Exhibit 10.04
AAM/GMCL SUPPLY AGREEMENT*
DATED THE 17TH DAY OF February, 1994
BETWEEN: AMERICAN AXLE & MANUFACTURING, INC.
- AND -
GENERAL MOTORS OF CANADA LIMITED
----------------------
* Portions of this Exhibit 10.04 were omitted and filed separately with the
Secretary of the Securities and Exchange Commission (the "Commission")
pursuant to an application for confidential treatment filed with the
Commission pursuant to Rule 406 under the Securities Act of 1933, as
amended. Such portions are marked by the symbol "***".
SUPPLY AGREEMENT
This SUPPLY AGREEMENT (the "Agreement") is made and entered
into on the 17TH day of February 1994,
BY AND BETWEEN:
GENERAL MOTORS OF CANADA LIMITED,
a corporation organized and existing
under the laws of Canada
(hereinafter referred to as "GMCL")
-and
AMERICAN AXLE & MANUFACTURING, INC.,
a corporation organized and existing
under the laws of Delaware
(hereinafter referred to as "AAM")
WHEREAS AAM will become a supplier of axles to General Motors
Corporation ("GM") effective March 1, 1994;
AND WHEREAS, GMCL has agreed to provide axles to AAM in
accordance with the terms and conditions set out herein;
NOW THEREFORE, in consideration of the mutual promises and
covenants contained herein, it is mutually agreed as follows:
1. SCOPE OF THIS AGREEMENT
This Agreement shall only cover and be applicable to GMCL
Axles and Accommodation Parts (as defined below) which shall be manufactured
and/or assembled by GMCL and which shall be supplied by GMCL to AAM and shall be
purchased by AAM from GMCL for resale by AAM.
2. DEFINITIONS
When used in this Agreement, the following definitions shall
apply:
(a) "AAM" shall mean American Axle & Manufacturing, Inc.
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(b) "Accommodation Parts" shall mean any part which is not now
a GMCL Axle and which does not become a GMCL Axle pursuant to Section
3D of this Agreement and which GMCL sells to AAM pursuant to the terms
of this Agreement.
(c) "Accommodation Parts Unit Price" shall mean that selling
price between GMCL and AAM established for an Accommodation Part
pursuant to Section 4D (1) of this Agreement.
(d) "Axle Business" shall mean that business of GMCL which is
the production and sale of rear wheel drive axle assemblies and
Accommodation Parts for passenger vehicles and light duty trucks and
specifically excludes that business related to the production and sale
of independent rear suspensions, brakes, brake components and forging.
(e) "Effective Date" shall mean March 1, 1994 or such other
date as may be agreed to in writing by the Parties.
(f) "Engineering Change Notice" or "ECN" shall mean the
document which provides complete descriptions. including designs and
design information, of any proposed alteration to any existing GMCL
Axle or Accommodation Part.
(g) "Event of Termination" shall have the meaning set forth in
Section 12B of this Agreement.
(h) "Final General Specifications" shall mean any final
specifications including final ECN and updated specifications with
respect to each GMCL Axle or Accommodation Part, delivered to GMCL in
respect of any GMCL Axle or Accommodation Part, proposed New Part, or
proposed alteration to any existing GMCL Axle.
(i) "Force Majeure" shall mean an event or occurrence beyond
the reasonable control of a Party and without its fault or negligence,
such as, by way of example and not by way of limitation, acts of God,
actions by any governmental authority (whether valid or invalid),
fires, floods, windstorms, explosions, riots, natural disasters, wars,
sabotage, labor problems (including lockouts, strikes and slowdowns),
inability to obtain power, material, labor, equipment or
transportation, or court injunction or order.
(j) "GM" shall mean General Motors Corporation.
(k) "GMCL" shall mean General Motors of Canada Limited.
(l) "GMCL Axle" shall mean those parts listed on Schedule 1,
as modified from time to time pursuant to this Agreement, and shall
also mean all New Parts and altered GMCL Axles that GMCL produces
pursuant to Section 3D of this Agreement.
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(m) "GMCL's Manufacturing Capability" shall mean the maximum
volume of GMCL Axles and Accommodation Parts at which GMCL's St.
Catharines Component Plant can operate taking into consideration such
factors as machinery and equipment, tools and available manpower.
(n) "New Part" shall mean any new product or substantially
redesigned GMCL Axle which is produced pursuant to this Agreement.
(o) "Party" or "Parties" shall mean only AAM and/or GMCL.
(p) "Product Assurance Procedures" shall mean GMCL's
procedures referred to in Section 3E of this Agreement which set forth
the procedures and terms and provisions used in connection with
measuring and assuring a level of quality for GMCL Axles and
Accommodation Parts.
(q) "Prototype/Pilot Parts" shall mean those parts produced on
a pre-production basis for design and/or manufacturing process
development purposes in relation to a proposed New Part or a proposed
alteration to a GMCL Axle.
(r) "Purchase Procedures" shall have the meaning set forth in
Section 4C of this Agreement.
(s) "Sales Area" shall mean any area in Canada Mexico or the
United States into which the GMCL Axles or Accommodation Parts, or any
product into which the GMCL Axles or Accommodation Parts are
incorporated, are sold by AAM.
(t) "Safety Acts" shall mean the Canadian, Mexican, and United
States of America federal, state, provincial, municipal or other
statutes and regulations thereto including the "Motor Vehicle Safety
Act of Canada" ("MVSA") and regulations thereunder and all amendments
thereto, that deal with or relate to the safety of a motor vehicle [or
otherwise affect the design and/or manufacturing of motor vehicle
and/or motor vehicle parts]
(u) "Start of Production Date" shall mean the date established
by GMCL and AAM pursuant to Section 3D of this Agreement for start of
production of a proposed New Part or a proposed altered GMCL Axle.
(v) "St. Catharines Components Plant" shall mean that GMCL
facility located at 000 Xxxxxxx Xxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx to the
extent such facility is used for the Axle Business.
(w) "Unit Price" shall mean that selling price between GMCL
and AAM set forth in Schedule 2 as amended from time to time pursuant
to Section 3D of this Agreement.
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3. PRODUCTS
A. Development and Planning
AAM has full responsibility, including compliance with all
Safety Acts and other governmental regulations applicable in the Sales Area, for
the development and design of all GMCL Axles and Accommodation Parts including
those designs for existing GMCL Axles and Accommodation Parts.
GMCL shall have full responsibility for the manufacturing and
assembly of all GMCL Axles and Accommodation Parts in compliance with the Final
General Specifications, designs and ECN's delivered to GMCL by AAM. GMCL shall
have the right to receive and use all Final General Specifications and ECN's
related to each GMCL Axle and Accommodation Part.
AAM shall be responsible for any modifications or additions to
Accommodation Parts that are made after their delivery to AAM.
B. New Part Review
In connection with each proposed New Part and each proposed
alteration to any GMCL Axle, and as soon as practicable prior to the proposed
Start of Production Date for such proposed New Part or proposed altered GMCL
Axle, AAM will review its proposed production specifications with GMCL with a
view to ensuring receipt and due consideration by AAM of GMCL input with respect
thereto.
C. Tests on Proposed New Parts, Proposed Alterations to GMCL
Axles and on GMCL Axles
(1) In General
The Parties agree that validation testing and evaluation of
any Prototype/Pilot Parts, proposed alterations to a GMCL Axle or proposed New
Parts shall be, subject only as provided below, performed by AAM at AAM's sole
expense. If AAM desires that GMCL perform any tests, testing or evaluation
required in respect of a Prototype/Pilot Part, proposed alteration to a GMCL
Axle, proposed New Part or any other part, then AAM shall immediately notify
GMCL. If GMCL agrees to perform such testing or evaluation then AAM shall pay to
GMCL the price therefor which is agreed upon between AAM and GMCL. GMCL shall
from time to time conduct certain testing on and/or in connection with the GMCL
Axles and/or Accommodation Parts. Such testing will continue to occur in the
normal course pursuant to Product Assurance Procedures and GMCL will continue to
bear all costs related to such testing. In the event that AAM desires any
additional testing on and/or in connection with any GMCL Axles or Accommodation
Parts at any time, GMCL shall cooperate with AAM in that respect and all costs
related to such testing shall be borne by AAM including all costs incurred by
GMCL in connection with such cooperation. Payment
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for any such testing shall be made within 30 days of delivery of an invoice to
AAM by GMCL.
(2) Product Problem Reporting and Resolution
Unless otherwise agreed, the Parties shall use GMCL's product
problem reporting and resolution procedure. Each Party will, in writing and at
its own expense, provide the other Party with information relating to any
deficiencies which are disclosed by the tests conducted pursuant to this Section
C. GMCL, at its own expense, shall make available at the sites where the GMCL
Axles or Accommodation Parts will be tested, such personnel as may be reasonably
required to: (i) facilitate a determination as to cause of any test incident;
(ii) discuss quality problems; and (iii) participate in determining the
corrective action which may be taken. AAM and GMCL will jointly designate those
deficiencies on which they require corrective action and further testing to
verify the effectiveness of such corrective action, the cost of which shall be
borne by AAM unless the problem/deficiency is a result of a deficiency in GMCL's
production process in which case the cost shall be borne by GMCL.
D. New Parts Production and Alterations To GMCL Axles
(1) To enable GMCL to determine whether or not it will be
within GMCL's Manufacturing Capability to produce a proposed New Part or
proposed altered GMCL Axles, AAM will prepare and deliver as soon as reasonably
possible to GMCL the following information and materials in connection with each
proposed New Part and proposed alteration to a GMCL Axle:
(i) Engineering Change Notices; and
(ii) Descriptions, (including engineering designs and
blueprints), of each proposed New Part or proposed alteration to a GMCL
Axle, and engineering support which will facilitate GMCL's analysis of
its capabilities to produce the proposed New Part and/or the proposed
alteration to a GMCL Axle.
(2) As soon as is reasonably possible following receipt of the
information and materials referenced in Paragraph (1) above, GMCL will advise
AAM as to whether or not the production of the proposed New Part and/or the
proposed alteration to a GMCL Axle for sale to AAM, is within GMCL's
Manufacturing Capability. If such production is within GMCL's Manufacturing
Capability and the Parties have agreed upon the Unit Price and the Start of
Production Date, GMCL will produce such New Part or altered GMCL Axle. Schedule
"2" of this Agreement shall be amended by the Parties to reflect the agreed upon
Unit Price for the New Part or the altered GMCL Axle. as the case may be. and
such New Part or altered GMCL Axle shall thereafter be a "GMCL Axle" for
purposes of this Agreement.
(3) The Parties shall review together and agree upon the
extent to which any new equipment and/or tooling must be purchased and the
extent to which any modifications
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are required to existing equipment and/or tooling in order to ensure that GMCL
will be able to produce high quality New Parts and high quality altered GMCL
Axles, as the case may be. The total cost for any and all such purchases and
modifications shall be borne by AAM. Any tooling purchased by AAM for use by
GMCL in the production of New Parts and/or altered GMCL Axles shall remain the
property of AAM and shall be maintained by GMCL tin accordance with the
practices of GMCL used by GMCL in the normal course for the maintenance of it
equipment in its Axle Business prior to the Effective Date.
(4) AAM agrees to provide GMCL, at a price of *** (U.S.) for
the *** calendar year and at a price to be mutually agreed to by the Parties for
each calendar year thereafter, all of the product engineering support GMCL may
require either before or after the Start of Production Date for any GMCL Axle,
Accommodation Part, proposed New Part or proposed altered GMCL Axle, as the case
may be, to ensure that GMCL is able to produce high quality GMCL Axles and
Accommodation Parts.
(5) In the event that it is within GMCL's Manufacturing
Capability and GMCL has agreed to produce a New Part or an altered GMCL Axle,
AAM agrees to provide GMCL with the Final General Specifications in respect
thereof and thereby, the right to use same, as soon as is reasonably possible.
AAM will ensure that such Final General Specifications are received by GMCL
within a time frame prior to the Start of Production Date that will permit GMCL
reasonable time to prepare its operations for production of the New Part or
altered GMCL Axles, as the case may be, in accordance with its obligations under
this Agreement.
E. Quality Assurance and Warranty
(1) Warranty - GMCL Axles and Accommodation Parts
(a) GMCL expressly warrants that all GMCL Axles and
Accommodation Parts will conform to the specifications, drawings, samples, or
written descriptions furnished or delivered by AAM to GMCL, and will be
merchantable, of good material and workmanship and free from defect. GMCL
provides no other warranty, either express or implied. of any nature whatsoever
including, without limiting the generality of the foregoing. any warranty as to
fitness for purpose or use.
(b) ***
(2) Quality Assurance
(a) To measure and assure the necessary level of quality of
GMCL Axles or Accommodation Parts supplied by GMCL to AAM, GMCL will use product
assurance procedures (the "Product Assurance Procedures") similar to those used
by GMCL for GMCL Axles produced prior to the Effective Date.
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(b) Each Party shall furnish to the other Party access to
those records which such Party may reasonably require for the purpose of
enabling it to repair or correct any defective or malfunctioning GMCL Axles or
Accommodation Parts.
AAM personnel shall have the right to visit the St. Catharines
Components Plant, during normal business hours and upon reasonable notice to
GMCL.
(3) Preparation, Packaging, and Packing
Except as AAM and GMCL may otherwise agree, GMCL shall
preserve, prepare and pack GMCL Axles supplied by GMCL to AAM for transportation
in accordance with the procedures used by GMCL for shipment of GMCL Axles to GM
prior to the Effective Date. Such procedures may be modified by agreement
between the Parties.
F. Product Liability
GMCL shall defend, indemnify, and hold harmless AAM, its
officers, agents, and employees, from and against any and all claims, suits,
causes of action, liabilities, losses, damages, costs of settlement, and
expenses (including reasonable attorneys fees) which may be imposed upon or
incurred by AAM from claims, suits, or causes of action (including without
limitation those for death, person injury, or property damage) by any person
whatsoever at any time against AAM, its officers, agents, and employees, arising
from, caused, or alleged to be caused by the manufacture of any GMCL Axles or
Accommodation Parts.
AAM shall defend, indemnify, and hold harmless GMCL, its
officer, agents, and employees, from and against any and all claims, suits,
causes of action, liabilities, losses, damages, costs of settlement, and
expenses (including reasonable attorneys fees) which may be imposed upon or
incurred by GMCI from claims, suits, or causes of action (including without
limitation those for death, personal injury, or property damage) by any person
whatsoever at any time against GMCL, its officers, agents, and employees,
arising from, caused or alleged to be caused by the design, operation, use,
sale, or transfer of any GMCL Axles or Accommodation Parts or caused or alleged
to be caused by the design, manufacture, operation, use, sale, or transfer of
any components or products manufactured or sold by AAM other than GMCL Axles or
Accommodation Parts.
4. SUPPLY AND PURCHASE OBLIGATIONS AND ARRANGEMENTS
A. General Understandings
The following general understandings will apply to the supply
and purchase commitments made under this Agreement:
Deliveries shall be made both in the proper quantities, mix and at the times
specified in AAM's delivery schedules (the "Delivery Schedules"). Such Delivery
Schedules shall reflect those delivery schedules provided to AAM by its
customers and shall be delivered to GMCL
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in accordance with the Purchase Procedures defined below and as soon as is
reasonably possible following receipt by AAM thereof:
In setting forth supply and purchase procedures under this
Section 4, AAM and GMCL acknowledge that their mutual best interests can best be
served if orderly procedures and scheduling are followed consistently in the
making of supply and purchase commitments under this Agreement. AAM and GMCL
further acknowledge that a decree of flexibility is necessary in the actual
purchasing and supply process to accommodate AAM's requirements, which will be
based on the requirements of GM, and GMCL's business and manufacturing
practices.
As soon as is reasonably possible following Effective Date,
AAM shall deliver to GMCL its best estimates of the total volumes of each GMCL
Axle that it anticipates purchasing from GMCL for each calendar year of this
Agreement in addition to their anticipated allocation plan for such periods. If,
at any time, AAM determines that these estimates will vary, up or down, by any
material amount, AAM shall immediately advise GMCL so as to ensure that GMCL has
as much prior written notice as is reasonably possible, of any such material
reduction or increase.
B. AAM Purchase Obligations
AAM shall at all times, use its best efforts to purchase at
least those quantities of each GMCL Axle and Accommodation Part as established
in the Delivery Schedules, in a manner which provides GMCL with a stable
production volume permitting it to minimize fluctuations in production schedules
and which is in accordance with the Purchase Procedures defined below.
C. Purchase Procedures
As soon as practicable following the execution of this
Agreement, GMCL and AAM shall agree upon those procedures, in accordance with
which GMCL Axles orders shall be submitted by AAM to GMCL (collectively, the
"Purchase Procedures").
D. Terms of Sale
GMCL shall at all times. use its best efforts to supply to
GMCL to the extent of GMCL's Manufacturing Capability. those quantities of each
GMCL Axle and Accommodation Part in the Delivery Schedules tin accordance with
the Purchase Procedures and any other terms that may be agreed to bs the Parties
from time to time pursuant to this Agreement, including the terms set out below:
(l) Pricing
(i) The Unit Price to be paid by AAM to GMCL for each GMCL
Axle is set forth in Schedule "2" of this Agreement as such Schedule
may be amended from time to time by agreement in writing by the
Parties;
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(ii) The Accommodation Parts Unit Price to be paid by AAM
which relates to an Accommodation Part shall be negotiated and agreed
upon by the Parties at the time that GMCL agrees to supply such
Accommodation Part to AAM;
(iii) All Unit Prices and Accommodation Parts Unit Prices
shall be in the currency of the United States of America; and
(iv) AAM shall be liable for and shall pay to GMCL or the
appropriate taxing or governmental authority, any tax, duty, levy,
import charge or other amount properly payable in connection with the
purchase by AAM of GMCL Axles or Accommodation Parts pursuant to this
Agreement.
(2) Delivery Terms and Title
All deliveries to AAM pursuant to this Agreement shall be made
on an "FOB GMCL St. Catharines Components Plant" basis unless otherwise agreed
to by the Parties and the property, control, beneficial ownership and legal
title in and to the GMCL Axles and Accommodation Parts shall pass to AAM upon
delivery.
(3) Invoicing and Payment
On a weekly basis, GMCL shall invoice AAM for the GMCL Axles
and Accommodation Parts delivered by GMCL. Full payment of the Unit Price or
Accommodation Part Price in respect of each GMCL Axle or Accommodation Part
delivered to AAM shall be due and payable, in immediately available funds, on
the *** following invoice date. All payments shall be made in U. S. Dollars.
E. Volume/Mix and Catastrophic Reduction
It is AAM's intent to continue the use of the current Axle
allocation formula set out in Schedule "3". AAM will give serious consideration
to any proposed revision to the current allocation formula in a manner which is
consistent with the maintenance of the best interests of each Party including
without limitations, the maintenance of AAM's profitability and the maintenance
of the economic viability of the Axle Business at the St. Catharines Components
Plant. In the event of a major or catastrophic reduction in overall market
demand for GM products, causing a proportional reduction in demand for AAM
products, AAM will adjust plant allocation as it sees fit: Provided however
that, in the event that any such catastrophic reduction in demand reduces or is
reasonably expected to reduce those volumes of GMCL Axles purchased or to be
purchased by AAM from GMCL over any six (6) month period to less than 1600 GMCL
Axles per day, then the Parties agree to renegotiate, in good faith, the Unit
Prices and Accommodation Parts Unit Prices.
5. PROVISION OF PROTOTYPE/PILOT PARTS
AAM may request preproduction by GMCL of Prototype/ Pilot
Parts in order to conduct research or perform special testing. Subject to GMCL's
agreement to produce such
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Prototype/ Pilot Parts, GMCL will furnish AAM with Prototype/Pilot Parts in
accordance with:
(a) general specification information agreed upon by the
Parties;
(b) a schedule for delivery agreed upon by the Parties,
including any special shipping arrangements required;
(c) a per unit price and payment terms agreed upon by the
Parties; and
(d) the other terms of this Agreement unless otherwise agreed
to by the Parties.
6. POTENTIALLY HARMFUL INGREDIENTS
Each Party shall provide the other Party with a list of all
potentially harmful ingredients known by it to be included or contained in any
GMCL Axle or Accommodation Part supplied hereunder or in any components or
materials from which GMCL Axles or Accommodation Parts supplied hereunder, are
manufactured which are covered by Canadian and/or United States laws or
regulations or as may be required by the Parties. Thereafter, if necessary to
comply with any applicable federal, state. provincial territorial or other
applicable law or regulation, GMCL or AAM, as the case may be, will to the best
of its knowledge, furnish AAM or GMCL, as the case may be, with information
concerning changes in such lists of ingredients.
7. INSURANCE
Unless otherwise agreed to by the Parties, each Party agrees
to maintain, at its own expense, broad form comprehensive liability insurance on
an occurrence form basis (including product, completed operations, and
contractual liability covering the terms of this Agreement), whether primary or
excess coverage, or a combination thereof, with a combined single limit for
personal injury and property damage of not less than Ten Million U.S. Dollars
(U.S. $10,000,000) per occurrence, at all times, from the Effective Date through
the termination of this Agreement.
Each Party shall ensure that the other Party is named as an
additional insured and loss payee to such insurance coverage. Upon request of a
Party, the other Party shall provide the requesting Party with certificates of
insurance evidencing the coverage described above showing the requesting Party
as a named additional insured and loss payee. No cancellation, modification or
material change to this coverage shall be made without thirty (30) days written
notice to the other Party.
8. INFORMATION AND MATERIALS
A. Use of Information and Materials
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It is anticipated that in connection with the performance of
their respective responsibilities and obligations under this Agreement, AAM and
GMCL will be providing each other with information, data, and materials that
each of them have developed or that pertains to their respective operations.
The information, data, and materials provided by one Party to
the other Party will be utilized by the receiving Party solely in connection
with the performance of the receiving Party's responsibilities and obligations
under and in furtherance of the obligations contemplated by this Agreement. AAM
and GMCL may in any specific situation instruct the other Party as to the degree
of confidentiality that is to be observed by the receiving Party with respect
to, and the manner in which the receiving Party may utilize, the information,
data, or materials furnished to it.
However, neither AAM nor GMCL shall be required to keep
confidential any information, data, or materials which are, or become, publicly
available through no fault of the receiving Party; or which are already in the
possession of either of them under arrangements which are not confidentiality
arrangements between AAM and GMCL or related to confidentiality agreements
between GM and AAM; or which are independently developed by either of them
without access to confidential information of the other Party; or which are
rightfully obtained from third parties, or which are disclosed with the prior
written consent of the other Party.
9. RESPONSIBILITY FOR PERSONNEL
Whenever AAM or GMCL sends its own personnel to plants or
offices of the other of them or for conferences, negotiations, discussions, or
preparation of materials or of documents required or appropriate under this
Agreement, the Party sending such personnel shall be responsible for all living
and traveling expenses of, and for injury to, death of, or property loss, or
damage suffered by, such personnel.
Each Party, however, shall extend such assistance to the
other's personnel as it may deem desirable and appropriate under the
circumstances.
10. PATENTS
AAM will defend, protect, and save harmless GMCL, its
successors, assigns, and users of GMCL Axles and Accommodation Parts against all
suits at law or in equity, and from all damages, claims, and demands and all
losses and costs, including reasonable legal costs for actual or alleged
infringement of any Canadian or foreign patent by reason of the use or sale of
GMCL Axles and Accommodation Parts in the Sales Areas as and where such actual
or alleged infringement would not be attributable solely to GMCL's cause and
fault.
AAM hereby grants to GMCL a non-exclusive, non-transferable
right to use all patents, technical information and other forms of intellectual
property rights associated with the GMCL Axles and Accommodation Parts for the
purposes of fulfilling its obligations under this Agreement. Upon receipt of
approval from AAM, which approval shall not be
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unreasonably withheld or delayed, the license hereby granted by AAM to GMCL
shall be sublicensable to third parties for the purposes only of making, having
made, using and/or selling to GMCL, GMCL Axles, Accommodation Parts, New Parts
and/or Prototype/Pilot Parts for resale to AAM.
AAM shall not assert any claim against GMCL with respect to
GMCL's use of any technical information which AAM shall have disclosed or may
hereafter disclose to GMCL in connection with GMCL Axles and Accommodation
Parts, provided such use is in accordance with the terms of this Agreement and
in the absence of a separate written agreement directed to the use of such
technical information.
11. FORCE MAJEURE
GMCL shall not be liable to AAM if it is delayed in the
performance or fails to perform any of its obligations or responsibilities under
this Agreement, if such delay or failure is due to Force Majeure. Without
limiting the generality of the foregoing, GMCL shall make all reasonable efforts
to fill each Delivery Schedule that is received by GMCL in accordance with the
Purchase Procedures, but shall not be liable in any respect for failure to
deliver or for delay in delivery of the GMCL Axles or Accommodation Parts where
such failure or delay is due wholly or in part to Force Majeure.
In the event of Force Majeure, GMCL shall immediately give
written notice of such Force Majeure to AAM and shall give its best estimate of
the extent to which and the length of time GMCL's ability to perform may be
prevented, interfered with, or delayed. GMCL shall, in any case, employ due
diligence in endeavoring to cure any such cause, event, or occurrence and to
resume performance.
If it is determined that any of the supply and purchase
commitments that have been made under this Agreement cannot be fulfilled because
of Force Majeure, AAM and GMCL may, by mutual agreement, modify the applicable
commitments to the extent deemed necessary or appropriate.
12. EFFECTIVE DATE, TERM AND TERMINATION
A. Term of Agreement
This Agreement shall become effective on the Effective Date
and shall continue in effect until September 14, 1996 unless earlier terminated
pursuant to this Section 12.
B. Termination due to Certain Acts or Events
Each of the following shall be referred to as an "Event of
Termination" of a Party:
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(a) Any attempted or actual sale, transfer or assignment
by that Party of this Agreement or any of the rights
granted to that Party hereunder, or any attempted or
actual transfer, assignment or delegation by that
Party of any of the responsibilities assumed by it
under this Agreement, except where such transfer,
assignment or delegation of rights or
responsibilities is to one of its divisions,
subsidiaries, affiliated, related or associated
corporations or is otherwise permitted herein or is
otherwise agreed to by the Parties.
(b) Insolvency of that Party, suspension of payments by
that Party, filing of a voluntary petition in
bankruptcy by that Party, filing of a petition to
have that Party declared bankrupt or appointment of a
receiver or trustee or the like for that Party;
execution by that Party of an assignment for the
benefit of creditors or any foreclosure or other due
process of law whereby a third party acquires rights
to the operation, ownership or principal assets of
that Party.
In the event that one Party elects to terminate this Agreement
pursuant to this Paragraph 12B, that Party shall first notify the other Party in
writing of the grounds for the intended termination. In the event that the
receiving Party fails to remedy such grounds for termination within sixty (60)
days after such notice is so delivered, then the notifying Party may, at its
option, terminate this Agreement effective at any time during the remaining term
of this Agreement.
C. Performance After Termination
Termination of this Agreement shall not relieve either Party
from completing any commitments to supply or commitments to purchase or pay for
GMCL Axles and Accommodation Parts that remain in effect under any Delivery
Schedule that extends beyond the effective date of termination or from
discharging completely any and all other obligations under this Agreement which
exist at the date of termination, subject to the other terms of the Agreement.
Upon the effective date of termination of this Agreement, the
Parties shall negotiate, subject to other provisions of this Section 12, an
arrangement between them that will minimize losses that may be incurred by each
of the Parties as a result of termination.
13. GENERAL PROVISIONS
A. Notices
Any notice or other writing required or permitted to be given
under this Agreement or for the purposes of this Agreement (in this Section
referred to as a "Notice") shall be in writing and shall be sufficiently given
if delivered personally, or if sent by prepaid registered mail or if transmitted
by facsimile or other form of recorded communication tested prior to
transmission to such Party:
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(a) in the case of a notice to GMCL at:
General Motors of Canada Limited
000 Xxxxxxxx Xxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Plant Manager
Fax: (000) 000-0000
with a copy of the notice to:
General Motors of Canada Limited
ATTENTION: Vice-President, General Counsel
0000 Xxxxxxx Xxx Xxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
Fax: (000) 000-0000
(b) in the case of a notice to AAM at:
American Axle & Manufacturing, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx
00000-0000
Attention: X.X. Xxxxxx, Vice-President Administration
Fax: (000) 000-0000
or at such other address as the Party to whom such Notice is to be given shall
have last notified the Party giving the same in the manner provided in this
Section. Any Notice personally delivered to the Party to whom it is addressed as
provided above shall be deemed to have been given and received on the day it is
so delivered at such address, provided that if such day is not a business day
then the Notice shall be deemed to have been given and received on the next
business day. Any Notice sent by prepaid registered mail shall be deemed to have
been given and received on the fifth business day following the date of its
mailing. Any Notice transmitted by facsimile or other form of recorded
communication shall be deemed given and received on the first business day after
its transmission.
B. Waivers
The failure of any Parts at any time to require performance by
any other Party of any responsibility or obligation provided for in this
Agreement shall in no way affect the full right to require such performance at
any later time. The waiver by any Party of a breach of any provision of this
Agreement shall not constitute a waiver of any succeeding breach of the same or
any other such provision nor constitute a waiver of the responsibility or
obligation itself.
15
C. Assignability
This Agreement may not be assigned by any Party or to any
person, firm, or corporation, nor may any Party transfer or assign or attempt to
transfer or assign any right or transfer or delegate any obligation or
responsibility under this Agreement to any person, firm, or corporation, without
the prior written consent of the other Party; provided however that such an
assignment, transfer or delegation may be made by either Party to any of its
divisions, or subsidiary, affiliated, related or associated corporations without
prior written consent of the other Party.
D. Applicable Law and Arbitration
(a) This Agreement shall be construed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein and
shall be treated, in all respects as an Ontario contract. Application of the
United Nations Convention on Contracts for the International Sale of Goods is
expressly excluded.
(b) The Parties agree that any dispute, disagreement,
controversy or claim arising out of or related to this Agreement including,
without limitation, its formation, execution, validity, interpretation,
performance, breach, enforcement and/or damages or remedies arising out of its
breach or non-compliance therewith shall first be subject to negotiation for the
amicable settlement thereof among the Parties and failing settlement within
ninety (90) days of the giving of notice by one Party to the other, which
identifies the issue to be settled, shall be finally determined by arbitration
to be conducted in Toronto, Canada by a single arbitrator chosen by the Parties
and, in default of such choice within ten (10) business days, as chosen by the
President of the Arbitrators' Institute of Canada. The Parties agree that the
provisions of the International Commercial Arbitration Act R.S.O. 1990. c.I.g
1988 of the Province of Ontario and the UNCITRAL Model Law on International
Commercial Arbitration adopted thereby shall govern such arbitration and that
neither of them shall apply to the courts of Ontario or any other jurisdiction
to attempt to enjoin, delay, impede or interfere with or limit the rights and
powers of the arbitrator under the said statute. The award of the arbitrator
shall be final and conclusive and there shall be no appeal therefrom to any
court, tribunal or other authority. The award of the arbitrator may be entered
and enforced by any court in any jurisdiction having jurisdiction over the
Parties and/or the subject matter of the award.
(c) Should any provision of this Agreement be or become
ineffective because of changes in applicable laws or interpretations thereof or
should this Agreement fail to include a provision that is required as a matter
of law, the validity of the other provisions of this Agreement shall not be
affected thereby. If such circumstances arise, the Parties shall negotiate
appropriate modifications to this Agreement to reflect those changes that are
required by law.
E. Headings and Interpretation
16
The table of contents, Section, subsection, and paragraph
headings of this Agreement are for the convenience of the Parties and shall not
be considered in any question of interpretation or construction of this
Agreement. The use of words in the singular or plural, or with a particular
gender, shall not limit the scope or exclude the application of any provision of
this Agreement to such person or persons or circumstances as the context
otherwise permits.
F. Persons Authorized to Act for the Parties
This Agreement and each change, variation, or modification
thereof and any notice that provides for termination of this Agreement, in whole
or in part, shall be effective only when executed on behalf of each Party and
where appropriate by an authorized officer of such Party.
Each of the Parties shall furnish the others with lists of the
names and titles of the persons who are authorized to sign on its behalf the
documents or papers required in conjunction with this Agreement.
G. Entire Agreement of the Parties
This Agreement, including any exhibits referenced herein or
attached hereto or thereto, constitutes the entire understanding of the Parties
in respect of the subject matter of this Agreement and cancels and supersedes
all previous negotiations, discussions and agreements of the Parties directly
related to the subject matter of this Agreement; and there are, as of the
Effective Date, no other agreements or understandings, either oral or in
writing, between the Parties directly affecting this Agreement or relating to
the manufacture and supply by GMCL or the purchase by AAM of GMCL Axles or
Accommodation Parts. This Agreement will further override and take precedence
over any subsequent document which may be used by the Parties in the execution
of this Agreement (for example purchase orders), and the terms and conditions
hereof shall prevail unless otherwise agreed to in writing by the Parties.
H. Further Assurances
The Parties shall, with reasonable diligence, do all such
things and provide all such reasonable assurances as may be required to
consummate the transactions contemplated hereby, and each Party shall provide
such further documents or instruments required by the other Party as may be
reasonably necessary or desirable to effect the purpose of this Agreement and
carry out its provisions, whether before or after the Effective Date.
I. Counterparts
This Agreement may be executed by the Parties in separate
counterparts each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
17
J. Relationship of Parties
Nothing in this Agreement is intended to make one Party the
partner, joint venturer or agent of the other Party.
18
IN WITNESS WHEREOF the parties hereto have each caused this
Agreement to be executed as of the day and year first above written by its duly
authorized officers.
AMERICAN AXLE & MANUFACTURING, INC.
Per: /s/ R.E. Xxxxx
------------------------------------
Name: R.E. Xxxxx
-----------------------------------
Title: President & CEO
----------------------------------
GENERAL MOTORS OF CANADA LIMITED
Per: /s/ X.X. Xxxxxxxx, Xx.
------------------------------------
Name: X.X. Xxxxxxxx, Xx.--Vice President
-----------------------------------
Per: /s/ X.X. Xxxxxxx
------------------------------------
Name: X.X. Xxxxxxx
-----------------------------------
Title: Assistant Secretary
----------------------------------
SCHEDULE 1
GMCL AXLES
PART NO. MODEL RATIO* PART DESCRIPTION
-------- ----- ------ ----------------
26031842 C TRUCK 3.08 STD. 8.6 REAR AXLE ASSEMBLY
26031845 C TRUCK 3.08 X.X. 8.6 REAR AXLE ASSEMBLY
26031843 C TRUCK 3.42 STD. 8.6 REAL AXLE ASSEMBLY
26031846 C TRUCK 3.42 X.X. 8.6 REAR AXLE ASSEMBLY
26031844 C TRUCK 3.73 STD. 8.6 REAR AXLE ASSEMBLY
26031847 C TRUCK 3.73 X.X. 8.6 REAR AXLE ASSEMBLY
26031848 C TRUCK 3.08 STD. 8.6 REAR AXLE ASSEMBLY
26031850 C TRUCK 3.08 X.X. 8.6 REAR AXLE ASSEMBLY
26031849 C TRUCK 3.42 STD. 8.6 REAR AXLE ASSEMBLY
26031851 C TRUCK 3.42 X.X. 8.6 REAR AXLE ASSEMBLY
26031852 K TRUCK 3.42 STD. 8.6 REAR AXLE ASSEMBLY
26031855 K TRUCK 3.42 X.X. 8.6 REAR AXLE ASSEMBLY
26031853 K TRUCK 3.73 STD. 8.6 REAR AXLE ASSEMBLY
26031856 K TRUCK 3.73 X.X. 8.6 REAR AXLE ASSEMBLY
26031854 K TRUCK 4.10 STD. 8.6 REAR AXLE ASSEMBLY
26031857 K TRUCK 4.10 X.X. 8.6 REAR AXLE ASSEMBLY
26031858 K TRUCK 3.42 STD. 8.6 REAR AXLE ASSEMBLY
26031860 K TRUCK 3.42 X.X. 8.6 REAR AXLE ASSEMBLY
26031859 K TRUCK 3.73 STD. 8.6 REAR AXLE ASSEMBLY
26031861 K TRUCK 3.73 X.X. 8.6 REAR AXLE ASSEMBLY
26040724 B CAR 2.73 STD. 7 5/8 REAR AXLE ASSEMBLY
26040725 B CAR 2.73 STD. 7 5/8 REAR AXLE ASSEMBLY
26044893 (1995) B CAR 2.93 STD. 7 5/8 REAR AXLE ASSEMBLY
26044895 (1995) B CAR 2.93 STD. 7 5/8 REAR AXLE ASSEMBLY
26031321 (26043712)** S TRUCK 3.08 STD. 7 5/8 REAR AXLE ASSEMBLY
26031322 (26043713)** S TRUCK 3.42 STD. 7 5/8 REAR AXLE ASSEMBLY
26046059 S TRUCK EXTENDED CAB 3.08 STD. 7 5/8 REAR AXLE ASSEMBLY
26046061 S TRUCK EXTENDED CAB 3.42 STD. 7 5/8 REAR AXLE ASSEMBLY
26046062 S TRUCK EXTENDED CAB 3.42 X.X. 7 5/8 REAR AXLE ASSEMBLY
* X.X. = LOCKING DIFFERENTIAL (LIMITED SLIP)
** PART NUMBER REVISION EFFECTIVE A.S.A.P.
SCHEDULE 2
GMCL AXLE PRICE SCHEDULE $ U.S. / UNIT
PART NO. MODEL RATIO* *GMCL PRICE*** (See Qualifiers on
Attached Notes to
Schedule 2)
26031842 C TRUCK 3.08 STD. ***
26031845 C TRUCK 3.08 X.X. ***
26031843 C TRUCK 3.42 STD. ***
26031846 C TRUCK 3.42 X.X. ***
26031844 C TRUCK 3.73 STD. ***
26031847 C TRUCK 3.73 X.X. ***
26031848 C TRUCK 3.08 STD. ***
26031850 C TRUCK 3.08 X.X. ***
26031849 C TRUCK 3.42 STD. ***
26031851 C TRUCK 3.42 ***
26031852 K TRUCK 3.42 ***
26031855 K TRUCK 3.42 X.X. ***
26031853 K TRUCK 3.73 STD. ***
26031856 K TRUCK 3.73 X.X. ***
26031854 K TRUCK 4.10 STD. ***
26031857 K TRUCK 4.10 X.X. ***
26031858 K TRUCK 3.42 STD. ***
26031860 K TRUCK 3.42 X.X. ***
26031859 K TRUCK 3.73 STD. ***
26031861 K TRUCK 3.73 X.X. ***
26040724 B CAR 2.73 STD. ***
26040725 B CAR 2.73 STD. ***
26044893 (1995) B CAR 2.93 STD. N/A
26044895 (1995) B CAR 2.93 STD. N/A
26031321 (26043712)** S TRUCK 3.08 STD. ***
26031322 (26043713)** S TRUCT 3.42 STD ***
26046059 S TRUCT EXTENDED CAB 3.08 STD. N/A
26046061 S TRUCK EXTENDED CAB 3.42 STD. N/A
26046062 S TRUCK EXTENDED CAB 3.42 X.X. N/A
* X.X. = LOCKING DIFFERENTIAL (LIMITED SLIP)
** PART NUMBER REVISION EFFECTIVE A.S.A.P.
SCHEDULE 2
UNIT PRICES
NOTES TO SCHEDULE 2: Unit Price columns shall be marked to reference the
following qualifiers:
1/***Notwithstanding the Unit Prices set out above, increases or decreases to
such Unit Prices shall be made, on a dollar for dollar basis, by reason of ***.
2/ COLUMNS FOR UNIT PRICES ARE QUALIFIED AS FOLLOWS:
*If AAM determines at any time to change the manufacturing content of GMCL Axles
so as to include AAM produced components, the Parties will evaluate the
implication of such content change on the total cost of the Axle Business. The
Parties agree that they will make adjustments to the Unit Prices based on such
evaluation. Such adjustment shall, at a minimum, include an adjustment to the
affected prices equal to the difference between:
a) The St. Catharines Components Plant total production cost for each such
component in the fiscal period during which it last produced such component; and
b) The total purchase price payable to AAM for each such AAM produced component.
Any such price adjustment shall be effective with the first purchase by GMCL of
the said AAM component.
SCHEDULE 3
SCHEDULING / VOLUME RATIO
PRODUCT LINES ST. CATHARINES ALLOCATION
------------- -------------------------
"C" TRUCK )
)
"K" TRUCK )
) ---- > ST. CATHARINES ALLOCATION
"B" CAR ) OF 8.6" GMT 400 CK10 AXLE
) VOLUME PLUS 7 5/8" "B" CAR AXLE
) VOLUME EQUAL TO 57.9% OF TOTAL
) GM CORPORATE VOLUME
"D" Car ) REQUIREMENTS FOR THESE
PRODUCT LINES.
PRODUCT LINES ST. CATHARINES ALLOCATION
------------- -------------------------
"F" CAR )
)
"M" VAN )
)
"L" VAN ) ---- > ST. CATHARINES 'S' TRUCK 7 5/8"
) AXLE VOLUME ALLOCATION EQUAL
"S" TRUCK ) TO 13.4% OF TOTAL GM CORPORATE
) VOLUME REQUIREMENTS FOR
"T" TRUCK ) THESE PRODUCT LINES.
