SECURED NOTE AGREEMENT

Exhibit 10.7

EXECUTION VERSION

$2,500,000,000

SECURED NOTE AGREEMENT

among

GENERAL MOTORS COMPANY,

as the Issuer,

THE GUARANTORS

and

UAW RETIREE MEDICAL BENEFITS TRUST,

as the Noteholder

Dated as of July 10, 2009

TABLE OF CONTENTS

 

 

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SECURED NOTE AGREEMENT (this “ Agreement ”), dated as of July 10, 2009 by and among GENERAL MOTORS COMPANY, a Delaware corporation (the “ Issuer ”), the Guarantors (as defined below), and UAW RETIREE MEDICAL BENEFITS TRUST, as the noteholder hereunder (the “ Initial Noteholder ” and, together with its permitted assigns, the “ Noteholder ”).

W I T N E S S E T H :

WHEREAS, pursuant to (a) the Amended and Restated Master Sale and Purchase Agreement dated as of June 26, 2009 (as amended by the First Amendment dated as of June 30, 2009 and the Second Amendment dated as of July 5, 2009, the “ Master Transaction Agreement ”) among General Motors Corporation, a Delaware corporation (“ GM Oldco ”), a debtor and debtor-in-possession in a case pending under chapter 11 of the Bankruptcy Code (as defined below) and certain other sellers party thereto (collectively, the “ Sellers ”) and the Issuer, and (b) the other Transaction Documents (as defined below), and in accordance with the Bankruptcy Code, on the date hereof (i) the Sellers sold, transferred, assigned, conveyed and delivered to the Issuer and certain of its Subsidiaries, and the Issuer and certain of its Subsidiaries directly or indirectly purchased, accepted and acquired from the Sellers, the Purchased Assets (as defined in the Master Transaction Agreement) and assumed the Assumed Liabilities (as defined in the Master Transaction Agreement) and (ii) the Sellers and the Issuer and one or more of their respective Subsidiaries have entered into the other Related Transactions (as defined below);

WHEREAS, pursuant to the Master Transaction Agreement, on or prior to the Closing (as defined in the Master Transaction Agreement), the Issuer and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (the “ UAW ”) will enter into the UAW Retiree Settlement Agreement (as defined herein), which will become legally binding on the Issuer and the UAW through court approval and provides, among other things, for the issuance of the Note (as defined herein) to the Noteholder;

NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein, the parties hereto agree that on the Effective Date, the Issuer shall issue the Note to the Noteholder on the terms and subject to the conditions set forth herein and in the other Secured Note Documents:

SECTION 1

DEFINITIONS

1.1. Defined Terms . As used in this Agreement, the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

“ 1908 Holdings ”: 1908 Holdings Ltd., a Subsidiary of General Motors of Canada Limited.

“ Acceleration Payment Amount ”: as defined in Section 2.7(b).

“Additional First Lien Indebtedness”: as of any date of determination, principal amount of Indebtedness (other than Indebtedness described in clauses (a) through (r) (inclusive) of the definition of “Permitted Indebtedness”) in excess of $6,000,000,000 secured on a first priority basis by the Collateral or the Canadian Collateral or any portion of either of the foregoing (including, without limitation, Structured Financing), provided that, (i) on the date such Indebtedness is incurred, the Consolidated Leverage Ratio shall be less than 3.00 to 1.00 after giving pro forma effect to the incurrence of such Indebtedness, (ii) a portion of the Net Cash Proceeds of such Indebtedness (other than revolving credit loans) are used to prepay the Notes in accordance with Section 2.5(a), (iii) the aggregate amount of commitments under revolving credit facilities, if any, together with any revolving credit facilities constituting Excluded First Lien Indebtedness, shall not exceed $4,000,000,000, (iv) with respect to any revolving credit facility, the amount of Indebtedness thereunder for the purpose of determining compliance with clauses (i) and (iii) of this definition shall equal the commitment thereunder and (v) the lenders party thereto (or an agent on behalf of such lenders) shall have executed and delivered an intercreditor agreement in form and substance reasonably satisfactory to the Approving Party. Such intercreditor agreement shall preserve the relationship in the Intercreditor Agreement between the Treasury and the Noteholder (including the terms of Section 2.4 of the Intercreditor Agreement) and may take the form of an amendment, restatement, modification or supplement to the Intercreditor Agreement.

“ Additional Guarantor ”: as defined in Section 5.23.

“ Affiliate ”: with respect to any Person, any other Person which, directly or indirectly, controls, is controlled by, or is under common control with, such Person. For purposes of this Agreement, “control” (together with the correlative meanings of “controlled by” and “under common control with”) means possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. For the avoidance of doubt, pension plans of a Person and entities holdings the assets of such plans, shall not be deemed to be Affiliates of such Person. Notwithstanding the foregoing, none of (i) the Government of the United States (or any branch or agency thereof), (ii) the Government of Canada (or any branch or agency thereof), (iii) the Government of Ontario (or any branch or agency thereof), or (iv) the Initial Noteholder or the UAW, shall be considered an Affiliate of the Issuer or any of its Subsidiaries.

“ Agreement ”: as defined in the preamble hereto.

“ Applicable Law ”: as to any Person, all laws (including common law), statutes, regulations, ordinances, treaties, judgments, decrees, injunctions, writs and orders of any court, governmental agency or authority and rules, regulations, orders, directives, licenses and permits of any Governmental Authority applicable to such Person or its property or in respect of its operations.

“ Applicable Net Cash Proceeds ”: with respect to any Additional First Lien Indebtedness, Permitted Unsecured Indebtedness or Attributable Obligations under each

 

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applicable Sale/Leaseback Transaction, an amount equal to the VEBA Facility Percentage of an amount equal to 41.949% of the Net Cash Proceeds of such Indebtedness or Attributable Obligations, as applicable.

“ Applicable Rate ”: for each day on which (a) no Event of Default has occurred on such day or is continuing (but including each day on which an Event of Default is cured), the Implied Interest Rate and (b) an Event of Default has occurred on such day or is continuing (but excluding each day on which an Event of Default is cured), the Default Rate.

“ Applicable Rejected Prepayment Amount ”: on any date of determination:

(a) with respect to any Canadian Lender Rejection Notice, an amount equal to (i) the amount of the mandatory prepayment rejected by the Canadian Lender pursuant to Section 2.07(d) of the Canadian Facility multiplied by (ii) a percentage equal to (x) the aggregate Outstanding Principal of the Notes held by the Initial Noteholder on such date divided by (y) the sum of the aggregate outstanding amount of the Loans (as defined in the UST Facility) held by the Treasury on such date and the aggregate Outstanding Principal of the Notes held by the Initial Noteholder on such date; and

(b) with respect to any UST Rejection Notice, an amount equal to (i) the amount of the mandatory prepayment rejected by the Treasury pursuant to Section 2.5(g) of the UST Facility multiplied by (ii) a percentage equal to (x) the aggregate Outstanding Principal of the Notes held by the Initial Noteholder on such date divided by (y) the sum of the aggregate Outstanding Principal of the Notes held by the Initial Noteholder on such date and the aggregate outstanding principal balance of the loans held by the Canadian Lender under the Canadian Facility on such date.

“ Approving Party ”: on any date of determination, (x) until the occurrence of the earlier to occur of (i) the Treasury Control Change Date and (ii) the UST Secured Obligations Payment Date, the Treasury in its capacity as lender under the UST Facility, and (y) thereafter, the Noteholders.

“ Asset Sale ”: any Disposition of property or series of related Dispositions of property occurring contemporaneously (other than any Excluded Disposition) that yields gross proceeds to any Group Member (other than Excluded Subsidiaries) (valued at the initial principal amount thereof in the case of non-cash proceeds consisting of notes or other debt securities and valued at fair market value in the case of other non-cash proceeds) in excess of (i) $25,000,000 if received by a Group Member that is a Foreign Subsidiary, or (ii) $15,000,000 if received by a Group Member that is not a Foreign Subsidiary. The term “Asset Sale” shall not include any issuance of Capital Stock or any event that constitutes a Recovery Event.

“ Assignee ”: as defined in Section 8.6(b).

“ Assignment and Assumption ”: an Assignment and Assumption, substantially in the form of Exhibit C, including an agreement by the assignee thereunder to be bound by the terms and provisions of the Intercreditor Agreement.

 

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“ Attributable Obligations ”: in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate implicit in the transaction) of the total obligations of the lessee for rental payments required to be paid during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended), determined in accordance with GAAP; provided , however , that if such Sale/Leaseback Transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby shall be determined in accordance with the definition of “Capital Lease Obligations.” For purposes of calculating the Consolidated Leverage Ratio, the aggregate amount of Attributable Obligations outstanding as of any date of determination shall be (i) $500,000,000 plus (ii) the amount of Attributable Obligations entered into after the Effective Date.

“ Bankruptcy Code ”: the United States Bankruptcy Code, 11 U.S.C. Section 101 et seq.

“ Bankruptcy Court ”: the United States Bankruptcy Court for the Southern District of New York (together with the District Court for the Southern District of New York, where applicable).

“ Bankruptcy Exceptions ”: limitations on, or exceptions to, the enforceability of an agreement against a Person due to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or the application of general equitable principles, regardless of whether such enforceability is considered in a proceeding at law or in equity.

“ Benefit Plan ”: any employee benefit plan within the meaning of section 3(3) of ERISA and any other plan, arrangement or agreement which provides for compensation, benefits, fringe benefits or other remuneration to any employee, former employee, individual independent contractor or director, including without limitation, any bonus, incentive, supplemental retirement plan, golden parachute, employment, individual consulting, change of control, bonus or retention agreement, whether provided directly or indirectly by any Issuer Party or otherwise.

“ Budget ”: a budget substantially in the form of Annex I, (a) with respect to the budget of the Issuer in effect on the Effective Date, covering the remainder of fiscal year 2009 (presented on a monthly basis) together with a budget with respect to the four immediately succeeding fiscal years (presented on an annual basis); and (b) with respect to each budget delivered after the Effective Date, covering the periods and presented in accordance with Section 5.2(k).

“ Business Day ”: any day other than a Saturday, Sunday or other day on which banks in New York City are permitted to close.

“ Business Plan ”: as defined in Section 4.1(t).

“ Canadian Collateral ”: the “Collateral” as defined in the Canadian Facility.

 

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“ Canadian Facility ”: the Second Amended and Restated Loan Agreement, dated as of the date hereof, by and among GM Canada, as borrower, the other loan parties party thereto, and the Canadian Lender, as lender, in form and substance substantially similar to the UST Facility as the same may be amended, restated, supplemented or modified from time to time hereafter in accordance with the other Secured Note Documents.

“ Canadian Guarantors ”: shall mean the “Guarantors” under and as defined in the Canadian Facility.

“ Canadian Lender ”: Export Development Canada, a corporation established pursuant to the laws of Canada, and its successors and assigns.

“ Canadian Lender Rejection Notice ”: a notice from the Canadian Lender to GM Canada rejecting a mandatory prepayment under the Canadian Facility following the initial offer to repay the loans thereunder in accordance with Section 2.07(d) of the Canadian Facility.

“ Canadian Subscriber ”: 7176384 Canada, Inc.

“ Canadian Subscription Agreement ”: as defined in the Canadian Facility.

“ Canadian Subsidiary ”: each direct or indirect Subsidiary of the Issuer incorporated under the laws of Canada or any state, province, commonwealth or territory thereof.

“ Capital Lease Obligations ”: for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

“ Capital Stock ”: any and all equity interests, including any shares of stock, membership or partnership interests, participations or other equivalents whether certificated or uncertificated (however designated) of a corporation, limited liability company, partnership or joint venture or any other entity, and any and all similar ownership interests in a Person and any and all warrants or options to purchase any of the foregoing.

“ Cases ”: the cases commenced on June 1, 2009 by GM Oldco, Saturn, LLC, a Delaware limited liability company, Saturn Distribution Corporation, a Delaware corporation, and Chevrolet-Saturn of Harlem, Inc., a Delaware corporation, in connection with voluntary petitions filed by each of the foregoing in the Bankruptcy Court for relief.

“ Cash Equivalents ”: (a) U.S. Dollars, or money in other currencies received in the ordinary course of business, (b) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed or insured by the United States or Canadian government or any agency thereof, (c) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, province, commonwealth or territory of the United States or Canada, by any political subdivision or taxing authority of any such state, province, commonwealth or territory or by any foreign government, the securities of which state, province, commonwealth, territory, political subdivision, taxing authority or foreign government (as the

 

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case may be) are rated at least “A” by S&P or “A” by Moody’s or equivalent rating; (d) demand deposit, certificates of deposit and time deposits with maturities of one year or less from the date of acquisition and overnight bank deposits of any commercial bank, supranational bank or trust company having a credit rating of “F-1” or higher by Fitch (or the equivalent rating by S&P or Moody’s), (e) repurchase obligations with respect to securities of the types (but not necessarily maturity) described in clauses (b) and (c) above, having a term of not more than 90 days, of banks (or bank holding companies) or subsidiaries of such banks (or bank holding companies) and non-bank broker-dealers listed on the Federal Reserve Bank of New York’s list of primary and other reporting dealers (“ Repo Counterparties ”), which Repo Counterparties have a credit rating of at least “F-1” or higher by Fitch (or the equivalent rating by S&P or Moody’s), (f) commercial paper rated at least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s and in either case maturing within one year after the day of acquisition, (g) short-term marketable securities of comparable credit quality, (h) shares of money market mutual or similar funds which invest at least 95% in assets satisfying the requirements of clauses (a) through (g) of this definition (except that such assets may have maturities of 13 months or less), and (i) in the case of a Foreign Subsidiary, substantially similar investments, of comparable credit quality relative to the sovereign credit risk of the Foreign Subsidiary’s country, denominated in the currency of any jurisdiction in which such Foreign Subsidiary conducts business.

“ Challenge Period ”: as defined in the Final DIP Order.

“ Change of Control ”: with respect to the Issuer, the acquisition, after the Effective Date, by any other Person, or two or more other Persons acting in concert other than the Permitted Holders, the Noteholders, the Treasury or the Canadian Lender or any Affiliate of the Noteholders, the Treasury or the Canadian Lender, of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of outstanding shares of voting stock of the Issuer at any time if after giving effect to such acquisition such Person or Persons owns 20% or more of such outstanding voting stock.

“ Code ”: the Internal Revenue Code of 1986, as amended from time to time.

“ Collateral ”: all property and assets of the Issuer Parties of every kind or type whatsoever, including tangible, intangible, real, personal or mixed, whether now owned or hereafter acquired or arising, wherever located, and all proceeds, rents and products of the foregoing other than Excluded Collateral.

“ Collateral Documents ”: means, collectively, the Guaranty, the Equity Pledge Agreement, the Intellectual Property Pledge Agreement, each Mortgage and each other collateral assignment, security agreement, pledge agreement, agreement granting Liens in intellectual property rights, or similar agreements delivered to the Noteholders to secure the Obligations as may be amended from time to time.

“ Compliance Certificate ”: a certificate duly executed by a Responsible Officer, substantially in the form of Exhibit F.

“ Consolidated ”: the consolidation of accounts in accordance with GAAP.

 

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“ Consolidated Leverage Ratio ”: as of any date, the ratio of (a) Consolidated Total Debt, less the sum of cash and Cash Equivalents held by the Issuer and its Subsidiaries, excluding Restricted Cash, on such day to (b) EBITDA for the period of four fiscal quarters ended on the last day of the most recent fiscal quarter for which financial statements have been delivered pursuant to Section 5.1.

“ Consolidated Total Debt ”: at any date, the aggregate principal amount of all Indebtedness of the Issuer and its Subsidiaries that would be reflected on the consolidated balance sheet of the Issuer and its Subsidiaries as of such date in accordance with GAAP.

“ Contractual Obligation ”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“ Control ”: as defined in the definition of “Affiliate”.

“ Controlled Affiliat e”: as defined in Section 3.18(a).

“ Copyright Licenses ”: all licenses, contracts or other agreements, whether written or oral, naming an Issuer Party as licensee or licensor and providing for the grant of any right to reproduce, publicly display, publicly perform, distribute, create derivative works of or otherwise exploit any works covered by any Copyright (including, without limitation, all Copyright Licenses set forth in Schedule 3.25 hereto).

“ Copyrights ”: all domestic and foreign copyrights, whether registered or unregistered, including, without limitation, all copyright rights throughout the universe (whether now or hereafter arising) in any and all media (whether now or hereafter developed), in and to all original works of authorship (including, without limitation, all marketing materials created by or on behalf of any Issuer Party), acquired or owned by an Issuer Party (including, without limitation, all copyrights described in Schedule 3.25 hereto), all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Copyright Office or in any similar office or agency of the United States or any other country or any political subdivision thereof), and all reissues, renewals, restorations, extensions or revisions thereof.

“ Default ”: any event, that with the giving of notice, the lapse of time, or both, would become an Event of Default.

“ Default Rate ”: a rate equal to the Implied Interest Rate plus 2% per annum, compounded annually, on the basis of a 360-day year consisting of 12 30-day months.

“ DIP Credit Agreement ”: the $33,300,000,000 Secured Superpriority Debtor-in-Possession Credit Agreement, dated as of June 3, 2009, among GM Oldco, certain guarantors, the Treasury, the Canadian Lender and the other lenders from time to time parties thereto.

“ Disposition ”: with respect to any Property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof (other than (i) exclusive licenses that do not materially impair the relevant Issuer Party’s ability to use or exploit the relevant

 

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Intellectual Property as it has been used or exploited by the Issuer Parties as of the Closing Date (as defined in the DIP Credit Agreement) or (ii) nonexclusive licenses); and the terms “Dispose” and “Disposed of” shall have correlative meanings.

“ DOL ”: as defined in Section 4.1(d).

“ Dollar Equivalent ”: on any date of determination, (a) with respect to any amount denominated in Dollars, such amount and (b) with respect to an amount denominated in any other currency, the equivalent in Dollars of such amount as determined by the Approving Party in accordance with normal banking industry practice using the Exchange Rate on the date of determination of such equivalent. In making any determination of the Dollar Equivalent, the Approving Party shall use the relevant Exchange Rate in effect on the date on which a Dollar Equivalent is required to be determined pursuant to the provisions of this Agreement. As appropriate, amounts specified herein as amounts in Dollars shall include any relevant Dollar Equivalent amount.

“ Dollars ” and “ $ ”: the lawful money of the United States.

“ Domestic 956 Subsidiary ”: any U.S. Subsidiary substantially all of the value of whose assets consist of equity of one or more Foreign 956 Subsidiaries for U.S. federal income tax purposes.

“ Domestic Subsidiary ”: any Subsidiary that is organized or existing under the laws of the United States or Canada or any state, province, commonwealth or territory of the United States or Canada.

“ EBITDA ”: for any period, Net Income plus , to the extent deducted in determining Net Income, the sum of: (a) Interest Expense, amortization or write-off of debt discount, other deferred financing costs and other fees and charges associated with Indebtedness, plus (b) tax expense, plus (c) depreciation, plus (d) amortization, write-offs, write-downs, asset revaluations and other non-cash charges, losses and expenses, plus (e) impairment of intangibles, including goodwill, plus (f) extraordinary expenses or losses (as determined in accordance with GAAP) including an amount equal to any extraordinary loss, plus (g) any net loss realized by the Issuer or any of its Subsidiaries in connection with any Disposition or the extinguishment of Indebtedness, plus (h) special charges (including restructuring costs), plus (i) losses (but minus gains) due solely to the fluctuations in currency values or the mark-to-market impact of commodities derivatives, in each case in accordance with GAAP, plus (j) losses attributable to discontinued operations, plus (k) losses (but minus gains) attributable to the cumulative effect of a change in accounting principles, plus (l) non-recurring costs, charges and expenses during such period, plus (m) the amount of fees associated with advisory, consulting or other professional work done for equity offerings, minus (n) to the extent included in Net Income, extraordinary gains (as determined in accordance with GAAP), together with any related provision for taxes on such extraordinary gain, all calculated without duplication for the Issuer and its Subsidiaries on a consolidated basis for such period. For purposes of this Agreement, EBITDA shall (to the extent required to comply with Regulation S-X promulgated under the Securities Act) be adjusted on a pro forma basis to include, as of the first day of any applicable period, any acquisition and any Disposition contemplated by the Business Plan to be consummated during such period,

 

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including, without limitation, adjustments reflecting any non-recurring costs and any extraordinary expenses of any acquisition and any Disposition consummated during such period and any Pro Forma Cost Savings attributable thereto, each calculated on a basis consistent with GAAP or as otherwise approved by the Approving Party in its sole discretion.

“ Effective Date ”: July 10, 2009.

“ EISA ”: the Energy Independence and Security Act of 2007, Public Law No. 110-140, effective as of January 1, 2009, as may be amended and in effect from time to time.

“ Embargoed Person ”: as defined in Section 3.19.

“ Environmental Agreement ”: the Environmental Agreement dated as of the date hereof, executed by the Issuer Parties for the benefit of the Noteholder, substantially in the form of Exhibit I.

“ Environmental Laws ”: any and all foreign, Federal, state, provincial, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health, the environment or natural resources, as now or may at any time hereafter be in effect.

“ Equity Pledge Agreement ”: the Equity Pledge Agreement dated as of the date hereof, made by each Pledgor in favor of the Noteholder substantially in the form of Exhibit L.

“ ERISA ”: the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ ERISA Affiliate ”: any corporation or trade or business or other entity, whether or not incorporated, that is a member of any group of organizations (i) described in Section 414(b), (c), (m) or (o) of the Code of which any Issuer Party is a member or (ii) which is under common control with any Issuer Party within the meaning of section 4001 of ERISA.

“ ERISA Event ”: (i) any Reportable Event or a determination that a Plan is “at risk” (within the meaning of Section 302 of ERISA); (ii) the incurrence by the Issuer or any ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan or the withdrawal or partial withdrawal of the Issuer or any of its respective ERISA Affiliates from any Plan or Multiemployer Plan; (iii) the receipt by the Issuer or any ERISA Affiliates from the PBGC or a plan administrator of any notice relating to the intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (iv) the receipt by the Issuer or any ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from the Issuer or any ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA; or (v) the occurrence of a nonexempt “prohibited transaction” with respect to which the Issuer, the other Issuer Parties or their ERISA Affiliates is a “disqualified person” (within the meaning of Section 4975 of the Code) or with respect to which the Issuer or any ERISA Affiliate could otherwise be liable.

 

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“ ERISA Exemption ”: as defined in Section 4.1(d).

“ Event of Default ”: as defined in Section 7.1.

“ Exchange Act ”: the Securities and Exchange Act of 1934, as amended.

“ Exchange Rate ”: for any day with respect to any currency (other than Dollars), the rate at which such currency may be exchanged into Dollars, as set forth at 11:00 a.m. (New York time) on such day on the applicable Bloomberg currency page with respect to such currency. In the event that such rate does not appear on the applicable Bloomberg currency page, the Exchange Rate with respect to such currency shall be determined by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Approving Party and the Issuer or, in the absence of such agreement, such Exchange Rate shall instead be the spot rate of exchange of a reference institution selected by the Approving Party in the London Interbank market or other market where such reference institution’s foreign currency exchange operations in respect of such currency are then being conducted, at or about 11:00 a.m. (New York time) on such day for the purchase of Dollars with such currency, for delivery two Business Days later; provided , however , that if at the time of any such determination, for any reason, no such spot rate is being quoted, the Approving Party may use any reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error.

“ Excluded Collateral ”: as defined on Schedule 3.28; provided that, Excluded Collateral shall include the cash on deposit in any Escrow Account (as defined in the UST Facility) and any proceeds thereof.

“ Excluded Dispositions ”:

(a) Dispositions of inventory in the ordinary course of business;

(b) Dispositions of obsolete or worn-out property in the ordinary course of business, including leases with respect to facilities that are temporarily not in use or pending their Disposition;

(c) Dispositions of accounts receivable more than 90 days past due in connection with the compromise, settlement or collection thereof on market terms;

(d) Dispositions of any Capital Stock of any JV Subsidiary in accordance with the applicable joint venture agreement relating thereto;

(e) any Disposition of (i) any Guarantor’s or Pledged Entity’s Capital Stock or other assets or Property of the Issuer or any Guarantor to the Issuer or any Guarantor, or (ii) any Group Member’s (other than a Guarantor’s or Pledged Entity’s) Capital Stock or other assets or Property of any Group Member (other than the Issuer or any Guarantor) to the Issuer, any Guarantor or any other Group Member;

(f) any Disposition of Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or the other Secured Note Documents;

 

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(g) any Disposition by the Issuer or any of its Subsidiaries of any dealership property or Capital Stock in a dealership Subsidiary to the operating management of a dealership or any Disposition of property in connection with the dealer optimization plan, in each case in the ordinary course of business;

(h) [intentionally omitted];

(i) [intentionally omitted]; and

(j) the licensing and sublicensing of Patents, Trademarks and other Intellectual Property or other general intangibles to third persons on customary terms as determined by the board of directors, or such other individuals as they may delegate, in good faith and the ordinary course of business.

“ Excluded First Lien Indebtedness ”: Indebtedness secured on a first priority basis by the Collateral or the Canadian Collateral or any portion of either of the foregoing (other than Indebtedness described in clauses (a) through (r) (inclusive) of the definition of “Permitted Indebtedness”) in an aggregate amount not exceeding $6,000,000,000 comprised of term loan and/or revolving credit loan facilities (including without limitation Structured Financing), provided that, (i) the aggregate amount of commitments under the revolving credit facilities, if any, together with any revolving credit facilities constituting Additional First Lien Indebtedness, shall not exceed $4,000,000,000, (ii) with respect to any revolving credit facility, the amount of Indebtedness thereunder for the purpose of determining compliance with clause (i) of this definition shall equal the commitment thereunder and (iii) the lenders party thereto (or an agent on behalf of such lenders) shall have executed and delivered an intercreditor agreement in form and substance reasonably satisfactory to the Approving Party. Such intercreditor agreement shall preserve the relationship in the Intercreditor Agreement between the Treasury and the Noteholders (including the terms of Section 2.4 of the Intercreditor Agreement) and may take the form of an amendment, restatement, modification or supplement to the Intercreditor Agreement.

“ Excluded Subsidiary ”: (i) any JV Subsidiary in which any Group Member owns less than 80% of the voting or economic interest, (ii) any Subsidiary that is a dealership, (iii) the Subsidiaries identified on Schedule 1.1G and any of the following, to the extent they become Subsidiaries after the Effective Date: (A) any Securitization Subsidiary; (B) any Financing Subsidiary; (C) any Insurance Subsidiary; and (D) any Subsidiary (and any parent or holding company thereof) that is primarily engaged in the investment management business or that is regulated by the Office of the Comptroller of the Currency.

“ Excluded Taxes ”: as defined in Section 2.12.

“ Executive Order ”: as defined in Section 3.19.

“ Existing Agreements ”: the agreements of the Issuer Parties and their Subsidiaries in effect (giving effect, where applicable, to their assumption by the applicable Person pursuant to any Transaction Document) on the Effective Date and any extensions, renewals and replacements thereof so long as any such extension, renewal and replacement could not reasonably be expected to have a material adverse effect on the rights and remedies of the Noteholders under any of the Secured Note Documents.

 

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“ Extraordinary Receipts ”: any (i) insurance proceeds (other than the proceeds of self-insurance) that are not the proceeds of a Recovery Event, (ii) downward purchase price adjustments (other than purchase price adjustments resulting from tax refunds received by Canadian Subsidiaries), (iii) tax refunds (other than tax refunds received by Canadian Subsidiaries), judgments and litigation settlements, pension plan reversions and indemnity payments, and (iv) similar receipts outside of the ordinary course of business in each case received by any Group Member (other than an Excluded Subsidiary), in excess of (A) $25,000,000 if received by an applicable Group Member that is a Foreign Subsidiary, or (B) $15,000,000 if received by an applicable Group Member that is not a Foreign Subsidiary.

“ Final DIP Order ”: Final Order Pursuant to Bankruptcy Code Sections 105(a), 361, 362, 363, 364 and 507 and Bankruptcy Rules 2002, 4001 and 6004 (a) Approving a DIP Credit Facility and Authorizing the Debtors to Obtain Post-Petition Financing Pursuant Thereto, (b) Granting Related Liens and Super-Priority Status, (c) Authorizing the Use of Cash Collateral and (d) Granting Adequate Protection to Certain Pre-Petition Secured Parties, dated June 25, 2009 by the United States Bankruptcy Court for the Southern District of New York, In re General Motors Corporation et al., chapter 11 case no. 09-50026 (REG) (jointly administered) .

“ Financing Subsidiary ”: any Subsidiary that is primarily engaged in financing activities including, without limitation (a) debt issuances to, or that are guaranteed by, governmental or quasi-governmental entities (including any municipal, local, county, regional, state, provincial, national or international organization or agency), (b) lease transactions (including synthetic lease transactions and Sale/Leaseback Transactions permitted hereunder) and (c) lease and purchase financing provided by such Subsidiary to dealers and consumers.

“ Fitch ”: Fitch, Inc. d/b/a Fitch IBCA.

“ Foreign Assets Control Regulations ”: as defined in Section 3.19.

“ Foreign 956 Subsidiary ”: any Non-U.S. Subsidiary of the Issuer that is a “controlled foreign corporation” as defined in Code Section 957.

“ Foreign Subsidiary ”: any Subsidiary that is not a Domestic Subsidiary.

“ GAAP ”: generally accepted accounting principles as in effect from time to time in the United States.

“ GM Canada ”: General Motors of Canada Limited, a corporation established pursuant to the laws of Canada.

“ GM Oldco ”: as defined in the recitals hereto.

“ GM Oldco Parties ”: GM Oldco and its Subsidiaries that were Subsidiaries of GM Oldco immediately prior to the Effective Date.

“ GMAC ”: GMAC LLC, a Delaware limited liability company, and its Subsidiaries.

 

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“ GMAC Reorganization ”: any transactions consummated for the purpose of or in connection with the Issuer or any of its Affiliates (a) not being in control of GMAC for purposes of the Bank Holding Company Act of 1956, (b) not being an affiliate of GMAC for purposes of Sections 23A or 23B of the Federal Reserve Act, or (c) otherwise complying with the commitments made by the Issuer to the Federal Reserve System with regard to GMAC, including but not limited to, in each case, (i) the Disposition of all or any portion of the Capital Stock owned by the Issuer in GMAC to one or more trusts, and (ii) the Disposition of all or any portion of such Capital Stock by any trustee of any such trust.

“ Governmental Authority ”: any federal, state, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, or any federal, state or municipal court, in each case whether of the United States or a foreign jurisdiction.

“ Group Members ”: the collective reference to the Issuer and its Subsidiaries.

“ Guarantee Obligation ”: as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, or to take-or-pay or otherwise), provided that the term “Guarantee Obligation” shall not include (i) endorsements for collection or deposit in the ordinary course of business, or (ii) obligations to make servicing advances for delinquent taxes and insurance, or other obligations in respect of the Collateral, to the extent required by the Approving Party. The amount of any Guarantee Obligation of a Person shall be deemed to be an amount equal to the stated or determinable amount of the primary Indebtedness in respect of which such Guarantee Obligation is made or, if not stated or determinable, the maximum reasonably anticipated Indebtedness in respect thereof as determined by such Person in good faith. The terms “Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.

“ Guarantor ”: each Person listed on Schedule 1.1B and each other Person that becomes an Additional Guarantor.

“ Guaranty ”: the Guaranty and Security Agreement dated as of the date hereof, executed and delivered by the Issuer and each Guarantor, substantially in the form of Exhibit A.

“ Implied Interest Rate ”: a rate of 9% per annum, compounded annually, on the basis of a 360-day year consisting of 12 30-day months.

“ Indebtedness ”: for any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person (other than any repurchase obligations accounted for as operating leases)); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services (other than trade payables or obligations associated with the purchase of tooling, machinery, equipment and engineering and design services, in each case incurred in the ordinary course of business); (c) indebtedness of others of the type referred to in clauses (a), (b), (d), (e), (f), (g) and (i) of this definition secured by a Lien on the Property

 

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of such Person, whether or not the respective indebtedness so secured has been assumed by such Person ( provided , that for purposes of this Agreement the amount of such Indebtedness shall be deemed to be the lower of (x) the book value of such Property and (y) the principal amount of the indebtedness secured by such Property); (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) Capital Lease Obligations or Attributable Obligations of such Person; (f) [intentionally omitted]; (g) indebtedness of others of the type referred to in clauses (a), (b), (d), (e), (f), (h) and (i) of this definition guaranteed by such Person; (h) all purchase money indebtedness of such Person; (i) indebtedness of general partnerships of which such Person is a general partner unless the terms of such indebtedness expressly provide that such Person is not liable therefor; (j) [intentionally omitted]; (k) [intentionally omitted]; and (l) any other indebtedness of such Person evidenced by a note, bond, debenture or similar instrument; provided , however, that Indebtedness shall exclude any obligations related to the hourly pension plan(s) for Delphi Corporation and its Affiliates.

“ Indemnified Liabilities ”: as defined in Section 8.5.

“ Indemnitee ”: as defined in Section 8.5.

“ Initial Note ”: as defined in Section 4.1(a)(vi).

“ Initial Noteholder ”: as defined in the recitals hereto.

“ Insolvency ”: with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of section 4245 of ERISA.

“ Insurance Subsidiary ”: shall mean (i) any Subsidiary that is required to be licensed as an insurer or reinsurer or that is primarily engaged in insurance or reinsurance any (ii) any Subsidiary of a Person described in clause (i) above.

“ Intellectual Property ”: all Patents, Trademarks and Copyrights owned by any Issuer Party, and all rights under any Licenses to which an Issuer Party is a party.

“ Intellectual Property Pledge Agreement ”: the Intellectual Property Pledge Agreement, dated as of the date hereof, by and among each Issuer Party and the Noteholder, substantially in the form of Exhibit K.

“ Intercreditor Agreement ”: the Intercreditor Agreement, dated as of the date hereof, by and among the Issuer, the Treasury and the Initial Noteholder.

“ Interest Expense ”: for any Person for any period, consolidated total interest expense of such Person and its Subsidiaries for such period and including, in any event, costs under interest rate swap agreements, interest rate cap agreements, interest rate collar agreements and interest rate insurance for such period.

“ Investments ”: any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase of any Capital Stock, bonds, notes, debentures or other debt securities of, or any assets constituting a business unit of, or any other investment in, any Person.

 

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“ Issuer ”: as defined in the preamble hereto.

“ Issuer’s Organizational Documents ”: the Amended and Restated Certificate of Incorporation of the Issuer dated June 9, 2009 and filed with the Secretary of State of the State of Delaware, together with the Amended and Restated Bylaws of the Issuer, dated as of July 9, 2009 as the same may be further amended, restated, supplemented or replaced from time to time in accordance with the terms and conditions hereof and of the other Secured Note Documents.

“ Issuer Parties ”: the Issuer and each Guarantor.

“ JV Agreement ”: each partnership or limited liability company agreement (or similar agreement) between a North American Group Member or one of its Subsidiaries and the relevant JV Partner as the same may be amended, restated, supplemented or otherwise modified from time to time, in accordance with the terms hereof.

“ JV Partner ”: each Person party to a JV Agreement that is not an Issuer Party or one of its Subsidiaries.

“ JV Subsidiary ”: any Subsidiary of a Group Member which is not a Wholly Owned Subsidiary and as to which the business and management thereof is jointly controlled by the holders of the Capital Stock therein pursuant to customary joint venture arrangements.

“ Licenses ”: collectively, the Copyright Licenses, the Trademark Licenses and the Patent Licenses.

“ Lien ”: any mortgage, pledge, security interest, lien or other charge or encumbrance (in the nature of a security interest and other than licenses of Intellectual Property), including the lien or retained security title of a conditional vendor, upon or with respect to any property or assets.

“ Master Transaction Agreement ”: as defined in the recitals.

“ Material Adverse Effect ”: a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) or prospects of (i) the North American Group Members (taken as a whole) or (ii) the Group Members (taken as a whole), (b) the ability of the Issuer Parties (taken as a whole) to perform their obligations under any of the Secured Note Documents to which they are a party, (c) the validity or enforceability in any material respect of any of the Secured Note Documents to which the Issuer Parties are a party, (d) the rights and remedies of the Noteholders under any of the Secured Note Documents, or (e) the Collateral (taken as a whole); provided that (w) the taking of any action by the Issuer and its Subsidiaries, including the cessation of production, pursuant to and in accordance with the Budget, (x) the filing and continuance of the Cases and the orders thereunder, and (y) any action taken pursuant to the Section 363 Sale Order shall not be taken into consideration.

 

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“ Material North American Group Member ”: any North American Group Member that is a “Significant Subsidiary” as defined in Regulation S-X promulgated under the Securities Act.

“ Maturity Date ”: the date that is the earlier to occur of (a) July 15, 2017 and (b) the acceleration of the Notes in accordance with the terms of this Agreement.

“ Moody’s ”: Moody’s Investors Service, Inc. and its successors.

“ Mortgage ”: each of the mortgages and deeds of trust made by the Issuer or any Guarantor in favor of, or for the benefit of, the Noteholder, substantially in the form of Exhibit J, taking into consideration the law and jurisdiction in which such mortgage or deed of trust is to be recorded or filed, to the extent applicable.

“ Mortgaged Property ”: each property listed on Schedule 1.1C , as to which the Noteholder shall be granted a Lien pursuant to the Mortgages.

“ Multiemployer Plan ”: a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions are required to be made by any Issuer Party or any ERISA Affiliate or to which any Issuer Party or any ERISA Affiliate may have any direct or indirect liability or obligation contingent or otherwise.

“ Net Cash Proceeds ”: with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, (ii) in the case of a Disposition of an asset (including pursuant to a Sale/Leaseback Transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made as a result of such event to repay Indebtedness (other than the Notes) secured by such asset or otherwise subject to mandatory prepayment or lease obligations, as applicable, as a result of such event and (iii) the amount of all taxes paid (or reasonably estimated to be payable, including under any tax sharing arrangements) and, with respect to amounts that will be expatriated as a result of any event attributable to a Non-U.S. Subsidiary, the amount of any taxes that will be payable by any applicable Group Member as a result of the expatriation, and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case that are directly attributable to such event (as determined reasonably and in good faith by a Responsible Officer); provided that, Net Cash Proceeds shall exclude funds that GM Canada or any of the Canadian Guarantors are required to use to repay the loans under the Canadian Facility.

“ Net Income ”: for any period, the net income (or loss) of the Issuer and its Subsidiaries calculated on a consolidated basis for such period determined in accordance with GAAP.

 

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“ Non-Excluded Taxes ”: as defined in Section 2.12.

“ Non-U.S. Noteholder ”: as defined in Section 2.12.

“ Non-U.S. Subsidiary ”: any Subsidiary of any Issuer Party that is not a U.S. Subsidiary.

“ North American Group Members ”: collectively, the Issuer Parties and each Domestic Subsidiary of an Issuer Party that is not an Excluded Subsidiary.

“ Note ” or “ Notes ”: collectively, the Initial Note and any promissory notes issued in connection with an assignment as contemplated by Section 2.3(b).

“ Noteholder ”: as defined in the preamble hereto.

“ Obligations ”: the unpaid principal of and interest on (including, without limitation, interest accruing after the maturity of the Notes and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to any Issuer Party, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Notes and all other obligations and liabilities of any Issuer Party to the Noteholders, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Secured Note Document or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including, without limitation, all fees, charges and disbursements of counsel to the Noteholders that are required to be paid by any Issuer Party pursuant hereto) or otherwise.

“ OFAC ”: the Office of Foreign Assets Control of the Treasury.

“ Other Foreign 956 Subsidiary ”: any Non-U.S. Subsidiary substantially all of the value of whose assets consist of equity of one or more Foreign 956 Subsidiaries for U.S. federal income tax purposes.

“ Other Taxes ”: any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Secured Note Document (excluding, in each case, amounts imposed on an assignment, a grant of a Participation or other transfer of an interest in a Note or any Secured Note Document).

“ Outstanding Amount ”: as of any date of determination (a) with respect to Indebtedness, the aggregate outstanding principal amount thereof, (b) with respect to banker’s acceptances, letters of credit or letters of guarantee, the aggregate undrawn, unexpired face amount thereof plus the aggregate unreimbursed drawn amount thereof, (c) with respect to hedging obligations, the aggregate amount recorded by the Issuer or any Subsidiary as its net termination liability thereunder calculated in accordance with the Issuer’s customary accounting procedures, (d) with respect to cash management obligations or guarantees, the aggregate

 

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maximum amount thereof (i) that the relevant cash management provider is entitled to assert as such as agreed from time to time by the Issuer or any Subsidiary and such provider or (ii) the principal amount of the Indebtedness being guaranteed or, if less, the maximum amount of such guarantee set forth in the relevant guarantee and (e) with respect to any other obligations, the aggregate outstanding amount thereof.

“ Outstanding Principal ”: as of any date of determination, $2,500,000,000, accreted to such date of determination at the Applicable Rate for each day commencing on and including July 15, 2009 and ending on but excluding such date of determination as may be recalculated pursuant to Section 2.7 from time to time.

“ Participant ”: as defined in Section 8.6(c).

“ Participation ”: as defined in Section 8.6(c).

“ Patent Licenses ”: all licenses, contracts or other agreements, whether written or oral, naming an Issuer Party as licensee or licensor and providing for the grant of any right to manufacture, use, lease, or sell any invention, design, idea, concept, method, technique, or process covered by any Patent (including, without limitation, all Patent Licenses set forth in Schedule 3.25 hereto).

“ Patents ”: all domestic and foreign letters patent, design patents, utility patents, industrial designs, and all intellectual property rights in inventions, trade secrets, ideas, concepts, methods, techniques, processes, proprietary information, technology, know-how, formulae, and other general intangibles of like nature, now existing or hereafter acquired or owned by an Issuer Party (including, without limitation, all domestic and foreign letters patent, design patents, utility patents, industrial designs, inventions, trade secrets, ideas, concepts, methods, techniques, processes, proprietary information, technology, know-how and formulae described in Schedule 3.25 hereto), all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Patent and Trademark Office, or in any similar office or agency of the United States or any other country or any political subdivision thereof), and all reissues, re-examinations, divisions, continuations, continuations in part and extensions or renewals thereof.

“ Payment Date ”: (a) with respect to the Scheduled Payments, July 15 in each of the years 2013, 2015 and 2017 and (b) with respect to any other payment made in respect hereof, the date of such payment.

“ PBGC ”: the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

“ Permitted Holders ”: any holder of any Capital Stock of the Issuer as of the Effective Date, including, with respect to Capital Stock held by any GM Oldco Party, (i) a “liquidating trust,” within the meaning of Treas. Reg. § 301.7701-4, to which such GM Oldco Party’s assets are distributed, or (ii) any other entity established for the sole purpose of liquidating the assets of such GM Oldco Party.

 

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“ Permitted Indebtedness ”:

(a) Indebtedness created under any Secured Note Document;

(b) purchase money Indebtedness for real property, improvements thereto or equipment or personal property hereafter acquired (or, in the case of improvements, constructed) by, or Capital Lease Obligations of, any North American Group Member, provided that, the aggregate principal balance of such Indebtedness shall not exceed $1,000,000,000 at any one time outstanding;

(c) trade payables, if any, in the ordinary course of its business;

(d) Indebtedness existing on the Effective Date;

(e) intercompany Indebtedness of a North American Group Member in the ordinary course of business; provided that, the right to receive any repayment of such Indebtedness (other than any scheduled payments so long as no Event of Default has occurred and is continuing) shall be subordinated to the Noteholders’ rights to receive repayment of the Obligations;

(f) Indebtedness under the Canadian Facility and the guarantee by the Issuer of the obligations thereunder;

(g) Indebtedness existing at the time any Person merges with or into or becomes a North American Group Member and not incurred in connection with, or in contemplation of, such Person merging with or into or becoming a North American Group Member; provided that any such merger shall comply with Section 6.1;

(h) Swap Agreements that are not entered into for speculative purposes;

(i) Indebtedness, including letters of credit, bankers’ acceptances and similar instruments issued in the ordinary course of business, in respect of the financing of insurance premiums, customs, stay, performance, bid, surety or appeal bonds and similar obligations, completion guaranties, “take or pay” obligations in supply agreements, reimbursement obligations regarding workers’ compensation claims, indemnification, adjustment of purchase price and similar obligations incurred in connection with the acquisition or disposition of any business or assets, and sales contracts, coverage of long-term counterparty risk in respect of insurance companies, purchasing and supply agreements, rental deposits, judicial appeals and service contracts;

(j) Indebtedness incurred in the ordinary course of business in connection with cash management and deposit accounts and operations, netting services, employee credit card programs and similar arrangements and Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;

(k) any guarantee by any Issuer Party of Permitted Indebtedness;

 

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(l) Indebtedness entered into under Section 136 of EISA;

(m) any extensions, renewals, exchanges or replacements of Indebtedness of the kind in clauses (a), (d), (e), (f), (g), (h), (i) and (l) of this definition to the extent (i) the principal amount of or commitment for such Indebtedness is not increased (except by an amount equal to unpaid accrued interest and premium thereon plus other reasonable fees and expenses incurred in connection with such extension, renewals or replacement), (ii) neither the final maturity nor the weighted average life to maturity of such Indebtedness is decreased and (iii) such Indebtedness, if subordinated in right of payment to the Noteholders of the Indebtedness under this Agreement, remains so subordinated on terms no less favorable to the Noteholders;

(n) any Sale/Leaseback Transaction; provided that, if on the date such Indebtedness is incurred, the Consolidated Leverage Ratio is greater than or equal to 3.00 to 1.00 after giving pro forma effect to such Indebtedness, an amount equal to the Applicable Net Cash Proceeds of the Attributable Obligations under such Sale/Leaseback Transaction shall be applied as a prepayment of the Notes in accordance with Section 2.5(a);

(o) [intentionally omitted];

(p) any transactions undertaken by the Canadian Subsidiaries with 1908 Holdings, Parkwood Holdings Ltd., or GM Overseas Funding LLC in the ordinary course, consistent with past practice of the GM Oldco Parties;

(q) Indebtedness under the UST Facility;

(r) Indebtedness under the Supplier Receivables Facility;

(s) Excluded First Lien Indebtedness and Additional First Lien Indebtedness; and

(t) Permitted Unsecured Indebtedness.

“ Permitted Liens ”: with respect to any Property of the Issuer or any of its U.S. Subsidiaries:

(a) Liens created under the Secured Note Documents;

(b) Liens on Property of a U.S. Subsidiary existing on the date hereof (including Liens on Property of a U.S. Subsidiary pursuant to Existing Agreements; provided that such Liens, and any renewal, replacement, amendment, extension or modification in whole or in part thereof, shall secure only those obligations that they secure on the date hereof and any permitted refinancing thereof);

(c) any Lien existing on any Property prior to the acquisition thereof by the Issuer or a U.S. Subsidiary or existing on any Property of any Person that becomes a U.S. Subsidiary after the date hereof prior to the time such Person becomes a U.S. Subsidiary;

 

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provided that (x) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a U.S. Subsidiary, (y) such Lien does not apply to any other Property or assets of the Issuer or a U.S. Subsidiary, and (z) such Lien, and any renewal, replacement, amendment, extension or modification in whole or in part thereof, secures only those obligations that it secures on the date of such acquisition or the date such Person becomes a U.S. Subsidiary, as the case may be;

(d) Liens for taxes, assessments, governmental charges and utility charges not yet due or that are being contested in good faith, by proper proceedings diligently pursued, and as to which adequate reserves have been provided;

(e) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business and securing obligations that are not due and payable or that are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been provided for in accordance with GAAP;

(f) Liens securing Indebtedness permitted by clause (i) of the definition of “Permitted Indebtedness”; provided that, the aggregate principal balance of the Indebtedness at any one time outstanding secured by such Liens shall not exceed the greater of (x) $800,000,000 and (y) the maximum amount of Liens securing such Indebtedness permitted to be issued or incurred by North American Group Members and Structured Financing Subsidiaries under any Excluded First Lien Indebtedness and Additional First Lien Indebtedness;

(g) Liens securing Swap Agreements permitted by clause (h) of the definition of “Permitted Indebtedness”;

(h) Liens securing Indebtedness permitted by clause (j) of the definition of “Permitted Indebtedness”;

(i) customary Liens in favor of trustees and escrow agents, and netting and set-off rights, banker’s liens and the like in favor of counterparties to financial obligations and instruments;

(j) Liens securing Indebtedness incurred under Section 136 of EISA;

(k) pledges and deposits made in the ordinary course of business in compliance with workmen’s compensation, unemployment or other insurance and other social security laws or regulations;

(l) deposits to secure the performance of bids, trade contracts (other than for Indebtedness), leases (other than Capital Lease Obligations), statutory obligations, surety, customs and appeal bonds, performance bonds and other obligations of a like nature, or to secure the payment of import or customs duties, in each case incurred in the ordinary course of business;

 

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(m) zoning and environmental restrictions, easements, licenses, encroachments, covenants, servitudes, rights-of-way, restrictions on use of real property or groundwater, institutional controls and other similar encumbrances or deed restrictions incurred in the ordinary course of business that, in the aggregate, are not substantial in amount and do not materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of the Issuer or any U.S. Subsidiary;

(n) purchase money security interests in real property, improvements thereto or equipment or personal property hereafter acquired (or, in the case of improvements, constructed) by the Issuer or a U.S. Subsidiary, including pursuant to Capital Lease Obligations; provided that (i) such security interests secure Indebtedness permitted by Section 6.9, (ii) such security interests are incurred, and the Indebtedness secured thereby is created, within 90 days after such acquisition (or construction), (iii) the Indebtedness secured thereby does not exceed the lesser of the cost or the fair market value of such real property, improvements or equipment at the time of such acquisition (or construction) and (iv) such security interests do not apply to any other property or assets of the Issuer or any U.S. Subsidiary;

(o) judgment Liens securing judgments not constituting an Event of Default under Section 7.1(n);

(p) any Lien consisting of rights reserved to or vested in any Governmental Authority by statutory provision;

(q) Liens securing Indebtedness described in clauses (d), (e), (f), (n), (q) and (s) of the definition of “Permitted Indebtedness”;

(r) pledges or deposits made to secure reimbursement obligations in respect of letters of credit issued to support any obligations or liabilities described in clauses (k) or (l) of this definition;

(s) Liens securing the Supplier Receivables Facility;

(t) [intentionally omitted];

(u) statutory Liens incurred or pledges or deposits made in favor of a Governmental Authority to secure the performance of obligations of the Issuer and its Subsidiaries under Environmental Laws to which any assets of the Issuer or any such Subsidiary are subject;

(v) other Liens created or assumed in the ordinary course of business of the Issuer and the U.S. Subsidiary; provided that the obligations secured by all such Liens shall not exceed the principal amount of $50,000,000 in the aggregate at any one time outstanding;

(w) Liens on securities accounts (other than Liens to secure Indebtedness);

 

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(x) Liens under industrial revenue, municipal or similar bonds, only to the extent the corresponding Indebtedness is Permitted Indebtedness;

(y) servicing agreements, development agreements, site plan agreements and other agreements with Governmental Authorities pertaining to the use or development of any of the properties and assets of the Issuer or any Subsidiary consisting of real property, provided the same are complied with;

(z) Liens arising from security interests granted by Persons who are not Affiliates of the Issuer in such Person’s co-ownership interest in Intellectual Property that such Person co-owns together with any Group Member; and

(aa) during the Challenge Period, Liens securing Reserved Claims.

“ Permitted Transferee ”: (a) (1) a person whom the seller reasonably believes is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A or (2) an institutional “accredited investor” (as defined in Rule 501(a) (1), (2), (3) or (7) under the Securities Act (an “ Institutional Accredited Investor ”)) if, prior to such transfer, in the case of (2) the transferee furnishes the Issuer a signed letter from the transferee containing certain representations and agreements in the form attached hereto as Exhibit H or (b) the Issuer or its Subsidiaries or Affiliates.

“ Permitted Unsecured Indebtedness ”: unsecured Indebtedness of the Group Members (other than Excluded Subsidiaries) other than unsecured Indebtedness described in clauses (a) through (r) inclusive of the definition of “Permitted Indebtedness”, provided that, (i) solely in the case of such unsecured Indebtedness incurred by the Issuer or any Domestic Subsidiary (other than Excluded Subsidiaries), in the event that such unsecured Indebtedness, when aggregated with all other Permitted Unsecured Indebtedness of the Issuer and its Domestic Subsidiaries (other than Excluded Subsidiaries) then outstanding or to be issued or incurred simultaneously with such unsecured Indebtedness, exceeds $1,000,000,000, then on the date such Indebtedness is incurred, the Consolidated Leverage Ratio shall be less than 3.00 to 1.00 after giving pro forma effect to the incurrence of such Indebtedness, (ii) with respect to any revolving credit facility, the amount of Indebtedness for the purpose of determining compliance with clause (i) of this definition shall equal the related commitment thereunder and (iii) a portion of the Net Cash Proceeds of such Indebtedness (other than revolving credit loans) are used to prepay the Notes in accordance with Section 2.5(a).

“ Person ”: any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust, unincorporated association or government (or any agency, instrumentality or political subdivision thereof) or other entity of whatever nature.

“ Plan ”: an employee benefit or other plan covered by Title IV of ERISA, other than a Multiemployer Plan, which is sponsored, established, contributed to or maintained by any Issuer Party or any ERISA Affiliate, for which any of the Issuer Parties or any of their respective ERISA Affiliates could have any liability, whether actual or contingent (whether pursuant to Section 4069 of ERISA or otherwise) or which any of the Issuer Parties or any of their respective ERISA Affiliates previously maintained or contributed to during the six years prior to the Effective Date.

 

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“ Pledged Entity ”: a Subsidiary of an Issuer Party whose Capital Stock is subject to a security interest in favor of the Noteholders pursuant to the Collateral Documents.

“ Pledgors ”: the parties set forth on Schedule 1.1D and each other Person that makes a pledge in favor of the Noteholders under the Equity Pledge Agreement.

“ Prepayment Date ”: the date of any prepayment hereunder pursuant to Section 2.4 or 2.5.

“ Pro Forma Cost Savings ”: with respect to any period, the reduction in net costs and related adjustments that (i) were directly attributable to an acquisition or a Disposition that occurred during the four-quarter period or after the end of the four-quarter period and on or prior to the applicable calculation date and calculated on a basis that is consistent with Regulation S-X, (ii) were actually implemented by the business that was the subject of any such acquisition or Disposition within six months after the date of the acquisition or Disposition and prior to the applicable calculation date that are supportable and quantifiable by the underlying accounting records of such business or (iii) relate to the business that is the subject of any such acquisition or Disposition and that the Issuer reasonably determines are probable based upon specifically identifiable actions to be taken within six months of the date of the acquisition or Disposition and, in the case of each of (i), (ii) and (iii), are described, as provided below, in an officers’ certificate, as if all such reductions in costs had been effected as of the beginning of such period. Pro Forma Cost Savings described above shall be set forth in a certificate delivered to the Initial Noteholder from the Issuer’s chief financial officer, treasurer or assistant treasurer that outlines the specific actions taken or to be taken, the net cost savings achieved or to be achieved from each such action and that, in the case of clause (iii) above, such savings have been determined to be probable.

“ Prohibited Jurisdiction ”: any country or jurisdiction, from time to time, that is the subject of a prohibition order (or any similar order or directive), sanctions or restrictions promulgated or administered by any Governmental Authority of the United States.

“ Prohibited Person ”: any Person:

(a) subject to the provisions of the Executive Order;

(b) that is owned or controlled by, or acting for or on behalf of, any person or entity that is subject to the provisions of the Executive Order;

(c) with whom a Noteholder is prohibited from dealing or otherwise engaging in any transaction by any terrorism or money laundering law, including the Executive Order;

(d) who commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order;

 

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(e) that is named as a “specially designated national and blocked person” on the most current list published by the OFAC at its official website, http://www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf or at any replacement website or other replacement official publication of such list; or

(f) who is an Affiliate or affiliated with a Person listed above.

“ Property ”: any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

“ Recalculated Principal ”: as defined in Section 2.7(a).

“ Recalculation Date ”: as defined in Section 2.7(a).

“ Records ”: all books, instruments, agreements, customer lists, credit files, computer files, storage media, tapes, disks, cards, software, data, computer programs, printouts and other computer materials and records generated by other media for the storage of information maintained by any Person with respect to the business and operations of the Issuer Parties and the Collateral.

“ Recovery Event ”: any settlement of or payment in respect of any property or casualty insurance claim (other than the proceeds of any self-insurance) or any condemnation proceeding relating to any asset of any Group Member other than an Excluded Subsidiary in each case, in excess of (i) $25,000,000 if received by an applicable Group Member that is a Foreign Subsidiary, or (ii) $15,000,000 if received by an applicable Group Member that is not a Foreign Subsidiary.

“ Register ”: as defined in Section 8.6(b).

“ Registration Rights Agreement ”: the Equity Registration Rights Agreement dated July 10, 2009 by and among the Issuer, the Treasury, the Canadian Subscriber, the Initial Noteholder and GM Oldco.

“ Reinvestment Deferred Amount ”: with respect to any Reinvestment Event, an amount equal to the specified portion of the Net Cash Proceeds received by any applicable Group Member in connection therewith that is intended to be reinvested as stated in the applicable Reinvestment Notice.

“ Reinvestment Event ”: any Asset Sale or Recovery Event in respect of which the Issuer has delivered a Reinvestment Notice.

“ Reinvestment Notice ”: a written notice executed by a Responsible Officer stating that no Default or Event of Default has occurred and is continuing and that the Issuer (directly or indirectly through a Subsidiary) intends and expects to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event (or committed to be expended pursuant to a binding contract) to acquire or repair assets useful in its business.

 

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“ Reinvestment Prepayment Amount ”: with respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any amount expended (or committed to be expended pursuant to a binding contract) prior to the relevant Reinvestment Prepayment Date to acquire or repair assets useful in the Issuer’s business.

“ Reinvestment Prepayment Date ”: with respect to any Reinvestment Event, the earlier of (a) the date occurring one year after such Reinvestment Event and (b) the date on which the Issuer shall have made a final determination not to, or shall have otherwise ceased to, acquire or repair assets useful in the Issuer’s business with all or any portion of the relevant Reinvestment Deferred Amount.

“ Related Transactions ”: each of the transactions described in the Transaction Documents.

“ Reportable Event ”: any of the events set forth in section 4043(c) of ERISA or the regulations issued thereunder, other than those events as to which the thirty day notice period referred to in section 4043(c) of ERISA have been waived.

“ Requirements of Law ”: as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court of competent jurisdiction or other Governmental Authority, in each case applicable to and binding upon such Person and any of its property, and to which such Person and any of its property is subject.

“ Reserved Claims ”: as defined in the Final DIP Order.

“ Responsible Officer ”: as to any Person, the chief executive officer or, with respect to financial matters (including, without limitation those matters set forth in Section 5.2(h)), the chief financial officer, treasurer or assistant treasurer of such Person, an individual so designated from time to time by such Person’s board of directors or, for the purposes of Section 5.2 only (other than Section 5.2(h)), the secretary or an assistant secretary of the Issuer, or, in the event any such officer is unavailable at any time he or she is required to take any action hereunder, “Responsible Officer” shall mean any officer authorized to act on such officer’s behalf as demonstrated by a certificate or corporate resolution (or equivalent); provided that the Initial Noteholder is notified in writing of the identity of such Responsible Officer. Unless otherwise qualified, all references to “Responsible Officer” in this Agreement shall refer to a Responsible Officer of the Issuer.

“ Restricted Cash ”: cash, in whatever currency of denomination, and Cash Equivalents of the Issuer or any of its Subsidiaries (i) that is subject to a Lien (other than (x) the Liens created pursuant to the Collateral Documents, (y) ordinary course set-off rights of depository banks for charges and fees related to amounts held therewith and (z) Liens for the benefit of any Issuer Party arising under intercompany transactions), or (ii) the use of which is otherwise restricted pursuant to any Requirement of Law or Contractual Obligation. Notwithstanding the foregoing, none of the cash, in whatever currency of denomination, and Cash Equivalents of the Issuer or any of its Subsidiaries deposited with a trustee of the Initial Noteholder or any other short-term or long-term voluntary employee’s beneficiary association, if any, which the Issuer or relevant Subsidiary may access on an unrestricted basis for use in its business shall constitute Restricted Cash.

 

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“ Restricted Payments ”: as defined in Section 6.5.

“ S&P ”: Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies and its successors.

“ Sale/Leaseback Transaction ”: any arrangement with any Person providing for the leasing by any Group Member (other than any Excluded Subsidiary, except Financing Subsidiaries) of real or personal property that has been or is to be sold or transferred by the applicable Group Member to such Person, including any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of the applicable Group Member.

“ Scheduled Payment ”: the payment of the applicable Scheduled Payment Amount to be made on the related Payment Date.

“ Scheduled Payment Amount ”: as of any Payment Date, the amount due on the Notes pursuant to Section 2.6, as adjusted pursuant to Section 2.7. As of the Effective Date, each Scheduled Payment Amount is $1,384,000,000.

“ SEC ”: the Securities and Exchange Commission, any successor thereto and any analogous Governmental Authority.

“ Section 363 Sale ”: as defined in Section 4.1(b).

“ Section 363 Sale Order ”: as defined in Section 4.1(b).

“ Secured Note Documents ”: this Agreement, the Notes, the Environmental Agreement, the Collateral Documents and each post-closing letter or agreement now and hereafter entered into among the parties hereto.

“ Securities Act ”: as defined in Section 8.6(e).

“ Securitization Subsidiary ”: any Subsidiary formed for the purpose of, and that engages in, one or more receivables or securitization financing facilities and other activities reasonably related thereto.

“ Sellers ”: as defined in the recitals hereto.

“ Stockholders Agreement ”: the Stockholders Agreement dated as of July 10, 2009 among the Issuer, the Treasury, the Canadian Subscriber and the Initial Noteholder.

“ Structured Financing ”: Indebtedness (including any Sale/Leaseback Transaction) issued or incurred by any Structured Financing Subsidiary.

 

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“ Structured Financing Subsidiary ”: any Financing Subsidiary or Securitization Subsidiary.

“ Subsidiary ”: with respect to any Person, any corporation, partnership, limited liability company or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or shall have the right to have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person. Unless otherwise qualified, all references to a “Subsidiary” or “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Issuer.

“ Supplier Receivables Facility ”: that certain Credit Agreement, dated as of April 3, 2009, between Supplier SPV and the Treasury.

“ Supplier SPV ”: GM Supplier Receivables LLC, a Delaware limited liability company.

“ Swap Agreement ”: any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Issuer or any of its Subsidiaries shall be a “ Swap Agreement .”

“ taxes ”: except as the context otherwise requires, all taxes of any kind or nature whatsoever together with penalties, fines, additions to tax and interest thereon.

“ Trademark Licenses ”: all licenses, contracts or other agreements, whether written or oral, naming any Issuer Party as licensor or licensee and providing for the grant of any right concerning any Trademark, together with any goodwill connected with and symbolized by any such trademark licenses, contracts or agreements and the right to prepare for sale or lease and sell or lease any and all inventory now or hereafter owned by any Issuer Party and now or hereafter covered by such licenses (including, without limitation, all Trademark Licenses described in Schedule 3.25 hereto).

“ Trademarks ”: all domestic and foreign trademarks, service marks, collective marks, certification marks, trade dress, trade names, corporate names, business names, d/b/a’s, Internet domain names, designs, logos and other source or business identifiers and all general intangibles of like nature, now or hereafter owned, adopted, or acquired by any Issuer Party (including, without limitation, all domestic and foreign trademarks, service marks, collective marks, certification marks, trade dress, trade names, business names, d/b/as, Internet domain

 

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names, designs, logos and other source or business identifiers described in Schedule 3.25 hereto), all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof), and all reissues, extensions or renewals thereof, together with all goodwill of the business symbolized by such marks.

“ Trading With the Enemy Act ”: as defined in Section 3.19.

“ Transaction Documents ”: Each of, and collectively, (i) the Master Transaction Agreement, (ii) the Section 363 Sale Order, (iii) the Issuer’s Organizational Documents, (iv) the UAW Retiree Settlement Agreement, (v) the Transition Services Agreement and (vi) the related manufacturing agreements, asset purchase agreements, organizational documents, finance support agreements and all other related documentation, each as amended, supplemented or modified from time to time in accordance with Section 6.6.

“ Transferee ”: any Assignee or Participant.

“ Transition Services Agreement ”: as defined in the Master Transaction Agreement.

“ Treasury ”: The United States Department of the Treasury.

“ Treasury Control Change Date ”: the date on which (a) the Treasury has assigned or otherwise transferred more than 75% of the outstanding principal balance of the Loans (as defined in the UST Facility) and (b) the portion of the Loans (as defined in the UST Facility) then held by the Treasury has an outstanding principal balance that is less than the Outstanding Principal of the Notes as of such date.

“ U.S. Subsidiary ”: any Subsidiary of any Issuer Party that is organized or existing under the laws of the United States or any state thereof or the District of Columbia.

“ UAW ”: as defined in the recitals hereto.

“ UAW Retiree Settlement Agreement ”: as defined in the Master Transaction Agreement.

“ Uniform Commercial Code ”: the Uniform Commercial Code as in effect from time to time in any applicable jurisdiction.

“ United States ”: the United States of America.

“ USA PATRIOT Act ”: as defined in Section 3.18(d).

“ UST Facility ”: the $7,072,488,605 Secured Credit Agreement, dated as of the date hereof, among the Issuer, as borrower, the Subsidiaries of the Issuer that are guarantors, and the Treasury, as lender.

 

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“ UST Non-Binding Amendment ”: as defined in the Intercreditor Agreement.

“ UST Rejection Notice ”: a notice from the Treasury to the Issuer rejecting a mandatory prepayment under the UST Facility following the initial offer to repay the loans thereunder in accordance with Section 2.5(g) thereof.

“ UST Secured Obligations Payment Date ”: as defined in the Intercreditor Agreement.

“ VEBA Facility Percentage ”: on any date of determination, a percentage equal to (x) the aggregate Outstanding Principal of the Notes on such date divided by (y) an amount equal to the sum of (i) the aggregate Outstanding Principal of the Notes on such date and (ii) the aggregate outstanding principal balance of the Loans (as defined in the UST Facility) under the UST Facility on such date.

“ VEBA’s Percentage ”: on any date of determination, (i) in the event that the Initial Noteholder is the sole Noteholder, 100%, and (ii) in the event that there is more than one Noteholder, a percentage equal to (x) the aggregate Outstanding Principal of the Note held by the Initial Noteholder on such date divided by (y) the aggregate Outstanding Principal of the Notes of all Noteholders on such date.

“ VEBA Rejection Notice ”: a notice from the Initial Noteholder to the Issuer rejecting a mandatory prepayment hereunder following the initial offer to prepay the Notes hereunder in accordance with Section 2.5(g) hereof.

“ Wholly Owned Subsidiary ”: as to any Person, any other Person all of the Capital Stock of which (other than directors’ qualifying shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries.

“ Withdrawal Liability ”: liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

1.2. Other Definitional Provisions . (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Secured Note Documents or any certificate or other document made or delivered pursuant hereto or thereto.

(b) As used herein and in the other Secured Note Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms relating to Group Members not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP, (ii) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” (iii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings), (iv) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, Capital Stock, securities, revenues, accounts, leasehold

 

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interests and contract rights, (v) references to agreements or other Contractual Obligations shall, unless otherwise specified, be deemed to refer to such agreements or Contractual Obligations as amended, supplemented, restated or otherwise modified from time to time, (vi) references to any Person shall include its successors and assigns and (vii) references to any statute, rule or regulation shall be to such statute as amended or modified from time to time and to any successor legislation, rule or regulation thereto, in each case as in effect at the time any such reference is operative.

(c) The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole (including the Schedules and Exhibits hereto) and not to any particular provision of this Agreement (or the Schedules and Exhibits hereto), and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

(e) It is understood and agreed that any reference to the terms “Subsidiary” and “Affiliate” shall not be deemed or interpreted to include GMAC; provided that, the ownership thereof by the Issuer does not increase beyond the amount owned immediately following the consummation of the transactions contemplated by the GMAC Reorganization.

1.3. Conversion of Foreign Currencies . (a) For purposes of this Agreement and the other Secured Note Documents, with respect to any monetary amounts in a currency other than Dollars, the Dollar Equivalent thereof shall be determined based on the Exchange Rate in effect at the time of such determination (unless otherwise explicitly provided herein).

(b) The Issuer may round-off amounts hereunder to the nearest higher or lower amount in whole Dollar and cents to ensure amounts owing by any party hereunder or that otherwise need to be calculated or converted hereunder are expressed in whole Dollars and in whole cents, as may be necessary or appropriate.

SECTION 2

AMOUNT AND TERMS OF LOANS

2.1. Issuance of Note . As consideration for the agreement of the parties thereto to enter into the UAW Retiree Settlement Agreement, the Issuer has issued the Initial Note in the amount of $2,500,000,000 pursuant to the terms and conditions of this Agreement.

2.2. [ Intentionally Omitted ].

2.3. Payment of Notes; Evidence of Debt . (a) The Notes shall mature on the Maturity Date.

(b) Pursuant to Section 4.1(a), the Issuer shall execute and deliver the Initial Note on the Effective Date. Following any assignment or transfer of a Note pursuant to

 

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Section 8.6, the Issuer agrees that, upon the request of the Noteholder, the Issuer shall promptly execute and deliver to the Noteholders Notes reflecting the Notes assigned or transferred and the Notes retained by each Noteholder, if any.

2.4. Optional Prepayments . The Issuer may at any time and from time to time prepay the Notes, in whole or in part, without premium or penalty, upon irrevocable notice delivered to the Noteholders no later than 12:00 noon (New York City time) three Business Days prior to the date such prepayment is requested to be made, which notice shall specify the date of such prepayment and the amount of such prepayment. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein. Partial prepayments of Notes shall be in an aggregate principal amount of $25,000,000 or a whole multiple thereof or, if less, the entire Outstanding Principal as of the date of such prepayment. Upon any partial prepayment pursuant to this Section 2.4, the Scheduled Payment Amounts shall be recalculated in accordance with Section 2.7(a).

2.5. Mandatory Prepayments . (a) Unless the Approving Party shall otherwise agree (and, if the Approving Party is the Treasury, the Treasury concurrently agrees under the UST Facility), if any Additional First Lien Indebtedness or Permitted Unsecured Indebtedness is incurred by any Group Member (other than an Excluded Subsidiary), then promptly upon such incurrence (and in any case not more than twenty Business Days thereafter), the Notes shall be prepaid by an amount equal to the Applicable Net Cash Proceeds of such incurrence, as set forth in Section 2.5(d). If any amount in respect of Attributable Obligations under a Sale/Leaseback Transaction is required to be applied as a prepayment of the Notes pursuant to clause (n) of the definition of “Permitted Indebtedness,” then promptly upon the occurrence of such Sale/Leaseback Transaction (and in any case not more than twenty Business Days thereafter), the Notes shall be prepaid by an amount equal to the Applicable Net Cash Proceeds of such Sale/Leaseback Transaction, as set forth in Section 2.5(d). With respect to any such Indebtedness incurred by an applicable Non-U.S. Subsidiary, the aggregate amount of the Applicable Net Cash Proceeds thereof required to be applied pursuant to Section 2.5(d) to the prepayment of the Notes shall be subject to reduction to the extent that expatriation of such Applicable Net Cash Proceeds (i) would result in material adverse tax or legal consequences (including, without limitation, violation of Contractual Obligations), (ii) would be reasonably likely to result in adverse personal liability of any director of any applicable Group Member, or (iii) would result in the insolvency of the applicable Non-U.S. Subsidiary. The provisions of this Section do not constitute a consent to the incurrence of any Indebtedness by any Group Member to which consent is otherwise required under this Agreement or the other Secured Note Documents. Notwithstanding the foregoing, no prepayment shall be required under this Section 2.5(a) if (A) the aggregate principal amount of Indebtedness and any Attributable Obligations incurred by the applicable Group Member on the date of incurrence does not exceed $5,000,000, or (B) the Indebtedness was incurred or issued by a Foreign Subsidiary, General Motors China, Inc. or GM APO Holdings LLC solely for the purpose of funding operations outside the United States and Canada.

(b) Unless the Approving Party shall otherwise agree (and, if the Approving Party is the Treasury, the Treasury concurrently agrees under the UST Facility), if on any date any Group Member other than an Excluded Subsidiary shall receive Net Cash Proceeds from any Asset Sale, Recovery Event or Extraordinary Receipt, then unless a Reinvestment Notice shall be

 

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delivered in respect of any Asset Sale or Recovery Event, promptly upon receipt by such Group Member of such Net Cash Proceeds (and in any case not more than twenty Business Days thereafter), the Notes shall be prepaid by an amount equal to the amount of such Net Cash Proceeds, as set forth in Section 2.5(d); provided that, on each Reinvestment Prepayment Date, the Notes shall be prepaid by an amount equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event, as set forth in Section 2.5(d). With respect to any Net Cash Proceeds realized or received by an applicable Non-U.S. Subsidiary in connection with any Asset Sale, Recovery Event or Extraordinary Receipt, the aggregate amount of such Net Cash Proceeds required to be applied pursuant to this Section 2.5(b) to the prepayment of the Notes shall be subject to reduction to the extent that expatriation of such Net Cash Proceeds (i) would result in material adverse tax or legal consequences (including, without limitation, violation of Contractual Obligations), (ii) would be reasonably likely to result in adverse personal liability of any director of any applicable Group Member, or (iii) would result in the insolvency of the applicable Non-U.S. Subsidiary. The provisions of this Section 2.5(b) do not constitute a consent to the consummation of any Disposition not permitted by Section 6.12.

(c) [Intentionally omitted].

(d) Amounts to be applied in connection with prepayments pursuant to Section 2.4 and this Section 2.5 shall be applied to prepay the Notes and upon the occurrence of a prepayment pursuant to this Section 2.5, the Outstanding Principal and each remaining Scheduled Payment Amount shall be recalculated pursuant to Section 2.7. Any such prepayment shall be accompanied by a notice to the Noteholders specifying the amount of such prepayment and the remaining Scheduled Payments Amounts.

(e) [Intentionally omitted].

(f) [Intentionally omitted].

(g) With respect to the amount of any mandatory prepayment required to be made pursuant to Section 2.5(a) or (b) (the “ Mandatory Prepayment Amount ”), at any time when the Initial Noteholder is a Noteholder hereunder, the Issuer may, in lieu of applying the VEBA’s Percentage of such amount to the prepayment of the Initial Noteholder’s Note as provided in Section 2.5(a) or (b), as applicable, on the date specified in Section 2.5(a) or (b), as applicable (the “ Offer Date ”), for such prepayment, deliver a written offer to the Initial Noteholder to permit the Initial Noteholder to decline all or a portion of such mandatory prepayment; provided that, the Issuer shall pay to each Noteholder other than the Initial Noteholder such Noteholder’s pro rata share of such mandatory prepayment as otherwise required by Section 2.5(a) or (b), as applicable. If, no later than 5 Business Days following the Offer Date (the “ Mandatory Prepayment Date ”), (i) the Initial Noteholder and the Issuer have mutually agreed, the Initial Noteholder may deliver a written notice to reject (a “ VEBA Rejection Notice ”) all or a portion of the applicable Mandatory Prepayment Amount (such rejected amount, the “ Rejected Prepayment Amount ”), and the Issuer shall offer to apply the Rejected Prepayment Amount to the Canadian Facility and the UST Facility in accordance with Section 2.5(h) and (ii) otherwise, the Initial Noteholder’s Note shall be repaid on the Mandatory Prepayment Date, together with all accrued and unpaid interest thereon. For avoidance of doubt, the Initial Noteholder is the sole Noteholder that may reject a mandatory prepayment pursuant to this Section 2.5(g) and such right shall not be available to any other Noteholder.

 

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(h) In the event that there is any Rejected Prepayment Amount relating to a mandatory prepayment required to be made pursuant to Section 2.5(a) and the Canadian Lender is a lender under the Canadian Facility or the Treasury is a lender under the UST Facility, the Issuer shall offer to apply the Rejected Prepayment Amount to the loans under the Canadian Facility and the loans under the UST Facility on the date that is five Business Days after the date the Initial Noteholder has delivered a VEBA Rejection Notice, as follows:

(i) if the Treasury is no longer a lender under the UST Facility, the entire Rejected Prepayment Amount shall be offered to the Canadian Lender as a prepayment of the loans under the Canadian Facility in accordance with the terms of Section 2.07(d) of the Canadian Facility;

(ii) if the Canadian Lender is no longer a lender under the Canadian Facility, the entire Rejected Prepayment Amount shall be offered to the Treasury as a prepayment of the loans under the UST Facility in accordance with Section 2.5(j) of the UST Facility; or

(iii) otherwise, the Rejected Prepayment Amount shall be offered to both the Canadian Lender and the Treasury on a pro rata basis based on the aggregate outstanding principal balance of the Canadian Lender’s loans under the Canadian Facility on the date of such offer and the aggregate outstanding principal balance of the Treasury’s loans outstanding under the UST Facility on the date of such offer.

Any amounts rejected by the Canadian Lender or the Treasury, as applicable, following any offer pursuant to this Section 2.5(h) may be retained by the Issuer. In the event that the Canadian Lender is no longer a lender under the Canadian Facility and the Treasury is no longer a lender under the UST Facility, the Issuer may retain any Rejected Prepayment Amount; provided that, the Issuer may not use any portion of any Rejected Prepayment Amount to make an optional prepayment pursuant to Section 2.4.

(i) In the event that there is any Rejected Prepayment Amount relating to a mandatory prepayment required to be made pursuant to Section 2.5(b) and the Treasury is a lender under the UST Facility, the Issuer shall offer to apply the Rejected Prepayment Amount to the UST Facility on the date that is five Business Days after the date the Initial Noteholder has delivered a VEBA Rejection Notice, in accordance with Section 2.5(j) of the UST Facility. Any amounts rejected by the Treasury following any offer pursuant to Section 2.5(j) of the UST Facility may be retained by the Issuer. In the event that the Treasury is no longer a lender under the UST Facility, the Issuer may retain any Rejected Prepayment Amount relating to a mandatory prepayment required to be made to the Initial Noteholder pursuant to Section 2.5(b); provided that, the Issuer may not use any portion of any Rejected Prepayment Amount to make an optional prepayment pursuant to Section 2.4.

(j) If on any date, the Issuer or GM Canada shall have received a Canadian Lender Rejection Notice or a UST Rejection Notice, the Issuer shall at any time when the Initial

 

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Noteholder is a Noteholder hereunder, deliver a written offer to the Initial Noteholder to prepay on the date that is five Business Days after the date of the Canadian Lender Rejection Notice or the UST Rejection Notice, as applicable, the Notes held by the Initial Noteholder by an amount equal to the Applicable Rejected Prepayment Amount. The Initial Noteholder may, in its sole discretion, elect to reject all or a portion of such Applicable Rejected Prepayment Amount. Any amounts rejected by the Initial Noteholder following any offer pursuant to this Section 2.5(j) may be retained by the Issuer; provided that, the Issuer may not use any portion of any Applicable Rejected Prepayment Amount to make an optional prepayment pursuant to Section 2.4. For the avoidance of doubt, the Initial Noteholder is the sole Noteholder that shall be offered, and shall have the right to reject, any Applicable Rejected Prepayment Amount.

(k) Notwithstanding anything to the contrary set forth herein, the Issuer shall not be required to make an offer to any of the Treasury, the Canadian Lender or the Initial Noteholder pursuant to Section 2.5(g), (h), (i) or (j) in excess of the outstanding principal balance of the Treasury’s loans under the UST Facility, the outstanding principal balance of the Canadian Lender’s loans under the Canadian Facility, or the Outstanding Principal of the Initial Noteholder under the Notes, as applicable.

2.6. Interest Rates and Payment Dates . (a) The Notes shall have an implied rate equal to the Implied Interest Rate accreting from July 15, 2009. Each payment on the Notes on each Payment Date shall be in an amount equal to the applicable Scheduled Payment.

(b) [Intentionally omitted].

(c) [Intentionally omitted].

(d) If at any time any Event of Default shall have occurred and be continuing, all outstanding Notes and all other outstanding Obligations shall bear interest at the Default Rate.

(e) Interest accruing pursuant to Section 2.6(d) shall be calculated and payable in accordance with Section 2.7(a).

(f) Payments on the Notes shall be made on each Payment Date.

2.7. Calculations of Scheduled Payment Amounts, Acceleration Payment Amounts and Default Interest; Payment Dates . (a) On (i) any scheduled Payment Date after an occurrence of an Event of Default or (ii) any Prepayment Date (each of clause (i), (ii) and, if the Notes are accelerated, the date of determination of the Acceleration Payment Amount, a “ Recalculation Date ”), the Outstanding Principal of the Notes shall be recalculated to reflect the prepayment of principal from the Outstanding Principal on such Prepayment Date and/or the incurrence of default interest, as applicable (as recalculated, the “ Recalculated Principal ”), and the remaining Scheduled Payment Amounts shall be adjusted in a manner such that (x) all remaining Scheduled Payment Amounts are equal, and (y) the present value of all remaining Scheduled Payment Amounts, discounted to such Recalculation Date at the Implied Interest Rate, equals the Recalculated Principal. The Outstanding Principal and Scheduled Payment Amounts shall be adjusted to take account of each successive prepayment or period of default interest, as the case may be, in the manner described above. For example, in the event of a

 

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$1,000,000,000 prepayment occurring on January 1, 2012, each remaining Scheduled Payment Amount would be adjusted to $ 935,987,673. If an Event of Default occurs on January 1, 2013 and then ceases to exist on August 1, 2013, the Scheduled Payment Amount on July 15, 2013 would be $1,397,542,949 and each other remaining Scheduled Payment Amount would be adjusted to $1,398,602,124.

(b) Upon an acceleration of the Notes pursuant to Section 7.2, the amount due on the Notes (the “ Acceleration Payment Amount ”) shall be the Outstanding Principal of the Notes as of such date of acceleration (determined after taking into account any recalculation of the Outstanding Principal pursuant to Section 2.7(a) above). From and including the date of an acceleration to but excluding the date of the payment of the Acceleration Payment Amount and all other outstanding Obligations, each of the Acceleration Payment Amount and all other outstanding Obligations shall bear interest at the Default Rate.

2.8. [Intentionally Omitted] .

2.9. Treatment of Payments . (a) [Intentionally omitted].

(b) [Intentionally omitted].

(c) [Intentionally omitted].

(d) All payments (including prepayments) to be made by the Issuer hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 3:00 p.m. (New York City time) on the due date thereof, in Dollars and shall be paid by wire transfer of immediately available funds; provided that, if the Issuer has not received wire transfer instructions in writing on or before the 30 ^th day prior to the date and time such moneys are to be paid to any Noteholder in accordance with the terms thereof, such payment shall be made by mailing checks payable to or upon the order of such Noteholder at its last address as it appears on the Register for such Note as of the fifth (5 ^th ) Business Day prior to the date such payment is due. If any payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. As of the Effective Date, the Initial Noteholder’s wire instructions are as set forth on Exhibit 1.1A.

2.10. [Intentionally Omitted] .

2.11. [Intentionally Omitted] .

2.12. Taxes . (a) Except as required by Applicable Law, all payments made by the Issuer under this Agreement or any other Secured Note Document shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding net or overall gross income taxes or net or overall gross profit taxes, franchise taxes (imposed in lieu of net or overall gross income taxes), capital taxes and branch profit taxes imposed on a Noteholder as a result of a present or former connection between such Noteholder and the jurisdiction of the Governmental Authority imposing such tax or any political

 

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subdivision or taxing authority thereof or therein (other than any such connection arising solely from such Noteholder’s having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Secured Note Document). If any such non-excluded taxes (such taxes, excluding Excluded Taxes, “ Non-Excluded Taxes ”) are required to be withheld from any amounts payable by the Issuer to a Noteholder hereunder, the amounts so payable to such Noteholder shall be increased so that after making or allowing for all such required withholdings (including withholdings applicable to additional amounts payable under this Section 2.12) such Noteholder receives an amount equal to the sum it would have received had no such withholdings been required; provided , however , that the Issuer shall not be required to increase any such amounts payable to a Noteholder with respect to any Non-Excluded Taxes that are (i) attributable to such Noteholder’s failure to comply with the requirements of paragraph (d) of this Section 2.12, (ii) taxes imposed by way of withholding on net or gross income, but not excluding such taxes arising as a result of a change in Applicable Law occurring after (A) the date that such Noteholder became a party to this Agreement (unless after that date such Noteholder has designated a new lending office, in which case sub-clause (C) below shall apply), or (B) with respect to an assignment, acquisition or grant of a participation, the effective date of such assignment, acquisition or participation, except to the extent that such Noteholder’s predecessor was entitled to such amounts, or (C) with respect to the designation of a new lending office, the effective date of such designation, except to the extent such Noteholder was entitled to receive such amounts with respect to its previous lending office, and (iii) taxes resulting from such Noteholder’s gross negligence or willful misconduct (collectively, and together with the taxes excluded by the first sentence of this Section 2.12, “ Excluded Taxes ”).

(b) In addition, the Issuer shall pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law.

(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Issuer, as promptly as possible thereafter, the Issuer shall send to the relevant Noteholder a certified copy of an original official receipt received by the Issuer showing payment thereof (or if an official receipt is not available, such other evidence of payment as shall be reasonably satisfactory to such Noteholder). If the Issuer fails to pay any Non-Excluded Taxes or Other Taxes required to be paid by the Issuer under this Section 2.12 when due to the appropriate taxing authority or fails to remit to a Noteholder the required receipts or other required documentary evidence, the Issuer shall indemnify such Noteholder and hold such Noteholder harmless against any such Non-Excluded Taxes or Other Taxes and for any incremental taxes, interest or penalties that may become payable by such Noteholder as a result of any such failure to remit or pay. The agreements in this Section 2.12 shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable hereunder.

(d) Each Noteholder (or any Transferee) (other than the United States government (including the Treasury)) that either (A) is not incorporated under the laws of the United States, any state thereof, or the District of Columbia or (B) whose name does not include “Incorporated,” “Inc.,” “Corporation,” “Corp.,” “P.C.,” “insurance company,” or “assurance company” (a “ Non-U.S. Noteholder ”) shall deliver to the Issuer, so long as such Noteholder is legally entitled to do so, two originals of either U.S. Internal Revenue Service Form W-9, Form W-8BEN, Form W-8EXP, Form W-8ECI, or in the case of a Non-U.S. Noteholder claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the

 

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Code with respect to payment of “portfolio interest”, a Form W-8BEN (along with a statement as to certain requirements in order to claim an exemption for “portfolio interest” reasonably acceptable to the Issuer), or Form W-8IMY (with applicable attachments), or any subsequent versions thereof or successors thereto, properly completed and duly executed by such Non-U.S. Noteholder claiming a complete exemption from (or reduced rate of) United States federal withholding tax on all payments by the Issuer under this Agreement or any other Secured Note Document. In addition, each Noteholder shall provide any other U.S. tax forms (with applicable attachments) as will reduce or eliminate United States federal withholding tax on payments by the Issuer under this Agreement or any other Secured Note Document. Each Noteholder (other than the United States government (including the Treasury)) shall provide the appropriate documentation under this clause (d) at the following times: (1) prior to the first Payment Date after becoming a party to this Agreement, (2) upon a change in circumstances or upon a change in law, in each case, requiring or making appropriate a new or additional form, certificate or documentation, (3) upon or before the expiration, obsolescence or invalidity of any documentation previously provided to the Issuer and (4) upon reasonable request by the Issuer. If a Noteholder is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Issuer is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement, then such Noteholder shall deliver to the Issuer, at the time or times prescribed by Applicable Law or reasonably requested by the Issuer, such properly completed and executed documentation as will permit such payments to be made without withholding or at a reduced rate, provided that such Noteholder is legally entitled to complete, execute and deliver such documentation and in the Noteholder’s reasonable judgment such completion, execution or submission would not materially prejudice the legal position of such Noteholder.

(e) If a Noteholder determines that it has received a refund, credit, or other reduction of taxes in respect of any Non-Excluded Taxes or Other Taxes paid by the Issuer, as to which it has been indemnified by the Issuer, or with respect to which the Issuer has paid additional amounts pursuant to this Section 2.12, such Noteholder shall within 60 days from the date of actual receipt of such refund or the filing of the tax return in which such credit or other reduction results in a lower tax payment, pay over such refund or the amount of such tax reduction to the Issuer (but only to the extent of such Non-Excluded Taxes or Other Taxes paid by the Issuer, indemnity payments made by the Issuer with respect to such Non-Excluded Taxes or Other Taxes, or additional amounts paid by the Issuer with respect to such Non-Excluded Taxes or Other Taxes, as applicable), net of all out of pocket expenses of such Noteholder, and without interest (other than interest paid by the relevant Governmental Authority with respect to such refund). Notwithstanding anything to the contrary in this Agreement, upon the request of a Noteholder, the Issuer agrees to repay any amount paid over to the Issuer pursuant to the immediately preceding sentence (plus penalties, interest, or other charges) if such Noteholder is required to repay such amount to the taxing Governmental Authority. This paragraph shall not be construed to (i) interfere with the rights of any Noteholder to arrange its tax affairs in whatever manner it sees fit, (ii) obligate any Noteholder to claim any tax refund, (iii) require any Noteholder to make available its tax returns (or any other information relating to its taxes or any computation with respect thereof which it deems in its sole discretion to be confidential) to the Issuer or any other Person, or (iv) require any Noteholder to do anything that would in its sole discretion prejudice its ability to benefit from any other refunds, credits, reliefs, remissions or repayments to which it may be entitled.

 

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(f) Each Noteholder that is an Assignee shall be bound by this Section 2.12.

(g) The agreements contained in this Section 2.12 shall survive the termination of this Agreement or any other Secured Note Document and the payments contemplated hereunder or thereunder.

2.13. Requirements of Law . (a) If any Requirement of Law or any change in the interpretation or application thereof or compliance by a Noteholder with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:

(i) shall subject a Noteholder to any tax of any kind whatsoever with respect to this Agreement or the Notes or change the basis of taxation of payments to a Noteholder in respect thereof (provided that, this clause (i) shall not apply to any withholding taxes or taxes covered by Section 2.12);

(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory advance or similar requirement or otherwise impose any cost on a Noteholder in connection with holding the Notes or other extensions of credit;

(iii) shall impose on a Noteholder any other condition;

(iv) and the result of any of the foregoing is to increase the cost to such Noteholder, by an amount which such Noteholder deems to be material, of holding the Notes or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Issuer shall promptly pay such Noteholder such additional amount or amounts as will compensate such Noteholder for such increased cost or reduced amount receivable thereafter incurred.

(b) If a Noteholder shall have determined in its sole discretion that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Noteholder or any Person controlling such Noteholder with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Noteholder’s or such Person’s capital as a consequence of any obligations hereunder to a level below that which such Noteholder or such Person (taking into consideration such Noteholder’s or such Person’s policies with respect to capital adequacy) by an amount deemed by such Noteholder to be material, then from time to time, the Issuer shall promptly pay to such Noteholder such additional amount or amounts as will thereafter compensate such Noteholder for such reduction.

(c) If a Noteholder becomes entitled to claim any additional amounts pursuant to this Section 2.13, it shall promptly notify the Issuer of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this Section 2.13 submitted by such Noteholder to the Issuer shall be conclusive in the absence of manifest error.

 

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SECTION 3

REPRESENTATIONS AND WARRANTIES

To induce the Initial Noteholder to enter into this Agreement, each Issuer Party represents to the Initial Noteholder, with respect to itself and each of its Subsidiaries that is a North American Group Member, that as of the Effective Date:

3.1. Existence . Each North American Group Member (a) is a corporation, limited partnership or limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has all requisite corporate or other power, and has all governmental licenses, authorizations, consents and approvals, necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect, (c) is qualified to do business and is in good standing in all other jurisdictions in which the nature of the business conducted by it makes such qualification necessary, except where failure so to qualify would not be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect, and (d) is in compliance in all material respects with all Requirements of Law.

3.2. Financial Condition . GM Oldco has heretofore furnished to the Initial Noteholder a copy of its audited Consolidated balance sheet as at December 31, 2008, with the opinion thereon of Deloitte & Touche LLP or such other independent auditor acceptable to the Initial Noteholder, a copy of which has been provided to the Initial Noteholder. GM Oldco has also heretofore furnished to the Initial Noteholder the related Consolidated statements of equity (deficit) and of cash flows for GM Oldco and its Consolidated Subsidiaries for its most recent fiscal year, setting forth in comparative form the same information for the previous year. All such financial statements are materially complete and correct and fairly present the Consolidated financial condition of GM Oldco and its Consolidated Subsidiaries and the Consolidated results of their operations for the fiscal year ended on said date, all in accordance with GAAP applied on a consistent basis.

3.3. Litigation . Except as set forth on Schedule 3.3 hereto or otherwise disclosed by a Responsible Officer in writing to the Initial Noteholder from time to time, there are no actions, suits, arbitrations, investigations or proceedings pending or, to its knowledge, threatened against any Issuer Party or any of their Subsidiaries or affecting any of their respective Property before any Governmental Authority, (i) as to which individually or in the aggregate there is a reasonable likelihood of an adverse decision which could reasonably be expected to have a Material Adverse Effect or (ii) which questions the validity or enforceability of this Agreement or any of the other Secured Note Documents or any action to be taken in connection with the transactions contemplated hereby or thereby and could reasonably be expected to have a Material Adverse Effect.

3.4. No Breach . Neither the execution and delivery of the Secured Note Documents nor the consummation of the transactions therein contemplated in compliance with the terms and provisions thereof will (a) conflict with or result in a breach of (i) the charter, by laws, certificate of incorporation, operating agreement or similar organizational document of any

 

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North American Group Member, (ii) any Requirement of Law, (iii) any Applicable Law, rule or regulation, or any order, writ, injunction or decree of any Governmental Authority, (iv) any material Contractual Obligation to which any Issuer Party is a party or by which any of them or any of their Property is bound or to which any of them or any of their Property is subject, or (b) constitute a default under any material Contractual Obligation, or (c) (except for Permitted Liens) result in the creation or imposition of any Lien upon any property of any Issuer Party pursuant to the terms of any such agreement or instrument.

3.5. Action, Binding Obligations . (i) Each Issuer Party has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations under each of the Secured Note Documents to which it is a party; (ii) the execution, delivery and performance by each Issuer Party of each of the Secured Note Documents to which it is a party has been duly authorized by all necessary corporate or other action on its part; and (iii) each Secured Note Document has been duly and validly executed and delivered by each Issuer Party party thereto and constitutes a legal, valid and binding obligation of each Issuer Party party thereto, enforceable against such Issuer Party in accordance with its terms, subject to the Bankruptcy Exceptions.

3.6. Approvals . No authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority, or any other Person, are necessary for the execution, delivery or performance by each Issuer Party of the Secured Note Documents to which it is a party for the legality, validity or enforceability thereof, except for filings and recordings or other actions in respect of the Liens pursuant to the Collateral Documents, unless the same has already been obtained and provided to the Initial Noteholder. The execution, delivery and performance of the Transaction Documents do not and will not require any consent, approval, authorization or other order of, action by, filing with, or notification to, any Governmental Authority, except consents, approvals, authorizations, filings and notices that have been obtained or made and which are in full force and effect or which are not required by the terms of the Transaction Documents to be in effect prior to the Effective Date, except where the failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not prevent or materially delay the consummation of the Related Transactions and would not have a Purchaser Material Adverse Effect (as defined in the Master Transaction Agreement).

3.7. Taxes . Each North American Group Member has timely filed or caused to be filed all federal, state and other material tax returns that are required to be filed and all such tax returns are true and correct in all material respects and such North American Group Member has timely paid all material taxes levied or imposed on it or its property (whether or not shown to be due and payable on said returns) or on any assessments made against it or any of its property and all material other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any taxes, fees or other charges the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been provided on the books of the relevant North American Group Member). The charges, accruals and reserves on the books of each North American Group Member in respect of taxes and other governmental charges are, in the opinion of such North American Group Member, adequate; any taxes, fees and other governmental charges payable by any North American Group Member in connection with the execution and delivery of the

 

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Secured Note Documents have been paid; no tax Lien (except for any Permitted Liens) has been filed with respect to any North American Group Member or property of any North American Group Member; each North American Group Member has satisfied all of its material tax withholding obligations; and no North American Group Member has ever “participated” in a “listed transaction” within the meaning of Treasury Regulation section 1.6011-4.

3.8. Investment Company Act . None of the Issuer Parties is required to register as an “investment company”, or is a company “controlled” by a Person required to register as an “investment company”, within the meaning of the Investment Company Act of 1940, as amended. No Issuer Party is subject to any Federal or state statute or regulation which limits its ability to incur Indebtedness.

3.9. [Intentionally Omitted] .

3.10. Chief Executive Office; Chief Operating Office . The chief executive office and the chief operating office on the Effective Date for each Issuer Party is located at the location set forth on Schedule 3.10 hereto.

3.11. Location of Books and Records . The location where the Issuer Parties keep their books and records including all Records relating to their business and operations and the Collateral are located in the locations set forth in Schedule 3.11 .

3.12. True and Complete Disclosure . The information, reports, financial statements, exhibits and schedules furnished by or on behalf of any North American Group Member to the Initial Noteholder or its agents or representatives in connection with the negotiation, preparation or delivery of this Agreement and the other Secured Note Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading, it being understood that in the case of projections, such projections are based on reasonable estimates, on the date as of which such information is stated or certified. All information furnished after the date hereof by or on behalf of any North American Group Member to the Initial Noteholder in connection with this Agreement and the other Secured Note Documents and the transactions contemplated hereby and thereby will be true, complete and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified. There is no fact known to a Responsible Officer of any North American Group Member that, after due inquiry, could reasonably be expected to have a Material Adverse Effect that has not been disclosed herein, in the other Secured Note Documents or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to the Initial Noteholder for use in connection with the transactions contemplated hereby or thereby.

3.13. ERISA.

(a) (i) Any Benefit Plan that is intended to be a tax-qualified plan of any North American Group Member has received a favorable determination letter and such North American Group Member does not know of any reason why such letter should be revoked;

 

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(ii) the North American Group Members and each of their respective ERISA Affiliates are in compliance with the applicable provisions of ERISA and the Code and the regulations and published interpretations thereunder;

(iii) (A) as of December 31, 2008, no ERISA Event has occurred that could reasonably be expected to result in liability to any North American Group Member or any ERISA Affiliate in excess of $2,000,000,000, (B) as of the Effective Date, no ERISA Event other than a determination that a Plan is “at risk” (within the meaning of Section 302 of ERISA) has occurred or is reasonably likely to occur that could reasonably be expected to result in liability to any North American Group Member or ERISA Affiliate in excess of $2,000,000,000, (C) as of December 31, 2008, the present value of all benefit liabilities of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not exceed the fair market value of the assets of all such underfunded Plans by more than $13,000,000,000, and (D) as of the Effective Date, there is not, and there is not reasonably expected to be, any Withdrawal Liability from, or any obligation or liability (direct or indirect) with respect to, any Multiemployer Plan;

provided that, the representations set forth in the preceding clauses (i) through (iii) inclusive shall continue to be true and correct on each day that the Notes are outstanding pursuant to the Agreement except to the extent that any such change or failure when aggregated with all other changes or failures in the preceding clauses (i) through (iii) inclusive of this Section 3.13(a), would not be reasonably expected to result in a Material Adverse Effect.

(b) There are no Plans or other arrangements which would result in the payment to any employee, former employee, individual consultant or director of any amounts or benefits upon the consummation of the transactions contemplated herein or the exercise by the Approving Party of any right or remedy contemplated herein other than de minimis amounts under incentive arrangements. Assets of the North American Group Members or any ERISA Affiliate are not “plan assets” within the meaning of the DOL Regulation Section 2510.3-101 as amended by section 3(42) of ERISA.

3.14. [Intentionally Omitted].

3.15. Subsidiaries . All of the Subsidiaries of the Issuer at the date hereof are listed on Schedule 3.15 , which schedule sets forth the name and jurisdiction of formation of each Subsidiary and, as to each such Subsidiary, the percentage of each class of Capital Stock owned by the Issuer or any of its Subsidiaries.

3.16. Capitalization . One hundred percent (100%) of the issued and outstanding Capital Stock of each North American Group Member (other than Issuer) is owned by the Persons listed on Schedule 3.16 and, to the knowledge of each Issuer Party, such Capital Stock is owned by such Persons, free and clear of all Liens other than Permitted Liens. No Issuer Party has issued or granted any options or rights with respect to the issuance of its respective Capital Stock which are presently outstanding except as set forth on Schedule 3.16 hereto.

 

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3.17. Fraudulent Conveyance . Each Issuer Party will benefit from the Notes contemplated by this Agreement. No Issuer Party is incurring Indebtedness or transferring any Collateral with any intent to hinder, delay or defraud any of its creditors.

3.18. USA PATRIOT Act . (a) No North American Group Member nor any of its respective Affiliates over which it exercises management control (a “ Controlled Affiliate ”) is a Prohibited Person, and such Controlled Affiliates are in compliance with all applicable orders, rules, regulations and recommendations of OFAC.

(b) No North American Group Member nor any of its members, directors, officers, employees, parents, Subsidiaries or Affiliates: (1) is subject to U.S. or multilateral economic or trade sanctions currently in force; (2) is owned or controlled by, or act on behalf of, any governments, corporations, entities or individuals that are subject to U.S. or multilateral economic or trade sanctions currently in force; or (3) is a Prohibited Person or is otherwise named, identified or described on any blocked persons list, designated nationals list, denied persons list, entity list, debarred party list, unverified list, sanctions list or other list of individuals or entities with whom U.S. persons may not conduct business, including but not limited to lists published or maintained by OFAC, lists published or maintained by the U.S. Department of Commerce, and lists published or maintained by the U.S. Department of State.

(c) None of the Collateral is traded or used, directly or indirectly by a Prohibited Person or is located or organized (in the case of a Pledged Entity) in a Prohibited Jurisdiction.

(d) Each North American Group Member has established an anti-money laundering compliance program as required by all applicable anti-money laundering laws and regulations, including without limitation the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56) (the “ USA PATRIOT Act ”).

3.19. Embargoed Person . As of the date hereof and at all times throughout the term of the Notes, (a) none of any North American Group Member’s funds or other assets constitute property of, or are beneficially owned, directly or indirectly, by any person, entity or government subject to trade restrictions under U.S. law, including but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq. , The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq. (the “ Trading With the Enemy Act ”), any of the foreign assets control regulations of the Treasury (31 C.F.R., Subtitle B, Chapter V, as amended) (the “ Foreign Assets Control Regulations ”) or any enabling legislation or regulations promulgated thereunder or executive order relating thereto (which for the avoidance of doubt shall include but shall not be limited to (i) Executive Order No. 13224, effective as of September 24, 2001 and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the “ Executive Order ”) and (ii) the USA PATRIOT Act), with the result that the investment in the Issuer (whether directly or indirectly), is prohibited by law or any Notes issued to a Noteholder is in violation of law (“ Embargoed Person ”); (b) no Embargoed Person has any interest of any nature whatsoever in it with the result that the investment in it (whether directly or indirectly), is prohibited by law or the Notes are in violation of law; (c) none of its funds have been derived from any unlawful

 

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activity with the result that the investment in it (whether directly or indirectly), is prohibited by law or any Notes is in violation of law; and (d) neither it nor any of its Affiliates (i) is or will become a “blocked person” as described in the Executive Order, the Trading With the Enemy Act or the Foreign Assets Control Regulations or (ii) engages or will engage in any dealings or transactions, or be otherwise associated, with any such “blocked person”. For purposes of determining whether or not a representation with respect to any indirect ownership is true or a covenant is being complied with under this Section 3.19, no North American Group Member shall be required to make any investigation into (i) the ownership of publicly traded stock or other publicly traded securities or (ii) the ownership of assets by a collective investment fund that holds assets for employee benefit plans or retirement arrangements.

3.20. [Intentionally Omitted] .

3.21. Representations Concerning the Collateral . (a) No Issuer Party has assigned, pledged, conveyed, or encumbered any Collateral to any other Person (other than Permitted Liens) and immediately prior to the pledge of any such Collateral, an Issuer Party was the sole owner of such Collateral and had good and marketable title thereto, free and clear of all Liens (other than Permitted Liens), and no Person, other than the Initial Noteholder has any Lien (other than Permitted Liens) on any Collateral. No security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Collateral which has been signed by any Issuer Party or which any Issuer Party has authorized any other Person to sign or file or record, is on file or of record with any public office, except such as may have been filed by or on behalf of an Issuer Party in favor of the Initial Noteholder pursuant to the Secured Note Documents or in respect of applicable Permitted Liens.

(b) The provisions of the Secured Note Documents are effective to create in favor of the Initial Noteholder a valid security interest in all right, title, and interest of each Issuer Party in, to and under the Collateral, subject only to applicable Permitted Liens.

(c) Upon the filing of financing statements on Form UCC-1 naming the Initial Noteholder as “Secured Party” and each Issuer Party as “Debtor”, and describing the Collateral, in the jurisdictions and recording offices listed on Schedule 3.21 attached hereto, the security interests granted in the Collateral pursuant to the Collateral Documents will constitute perfected first-priority security interests under the Uniform Commercial Code in all right, title and interest of the applicable Issuer Party in, to and under such Collateral, which can be perfected by filing under the Uniform Commercial Code, in each case, subject to applicable Permitted Liens.

(d) Each Issuer Party has and will continue to have the full right, power and authority, to pledge the Collateral, subject to Permitted Liens, and the pledge of the Collateral may be further assigned by the Initial Noteholder without the consent of any Issuer Party to the extent provided in Section 8.6.

3.22. Labor Matters . (a) There are no strikes against any North American Group Member pending or, to the knowledge of any North American Group Member, threatened; (b) hours worked by and payment made to employees of each North American Group Member have not been in violation of the Fair Labor Standards Act or any other applicable Requirement of Law dealing with such matters; and (c) all payments due from each North

 

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American Group Member on account of employee health and welfare benefits, or health or welfare benefits to any former employees of any North American Group Member or for which any North American Group Member has any liability or obligation have been paid or accrued as a liability on the books of such North American Group Member in accordance with GAAP, except, in the case of each of the foregoing clauses (a), (b) and (c), where such strike or such failure to comply or to make or accrue such payments could not reasonably be expected to have a Material Adverse Effect.

3.23. Survival of Representations and Warranties . All of the representations and warranties of or in respect of such North American Group Member set forth in this Section 3 and elsewhere in this Agreement and in the other Secured Note Documents shall survive for so long as any amount remains owing to the Noteholders under this Agreement or any of the other Secured Note Documents by any Issuer Party. All representations, warranties, covenants and agreements made in this Agreement or in the other Secured Note Documents by or in respect of each North American Group Member shall be deemed to have been relied upon by the Noteholders notwithstanding any investigation heretofore or hereafter made by the Noteholders or on its behalf.

3.24. [Intentionally Omitted] .

3.25. Intellectual Property . (a) Except as would not reasonably be expected to have a Material Adverse Effect, each of the North American Group Members owns and controls, or otherwise possesses sufficient rights to use, all Intellectual Property necessary for the conduct of its business in substantially the same manner as conducted as of the date hereof. Schedule 3.25 hereto sets forth a true and complete list as of the date hereof of all Patents applications and issued Patents, and Trademark registrations and applications, and domain name registrations included in the Trademarks, owned by each North American Group Member. To the knowledge of each North American Group Member, Schedule 3.25 hereto also sets forth a true and complete list of all registered Copyrights for which any North American Group Member is the owner of record, provided however , except for material Copyrights listed on Schedule 3.25 , no representation is made that a North American Group Member owns title to any particular copyright registration listed therein. Notwithstanding anything to the contrary contained herein, each North American Group Member (other than any Foreign 956 Subsidiary or Other Foreign 956 Subsidiary) hereby represents that it grants a security interest contemplated by this agreement to all Copyrights, that it owns all material Copyrights, and, to the extent that any such material Copyrights are registered, a security interest may be recorded against them. Except as would not reasonably be expected to have a Material Adverse Effect, all Intellectual Property, other than licenses, of the North American Group Members is subsisting and in full force and effect, has not been adjudged invalid or unenforceable, is valid and enforceable and has not been abandoned in whole or in part. Except as would not reasonably be expected to have a Material Adverse Effect, no such Intellectual Property owned by any North American Group Member is the subject of any licensing or franchising agreement that prohibits or restricts any North American Group Member’s conduct of business as presently conducted, or the transfer or pledge as collateral of such Intellectual Property. Except as would not reasonably be expected to have a Material Adverse Effect, (i) the Intellectual Property owned by the North American Group Members does not infringe or conflict with the intellectual property rights of any Person, (ii) to the best knowledge of each North American Group Member, no North American Group

 

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Member is now infringing or in conflict with any intellectual property rights of any Person and no other Person is now infringing or in conflict with any such properties, assets and rights, owned or used by or licensed to any North American Group Member. Except as would not reasonably be expected to have a Material Adverse Effect, no North American Group Member has received any notice that it is violating or has violated the Trademarks, Patents, Copyrights, inventions, trade secrets, proprietary information and technology, know-how, formulae, rights of publicity or other Intellectual Property rights of any third party.

(b) Except as would not reasonably be expected to have a Material Adverse Effect, each License now existing is, and each other License will be, the legal, valid and binding obligation of the parties thereto, enforceable against such parties in accordance with its terms. Except as would not reasonably be expected to have a Material Adverse Effect, to the knowledge of such North American Group Member, no default thereunder by any such party has occurred, nor does any defense, offset, deduction, or counterclaim exist thereunder in favor of any such party.

3.26. JV Agreements . (a) Set forth on Schedule 3.26 is a complete and accurate list as of the date hereof of all JV Agreements, showing the parties and the dates of amendments and modifications thereto.

(b) Each JV Agreement (i) is in full force and effect and is binding upon and enforceable against each party thereto, (ii) has not been otherwise amended or modified, except as set forth on Schedule 3.26 and (iii) is not in default and no event has occurred that, with the passage of time and/or the giving of notice, or both, would constitute a default thereunder, except in the case of each of clauses (i) through (iii) above, to the extent any such default would not reasonably be expected to have a Material Adverse Effect.

3.27. [Intentionally Omitted] .

3.28. Excluded Collateral . Set forth on Annex I to Schedule 3.28 is a complete and accurate list as of the Effective Date of all Excluded Collateral that is Capital Stock of domestic joint ventures, Domestic Subsidiaries, “first-tier” foreign joint ventures, and Foreign 956 Subsidiaries.

3.29. Mortgaged Real Property . After giving effect to the recording of the Mortgages, real property identified on Schedule 1.1C shall be subject to a recorded first lien mortgage, deed of trust or similar security instrument (subject to Permitted Liens).

3.30. No Change . Since the Effective Date, there has been no development or event that has had or could reasonably be expected to have a Material Adverse Effect.

3.31. Certain Documents . The Issuer has delivered to the Initial Noteholder a complete and correct copy of the Transaction Documents, including any amendments, supplements or modifications with respect to any of the foregoing.

3.32. Insurance . The Issuer has maintained on behalf of itself and each Group Member (other than Excluded Subsidiaries), as appropriate, with insurance companies that the Issuer believes (in the good faith judgment of the Issuer) are financially sound and responsible or

 

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through self-insurance, insurance in amounts reasonable and prudent in light of the size and nature of the Issuer’s business and against at least such risks (and with such risk retentions) as the Issuer believes (in the good faith judgment of the Issuer) are reasonable in light of the size and nature of its business.

SECTION 4

CONDITIONS PRECEDENT

4.1. Conditions to Effectiveness . The effectiveness of this Agreement is subject to the satisfaction, prior to or concurrently on the Effective Date, of the following conditions precedent:

(a) Secured Note Documents . The Initial Noteholder shall have received the following documents, which shall be in form satisfactory to the Initial Noteholder:

(i) this Agreement executed and delivered by the Issuer;

(ii) the Guaranty, executed and delivered by each Guarantor;

(iii) the Equity Pledge Agreement, executed and delivered by each Pledgor;

(iv) the Intellectual Property Pledge Agreement, executed and delivered by each Issuer Party party thereto;

(v) the Environmental Agreement, executed and delivered by each Issuer Party party thereto; and

(vi) a note of the Issuer, substantially in the form of Exhibit G (the “ Initial Note ”), with appropriate insertions as to date and principal amount.

(b) Section 363 Sale Order . The sale of certain assets and the assignment and assumption of certain contracts of Sellers pursuant to Section 363 of the United States Bankruptcy Code (the “ Section 363 Sale ”) shall have been approved by the Bankruptcy Court pursuant to an order (the “ Section 363 Sale Order ”) that is in form and substance satisfactory to the Initial Noteholder (the Initial Noteholder acknowledges that the Sale Order issued by the Bankruptcy Court on July 5, 2009 is satisfactory) and that has been entered and not stayed, which shall, among other things, (i) approve the Section 363 Sale, (ii) authorize the assumption by and assignment to the Issuer and its Subsidiaries of the contracts included in the Section 363 Sale pursuant to the procedure approved by the Bankruptcy Court on June 1, 2009, (iii) approve the terms and conditions of the Master Transaction Agreement and the other Transaction Documents and other agreements, including the UAW Retiree Settlement Agreement, (iv) provide that the Issuer and its Subsidiaries shall acquire the assets and contracts being transferred pursuant to the Section 363 Sale free and clear of all liens, claims, encumbrances and other obligations (other than those liens, claims, encumbrances and other obligations expressly assumed pursuant to the Section 363 Sale), and (v) contain such other terms, conditions and

 

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provisions as are customary in transactions similar to the Section 363 Sale, including, without limitation, findings that the Issuer and its Subsidiaries are good faith purchasers pursuant to Section 363 of the Bankruptcy Code, that the Section 363 Sale is not subject to fraudulent transfer or similar challenge, and limitations on the Issuer and its Subsidiaries’ successor liabilities.

(c) Related Transactions . The Transaction Documents shall have been duly executed and delivered by the parties thereto, all conditions precedent to the Related Transactions set forth in the Transaction Documents which are required under the Transaction Documents to be consummated prior to or substantially contemporaneously with the effectiveness of this Agreement shall have been satisfied, such Related Transactions shall have been consummated pursuant to such Transaction Documents substantially contemporaneously with the conditions precedent set forth in this Section 4.1.

(d) ERISA Exemption . The Issuer and the Initial Noteholder shall have reasonable assurance that the Issuer will receive an exemption from the Department of Labor (the “ DOL ”) to permit the Initial Noteholder to acquire, hold and dispose of the Initial Note, without violating the prohibited transaction provisions under ERISA and without the imposition of an excise tax under Section 4975 of the Code (the “ ERISA Exemption ”).

(e) Lien Searches . The Initial Noteholder shall have received the results of a recent Lien search in each relevant jurisdiction with respect to the Issuer and the Guarantors, and such search shall reveal no Liens on any of the assets of the Issuer or the Guarantors except for Liens permitted by this Agreement or Liens to be discharged on or prior to the Effective Date pursuant to documentation satisfactory to the Initial Noteholder.

(f) [Intentionally omitted].

(g) [Intentionally omitted].

(h) Budgets . The Issuer shall have delivered to the Initial Noteholder a Budget covering the remainder of fiscal year 2009 through the year ending December 31, 2014.

(i) Canadian Facility . The Canadian Facility shall have become (or simultaneously with this Agreement, shall become) effective.

(j) [Intentionally omitted].

(k) [Intentionally omitted].

(l) Consents . The Initial Noteholder shall have received all necessary material third party and governmental waivers and consents, and each Issuer Party shall have complied with all Applicable Laws, decrees and material agreements.

(m) No Default . No Default or Event of Default shall exist on the Effective Date or after giving effect to the transactions contemplated to be consummated on the Effective Date pursuant to the Transaction Documents and the Secured Note Documents.

 

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(n) Accuracy of Representations and Warranties . All representations and warranties made by or with respect to the North American Group Members in or pursuant to the Secured Note Documents shall be true and correct in all material respects.

(o) Closing Certificate; Certified Certificate of Incorporation; Good Standing Certificates . The Initial Noteholder shall have received (i) a certificate of the secretary or assistant secretary of each Issuer Party, dated the Effective Date, substantially in the form of Exhibit B-1, with agreed insertions and attachments, including the certificate of incorporation (or equivalent organizational document) of each Issuer Party, certified by the relevant authority of the jurisdiction of organization of such Issuer Party, (ii) a long-form good standing certificate for each Issuer Party from its jurisdiction of organization or, for each such certificate delivered to the Treasury pursuant to the DIP Credit Agreement, a copy of such long-form good standing certificate together with a bring down good standing certification from the relevant Issuer Party’s jurisdiction of organization and (iii) a certificate of the Issuer and each Guarantor, dated the Effective Date, to the effect that the conditions set forth in this Section 4.1 have been satisfied, substantially in the form of Exhibit B-2.

(p) Legal Opinions . The Initial Noteholder shall have received the executed legal opinion of (i) Weil, Gotshal and Manges LLP, New York counsel to the Issuer Parties, substantially in the form of Exhibit E-1, as to New York law, United States federal law and the Delaware General Corporation Law, (ii) in-house counsel to the Issuer Parties, substantially in the form of Exhibit E-2, (iii) Cadwalader, Wickersham & Taft LLP, New York counsel to the Issuer, substantially in the form of Exhibit E-3, as to New York law, (iv) Honigman Miller Schwartz & Cohn LLP, Michigan counsel to Grand Pointe Holdings, Inc., a Guarantor, substantially in the form of Exhibit E-4, as to Michigan law, and (v) Gunderson Law Firm, a Professional Corporation, counsel to GM GEFS L.P., a Guarantor, substantially in the form of Exhibit E-5, as to Nevada law and United States federal law.

(q) [Intentionally omitted].

(r) UST Facility . The UST Facility shall have become (or simultaneously with this Agreement, shall become) effective and the Initial Noteholder shall have received all documents, instruments and related agreements in connection with the UST Facility.

(s) Intercreditor Agreement . The Intercreditor Agreement shall be in form and substance satisfactory to the Initial Noteholder and shall have become (or simultaneously with this Agreement, shall become) effective.

(t) Business Plan . The Initial Noteholder shall have received a copy of the Issuer’s business plan (the business plan delivered to the Initial Noteholder on the Effective Date and attached hereto as Annex II, the “ Business Plan ”).

(u) Canadian Pension and OPEB Loan . The Initial Noteholder shall have received evidence satisfactory to the Approving Party that, on or prior to the Effective Date, (i) the Canadian Lender shall have irrevocably committed (A) to fund loans to the Issuer in an aggregate amount of $3,887,000,000 to support certain pension and other pension and employment benefits obligations of GM Canada within three Business Days after the Effective

 

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Date and (B) immediately upon funding of such loans, to assign such loans to the Canadian Subscriber, and (ii) the Canadian Subscriber shall have irrevocably agreed to use such assigned loans to subscribe on the date of assignment for the Canadian Subscriber’s remaining shares under the Canadian Subscription Agreement.

SECTION 5

AFFIRMATIVE COVENANTS

Each Issuer Party jointly and severally covenants and agrees that, so long as the Notes are outstanding and until payment in full of all Obligations, each Issuer Party shall and shall cause each North American Group Member and each of its applicable Subsidiaries to comply with the following covenants:

5.1. Financial Statements . The Issuer shall deliver to the Initial Noteholder:

(a) as soon as reasonably possible after receipt by the Issuer, a copy of any material report that may be prepared and submitted by the Issuer or the applicable North American Group Member’s independent certified public accountants at any time;

(b) [intentionally omitted];

(c) promptly upon their becoming available, copies of such other financial statements and reports, if any, as any North American Group Member may be required to publicly file with the SEC or any similar or corresponding governmental commission, department or agency substituted therefor, or any similar or corresponding governmental commission, department, board, bureau, or agency, federal or state, including any filing made pursuant to Section 5.26;

(d) as soon as reasonably possible, and in any event within five Business Days after a Responsible Officer of a North American Group Member knows or has reason to believe, that any of the events or conditions specified below with respect to any Plan or Multiemployer Plan has occurred or exists, a statement signed by a Responsible Officer of the relevant North American Group Member setting forth details respecting such event or condition and the action, if any, that such North American Group Member or any ERISA Affiliate proposes to take with respect thereto (and a copy of any report or notice required to be filed with or given to PBGC by such Issuer Party or an ERISA Affiliate with respect to such event or condition);

(i) any Reportable Event which could reasonably be expected to result in a material liability, any failure to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA with respect to a Plan, including, without limitation, the failure to make on or before its due date a required installment under the Code or ERISA regardless of the issuance of any waivers in accordance with Section 412(d) of the Code, any failure to make any material contribution to a Multiemployer Plan; and any request for a waiver under Section 412(d) of the Code for any Plan;

 

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(ii) the distribution under Section 4041(c) of ERISA of a notice of intent to terminate any Plan or any action taken by any Issuer Party or an ERISA Affiliate to terminate any Plan;

(iii) the institution by PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by any Issuer Party or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by PBGC with respect to such Multiemployer Plan;

(iv) the complete or partial withdrawal from a Multiemployer Plan by any Issuer Party or any ERISA Affiliate that results in liability under Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary liability as a result of a purchaser default) or the receipt by any Issuer Party or any ERISA Affiliate of notice from a Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA, which could reasonably be expected to result in a material liability;

(v) the institution of a proceeding by a fiduciary of any Multiemployer Plan against any Issuer Party or any ERISA Affiliate to enforce Section 515 of ERISA, which proceeding is not dismissed in 30 days or is not subject to the automatic stay under the Bankruptcy Code, which could reasonably be expected to result in a material liability; and

(vi) any violation of section 401(a)(29) of the Code;

(e) as soon as practicable prior to the effectiveness thereof, copies of substantially final drafts of any material amendment, supplement, waiver or other modification with respect to the Transaction Documents;

(f) (i) as soon as available, but in any event within 90 days after the end of each fiscal year of the Issuer, a copy of the audited Consolidated balance sheet of the Issuer and its Consolidated Subsidiaries as at the end of such year and the related audited consolidated statements of income and of cash flows for such year, setting forth in each case in comparative form the figures as of the end of and for the previous year, reported on by Deloitte & Touche LLP or other independent certified public accountants of nationally recognized standing; and

(ii) as soon as available, but in any event not later than 45 days after the end of each of the first three quarterly periods of each fiscal year of the Issuer, the unaudited Consolidated balance sheet of the Issuer and its Consolidated Subsidiaries as at the end of such quarter and the related unaudited Consolidated statements of income and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures as of the end of and for the corresponding period in the previous year, certified by a Responsible Officer as being fairly stated in all material respects (subject to the absence of footnotes and to normal year-end audit adjustments);

 

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all such financial statements shall be complete and correct in all material respects and be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or officer, as the case may be, and disclosed therein); provided , that with respect to the quarterly financial statements to be provided for the third fiscal quarter of 2009, such financial statements shall be provided on a modified basis within the time frame set forth in clause (ii) above, with GAAP-compliant versions of such financial statements to be provided at the same time as the audited financial statements for fiscal year 2009 described in clause (i) above; and

(g) to the extent that the Issuer prepares quarterly or annual reports as to the Consolidated balance sheet of the Issuer and its Consolidated Subsidiaries as at the end of the related quarter or fiscal year (as the case may be) and the related Consolidated statements of income and of cash flows for such quarter or fiscal year (as applicable) which set forth in comparison form the figures as of the end of and for the corresponding period in the previous fiscal year (such figures for the year ending December 31, 2009 adjusted to reflect the Related Transactions), the Issuer shall promptly furnish copies of such reports to the Initial Noteholder.

5.2. Notices; Reporting Requirements . The relevant Issuer Party shall deliver written notice to the Initial Noteholder of the following:

(a) Defaults . The occurrence of any Default or Event of Default, or any event of default under any publicly filed material Contractual Obligation of any North American Group Member (other than Excluded Subsidiaries except for Financing Subsidiaries) which notice shall be given promptly after a Responsible Officer or any officer of a North American Group Member with a title of at least executive vice president becomes aware thereof and shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein;

(b) [Intentionally Omitted];

(c) [Intentionally Omitted];

(d) [Intentionally Omitted];

(e) [Intentionally Omitted];

(f) [Intentionally Omitted];

(g) [Intentionally Omitted];

(h) Compliance Certificate . On the date that is the earlier of (x) the date of delivery of the financial statements referred to in Section 5.1(f) and (y) the date such financial statements are required to be delivered by Section 5.1(f), a Compliance Certificate, executed by a Responsible Officer of the Issuer, stating that such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate;

(i) [Intentionally omitted];

 

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(j) [Intentionally omitted]; and

(k) Budget . As soon as available, and in any event no later than 45 days after the end of each fiscal year of the Issuer but only if the Issuer is required to deliver a Budget under the UST Facility, a Budget for the five immediately succeeding fiscal years.

5.3. Existence . The Issuer shall cause each North American Group Member to:

(a) except as permitted under Section 6.1 or with respect to North American Group Members that are not Material North American Group Members, preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises;

(b) [intentionally omitted];

(c) comply with the requirements of all Applicable Laws, rules, regulations and orders of Governmental Authorities if failure to comply with such requirements could be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect on any Issuer Party or the Collateral;

(d) [intentionally omitted];

(e) give the Initial Noteholder a written notice not later than ten days after the occurrence of any (i) change in the location of an Issuer Party’s chief executive office/chief place of business from that specified in Section 3.10, (ii) change in its name, identity or corporate structure (or the equivalent) or change the location where an Issuer Party maintains records with respect to the Collateral, or (iii) an Issuer Party’s reincorporation or reorganization under the laws of another jurisdiction, and deliver to the Initial Noteholder all Uniform Commercial Code financing statements and amendments as the Initial Noteholder shall request, and take all other actions deemed reasonably necessary by the Initial Noteholder to continue the Noteholders’ perfected status in the Collateral with the same or better priority; and

(f) keep in full force and effect the provisions of the Issuer Parties’ charter documents, certificate of incorporation, by-laws, operating agreements or similar organizational documents, except as permitted by Section 6.1 and for such changes that are not materially adverse to the interests of the Noteholder.

5.4. Payments of Taxes . The Issuer shall and shall cause each North American Group Member (i) to timely file or cause to be filed all federal and material state and other tax returns that are required to be filed and all such tax returns shall be true and correct and (ii) to timely pay and discharge or cause to be paid and discharged promptly all federal and material state and other taxes, assessments and governmental charges or levies imposed upon the Issuer or any of the other North American Group Members or upon any of their respective incomes or receipts or upon any of their respective properties before the same shall become in default or past due, as well as all lawful claims for labor, materials and supplies or otherwise which, if unpaid, might result in the imposition of a Lien or charge upon such properties or any part thereof; provided that it shall not constitute a violation of the provisions of this Section 5.4 if the Issuer or any of the other North American Group Members shall fail to pay any such tax, assessment,

 

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government charge or levy or claim for labor, materials or supplies which is being contested in good faith, by proper proceedings diligently pursued, and as to which adequate reserves have been provided.

5.5. [ Intentionally Omitted ].

5.6. Maintenance of Property; Insurance . The Issuer shall cause each North American Group Member to:

(a) keep all property useful and necessary in its business in good working order and condition;

(b) maintain errors and omissions insurance and blanket bond coverage in such amounts as are in effect on the Effective Date (as disclosed to the Approving Party in writing except in the event of self-insurance) and shall not reduce such coverage without the written consent of the Approving Party, and shall also maintain such other insurance with financially sound and reputable insurance companies, and with respect to property and risks of a character usually maintained by entities engaged in the same or similar business similarly situated, against loss, damage and liability of the kinds and in the amounts customarily maintained by such entities. Notwithstanding anything to the contrary in this Section 5.6, to the extent that any Issuer Party is engaged in self-insurance with respect to any of its property as of the Effective Date, such Issuer Party may, if consistent with past practices of (i) in the case of the Issuer, GM Oldco, or (ii) in the case of any other Issuer Party, such Issuer Party during such time as it was a GM Oldco Party, continue to engage in such self-insurance throughout the term of this Agreement; provided , that the Issuer Party shall promptly obtain third party insurance that conforms to the criteria in this Section 5.6 at the request of the Approving Party; and

(c) use its best efforts to protect the Intellectual Property that is material to the conduct of its business in a manner that is consistent with the value of such Intellectual Property.

5.7. Further Identification of Collateral . Each Issuer Party will furnish to the Initial Noteholder from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Initial Noteholder may reasonably request, all in reasonable detail.

5.8. Defense of Title . Each Issuer Party warrants and will defend the right, title and interest of the Noteholders in and to all Collateral against all adverse claims and demands of all Persons whomsoever, subject to (x) the restrictions imposed by the Existing Agreements to the extent that such restrictions are valid and enforceable under the applicable Uniform Commercial Code and other Requirements of Law and (y) the rights of holders of any Permitted Lien.

5.9. Preservation of Collateral . Each Issuer Party shall do all things necessary to preserve the Collateral so that the Collateral remains subject to a perfected security interest with the priority provided for such security interest under the Secured Note Documents. Without limiting the foregoing, each Issuer Party will comply with all Applicable Laws, rules and regulations of any Governmental Authority applicable to such Issuer Party or relating to the Collateral and will cause the Collateral to comply, with all Applicable Laws, rules and regulations of any such Governmental Authority, except where failure to so comply would not reasonably be expected to have a Material Adverse Effect.

 

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5.10. [ Intentionally Omitted ].

5.11. Maintenance of Licenses . Except where the failure to do so could not reasonably be likely to have a Material Adverse Effect, the Issuer shall cause each North American Group Member to (i) maintain all licenses, permits, authorizations or other approvals necessary for such Issuer Party to conduct its business and to perform its obligations under the Secured Note Documents, (ii) remain in good standing under the laws of the jurisdiction of its organization, and in each other jurisdiction where such qualification and good standing are necessary for the successful operation of such North American Group Member’s business, and (iii) shall conduct its business in accordance with Applicable Law in all material respects.

5.12. [ Intentionally Omitted ].

5.13. OFAC . At all times throughout the term of this Agreement, each Issuer Party and its Controlled Affiliates (a) shall be in full compliance with all applicable orders, rules, regulations and recommendations of OFAC and (b) shall not permit any Collateral to be maintained, insured, traded, or used (directly or indirectly) in violation of any United States statutes, rules or regulations, in a Prohibited Jurisdiction or by a Prohibited Person, and no lessee or sublessee shall be a Prohibited Person or a Person organized in a Prohibited Jurisdiction.

5.14. Investment Company . Each North American Group Member will conduct its operations in a manner which will not subject it to registration as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended from time to time.

5.15. Further Assurances . (a) The Issuer shall, and shall cause each Group Member other than Excluded Subsidiaries to, from time to time execute and deliver, or cause to be executed and delivered, such additional instruments, certificates or documents, and take such actions, as the Initial Noteholder may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and the other Secured Note Documents, or of more fully perfecting or renewing the rights of the Noteholders with respect to the Collateral (or with respect to any additions thereto or replacements or proceeds thereof or with respect to any other property or assets hereafter acquired by any applicable Group Member which may be deemed to be part of the Collateral) pursuant hereto or thereto. Upon the exercise by the Noteholders of any power, right, privilege or remedy pursuant to this Agreement or the other Secured Note Documents that requires any consent, approval, recording, qualification or authorization of any Governmental Authority, the Issuer will execute and deliver, or will cause the execution and delivery of, all applications, certifications, instruments and other documents and papers that the Noteholders may be required to obtain from the Issuer or any applicable Group Member such governmental consent, approval, recording, qualification or authorization.

(b) In furtherance and not in limitation of the foregoing, until the earlier of (i) the ninetieth day after the Effective Date and (ii) the date on which the Issuer shall incur Excluded First Lien Indebtedness, the Issuer shall execute and deliver, or cause to be executed and delivered, replacement Collateral Documents (which may be amendments, restatements,

 

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modifications or supplements of or to the Collateral Documents executed and delivered by the Issuer to the Initial Noteholder on the date hereof) as the Approving Party may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and the other Secured Note Documents, or of more fully perfecting or renewing the rights of the Noteholders with respect to the Collateral pursuant hereto and thereto. The Initial Noteholder shall have the right to consult with the Approving Party with respect to the forms of the replacement Collateral Documents.

5.16. [ Intentionally Omitted ].

5.17. [ Intentionally Omitted ].

5.18. [ Intentionally Omitted ].

5.19. [ Intentionally Omitted ].

5.20. [ Intentionally Omitted ].

5.21. [ Intentionally Omitted ].

5.22. Modification of Canadian Facility Documents and UST Facility .

(a) The Issuer shall notify the Initial Noteholder in writing of the effectiveness of any amendments, supplements, or other modifications to the documents related to the Canadian Facility not less than five Business Days, if practicable, prior to the same becoming effective (or concurrently with notice thereof to the Canadian Lender, if the Issuer gives such notice fewer than five Business Days prior to the same becoming effective).

(b) Subject to the Intercreditor Agreement, the Issuer shall notify the Initial Noteholder in writing of the effectiveness of any amendments, supplements, or other modifications to the documents related to the UST Facility not less than five Business Days, if practicable, prior to the same becoming effective (or concurrently with notice thereof to the Treasury, if the Issuer gives such notice fewer than five Business Days prior to the same becoming effective).

5.23. Additional Guarantors . Except as otherwise agreed to by the Approving Party, the Issuer shall cause each Domestic Subsidiary of a North American Group Member who becomes a Subsidiary after the Effective Date to become a Guarantor (each, an “ Additional Guarantor ”) in accordance with Section 4.24 of the Guaranty, other than (i) Excluded Subsidiaries, (ii) any Subsidiaries of GM Canada, (iii) any Foreign 956 Subsidiary, (iv) any Other Foreign 956 Subsidiary and (v) any Non-U.S. Subsidiary owned in whole or in part by a Foreign 956 Subsidiary, except in the case of clauses (i) through (iv), any Subsidiaries that were guarantors under the DIP Credit Agreement or the Existing UST Term Loan Agreements.

5.24. [ Intentionally Omitted ].

5.25. [ Intentionally Omitted ].

 

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5.26. SEC Reporting Requirements . Prior to the filing of a registration statement under the Securities Act, the Issuer shall file those reports contemplated to be filed by the Issuer pursuant to that certain no-action relief letter issued to GM Oldco by the SEC on or about the Effective Date.

5.27. [ Intentionally Omitted ].

5.28. [ Intentionally Omitted ].

5.29. [ Intentionally Omitted ].

5.30. Intellectual Property . Each Issuer Party shall use its best efforts to ensure that the Noteholders are obtaining through the Secured Note Documents sufficient rights and assets to enable a subsequent purchaser of the Collateral (subject to Permitted Liens) in a sale pursuant to its remedies under any Secured Note Document to manufacture vehicles of substantially the same quality and nature as those sold by the Issuer as of the date hereof, provided that such purchaser has access to reasonably common motor vehicle technologies and manufacturing capabilities appropriate for vehicles of such nature, and to market such vehicles through substantially similar channels as those employed by the Issuer.

5.31. Various Agreements . The Issuer shall at all times comply in all material respects with the Registration Rights Agreement and the Stockholders Agreement.

5.32. ERISA Exemption . The Issuer and the Initial Noteholder will each use its best efforts and will cooperate to ensure that the DOL will grant the ERISA Exemption.

SECTION 6

NEGATIVE COVENANTS

Each Issuer Party jointly and severally covenants and agrees that, so long as the Notes are outstanding and until payment in full of all Obligations, each Issuer Party shall and shall cause each North American Group Member and each other applicable Person to comply with the following negative covenants:

6.1. Prohibition on Fundamental Changes . No North American Group Member shall, at any time, directly or indirectly, enter into any transaction of merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) or Dispose of all or substantially all of its Property without the Approving Party’s prior consent, provided that, (a) any North American Group Member may merge with, consolidate with, amalgamate with, or Dispose of all or substantially all of its Property (and thereafter wind up or dissolve itself) to, (i) another North American Group Member or (ii) any other Person pursuant to the Transaction Documents; provided that (A) such action does not result in the material diminishment of the Collateral, (B) (x) in the case of a merger, consolidation or amalgamation with or into the Issuer, the Issuer shall be the continuing or surviving entity or, in the event that the Issuer is not the continuing or surviving entity, (1) the surviving entity expressly assumes the obligations of the Issuer under the Secured Note

 

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Documents and UST Facility and (2) the surviving entity is organized under the laws of a State in the United States, and (y) in the case of a merger, consolidation or amalgamation with or into any Guarantor, such Guarantor shall be the continuing or surviving entity or, in the event that such Guarantor is not the continuing or surviving entity, (1) the surviving entity expressly assumes the obligations of such Guarantor under the Secured Note Documents and UST Facility or promptly after the consummation of such transaction, the continuing or surviving corporation shall become a Guarantor, and (2) the surviving entity is organized under the laws of a State in the United States, and (C) any Guarantor may otherwise merge, consolidate, amalgamate into or divest of all or substantially all of its Property only to another Issuer Party.

6.2. [ Intentionally Omitted ].

6.3. [ Intentionally Omitted ].

6.4. Limitation on Liens . None of the Issuer, any U.S. Subsidiary, nor any Structured Financing Subsidiary (other than any other Excluded Subsidiary) will, create, incur, assume or suffer to exist any Lien upon any of its Property, whether now owned or hereafter acquired, except Permitted Liens.

6.5. Restricted Payments . No North American Group Member shall, (i) declare or pay any dividend (other than dividends payable solely in common Capital Stock of the Person making such dividend) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of any Capital Stock of any North American Group Member, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of any North American Group Member or (ii) optionally prepay, repurchase, redeem or otherwise optionally satisfy or defease with cash or Cash Equivalents any Indebtedness (other than any Permitted Indebtedness in accordance with this Agreement) (any such payment referred to in clauses (i) and (ii), a “ Restricted Payment ”), other than:

(a) redemptions, acquisitions or the retirement for value or repurchases (or loans, distributions or advances to effect the same) of shares of Capital Stock from current or former officers, directors, consultants and employees, including upon the exercise of stock options or warrants for such Capital Stock, or any executive or employee savings or compensation plans, or, in each case to the extent applicable, their respective estates, spouses, former spouses or family members or other permitted transferees;

(b) any Subsidiary (including an Excluded Subsidiary) may make Restricted Payments to its direct parent or to the Issuer or any Guarantor that is a Wholly Owned Subsidiary;

(c) any JV Subsidiary may make Restricted Payments required or permitted to be made pursuant to the terms of the joint venture arrangements in effect on the Effective Date (or otherwise as approved by the Approving Party) to holders of its Capital Stock, provided that, the Issuer and its Subsidiaries have received their pro rata portion of such Restricted Payments;

 

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(d) any Subsidiary that is not a North American Group Member may make Restricted Payments to any other Subsidiary or Subsidiaries that are not North American Group Members;

(e) [intentionally omitted];

(f) the Issuer may make Restricted Payments so long as (i) no Default or Event of Default shall have occurred and be continuing at the time of such payment and (ii) immediately prior to and after giving effect to such Restricted Payment, the Consolidated Leverage Ratio shall be less than 3.00 to 1.00; and

(g) the Issuer may make Restricted Payments in respect of preferred Capital Stock of the Issuer to the holders thereof.

6.6. Amendments to Transaction Documents . No North American Group Member shall (a) amend, supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and conditions of the indemnities and licenses furnished to the Issuer and its successors or any of its Subsidiaries pursuant to the Transaction Documents (other than as specifically contemplated thereby) such that after giving effect thereto such indemnities or licenses, taken as a whole, shall be materially less favorable to the interests of the Issuer and its successors and Subsidiaries or the Noteholders with respect thereto or (b) otherwise amend, supplement or otherwise modify the terms and conditions of the Transaction Documents (other than as specifically contemplated thereby) in such a manner as could reasonably be expected to increase the consideration or obligations owed by the Issuer as “Buyer” thereunder to the Sellers.

6.7. [ Intentionally Omitted ].

6.8. Negative Pledge . No U.S. Subsidiary (other than an Excluded Subsidiary) shall enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of any North American Group Member to create, incur, assume or permit to exist any Lien upon any of the Collateral, whether now owned or hereafter acquired, other than this Agreement, the other Secured Note Documents, the Existing Agreements, and Permitted Liens; provided that the agreements excepted from the restrictions of this Section shall include customary negative pledge clauses in agreements providing refinancing Indebtedness or permitted unsecured Indebtedness.

6.9. Indebtedness . No North American Group Member nor any Structured Financing Subsidiary shall create, incur, assume or suffer to exist any Indebtedness except Permitted Indebtedness.

6.10. [ Intentionally Omitted ].

6.11. [ Intentionally Omitted ].

6.12. Limitation on Sale of Assets . Subject to any other applicable provision of any Secured Note Document, each North American Group Member shall have the right to Dispose freely of any of its Property (including, without limitation, receivables and leasehold interests) whether now owned or hereafter acquired; provided that, to the extent required, the Net Cash Proceeds thereof are applied in accordance with Section 2.5.

 

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6.13. [ Intentionally Omitted ].

6.14. [ Intentionally Omitted ].

6.15. [ Intentionally Omitted ].

6.16. Clauses Restricting Subsidiary Distributions . The Issuer will not, and will not permit any Guarantor to, enter into or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any such Guarantor to (a) make Restricted Payments in respect of any Capital Stock of such Guarantor held by, or pay any Indebtedness owed to, the Issuer or any Guarantor, (b) make loans or advances to, or other Investments in, the Issuer or any Guarantor or (c) transfer any of its assets to the Issuer or any Guarantor, except, in the case of each of clauses (a), (b) and (c) above, for such encumbrances or restrictions existing under or by reason of (i) any restrictions existing under the Secured Note Documents and the UST Facility and, solely with respect to GM Canada and its Subsidiaries, the Canadian Facility, (ii) any restrictions with respect to a Guarantor imposed pursuant to an agreement that has been entered into in connection with the Disposition of all or substantially all of the Capital Stock or assets of such Guarantor, (iii) any agreement or instrument governing Indebtedness assumed in connection with the acquisition of assets by the Issuer or any Guarantor permitted hereunder or secured by a Lien encumbering assets acquired in connection therewith, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired, (iv) restrictions on the transfer of assets subject to any Lien permitted by Section 6.4 imposed by the holder of such Lien or on the transfer of assets subject to a Disposition permitted by Section 6.12 imposed by the acquirer of such assets, (v) provisions in joint venture agreements and other similar agreements (in each case relating solely to the respective joint venture or similar entity or the Capital Stock therein) entered into in the ordinary course of business, (vi) restrictions contained in the terms of any agreements governing purchase money obligations, Capital Lease Obligations or Attributable Obligations not incurred in violation of this Agreement; provided that, such restrictions relate only to the Property financed with such Indebtedness, (vii) restrictions contained in any Existing Agreement, (viii) restrictions contained in any agreement relating to any Indebtedness to the extent permitted by the provisions of any Excluded First Lien Indebtedness or Additional First Lien Indebtedness, (ix) restrictions on cash or other deposits imposed by customers under contracts or other arrangements entered into or agreed to in the ordinary course of business, (x) customary non-assignment provisions in leases, contracts, licenses and other agreements entered into in the ordinary course of business and consistent with past practices (including past practices of the GM Oldco Parties, as applicable), or (xi) any amendments, modifications, restatements, increases, supplements, refundings, replacements, or refinancings of the contracts, instruments or obligations referred to in clauses (i) through (x) above; provided , however , that the provisions relating to such encumbrance or restriction contained in any such amendment, modification, restatement, increase, supplement, refunding, replacement, or refinancing are not materially less favorable, taken as a whole, to the Group Members and the Noteholders than the provisions relating to such encumbrance or restriction contained in agreements referred to in such clause.

 

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6.17. [ Intentionally Omitted ].

6.18. [ Intentionally Omitted ].

6.19. [ Intentionally Omitted ].

6.20. Conflict with Canadian Facility . Notwithstanding anything to the contrary herein, nothing contained in this Section 6 shall restrict, limit or otherwise prohibit GM Canada or any of its Canadian Subsidiaries from complying with any payment obligation or any other affirmative obligation under the Canadian Facility.

6.21. [ Intentionally Omitted ].

6.22. Conflict with UST Facility . Notwithstanding anything to the contrary herein, nothing contained in this Section 6 shall restrict, limit or otherwise prohibit the Issuer or any of its Subsidiaries from complying with any payment obligation or any other affirmative obligation under the UST Facility.

SECTION 7

EVENTS OF DEFAULT

7.1. Events of Default . Each of the following events shall constitute an “ Event of Default ”, provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied:

(a) the Issuer shall default in the making of any payment on the Notes when due (whether at stated maturity, upon acceleration or pursuant to Section 2.5 or 2.6); or

(b) any Guarantor shall default in its payment obligations under the Guaranty; or

(c) any Issuer Party shall default in the payment of any other amount payable by it hereunder or under any other Secured Note Document after notification by a Noteholder of such default, and such default shall have continued unremedied for five (5) Business Days; or

(d) any North American Group Member shall breach any applicable covenant contained in Section 6 hereof; or

(e) any North American Group Member shall default in performance of or otherwise breach non-payment obligations or covenants under any of the Secured Note Documents not covered by another clause in this Section 7, and such default has not been remedied within the applicable grace period provided therein, or if no grace period, within 30 calendar days; or

(f) any representation, warranty or certification made or deemed made herein or in any other Secured Note Document by any North American Group Member or any certificate furnished to the Noteholders pursuant to the provisions hereof or thereof, shall prove to have been false or misleading in any material respect as of the time made or furnished; or

 

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(g) [intentionally omitted]; or

(h) [intentionally omitted]; or

(i) [intentionally omitted]; or

(j) any Material North American Group Member shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, interim receiver, receiver and manager, custodian, trustee, interim trustee, examiner or liquidator of itself or of all or a substantial part of its directly-owned property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Code, (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or winding-up, or composition or readjustment of debts, (v) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code, (vi) take any corporate or other action for the purpose of effecting any of the foregoing, or (vii) generally fail to pay the Issuer’s or such Material North American Group Member’s (as applicable) debts as they become due; or

(k) [intentionally omitted]; or

(l) [intentionally omitted]; or

(m) [intentionally omitted]; or

(n) a judgment or judgments as to any obligation for the payment of money in excess of $100,000,000 in the aggregate (to the extent that it is, in the reasonable determination of the Approving Party, uninsured and provided that any insurance or other credit posted in connection with an appeal shall not be deemed insurance for these purposes) shall be rendered against any North American Group Member by one or more courts, administrative tribunals or other bodies having jurisdiction over them and the enforcement thereof shall not be stayed (by operation of law, the rules or orders of a court with jurisdiction over the matter or by consent of the party litigants) for ten calendar days; or there shall be rendered against any North American Group Member a non-monetary judgment that causes or would reasonably be expected to cause a Material Adverse Effect on the ability of the Issuer Parties (taken as a whole) to perform their obligations under the Secured Note Documents and the enforcement thereof shall not be stayed (by operation of law, the rules or orders of a court with jurisdiction over the matter or by consent of the party litigants) for ten calendar days; or

(o) [intentionally omitted]; or

(p) any Secured Note Document shall for whatever reason be terminated, the Secured Note Documents shall cease to create a valid security interest in any of the Collateral purported to be covered hereby or thereby, or any North American Group Member’s material obligations under the Secured Note Documents (including the Issuer’s Obligations hereunder) shall cease to be in full force and effect, or the enforceability thereof shall be contested by any North American Group Member; or

 

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(q) the filing of a motion, pleading or proceeding by any of the other Issuer Parties which could reasonably be expected to result in a material impairment of the rights or interests of the Noteholders under any Secured Note Document, or a determination by a court with respect to a motion, pleading or proceeding brought by another party that results in a material impairment of the rights or interests of the Noteholders under any Secured Note Document; or

(r) [intentionally omitted]; or

(s) [intentionally omitted]; or

(t) (i) any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, or any other ERISA Event shall occur, (ii) any failure to meet the minimum funding standards of Section 302 of ERISA, whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC with respect to any such Plan shall arise on the assets of any North American Group Member or any ERISA Affiliate, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Approving Party, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Plan shall terminate for purposes of Title IV of ERISA, (v) any North American Group Member or any ERISA Affiliate shall, or in the reasonable opinion of the Approving Party is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or reorganization of, a Multiemployer Plan, (vi) any labor union or collective bargaining unit shall engage in a strike or other work stoppage, (vii) the assets of any North American Group Member shall be treated as plan assets under 29 C.F.R. 2510.3-101 as amended by section 3(42) of ERISA, or (viii) any other event or condition shall occur or exist with respect to a Plan; and in each case in clauses (i) through (viii) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect; or

(u) any Change of Control shall have occurred without the prior consent of the Approving Party; or

(v) any North American Group Member shall grant, or suffer to exist, any Lien on any Collateral other than Permitted Liens; or the Liens contemplated under the Secured Note Documents shall cease to be perfected Liens on the Collateral in favor of the Noteholders of the requisite priority hereunder with respect to such Collateral (subject to the Permitted Liens); or

(w) [intentionally omitted]; or

(x) any Governmental Authority or any person, agency or entity acting or purporting to act under governmental authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the Collateral, or

 

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(except with respect to any Permitted Holder in its capacity as a Permitted Holder) shall have taken any action to displace the management of any North American Group Member or to curtail its authority in the conduct of the business of any Issuer Party, and such action provided for in this subsection (x) shall not have been discontinued or stayed within 30 days; or

(y) [intentionally omitted]; or

(z) [intentionally omitted]; or

(aa) a custodian, receiver, conservator, liquidator, trustee or similar official for any Material North American Group Member, or of any of its directly owned Property (as a debtor or creditor protection procedure), is appointed or takes possession of such directly owned Property; or any Material North American Group Member is adjudicated bankrupt or insolvent; or an order for relief is entered under the Bankruptcy Code, or any successor or similar applicable statute, or any administrative insolvency scheme, against any Issuer Party; or any of its directly owned Property is sequestered by court or administrative order; or a petition is filed against any Material North American Group Member under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution, moratorium, delinquency or liquidation law of any jurisdiction, whether now or subsequently in effect, and such petition is not dismissed within 60 days; or

(bb) any Issuer Party shall admit its inability to, or intention not to, perform any of such party’s material Obligations hereunder; or

(cc) GM Canada shall (i) default in making any payment of any principal of any Indebtedness under the Canadian Facility on the scheduled or original due date with respect thereto; or (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the Canadian Facility; or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness (other than a breach of the COCA (as defined in the Canadian Facility)) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist (other than a breach of the COCA (as defined in the Canadian Facility)), the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or to become subject to a mandatory offer to purchase by the obligor thereunder or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable; or

(dd) the Issuer shall (i) default in making any payment of any principal of any Indebtedness under the UST Facility on the scheduled or original due date with respect thereto; or (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the UST Facility; or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness (other than a breach of the vitality commitment therein) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist (other than a breach of the vitality commitment therein), the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of

 

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such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or to become subject to a mandatory offer to purchase by the obligor thereunder or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable; or

(ee) any North American Group Member shall (i) default in making any payment of any principal of any Indebtedness (including any Guarantee Obligation, but excluding the Notes, the Canadian Facility (other than a breach of the COCA (as defined in the Canadian Facility)) and the UST Facility (other than a breach of the vitality commitment therein)) on the scheduled or original due date with respect thereto; or (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness (including a breach of the COCA (as defined in the Canadian Facility) or a breach of the vitality commitment in the UST Facility) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause such Indebtedness to become due prior to its stated maturity or to become subject to a mandatory offer to purchase by the obligor thereunder or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable; provided that a default, event or condition described in clause (i), (ii) or (iii) of this paragraph (ee) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses (i), (ii) and (iii) of this paragraph (ee) shall have occurred and be continuing with respect to Indebtedness, the Outstanding Amount of which exceeds in the aggregate $100,000,000.

7.2. Remedies upon Event of Default . (a) If any Event of Default occurs and is continuing, without limiting the rights and remedies available to the Noteholders under Applicable Law, the Noteholders may, by written notice to the Issuer, take any or all of the following actions, at the same or different times:

(i) declare the principal of and accrued interest on the outstanding Notes to be immediately due and payable as calculated in accordance with Section 2.7(b);

(ii) set-off any amounts held in any accounts maintained by any Issuer Party with respect to which the Noteholders are a party to a control agreement; or

(iii) take any other action or exercise any other right or remedy (including, without limitation, with respect to the Liens in favor of the Noteholders) permitted under the Secured Note Documents or by Applicable Law.

(b) Notwithstanding the foregoing, if such event is an Event of Default specified in Section 7.1(j) or 7.1(aa) above with respect to the Issuer, automatically the Notes (with accrued interest thereon) and all other amounts owing under this Agreement and the other Secured Note Documents shall immediately become due and payable as calculated pursuant to Section 2.7(b).

 

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(c) For the avoidance of doubt, subject to Section 8.6(g), the Initial Noteholder may in its discretion waive any Default, Event of Default or any right the Noteholders may have to take any enforcement action as a consequence thereof. Except as expressly provided above in this Section 7.2 or required by law (and which cannot be waived), presentment, demand, protest and all other notices of any kind are hereby expressly waived by the Issuer.

SECTION 8

MISCELLANEOUS

8.1. Amendments and Waivers . (a) Neither this Agreement, any other Secured Note Document, nor any terms hereof or thereof may be amended, supplemented or modified except (i) in accordance with the provisions of this Section 8.1 or as otherwise expressly provided herein and (ii) on or prior to the Treasury Control Change Date, with the consent of the Treasury (other than with respect to any UST Non-Binding Amendments). Subject to the foregoing, the Noteholders and the Issuer (on its own behalf and as agent on behalf of any other Issuer Party party to the relevant Secured Note Document) may, from time to time, (i) enter into written amendments, supplements or modifications hereto and to the other Secured Note Documents for the purpose of adding any provisions to this Agreement or the other Secured Note Documents or changing in any manner the rights or obligations of the Noteholder or of the Issuer Parties hereunder or thereunder or (ii) waive, on such terms and conditions as the Noteholder may specify in such instrument, any of the requirements of this Agreement or the other Secured Note Documents or any Default or Event of Default and its consequences.

(b) Any such waiver and any such amendment, supplement or modification shall be binding upon the Issuer Parties, the Initial Noteholder and all future Noteholders. In the case of any waiver, the Issuer Parties and the Noteholders shall be restored to their former position and rights hereunder and under the other Secured Note Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. Any such waiver, amendment, supplement or modification shall be effected by a written instrument signed by the parties required to sign pursuant to the foregoing provisions of this Section 8.1; provided that, delivery of an executed signature page of any such instrument by facsimile transmission shall be effective as delivery of a manually executed counterpart thereof.

(c) On or prior to the Treasury Control Change Date, upon the effectiveness of any waiver, amendment, modification, supplement, restatement or other revision to the UST Facility, the Issuer shall deliver notice of such waiver, amendment, modification, supplement, restatement or other revision to the Initial Noteholder, together with an executed copy of the agreement effecting such waiver, amendment, modification, supplement, restatement or other revision. Upon the effectiveness of any amendment, modification or supplement to the UST Facility, the corresponding provisions of the Note, this Agreement and the other Secured Note Documents, as applicable, will be deemed to be automatically so waived, amended, modified, supplemented restated or otherwise revised mutatis mutandis, except for any UST Non-Binding Amendment. Any waiver, amendment, modification, supplement, restatement or other revision made pursuant to this paragraph shall be deemed to be automatically effective, notwithstanding any contrary provision in the Note, this Agreement or any other Secured Note Document.

 

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8.2. Notices . (a) All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy or electronic transmission), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice or electronic transmission or overnight or hand delivery, when received, addressed as follows in the case of the Issuer and the Noteholder, or to such other address as may be hereafter notified by the respective parties hereto:

Issuer:

General Motors Company

300 Renaissance Center

Detroit, MI 48265-3000

Attention: Chief Financial Officer

Telecopy: 313-667-4605

with a copy to:

General Motors Company

767 Fifth Avenue, 14th Floor

New York, NY 10153

Attention: Treasurer

Telecopy: 212-418-3630

and

General Motors Company

300 Renaissance Center

Detroit, MI 48265-3000

Attention: Kimberly K. Hudolin

Telecopy: 248-267-4318

with a copy to:

Cadwalader, Wickersham & Taft LLP

One World Financial Center

New York, NY 10281

Attention: John J. Rapisardi

Telecopy: 212-504-6666

Telephone: 212-504-6000

 

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and:

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153-0119

Attention: Stephen Karotkin

                 Richard Ginsburg

                 Soo-Jin Shim

Telecopy: 212-310-8007

Noteholder:

UAW Retiree Medical Benefits Trust

P.O. Box 14309

Detroit, MI 48214

With a copy to:

International Union, United Automobile, Aerospace and

Agricultural Implement Workers of America

8000 East Jefferson Avenue

Detroit, MI 48214

Attention: Daniel W. Sherrick, General Counsel

Telecopy: 313-822-4844

and

Cleary Gottlieb Steen  & Hamilton LLP

One Liberty Plaza

New York, New York 10006

Attention: Richard S. Lincer/David I. Gottlieb

Telecopy: 212-225-3999

provided that any notice, request or demand to or upon the Noteholder shall not be effective until received.

(b) Notices and other communications to the Initial Noteholders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Initial Noteholder in its sole discretion. The Initial Noteholder or the Issuer may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

8.3. No Waiver; Cumulative Remedies . No failure to exercise and no delay in exercising, on the part of any Noteholder, any right, remedy, power or privilege hereunder or under the other Secured Note Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or thereunder preclude any

 

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other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

8.4. Survival of Representations and Warranties . All representations and warranties made hereunder, in the other Secured Note Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the Notes.

8.5. Payment of Expenses . The Issuer agrees (a) to pay or reimburse the Initial Noteholder for all its (i) reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Secured Note Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby (including the reasonable out-of-pocket costs and expenses and professional fees of the advisors and counsel to the Initial Noteholder), and (ii) costs and expenses incurred in connection with the enforcement or preservation of any rights or exercise of remedies under this Agreement, the other Secured Note Documents and any other documents prepared in connection herewith or therewith in respect of any Event of Default or otherwise, including the fees and disbursements of counsel (including the allocated fees and disbursements and other charges of in-house counsel) to the Initial Noteholder, (b) to pay, indemnify, or reimburse the Initial Noteholder for, and hold the Initial Noteholder harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying such fees, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Secured Note Documents and any such other documents, and (c) to pay, indemnify or reimburse the Noteholders, their affiliates, and their respective officers, directors, partners, employees, advisors, agents, controlling persons and trustees (each, an “ Indemnitee ”) for, and hold each Indemnitee harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever incurred by an Indemnitee or asserted against any Indemnitee by any third party or by the Issuer or any other Issuer Party arising out of, in connection with, or as a result of, the execution or delivery of this Agreement, any other Secured Note Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto or thereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, including the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations or assets of any Group Member, including any of the Mortgaged Properties, and the reasonable fees and expenses of legal counsel in connection with claims, actions or proceedings by any Indemnitee against any Issuer Party under any Secured Note Document or any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by any third party or by the Issuer or any other Issuer Party, and regardless of whether any Indemnitee is a party thereto (all the foregoing in this clause (c), collectively, the “ Indemnified Liabilities ”), provided that the Issuer shall have no obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities resulted from the gross negligence or willful

 

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misconduct of, in each case as determined by a final and nonappealable decision of a court of competent jurisdiction, such Indemnitee, any of its affiliates or its or their respective officers, directors, partners, employees, agents or controlling persons. No Indemnitee shall be liable for any damages arising from the use by unauthorized persons of information or other materials sent through electronic, telecommunications or other information transmission systems that are intercepted by such persons or for any special, indirect, consequential or punitive damages in connection with the Notes. Without limiting the foregoing, and to the extent permitted by Applicable Law, the Issuer agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its Subsidiaries to waive, all rights for contribution or any other rights of recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, under or related to Environmental Laws, that any of them might have by statute or otherwise against any Indemnitee. All amounts due under this Section 8.5 shall be payable not later than 30 days after written demand therefor. Statements payable by the Issuer pursuant to this Section 8.5 shall be submitted to the Treasurer of the Issuer as set forth in Section 8.2, or to such other Person or address as may be hereafter designated by the Issuer in a written notice to the Initial Noteholder. The agreements in this Section 8.5 shall survive payment of the Notes and all other amounts payable hereunder.

8.6. Successors and Assigns; Participations and Assignments . (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto, all future Noteholders and their respective successors and assigns permitted hereby, except that the Issuer may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Initial Noteholder (and any attempted assignment or transfer by the Issuer without such consent shall be null and void) and no Noteholder may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section 8.6.

(b) Any Noteholder may, without the consent of the Issuer, assign or transfer to one or more assignees that is a Permitted Transferee (each, an “ Assignee ”) all or a portion of its rights and obligations under this Agreement (including all or a portion of the Notes at the time owing to it) pursuant to an Assignment and Assumption or similar agreement which includes an agreement by the assignee thereunder to be bound by the terms and provisions of the Intercreditor Agreement, executed by such Assignee and such Noteholder and delivered to the Issuer for its records, together with any related rights and obligations thereunder and, in each case, in accordance with any applicable securities laws of any state of the United States; provided that, in no event may any transfer of a Note be made if such transfer, or such transfer together with any prior transfers, would trigger registration requirements under the Exchange Act. The Issuer or its agent will maintain a register (“ Register ”) of the Noteholders and Assignees. The Register shall contain the names and addresses of the Noteholders and Assignees and the principal amount of the Notes (and stated interest thereon) held by each Noteholder and each Assignee from time to time. The entries in the Register shall be conclusive and binding, absent manifest error. The Issuer shall refuse to register any transfer of any Note in violation of the foregoing restrictions, the restrictions set forth in Section 8.6(e) or the restrictions set forth in the Note. The Issuer shall enter into such amendments or other modifications to this Agreement and the other Secured Note Documents as are reasonably required to accommodate any such assignments, including, without limitation, amendments or modifications which provide for the accommodation of multiple holders and the appointment of

 

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administrative and collateral agents for the Noteholder and such Assignees; provided that such amendments or modifications do not materially increase the tax cost to the Issuer of maintaining the Notes. If there is more than one Noteholder, the Issuer shall provide all information and documents delivered hereunder to the Initial Noteholder to any other Noteholder upon such Noteholder’s reasonable request.

The Initial Note and each additional Note issued pursuant to Section 2.3(b) in connection with an assignment pursuant to this Section 8.6(b) shall bear the following legend:

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCES. THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THE HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT SUCH NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (A) (1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A OR (2) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AN “ INSTITUTIONAL ACCREDITED INVESTOR ”)), IF, IN THE CASE OF (2) PRIOR TO SUCH TRANSFER, THE TRANSFEREE FURNISHES THE ISSUER A SIGNED LETTER FROM THE TRANSFEREE CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE NOTEHOLDER) OR (B) TO THE ISSUER OR ITS SUBSIDIARIES AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES; PROVIDED THAT IN NO EVENT MAY ANY TRANSFER OF A NOTE BE MADE IF SUCH TRANSFER, OR SUCH TRANSFER TOGETHER WITH ANY PRIOR TRANSFERS, WOULD TRIGGER REGISTRATION REQUIREMENTS UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS