GM Affidavit Part II

Again, please excuse any typos

“Under the “UAW Retiree Settlement Agreement,” the Purchaser has agreed to provide, among other things: (i) shares of common stock of the Purchaser representing 17.5% of the Purchaser’s total outstanding common stock, (ii) a note of the Purchaser in the principal amount of $2.5 billion, (iii) shares of cumulative perpetual preferred stock of the Purchaser in the amount of $6.5 billion, (iv) warrants to acquire 2.5% of the Purchaser’s equity, and (v) the assets held in a voluntary employees’ beneficiary association trust sponsored by the Sellers and to be transferred to the Purchaser as part of the 363 Transaction, in each case to a new voluntary employees’ beneficiary association sponsored by an employees beneficiary association (the “New VEBA”), which will have the obligation to fund certain retiree medical benefits for the Debtors’ retirees and surviving spouses represented by the UAW (the “UAW-Represented Retirees”).”

"the 363 Transaction will allow a substantial majority of the GM dealerships to continue operations while providing a significant "wind-down" period for terminated and discontinued dealers.  Dealers represent the "face" of GM to its consumers -- not only selling new cars, but also providing service and parts for vehicle maintenance and a market for trade-ins of used vehicles in connection with new vehicle purchases.  Continuation of quality dealers is an essential element of the 363 Transaction and of the preservation and viability of the Company's business." 

“The need for speed in approving and consummating the 363 Transaction is critical for several reasons. Most obvious—the U.S. Treasury has made very clear that it will sponsor New GM as the purchaser and fund the chapter 11 cases only if the 363 Transaction is approved by July 10, 2009. As explained below, the assets that will be sold—that is, not merely the physical assets, but the value of and consumer confidence in the GM brand and its products and support systems (including parts, warranty service and a market for used vehicles)—are fragile and will be subject to significant value erosion unless they are expeditiously transferred to New GM and its operations start free from the stigma of bankruptcy. Any delay will result in irretrievable revenue perishability and loss of market share to the detriment of all economic interests. It will exacerbate and entrench consumer resistance to General Motors’ products. There is no other alternative. No other DIP financing source. No other buyer for the business.”