Limitation on Setoffs. Customers are entitled, under the terms of the Purchase Orders and otherwise applicable law, to exercise rights of setoff, recoupment, deduction or defense, subject to certain restrictions that may be imposed as the result of the Bankruptcy Proceedings. Notwithstanding such rights, as to all accounts payable owing by Customers to Supplier for Component Parts or otherwise, generated on or after the Effective Date through the expiration of the Term, for the sole and exclusive benefit of Supplier, each Customer agrees not to exercise its rights of setoff, recoupment, or other deduction of any kind, including, without limitation, with respect to any prior, existing or future defaults under any Purchase Orders, or any defenses, rights or claims (including, without limitation, claims for any incidental, special or consequential damages) (all of the preceding, each a “Setoff” and collectively “Setoffs”), except for “Allowed Setoffs,” “Material Setoffs,” “Ordinary Course Setoffs,” “Tooling Setoffs” (each defined below), and Setoffs for short shipments, misshipments, improper invoices, mispricing, unordered or unreleased parts returned to Supplier, and duplicate payments or billing errors (collectively, “Billing Errors”). Allowed Setoffs, Material Setoffs, Tooling Setoffs, Ordinary Course Setoffs and Setoffs for Billing Errors are collectively called “Permitted Setoffs”. Certain Customers have previously provided and will continue to provide certain materials, components or services to Supplier in the ordinary course under existing and future supply agreements and have taken and may continue to take Setoffs with respect to amounts owed to Customer under such supply agreements in the ordinary course (“Ordinary Course Setoffs”). Notwithstanding anything to the contrary in this Agreement, in order for a Setoff to be permissibly taken by a Customer, (a) any such Setoff must be permissible under the applicable Purchase Order or otherwise applicable law, and (b) any such Setoff must comply with the provisions of section 553 of title 11 of the United States Code (the “Bankruptcy Code”), but are not subject to section 362 of title 11 of the Bankruptcy Code. Additionally, no Customer shall be permitted to take a Setoff relating to force majeure, including due to the effects of the “coronavirus.”
Limitation on Setoffs. For the benefit of Lenders only and subject to Lenders' compliance with the terms of Exhibit 11-A and Lenders otherwise not materially interfering with GM's Right to Occupy, GM agrees:
Limitation on Setoffs. If the Company has a right of setoff that could apply to a 409A Award, such right may only be exercised at the time the 409A Award would have been distributed to the Participant or his or her Beneficiary, and may be exercised only as a setoff against an obligation that arose not more than 30 days before and within the same year as the distribution date if application of such setoff right against an earlier obligation would not be permitted under Code Section 409A.
