STRATEGIC COOPERATION AGREEMENT
This Strategic Cooperation Agreement (the "Agreement") is entered into as
of January 23, 2001 (the "Effective Date") by and between Metalync Company LLC,
a Delaware limited liability Company ("Metalync"), Metaldyne Corporation, a
Delaware corporation ("Metaldyne") (for purposes of Sections 2 and 4(a) only),
and Global Metal Technologies, Inc., a Delaware corporation ("GMTI') (each a
"Party" and collectively, the "Parties").
WHEREAS, Metalync and its subsidiary manufacture highly engineered products
for the transportation, industrial and consumer markets and is commonly
controlled with GMTI, a leading designer and manufacturer of highly engineered,
medium size aluminum die castings predominantly for the automotive industry;
WHEREAS, Metalync intends to change its name to Metaldyne Company LLC;
WHEREAS, the Parties desire to realize the benefits of a cooperative
relationship with respect to their complementary business services as part of a
full metal forming and fabrication platform serving automotive and other
industrial original equipment manufacturers ("OEMs");
WHEREAS, GMTI acknowledges that this Agreement is fair and equitable and
contains terms comparable to the terms that would be achieved in an arm's length
transaction with a person that is not an affiliate and is of the kind which
would be entered into by a prudent person in the position of GMTI with a person
which is not one of its affiliates;
WHEREAS, Metalync acknowledges that this Agreement is entered into in the
ordinary course of business and contains terms and conditions not less favorable
to Metalync than could be obtained on an arm's-length basis from an unrelated
third party;
WHEREAS, the Parties desire to set forth in this Agreement certain aspects
of a strategic relationship between Metalync and GMTI, some of which may be
supplemented in the future by more detailed agreements;
NOW, THEREFORE, in exchange for valuable and adequate consideration and the
terms set forth below, the Parties agree as follows:
1. STRATEGIC RELATIONSHIP.
(a) The purpose of this Agreement is to broadly establish certain of the
parameters for a strategic relationship between the Parties under
which the Parties will operate independently, but cooperatively, as
part of a full metal forming and fabrication platform serving
automotive and other industrial OEMs.
(b) During the Term of this Agreement, Metalync will provide to GMTI and
its subsidiaries, and GMTI will provide to Metalync and its
subsidiaries, the corporate services and functions listed on Schedule
A attached hereto as well as such other corporate services and/or
functions which may be mutually identified by the Parties in the
future, including those which may be contemplated by Section 1(c). It
is expected that the requirements for services and/or functions set
forth on Schedule A by a particular Party may be fluid. Accordingly,
the chief executive officers of each of GMTI and Metalync will be
meet frequently (and not less frequently than monthly) to identify
the mutual requirements of each such Party and to specify any changes
required to be made to the then existing arrangements.
(c) From time to time, the Parties will cooperate to identify employees
of GMTI and its subsidiaries whose employment by Metalync or one of
its subsidiaries rather than GMTI would be mutually advantageous.
Under such circumstances, the Parties will seek to arrange for the
termination of the GMTI employee, the immediate hiring of such
employee by Metalync or one of its subsidiaries on mutually
acceptable terms and the provision of services by such identified
employee or other employees of Metalync and its subsidiaries on the
terms contemplated hereby to the extent required by GMTI. In such
event, the salary and employee benefits paid to such employees will
become a responsibility of Metalync or its subsidiary from and after
the hiring of such employee.
(d) Charges by a Party for the provision of services by such Party to the
other Party and its subsidiaries pursuant to this Agreement will be
at the cost to the providing Party, except as set forth on the
Schedules hereto or as may be otherwise agreed. Metalync and GMTI
will deliver invoices to one another on a regular basis to be
determined (but not less frequently than quarterly) for services
rendered hereunder and the net amount shall be paid by the Party
owing amounts for the particular period in accordance with the term
of the particular invoice (but not later than 90 days after the date
of the invoice). Each Party will endeavor to maintain adequate
records to support such invoices and the Parties will cooperate with
one another in
accounting and tax matters necessitated by this Agreement. If
requested by any Party, the other Party will provide such supporting
information as may be reasonably requested by it.
(e) It is agreed that GMTI and Metalync will be cooperatively marketing
their collective products and services on a basis that is mutually
beneficial and that each Party will have the opportunity to benefit
from cost reductions in raw materials and energy costs due to, among
other things, volume discounts from suppliers, the greater
procurement and provisioning capabilities of one Party as compared
with the other Party. The Parties will negotiate with one another in
good faith to identify such opportunities and to document them as
identified. The first such initiatives, to become effective
immediately but to be more fully documented after the signing of this
Agreement, relate to metal purchases and energy supplies as set forth
on Schedule B hereto.
(f) The provision of services and/or the cooperation of the Parties with
respect to the procurement of other corporate services pursuant to
this Agreement will in no way create an obligation on the part of one
Party to assume, guarantee or otherwise become liable for, the debts
or obligations of the other Party.
(g) Each Party will provide to the other Party any information and
documentation, whether proprietary or otherwise, as may be required
in order for each Party to fulfill its obligations under this
Agreement, but subject to confidentiality to the extent such
information is non-public, in any reasonable manner whatsoever.
(h) GMTI or Metalync may provide the services contemplated hereby
directly or through any of their respective subsidiaries or
affiliates.
2. INTELLECTUAL PROPERTY USE AND OWNERSHIP.
(a) Metalync hereby authorizes the use of the "Metalync" trade name and
related intellectual property by Metalync in connection with its
performance of this Agreement.
(b) It is understood that Metalync will market certain agreed products
and services of GMTI and its subsidiaries when marketing its own
products and services Under the Metalync name. It will ensure paper
invoicing and allocation of all receivables and will not directly or
indirectly act to
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divest or impair GMTI of any of its business opportunities. Any such
unanticipated conflicts shall be resolved through good faith
negotiations between the chief executive officers of GMTI and
Metalync.
(c) The use by Metalync of any trademark, service xxxx or trade name of
GMTI in connection with the performance of this Agreement will in no
way create an obligation by Metalync to allow the use of, or a right
of GMTI to use, the "Metalync" trade name or related intellectual
property by GMTI. Any services provided by Metalync hereunder using
the "Metalync" trade name or related intellectual property shall not
be construed in any manner as authorizing or constituting the conduct
of business by GMTI under such name.
(d) GMTI acknowledges that Metalync retains title to and ownership of and
all rights with respect to the "Metalync" trade name and related
intellectual property.
(e) Metalync will retain all right, title and interest in and to all of
its trademarks, service marks and trade names worldwide.
3. TERM, TERMNATION AND SURVIVAL.
(a) This Agreement will begin on the Effective Date and will continue
until the earlier of: (i) any business combination involving Metalync
or any of its subsidiaries and GMTI or (ii) GMTI and Metalync ceasing
to be within the common control of Heartland Industrial Partners,
L.P. and its affiliates (the "Term"), unless terminated in accordance
with the provisions hereof.
(b) Either Party may terminate this Agreement upon written notice to the
other Party if the other Party materially fails to perform or observe
any of its obligations under this Agreement or if there is a
determination by either such Party that the intended benefits, or
anticipated burdens, of this Agreement are materially different than
presently anticipated and such failure or determination cannot be
remedied or, if remediable, is not cured within sixty (60) days after
written notice thereof from the terminating Party.
(c) The provisions of Section 4 with respect to indemnity will survive
any termination of this Agreement.
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4. REPRESENTATIONS, WARRANTIES AND INDEMNITY.
(a) Each Party represents and warrants that it is duly organized and has
the unrestricted right to enter into and perform this Agreement.
(b) Metalync will indemnify, defend and hold harmless GMTI, its
affiliates, officers, directors, employees, consultants and agents
from any and all third party claims, liability, damages and/or costs
(including, but not limited to, attorneys fees) arising from any
gross negligence or willful misconduct in the performance of this
Agreement by it or its breach of any representation or covenant in
this Agreement in any material respect. GMTI will promptly notify
Metalync of any and all such claims and will reasonably cooperate
with Metalync with the defense and/or settlement thereof, provided
that if any settlement requires an affirmative obligation of, results
in any ongoing liability to or prejudices or detrimentally impacts
GMTI in any way and such obligation, liability, prejudice or impact
can reasonably be expected to be material, then such settlement shall
require GMTI's written consent (not to be unreasonably withheld or
delayed) and GMTI may have its own counsel in attendance at all
proceedings and substantive negotiations relating to such claim.
(c) GMTI will indemnify, defend and hold harmless Metalync, its
affiliates, officers, directors, employees, consultants and agents
from any and all third party claims, liability, damages and/or costs
(including, but not limited to, attorneys fees) not arising from its
performance of this Agreement or its breach or covenant in this
Agreement. Metalync will promptly notify GMTI of any and all such
claims and will reasonably operate with GMTI with the defense and/or
settlement thereof, provided that, if any settlement requires an
affirmative obligation of, results in any ongoing liability to or
prejudices or detrimentally impacts Metalync in any way and such
obligation, liability, prejudice or impact can reasonably be expected
to be material, then such settlement shall require Metalync's written
consent (not to be unreasonably withheld or delayed) and Metalync may
have its own counsel in attendance at all proceedings and substantive
negotiations relating to such claim.
5. FURTHER AGREEMENT.
The Parties agree that as soon as practicable hereafter, they shall enter
into one or more detailed agreements related to the matters contemplated by this
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Agreement, as requested by any Party, as well as certain other services and/or
functions identified by the Parties in the future.
6. GOVERNING LAW
This Agreement, its interpretation, performance or any breach thereof,
shall be construed in accordance with, and all questions with respect thereto
shall be determined by, the internal, substantive laws of the State of Michigan.
In connection with any judicial proceeding, the parties consent to the exclusive
jurisdiction of the state and federal courts having jurisdiction over Xxxxx
County, Michigan.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives.
METALYNC COMPANY LLC
By: ____________________________
Name:
Title:
METALYNC CORPORATION
By: ____________________________
Name:
Title:
GLOBAL METAL TECHNOLOGIES, INC.
By: ____________________________
Name:
Title:
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Schedule A
SERVICES AND FUNCTIONS(a)
o Finance and Accounting
o Accounts Payable
o Accounts Receivable
o Human Resources (to be provided in both directions as agreed by the CEOs)
o Benefits Administration
o Insurance
o Risk Reserves
o Information Technology (to be provided in both directions as agreed by the
CEOs)
o Sales (to be provided in both directions on an account-by-account basis as
agreed by the CEOs)
o Strategic Light Metal Services (to be provided by GMTI)
o Operational Services
o Purchase of Raw Materials
o Quality Control and Engineering Services (mutual cooperation may be
required)
____________________
(a) To be provided by Metaldyne, unless otherwise noted.
STRATEGIC PURCHASING SERVICE
SCHEDULE B TO STRATEGIC COOPERATION AGREEMENT
SERVICE
On an ongoing basis, Metalync will purchase for GMTI raw materials and
utility services subject to the terms contained herein.
OBLIGATIONS OF PARTIES
o Raw Materials - Metalync will purchase for GMTI aluminum raw materials.
GMTI will promptly reimburse Metalync for the funds for raw material
purchases, together with the other payments described below.
o Utility Service - Metalync will purchase for GMTI electric and natural gas
services for its various plants. GMTI will promptly reimburse Metalync for
the funds for such utility service purchases, together with the other
payments described below.
o In no event shall the gross receivables due to Metalync from GMTI for the
purchasing services described herein at any time exceed Nine Million Dollars
($9,000,000) or such lesser amount as Metalync shall advise GMTI as causing
its aggregate investments in GMTI to exceed such amount.
LENGTH OF AGREEMENT
Metalync agrees to provide the purchasing services described herein on an
ongoing basis. Termination of any of these purchasing services by either party
requires thirty (30) days notice in writing.
PAYMENTS
o As long as any of the purchasing services described herein are being
provided by Metalync, GMTT agrees to make a payment in reimbursement of
assumed Metalync administrative fees of Five Thousand Dollars ($5,000)
per month.
o To the extent funds advanced by Metalync exceed funds due from GMTI for
any aspect of the purchasing services described herein, GMTI shall pay
Metalync interest on such excess at a rate equal to one percent (1%)
over the interest rate then being charged Metalync under its revolving
credit facility.
o To the extent Metalync provides raw materials or utility service at a
price less than GMTI could otherwise obtain such raw materials or utility
service, GMTI shall pay to Metalync cost savings payment equal to fifty
percent (50%) of the savings.
