EXECUTION COPY
May 10, 2007
VIA ELECTRONIC MAIL
Appaloosa Management L.P.
00 Xxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxx
Xx. Xxx Xxxxx
Harbinger Capital Partners Master Fund I, Ltd.
c/o 000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxx
SECOND AMENDED CONFIDENTIAL INFORMATION, STANDSTILL
AND NONDISCLOSURE AGREEMENT
Gentlemen:
This letter agreement (the "Second Amended NDA") relates to
discussions involving Appaloosa Management L.P. and its affiliates ("Appaloosa")
and Harbinger Capital Partners Master Fund I, Ltd. and its affiliates
("Harbinger") (collectively, "you" or "your", it being understood that, unless
otherwise determined by Delphi Corporation, Harbinger will communicate with
Delphi only through Appaloosa) involving Delphi Corporation ("Delphi"), a debtor
and debtor-in-possession in chapter 11 cases (the "Chapter 11 Cases") in the
United States Bankruptcy Court for the Southern District of New York (the
"Bankruptcy Court") concerning possible negotiated business arrangements between
you and the Company (defined below). The Second Amended NDA amends and
supersedes the Amended Confidential Information, Standstill and Nondisclosure
Agreement, dated August 25, 2006, among Delphi, Appaloosa, and Harbinger.
In connection with your interest in and review of certain matters
relating to Delphi and its subsidiaries and affiliates (together with their
respective officers, directors, employees, agents, affiliates and other
representatives, the "Company"), the Company may
May 10, 2007
furnish to you certain non-public, confidential and/or proprietary information
pertaining to the Company which is reasonably necessary in order for you to
evaluate a Transaction (as defined below) and which the Company reasonably
determines is not competitively sensitive or legally privileged (such
information is anticipated to include the financial presentations generally
provided on a regular basis to the Company's statutory committees and/or their
advisors relating to the Company's transformation plan which are reasonably
necessary in order for you to evaluate a Transaction). Such information, in
whole or in part, whether written or oral, together with any analyses,
summaries, compilations, studies, forecasts, abstracts or documents prepared
during the review of the Company by you or your Representatives (as defined
below) which contain, are based upon or otherwise reflect such information, is
hereinafter referred to as the "Evaluation Material." The term "Evaluation
Material" does not include any information which you demonstrate: (a) previously
was available to you on a non-confidential basis or by virtue of your becoming a
member, if ever, of an official committee in the Chapter 11 Cases (provided,
however, that any information made available to you in your capacity as a member
of a statutory committee shall be kept confidential as may be required pursuant
to agreements between such statutory committee and the Company and any
applicable duties and obligations you may have as a member of such committee);
(b) was obtained from a third person which, insofar as you know, following
reasonable inquiry, is not subject to any prohibition against disclosure; or (c)
is or becomes generally available to the public other than as a result of
disclosure by you or any of your Representatives in violation of this agreement.
You will use the Evaluation Material solely for the purpose of: (1)
considering a possible negotiated business arrangement in our mutual interest
involving the Company in the Chapter 11 Cases (such business arrangement, the
"Transaction"), and (2) to the extent such Transaction is acceptable to the
Company, implementation of such Transaction, and you will not use the Evaluation
Material for any other business or competitive purpose (collectively, the
"Permitted Purposes"). Except as required by law, rule or regulation, you will
keep the Evaluation Material strictly confidential and will not disclose the
Evaluation Material to any person or entity (including any official or
unofficial committee in the Chapter 11 Cases), except that you may disclose the
Evaluation Material or portions thereof to those of your directors, officers,
partners, employees, agents, financial institutions, attorneys, advisors and
accountants (collectively, "Representatives") who need to know such information
for the purpose of evaluating on your behalf a Transaction and who also execute
an acknowledgment wherein they agree to be bound by the confidentiality
provisions of this agreement as if they were parties hereto. Without the prior
written consent of the Company, neither you nor your Representatives will
disclose to any person or entity (including any official or unofficial committee
in the Chapter 11 Cases) the fact that the Evaluation Material has been made
available or that discussions between the parties concerning a Transaction are
taking place or any term, condition or other fact relating to such business
arrangement (except as required by law, rule or regulation and subject to any
applicable fiduciary duties as a committee member). You will be responsible for
any breach of this agreement by you or any of your Representatives. Prior to the
earlier of (i) February 15, 2007, (ii) the date on which the Company files a
plan of reorganization in the Chapter 11 Cases (a "Plan of Reorganization") in
which any party in interest in the Chapter 11
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May 10, 2007
Cases is afforded an opportunity to participate, including, without limitation,
an opportunity to participate in a rights offering for the equity of the Delphi
following emergence from the Chapter 11 Cases but the holders of Delphi equity
are not afforded such opportunity, (iii) any date selected by the Company in its
discretion following either the filing by you of a pleading in the Chapter 11
Cases or the taking by you of a public position which respect to a matter
relating to the Chapter 11 Cases which in either case the Company believes is in
opposition to, or inconsistent with, a position the Company has taken or expects
to take in the Chapter 11 Cases, and (iv) the fifth business day following
notice by you that the Company has not delivered to you previously-requested
information (other than information the Company reasonably determines is
competitively sensitive or legally privileged) described in such notice unless
either such information is not reasonably necessary in order for you to evaluate
a Transaction or prior, to such fifth business day, the Company delivers to you
such information (such earlier date, the "Release Date"), unless otherwise
agreed to by the Company in writing, you agree, in your individual capacity and
not as a committee member, if ever applicable, to engage (along with your
Representatives) in discussions and negotiate exclusively with the Company and
its legal and financial advisors with respect to a Transaction. In addition, you
hereby withdraw the letter to the Members of the Board of Directors of Delphi,
dated March 15, 2006 (the "March 15 Letter"). You will file an amendment to your
Schedule 13D disclosing this Agreement and related matters (including that you
have withdrawn the March 15 letter).
The Company acknowledges that the Release Date occurred on February
15, 2007.
In addition, certain representatives of Appaloosa have been furnished
and may continue to be furnished with certain confidential information produced
and designated as "confidential" or "highly confidential" by the Debtors (the
"Litigation Material") under various stipulations and protective orders entered
into in these chapter 11 cases by and between Debtors' counsel and counsel for
Appaloosa (the "Protective Orders").(1) You have expressed a desire to
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1 Appaloosa representatives are parties to the following Protective Orders in
these cases: (i) Stipulation And Agreed Protective Order Governing
Production And Use Of Confidential And Highly Confidential Information In
Connection With The Motion Of Appaloosa Management L.P.For An Order
Directing The United States Trustee To Appoint An Equity Committee And
Objections Filed Thereto, by and between Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP ("Skadden"), as counsel for Delphi and certain of its subsidiaries
and affiliates, debtors and debtors-in-possession in these chapter 11 cases
(the "Debtors"), and White & Case LLP ("W & C"), as counsel for Appaloosa,
dated January 31, 2006 (Docket No. 1998); (ii) Stipulation And Agreed
Protective Order Governing Production And Use Of Confidential And Highly
Confidential Information In Connection With The Motion For Order Under 11
U.S.C. Section 363(b) And Fed. R. Bankr. P. 6004 Approving Debtors' Human
Capital Hourly Attrition Programs, by and between Skadden, as counsel for
the Debtors, and W & C, as counsel for Appaloosa, dated April 5, 2006
(Docket No. 3125); (iii) Stipulation And Agreed Protective Order Governing
Production And Use Of Confidential And Highly Confidential Information In
Connection With The Motion For Order Under 11 U.S.C. Section 1113(c)
Authorizing Rejection Of Collective Bargaining Agreements And Under 11
U.S.C. Section 1114(g) Authorizing Modification Of Retiree Welfare Benefits
And Objections Filed Thereto, by and between Skadden, as counsel for the
Debtors, and W & C, as counsel for Appaloosa and Wexford Capital LLC,
(cont'd)
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May 10, 2007
review the Litigation Material for a Permitted Purpose. To the extent you wish
to use the Litigation Material for a Permitted Purpose then: (a) the Company
consents to the sharing of the Litigation Material by Appaloosa Representatives
subject to the Protective Orders with Appaloosa and Harbinger, (b) the
Litigation Material so used will be deemed Evaluation Material as defined
herein, and (c) such Litigation Material shall be subject to the terms of the
Second Amended NDA when used for a Permitted Purpose. Such Litigation Material
shall not be subject to the Second Amended NDA, but shall remain subject to
terms of any applicable Protective Order, when used by Appaloosa's
Representatives for all other purposes.
You hereby represent that you have, and will have at all times after
the execution of this agreement and prior to the Release Date, a "Net Long
Position" (as defined below) with respect to the Company. At the Company's
request you agree promptly to provide the Company with reasonable information
which supports the initial representation in the prior sentence and your
continued compliance with the prior sentence and the next sentence. In addition,
subject to the paragraph following this paragraph, prior to the Release Date,
you will not sell, dispose of or otherwise transfer any equity or debt
securities, equity or fixed income related credit derivatives or other
instruments (including put equivalent and call equivalent instruments) issued
by, guaranteed by or relating to the Company. With respect to the Company, a
"Net Long Position" means that, on an aggregate basis with respect to all equity
or debt securities, equity or fixed income related credit derivatives or other
instruments (including put equivalent and call equivalent instruments) issued
by, guaranteed by or relating to the Company, your portfolio of such securities,
derivatives and other instruments would be reasonably likely to gain in value if
an event occurred which would be reasonably likely to cause the credit quality
of the Company to improve.
Notwithstanding the foregoing, nothing in this letter agreement shall
prohibit Appaloosa or Harbinger from participating in a rights offering or
transferring or exercising rights in connection therewith in accordance with
applicable law. Notwithstanding anything in this
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(cont'd from previous page)
dated May 5, 2006 (Docket No. 3706); (iv) Stipulation And Agreed Protective
Order, among, Skadden, as counsel for the Debtors, Weil, Gotshal & Xxxxxx
LLP, as counsel for General Motors Corporation, Xxxxxx & Xxxxxxx LLP, as
counsel for the Official Committee of Unsecured Creditors, Fried, Frank,
Harris, Xxxxxxx & Xxxxxxxx LLP, as counsel for the Official Committee of
Equity Security Holder (Retention Subject to Court Approval), and W & C, as
counsel for the Ad Hoc Committee of Equity Security Holders, dated June 12,
2006 (Docket No. 4156); (v) Stipulation And Agreed Protective Order
Governing Production And Use Of Confidential And Highly Confidential
Information In Connection With The Motion Under 11 U.S.C. Section 363(b)
And Fed. R. Bankr. P. 6004 Approving (I) Supplement To UAW Special
Attrition Program, and (II) IUE-CWA Special Attrition Program, by and
between Skadden, as counsel for the Debtors, and W & C, as counsel for
Appaloosa, dated June 29, 2006 (Docket No. 4410); and (vi) Stipulation And
Agreed Protective Order Governing Production And Use Of Confidential And
Highly Confidential Information In Connection With The Motion For Order
Under 11 U.S.C. Section 365 And Fed. R. Bankr. P. 6006 Authorizing
Rejection Of Certain Executory Contracts With General Motors Corporation
And Objections Filed Thereto has been entered into by and between Skadden,
as counsel for the Debtors, and W & C, as counsel for Appaloosa and Wexford
(Docket No. TBD).
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May 10, 2007
agreement to the contrary, nothing in this letter agreement shall be deemed to
restrict in any way any transfer, exchange or receipt of any securities or other
instruments to or from the Company or in accordance with the consummation of any
Plan of Reorganization or Transaction. In the event that certain Equity Purchase
and Commitment Agreement dated as of January 18, 2007, as may be amended and
supplemented from time to time (the "EPCA") is terminated, this paragraph shall
automatically be modified to add the following sentence: "Notwithstanding
anything in this letter agreement to the contrary, nothing in this letter
agreement shall be deemed to restrict any transfer or delivery of any debt or
equity securities of the Company in connection with a public tender offer for
such securities."
In the event that you or any of your Representatives are legally
required (by deposition, interrogatories, requests for documents, subpoena,
civil investigation demand or similar process) to disclose any of the Evaluation
Material, or if you or any of your Representatives are legally required (by
deposition, interrogatories, requests for documents, subpoena, civil
investigation demand or similar process) to disclose the fact that the
Evaluation Material has been made available or that discussions between the
parties are taking place or any other fact relating to a Transaction, you will
provide to the extent practicable, the Company with prompt prior written notice
of such requirement so that the Company may, at its sole cost, (a) seek a
protective order or other appropriate remedy or (b) in its sole discretion,
waive compliance with the terms of this agreement. If a protective order or
other remedy is not obtained within a reasonable period of time, or the Company
waives compliance with the terms of this agreement, you or your Representatives,
as applicable, will disclose only that which you or your Representatives are
legally required to disclose or which is necessary to avoid sanction for
contempt of court and you or your Representatives, as applicable, will exercise
commercially reasonable efforts (which efforts will consist of at least the
efforts you undertake in connection with ensuring the confidential treatment of
your non-public, confidential and/or proprietary information), at the Company's
cost, to ensure confidential treatment of (x) the Evaluation Material, (y) the
fact that the Evaluation Material has been made available or that discussions
between the parties are taking place, and (z) any other fact you are prohibited
from disclosing pursuant to this agreement.
If we do not proceed with a Transaction, or if the Company so
requests, you will promptly return to the Company all copies (including
originals) of the Evaluation Material in your possession or in the possession of
your Representatives, and you will promptly destroy all Evaluation Material
which constitutes copies (including originals) of any analyses, studies,
abstracts or other documents prepared by you or your Representatives or for your
or your Representatives' use, and any such destruction shall be certified in
writing to us by a duly authorized Representative of yours. Notwithstanding your
obligations as described in the preceding sentence, if the Evaluation Material
also is Litigation Material, then with respect to Appaloosa Representatives also
subject to a Protective Order, the return and/or destruction of such material
shall be governed by the applicable Protective Order, and not this Second
Amended NDA. Notwithstanding the return or destruction of Evaluation Material,
you and your
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May 10, 2007
Representatives will continue to be bound by your obligations of confidentiality
hereunder for the period commencing on the date hereof through the first
anniversary of the date of the consummation of a Plan of Reorganization.
You understand and agree that except as set forth in written
definitive agreements in connection with a Transaction, the Company has not made
or is not making any representation or warranty, express or implied, as to the
accuracy or completeness of the Evaluation Material, and nor will the Company or
its affiliates or any of their respective officers, directors, employees,
agents, affiliates, attorneys, advisors or accountants have any liability to you
or any other person or entity relating to or resulting from the use of the
Evaluation Material or any errors therein or omissions therefrom.
For the period commencing on the date hereof through the Release Date
(unless the Company is determined by a final order of the Bankruptcy Court to
have failed to perform in all material respects all of its obligations
hereunder), (a) you will not seek, and will cause each of your affiliates not
to, directly or indirectly, knowingly seek, or solicit or induce, or attempt to
solicit or induce a third party to seek, or support a third party that may seek
or is seeking to shorten or terminate the Company's exclusive periods (the
"Exclusive Periods") to propose and/or solicit a Plan of Reorganization;
provided, however, that if you become a member of an official committee in the
Chapter 11 Cases, then in your capacity as a member of such a committee, you may
participate in committee discussions, committee meetings and committee votes
with respect to the foregoing matters consistent with your fiduciary duties as a
member of such committee and (b) you will not take, and will cause each of your
affiliates not to take, directly or indirectly, any action with respect to the
matters described in the March 15 Letter.
Until the later of the Release Date and the date upon which you are no
longer in possession of material, non-public information about the Company
(unless the Company is determined by a final order of the Bankruptcy Court to
have failed to perform in all material respects all of its obligations
hereunder), without the prior written consent of the Company, you will not, and
will cause each of your affiliates and Representatives (in their capacity as
such) not to, singly or as part of a group, in any manner, directly or
indirectly: (i) participate in any solicitation of proxies or become a
participant in any election contest with respect to the Company, (ii) form, join
or in any way participate in a "group" (within the meaning of Section 13(d)(3)
of the Securities Exchange Act of 1934) with respect to Delphi's common stock,
other than in connection with a Transaction in which Appaloosa is a lead
investor, and (iii) sell, dispose of or otherwise transfer any equity securities
of the Company ("Equity Securities"), any debt securities of the Company ("Debt
Securities"), or assets of or claims against the Company, or any rights to
acquire any Equity Securities, Debt Securities, or assets of or claims against
the Company. In addition, nothing in this Agreement results in or will result in
a modification, amendment, waiver of any provision in the (i) the Final Order
Under 11 USC Sections 105, 362 and 541 FED. R. BANKR. P. 3001 dated January 6,
2006 (A) Establishing Notification Procedures Applicable to Substantial Holders
of Claims and Equity Securities and (B)
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May 10, 2007
Establishing Notification and Hearing Procedures for Trading in Claims and
Equity Securities, (ii) the letter agreements, dated November 22, 2005 and
January 9, 2006, between the Company and Palomino Fund, (iii) the letter
agreements, dated December 5, 2005 and January 9, 2006 between the Company and
Appaloosa Investment Partnership I, and (iv) the letter agreements, both dated
January 9, 2006, between the Company and Appaloosa Management LP.
Notwithstanding the foregoing, nothing in this Agreement shall prohibit
Appaloosa or Harbinger from participating in a rights offering or transferring
or exercising rights in connection therewith in accordance with applicable law.
You agree that money damages would not be a sufficient remedy for any
breach of this agreement by you or your Representatives and that, in addition to
all other remedies, the Company will be entitled to equitable relief, including
specific performance and injunctive or other equitable relief, in the event of
any breach or threatened breach of any provision of this agreement. In the event
of litigation relating to this agreement, each party shall pay its own expenses.
You acknowledge and agree that the Company is free to terminate
discussions and negotiations with you at any time after the Release Date and for
any reason (provided, however, that the Company will not be limited in any way
by the terms of this Agreement in allocating, prioritizing and directing its
resources and personnel, including its employees, agents and representatives, to
discussions and negotiations with other parties in connection with the Chapter
11 Cases or other matter) and unless and until a written definitive agreement
concerning a Transaction has been executed and approved by the Bankruptcy Court,
neither the Company nor any of our affiliates or any of our or their respective
officers, directors, employees, agents, affiliates, attorneys, advisors or
accountants will have any liability to you with respect to any business
arrangement, whether by virtue of this agreement, any other written or oral
expression with respect to any Transaction or otherwise.
You acknowledge that you and your Representatives may receive material
non-public information in connection with your evaluation of any Transaction and
you are aware (and you will so advise your Representatives) that the United
States securities laws impose restrictions on trading in securities when in
possession of such information.
The Company understands that you would prefer not to be in possession
of material non-public information at the time a Plan of Reorganization becomes
effective. In this regard, the Company will use commercially reasonable efforts
to avoid providing you with information that the Company expects is likely to be
material non-public information as of the effective date of such a Plan of
Reorganization (the "Information Deadline") and you shall follow appropriate
procedures to screen information the Company provides to you to avoid being in
possession or having knowledge of material non-public information as of the
Information Deadline. If, however, you believe that you are in possession of
material non-public information
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May 10, 2007
as of the Information Deadline, you may request the Company to make appropriate
public disclosure such that the information would no longer be non-public, and
the Company will make such public disclosure if the Company reasonably
determines that such public disclosure would be in the best interests of the
Company and its constituents. Notwithstanding anything herein to the contrary,
in the event (1) the Company agrees to modify the Information Deadline (or
comparable term or provision) in a confidentiality agreement among the Company
and any other person or entity, to a date that is earlier than the date a Plan
of Reorganization is declared effective (an "Earlier Information Deadline"), the
Company shall notify Appaloosa and Harbinger, in writing, and the Information
Deadline set forth in this letter agreement shall at the request of Appaloosa or
Harbinger be modified to be the date of the Earlier Information Deadline or (2)
the EPCA is terminated, the Information Deadline set forth herein shall at the
request of Appaloosa or Harbinger be modified to be the earlier of the (a) date
a disclosure statement is approved by the Bankruptcy Court or (b) the
Information Deadline (or comparable term or provision) set forth in any
confidentiality agreement among the Company and any potential investor
including, but not limited to, any party to the EPCA.
If information subject to a claim of attorney-client privilege, work
product doctrine or any other ground on which production of such information
should not be made is nevertheless inadvertently produced by the Company to you
or your Representatives, such production shall in no way prejudice or otherwise
constitute a waiver of, or estoppel as to, any claim of privilege, work product
or other ground for withholding production to which the Company would otherwise
be entitled. If a claim of inadvertent production is made pursuant to this
paragraph with respect to information then in the custody of you or your
Representatives, then you or your Representatives, as the case may be, shall,
upon request, promptly return to the Company that material (including all copies
thereof) as to which the claim of inadvertent production has been made, and you
and your Representatives shall not further use such information for any purpose.
Appaloosa and Harbinger are acting independently and not in concert
with respect to this agreement and nothing in this agreement shall be construed
to suggest that Appaloosa and Harbinger are in any manner acting together with
respect to the Company or any Transaction.
This agreement is solely for the benefit of the Company and its
respective successors and assigns. The rights of the Company under this
agreement may be assigned in whole or in part to any purchaser of the Company or
any substantial part thereof, which purchaser shall be entitled to enforce this
agreement to the same extent and in the same manner as the Company is entitled
to enforce this agreement.
No failure or delay by the Company in the exercise of any right, power
or privilege hereunder will operate as a waiver thereof. This agreement can only
be modified or waived in writing.
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May 10, 2007
Notices required or permitted by this Agreement shall be given by
certified mail, return receipt requested, overnight courier service or facsimile
to the following notice addresses:
A. For the Company:
Xxxxx X. Xxxxxxx, Esq.
Vice President, General Counsel
and Chief Compliance Officer
Delphi Corporation
0000 Xxxxxx Xxxxx
Xxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxx Xx. Xxxxxx, Jr., Esq.
Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000-0000, Suite 2100
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
B. For Appaloosa Management L.P.
Appaloosa Management L.P.
00 Xxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxx
Xx. Xxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
C. For Harbinger Capital Partners Master Fund I, Ltd.
Harbinger Capital Partners Master Fund I, Ltd.
c/o 000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxx
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May 10, 2007
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Harbinger Capital Partners Master Fund I, Ltd.
Xxx Xxxxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Legal Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any proceeding relating to this letter agreement shall be brought in
the Bankruptcy Court during the pendency of the Chapter 11 Cases and thereafter
in a federal or state court of New York. You and the Company hereby consent to
personal jurisdiction in any such action and to service of process by mail, and
waive any objection to venue in any such court. This letter shall be governed by
the internal laws of the State of New York and shall inure to the benefit of and
be binding upon the Company and you and our respective affiliates, successors
and assigns, including any successor to the Company or you or substantially all
of the Company's or your assets or business.
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May 10, 2007
Please acknowledge your acceptance of the terms and conditions stated
herein by signing and returning this agreement to the Company.
DELPHI CORPORATION
/s/ Xxxx X. Xxxxxxx
--------------------------------
By: Xxxx X. Xxxxxxx
Its: Vice President &
Chief Restructuring Officer
ACCEPTED AND AGREED:
APPALOOSA MANAGEMENT L.P.
/s/ Xxx Xxxxxx
------------------------------
By:
Its:
HARBINGER CAPITAL PARTNERS
MASTER FUND I, LTD.
By: Harbinger Capital Partners
Offshore Manager, LLC,
as its investment manager
/s/ Xxxxxx X. Xxxxxxx
------------------------------
By:
Its:
11
