Exhibit 10.10
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is dated as
of February 28, 1994, by and between General Motors Corporation, a Delaware
corporation ("GM"), and American Axle & Manufacturing, Inc., a Delaware
corporation ("AAM").
RECITALS
WHEREAS, the parties hereto have entered into a certain Asset
Purchase Agreement dated as of February 18, 1994 (the "Asset Purchase
Agreement") (unless otherwise indicated, capitalized terms used herein have the
same meaning as those set forth in the Asset Purchase Agreement); and
WHEREAS, pursuant to the terms and conditions of the Asset
Purchase Agreement, the parties hereto have agreed to indemnify each other upon
the occurrence of certain events;
NOW, THEREFORE, in consideration of the promises and the
mutual covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, AAM and GM agree to
certain additional terms and conditions relating to such indemnities as follows:
I. Conditions of General Indemnification.
(a) GM shall indemnify and hold harmless AAM, its
shareholders, officers, directors, agents and employees from and against any and
all losses, liabilities, damages, demands, claims, suits, actions, judgements or
causes of action, assessments, costs and expenses including, without limitation,
interest, penalties, reasonable attorneys' fees, any and all reasonable expenses
incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation (collectively, "Damages"), asserted against, resulting to, imposed
upon, or incurred or suffered by AAM, directly or indirectly, as a result of or
arising from the following (individually an "Indemnifiable Claim" and
collectively "Indemnifiable Claims" when used in the context of AAM as the
Indemnified Party (as defined below)):
(i) Any breach of any of the representations, warranties or
agreements made by GM in the Asset Purchase Agreement or the non-performance of
any covenant or obligation to be performed by GM thereunder;
(ii) Any liability imposed upon AAM relating to the conduct by
GM of the operations of the Business on or prior to the date of the Closing,
except to the extent such liability may be expressly assumed by AAM pursuant to
Section 3.1 of the Asset Purchase Agreement;
(iii) Any misrepresentation in or any omission from any
certificate or Exhibit (excluding the Ancillary Agreements) to the Asset
Purchase Agreement or other material document furnished or to be furnished by or
on behalf of GM under the Asset Purchase Agreement; or
(iv) GM's failure to comply with the bulk transfer laws of any
state or its misapplication of the proceeds of the purchase price of the Assets
and the Business in fraud of its creditors.
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(b) AAM shall indemnify and hold harmless GM, its
shareholders, directors, officers, agents and employees from and against any and
all Damages asserted against, resulting to, imposed upon, or incurred or
suffered by GM, directly or indirectly, as a result of or arising from the
following (individually and "Indemnifiable Claim" and collectively
"Indemnifiable Claims" when used in the context of GM as the Indemnified Party):
(i) Any breach of any of the representations, warranties or
agreements made by AAM in the Asset Purchase Agreement or the non-performance of
any covenant or obligation to be performed by AAM thereunder;
(ii) Any liability imposed upon GM relating to the conduct by
AAM of the operations of the Business after the date of the Closing;
(iii) Any misrepresentation in or any omission from any
certificate or Exhibit (excluding the Ancillary Agreements) the Asset Purchase
Agreement or other material document furnished or to be furnished by or on
behalf of AAM under the Asset Purchase Agreement; or
(iv) The nonperformance or nonpayment by AAM of any of the
Assumed Liabilities expressly set forth in Section 3.1 of the Asset Purchase
Agreement.
(c) Without duplication of Damages, AAM or GM, as the case may
be, shall be deemed to have suffered Damages arising out of or resulting from
the matters referred to in subsections (a)
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and (b) above if the same shall be suffered by any parent, subsidiary or
Affiliate of AAM or GM, respectively.
II. Limitations on Indemnification.
Rights of indemnification hereunder are subject to the
following limitations:
(a) AAM shall not be entitled to indemnification hereunder
with respect to any Indemnifiable Claim if AAM's Damages relating to such
Indemnifiable Claim are less than $300,000 (the "Excluded Amount");
(b) Notwithstanding anything to the contrary in subparagraph
(a) above, AAM shall be entitled to indemnification hereunder, if and to the
extent that (i) the amount of any Damages asserted against, resulting to,
imposed upon, or incurred or suffered by AAM with respect to any Indemnifiable
Claim is equal to or in excess of the Excluded Amount (a "Permissible Claim"),
and (ii) that aggregate of all Damages with respect to a Permissible Claim (or,
if more than one Permissible Claim is asserted, with respect to all Permissible
Claims) equals or exceeds $3,000,000, in which event the indemnity provided for
in Section I hereof shall be effective with respect to all of such Damages
relating to Permissible Claims.
(c) Notwithstanding anything to the contrary in subparagraphs
(a) or (b) above, the limitations set forth in subparagraphs (a) and (b) above
shall not apply with respect to Indemnifiable Claims under Sections 4.1.4, 10.7,
10.8, or 10.9 or Section V of the Asset Purchase Agreement.
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(d) If, prior to the termination of any obligation to
indemnify as explicitly provided in the Asset Purchase Agreement, written notice
of a claimed breach is given by the party seeking indemnification including in
detail the basis therefor (the "Indemnified Party") to the party from whom
indemnification is sought (the "Indemnifying Party") or a suit or action based
upon a claimed breach is commenced against the Indemnifying Party, the
Indemnified Party shall not be precluded from pursuing such claimed breach or
suit or action, or from recovering from the Indemnifying Party (whether through
the courts or otherwise) on the claim, suit or action, by reason of the
termination otherwise provided for above.
III. Procedure for Indemnification with Respect to Third Party Claims.
(a) If the Indemnified Party determines to seek
indemnification under this Article with respect to Indemnifiable Claims
resulting from the assertion of liability by third parties, it shall give notice
to the Indemnifying Party within forty-five (45) days of the Indemnified Party's
becoming aware of any such Indemnifiable claim or of facts upon which any such
Indemnifiable Claim will be based; the notice shall set forth such information
with respect thereto as is then reasonably available to the Indemnified Party.
If any such liability is asserted against the Indemnified Party, and the
Indemnified Party notifies the Indemnifying Party thereof, the Indemnifying
Party will be entitled, if it so elects by written notice delivered to the
Indemnified Party within twenty (20) days after receiving the
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Indemnified Party's notice, to assume the defense thereof with counsel
reasonably satisfactory to the Indemnified Party. Notwithstanding the foregoing
(i) the Indemnified Party shall also have the right to employ its own counsel in
any such case, but the fees and expenses of such counsel shall be the expense of
the Indemnified Party; (ii) the Indemnified Party shall not have any obligation
to give any notice of any assertion of liability by a third party unless such
assertion is in writing; and (iii) the rights of the Indemnified Party to be
indemnified hereunder in respect of Indemnifiable Claims resulting from the
assertion of liability by third parties shall not be adversely affected by its
failure to give notice pursuant to the foregoing unless, and, if so, only to the
extent that, the Indemnifying Party is materially prejudiced thereby. With
respect to any assertion of liability by a third party that results in an
Indemnifiable Claim, the parties hereto shall make available to each other all
relevant information in their possession material to any such assertion.
(b) In the event that the Indemnifying Party, within twenty
(20) days after receipt of the aforesaid notice of an Indemnifiable Claim, fails
to assume the defense of the Indemnified Party against such Indemnifiable Claim,
the Indemnified Party shall have the right to undertake the defense, compromise
or settlement of such action on behalf of and for the account and risk of the
Indemnifying Party.
(c) Notwithstanding anything in this Section III to the
contrary, (i) if there is a reasonable probability that an
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Indemnifiable Claim may materially and adversely affect the Indemnified Party,
other than as a result of money damages or other money payments, the Indemnified
Party shall have the right, at its own cost and expense, to defend, compromise
or settle such Indemnifiable Claim; and (ii) the Indemnifying Party shall not,
without the Indemnified Party's written consent, settle or compromise any
Indemnifiable Claim or consent to entry of any judgment in respect thereof
unless such settlement, compromise or consent includes as an unconditional term
thereof providing for the giving by the claimant or the plaintiff to the
Indemnified Party and all affiliates of the Indemnified Party a release from all
liability in respect of such Indemnifiable Claim. If the Indemnifying Party can
settle such Indemnifiable Claim with a complete release of the Indemnified party
and all affiliates for the Indemnified Party for monetary damages only, but the
Indemnified Party refuses such settlement, the Indemnifying Party shall not be
liable for Damages in excess of the monetary damages of such proposed
settlement.
IV. Procedure For Indemnification with Respect to Non-Third Party Claims.
In the event that the Indemnified Party asserts that existence
of an Indemnifiable Claim (but excluding claims resulting from the assertion of
liability by third parties), it shall give written notice to the Indemnifying
Party specifying the nature and amount of the claim asserted. If the
Indemnifying Party, within ninety(90) days after receiving the notice from the
Indemnified Party, shall not give written notice to the
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Indemnified party announcing its intent to contest such assertion of the
Indemnified party, such assertion shall be deemed accepted and the amount of
claim shall be deemed a valid Indemnifiable Claim. During the time period set
forth in the preceding sentence, the Indemnified Party shall cooperate with the
Indemnifying Party in respect of such Claim.
V. Agreement Not Applicable to Environmental Matters.
Notwithstanding anything to the contrary contained in this
Agreement, Article VI of the Asset Purchase Agreement shall govern the rights
and obligations of GM and AAM with respect to all matters related to
Environmental Laws. The environmental condition of the Assets or compliance of
the Assets with Environmental Laws (hereinafter referred to as "Environmental
Matters"), and none of the terms of this Agreement shall be applicable with
respect to any Damages asserted against, resulting to, imposed upon, or incurred
or suffered by GM or AAM, directly or indirectly, as a result of or arising from
Environmental Matters.
VI. Miscellaneous
(a) This Agreement and the obligations of the parties
hereunder shall not be assignable by either party without the prior written
consent of the other party. This Agreement shall be binding upon, and inure to
the benefit of, the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns.
(b) Any notices, statements or other communications required
or permitted hereunder shall be in writing and shall be
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personally delivered (including courier service) or mailed by certified
first-class mail, postage prepaid, to:
If to AAM:
American Axle & Manufacturing, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
Xxxxx & Xxxxxxxxx
3200 National City Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
If to GM:
General Motors Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Treasurer
with a copy to:
Office of General Counsel
New Center One Building
0000 Xxxx Xxxxx Xxxxxxxxx
X.X. Xxx 00000
Xxxxxxx, XX 00000
or to such person or persons at such address or addresses as may be designated
by the written notice of the applicable party to the other parties hereunder.
Notice shall be deemed delivered at the time received for personal delivery, or
five (5) business days after mailing when mailed at a United States post office
box or branch office.
(c) This Agreement will be construed and interpreted in
accordance with the internal substantive laws of the State of Michigan without
regard to its conflicts of law rules.
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(d) This Agreement shall be amended only by a written
instrument duly executed and delivered by the party to be bound. No amendment to
this Agreement which increases the obligations of any Party hereunder shall be
effective against any Party unless it has been agreed to in writing by such
Party.
(e) Section headings are for convenience only and will not be
used in the interpretation hereof.
(f) This Agreement may be executed in counterparts, each of
which will be deemed an original but all of which together shall constitute one
and the same document.
(g) AAM and GM each hereby irrevocably consents to the
jurisdiction of the state and Federal courts located in Detroit, Michigan agrees
that any action, suit or proceeding brought by or against GM or AAM hereunder or
with respect hereto may be brought in any court in Michigan, and waives any
objection which it may not or hereafter have to the choice of forum, whether
personal jurisdiction, venue, forum non conveniens or on any other ground. AAM
and GM each hereby irrevocably designates appoints and empowers the Secretary of
State of the State of Michigan to receive for and on behalf of it service of
process in the State of Michigan and further irrevocably consents to the service
of process outside of the territorial jurisdiction of said courts by mailing
copies thereof by registered or certified united States mail, postage prepaid,
to its address as shown in Section (b) hereof with the same effect as if it were
a resident of the State of Michigan and had been lawfully served in such state.
Nothing in this Agreement shall affect the right to service of process in
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any other manner permitted by law. AAM and GM each further agree that final
judgment against it (after all appeals are exhausted) in any such action or
proceeding shall be conclusive and may be enforced in any other jurisdiction
within or outside the State of Michigan by suit on the judgment, a certified
copy of which shall be conclusive evidence of the fact and the amount of such
judgment.
(h) Unless the context otherwise requires: (i) a term has the
meaning assigned to it; (ii) "or" is not exclusive; (iii) words in the singular
include the plural, and words in the plural include the singular; (iv) "herein,"
"hereof," "hereto" and other words of similar import refer to this Agreement as
a whole and not of any particular Section or other subdivision; and (v) any
gender used in this Agreement shall be bound to include the neuter, masculine
and feminine genders.
(i) To the extent that there is any conflict between the terms
of this Agreement and the Asset Purchase Agreement, the Asset Purchase Agreement
shall control.
IN WITNESS WHEREOF, the parties have executed this
Indemnification Agreement as of the date first above written.
GENERAL MOTORS CORPORATION AMERICAN AXLE & MANUFACTURING
INC.
By: /s/ Xxxx X. Xxxx Xx. By: /s/ Xxxxxxx X. Xxxxx
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Its: Finance Director Its: President and CEO
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