EX-10.01 2 k63964ex10-01.txt PURCHASE AGREEMENT 1 EXHIBIT 10.01 LIFETIME PROGRAM CONTRACT BETWEEN GENERAL MOTORS CORPORATION NORTH AMERICAN OPERATIONS ("BUYER") AND AMERICAN AXLE & MANUFACTURING, INC. ("SELLER") 1. Purchase of Product Seller agrees to sell, and Buyer agrees to purchase, 100% of Buyer's production and service requirements for the following product (the "Product" or "Goods"): Part Number Description Per Unit Price Annual Daily Tool Capacity See Attached GMT-800 (INCLUDING ALL DERIVATIVES SUCH AS BUT NOT LIMITED TO THE 805, 806, 820, 830 & 880) Schedule, Exhibit B 2. Term The term of this Agreement is for the "life of the Product", which is defined as the duration of the GMT-800 (INCLUDING ALL DERIVATIVES SUCH AS BUT NOT LIMITED TO THE 805, 806, 820, 830 & 880) style presently projected to run from * * * through * * *. 3. Prices; Price Reduction The per unit price of the Product is F.O.B. Seller's Plant. Price for model year * * * is subject to the following annual percentage reduction from the prior years price: See Attached GMT-800 (INCLUDING ALL DERIVATIVES SUCH AS BUT NOT LIMITED TO THE 805, 806, 820, 830 & 880) Schedule, Exhibit B Purchases of Productive Material by Buyer for Seller shall continue through December 31, 2002, or such earlier date established by agreement of AAM and GM. Thereafter, except for increases or decreases in Seller's cost by reason of Seller's participation in Buyer's Steel Resale Program; Buyer's pricing adjustment policy(ies) for non-ferrous metals; or permitted under Buyer's Purchase Order Terms and Conditions no adjustments will be made hereunder for increases or decreases in Seller's costs for materials. Except for the increases or decreases set forth above, no other pricing adjustments (e.g. labor or overhead) will be made except by agreement between AAM and GM. 1 2 In addition, Buyer and Seller will use their best efforts to implement cost savings and productivity improvements, as set forth in Exhibit A attached hereto, in order to reduce Seller's costs, with the understanding the 50 percent (50%) of jointly achieved net savings (after deduction of expenditures for development, applications, engineering tools, prototypes and financing) will be applied to reduce the price of the Product to Buyer and the balance will be for the benefit of Seller. 4. Supplier Development; Quality Control Seller agrees to participate in Buyer's supplier quality and development program(s). In addition, Seller shall comply with all quality requirements and procedures specified by Buyer, as the same may be revised from time to time, including those applicable to Seller as set forth in Quality System Requirements QS-9000. 5. Right to Purchase from Others 5.1. Seller will assure that the Product remains competitive in terms of technology, design, and quality with similar goods available to Buyer during the term of this Agreement. If, in the reasonable opinion of Buyer, the Product does not remain competitive, Buyer, to the extent it is free to do so, will advise Seller in writing of the area(s) in which another product is more competitive with respect to technology, design or quality. If, within 150 days, Seller does not agree to immediately sell the Product with comparable technology, design or quality, Buyer may give notice of termination of this Agreement and after a period of one (1) year after such notice may purchase from another supplier without liability to Seller. 5.2. It is agreed by the parties that nothing in this Paragraph 5 shall modify or otherwise limit Buyer's right under Paragraph 12 ("Cancellation") of Buyer's Purchase Order Terms and Conditions. 6. Technical Information: Waiver of Claims 6.1. Buyer and Seller will cooperate to create, maintain, update and share technical information about the Product and its manufacture, without restriction, as needed, and in compliance with Buyer's drafting and math data standards. 6.2. In the event Buyer exercises its right to terminate or cancel this Agreement, for reasons other than those set forth in Paragraph 5 above, and then makes the Product or purchases the Product from another supplier, Seller agrees not to bring any action or claim against Buyer, its suppliers, dealers, or customers for any reason, excluding any claim for infringement of patents or other proprietary rights, arising from the manufacture, use and sale of the Product or use of the information furnished by Seller to Buyer under this Agreement. Seller will secure the necessary agreements with its employees and sub-contractors to assure compliance with this Section 6. 2 3 7. Purchase Order Terms and Conditions Buyer's Purchase Order Terms and Conditions (1986), a copy of which is attached, are hereby incorporated into this Agreement by reference. It is understood that Paragraph 13 TERMINATION will not be applicable with respect to this contract. Any amendment to or revision of such Terms and Conditions shall also become a part hereof, provided that: (i) Buyer provides Seller with a copy of the Terms and Conditions as amended or revised; and (ii) Seller does not object to said amendment or revised Terms and Conditions within thirty (30) days after receipt. The Terms and Conditions and any amendment or revision made a part thereof shall be construed, to the extent possible, as consistent with the terms and conditions set forth herein and as cumulative; provided, however, that if such construction is unreasonable, terms and conditions set forth herein shall control. This Agreement is effective upon its execution. The parties hereby agree that this agreement supersedes the Component Supply Agreement between them, dated February 28, 1994, as amended, as it relates to the subject matter contained herein and removes any requirement with respect to components covered hereby for GM to give notice of non-renewal under such agreement. Seller Buyer By /s/ Brian McKenna By /s/ Gloria Jackson ---------------------------------- ------------------------------ Title Director, Sales Title Manager - Metallic ------------------------------- --------------------------- Date April 30, 2001 Date 6/05/01 -------------------------------- ---------------------------- 3 4 EXHIBIT A "LIFETIME CONTRACT COST SAVINGS" Some examples of Cost Savings which shall be shared equally by the parties are set forth in (a), (b), and (c) below: (a) AAM requests from GM Engineering a dimensional change in an Existing Component that reduces scrap and improves efficiency. If granted, the savings with respect to that Existing Component would be shared equally by the two parties. (b) GM and AAM are both working on deproliferation of Existing Component Part Numbers by changing parts to commonize them. Savings with respect to such Existing Components would be shared by the two parties. (c) AAM or GM requests a material change applicable to a particular Existing Component or Components that would improve efficiency or reduce tool costs. These savings with respect to such Existing Components would be shared equally by the two parties. Improvements which are not attributable to specific components and improvements in processing, operating conditions, labor efficiency, scrap reduction, or any other area made by AAM as a result of its management expertise and knowledge or contributions by AAM employees, without any input from GM, are not included in the Cost Savings computation and are the exclusive property of AAM. 4 5 EXHIBIT B Page 1 of 6 LIFETIME PROGRAM CONTRACT GMT-800
* Unit Price is less brake components. ** Unit Price is less brake components and locking differential. *** Program change pending engineering/commercial direction. TBD pricing to be added upon commercial resolution. 6 Page 2 of 6 LIFETIME PROGRAM CONTRACT GMT-800
* Unit Price is less brake components. ** Unit Price is less brake components and locking differential. *** Program change pending engineering/commercial direction. TBD pricing to be added upon commercial resolution. 7 Page 3 of 6 LIFETIME PROGRAM CONTRACT GMT-800
* Unit Price is less brake components. ** Unit Price is less brake components and locking differential. *** Program change pending engineering/commercial direction. TBD pricing to be added upon commercial resolution. 8 Page 4 of 6 LIFETIME PROGRAM CONTRACT GMT-800
* Program change pending engineering/commercial direction. TBD pricing to be added upon commercial resolution. 05/29/98 9 Page 5 of 6 LIFETIME PROGRAM CONTRACT GMT-800
* Pricing includes Idler Assy as part of Linkage Assy. ** Pricing is included in the above Linkage Assy due to Program direction to attach Idler Assy to Linkage. Original LOI stated Linkage at $35.00 and Idler at $18.20. 05/29/98 10 Page 6 of 6 LIFETIME PROGRAM CONTRACT GMT-800
* Portions of this Exhibit 10.01 were omitted and filed separately with the Secretary of the Securities and Exchange Commission (the "Commission") pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 406 under the Securities Act of 1933, as amended. Such portions are marked by the symbol "* * *". * Program change pending engineering/commercial direction. 05/29/98