EXHIBIT 99(a)
EXHIBIT B
THIS AGREEMENT IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OR
A SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN. SUCH OFFER OR
SOLICITATION ONLY WILL BE MADE IN COMPLIANCE WITH ALL
APPLICABLE SECURITIES LAWS AND/OR PROVISIONS OF THE BANKRUPTCY
CODE.
PLAN FRAMEWORK SUPPORT AGREEMENT
by and among
DELPHI CORPORATION,
GENERAL MOTORS CORPORATION,
APPALOOSA MANAGEMENT L.P.,
CERBERUS CAPITAL MANAGEMENT, L.P.,
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD.,
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX, INCORPORATED
and
UBS SECURITIES LLC
Dated as of December 18, 2006
PLAN FRAMEWORK SUPPORT AGREEMENT
This Plan Framework Support Agreement (the "AGREEMENT"), is entered
into as of December 18, 2006, by and among Delphi Corporation ("Delphi"), on
behalf of itself and its subsidiaries and affiliates operating as debtors and
debtors-in-possession (together with Delphi, the "Debtors") in the Chapter 11
Cases (as defined below), General Motors Corporation ("GM"), Appaloosa
Management L.P., ("Appaloosa"), Cerberus Capital Management, L.P., ("Cerberus"),
Harbinger Capital Partners Master Fund I, Ltd., ("Harbinger"), Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx, Incorporated ("MERRILL") and UBS Securities LLC ("UBS").
Each of the Debtors, GM, Appaloosa, Cerberus, Harbinger, Merril and UBS is
referred to herein individually as a "Party," and collectively, as the
"Parties". As used herein, the phrases "this Agreement", "hereto", "hereunder"
and phrases of like import shall mean this Agreement.
RECITALS
A. On October 8 and October 14, 2005, the Debtors commenced jointly
administered chapter 11 cases (collectively, the "Chapter 11 Cases") in the
United States Bankruptcy Court for the Southern District of New York (the
"Bankruptcy Court") for the purpose of restructuring their businesses and
related financial obligations pursuant to an overall transformation strategy
(the "Transformation Plan") that would incorporate the following structural
components:
(i) Modification of the Debtors' labor agreements;
(ii) Resolution of all issues and disputes between the Debtors and GM
regarding (i) certain legacy obligations, including allocating
responsibility for various pension and other post-employment benefit
obligations; (ii) all alleged claims and causes of action arising from
the spin-off of Delphi from GM; (iii) costs associated with the
transformation of the Debtors' business (including the establishment
of support to be provided by GM in connection with certain of those
businesses that the Debtors intend to shut-down or otherwise dispose
of); (iv) the restructuring of ongoing contractual relationships with
respect to continuing operations; and (v) the amount and treatment of
GM's claims in the Chapter 11 Cases (together, the "Designated
Issues");
(iii) Development of a strategically focused product portfolio and
realignment of production capacity to support it;
(iv) Transformation of the Debtors' work force in keeping with a
sustainable cost structure and streamlined product portfolio;
(v) Resolution of the Debtors' pension issues; and
(vi) Restructuring of the Debtors' balance sheet to accommodate the
transformed business.
EXECUTION COPY
B. In the summer of 2006, Appaloosa and Harbinger, as significant
stakeholders of the Debtors, negotiated and entered into non-disclosure
agreements with the Debtors pursuant to which they obtained certain information
from and about the Debtors and their businesses and engaged in discussions
regarding various potential reorganization structures and related matters,
including the potential requirement for a substantial equity investment in
Delphi to facilitate the Debtors' restructuring.
C. Separately, the Debtors conducted negotiations with other potential
investors, including Cerberus.
D. At the Debtors' request, Appaloosa, Harbinger and Cerberus engaged in
discussions regarding their respective views of the Transformation Plan, the
terms of a potential investment in Delphi and the general terms of various
potential restructuring strategies for the Debtors.
E. As a consequence of the foregoing discussions, this Agreement sets forth
in Article VI hereof certain material terms of a chapter 11 plan for the Debtors
(the "Plan") that is conditioned on (i) the implementation of the Transformation
Plan, including a settlement of the Designated Issues, and (ii) a proposed
equity investment by certain affiliates of Appaloosa, Cerberus, Harbinger, UBS
and Merrill (collectively, the "Plan Investors") in Delphi (the "Investment").
F. The Plan Investors have committed to Delphi to make the Investment on
the terms and on the conditions set forth in the Equity Purchase and Commitment
Agreement, the form of which is annexed as Exhibit A hereto (the "Investment
Agreement"), which sets forth the obligations of the Plan Investors to (i)
purchase any unsubscribed shares issued under a rights offering (the "Rights
Offering") of new common stock, and additional shares of common stock, of Delphi
to be issued pursuant to the Plan, and (ii) purchase newly issued shares of
preferred stock of Delphi.
G. Subject to the terms of this Agreement, the Parties have agreed to work
together to attempt to complete the negotiation of the terms of the Plan, as
well as to resolve other outstanding issues, and to formulate and facilitate
confirmation and consummation of the Plan and the transactions contemplated
hereby; provided, however, that Delphi will be the sole proponent of the Plan.
H. In so agreeing, the Parties do not desire and do not intend in any way
to derogate from or diminish the solicitation requirements of applicable
securities and bankruptcy law, or the fiduciary duties of the Debtors or any
such other Party having such duties.
I. Settlement of the Designated Issues is contingent upon Delphi and GM
reaching agreement on all documents pertinent in any way to GM's participation
in the Plan and/or all transactions contemplated thereby, including, without
limitation, definitive documentation evidencing all aspects of the commercial,
business and labor-related agreements between Delphi and GM and any other
Designated Issues (collectively, the "Delphi/GM Definitive Documents").
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AGREEMENT
ARTICLE I
OBLIGATIONS OF THE DEBTORS
The Debtors presently believe that, subject to the exercise (after
consultation with outside legal counsel) by each Debtor of its fiduciary duties
as a debtor and debtor-in-possession in the Chapter 11 Cases, prompt
consummation of the Plan will facilitate the Debtors' businesses and financial
restructuring and is in the best interests of their creditors, shareholders, and
other parties-in-interest. Accordingly, the Debtors hereby agree, subject to the
exercise (after consultation with outside legal counsel) by each Debtor of its
fiduciary duties as a debtor and debtor-in-possession in the Chapter 11 Cases,
to use commercially reasonable efforts to obtain confirmation and consummation
of the Plan; provided, however, that any failure by the Debtors to take any such
actions shall not create any claim (administrative or otherwise) or cause of
action against the Debtors or any of their affiliates. Subject to the foregoing
and to Delphi and GM reaching agreement on the Delphi/GM Definitive Documents on
or before January 31, 2007 or such later date as the Debtors shall agree, for so
long as this Agreement remains in effect, the Debtors agree to:
1.1 Subject to the terms of applicable non-disclosure agreements, provide
the Plan Investors and their counsel, accountants, financial advisors and other
representatives with access to information and personnel so that the Plan
Investors can complete their due diligence review of Delphi and its subsidiaries
within the timeframe contemplated by the Investment Agreement;
1.2 Subject to the terms of applicable non-disclosure agreements, promptly
provide the Plan Investors with information regarding the results of operations
and other activities and negotiations related to the Transformation Plan,
settlement of the Designated Issues and the Plan;
1.3 Prepare and file with the Bankruptcy Court no later than December 18,
2006, a motion (the "Initial Motion") seeking an order from the Bankruptcy Court
(i) approving and authorizing the Debtors to enter into the Investment
Agreement; (ii) authorizing payment of Transaction Expenses, the Commitment Fees
and the Alternate Transaction Fee (as such terms are defined in the Investment
Agreement) on the terms and conditions set forth in the Investment Agreement,
(iii) approving and authorizing the Debtors to enter into this Agreement and
(iv) determining that the Parties' entry into, and performance of, their
obligations under this Agreement does not violate any law, including the
Bankruptcy Code, and does not give rise to any claim or remedy against the
Parties including, without limitation, designating the vote of GM or any Plan
Investor on the Plan under section 1125(e) of the Bankruptcy Code;
1.4 Use commercially reasonable efforts to have the Bankruptcy Court enter
an order (the "Initial Approval Order") granting the relief requested in the
Initial Motion, on or before January 5, 2007;
1.5 Use commercially reasonable efforts to prepare and distribute to each
Party no later than January 31, 2007 drafts of (i) the Plan, (ii) a disclosure
statement with respect to the Plan (the
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"Disclosure Statement"), and (iii) a registration statement to be filed with the
Securities and Exchange Commission (the "Registration Statement") relating to
the Rights Offering;
1.6 Use commercially reasonable efforts to obtain entry by the Bankruptcy
Court of an order approving the Disclosure Statement (the "Disclosure Statement
Order") on or before April 5, 2007;
1.7 Subject to (and conditioned upon) entry of the Disclosure Statement
Order, use commercially reasonable efforts to solicit the requisite votes in
favor of the Plan, obtain confirmation by the Bankruptcy Court of the Plan,
obtain the debt financings contemplated by the Plan and cause the effective date
of the Plan to occur on or before the later of (a) July 31, 2007 or (b) the
first business day that is 180 days following the date on which the diligence
out in the Investment Agreement is no longer able to be exercised as a result of
waiver or the passage of time;
1.8 Use commercially reasonable efforts to cause the Registration Statement
to become effective during the period approved for the commencement of
solicitation of votes on the Plan; and
1.9 Engage in good faith negotiations with the other Parties regarding the
Plan, Disclosure Statement and other definitive documents that are materially
consistent with this Agreement and that resolve all unresolved items reflected
herein and/or are necessary to the implementation of the transactions
contemplated by this Agreement (collectively, the "Definitive Documents").
ARTICLE II
SUPPORT OBLIGATIONS OF THE PLAN INVESTORS AND GM
Unless and until this Agreement has been terminated in accordance with its
terms, and subject to GM's and the Plan Investors' obligations in this Article
II (other than clauses (i) through (iii) of Section 2.4 hereof) being subject to
Delphi and GM reaching agreement on the Delphi/GM Definitive Documents (it being
understood that no Party has any obligation to agree to or enter into any such
documents), and provided that any failure by any Plan Investor or GM to take or
refrain from taking, as the case may be, any actions described below in this
Article II shall not create any claim or cause of action against them or any of
their affiliates, each of the Plan Investors and GM agree (and shall cause its
respective subsidiaries and controlled affiliates to agree) that it will:
2.1 Support entry of the Disclosure Statement Order;
2.2 Not commence any proceeding or prosecute, join in, or otherwise support
any action to oppose or object to entry of the Disclosure Statement Order;
2.3 Not, nor will it encourage any other person or entity to, object to,
delay, impede, appeal, or take any other action, directly or indirectly, to
interfere with, entry of the Disclosure Statement Order;
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2.4 Until April 1, 2007, or such later date as may be mutually agreed by GM
and the Plan Investors (such agreement not to be unreasonably withheld), not,
directly or indirectly (i) initiate, solicit, knowingly cooperate with, or
knowingly encourage any inquiries or the making of any proposal or offer that
constitutes, or can reasonably be expected to lead to, any Alternate Transaction
(as defined in the Investment Agreement), (ii) engage in, continue, or otherwise
participate in any negotiations regarding any Alternate Transaction, (iii) enter
into any letter of intent, memorandum of understanding, agreement in principle,
or other agreement relating to any Alternate Transaction or (iv) withhold,
withdraw, qualify, or modify (or resolve to do so) in a manner adverse to the
Plan Investors or the Debtors its approval or recommendation of this Agreement,
the Plan or the transactions contemplated thereby; and that it will cause its
subsidiaries and controlled affiliates not to undertake, directly or indirectly,
any of the actions described in the immediately preceding clauses (i) through
(iv); and that it will use its commercially reasonable efforts to cause its
respective directors, officers, employees, investment bankers, attorneys,
accountants, and other advisors or representatives not to undertake, directly or
indirectly, any of such actions; provided, however, that nothing in this Section
2.4 shall preclude GM or any of the Plan Investors or any of their respective
subsidiaries or controlled affiliates, or any of their respective directors,
officers, employees, investment bankers, attorneys, accountants, and other
advisors or representatives from initiating, soliciting, knowingly cooperating
with, knowingly encouraging, discussing, negotiating, entering into,
consummating or otherwise participating in any transactions relating to (x) the
sale and/or wind-down of any of the Debtors' non-core sites and/or business
lines as publicly announced by the Debtors on March 31, 2006 and as modified by
the Debtors, in writing provided to GM, from time to time, (y) resourcing
products purchased by GM and/or (z) discussions engaged in by the Debtors in the
performance of their fiduciary duties; provided further however, that if this
provision is extended beyond April 1, 2007 as provided above, from and after
April 1, 2007, with Delphi's prior consent, any Plan Investor or GM, as
applicable, may be released from any and all of the foregoing prohibitions of
this Section 2.4.
2.5 Support confirmation of the Plan and entry by the Bankruptcy Court of
the order confirming the Plan (the "Confirmation Order"); provided, however,
that, for the avoidance of doubt, nothing in this Section 2.5 is an agreement by
any of the Plan Investors or GM to vote to accept or reject the Plan;
2.6 Not commence any proceeding or prosecute, join in, or otherwise support
any action to oppose or object to the Plan; and
2.7 Not, nor will it encourage any other person or entity to, delay, object
to, impede, appeal, or take any other action, directly or indirectly, to
interfere with the acceptance, confirmation or occurrence of the effective date
of the Plan.
Notwithstanding any other term or provision of this Agreement, nothing herein
shall prevent any Party from taking any action in court as it determines is
necessary or appropriate to protect its interests, including, without
limitation, objecting (in writing or orally) to any document, such as the Plan
or Disclosure Statement, filed in the Chapter 11 Cases by any party in interest.
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ARTICLE III
TERMINATION EVENTS
3.1 The occurrence of any of the following shall be a "Termination Event":
a. Termination of the Investment Agreement, whether pursuant to its
terms or otherwise;
b. Delivery of notice of the termination of this Agreement by any
Party to the other Parties for any reason or no reason as determined by the
Party delivering such notice in its sole discretion; provided however, that such
notice may not be given until April 1, 2007.
3.2 All obligations hereunder of all Parties shall terminate and shall be
of no further force and effect:
a. Immediately and automatically upon the occurrence of the
Termination Event described in Section 3.1(a) hereof;
b. Two (2) business days after receipt by the other non-terminating
Parties of the notice described in Section 3.1(b) hereof; provided however, that
delivery of such written notice by any Plan Investor other than Cerberus or
Appaloosa shall terminate only the obligations of such Plan Investor hereunder;
and
c. Automatically, and without written notice, immediately prior to
the issuance of the common stock and preferred stock contemplated by the Plan
and the Investment Agreement.
ARTICLE IV
GOVERNING LAW; JURISDICTION; VENUE
This Agreement will be governed and construed in accordance with the
internal laws of the State of New York without regard to any conflict of law
provision that could require the application of the law of any other
jurisdiction. By its execution and delivery of this Agreement, each Party hereby
irrevocably and unconditionally agrees for itself that the Bankruptcy Court will
retain exclusive jurisdiction over all matters related to the construction,
interpretation or enforcement of this Agreement. Each Party further agrees to
waive any objection based on forum non conveniens.
ARTICLE V
ADDITIONAL AGREEMENTS
The Parties acknowledge that Delphi and GM presently intend to pursue
agreements, to be documented in the Plan, the Confirmation Order and/or the
Delphi/GM Definitive Documents, as applicable, concerning, among other matters:
(a) triggering of the GM benefit guarantees; (b) assumption by GM of certain
postretirement health and life insurance
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obligations for certain Delphi hourly employees; (c) funding of Delphi's
underfunded pension obligations, including by the 414(l) Assumption (defined
below); (d) provision of flowback opportunities at certain GM facilities for
certain Delphi employees; (e) GM's payment of certain retirement incentives and
buyout costs under current or certain future attrition programs for Delphi
employees; (f) GM's payment of mutually negotiated buy-downs; (g) GM's payment
of certain labor costs for Delphi employees; (h) a revenue plan governing
certain other aspects of the commercial relationship between Delphi and GM; (i)
the wind-down of certain Delphi facilities and the sales of certain Delphi
business lines and sites; (j) the Debtors' support for GM's efforts to resource
products purchased by GM; (k) licensing of the Debtors' intellectual property to
GM or for its benefit; (l) treatment of the Environmental Matters Agreement
between Delphi and GM; (m) treatment of normal course items, such as warranty,
recall and product liability obligations; and (n) treatment of all other
executory contracts between the Debtors and GM. The Parties agree to negotiate
in good faith all of the documents and transactions described in this Article
(it being understood that (i) no Party has any obligation to enter into any such
documents or consummate any such transactions and (ii) the delivery by any Party
of a termination notice pursuant to Section 3.1(b) hereof shall not constitute a
breach of this Article V).
ARTICLE VI
PLAN FRAMEWORK
The Plan shall contain all of the following terms:
6.1 A condition precedent to the effectiveness of the Plan (subject to the
waiver provisions to be negotiated in connection with the Plan) shall be that
the aggregate amount of all trade claims and other unsecured claims (including
any accrued interest) (excluding (i) unsecured funded debt claims, (ii)
Flow-Through Claims (defined below), (ii) GM claims, which shall be treated as
set forth below, (iii) subordinated debt claims, which shall be treated as set
forth below, and (iv) securities claims, which shall be treated as set forth
below) (collectively, the "Trade and Other Unsecured Claims") that have been
asserted or scheduled but not yet disallowed as of the effective date of the
Plan shall be allowed or estimated for distribution purposes by the Bankruptcy
Court to be no more than $1.7 billion.
6.2 All senior secured debt shall be refinanced and paid in full and all
allowed administrative and priority claims shall be paid in full.
6.3 Trade and Other Unsecured Claims and unsecured funded debt claims shall
be placed in a single class. All such claims that are allowed (including all
allowed accrued interest) shall be satisfied in full with (a) $810 million of
common stock (18,000,000 out of a total of 135,285,714 shares,(2) at a deemed
value of $45.00 per share for Plan distribution purposes) in reorganized Delphi
and (b) the balance in cash; provided, however, that the common stock and cash
to be distributed pursuant to the immediately preceding clause shall be reduced
----------
(1) References in this Article VI to the total number of shares of common stock
gives effect to the conversion of the preferred stock issued pursuant to
the Investment Agreement to common stock.
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proportionately by the amount that allowed Trade and Other Unsecured Claims are
less than $1.7 billion.
6.4 (i) Customer and environmental obligations, (ii) employee-related
(excluding collective bargaining-related obligations) and other obligations (as
to be agreed by the Debtors and the Plan Investors) and (iii) litigation
exposures and other liabilities that are covered by insurance (as to be agreed
by the Debtors and the Plan Investors and scheduled in the Plan) ((i), (ii) and
(iii) together, the "Flow-Through Claims") will be unimpaired and will be
satisfied in the ordinary course of business (subject to the preservation and
flow-through of all estate rights, claims and defenses with respect thereto
which shall be fully reserved).
6.5 GM will receive an allowed general unsecured claim for all claims and
rights of GM and its affiliates (excluding in respect of the 414(l) Assumption,
all Flow Through Claims and all other claims and amounts to be treated in the
normal course or arising or paid pursuant to the Delphi/GM Definitive Documents)
that will be satisfied with (a) 7,000,000 out of a total of 135,285,714 shares
of common stock in reorganized Delphi and (b) $2.63 billion in cash.
6.6 All subordinated debt claims (including all accrued interest) will be
allowed and will be satisfied with (a) $450 million of common stock (10,000,000
out of a total of 135,285,714 shares, at a deemed value of $45.00 per share for
Plan distribution purposes) in reorganized Delphi and (b) the balance in cash.
6.7 Allowed securities claims will be satisfied solely from available
insurance or as otherwise agreed by the Plan Investors.
6.8 Holders of existing equity securities in Delphi shall receive, in the
aggregate, (a) $135 million of common stock (3,000,000 out of a total of
135,285,714 shares, at a deemed value of $45.00 per share for Plan distribution
purposes) in reorganized Delphi and (b) rights to purchase 63,000,000 out of a
total of 135,285,714 shares of common stock (to be reduced by the guaranteed
minimum of 10% of the rights for the Plan Investors) in reorganized Delphi for
$2.205 billion (exercise price: $35/share).
6.9 The preferred stock to be issued pursuant to the Plan in connection
with the Investment Agreement shall be subject to the terms listed on the term
sheet attached to the Investment Agreement ("Summary of Terms of Preferred
Stock"), which are incorporated by reference herein.
6.10 Delphi will arrange for payment on the effective date of the Plan of
$3.5 billion to fund its pension obligations. Such payment will include GM
taking $2.0 billion of net pension obligations pursuant to a 414(l) transaction
(the "414(l) Assumption"), which amount shall be reduced to no less than $1.5
billion if (a) Delphi and the Plan Investors determine that any greater amount
will have an adverse impact on the Debtors or (b) the Plan Investors determine
that any greater amount will have an adverse impact on the Plan Investors'
proposed investment in the Debtors. GM will receive a note from Delphi in the
amount of the 414(l) Assumption transferred in the 414(l) transaction, subject
to agreed market terms to be specified in the Delphi/GM Definitive Documents;
provided, however, that such note will be due, payable and paid in full at par
plus accrued interest in cash within ten (10) days following the effective date
of the Plan.
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6.11 A joint claims oversight committee shall be established on the
effective date of the Plan or as soon thereafter as practicable to monitor
claims administration, provide guidance to the Debtors, and address the
Bankruptcy Court if such post-effective date joint claims oversight committee
disagrees with the Debtors' determinations requiring claims resolution. The
composition of the joint claims oversight committee shall be satisfactory to the
Plan Investors in their sole and absolute discretion, but in any case, shall
include at least one representative appointed by the Plan Investors.
6.12 Reorganized Delphi will be subject to the following corporate
governance provisions:
a. A five-member selection committee (the "Selection Committee") will
select a new executive chair of reorganized Delphi. The Selection Committee will
consist of the following members: (i) Xxxx X. Xxxx, currently a member of
Delphi's board of directors and its lead independent director; (ii) one (1)
representative appointed by the statutory committee of unsecured creditors
appointed in the Chapter 11 Cases; (iii) one (1) representative appointed by the
statutory committee of equity security holders appointed in the Chapter 11
Cases; and (iv) two (2) representatives appointed by the Plan Investors. The new
executive chair will be chosen by a super majority of four (4) of the five (5)
members of the Selection Committee, which must include both representatives
appointed by the Plan Investors.
b. The board of directors of reorganized Delphi will consist of twelve
(12) members: (i) the new executive chair; (ii) Xxxxxx X'Xxxx, who will be
appointed chief executive officer and president of reorganized Delphi not later
than the effective date of the Plan; (iii) four (4) members (who may include one
(1) existing independent director) chosen by a unanimous vote of the Selection
Committee, provided, however, that the representatives of the Selection
Committee appointed by the Plan Investors will not be entitled to vote on these
four (4) directors (the "Common Directors"); (iv) three (3) members chosen by
Appaloosa; and (v) three (3) members chosen by Cerberus. All twelve (12) new
directors will be publicly identified not later than the day that is ten (10)
days prior to the date scheduled for the hearing of the Bankruptcy Court to
confirm the Plan. The board of directors of reorganized Delphi will satisfy all
applicable exchange/NASDAQ independence requirements.
c. Ongoing management compensation, including the SERP, stock options,
restricted stock, severance, change in control provisions and all other benefits
will be on market terms (as determined by the Board of Directors, based on the
advice of Xxxxxx-Xxxxx, and such management compensation plan design shall be
described in the Disclosure Statement and included in the Plan) and reasonably
acceptable to the Plan Investors; claims of former management and
terminated/resigning management will be resolved on terms acceptable to Delphi
and the Plan Investors or by court order. Equity awards will dilute all equity
interests pro rata.
d. The amended and restated certificate of incorporation of Delphi to
be effective immediately following the effective date of the Plan shall
prohibit; (A) for so long as Appaloosa or Dolce Investments, LLC ("Dolce"), as
the case may be, owns any shares of Series A Preferred Stock, any transactions
between Delphi or any of its Subsidiaries (as defined in the Investment
Agreement), on the one hand, and Appaloosa or Dolce or their respective
Affiliates (as defined in the Investment Agreement), as the case may be, on the
other hand (including any
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"going private transaction" sponsored by Appaloosa or Dolce) unless such
transaction shall have been approved by (x) directors constituting not less than
75% of the number of Common Directors (as defined in the Investment Agreement)
and (y) in the case of any transaction with Appaloosa or its Affiliates, Dolce,
and in the case of any transaction with Dolce or its Affiliates, Appaloosa, and
(B) any transaction between Delphi or any of its Subsidiaries, on the one hand,
and a director, on the other hand, other than a director appointed by holders of
Series A Preferred Stock (as defined in the Investment Agreement), unless such
transaction shall have been approved by directors having no material interest in
such transaction (a "Disinterested Director") constituting not less than 75% of
the number of Disinterested Directors; provided, that nothing in this provision
shall require any approval of any arrangements in effect as of December 18, 2006
with either General Motors Acceptance Corporation ("GMAC") or GM as a result of
the ownership by Dolce and its Affiliates of securities of GMAC or Dolce's and
its Affiliates' other arrangements in effect as of December 18, 2006 with GM
with respect to GMAC.
6.13 A condition precedent to the effectiveness of the Plan shall be the
ratification (and/or fulfillment of all other prerequisites to the
effectiveness) of each of Delphi's definitive labor agreements with each of its
U.S. labor unions (including, without limitation, new or amended collective
bargaining agreements and withdrawals and/or settlements of all claims of each
of Delphi's labor unions) and each of the labor-related Delphi/GM Definitive
Documents.
ARTICLE VII
IMPLEMENTATION
7.1 Promptly after execution of this Agreement by all Parties, Delphi will
seek entry of the Initial Approval Order, in form and substance satisfactory to
each Party, by the Bankruptcy Court. The Plan Investors and GM will timely file
statements in support thereof with the Bankruptcy Court.
7.2 The Parties agree to negotiate in good faith all of the documents and
transactions described in this Agreement (it being understood that (i) no Party
has any obligation to enter into any such documents or consummate any such
transactions and (ii) the delivery by any Party of a termination notice pursuant
to Section 3.1(b) hereof shall not constitute a breach of this Section 7.2).
ARTICLE VIII
GENERAL PROVISIONS
8.1 This Agreement is expressly contingent on, and shall automatically
become effective on such date as the Initial Approval Order, in form and
substance satisfactory to each Party, has been entered by the Bankruptcy Court
and the Investment Agreement, substantially in the form of Exhibit A hereto, has
been executed by all parties to the Investment Agreement; provided, however,
that if the Bankruptcy Court shall not have entered the Initial Approval Order,
in form and substance satisfactory to each Party, on or before January 22, 2007
and all parties to
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the Investment Agreement shall not have executed the Investment Agreement,
substantially in the form of Exhibit A hereto, within three (3) business days
following entry of the Initial Approval Order, this Agreement (and all
obligations hereunder of all Parties) shall automatically terminate without ever
having become effective.
8.2 Except as expressly provided in this Agreement, nothing contained
herein (i) is intended to, or does, in any manner waive, limit, impair or
restrict the ability of each of the Parties to protect and preserve its rights,
remedies, and interests, (ii) may be deemed an admission of any kind, or (iii)
effects a modification of any existing agreement until the occurrence of the
effective date of the Plan. If the transactions contemplated herein are not
consummated, or if this Agreement is terminated for any reason, the Parties
fully reserve any and all of their rights. Pursuant to Federal Rule of Evidence
408 and any applicable state rules of evidence, this Agreement and all
negotiations relating thereto are not admissible into evidence in any proceeding
other than a proceeding to enforce its terms.
8.3 The Plan Investors shall promptly deliver to GM (i) written notice upon
the termination of the Investment Agreement, whether pursuant to its terms or
otherwise, and (ii) copies of any amendments, waivers, supplements or other
modifications to the Investment Agreement.
8.4 Delphi and the Plan Investors have advised GM that (a) the Plan
Framework described in Article VI of this Agreement and the planned investments
of the Plan Investors described in the Investment Agreement are predicated, in
part, on the ability of Delphi to formulate a business plan and projections
reflecting that Delphi's reorganized businesses will achieve annual EBITDA of
not less than $2.4 billion on a consolidated basis following completion of
Delphi's Transformation Plan and (b) Delphi will not be able to achieve such
financial results if the Transformation Plan is not implemented.
8.5 Each Plan Investor and GM hereby agrees that it shall not (and shall
cause its subsidiaries and controlled affiliates not to) (a) sell, transfer,
assign, pledge, or otherwise dispose, directly or indirectly, of its right,
title or interest in respect of its claims against or interests in any of the
Debtors (to the extent held by it on the date hereof or acquired hereafter), in
whole or in part, or (b) grant any proxies, deposit any such claims or interests
(to the extent held by it on the date hereof or acquired hereafter) into a
voting trust, or enter into a voting agreement with respect to such claims or
interests, as the case may be, unless the transferee agrees in writing at the
time of such transfer to be bound by all obligations of the transferor contained
in this Agreement, including, but not limited to, Article II hereof, and the
transferor, within three business days, provides written notice of such transfer
to each other Party, together with a copy of the written agreement of the
transferee agreeing to be so bound. Each Party further agrees that it may not
create any subsidiary or affiliate for the sole purpose of acquiring any claims
against or interests in any member of the Debtors without causing such
subsidiary or affiliate to become a Party hereto prior to such acquisition.
8.6 Each of Appaloosa, Harbinger, Cerberus, Merrill and UBS hereby
confirms, on a several but not joint basis, that it and its affiliates remains
the beneficial holder of, and/or the holder of investment authority over, the
claim and interests, if any, previously disclosed in
11
connection with its applicable non-disclosure agreement with the Debtors and
that it will advise the Debtors upon any change in its or its affiliates'
holdings.
8.7 Each Party hereby acknowledges that this Agreement is not and shall not
be deemed to be a solicitation to accept or reject a plan in contravention of
section 1125(b) of the Bankruptcy Code. Each Party further acknowledges that no
securities of any Debtor are being offered or sold hereby and that this
Agreement does not constitutes an offer to sell or a solicitation of an offer to
buy any securities of any Debtor.
8.8 Each Party, severally and not jointly, represents, covenants, warrants,
and agrees to each other Party, only as to itself and not as to each of the
others, that the following statements, as applicable, are true, correct, and
complete as of the date hereof:
a. It has all requisite corporate, partnership or limited liability
company power and authority to enter into this Agreement and to perform its
obligations hereunder;
b. It is duly organized, validly existing, and in good standing under
the laws of its state of organization and it has the requisite power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder;
c. The execution and delivery of this Agreement and the performance of
its obligations hereunder have been duly authorized by all necessary corporate,
partnership, or limited liability company action on its part; provided, however,
that the Debtors' authority to enter into this Agreement is subject to
Bankruptcy Court approval;
d. This Agreement has been duly executed and delivered by it and
constitutes its legal, valid, and binding obligation, enforceable in accordance
with the terms hereof, subject to entry of the Initial Approval Order;
e. The execution, delivery, and performance by it (when such
performance is due) of this Agreement do not and shall not (i) violate any
provision of law, rule, or regulation applicable to it or any of its
subsidiaries or its certificate of incorporation or bylaws or other
organizational documents or those of any of its subsidiaries or (ii) conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation to which it or any of
its subsidiaries is a party; and
f. There are no undisclosed agreements or commitments between or among
the Parties regarding matters subject to the terms of this Agreement.
8.9 Except as otherwise specifically provided herein, this Agreement may
not be modified, waived, amended or supplemented unless such modification,
waiver, amendment or supplement is in writing and has been signed by each Party.
No waiver of any of the provisions of this Agreement shall be deemed or
constitute a waiver of any other provision of this Agreement, whether or not
similar, nor shall any waiver be deemed a continuing waiver.
8.10 This Agreement is intended to bind and inure to the benefit of the
Parties and their respective successors, assigns, heirs, executors,
administrators, and representatives; provided,
12
however, that nothing contained in this Section 8.10 will be deemed to permit
sales, assignments, or transfers of this Agreement.
8.11 Nothing contained in this Agreement is intended to confer any rights
or remedies under or by reason of this Agreement on any person or entity other
than the Parties hereto, nor is anything in this Agreement intended to relieve
or discharge the obligation or liability of any third party to any Party to this
Agreement, nor shall any provision give any third party any right of subrogation
or action over or against any Party to this Agreement.8.12 All notices and other
communications in connection with this Agreement will be in writing and will be
deemed given (and will be deemed to have been duly given upon receipt) if
delivered personally, sent via electronic facsimile (with confirmation), mailed
by registered or certified mail (return receipt requested) or delivered by an
express courier (with confirmation) to the Parties at the following addresses
(or at such other address for a Party as will be specified by like notice):
If to the Debtors, to:
a. Delphi Corporation
0000 Xxxxxx Xxxxx
Xxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx - Facsimile: (000) 000-0000
Xxxxx X. Xxxxxxx, Esq./
Xxxx Xxxxxxxx - Facsimile: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000/1
Attention: Xxxx X. Xxxxxxx, Esq.
Xxxxxxx X. Xxxxxxxxx, Esq.
Xxxxxx X. Xxxx, Esq.
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xx. Xxxxxx, Jr., Esq.
Xxxxxx X. Xxxxxxxxx, Esq.
13
b. If to Appaloosa, to:
Appaloosa Management L.P.
00 Xxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx
with a copy to:
White & Case LLP
Wachovia Financial Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Facsimile: (000) 000-0000/5766
Attention: Xxxxxx X Xxxxxx, Esq.
c. If to Harbinger, to:
Harbinger Capital Partners Master Fund I, Ltd.
c/o Harbinger Capital Partners
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
with a copy to:
White & Case LLP
Wachovia Financial Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Facsimile: (000) 000-0000/5766
Attention: Xxxxxx X Xxxxxx
and
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxxx, Esq.
Xxxx Xxxx Xxxxxx, Esq.
14
d. If to Cerberus, to:
Cerberus Capital Management, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000 / (000) 000-0000 / (000) 000-0000
Attention: Xxxxx Xxxxx / Dev Xxxxxxx / Xxxx Xxxxxxx
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
e. If to GM, to:
General Motors Corporation
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxx
and
General Motors Corporation
000 XX Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: E. Xxxxx Xxxxxxx, Esq.
Xxxxxxxxx X. Xxxxx, Esq.
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxxx, Esq.
Xxxxxxx X. Xxxxxxxxx, Esq.
Xxxxxxx X. Xxxxxxx, Esq.
f. If to Merrill, to:
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
4 World Financial Xxxxxx
00
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx / Xxxx Xxxxxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
g. If to UBS, to:
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000 / (000) 000-0000
Attention: Xxxxx Xxxxx / Xxxxx Xxxxxxxx
with a copy to:
Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
8.13 This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which shall constitute one and the
same Agreement. Delivery of an executed signature page of this Agreement by
facsimile shall be effective as delivery of a manually executed signature page
of this Agreement.
8.14 This Agreement constitutes the entire agreement among the Parties with
respect to the subject matter hereof and supersedes all prior agreements,
whether oral or written, with respect to such subject matter. This Agreement is
the product of negotiations among the Parties and represents the Parties'
intentions. In any action to enforce or interpret this Agreement, this Agreement
will be construed in a neutral manner, and no term or provision of this
Agreement, or this Agreement as a whole, will be construed more or less
favorably to any Party.
8.15 The agreements, representations and obligations of the Parties under
this Agreement are, in all respects, several and not joint. Any breach of this
Agreement by any Party shall not result in liability for any other non-breaching
Party.
[Remainder of page intentionally blank; remaining pages are signature pages.]
16
IN WITNESS WHEREOF, the undersigned have each caused this Agreement to be
duly executed and delivered by their respective, duly authorized officers as of
the date first above written.
DELPHI CORPORATION
By: /s/ XXXX X. XXXXXXX
------------------------------------
Name: Xxxx X. Xxxxxxx
----------------------------------
Title: Vice President and Chief
Restructuring Officer
---------------------------------
GENERAL MOTORS CORPORATION
By: /s/ XXXXXXXXX X. XXXXXXXXX
------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
----------------------------------
Title: Vice Chairman and Chief
Financial Officer
---------------------------------
APPALOOSA MANAGEMENT L.P.
By: /s/ XXXXXX X. XXXXXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
----------------------------------
Title: Partner
---------------------------------
HARBINGER CAPITAL PARTNERS MASTER
FUND I, LTD.
By: Harbinger Capital Partners Offshore
Manager, L.L.C., as investment
manager
By: /s/ XXXXXX X. XXXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Managing Director
17
CERBERUS CAPITAL MANAGEMENT, L.P.
By: /s/ XXXXX XXXXX
------------------------------------
Name: Xxxxx Xxxxx
----------------------------------
Title: Managing Director
---------------------------------
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX,
INCORPORATED
By: /s/ XXXXXX XXXXXXXXX
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Managing Director
UBS SECURITIES LLC
By: /s/ XXXXXX X. XXXXX
------------------------------------
Name: Xxxxxx X. Xxxxx
----------------------------------
Title: Managing Director
---------------------------------
By: /s/ XXXXXX XXXXXX
------------------------------------
Name: Xxxxxx Xxxxxx
----------------------------------
Title: Managing Director
---------------------------------
18
