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Global Purchasing and
Supply Chain
Cadillac Building
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April 6, 2005
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Allied Automotive Group, Inc.
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Re: MODIFICATION TO THE CONTRACT AND EXPEDITED PAY AGREEMENTS (AS EACH
ARE DEFINED BELOW)
Dear ▇▇. ▇▇▇▇▇:
Reference is made to that certain Contract for Motor Transportation dated
January 2, 2004 between Allied Automotive Group, Inc. ("Allied") and General
Motors Corporation ("GM") (the "Contract"). Reference is additionally made to
those certain agreements among Allied and certain of its affiliates and GM and
certain of its affiliates regarding the expedited payment of GM's and its
affiliates' accounts payable to Allied and certain of its affiliates
(collectively, the "Expedited Pay Agreements"). Capitalized terms used, but not
defined herein, shall have the meaning ascribed to such terms in the Contract
and the Expedited Pay Agreements, respectively.
GM recently advised Allied, in accordance with the terms of the Expedited Pay
Agreements, that GM desires to terminate Allied's participation in such
programs. Allied, in turn, has advised GM that it desires to continue to
participate in such program or a replacement program providing similar terms and
conditions as set forth in the Expedited Pay Agreements. GM has agreed to
continue the expedited payment accommodations on the terms and conditions set
forth in this letter agreement.
GM agrees to permit Allied to continue as a participant in the GECC Trade
Payable Program (the "TPP") or a substantially similar program, in either case,
pursuant to the terms and conditions of the Expedited Pay Agreements, through
the earlier to occur of (a) December 31, 2005; (b) a termination of the
Contract; or (c) Allied's breach of the terms of this letter agreement. GM and
Allied each acknowledge and agree that the applicable discount rate will be
[XXXX]% APR ([XXXX]% daily rate) calculated times the number of days of actual
improvement relative to the Contract's current payment terms (i.e., payment on
the twenty-fifth day of the following month from the date of service per Section
11.02 of the Contract). Effective January 1, 2006 and continuing through the
earlier to occur of (i) the expiration or termination of the Contract; or (ii)
Allied's breach of the terms of this letter agreement, GM will make payment of
its accounts payable to Allied on terms of "25th instant, 10th prox." (i.e.,
invoices received in GM's accounts payable systems on the first through
fifteenth of the month shall be paid on the twenty-fifth day of the then current
month, and invoices received on the sixteenth through the end of the month will
be paid on the tenth day of the following month) or equivalent expedited basis,
with the effective discount rate of 9.1%. If, for any reason other than (a) a
termination of the Contract; or (b) Allied's breach of the terms of this letter
agreement, prior to January 1, 2006, Allied is unable to participate in the TPP
or similar
Allied AUtomotive Group, Inc.
Page 2 of 3
program pursuant to the terms and conditions of the Expedited Pay Agreements, GM
shall make expedited payment of its accounts payable on terms of "25th instant,
10th prox." as set forth in the preceding sentence, including application of the
discount rate of [XXXX]%.
In consideration of GM's agreement memorialized herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Allied acknowledges and agrees to the following:
1. Allied will refrain from requesting any further accommodations from
GM, financial or otherwise, during the Term of the Contract.
2. To the extent that Allied requests any further accommodations from
GM, including, but not necessarily limited to, pricing relief under the
Contract, such request shall automatically constitute a default under the
Contract (regardless of the express terms of the Contract and any applicable
cure period(s)) and the Expedited Pay Agreements, thus entitling GM to
simultaneously terminate the Contract and the Expedited Pay Agreements and
immediately exercise any rights available to it under the Contract, the
Expedited Pay Agreements and applicable law.
3. Allied further acknowledges and agrees that it will consummate the
transfer of the Janesville Property (as contemplated under Section 13.01 of the
Contract) by no later than May 15, 2005. The failure to timely consummate the
transfer of the Janesville Property (unless such failure is a direct result of
any act or omission by GM) in accordance with this letter agreement shall
automatically constitute an event of default under the Contract and the
Expedited Pay Agreements, thus entitling GM to exercise its rights as set forth
in paragraph 2 above.
4. Effective on the date of this letter agreement and continuing for
the Term of the Contract, Allied shall timely provide to GM or its designee the
same monthly financial reporting package that Allied provides to its senior
lenders simultaneously with providing such package to the senior lenders in
accordance with Section 14.01 of the Contract.
5. Allied acknowledges and agrees that the foregoing agreements by GM
constitute a "modification" of Section 11.02 of the Contract and thus GM is
entitled to the reimbursement of its professional fees and costs incurred in
connection with such modification in accordance with Section 21.07 of the
Contract, but not to exceed $[XXXX].
Except as modified above, all other terms and conditions of the Contract and the
Expedited Pay Agreements shall remain in full force and effect. To the extent of
any inconsistency between the express terms of the Contract or the Expedited Pay
Agreements and this letter agreement, the terms of this letter agreement shall
govern and control.
This letter agreement may be executed in any number of duplicate originals or
counterparts, each of such duplicate originals or counterparts shall be deemed
to be an original and taken together shall constitute but one and the same
instrument. The parties agree that their respective signatures may be delivered
by facsimile with original signatures to follow, and that facsimile signatures
shall be treated as originals for all purposes.
This letter agreement together with the Contract and the Expedited Pay
Agreements constitutes the entire agreement between the parties relating to the
subject matter hereof, and may not be modified except in a writing signed by
both parties hereto.
Allied Automotive Group, Inc.
Page 3 of 3
Sincerely yours,
GENERAL MOTORS CORPORATION
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Director, Supply Risk Management
ACKNOWLEDGED AND AGREED:
ALLIED AUTOMOTIVE SYSTEMS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Its: Executive Vice President
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[XXXX] Represents material deleted per the Company's request for
Confidential Treatment and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.