsolete as determined in accordance with applicable industry
standards for the Purchased Inventory and reasonably usable in the production of
Component Parts in the quantities called for by Customer’s fabrication
authorizations and production releases, including material ordered on account of
lead times as actually required to satisfy outstanding releases and other
binding commitments issued against current Access Facilities Supply Contracts in
effect as of the date Customer exercises the Right of Access, and (b) the term
“merchantable”
means merchantable as defined in the Code and in conformance with all
specifications contained in the applicable Access Facilities Supply
Contract. All Purchased Inventory must be transferred to GM free and
clear of all liens, claims, encumbrances, and security interests within 14 days
after the date GM invokes the Right of Access.
The
Purchased Inventory must be sold free and clear of any and all liens, claims,
encumbrances, and security interests other than the lien granted pursuant to the
Second Lien Loan Agreement. Customer will only be obligated to
purchase the Inventory under this Agreement if all requirements of this Section 5 are satisfied
and Customer is allowed to take possession of or use the Inventory no later than
ten (10) days after Customer’s exercise of the Right of Access. Customer must
purchase the Purchased Inventory for the following amounts:
(a) for raw
materials, 100% of Supplier’s actual invoice cost;
(b) for work
in process, 100% of pro-rated current purchase order price for the Component
Parts in question based on percentage of completion; and
(c) for
finished goods, 100% of purchase price called for by the underlying Access
Facilities Supply Contract.
6
Within
five (5) business days of invoking the Right of Access at an Access Facility,
Customer will be required to deposit into escrow with [Escrow Agent] an amount
equal to 50% of Supplier’s then current book value of inventory (on a FIFO
basis, without reserve) in respect of Component Parts produced at the Access
Facility(ies). Within seven (7) days after commencement of the Access
Period, Customer and Supplier will commence a physical inventory of
all inventory in respect of Component Parts manufactured at an Access
Facility(ies), which physical inventory will be completed no later than ten (10)
days after commencement of the physical inventory. Upon completion of
the physical inventory and Supplier’s satisfaction of its obligations under this
Section 5, the funds in the escrow will be released
to Agent for Supplier’s account (or returned to Customer to the extent the value
of the Purchased Inventory is less than the amount escrowed by Customer) and
Customer will pay the balance of the purchase price of the Purchased Inventory
(if any) to Agent within ten (10) business days after the release of the amount
escrowed hereunder. If there are any disputes regarding whether
Inventory is usable and merchantable, (1) the undisputed amount due
from the escrow account will be released immediately to the Agent; (2) Customer
and Supplier will each select an independent accountant with experience in
automotive-related inventory valuation (whose fees and costs shall be paid by
the party who retained such accountant) and the two accountants will jointly
determine whether any Inventory for which Customer has not paid is useable and
merchantable; and (3) if the two independent accountants cannot agree, the
dispute will be referred to binding arbitration with all costs and expenses
shared equally.
Supplier
acknowledges that the foregoing prices to be paid for the Purchased Inventory
constitute commercially reasonable prices, and that any sale pursuant to the
foregoing will be deemed to be commercially reasonable in all respects,
including method, time, place, and terms.
6. License. Subject
to subsection
(a), below, Supplier hereby grants to Customer, a perpetual, fully paid
up, worldwide, non-exclusive, irrevocable right and license to use any of its
Intellectual Property that is necessary to develop, manufacture, assemble,
and/or sell the Component Parts to make, have made, use, have used, sell, offer
to sell, import, export, reproduce, copy, prepare derivative works, and
distribute all Component Parts (the “License”). Customer’s
right to use the License will include the right to grant one or more third
parties sublicenses for the manufacture or sub-assembly of the applicable
Component Parts, provided, however, that any
sublicensee must satisfy the terms of this Agreement and any such sublicensing
will neither limit, discharge, or modify nor have any other effect on
Customer’s obligations under this Agreement.
(a) Right to Use
License. Although the License is being granted to Customer as
of the date set forth above, Customer agrees that neither it nor its
sublicensees will utilize the License with respect to Intellectual Property
utilized at a given Access Facility, unless and until Customer exercises the
Right of Access.
(b) No
Royalty. For all purposes, subject to payments required under
third party licenses (provided that such third parties are not Supplier’s
subsidiaries or affiliates and provided that such third party license payments
do not spring into effect upon GM’s exercise of the Right of Access), Supplier
has been fully paid for the License and other rights granted to Customer under
this Agreement (except as otherwise provided in this Agreement) and no
royalties, fees, payments, charges or other consideration will be due from
Customer on account of the License or this Agreement or Customer’s (or
sublicensee’s) use of the License or other rights granted pursuant to this
Agreement (except as otherwise provided in this Agreement).
(c) Protection of
Ownership. Customer will treat and preserve the Intellectual
Property in accordance with practices no less protective than Supplier’s (or
Customer’s, to the extent Customer’s practices are more protective of
Intellectual Property) against unauthorized use and disclosure and will only use
such information, data, and trade secrets in connection with the
License. The foregoing obligations of Customer will not be applicable
to information which is now or becomes hereafter available to the public through
no action, conduct, admission, or fault of Customer.
(d) The
provisions of this Section 6 will survive the
expiration or any earlier termination of this Agreement.
7. Rights of
Customer; Limitations on Customer’s Obligations. Unless
Customer exercises the Right of Access, in which case Customer will have the
obligations as are expressly provided in this Agreement, except as provided by
applicable law, Customer will not have any obligation or liability by reason of
or arising out of this Agreement nor will Customer be required or obligated in
any manner to perform or fulfill any of the obligations of Supplier under this
Agreement.
8. Remedies. Upon
the occurrence of an Event of Default, Customer will have all rights and
remedies provided in this Agreement, in any other agreements with Supplier, and
all rights and remedies available under applicable law. Supplier
waives any right it may have to require Customer to foreclose its security
interest and/or reduce the Obligations to a monetary sum. Customer
shall have no right under this Agreement to attach, foreclose, sell, or
otherwise dispose of all or any portion of the Collateral; provided, however, that the
preceding sentence shall not have any effect on any rights Customer may have
arising under the Second Lien Loan Agreement, which rights are expressly
reserved. If Customer exercises the Right of Access, Customer will be
treated as a secured party in possession and Customer’s use and occupancy of the
Operating Assets will not be deemed to be acceptance of such assets in
satisfaction of the Obligations. Further, all of Customer’s rights
and remedies under this Agreement are cumulative and not exclusive of any rights
and remedies under any other agreement or under applicable law or at
equity.
9. Injunctive
Relief. Given the possibility that Customer will incur
significant damages if Supplier fails to timely satisfy its obligations to
Customer and Customer’s assembly plant operations will be negatively impacted,
and because Customer does not have adequate remedy at law and could be
irreparably harmed by such events, Supplier agrees that Customer will be
entitled to injunctive relief (both prohibitive and mandatory) to enforce the
terms and conditions of this Agreement.
10. Representations and
Warranties
(a) Title; No Other Security
Interests. Except for the liens, security interests or claims
of others identified on Schedule 10(a), including
any successor liens or security interests thereto, Supplier owns the Operating
Assets and Owned Real Estate free and clear of any and all liens, security
interests, or claims of others, which are reasonably likely to interfere with
GM’s Right of Access.
(b) Accuracy of
Information. All information, certificates, or statements
given to Customer under this Agreement must be true and complete in all material
respects, when given.
(c) Authority. The
parties to this Agreement have the necessary authority and control to satisfy
their respective obligations under this Agreement.
11. Covenants. Supplier
covenants and agrees with Customer that from and after the date of this
Agreement until the Obligations are fully performed:
(a) Further
Documentation. At any time and from time to time, upon the
prior written request of Customer, Supplier will promptly and duly execute and
deliver any and all such further instruments and documents and take such further
action as Customer may reasonably request for the purpose of obtaining the full
benefits of this Agreement and of the rights and powers herein
granted.
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(b) Payment of
Obligations. Prior to an exercise of the Right of Access by
Customer, if any, Supplier will pay promptly when due, all rent payments, taxes,
assessments and governmental charges or levies imposed upon or relating to the
Operating Assets and the Real Estate or in respect of Supplier’s income or
profits, as well as all claims of any kind (including, without limitation,
claims for labor, materials, or supplies) against or with respect to the
Operating Assets and the Real Estate. GM shall not make any payment
of the foregoing obligations on Supplier’s behalf without Supplier’s consent,
which consent will not be unreasonably withheld.
(c) Sales or Dispositions of
Assets; Certain Uses Prohibited. Supplier will not sell or
otherwise dispose of the Operating Assets or the Real Estate without the written
consent of Customer, which consent shall not be unreasonably withheld or
delayed, except for (i) inventory in the ordinary course of business; (ii)
surplus or obsolete assets or assets which are no longer used in or necessary
for the production or assembly of Component Parts; or (iii) sales that are part
of Supplier’s sale of an entire product line, business unit, or division,
provided that the purchaser, in connection with such sale, assumes and takes an
assignment of this Agreement and the post-closing obligations of Supplier under
this Agreement without modification as to the Access Facilities it
acquires. Further, Supplier will not use any of the Operating Assets
or the Real Estate in any way which would materially adversely affect Customer’s
Right of Access or Customer’s other rights and remedies under this
Agreement. Supplier acknowledges and agrees that it will be
reasonable for Customer to withhold consent if the proposed sale or encumbrance
materially impairs, or is reasonably likely to materially impair, Customer’s
rights under this Agreement.
(d) Limitations on Modifications
of Agreements, etc. Supplier will not: (i) amend, modify,
terminate, or waive any provision of any Contract, or enter into any Contract,
which might materially adversely affect Customer’s Right of Access; or
(ii) fail to exercise promptly and diligently each and every right which it
may have under each Contract in any manner that could materially adversely
affect Customer’s Right of Access or Customer’s other rights or remedies under
this Agreement.
(e) Maintenance of
Insurance. Supplier will, at its expense, keep and maintain
the Operating Assets and the Real Estate insured against all risk of loss or
damage from fire, theft, malicious mischief, explosion, sprinklers, and all
other hazards or risks of physical damage included within the meaning of the
term “extended coverage”, all of the foregoing in amounts and on terms
consistent with Supplier’s past practices. Supplier will furnish
Customer evidence of said insurance upon Customer’s reasonable prior written
request, but Customer will not be named as an additional insured or loss
payee.
(f) Right of Inspection;
Cooperation. In addition to any rights Customer may have under
the Access Facilities Supply Contracts or any other agreements with Supplier,
Customer and its representatives will, at Customer’s expense, upon reasonable
prior request and at reasonable times, have the right to enter into and upon any
premises where any of the Operating Assets and the Real Estate are located for
the purpose of inspecting the same, observing their use or monitoring Supplier’s
compliance with the terms of this Agreement, or otherwise protecting Customer’s
interests therein, provided that Customer will not be permitted to have access
to Operating Assets or portions of the Real Estate or observe production (i)
dedicated to Supplier’s other customers, or (ii) that would disclose
confidential, proprietary, or sensitive information related to Supplier’s other
customers or the component parts manufactured by Supplier for such other
customers, provided, however, Supplier will take reasonable steps to accommodate
Customer’s rights of inspection and observation hereunder when in potential
conflict with the need to maintain confidentiality as referenced
above. For clarity, Supplier shall not be required to disclose any
information regarding any of Customer’s competitors. Except (i) to
the extent necessary or helpful for Customer to effect a Resourcing, and (ii) to
the extent that Customer is advised by counsel that it is required under
applicable legal, governmental, regulatory, or administrative process or
proceeding to disclose confidential information concerning Supplier, Customer
shall keep all information confidential and shall not use or disclose such
information to any third party outside of Customer without the prior written
consent of Supplier. If, in accordance with the preceding sentence,
Customer is required to disclose information concerning Supplier, Customer and
Supplier will reasonably cooperate with each other in obtaining a mutually
agreed protective order or other arrangement pursuant to which confidential
treatment will be afforded to that confidential information that Customer is
required to disclose. Notwithstanding the foregoing, in no event
shall Customer’s access under this Section 11(f)
materially interfere with Supplier’s operations.
(g) Notice of
Default. Supplier will provide notice to Customer, by way of
facsimile transmission and overnight express mail service, of its or its
attorneys’ or agents’ receipt of any notice of default received from a creditor
that holds an interest in the Operating Assets or from any lessor of any
Operating Assets or the Real Estate, including but not limited to taxing
authorities and the landlord to the Facilities. Supplier hereby
grants to Customer the option, but not the obligation, to exercise whatever
rights to cure defaults that Supplier has under such agreements or by
law.
12. Secured Party and Lessor
Acknowledgments
(a) Except
with respect to purchase money security interests, Supplier will not enter into
any proposed security agreement or lending commitment in which a security
interest is granted with respect to any portion of the Operating Assets or Real
Estate and for which the proposed lender or secured party does not expressly
agree to the acknowledgement and consent referenced
below. Concurrently with execution of this Agreement, Supplier
will provide to Customer (a) the Lenders’ acknowledgment of and
consent to the rights granted to Customer under this Agreement by providing to
Customer a form substantially similar to Schedule 12(a) executed by
duly authorized representatives of the Lenders, and (b) the acknowledgment and
consent of any secured party other than the Lenders holding a security interest
in any of the Operating Assets or Real Estate to the rights granted to Customer
under this Agreement in a form substantially similar to Schedule 12(a).
(b) Concurrently
with execution of this Agreement, Supplier will use commercially reasonable
efforts to provide to Customer the acknowledgement and consent of any personal
property lessors of material Operating Assets to the rights granted to Customer
under this Agreement by providing a copy to Customer of a form executed by such
party substantially similar to Schedule 12(b).
(c) If
subsequent to execution of this Agreement Supplier intends to grant additional
or further security interests, liens or mortgages in a material portion of
Operating Assets or the Real Estate to any additional parties, five (5)
business days prior to granting such liens, security interests, mortgages, or
leaseholds, Supplier must deliver to Customer an acknowledgment from such
secured creditors, mortgagees, and/or lessees in a form substantially similar to
Schedule 12(a) or 12(b), as appropriate, provided Customer executes a
subordination agreement as contemplated under Section 2 of this
Agreement.
13. Term. The
rights granted to Customer under this Agreement will continue for the period
beginning on the Effective Date and ending ninety (90) days after the later to
occur of: (a) termination and repayment of the Second Lien Loan Agreement, and
(b) the day Supplier elects to terminate the Expedited Payment Terms (the “Term”). If
Customer has invoked the Right of Access before the expiration of the Term of
this Agreement, the Term will expire upon the earlier of the expiration of the
Access Period or Customer’s termination of the Access
Period. Notwithstanding the foregoing, the Right of Access shall
terminate and be of no further force and effect ten (10) days after (x) Agent
gives written notice, in accordance with this Agreement, and referencing this
Agreement, that Agent or Senior Lenders intend to exercise their rights with
respect to the Operating Assets and/or Real Estate, (y) Agent or Senior Lenders
cease lending under the Loan Agreements, and (z) Agent or Senior Lenders
commence proceedings to foreclose on the Operating Assets or Real Estate, unless
Customer exercises the Right of Access during such ten-day
period. Agent and Senior Lenders agree to forbear from exercising
their rights in a manner that would impair the Right of Access against the
Operating Assets or Real Estate during such ten-day period.
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14. Confidential
Information and Data. Without limiting Customer’s rights under
this Agreement, to the extent the Operating Assets include or Customer or its
Designee otherwise comes into possession of or becomes aware of, Supplier’s
trade secrets or proprietary information during Customer’s exercise of the Right
of Access, Customer and its Designee must, except as required by applicable law
or helpful to effect a Resourcing, (a) keep the information, data, and trade
secrets confidential; and (b) only use the information, data, and trade secrets
during the Access Period in connection with producing the Component
Parts. The provisions of this paragraph will survive termination of
this Agreement. Customer and Supplier each agree to keep all terms
and conditions set forth in this Agreement confidential from any third party,
provided, however, that the terms of this Agreement may be disclosed by Customer
or Supplier to their respective directors, officers, employees, legal and
financial advisors, and to other individuals acting on behalf of Customer or
Supplier, who need to know such information, provided, further, that Customer
and Supplier will advise such respective directors, officers, employees, legal
and financial advisors, or other individuals of the confidential nature of this
Agreement and the requirement for confidentiality as to this Agreement’s terms
and conditions. Notwithstanding the foregoing, Customer and Supplier,
as the case may be, may disclose the terms of the Agreement without liability
hereunder to the extent either of them is required to do so in
connection with any applicable legal, regulatory, governmental, or
administrative process or proceeding.
15. Severability. Should
any provision of this Agreement be held invalid, prohibited or unenforceable in
any one jurisdiction it will, as to that jurisdiction only, be ineffective to
the extent of such holding without invalidating the remaining provisions of this
Agreement, and any such holding does not invalidate or render unenforceable that
provision in any other jurisdiction wherein it would be valid and
enforceable.
16. Authorization. The
parties executing this Agreement as representatives warrant that they have the
power and authority to execute this Agreement on behalf of the corporation that
they represent and that their signatures bind said corporations to the terms of
this Agreement.
17. Section
Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation of this
Agreement. All references to Sections, Schedules, and Exhibits are to
Sections, Schedules, and Exhibits in or to this Agreement unless otherwise
specified.
18. No
Waiver; Cumulative Remedies. No party will by any act, delay,
indulgence, omission, or otherwise be deemed to have waived any right or remedy
under this Agreement or of any breach of the terms and conditions of this
Agreement. A waiver by a party of any right or remedy under this
Agreement on any one occasion will not be construed as a bar to any right or
remedy which that party would otherwise have had on a subsequent
occasion. No failure to exercise nor any delay in exercising on the
part of a party any right, power, or privilege under this Agreement, will
operate as a waiver, nor will any single or partial exercise of any right, power
or privilege under this Agreement preclude any other or future exercise thereof
or the exercise of any other right, power or privilege. The rights
and remedies under this Agreement are cumulative, may be exercised singly or
concurrently, and are not exclusive of any rights and remedies provided by any
other agreements or applicable law.
19. Waivers
and Amendments; Successors and Assigns. No term or provision
of this Agreement may be waived, altered, modified, or amended except by a
written instrument, duly executed by Supplier (with the written consent of
Agent, such consent not to be unreasonably withheld) and
Customer. This Agreement and all of Supplier’s obligations are
binding upon the successors and assigns of Supplier, and together with the
rights and remedies of Customer under this Agreement, inure to the benefit of
Customer, and its successors and assigns; provided, however, that Supplier may
not assign or transfer any right or obligation under this Agreement without the
prior written consent of Customer.
20. Governing
Law and 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.
21. Notices. All
notices, requests, and other communications that are required or may be given
under this Agreement must be in writing, and will be deemed to have been given
on the date of delivery, if delivered by hand, facsimile or courier, or three
(3) days after mailing, if mailed by certified or registered mail, postage
prepaid, return receipt requested, addressed as set forth below (which addresses
may be changed, from time to time, by notice given in the manner provided in
this Section 21, unless otherwise set forth in this
Agreement):
If given to
Supplier: American
Axle & Manufacturing, Inc.
One Dauch Drive
Detroit, Michigan 48211
Facsimile: (313)
758-4262
Attn: Patrick S.
Lancaster
and
to:
General Counsel
American Axle & Manufacturing,
Inc.
One Dauch Drive
Detroit, Michigan 48211
Facsimile: (313)
758-3897
Attn: Richard
Raymond
with a copy
to: Shearman
& Sterling LLP
599 Lexington Avenue
New York, NY 10022
Facsimile: (646) 848-7666
Attn: Peter D.
Lyons
If given to
GM: General
Motors Company
30009 Van Dyke Road
Mail Code 480-206-116
Warren, Michigan 48090
Facsimile: (586)
575-3404
Attn: Mark W.
Fischer
with a copy
to: 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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Facsimile: (313)
465-7597
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Attn: Robert
B. Weiss
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If
given to Agent:
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JPMorgan
Chase Bank
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Loan
and Agency Services Group
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111
Fannin-10th Floor
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Houston,
TX 77002
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Facsimile:
(713) 750-2938
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Attn:
Clifford Trappani
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with
a copy to:
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Cravath,
Swaine & Moore LLP
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Worldwide
Plaza
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825
Eighth Avenue
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New
York, NY 10019
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Facsimile:
(212) 474-3700
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Attn:
James C. Vardell III
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9
22. Third
Party Beneficiary. The parties hereto acknowledge and agree
that, other than with respect to the Lenders, the rights and interests of the
parties under this Agreement are intended to benefit solely the parties to this
Agreement. The Lenders are intended third-party beneficiaries of this
Agreement and they may enforce the terms of this Agreement against the parties
hereto.
23. Counterparts. This
Agreement may be executed in any number of counterparts and by each party hereto
on separate counterparts, each of which when so executed and delivered will be
an original, but all of which together will constitute one and the same
instrument, and it will not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart. For purposes
of this Agreement, signatures obtained by facsimile will constitute original
signatures.
24. Entire
Agreement; Conflicts. This Agreement together with any other
agreements and schedules executed in connection with this Agreement constitutes
the entire understanding of the parties in connection with the subject matter
hereof. This Agreement may not be modified, altered, or amended
except by an agreement in writing signed by Customer and
Supplier. The terms and conditions of the Access Facilities Supply
Contracts will be unaffected by this Agreement except to the extent that an
inconsistency or conflict exists between the express terms of the Access
Facilities Supply Contracts and this Agreement in which event the terms of this
Agreement will govern and control. To the extent any term or
condition of this Agreement is inconsistent or in conflict with the terms of any
other agreements between the parties, the terms of this Agreement will govern
and control.
25. Setoff
Limitation. If GM invokes the
Right of Access, then as to all accounts payable owing by GM to Supplier as of
the date GM exercises the Right of Access, GM will not exercise its rights of
setoff and/or recoupment, including without limitation in connection with any
Access Facilities Supply Contract, or any defenses, rights and claims (including
without limitation claims for any incidental, special, or consequential
damages), other than to the extent of the Allowed Setoffs (defined below); provided, however, (i) under no
circumstances may Allowed Setoffs exceed 7% (“Cap”) of the face
amount of any invoices or accounts payable; (ii) once an Allowed Setoff is
deducted from a particular invoice or account payable, no further Allowed
Setoffs may be taken against that invoice or account payable, and (iii) if an
invoice or account payable is paid, GM will have no right after that payment to
assert an Allowed Setoff in respect of the invoice or accounts payable
paid. GM will provide Supplier and Lenders with notice of any Allowed
Setoff being asserted one (1) business day before it is asserted.
(a) “Allowed Setoffs”
means any setoff, recoupment, or deduction, whether for defective or
nonconforming products, quality problems, unordered or unreleased parts returned
to Supplier, short shipments, misshipments, premium freight charges (not caused
by GM), improper invoices, mispricing, duplicate payments and/or billing errors,
payments to tooling vendors and/or a third party for the purchase price of or
costs to modify or repair tooling or any portion thereof, direct payments to
vendors by GM or payments on Supplier’s behalf for the purchase of materials,
services, or components used by Supplier in connection with the production of
Component Parts, and professional fees and costs incurred in connection with
Supplier, but excluding any incidental, special, or consequential damages
arising from or relating to such items. For clarification, setoffs
for amounts owing by Supplier to GM pursuant to the Second Lien Loan Agreement
shall not be “Allowed Setoffs”.
(b) GM
reserves and does not waive any rights and interests it may have or would have
but for this Section 25, including the right to
assert affirmative claims against Supplier and setoffs asserted for defense
purposes.
26. CONSULTATION WITH
COUNSEL. THE PARTIES HERETO ACKNOWLEDGE THAT THEY HAVE BEEN
GIVEN THE OPPORTUNITY TO CONSULT WITH COUNSEL BEFORE EXECUTING THIS AGREEMENT
AND ARE EXECUTING SUCH AGREEMENT WITHOUT DURESS OR COERCION AND WITHOUT RELIANCE
ON ANY REPRESENTATIONS, WARRANTIES OR COMMITMENTS OTHER THAN THOSE
REPRESENTATIONS, WARRANTIES AND COMMITMENTS SET FORTH IN THIS
AGREEMENT.
27. WAIVER OF JURY
TRIAL. THE PARTIES HERETO ACKNOWLEDGE THAT THE RIGHT TO TRIAL
BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT THIS RIGHT MAY BE
WAIVED. THE PARTIES EACH HEREBY KNOWINGLY, VOLUNTARILY AND WITHOUT
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. NO PARTY WILL 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.
[
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK ]
10
IN
WITNESS WHEREOF, the undersigned have each caused this Access Agreement to be
duly executed and delivered by their respective, duly authorized officers as of
the date first written above.
GENERAL
MOTORS COMPANY
By: _/s/__________________________________
Name: _Authorized Signatory_______
___
Title:
_____________________________
AMERICAN AXLE & MANUFACTURING,
INC.,
on behalf
of itself and its subsidiaries and affiliates
By: _/s/__________________________________
Name: _Authorized Signatory
__________
Title:
_____________________________
Schedules:
Schedule
1 -- Access
Facilities
Schedule
3(b)(vii) -- Access
Fees
Schedule
12(a) -- Lender’s
Acknowledgment and Consent
Schedule
12(b) -- Lessor’s
Acknowledgment and Consent
11
SCHEDULE 1
ACCESS
FACILITIES
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1.
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Cheektowaga
Manufacturing Facility (Buffalo, New
York)
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2.
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Detroit
Manufacturing Facility (Detroit,
Michigan)
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3.
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Three
Rivers Manufacturing Facility (Three Rivers,
Michigan)
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4.
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MSP
Industries (Oxford, Michigan)
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5.
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Colfor
Manufacturing (Malvern, Ohio)
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6.
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Colfor
Manufacturing (Minerva, Ohio)
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7.
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Colfor
Manufacturing (Salem, Ohio)
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8.
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Guanajuato,
Mexico Manufacturing Complex
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9.
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Araucaria,
Brazil Manufacturing Facility
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10.
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Rayong,
Thailand Manufacturing Facility
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11.
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Any
other AAM facility that manufactures Component Parts for GM in the future,
as and when such facility begins manufacturing Component Parts for
GM
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12
SCHEDULE 3(b)(vii)
ACCESS
FEES
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Cheektowaga
Manufacturing Facility (Buffalo, New York)
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$ 45,000
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Detroit
Manufacturing Facility (Detroit, Michigan)
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32,000
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Three
Rivers Manufacturing Facility (Three Rivers, Michigan)
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357,000
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MSP
Industries (Oxford, Michigan)
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77,000
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Colfor
Manufacturing (Malvern, Ohio)
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32,000
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Colfor
Manufacturing (Minerva, Ohio)
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13,000
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Colfor
Manufacturing (Salem, Ohio)
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37,000
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Guanajuato,
Mexico Manufacturing Complex
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1,258,000
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Araucaria,
Brazil Manufacturing Facility
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264,000
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Rayong,
Thailand Manufacturing Facility
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20,000
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Any
other AAM facility that manufactures Component Parts for GM in the future,
as and when such facility begins manufacturing Component Parts for
GM
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To
be mutually agreed upon
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13
SCHEDULE 12(a)
LENDER’S ACKNOWLEDGMENT AND
CONSENT
While not
a party to the Access and Security Agreement (“Access Agreement”)
between General Motors Company (“Customer”) and
American Axle & Manufacturing, Inc. (“Supplier”) dated
_____________, 2009, ________________________ (“Bank”) is a party to
various loan and/or security agreements with Supplier under which Bank has liens
and security interests in Supplier’s assets. In such capacity, the
Bank acknowledges, consents to and agrees that its liens and security interests
in the Operating Assets and Real Estate (each as defined in the Access
Agreement) will be subject to the terms and conditions of the Access Agreement,
and such acknowledgement and consent will continue subject to GM’s payment of
the Access Fee to the Bank as provided under the Access Agreement. By
execution of the Access Agreement, Customer acknowledges (a) that Bank’s
execution of this Acknowledgment and Consent will not in any way make it a
guarantor or surety for Supplier’s performance under the Access Agreement, and
(b) except as provided in the Access Agreement, Bank reserves all of its rights
against Supplier under its agreements with Supplier or applicable
law.
By:
Name:
Title:
Date:
14
SCHEDULE 12(b)
LESSOR’S ACKNOWLEDGMENT AND
CONSENT
While not
a party to the Access Agreement (“Access Agreement”)
between General Motors Company (“Customer”) and
American Axle & Manufacturing, Inc. (“Supplier”) dated
_________, 2009, the undersigned leases certain real estate or personal property
to Supplier and, in such capacity, the undersigned, subject to GM’s payment of
all lease or rental payments due to the undersigned with respect to such real
estate or personal property and GM’s compliance with the terms of the underlying
lease or rental agreement, acknowledges, consents to, and agrees with, and
agrees to be bound by, the terms and conditions of the Access Agreement,
including Customer’s right to use the Operating Assets and the Real Estate
during any Access Period.
By:
Name:
Title:
Date:
DETROIT.3767740.17
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