EXHIBIT 10.17
CONTRACT FOR MOTOR TRANSPORTATION
This Contract for Motor Transportation (this "Agreement") is made as of
January 2, 2004 (the "Effective Date") by and between Allied Automotive Group,
Inc., with its principal location at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ ("Service Provider"), and General Motors Corporation, a Delaware
corporation, with a principal location at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("GM").
A. This Agreement sets forth the terms pursuant to which Service
Provider shall provide Transportation Service (as defined in Section 1.00 below)
to GM.
B. GM requires Service Provider's efficient, prompt and
high-quality delivery of finished vehicles to, from or between its various
dealers, and other origins and destinations that GM may, from time to time,
designate to Service Provider.
C. Service Provider is prepared to provide Transportation Service
for GM as contemplated in this Agreement.
Now, therefore, for good and valuable consideration, the receipt and
adequacy of which is acknowledged, the parties agree as follows:
1. TRANSPORTATION SERVICE.
During the Term (as defined in Section 16.00), Service
Provider shall furnish to GM those delivery and transportation
services, including, but not necessarily limited to, plant
releasing, loading motor vehicles onto rail cars and vehicle
haul-away, that Service Provider provides to GM in the United
States and Canada as of the Effective Date (collectively,
"Transportation Service").
2. VEHICLES; DRIVERS, ETC.
Service Provider shall be responsible for all facilities,
properly licensed drivers and other personnel and equipment
necessary to perform Transportation Service in a safe and
efficient manner. Service Provider, including Service
Provider's affiliated companies, if applicable, shall also
provide, operate and maintain, in good working condition, the
motor vehicles, trailers and related equipment necessary for
the performance of Transportation Service. Service Provider
shall also ensure, to GM's reasonable satisfaction, that
contracted third party carriers operate and maintain, in good
working condition, the motor vehicles, trailers and related
equipment necessary for the performance of Transportation
Service pursuant to this Agreement.
3. CONTROL OF TRANSPORTATION SERVICE.
Service Provider shall have sole and exclusive control over
the manner in which Service Provider and its employees, agents
and subcontractors (collectively, "Service Provider
Employees") perform Transportation Service. Service Provider
shall employ those Service Provider Employees it deems
necessary in connection therewith. Notwithstanding anything
herein to the contrary, Service Provider Employees shall be
considered employees or subcontractors of Service Provider
only and shall be subject to employment, discharge, discipline
and control, solely and exclusively by Service Provider. While
on GM property, Service Provider Employees must follow
applicable GM rules provided and/or communicated to Service
Provider and/or Service Provider Employees by GM, including
GM's plant security and dock personnel. GM reserves the right,
in its sole discretion, to instruct Service Provider to remove
any Service Provider Employee from Transportation Service at
GM locations.
4. QUALITY SERVICE REQUIREMENTS.
During the Term, Service Provider shall:
A. Follow GM's Vehicle Logistics Common Quality Processes
(collectively, the "Common Process") including GM's:
(i) Damage Elimination Teams
(ii) Transportation Acceptance Process ("TAP")
(iii) Transportation Self-Audit Process
(iv) Early production Shipping Verification Process
(v) Key Handling Process
(vi) Vehicle Logistics Problem Reporting/Resolution
("PRR") Process (available on "▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇")
B. Process transportation claims through the Common Process.
C. Follow the Common Process when filing supplemental
inspections.
D. Achieve an annual damage frequency of [XXXXXXX] or less for
shuttle moves and an annual damage frequency of [XXXXXXX] or
less for non-shuttle moves for calendar year 2003. During the
remainder of the Term, the damage frequency shall be reduced
by [XXXXXXX] per calendar year, respectively. GM, in its sole
discretion, may impose a penalty equal to [XXXXXXXXXX] of the
total annual invoiced amount for failure to achieve the annual
target. GM shall compile the assessment for this penalty
annually in August. Service Provider shall monitor and report
to GM monthly the damage frequency by location. The
[XXXXXXXXXXXXXXX]. Service Provider must remit payment within
thirty (30) days after this assessment.
E. Ship all vehicles in accordance with the latest revision of
GM'S Vehicle Shipping Manual (as set forth and available on
"▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇").
F. If performance falls below the damage frequency target (as set
forth in Section 4.00(D) hereof), Service Provider shall be
given one week, following receipt of written notice from GM,
to provide to GM a written corrective action plan per the PRR
process. Service Provider shall have thirty (30) days, from
the date on which GM, in writing, approves Service Provider's
written corrective action plan to cure the noncompliance at
the location subject to the corrective action plan. In the
event Service Provider fails to timely submit a corrective
action plan or if a corrective action plan is timely
submitted, but Service Provider fails to timely cure the
noncompliance, upon failure to timely submit the
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corrective action plan or expiration of thirty (30) day cure
period, whichever is applicable, at GM's sole option, GM may
resource its business at such location, in addition to
exercising other remedies to which GM is entitled under this
Agreement, by providing Service Provider with sixty (60) days
prior written notice of GM's intent to resource.
G. Contract with an inspection agency selected by GM for third
party inspection. A third party inspection is required before
and after all shuttle moves. Service Provider may negotiate
with the other service providers (i.e., the serving railroad)
for the cost of the third party inspection. This cost is
typically allocated by volume between the individual service
providers; provided, however, as between Service Provider and
GM, Service Provider retains sole responsibility for the cost
of such inspections irrespective of Service Provider's ability
to allocate the inspection cost among other service providers.
Service Provider is responsible to ensure adequate lighting
exists for inspections.
H. Assign a loading supervisor to cover all hours of loading
operation. All loads are to be audited one hundred percent
(100%).
I. Submit an appraisal of equipment and maintenance plan, each in
accordance with GM's Haul-Away Equipment Appearance
Initiative.
J. Provide twenty-four hour security for Service Provider's
operations. Service Provider shall select, and GM shall
approve, which approval shall not be unreasonably withheld, a
security company, the cost will be borne by Service Provider.
Security is required for all assembly center yard areas for
which Service Provider is responsible.
K. Obtain GM's approval for all facility layout changes.
L. Obtain ISO 9001:2000 certification for Service Provider, its
agents and subcontractors.
M. Obtain GM's approval for all second tier suppliers used for
trip leasing.
N. Perform routine maintenance, including, but not limited to,
yard stripping, pavement sealing, etc., to the extent Service
Provider is the rail loading and/or unloading contractor.
5. OPERATIONAL REQUIREMENTS.
During the Term, Service Provider shall perform Transportation
Service in accordance with the operational requirements set
forth in this Section 5.00.
5.01 All vehicles must be dispatched within the target dispatch
requirement for each demand area existing as of the Effective
Date, or as mutually agreed by the parties. For each vehicle
not meeting this requirement, GM may, in its sole discretion,
assess Service Provider a [XXXXXXXXX]; provided, however, the
maximum amount of penalties which may be assessed against
Service Provider by GM under this Section 5.01 and under
Section 4.00(D) hereof, in the aggregate, shall be capped at
[XXXXX] on an annual basis (with the first twelve (12) month
period commencing on the Effective Date). Without waiving any
other rights or remedies under this Agreement, GM agrees to
waive all claims for penalties under this Section 5.01 and
under Section 4.00(D) for periods prior to March 7, 2004. All
accrued assessments resulting from noncompliance shall be
billed on a monthly basis (VIN
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detail will be supplied at billing). If a force majeure event
prevents delivery, Service Provider must invoke Section 19.00
of this Agreement. GM, in its sole discretion, may grant other
exceptions for noncompliance if a timely request is submitted
in writing to GM. GM agrees to use reasonable efforts to
cooperate with Service Provider in order that Service Provider
achieves the performance standards set forth in this
Agreement, and to investigate the feasibility and potential
benefits of adjusting demand area standards in order to
improve order to delivery performance in a manner acceptable
to GM and Service Provider.
5.02 If Service Provider's performance at any location falls below
[XXXXXXXXX] compliance with GM's weekly dispatch requirements,
or any unit dwells longer than [XXXXXXXXX], Service Provider
shall submit, within seven (7) days of GM's written
notification to Service Provider identifying Service
Provider's noncompliance, a written corrective action plan to
GM (the format of said action plan will be provided by GM).
Service Provider shall have thirty (30) days from the date on
which GM, in writing, approves Service Provider's written
corrective action plan to cure noncompliance at the location
subject to the corrective action plan. In the event Service
Provider fails to timely submit a written corrective action
plan or if a corrective action plan is timely submitted, but
Service Provider fails to timely cure the noncompliance, upon
failure to timely submit the corrective action plan or
expiration of the thirty (30) day cure period, whichever is
applicable, at GM's sole option, GM may resource its business
at such location, in addition to any other remedies to which
GM may be entitled under this Agreement, by providing Service
Provider with sixty (60) days' prior written notice of GM's
intent to resource. Notwithstanding anything to contrary,
Service Provider acknowledges and agrees that Service Provider
shall be limited to one (1) cure period per location during
each twelve (12) month period of this Agreement (with the
first such twelve (12) month period commencing on the
Effective Date) for a breach of either Section 5.01 or Section
4.00(D) of this Agreement, after which GM shall be free to
resource its business at the location at which Service
Provider's noncompliance occurs.
5.03 Service Provider must appropriately fleet size its operations
for both equipment and drivers based on a quarterly forecast
provided by GM and a quarterly capacity review between Service
Provider and the GM NAO Vehicle Logistics Operations Manager.
5.04 Service Provider must implement a "24 hour, 7 days a week"
delivery program to dealers participating in the "24 hour, 7
days a week" program.
6. PROPERTY DAMAGE AND LOSS.
Service Provider shall have exclusive care, custody and
control of all goods hereunder, including motor vehicles and
related components, from the time GM delivers to Service
Provider until delivery to a consignee named by GM, in the
case of truck haul-away, or until properly loaded and
otherwise delivered to the rail carrier in the case of rail
shipment. Service Provider assumes full responsibility for any
and all loss or damage to GM's property while in Service
Provider's care, custody or control, unless such loss or
damage is caused by the acts or omissions of GM, its
consignees, agents or employees, rail carriers, or by a force
majeure event as defined in Section 19.00; provided, however,
if insurance coverage is in place regarding a force majeure
loss, Service Provider shall make and reasonably pursue a
claim to the extent of such coverage and to the extent Service
Provider
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receives insurance proceeds from a third party insurance
provider for loss or damage to GM's property caused by a force
majeure event described in Section 19.00 hereof, then Service
Provider shall turn over such proceeds to GM. Service Provider
shall ensure that its affiliated and nonaffiliated
subcontracted truck haul-away providers adhere to the
applicable vehicle care and loss and damage requirements of
this Agreement, including insurance and indemnification, and
such affiliated and nonaffiliated subcontracted truck
haul-away carriers or other subcontractors shall be
responsible for administrating any loss or damage suffered
with respect to GM property while in the care, custody or
control of such haul-away carriers or other subcontractors.
The value of said goods shall be based on the normal GM
invoice price thereof plus freight charges, with the exception
of certain major vehicle damage claims described in Section
6.01.
6.01 Service Provider agrees to the following process for Major
Vehicle Damage Claims.
(A) As to vehicles sustaining damage under Service
Provider's custody or control, to the extent that
such damage affects the merchantability, safety,
durability or reliability of the vehicle, such claims
shall be handled as major transportation damage
claims.
(B) GM, in its sole discretion, shall determine whether a
damaged vehicle is capable of restoration to a
marketable condition, complying with all applicable
government motor vehicle standards.
(C) If GM determines that a vehicle is not reparable,
Service Provider shall immediately return the vehicle
to GM. GM shall process a claim utilizing the
vehicle's dealer net price, minus [XXXXXXXXX] as the
salvage value, plus Destination Freight Charge.
(D) All major damage claims will be reviewed and either
paid or rejected by Service Provider within thirty
(30) days of transmittal to Service Provider.
6.02 Service Provider shall accept all claims, including Major
Vehicle Damage Claims, for loss or damage submitted in writing
or via electronic transmission for a period of nine (9) months
following delivery as follows:
(A) Claims received at the GM Corporate Claim Center
within nine (9) months after delivery of lost or
damaged motor vehicles or related components shall be
deemed accepted by Service Provider, including its
subcontractors, provided any such claim is
transmitted to Service Provider within nine (9)
months after scheduled delivery.
(B) Claims filed against one Service Provider on a joint
line, or joint line cross-border movement, shall be
deemed a filing against all connecting Service
Providers within the time limits in (A) above.
6.03 Service Provider shall render payment, or provide written
reasons for any nonpayment, of any claim within thirty (30)
days of Service Provider's receipt of such claims in
accordance with Section 6.02 herein.
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7. STANDARD INSURANCE REQUIREMENTS.
During the Term, Service Provider shall obtain and maintain,
at its sole expense, the following types of insurance
coverage, with minimum limits as set forth below, unless
increased types and amounts are required due to the equipment
of service requirements in specific Appendices and Service
Provider shall ensure that all subcontractors, including owner
operators and independent carriers in its employ, shall
maintain the same coverage:
A. Commercial General Liability, covering liability arising from
premises, operations, independent contractors,
products-completed operations, personal and advertising
injury, and liability assumed under an insured contract -
$2,000,000 each occurrence.
B. Commercial Automobile Liability, covering all owned, hired,
and non-owned vehicles - $2,000,000 each occurrence, including
all statutory coverage for all states of operation.
C. Workers Compensation, in an amount not less than the statutory
limits for all states of operation.
D. Employers Liability, $500,000 each employee for bodily injury
by accident and $500,000 each employee for bodily injury by
disease.
E. Cargo Insurance, including loading and unloading, with a limit
equal at least to the value of the property shipped and in any
event not less than $250,000 per occurrence.
F. Any insurance coverage required by any government body for the
types of Transportation Service specified in the Appendices.
G. Any deductible or self-insured retention in excess of existing
retention limits must be declared to and approved by GM.
H. Service Provider shall provide GM with a certificate of
insurance evidencing compliance with the insurance
requirements set forth above. Each certificate shall name GM
as (or provide that GM shall have the benefits of) an
additional insured for liability and loss payee for damage to
GM's vehicles or property, each arising from the operations of
the Service Provider on all policies (except Cargo Insurance,
Workers' Compensation and Employers Liability) and state that
the above required coverage shall apply as primary insurance
with respect to any other insurance or self-insurance programs
afforded to GM. Each certificate shall provide that GM shall
receive thirty (30) days' prior written notice from the
insurer of any termination or reduction in the amount or scope
of coverage.
I. Each certificate shall be in a form acceptable to, and
underwritten by, insurance company(ies) reasonably
satisfactory to GM. The purchase of appropriate insurance
coverage by Service Provider or the furnishing of
certificate(s) of insurance shall not release Service Provider
from its respective obligations or liabilities under this
Agreement. These insurance requirements shall be applicable to
subcontractors performing services as directed by Service
Provider under this Agreement.
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8. RATES; BRIDGE PAYMENTS; REDUCTIONS; 2003 REBATE; CANADA.
8.01 During the Term, GM shall pay Service Provider for
Transportation Service performed in either the United States
or Canada, pursuant to the rates (including the Administrative
Processing Fee in existence on the Effective Date) that are in
effect between the parties on the Effective Date, subject to
the modifications as required by Section 8.02 and Section 8.03
hereof. For clarity, GM will not reimburse the Service
Provider for overtime due to weekend activity, which weekend
operations are scheduled at GM's discretion. Service Provider
shall be solely responsible for payments to Service Provider's
agents and subcontractors.
8.02 During the Term, GM shall pay Service Provider a [XXXXXXXXX]
for Transportation Service performed in the United States.
8.03 During the Term, Service Provider and GM agree to the
[XXXXXXXXX] for Transportation Service performed in the United
States, as set forth in Exhibit 8.03 to this Agreement.
8.04 On or before January 2, 2004, Service Provider shall
[XXXXXXXXX]. On the Transfer Date (as defined in Section 13.01
hereof), Service Provider shall [XXXXXXXXX].
8.05 The rates on Transportation Service performed from the points
of origin set forth on the attached Exhibit 8.05 shall not be
reduced and shall remain as currently in effect on the
Effective Date.
9. OVERCHARGES AND UNDERCHARGES.
Service Provider shall file any overcharges or undercharge
claims within one hundred and twenty (120) days from the time
GM receives a valid and acceptable electronic delivery record.
Service Provider's failure to timely file will waive any such
claims by Service Provider, including its agents and
subcontractors.
10. PAYMENT SUNSET.
Service Provider shall, within nine (9) months from date of
delivery or date service was performed, manually or
electronically transmit a delivery record to GM. Service
Provider's failure to so transmit a delivery record will waive
any future claims for payment by Service Provider, including
its agents and subcontractors.
11. EFT; PAYMENT - ELECTRONIC DATA INTERCHANGE - (EDI).
11.01 Service Provider and GM acknowledge that the existing EFT
agreement shall continue in full force and effect during the
Term. Service Provider agrees to hold GM harmless for
uncollected funds not properly or timely transferred from bank
or depository in accordance with EFT or Appendices.
11.02 After GM receives a valid and acceptable electronic service
record, GM will transmit to the Service Provider an EDI 820
Transaction Set (Advance Payment Notification). GM shall
transfer funds electronically (pay) to the bank designated by
the Service Provider in the
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applicable wire transfer agreement or Appendix on the
twenty-fifth (25th) (or following business day) of the
following month from the date that service was performed.
Balance Due payments will fall under the same rules as do
original payments.
12. NEW BUSINESS; FUEL SURCHARGE PROGRAM; DISCONTINUATION OF YARD
MANAGEMENT.
12.01 GM and Service Provider acknowledge and agree that GM has
awarded to Service Provider the new business for
Transportation Service set forth on Exhibit 12.01 attached
hereto, which new business, subject to volume fluctuations, is
projected to result in annual revenue of [XXXXXXXXX] (the "New
Business Award"). GM and Service Provider further acknowledge
and agree the above projection is only an estimate, and, as a
result, the actual revenue will be based upon the sales of
those vehicles subject to the Transportation Service set forth
on Exhibit 12.01. GM and Service Provider acknowledge and
agree (i) Service Provider shall begin providing the
Transportation Service in respect of the New Business Award on
or before March 7, 2004, and (ii) Service Provider will
provide Transportation Service with respect to the New
Business Award pursuant to the rates set forth on Exhibit
12.01 exclusively and without the rate reductions contemplated
by Section 8.03 hereof, but otherwise subject to the terms of
this Agreement and Exhibit 12.01.
12.02 GM agrees that Service Provider will participate, on the same
terms and conditions on which other haul-away service
providers participate, in any fuel surcharge program or
allowance provided by GM during the Term; provided, however,
the maximum amount of such fuel allowance shall be capped at
[XXXXXXXXX] on an annual basis (with the first such twelve
(12) month period commencing on the Effective Date).
12.03 GM agrees to use best reasonable efforts to discontinue all
services related to GM yard operations effective March 7,
2004, or as soon thereafter as GM contracts with an alternate
service provider to provide such yard operations.
13. JANESVILLE PROPERTY; [XXX] SPECIALIZED EQUIPMENT.
13.01 Service Provider shall transfer clear and marketable title to
GM, free and clear of all liens, claims, encumbrances or
security interests, but subject, however, to applicable
building and zoning laws and existing utility easements, to
the land, buildings, fixtures and personal property located at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ (the "Janesville
Property") utilized to perform Transportation Service for GM.
In consideration of such transfer, and immediately upon the
Transfer Date (as defined below), GM agrees to pay to Service
Provider the sum of [XXXXXXXXX]. Service Provider agrees to
enter into GM's standard form lease agreement, a copy of which
is attached to this Agreement as Exhibit 13.01, pursuant to
which GM shall lease the Janesville Property to Service
Provider at the rate of $1.00 per year for so long as Service
Provider provides Transportation Service to GM at the
Janesville Property. Service Provider and GM further agree to
enter into customary documentation evidencing the sale and
lease-back of the Janesville Property, all on terms
satisfactory to each of GM and Allied, by January 31, 2004, or
as soon as reasonably practicable thereafter (the "Transfer
Date").
13.02 Upon GM's request, following a termination or expiration of
Service Provider's provision of Transportation Service at the
[XXXXXXXXX] location with respect to the [XXXXXXXXX], Service
Provider agrees to cooperate in good faith to enable GM, at
its
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election, to either purchase the equipment Service Provider
utilizes to transport the [XXXXXXXXX] product at [XXXXXXXXX]
or assign all of Service Provider's rights under the Master
Lease (as defined below) to GM. GM acknowledges and agrees
that the [XXXXXXXXX] is subject to that certain Master Lease
Agreement dated September 19, 2003 with ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital,
including Schedule No. 001 and Schedule No. 002 attached
thereto (collectively, the "Master Lease"), and GM's purchase,
if any, of the [XXXXXXXXX] pursuant to this Section 13.02
shall be subject to and in accordance with the Master Lease.
14. FINANCIAL REPORTING; REFINANCE PLAN; ACCESS.
14.01 Service Provider shall provide to GM the same monthly
financial reporting package Service Provider provides to
Service Provider's senior secured debt holders, excluding any
information Service Provider reasonably determines as
confidential, including information relating to Service
Provider's customers, other than GM. Service Provider shall
provide to GM such monthly financial reporting package
simultaneously with providing same to Service Provider's
senior secured debt holders.
14.02 Service Provider shall present, within eighteen (18) months
from March 7, 2004, a refinancing plan (the "Refinancing
Plan") demonstrating to GM's satisfaction Service Provider's
long-term viability beyond the expiry of Service Provider's
senior secured credit facilities in September, 2007. The
Refinancing Plan shall indicate that the consolidated EBITDA
interest coverage shall exceed [XXXX] and the Total Debt to
EBITDA ratio shall not exceed [XXXX]. Each ratio shall be
calculated in accordance with Standard and Poor's. The
Refinancing Plan shall indicate the effective date by which
the refinancing will be implemented, and that such date shall
be no less than one hundred twenty (120) days before the
expiry of the senior credit facilities. Service Provider's
failure to deliver a Refinancing Plan in accordance with this
Section 14.02 shall not constitute a breach of this Agreement.
14.03 Service Provider shall grant to GM and its designees
(including, but not limited to, BBK, Ltd.) access to Service
Provider's books, records, officers, employees and business
operations, upon reasonable request and prior notice, to
monitor Service Provider's compliance with and performance
under this Agreement. Service Provider agrees to use
reasonable best efforts to fully cooperate with the agents,
representatives, consultants, officers and employees of GM and
its designees to effectuate this right of access.
15. NOTICES.
All notices under the terms of this Agreement shall be in
writing, signed by or on behalf of the party giving such
notice, and sent by certified mail, or via facsimile and first
class mail, to the following addresses:
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If to GM: General Motors Corporation
▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
Mail Code: ▇▇▇-▇▇▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Director, Vehicle Logistics
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇
LLP
2290 First National Building
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Service Provider: Allied Automotive Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President, General
Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
Bank of America Plaza
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. - ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
16. TERM; REMEDIES; COOPERATION IN RESOURCING.
16.01 Unless otherwise terminated in accordance with the provisions
of this Agreement, the term of this Agreement (the "Term")
shall commence on the Effective Date and continue until March
7, 2006. If, during the Term, Service Provider has (i)
complied in all material respects, as determined by GM in its
sole discretion, with all of the terms and conditions of this
Agreement, including the Quality Service Requirements set
forth in Section 4.00 and the Operational Requirements set
forth in Section 5.00 above; and (ii) complied with Section
14.02 of this Agreement, then, upon satisfaction of each of
the foregoing conditions, the Term, upon the mutual written
agreement of GM and Service Provider, shall be extended for an
additional one (1) year.
16.02 Upon any breach of this Agreement by Service Provider with
respect to the Quality Service Requirements set forth in
Section 4.00 or the Operational Requirements set forth in
Section 5.00, GM's remedy with respect thereto shall be as set
forth in Section 4.00 hereof with respect to breaches of the
Quality Service Requirements and as set forth in Section 5.00
hereof with respect to breaches of Operational Requirements.
Without limiting the foregoing, upon written notice from GM,
GM shall have the right to terminate this Agreement in the
event Service Provider's action or inaction, as the case may
be, results in a substantial discontinuation of Transportation
Service that threatens operations at any one
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or more of GM's assembly plants or vehicle distribution
centers; provided, however, GM's written notice terminating
the Agreement shall be effective only if given during the
occurrence of such substantial discontinuation of
Transportation Service.
16.03 Upon any breach of this Agreement by Service Provider,
excluding breaches of the Quality Service Requirements and the
Operational Requirements, the consequences of which are
addressed in Section 16.02 of this Agreement, GM shall provide
written notice to Service Provider identifying the breach.
Service Provider shall have sixty (60) days following the
receipt of such written notice from GM to cure such breach. In
the event Service Provider fails to cure such breach to the
satisfaction of GM during such sixty (60) day period, GM shall
have all rights and remedies available to GM under applicable
law, including the right to terminate this Agreement and
immediately, without further notice to Service Provider, which
right is expressly waived, commence resourcing all or any
portion of the Transportation Service; provided, however GM
will not have the right to terminate this Agreement and
commence resourcing all or any portion of the Transportation
Service unless Service Provider's breach is material.
16.04 In addition to any right GM may have to terminate this
Agreement, GM may terminate this Agreement if: (a) Service
Provider becomes insolvent; (b) Service Provider files a
voluntary bankruptcy petition; (c); a receiver or trustee is
appointed over Service Provider's assets; or (d) Service
Provider executes an assignment for the benefit of Service
Provider's creditors.
16.05 Notwithstanding anything in this Agreement to the contrary,
this Agreement shall automatically terminate if ten percent
(10%) or more of the voting shares of Service Provider become
owned or controlled, directly or indirectly, by a competitor
of GM, or entity in which competitor owns fifty percent (50%)
or more or otherwise controls such entity, in the business of
manufacturing motor vehicles.
16.06 In the event a competitor of GM in the business of
manufacturing motor vehicles acquires any interest in Service
Provider (directly or indirectly), Service Provider shall
provide GM with reasonable assurances that Service Provider
will utilize its commercially reasonable efforts to preserve
the confidentiality of all information related to
Transportation Service performed by Service Provider for GM.
16.07 Upon the expiration or termination of the Term, Service
Provider agrees to cooperate with GM in resourcing the
Transportation Service from Service Provider.
17. INDEMNIFICATION.
Except for the penalties in Sections 4.00(D) and 5.01, and the
damage claims in Section 6.00 for which Service Provider is
responsible in accordance with those respective sections,
Service Provider shall indemnify, defend and hold GM
(including its officers, directors, employees, subcontractors
and agents) harmless from and against any and all liabilities,
damages, fines, penalties, costs, claims, demands and expenses
(including costs of defense, settlement, and reasonable
attorney's fees) of whatever type or nature, including damage
or destruction of any property, or injury (including death) to
any person, arising out of (a) any act or omission by Service
Provider or Service Provider Employees, (b) any claims or
actions by Service Provider Employees, or (c) the failure of
Service Provider or
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Service Provider Employees to comply with this Agreement, the
Appendices hereto, or any applicable federal, provincial,
and/or local law, statute, regulation, rule, ordinance, or
government directive which may directly or indirectly regulate
or affect the obligations of Service Provider hereunder;
provided, however, the foregoing agreement to indemnify and
hold GM harmless shall not be applicable to the extent that
such liabilities, damages, fines, penalties, costs, claims,
demands or expenses are attributable to the negligence or
willful misconduct of GM, its officers, directors, employees,
subcontractors or agents.
18. COMPLIANCE WITH LAWS.
Service Provider agrees to comply with all applicable
provisions of federal, provincial, state and/or local law or
ordinance and all lawful orders, rules and regulations issued
thereunder.
19. FORCE MAJEURE.
Except as otherwise provided in this Agreement, Service
Provider's obligation to furnish the Transportation Service
shall be temporarily suspended during any period(s) in which
Service Provider is unable to comply with the requirements of
this Agreement, as a result of an event or occurrence beyond
the reasonable control of Service Provider and without its
fault or negligence, including, but not limited to, acts of
God, actions by any governmental authority (whether valid or
invalid), fires, floods, windstorms, explosions, riots,
natural disasters, wars, or court injunction or order;
provided, however written notice of such delay (including the
anticipated duration of the delay) shall be given by Service
Provider to GM as soon as Service Provider knows or reasonably
anticipates the possibility of the force majeure condition. If
requested by GM, Service Provider shall, within ten (10) days,
provide adequate assurances that the delay shall not exceed
thirty (30) days. If the term of the delay exceeds thirty (30)
days, or Service Provider does not provide adequate assurance
that the delay will cease within thirty (30) days, GM may, in
its sole discretion, terminate this Agreement. The suspension
of any obligations owing to force majeure shall neither cause
the Term of this Agreement to be extended nor affect any
rights accrued under this Agreement prior to the force majeure
condition.
20. SYSTEM REQUIREMENTS.
All Events (as defined below) must be reported into VTIMS
(General Motors Vehicle Transportation Information Management
System) and/or to GM's designated supply chain management
contractor or the supply chain management's contractor's
chosen data service provider. Events include, but are not
necessarily limited to, receipt, dispatch, delivery, and start
of storage. Payment for each service is based on event
reporting. VTIMS reporting must be completed the day the event
occurs or as signified below. In being given access to VTIMS
reporting as required, the Service Provider recognizes that
unauthorized use of or contribution to the unauthorized use of
computer facilities and/or GM data constitutes a violation of
this Agreement. Service Provider recognizes its responsibility
to maintain the confidentiality of GM information to which
Service Provider has access during the Term of this Agreement,
and failure to comply with these responsibilities is
considered a material breach of this Agreement. Service
Provider systems must possess the following electronic
capabilities:
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(a) Receive advance shipping notices (ASN's).
(b) Record receipt of vehicle and bay locations and
communicate event (EV4B) to VTIMS.
(c) Confirm routing based on response from VTIMS to
reported EV4B.
(d) Build loads to conform to operational and quality
guidelines.
(e) Transmit receipt (EV4B) and dispatch (EV42) within
one hour of actual event.
(f) Deliveries should be reported within four hours of
actual event.
(g) Other reporting as required:
1. Vehicle on hold (EV4D)
2. Return to plant (EV4P)
3. Downloading and responding to
re-consignments in VTIMS
4. Inspection transmissions and DECS (claims)
(h) Reporting will be in LU6.2. a system to system
protocol.
(i) Limited transactions and EDI are to be communicated
via batch EDS ELITE.
(j) Service Provider shall provide data transmissions to
GM and GM's designated supply chain management
contractor, or the supply chain management's
contractor's chosen data service provider at no
additional cost.
(k) Service Provider shall request VTIMS Online access
for select employees to facilitate reporting error
corrections. The Service Provider shall also request
deletion of employee access upon reassignment or
termination such that their access to VTIMS is no
longer required.
21. MISCELLANEOUS.
21.01 Amendments. No amendment to this Agreement shall be binding
upon either Service Provider or GM, unless such amendment is
in writing and it is signed by a duly authorized
representative of each of Service Provider and GM.
21.02 Assignments. GM, in its sole discretion, reserves the right to
assign or delegate its obligations under this Agreement to
Vector SCM, LLC in accord with GM's realignment of its global
logistics management; provided, no such assignment or
delegation shall operate as a release of GM with respect to
its payment and other obligations hereunder. GM shall provide
written notification to the Service Provider of its intent to
do so. Otherwise, this Agreement shall be binding upon and
inure to the benefit of the parties, and their respective
successors and permitted assigns, but no rights, interests, or
obligations of either party herein may be assigned without the
prior written consent of GM. For purposes of this Section
21.02, a merger of Service Provider with an affiliated entity
or a sale of less than ten (10%) of Service Provider's voting
shares shall not constitute an assignment.
21.03 Severability. If any provision of this Agreement, or any
portion thereof, is invalid or unenforceable under any
statute, regulation, ordinance, executive order or other rule
of law, such provision, or portion, thereof, shall be deemed
reformed or deleted, but only to the extent necessary to
comply with such statute, regulation, ordinance, order or
rule, and the remaining provisions of this Agreement shall
remain in full force and effect.
21.04 Governing Law. This Agreement shall be construed and enforced
in accordance with the laws of the State of Michigan,
excluding its conflicts of law rules. Each party consents, for
purposes of enforcing this Agreement, to non-exclusive
personal jurisdiction, service of
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process and venue in any state or federal court within the
State of Michigan having jurisdiction over the subject matter.
21.05 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. All
signatures of any party may be transmitted by facsimile, and a
facsimile will for all purposes be deemed to be the original
signature of the person whose signature it reproduces and will
be binding upon that person and on the party on whose behalf
that person signed.
21.06 Waiver. Any extension or waiver will be valid only if set
forth in a written instrument signed by the party sought to be
bound. No failure or delay on the part of any party in the
exercise of any right or remedy under this Agreement will
impair that right or remedy or be construed to be a waiver of,
or acquiescence in, any inaccuracy or breach of any
representation, warranty or agreement in this Agreement, nor
will any single or partial exercise of any right or remedy
preclude other or further exercise of that right or remedy, or
of any other right or remedy.
21.07 Modifications. If, during the Term of this Agreement, either
party requires any material modifications to the terms of this
Agreement, although neither party is under an obligation to
agree to any such modifications, should a party agree to
modifications, the party requesting such modifications shall
be responsible for any fees, including, but not limited to,
attorneys' and professional fees relating to such
modification.
21.08 Time of the Essence. TIME IS OF THE ESSENCE OF THIS AGREEMENT
AND EACH OF ITS PROVISIONS.
21.09 Headings. The headings contained in this Agreement are
inserted for convenience only and do not constitute a part of
this Agreement.
21.10 Incorporation of Appendices and Exhibits. The Appendices and
Exhibits identified in this Agreement are incorporated in this
Agreement by reference and made a part of this Agreement.
21.11 Non-Waiver - Applicable Law. Notwithstanding anything herein
to the contrary, it is not the intent of the parties to waive
any rights each party has under applicable law in connection
with this Agreement, which rights are hereby expressly
reserved.
21.12 Confidentiality. Except as otherwise provided in Section 21.12
hereof, GM and Service Provider acknowledge and agree that the
terms of this Agreement are and shall remain confidential.
21.13 Public Announcements. Subject to a party's legal obligation to
disclose the existence of this Agreement and/or the terms
hereof, neither party shall make any public disclosure
regarding this Agreement or its terms without the prior
written consent of the other party, and any such public
disclosure shall be mutually agreed upon by both parties to
this Agreement.
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21.14 Consultation with Counsel. THE PARTIES ACKNOWLEDGE THAT THEY
HAVE BEEN GIVEN THE OPPORTUNITY TO CONSULT WITH COUNSEL BEFORE
EXECUTING THIS AGREEMENT AND ARE EXECUTING THIS 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.
22. ENTIRE AGREEMENT.
This Agreement, together with any Appendices and Exhibits
attached hereto or to be attached hereto, constitute the
entire agreement and understanding between the parties
concerning the Transportation Service, and cancels and
supersedes any and all prior agreements and discussions
between the parties prior to the Effective Date.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
ALLIED AUTOMOTIVE GROUP, INC. GENERAL MOTORS CORPORATION
By: ________________________________ By: ______________________________
Title: ______________________________ Title: Director, Vehicle Logistics
Date: January 2, 2004 Date: January 2, 2004
------------------
[XXXXX] 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.
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