10-Q
Execution
Copy
WARRANT
AGREEMENT
Dated as
of September 16, 2009
by and
between
American
Axle & Manufacturing Holdings, Inc.
and
General
Motors Company
WARRANT
AGREEMENT
TABLE
OF CONTENTS
WARRANT
AGREEMENT
WARRANT
AGREEMENT (this “
Agreement
”) dated
as
of September
16, 2009 by and between American Axle & Manufacturing Holdings, Inc., a
Delaware corporation (the “
Company
”), and
General Motors Company, a Delaware corporation (“
GM
”).
WHEREAS,
the Company is issuing the Warrants pursuant to the Settlement and Commercial
Agreement, dated September 16, 2009, by and among the Company, American Axle
& Manufacturing, Inc. and GM;
WHEREAS,
on the date hereof, the Company shall issue to GM 4,093,729 Warrants;
and
WHEREAS,
upon various drawdowns under the Credit Facility, the Company shall issue to GM
up to 6,915,083 additional Warrants.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein set
forth, the parties hereto agree as follows:
SECTION
1.
Defined
Terms
ARTICLE
1 .
“
Action
” shall mean
any action, suit, arbitration, inquiry, proceeding or investigation by or before
any Governmental Authority.
“
Affiliate
” shall
mean, with respect to any specified Person, any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such specified Person.
“
Additional Shares
”
shall mean all shares of Common Stock issued or sold by the Company on or after
the date hereof.
“
Agreement
” shall have
the meaning set forth in the preamble hereto.
“
beneficial owner
”,
with respect to any Shares, shall have the meaning ascribed to such term under
Rule 13d-3(a) of the Exchange Act.
“
Blackout Period
”
shall have the meaning set forth in
Section 17.3
of this
Agreement.
“
Board
” shall mean the
board of directors of the Company.
“
Business Day
” shall
mean any day other than a Saturday, Sunday or a day on which commercial banks in
either the City of New York or the State of Michigan are authorized or required
by Law to close.
“
Capital Stock
” shall
mean (a) with respect to any Person that is a corporation, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock; and (b) with respect to any other Person, any and all
partnership, membership or other equity interests of such Person.
“
Common Stock
” shall
mean the common stock, par value $0.01 per share, of the Company.
“
Company
” shall have
the meaning set forth in the preamble hereto.
“
control
” (including
the terms “
controlled
by
”, “
controlling
” and
“
under common control
with
”) shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, as trustee or executor, by
contract or otherwise, including the ownership, directly or indirectly, of
securities having the power to elect a majority of the board of directors or
similar body governing the affairs of such Person.
“
Credit Facility
”
shall mean the Credit Agreement, dated as of the date hereof, by and among the
Company, American Axle & Manufacturing, Inc. and GM.
“
Current Market Price
”
per share of Common Stock, on any date specified herein, shall mean the average
daily Market Price during the period of the most recent ten days, ending on such
date, on which the national securities exchanges were open for trading, except
that if the Common Stock is not then listed or admitted to trading on any
national securities exchange or quoted in the over-the-counter market, the
Current Market Price shall be the Market Price on such date.
“
Demand Registration
”
shall have the meaning set forth in
Section 17.1(a)
of
this Agreement.
“
Demand Registration
Statement
” shall have the meaning set forth in
Section 17.1(a)
of
this Agreement.
“
Disposal Period
”
shall have the meaning set forth in
Section 16.2(h)
of
this Agreement.
“
Equity Interests
”
shall mean Capital Stock or warrants, options or other rights to acquire Capital
Stock.
“
Exchange Act
” shall
mean the Securities Exchange Act of 1934, as amended, and any similar or
successor federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect at any applicable time.
“
Exercise Date
” shall
have the meaning set forth in
Section 7.8
of this
Agreement.
“
Exercise Period
”
shall mean the period commencing on September 16, 2009 and continuing until 5:00
p.m. New York City time on September 16, 2014.
“
Exercise Price
” shall
have the meaning set forth in
Section 3(a)
of this
Agreement, as adjusted pursuant to
Section
8
.
“
Expiration Date
”
shall mean 5:00 p.m. New York City time on September 16, 2014.
“
FINRA
” shall mean the
Financial Industry Regulatory Authority, Inc.
“
GM
” shall have the
meaning set forth in the preamble hereto.
“
Governmental
Authority
” shall mean any United States or non-United States, federal,
national, state, provincial, municipal, local, or other government,
governmental, regulatory or administrative authority, agency or commission or
any non-governmental self-regulatory agency, instrumentality or commission, any
stock exchange, or any court, tribunal or judicial or arbitral
body.
“
Holder
” shall mean
initially GM, and thereafter any Person to whom Registrable Securities are
permitted to be transferred in accordance with the terms of this Agreement and
that is the registered holder(s) of any Warrants or Warrant Shares as registered
on the Warrant Register maintained by the Company in accordance with this
Agreement.
“
Indemnified Party
”
shall have the meaning set forth in
Section 17.7(d)
of
this Agreement.
“
Indemnifying Party
”
shall have the meaning set forth in
Section 17.7(d)
of
this Agreement.
“
Initial Number
” shall
have the meaning set forth in
Section 8.2(a)(i)
of
this Agreement.
“
Law
” shall mean any
federal, national, supranational, state, provincial or local statute, law,
ordinance, regulation, rule, code, order or requirement (including common
law).
“
Loss
” shall have the
meaning set forth in
Section 17.7(a)
of
this Agreement.
“
Majority Holders
”
shall mean Holders of Warrants evidencing a majority in number of the total
number of Warrant Shares at the time purchasable upon the exercise of all then
outstanding Warrants.
“
Market Price
” shall
mean, on any date specified herein, the amount per share equal to (a) if the
Common Stock is then listed on the NYSE, the last sale price of shares of Common
Stock on such date or, if no such sale takes place on such date, the average of
the closing bid and asked prices thereof on such date, in each case as
officially reported on the NYSE, (b) if the Common Stock is then listed or
admitted to trading on any national securities exchange (other than the NYSE),
the last sale price of shares of Common Stock on such date or, if no such sale
takes place on such date, the average of the closing bid and asked prices
thereof on such date, in each case as officially reported on the principal
national securities exchange on which the Common Stock is then listed or
admitted to trading (other than the NYSE), (c) if the Common Stock is not then
listed or admitted to trading on any national securities exchange but is
designated as a national market system security by FINRA, the last trading price
of shares of Common Stock on such date, (d) if there shall have been no trading
on such date or if the Common Stock is not so designated, the average of the
closing bid and asked prices of shares of Common Stock on such date as shown by
FINRA automated quotation system, or (e) if Common Stock is not then listed or
admitted to trading on any national exchange or quoted in the over-the-counter
market, the fair value thereof determined by a nationally recognized investment
bank selected by the Board and reasonably acceptable to the largest Holder of
Warrants at such time.
“
Maximum Number of
Securities
” shall have the meaning set forth in
Section 17.1(b)
of
this Agreement.
“
NYSE
” shall mean the
New York Stock Exchange.
“
Officers
” shall mean,
with respect to any Person, the Chief Executive Officer, the Chief Financial
Officer, the President, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary, any Assistant Secretary, or any Vice-President of such
Person.
“
Other Securities
”
shall mean any shares of Common Stock (other than Warrant Shares) and other
Equity Interests of the Company or any other Person (corporate or otherwise)
which a Holder at any time shall be entitled to receive, or shall have received,
upon exercise of the Warrants held by such Holder or pursuant to
Section 9
hereof, in
lieu of or in addition to Warrant Shares, or which at any time shall be issuable
or shall have been issued in exchange for or in replacement of Warrant Shares or
Other Securities received in an earlier exchange, exercise or replacement of
Warrant Shares.
“
Participating Demand
Holders
” shall have the meaning set forth in
Section 17.1(a)
of
this Agreement.
“
Participating Piggy-Back
Holders
” shall have the meaning set forth in
Section 17.2(b)
of
this Agreement.
“
Person
” shall include
an individual, a corporation, an association, a partnership, a limited liability
company, a trust or estate, a government, foreign or domestic, and any agency or
political subdivision thereof, or any other entity.
“
Piggy-Back
Registration
” shall have the meaning set forth in
Section 17.2(a)
of
this Agreement.
“
Piggy-Back Registration
Statement
” shall have the meaning set forth in
Section 17.2(a)
of
this Agreement.
“
Pro Rata Repurchase
”
means any purchase of shares of Common Stock by the Company or any Affiliate
thereof pursuant to (a) any tender offer or exchange offer subject to Section
13(e) or 14(e) of the Exchange Act or Regulation 14E promulgated thereunder or
(b) any other offer available to substantially all holders of Common Stock, in
the case of both (a) or (b), whether for cash, shares of Capital Stock of the
Company, other securities of the Company, evidences of indebtedness of the
Company or any other Person or any other property (including, without
limitation, shares of Capital Stock, other securities or evidences of
indebtedness of a subsidiary), or any combination thereof, effected while a
Warrant is outstanding. The “
Effective Date
” of a
Pro Rata Repurchase shall mean the date of acceptance of shares for purchase or
exchange by the Company under any tender or exchange offer which is a Pro Rata
Repurchase or the date of purchase with respect to any Pro Rata Repurchase that
is not a tender or exchange offer.
“
Qualified Purchaser
”
shall mean any institutional “Accredited Investor” as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act.
“
Registrable
Securities
” shall mean (a) the Warrants, (b) the shares of Common Stock
held by a Holder upon exercise of the Warrants and (c) any securities issuable
or issued or distributed in respect of any of the Warrants identified in clause
(a) or the Common Stock identified in clause (b) by way of stock dividend or
stock split or in connection with a combination of shares, recapitalization,
reorganization, merger, consolidation or otherwise. For purposes of
this Agreement, (i) Registrable Securities shall cease to be Registrable
Securities when a Registration Statement covering such Registrable Securities
has been declared effective under the Securities Act by the SEC and such
Registrable Securities have been disposed of pursuant to such effective
Registration Statement and/or they otherwise cease to be outstanding and (ii)
the Registrable Securities of a Holder shall not be deemed to be Registrable
Securities at any time when the entire amount of such Registrable Securities
may, in the written opinion of counsel satisfactory to the Company (in its
reasonable judgment), be distributed to the public pursuant to Rule 144 (or any
successor provision then in effect) under the Securities Act without limitation
thereunder on volume or manner of sale or any such Registrable Securities have
been sold in a sale made pursuant to Rule 144 of the Securities
Act.
“
Registration
Statement
” shall mean a Demand Registration Statement, a Piggy-Back
Registration Statement and/or a Shelf Registration Statement, as the case may
be.
“
Regulatory Approvals
”
with respect to a Holder, means, to the extent applicable and required to permit
such Holder to exercise a Warrant for Warrant Shares without such Holder being
in violation of applicable Law, the receipt of any necessary approvals and
authorizations of any Governmental Authority and any notifications to, or
expiration or termination of, any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder.
“
SEC
” shall mean the
Securities and Exchange Commission.
“
Securities Act
” shall
mean the Securities Act of 1933, as amended, and any similar or successor
federal statute, and the rules and regulations of the SEC thereunder, all as the
same shall be in effect at any applicable time.
“
Shelf Registration
Statement
” shall have the meaning set forth in
Section 17.1(c)
of
this Agreement.
“
Special Registration
”
means the registration of (a) equity securities and/or options or other rights
in respect thereof solely registered on Form S-4 or Form S-8 (or successor form)
or (b) shares of equity securities and/or options or other rights in respect
thereof to be offered to directors, members of management, employees,
consultants, customers, lenders or vendors of the Company or its subsidiaries or
in connection with dividend reinvestment plans.
“
Trading Day
” shall
mean a day during which trading in securities generally occurs on the NYSE or,
if the Common Stock is not listed on the NYSE, on the principal other national
or regional securities exchange on which the Common Stock is then listed or, if
the Common Stock is not listed on a national or regional securities exchange, on
the National Association of Securities Dealers Automated Quotation System or, if
the Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on any Business Day.
“
Transfer
” shall have
the meaning set forth in
Section 6.1(a)
of
this Agreement.
“
Transfer Agent
” shall
have the meaning set forth in
Section 13.2
of this
Agreement.
“
Warrants
” shall mean
the warrants issued pursuant to this Agreement and represented by Warrant
Certificates, and all warrants issued upon transfer, division or combination of,
or in substitution thereof.
“
Warrant Certificates
”
shall have the meaning set forth in
Section
2
of this
Agreement.
“
Warrant Register
”
shall have the meaning set forth in
Section 5
of this
Agreement.
“
Warrant Shares
” shall
mean the shares of Common Stock issuable upon exercise of the
Warrants.
SECTION
2.
Warrant
Certificates
The certificates evidencing the Warrants to be delivered pursuant to this
Agreement shall be in registered form only and shall be substantially in the
form set forth in
Exhibit A
attached hereto (“
Warrant
Certificates
”) and may have such letters, numbers, or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the Officers of the Company executing the
same may approve (with execution thereof to be conclusive evidence of such
approval) and as are not inconsistent with the provisions of this Agreement, or
as may be required to comply with any applicable Law or with any rule or
regulation of any exchange, inter-dealer quotation system or regulated quotation
service on which the Warrants or the Common Stock may be listed or quoted, as
the case may be.
SECTION
3.
Issuance of
Warrants
(a)
Subject
to adjustment in accordance with
Section 8
, each
Warrant shall entitle the holder of such Warrant, upon proper exercise during
the Exercise Period, to purchase from the Company one (1) share of Common Stock
at a price of $2.76 per share (the “
Exercise
Price
”).
(b)
Each
Warrant Certificate shall be dated the date of execution by the Company and
shall evidence one or more Warrants. Each Warrant evidenced thereby
entitles the Holder, upon proper exercise to receive from the Company the stated
number of Warrant Shares at the Exercise Price, as adjusted as provided
herein.
SECTION
4.
Execution of Warrant
Certificate
s
Warrant
Certificates shall be signed on behalf of the Company by any Officer thereof
under its corporate seal. The seal of the Company may be in the form
of a facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Warrant Certificates. The Warrant Certificates may
be executed in any number of original, facsimile or electronic counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instruments;
provided
,
however
, if the
Warrant Certificate is executed in counterparts, the corporate seal may be
imprinted on only one such counterpart. Each such signature upon any
Warrant Certificate may be of the present or any future Officer of the Company,
notwithstanding the fact that at the time any Warrant Certificate shall be
delivered or disposed of by the Company such Officer shall have ceased to hold
such office, so long as, and the Company hereby represents that, under the
Company’s certificate of incorporation and bylaws, any Warrants or Warrant
Shares so issued would be validly issued. Any Warrant Certificate may
be signed on behalf of the Company by any Person who, at the actual date of the
execution of such Warrant Certificate, shall be a proper Officer of the Company
to sign such Warrant Certificate, although at the date of the execution of this
Agreement any such Person was not such Officer, so long as, and the Company
hereby represents that, under the Company’s certificate of incorporation and
bylaws, any Warrants or Warrant Shares so issued would be validly
issued.
SECTION
5.
Registration
The
Company shall number and register the Warrant Certificates in a register (the
“
Warrant
Register
”) as they are issued by the Company. The Warrant
Register will show the names and addresses of the Holders, the numbers of
Warrants and Warrant Shares evidenced on the face of each Warrant Certificate
and the date of each Warrant Certificate. The Company may deem and
treat the Holders as the absolute owner(s) of the Warrant Certificates
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for all purposes, and the Company shall not be affected by any notice
to the contrary.
SECTION
6.
Transfers and
Exchanges
6.1
Limitation on
Transfers
.
(a)
A Holder
may not transfer, assign or encumber all or any part of a Warrant
Certificate (a “
Transfer
”).
(b)
Notwithstanding
the foregoing, a Holder may Transfer all or any portion of a Warrant Certificate
to (i) any of its Affiliates, (ii) any Qualified Purchaser, (iii) pursuant to a
registration statement under the Securities Act;
provided
,
however
, that such
transfer shall be in compliance with the Securities Act or any state (or other
jurisdiction) securities or “blue sky” laws applicable to the Company or the
Warrants or (iv) pursuant to the Holder’s lending arrangements with the Holder’s
secured lenders (to the extent the Warrants are pledged as collateral to such
lenders).
(c)
Any
purported Transfer other than in accordance with the terms of this Agreement
shall be null and void, and the Company shall refuse to recognize any such
Transfer for any purpose and shall not reflect in its records any change in
record ownership pursuant to any such Transfer.
6.2
Registration of
Transfers
. The Company shall from time to time register the
transfer of any outstanding Warrant Certificates in the Warrant Register, upon
surrender thereof accompanied by a written instrument or instruments of transfer
in form reasonably satisfactory to the Company, including with respect to the
matters referred to in
Section 6.1(b)
, any
legal opinion reasonably requested by the Company, duly executed by the Holders
thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney. Upon any such registration of transfer, a new
Warrant Certificate shall be issued to the transferee(s) and the surrendered
Warrant Certificate shall be cancelled and disposed of by the Company in
accordance with applicable Law.
6.3
Exchange of Warrant
Certificates
. Warrant Certificates may be exchanged at the
option of the Holder(s), when surrendered to the Company during normal business
hours for another Warrant Certificate or other Warrant Certificates of like
tenor and representing in the aggregate a like number of
Warrants. Warrant Certificates surrendered for exchange shall be
cancelled by the Company. Such cancelled Warrant Certificates shall
then be disposed of by the Company in accordance with applicable
Law.
SECTION
7.
Exercise of
Warrants
7.1
Exercise of
Warrants
. A Warrant may be exercised upon surrender to the
Company of the Warrant Certificate evidencing the Warrant to be exercised with
the form of election to purchase on the reverse thereof duly completed and
signed, and upon payment to the Company of the Exercise Price, as adjusted from
time to time as provided herein, for each Warrant Share then
purchased. Payment of the aggregate Exercise Price for all Warrant
Shares being purchased in respect of a Warrant shall be made (a) by wire
transfer of immediately available funds in United States Dollars or (b) by
certified or official bank check for United States Dollars made payable to the
order of the Company. Each Warrant not exercised prior to the
Expiration Date shall become void and all rights thereunder and all rights in
respect thereof under this Agreement shall cease as of such
time. Notwithstanding anything in this Agreement to the contrary,
each Holder hereby acknowledges and agrees that its exercise of a Warrant for
Warrant Shares is subject to the condition that such Holder will have first
received any applicable Regulatory Approvals;
provided
,
however
, that in the
event a Holder has delivered a notice of exercise to the Company prior to the
Expiration Date and any Regulatory Approvals with respect to such exercise are
pending as of the Expiration Date, the Expiration Date with respect to such
Warrants shall automatically be extended for a period of 30 days following final
approval or disapproval of any such Regulatory Approval.
7.2
Issuance of Certificates
Representing Shares
. Upon such surrender of Warrant
Certificates and payment of the aggregate Exercise Price, the Company shall
issue and cause to be delivered promptly to or upon the written order of the
Holder and in such name or names, as the Holder may designate, a certificate or
certificates for the number of full Warrant Shares issuable upon the exercise of
such Warrants together with cash in lieu of fractional shares as provided in
Section
7.7
. Such certificate or certificates shall be deemed to have
been issued and any Person so designated to be named therein shall be deemed to
have become a Holder of such Warrant Shares as of the date of the surrender of
such Warrants Certificates and payment of the aggregate Exercise
Price.
7.3
Issuance of New Warrant
Certificates
. Each Warrant shall be exercisable at the
election of the Holder thereof, either in full or from time to time in part (in
whole Warrant Shares), and, in the event that a Warrant is exercised (and a
Warrant Certificate is surrendered) in respect of fewer than all of the Warrant
Shares issuable on such exercise at any time prior to the Expiration Date, a new
Warrant Certificate evidencing the remaining Warrant or Warrants will be issued
and delivered by the Company.
7.4
Cancellation of Warrant
Certificates
. All Warrant Certificates surrendered upon
exercise of Warrants shall be cancelled and disposed of by the Company in
accordance with applicable Law.
7.5
Warrant
Agreement
. The Company shall keep copies of this Agreement and
any notices given or received hereunder available for inspection by the Holders
of the Warrants during normal business hours at its office.
7.6
Alternative Cashless
Exercise
. Notwithstanding any provision herein to the
contrary, in lieu of exercising a Warrant as set forth above, a Holder may
exercise a Warrant by electing to receive that number of shares of Common Stock
as determined below by surrendering to the Company such Warrant, with the
applicable election to purchase such Common Stock duly completed and signed by
the Holder, in which event the Company shall issue to the Holder the number of
shares of Common Stock computed using the following formula:
CS = WCS x
(MP- PP)
MP
where:
“
CS
” equals the number
of shares of Common Stock to be issued to the Holder;
“
WCS
” equals the
number of Warrant Shares purchasable under the Warrant or, if only a
portion of the
Warrant is being exercised, the portion of the Warrant being
exercised;
“
MP
” equals the
Current Market Price; and
“
PP
” equals the
Exercise Price.
Following
the surrender of any Warrant pursuant to this
Section 7.6
, the
Company shall promptly record the name of the Holder in the Warrant Register for
that number of shares, as calculated above in such name or names as may be
designated by such Holder.
7.7
Fractional
Shares
. The Company shall not be required to issue fractional
Warrant Shares on the exercise of any Warrant. If more than one
Warrant shall be presented for exercise in full at the same time by the same
Holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this
Section 7.7
be
issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall pay an amount in cash equal to the Market Price multiplied by such
fraction.
7.8
When Exercise
Effective
. The exercise of any Warrant shall be deemed to have
been effective immediately prior to the close of business on the Business Day on
which such Warrant is surrendered to and the Exercise Price is received by the
Company as provided in this
Section 7
(the “
Exercise Date
”) and
the Person in whose name the shares of Common Stock shall be issuable upon such
exercise shall be deemed to be the Holder of such shares for all purposes on the
Exercise Date.
SECTION
8.
Adjustment of
Exercise
Price
. If
any of the events set forth in this
Section 8
occur
during the Exercise Period, the Exercise Price and the number of Warrant Shares
for which any Warrant is exercisable, as applicable, shall be subject to
adjustment from time to time as set forth in this
Section 8
;
provided
,
however
, that if more
than one subsection of this
Section 8
is
applicable to a single event, the subsection shall be applied that produces the
largest adjustment. All of the adjustments referred to in this
Section 8
shall only
apply to Warrants which have not yet been exercised and shall not apply to the
grant or issuance of the Warrants or the issuance of any Warrant Shares upon
exercise of any Warrant.
8.1
Adjustments for Change in
Capital Stock
. If at any time the Company shall:
(a)
pay a
dividend or make a distribution on its Common Stock payable in Additional Shares
or shares of other Capital Stock;
(b)
subdivide
its outstanding shares of Common Stock into a greater number of
shares;
(c)
combine
its outstanding shares of Common Stock into a smaller number of
shares; or
(d)
issue by
reclassification of the Common Stock any shares of its Capital Stock (other than
rights, warrants or options for its Capital Stock);
then (i)
the aggregate number of Warrant Shares for which any Warrant is exercisable
immediately prior to such action shall be adjusted so that the Holder shall be
entitled to receive upon exercise of such Warrant the number of shares or other
units of Capital Stock of the Company which such Holder would have owned or
would have been entitled to receive immediately following such action if such
Holder had exercised such Warrant immediately prior to such action and (ii) the
Exercise Price payable upon the exercise of such Warrant shall be adjusted by
multiplying such Exercise Price immediately prior to such adjustment by a
fraction, the numerator of which shall be the number of Warrant Shares issuable
upon the exercise of such Warrant immediately prior to such adjustment and the
denominator of which shall be the number of Warrant Shares issuable immediately
thereafter.
8.2
Adjustment for Rights
Issue
.
(a)
If the
Company distributes any rights, warrants, options or other securities
exercisable or convertible into or exchangeable (collectively, an “
exercise
”) for shares
of Common Stock (collectively, “
rights
”) to all
holders of its Common Stock entitling them to purchase shares of Common Stock at
a price per share (or having a exercise price per share) less than the Market
Price of the Common Stock as of the last Trading Day preceding the date of the
agreement on pricing such rights, then, in such event:
(i)
the
number of Warrant Shares for which any Warrant is exercisable immediately prior
to the date of the agreement on pricing of such rights (the “
Initial Number
”)
shall be increased to the number obtained by multiplying the Initial Number by a
fraction (A) the numerator of which shall be the sum of (1) the number
of shares of Common Stock outstanding on such date and (2) the number of
Additional Shares for which rights may be exercised and (B) the denominator
of which shall be the sum of (1) the number of shares of Common Stock
outstanding on such date and (2) the number of shares of Common Stock which the
aggregate consideration receivable by the Company for the total number of shares
of Common Stock into which rights may be exercised would purchase at the Market
Price on the last Trading Day preceding the date of the agreement on pricing
such rights; and
(ii)
the
Exercise Price payable upon exercise of a Warrant shall be adjusted by
multiplying such Exercise Price in effect immediately prior to the date of the
agreement on pricing of such rights by a fraction, the numerator of which shall
be the number of Warrant Shares prior to such date and the denominator of which
shall be the number of Warrant Shares immediately after the adjustment described
in
Section
8.2(a)(i)
.
(b)
For
purposes of the foregoing, the aggregate consideration receivable by the Company
in connection with the issuance of such rights shall be deemed to be equal to
the sum of the net offering price (including the fair market value, as
determined by a nationally recognized investment bank selected by the Board and
reasonably acceptable to the largest Holder of Warrants at the time of such
adjustment, of any non-cash consideration and after deduction of any related
expenses payable to third parties) of all such rights plus the minimum aggregate
amount, if any, payable upon exercise of any such rights into shares of Common
Stock. Any adjustment made pursuant to this
Section 8.2
shall
become effective immediately upon the date of such issuance.
8.3
Adjustment for Other
Non-Cash Distributions
.
(a)
If the
Company distributes to all holders of its Common Stock any of its non-cash
assets or debt securities or any rights, warrants or options to purchase
securities of the Company (including securities but excluding distributions of
Capital Stock referred to in
Section 8.1
,
distributions of rights, warrants or options referred to in
Section 8.2
and in
the case of any spin-off as described in
Section 8.3(c)
), the
Exercise Price shall be adjusted in accordance with the formula:
E′ =
E - F
where:
E' = the
adjusted Exercise Price;
E = the
current Exercise Price; and
F = the
fair market value (on the record date for the distribution to which this
Section 8.3(a)
applies) of the assets, securities, rights, warrants or options to be
distributed in respect of each share of Common Stock in the distribution to
which this
Section
8.3(a)
is being applied.
(b)
A
nationally recognized investment bank selected by the Board and reasonably
acceptable to the largest Holder of Warrants at the time of such adjustment
shall determine fair market values for the purposes of this
Section
8.3
. The adjustment shall become effective immediately after
the record date for the determination of stockholders entitled to receive the
distribution to which this
Section 8.3
applies.
(c)
In
respect of a dividend or other distribution of shares of Capital Stock of any
class or series, or similar equity interests, of or relating to a subsidiary of
the Company or other business unit, referred to herein as a “spin-off,” for
purposes of the adjustment in
Section 8.3(a)
above,
“F” shall be equal to the average of the closing price of the portion of those
shares of Capital Stock or similar equity interests so distributed applicable to
one share of the Common Stock for the ten (10) consecutive Trading Days
beginning on the effective day of the spin-off. The adjustment to the
Exercise Price in the event of a spin-off will occur on the tenth Trading Day
from, and including, the effective date of the spin-off.
8.4
Adjustment for Cash
Distributions
. In case the Company shall pay an annual cash
dividend in excess of $0.08 per share of Common Stock, excluding any dividend or
distribution in connection with the liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary, then, in such case, the Exercise
Price shall be decreased by the amount of the cash dividend in excess of $0.08
per share payable to the holder of one share of Common Stock, such adjustment to
be effective immediately prior to the opening of business on the day following
such record date. If any such dividend is not so paid, the Exercise
Price shall again be adjusted to be the Exercise Price that would then be in
effect if such dividend had not been declared.
8.5
Certain Repurchases of
Common Stock
.
(a)
In case
the Company effects a Pro Rata Repurchase in which the cash and value of any
other consideration included in the payment per share of Common Stock exceeds
the Market Price on the Trading Day next succeeding the last date on which
tenders or exchanges may be made pursuant to such Pro Rata Repurchase, then the
Exercise Price shall be reduced to the price determined by multiplying the
Exercise Price in effect immediately prior to the Effective Date of such Pro
Rata Repurchase by a fraction of which (i) the numerator shall be (A) the
product of (1) the number of shares of Common Stock outstanding immediately
before such Pro Rata Repurchase and (2) the Market Price of a share of Common
Stock on the Trading Day immediately preceding the first public announcement by
the Company or any of its Affiliates of the intent to effect such Pro Rata
Repurchase, minus (B) the aggregate purchase price of the Pro Rata Repurchase,
and of which (ii) the denominator shall be the product of (A) the number of
shares of Common Stock outstanding immediately prior to such Pro Rata Repurchase
minus the number of shares of Common Stock so repurchased and (B) the Market
Price per share of Common Stock on the Trading Day immediately preceding the
first public announcement by the Company or any of its Affiliates of the intent
to effect such Pro Rata Repurchase.
(b)
In such
event, the number of Warrant Shares for which any Warrant is exercisable shall
be increased to the number obtained by dividing (i) the product of (A) the
number of Warrant Shares before such adjustment, and (B) the Exercise Price in
effect immediately prior to the Pro Rata Repurchase giving rise to this
adjustment by (ii) the new Exercise Price determined in accordance with the
immediately preceding sentence.
(c)
For the
avoidance of doubt, no increase to the Exercise Price or decrease in the number
of Warrant Shares shall be made pursuant to this
Section
8.5
.
8.6
Other Provisions Applicable
to Adjustments Under this Section 8
. The following provisions
shall be applicable to the making of adjustments of the Exercise Price
hereinbefore provided for in this
Section 8
,
irrespective of the accounting treatment of any consideration described
below:
(a)
When Adjustments to be
Made
. The adjustments required by this
Section 8
shall be
made whenever and as often as any specified event requiring an adjustment shall
occur. For the purpose of any adjustment, any specified event shall
be deemed to have occurred at the close of business on the date of its
occurrence.
(b)
When Adjustments May Be
Deferred
. No adjustment in the Exercise Price needs to be made
if the amount of such adjustment would be less than $0.01. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment and all adjustments that are made and carried forward
shall be taken in the aggregate in order to determine if the $0.01 threshold is
met. In computing adjustments under this
Section 8
, fractional
interests in shares of Common Stock shall be taken into account to the nearest
one-hundredth of a share.
(c)
When Adjustment Not
Required
. If the Company shall take a record of the holders of
Common Stock for the purpose of entitling them to receive a dividend or
distribution or subscription or purchase rights and shall, thereafter and before
the distribution thereof to the holders of Common Stock, legally abandon its
plan to pay or deliver such dividend, distribution, subscription or purchase
rights, then no adjustment shall be required by reason of the taking of such
record and any such adjustment previously made in respect thereof shall be
rescinded and annulled, and no adjustment to the Exercise Price under this
Section 8
shall be
made in respect of the Warrants held by such Holder.
SECTION
9.
Consolidation and
Merger
.
9.1
Consolidation and
Merger
. In case a consolidation, merger or other transaction
that has substantially the same effect of the Company shall be effected with
another Person after the date hereof and the Company shall not be the surviving
entity, or the Company shall be the surviving entity but its Common Stock shall
be changed into securities or other property of another Person, then, as a
condition of such consolidation, merger or other transaction that has
substantially the same effect, lawful and adequate provision shall be made
whereby each Holder shall thereafter have the right to purchase and receive,
upon the exercise of its Warrants, on the basis and the terms and conditions
specified herein (and in lieu of each Warrant Share immediately theretofore
purchasable and receivable upon the exercise of the Warrants), such securities,
cash or other property receivable upon such consolidation, merger or other
transaction that has substantially the same effect as such Holder would have
been entitled to receive if its Warrants had been exercised immediately prior to
such event. In any such case, appropriate and equitable provision
also shall be made with respect to the rights and interests of each Holder to
the end that the provisions hereof (including
Section 8
hereof)
shall thereafter be applicable, as nearly as may be, in relation to any
securities, cash or other property thereafter deliverable upon the exercise of
any Warrants. The Company shall not effect any such consolidation,
merger or other transaction that has substantially the same effect unless prior
to or simultaneously with the consummation thereof the successor Person (if
other than the Company) resulting from such consolidation, merger or other
transaction that has substantially the same effect shall assume, by written
instrument, the obligation to deliver to such Holder such securities, cash or
other property as, in accordance with the foregoing provisions, such Holder may
be entitled to upon the exercise of its Warrants. The above
provisions of this
Section 9.1
shall
similarly apply to successive consolidations, mergers or other transactions that
have substantially the same effect.
9.2
Dilution in Case of Other
Securities
.
In
case any Other Securities shall be issued or sold or shall become subject to
issue or sale upon the conversion or exchange of Common Stock (or Other
Securities) of the Company (or any issuer of Other Securities or any other
Person referred to in
Section 9.1
hereof)
or to subscription, purchase or other acquisition pursuant to any rights,
options, warrants to subscribe for, purchase or otherwise acquire either
Additional Shares or securities directly or indirectly convertible into or
exchangeable for Additional Shares, issued or granted by the Company (or any
such other issuer or Person) for a consideration such as to dilute, on a basis
consistent with the standards established in the other provisions of
Section 8
, the
purchase rights granted by the Warrants, then, and in each such case, the
computations, adjustments and readjustments provided for in
Section 8
with
respect to the Exercise Price and Warrant Shares shall be made as nearly as
possible in the manner so provided and applied to determine the Exercise Price
and amount of Other Securities from time to time receivable upon the exercise of
the Warrants, so as to protect the Holders against the effect of such dilution;
or, in the event such Other Securities are issued or sold prior to the exercise
of any Warrants and are not subsequently obtainable upon exercise of such
Warrants, such adjustments shall instead be made to determine the adjusted
amount of shares of Common Stock represented by a Warrant Share, so as to
protect the Holders against the effect of such dilution in accordance with
Section 8
hereof.
SECTION
10.
Notice of
Adjustments
Whenever
the Exercise Price shall be adjusted pursuant to
Section 8
, the
Company shall forthwith provide a certificate signed by an Officer, setting
forth, in reasonable detail, the event requiring the adjustment and the method
by which such adjustment was calculated and describing the number and kind of
any other securities issuable upon exercise of the Warrants and any change in
the Exercise Price after giving effect to such adjustment or
change. The Company shall promptly, and in any case within ten
Business Days after the making of such adjustment, cause a signed copy of such
certificate to be delivered to each Holder in accordance with
Section 18.1
. The
Company shall keep at its principal executive offices referred to in
Section 18.1
copies
of all such certificates and cause the same to be available for inspection at
said office during normal business hours by any Holder or any prospective
purchaser of a Warrant designated by a Holder.
SECTION
11.
Payment of
Taxes
No
service charge shall be made to any Holder for any exercise, exchange or
registration of transfer of Warrant Certificates, and the Company will pay all
documentary stamp taxes attributable to the initial issuance of Warrant Shares
upon the exercise of Warrants;
provided
,
however
, that the
Company shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issue of any Warrant Certificates or any
certificates for Warrant Shares in a name other than that of the registered
holder of a Warrant Certificate surrendered upon the exercise of a
Warrant.
SECTION
12.
Mutilated or Missing Warrant
Certificates
If any of
the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company shall issue, in exchange and substitution for and upon cancellation of
the mutilated Warrant Certificate, or in lieu of and substitution for the
Warrant Certificate lost, stolen or destroyed, a new Warrant Certificate of like
date and tenor and representing an equivalent number of Warrants, but only upon
receipt of evidence satisfactory to the Company of such loss, theft or
destruction of such Warrant Certificate and such indemnity and security therefor
as is customary and reasonably satisfactory to the Company, if
requested. Applicants for such substitute Warrant Certificate shall
also comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.
SECTION
13.
Reservation of
Shares
13.1
Reservation of
Shares
. The Company will, commencing on the first day of the
Exercise Period and at all times subsequent thereto until the sooner of the
expiration of the Exercise Period or the exercise of all of the Warrants by the
Holders thereof, reserve and keep available, out of the aggregate of its
authorized but unissued Common Stock or its authorized and issued Common Stock
held in treasury, for the purpose of enabling it to satisfy any obligation to
issue Warrant Shares upon exercise of Warrants, the maximum number of shares of
Common Stock which may then be deliverable upon the exercise of all outstanding
Warrants.
13.2
Transfer
Agent
. The Company or the transfer agent for the Common Stock
and every subsequent transfer agent for any Common Stock issuable upon the
exercise of any of the rights of purchase represented by the Warrants as
aforesaid (the “
Transfer Agent
”) will
be irrevocably authorized and directed at all times commencing on the first day
of the Exercise Period, and continuing until the sooner of the expiration of the
Exercise Period or the exercise of all of the Warrants by the Holders thereof,
to reserve such number of authorized shares of Common Stock as shall be required
for such purpose. The Company will keep a copy of this Agreement on
file with the Transfer Agent for any Common Stock issuable upon the exercise of
the rights of purchase represented by the Warrants. The Company will
supply such Transfer Agent with duly executed certificates for such purposes and
will provide or otherwise make available any cash which may be payable as
provided in
Section 7.7
.
SECTION
14.
Notices
of Certain Corporate
Actions
14.1
.
(a)
In
case:
(i)
the
Company proposes to take any action that would require an adjustment to the
Exercise Price or the number of Warrant Shares issuable upon exercise of the
Warrants pursuant to
Section
8
;
(ii)
of any
consolidation or merger to which the Company is a party and for which approval
of any stockholders of the Company is required, or of the sale, lease, exchange,
conveyance or transfer of the properties and assets of the Company substantially
as an entirety, or of any reclassification or change of the Common Stock
issuable upon exercise of the Warrants (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), or a tender offer or exchange offer for
the Common Stock; or
(iii)
of the
voluntary or involuntary dissolution, liquidation or winding up of the Company;
then, in
each case, the Company shall cause to be delivered to each Holder at his address
appearing on the Warrant Register, at least 20 Business Days prior to the
applicable record date hereinafter specified, or promptly in the case of events
for which there is no record date, by first-class mail, postage prepaid, a
written notice stating (A)(1) the date as of which the Holders to be
entitled to receive any such rights, options, warrants or distribution are to be
determined or (2) the initial expiration date set forth in any tender offer
or exchange offer for Common Stock or (3) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that Holders shall be entitled to exchange such Common Stock for
securities or other property, if any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up and (B) the facts with respect thereto as shall reasonably be necessary to
indicate the effect on the Exercise Price and the number, kind or class of
shares or other securities or property which shall be deliverable upon exercise
of any Warrants. The failure to give the notice required by this
Section 14(a)
or
any defect therein shall not affect the legality or validity of any
distribution, right, option, warrant, consolidation, merger, conveyance,
transfer, lease, dissolution, liquidation or winding up, or the vote upon any
action.
(b)
Nothing
contained in this Agreement shall be construed as conferring upon the Holder the
right to vote or consent to or receive notice as a stockholder in respect of the
meetings of stockholders or the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the
Company.
SECTION
15.
Expenses
All expenses incident to the Company’s performance of or compliance with this
Agreement will be borne by the Company, including: (a) all expenses of
printing Warrant Certificates; (b) messenger and delivery services and
telephone calls; (c) all fees and disbursements of counsel for the Company;
(d) all fees and disbursements of independent certified public accountants
or knowledgeable experts selected by the Company; and (e) the Company’s
internal expenses (including all salaries and expenses of their officers and
employees performing legal or accounting duties).
SECTION
16.
Representations, Warranties
and Covenants
.
16.1
Representations, Warranties
and Covenants of the Company
. The Company represents, warrants
and covenants the following to each Holder:
(a)
The
Company has all requisite power and authority to execute, deliver and perform
its obligations under this Agreement.
(b)
This
Agreement has been duly authorized, executed and delivered by the Company and,
assuming due authorization, execution and delivery by the Holder, constitutes a
valid and binding agreement of the Company.
(c)
The
execution and delivery by the Company of this Agreement do not, and the
consummation and performance of the transactions contemplated hereby, will not
(i) contravene the Company’s certificate of incorporation or bylaws,
(ii) violate any Law or (iii) conflict with or result in the breach
of, or constitute a default or require any payment to be made under, any
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting the Company.
(d)
During
the Exercise Period, the Warrant Shares have been duly and validly authorized
for issuance and, when issued and delivered in accordance with the provisions of
this Agreement and the Warrants, will be duly and validly issued and will
conform to the existing Common Stock.
(e)
No
consent, approval, authorization, finding of suitability, registration,
exemption or permit or (other than informational filings or notices) any filing
with or notice to any Governmental Authority or any third party that is a party
to any of the documents, to which the Company or any of its subsidiaries is a
party, is required in connection with, or as a condition to, the execution,
delivery or performance by the parties of this Agreement and the consummation of
the transactions contemplated hereby.
(f)
The
Company agrees that if the exercise of any Warrant requires any Regulatory
Approvals that it will use its reasonable efforts to cooperate with the Holder
to obtain such Regulatory Approvals.
16.2
Representations, Warranties
and Covenants of the Holder
. The Holder hereby represents,
warrants and covenants the following to the Company:
(a)
The
Holder has all requisite power and authority to execute, deliver and perform its
obligations under this Agreement.
(b)
This
Agreement has been duly authorized, executed and delivered by the Holder and,
assuming due authorization, execution and delivery by the Company, constitutes a
valid and binding agreement of the Holder.
(c)
The
execution and delivery by the Holder of this Agreement do not, and the
consummation and performance of the transactions contemplated hereby, will not
(i) contravene the Holder’s certificate of incorporation or bylaws,
(ii) violate any Law or (iii) conflict with or result in the breach
of, or constitute a default or require any payment to be made under, any
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting the Holder.
(d)
The
Warrants being acquired by the Holder pursuant to this Agreement are being
acquired for its own account and with no intention of distributing or reselling
such Warrants or the Warrant Shares issuable upon exercise thereof or any part
thereof in any transaction that would be in violation of the securities Laws of
the United States, any state of the United States or any foreign jurisdiction,
without prejudice, however, to the rights of such Holder at all times to sell or
otherwise dispose of all or any part of such Warrants or Warrant Shares in a
transaction that does not violate the Securities Act under an effective
registration statement under the Securities Act, or under an exemption from such
registration available under the Securities Act. If such Holder
should in the future decide to dispose of any of such Warrants or Warrant
Shares, such Holder understands and agrees that it may do so only in compliance
with the Securities Act and applicable state and foreign securities Laws, as
then applicable and in effect.
(e)
Such
Holder understands that (i) the Warrants and the Warrant Shares will not be
registered at the time of their issuance under the Securities Act for the reason
that the sale provided for in this Agreement and upon exercise of Warrants is
exempt pursuant to Section 4(2) of the Securities Act, (ii) the reliance of the
Company on such exemption is predicated in part on such Holder’s representations
set forth herein, and (iii) such Warrants and Warrant Shares must be held
indefinitely unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from such registration.
(f)
Such
Holder has such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of the transactions
contemplated by this Agreement, has the ability to bear the economic risks of
the investment and is an “accredited investor” as defined in Rule 501 of
Regulation D, promulgated under the Securities Act.
(g)
While GM
(or any of its Affiliates) holds any Warrants or Warrant Shares, it shall not,
and shall direct its Affiliates not to, without the prior written consent of the
Company, directly or indirectly:
(i)
acquire,
offer to acquire, or agree to acquire, directly or indirectly, by purchase or
otherwise, any securities or direct or indirect rights to acquire any securities
of the Company or any subsidiary thereof, or of any successor to the Company, or
any assets of the Company or any division thereof or of any such successor if,
following such acquisition, GM and its Affiliates would be the beneficial owners
of more than 20% of the then outstanding Common Stock;
(ii)
seek or
propose to influence or control the management or policies of the Company, make
or in any way participate, directly or indirectly, in any “solicitation” of
“proxies” (as such terms are used in the rules of the SEC) to vote any voting
securities of the Company or any subsidiary thereof, or seek to advise or
influence any Person or entity with respect to the voting of any voting
securities of the Company or any subsidiary thereof; the Company hereby
acknowledges and agrees that the commercial relationship between the Company and
GM, and GM’s exercise of its rights under its various commercial agreements with
the Company as they may be in effect from time to time, are not the seeking or
proposing of influence or control over the management or policies of the
Company;
(iii)
make any
public announcement with respect to, or submit a proposal for or offer of (with
or without conditions), any merger, recapitalization, reorganization, business
combination or other extraordinary transaction involving the Company or any
subsidiary thereof or any of their securities or assets;
(iv)
enter
into any negotiations, arrangements or understandings with any third party with
respect to any of the foregoing, or otherwise form, join or in any way engage in
discussions relating to the formation of, or participate in, a “group” within
the meaning of Section 13(d)(3) of the Exchange Act in connection with any of
the foregoing; or
(v)
publicly
disclose that it has requested that the Company amend or waive any provision of
this
Section
16.2(g)
or make any such request in a manner that would require public
disclosure thereof by the Company.
(h)
If GM (or
any of its Affiliates) exercises a Warrant at any time prior to the 30
th
calendar day prior to the Expiration Date, it shall not hold any Warrant Shares
issued pursuant to such Warrant for more than 30 calendar days following such
exercise (the “
Disposal Period
”);
provided
,
however
, that if GM
(or any of its Affiliates) is prohibited from selling all or any portion of its
Warrant Shares pursuant to
Section 17.1(b)
,
Section
17.2(c)
,
Section 17.3
or
Section 17.8
during
the Disposal Period, then the Disposal Period with respect to such Warrant
Shares shall be extended by the length of time GM (or any of its Affiliates) is
prohibited from selling Warrant Shares. GM and its Affiliates shall
have no rights (including the right to vote in the election of directors or
receive dividends) with respect to any Warrant Shares held in violation of this
Section
16.2(h)
.
(i)
If GM (or
any of its Affiliates) holds any Warrant Shares either during the Disposal
Period or following the Expiration Date, it shall vote such Warrant Shares
proportionally with all other stockholders of the Company.
SECTION
17.
Registration
Rights.
17.1
Demand Registration
Rights
.
(a)
After
receipt of a written request from a Holder requesting that the Company effect a
registration (a “
Demand Registration
”)
under the Securities Act covering all or part of the Registrable Securities
which specifies the intended method or methods of disposition thereof, the
Company shall, (i) as expeditiously as is possible, but in any event no later
than 30 days (excluding any days which occur during a permitted Blackout Period)
after receipt of a written request for a Demand Registration, file with the SEC
a registration statement (a “
Demand Registration
Statement
”) relating to all shares of Registrable Securities which the
Company has been so requested to register by such Holders (“
Participating Demand
Holders
”) for sale, to the extent required to permit the disposition (in
accordance with the intended method or methods thereof, as aforesaid) of the
Registrable Securities so registered and (ii) use its reasonable best efforts to
cause such Demand Registration Statement to be declared effective within 60 days
after the date of filing of the Demand Registration Statement;
provided
,
however
, that in the
case the Company is not permitted to use Form S-3 to register such Registrable
Securities of the Participating Demand Holders, the Company shall be entitled to
register the resale of the Registrable Securities on another form, including a
registration statement on Form S-1, and the Company shall have 90 days to cause
such Demand Registration Statement to be declared effective after the date of
filing such Demand Registration Statement;
provided
,
further
,
however
, that the
Company shall not be required to file a Demand Registration Statement unless the
aggregate number of the Registrable Securities requested to be registered (i)
constitute at least 25% of the Registrable Securities or (ii) include all
Registrable Securities which remain outstanding at such time.
(b)
If the
majority of the Participating Demand Holders in a Demand Registration relating
to a public offering so request that the offering be underwritten with a
managing underwriter selected in the manner set forth in
Section 17.9
below
and such managing underwriter of such Demand Registration advises the Company in
writing that, in its opinion, the number of securities to be included in such
offering is greater than the total number of securities which can be sold
therein without having a material adverse effect on the distribution of such
securities or otherwise having a material adverse effect on the marketability
thereof (the “
Maximum
Number of Securities
”), then the Company shall include in such Demand
Registration the Registrable Securities that the Participating Demand Holders
have requested to be registered thereunder only to the extent the number of such
Registrable Securities does not exceed the Maximum Number of
Securities. If such amount exceeds the Maximum Number of Securities,
the number of Registrable Securities included in such Demand Registration shall
be allocated among all the Participating Demand Holders on a pro rata basis
(based on the number of Registrable Securities held by each Participating Demand
Holder). If the amount of such Registrable Securities does not
exceed the Maximum Number of Securities, the Company may include in such Demand
Registration any other securities of the Company and other securities held by
other security holders of the Company, as the Company may in its discretion
determine or be obligated to allow, in an amount which together with the
Registrable Securities included in such Demand Registration shall not exceed the
Maximum Number of Securities.
(c)
To the
extent the Company is permitted to do so under the Securities Act, any Demand
Registration Statement may be required by Participating Demand Holders
constituting a majority of the Registrable Securities to be in an appropriate
form under the Securities Act (a “
Shelf Registration
Statement
”) relating to any or all of the Registrable Securities in
accordance with the methods and distribution set forth in the Shelf Registration
Statement and Rule 415 under the Securities Act.
(d)
Holders
shall be entitled to an aggregate of two registrations of Registrable Securities
pursuant to this
Section 17.1
;
provided
, that a
registration requested pursuant to this
Section 17.1
shall
not be deemed to have been effected for purposes of this
Section 17.1(d)
unless (i) it has been declared effective by the SEC, (ii) it has remained
effective for the period set forth in
Section 17.4(a)
, and
(iii) the offering of Registrable Securities pursuant to such registration is
not subject to any stop order, injunction or other order or requirement of the
SEC (other than any such stop order, injunction, or other requirement of the SEC
prompted by act or omission of Holders of Registrable Securities).
(e)
Notwithstanding
anything to the contrary contained herein, the Company shall not be required to
prepare and file (i) more than one Demand Registration Statement in any
twelve-month period, or (ii) any Demand Registration Statement within 180 days
following the date of effectiveness of any other Registration
Statement.
17.2
Piggy-Back Registration
Rights
.
(a)
If the
Company, proposes to file on its behalf and/or on behalf of any holder of its
securities a registration statement under the Securities Act on any form
relating solely to the Common Stock of the Company (other than a registration
statement on Form S-4 or S-8 or any successor form for securities to be offered
in a transaction of the type referred to in Rule 145 under the Securities Act or
to employees of the Company pursuant to any employee benefit plan, respectively)
for the registration of any securities of the Company (a “
Piggy-Back
Registration
”), it will give written notice to all Holders at least 15
days before the initial filing with the SEC of such piggy-back registration
statement (a “
Piggy-Back Registration
Statement
”), which notice shall set forth the intended method of
disposition of the securities proposed to be registered by the
Company. The notice shall offer to include in such filing the
aggregate number of Registrable Securities as such Holders may
request.
(b)
Each
Holder desiring to have Registrable Securities registered under this
Section 17.2
(“
Participating Piggy-Back
Holders
”) shall advise the Company in writing within ten days after the
date of receipt of such notice from the Company, setting forth the amount of
such Registrable Securities for which registration is requested. The
Company shall thereupon include in such filing the number or amount of
Registrable Securities for which registration is so requested, subject to
Section 17.2(c)
below, and shall use its reasonable efforts to effect registration of such
Registrable Securities under the Securities Act.
(c)
If the
Piggy-Back Registration relates to an underwritten public offering and the
managing underwriter of such proposed public offering advises in writing that,
in its opinion, the amount of Registrable Securities requested to be included in
the Piggy-Back Registration in addition to the securities being registered by
the Company would be greater than the Maximum Number of Securities (having the
same meaning as defined in
Section 17.1(b)
, but
replacing the term “Demand Registration” with “Piggy-Back Registration”),
then:
(i)
in the
event Company initiated the Piggy-Back Registration, the Company shall include
in such Piggy-Back Registration
first
, the securities
the Company proposes to register and
second
, the
securities of all other selling security holders, including the Participating
Piggy-Back Holders, to be included in such Piggy-Back Registration in an amount
which together with the securities the Company proposes to register, shall not
exceed the Maximum Number of Securities, such amount to be allocated among such
selling security holders, including the Participating Piggy-Back Holders, on a
pro rata basis (based on the number of securities of the Company held by each
such selling security holder); and
(ii)
in the
event any holder of securities of the Company, including any Holder, initiated
the Piggy-Back Registration, the Company shall include in such Piggy-Back
Registration
first
, the securities
such initiating security holder proposes to register,
second
,
the securities of any other
selling security holders, including the Participating Piggy-Back Holders, in an
amount which together with the securities the initiating security holder
proposes to register, shall not exceed the Maximum Number of Securities, such
amount to be allocated among such other selling security holders, including the
Participating Piggy-Back Holders, on a pro rata basis (based on the number of
securities of the Company held by each such selling security holder) and
third
, any securities
the Company proposes to register, in an amount which together with the
securities the initiating security holder and the other selling security
holders, including the Participating Piggy-Back Holders, propose to register,
shall not exceed the Maximum Number of Securities.
(d)
The
Company will not hereafter enter into any agreement, which is inconsistent with
the rights of priority provided in
Section
17.2(c)
.
17.3
Blackout
Periods
. The Company shall have the right to delay the filing
or effectiveness of a Registration Statement required pursuant to
Section 17.1
or
Section 17.2
hereof
during no more than two periods aggregating to not more than 90 days in any
twelve-month period (a “
Blackout Period
”) in
the event that (i) the Company would, in accordance with the advice of its
counsel, be required to disclose in the prospectus information not otherwise
then required by Law to be publicly disclosed and (ii) in the judgment of the
Board, there is a reasonable likelihood that such disclosure, or any other
action to be taken in connection with the prospectus, would materially and
adversely affect or interfere with any financing, acquisition, merger,
disposition of assets (not in the ordinary course of business), corporate
reorganization or other similar transaction involving the Company;
provided
,
however
, that the
Company shall delay during such Blackout Period the filing or effectiveness of
any Registration Statement required pursuant to the registration rights of the
holders of any securities of the Company;
provided
,
further
, that the
Company will not exercise its right to delay unless at the time of such delay
the Company concurrently exercises similar black-out rights against holders of
securities with similar rights as the Holders. The Company shall
promptly give the Holders written notice of such determination containing a
general statement of the reasons for such postponement and an approximation of
the anticipated duration of the delay. The Company shall have no
obligation to include in any such notice any reference to or description of the
facts based upon which the Company is delivering such notice.
17.4
Registration
Procedures
. The Company shall use its reasonable best efforts,
for so long as there are Registrable Securities outstanding, to take such
actions as are under its control to not become an ineligible issuer (as defined
in Rule 405 under the Securities Act) and to remain a well-known seasoned issuer
(as defined in Rule 405 under the Securities Act) if it becomes eligible for
such status in the future. Additionally, If the Company is required
by the provisions of
Section 17.1
or
Section 17.2
to
effect the registration of any of its securities under the Securities Act, the
Company will, as expeditiously as possible:
(a)
prepare
and file with the SEC a Registration Statement with respect to such securities
and use its reasonable efforts to cause such Registration Statement promptly to
become and remain effective for a period of time required for the disposition of
such securities by the holders thereof but not to exceed 45 days (except with
respect to a Shelf Registration Statement which shall remain effective for a
period not to exceed 180 days);
provided
,
however
, that before
filing such Registration Statement or any amendments or supplements thereto (for
purposes of this subsection, amendments and supplements shall not be deemed to
include any filing that the Company is required to make pursuant to the Exchange
Act), the Company shall furnish the representatives of the Holders referred to
in
Section 17.4(l)
copies of all documents proposed to be filed, which documents will be subject to
the review of such counsel. The Company shall not be deemed to have
used its reasonable efforts to keep a Registration Statement effective during
the applicable period if it voluntarily takes any action that would result in
the Holders of such Registrable Securities not being able to sell such
Registrable Securities during that period, unless such action is required under
applicable Law;
(b)
prepare
and file with the SEC such amendments and supplements to such Registration
Statement and the prospectus used in connection therewith as may be necessary to
keep such Registration Statement effective and to comply with the provisions of
the Securities Act with respect to the sale or other disposition of all
securities covered by such Registration Statement until the earlier of such time
as all of such securities have been disposed of in a public offering or the
expiration of 45 days (except with respect to the Shelf Registration Statement,
for which such period shall be 180 days) after such Registration Statement
becomes effective;
(c)
furnish
to such selling Holders such number of conformed copies of the applicable
Registration Statement and each such amendment and supplement thereto, and of
any summary prospectus or other prospectus, including any preliminary
prospectus, in conformity with the requirements of the Securities Act in order
to facilitate the public sale or other disposition of such Registrable
Securities;
(d)
use its
reasonable best efforts to register or qualify the securities covered by such
Registration Statement under such other securities or blue sky laws of such
jurisdictions within the United States as each Holder of such securities shall
reasonably request, to keep such registration or qualification in effect for so
long as such Registration Statement remains in effect, and to take any other
action which may be reasonably necessary to enable such selling Holder to
consummate the disposition in such jurisdictions of the securities owned by such
Holder;
provided
,
however
, that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business, subject itself to taxation in or to file a general
consent to service of process in any jurisdiction wherein it would not but for
the requirements of this
Section 17.4(d)
be
obligated to do so; and
provided
,
further
, that the
Company shall not be required to qualify such Registrable Securities in any
jurisdiction in which the securities regulatory authority requires that any
Holder submit any Registrable Securities to the terms, provisions and
restrictions of any escrow, lockup or similar agreement(s) for consent to sell
Registrable Securities in such jurisdiction unless such Holder agrees to do
so;
(e)
furnish,
at the request of any Holder requesting registration of Registrable Securities
pursuant to
Section 17.1
or
Section 17.2
,
if the method of distribution is by means of an underwriting, on the date that
the Registrable Securities are delivered to the underwriters for sale pursuant
to such registration, (i) a signed opinion, dated such date, of the
independent legal counsel representing the Company for the purpose of such
registration, addressed to the underwriters, if any, as to such matters as such
underwriters may reasonably request and as would be customary in such a
transaction; and (ii) letters dated such date and the date the offering is
priced from the independent certified public accountants of the Company,
addressed to the underwriters, if any (A) stating that they are independent
certified public accountants within the meaning of the Securities Act and that,
in the opinion of such accountants, the financial statements and other financial
data of the Company included in the Registration Statement or the prospectus, or
any amendment or supplement thereto, comply as to form in all material respects
with the applicable accounting requirements of the Securities Act and
(B) covering such other financial matters (including information as to the
period ending not more than five Business Days prior to the date of such
letters) with respect to the registration in respect of which such letter is
being given as such underwriters or the Holders holding a majority of the
Registrable Securities included in such registration, as the case may be, may
reasonably request and as would be customary in such a transaction;
(f)
enter
into customary agreements (including if the method of distribution is by means
of an underwriting, an underwriting agreement in customary form) and take such
other actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities (including in any underwritten
offering, making members of management and executives of the Company available
to participate in “road shows”, similar sales events and other marketing
activities);
(g)
otherwise
use its reasonable efforts to comply with all applicable rules and regulations
of the SEC, and make generally available to the Holders no later than 45 days
after the end of any twelve-month period (or 90 days, if such period is a fiscal
year) earnings statements satisfying the provisions of Section 11(a) of the
Securities Act, (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in an underwritten public
offering, or (ii) if not sold to underwriters in such an offering, beginning
with the first month of the Company’s first fiscal quarter commencing after the
effective date of the Registration Statement, which statements shall cover said
twelve-month periods;
(h)
use its
reasonable efforts to cause all such Registrable Securities to be listed on each
securities exchange or quotation system on which similar securities issued by
the Company are listed or traded;
(i)
notify
the Holders at any time when a prospectus relating to Registrable Securities is
required to be delivered under the Securities Act because of the happening of
any event as a result of which the applicable prospectus, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
(j)
give
notice to the Holders:
(i)
when such
Registration Statement or any amendment thereto has been filed with the SEC and
when such Registration Statement or any post-effective amendment thereto has
become effective;
(ii)
of any
request by the SEC for amendments or supplements to such Registration Statement
or the prospectus included therein, or for additional information, except for
amendments or supplements or additional information required to be delivered
pursuant to the Exchange Act;
(iii)
of the
issuance by the SEC of any stop order suspending the effectiveness of such
Registration Statement or the initiation of any proceedings for that
purpose;
(iv)
of the
receipt by the Company or its legal counsel of any notification with respect to
the suspension of the qualification of the Common Stock for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and
(v)
of the
happening of any event that requires the Company to make changes in such
Registration Statement or the prospectus in order to make the statements therein
not misleading (which notice shall be accompanied by an instruction to suspend
the use of the prospectus until the requisite changes have been
made);
(k)
use its
reasonable efforts to prevent the issuance or obtain the withdrawal of any order
suspending the effectiveness of such Registration Statement at the earliest
possible time;
(l)
upon the
occurrence of any event contemplated by
Section 17.4(j)(v)
,
promptly prepare a post-effective amendment to such Registration Statement, if
necessary, or a supplement to the related prospectus or file any other required
document so that, as thereafter delivered to the Holders, the prospectus will
not contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. If the Company notifies
the Holders in accordance with
Section 17.4(j)(v)
to
suspend the use of the prospectus until the requisite changes to the prospectus
have been made, then each Holder shall suspend use of such prospectus and use
their reasonable efforts to return to the Company all copies of such prospectus
other than permanent file copies then in the Holder’s possession, and the period
of effectiveness of such Registration Statement provided for above shall be
extended by the number of days from and including the date of the giving of such
notice to the date Holders shall have received such amended or supplemented
prospectus pursuant to this
Section
17.4(l)
;
(m)
make
reasonably available for inspection by the representatives of the Holders, any
underwriter participating in any disposition pursuant to such Registration
Statement and any attorney, accountant or other agent retained by such
representative or any such underwriter, upon prior notice and during normal
business hours, all relevant financial and other records, pertinent corporate
documents and properties of the Company and cause the Company’s officers,
directors and employees to supply all relevant information reasonably requested
by such representative or any such underwriter, attorney, accountant or agent in
connection with the registration;
(n)
use
reasonable efforts to procure the cooperation of the Transfer Agent in settling
any offering or sale of Registrable Securities, including with respect to the
transfer of physical stock certificates into book-entry form in accordance with
any procedures reasonably requested by the Holders or the underwriters;
and
(o)
if
requested by Holders of a majority of the Registrable Securities being
registered and/or sold in connection therewith, or the managing underwriter(s),
if any, promptly include in a prospectus supplement or amendment such
information as the Holders of a majority of the Registrable Securities being
registered and/or sold in connection therewith or managing underwriter(s), if
any, may reasonably request, in good faith, in order to permit the intended
method of distribution of such securities and make all required filings of such
prospectus supplement or such amendment as soon as practicable after the Company
has received such request.
To the
extent permitted by the SEC rules and regulations, the parties agree that the
Company may satisfy the obligations of filing a registration statement relating
to Registrable Securities under this
Section 17
by filing
any prospectus supplement to its existing effective registration
statement.
It shall be a condition precedent to
the obligation of the Company to take any action pursuant to this Agreement in
respect of the securities which are to be registered at the request of any
Holder, that such Holder shall furnish to the Company such information regarding
the securities held by such Holder and the intended method of disposition
thereof as the Company shall reasonably request and as shall be required in
connection with the action taken by the Company.
17.5
Expenses of
Registration.
All expenses incurred in connection with each
registration pursuant to
Section 17.1
and
Section 17.2
of
this Agreement, excluding underwriters’ discounts and commissions, but including
all registration, filing and qualification fees, word processing, duplicating,
printers’ and accounting fees (including the expenses of any special audits or
“comfort” letters required by or incident to such performance and compliance),
fees of FINRA or listing fees, messenger and delivery expenses, all fees and
expenses of complying with state securities or blue sky laws and fees and
disbursements of counsel for the Company, shall be paid by the Company, except
that:
(a)
all such
expenses in connection with any amendment or supplement to a Registration
Statement or prospectus filed more than 45 days (or in the case of a Shelf
Registration Statement, 180 days) after the effective date of such Registration
Statement because any Holder has not effected the disposition of the securities
requested to be registered shall be paid by such Holder;
(b)
if a
registration request pursuant to
Section 17.1
of this
Agreement is subsequently withdrawn at the request of the Holders of a number of
shares of Registrable Securities such that the remaining Holders requesting
registration would not have been able to request registration under the
provisions of
Section
17.1
of this Agreement, such withdrawing Holders shall bear such expenses
unless such withdrawing Holders shall forfeit their right to the Demand
Registration requests otherwise required to be used pursuant to
Section 17.1
of this
Agreement;
(c)
The
Holders shall bear and pay the (i) underwriting commissions and discounts
applicable to securities offered for their account in connection with any
registrations, filings and qualifications made pursuant to this Agreement and
(ii) any fees and expenses incurred in respect of counsel or other advisors to
the Holders.
17.6
Rule 144 and Rule 144A
Information
.
(a) With
a view to making available the benefits of certain rules and regulations of the
SEC which may at any time permit the sale of the Registrable Securities to the
public without registration, at all times after the date of this Agreement, the
Company agrees to:
(i)
make and
keep public information available, as those terms are understood and defined in
Rule 144 under the Securities Act;
(ii)
use its
best efforts to file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(iii)
furnish
to each Holder of Registrable Securities forthwith upon request a written
statement by the Company as to its compliance with the reporting requirements of
such Rule 144 and of the Securities Act and the Exchange Act, a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents so filed by the Company as such Holder may reasonably request in
availing itself of any rule or regulation of the SEC allowing such Holder to
sell any Registrable Securities without registration.
(b)
At all
times during which the Company is neither subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, nor exempt from reporting pursuant
to Rule 12g3-2(b) under the Exchange Act, it will provide, upon the written
request of any holder of Registrable Securities in written form (as promptly as
practicable and in any event within 15 Business Days), to any prospective buyer
of the securities designated by the Holder, all information required by Rule
144A(d)(4)(i) of the General Regulations promulgated by the SEC under the
Securities Act.
17.7
Indemnification and
Contribution
.
(a)
The
Company shall indemnify and hold harmless each Holder, such Holder’s directors
and officers, each Person who participates in the offering of such Registrable
Securities, including underwriters (as defined in the Securities Act), and each
Person, if any, who controls such Holder or participating Person within the
meaning of the Securities Act, against any losses, claims, damages, liabilities,
costs and expenses, interest, awards, judgments and penalties (including
reasonable attorneys’ and consultants’ fees and expenses) (hereinafter, a “
Loss
”) to which they
may become subject under the Securities Act or otherwise, insofar as such Losses
(or proceedings in respect thereof) arise out of or are based on any untrue or
alleged untrue statement of any material fact contained in such Registration
Statement on the effective date thereof (including any prospectus filed under
Rule 424 under the Securities Act or any amendments or supplements thereto
and any information contained in a form of prospectus or prospectus supplement
that is deemed to be a part of a Registration Statement pursuant to Rule 430B
under the Securities Act) or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall reimburse
each such Holder, such Holder’s directors and officers, such participating
Person or controlling Person for any legal and other expenses reasonably
incurred by them (but not in excess of expenses incurred in respect of one firm
of legal counsel for all of them unless there is an actual conflict of interest
between any Indemnified Parties, which Indemnified Parties may be represented by
separate counsel) in connection with investigating or defending any such Loss;
provided
,
however
, that the
indemnity agreement contained in this
Section 17.7(a)
shall not apply to amounts paid in settlement of any such Loss if such
settlement is effected without the consent of the Company;
provided
,
further
, that the
Company shall not be liable to any Holder, such Holder’s directors and officers,
participating Person or controlling Person in any such case for any such Loss to
the extent that it arises out of, or is based upon, an untrue statement or
alleged untrue statement or omission or alleged omission made in connection with
such Registration Statement, preliminary prospectus, final prospectus or
amendments or supplements thereto, in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder or such Holder’s directors and officers,
participating Person or controlling Person.
(b)
Each
Holder requesting or joining in a registration, severally and not jointly, shall
indemnify and hold harmless the Company, each of its directors and officers, and
each Person who participates in the offering of such Registrable Securities,
including agents and underwriters (as defined in the Securities Act), and each
other Person, if any, who controls the Company within the meaning of the
Securities Act against any Losses to they may become subject, under the
Securities Act or otherwise, insofar as such Losses (or proceedings in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such Registration Statement on the
effective date thereof (including any prospectus filed under Rule 424 under
the Securities Act or any amendments or supplements thereto and any information
contained in a form of prospectus or prospectus supplement that is deemed to be
a part of a Registration Statement pursuant to Rule 430B under the Securities
Act) or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in such Registration Statement, preliminary or final
prospectus, or amendments or supplements thereto, in reasonable reliance upon
and in conformity with written information furnished by or on behalf of such
Holder expressly for use in connection with such registration; and each such
Holder shall reimburse any legal and other expenses reasonably incurred by the
Company or any such director, officer, controlling Person, agent or underwriter
(but not in excess of expenses incurred in respect of one counsel for all of
them unless there is an actual conflict of interest between any Indemnified
Parties, which Indemnified Parties may be represented by separate counsel) in
connection with investigating or defending any such Loss;
provided
,
however
, that the
indemnity agreement contained in this
Section 17.7(b)
shall not apply to amounts paid in settlement of any such Loss if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld), and
provided
,
further
, that the
liability of each Holder hereunder shall be limited to the aggregate proceeds
received by such Holder in connection with any such registration under the
Securities Act.
(c)
If the
indemnification provided for in this
Section 17.7
from the
Indemnifying Party is unavailable to an Indemnified Party hereunder in respect
of any Losses referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions which resulted in such Losses,
as well as any other relevant equitable considerations. The relative
fault of such Indemnifying Party and Indemnified Party shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such Indemnifying Party or Indemnified Party, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a
result of the Losses referred to above shall be deemed to include any legal and
other fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding. If the allocation provided in this
Section 17.7(c)
is
not permitted by applicable Law, the parties shall contribute based upon the
relevant benefits received by the Company from the initial offering of the
securities, on the one hand, and the net proceeds received by the Holders from
the sale of securities, on the other hand.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this
Section 17.7(c)
were
determined by pro rata
allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(d)
Any
Person entitled to indemnification hereunder (the “
Indemnified Party
”)
agrees to give prompt written notice to the indemnifying party (the “
Indemnifying Party
”)
after the receipt by the Indemnified Party of any written notice of the
commencement of any Action or threat thereof made in writing for which the
Indemnified Party intends to claim indemnification or contribution pursuant to
this Agreement;
provided
,
however
, that the
failure so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of any liability that it may have to the Indemnified Party hereunder
unless and to the extent such failure is materially prejudicial to the
Indemnifying Party. If notice of commencement of any such Action is
given to the Indemnifying Party as above provided, the Indemnifying Party shall
be entitled to participate in and, to the extent it may wish, to assume the
defense of such Action at its own expense, with counsel chosen by it and
reasonably satisfactory to such Indemnified Party. The Indemnified
Party shall have the right to employ separate counsel in any such Action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be paid by the Indemnified Party unless (i) the Indemnifying Party
agrees to pay the same, (ii) the Indemnifying Party fails to assume the
defense of such Action, or (iii) the named parties to any such Action
(including any impleaded parties) have been advised by such counsel that either
(A) representation of such Indemnified Party and the Indemnifying Party by
the same counsel would be inappropriate under applicable standards of
professional conduct or (B) there are one or more legal defenses available
to it which are substantially different from or additional to those available to
the Indemnifying Party. No Indemnifying Party shall be liable for any
settlement entered into without its written consent, which consent shall not be
unreasonably withheld and no Indemnifying Party shall be liable for the fees and
expenses of more than one counsel.
(e)
The
agreements contained in this
Section 17.7
shall
survive the transfer of the Registrable Securities by any Holder and sale of all
the Registrable Securities pursuant to any Registration Statement and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Holder or such director, officer or participating or controlling
Person.
17.8
Certain Additional
Limitations on Registration Rights
. Notwithstanding the other
provisions of this Agreement, the Company shall not be obligated to register the
Registrable Securities of any Holder (a) if such Holder or any underwriter
of such Registrable Securities shall fail to furnish to the Company necessary
information in respect of the distribution of such Registrable Securities, or
(b) if such registration involves an underwritten offering, such
Registrable Securities are not included in such underwritten offering on the
same terms and conditions as shall be applicable to the other securities being
sold through underwriters in the registration or such Holder fails to enter into
an underwriting agreement in customary form with the underwriter or underwriters
selected for such underwritten offering. In addition, each Holder
agrees not to effect any public sale or distribution of any Registrable
Securities or of any securities convertible into or exchangeable or exercisable
for such Registrable Securities, including a sale pursuant to Rule 144
under the Securities Act, and to enter into a customary lock-up agreement with
the managing underwriter for an offering, during the 90-day period beginning on
the effective date of any Demand Registration Statement or Piggy-Back
Registration Statement or other underwritten offering (except as part of such
registration), if and to the extent requested by the managing underwriter for
such offering and if the Company enters into similar agreements.
17.9
Selection of Managing
Underwriters
. In the event the Participating Demand Holders
have requested an underwritten offering, the underwriter or underwriters shall
be selected by the Company and shall be approved by the Holders of a majority of
the shares being so registered, which approval shall not be unreasonably
withheld or delayed.
17.10
Clear
Market
. If any underwritten offering of Registrable Securities
is effected by Holders pursuant to this Agreement, the Company agrees not to
effect (other than pursuant to such registration or pursuant to a Special
Registration) any public sale or distribution, or to file any Shelf Registration
Statement (other than such registration or a Special Registration) covering
shares of Common Stock or any securities convertible into or exchangeable or
exercisable for shares of Common Stock, during the period not to exceed ten days
prior and 90 days following the effective date of such offering or such longer
period up to 180 days as may be requested by the managing underwriter for such
underwritten offering. The Company also agrees to cause such of its directors
and senior executive officers to execute and deliver customary lock-up
agreements in such form and for such time period up to 90 days as may be
requested by the managing underwriter.
SECTION
18.
Miscellaneous
18.1
Notices
. All
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by an internationally recognized courier
service, by fax or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified by notice given in
accordance with this
Section
18.1
:
If to any
Holder, at its last known address appearing on the books of the Company
maintained for such purpose.
If to the
Company, at
One Dauch
Drive
Detroit,
Michigan 48211
Attention: General
Counsel
Facsimile: (313)
758-3897
with a
copy to:
Shearman
& Sterling LLP
599
Lexington Avenue
New York,
NY 10022
Attention: Peter
D. Lyons, Esq.
Facsimile: (212)
848-7179
or at
such other address as may be substituted by notice given as herein
provided.
18.2
Specific
Performance
. The parties hereto agree that irreparable damage
would occur in the event any provision of the Agreement was not performed in
accordance with the terms hereof and that the parties hereto shall be entitled
to specific performance of the terms hereof, in addition to any other remedy at
law or in equity.
18.3
Amendment
. This
Agreement may not be amended or modified except (i) in an instrument in writing
signed by, or on behalf of, the Company and the Majority Holders or (ii) by a
waiver in accordance with
Section
18.4
.
18.4
Waiver
. Any
party to this Agreement may (i) extend the time for the performance of any
of the obligations or other acts of the other party, (ii) waive any
inaccuracies in the representations and warranties of the other party contained
herein or in any document delivered by the other party pursuant hereto or
(iii) waive compliance with any of the agreements of the other party or
conditions to such party’s obligations contained herein. Any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by the party to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or a waiver of any other term
or condition of this Agreement. The failure of either party hereto to
assert any of its rights hereunder shall not constitute a waiver of any of such
rights.
18.5
Successors
and
Assigns
. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of the parties hereto as
hereinafter provided. The registration rights of any Holder with
respect to any Registrable Securities shall be transferred to any Person who is
the transferee of such Registrable Securities as provided under this
Agreement. All of the obligations of the Company hereunder shall
survive any such transfer.
18.6
Headings
. The
descriptive headings and subheadings in this Agreement are included for
convenience and identification only and are in no way intended to describe,
interpret, define or limit the scope, extent or intent of this Agreement or any
provision hereof.
18.7
Governing Law;
Jurisdiction
. This Agreement shall be governed by, and
construed in accordance with, the Laws of the State of Michigan. All
Actions arising out of or relating to this Agreement shall be heard and
determined exclusively in any federal court sitting in Wayne County, Michigan;
provided
,
however
, that if such
federal court does not have jurisdiction over such Action, such Action shall be
heard and determined exclusively in any state court sitting in Wayne County,
Michigan. Consistent with the preceding sentence, the parties hereto
hereby (a) submit to the exclusive jurisdiction of any federal or state court
sitting in Wayne County, Michigan for the purpose of any Action arising out of
or relating to this Agreement brought by any party hereto and
(b) irrevocably waive, and agree not to assert by way of motion, defense,
or otherwise, in any such Action, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is improper, or that this
Agreement or the transactions contemplated by this Agreement may not be enforced
in or by any of the above-named courts.
18.8
Severability
. If
any term or other provision of this Agreement is held to be invalid, illegal or
incapable of being enforced by any Law, or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated by
this Agreement is not affected in any manner materially adverse to either party
hereto. Upon a determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated by this Agreement be consummated as
originally contemplated to the fullest extent possible.
18.9
Entire
Agreement
. This Agreement constitutes the entire agreement
among the parties hereto pertaining to the subject matter hereof and supersedes
all prior agreements and understandings pertaining thereto.
18.10
No Third Party
Beneficiaries
. This Agreement shall be binding upon and inure
solely to the benefit of the parties hereto and their respective successors and
permitted assigns and nothing herein, express or implied (except as provided in
Section 17.7
relating to indemnified parties), is intended to or shall confer upon any other
Person any legal or equitable right, benefit or remedy of any nature whatsoever,
including any rights of employment for any specified period, under or by reason
of this Agreement.
18.11
Termination
. This
Agreement shall terminate on the Expiration Date, after which time this
Agreement and all Warrants shall no longer be of any force or effect;
provided
,
however
, that this
Agreement will terminate on such earlier date on which all outstanding Warrants
have been exercised;
provided
,
further
, that
provisions of
Sections 15, 16 and
17
and this
Section 18
shall
survive such termination;
provided
,
further
, that the
rights and obligations under
Section 17
shall,
except for
Section
17.7
, terminate upon the earlier of (i) all Registerable Securities
having been exchanged or disposed, (ii) all Registerable Securities being
eligible to be sold pursuant to Rule 144 (or any similar provision then in
force, but not Rule 144A) under the Securities Act without being subject to any
restrictions under such rule, and (iii) all Registerable Securities ceasing to
be outstanding.
18.12
Interpretation and Rules of
Construction
. In this Agreement, except to the extent
otherwise provided or that the context otherwise requires:
(a)
when a
reference is made in this Agreement to a Section, such reference is to a Section
of this Agreement unless otherwise indicated;
(b)
whenever
the words “include,” “includes” or “including” are used in this Agreement, they
are deemed to be followed by the words “without limitation”;
(c)
the words
“hereof,” “herein” and “hereunder” and words of similar import, when used in
this Agreement, refer to this Agreement as a whole and not to any particular
provision of this Agreement;
(d)
the
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms; and
(e)
references
to a Person are also to its successors and permitted assigns.
18.13
Counterparts
. This
Agreement may be executed and delivered (including by facsimile transmission) in
two or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original, but
all of which taken together shall constitute one and the same
agreement.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the day and year first above written.
AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC.
By: /s/___________________________
|
Name:
Authorized Signatory
|
GENERAL
MOTORS COMPANY
By: _/s/___________________________
|
Name:
Authorized Signatory
|
EXHIBIT A
Form
of Warrant Certificate
[Face of
Warrant Certificate]
|
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAWS, AND ACCORDINGLY, SUCH SECURITIES MAY NOT BE OFFERED, TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE REGISTRATION
OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR APPLICABLE EXEMPTIONS
THEREFROM.
|
|
THE
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
THE CONDITIONS SPECIFIED IN THAT CERTAIN WARRANT AGREEMENT DATED AS OF
SEPTEMBER 16, 2009, BY AND BETWEEN AMERICAN AXLE & MANUFACTURING
HOLDINGS, INC., A DELAWARE CORPORATION, AS THE ISSUER, AND GENERAL MOTORS
COMPANY, A DELAWARE CORPORATION, AS HOLDER, AS SUCH WARRANT AGREEMENT MAY
BE MODIFIED AND SUPPLEMENTED AND IN EFFECT FROM TIME TO TIME, AND NO
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL BE VALID
OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. THE
HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO
BE BOUND BY THE PROVISIONS OF SUCH WARRANT
AGREEMENT.
|
No. of
Warrants: Warrant No:
__
WARRANT
TO
PURCHASE SHARES OF
AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC.
This
certifies that
, or its
registered assigns, is the registered holder (the “
Holder
”) of [___]
warrants (the “
Warrants
”) of
American Axle & Manufacturing, Inc., a Delaware corporation (the “
Company
”), that would
entitle the Holder, upon proper exercise, during Exercise Period (as defined in
below) to receive from the Company [_____] shares (the “
Warrant Shares
”) of
Company’s common stock, par value $0.01 per share (“
Common Stock
”), at
the Exercise Price (as defined below). The Exercise Period shall mean
the period commencing on September 16, 2009 and continuing until 5:00 p.m., New
York City Time, on September 16, 2014. The Exercise Price shall mean $2.76 per
Warrant Share an shall be payable (i) by wire transfer of immediately
available funds in United States Dollars or (ii) by certified or official
bank check for United States Dollars made payable to the order of “American Axle
& Manufacturing Holdings, Inc.” The Exercise Price is subject to
adjustment upon the occurrence of certain events set forth in the Warrant
Agreement. No Warrant may be exercised after 5:00 p.m., New York City
Time, on September 16, 2014, and to the extent not exercised by such time such
Warrants shall become void. Reference is made to the further
provisions of this Warrant Certificate set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as though fully
set forth at this place. This Warrant Certificate shall be governed
and construed in accordance with the internal laws of the State of New
York.
IN
WITNESS WHEREOF, the Company has caused this Warrant Certificate No.[__] to be
signed by the undersigned President and the undersigned Secretary of the Company
and has caused its corporation seal to be imprinted hereon.
Dated:
|
|
AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC.
|
|
[corporation
seal]
|
|
|
|
By:
|
|
______________________________
|
______________________________
|
President
|
Secretary
|
[Reverse
of Warrant Certificate]
AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC. (WARRANT)
By
accepting a Warrant Certificate, each Holder shall be bound by all of the terms
and provisions of the Warrant Agreement (a copy of which is available on request
to the Secretary of the Company) and any amendments thereto as fully and
effectively as if such Holder had signed the same.
The
Warrants evidenced by this Warrant Certificate are part of a duly authorized
issue of Warrants by the Company expiring at 5:00 p.m., New York City Time, on
September 16, 2014, entitling the Holder upon proper exercise to receive Warrant
Shares and are issued or to be issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and each
Holder of the Warrants.
The
Holder of the Warrants evidenced by this Warrant Certificate may exercise them
by surrendering this Warrant Certificate, with the form of election to purchase
set forth below on this Warrant Certificate properly completed and executed,
together with payment of the aggregate Exercise Price in accordance with the
provisions set forth on the face of this Warrant Certificate. In the
event that upon any exercise of Warrants evidenced hereby the number of Warrants
exercised shall be less than the total number of Warrants evidenced hereby,
there shall be issued to the Holder hereof or his assignee a new Warrant
Certificate evidencing the number of Warrants not exercised.
The
Warrant Agreement provides that upon the occurrence of certain events the
Exercise Price and the number of Warrant Shares issuable upon exercise of this
Warrant, each as set forth on the face hereof, may, subject to certain
conditions, be adjusted. No fractions of a Warrant Share will be
issued upon the exercise of any Warrant, but the Company will pay the cash value
in lieu thereof determined as provided in the Warrant Agreement.
Warrant
Certificates, when surrendered to the Company by the Holder thereof in person or
by legal representative or attorney duly authorized in writing, may be
exchanged, in the manner and subject to the limitations provided in the Warrant
Agreement, but without payment of any service charge, for another Warrant
Certificate or Warrant Certificates of like tenor evidencing in the aggregate a
like number of Warrants.
Upon due
presentation for registration of transfer of this Warrant Certificate to the
Company a new Warrant Certificate or Warrant Certificates of like tenor and
evidencing in the aggregate a like number of Warrants shall be issued to the
transferee(s) in exchange for this Warrant Certificate, subject to the
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.
The
Company may deem and treat the Holder(s) hereof as the absolute owner(s) of this
Warrant Certificate (notwithstanding any notation of ownership or other writing
hereon made by anyone), for the purpose of any exercise hereof, of any
distribution to the Holder(s) hereof, and for all other purposes, and the
Company shall not be affected by any notice to the contrary.
The
Warrant Agreement permits, with certain exceptions therein provided, the
supplementing or amendment thereof at any time by the Company with the written
consent of the Majority Holders. Any such consent by or on behalf of
a Holder shall be conclusive and binding upon such Holder and upon all future
Holders of this Warrant and any Warrant issued upon the registration of transfer
thereof or in exchange thereof whether or not notation of such consent is made
upon such Warrant or any other Warrant.
[Form of
Assignment to be Executed if Holder
Desires
to Transfer Warrants Evidenced Hereby]
ASSIGNMENT
(To
Be Executed by the Holder in Order to Assign Warrants)
FOR VALUE
RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE
INSERT SOCIAL SECURITY, TAXPAYER IDENTIFICATION
OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
|
(PLEASE
PRINT OR TYPE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE)
of the
Warrants represented by this Warrant Certificate, and hereby irrevocably
constitutes and appoints ____________________________________________________
Attorney to transfer this Warrant Certificate on the books of the Company, with
full power of substitution in the premises.
Dated:_______,
______
|
_______________________________________________________
Signature(s)*
|
|
|
|
_______________________________________________________
|
|
|
|
_______________________________________________________
(Social
Security or Taxpayer Identification Number)
|
|
|
[Form of
Election to Purchase, To Be Executed Upon Exercise Of Warrant]
NOTICE
OF EXERCISE
(To
Be Executed by the Holder in Order to Exercise Warrants)
p
The
undersigned hereby irrevocably elects to exercise the right, represented by this
Warrant Certificate, to receive Common Stock and herewith tenders payment for
such Common Stock to the order of American Axle & Manufacturing, Inc. in the
amount of $[__] per share of Common Stock in accordance with the terms of the
Warrant Agreement, in cash or by certified or official bank check made payable
to the order of the Company.
p
The
undersigned hereby irrevocably elects to exercise the right, represented by this
Warrant Certificate, to receive Common Stock and hereby elect to use the
“cashless exercise” option to purchase the shares of Common Stock under Section
7.6 of the Warrant Agreement.
The
undersigned requests that a certificate for such Common Stock be registered in
the name of:
PLEASE
INSERT SOCIAL SECURITY
OR OTHER
IDENTIFYING NUMBER
and be
delivered
to:
(PLEASE PRINT OR TYPE NAME AND
ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE)
and, if
such number of Warrants shall not be all the Warrants evidenced by this Warrant
Certificate, that a new Warrant Certificate for the balance of such Warrants be
registered in the name of, and delivered to, the Holder at the address stated
below:
(PLEASE PRINT OR TYPE
ADDRESS)
Dated:_______,
______
|
_______________________________________________________
Signature(s)*
|
|
|
|
_______________________________________________________
|
|
|
|
_______________________________________________________
(Social
Security or Taxpayer Identification Number)
|
|
|
10-Q
EXECUTION
VERSION
CREDIT
AGREEMENT
dated as
of
September
16, 2009
among
AMERICAN
AXLE & MANUFACTURING, INC.,
AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC.,
and
GENERAL
MOTORS COMPANY,
as
Lender
TABLE OF
CONTENTS
Page
CREDIT
AGREEMENT dated as of September 16, 2009, among AMERICAN AXLE &
MANUFACTURING, INC., as Borrower, AMERICAN AXLE & MANUFACTURING HOLDINGS,
INC., and GENERAL MOTORS COMPANY, as Lender.
WHEREAS,
the Borrower has requested, and the Lender has agreed, upon the terms and
subject to the conditions set forth therein, to provide Borrower with a $100
million second lien term loan facility.
NOW,
THEREFORE, the parties hereto agree as follows:
ARTICLE
I
Definitions
SECTION
1.01.
Defined
Terms.
As
used in this Agreement, the following terms have the meanings specified
below:
"
Account
" means,
collectively, (a) an "account" as such term is defined in the Uniform Commercial
Code as in effect from time to time in the State of New York or under other
relevant law, (b) a "payment intangible" as such term is defined in the Uniform
Commercial Code as in effect from time to time in the State of New York or under
other relevant law, and (c) the Parent's or any Subsidiary's rights to payment
for goods sold or leased or services performed or rights to payment in respect
of any monetary obligation owed to the Parent or any Subsidiary, including all
such rights evidenced by an account, note, contract, security agreement, chattel
paper, or other evidence of indebtedness or security.
“
Access Agreement
”
means the Access and Security Agreement between General Motors Company and the
Borrower, on behalf of itself and its subsidiaries and affiliates now existing
or to be formed, of even date herewith.
“
Acquired/Disposed
EBITDA
” means, with respect to any Acquired Entity or Business or any
Sold Entity or Business (any of the foregoing, a “
Pro Forma Entity
”)
for any period, the Consolidated Net Income of such Pro Forma Entity for such
period plus (a) without duplication and to the extent deducted in determining
such Consolidated Net Income for such Pro Forma Entity, the sum of (i) income
tax expense for such period, (ii) gross interest expense for such period
(including interest-equivalent costs associated with any Permitted Receivables
Financing, whether accounted for as interest expense or loss on the sale of
Receivables), (iii) depreciation and amortization expense for such period, (iv)
any special charges and any extraordinary or nonrecurring losses for such period
and (v) other non-cash items reducing Consolidated Net Income for such period,
and minus (b) without duplication and to the extent included in determining
Consolidated Net Income, (i) interest income for such period,
(ii) extraordinary or nonrecurring gains for such period and (iii) other
non-cash items increasing Consolidated Net Income for such period, all
determined on a consolidated basis for such Pro Forma Entity in accordance with
GAAP.
"
Acquired Entity or
Business
" has the meaning assigned to such term in the definition of
"Consolidated EBITDA.
“
Adjusted LIBO Rate
”
means, with respect to any Loan for any Interest Period, an interest rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the
LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve
Rate.
"
Affiliate
" means,
with respect to a specified Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.
“
Alternative Interest
Rate
” means the Prime Rate plus 10% per annum.
“
Asset Disposition
”
means any sale, lease, transfer or other disposition (or series of related
sales, leases, transfers or dispositions) by the Parent or any Subsidiary,
including any disposition by means of a merger, consolidation or similar
transaction (each referred to for the purposes of this definition as a
“disposition”), of:
(a)
any
Equity Interests of a Subsidiary (other than directors’ qualifying shares or
shares required by applicable law to be held by a Person other than the Parent
or a Subsidiary);
(b)
all or
substantially all the assets of any division or line of business of the Parent
or any Subsidiary; or
(c)
any other
assets of the Parent or any Subsidiary outside of the ordinary course of
business of the Parent or such Subsidiary other than, in the case of clauses
(a), (b) and (c) above,
(i)
|
a
disposition by a Subsidiary to the Parent or by the Parent or a Subsidiary
to a Subsidiary;
|
(ii)
|
a
disposition of assets with a fair market value of less than
$50,000,000;
|
(iii)
|
the
lease, assignment, sublease, license or sublicense of any real or personal
property in the ordinary course of business and consistent with past
practice;
|
(iv)
|
foreclosure
on assets or transfers by reason of eminent
domain;
|
(v)
|
disposition
of accounts receivable in connection with the collection or compromise
thereof;
|
(vi)
|
a
disposition of surplus, obsolete or worn out equipment or other property
in the ordinary course of business;
|
(vii)
|
assignments
and sales of Receivables and Related Security pursuant to a Permitted
Receivables Financing;
|
(viii)
|
any
substantially concurrent exchange of assets of comparable value to be used
in a Related Business;
|
(ix)
|
a
disposition of cash or Permitted Investments;
and
|
(x)
|
the
creation of a Lien (but not the sale or other disposition of the property
subject to such Lien).
|
''
Board
” means the
Board of Governors of the Federal Reserve System of the United States of
America.
"
Borrower
" means
American Axle & Manufacturing, Inc., a Delaware corporation.
"
Borrowing Request
"
means a request by the Borrower for a borrowing under the Term Loan
facility in accordance with Section 2.03.
"
Business Day
" means
any day that is not a Saturday, Sunday or other day on which commercial banks in
New York City are authorized or required by law to remain closed, provided that
when used in connection with a Loan bearing interest at the Adjusted LIBO Rate,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in deposits in the London interbank market.
"
Capital Lease
Obligations
" of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with
GAAP.
“
Cash Interest Expense
Coverage Ratio
” means, for any period of four consecutive fiscal
quarters, the ratio of Consolidated EBITDA of the Parent for such period to
Consolidated Cash Interest Expense of the Parent for such period.
"
Change in Control
"
means (a) the acquisition of ownership, directly or indirectly, beneficially or
of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission thereunder
as in effect on the date of this Agreement), of Equity Interests representing
more than 35% of the aggregate ordinary voting power represented by the issued
and outstanding Equity Interests of the Parent; (b) occupation of a majority of
the seats (other than vacant seats) on the board of directors of the Parent by
Persons who were neither (i) nominated by the board of directors of the Borrower
or the Parent nor (ii) appointed by directors so nominated; (c) the acquisition
of direct or indirect Control of the Parent by any Person or group; (d) the
failure of the Parent to own, directly or indirectly, at least 75% of the
outstanding Equity Interests of the Borrower; or (e)
at any time that any
Disqualified Equity Interest of the Parent or any Subsidiary is outstanding, the
occurrence of any "change of control" (or similar event) shall occur that would
require (or entitle any holder or holders thereof to require) the Parent or any
Subsidiary to redeem or purchase any such Disqualified Equity
Interest.
"
Change in Law
" means
(a) the adoption of any law, rule or regulation after the date of this
Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by Lender with any request, guideline
or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.
''
Code
” means
the Internal Revenue
Code of 1986, as amended from time to time.
"
Collateral
" means any
and all assets, whether real or personal, tangible or intangible, on which Liens
are purported to be granted pursuant to the Security Documents as security for
any of the Secured Obligations.
"
Collateral Agreement
"
means the Collateral Agreement among the Borrower, the Parent, the Subsidiary
Loan Parties and the Lender substantially in the form of Exhibit A.
"
Collateral
Requirement
" means, at any time, the requirement that:
(a) the Lender shall have
received from each Loan Party either (i) a counterpart of the Collateral
Agreement duly executed and delivered on behalf of such Loan Party or (ii) in
the case of any Person that becomes a Loan Party after the date of this
Agreement, a supplement to the Collateral Agreement, in the form specified
therein, duly executed and delivered on behalf of such Loan Party;
(b) all Equity Interests of
each Subsidiary owned by or on behalf of any Loan Party shall have been pledged
pursuant to the Collateral Agreement (except that the Loan Parties shall not be
required to pledge (i) more than 66% of the outstanding voting Equity Interests
of any Foreign Subsidiary or (ii) Equity Interests of any NWO Subsidiary to the
extent that such pledge requires the consent of any other holder of Equity
Interests in such NWO Subsidiary and such consent has not been obtained, being
understood that commercially reasonable efforts will be made by the Parent and
the Subsidiaries to obtain such consent) and, to the extent required by the
Collateral Agreement and permitted by the Intercreditor Agreement, the Lender
shall have received certificates or other instruments representing all such
Equity Interests, together with undated stock powers or other instruments of
transfer with respect thereto endorsed in blank, provided that, if any
outstanding non-voting Equity Interests of a Foreign Subsidiary are, by their
terms, able to be assigned or transferred (or required to be owned) only
together with outstanding voting Equity Interests of such Foreign Subsidiary,
then such non-voting Equity Interests shall be required to be pledged but only
to the extent such voting Equity Interests are required to be pledged after
taking into account clause (i) of this paragraph (b);
(c) all Indebtedness of the
Parent and each Subsidiary that is owing to any Loan Party shall be evidenced by
a promissory note and shall have been pledged pursuant to the Collateral
Agreement, in each case to the extent permitted under the Intercreditor
Agreement, and the Lender shall have received all such promissory notes
(together with any promissory note evidencing Indebtedness of any other Person
owing to a Loan Party in a principal amount exceeding $10,000,000), together
with undated instruments of transfer with respect thereto endorsed in blank,
provided that any such Indebtedness of a Foreign Subsidiary owing to a Loan
Party shall not be required to be evidenced by a promissory note if, and for so
long as, under the laws of the jurisdiction where such Foreign Subsidiary is
organized, promissory notes are not recognized as an instrument for evidencing
Indebtedness (it being understood that (i) any such Indebtedness shall, in any
event, constitute Collateral and (ii) if any promissory note or other instrument
is created to evidence such Indebtedness, it shall be delivered to the
Lender);
(d)
all
documents and instruments, including Uniform Commercial Code financing
statements, required by law or reasonably requested by the Lender to be filed,
registered or recorded to create the Liens intended to be created by the
Security Documents and perfect such Liens to the extent required by, and with
the priority required by, the Loan Documents, shall have been filed, registered
or recorded or delivered to the Lender for filing, registration or recording;
provided that compliance with this clause (d) shall not be required in respect
of Collateral located in Brazil, Luxembourg and Scotland prior to the date that
is 15 Business Days after the date of this Agreement, and provided further that,
in respect of Collateral located in Brazil, Luxembourg and Scotland, compliance
with this clause (d) shall not be required in the event that the applicable
foreign jurisdiction does not permit the filing, registration or recordation of
any document or instrument to create a second priority Lien unless and until
such time as the applicable foreign jurisdiction permits the filing,
registration or recordation of a second priority Lien or Lender’s Lien is not a
second priority Lien;
(e)
the
Lender shall have received, or shall have confirmation that the title company
recording the Mortgages has received, (i) counterparts of a Mortgage with
respect to each Mortgaged Property duly executed and delivered by the record
owner of such Mortgaged Property, (ii) with respect to each Material Property, a
policy or policies of title insurance issued by a nationally recognized title
insurance company, in an amount reasonably acceptable to the Lender, insuring
the Lien of the Mortgage with respect to such Material Property as a valid and
enforceable second priority Lien on such Mortgaged Property described therein,
free of any other Liens except as expressly permitted by Section 6.02, together
with such endorsements, coinsurance and reinsurance as the Lender may reasonably
request, (iii) if any Mortgaged Property is located in an area determined by the
Federal Emergency Management Agency to have special flood hazards, evidence of
such flood insurance as may be required under applicable law, including
Regulation H of the Board, and (iv) with respect to each Material Property, such
land survey, legal opinion of local counsel in the jurisdiction where such
Material Property is located and other documents as the Lender may reasonably
request with respect to any such Mortgage or Material Property; and
(f)
each Loan
Party shall have obtained all consents and approvals required to be obtained by
it in connection with the execution and delivery of all Security Documents to
which it is a party, the performance of its obligations thereunder and the
granting by it of the Liens thereunder, including those required by the
Collateral Agreement; provided that, in connection with any Security Documents
governed by the law of Brazil, Luxembourg or Scotland, compliance with clause
(f) shall not be required prior to the date that is 15 Business Days after the
date this Agreement.
The
foregoing definition shall not require the creation or perfection of pledges of
or security interests in, or the obtaining of title insurance, legal opinions or
other deliverables with respect to, particular assets of the Loan Parties, if
and for so long as the Lender, in consultation with Parent and the Borrower,
determines that the cost of creating or perfecting such pledges or security
interests in such assets, or obtaining such title insurance, legal opinions or
other deliverables in respect of such assets, shall be excessive in view of the
benefits to be obtained by the Lender therefrom. The Lender may grant
extensions of time for the creation and perfection of security interests in or
the obtaining of title insurance, legal opinions or other deliverables with
respect to particular assets (including extensions beyond the date of this
Agreement or in connection with assets acquired, or Subsidiaries formed or
acquired, after the date of this Agreement) where it determines that such action
cannot be accomplished without undue effort or expense by the time or times at
which it would otherwise be required to be accomplished by this Agreement or the
Security Documents.
It is
understood that the requirements of this definition shall not be construed to
require any Subsidiary that is not a Loan Party (including any Foreign
Subsidiary) to grant any Lien on or otherwise pledge its assets to secure any of
the Secured Obligations.
“
Collateral Value
Amount
” has the meaning specified in the First Lien Term Loan Agreement
in effect on the date of this Agreement.
"
Commitment
"
means the Term Loan Commitment.
“
Consolidated Cash Interest
Expense
” means, for any period, the excess of (a) the sum, without
duplication, of (i) the interest expense of the Parent and its consolidated
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP, (ii) any interest or other financing costs becoming payable during
such period in respect of Indebtedness of the Parent or its consolidated
Subsidiaries to the extent such interest or other financing costs shall have
been capitalized (excluding fees paid in connection with the Restatement
Transactions) rather than included in consolidated interest expense for such
period in accordance with GAAP and (iii) any cash payments made during such
period in respect of obligations referred to in clause (b)(ii) below that were
amortized or accrued in a previous period,
minus
(b) the sum of
(i) to the extent included in such consolidated interest expense for such
period, non-cash amounts attributable to amortization or write-off of
capitalized interest or other financing costs paid in a previous period, (ii) to
the extent included in such consolidated interest expense for such period,
non-cash amounts attributable to amortization of debt discounts or accrued
interest payable in kind for such period, and (iii) to the extent included in
such consolidated interest expense for such period, non-cash interest relating
to the issuance of warrants or other equity-like instruments for such
period.
“
Consolidated EBITDA
”
means, of any Person for any period, Consolidated Net Income of such Person for
such period plus (a) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of (i) income tax expense for
such period, (ii) gross interest expense for such period (including
interest-equivalent costs associated with any Permitted Receivables Financing,
whether accounted for as interest expense or loss on the sale of Receivables),
(iii) depreciation and amortization expense for such period, (iv) any special
charges and any extraordinary or nonrecurring losses for such period (
provided
that to the
extent that such charges or losses involve payments of cash in such period or
any future period, the amount thereof shall be limited to $75,000,000 in the
aggregate for any fiscal quarter or quarters ending after the date of this
Agreement that are included in any period for which Consolidated EBITDA is being
calculated,
provided
further
that any such
charges or losses referred to in the definition of “Acquired/Disposed EBITDA”
shall be included in such limit), (v) other non-cash items reducing such
Consolidated Net Income for such period, and (vi) any arrangement,
dealer-manager or similar fees and expenses (including any tax expenses related
to gains in connection with any Auction (as defined in the First Lien Term Loan
Agreement)), in connection with each prepayment pursuant to Section 2.07(e)
in the First Lien Term Loan Agreement minus (b) without duplication and to the
extent included in determining such Consolidated Net Income, (i) interest income
for such period, (ii) extraordinary or nonrecurring gains (including any gains
attributable to prepayments pursuant to Section 2.07(e) in the First Lien
Term Loan Agreement) for such period and (iii) other non-cash items increasing
such Consolidated Net Income for such period, all determined on a consolidated
basis in accordance with GAAP;
provided
that for
purposes of determining the Secured Leverage Ratio and Total Leverage Ratio
only, (A) there shall be included in determining the Consolidated EBITDA of the
Parent for any period the Acquired/Disposed EBITDA of any Person, property,
business or asset acquired outside the ordinary course of business during or
after the end of such period by the Parent or a Subsidiary, to the extent not
subsequently sold, transferred or otherwise disposed of by the Parent or a
Subsidiary (each such Person, property, business or asset acquired and not
subsequently so disposed of, an “
Acquired Entity or
Business
”), based on the actual Acquired/Disposed EBITDA of such Acquired
Entity or Business for such period (including the portion thereof occurring
prior to such acquisition) and (B) there shall be excluded in determining
Consolidated EBITDA of the Parent for any period the Acquired/Disposed EBITDA of
any Person, property, business or asset sold, transferred or otherwise disposed
of outside the ordinary course of business by the Parent or any Subsidiary
during or after the end of such period (each such Person, property, business or
asset so sold or disposed of, a “
Sold Entity or
Business
”) based on the actual Acquired/Disposed EBITDA of such Sold
Entity or Business for such period (including the portion thereof occurring
prior to such sale, transfer or disposition). Unless the context
otherwise requires, references to Consolidated EBITDA shall be construed to mean
Consolidated EBITDA of the Parent.
“
Consolidated Net
Income
” means, of any Person for any period, the net income or loss of
such Person for such period determined on a consolidated basis in accordance
with GAAP. Unless the context otherwise requires, references to
Consolidated Net Income shall be construed to mean Consolidated Net Income of
the Parent.
"
Control
" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto.
"
Copyright
" has the
meaning specified in the Collateral Agreement.
"
Copyright Security
Agreement
" has the meaning specified in the Collateral
Agreement.
"
Default
" means any
event or condition which constitutes an Event of Default or which upon notice,
lapse of time or both would, unless cured or waived, become an Event of
Default.
"
Disclosed Matters
"
means the actions, suits and proceedings and the environmental matters disclosed
in Schedule 3.05.
"
Disqualified Equity
Interest
" means, with respect to any Person, any Equity Interest in such
Person that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable, either mandatorily or at the option
of the holder thereof), or upon the happening of any event or
condition:
(a)
matures
or is mandatorily redeemable (other than solely for Equity Interests in such
Person that do not constitute Disqualified Equity Interests and cash in lieu of
fractional shares of such Equity Interests), whether pursuant to a sinking fund
obligation or otherwise;
(b)
is
convertible or exchangeable at the option of the holder thereof for Indebtedness
or Equity Interests (other than solely for Equity Interests in such Person that
do not constitute Disqualified Equity Interests and cash in lieu of fractional
shares of such Equity Interests); or
(c)
is
redeemable (other than solely for Equity Interests in such Person that do not
constitute Disqualified Equity Interests and cash in lieu of fractional shares
of such Equity Interests) or is required to be repurchased by such Person or any
of its Affiliates, in whole or in part, at the option of the holder
thereof;
in each
case, on or prior to the Maturity Date;
provided
,
however
, that an
Equity Interest in any Person that would not constitute a Disqualified Equity
Interest but for terms thereof giving holders thereof the right to require such
Person to redeem or purchase or otherwise retire such Equity Interest upon the
occurrence of an "asset sale" or a "change of control" shall not constitute a
Disqualified Equity Interest.
"
Dollars
" or "
$
" refers to lawful
money of the United States of America.
"
Environmental Laws
"
means all laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions or binding agreements issued, promulgated or entered into
by any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources or the management, release or
threatened release of any Hazardous Material.
"
Environmental
Liability
" means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or
indemnities), of the Parent or any Subsidiary directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"
Equity Interests
"
means shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, and any warrants, options or other rights
entitling the holder thereof to purchase or acquire any such equity
interest.
"
ERISA
" means the
Employee Retirement Income Security Act of 1974, as amended from time to time
and the regulations promulgated and rulings issued thereunder.
"
ERISA Affiliate
"
means any trade or business (whether or not incorporated) that, together with
the Parent, is treated as a single employer under Section 414(b) or (c) of the
Code or, solely for purposes of Section 302 of ERISA and Section 412 of the
Code, is treated as a single employer under Section 414 of the
Code.
"
ERISA Event
" means
(a) any "reportable event", as defined in Section 4043 of ERISA, with respect to
a Plan (other than an event for which the 30-day notice period is waived), (b)
any failure by any Plan to satisfy the minimum funding standard (within the
meaning of Section 412 of the Code or Section 302 of ERISA), applicable to such
Plan, whether or not waived, (c) the filing pursuant to Section 412(d) of the
Code or Section 302(c) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan, (d) a determination that any Plan is,
or is expected to be, in "at-risk" status (as defined in Section 303(i)(4) of
ERISA or Section 430(i)(4) of the Code) and the Parent or ERISA Affiliate, as
applicable, fails to make required contributions for a plan year with respect to
such Plan by the annual due date for such contribution as determined under
Section 303(j) of ERISA, (e) the incurrence by the Parent or any ERISA Affiliate
of any liability under Title IV of ERISA with respect to the termination of any
Plan, (f)
the
receipt by the Parent or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to the intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan, (g) the incurrence by the
Parent or any ERISA Affiliate of any liability under Title IV of ERISA with
respect to the withdrawal or partial withdrawal of the Parent or any ERISA
Affiliate from any Plan or Multiemployer Plan, (h) the receipt by the Parent or
any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from
the Parent or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA or in endangered or critical status, within the meaning of Section 305
of ERISA, (i) the occurrence of a "prohibited transaction" with respect to which
the Parent or any of the Subsidiaries is a "disqualified person" (within the
meaning of Section 4975 of the Code) or with respect to which the Parent or any
such Subsidiary could otherwise be liable or (j) any Foreign Benefit
Event.
"
Event of Default
" has
the meaning assigned to such term in Article VII.
“
Excluded Guarantee
”
means any Guarantee by any Loan Party of (a) any Indebtedness of a Foreign
Subsidiary, to the extent such Guarantee relates to (i) Indebtedness that was
outstanding on the date of this Agreement or was incurred under (and within the
limits of the amount of) a line of credit in a specified amount that was in
effect on the date of this Agreement or (ii) any renewal or replacement after
the date of this Agreement of Indebtedness that, as of the date of this
Agreement, is permitted by clause (i) above (without increasing the amount
permitted), and (b) obligations under leases and similar obligations incurred in
the ordinary course of business consistent with past practices and/or industry
practices that do not constitute Indebtedness.
“
Excluded Subsidiary
”
means, at any time, any Subsidiary affected by an event referred to in clause
(i), (j) or (k) of Article VII at such time that would constitute an Event of
Default if such Subsidiary was not an “Excluded Subsidiary”;
provided
that
(a) no Loan Party shall be an Excluded Subsidiary and (b) a Subsidiary
shall not be an Excluded Subsidiary if such Subsidiary (on a consolidated basis
with all other Excluded Subsidiaries affected by an event referred to in clause
(i), (j) or (k) of Article VII and their respective subsidiaries)
(i) account for more than 10% of Total Assets of the Parent or
(ii) account for more than 10% of the consolidated revenues of the Parent
and the Subsidiaries for the most recently ended period of four consecutive
fiscal quarters for which financial statements are available, in each case,
determined in accordance with GAAP.
"
Excluded Taxes
"
means, with respect to the Lender or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (a) income,
franchise or similar Taxes imposed on (or measured by) its net income or, in the
case of franchise or similar Taxes, gross receipts, by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of Lender,
in which its applicable lending office is located or in which it is otherwise
doing business, (b) any branch profits Taxes imposed by the United States of
America or any similar Tax imposed by any other jurisdiction in which the
Borrower is located, (c) any Taxes attributable to a failure by the Lender to
comply with Section 2.08(e), and (d) any withholding Taxes imposed as a result
of a change in the circumstances of the Lender, other than a Change in
Law.
"
Existing Convertible
Notes
" means the 2% senior convertible notes due 2024 issued pursuant to
the Indenture, dated as of February 11, 2004, between the Parent and BNY Midwest
Trust Company, as trustee.
"
Existing Debt
Securities
" means the Existing Senior Notes and the Existing Convertible
Notes, in each case outstanding as of the date hereof.
"
Existing Senior
Notes
" means (a) the 5.25% senior notes due 2014 issued pursuant to the
Indenture, dated as of February 11, 2004, between the Borrower, the Parent and
BNY Midwest Trust Company, as trustee, outstanding as of the Date of this
Agreement, and (b) the 7.875% senior notes due 2017 issued pursuant to the
Indenture, dated as of February 27, 2007, among the Borrower, the Parent and The
Bank of New York Trust Company, N.A., as trustee, outstanding as of the Date of
this Agreement.
"
Existing Senior Notes
Indentures
" means the indentures pursuant to which the Existing Senior
Notes were issued.
"
Financial Officer
"
means, with respect to the Parent or the Borrower, the chief financial officer,
principal accounting officer, treasurer or controller thereof, as
applicable.
“
First Lien Credit
Agreement
” means the Amended and Restated Credit Agreement, dated as of
September 16, 2009, among the Borrower, the Parent, the lenders party thereto
and JPMorgan Chase Bank, N.A., as administrative agent, as amended, restated,
supplemented or otherwise modified from time to time.
"
First Lien Term Loan
Agreement
" means the Credit Agreement, dated as of September 16, 2009,
among the Borrower, the Parent, the several lenders party thereto, and JPMorgan
Chase Bank, N.A., as administrative agent, as amended, restated, supplemented or
otherwise modified from time to time.
“
First Lien Loan
Documents
” means the First Lien Credit Agreement and the First Lien Term
Loan Agreement, together with all related documents and agreements, including
without limitation security documents, as amended, restated, supplemented or
otherwise modified from time to time.
"
Foreign Benefit
Event
" means, with respect to any Foreign Pension Plan, (a) the existence
of unfunded liabilities in excess of the amount permitted under any applicable
law, or in excess of the amount that would be permitted absent a waiver from a
Governmental Authority, (b) the failure to make the required contributions or
payments, under any applicable law, on or before the due date for such
contributions or payments, (c) the receipt of a notice by a Governmental
Authority relating to the intention to terminate any such Foreign Pension Plan
or to appoint a trustee or similar official to administer any such Foreign
Pension Plan, or alleging the insolvency of any such Foreign Pension Plan, (d)
the incurrence of any liability by the Parent or any Subsidiary under applicable
law on account of the complete or partial termination of such Foreign Pension
Plan or the complete or partial withdrawal of any participating employer
therein, in each case except as could not reasonably be expected to result in a
Material Adverse Effect or (e) the occurrence of any transaction that is
prohibited under any applicable law and that could reasonably be expected to
result in the incurrence of any liability by the Parent or any Subsidiary, or
the imposition on the Parent or any Subsidiary of any fine, excise tax or
penalty resulting from any noncompliance with any applicable law, in each case
except as could not reasonably be expected to result in a Material Adverse
Effect.
"
Foreign Pension Plan
"
means any benefit plan that under applicable law of any jurisdiction other than
the United States is required to be funded through a trust or other funding
vehicle other than a trust or funding vehicle maintained exclusively by a
Governmental Authority and that would constitute a defined benefit pension plan
under U.S. law.
"
Foreign Subsidiary
"
means (a) any Subsidiary that is organized under the laws of a jurisdiction
other than the United States of America or any State thereof or the District of
Columbia and (b) any Subsidiary, organized under the laws of any jurisdiction,
of a Subsidiary described in clause (a) above.
"
GAAP
" means generally
accepted accounting principles in the United States of America.
"
Governmental
Authority
" means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"
Guarantee
" of or by
any Person (the "guarantor") means any obligation, contingent or otherwise, of
the guarantor guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person (the "
primary obligor
") in
any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation;
provided
, that the
term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business or customary and reasonable indemnity obligations
entered into in connection with any acquisition or disposition of assets
permitted under this Agreement.
"
Guarantee Agreement
"
means the Guarantee Agreement, substantially in the form of Exhibit B, among the
Borrower, the Guarantors and the Lender.
"
Guarantors
" means, as
of any date, the Parent and each Subsidiary Loan Party that is a party to the
Guarantee Agreement as a guarantor thereunder as of such date.
"
Hazardous Materials
"
means all explosive or radioactive substances or wastes and all hazardous or
toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"
Indebtedness
" of any
Person means, without duplication, (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid (excluding current accounts
payable incurred in the ordinary course of business), (d) all obligations of
such Person under conditional sale or other title retention agreements relating
to property acquired by such Person, (e) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of business), (f
)
all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (j)
all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances and
(k) Receivables Financing Debt. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor;
provided
, that if the
sole asset of such Person is its ownership interest in such other entity, the
amount of such Indebtedness shall be deemed equal to the value of such ownership
interest. For the avoidance of doubt, the Indebtedness of the Borrower or any
other Subsidiary shall not include any obligations of the Borrower or such other
Subsidiary arising in the ordinary course of business from the establishment,
offering and maintenance by the Borrower or such other Subsidiary, as the case
may be, of trade payables financing programs under which suppliers to the
Borrower or such other Subsidiary, as the case may be, can request accelerated
payment from one or more designated financial institutions;
provided
, that (i)
the Borrower or such other Subsidiary, as the case may be, reimburses the
designated financial institution or institutions for such accelerated payment on
the date specified in the purchase terms and conditions previously agreed upon
by the applicable supplier and the Borrower or such other Subsidiary, as the
case may be and (ii) had such financial institution or institutions not paid
such obligations to the applicable supplier, such obligations would have been
required to be classified as a trade payable in the consolidated financial
statements of the Borrower or such other Subsidiary, as the case may be,
prepared in accordance with GAAP.
"
Indemnified Taxes
"
means Taxes other than Excluded Taxes.
"
Intellectual
Property
" has the meaning specified in the Collateral
Agreement.
“
Intercreditor
Agreement
” means that certain Intercreditor Agreement of
approximate even date among Lender, JPMorgan Chase Bank, N.A., as administrative
agent under the First Lien Credit Agreement and JPMorgan Chase Bank, N.A., as
administrative agent under the First Lien Term Loan Agreement, substantially in
the form of Exhibit C, as amended, restated, supplemented or otherwise modified
from time to time.
"
Interest Payment
Date
" means (a) with respect to any Loan bearing interest at the
Alternative Interest Rate, the last day of each March, June, September and
December and (b) with respect to any Loan bearing interest at the Adjusted LIBO
Rate, the last day of each Interest Period.
"
Interest Period
"
means, with respect to any Loan bearing interest at the Adjusted LIBO Rate, the
period commencing on the date of such Loan and ending on the numerically
corresponding day in the calendar month that is three months thereafter;
provided
that (i) if
any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, and (ii) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period.
“
International Holdco
”
means AAM International Holdings, Inc., a Delaware corporation.
“
LIBO Rate
” means,
with respect to any Loan bearing interest at the Adjusted LIBO Rate for any
Interest Period, the three month rate appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Lender from time to time for purposes of providing quotations
of interest rates applicable to Dollar deposits in the London interbank market)
at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for Dollar deposits with a
maturity comparable to such Interest Period;
provided
that, if
such “
LIBO
Rate
” is below 2.00%, it shall be deemed to be 2.00%. Subject
to the proviso in the immediately preceding sentence, in the event that such
rate is not available at such time for any reason, then the “
LIBO Rate
” with
respect to such Loan bearing interest at the Adjusted LIBO Rate for such
Interest Period shall be the three month rate at which Dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal London office of JPMorgan Chase Bank, N.A. in immediately
available funds in the London interbank market at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period.
“
Lien
” means, with
respect to any asset, (a) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, on or of such asset,
(b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.
“
Lien Basket Amount
”
means, as of any date, an amount equal to 10% of “Consolidated Net Tangible
Assets” (within the meaning of the Existing Senior Notes Indentures) as of such
date.
"
Loan Documents
" means
this Agreement, the Note, the Guarantee Agreement the Security Documents, any
notes, and any other agreements entered into between Borrower or any guarantor
of the Obligations and Lender relating to or in connection with this Agreement,
as amended, restated, supplemented or otherwise modified from time to
time.
"
Loan Parties
" means
the Parent, the Borrower and the Subsidiary Loan Parties.
''
Loans
" means the
loans made by the Lender to the Borrower pursuant to this
Agreement.
"
Local Time
" means New
York City time.
"
Material Adverse
Effect
" means a material adverse effect on (a) the business, assets,
operations, or financial condition of the Parent and the Subsidiaries taken as a
whole, (b) the ability of any Loan Party to perform any of its material
obligations under the Loan Documents or (c) the validity and enforceability of
any Loan Document, or the rights and remedies of the Lender hereunder or under
any other Loan Document, taken as a whole.
"
Material
Indebtedness
" means Indebtedness (other than the Loans), or obligations
in respect of one or more Swap Agreements, of any one or more of the Parent and
its Subsidiaries in an aggregate principal amount exceeding $50,000,000. For
purposes of determining Material Indebtedness, the "principal amount" of the
obligations of the Parent or any Subsidiary in respect of any Swap Agreement at
any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Parent or such Subsidiary would be required to pay if such
Swap Agreement were terminated at such time.
"
Material Properties
"
means (a) those Mortgaged Properties designated on Schedule 3.12 as Material
Properties and (b) each other Mortgaged Property with respect to which a
Mortgage is granted pursuant to Section 5.11 after the date of this
Agreement.
"
Material Subsidiary
"
means, as of any date, any Subsidiary (other than the Borrower, a Foreign
Subsidiary or a Receivables Subsidiary) that either (a) accounts (together with
its subsidiaries on a consolidated basis) for more than 10% of Total Assets of
the Parent or (b) accounts (together with its subsidiaries on a consolidated
basis) for more than 10% of the consolidated revenues of the Parent and the
Subsidiaries for the most recently ended period of four consecutive fiscal
quarters for which financial statements are available, in each case, determined
in accordance with GAAP.
“
Maturity Date
” means
December 31, 2013.
"
Moody's
" means
Moody's Investors Service, Inc.
"
Mortgage
" means a
mortgage, deed of trust, assignment of leases and rents or other Security
Document substantially in the forms of collective Exhibit D granting a Lien on
any Mortgaged Property to secure any of the Secured Obligations. Each Mortgage
shall be reasonably satisfactory in form and substance to the
Lender.
"
Mortgaged Property
"
means, initially, each parcel of real property and the improvements thereto
owned by a Loan Party and identified on Schedule 3.12 as a Mortgaged Property,
and includes each other parcel of real property and improvements thereto with
respect to which a Mortgage is granted pursuant to Section 5.11.
"
Multiemployer Plan
"
means a multiemployer plan as defined in Section 4001(a)(3) of ERISA that is, or
within any of the preceding five plan years was, sponsored, maintained or
contributed to, or required to be sponsored, maintained or contributed to, by
the Parent or any ERISA Affiliate.
“
Note
” has the meaning
specified in Section 2.05(d).
"
NWO Subsidiary
" means
any Subsidiary of the Borrower with respect to which (except for directors'
qualifying shares) the Borrower owns, directly or indirectly, Equity Interests
representing less than 100% of the outstanding Equity Interests and less than
100% of the outstanding voting Equity Interests;
provided
that a
Subsidiary shall not be a "NWO Subsidiary" if (a) such Subsidiary was a
Subsidiary Loan Party before it met the foregoing criteria for becoming a "NWO
Subsidiary", unless such Subsidiary became a "
NWO Subsidiary
"
pursuant to a transfer of all Equity Interests in such Subsidiary owned,
directly or indirectly, by the Borrower to a NWO Subsidiary, in accordance with
this Agreement or (b) such Subsidiary is not prohibited from guaranteeing the
Secured Obligations (it being understood that the Parent and the Subsidiaries
will exercise reasonable efforts (which shall not include undue costs or
expenses) to obtain any consent or approval necessary to avoid any such
prohibition).
"
Other Taxes
" means
any and all present or future stamp, documentary Taxes and any other excise, or
property, intangible, recording, filing or similar Taxes which arise from any
payment made under, from the execution, delivery, or registration of, or from
the receipt or perfection of a security interest under, enforcement of, or
otherwise with respect to, any Loan Document.
"
Parent
" means
American Axle & Manufacturing Holdings, Inc., a Delaware
corporation.
"
PBGC
" means the
Pension Benefit Guaranty Corporation referred to and defined in ERISA and any
successor entity performing similar functions.
"
Perfection Schedule
"
has the meaning specified in the Collateral Agreement.
“
Permitted
Acquisition
” means any acquisition by the Borrower or any other
Subsidiary of all or substantially all the assets of, or all the Equity
Interests in, a Person or division or line of business of a Person if,
immediately after giving effect thereto, (a) no Default has occurred and is
continuing or would result therefrom, (b) the business of such acquired
Person or division or line of business shall comply with the permitted
businesses of the Borrower and the other Subsidiaries as provided in
Section 6.03(b), (c) the portion of the fair market value of the
consideration paid or delivered by any Loan Parties for such acquisition
(excluding Equity Interests of the Parent) that is attributable to investments
in Persons (whether or not Subsidiaries) that do not become Loan Parties as a
result of such acquisition but in which the Borrower or any other Subsidiary
shall own, directly or indirectly, any investment as a result of such
acquisition (including the investment in the Person acquired, if it is not a
Subsidiary Loan Party) are treated, at the time of such acquisition, as
investments in such Person pursuant to Section 6.08 and are permitted to be made
thereunder at such time (other than pursuant to the clause thereof that permits
Permitted Acquisitions), (d) the Parent would have been in compliance with the
covenant contained in Section 6.11 as of the last day of the most recently ended
fiscal quarter of the Parent for which financial statements are available (the
“Test Date”), determined as provided below, and (e) for any acquisition (or
series of related acquisitions) involving consideration (excluding Equity
Interests of the Parent) exceeding $20,000,000, the Borrower has delivered to
the Lender a certificate executed by a Financial Officer to the effect set forth
in clauses (a), (b), (c) and (d) above, together with all relevant financial
information for the Person or assets to be acquired and reasonably detailed
calculations demonstrating satisfaction of the requirement set forth in clause
(d) above and compliance with Section 6.01 in respect of any Indebtedness
resulting from such acquisition. For purposes of clause (d) above,
compliance with Section 6.11 shall be determined as though such acquisition, and
each other acquisition of an Acquired Entity or Business consummated subsequent
to the Test Date, had occurred on the Test Date, and as though the sale or
disposition of any Sold Entity or Business sold or disposed of subsequent to the
Test Date had been sold or disposed of on the Test Date.
"
Permitted
Encumbrances
" means:
(a)
Liens
imposed by law for Taxes that are not yet due or are being contested in
compliance with Section 5.04;
(b)
carriers',
warehousemen's, mechanics', materialmen's, repairmen's construction, artisan's
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 60 days or are being
contested in compliance with Section 5.04;
(c)
pledges
and deposits made in the ordinary course of business in compliance with workers'
compensation, unemployment insurance and other social security laws or
regulations and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements in respect of such
obligations;
(d)
deposits
to secure or in connection with the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business, including those incurred to secure health, safety and environmental
obligations in the ordinary course of business;
(e)
judgment
liens in respect of judgments that do not constitute an Event of Default under
clause (k) of Article VII;
(f)
easements,
zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business which, in the
aggregate, are not substantial in amount and do not materially detract from the
value of the affected property or materially interfere with the ordinary conduct
of business of the Parent or any Subsidiary;
(g)
Liens
arising by virtue of any statutory or common law provision relating to banker's
liens, rights of setoff or similar rights as to deposit accounts or other funds
maintained with creditor depository institution; and
(h)
landlord's
Liens under leases of property to which the Parent or a Subsidiary is a
party;
provided
that the
term "Permitted Encumbrances" shall not include any Lien securing
Indebtedness.
“
Permitted Governmental
Receivables Program
” means the Auto Supplier Support Program established
by the United States Department of the Treasury pursuant to the authority
granted to it by and under the Emergency Economic Stabilization Act of 2008, as
amended or any similar governmental receivables program approved by the
Administrative Agent under the First Lien Credit Agreement;
provided
that the
Parent or the Borrower shall deliver to the Lender copies of all documentation
entered into in connection with any such transaction.
“
Permitted
Investments
” means:
(a)
direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency or
instrumentality thereof to the extent such obligations are backed by the full
faith and credit of the United States of America),
(b)
investments
in commercial paper maturing within 270 days from the date of acquisition
thereof and having, at such date of acquisition, a rating of at least A-1 by
S&P or P-1 by Moody’s;
(c)
investments
in certificates of deposit, banker’s acceptances and time deposits maturing
within 270 days from the date of acquisition thereof issued or guaranteed
by or placed with, and money market deposit accounts issued or offered by,
(i) any lender under the Revolving Credit Agreement, (ii) any domestic
office of any commercial bank organized under the laws of the United States of
America or any State thereof or any foreign country recognized by the United
States of America which has a combined capital and surplus and undivided profits
of not less than $250,000,000 (or the foreign currency equivalent thereof) or
(iii) any bank whose short-term commercial paper rating from S&P is at
least A-1 or the equivalent thereof or from Moody’s is at least P-1 or the
equivalent thereof;
(d)
fully
collateralized repurchase agreements with a term of not more than 30 days
for securities described in clauses (a), (e) and (f) of this definition of
“Permitted Investments” and entered into with a financial institution satisfying
the criteria described in clause (c) above;
(e)
money
market funds that (i) comply with the criteria set forth in Securities and
Exchange Commission Rule 2a-7 under the Investment Company Act of 1940,
(ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have
portfolio assets of at least $5,000,000,000;
(f)
securities
with maturities of six months or less from the date of acquisition issued or
fully guaranteed by any State, commonwealth or territory of the United States of
America, or by any political subdivision or taxing authority thereof, and rated
at least A by S&P or Moody’s;
(g)
in the
case of any Foreign Subsidiary, (i) direct obligations of the sovereign
nation (or any agency thereof) in which such Subsidiary is organized and is
conducting business or in obligations fully and unconditionally guaranteed by
such sovereign nation (or any agency thereof), (ii) investments of the type
and maturity described in clauses (a) through (f) above of foreign obligors,
which investments or obligors (or the parents of such obligors) have ratings
described in such clauses or equivalent ratings from comparable foreign rating
agencies and (iii) investments of the type and maturity described in clauses (a)
through (f) above of foreign obligors (or the parents of such obligors), which
investments of obligors (or the parents of such obligors) are not rated as
provided in such clauses or in clause (ii) above but which are, in the
reasonable judgment of the Parent and the Borrower, comparable in investment
quality to such investments and obligors (or the parents of such
obligors);
(h)
shares of
mutual funds whose investment guidelines restrict 95% of such funds’ investments
to those satisfying the provisions of clauses (a) through (f) above;
and
(i)
time
deposit accounts, certificates of deposits and money market deposits in an
aggregate face amount not in excess 1% of Total Assets of the Parent as of the
end of the Parent’s most recently completed fiscal year.
“
Permitted Receivables
Factoring
” means a factoring transaction pursuant to which the Parent or
one or more Subsidiaries (or a combination thereof) sells (on a non-recourse
basis other than Standard Securitization Undertakings) Receivables (and Related
Security) for cash consideration to a Person or Persons (other than to an
Affiliate or to General Motors Company or any of its Affiliates);
provided
that the
Parent or the Borrower shall deliver to the Lender copies of all documentation
entered into in connection with any such transaction.
“
Permitted Receivables
Financing
” means a Permitted Receivables Securitization, a Permitted
Governmental Receivables Program or a Permitted Receivables
Factoring.
“
Permitted Receivables
Securitization
” means transactions (other than pursuant to a Permitted
Governmental Receivables Program or Permitted Receivables Factoring) pursuant to
which the Parent or one or more of the Subsidiaries (or a combination thereof)
realizes cash proceeds in respect of Receivables and Related Security by selling
or otherwise transferring such Receivables and Related Security (on a
non-recourse basis with respect to the Parent and the Subsidiaries, other than
Standard Securitization Undertakings) to one or more Receivables Subsidiaries,
and such Receivables Subsidiary or Receivables Subsidiaries realize cash
proceeds in respect of such Receivables and Related Security;
provided
that the
Parent or the Borrower shall deliver to the Lender copies of all documentation
entered into in connection with any such transaction.
“
Permitted Refinancing
Indebtedness
” means any Indebtedness (other than any Indebtedness
incurred under this Agreement) of the Parent or a Subsidiary, issued in exchange
for, or the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund (collectively, to “
Refinance
”),
Indebtedness of the Parent or such Subsidiary, as the case may be, that is
permitted by this Agreement to be Refinanced;
provided
that:
(a)
the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness so Refinanced (
plus
all refinancing
expenses incurred in connection therewith, including, without limitation, any
related fees and expenses, make-whole amounts, original issue discount, unpaid
accrued interest and premium thereon);
(b)
the
average life to maturity of such Permitted Refinancing Indebtedness is greater
than or equal to (and the maturity of such Permitted Refinancing Indebtedness is
no earlier than) that of the Indebtedness being Refinanced;
(c)
if the
Indebtedness being Refinanced is subordinated in right of payment to any of the
Secured Obligations, such Permitted Refinancing Indebtedness shall be
subordinated in right of payment to such Secured Obligations on terms at least
as favorable, taken as a whole, to the Lender as those contained in the
documentation governing the Indebtedness being Refinanced;
provided
that a
certificate of an officer of the Borrower is delivered to the Lender at least
ten (10) Business Days (or such shorter period as the Lender may reasonably
agree) prior to the incurrence of such Indebtedness, together with a reasonably
detailed description of the material terms and conditions of such subordination
terms or drafts of the documentation relating thereto, stating that (i) the
Borrower has determined in good faith that such terms and conditions satisfy the
foregoing requirement and (ii) unless the Lender disagrees by a specified date
(as provided below), such terms and conditions shall be permitted and shall be
conclusive evidence that such terms and conditions satisfy the foregoing
requirement unless the Lender notifies the Borrower within such period that it
disagrees with such determination (including a reasonable description of the
basis upon which it disagrees);
(d)
no
Permitted Refinancing Indebtedness shall have different obligors than the
Indebtedness being Refinanced;
(e)
in the
case of a Refinancing of Restricted Debt, the terms of such Permitted
Refinancing Indebtedness shall be no less favorable taken as a whole to the
Parent and the Subsidiaries than the terms of the Indebtedness being Refinanced;
provided
that
(i) a certificate of an officer of the Borrower is delivered to the Lender
at least ten (10) Business Days (or such shorter period as the Lender may
reasonably agree) prior to the incurrence of such Indebtedness, together with a
reasonably detailed description of the material terms and conditions of such
Indebtedness or drafts of the documentation relating thereto, stating that
(A) the Borrower has determined in good faith that such terms and
conditions satisfy the foregoing requirement and (B) unless the Lender
disagrees by a specified date (as provided below), such terms and conditions
shall be permitted, shall be conclusive evidence that such terms and conditions
satisfy the foregoing requirement unless the Lender notifies the Borrower within
such period that it disagrees with such determination (including a reasonable
description of the basis upon which it disagrees), and (ii) the pricing terms
may be less favorable to the Parent and the Subsidiaries so long as it is being
refinanced at the then-prevailing market price; and
(f)
in the
case of a Refinancing of Indebtedness arising under the First Lien Loan
Documents, the aggregate principal amount of such Permitted Refinancing
Indebtedness, together with the outstanding principal amount of any remaining
Indebtedness owing under the First Lien Loan Documents and not simultaneously
Refinanced, shall be subject to the Senior Obligations Cap as defined in the
Intercreditor Agreement.
"
Person
" means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other
entity.
"
Plan
" means any
employee pension benefit plan (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA, and in respect of which the Parent or any ERISA Affiliate is (or, if such
plan were terminated, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"
Prime Rate
" means the
rate of interest per annum publicly announced from time to time by JPMorgan
Chase Bank, N.A., as its prime rate in effect at its principal office in New
York City; each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.
“
Receivable
” means an
Account owing to the Parent or any Subsidiary (before its transfer to a
Receivables Subsidiary or to another Person), whether now existing or hereafter
arising, together with all cash collections and other cash proceeds in respect
of such Account, including all yield, finance charges or other related amounts
accruing in respect thereof and all cash proceeds of Related Security with
respect to such Receivable.
“
Receivables Financing
Debt
” means, as of any date with respect to any Permitted Receivables
Financing, the amount of the outstanding uncollected Receivables subject to such
Permitted Receivables Financing that would not be returned, directly or
indirectly, to the Parent or the Borrower, if all such Receivables were to be
collected at such date and such Permitted Receivables Financing were to be
terminated at such date.
“
Receivables
Subsidiary
” means a wholly owned Subsidiary that does not engage in any
activities other than participating in one or more Permitted Receivables
Securitizations and activities incidental thereto;
provided
that
(a) such Subsidiary does not have any Indebtedness other than Indebtedness
incurred pursuant to a Permitted Receivables Securitization owed to financing
parties (including the Parent or the applicable seller of Receivables) supported
by Receivables and Related Security and (b) neither the Parent nor any
Subsidiary Guarantees any Indebtedness or other obligation of such Subsidiary,
other than Standard Securitization Undertakings.
"
Related Business
"
means any business in which the Parent or any of the Subsidiaries was engaged on
the Effective Date and any business related, ancillary or complimentary to such
business.
"
Related Parties
"
means, with respect to any specified Person, such Person's Affiliates and the
respective directors, officers, employees, agents and advisors of such Person
and such Person's Affiliates.
"
Related Security
"
means, with respect to any Receivables subject to a Permitted Receivables
Financing, all assets that are customarily transferred or in respect of which
security interests are customarily granted in connection with asset
securitization transactions involving Receivables, including all collateral
securing such Receivables, all contracts and all Guarantee or other obligations
in respect of such Receivables, and all proceeds of such
Receivables.
“
Restatement
Transactions
” has the meaning specified in the First Lien Term Loan
Agreement in effect on the date of this Agreement.
"
Restricted Debt
"
means (a) any Existing Debt Securities and (b) any other Indebtedness (other
than Indebtedness owed to the Parent or a Subsidiary) of any Loan Party that (i)
matures on or after the date that is one year prior to the Maturity Date and
(ii) is unsecured or is secured by a Lien on Collateral that is junior to the
Lien thereon granted under the Loan Documents.
"
Restricted Payment
"
means any dividend or other distribution (whether in cash, securities or other
property) with respect to any Equity Interests in the Parent or any Subsidiary,
or any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Equity Interests in
the Parent or any Subsidiary or any option, warrant or other right to acquire
any such Equity Interests in the Parent or any Subsidiary.
"
Restricted Property
"
means any "Operating Property" or "shares of capital stock or Debt issued by any
Restricted Subsidiary and owned by the Company or Holdings or any Restricted
Subsidiary", in each case within the meaning of the Existing Senior Notes
Indentures.
"
S&P
"
means Standard &
Poor's, a division of The McGraw-Hill Companies, Inc., and any successor to its
rating agency business.
“
Secured Leverage
Ratio
” means, on any date, the ratio of (a) Total Priority
Indebtedness as of such date to (b) Consolidated EBITDA of the Parent for
the period of four consecutive fiscal quarters of the Parent ended on such date
(or, if such date is not the last day of a fiscal quarter, ended on the last day
of the fiscal quarter of the Parent most recently ended prior to such
date).
"
Secured Obligations
"
has the meaning assigned to such term in the Collateral Agreement.
“
Secured Obligations
Amount
” has the meaning specified in the First Lien Term Loan Agreement
in effect on the date of this Agreement.
"
Security Documents
"
means the Collateral Agreement, the Mortgages and each other security agreement
or other instrument or document executed and delivered pursuant to Section 5.09
or 5.10 to secure any of the Secured Obligations.
“
Settlement Agreement
”
means the Settlement and Commercial Agreement between Lender, Borrower and
Parent, of even date herewith.
"
Sold Entity or
Business
" has the meaning assigned to such term in the definition of
"Consolidated EBITDA"
"
Standard Securitization
Undertakings
" means representations, warranties, covenants and
indemnities made by the Parent or any of the Subsidiaries in connection with a
Permitted Receivables Financing that are customary for Permitted Receivables
Financings of the same type;
provided
that
Standard Securitization Undertakings shall not include any Guarantee of any
Indebtedness or collectability of any Receivables.
"
Statutory Reserve
Rate
" means a fraction (expressed as a decimal), the numerator of which
is the number one and the denominator of which is the number one minus the
aggregate of the maximum reserve percentages (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established by the
Board to which the Lender is subject with respect to the Adjusted LIBO Rate for
Eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Loans bearing interest at the Adjusted
LIBO Rate shall be deemed to constitute Eurocurrency funding and to be subject
to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"
subsidiary
" means,
with respect to any Person (the "
parent
") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
"
Subsidiary
" means any
subsidiary of the Parent, including the Borrower.
''
Subsidiary Loan
Party
" means any Subsidiary that is not the Borrower, a Foreign
Subsidiary, an NWO Subsidiary or a Receivables Subsidiary.
"
Swap Agreement
" means
any agreement with respect to any swap, forward, future or derivative
transaction or option or similar agreement involving, or settled by reference
to, one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions;
provided
that no
phantom stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
the Parent or the Subsidiaries shall be a Swap Agreement.
“
Taxes
” means any and
all present or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority, and includes all
liabilities, penalties and interest with respect to such amounts.
“
Term Loan Commitment
”
means the commitment of Lender to make Loans hereunder in an amount not to
exceed (a) $100,000,000.00,
less
(b) the amount
of any termination or reduction by Borrower pursuant to Section 2.04 of this
Agreement.
"
Total Assets
" means,
with respect to any Person as of any date, the amount of total assets of such
Person and its subsidiaries that would be reflected on a balance sheet of such
Person prepared as of such date on a consolidated basis in accordance with
GAAP.
“
Total Indebtedness
”
means, as of any date, the sum (without duplication) of (a) the aggregate
principal amount of Indebtedness of the Parent and the Subsidiaries outstanding
as of such date that consists of Capital Lease Obligations, obligations for
borrowed money and obligations in respect of the deferred purchase price of
property or services, determined on a consolidated basis, plus (b) the aggregate
amount, if any, of Receivables Financing Debt of the Parent and the Subsidiaries
outstanding as of such date.
“
Total Leverage Ratio
”
means, on any date, the ratio of (a) Total Indebtedness as of such date to (b)
Consolidated EBITDA of the Parent for the period of four consecutive fiscal
quarters of the Parent ended on such date (or, if such date is not the last day
of a fiscal quarter, ended on the last day of the fiscal quarter of the Parent
most recently ended prior to such date).
“
Total Priority
Indebtedness
” has the meaning specified in the First Lien Term Loan
Agreement in effect on the date of this Agreement.
"
Transactions
" means
the execution, delivery and performance by the Loan Parties of the Loan
Documents, the borrowing of Loans and the use of the proceeds
thereof.
"
Withdrawal Liability
"
means liability to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.
SECTION
1.02.
Terms
Generally.
The
definitions of terms herein shall apply equally to the singular and plural forms
of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The
words "include", "includes" and "including" shall be deemed to be followed by
the phrase "without limitation". The word "will" shall be construed to have the
same meaning and effect as the word "shall". Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person shall
be construed to include such Person's successors and assigns, (c) the words
"herein", "hereof' and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
SECTION
1.03.
Accounting Terms;
GAAP.
Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the Lender that the Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision,
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.
ARTICLE
II
The
Loans
SECTION
2.01.
Commitment.
Subject
to the terms and conditions set forth herein, Lender agrees to make Loans to the
Borrower from time to time in an aggregate amount not to exceed the Term Loan
Commitment. Amounts borrowed under this Section 2.01 and repaid or
prepaid may not be reborrowed.
SECTION
2.02.
Loans.
(a)
Provided
no Default has occurred and is continuing, Lender will make Loans through
September 30, 2013 on the following terms:
(i)
|
the
aggregate principal amount of all Loans made on or after the date of this
Agreement will not exceed the Term Loan
Commitment;
|
(ii)
|
the
Loans will be made in increments of no less than $25,000,000.00 following
Lender’s receipt of a Borrowing Request in accordance with Section 2.03
below; and
|
(iii)
|
all
Loans will bear interest at the rates provided in, and interest on the
Loans will be payable in accordance with the terms of, Section
2.07.
|
(b)
[
Intentionally
omitted
].
SECTION
2.03.
Requests for
Borrowings.
To request a Loan, the Borrower shall
notify the Lender of such request by telephone not later than 12:00 noon, New
York City time, three Business Days before the date of the proposed
Loan. Each such telephonic Borrowing Request shall be irrevocable and
shall be confirmed promptly by hand delivery or telecopy to the Lender of a
written Borrowing Request in a form approved by the Lender and signed by the
Borrower. Each such telephonic and written Borrowing Request shall specify the
following information in compliance with Section 2.02:
(i)
|
the
aggregate amount (expressed in Dollars) of the requested Loan (which must
be equal to or greater than
$25,000,000);
|
(ii)
|
the
date of such Loan, which must be a Business
Day;
|
(iii)
|
the
location and number of the Borrower's account to which funds are to be
disbursed.
|
SECTION
2.04.
Termination and Reduction of
Commitment.
(a)
Unless
previously terminated, the unused portion of the Term Loan Commitment shall
terminate on the Maturity Date.
(b)
The
Borrower may at any time from and after June 30, 2011 terminate, or from time to
time reduce, the Term Loan Commitment without premium or penalty; provided that
each reduction of the Term Loan Commitment shall be in an amount that is an
integral multiple of $500,000 and not less than $5,000,000, provided that any
termination or reduction of the Term Loan Commitment caused by the borrowing of
a Loan or Loans may occur at any time.
(c)
The
Borrower shall notify the Lender of any election to terminate or reduce the
unused portion of the Term Loan Commitment under paragraph (b) of this Section
at least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Each notice
delivered by the Borrower pursuant to this Section shall be irrevocable;
provided that a notice of termination of the unused portion of the Term Loan
Commitment delivered by the Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by the Borrower (by notice to the Lender on or prior to the specified
effective date) if such condition is not satisfied. Any termination or reduction
of the Term Loan Commitment shall be permanent.
SECTION
2.05.
Repayment of Loans; Evidence
of Debt.
(a)
The
Borrower hereby unconditionally promises to pay to Lender the then unpaid
principal amount of the Loans on the Maturity Date.
(b)
Lender
shall maintain an account or accounts evidencing the indebtedness of the
Borrower to Lender resulting from each Loan made by Lender, including the
amounts of principal and interest payable and paid to Lender from time to time
hereunder.
(c)
The
entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be
prima
facie
evidence of the
existence and amounts of the obligations recorded therein;
provided
that the
failure of Lender to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.
(d)
Lender
may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of Lender (or, if
requested by Lender, to Lender and its registered assigns) and in a form
approved by Lender and in an amount equal to the Term Loan Commitment (although
Borrower will only be obligated to repay the amount of the Loans actually
outstanding, together with any other amounts owing under this Agreement) (the
“
Note
”).
SECTION
2.06.
Prepayment of
Loans.
(a)
The
Borrower shall have the right at any time and from time to time to prepay any
Loan in whole or in part, without premium or penalty, subject to prior notice in
accordance with paragraph (b) of this Section,
provided
,
however
, that any
such prepayment made prior to June 30, 2011 may only be made with cash flow
generated by Borrower from its ordinary course business operations and must be
accompanied by a certificate executed by a Financial Officer verifying the
source of such repayment funds.
(b)
The
Borrower shall notify the Lender by telephone (confirmed by telecopy) of any
prepayment hereunder not later than 12:00 noon, New York City time, on the date
of prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Loan or portion thereof to be
prepaid. Prepayments will be accompanied by accrued interest as
required by Section 2.07.
SECTION
2.07.
Interest.
(a)
The Loans
shall bear interest at the Adjusted LIBO Rate
plus
twelve percent
(12.00%) per annum.
(b)
Notwithstanding
the foregoing, if any principal of or interest on any Loan or any fee or other
amount payable by the Borrower hereunder is not paid when due, whether at stated
maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to two
percent (2%) plus the rate otherwise applicable to such Loan.
(c)
Accrued
interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan; provided that (i) interest accrued pursuant to paragraph (b) of
this Section shall be payable on demand, and (ii) in the event of any repayment
or prepayment of any Loan, accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or
prepayment.
(d)
All
interest hereunder shall be computed on the basis of a year of 360
days.
(e)
If Lender
determines that reasonable means do not exist for determining the Adjusted LIBO
Rate for any Interest Period, then Lender shall not be obligated to make Loans
bearing interest at a rate based on the Adjusted LIBO Rate and all Loans will
instead bear interest at a rate equal to the Alternative Interest Rate, until
the next month for which Lender determines that the Adjusted LIBO Rate can
reasonably be established.
SECTION
2.08.
Taxes.
(a)
Any and
all payments by or on account of any obligation of the Borrower hereunder shall
be made free and clear of and without deduction for any Indemnified Taxes or
Other Taxes;
provided
that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions for Indemnified Taxes or Other Taxes
(including any such deductions applicable to additional sums payable under this
Section 2.08(a)), Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b)
In
addition, and without duplication of paragraph (a) hereof, the Borrower shall
pay any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.
(c)
The
Borrower shall indemnify the Lender within 30 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid or
payable by the Lender, on or with respect to any payment by or on account of any
obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section
2.08) and any penalties, interest and reasonable expenses (other than Excluded
Taxes) arising therefrom or with respect thereto;
provided
, that the
Lender provides the Borrower with a written record therefor setting forth in
reasonable detail the basis and calculation of such amounts.
(d)
As soon
as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the Lender
the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, to the extent such a receipt is issued
therefor, or other evidence of such payment reasonably satisfactory to
Lender.
(e)
If the
Lender determines, in its sole discretion, that it has received a refund of any
Taxes or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section 2.08, it shall pay over such refund to the Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrower
under this Section 2.08 with respect to the Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of the Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund);
provided
, that the
Borrower, upon the request of the Lender, agrees to repay the amount paid over
to the Borrower (plus any penalties, interest or other reasonable charges
imposed by the relevant Governmental Authority) to the Lender in the event the
Lender is required to repay such refund to such Governmental
Authority. This Section shall not be construed to require the Lender
or any Lender to make available its tax returns (or any other information
relating to its Taxes which it deems confidential) to the Borrower or any other
Person.
(f)
If Lender
claims any indemnity payment or additional amounts payable pursuant to this
Section 2.08, it shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document reasonably
requested by the Borrower following the reasonable written request by the
Borrower if the making of such a filing would avoid the need for or reduce the
amount of any such indemnity payment or additional amounts that may thereafter
accrue and would not, in the sole determination of Lender, require the
disclosure of information that the Lender reasonably considers confidential or
be otherwise disadvantageous to the Lender.
SECTION
2.09.
Payments
Generally.
The Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest, fees, or of
amounts payable under Section 2.08, or otherwise) by wire transfer to Lender
prior to 2:00 p.m., Local Time, on the date when due, in immediately available
funds, without set-off or counterclaim, pursuant to the following wire
instructions:
ABA#: 021
000 089
Acct#: 3053-2921
Beneficiary: NYTO-Supplier
Remittance, General Motors Company
Bank
Name: Citibank
Bank
Address: 1 Penn's Way, New
Castle, Delaware 19720-2437
Any
amounts received after such time on any date may, in the discretion of the
Lender be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the
Lender at its offices at 767 Fifth Avenue, New York, New York
10153.
ARTICLE
III
Representations and
Warranties
Each of
the Parent and the Borrower represents and warrants to the Lender
that:
SECTION
3.01.
Organization;
Powers.
Each of the Parent and the Subsidiaries
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is
required.
SECTION
3.02.
Authorization;
Enforceability.
The Transactions to be entered into by
each Loan Party are within such Loan Party's corporate powers and have been duly
authorized by all necessary corporate and, if required, stockholder action. This
Agreement has been duly executed and delivered by the Parent and the Borrower
and constitutes, and each other Loan Document to which any Loan Party is to be a
party, when executed and delivered by such Loan Party, will constitute, a legal,
valid and binding obligation of the Parent, the Borrower and such other Loan
Party (as the case may be), enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at
law.
SECTION
3.03.
Governmental Approvals; No
Conflicts.
The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect and except registrations and filings necessary
to perfect Liens created under the Loan Documents, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of any Loan Party or any order of any Governmental Authority,
(c) will not violate or result in a default under any indenture, agreement
or other instrument binding upon the Parent or any Subsidiary or its assets the
violation or breach of which would result in or would reasonably be expected to
result in a Material Adverse Effect, or give rise to a right thereunder to
require any payment to be made by the Parent or any Subsidiary, and
(d) will not result in the creation or imposition of any Lien on any asset
of the Parent or any Subsidiary, except Liens created under the Loan
Documents.
SECTION
3.04.
Financial Condition; No
Material Adverse Change.
(a)
The
Parent has heretofore furnished to the Lender its consolidated balance sheet and
statements of income, stockholders equity and cash flows (i) as of and for the
fiscal year ended December 31, 2008, reported on by Deloitte & Touche LLP,
independent public accountants, and (ii) as of and for the fiscal quarter and
the portion of the fiscal year ended June 30, 2009, certified by its chief
financial officer. Such financial statements present fairly, in all
material respects, the financial position and results of operations and cash
flows of the Parent and its consolidated Subsidiaries as of such dates and for
such periods in accordance with GAAP, subject to year-end audit adjustments and
the absence of footnotes in the case of the statements referred to in
clause (ii) above.
(b)
Since
June 30, 2009, there has been no material adverse change in the business,
assets, operations or financial condition of the Parent and the Subsidiaries,
taken as a whole, except for the information disclosed to the Lender prior to
the execution and delivery of this Agreement.
SECTION
3.05.
Litigation and Environmental
Matters.
(a)
There are
no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Parent or the Borrower,
threatened against or affecting the Parent or any Subsidiary (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, would reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve any of the Loan Documents or the
Transactions.
(b)
Except
for the Disclosed Matters and except with respect to any other matters that,
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect, neither the Parent nor any Subsidiary (i) has
failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has
received notice of any claim with respect to any Environmental Liability or
(iv) knows of any basis for any Environmental Liability.
SECTION
3.06.
Compliance with Laws and
Agreements.
Each of the Parent and the Subsidiaries
is in compliance with all laws, regulations and orders of any Governmental
Authority applicable to it or its property and all indentures, agreements and
other instruments binding upon it or its property, except where the failure to
do so, individually or in the aggregate, would not reasonably be expected to
result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION
3.07.
Investment Company
Status.
Neither the Parent nor any of the
Subsidiaries is an "investment company" as defined in, or subject to regulation
under, the Investment Company Act of 1940.
SECTION
3.08.
Taxes.
Each of the Parent and the Subsidiaries
has timely filed or caused to be filed all Federal and other material Tax
returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which the Parent or
such Subsidiary, as applicable, has set aside on its books adequate reserves or
(b) to the extent that the failure to do so would not reasonably be expected to
result in a Material Adverse Effect.
SECTION
3.09.
ERISA.
(a) Each
of the Parent and its ERISA Affiliates is in compliance in all material respects
with the applicable provisions of ERISA and the Code and the regulations and
published interpretations thereunder. No ERISA Event has occurred or
is reasonably expected to occur that, when taken together with all other such
ERISA Events, could reasonably be expected to result in a Material Adverse
Effect.
(b) Each
Foreign Pension Plan is in compliance in all material respects with all
requirements of law applicable thereto and the respective requirements of the
governing documents for such plan. With respect to each Foreign
Pension Plan, none of the Parent, its Affiliates or any of their respective
directors, officers, employees or agents has engaged in a transaction that could
subject the Parent or any Subsidiary, directly or indirectly, to a tax or civil
penalty that could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect. With respect to each Foreign
Pension Plan, reserves have been established in the financial statements
furnished to Lender in respect of any unfunded liabilities in
accordance with applicable law or, where required, in accordance with ordinary
accounting practices in the jurisdiction in which such Foreign Pension Plan is
maintained. The aggregate unfunded liabilities with respect to such
Foreign Pension Plans could not reasonably be expected to result in a Material
Adverse Effect
SECTION
3.10.
Disclosure.
None of the reports, financial
statements or other information furnished by or on behalf of the Parent or the
Borrower to the Lender in connection with the negotiation of the Loan Documents
or delivered thereunder, taken as a whole, contains any material misstatement of
fact or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that, with respect to projected financial information or
any information concerning future proposed and intended activities of the Parent
and the Subsidiaries, the Parent and the Borrower represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time (it being understood that such projections and
information are forward looking statements which by their nature are subject to
significant uncertainties and contingencies, many of which are beyond the
Parent's and the Borrower's control, and that actual results may differ, perhaps
materially, from those expressed or implied in such forward looking statements,
and no assurance can be given that the projections will be
realized).
SECTION
3.11.
Subsidiaries.
Schedule 3.11 sets forth the name and
jurisdiction of organization of, and the direct or indirect ownership interest
of the Parent in, each Subsidiary, and identifies each Subsidiary that is a
Subsidiary Loan Party, in each case, as of the date of this
Agreement.
SECTION
3.12.
Properties.
(a)
Each of
the Parent and its Subsidiaries has good title to, or valid leasehold interests
in, all its real and personal property material to its business (including its
Mortgaged Properties), except for minor defects in title that do not interfere
with its ability to conduct its business as currently conducted or to utilize
such properties for their intended purposes.
(b)
Each of
the Parent and its Subsidiaries owns, or is licensed to use, all Intellectual
Property material to the business of the Parent and the Subsidiaries (taken as a
whole) as presently conducted, and the use thereof by the Parent and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(c)
Schedule
3.12 sets forth the address of each real property that is owned by the Parent or
any of its Subsidiaries as of the date of this Agreement and, in the case of
each such property designated on such Schedule as a Mortgaged Property, the
proper jurisdiction for filing of a Mortgage in respect thereof.
(d)
As of the
date of this Agreement, no Loan Party has received notice of, or has knowledge
of, any pending or contemplated condemnation proceeding affecting any Mortgaged
Property or any sale or disposition thereof in lieu of
condemnation. Neither any Mortgaged Property nor any interest therein
is subject to any right of first refusal, option or other contractual right to
purchase such Mortgaged Property or interest therein.
SECTION
3.13.
Collateral
Matters.
(a)
The
Collateral Agreement, upon execution and delivery thereof by the parties
thereto, will create in favor of the Lender, a valid and enforceable security
interest in the Collateral (as defined therein) and (i) when the Collateral (as
defined therein) constituting certificated securities (as defined in the Uniform
Commercial Code), is delivered to the Lender, or is delivered to a collateral
agent for Lender subject to the terms and conditions of the Intercreditor
Agreement, together with instruments of transfer duly endorsed in blank, the
security interest created under the Collateral Agreement will constitute a fully
perfected security interest in all right, title and interest of the pledgors
thereunder in such Collateral, prior and superior in right to any other Person
other than the secured parties under the First Lien Loan Documents, and (ii)
when financing statements in appropriate form are filed in the applicable filing
offices, the security interest created under the Collateral Agreement will
constitute a fully perfected security interest in all right, title and interest
of the Loan Parties in the remaining Collateral (as defined therein) to the
extent perfection can be obtained by filing Uniform Commercial Code financing
statements, prior and superior to the rights of any other Person, except for
rights secured by Liens permitted by Section 6.02.
(b)
Each
Mortgage, upon execution and delivery thereof by the parties thereto, will
create in favor of the Lender, a legal, valid and enforceable second lien and
security interest in all the applicable mortgagor’s right, title and interest in
and to the Mortgaged Properties and when the Mortgages have been filed in the
jurisdictions specified therein, the Mortgages will constitute a fully perfected
second lien mortgage and security interest in all right, title and interest of
the mortgagors in the Mortgaged Properties and the proceeds thereof, prior and
superior in right to any other Person, but subject to Liens permitted by
Section 6.02.
(c)
Upon the
recordation of the Copyright Security Agreement with the United States Copyright
Office pursuant to 17 U.S.C. § 205 and the regulations thereunder and the filing
of the financing statements referred to in paragraph (a) of this Section, the
security interest created under the Collateral Agreement will constitute a fully
perfected security interest in all right, title and interest of the Loan Parties
in the material Copyrights in which a security interest may be perfected by
filing in the United States of America, in each case prior and superior in right
to any other Person, but subject to Liens permitted by Section 6.02 (it being
understood that subsequent recordings in the United States Copyright Office may
be necessary to perfect a security interest in such Copyrights acquired by the
Loan Parties after the date of this Agreement).
(d)
Each
Security Document, other than any Security Document referred to in the preceding
paragraphs of this Section, upon execution and delivery thereof by the parties
thereto and the making of the filings and taking of the other actions provided
for therein, will be effective under applicable law to create in favor of the
Lender, a valid and enforceable security interest in the Collateral subject
thereto and will constitute a fully perfected security interest in all right,
title and interest of the Loan Parties in the Collateral subject thereto, prior
and superior to the rights of any other Person, except for rights secured by
Liens permitted by Section 6.02.
ARTICLE
IV
Conditions
SECTION
4.01.
Conditions to
Effectiveness.
The obligations of the Lenders to make Loans
hereunder shall not become effective until the date on which each of the
following conditions is satisfied:
(a)
The
Lender (or its counsel) shall have received (i) from each party hereto
either a counterpart of this Agreement signed on behalf of such party or written
evidence satisfactory to the Lender (which may include telecopy or electronic
mail transmission of a signed signature page of this Agreement) that such party
has signed a counterpart of this Agreement, (ii) from each of the Borrower
and each Guarantor a counterpart of the Guarantee Agreement signed on behalf of
such party or written evidence satisfactory to the Lender (which may include
telecopy or electronic mail transmission of a signed signature page of the
Guarantee Agreement) that such party has signed a counterpart of the Guarantee
Agreement, and (iii) from each party to each of the Loan Documents, the Access
Agreement and the Settlement Agreement, a counterpart of such document signed on
behalf of such party or written evidence satisfactory to the Lender (which may
include telecopy or electronic mail transmission of a signed signature page)
that such party has signed such document.
(b)
The
Lender shall have received favorable written opinions (addressed to the Lender
and dated the date hereof) of each of Richard G. Raymond, General Counsel of the
Borrower, Shearman & Sterling LLP, counsel to the Loan Parties, and
Driggers, Schultz & Herbst, P.C., Michigan counsel to the Loan Parties,
substantially in the form of collective Exhibit E, respectively. The
Parent and the Borrower hereby request such counsel to deliver such
opinions.
(c)
The
Lender shall have received a fully executed Secretary’s Certificate in the form
of Exhibit F hereto.
(d)
The
Restatement Effective Date has occurred under the First Lien Loan Documents and
the Restatement Transactions (as defined therein) are effective.
(e)
The
Collateral Requirement has been met.
SECTION
4.02.
Each Loan
Event.
The obligation of Lender to make any
Loan is subject to the satisfaction of the following conditions:
(a)
The
representations and warranties of the Loan Parties set forth in the Loan
Documents (except the representation and warranty set forth in Section 3.04(b)
with respect to Loans made after the date of this Agreement) shall be true and
correct in all material respects on and as of the date of such Loan, except to
the extent such representations and warranties expressly relate to an earlier
date (in which case such representations and warranties shall have been true and
correct in all material respects with respect to such earlier
date).
(b)
At the
time of and immediately after giving effect to such Loan, (i) no Default shall
have occurred and be continuing and (ii) the total principal amount of all Loans
shall not exceed the Term Loan Commitment.
(c)
At the
time of such Loan, (i) no Event of Default shall have occurred and be continuing
under the Settlement Agreement, and (ii) no Event of Default shall have
occurred and be continuing under the First Lien Loan Documents (regardless of
whether such Event of Default constitutes an Event of Default under this
Agreement at that time).
(d)
Simultaneously
with the delivery or other submission of a Borrowing Request under Section 2.03
of this Agreement, Borrower shall execute and deliver to Lender under the
Warrant Agreement, dated as of the date of this Agreement, between the Borrower
and the Lender, a Warrant Certificate, dated the date of funding of the Loan
contemplated by the Borrowing Request, which Warrant Certificate shall be
substantially similar to, and with the same Exercise Price and Expiration Date
as are set forth and defined in, the Warrant Certificate delivered by the
Borrower to the Lender on the date hereof, except that the new Warrant
Certificate shall be for an amount of shares of common stock of the Borrower
equal to (A) 6,915,226 by (B) the principal amount of the initial Loan divided
by the Term Loan Commitment as of such date.
(e)
Each Loan
shall be deemed to constitute a representation and warranty by the Parent and
the Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.
ARTICLE
V
Affirmative
Covenants
Until the
Term Loan Commitment has expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full, the Parent and the Borrower covenant and agree with the Lender
that:
SECTION
5.01.
Financial Statements and
Other Information.
The Parent or the Borrower will furnish
to the Lender:
(a)
within
90 days after the end of each fiscal year of the Parent, its audited
consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all reported
on by independent public accountants of recognized national standing (without a
“going concern” or like qualification or exception and without any qualification
or exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Parent and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;
provided
that it is
understood and agreed that the delivery of the Parent’s Form 10-K and
annual report for the applicable fiscal year shall satisfy the requirements of
this clause (a) if such materials contain the information required by this
clause (a);
(b)
within
45 days after the end of each of the first three fiscal quarters of each
fiscal year of the Parent, its condensed consolidated balance sheet and related
statements of operations, stockholders’ equity and cash flows as of the end of
and for such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of the Parent and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;
provided
that it is
understood and agreed that the delivery of the Parent’s Form 10-Q for the
applicable fiscal quarter shall satisfy the requirements of this clause (b) if
such materials contain the information required by this clause (b);
(c)
concurrently
with any delivery of financial statements under clause (a) or (b)
above, a certificate of a Financial Officer of the Parent (i) certifying as
to whether a Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed calculations demonstrating
compliance with Sections 6.11 and 6.12, and (iii) stating whether any
change in GAAP or in the application thereof affecting the financial statements
accompanying such certificate in any material respect has occurred since the
date of the audited financial statements referred to in Section 3.04 and,
if any such change has occurred, specifying the effect of such change on such
financial statements;
(d)
promptly
after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by the Parent or any
Subsidiary with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of said Commission, or with
any national securities exchange, or distributed by the Parent to its
shareholders generally, as the case may be; and
(e)
promptly
following any request therefor, such other information regarding the operations,
business affairs and financial condition of the Parent or any Subsidiary, or
compliance with the terms of the Loan Documents, as the Lender may reasonably
request.
Any
financial statement, report, proxy statement or other material required to be
delivered pursuant to clause (a), (b) or (d) of this Section shall be deemed to
have been furnished to the Lender on the date that the Parent notifies the
Lender that such financial statement, report, proxy statement or other material
is posted on the Securities and Exchange Commission’s website at www.sec.gov or
on the Parent’s website at www.aam.com;
provided
that the
Parent will furnish paper copies of such financial statement, report, proxy
statement or material to the Lender, if the Lender so requests, by notice to the
Parent, that the Parent do so, until the Parent receives notice from the Lender
to cease delivering such paper copies.
SECTION
5.02.
Notices of Material
Events.
The Parent or the Borrower will furnish
to the Lender written notice of the following, promptly after any executive
officer or Financial Officer of the Parent or the Borrower obtains actual
knowledge thereof:
(a)
the
occurrence of any Default;
(b)
the
filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Parent or any
Subsidiary that involves a reasonable possibility of an adverse determination
and that, if adversely determined, would reasonably be expected to result in a
Material Adverse Effect;
(c)
the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, would result in or would reasonably be expected to
result in a Material Adverse Effect; and
(d)
any other
development that would result in or would reasonably be expected to result in a
Material Adverse Effect.
Each
notice delivered under this Section shall be accompanied by a statement of a
Financial Officer or other executive officer of the Parent or the Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
SECTION
5.03.
Existence; Conduct of
Business.
The Parent and the Borrower will, and
will cause each of the other Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises, material
to the conduct of its business; provided that (i) the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 6.03 and (ii) neither the Parent nor any of its Subsidiaries shall be
required to preserve any rights, licenses, permits or franchises, if the Parent
or such Subsidiary shall determine that the preservation thereof is no longer
desirable in the conduct of its business and if the loss thereof would not have
and would not reasonably be expected to have a Material Adverse
Affect.
SECTION
5.04.
Payment of
Obligations.
The Parent and the Borrower will, and
will cause each of the other Subsidiaries to, pay its obligations, including Tax
liabilities (but excluding Indebtedness), that, if not paid, would reasonably be
expected to result in a Material Adverse Effect before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings and (b) the Parent, the
Borrower or such other Subsidiary has set aside on its books adequate reserves
with respect thereto in accordance with GAAP.
SECTION
5.05.
Maintenance of Properties;
Insurance.
The Parent and the Borrower will, and
will cause each of the other Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as are reasonable and prudent, as well as such insurance
as is required by any Security Document.
SECTION
5.06.
Books and Records:
Inspection Rights.
The Parent and the Borrower will, and
will cause each of the other Subsidiaries to, keep proper financial books of
record and account in which full, true and correct entries are made of all
financial dealings and transactions in relation to its business and activities
in order to produce its financial statements in accordance with
GAAP. The Parent and the Borrower will, and will cause each of the
other Subsidiaries to, permit any representatives designated by the Lender, upon
reasonable prior notice and at the Lender’s expense, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times during normal business hours and as
often as reasonably requested (subject to reasonable requirements of
confidentiality, including requirements imposed by law or
contract).
SECTION
5.07.
Compliance with
Laws.
The Parent and the Borrower will, and
will cause each of the other Subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its
property, except where the failure to do so, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse
Effect.
SECTION
5.08.
Use of
Proceeds.
The proceeds of the Loans will be used
for general corporate purposes. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations T, U and
X.
SECTION
5.09.
Additional Subsidiary Loan
Parties.
If any Subsidiary Loan Party is
formed or otherwise acquired after the date hereof or any Subsidiary that is not
a Subsidiary Loan Party subsequently becomes a Subsidiary Loan Party, then, in
each case, within 10 Business Days thereafter the Parent or the Borrower shall
notify the Lender thereof and cause such Subsidiary to (a) execute a supplement
to the Guarantee Agreement (substantially in the form provided as an annex
thereto or otherwise in form and substance reasonably satisfactory to the
Lender) in order to become a Guarantor and (b) satisfy the Collateral
Requirement.
SECTION
5.10.
Information Regarding
Collateral.
(a)
The
Parent or the Borrower will furnish to the Lender prompt written notice of any
change (i) in the legal name of any Loan Party, as set forth in its
organizational documents, (ii) in the jurisdiction of organization or the form
of organization of any Loan Party (including as a result of any merger or
consolidation), or (iii) in the organizational identification number, if any,
or, with respect to any Loan Party organized under the laws of a jurisdiction
that requires such information to be set forth on the face of a Uniform
Commercial Code financing statement, the Federal Taxpayer Identification Number
of such Loan Party. The Parent and the Borrower agree not to effect
or permit any change referred to in the preceding sentence unless all filings
have been made under the Uniform Commercial Code or otherwise that are required
in order for the Lender to continue at all times following such change to have a
valid, legal and perfected security interest in all the Collateral.
(b)
Each
year, at the time of delivery of annual financial statements with respect to the
preceding fiscal year pursuant to clause (a) of Section 5.01, the Parent or the
Borrower shall deliver to the Lender a certificate of a Financial Officer
attaching a Perfection Schedule setting forth any changes, including all
additions, in the information required pursuant to the Perfection Schedule
(other than Sections 2-6 thereof) or confirming that there has been no change in
such information since the Perfection Schedule included in the Collateral
Agreement on the date of this Agreement or the date of the most recent
certificate delivered pursuant to this Section.
(c)
The
Borrower (i) will furnish to the Lender prompt written notice of any
casualty or other insured damage to any material portion of any Collateral or
the commencement of any action or proceeding for the taking of any Collateral or
any part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding and (ii) will ensure that the net
proceeds of any such event (whether in the form of insurance proceeds,
condemnation awards or otherwise) are collected and applied in accordance with
the applicable provisions of the Security Documents.
SECTION
5.11.
Further
Assurances.
(a)
Each of
the Parent and the Borrower will, and will cause each Subsidiary Loan Party to,
execute any and all further documents, financing statements, agreements and
instruments, and take all such further actions (including the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust
and other documents), which may be required under any applicable law, or which
the Lender may reasonably request, to cause the Collateral Requirement to be and
remain satisfied at all times or otherwise to effectuate the provisions of the
Loan Documents, all at the expense of the Loan Parties.
(b)
If any
material assets (including any real property or improvements thereto or any
interest therein having an aggregate fair market value or purchase price
exceeding $25,000,000, other than leasehold interests in real property not owned
by the Parent or a Subsidiary) are acquired by any Loan Party after the date of
this Agreement (other than assets constituting Collateral under the Collateral
Agreement that become subject to the Lien of the Collateral Agreement upon
acquisition thereof), the Borrower will notify the Lender thereof, and, if
requested by the Lender, the Parent and the Borrower will cause such assets to
be subjected to a Lien securing the Secured Obligations (in the same manner as
Collateral under the Collateral Agreement secures the Secured Obligations) and
will take, and cause the Subsidiary Loan Parties to take, such actions as shall
be necessary or reasonably requested by the Lender to cause the Collateral
Requirement to be satisfied with respect to such assets, including actions
described in paragraph (a) of this Section, all at the expense of the Loan
Parties.
ARTICLE
VI
Negative
Covenants
Until the
Term Loan Commitment has expired or terminated and the principal of and interest
on each Loan and all fees payable hereunder have been paid in full, the Parent
and the Borrower covenant and agree with the Lender that:
SECTION
6.01.
Indebtedness.
(a)
The
Parent and the Borrower will not, and will not permit any other Subsidiary to,
create, incur, assume or permit to exist any Indebtedness, including pursuant to
any Guarantee of Indebtedness of the Parent or another Subsidiary,
except:
(i)
|
Indebtedness
owing to the Parent or another Subsidiary, if also permitted by
Section 6.08;
|
(ii)
|
Guarantees
of Indebtedness of the Parent or a Subsidiary, if also permitted by
Section 6.08;
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(iii)
|
any
Indebtedness under the First Lien Loan Documents and any Permitted
Refinancing Indebtedness incurred to refinance any such Indebtedness and
(B) Indebtedness under the Loan
Documents;
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(iv)
|
Existing
Debt Securities outstanding on the date of this Agreement, and any
Permitted Refinancing Indebtedness incurred to refinance any such
Indebtedness, and (B) other Indebtedness existing as of the date of this
Agreement and set forth on Schedule 6.01
hereto;
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(v)
|
other
Indebtedness of a Loan Party or NWO Subsidiary that is not a Loan Party
secured by any Lien on any asset of any Loan Party and Receivables
Financing Debt attributable to any Permitted Receivables Financing;
provided
that
(A) the aggregate principal amount of Indebtedness permitted by this
clause shall not exceed $75,000,000 at any time outstanding and (B) not
more than $25,000,000 of the aggregate principal amount of such
Indebtedness (other than Receivables Financing Debt and any Indebtedness
secured by Liens permitted by clause (e) of Section 6.02) shall be secured
by Liens;
provided
further
that,
the limitation in each of clause (A) and clause (B) above may be
exceeded if, at the time any such Indebtedness is incurred (or results
from a Permitted Acquisition) in excess of such limitation (both before
and after giving effect to such incurrence and application of the proceeds
thereof), no Default shall exist or shall result therefrom and the ratio
of the Collateral Value Amount to the Secured Obligations Amount shall
equal or exceed 1.75 to 1.0;
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(vi)
|
other
unsecured Indebtedness of any Loan Party or NWO Subsidiary that is not a
Loan Party;
provided
that
the aggregate principal amount of Indebtedness permitted by this clause
shall not exceed $250,000,000 at any time outstanding;
provided
further
that
such limitation may be exceeded if, at the time any such Indebtedness is
incurred (or results from a Permitted Acquisition) in excess of such
limitation (both before and after giving effect to such incurrence and the
application of the proceeds thereof), no Default shall exist or shall
result therefrom and the Total Leverage Ratio shall not exceed 3.25 to
1.00;
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(vii)
|
other
Indebtedness of any Foreign Subsidiary and Receivables Financing Debt
attributable to Receivables of any Foreign Subsidiary;
provided
that
the aggregate principal amount of Indebtedness permitted by this clause
(other than Indebtedness owing by a Foreign Subsidiary to another Foreign
Subsidiary) shall not exceed $175,000,000 at any time
outstanding;
provided
further
that
such limitation may be exceeded if, at the time any such Indebtedness is
incurred (or results from results from a Permitted Acquisition) in excess
of such limitation (both before and after giving effect to such
incurrence), no Default shall exist or shall result therefrom and the
ratio of the Collateral Value Amount (adjusted to reflect Indebtedness of
Foreign Subsidiaries after giving effect to the incurrence of such
Indebtedness) to the Secured Obligations Amount is equal to or exceeds
1.75 to 1.0; and
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(b)
None of
the Parent, the Borrower or any other Subsidiary will issue any Disqualified
Equity Interests, other than any such issuance by a Subsidiary to the Parent or
another Subsidiary (except by a Subsidiary that is not a Loan Party to a Loan
Party) otherwise permitted by this Agreement.
SECTION
6.02.
Liens.
The Parent and the Borrower will not,
and will not permit any other Subsidiary to, create, incur, assume or permit to
exist any Lien on any property or asset now owned or hereafter acquired by it,
or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except:
(a)
Liens
created under the Loan Documents;
(b)
Liens
created under the First Lien Loan Documents;
(c)
Permitted
Encumbrances;
(d)
any Lien
on any property or asset of the Parent or any Subsidiary existing on the date of
this Agreement (other than Liens of the type permitted under clause (h) of this
Section) and set forth in Schedule 6.02;
provided
that (i)
such Lien shall not apply to any other property or asset of the Parent or any
Subsidiary and (ii) such Lien shall secure only those obligations which it
secures on the date of this Agreement and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount
thereof;
(e)
any Lien
existing on any property or asset prior to the acquisition thereof by the Parent
or any Subsidiary or existing on any property or asset of any Person that
becomes a Subsidiary after the date of this Agreement prior to the time such
Person becomes a Subsidiary;
provided
that
(i) such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary, as the case may be,
(ii) such Lien shall not apply to any other property or assets of the
Parent or any Subsidiary, (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such
Person becomes a Subsidiary, as the case may be, and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof and (iv) if such Lien secures Indebtedness, such Indebtedness is
permitted by Section 6.01 and the aggregate principal amount of all
Indebtedness secured by Liens permitted by this clause (e) does not exceed
$50,000,000;
(f)
Liens on
fixed or capital assets acquired, constructed or improved by the Parent or any
Subsidiary on or after the date of this Agreement;
provided
that
(i) such Liens secure Indebtedness incurred to finance the acquisition,
construction or improvement of such fixed or capital assets, including Capital
Lease Obligations and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets prior to
the acquisition thereof, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof,
(ii) such Liens and the Indebtedness secured thereby are incurred prior to
or within 360 days after such acquisition or the completion of such construction
or improvement, (iii) the Indebtedness secured thereby is permitted by
Section 6.01 and does not exceed the cost of acquiring, constructing or
improving such fixed or capital assets, and (iv) such Liens shall not apply
to any other property or assets of the Parent or any Subsidiary (other than to
accessions to such fixed or capital assets and provided that individual
financings of equipment provided by a single lender may be cross-collateralized
to other financings of equipment provided solely by such lender);
(g)
any other
Lien on any property or asset of any Foreign Subsidiary;
provided
that (i)
such Lien secures Indebtedness or other obligations of such Subsidiary that is
not Guaranteed by any Loan Party and (ii) with respect to Indebtedness such
Indebtedness is permitted by Section 6.01;
(h)
Liens
comprising easements, rights of way or other encumbrances on title to real
property that do not render title to the property encumbered thereby
unmarketable or do not materially interfere with the ordinary conduct of
business of the Parent or any Subsidiary;
(i)
assignments
and sales of Receivables and Related Security pursuant to a Permitted
Receivables Financing and Liens arising pursuant to a Permitted Receivables
Financing on Receivables and Related Security sold or financed in connection
with such Permitted Receivables Financing;
provided
that the
related Receivables Financing Debt is permitted by
Section 6.01;
(j)
any other
Lien securing Indebtedness or other obligations of any Loan Party;
provided
that
(i) such Lien secures Indebtedness permitted by clause (v) of
Section 6.01(a) or other obligations to the extent such obligations do not
exceed, when taken together with Indebtedness permitted under Section
6.01(a)(v)(B), $15,000,000 and (ii) such Lien shall not attach to
Restricted Property and, if any such Lien attaches to Collateral, such Lien
shall be junior to the Liens granted pursuant to the Loan
Documents;
(k)
any
purchase option, call or similar right of a third party that owns Equity
Interests in a NWO Subsidiary with respect to any Equity Interests in such NWO
Subsidiary that are customary among parties to a joint venture; and
(l)
any Lien
securing the obligations under the Access Agreement.
SECTION
6.03.
Fundamental
Changes
(a)
The
Parent and the Borrower will not, and will not permit any other Subsidiary to,
merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or sell, transfer, lease or otherwise dispose
of (in one transaction or in a series of transactions) all or substantially all
of the assets of the Parent and the Subsidiaries, taken as a whole, or liquidate
or dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing (i) any
Person (other than the Borrower) may merge into the Parent in a transaction in
which the Parent is the surviving corporation, (ii) any Person may merge
into any Subsidiary in a transaction in which the surviving entity is a
Subsidiary and, if a Loan Party is a party to such merger, then the surviving
entity is a Loan Party, (iii) any Subsidiary may sell, transfer, lease or
otherwise dispose of its assets to another Subsidiary and (iv) any
Subsidiary (other than the Borrower or a Guarantor (except for International
Holdco to the extent described below)) may liquidate or dissolve if the Parent
determines in good faith that such liquidation or dissolution is in the best
interests of the Parent and is not materially disadvantageous to the Lender;
provided that any such merger involving a Person that is not a wholly owned
Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by Section 6.08.
(b) The
Parent will not, and will not permit any of its Subsidiaries to, engage to any
material extent in any line of business other than lines of business conducted
by the Parent and its Subsidiaries on the date of this Agreement and lines of
business reasonably related or incidental thereto.
(c) International
Holdco will not engage in any business or activity other than the ownership of
Equity Interests and other investments in Foreign Subsidiaries and activities
incidental thereto. International Holdco will not own or acquire any
assets (other than Equity Interests and other investments in Foreign
Subsidiaries, cash and Permitted Investments) or incur any liabilities (other
than liabilities under the Loan Documents, liabilities imposed by law, including
Tax liabilities, and other liabilities incidental to its existence and permitted
business and activities). International Holdco will not sell, transfer or
otherwise dispose of any of the Equity Interests or other investments in the
Foreign Subsidiaries located in China or India to the Parent or any other
Subsidiary; provided that International Holdco may transfer such Equity
Interests to any wholly-owned Foreign Subsidiary of International Holdco but, in
such event, all such Equity Interests shall remain owned by International Holdco
or a wholly-owned Foreign Subsidiary of International Holdco unless and until
sold or otherwise disposed of to a Person other than the Parent or a Subsidiary
in compliance with this Agreement; provided further that International Holdco
may dissolve or liquidate into the Borrower or any other Loan Party the assets
of which at such time do not consist only of Equity Interests in Foreign
Subsidiaries.
SECTION
6.04.
Transactions with
Affiliates.
The Parent and the Borrower will not,
and will not permit any of the other Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) at prices and on terms and conditions not
less favorable to the Parent, the Borrower or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties,
(b) transactions between or among the Loan Parties not involving any other
Affiliate or between or among Foreign Subsidiaries not involving any other
Affiliate, (c) transactions between a Loan Party and a Foreign Subsidiary,
provided that, to the extent that such transaction is not in the ordinary course
of business (based upon past practices and customary industry practices) and is
at prices and on terms less favorable to such Loan Party then could be obtained
on an arm’s length basis from an unrelated third party, the excess value
conferred by such Loan Party on such Foreign Subsidiary as a result thereof
shall be treated as an investment in such Foreign Subsidiary for purposes of
determining compliance with Section 6.08, (d) advances to employees
permitted by Section 6.08, (e) any Restricted Payments permitted by
Section 6.06, (f) fees, compensation and other benefits paid to, and
customary indemnity and reimbursement provided on behalf of, officers, directors
and employees of any Loan Party in the ordinary course of business consistent
with past practices and/or industry practices, (g) any employment agreement
entered into by the Parent or any of the Subsidiaries in the ordinary course of
business, (h) any Permitted Receivables Financing, (i) transactions and
agreements in existence on the date of this Agreement and listed on Schedule
6.04 and, in each case, any amendment thereto that is not disadvantageous to the
Lender in any material respect, (j) transactions described in
Schedule 6.08B and (k) transactions among the Parent, any Loan Party
and any of the Subsidiaries, permitted by Section 6.03(a) (other than
clause (iii) thereof, except transactions solely between Loan Parties or solely
between Foreign Subsidiaries).
SECTION
6.05.
Restrictive
Agreements.
The Parent and the Borrower will not,
and will not permit any other Subsidiary (other than a Receivables Subsidiary)
to, directly or indirectly, enter into, incur or permit to exist any agreement
or other arrangement that prohibits, restricts or imposes any condition upon
(a) the ability of any Loan Party to create, incur or permit to exist any
Lien upon any of its property or assets to secure any of the Secured Obligations
or any refinancing or replacement thereof, or (b) the ability of any
Subsidiary (other than the Borrower) to pay dividends or other distributions
with respect to any of its Equity Interests or to make or repay loans or
advances to the Parent or any other Loan Party or to Guarantee Indebtedness of
the Parent or any other Loan Party; provided, that (i) the foregoing shall
not apply to restrictions and conditions imposed by law or any Loan Document,
(ii) the foregoing shall not apply to restrictions and conditions existing
on the date of this Agreement in the First Lien Loan Documents or the Existing
Senior Note Indentures or identified on Schedule 6.04 or to any extension or
renewal thereof, or any amendment or modification thereto that does not expand
the scope of any such restriction or condition, (iii) the foregoing shall
not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted hereunder, (iv) clause (a) of the foregoing
shall not apply to restrictions or conditions imposed by any agreement relating
to (A) secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness or
(B) Receivables sold pursuant to any Permitted Receivables Financing and
(v) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment
thereof.
SECTION
6.06.
Restricted Payments; Certain
Payments of Indebtedness.
(a)
Neither
the Parent nor the Borrower will, nor will they permit any Subsidiary to,
declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, or incur any obligation (contingent or otherwise) to do so, except (i)
the Parent may declare and pay dividends with respect to its Equity Interests
payable solely in additional shares of its Equity Interests permitted hereunder,
(ii) any Subsidiary may declare and pay dividends or make other
distributions with respect to its Equity Interests, ratably to the holders of
such Equity Interests, (iii) the Parent may repurchase its Equity Interests upon
the exercise of stock options if such Equity Interests represent a portion of
the exercise price of such options, (iv) the Parent may make cash payments in
lieu of the issuance of fractional shares representing insignificant interests
in the Parent in connection with the exercise of warrants, options or other
securities convertible into or exchangeable for Equity Interests in the Parent,
(v) the Parent or the Borrower may, in the ordinary course of business and
consistent with past practices, repurchase, retire or otherwise acquire for
value Equity Interests (including any restricted stock or restricted stock
units) held by any present, future or former employee, director, officer or
consultant (or any Affiliate, spouse, former spouse, other immediate family
member, successor, executor, administrator, heir, legatee or distributee of any
of the foregoing) of the Parent or any of its Subsidiaries pursuant to any
employee, management or director benefit plan or any agreement (including any
stock subscription or shareholder agreement) with any employee, director,
officer or consultant of the Parent or any Subsidiary and (vi) the Borrower may
make Restricted Payments to the Parent the proceeds of which shall be used to
pay customary salary, bonus and other benefits payable to officers.
(b)
Neither
the Parent nor the Borrower will, nor will they permit any Subsidiary to, make
or agree to pay or make, directly or indirectly, any voluntary payment or other
distribution (whether in cash, securities or other property) of or in respect of
any Restricted Debt, or any payment or other distribution (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Restricted Debt, except:
(i)
|
any
refinancing of Restricted Debt with Permitted Refinancing Indebtedness;
and
|
(ii)
|
regularly
scheduled payments of principal or
interest.
|
SECTION
6.07.
Sales of Assets and
Subsidiary Stock.
The Parent and Borrower will not, and
will not permit any Subsidiary to, directly or indirectly, consummate any Asset
Disposition unless:
(a)
the
Parent or such Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the fair market value (including as to the value
of all non-cash consideration), as determined in good faith by the Borrower’s
board of directors, of the shares and assets subject to such Asset
Disposition;
(b)
the terms
and conditions of such Asset Disposition were obtained through an arm’s-length
negotiation; and
(c) at least 75% of the
consideration therefor received by the Parent or such Subsidiary is in the form
of cash or Permitted Investments; provided that for the purposes of this
paragraph (c), the amount of (i) any liabilities (as shown on the Parent’s or
the applicable Subsidiary’s most recent balance sheet (or in the notes thereto))
of the Parent or any Subsidiary (other than liabilities that by their terms are
subordinated to the obligations with respect to the Loans) that are assumed by
the transferee of any such assets and from which the Parent and any Subsidiary
have been validly released by all creditors in writing and (ii) any securities
received by the Parent or any Subsidiary from such transferee that are converted
into cash (to the extent of the cash received) within 180 days following the
closing of such Asset Disposition shall be deemed to be cash for the purposes of
this Section 6.07.
SECTION
6.08.
Investments, Loans,
Advances, Guarantees and Acquisitions.
The Parent and Borrower will not, and
will not permit any of the other Subsidiaries (other than a Receivables
Subsidiary) to, purchase, hold or acquire (including pursuant to any merger with
any Person that was not a wholly owned Subsidiary prior to such merger) any
Equity Interests, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit,
except:
(a)
cash and
Permitted Investments;
(b)
investments
existing on the date of this Agreement and set forth on Schedule 6.08A plus
(i) any additional investments in the Persons identified on such Schedule
that, as of date of this Agreement, are required by contract or law to be made
after the date of this Agreement and (ii) other investments that may be
required to be made in such Persons after the date of this Agreement either by
contract or law;
provided
that the
aggregate amount of investments permitted by clauses (i) and (ii) shall not
exceed $10,000,000;
(c)
investments
by the Parent, the Borrower and the other Subsidiaries in Equity Interests in
their respective Subsidiaries, and by any Foreign Subsidiary in Equity Interests
in any other Foreign Subsidiary; provided that (i) the Subsidiary in which such
investment is made is a Subsidiary before such investment is made, or such
investment is made in connection with the formation of such Subsidiary and (ii)
the aggregate amount of investments by Loan Parties in, and loans and advances
by Loan Parties to, and Guarantees (other than Excluded Guarantees) by Loan
Parties of Indebtedness and other obligations of, Subsidiaries that are not Loan
Parties (excluding, without duplication, all such investments, loans or advances
existing on the date of this Agreement) shall not exceed (x) from the date of
this Agreement to (and including) December 31, 2011, $100,000,000 at any time
outstanding (disregarding any write-down or write-off of any such loan, advance
or other investment) and (y) thereafter, $175,000,000 at any time outstanding
(disregarding any write-down or write-off of any such loan, advance or other
investment);
(d)
loans or
advances made by the Parent to any Subsidiary and made by any Subsidiary to the
Parent or any other Subsidiary;
provided
that the
amount of such loans and advances made by Loan Parties to Subsidiaries that are
not Loan Parties shall be subject to the limitation set forth in clause (c)
above;
(e)
Guarantees
by the Parent of obligations of any Subsidiary and Guarantees by any Subsidiary
of obligations of the Parent or any other Subsidiary;
provided
that (i) a
Subsidiary that is not a Loan Party shall not Guarantee any obligations of any
Loan Party and (ii) the aggregate amount of Indebtedness and other obligations
of Subsidiaries that are not Loan Parties that is guaranteed by any Loan Party
shall be subject to the limitation set forth in clause (c) above;
(f)
loans and
advances to employees in the ordinary course of business of the Parent and the
Subsidiaries as presently conducted in an aggregate amount not to exceed
$10,000,000 at any time outstanding (disregarding any write-down or write-off
thereof):
(g)
Permitted
Acquisitions;
(h)
investments
received in connection with the bankruptcy or reorganization of, or settlement
of delinquent accounts and disputes with, customers and suppliers, in each case
in the ordinary course of business;
(i)
investments
described on Schedule 6.08B;
(j)
investments,
Guarantees, loans and advances made amongst and between Foreign
Subsidiaries;
(k)
promissory
notes and other non-cash consideration received in connection with dispositions
of assets;
(l)
investments
in the ordinary course of business consisting of endorsements for collection or
deposit and customary trade arrangements with customers consistent with past
practices; and
(m)
other
investments, loans, advances, acquisitions and Guarantees;
provided
that
(i) at the time any such investment, loan, advance, acquisition or
Guarantee, is made and immediately after giving effect thereto, no Default shall
have occurred and be continuing and (ii) the aggregate amount of all such
investments, loans, advances, acquisitions and Guarantees outstanding at any
time (disregarding any write-down or write-off thereof) shall not exceed (x)
from the date of this Agreement to (and including) December 31,
2011, $20,000,000 and (y) thereafter, $50,000,000.
SECTION
6.09.
Lien Basket
Amount
. The
Parent and the Borrower will not, and will not permit any other Subsidiary to,
create, incur, assume or permit to exist any Indebtedness secured by a Lien
(other than pursuant to the First Lien Loan Documents and, subject to the
Intercreditor Agreement, the Secured Obligations) on any Restricted Property
that would utilize any of the Lien Basket Amount under the Existing Senior Notes
Indenture (that permits Liens on Restricted Property without equally and ratably
securing the Existing Senior Notes).
SECTION
6.10.
Amendment of Material
Documents
Neither the Parent nor the Borrower will, nor will they permit any
Subsidiary to, amend, modify or waive any of its rights under any First Lien
Loan Documents or any agreements or instruments governing or evidencing any
Restricted Debt in a manner that would be adverse in any material respect to the
interests of the Lender.
SECTION
6.11.
Secured Leverage
Ratio
The
Parent will not permit the Secured Leverage Ratio as of the end of any fiscal
quarter set forth below to exceed the ratio set forth below with respect to such
fiscal quarter:
Fiscal Quarter End Date
|
Secured Leverage Ratio
|
September
30, 2009
|
14.00:1.00
|
December
31, 2009
|
10.00:1.00
|
March
31, 2010
|
10.00:1.00
|
June
30, 2010
|
4.75:1.00
|
September
30, 2010
|
4.50:1.00
|
December
31, 2010
|
4.25:1.00
|
March
31, 2011
|
4.25:1.00
|
June
30, 2011 and thereafter
|
3.75:1.00
|
SECTION
6.12.
Cash
Interest Expense Coverage Ratio
. The
Parent will not permit the Cash Interest Expense Coverage Ratio for any period
of four consecutive fiscal quarters ending on any date set forth below to be
less than the ratio set forth below with respect to such date:
Fiscal Quarter End Date
|
Cash Interest Expense Coverage
Ratio
|
September
30, 2009
|
0.50:1.00
|
December
31, 2009
|
0.65:1.00
|
March
31, 2010
|
0.65:1.00
|
June
30, 2010
|
1.25:1.00
|
September
30, 2010
|
1.25:1.00
|
December
31, 2010
|
1.25:1.00
|
March
31, 2011
(and
thereafter)
|
1.70:1.00
|
ARTICLE
VII
Events of
Default
If any of
the following events ("
Events of Default
")
shall occur:
(a)
the
Borrower shall fail to pay any principal of any Loan when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;
(b)
the
Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement or any other Loan Document, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of five Business Days;
(c)
any
representation or warranty made or deemed made by or on behalf of any Loan Party
in or in connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, or in any report, certificate or financial
statement furnished pursuant to or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder, shall prove to have been
incorrect in any material respect when made or deemed made;
(d)
the
Parent or the Borrower shall fail to observe or perform any covenant, condition
or agreement contained in clause (a) of Section 5.02 or in Section 5.03
(with respect to the existence of the Parent or the Borrower) or 5.08 or in
Article VI (other than Section 6.05);
(e)
any Loan
Party shall fail to observe or perform any covenant, condition or agreement
contained in any Loan Document (other than those specified in clause (a),
(b), or (d) of this Article), and such failure shall continue unremedied for a
period of 30 days after notice thereof from the Lender to the
Borrower;
(f)
the
Parent or any Subsidiary shall fail to make any payment of principal, interest
or premium (regardless of amount) in respect of any Material Indebtedness when
and as the same shall become due and payable, and such failure shall continue
after the expiration of the grace period (if any) for such failure specified in
the agreement or instrument governing such Material Indebtedness;
provided
that, in the
case of any such failure to pay under the First Lien Loan Documents, such
failure shall only constitute an Event of Default under this Agreement if such
failure is not cured or waived prior to the date that is 60 days after the
occurrence of such failure to pay;
(g)
the
Parent or any Subsidiary shall fail to observe or perform any term, covenant,
condition or agreement (other than the failure to pay principal, interest or
premiums) contained in any agreement or instrument evidencing or governing any
Material Indebtedness, and such failure shall continue after the expiration of
the grace period (if any) for such failure specified in the agreement or
instrument governing such Material Indebtedness, if such failure enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity;
provided
that, in the
case of any such failure to perform any term, covenant, condition or agreement
under the First Lien Loan Documents, such failure shall only constitute an Event
of Default under this Agreement if such failure is not cured or waived
prior to the date that is 60 days after the occurrence of such failure to
observe or perform;
provided further
that
this clause (g) shall not apply to secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets securing such
Indebtedness;
(h)
an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed in a court of competent jurisdiction seeking (i) liquidation,
reorganization or other relief in respect of the Parent or any Subsidiary (other
than an Excluded Subsidiary) or its debts, or of a substantial part of its
assets, under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
the Parent or any Subsidiary (other than an Excluded Subsidiary) or
for a substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
(i)
the
Parent or any Subsidiary (other than an Excluded Subsidiary) shall
(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (i) of
this Article, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the Parent
or any Subsidiary (other than an Excluded Subsidiary) or for a substantial part
of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(j)
the
Parent or any Subsidiary (other than an Excluded Subsidiary) shall become
unable, admit in writing its inability or fail generally to pay its debts as
they become due;
(k)
one or
more judgments for the payment of money in an aggregate amount in excess of
$35,000,000 (to the extent such amount is not either (i) covered by insurance
and the applicable insurer has acknowledged liability or has been notified and
is not disputing coverage or (ii) required to be indemnified by another Person
that is reasonably likely to be able to satisfy its indemnity obligation (other
than the Parent or a Subsidiary) and such Person has acknowledged such
obligation or has been notified and is not disputing such obligation) shall be
rendered against the Parent, any Subsidiary or any combination thereof and the
same shall remain undischarged and unsatisfied for a period of
30 consecutive days during which execution shall not be effectively stayed,
or any action shall be legally taken by a judgment creditor to attach or levy
upon any assets of the Parent or any Subsidiary to enforce any such
judgment;
(l)
an ERISA
Event shall have occurred that, in the opinion of the Lender, when taken
together with all other ERISA Events that have occurred, would reasonably be
expected to result in a Material Adverse Effect; or
(m)
any Lien
purported to be created under any Security Document shall cease to be, or shall
be asserted by any Loan Party not to be, a valid and perfected Lien on
Collateral having a fair value exceeding $10,000,000, with the priority required
by the applicable Security Document, except (i) as a result of the sale or
other disposition of the applicable Collateral in a transaction permitted under
the Loan Documents, (ii) as a result of the Lender’s failure to maintain
possession (either directly or through a collateral agent subject to the terms
of the Intercreditor Agreement) of any stock certificates, promissory notes or
other instruments delivered to it under the Collateral Agreement, (iii) as a
result of the Lender’s failure to take any action required in order to create or
perfect any such Lien following notice from the Borrower that such action is
required or (iv) as a result of the Lender’s release of any such Lien that it is
not authorized to release pursuant to the Loan Documents;
then, and
in every such event (other than an event with respect to the Parent or the
Borrower described in clause (h) or (i)
of this Article), and
at any time thereafter during the continuance of such event, the Lender may, by
notice to the Borrower, take either or both of the following actions, at the
same or different times: (i) terminate the Term Loan Commitment, and thereupon
the Term Loan Commitment shall terminate immediately, and (ii) declare the Loans
then outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in case of any event with
respect to the Parent or the Borrower described in clause (h) or (i) of this
Article, the Term Loan Commitment shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the
Borrower.
ARTICLE
VIII
[INTENTIONALLY
OMITTED]
ARTICLE
IX
Miscellaneous
SECTION
9.01.
Notices.
(a)
Except in
the case of notices and other communications expressly permitted to be given by
telephone (and subject to paragraph (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:
(i)
|
if
to the Parent or the Borrower, to it at One Dauch Drive, Detroit, Michigan
48211, Attention of the Chief Financial Officer (Telecopy No.
313-758-4238) with a copy to the Treasurer (Telecopy No.313-758-3936) and
the General Counsel (Telecopy No. 313-758-3897); if to the Lender, to
General Motors Company, 30009 Van Dyke Road, P.O. Box 9025, Mail Code
480-206-116, Warren, Michigan 48090-9025, Attention: Christopher F. Dubay,
Group Counsel, Global Purchasing & Supply Chain (Telecopy No.
586-575-1887), with a copy to Honigman Miller Schwartz and Cohn
LLP, 2290 First National Building, 660 Woodward Avenue,
Detroit, MI 48226, Attention Robert B. Weiss (Telecopy No.
313-465-7597);
|
(b)
Notices
and other communications to Lender hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by
Lender. Lender or the Borrower may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it;
provided
that
approval of such procedures may be limited to particular notices or
communications.
(c)
Any party
hereto may change its address or telecopy number or the contact person for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
SECTION
9.02.
Waivers;
Amendments.
(a)
No
failure or delay by Lender in exercising any right or power hereunder or under
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Lender hereunder are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
any Loan Document or consent to any departure by any Loan Party therefrom shall
in any event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default, regardless of whether Lender may have had notice or
knowledge of such Default at the time.
(b)
Neither
this Agreement nor any other Loan Document nor any provision hereof or thereof
may be waived, amended or modified except, in the case of this Agreement,
pursuant to an agreement or agreements in writing entered into by the Parent,
the Borrower and Lender or in the case of any other Loan Document, pursuant to
an agreement or agreements in writing entered into by the Lender and each Loan
Party that is a party thereto.
SECTION
9.03.
Expenses; Indemnity; Damage
Waiver.
(a)
The
Borrower shall pay all reasonable and documented out-of-pocket expenses incurred
by Lender, including the reasonable fees, charges and disbursements of a single
counsel for the Lender (and any local counsel that Lender determines to be
appropriate in connection with matters affected by laws other than those of the
State of New York), in connection with the Transactions, the preparation and
administration of the Loan Documents or any amendments, modifications or waivers
of the provisions thereof (whether or not the transactions contemplated hereby
or thereby shall be consummated), in connection with the enforcement or
protection of its rights in connection with the Loan Documents, including its
rights under this Section, or in connection with the Loans made hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of the Loans.
(b)
The
Borrower shall indemnify Lender and each Related Party (each such Person being
called an "
Indemnitee
") against,
and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of the Loan Documents or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto or thereto
of their respective obligations hereunder or thereunder or the consummation of
the Transactions or any other transactions contemplated hereby or thereby, (ii)
any Loan or the use of the proceeds therefrom, (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by the Parent or any of the Subsidiaries, or any Environmental
Liability related in any way to the Parent or any of the Subsidiaries, or (iv)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto;
provided
that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
any of its directors, trustees, officers or employees.
(c)
To the
extent permitted by applicable law, the Borrower shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, the Loan
Documents or any agreement or instrument contemplated thereby, the Transactions,
any Loan or the use of the proceeds thereof.
(d)
All
amounts due under this Section shall be payable promptly after written demand
therefor.
SECTION
9.04.
Successors and
Assigns.
(a)
The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that (i) the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of Lender (and
any attempted assignment or transfer by the Borrower without such consent shall
be null and void) and (ii) Lender may not assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section. Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, and, to the extent expressly contemplated hereby, the Related
Parties of Lender) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b)
Lender
may assign to one or more of its direct or indirect subsidiaries all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it) in its sole
discretion, and Lender may make any other assignment with the prior written
consent of the Borrower;
provided
that no
consent of the Borrower shall be required if an Event of Default under clause
(a), (b), (h) or (i) of Article VII has occurred and is continuing.
(c)
Lender
may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of Lender pursuant to any
of its loan arrangements with the UAW Retiree Medical Benefits Trust, the United
States Department of the Treasury and/or Export Development Canada and this
Section shall not apply to any such pledge or assignment of a security interest;
provided
that
no such pledge or assignment of a security interest shall release Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
Lender as a party hereto.
SECTION
9.05.
Survival.
All covenants, agreements,
representations and warranties made by the Parent and Borrower herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of any Loans, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid and so long
as the Term Loan Commitment has not expired or terminated. The provisions of
Sections 2.08 and 9.03 shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Term Loan
Commitment or the termination of this Agreement or any provision
hereof.
SECTION
9.06.
Counterparts; Integration;
Effectiveness
This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement, the Intercreditor
Agreement, the Guarantee Agreement and other Loan Documents, including without
limitation any separate letter agreements with respect to fees payable to the
Lender, constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as
provided in Article IV, this Agreement shall become effective when it shall have
been executed by the Lender and when the Lender shall have received counterparts
hereof which, when taken together, bear the signatures of each of the other
parties hereto, and thereafter shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and
assigns. Delivery of an executed counterpart of a signature page of
this Agreement by telecopy or electronic mail shall be effective as delivery of
a manually executed counterpart of this Agreement.
SECTION
9.07.
Severability.
Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION
9.08.
Governing Law; Jurisdiction;
Consent to Service of Process.
(a)
This
Agreement shall be construed in accordance with and governed by the law of the
State of New York.
(b)
Each of
the Parent and the Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to any
Loan Document, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement or any other Loan Document shall affect any right that the Lender may
otherwise have to bring any action or proceeding relating to this Agreement
against the Borrower or its properties in the courts of any
jurisdiction.
(c)
Each of
the Parent and the Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to any Loan Document in any court referred
to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d)
Each
party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.01. Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other manner
permitted by law.
SECTION
9.09.
WAIVER OF JURY
TRIAL.
EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION
9.10.
Headings.
Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION
9.11.
Confidentiality.
Lender agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to any Loan Document or the enforcement of rights
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of, or any prospective
assignee of, any of its rights or obligations under this Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (g) with the consent
of the Parent or the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to the Lender on a non-confidential basis from a source other
than the Parent or the Borrower. For the purposes of this Section, "Information"
means all information received from the Parent or the Borrower relating to the
Parent or the Borrower or their respective businesses, other than any such
information that is available to Lender on a non-confidential basis prior to
disclosure by the Parent or the Borrower. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION
9.12.
Interest Rate
Limitation.
Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the "Charges"), shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, such excess amount shall be paid to such
Lender on subsequent payment dates to the extent not exceeding the Maximum
Rate.
SECTION
9.13.
Non-Public
Information.
Lender acknowledges that all
information furnished to it pursuant to this Agreement by or on behalf of the
Parent or the Borrower and relating to the Parent, the Borrower, the other
Subsidiaries or their businesses may include material non-public information
concerning the Parent, the Borrower and the other Subsidiaries and their
securities, and confirms that it has developed compliance procedures regarding
the use of material non-public information and that it will handle such material
non-public information in accordance with such procedures and applicable law,
including Federal, state and foreign securities laws.
All such information, including
requests for waivers and amendments, furnished by the Parent, the Borrower or
the Lender pursuant to, or in the course of administering, this Agreement will
be syndicate-level information, which may contain material non-public
information concerning the Parent, the Borrower and the other Subsidiaries and
their securities.
[Signature
page follows]
[Signature
page to Credit Agreement]
GENERAL MOTORS COMPANY
By: /s/
Name: Authorized
Signatory
Title:
AMERICAN AXLE &
MANUFACTURING, INC.
By: /s/
Name: Authorized
Signatory
Title:
AMERICAN AXLE &
MANUFACTURING HOLDINGS,
INC.
By: /s/
Name: Authorized
Signatory
Title:
DETROIT.3806117.16
EXECUTION
VERSION
COLLATERAL
AGREEMENT
dated as
of
September
16, 2009,
among
AMERICAN
AXLE & MANUFACTURING
HOLDINGS,
INC.,
AMERICAN
AXLE & MANUFACTURING, INC.,
THE
SUBSIDIARIES OF AMERICAN AXLE &
MANUFACTURING,
IN. IDENTIFIED HEREIN
and
GENERAL
MOTORS COMPANY,
as
Lender
TABLE OF
CONTENTS
|
SECTION
3.07.
Limitations on Duties of
Lender
|
|
SECTION
7.08.
[Intentionally Omitted]
|
COLLATERAL
AGREEMENT dated as of September 16, 2009, among AMERICAN AXLE &
MANUFACTURING HOLDINGS, INC., AMERICAN AXLE & MANUFACTURING, INC. AND ITS
SUBSIDIARIES identified herein and GENERAL MOTORS CORPORATION, as Lender (the
“
Lender
”).
Reference
is made to the Credit Agreement dated as of September 16, 2009 (the “
Credit Agreement
”), among
American Axle & Manufacturing, Inc. (the "
Borrower
"), American Axle
& Manufacturing Holdings, Inc. (the "
Parent
"), and
Lender. The Credit Agreement, is conditioned upon, among other
things, the execution and delivery of this Agreement. The Parent and
the Subsidiary Parties are affiliates of the Borrower, will derive substantial
benefits from the Credit Agreement and extension of credit thereunder and are
willing to execute and deliver this Agreement in order to induce Lender to enter
into the Credit Agreement and extend such credit.
ARTICLE
I
Definitions
SECTION
1.01.
Credit
Agreement
(a) Capitalized terms used in this Agreement and not
otherwise defined herein have the meanings set forth in the Credit
Agreement. All capitalized terms defined in the New York UCC (as such
term is defined herein) and not defined in this Agreement have the meanings
specified therein; the term "instrument" shall have the meaning specified in
Article 9 of the New York UCC. All references to the Uniform
Commercial Code shall mean the New York UCC.
(b)
The rules
of construction specified in Section 1.03 of the Credit Agreement also apply to
this Agreement.
SECTION
1.02.
Other
Defined Terms
As used
in this Agreement, the following terms have the meanings specified
below:
"Account Debtor"
means any
person who is or who may become obligated to any Grantor under, with respect to
or on account of an Account.
"Article 9 Collateral"
has
the meaning assigned to such term in Section 3.01.
"Borrower"
has the meanings
assigned to such term in the preliminary statement of this
Agreement.
"Collateral"
means Article 9
Collateral and Pledged Collateral. It is understood that this
definition shall not include the assets of any Subsidiary that is not a Loan
Party (including any Foreign Subsidiary).
“
Control Agreement
” means,
with respect to any Deposit Account or Securities Account maintained by any
Grantor, a control agreement in form and substance reasonably satisfactory to
the Lender, duly executed and delivered by such Grantor and the depositary bank
or the securities intermediary, as the case may be, with which such Account is
maintained.
"Copyright License"
means any
written agreement, now or hereafter in effect, granting to any third party any
right under any Copyright or any such right that such Grantor now or hereafter
otherwise has the right to license, and all rights of such Grantor under any
such agreement.
"Copyrights"
means all of the
following now owned or hereafter acquired by any Grantor: (a) all copyright
rights in any work subject to the copyright laws of the United States or any
other country, including copyrights in computer software and databases, whether
as author, assignee, transferee or otherwise, and (b) all registrations and
applications for registration of any such copyright in the United States or any
other country, including registrations, recordings, supplemental registrations
and pending applications for registration in the United States Copyright Office
(or any successor office, or any similar office in any other country),
including, in the case of clauses (a) and (b), those listed on Schedule
III.
"Credit Agreement"
has the
meaning assigned to such term in the preliminary statement of this
Agreement.
"Federal Securities Laws"
has
the meaning assigned to such term in Section 4.04.
"General Intangibles"
means
all choses in action causes of action, and all other intangible personal
property of every kind and nature (other than Accounts) now owned or hereafter
acquired by any Grantor, including corporate or other business records,
indemnification claims, contract rights (including rights under leases, whether
entered into as lessor or lessee, Swap Agreements and other agreements),
Intellectual Property, goodwill, registrations, franchises, tax refund claims
and any letter of credit, guarantee, claim, security interest or other security
held by or granted to any Grantor to secure payment by an Account Debtor of any
of the Accounts.
"Grantors"
means the Parent,
the Borrower and the Subsidiary Parties.
"Intellectual Property"
means
all intellectual property now owned or hereafter acquired by any Grantor,
including Patents, Copyrights, Licenses, Trademarks, trade secrets and all
rights therein and tangible embodiments thereof and all additions, improvements
and accessions thereto.
"Intercreditor Agreement"
has
the meaning assigned to such term in Article VI.
"Lender"
has the meaning
assigned to such term in the preliminary statement of this
Agreement.
"License"
means any Patent
License, Trademark License, or Copyright License to which any Grantor is a
party, including those listed on Schedule III.
"New York UCC"
means the
Uniform Commercial Code as from time to time in effect in the State of New
York.
"Parent"
has the meaning
assigned to such term in the preliminary statement of this
Agreement.
"Patent License"
means any
written agreement, now or hereafter in effect, granting to any third party any
right to make, use or sell any invention on which a Patent, or any
such right that any Grantor now or hereafter otherwise has the right to license,
is in existence, or granting to any Grantor any right to make, use or sell any
invention on which a patent, now or hereafter owned by any third party, or that
a third party now or hereafter otherwise has the right to license, is in
existence, and all rights of any Grantor under such agreement.
"Patents"
means all of the
following now owned or hereafter acquired by any Grantor: (a) all
letters patent of the United States or the equivalent thereof in any other
country, all registrations and recordings thereof, and all applications for
letters patent of the United States or the equivalent thereof in any other
country, including registrations, recordings and pending applications in the
United States Patent and Trademark Office (or any successor or any similar
offices in any other country), including those listed on Schedule III, and (b)
all reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof, and in the case of (a) and (b), all the inventions disclosed
or claimed therein, including the right to make, use and/or sell the inventions
disclosed or claimed therein.
"Perfection Schedule"
means
Schedule 3.02.
"Pledged Collateral"
has the
meaning assigned to such term in Section 2.01.
"Pledged Debt Securities"
has
the meaning assigned to such term in Section 2.01.
"Pledged Securities"
means
any promissory notes, stock certificates or other certificated securities now or
hereafter included in the Pledged Collateral, including all certificates,
instruments or other documents representing or evidencing any Pledged
Collateral.
"Pledged Stock"
has the
meaning assigned to such term in Section 2.01.
"Proceeds"
has the meaning
specified in Section 9-102 of the New York UCC.
“Secured Obligations"
means
(a) the due and punctual payment by the Borrower of (i) the principal of and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, and (ii) all other monetary obligations of the Borrower to the Lender
under the Credit Agreement and each of the other Loan Documents, including
obligations to pay fees, expense reimbursement obligations and indemnification
obligations, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), (b) the due and punctual performance
of all other obligations of the Borrower under or pursuant to the Credit
Agreement and each of the other Loan Documents, and (c) the due and punctual
payment and performance of all the obligations of each other Loan Party under or
pursuant to this Agreement and each of the other Loan Documents (including
monetary obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding).
"Security Interest"
has the
meaning assigned to such term in Section 3.01.
"Subsidiary Parties"
means
(a) the Subsidiaries identified on Schedule I and (b) each other Subsidiary that
becomes a party to this Agreement as a Subsidiary Party after the date of this
Agreement.
"Trademark License"
means any
written agreement, now or hereafter in effect, granting to any third party any
right to use any Trademark or any such right that any Grantor now or hereafter
otherwise has the right to license, or granting to any Grantor any right to use
any trademark now or hereafter owned by any third party, or that a third party
now or hereafter otherwise has the right to license, and all rights of any
Grantor under any such agreement.
"Trademarks"
means all of the
following now owned or hereafter acquired by any Grantor: (a) all trademarks,
service marks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, trade dress, logos, other source or
business identifiers and designs, now existing or hereafter adopted or acquired
and all registrations, recordings and applications filed in connection with the
foregoing, including registrations and registration applications in the United
States Patent and Trademark Office (or any successor office) or any similar
offices in any State of the United States or any other country or any political
subdivision thereof (provided that no security interest shall be granted in the
United States intent-to-use trademark applications to the extent that, and
solely during the period in which, the grant of a security interest therein
would impair the validity and enforceability of such intent-to-use trademark
applications under applicable federal law), and all extensions or renewals
thereof, including those listed on Schedule III, (b) all goodwill associated
therewith or symbolized thereby and (c) all other assets, rights and interests
that uniquely reflect or embody such goodwill.
ARTICLE
II
Pledge
of Securities
SECTION
2.01.
Pledge
.
Subject to Section
3.06, as security for the payment or performance, as the case may be, in full of
the Secured Obligations, each Grantor hereby assigns and pledges to the Lender,
its successors and assigns, and hereby grants to the Lender, its successors and
assigns, a security interest in, all of such Grantor's right, title and interest
in, to and under (a) the shares of capital stock and other Equity Interests of
any subsidiaries owned by it and listed on Schedule II and any other Equity
Interests of any subsidiaries obtained in the future by such Grantor and the
certificates representing all such Equity Interests (the "
Pledged Stock
");
provided
that the Pledged
Stock shall not include more than 66% of the issued and outstanding voting
Equity Interests of any Foreign Subsidiary; (b)(i) the debt securities listed
opposite the name of such Grantor on Schedule II, (ii) any debt securities
(other than Permitted Investments) in the future issued to such Grantor and
(iii) the promissory notes and other instruments evidencing such debt securities
(collectively, the "
Pledged
Debt Securities
"); (c) all other property that may be delivered to and
held by the Lender pursuant to the terms of this Section 2.01; (d) subject to
Section 2.06, all payments of principal or interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the conversion of,
and all other Proceeds received in respect of, the securities referred to in
clauses (a) and (b) above; (e) subject to Section 2.06, all rights and
privileges of such Grantor with respect to the securities and other property
referred to in clauses (a), (b), (c) and (d) above; and (f) all Proceeds of any
of the foregoing (the items referred to in clauses (a) through (f) above being
collectively referred to as the "
Pledged
Collateral
").
TO HAVE
AND TO HOLD the Pledged Collateral, together with all right, title, interest,
powers, privileges and preferences pertaining or incidental thereto, unto the
Lender, its successors and assigns forever;
subject, however,
to the
terms, covenants and conditions hereinafter set forth.
SECTION
2.02.
Delivery of the Pledged
Collateral
.
(a) Subject to the Intercreditor Agreement, each Grantor agrees promptly to
deliver or cause to be delivered to the Lender or an agent on behalf of the
Lender any and all Pledged Securities.
(b)
Each
Grantor will cause (i) any Indebtedness for borrowed money owed to such Grantor
by the Parent or any subsidiary to be evidenced by a duly executed promissory
note (except as otherwise provided pursuant to the Collateral Requirement) that
is pledged and delivered to the Lender and (ii) any Indebtedness for borrowed
money in an aggregate principal amount exceeding $10,000,000 owed to such
Grantor by any other Person that is not the Parent or a subsidiary that is
evidenced by a promissory note to be pledged and delivered to the
Lender.
(c)
Upon
delivery to the Lender, (i) any Pledged Securities shall be accompanied by stock
powers duly executed in blank or other instruments of transfer satisfactory to
the Lender and by such other instruments and documents as the Lender may
reasonably request and (ii) all other property comprising part of the Pledged
Collateral shall be accompanied by proper instruments of assignment duly
executed by the applicable Grantor and such other instruments of assignment duly
executed by the applicable Grantor and such other instruments or documents as
the Lender may reasonably request. Each delivery
of Pledged Securities shall be accompanied by a schedule describing
the securities, which schedule shall be attached hereto as Schedule II and made
a part hereof;
provided,
that
failure to attach any
such schedule hereto shall not affect the validity of such pledge of such
Pledged Securities. Each schedule so delivered shall supplement any
prior schedules so delivered.
SECTION
2.03.
Representations, Warranties
and Covenants
.
The
Grantors jointly and severally represent, warrant and covenant to and with the
Lender, that:
(a)
Schedule
II correctly sets forth the percentage of the issued and outstanding units of
each class of the Equity Interests of the issuer thereof represented by the
Pledged Stock and includes all Equity Interests, debt securities and promissory
notes required to be pledged hereunder in order to satisfy the Collateral
Requirement;
(b)
the
Pledged Stock and Pledged Debt Securities issued by the Parent or any subsidiary
have been duly and validly authorized and issued by the issuers thereof and (i)
in the case of Pledged Stock, are fully paid and nonassessable, (ii) in the case
of Pledged Debt Securities issued by the Parent or any subsidiary, are legal,
valid and binding obligations of the issuers thereof and (iii) in the case of
the Pledged Debt Securities issued by a Person other than the Parent or a
subsidiary, to the applicable Grantor's best knowledge, are legal, valid and
binding obligations of the issuers thereof;
(c)
except
for the security interests granted hereunder and granted under the First Lien
Loan Documents, each of the Grantors (i) is and, subject to any transfers made
in compliance with the Credit Agreement, will continue to be the direct owner,
beneficially and of record, of the Pledged Securities indicated on Schedule II
as owned by such Grantor, (ii) holds the same free and clear of all Liens, other
than Liens created by this Agreement, Permitted Encumbrances and Liens and
transfers made in compliance with the Credit Agreement, (iii) will make no
assignment, pledge, hypothecation or transfer of, or create or permit to exist
any security interest in or other Lien on, the Pledged Collateral, other than
Liens created by this Agreement, Permitted Encumbrances and Liens and transfers
made in compliance with the Credit Agreement, and (iv) will defend its title or
interest thereto or therein against any and all Liens (other than the Lien
created by this Agreement and Permitted Encumbrances and Liens permitted
pursuant to the Credit Agreement), however, arising, of all Persons
whomsoever;
(d)
except
for restrictions and limitations imposed by the Loan Documents or the First Lien
Loan Documents or securities laws generally, the Pledged Collateral is and will
continue to be freely transferable and assignable, and none of the Pledged
Collateral is or will be subject to any option, right of first refusal,
shareholders agreement, charter or by-law provisions or contractual restriction
of any nature that might prohibit, impair, delay or otherwise affect the pledge
of such Pledged Collateral hereunder, the sale or disposition thereof pursuant
hereto or the exercise by the Lender of rights and remedies
hereunder;
(e)
each of
the Grantors has the power and authority to pledge the Pledged Collateral
pledged by it hereunder in the manner hereby done or contemplated;
(f)
no
consent or approval of any Governmental Authority, any securities exchange or
any other Person was or is necessary to the validity of the pledge effected
hereby (other than such as have been obtained and are in full force and
effect);
(g)
by virtue
of the execution and delivery by the Grantors of this Agreement, when any
Pledged Securities issued by an issuer organized under the laws of any of the
States of the United States or the District of Columbia are delivered to the
Lender in the State of New York in accordance with this Agreement or to a
collateral agent for Lender in accordance with the Intercreditor Agreement, the
Lender will obtain a legal, valid and perfected lien upon and security interest
in such Pledged Securities as security for the payment and performance of the
Secured Obligations; and
(h)
the
pledge effected hereby is effective to vest in the Lender the rights of the
Lender in the Pledged Collateral as set forth herein.
SECTION
2.04.
Certification of Limited
Liability Company and Limited Partnership Interests
.
Each
interest in any limited liability company or limited partnership controlled by
any Grantor and pledged hereunder shall be a "security" within the meaning of
Article 8 of the New York UCC and shall be governed by Article 8 of the New York
UCC and shall be represented by a certificate and delivered to the Lender
pursuant to Section 2.02 or shall be an uncertificated security and subject to
the provisions of Section 3.04(b);
provided
that the agreement
referred to therein shall be in form and substance reasonably satisfactory to
the Lender and shall have been executed and delivered to the Lender within 10
days after the date the Parent or the Borrower shall have been required to
comply with Sections 5.09 or 5.10(a) of the Credit Agreement.
SECTION
2.05.
Registration in Nominee Name;
Denominations
.
Upon the
occurrence and during the continuance of a Default, subject to the Intercreditor
Agreement, the Lender shall have the right (in its sole and absolute discretion)
to hold the Pledged Securities in its own name as pledgee, the name of its
nominee (as pledgee or as sub-agent) or the name of the applicable Grantor,
endorsed or assigned in blank or in favor of the Lender. Each Grantor
will promptly give to the Lender copies of any notices or other communications
received by it with respect to Pledged Securities registered in the name of such
Grantor. Subject to the Intercreditor Agreement, the Lender shall, if
a Default shall have occurred and be continuing, have the right to exchange the
certificates representing Pledged Securities for certificates of smaller or
larger denominations for any purpose consistent with this
Agreement.
SECTION
2.06.
Voting
Rights; Dividends and Interest
(a)
Subject to the Intercreditor Agreement, unless and until an Event of Default
shall have occurred and be continuing and the Lender shall have notified the
Grantors that their rights under this Section 2.06 are being
suspended:
(i)
Each
Grantor shall be entitled to exercise any and all voting and/or other consensual
rights and powers inuring to an owner of Pledged Securities or any part thereof
for any purpose consistent with the terms of this Agreement, the Credit
Agreement and the other Loan Documents;
provided
that such rights and
powers shall not be exercised in any manner that could materially and adversely
affect the rights inuring to a holder of any Pledged Securities or the rights
and remedies of Lender under this Agreement or the Credit Agreement
or any other Loan Document or the ability of Lender to exercise the
same.
(ii)
The
Lender shall execute and deliver to each Grantor, or cause to be executed and
delivered to such Grantor, all such proxies, powers of attorney and other
instruments as such Grantor may reasonably request for the purpose of enabling
such Grantor to exercise the voting and/or consensual rights and powers it is
entitled to exercise pursuant to subparagraph (i) above.
(iii)
Each
Grantor shall be entitled to receive and retain any and all dividends, interest,
principal and other distributions paid on or distributed in respect of the
Pledged Securities to the extent and only to the extent that such dividends,
interest, principal and other distributions are permitted by, and otherwise paid
or distributed in accordance with, the terms and conditions of the Credit
Agreement, the other Loan Documents and applicable laws;
provided
that any non-cash
dividends, interest, principal or other distributions that would constitute
Pledged Stock or Pledged Debt Securities, whether resulting from a subdivision,
combination or reclassification of the outstanding Equity Interests of the
issuer of any Pledged Securities or received in exchange for Pledged Securities
or any part thereof, or in redemption thereof, or as a result of any merger,
consolidation, acquisition or other exchange of assets to which such issuer may
be a party or otherwise, shall be and become part of the Pledged Collateral,
and, if received by any Grantor, shall not be commingled by such Grantor with
any of its other funds or property but shall be held separate and apart
therefrom, shall be held in trust for the benefit of the Lender and shall be
forthwith delivered to the Lender in the same form as so received (with any
necessary endorsement).
(b)
Subject
to the Intercreditor Agreement, upon the occurrence and during the continuance
of an Event of Default, after the Lender shall have notified the Grantors of the
suspension of their rights under paragraph (a)(iii) of this Section 2.06, then
all rights of any Grantor to dividends, interest, principal or other
distributions that such Grantor is authorized to receive pursuant to paragraph
(a)(iii) of this Section 2.06 shall cease, and all such rights shall thereupon
become vested in the Lender, which shall have the sole and exclusive right and
authority to receive and retain such dividends, interest, principal or other
distributions. All dividends, interest, principal or other
distributions received by any Grantor contrary to the provisions of this Section
2.06 shall be held in trust for the benefit of the Lender, shall be segregated
from other property or funds of such Grantor and shall be forthwith delivered to
the Lender upon demand in the same form as so received (with any necessary
endorsement). Any and all money and other property paid over to or
received by the Lender pursuant to the provisions of this paragraph (b) shall be
retained by the Lender in an account to be established by the Lender upon
receipt of such money or other property and shall be applied in accordance with
the provisions of Section 4.02. After all Events of Default have been
cured or waived and the Borrower has delivered to the Lender a certificate to
that effect, the Lender shall promptly repay to each Grantor (without interest
if the account is non-interest bearing) all dividends, interest, principal or
other distributions that such Grantor would otherwise be permitted to retain
pursuant to the terms of paragraph (a)(iii) of this Section 2.06 and that remain
in such account.
(c)
Upon the
occurrence and during the continuance of an Event of Default, after the Lender
shall have notified the Grantors of the suspension of their rights under
paragraph (a)(i) of this Section 2.06, then all rights of any Grantor to
exercise the voting and consensual rights and powers it is entitled to exercise
pursuant to paragraph (a)(i) of this Section 2.06, and the obligations of the
Lender under paragraph (a)(ii) of this Section 2.06, shall cease, and all such
rights shall thereupon become vested in the Lender, which shall have the sole
and exclusive right and authority to exercise such voting and consensual rights
and powers;
provided
that the Lender shall have the right from time to time following and during the
continuance of an Event of Default to permit the Grantors to exercise such
rights.
(d)
Any
notice given by the Lender to the Grantors suspending their rights under
paragraph (a) of this Section 2.06 (i) may be given by telephone if promptly
confirmed in writing within two Business Days thereafter, (ii) may be given to
one or more of the Grantors at the same or different times and (iii) may suspend
the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part
without suspending all such rights (as specified by the Lender in its sole and
absolute discretion) and without waiving or otherwise affecting the Lender's
rights to give additional notices from time to time suspending other rights so
long as an Event of Default has occurred and is continuing.
ARTICLE
III
Security
Interests in Personal Property
SECTION
3.01.
Security
Interest
.
(a)
Subject to Section 3.06, as security for the payment or performance, as the case
may be, in full of the Secured Obligations, each Grantor hereby assigns and
pledges to the Lender, its successors and assigns, and hereby grants to the
Lender, its successors and assigns, a security interest (the "
Security Interest
") in, all
right, title or interest in or to any and all of the following assets and
properties now owned or at any time hereafter acquired by such Grantor or in
which such Grantor now has or at any time in the future may acquire any right,
title or interest (collectively, the "
Article 9 Collateral
")
:
(i)
all
Accounts;
(ii)
all
Chattel Paper;
(iii)
all
Documents;
(iv)
all
Equipment;
(v)
all
General Intangibles;
(vi)
all
Instruments;
(vii)
all
Inventory;
(viii)
all
Investment Property;
(ix)
all books
and records pertaining to the Article 9 Collateral;
(x)
all cash
and Deposit Accounts; and
(xi)
to the
extent not otherwise included, all Proceeds and products of any and all of the
foregoing and all collateral security and guarantees given by any Person with
respect to any of the foregoing.
(b)
Each
Grantor hereby irrevocably authorizes the Lender at any time and from time to
time to file in any relevant jurisdiction any initial financing statements
(including fixture filings) with respect to the Article 9 Collateral or any part
thereof and amendments thereto that (i) indicate the Collateral as all assets of
such Pledgor or words of similar effect as being of an equal or lesser scope or
with greater detail, and (ii) contain the information required by Article 9 of
the Uniform Commercial Code of each applicable jurisdiction for the filing of
any financing statement or amendment, including (A) whether such Grantor is an
organization, the type of organization and any organizational identification
number issued to such Grantor and (B) in the case of a financing statement filed
as a fixture filing or covering Article 9 Collateral constituting minerals or
the like to be extracted or timber to be cut, a sufficient description of the
real property to which such Article 9 Collateral relates. Each Grantor agrees to
provide such information to the Lender promptly upon request.
The Lender is further authorized to
file with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office) such documents as may be necessary or
advisable for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest granted by each Grantor naming any Grantor or
the Grantors as debtors and the Lender as secured party;
provided
that the Lender
shall obtain such Grantor's written consent (which shall not be unreasonably
withheld) prior to such filings;
provided further
that no
consent shall be required if a Default shall have occurred and be
continuing.
(c)
The
Security Interest is granted as security only and shall not subject the Lender
to, or in any way alter or modify, any obligation or liability of any Grantor
with respect to or arising out of the Article 9 Collateral.
(d)
Notwithstanding
anything herein to the contrary, in no event shall the security interest granted
hereunder attach to any contract or agreement to which a Grantor is a party or
any of its rights or interests thereunder if and for so long as the grant of
such security interest shall constitute or result in (i) the unenforceability of
any right of the Grantor therein or (ii) a breach or termination pursuant to the
terms of, or a default under, any such contract or agreement (other than to the
extent that any such term would be rendered ineffective pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the New York UCC or any other applicable law or
principles of equity),
provided, however
, that such
security interest shall attach immediately at such time as the condition causing
such unenforceability or breach termination or default, as the case may be,
shall be remedied and, to the extent severable, shall attach immediately to any
portion of such contract or agreement that does not result in any of the
consequences specified in (i) or (ii) including, without limitation, any
proceeds of such contract or agreement.
SECTION
3.02.
Representations and
Warranties
.
The
Grantors jointly and severally represent and warrant to the Lender
that:
(a)
Each
Grantor has good and valid rights in and title to the Article 9 Collateral with
respect to which it has purported to grant a Security Interest hereunder and has
full power and authority to grant to the Lender the Security Interest in such
Article 9 Collateral pursuant hereto and to execute, deliver and perform its
obligations in accordance with the terms of this Agreement, without the consent
or approval of any other Person other than any consent or approval that has been
obtained.
(b)
The
Perfection Schedule has been duly prepared and completed (other than Sections
4-6 thereof) and the information set forth therein, including the exact legal
name of each Grantor, is correct and complete as of the date of this Agreement;
provided that the information listed on Annex 2 of the Perfection Schedule
required under Section 2(f) of the Perfection Schedule lists only the names and
addresses of those Persons other than any Grantor that have possession of any of
the Collateral, which for such purposes shall include any assets of any Loan
Party upon which a Lien is granted pursuant to any other Security Document to
secure any Secured Obligations, of any Grantor with a book value exceeding
$1,000,000 on the date hereof. The Uniform Commercial Code financing statements
(including fixture filings, as applicable) or other appropriate filings,
recordings or registrations prepared by the Lender based upon the information
provided to the Lender in the Perfection Schedule for filing in each
governmental, municipal or other office specified in Annex 2 to the Perfection
Schedule (or specified by notice from the Borrower to the Lender after the date
of this Agreement in the case of filings, recordings or registrations required
by Section 5.10 or 5.11 of the Credit Agreement), are all the filings,
recordings and registrations (other than filings required to be made in the
United States Copyright Office in order to perfect the Security Interest in
Article 9 Collateral consisting of Copyrights) that are necessary to publish
notice of and protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Lender in respect of all Article 9
Collateral in which the Security Interest may be perfected by filing, recording
or registration in the United States (or any political subdivision thereof) and
its territories and possessions, and no further or subsequent filing, re-filing,
recording, re-recording, registration or re-registration is necessary in any
such jurisdiction, except as provided under applicable law with respect to the
filing of continuation statements. As of the date of this Agreement, no Grantor
owns any Copyright that is material to the conduct of its business.
(c)
The
Security Interest constitutes (i) a legal and valid security interest in all the
Article 9 Collateral securing the payment and performance of the Secured
Obligations, (ii) subject to the filings described in Section 4.02(b), a
perfected security interest in all Article 9 Collateral in which a security
interest may be perfected by filing, recording or registering a financing
statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code or other applicable law in such jurisdictions and (iii) a
security interest that shall be perfected in all Article 9 Collateral in which a
security interest may be perfected upon the receipt and recording of a copyright
security agreement with the United States Copyright Office pursuant to 17 U.S.C.
§ 205. Except for the Lien on U.S. Patent no. 5787753, the Security Interest is
and shall be prior to any other Lien on any of the Article 9 Collateral, other
than Permitted Encumbrances that have priority as a matter of law and Liens
expressly permitted to be prior to the Security Interest pursuant to Section
6.02 of the Credit Agreement.
(d)
The
Article 9 Collateral is owned by the Grantors free and clear of any Lien, except
for Permitted Encumbrances and Liens expressly permitted pursuant to Section
6.02 of the Credit Agreement. Other than with respect to any filing
made with respect to the First Lien Documents, none of the Grantors has filed or
consented to the filing of (i) any financing statement or analogous document
under the Uniform Commercial Code or any other applicable laws covering any
Article 9 Collateral, (ii) any assignment in which any Grantor assigns any
Collateral or any security agreement or similar instrument covering any Article
9 Collateral with the United States Patent and Trademark Office or the United
States Copyright Office or (iii) any assignment in which any Grantor assigns any
Article 9 Collateral or any security agreement or similar instrument covering
any Article 9 Collateral with any foreign governmental, municipal or other
office, which financing statement or analogous document, assignment, security
agreement or similar instrument is still in effect, except, in each case, for
Liens expressly permitted pursuant to the Loan Documents or Section 6.02 of the
Credit Agreement.
SECTION
3.03.
Covenants
.
(a)
Each Grantor agrees to maintain, at its own cost and expense, such complete and
accurate records with respect to the Article 9 Collateral owned by it as is
consistent with its current practices and in accordance with such prudent and
standard practices used in industries that are the same as or similar to those
in which such Grantor is engaged, but in any event to include complete
accounting records indicating all payments and proceeds received with respect to
any part of the Article 9 Collateral.
(b)
Each
Grantor shall, at its own expense, take any and all actions necessary to defend
title to the Article 9 Collateral against all Persons and to defend the Security
Interest of the Lender in the Article 9 Collateral and the priority thereof
against any Lien not expressly permitted pursuant to Section 6.02 of the Credit
Agreement.
(c)
Each
Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause
to be duly filed all such further instruments and documents and take all such
actions as the Lender may from time to time reasonably request to better assure,
preserve, protect and perfect the Security Interest and the rights and remedies
created hereby, including the payment of any fees and taxes required in
connection with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing statements (including
fixture filings) or other documents in connection herewith or therewith. If any
amount payable under or in connection with any of the Article 9 Collateral shall
be or become evidenced by any promissory note or other instrument, such note or
instrument shall be immediately pledged and delivered to the Lender, duly
endorsed in a manner satisfactory to the Lender.
Without limiting the generality of the
foregoing, each Grantor hereby authorizes the Lender, with prompt notice thereof
to the Grantors, to supplement this Agreement by supplementing Schedule III or
adding additional schedules hereto to specifically identify any asset or item
that may constitute Copyrights, Licenses, Patents or Trademarks; provided that
(i) any Grantor shall have the right, exercisable within 10 days after it has
been notified by the Lender of the specific identification of such Collateral,
to advise the Lender in writing of any inaccuracy of the representations and
warranties made by such Grantor hereunder with respect to such Collateral, and
(ii) the Lender may not file such supplemental schedules with the United States
Patent and Trademark Office or United States Copyright Office without such
Grantor's consent (such consent not to be unreasonably withheld); provided that
no consent of such Grantor shall be required if a Default shall have occurred
and be continuing. Each Grantor agrees that it will use its best efforts to take
such action as shall be necessary in order that all representations and
warranties hereunder shall be true and correct with respect to such Collateral
within 30 days after the date it has been notified by the Lender of the specific
identification of such Collateral.
(d)
The
Lender and such Persons as the Lender may reasonably designate shall have the
right, at the Grantors' own cost and expense, to inspect the Article 9
Collateral, all records related thereto (and to make extracts and copies from
such records) and the premises upon which any of the Article 9 Collateral is
located, to discuss the Grantors' affairs with the officers of the Grantors and
their independent accountants and to verify under reasonable procedures, in
accordance with Section 5.06 of the Credit Agreement, the validity, amount,
quality, quantity, value, condition and status of, or any other matter relating
to, the Article 9 Collateral, including, in the case of Accounts or Article 9
Collateral in the possession of any third person, by contacting Account Debtors
or the third person possessing such Article 9 Collateral for the purpose of
making such a verification.
(e)
At its
option, the Lender may discharge past due taxes, assessments, charges, fees,
Liens, security interests or other encumbrances at any time levied or placed on
the Article 9 Collateral and not permitted pursuant to Section 6.02 of the
Credit Agreement, and may pay for the maintenance and preservation of the
Article 9 Collateral to the extent any Grantor fails to do so as required by the
Credit Agreement or this Agreement, and each Grantor jointly and severally
agrees to reimburse the Lender on demand for any payment made or any expense
incurred by the Lender pursuant to the foregoing authorization; provided that
nothing in this paragraph shall be interpreted as excusing any Grantor from the
performance of, or imposing any obligation on the Lender or any Secured Party to
cure or perform, any covenants or other promises of any Grantor with respect to
taxes, assessments, charges, fees, Liens, security interests or other
encumbrances and maintenance as set forth herein or in the other Loan
Documents.
(f)
If at any
time any Grantor shall take a security interest in any property of an Account
Debtor or any other Person to secure payment and performance of an Account in an
amount exceeding $5,000,000, such Grantor shall promptly assign such security
interest to the Lender. Such assignment need not be filed of public record
unless necessary to continue the perfected status of the security interest
against creditors of and transferees from the Account Debtor or other Person
granting the security interest.
(g)
Each
Grantor shall remain liable to observe and perform all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Article 9 Collateral, all in accordance with the
terms and conditions thereof, and each Grantor jointly and severally agrees to
indemnify and hold harmless the Lender from and against any and all liability
for such performance.
(h)
None of
the Grantors shall make or permit to be made an assignment, pledge or
hypothecation of the Article 9 Collateral or shall grant any other Lien in
respect of the Article 9 Collateral, except as permitted by the Credit
Agreement, the First Lien Credit Agreement and the First Lien Term Loan
Agreement. None of the Grantors shall make or permit to be made any
transfer of the Article 9 Collateral and each Grantor shall remain at all times
in possession of the Article 9 Collateral owned by it, except that unless and
until the Lender shall notify the Grantors that an Event of Default shall have
occurred and be continuing and that during the continuance thereof the Grantors
shall not sell, convey, lease, assign, transfer or otherwise dispose of any
Article 9 Collateral (which notice may be given by telephone if promptly
confirmed in writing), the Grantors may use and dispose of the Article 9
Collateral in any lawful manner not inconsistent with the provisions of this
Agreement, the Credit Agreement, any other Loan Document, the First Lien Credit
Agreement or the First Lien Term Loan Agreement. Without limiting the generality
of the foregoing, each Grantor agrees that it shall use commercially reasonable
efforts to not permit any Inventory with a book value at any time exceeding
$1,000,000 at any one location to be in the possession or control of any
warehouseman, agent, bailee, or processor at any time unless such warehouseman,
bailee, agent or processor shall have been notified of the Security Interest and
shall have acknowledged in writing, in form and substance reasonably
satisfactory to the Lender, that such warehouseman, agent, bailee or processor
holds the Inventory for the benefit of the Lender subject to the Security
Interest and shall act upon the instructions of the Lender without further
consent from the Grantor, and that such warehouseman, agent, bailee or processor
further agrees to waive and release any Lien held by it with respect to such
Inventory, whether arising by operation of law or otherwise;
provided
that the Lender
agrees that it will not deliver any such instructions unless an Event of Default
shall have occurred and be continuing.
(i)
None of
the Grantors will, without the Lender's prior written consent (which consent,
unless an Event of Default shall have occurred and be continuing, shall not be
unreasonably withheld), grant any extension of the time of payment of any
Accounts included in the Article 9 Collateral, compromise, compound or settle
the same for less than the full amount thereof, release, wholly or partly, any
Person liable for the payment thereof or allow any credit or discount whatsoever
thereon, other than extensions, compromises, settlements, releases, credits or
discounts granted or made in the ordinary course of business and consistent with
its current practices and in accordance with such prudent and standard practice
used in industries that are the same as or similar to those in which such
Grantor is engaged.
(j)
The
Grantors, at their own expense, shall maintain or cause to be maintained
insurance covering physical loss or damage to the Inventory and Equipment in
accordance with the requirements set forth in Schedule IV
hereto. Subject to the Intercreditor Agreement, each Grantor
irrevocably makes, constitutes and appoints the Lender (and all officers,
employees or agents designated by the Lender) as such Grantor's true and lawful
agent (and attorney-in-fact) for the purpose, during the continuance of an Event
of Default, of making, settling and adjusting claims in respect of Article 9
Collateral under policies of insurance, endorsing the name of such Grantor on
any check, draft, instrument or other item of payment for the proceeds of such
policies of insurance and for making all determinations and decisions with
respect thereto. In the event that any Grantor at any time or times shall fail
to obtain or maintain any of the policies of insurance required hereby or to pay
any premium in whole or part relating thereto, the Lender may, without waiving
or releasing any obligation or liability of the Grantors hereunder or any Event
of Default, in its sole discretion, obtain and maintain such policies of
insurance and pay such premium and take any other actions with respect thereto
as the Lender deems advisable. All sums disbursed by the Lender in connection
with this paragraph, including reasonable attorneys' fees, court costs, expenses
and other charges relating thereto, shall be payable, upon demand, by the
Grantors to the Lender and shall be additional Secured Obligations secured
hereby.
(k)
Each
Grantor shall maintain, in form and manner reasonably satisfactory to the
Lender, records of its Chattel Paper and its books, records and documents
evidencing or pertaining thereto.
SECTION
3.04.
Other
Actions
In order
to further insure the attachment, perfection and priority of, and the ability of
the Lender to enforce, the Security Interest, each Grantor agrees, in each case
at such Grantor's own expense, to take the following actions with respect to the
following Article 9 Collateral:
(a)
Instruments
. If any Grantor
shall at any time hold or acquire any Instruments, subject to the Intercreditor
Agreement, such Grantor shall forthwith endorse, assign and deliver the same to
the Lender, accompanied by such instruments of transfer or assignment duly
executed in blank as the Lender may from time to time reasonably
request.
(b)
Investment Property
. Except
to the extent otherwise provided in Article III, and subject to the
Intercreditor Agreement, if any Grantor shall at any time hold or acquire any
certificated securities, such Grantor shall forthwith endorse, assign and
deliver the same to the Lender, accompanied by such instruments of transfer or
assignment duly executed in blank as the Lender may from time to time specify.
If any securities now or hereafter acquired by any Grantor are uncertificated
and are issued to such Grantor or its nominee directly by the issuer thereof,
such Grantor shall immediately notify the Lender thereof and, at the Lender's
request and option, pursuant to an agreement in form and substance reasonably
satisfactory to the Lender, and subject to the Intercreditor Agreement, either
(i) cause the issuer to agree to comply with instructions from the Lender as to
such securities, without further consent of any Grantor or such nominee, or (ii)
arrange for the Lender to become the registered owner of the
securities.
SECTION
3.05.
Covenants Regarding Patent,
Trademark and Copyright Collateral
.
(a)
Each Grantor agrees that it will not do any act or knowingly omit to do any act
(and will exercise commercially reasonable efforts to prevent its licensees from
doing any act or omitting to do any act) whereby any Patent that is material to
the conduct of such Grantor's business may become invalidated or dedicated to
the public, and agrees that it shall continue to use proper statutory notice in
connection with Grantor's products covered by a Patent in a manner consistent
with past practices in the ordinary course of business.
(b)
Each
Grantor (either itself or through its licensees or its sublicensees) will, for
each Trademark material to the conduct of such Grantor's business, (i) maintain
such Trademark in full force free from any claim of abandonment or invalidity
for non-use, (ii) maintain the quality of products and services offered under
such Trademark, consistent with the quality of the products and services of the
date hereof, (iii) use proper statutory notice in a manner consistent with past
practices in the ordinary course of business and (iv) not knowingly use or
knowingly permit the use of such Trademark in violation of any third party
rights.
(c)
Each
Grantor (either itself or through its licensees or sublicensees) will, for each
work covered by a Copyright material to the conduct of such Grantor's business,
continue to publish, reproduce, display, adopt and distribute the work with
proper statutory notice in a manner consistent with past practices in the
ordinary course of business.
(d)
Each
Grantor shall notify the Lender promptly if it knows or has reason to know that
any Patent, Trademark or Copyright material to the conduct of its business may
become abandoned, lost or dedicated to the public, or of any materially adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, United States Copyright Office or any court or similar office
of any country) regarding such Grantor's ownership of any Patent, Trademark or
Copyright, its right to register the same, or its right to keep and maintain the
same.
(e)
In the
event that any Grantor, either itself or through any agent, employee, licensee
or designee, files an application for any Patent, Trademark or Copyright
material to the conduct of its business (or for the registration of any
Trademark or Copyright) with the United States Patent and Trademark Office,
United States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision thereof, such Grantor shall, substantially contemporaneously with
such filing, notify the Lender, and, upon request of the Lender, execute and
deliver any and all agreements, instruments, documents and papers as the Lender
may reasonably request to evidence the Lender's security interest in such
Patent, Trademark or Copyright.
(f)
Each
Grantor will take all necessary steps that are consistent with the practice in
any proceeding before the United States Patent and Trademark Office, United
States Copyright Office or any office or agency in any political subdivision of
the United States or in any other country or any political subdivision thereof,
to maintain and pursue each material application relating to the Patents,
Trademarks and/or Copyrights (and to obtain the relevant grant or registration)
and to maintain each issued Patent and each registration of the Trademarks and
Copyrights that is material to the conduct of any Grantor's business, including
timely filings of applications for renewal, affidavits of use, affidavits of
incontestability and payment of maintenance fees, and, if consistent with good
business judgment, to initiate opposition, interference and cancellation
proceedings against third parties.
(g)
In the
event that any Grantor has reason to believe that any Article 9 Collateral
consisting of a Patent, Trademark or Copyright material to the conduct of any
Grantor's business has been or is about to be infringed, misappropriated or
diluted by a third party, such Grantor promptly shall notify the Lender and
shall, if consistent with good business judgment, promptly sue for infringement,
misappropriation or dilution and to recover any and all damages for such
infringement, misappropriation or dilution, and take such other actions as are
appropriate under the circumstances to protect such Article 9
Collateral.
(h)
Upon and
during the continuance of an Event of Default, each Grantor shall use its best
efforts to obtain all requisite consents or approvals by the licensor of each
Copyright License, Patent License or Trademark License to effect the assignment
of all such Grantor's right, title and interest thereunder to the Lender or its
designee.
(i)
Each year
at the time of delivery of the certificate required pursuant to Section 5.10(b)
of the Credit Agreement, the Parent or the Borrower shall supplement Schedule
III to this Agreement with any information not previously disclosed to the
Lender.
SECTION
3.06.
Existing Senior Notes
Indentures
.
This
Agreement and the other Security Documents (a) are intended not to create a Lien
on any Restricted Property to secure any of the Secured Obligations if and to
the extent doing so would require any of the Existing Senior Notes to be equally
and ratably secured, and (b) shall be construed and enforced to give effect to
such intention.
SECTION
3.07.
Deposit Accounts and Securities
Accounts.
(a)
The Grantors shall
have Control Agreements executed and delivered to the Lender by all depositary
banks and securities intermediaries with which the Grantors maintain Deposit
Accounts or Securities Accounts on the date hereof;
provided
that the Grantors
shall not be required to have Control Agreements executed and delivered for
Deposit Accounts that do not at any time contain any deposits other than those
exclusively used for (i) payroll, payroll taxes and other wage or benefit
payments to or for the benefit of employees of one or more of the Grantors or
(ii) disbursements;
provided
,
further
, that,
notwithstanding the foregoing, the Grantors shall use commercially reasonable
efforts to have Control Agreements executed and delivered to the Lender no later
than 60 days after the date hereof (or such later date as the Lender shall
approve in its sole discretion) with respect to the Deposit Accounts and
Securities Accounts listed on Schedule V.
(b)
No
Grantor shall open any additional Deposit Account (other than a Deposit Account
for which no Control Agreement is required under paragraph (a) of this Section)
or Securities Account after the date hereof unless such Grantor shall notify the
Lender thereof and either (i) cause the depositary bank or securities
intermediary, as the case may be, to agree to comply with instructions from the
Lender to such depositary bank or securities intermediary directing the
disposition of funds or securities from time to time credited to such Deposit
Account or Securities Account, without further consent of such Grantor or any
other Person, pursuant to a Control Agreement reasonably satisfactory to the
Lender and the Borrower, or (ii) arrange for the Lender to become the
customer of the depositary bank or securities intermediary with respect to the
Deposit Account or Securities Account, with the Grantor being permitted, only
with the consent of the Lender, to exercise rights to withdraw funds from such
Deposit Account or sell or otherwise dispose in any way of securities from such
Securities Accounts. The Lender agrees with each Grantor that the
Lender shall not give any such instructions or withhold any withdrawal or sale
rights from any Grantor unless an Event of Default under either Credit Agreement
has occurred and is continuing, or, after giving effect to any such withdrawal
or sale, would occur.
SECTION
3.08.
Limitations on Duties of
Lender
.
Beyond
its duties as to the custody thereof expressly provided herein or in any other
Security Document and to account to the Loan Parties for moneys and other
property received by it hereunder or under any other Security Document, the
Lender shall not have any duty to the Loan Parties as to any Collateral in its
possession or control of any of its agents or nominees, or any income thereon or
as to the preservation of rights against prior parties or any other rights
pertaining thereto.
ARTICLE
IV
Remedies
SECTION
4.01.
Remedies Upon
Default
.
Upon the
occurrence and during the continuance of an Event of Default, subject to the
Intercreditor Agreement, each Grantor agrees to deliver each item of Collateral
to the Lender on demand, and it is agreed that the Lender shall have the right
to take any of or all the following actions at the same or different times: (a)
with respect to any Article 9 Collateral consisting of Intellectual Property, on
demand, to cause the Security Interest to become an assignment, transfer and
conveyance of any of or all such Article 9 Collateral by the applicable Grantors
to the Lender, or to license or sublicense, whether general, special or
otherwise, and whether on an exclusive or nonexclusive basis, any such Article 9
Collateral throughout the world on such terms and conditions and in such manner
as the Lender shall determine (other than in violation of any then-existing
licensing arrangements to the extent that waivers cannot be obtained), and (b)
with or without legal process and with or without prior notice or demand for
performance, to take possession of the Article 9 Collateral and without
liability for trespass to enter any premises where the Article 9 Collateral may
be located for the purpose of taking possession of or removing the Article 9
Collateral and, generally, to exercise any and all rights afforded to a secured
party under the Uniform Commercial Code or other applicable law. Without
limiting the generality of the foregoing, each Grantor agrees that the Lender
shall have the right, subject to the mandatory requirements of applicable law,
and subject to the Intercreditor Agreement, to sell or otherwise dispose of all
or any part of the Collateral at a public or private sale or at any broker's
board or on any securities exchange, for cash, upon credit or for future
delivery as the Lender shall deem appropriate. The Lender shall be authorized at
any such sale of securities (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to Persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Lender shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any sale of Collateral shall hold the property sold absolutely, free from any
claim or right on the part of any Grantor, and each Grantor hereby waives (to
the extent permitted by law) all rights of redemption, stay and appraisal which
such Grantor now has or may at any time in the future have under any rule of law
or statute now existing or hereafter enacted.
The
Lender shall give the applicable Grantors 10 days' written notice (which each
Grantor agrees is reasonable notice within the meaning of Section 9-611 of the
New York UCC or its equivalent in other jurisdictions) of the Lender's intention
to make any sale of Collateral. Such notice, in the case of a public sale, shall
state the time and place for such sale and, in the case of a sale at a broker's
board or on a securities exchange, shall state the board or exchange at which
such sale is to be made and the day on which the Collateral, or portion thereof,
will first be offered for sale at such board or exchange. Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as the Lender may fix and state in the notice (if any) of such
sale. At any such sale, the Collateral , or portion thereof, to be sold may be
sold in one lot as an entirety or in separate parcels, as the Lender may (in its
sole and absolute discretion) determine. The Lender shall not be obligated to
make any sale of any Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of such Collateral shall have been
given. Subject to the Intercreditor Agreement, the Lender may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case any sale of all or any
part of the Collateral is made on credit or for future delivery, the Collateral
so sold may be retained by the Lender until the sale price is paid by the
purchaser or purchasers thereof, but the Lender shall not incur any liability in
case any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may be sold
again upon like notice. Subject to the Intercreditor Agreement, at
any public (or, to the extent permitted by law, private) sale made pursuant to
this Agreement, Lender may bid for or purchase, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any Grantor (all said rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale. For purposes hereof, a written agreement to purchase the Collateral or any
portion thereof shall be treated as a sale thereof; the Lender shall be free to
carry out such sale pursuant to such agreement and no Grantor shall be entitled
to the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Lender shall have entered into such an
agreement all Events of Default shall have been remedied and the Secured
Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Lender may proceed by a suit or suits at law or in
equity to foreclose this Agreement and to sell the Collateral or any portion
thereof pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale
pursuant to the provisions of this Section 4.01 shall be deemed to conform to
the commercially reasonable standards as provided in Section 9-610(b) of the New
York UCC or its equivalent in other jurisdictions.
Subject
to the Intercreditor Agreement, in the event of a foreclosure or other exercise
of remedies against the Collateral by the Lender on any of the Collateral
pursuant to a public or private sale or other disposition, the Lender may be the
purchaser or licensor of any or all of such Collateral at any such sale or other
disposition, and the Lender shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by the Lender at such sale or other disposition.
SECTION
4.02.
Application of
Proceeds
.
(a)
Subject to the Intercreditor Agreement, the Lender shall apply the proceeds of
any collection or sale of Collateral, which for such purposes shall include any
assets of any Grantor upon which a Lien is granted pursuant to any other
Security Document to secure any Secured Obligations, hereunder or under any
other Security Document, including any Collateral consisting of cash, as
follows:
FIRST, to the payment of all costs and
expenses incurred by the Lender in connection with such collection or sale or
otherwise in connection with this Agreement, any other Loan Document or any of
the Secured Obligations, including all court costs and the fees and expenses of
its agents and legal counsel, the repayment of all advances made by the Lender
hereunder or under any other Loan Document on behalf of any Grantor and any
other costs or expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Loan Document;
SECOND, to the payment in full of the
Secured Obligations; and
THIRD, to the Grantors, their
successors or assigns, or as a court of competent jurisdiction may otherwise
direct.
Subject
to the Intercreditor Agreement,
the Lender shall have
absolute discretion as to the time of application of any such proceeds, moneys
or balances in accordance with this Agreement. Upon any sale of Collateral,
which for such purposes shall include any assets of any Grantor upon which a
Lien is granted pursuant to any other Security Document to secure any Secured
Obligations, by the Lender (including pursuant to a power of sale granted by
statute or under a judicial proceeding), the receipt of the Lender or of the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral, which for such purposes shall include any assets
of any Grantor upon which a Lien is granted pursuant to any other Security
Document to secure any Secured Obligations, so sold and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Lender or such officer or be answerable in any
way for the misapplication thereof.
SECTION
4.03.
Grant
of License to Use Intellectual Property
For the
purpose of enabling the Lender to exercise the rights and remedies under this
Agreement at such time as the Lender shall be lawfully entitled to exercise such
rights and remedies, each Grantor hereby grants to the Lender (to the extent
grantable by such Grantor without breaching or violating any agreement) an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to the Grantors and subject, in the case of Trademarks, to
sufficient rights to quality control and inspection in favor of such Grantor to
avoid the risk of invalidation of such Trademarks and, in the case of trade
secrets, to an obligation of Lender to take reasonable steps under the
circumstances to keep the trade secrets confidential to avoid the risk of
invalidation of such trade secrets) to use, license or sublicense any of the
Article 9 Collateral consisting of Intellectual Property now owned or hereafter
acquired by such Grantor, and wherever the same may be located, and including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Lender may be
exercised, at the option of the Lender, only upon the occurrence and during the
continuation of an Event of Default and subject to the Intercreditor Agreement;
provided
that any
license to any third party, sublicense to any third party or other transaction
entered into by the Lender in accordance herewith shall be binding upon the
Grantors notwithstanding any subsequent cure of an Event of
Default.
SECTION
4.04.
Securities
Act
In view
of the position of the Grantors in relation to the Pledged Collateral, or
because of other current or future circumstances, a question may arise under the
Securities Act of 1933, as now or hereafter in effect, or any similar statute
hereafter enacted analogous in purpose or effect (such Act and any such similar
statute as from time to time in effect being called the "
Federal Securities Laws
")
with respect to any disposition of the Pledged Collateral permitted hereunder.
Each Grantor understands that compliance with the Federal Securities Laws might
very strictly limit the course of conduct of the Lender if the Lender were to
attempt to dispose of all or any part of the Pledged Collateral, and might also
limit the extent to which or the manner in which any subsequent transferee of
any Pledged Collateral could dispose of the same. Similarly, there may be other
legal restrictions or limitations affecting the Lender in any attempt to dispose
of all or part of the Pledged Collateral under applicable Blue Sky or other
state securities laws or similar laws analogous in purpose or effect. Each
Grantor recognizes that in light of such restrictions and limitations the Lender
may, with respect to any sale of the Pledged Collateral, limit the purchasers to
those who will agree, among other things, to acquire such Pledged Collateral for
their own account, for investment, and not with a view to the distribution or
resale thereof. Each Grantor acknowledges and agrees that in light of such
restrictions and limitations, the Lender, in its sole and absolute discretion
(a) may proceed to make such a sale whether or not a registration statement for
the purpose of registering such Pledged Collateral or any part thereof shall
have been filed under the Federal Securities Laws and (b) may approach and
negotiate with a single potential purchaser to effect such sale. Each Grantor
acknowledges and agrees that any such sale might result in prices and other
terms less favorable to the seller than if such sale were a public sale without
such restrictions. In the event of any such sale, the Lender shall incur no
responsibility or liability for selling all or any part of the Pledged
Collateral at a price that the Lender, in its sole and absolute discretion, may
in good faith deem reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might have been realized if the
sale were deferred until after registration as aforesaid or if more than a
single purchaser were approached. The provisions of this Section 4.04 will apply
notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which the
Lender sells.
ARTICLE
V
Indemnity,
Subrogation and Subordination
SECTION
5.01.
Indemnity
and Subrogation
In
addition to all such rights of indemnity and subrogation as the Grantors may
have under applicable law (but subject to Section 5.03), the Borrower agrees
that in the event any assets of any Grantor shall be sold pursuant to this
Agreement or any other Security Document to satisfy in whole or in part an
obligation owed to any Secured Party, the Borrower shall indemnify such Grantor
in an amount equal to the greater of the book value or the fair market value of
the assets so sold.
SECTION
5.02.
Contribution and
Subrogation
.
Each
Grantor (a "
Contributing
Party
") agrees (subject to Section 5.03) that, in the event any assets of
any other Grantor shall be sold pursuant to any Security Document to satisfy any
Secured Obligation owed to the Lender and such other Grantor (the "
Claiming Party
") shall not
have been fully indemnified by the Borrower as provided in Section 5.01, the
Contributing Party shall indemnify the Claiming Party in an amount equal to the
greater of the book value or the fair market value of such assets multiplied by
a fraction of which the numerator shall be the net worth of the Contributing
Party on the date hereof and the denominator shall be the aggregate net worth of
all the Grantors on the date hereof (or, in the case of any Grantor becoming a
party hereto pursuant to Section 7.14, the date of the supplement hereto
executed and delivered by such Grantor). Any Contributing Party making any
payment to a Claiming Party pursuant to this Section 5.02 shall be subrogated to
the rights of such Claiming Party under Section 5.01 to the extent of such
payment.
SECTION
5.03.
Subordination
.
(a) Notwithstanding any provision of this Agreement to the contrary, all rights
of the Grantors under Sections 5.01 and 5.02 and all other rights of indemnity,
contribution or subrogation under applicable law or otherwise shall be fully
subordinated to the indefeasible payment in full in cash of the Secured
Obligations. No failure on the part of the Borrower or any Grantor to make the
payments required by Sections 5.01 and 5.02 (or any other payments required
under applicable law or otherwise) shall in any respect limit the obligations
and liabilities of any Grantor with respect to its obligations hereunder, and
each Grantor shall remain liable for the full amount of the obligations of such
Grantor hereunder.
(b)
Each
Grantor hereby agrees that all Indebtedness and other monetary obligations owed
by it to any other Grantor or any other Subsidiary shall be fully subordinated
to the indefeasible payment in full in cash of the Secured
Obligations.
ARTICLE
VI
Intercreditor
Agreement
Notwithstanding
anything herein to the contrary, the Liens and security interests granted to the
Lender pursuant to this Agreement and the exercise of any right or remedy by the
Lender hereunder are subject to the provisions of the Intercreditor Agreement,
dated of even date herewith (as amended, restated, supplemented or otherwise
modified from time to time, the "I
ntercreditor
Agreement
"), among JPMorgan Chase Bank, N.A., as agent, General Motors
Company and the Grantors (as defined therein) from time to time a party thereto
and certain other persons party or that may become party thereto from time to
time. In the event of any conflict between the terms of the
Intercreditor Agreement and this Agreement, the terms of the Intercreditor
Agreement shall govern and control
.
ARTICLE
VII
Miscellaneous
SECTION
7.01.
Notices
All
communications and notices hereunder shall (except as otherwise expressly
permitted herein) be in writing and given as provided in Section 9.01 of the
Credit Agreement. All communications and notices hereunder to any Subsidiary
Party shall be given to it in care of the Borrower as provided in Section 9.01
of the Credit Agreement.
SECTION
7.02.
Waivers;
Amendment
(a)
No failure or delay by the Lender in exercising any right or power hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Lender hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by any Loan Party therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section 7.02, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan shall not be construed as a waiver of any Default, regardless
of whether the Lender may have had notice or knowledge of such Default at the
time. No notice or demand on any Loan Party in any case shall entitle any Loan
Party to any other or further notice or demand in similar or other
circumstances.
(b)
Neither
this Agreement nor any provision hereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by the
Lender and the Loan Party or Loan Parties with respect to which such waiver,
amendment or modification is to apply.
SECTION
7.03.
Lender's
Fees and Expenses; Indemnification
(a) The parties hereto agree that the Lender shall be entitled to
reimbursement of its reasonable expenses incurred hereunder as provided in
Section 9.03 of the Credit Agreement.
(b)
Without
limitation of its indemnification obligations under the other Loan Documents,
each Grantor jointly and severally agrees to indemnify the Lender and the other
Indemnitees (as defined in Section 9.03 of the Credit Agreement) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of, the execution,
delivery or performance of this Agreement or any claim, litigation,
investigation or proceeding relating to any agreement or instrument contemplated
hereby, or to the Collateral, which for such purposes shall include any assets
of any Loan Party upon which a Lien is granted pursuant to any other Security
Document to secure any Secured Obligations, whether or not any Indemnitee is a
party thereto;
provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or any of its Related Parties.
(c)
Any such
amounts payable as provided hereunder shall be additional Secured Obligations
secured hereby and by the other Security Documents. The provisions of this
Section 7.03 shall remain operative and in full force and effect regardless of
the termination of this Agreement or any other Loan Document, the consummation
of the transactions contemplated hereby, the repayment of any of the Secured
Obligations, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of the Lender or any other Secured Party. All amounts due under this Section
7.03 shall be payable promptly after written demand therefor.
SECTION
7.04.
Successors
and Assigns
Whenever
in this Agreement any of the parties hereto is referred to, such reference shall
be deemed to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of any Grantor or the Lender
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.
SECTION
7.05.
Survival
of Agreement
All
covenants, agreements, representations and warranties made by the Loan Parties
in the Loan Documents and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the Lenders and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans, regardless of any investigation made by any Lender or on its behalf and
notwithstanding that the Lender may have had notice or knowledge of any Default
or incorrect representation or warranty at the time any credit is extended under
the Credit Agreement, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under any Loan Document is outstanding and so long as the Commitment has
not expired or terminated.
SECTION
7.06.
Counterparts;
Effectiveness; Several Agreement
This
Agreement may be executed in counterparts, each of which shall constitute an
original but all of which when taken together shall constitute a single
contract. Delivery of an executed signature page to this Agreement by facsimile
transmission or electronic transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement. This Agreement shall become
effective as to any Loan Party when a counterpart hereof executed on behalf of
such Loan Party shall have been delivered to the Lender and a counterpart hereof
shall have been executed on behalf of the Lender, and thereafter shall be
binding upon such Loan Party and the Lender and their respective permitted
successors and assigns, and shall inure to the benefit of such Loan Party, the
Lender and their respective successors and assigns, except that no Loan Party
shall have the right to assign or transfer its rights or obligations hereunder
or any interest herein or in the Collateral (and any such assignment or transfer
shall be void) except as expressly contemplated by this Agreement or the Credit
Agreement. This Agreement shall be construed as a separate agreement with
respect to each Loan Party and may be modified, supplemented, waived or released
with respect to any Loan Party without the approval of any other Loan Party and
without affecting the obligations of any other Loan Party
hereunder.
SECTION
7.07.
Severability
Any
provision of this Agreement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable
provisions.
SECTION
7.08.
[Intentionally
Omitted].
SECTION
7.09.
Governing
Law; Jurisdiction; Consent to Service of Process
(a) This Agreement shall be construed in accordance with and governed by
the law of the State of New York.
(b)
Each of
the Loan Parties hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court of the State
of New York sitting in New York County and of the United States District Court
of the Southern District of New York, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or any
other Security Document, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Security Document shall affect any right
that the Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any other Loan Document against any Grantor or its properties
in the courts of any jurisdiction.
(c)
Each of
the Loan Parties hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Security Document in any court
referred to in paragraph (b) of this Section 7.09. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d)
Each
party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 7.01. Nothing in this Agreement or any other
Security Document will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION
7.10.
WAIVER OF JURY
TRIAL
.
EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 7.10.
SECTION
7.11.
Headings
Article
and Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.
SECTION
7.12.
Security
Interest Absolute
All
rights of the Lender hereunder, the Security Interest, the grant of a security
interest in the Pledged Collateral and all obligations of each Grantor hereunder
shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Secured Obligations or any other agreement or
instrument relating to any of the foregoing, (b) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Secured
Obligations, or any other amendment or waiver of or any consent to any departure
from the Credit Agreement, any other Loan Document or any other agreement or
instrument, (c) any exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or
departure from any guarantee, securing or guaranteeing all or any of the Secured
Obligations, or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Grantor in respect of the Secured
Obligations or this Agreement.
SECTION
7.13.
Termination
or Release
(a) This Agreement, the Security Interest and all other security interests
granted hereby shall terminate when all the Secured Obligations have been
indefeasibly paid in full and the Lenders have no further commitment to lend
under the Credit Agreement.
(b)
A
Subsidiary Party shall automatically be released from its obligations hereunder
and the Security Interest in the Collateral of such Subsidiary Party shall be
automatically released upon the consummation of any transaction permitted by the
Credit Agreement as a result of which such Subsidiary Party ceases to be a
Subsidiary of the Borrower;
provided
that the Lender
shall have consented to such transaction (if and only to the extent required by
the Credit Agreement) and the terms of such consent did not provide
otherwise.
(c)
Upon any
sale or other transfer by any Grantor of any Collateral that is permitted under
the Credit Agreement to a transferee that is not a Grantor, or if and to the
extent required pursuant to Section 9.02 of the Credit Agreement upon the
effectiveness of any written consent to the release of the security interest
granted hereby in any Collateral, the security interest in such Collateral shall
be automatically released. For the avoidance of doubt, for purposes
of this Section 7.13(c), the term “Collateral” shall include any assets of any
Loan Party upon which a Lien is granted pursuant to any other Security Document
to secure any Secured Obligations.
(d)
In
connection with any termination or release pursuant to paragraph (a), (b) or
(c), the Lender shall execute and deliver to any Grantor, at such Grantor's
expense, all documents that such Grantor shall reasonably request to evidence
such termination or release. Any execution and delivery of documents pursuant to
this Section 7.13 shall be without recourse to or warranty by the
Lender.
SECTION
7.14.
Additional
Subsidiaries
.
Pursuant
to Section 5.09 of the Credit Agreement, each Subsidiary Loan Party that was not
in existence or not a Subsidiary Loan Party on the date of this Agreement is
required to enter into this Agreement as a Subsidiary Party upon becoming such a
Subsidiary Loan Party. Upon execution and delivery by the Lender and a
Subsidiary of an instrument in the form of Exhibit I hereto, such Subsidiary
shall become a Subsidiary Party hereunder with the same force and effect as if
originally named as a Subsidiary Party herein. The execution and delivery of any
such instrument shall not require the consent of any other Loan Party hereunder.
The rights and obligations of each Loan Party hereunder shall remain in full
force and effect notwithstanding the addition of any new Loan Party as a party
to this Agreement.
SECTION
7.15.
Lender Appointed
Attorney-in-Fact
.
Each
Grantor hereby appoints the Lender the attorney-in-fact of such Grantor for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument that the Lender may deem necessary or advisable to
accomplish the purposes hereof, which appointment is irrevocable and coupled
with an interest. Without limiting the generality of the foregoing, the Lender
shall have the right, upon the occurrence and during the continuance of an Event
of Default, with full power of substitution either in the Lender's name or in
the name of such Grantor (a) to receive, endorse, assign and/or deliver any and
all notes, acceptances, checks, drafts, money orders or other evidences of
payment relating to the Collateral or any part thereof; (b) to demand, collect,
receive payment of, give receipt for and give discharges and releases of all or
any of the Collateral; (c) to sign the name of any Grantor on any invoice or
bill of lading relating to any of the Collateral; (d) to send verifications of
Accounts Receivable to any Account Debtor; (e) to commence and prosecute any and
all suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect or otherwise realize on all or any of the Collateral or
to enforce any rights in respect of any Collateral; (f) to settle, compromise,
compound, adjust or defend any actions, suits or proceedings relating to all or
any of the Collateral; (g) to notify, or to require any Grantor to notify,
Account Debtors to make payment directly to the Lender; and (h) to use, sell,
assign, transfer, pledge, make any agreement with respect to or otherwise deal
with all or any of the Collateral, and to do all other acts and things necessary
to carry out the purposes of this Agreement, as fully and completely as though
the Lender were the absolute owner of the Collateral for all purposes;
provided
that nothing herein
contained shall be construed as requiring or obligating the Lender to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Lender, or to present or file any claim or notice, or to take
any action with respect to the Collateral or any part thereof or the moneys due
or to become due in respect thereof or any property covered thereby. The Lender
shall be accountable only for amounts actually received as a result of the
exercise of the powers granted to them herein, and neither they nor their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
willful misconduct. For the avoidance of doubt, for purposes of this Section
7.15, the term “Collateral” shall include any assets of any Loan Party upon
which a Lien is granted pursuant to any other Security Document to secure any
Secured Obligations.
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
day and year first above written.
[Signature
page follows]
[Signature
page to the Collateral Agreement]
AMERICAN AXLE &
MANUFACTURING HOLDINGS,
INC.,
By: /s/
Name: Shannon J. Curry
Title: Treasurer
AMERICAN AXLE &
MANUFACTURING, INC.,
By: /s/
Name: Shannon J. Curry
Title: Treasurer
AAM INTERNATIONAL
HOLDINGS,
INC.,
By: /s/
Name: Shannon J. Curry
Title: Treasurer
COLFOR MANUFACTURING,
INC,.
By: /s/
Name: Shannon J. Curry
Title: Treasurer
[Signature
Page to the Collateral Agreement]
DIETRONIK, INC,.
By: /s/
Name: Shannon J. Curry
Title: Treasurer
MSP INDUSTRIES
CORPORATION,
By: /s/
Name: Shannon J. Curry
Title: Treasurer
OXFORD FORGE, INC.,
By: /s/
Name: Shannon J. Curry
Title: Treasurer
ACCUGEAR, INC.,
By: /s/
Name: Shannon J. Curry
Title: Treasurer
[Signature
Page to the Collateral Agreement]
GENERAL MOTORS COMPANY,
By: /s/
Name: __Authorized Signatory
___________
Title: ______________________________
DETROIT.3786481.8
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.
“
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).
(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.
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:
(i)
|
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;
|
(ii)
|
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)
|
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)
|
purchase
Supplier’s Inventory according to the terms of this
Agreement;
|
(v)
|
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)
|
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)
|
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)
|
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:
(i)
|
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)
|
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)
|
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)
|
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)
|
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.
|
(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:
(i)
|
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)
|
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)
|
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.
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.
(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.
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
|
2290
First National Building
|
|
Facsimile: (313)
465-7597
|
|
If
given to Agent:
|
JPMorgan
Chase Bank
|
|
Loan
and Agency Services Group
|
|
Facsimile:
(713) 750-2938
|
|
with
a copy to:
|
Cravath,
Swaine & Moore LLP
|
|
Facsimile:
(212) 474-3700
|
|
Attn:
James C. Vardell III
|
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 ]
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
12(a)
-- Lender’s
Acknowledgment and Consent
Schedule
12(b)
-- Lessor’s
Acknowledgment and Consent
ACCESS
FACILITIES
1.
|
Cheektowaga
Manufacturing Facility (Buffalo, New
York)
|
2.
|
Detroit
Manufacturing Facility (Detroit,
Michigan)
|
3.
|
Three
Rivers Manufacturing Facility (Three Rivers,
Michigan)
|
4.
|
MSP
Industries (Oxford, Michigan)
|
5.
|
Colfor
Manufacturing (Malvern, Ohio)
|
6.
|
Colfor
Manufacturing (Minerva, Ohio)
|
7.
|
Colfor
Manufacturing (Salem, Ohio)
|
8.
|
Guanajuato,
Mexico Manufacturing Complex
|
9.
|
Araucaria,
Brazil Manufacturing Facility
|
10.
|
Rayong,
Thailand Manufacturing Facility
|
11.
|
Any
other AAM facility that manufactures Component Parts for GM in the future,
as and when such facility begins manufacturing Component Parts for
GM
|
ACCESS
FEES
Cheektowaga
Manufacturing Facility (Buffalo, New York)
|
$ 45,000
|
Detroit
Manufacturing Facility (Detroit, Michigan)
|
32,000
|
Three
Rivers Manufacturing Facility (Three Rivers, Michigan)
|
357,000
|
MSP
Industries (Oxford, Michigan)
|
77,000
|
Colfor
Manufacturing (Malvern, Ohio)
|
32,000
|
Colfor
Manufacturing (Minerva, Ohio)
|
13,000
|
Colfor
Manufacturing (Salem, Ohio)
|
37,000
|
Guanajuato,
Mexico Manufacturing Complex
|
1,258,000
|
Araucaria,
Brazil Manufacturing Facility
|
264,000
|
Rayong,
Thailand Manufacturing Facility
|
20,000
|
Any
other AAM facility that manufactures Component Parts for GM in the future,
as and when such facility begins manufacturing Component Parts for
GM
|
To
be mutually agreed upon
|
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:
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