SECOND RESTATED FIRST AMENDMENT TO THE EQUITY PURCHASE AND
COMMITMENT AGREEMENT
THIS SECOND RESTATED FIRST AMENDMENT TO THE EQUITY PURCHASE AND
COMMITMENT AGREEMENT (this "Amendment"), dated as of December 10, 2007, is made
by and among A-D Acquisition Holdings, LLC, a limited liability company formed
under the laws of the State of Delaware ("XXXX"), Harbinger Del-Auto Investment
Company, Ltd., an exempted company incorporated in the Cayman Islands
("Harbinger"), Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, a Delaware
corporation ("Merrill"), UBS Securities LLC, a Delaware limited liability
company ("UBS"), Xxxxxxx, Xxxxx & Co., a New York limited partnership ("GS"),
Pardus DPH Holding LLC, a Delaware limited liability company ("Pardus"), and
Delphi Corporation, a Delaware corporation (as a debtor-in-possession and a
reorganized debtor, as applicable, the "Company"). XXXX, Harbinger, Merrill,
UBS, GS and Pardus are each individually referred to herein as an "Investor" and
collectively as the "Investors". Capitalized terms used and not otherwise
defined in this Amendment shall have the meanings assigned thereto in the EPCA
(as defined below).
WHEREAS, the Company and certain of its subsidiaries and affiliates
commenced the Chapter 11 Cases under the Bankruptcy Code in the Bankruptcy
Court;
WHEREAS, the Company and the Investors have entered into that certain
Equity Purchase and Commitment Agreement dated as of August 3, 2007 (the
"EPCA"); and
WHEREAS, the Company has proposed certain changes to the Company's
plan of reorganization and in connection therewith the Investors and the Company
have agreed to amend the EPCA pursuant to this Amendment.
NOW, THEREFORE, in consideration of the mutual promises, agreements,
representations, warranties and covenants contained herein, each of the parties
hereto hereby agrees as follows:
1. Amended Provisions of EPCA.
(a) The sixth WHEREAS clause of the EPCA is hereby amended and restated in
its entirety as follows:
"WHEREAS, the Company filed its motion (the "Approval Motion") seeking an
order from the Bankruptcy Court that, among other things, all of the
findings, conclusions and
rulings contained in the Original Approval Order (i) apply to this
Agreement (including the Commitment Fees, the Arrangement Fee, the
Alternate Transaction Fees and the Transaction Expenses provided for
herein), the parties hereto and the transactions contemplated hereby, and
(ii) continue in full force and effect with respect thereto (as so granted
and issued on August 2, 2007; the "Approval Order");".
(b) The seventh WHEREAS clause of the EPCA is hereby amended and restated
in its entirety as follows:
"WHEREAS, the Company filed its motion (the "Subsequent Approval Motion")
seeking an order from the Bankruptcy Court that (i) all the findings,
conclusions and rulings contained in the Original Approval Order and the
Approval Order (A) apply to this Agreement as amended (including the
Commitment Fees, the Arrangement Fees, the Alternate Transaction Fees and
the Transaction Expenses provided for herein), the Plan of Reorganization
attached hereto as Exhibit B (the "Plan"), the parties hereto and the
transactions contemplated hereby and (B) continue in full force and effect
with respect thereto, and (ii) the disclosure statement attached hereto as
Exhibit C ("Disclosure Statement") is approved as containing adequate
information pursuant to Section 1125 of the Bankruptcy Code, which
Subsequent Approval Motion was granted and order issued on December 10,
2007 (as so issued, the "Subsequent Approval Order" and the date of such
order being the "Subsequent Approval Date");"
(c) The eighth WHEREAS clause of the EPCA is hereby amended and restated
in its entirety as follows:
"WHEREAS, the Company has proposed and submitted the Plan to the Bankruptcy
Court for its approval;"
(d) The ninth WHEREAS clause of the EPCA is hereby amended by deleting the
words "plan of reorganization" at each occurrence of such words
therein and replacing such words with the word "Plan".
(e) The tenth WHEREAS clause of the EPCA is hereby amended by: (i)
deleting the words "will provide, on the date hereof," and replacing
them with the words "have provided"; and (ii) deleting the words "will
confirm," and replacing them with the word "confirms".
(f) Section 1 of the EPCA is hereby amended and restated in its entirety
as follows:
"1. Rights Offering.
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(a) The Company proposes to offer and sell shares of its new common stock,
par value $0.01 per share (the "New Common Stock"), pursuant to a
rights offering (the "Rights Offering"). Pursuant to the Rights
Offering, the Company will distribute at no charge to each Eligible
Holder (as defined below), including, to the extent applicable, the
Investors, that number of rights (each, a "Right") that will enable
each Eligible Holder to purchase up to its pro rata portion
(determined on the basis set forth in Section 5.3(b) of the Plan) of
41,026,309 shares in the aggregate of New Common Stock (each, a
"Share") at a purchase price of $38.39 per Share (the "Purchase
Price"). The term "Eligible Holder" means the holder of a General
Unsecured Claim, Section 510(b) Note Claim, Section 510(b) Equity
Claim or Section 510(b) ERISA Claim (as each such term is defined in
the Plan), which claim has been allowed or otherwise estimated for the
purpose of participating in the Rights Offering on or before the date
established by the Bankruptcy Court for determining all Eligible
Holders of record or transferees receiving such holders' Rights.
(b) The Company will conduct the Rights Offering pursuant to the Plan,
which shall reflect the Company's proposed restructuring transactions
described in this Agreement and the Summary of Terms of Preferred
Stock attached hereto as Exhibit A (the "Preferred Term Sheet").
(c) The Rights Offering will be conducted as follows:
(i) On the terms and subject to the conditions of this Agreement and
subject to applicable law, the Company shall offer Shares for
subscription by the holders of Rights as set forth in this
Agreement.
(ii) Promptly, and no later than four (4) Business Days, following the
occurrence of both (1) the date that the Confirmation Order shall
have been entered by the Bankruptcy Court and (2) the
effectiveness under the Securities Act of 1933, as amended (the
"Securities Act"), of the Rights Offering Registration Statement
filed with the Securities and Exchange Commission (the
"Commission") relating to the Rights Offering, the Company shall
issue (the date of such distribution, the "Rights Distribution
Date") to each Eligible Holder, Rights to purchase up to its pro
rata portion of 41,026,309 Shares in the aggregate (the "Basic
Subscription Privilege"). The Company will be responsible for
effecting the distribution of certificates representing the
Rights, the Rights Offering Prospectus and any related materials
to each Eligible Holder.
(iii) Each Eligible Holder who exercises in full its Basic
Subscription Privilege will be entitled to subscribe for
additional Shares offered in the Rights Offering for an amount as
provided in the Plan to the extent the other
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Eligible Holders do not exercise all of their Rights in the Basic
Subscription Privilege (the "Over-Subscription Privilege") with
amounts in excess of the Purchase Price per Share paid pursuant
to an Over-Subscription Privilege to be aggregated and
distributed as provided for in the Plan.
(iv) The Rights may be exercised during a period (the "Rights Exercise
Period") commencing on the Rights Distribution Date and ending at
the Expiration Time. The Rights shall separately be transferable.
"Expiration Time" means the date that is 20 days after the Rights
Distribution Date, or such later date and time as the Company,
subject to the prior written approval of XXXX, may specify in a
notice provided to the Investors before 9:00 a.m., New York City
time, on the Business Day before the then-effective Expiration
Time. The Company shall use its reasonable best efforts to cause
the effective date of the Plan (the "Effective Date") to occur as
promptly as reasonably practicable after the Expiration Time. For
the purpose of this Agreement, "Business Day" means each Monday,
Tuesday, Wednesday, Thursday and Friday that is not a day on
which banking institutions in New York City are generally
authorized or obligated by law or executive order to close. Each
Eligible Holder who wishes to exercise all or a portion of its
Rights shall (i) during the Rights Exercise Period return a duly
executed document to a subscription agent reasonably acceptable
to the Company and XXXX (the "Subscription Agent") electing to
exercise all or a portion of such Eligible Holder's Basic
Subscription Privilege and specifying the number of Shares, if
any, such Eligible Holder wishes to purchase pursuant to its
Over-Subscription Privilege and (ii) pay an amount, equal to the
full Purchase Price of the number of Shares that the Eligible
Holder elects to purchase pursuant to its Basic Subscription
Privilege and Over-Subscription Privilege, by wire transfer of
immediately available funds by the Expiration Time to an escrow
account established for the Rights Offering.
(v) As soon as reasonably practicable following the Effective Date,
the Company will issue to each Eligible Holder who validly
exercised its Basic Subscription Privilege and, if applicable,
its Over-Subscription Privilege, the number of Shares to which
such holder of Rights is entitled based on the terms of the
Rights Offering.
(vi) The Company hereby agrees and undertakes to give each Investor by
electronic facsimile transmission the certification by an
executive officer of the Company of either (i) the number of
Shares elected to be purchased by Eligible Holders under their
Basic Subscription Privilege and, if applicable, their
Over-Subscription Privilege, the aggregate Purchase Price
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therefor, the number of Unsubscribed Shares and the aggregate
Purchase Price therefor (a "Purchase Notice") or (ii) in the
absence of any Unsubscribed Shares, the fact that there are no
Unsubscribed Shares and that the commitment set forth in Section
2(a)(iv) is terminated (a "Satisfaction Notice") as soon as
practicable after the Expiration Time and, in any event,
reasonably in advance of the Closing Date (the date of
transmission of confirmation of a Purchase Notice or a
Satisfaction Notice, the "Determination Date").
(vii) The Rights Offering will provide each Eligible Holder who
validly exercised its Rights with the right to withdraw a
previous exercise of Rights after the withdrawal deadline
established in the Rights Offering Registration Statement if
there are changes to the Plan after the withdrawal deadline that
the Bankruptcy Court determines are materially adverse to the
holders of the Rights and the Bankruptcy Court requires
resolicitation of votes under Section 1126 of the Bankruptcy Code
or an opportunity to change previously cast acceptances or
rejections of the Plan.".
(g) Section 2(a)(i) of the EPCA is hereby amended by replacing the number
"$38.39" with the number "$42.58".
(h) Section 2(a)(iii) of the EPCA is hereby amended by replacing the
number "$31.28" with the number "$42.20" and by replacing the number
"12,787,724" with the number "9,478,887".
(i) Section 2(a)(iv) of the EPCA is hereby amended by adding the words
"pursuant to the Basic Subscription Privileges and Over-Subscription
Privileges" after the words "Rights Exercise Period".
(j) Section 2(i) of the EPCA is hereby amended (i) by replacing the words
"Disclosure Statement Filing Date." with the words "original filing on
September 6, 2007 of the Company's disclosure statement. The
Arrangement Fee and the first fifty percent (50%) of the Commitment
Fees have been paid to XXXX." and (ii) by replacing the words
"Disclosure Statement Approval Date. The Arrangement Fee shall be paid
to XXXX upon entry of the Approval Order." with the words "Subsequent
Approval Date.".
(k) The introductory paragraph to Section 3 of the EPCA is hereby amended
(i) to delete the words "to be delivered pursuant to Section 5(s)"
appearing in the first sentence and replacing them with the following
words "delivered by the Company to the Investors on October 29, 2007"
and (ii) to delete the ":" appearing at the
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end thereof and replace it with the following words ". References in
this Agreement to the Company SEC Documents filed prior to the date
hereof shall mean Company SEC Documents filed prior to the Disclosure
Letter Delivery Date and the Company's Quarterly Report on Form 10-Q
filed on November 6, 2007.".
(l) Section 3(a) of the EPCA is hereby amended in clause (vi) by replacing
the words "or any failure to timely file periodic reports or timely
prepare financial statements and the costs and effects of completing
the preparation of the Company's financial statements and periodic
reports" and replacing them with the words ", the Company's failure to
timely file its Form 10-Ks for the years ended December 31, 2005 and
2004, and its Form 10-Qs for the quarters ended September 30, 2006,
March 31, 2006, March 31, 2005 and September 30, 2004, respectively,
or timely prepare the corresponding required financial statements (and
the costs and effects of completing the preparation of those
aforementioned financial statements and periodic reports)".
(m) Section 3(b)(ii) of the EPCA is hereby amended (i) by deleting the
words "Prior to the execution by the Company and filing with the
Bankruptcy Court of the Plan, the" and replacing them with the word
"The" and (ii) by adding the words "had and" after the words "into the
Plan".
(n) Section 3(c)(ii) of the EPCA is hereby amended by replacing the words
"will be" with the words "has been".
(o) Section 3(d) in the fifth sentence thereof, Section 3(f), Section
3(g), Section 4(h), Section 4(i), Section 5(d), Section 8(c)(v),
Section 9(a)(xv), Section 9(c)(iii) and Section 12(c) of the EPCA are
hereby amended by deleting the word "Terms" after the word "Plan" at
each occurrence of such words therein.
(p) Section 3(d) in the seventh sentence thereof, Section 3(nn), Section
3(oo), Section 5(b), Section 5(j), Section 6(d), the introductory
paragraph to Section 8, Section 9(a)(vi), Section 9(a)(xiv), Section
9(a)(xix), Section 9(c)(x) and Section 12(f) of the EPCA are hereby
amended by deleting the words ", the Plan Terms" at each occurrence of
such words therein.
(q) Section 3(d) of the EPCA is hereby amended by (i) replacing the word
"June" in the second sentence thereof with the word "September", (ii)
replacing the number "561,781,500" in the second sentence thereof with
the number "561,781,590", (iii) replacing the number "85,978,864" in
the second sentence thereof with the number "77,847,906", (iv)
replacing the number "23,207,104" in the eighth sentence thereof with
the number "35,381,155", (v) replacing the number
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"124,400,000" with the number "95,885,251" in the ninth sentence
thereof, (vi) replacing the number "12,787,724" with the number
"9,478,887" in the ninth sentence thereof and (vii) deleting the words
"and (iii) 10,419,380 shares of Series B Preferred Stock will be
issued and outstanding" and replacing them with the words "; (iii)
9,394,092 shares of Series B Preferred Stock will be issued and
outstanding; (iv) 16,508,176 shares of Series C Convertible Preferred
Stock, par value $0.01 per share, will be issued and outstanding and
(v) neither the Company nor any of its Subsidiaries will be a party to
or otherwise bound by or subject to any option, warrant, call,
subscription or other right, agreement or commitment which (A)
obligates the Company or any of its Subsidiaries to issue, deliver,
sell or transfer, or repurchase, redeem or otherwise acquire, or cause
to be acquired, any shares of the capital stock of, or other equity or
voting interest in, the Company or any security convertible or
exercisable for or exchangeable into any capital stock of, or other
equity or voting interest in, the Company or (B) obligates the Company
or any of its Subsidiaries to issue, grant, extend or enter into any
such option, warrant, call, right, security, commitment, contract,
arrangement or undertaking, in each case other than as required by the
terms of either the Preferred Shares or the warrants to be issued
pursuant to the Plan in the form attached hereto as Exhibit B and
other than pursuant to employee equity incentive plans as satisfying
the requirements of Section 8(c) or, the extent not addressed in
Section 8(c), as specified in the Plan in the form attached hereto as
Exhibit B" in the ninth sentence thereof.
(r) Section 3(i) of the EPCA is hereby amended by (i) inserting the words
"included or incorporated by reference or" immediately preceding the
words "to be included" at each occurrence of such words therein and
(ii) replacing the words "will be set forth in the Disclosure
Statement," with the words "the Disclosure Statement and will be set
forth in the".
(s) Section 3(j) of the EPCA is hereby amended by (i) inserting the words
"conformed and" immediately prior to the words "will conform"
appearing in the fifth sentence thereof and (ii) by inserting the
words "did not and" immediately preceding the words "will not"
appearing in the sixth sentence thereof.
(t) Section 3(m)(vii)(A) of the EPCA is hereby amended by inserting the
words "and dated August 21, 2007" immediately after the words "April
5, 2007".
(u) Section 3(m)(vii)(A) and Section 3(m)(viii)(A) of the EPCA are hereby
amended by replacing the words "satisfaction of the condition with
respect to the Business Plan in accordance with Section 9(a)(xxviii)
of this Agreement" with the words "Disclosure Letter Delivery Date".
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(v) Section 3(m)(vii)(B) and Section 3(m)(viii)(B) of the EPCA are hereby
amended by replacing the words "after the satisfaction of the
condition with respect to the Business Plan in accordance Section
9(a)(xxviii) of this Agreement, the Business Plan approved by XXXX in
accordance with this Agreement," with the words "from and after the
Disclosure Letter Delivery Date, the Business Plan (and if amended in
a manner that satisfies the condition with respect to the Business
Plan set forth in Section 9(a)(xxviii), as so amended),".
(w) Section 3(n) of the EPCA is hereby amended by replacing the words "or
the Approval Order" with the words ", the Approval Order, the
Subsequent Approval Order".
(x) Section 3(ii) of the EPCA is hereby amended by adding the words "the
Preferred Term Sheet or the Plan," immediately following the words
"Section 8(c)(iv)," appearing therein.
(y) Section 3(pp) of the EPCA is hereby amended and restated in its
entirety to read as follows:
"(pp) Labor MOUs. On June 22, 2007, the Company entered into a Memorandum
of Understanding (the "UAW MOU") with the International Union, United
Automobile, Aerospace and Agricultural Implement Workers of America ("UAW")
and GM. On August 5, 2007, the Company entered into a Memorandum of
Understanding (the "IUE-CWA MOU") with the International Union of
Electronic, Electrical, Salaried, Machine and Furniture
Workers-Communication Workers of America ("IUE-CWA") and GM. On August 16,
2007, the Company entered into two Memoranda of Understanding (the "USW
MOUs", and collectively with the UAW MOU and the IUE-CWA MOU, as each such
agreement has been amended through the Disclosure Letter Delivery Date, the
"Labor MOUs") with the United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service Workers International
Union and its Local Union 87L (together, the "USW") and GM. The UAW MOU,
IUE-CWA MOU and the USW MOUs have been ratified by the membership of the
UAW, IUE-CWA and USW, respectively, and true and complete copies of the
Labor MOUs have been made available to XXXX.".
(z) The following paragraph should be inserted in its entirety immediately
following Section 3(pp):
"(qq) Debt Financing. The Company has delivered to XXXX a correct and
complete copy of an executed "best efforts" financing letter (the
"Financing Letter") from X.X. Xxxxxx Securities Inc., JPMorgan Chase Bank,
N.A. and Citigroup Global Markets Inc. dated November 3, 2007 and as filed
with the Bankruptcy Court on November 6,
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2007 and as approved by the Bankruptcy Court on November 16, 2007 (on the
terms indicated, the "Bank Financing" and, together with the GM Debt (as
defined below), the "Debt Financing"). The Financing Letter is a legal,
valid and binding obligation of the Company, and to the knowledge of the
Company, the other parties thereto, and is in full force and effect. The
Financing Letter has not been withdrawn, terminated or otherwise amended or
modified in any respect and no event has occurred which, with or without
notice, lapse of time or both, would constitute a default or breach on the
part of the Company under the Financing Letter. The Company has fully paid
any and all fees required by the Financing Letter to be paid as of the date
hereof."
(aa) The introductory paragraph to Section 4 of the EPCA is hereby amended
to replace the word "Each" in the first sentence thereof with the
words "Except as set forth in a disclosure letter delivered by the
Investors to the Company on the Disclosure Letter Delivery Date (the
"Investor Disclosure Letter"), each".
(bb) Section 5(a) of the EPCA is hereby amended by adding the word
"Subsequent" immediately after the words "cause the" and the words
"filing of the".
(cc) Section 5(b) of the EPCA is hereby amended by (i) replacing the words
"shall authorize, execute, file with the Bankruptcy Court and seek
confirmation of, a Plan (and a related disclosure statement (the
"Disclosure Statement"))" with the words "has authorized, executed and
filed with the Bankruptcy Court and shall seek confirmation of, the
Plan", (ii) replacing the words "each Investor, its Affiliates,
shareholders, partners, directors, officers, employees and advisors
from liability for participation in the transactions contemplated by
the Original Agreement, this Agreement, the Preferred Term Sheet, the
Original PSA and the Plan to the fullest extent permitted under
applicable law" with the words "as contemplated in Section 9(a)(iv)",
(iii) replacing the words ", the Preferred Term Sheet and the Plan
Terms," and the words ", the Preferred Term Sheet and the Plan Terms"
with the words "and the Preferred Term Sheet" and (iv) replacing the
words "entry of an order by the Bankruptcy Court approving the
Disclosure Statement (the "Disclosure Statement Approval Date") and
the effectiveness under the Securities Act of the Rights Offering
Registration Statement" with the words "Subsequent Approval Date".
(dd) Section 5(d) of the EPCA is hereby amended by replacing the words
"date the GM Settlement is agreed" with the words "Subsequent Approval
Date" in the second sentence thereof.
(ee) Section 5(i) of the EPCA are hereby amended by replacing the words
"Disclosure Statement" with the word "Subsequent".
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(ff) The introductory paragraph of Section 5(n) of the EPCA is hereby
amended and restated in its entirety as follows:
"(n) Conduct of Business. During the period from the date of this Agreement
to the Closing Date (except as otherwise expressly provided by the terms of
this Agreement including the Disclosure Letter, the Plan or any other order
of the Bankruptcy Court entered on or prior to the date hereof in the
Chapter 11 Cases), the Company and its Subsidiaries shall carry on their
businesses in the ordinary course (subject to any actions which are
consistent with the, at any time prior to the Disclosure Letter Delivery
Date, Draft Business Plan or at all times from and after the Disclosure
Letter Delivery Date, the Business Plan (and, if amended in a manner that
satisfies the condition with respect to the Business Plan set forth in
Section 9(a)(xxviii), as so amended)) and, to the extent consistent
therewith, use their commercially reasonable efforts to preserve intact
their current business organizations, keep available the services of their
current officers and employees and preserve their relationships with
customers, suppliers, licensors, licensees, distributors and others having
business dealings with the Company or its Subsidiaries. Without limiting
the generality of the foregoing, except as set forth in the Disclosure
Letter, the Company and its Subsidiaries shall carry on their businesses in
all material respects in accordance with, at any time prior to the
Disclosure Letter Delivery Date, the Draft Business Plan and at all times
from and after the Disclosure Letter Delivery Date, the Business Plan (and,
if amended in a manner that satisfies the condition with respect to the
Business Plan set forth in Section 9(a)(xxviii), as so amended) and shall
not enter into any transaction that, at any time prior to the Disclosure
Letter Delivery Date, would be inconsistent with the Draft Business Plan
(and, if amended in a manner that satisfies the condition with respect to
the Business Plan set forth in Section 9(a)(xxviii), as so amended) and
shall use its commercially reasonable efforts to effect such Draft Business
Plan and the Business Plan. Without limiting the generality of the
foregoing, and except as otherwise expressly provided or permitted by this
Agreement (including the Disclosure Letter), the Plan or any other order of
the Bankruptcy Court entered as of the date of the Original Agreement in
these Chapter 11 Cases, prior to the Closing Date, the Company shall not,
and shall cause its Subsidiaries not to, take any of the following actions
without the prior written consent of XXXX, which consent shall not be
unreasonably withheld, conditioned or delayed:".
(gg) Section 5(n)(vi) of the EPCA is hereby amended (i) by replacing the
word "satisfying" with the words "(and, if amended in a manner that
satisfies", (ii) by replacing the word "of" with the words ", as so
amended)" and (iii) by deleting the words "this Agreement, the Plan
Terms,".
(hh) Section 5(p) of the EPCA is hereby amended and restated in its
entirety as follows:
"(p) GM Settlement. The Company has delivered to XXXX and its counsel a
copy of the Global Settlement Agreement between the Company and GM dated
September 6,
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2007, the Master Restructuring Agreement between the Company and GM, dated
September 6, 2007 each as amended by amendments (the "GM Amendments") dated
as of December 7, 2007 (collectively, the "GM Settlement"). Other than the
GM Amendments, the Company shall not enter into any other agreement with GM
that (i) is materially inconsistent with this Agreement and the Plan, (ii)
is outside the ordinary course of business or (iii) the terms of which
would have a material impact on the Investors' proposed investment in the
Company. The Company has not entered into any material written agreements
between or among the Company or any of its Subsidiaries and GM or any of
its Subsidiaries directly relating to the Plan or the GM Settlement or the
performance of the Transaction Agreements, and any such written agreements
hereafter entered into will be disclosed promptly to XXXX.".
(ii) Section 5(s) of the EPCA is hereby amended and restated in its
entirety as follows:
"(s) Business Plan. The Company has delivered to XXXX a final five-year
business plan dated the Disclosure Letter Delivery Date (the "Business
Plan"). The Company represents and warrants to the Investors that the
Business Plan was approved by the Company's board of directors and prepared
in good faith and based on reasonable assumptions.".
(jj) Section 5(t) of the EPCA is hereby amended and restated in its
entirety as follows:
"(t) Financing Assistance. (i) The Company shall use its reasonable best
efforts to arrange the Bank Financing and the second lien debt to be issued
to GM set forth in Exhibit E (the "GM Debt") on the terms and conditions
described in the Financing Letter and in Exhibit E, including using its
reasonable best efforts to (i) negotiate definitive agreements with respect
thereto on terms and conditions contained therein, (ii) satisfy on a timely
basis all conditions applicable to the Company in such definitive
agreements that are within its control and (iii) consummate the Debt
Financing at the Closing. In the event any portion of the Debt Financing
becomes unavailable on the terms and conditions contemplated in the
Financing Letter or in Exhibit E, the Company shall promptly (and in any
event within one Business Day) notify XXXX of such unavailability and the
reasons therefore. The Company shall give XXXX prompt notice of any breach
by any party of the Financing Letter or any termination of the Financing
Letter. The Company shall keep XXXX informed on a reasonably current basis
in reasonable detail of the status of its efforts to arrange the Debt
Financing and shall not permit any amendment or modification to be made to,
or any waiver of any provision or remedy under, in each case, to the extent
adverse to the Company or the Investors, the Financing Letter or the terms
set forth in Exhibit E. The Company shall provide notice to XXXX promptly
upon receiving the Debt Financing and shall furnish correct and complete
copies of the definitive agreements with respect thereto to XXXX promptly
upon their execution. Subject to applicable regulatory or NASD
requirements, Merrill and UBS (or their
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Affiliates) shall be entitled to participate in the Debt Financing on
market terms. The Company and its Subsidiaries shall execute and deliver
any commitment letters, underwriting or placement agreements, registration
statements, pledge and security documents, other definitive financing
documents, or other requested certificates or documents necessary or
desirable to obtain the Debt Financing. The Company will (i) provide to
XXXX and its counsel a copy of all marketing information, term sheets,
commitment letters and agreements related to the Debt Financing and a
reasonable opportunity to review and comment on such documents prior to
such document being distributed, executed or delivered or filed with the
Bankruptcy Court, (ii) duly consider in good faith any comments of XXXX and
its counsel consistent with the Agreement, the Preferred Term Sheet and the
Plan and any other reasonable comments of XXXX and its counsel and shall
not reject such comments without first discussing the reasons therefor with
XXXX or its counsel and giving due consideration to the views of XXXX and
its counsel, and (iii) keep XXXX reasonably informed on a timely basis of
developments in connection with the Debt Financing and provide the
Investors with an opportunity to attend and participate in meetings and/or
roadshows with potential providers of the Debt Financing.".
(kk) Section 5(u), Section 12(d)(ii) and Section 12(d)(iv) of the EPCA are
hereby amended by deleting such section and replacing it with the word
"[Reserved].".
(ll) Section 5(w) of the EPCA is hereby amended and restated in its
entirety as follows:
"(w) Agreement on Key Documentation. The Company shall use its commercially
reasonable efforts to agree on or prior to the date of issuance of the
Confirmation Order on the terms of the Amended and Restated Constituent
Documents, the Series A Certificate of Designations, the Series B
Certificate of Designations and the Series C Certificate of Designations,
the Shareholders Agreement and the Registration Rights Agreement with XXXX
and any other Transaction Agreements.".
(mm) Section 5(y) of the EPCA is hereby amended and restated in its
entirety as follows:
"(y) Termination of Commitment Letters. The Company acknowledges and agrees
that (i) the various commitment letters of Appaloosa in favor of XXXX and
the Company, and of Harbinger Fund in favor of Harbinger and the Company,
each dated January 18, 2007 and August 3, 2007, respectively, and (ii) the
commitment letter of Pardus Special Opportunities Master Fund L.P. in favor
Pardus and the Company dated as of August 3, 2007, have been terminated and
are of no further force or effect and that each of Appaloosa, Harbinger
Fund and Pardus Special Opportunities Master Fund L.P. shall have no
further liability or obligation under those commitment letters.".
-12-
(nn) Section 6(a) of the EPCA is hereby amended by inserting the words "any
amendments to" prior to the words "the Disclosure Statement".
(oo) Section 6(b), in the second sentence thereof, and Section 7, in the
first sentence thereof, of the EPCA are hereby amended by replacing
the words "Disclosure Statement Filing Date" with the words
"Subsequent Approval Date".
(pp) Section 8(b) and Section 8(c) of the EPCA is hereby amended by
deleting the words "the PSA,".
(qq) Section 8(c) of the EPCA is hereby amended by (i) in (c)(iii),
replacing the words ", and certain of the Investors" with the words "
and XXXX", (ii) in (c)(iv) deleting the words "among the Company and
the Investors", (iii) in (c)(iv)(a), replacing the words "by the
Investors, any Related Purchasers and the Ultimate Purchasers of the
Unsubscribed Shares, the Direct Subscription Shares and the Series B
Preferred Shares" with the words "of Registrable Securities (as
defined in the Preferred Term Sheet)", (iv) in (c)(iv)(c) and
(c)(iv)(d), inserting the words "and GM and, to the extent customary
and appropriate, the selling shareholders under the Resale
Registration Statement" after the words "Investors" and "Investor",
respectively, and (v) in (c)(vi), by replacing the words "and the
Series B" with the words ", the Series B Certificate of Designations
and the Series C".
(rr) Section 9(a)(i) of the EPCA is hereby amended by (i) in the first
sentence, inserting the word "Subsequent" between the words "The" and
"Approval" and (ii) in the second sentence, replacing the words
"Approval Order" with the word "order".
(ss) Section 9(a)(iv) of the EPCA is hereby amended and restated in its
entirety as follows:
"(iv) Release. The Confirmed Plan shall provide for (A) the release of each
Investor (in its capacity as such or otherwise), its Affiliates,
shareholders, partners, directors, officers, employees and advisors from
liability for participation in the transactions contemplated by the
Original Agreement, this Agreement, the Preferred Term Sheet, the Original
PSA and the Plan and any other investment in the Company discussed with the
Company whether prior to or after the execution of the foregoing to the
fullest extent permitted under applicable law, (B) the exculpation of each
Investor (in its capacity as such or otherwise), its Affiliates,
shareholders, partners, directors, officers, employees and advisors with
respect to all of the foregoing actions set forth in subclause (A) and
additionally to the same extent the Company's directors, officers,
employees, attorneys, advisors and agents are otherwise exculpated under
the Plan, and (C) the release of each Investor (in its capacity as an
investor), its Affiliates, shareholders, partners, directors,
-13-
officers, employees and advisors to the same extent the Company's
directors, officers, employees, attorneys, advisors and agents are
otherwise released under the Plan; provided, that such releases and
exculpations shall not prohibit or impede the Company's ability to assert
defenses or counterclaims in connection with or relating to the Original
Agreement or the Original PSA.".
(tt) Section 9(a)(v) of the EPCA is hereby amended by deleting the words
"the Plan Terms and".
(uu) Section 9(a)(ix) of the EPCA is hereby amended by deleting the words
"Confirmed Plan" appearing therein and replacing them with the words
"Plan approved by the Bankruptcy Court in the Confirmation Order (the
"Confirmed Plan")".
(vv) Section 9(a)(xix) of the EPCA is hereby amended and restated in its
entirety as follows:
"(xix) Financing. (A) The Company shall have received the proceeds of the
Debt Financings and the Rights Offering that, together with the proceeds of
the sale of the Investor Shares, are sufficient to fund fully the
transactions contemplated by this Agreement, the Preferred Term Sheet, the
GM Settlement (to the extent the Company is to fund such transactions) and
the Plan; and (B) undrawn availability under the asset backed revolving
loan facility described in the Financing Letter (after taking into account
any open letters of credit pursuant to such loan facility and after taking
into account any reductions in availability due to any shortfall in
collateral under the borrowing base formula set forth in such facility)
shall be no less than $1.4 billion..
(ww) Section 9(a)(xx) of the EPCA is hereby amended and restated in its
entirety as follows:
"(xx) Interest Expense. The Company shall have demonstrated, to the
reasonable satisfaction of XXXX, that the pro forma interest expense (cash
or noncash) for the Company during 2008 on the Company's Indebtedness will
not exceed $585 million and XXXX shall have received from Delphi a
certificate of a senior executive officer with knowledge of the foregoing
to this effect with reasonably detailed supporting documentation to support
such amount. For the purpose of this condition, pro forma interest expense
shall be the full annual interest expense on all pro forma Indebtedness
(i.e., as if drawn and outstanding for a consecutive 365-day period). For
purposes of this calculation, pro forma Indebtedness shall mean, (1)
Indebtedness outstanding or to be incurred at the Effective Date as
calculated pursuant to Section 9(a)(xxvii); (2) Total Adjustments pursuant
to Exhibit F; plus (3) the expected average annual balance of incremental
borrowing under the Company's revolving credit facility included in the
Bank Financing to fund seasonal increases in working capital and any other
operating cash flow deficits from the Closing Date through December 31,
2008, in each case, which
-14-
shall be assumed to be funded from borrowing under the delayed draw term
loan included in the Bank Financing first, and the revolving credit
facility included in the Bank Financing, second. Pro forma interest expense
shall be computed in accordance with GAAP and shall include cash and
non-cash components including, for example, accretion of discounts and
amortization of related fees.".
(xx) Section 9(a)(xxii) of the EPCA is hereby amended and restated in its
entirety as follows:
"(xxii) Trade and Other Unsecured Claims. The aggregate amount of all Trade
and Other Unsecured Claims (as defined in the Plan) that have been asserted
or scheduled but not yet disallowed shall be allowed or estimated for
distribution purposes by the Bankruptcy Court to be no more than $1.45
billion, excluding all allowed accrued post-petition interest thereon;
provided, that if XXXX waives this condition and the Company issues any
shares of Common Stock pursuant to the Plan (after giving effect to any
cash or other consideration provided to holders of Trade and Other
Unsecured Claims under the Plan) as a result of Trade and Other Unsecured
Claims aggregating in excess of $1.475 billion, then (i) the Company shall
issue to the Investors additional Direct Subscription Shares (in the
proportions set forth in Schedule 2), without the payment of any additional
consideration therefor, in such amount in the aggregate that is sufficient
to ensure that the percentage of shares of outstanding Common Stock that
such Investors would have owned on the Closing Date had the Excess Shares
not been issued (assuming for this purpose that all Excess Shares are
issued on the Closing Date) is maintained and (ii) the issuance of shares
of Common Stock described in this Section 9(a)(xxii) shall be treated as an
issuance of Common Stock without consideration for purposes of the
anti-dilution provisions of the Preferred Shares and shall result in an
adjustment to the conversion price of the Preferred Shares pursuant to the
Series A Certificate of Designation and Series B Certificate of
Designations. For purposes of this Section 9(a)(xxii), "Excess Shares"
shall mean any shares of Common Stock issued by the Company pursuant to the
Plan (after giving effect to any cash or other consideration provided to
holders of Trade and Other Unsecured Claims under the Plan) as a result of
Trade and Other Unsecured Claims aggregating in excess of $1.45 billion.".
(yy) Section 9(a)(xxvi) of the EPCA is hereby amended by inserting the
words "after the Disclosure Letter Delivery Date" immediately after to
the words "shall not have occurred" at each occurrence of such words
therein.
(zz) Section 9(a)(xxvii) of the EPCA is hereby amended (i) by, in the first
sentence, replacing the words "the final Business Plan satisfying the
condition with respect to the Business Plan set forth in Section
9(a)(xxviii) of this Agreement" with the words "the Business Plan" at
each occurrence of such words therein, (ii) by, in the third sentence,
replacing the words "$7,159 million" with the words "$5.2 billion" and
(iii) by, in the third sentence, inserting the words "(such
calculation to be
-15-
performed in accordance with the Net Debt calculation set forth in
Exhibit F)" immediately after the words "more than $250 million".
(aaa) Section 9(a)(xxviii) of the EPCA is hereby amended and restated in
its entirety as follows:
"(xxviii) Plan, Delivered Investment Documents and Material Investment
Documents.
(A) (i) The Company shall have delivered to XXXX prior to each
Relevant Date and XXXX shall have made the determination
referred to in Section 9(a)(xxviii)(B) with respect to all
Material Investment Documents. The term "Material Investment
Documents" shall mean the Confirmation Order, the Rights
Offering Registration Statement, any amendments or
supplements to the Delivered Investment Documents, the
Amended and Restated Constituent Documents, the Series A
Certificate of Designations, the Series B Certificate of
Designations, Series C Certificate of Designations, the
Shareholders Agreement, the Registration Rights Agreement,
the Transaction Agreements and any amendments and/or
supplements to the foregoing. The term "Delivered Investment
Documents" shall mean, the GM Settlement, the Plan, the
Disclosure Statement, the Business Plan and the Labor MOUs.
The term "Relevant Date" shall mean the date of issuance of
the Confirmation Order and the Closing Date.
(ii) With respect to any agreement that is a Material
Investment Document or a Delivered Investment Document and
was or is entered into in satisfaction of the condition set
forth in Section 9(a)(xxviii), at each Relevant Date (i)
such agreement shall remain in full force and effect and
shall not have been rescinded, terminated, challenged or
repudiated by any party thereto and (ii) the parties to such
agreement, shall have performed and complied with all of
their respective covenants and agreements contained in such
agreement in all material respects through the Closing Date.
The Business Plan (and, if amended in a manner that
satisfies the condition with respect to the Business Plan
set forth in this Section 9(a)(xxviii), as so amended) shall
not have been rescinded or repudiated in any material
respect by the Company or its Board of Directors.
(B) With respect to any Material Investment Document (other than
amendments or supplements to the GM Settlement), XXXX shall
have determined within the time frames set forth in Section
-16-
9(a)(xxviii)(C), that it is reasonably satisfied with the
terms thereof to the extent such terms would have a material
impact on the Investors' proposed investment in the Company.
With respect to any amendments or supplements to the GM
Settlement XXXX shall have determined that it is satisfied
with the GM Settlement as so amended or supplemented in its
reasonable discretion taking into account whether it has a
material impact on the Investors' proposed investment in the
Company and other relevant factors.
(C) The conditions referred to in clauses (A)(i) and B above
shall be deemed to have been conclusively satisfied without
further action by any Party unless:
(1) [Reserved];
(2) [Reserved];
(3) with respect to any Material Investment Document (or
any amendment or supplement thereto) delivered to XXXX
by the Company prior to the date of issuance of the
Confirmation Order, XXXX has delivered (and has not
withdrawn), within ten (10) days of delivery by the
Company of the final form of such document, accompanied
by a written request for approval of such document, a
written deficiency notice to the Company reasonably
asserting with reasonable specificity that such
condition is not satisfied, and the Company shall not
have cured such deficiency within ten (10) days of the
Company's receipt of such notice (the "Cure Period");
and
(4) with respect to any Material Investment Document (or
any amendment or supplement thereto) delivered to XXXX
by the Company after the date of issuance of the
Confirmation Order and prior to the Closing Date, XXXX
has delivered (and has not withdrawn), within five (5)
Business Days of delivery by the Company of the final
form of such document accompanied by a written request
for approval of such documents, a written deficiency
notice to the Company reasonably asserting with
reasonable specificity that such condition is not
satisfied and the Company shall not have cured such
deficiency during the Cure Period.".
-17-
(bbb) Inserting the following immediately after Section 9(a)(xxviii) of the
EPCA:
"(xxix) PBGC Liens. XXXX shall be reasonably satisfied that the
Company has obtained an agreement of the PBGC that the PBGC liens set
forth on Section 3(t) and Section 3(z) of the Disclosure Letter will
be withdrawn in accordance with applicable law and XXXX shall have
received evidence satisfactory to it to that effect.".
-18-
(ccc) Section 9(c)(i) of the EPCA is hereby amended by inserting the word
"Subsequent" between the word "The" and the word "Approval".
(ddd) Section 11(b) of the EPCA is hereby amended by replacing (i) the
words "Disclosure Statement" with the words "Subsequent" at each
occurrence of such words therein and (ii) the words "Filing Date" with
the words "Approval Date" at each occurrence of such words therein.
(eee) Section 12(d)(i) of the EPCA is hereby amended (i) by deleting the
words "August 16, 2007" and replacing them with the words "December
20, 2007", (ii) by deleting the words "August 31, 2007" and replacing
them with the words "January 7, 2008", and (iii) by inserting the word
"Subsequent" between the word "the" and the word "Approval" at each
occurrence therein.
(fff) Section 13(b) is hereby amended by inserting the words "Facsimile:
(000) 000-0000" directly beneath the words "Attn: Xxxxxx X. Xxxxxxx".
(ggg) (i) Section 13(e) and the signature bloc of the EPCA are hereby
amended by inserting a "," after the word "Goldman" at each occurrence
of such word therein and (ii) Section 13(e) is hereby amended by
inserting "LLP" after the word "Xxxxxxxx".
(hhh) Section 15 of the EPCA is hereby amended by inserting the following
after the first paragraph:
"Notwithstanding anything to the contrary in the Plan (including any
amendments, supplements or modifications thereto) or the Confirmation Order
(and any amendments, supplements or modifications thereto) or an
affirmative vote to accept the Plan submitted by any Investor, nothing
contained in the Plan (including any amendments, supplements or
modifications thereto) or Confirmation Order (including any amendments,
supplements or modifications thereto) shall alter, amend or modify the
rights of the Investors under this Agreement unless such alteration,
amendment or modification has been agreed to in writing by each Investor.".
(iii) Inserting the following immediately after Section 22 of the EPCA:
"23. Expectation of Indebtedness. For the avoidance of doubt and for the
purpose of Section 9(a), it is the expectation of both XXXX and the Company
that the 2008 pro forma Company Indebtedness shall constitute the maximum
amount of Company Indebtedness over the course of the Business Plan."
-19-
(jjj) Schedule 1 to the EPCA is replaced in its entirety with Schedule 1
hereto.
(kkk) Schedule 2 to the EPCA is replaced in its entirety with Schedule 2
hereto.
(lll) Exhibit A to the EPCA is replaced in its entirety with Exhibit A
hereto.
(mmm) Exhibit B to the EPCA is replaced in its entirety with Exhibit B
hereto.
(nnn) Exhibit C hereto should be inserted immediately following Exhibit B
to the EPCA.
(ooo) Exhibit D hereto should be inserted immediately following Exhibit C
to the EPCA.
(ppp) Exhibit E hereto should be inserted immediately following Exhibit D
to the EPCA.
(qqq) Exhibit F hereto should be inserted immediately following Exhibit E
to the EPCA.
2. Effectiveness. This Amendment shall become effective (the "Effective Date")
immediately upon (i) its execution by all the parties hereto and (ii) upon
entry by the Bankruptcy court of the Subsequent Approval Order. On and
after the Effective Date, each reference in the EPCA to "this Agreement,"
"hereunder," "hereof," "herein" or words of like import referring to the
EPCA, shall mean and be a reference to the EPCA as amended by this
Amendment. This Amendment shall operate as an amendment of the provisions
of the EPCA referred to specifically herein. Except as specifically amended
by this Amendment and as set forth in the preceding sentence, the EPCA
shall remain in full force and effect. Except as expressly provided herein,
this Amendment shall not be deemed to be a waiver of, or consent to, or a
modification or amendment of, any other term or condition of the EPCA.
3. Assignment. Neither this Amendment nor any of the rights, interests or
obligations under this Amendment will be assigned by any of the parties
(whether by operation of law or otherwise) without the prior written
consent of the other parties, except in accordance with Section 14 of the
EPCA.
4. Third Party Beneficiaries. Except as otherwise provided in the EPCA, this
Amendment (including the documents and instruments referred to in this
Amendment) is not intended
-20-
to and does not confer upon any person other than the parties hereto any
rights or remedies under this Amendment.
5. Prior Negotiations; Entire Agreement. This Amendment (including the
documents and instruments referred to in this Amendment) constitutes the
entire agreement of the parties with respect to the subject matter of this
Amendment and supersedes all prior agreements, arrangements or
understandings, whether written or oral, among the parties with respect to
the to the subject matter of this Amendment.
6. Miscellaneous. The provisions of Sections 13, 16, 17, 18, 20 and 21 of the
EPCA shall apply to this Amendment.
[Signature Page Follows]
-21-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
signed by their respective officers thereunto duly authorized, all as of the
date first written above.
DELPHI CORPORATION
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxx
Title: VP & CRO
A-D ACQUISITION HOLDINGS, LLC
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Name:
Title:
HARBINGER DEL-AUTO INVESTMENT COMPANY, LTD.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
---------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: Vice President
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Managing Director
UBS SECURITIES LLC
By: /s/ Xxxxxx Xxxxx
---------------------------------------
Name: Xxxxxx Xxxxx
Title: Managing Director
By: /s/ Xxxxxx Nicoloievsky
---------------------------------------
Name: Xxxxxx Nicoloievsky
Title: Director
XXXXXXX, SACHS & CO.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
PARDUS DPH HOLDING LLC
By: /s/ Xxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxx
Title:
-23-
SCHEDULE 1
Defined Term Section
--------------------------------------------------- ---------------------------
XXXX............................................... Preamble
Additional Investor Agreement...................... Section 2 (k)
Affiliate.......................................... Section 2 (a)
Agreement.......................................... Preamble
Alternate Transaction.............................. Section 9 (a)(v)
Alternate Transaction Agreement.................... Section 9 (a)(v)
Alternate Transaction Fee.......................... Section 12 (g)
Alternative Financing.............................. Section 2 (b)
Amended and Restated Constituent Documents......... Section 8 (c)
Appaloosa.......................................... Recitals
Approval Motion.................................... Recitals
Approval Order..................................... Recitals
Arrangement Fee.................................... Section 2 (h)(iii)
Assuming Investor.................................. Section 11 (b)
Available Investor Shares.......................... Section 2 (b)
Bank Financing..................................... Section 3 (qq)
Bankruptcy Code.................................... Recitals
Bankruptcy Court................................... Recitals
Bankruptcy Rules................................... Section 3 (b)(i)
Basic Subscription Period.......................... Section 1 (c)(ii)
Breaching Investor................................. Section 11 (b)
Business Day....................................... Section 1 (c)(iv)
Business Plan...................................... Section 5 (s)
Capital Structure Date............................. Section 3 (d)
Cerberus........................................... Recitals
Change of Recommendation........................... Section 9 (a)(vi)
Chapter 11 Cases................................... Recitals
Closing Date....................................... Section 2 (d)
Closing Date Outside Date.......................... Section 12 (d)(iii)
Code............................................... Section 3 (z)(ii)
Commission......................................... Section 1 (c)(ii)
Commitment Fees.................................... Section 2 (h)(ii)
Commitment Parties................................. Recitals
Company............................................ Preamble
Company ERISA Affiliate............................ Section 3 (z)(ii)
Company Plans...................................... Section 3 (z)(i)
Company SEC Documents.............................. Section 3 (j)
Confirmation Order................................. Section 9 (a)(vii)
Confirmed Plan..................................... Section 9 (a)(ix)
Consideration Period............................... Section 12 (f)(ii)
Cure Period........................................ Section 9 (a)(xxviii)(C)(3)
Debt Financing..................................... Section 3 (qq)
Debtors............................................ Recitals
Delivered Investment Documents..................... Section 9(a)(xxviii)(A)(i)
SCHEDULE 1
Page 2
Defined Term Section
--------------------------------------------------- ---------------------------
Determination Date................................. Section 1 (c)(vi)
DGCL............................................... Section 3 (oo)
Direct Subscription Shares......................... Section 2 (a)(i)
Disclosure Letter.................................. Section 3
Disclosure Letter Delivery Date.................... Section 3
Disclosure Statement............................... Recitals
Disinterested Director............................. Section 8 (c)
Dolce.............................................. Recitals
Draft Business Plan................................ Section 3 (m)(vii)
Effective Date..................................... Section 1 (c)(iv)
Eligible Holder.................................... Section 1 (a)
Environmental Laws................................. Section 3 (x)(i)
Equity Commitment Letter........................... Section 4 (o)
ERISA.............................................. Section 3 (z)(i)
Excess Shares...................................... Section 9 (a)(xxii)
Exchange Act....................................... Section 3 (i)
Existing Shareholder Rights Plan................... Section 3 (d)
Expiration Time.................................... Section 1 (c)(iv)
E&Y................................................ Section 3 (q)
Final Approval Order............................... Section 9 (a)(i)
Financing Letter................................... Section 3 (qq)
Financing Order.................................... Section 2 (j)
GAAP............................................... Section 3 (i)
GM................................................. Recitals
GM Debt............................................ Section 5 (t)
GM Settlement...................................... Section 5 (p)
GS................................................. Preamble
Harbinger.......................................... Preamble
Harbinger Fund..................................... Recitals
HSR Act............................................ Section 3 (g)
Indebtedness....................................... Section 9 (a)(xxvii)
Indemnified Person................................. Section 10 (a)
Indemnifying Party................................. Section 10 (a)
Intellectual Property.............................. Section 3 (s)
Investment Decision Package........................ Section 3 (k)(iii)
Investor........................................... Preamble
Investor Default................................... Section 2 (b)
Investor Disclosure Letter......................... Section 4
Investors.......................................... Preamble
Investor Shares.................................... Section 2 (a)
Issuer Free Writing Prospectus..................... Section 3 (k)(iv)
IUE-CWA............................................ Section 3 (pp)
IUE-CWA MOU........................................ Section 3 (pp)
knowledge of the Company........................... Section 22
SCHEDULE 1
Page 3
Defined Term Section
--------------------------------------------------- ---------------------------
Labor MOUs......................................... Section 3 (pp)
Limited Termination................................ Section 12 (d)
Losses............................................. Section 10 (a)
Material Adverse Effect............................ Section 3 (a)
Material Investment Documents...................... Section 9 (a)(xxviii)
Maximum Number..................................... Section 2 (a)
Merrill............................................ Preamble
Money Laundering Laws.............................. Section 3 (ee)
Monthly Financial Statements....................... Section 5 (r)
Multiemployer Plans................................ Section 3 (z)(ii)
Net Amount......................................... Section 9 (a)(xxvii)
New Common Stock................................... Section 1 (a)
OFAC............................................... Section 3 (ff)
Option............................................. Section 3 (d)
Options............................................ Section 3 (d)
Original Agreement................................. Recitals
Original Approval Motion........................... Recitals
Original Approval Order............................ Recitals
Original Investors................................. Recitals
Original PSA....................................... Recitals
Over-Subscription Privilege........................ Section 1 (c)(iii)
Pardus............................................. Preamble
Plan............................................... Recitals
Preferred Commitment Fee........................... Section 2 (h)(i)
Preferred Shares................................... Section 2 (a)
Preferred Term Sheet............................... Section 1 (b)
Preliminary Rights Offering Prospectus............. Section 3 (k)(v)
Proceedings........................................ Section 10 (a)
Purchase Notice.................................... Section 1 (c)(vi)
Purchase Price..................................... Section 1 (a)
Registration Rights Agreement...................... Section 8 (c)
Related Purchaser.................................. Section 2 (a)
Relevant Date...................................... Section 9 (a)(xxviii)(A)(i)
Resale Registration Documents...................... Section 8 (c)
Resale Registration Statement...................... Section 8 (c)
Restricted Period.................................. Section 5 (j)
Right.............................................. Section 1 (a)
Rights Distribution Date........................... Section 1 (c)(ii)
Rights Exercise Period............................. Section 1 (c)(iv)
Rights Offering.................................... Section 1 (a)
Rights Offering Prospectus......................... Section 3 (k)(ii)
Rights Offering Registration Statement............. Section 3 (k)(i)
Satisfaction Notice................................ Section 1 (c)(vi)
Securities Act..................................... Section 1 (c)(ii)
SCHEDULE 1
Page 4
Defined Term Section
--------------------------------------------------- ---------------------------
Securities Act Effective Date...................... Section 3 (k)(vi)
Series A Certificate of Designations............... Section 2 (a)(iii)
Series A Preferred Stock........................... Section 2 (a)(iii)
Series A Purchase Price............................ Section 2 (a)(iii)
Series B Certificate of Designations............... Section 2 (a)(i)
Series B Preferred Stock........................... Section 2 (a)(i)
Share.............................................. Section 1 (a)
Shareholders Agreement............................. Section 8 (c)
Significant Subsidiary............................. Section 3 (a)
Single-Employer Plan............................... Section 3 (z)(ii)
Standby Commitment Fee............................. Section 2 (h)(ii)
Stock Plans........................................ Section 3 (d)
Subscription Agent................................. Section 1 (c)(iv)
Subsequent Approval Date........................... Recitals
Subsequent Approval Motion......................... Recitals
Subsequent Approval Order.......................... Recitals
Subsidiary......................................... Section 3 (a)
Superior Transaction............................... Section 12 (f)
Takeover Statute................................... Section 3 (oo)
Taxes.............................................. Section 3 (y)
Tax Returns........................................ Section 3 (y)(i)
Transaction Agreements............................. Section 3 (b)(i)
Transaction Expenses............................... Section 2 (j)
Transformation Plan................................ Section 3 (m)(vi)
UAW................................................ Section 3 (pp)
UAW MOUs........................................... Section 3 (pp)
UBS................................................ Preamble
Ultimate Purchasers................................ Section 2 (k)
Unsubscribed Shares................................ Section 2 (a)(iv)
USW................................................ Section 3 (pp)
USW MOUs........................................... Section 3 (pp)
SCHEDULE 2
Direct
Subscription
Direct Shares Maximum Maximum Maximum Maximum Total
Subscription Purchase Backstop Backstop Shares Total Common Common Shares
Investor Shares Price Shares Purchase Price Shares Purchase Price
------------------ ------------- --------------- ------------- ------------------ ------------- -------------------
XXXX ............. 1,761,878.57 $ 67,638,517.92 15,856,906.29 $ 608,746,631.59 17,618,784.86 $ 676,385,149.51
Del-Auto ......... 702,593.81 $ 26,972,576.37 6,323,344.00 $ 242,753,175.46 7,025,937.81 $ 269,725,751.83
Merrill .......... 265,346.92 $ 10,186,668.26 2,388,122.17 $ 91,680,009.86 2,653,469.09 $ 101,866,678.12
UBS .............. 265,346.92 $ 10,186,668.26 2,388,122.17 $ 91,680,009.86 2,653,469.09 $ 101,866,678.12
GS ............... 950,768.23 $ 36,499,992.35 8,556,913.67 $ 328,499,915.13 9,507,681.90 $ 364,999,907.48
Pardus ........... 612,544.55 $ 23,515,585.27 5,512,900.70 $ 211,640,257.15 6,125,445.25 $ 235,155,842.42
------------- --------------- ------------- ------------------ ------------- -------------------
Total .......... 4,558,479.00 $175,000,008.43 41,026,309.00 $ 1,574,999,999.05 45,584,788.00 $ 1,750,000,007.48
Series A Series B
Preferred Purchase Preferred Purchase Total
Investor Stock(1) Price Stock(2) Price Purchase Price
------------------ ------------- --------------- --------------- --------------- -----------------
XXXX.............. 9,478,887 $400,009,031.40 - $ - $1,076,394,180.91
Del-Auto.......... - - 2,994,366.825 $127,500,139.41 $ 397,225,891.24
Merrill........... - - 1,526,539.950 $ 65,000,071.07 $ 166,866,749.19
UBS............... - - 1,526,539.950 $ 65,000,071.07 $ 166,866,749.19
GS................ - - 821,983.050 $ 35,000,038.27 $ 399,999,945.75
Pardus............ - - 2,524,662.225 $107,500,117.54 $ 342,655,959.96
------------- --------------- --------------- --------------- -----------------
Total........... 9,478,887 $400,009,031.40 9,394,092.000 $400,000,437.36 $2,550,009,476.24
Proportionate
Share of Preferred
Commitment Fee:
------------------
XXXX.............. 50.4861%
Del-Auto.......... 15.9375%
Merrill........... 8.1250%
UBS............... 8.1250%
GS................ 3.8889%
Pardus............ 13.4375%
-------------
Total........... 100%
Proportionate
Share of Standby
Commitment Fee:
------------------
XXXX.............. 40.3977%
Del-Auto.......... 15.4712%
Merrill........... 6.0769%
UBS............... 6.0769%
GS................ 18.5397%
Pardus............ 13.4375%
-------------
Total........... 100%
If remaining
Proportionate If full 50% of
Share of Alternate Commitment Commitment Fee
Transaction Fee:(3) Fee received not received
------------------ ------------- --------------
XXXX.............. 54.3750% 50.62%
Del-Auto.......... 15.9375% 15.83%
Merrill........... 8.1250% 7.64%
UBS............... 8.1250% 7.64%
GS................ 0% 4.85%
Pardus............ 13.4375% 13.4375%
------------- --------------
Total........... 100% 100%
----------
(1) Common stock equivalent units.
(2) Common stock equivalent units.
SCHEDULE 1
Page 2
----------
(cont'd from previous page)
(3) Percentages will fluctuate depending on the amount of any Commitment Fee
received.
EXHIBIT A
Summary of Terms of Preferred Stock
EXHIBIT A
SUMMARY OF TERMS OF
SERIES A-1 PREFERRED STOCK,
SERIES A-2 PREFERRED STOCK,
AND SERIES B PREFERRED STOCK
Set forth below is a summary of indicative terms for a potential
investment in Delphi Corporation by entities or funds controlled by Appaloosa
Management, Harbinger Capital Partners, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated., UBS Securities, Xxxxxxx, Sachs & Co. and Pardus Special
Opportunities Master Fund L.P. The investment is being made in connection with a
Plan of Reorganization of Delphi Corporation under chapter 11 of the Bankruptcy
Code. The terms set forth below are intended solely to provide a framework for
the parties as they proceed with discussions of the proposed transaction and do
not constitute any agreement with respect to the definitive terms for any
transaction or any agreement to agree or any solicitation of acceptances or
rejections of any plan of reorganization. While the parties expect to negotiate
in good faith with respect to the terms for a transaction, any party shall be
free to discontinue discussions and negotiations at any time for any reason or
no reason. No party shall be bound by the terms hereof and only execution and
delivery of definitive documentation relating to the transaction shall result in
any binding or enforceable obligations of any party relating to the transaction.
Issuer: Delphi Corporation (the "Company"), a corporation organized
under the laws of Delaware and a successor to Delphi
Corporation, as debtor in possession in the chapter 11
reorganization case (the "Bankruptcy Case") pending in the
United States Bankruptcy Court for the Southern District of
New York.
Investors: Entities or funds controlled by Appaloosa Management
("Appaloosa"), Harbinger Capital Partners ("Harbinger"),
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Merrill"), UBS Securities ("UBS"), Xxxxxxx, Xxxxx & Co.
("GS") and Pardus Special Opportunities Master Fund L.P.
("Pardus" and together with Harbinger, Merrill, UBS and GS,
the "Co-Lead Investors"), with the Series B Preferred Stock
to be purchased by the Co-Lead Investors allocated as
follows: (a) Harbinger--31.875%; (b) Merrill--16.25%; (c)
UBS--16.25%; (d) GS--8.75%; and (e) Pardus--26.875%.
Appaloosa or any Permitted Holder (as defined below) shall
be the exclusive purchaser and sole beneficial owner for all
purposes hereunder of the Series A-1 Preferred Stock (as
defined below). Appaloosa, Harbinger, Merrill, UBS, GS and
Pardus are collectively referred to as the "Investors."
Securities to
be Issued: Series A-1 Senior Convertible Preferred Stock, par
value $0.01 per share (the "Series A-1 Preferred Stock").
The Series A-1 Preferred Stock shall convert to Series A-2
Preferred Stock (the "Series A-2 Preferred Stock" and,
together with the Series A-1 Preferred Stock, the "Series A
Preferred Stock") in certain circumstances described in this
term sheet.
Series B Senior Convertible Preferred Stock, par value $0.01
per share
(the "Series B Preferred Stock" and, together with the
Series A Preferred Stock, the "Preferred Stock").
The Series B Preferred Stock shall be identical in all
respect to the Series A-1 Preferred Stock except as
specifically set forth below.
The Series A-2 Preferred Stock shall be identical in all
respect to the Series A-1 Preferred Stock except it shall
not have Voting Rights and Governance Rights (as defined
below).
The (i) Series A-1 Preferred Stock and the shares of Common
Stock underlying such Series A-1 Preferred Stock may not be,
directly or indirectly, sold, transferred, assigned,
pledged, donated, or otherwise encumbered or disposed of by
any Series A Preferred Stock Holder (as defined below),
during the two years following the effective date (the
"Effective Date") of the Company's plan of reorganization in
the Bankruptcy case (the "Plan") other than in whole
pursuant to a sale of the Company (as defined below)
(provided, however, that in any sale of Series A-1 Preferred
Stock in connection with a sale of the Company, the seller
of the Series A-1 Preferred Stock may receive consideration
with a value no greater than the greater of (i) the fair
market value of the Series A-1 Preferred Stock (or a
preferred security of equivalent economic value), such fair
market value not to reflect the value of the Voting Rights
and Governance Rights attributable to the Series A-1
Preferred Stock, and (ii) the Liquidation Value) and (ii)
Series B Preferred Stock and the shares of Common Stock
underlying such Series B Preferred Stock, or any interest or
participation therein may not be, directly or indirectly,
sold, transferred, assigned, pledged or otherwise encumbered
or disposed of (including by exercise of any registration
rights) during the ninety days following the Effective Date
other than in whole pursuant to a sale of the Company (each
of (i) and (ii), the "Transfer Restriction"). A "sale of the
Company" means the sale of the Company to a party or parties
other than, and not including, Appaloosa or any affiliate of
Appaloosa (for this purpose, an "affiliate" of Appaloosa
shall not include any company in which a fund managed by
Appaloosa or its affiliates invests and does not control)
pursuant to which such party or parties acquire (i) the
capital stock of the Company possessing the voting power
under normal circumstances to elect a majority of the
Company's Board of Directors (whether by merger,
consolidation or sale or transfer of the Company's capital
stock) or (ii) all or substantially all of the Company's
assets determined on a consolidated basis.
Purchase of At the Effective Date, (i) Appaloosa will purchase all of
Preferred the 9,478,887 shares of Series A-1 Preferred Stock for an
Stock: aggregate purchase price of $400 million and (ii) the
Co-Lead Investors shall purchase all of the 9,394,092 shares
of Series B Preferred Stock, for an aggregate purchase price
of $400 million. The aggregate stated value of the Series
A-1 Preferred Stock shall be $400 million and the aggregate
stated value of
2
the Series B Preferred Stock shall be $400 million (in each
case, the "Stated Value").
Mandatory The Company shall convert into Common Stock all, but not
Conversion into less than all, of the (i) Series A Preferred Stock on the
Common Stock: first date the Mandatory Conversion Requirements are
satisfied (but in no event earlier than August 31, 2012(1))
at the Conversion Price (as defined below) of the Series A
Preferred Stock in effect on such conversion date, and (ii)
Series B Preferred Stock on the first day the Mandatory
Conversion Requirements are satisfied (but in no event
earlier than the third anniversary of the Effective Date) at
the Conversion Price (as defined below) of the Series B
Preferred Stock in effect on such conversion date.
The "Mandatory Conversion Requirements" set forth in this
section are as follows: (i) the closing price for the Common
Stock for at least 35 trading days in the period of 45
consecutive trading days immediately preceding the date of
the notice of conversion shall be equal to or greater than
$81.61 per share and (ii) the Company has at the conversion
date an effective shelf registration covering resales of the
shares of Common Stock received upon such conversion of the
Preferred Stock.
The Company will provide each Preferred Stock Holder (as
defined below) with notice of conversion at least five (5)
business days prior to the date of conversion.
The holders of the Series A Preferred Stock (the "Series A
Preferred Stock Holders" and each, a "Series A Preferred
Stock Holder") will agree not to take any action to delay or
prevent such registration statement from becoming effective.
Liquidation Rights: In the event of any liquidation, dissolution or winding up
of the Company, whether voluntary or involuntary, the
holders of Preferred Stock (the "Preferred Stock Holders"
and each, a "Preferred Stock Holder") shall receive, in
exchange for each share, out of legally available assets of
the Company, (A) a preferential amount in cash equal to (i)
the Stated Value plus (ii) the aggregate amount of all
accrued and unpaid dividends or distributions with respect
to such share (such amount being referred to as the
"Liquidation Value") and (B) a non-preferential amount (if
any) in cash (the "Common Equivalent Amount") equal to (i)
the amount that Preferred Stock Holder would have received
pursuant to the liquidation if it had converted its
Preferred Stock into Common Stock immediately prior to the
liquidation minus (ii) any amounts received pursuant to
(A)(i) and (ii) hereof (the Stated Value and dividends and
distributions). For the avoidance of doubt, this paragraph
should operate so that in the event of a liquidation,
dissolution or winding up of the business of the Company, a
Preferred Stock Holder
----------
(1) Assumes emergence by February 29, 2008. Conversion date to be adjusted
day-by-day to reflect any later date.
3
shall receive a total amount, in cash, equal to the greater
of: (i) the Liquidation Value and (ii) the amount that a
Preferred Stock Holder would have received pursuant to the
liquidation, dissolution or winding up of the business if it
converted its Preferred Stock into Common Stock immediately
prior to the liquidation.
Ranking: The Series A Preferred Stock and the Series B Preferred
Stock shall rank pari passu with respect to any
distributions upon liquidation, dissolution or winding up of
the Company. The Preferred Stock will rank senior to any
other class or series of capital stock of the Company
("Junior Stock") with respect to any distributions upon
liquidation, dissolution or winding up of the Company.
While any bankruptcy event is pending: (i) there shall be no
dividends or other distributions on shares of Junior Stock
or any purchase, redemption, retirement or other acquisition
for value or other payment in respect of Junior Stock unless
the Preferred Stock has been paid its Liquidation Value in
full, (ii) there shall be no such dividends, distributions,
purchases, redemptions, retirement, acquisitions or payments
on Junior Stock in each case in cash unless the Preferred
Stock has first been paid in full in cash its Liquidation
Value and (iii) there shall be no dividends or other
distributions on Series A Preferred Stock or Series B
Preferred Stock or any purchase, redemption, retirement or
other acquisition for value or other payment in respect of
Series A Preferred Stock or Series B Preferred Stock unless
each of the Series A Preferred Stock and Series B Preferred
Stock shall receive the same securities and the same
percentage mix of consideration in respect of any such
payment, dividend or distribution.
Conversion of Each share of Preferred Stock shall be convertible at any
Preferred Stock time, without any payment by the Preferred Stock Holder,
into Common Stock: into a number of shares of Common Stock equal to (i) the
Liquidation Value divided by (ii) the Conversion Price. The
Conversion Price shall initially be $42.20, with respect to
the Series A Preferred Stock, and $42.58 with respect to the
Series B Preferred Stock, in each case subject to adjustment
from time to time pursuant to the anti-dilution provisions
of the Preferred Stock (as so adjusted, the "Conversion
Price"). The anti-dilution provisions will contain customary
provisions with respect to stock splits, recombinations and
stock dividends and customary weighted average anti-dilution
provisions in the event of, among other things, the issuance
of rights, options or convertible securities with an
exercise or conversion or exchange price below the
Conversion Price, the issuance of additional shares at a
price less than the Conversion Price and other similar
occurrences.
4
Conversion of If (a) Appaloosa or any Permitted Holder (as defined below)
Series A-1 sells, transfers, assigns, Preferred Stock Into pledges,
Preferred Stock donates or otherwise encumbers to any person other than a
Into Series A-2 Permitted Holder, or converts into Common Stock, shares of
Preferred Stock: Series A-1 Preferred Stock with an aggregate Liquidation
Value in excess of $100 million, or (b) Xxxxx Xxxxxx no
longer controls Appaloosa and Xxxxx Xxxxx is no longer an
executive officer of Appaloosa, then all the shares of
Series A-1 Preferred Stock shall automatically convert into
Series A-2 Preferred Stock without any action on the part of
the holder thereof; provided, that with respect to clause
(a), no such conversion shall be effective until the Company
has in effect a registration statement covering resales of
the Common Stock issuable upon conversion of the Preferred
Stock. The Series A Preferred Stock Holders will agree not
to take any action to delay or prevent such registration
statement from becoming effective.
If Appaloosa transfers shares of Series A-1 Preferred Stock
to any person other than an affiliate of Appaloosa (such
affiliate being a "Permitted Holder"), then all the shares
of Series A-1 Preferred Stock so transferred shall
automatically convert into Series A-2 Preferred Stock
without any action on the part of the holder thereof.
The direct or indirect transfer of ownership interests in
any Permitted Holder that owns shares of Series A-1
Preferred Stock such that such Permitted Holder ceases to be
an affiliate of Appaloosa shall constitute a transfer of
such Series A-1 Preferred Stock to a person other than a
Permitted Holder for the purpose of this provision.
Each event described above in the previous two paragraphs of
this section "Conversion of Series A Preferred Stock into
Series A-2 Preferred Stock" is referred to as a "Series A-2
Conversion Event."
Subject to compliance with applicable securities laws and
the Transfer Restriction, shares of Preferred Stock will be
freely transferable.
Dividends: Each Preferred Stock Holder shall be entitled to receive
dividends and distributions on the Preferred Stock at an
annual rate of 7.5% of the Liquidation Value thereof, with
respect to the Series A Preferred Stock, and 3.25% of the
Liquidation Value thereof, with respect to the Series B
Preferred Stock, in each case payable quarterly in cash as
declared by the Company's Board. Unpaid dividends shall
accrue. In addition, if any dividends are declared and paid
on the Common Stock, the Series A Preferred Stock shall be
entitled to receive, in addition to the dividend on the
Series A Preferred Stock at the stated rate, the dividends
that would have been payable on the number of shares of
Common Stock that would have been issued on the Series A
Preferred Stock had it been converted immediately prior to
the record date for such dividend.
5
Preference Each Preferred Stock Holder shall, prior to the payment of
with respect to any dividend or distribution in respect of any Junior Stock,
to Dividends: be entitled to be paid in full the dividends and
distributions payable in respect of the Preferred Stock.
Restriction on So long as shares of Series A Preferred Stock having a
Redemptions of Liquidation Value of $200 million or more remain
Junior Stock: outstanding, the Company shall not and shall not permit any
of its subsidiaries to, purchase, redeem or otherwise
acquire for value any Junior Stock, except, so long as
no bankruptcy event is pending, for (i) customary provisions
with respect to repurchase of employee equity upon
termination of employment, (ii) purchases, redemptions or
other acquisitions for value of Common Stock not to exceed
$50 million in any calendar year, and (iii) the mandatory
redemption of outstanding shares of the Company's Series C
Convertible Preferred Stock in accordance with the terms and
conditions, and in the amounts, set forth on the Summary of
Terms of Series C Preferred Stock attached as Annex I to
this Exhibit A.
Governance - Board A committee (the "Search Committee") shall be appointed
of Directors: consisting of one (1) representative of Appaloosa, one (1)
representative of the Company, being the Company's lead
director (currently Xxxx Xxxx), one (1) representative of
the Unsecured Creditors Committee, being Xxxxx Xxxxxx, one
(1) representative of the Co-Lead Investors other than UBS,
GS and Xxxxxxx (who shall be determined by Appaloosa), and
one (1) representative of the Equity Committee reasonably
acceptable to the other members of the Search Committee.
Each member of the Search Committee shall be entitled to
require the Search Committee to interview any person to
serve as a director unless such proposed candidate is
rejected by each of the Appaloosa representative, the
Company representative and the representative of the
Unsecured Creditors' Committee. The entire Search Committee
shall be entitled to participate in such interview and in a
discussion of such potential director following such
interview.
The board of directors of the Company shall consist of nine
(9) directors (which number shall not be expanded at all
times that the Series A-1 Preferred Stock has Series A-1
Board Rights (as defined below)), three (3) of whom (who
shall be Class III Directors) shall initially be nominated
by Appaloosa and elected at the time of emergence from
Chapter 11 by the Series A Preferred Stock Holders (and
thereafter shall be elected directly by the Series A
Preferred Stock Holders) (the "Series A Directors"), one (1)
of whom (who shall be a Class I Director) shall be the
Executive Chairman selected as described below under
"Executive Chairman", one (1) of whom (who shall be a Class
I Director) shall be the Chief Executive Officer, one (1) of
whom (who shall be a Class II Director) shall initially be
selected by the Co-Lead Investor representative on the
Search Committee with the approval of either the Company or
the Unsecured Creditors' Committee (the "Joint Investor
6
Director"), one (1) of whom (who shall be a Class I
Director) shall initially be selected by the Unsecured
Creditors' Committee and two (2) of whom (who shall be Class
II Directors) shall initially be selected by the Unsecured
Creditors' Committee (such directors selected by the
Unsecured Creditors' Committee and the Joint Investor
Director, being the "Common Directors"). For the avoidance
of doubt, all directors selected in accordance with this
paragraph, shall have been interviewed and/or discussed by
the Search Committee. Each director so selected shall be
appointed to the initial Board of Directors of the Company
unless at least three members of the following four members
of the Search Committee objects to the appointment of such
individual: the Appaloosa representative, the Company
representative; the representative of the Unsecured
Creditors' Committee; and the representative of the Equity
Committee. Initially, the Board shall be comprised of (a)
six (6) directors who satisfy all applicable independence
requirements of the relevant stock exchange on which it is
expected the Common Stock would be traded and (b) six (6)
directors who are independent from the Investors; provided,
that the requirements of this sentence may be waived by the
unanimous consent of the Company, Appaloosa and the
Unsecured Creditors Committee. Additionally, the Joint
Investor Director must be independent from the Investors.
Directors initially will be placed as set forth above in
three (3) classes: directors in the first class will have an
initial term expiring at the annual meeting of stockholders
to be held in 2009 (each a "Class I Director"), directors in
the second class will have an initial term expiring at the
annual meeting of stockholders to be held in 2010 (each a
"Class II Director"), and directors in the final class will
have an initial term expiring at the annual meeting of
stockholders to be held in 2011 (each a "Class III
Director"). After the expiration of each initial term of
each class of directors, the directors will thereafter each
have a one year term elected annually.
Following the initial election of the Executive Chairman and
the Chief Executive Officer, the Executive Chairman and
Chief Executive Officer shall be nominated for election to
the Board by the Nominating and Corporate Governance
Committee of the Board and elected to the board by the
holders of the Common Stock and the Preferred Stock, voting
as a class. The Executive Chairman of the Board shall be
selected as described below under "Executive Chairman." The
initial Chief Executive Officer shall be Xxxxxx X'Xxxx, who
shall become the Chief Executive Officer and President not
later than the effective date of the Plan.
After the initial selection of the Series A Directors, until
the earlier of the expiration of the term of the Class III
Directors and the conversion of all Series A-1 Preferred
Stock to Series A-2 Preferred Stock or Common Stock, (a) the
Series A Preferred Stock shall continue to directly elect
7
(including removal and replacement) the Series A Directors
subject to the ability of the Nominating and Corporate
Governance Committee to, by majority vote, veto the
selection of up to two proposed Series A Directors for each
Series A director position on the Board and (b) the number
of directors on the board of directors may not be increased.
The rights of Series A-1 Preferred Stock described in this
paragraph are referred to as "Series A-1 Board Rights". Upon
the earlier of such date, the Series A-1 Directors shall
serve out their remaining term and thereafter be treated as
Common Directors.
After the initial selection of the Common Directors, the
nominees for election of the Common Directors shall be
determined by the Nominating and Corporate Governance
Committee of the Company's Board of Directors, with the
Series A Directors on such committee not entitled to vote on
such determination at any time the Series A-1 Preferred
Stock retains Series A-1 Board Rights, and recommended to
the Company's Board of Directors for nomination by the
Board. Only holders of Common Stock, Series B Preferred
Stock and Series A Preferred Stock that is not entitled to
Series A Board Rights shall be entitled to vote on the
election of the Common Directors.
The Search Committee shall determine by majority vote the
Committee assignments of the initial Board of Directors;
provided, that for the initial Board and at all times
thereafter that the Series A-1 Preferred Stock retains
Series A-1 Board Rights at least one Series A Director shall
be on all committees of the Board and a Series A Director
shall constitute the Chairman of the Compensation Committee
of the Board; provided, further, that so long as the Series
A-1 Preferred Stock retains Series A-1 Board Rights, the
Series A Directors shall not constitute a majority of the
Nominating and Corporate Governance Committee. Committee
assignments shall be subject to all applicable independence
and qualification requirements for directors including those
of the relevant stock exchange on which the Common Stock is
expected to be traded. Pursuant to a stockholders' agreement
or other arrangements, the Company shall maintain that
composition.
Governance - The Executive Chairman shall initially be selected by
Executive Chairman: majority vote of the Search Committee, which must include
the approval of the representatives of Appaloosa and the
Unsecured Creditors' Committee. Any successor Executive
Chairman shall be selected by the Nominating and Corporate
Governance Committee of the Board, subject (but only for so
long as any of the Series A-1 Preferred Stock remains
outstanding) to the approval of the Series A-1 Preferred
Stock Holders. Upon approval, such candidate shall be
recommended by the Nominating and Corporate Governance
Committee to the Company's Board of Directors for
appointment as the Executive Chairman and nomination to the
Board. The Preferred Stock Holders will vote on the
candidate's election to the Board on an as-converted basis
together with holders of Common Stock.
8
Notwithstanding the foregoing, if there shall occur any
vacancy in the office of the Executive Chairman during the
initial one (1) year term, the successor Executive Chairman
shall be nominated by the Series A-1 Preferred Stock Holders
(but only for so long any of as the Series A-1 Preferred
Stock remains outstanding) subject to the approval of the
Nominating and Corporate Governance Committee of the Board.
The Executive Chairman shall be a full-time employee of the
Company with his or her principal office in the Company's
world headquarters in Troy, Michigan and shall devote
substantially all of his or her business activity to the
business affairs of the Company.
The Executive Chairman shall cause the Company to and the
Company shall be obligated to meaningfully consult with the
representatives of the Series A-1 Preferred Stock Holders
with respect to the annual budget and material modifications
thereto prior to the time it is submitted to the Board for
approval.
The employment agreements entered into by the Company with
the Executive Chairman and the Chief Executive Officer shall
provide that (i) upon any termination of employment, the
Executive Chairman and/or the Chief Executive Officer shall
resign as a director (and the employment agreements shall
require delivery at the time such agreements are entered
into of an executed irrevocable resignation that becomes
effective upon such termination) and (ii) the right to
receive any payments or other benefits upon termination of
employment shall be conditioned upon such resignation. If
for any reason the Executive Chairman or the Chief Executive
Officer does not resign or the irrevocable resignation is
determined to be ineffective, then the Series A-1 Preferred
Stock Holders may remove the Executive Chairman and/or Chief
Executive Officer as a director, subject to applicable law.
The employment agreement of the Chief Executive Officer will
provide that if the Chief Executive Officer is not elected
as a member of the Company's Board, the Chief Executive
Officer may resign for "cause" or "good reason".
The special rights of the Series A-1 Preferred Stock
referred to in "Governance - Board of Directors" and in this
"Executive Chairman" section are referred to as the
"Governance Rights".
Governance - Except with respect to the election of directors, who shall
Voting Rights: be elected as specified above, the Preferred Stock Holders
shall vote, on an "as converted" basis, together with the
holders of the Common Stock, on all matters submitted to
shareholders.
The Series A-1 Preferred Stock Holders shall be entitled to
propose individuals for appointment as Chief Executive
Officer and Chief Financial Officer, subject to a vote of
the Board. The Series A-1
9
Preferred Stock Holders shall also have the non-exclusive
right to propose the termination of the Executive Chairman
(but only during the initial one (1) year term of the
Executive Chairman and only for so long as the Series A-1
Preferred Stock remains outstanding), the Chief Executive
Officer and Chief Financial Officer, in each case, subject
to a vote of the Board. If the Series A Preferred Stock
Holders propose the appointment or termination of the Chief
Executive Officer or Chief Financial Officer, the Board
shall convene and vote on such proposal within ten (10) days
of the Board's receipt of notice from the Series A-1
Preferred Stock Holders; provided, that the then current
Chief Executive Officer shall not be entitled to vote on
either the appointment or termination of the Chief Executive
Officer and shall not be entitled to vote on the termination
of the Chief Financial Officer.
The Company shall not, and shall not permit its subsidiaries
to, take any of the following actions (subject to customary
exceptions as applicable) unless (i) the Company shall
provide the Series A-1 Preferred Stock Holders with at least
20 business days advance notice and (ii) it shall not have
received, prior to the 10th business day after the receipt
of such notice by the Series A-1 Preferred Stock Holders,
written notice from all of the Series A-1 Preferred Stock
Holders that they object to such action:
o any action to liquidate the Company;
o any amendment of the charter or bylaws that adversely
affects the Series A Preferred Stock (any expansion of
the Board of Directors would be deemed adverse); or
o at all times that the Series A Preferred Stock is
subject to the Transfer Restriction:
o a sale, transfer or other disposition of all or
substantially all of the assets of the Company
and its subsidiaries, on a consolidated basis;
o any merger or consolidation involving a change of
control of the Company; or
o any acquisition of or investment in any other person
or entity having a value in excess of $250 million
in any twelve-month period after the Issue Date.
The approval rights set forth above shall be in addition to
the other rights set forth above and any voting rights to
which the Series A Preferred Stock Holders are entitled
above and under Delaware law.
The special rights of the Series A-1 Preferred Stock
described above in this section "Governance - Voting Rights"
are referred to as the "Voting Rights". The Series A-1
Preferred Stock Holders shall have no Voting
10
Rights after no shares of Series A-1 Preferred Stock are
outstanding.
Appaloosa and the Permitted Holders shall not receive, in
exchange for the exercise or non-exercise of voting or other
rights in connection with any transaction subject to Voting
Rights, any compensation or remuneration; provided, that
this restriction shall not prohibit the reimbursement of
expenses incurred by Appaloosa or any Permitted Holders and
shall not prohibit the payment of fees by the Company to
Appaloosa or any Permitted Holder if the Company has engaged
Appaloosa or its affiliates as an advisor or consultant in
connection with any such transaction.
Change of Control: In a merger or consolidation, or sale of the Company,
involving a change of control of the Company (a "Change of
Control Transaction"), each holder of Series A Preferred
Stock may elect to require (the "Series A Change of Control
Put") that such holder's shares of Series A Preferred Stock
be redeemed by the Company for consideration payable in cash
and/or freely tradable marketable securities with a fair
market value equal to the greater of (i) the fair market
value of the Series A Preferred Stock (provided that such
fair market value shall be determined without ascribing any
value to the Voting Rights and Governance Rights
attributable to the Series A-1 Preferred Stock) and (ii) the
Liquidation Value. In a Change of Control Transaction, each
holder of Series B Preferred Stock may elect to require (the
"Series B Change of Control Put" and, together with the
Series A Change of Control Put, the "Change of Control Put")
that such holder's shares of Series B Preferred Stock be
redeemed by the Company for consideration payable in cash
and/or freely tradable marketable securities with a fair
market value equal to the greater of (i) the fair market
value of the Series B Preferred Stock and (ii) the
Liquidation Value; provided, that each holder of Series B
Preferred Stock who elects to exercise its Series B Change
of Control Put shall receive the same securities and the
same percentage mix of consideration as received by each
holder of Series A Preferred Stock upon exercise of the
Series A Change of Control Put in connection with such
Change of Control Transaction. For the purpose of this
provision, equity securities that are listed on a national
securities exchange and debt that is registered, or 144A
debt instruments which contain customary A/B exchange
registration rights, shall be marketable securities.
In the event of a Change of Control Put where all or a part
of the consideration to be received is marketable
securities, the fair market value of such securities shall
be determined as follows:
o If the consideration to be received is an existing
publicly traded security, the fair market value
shall reasonably be determined based on the market
value of such security.
o If the consideration to be received is not an
existing publicly traded security, the fair market
value (taking into account the liquidity of such
security) shall reasonably be determined by the
11
board of directors of the Company in good faith.
If the holders of the Preferred Stock object to
the valuation of the board of directors, they may
request that an appraisal be conducted to
determine the fair market value of the
consideration (taking into account the liquidity
of such security). If such a request is made, the
determination of the fair market value of the
consideration shall be made by a nationally
recognized investment banking, appraisal or
valuation firm selected by the holders of the
Series A and B Preferred Stock. If such holders
cannot agree on a mutually acceptable appraisal
firm, then the holders of the Series A Preferred
Stock, on the one hand, and the Series B Preferred
Stock, on the other hand, shall each choose one
appraisal firm and the respective chosen firms
shall agree on another appraisal firm which shall
make the determination. The cost of such appraisal
shall be borne by the Company.
o The determination of the fair market value of the
consideration received in a Change of Control
Transaction shall be determined within appropriate
time periods to be agreed upon.
The Company shall not enter into a Change of Control
Transaction unless adequate provision is made to ensure that
holders of the Preferred Stock will receive the
consideration referred to above in connection with such
Change of Control Transaction.
Reservation of The Company shall maintain sufficient authorized but
Unissued Stock: unissued securities of all classes issuable upon the
conversion or exchange of shares of Preferred Stock and
Common Stock.
Transferability: The Series A Preferred Stock Holders may sell or otherwise
transfer such stock as follows:
o to any Permitted Holder; or
o subject to the Transfer Restriction, to any other
person; provided, however, that upon any such transfer,
the shares of Series A-1 Preferred Stock so transferred
shall automatically convert into Series A-2
Preferred Stock.
Registration Each and any Investor, Related Purchaser (as such
Rights: term is defined in the Equity Purchase and Commitment
Agreement among the Company and the Investors (as amended,
the "EPCA")), Ultimate Purchaser (as such term is defined in
the EPCA), and their affiliates or assignee or transferee of
Registrable Securities (as defined below) (collectively, the
"Holders") shall be entitled to registration rights as set
forth below. The registration rights agreement shall contain
customary terms and provisions consistent with such terms,
including customary hold-back, cutback and indemnification
provisions.
12
Demand Registrations. Subject to the Transfer Restriction,
the Investors and their respective affiliates (including
Related Purchasers) shall be entitled to an aggregate of
five (5) demand registrations with respect to Registrable
Securities, in addition to any shelf registration statement
required by the EPCA with respect to Registrable Securities
(which shelf registration shall be renewed or remain
available for at least three years or, if longer, so long as
the Company is not eligible to use Form S-3); provided, that
all but one such demand right requires the prior written
consent of Appaloosa and the one demand not requiring the
consent of Appaloosa shall be at the request of the
Investors and their respective affiliates (including Related
Purchasers) holding a majority of the shares of Series B
Preferred Stock; provided, further, that following the time
that the Company is eligible to use Form S-3, the Investors
and their respective affiliates (including Related
Purchasers) shall be entitled to an unlimited number of
demand registrations with respect to Registrable Securities
(without the need for Appaloosa's consent). Any demand
registration may, at the option of the Investors and their
respective affiliates (including Related Purchasers) be a
"shelf" registration pursuant to Rule 415 under the
Securities Act of 1933. All registrations will be subject to
customary "windows."
Piggyback Registrations. In addition, subject to the
Transfer Restriction, the Holders shall be entitled to
unlimited piggyback registration rights with respect to
Registrable Securities, subject to customary cut-back
provisions.
Registrable Securities: "Registrable Securities" shall mean
and include (i) any shares of Series A-2 Preferred Stock,
Series B Preferred Stock, any shares of Common Stock
issuable upon conversion of the Preferred Stock, any other
shares of Common Stock (including shares acquired in the
rights offering or upon the exercise of preemptive rights)
and any additional securities issued or distributed by way
of a dividend or other distribution in respect of any such
securities, in each case, held by any Holder, and (ii) any
shares of Common Stock issuable upon the conversion of the
Company's Series C Preferred Stock and any additional
securities issued or distributed by way of dividend or
distribution in respect of any such shares of Common Stock.
Securities shall cease to be Registrable Securities upon
sale to the public pursuant to a registration statement or
Rule 144, or when all shares held by a Holder may be
transferred without restriction pursuant to Rule 144(k).
Expenses. All registrations shall be at the Company's
expense (except underwriting fees, discounts and commissions
agreed to be paid by the selling holders), including,
without limitation, all fees and expenses of one counsel for
any holders selling Registrable Securities in connection
with any such registration.
Preemptive So long as shares of Series A-1 Preferred Stock having a
Liquidation
13
Rights: Value of $250 million or more remain outstanding, the
Preferred Stock Holders shall be entitled to participate pro
rata in any offering of equity securities of the Company,
other than with respect to (i) shares issued or underlying
options issued to management and employees and (ii) shares
issued in connection with business combination transactions.
Commitment Fee: (a) A commitment fee of 2.25% of total commitment shall
be earned by and payable to the Investors and (b) an
additional arrangement fee of 0.25% of total commitment
shall be earned by and payable to Appaloosa, all as provided
for in the EPCA.
Standstill For a period of five (5) years from the Closing Date,
Appaloosa will not (a) acquire, offer or propose to acquire,
solicit an offer to sell or donate or agree to acquire, or
enter into any arrangement or undertaking to acquire,
directly or indirectly, by purchase, gift or otherwise,
record or direct or indirect beneficial ownership (as such
term is defined in Rule 13d-3 of the Exchange Act) of more
than 25% of the Company's common stock or any direct or
indirect rights, warrants or options to acquire record or
direct or indirect beneficial ownership of more than 25% of
the Company's common stock or (b) sell, transfer, pledge,
dispose, distribute or assign ("Transfer") to any person in
a single transaction, Company Common Stock or any securities
convertible into or exchangeable for or representing the
right to acquire the Company's Common Stock ("Common Stock
Equivalents") representing more than 15% of the Company's
then issued and outstanding (on a fully diluted basis)
Common Stock; provided, that Appaloosa shall be permitted to
Transfer the Company's Common Stock or Common Stock
Equivalents (i) to Permitted Holders, (ii) as part of a
broadly distributed public offering effected in accordance
with an effective registration statement, (iii) in a sale of
the Company, (iv) pursuant to any tender or exchange offer
or (v) as otherwise approved by (A) during the initial three
year term of the Series A Directors, a majority of Directors
who are not Series A Directors or (B) after the initial
three year term of the Series A Directors, a majority of the
Directors (customary exceptions shall apply for Transfers to
partners, stockholders, family members and trusts and
Transfers pursuant to the laws of succession, distribution
and descent).
Stockholders Certain of the provisions hereof will be contained in a
Agreement: Stockholders Agreement to be executed and delivered by
XXXX and the Company on the Effective Date.
Governing Law: State of Delaware
14
ANNEX I to
EXHIBIT A
SUMMARY OF TERMS OF SERIES C PREFERRED STOCK
Set forth below is a summary of indicative terms for the preferred stock of
Delphi Corporation to be issued to General Motors Corporation pursuant to a Plan
of Reorganization of Delphi Corporation under chapter 11 of the Bankruptcy Code.
No party shall be bound by the terms hereof and only execution and delivery of
definitive documentation relating to the transaction shall result in any binding
or enforceable obligations of any party relating to the transaction.
Issuer: Delphi Corporation (the "Company"), a corporation organized
under the laws of Delaware and a successor to Delphi
Corporation, as debtor in possession in the chapter 11
reorganization case (the "Bankruptcy Case") pending in the
United States Bankruptcy Court for the Southern District of
New York.
Series C Preferred General Motors Corporation ("GM").
Stock Holder:
Securities 16,969,728 shares of Series C Convertible Preferred Stock,
to be Issued: par value $0.01 per share, (as such amount may be reduced
in accordance with the Terms of Section 7.15(b) of the
Company's Plan of Reorganization, the "Series C Preferred
Stock") with a stated value of $65.00 per share (the "Stated
Value").
Mandatory The Company shall convert into Common Stock all, but not
Conversion into less than all, of the Stock: Series C Preferred Stock on
Common Stock: the first day the Mandatory Conversion Requirements are
satisfied (but in no event earlier than the third
anniversary of the Effective Date) at the Conversion Price
(as defined below) of the Series C Preferred Stock in effect
on such conversion date.
The "Mandatory Conversion Requirements" set forth in this
section are as follows: (i) the closing price for the Common
Stock for at least 35 trading days in the period of 45
consecutive trading days immediately preceding the date of
the notice of conversion shall be equal to or greater than
$79.44 per share and (ii) the Company has at the conversion
date an effective shelf registration covering resales of the
shares of Common Stock received upon such conversion of the
Series C Preferred Stock.
The Company will provide the Series C Preferred Stock Holder
with notice of
conversion at least five (5) business days prior to the date
of conversion.
The Series C Preferred Stock Holder will agree not to take
any action to delay or prevent such registration statement
from becoming effective.
Liquidation In the event of any liquidation, dissolution or winding up
Preference: of the Company, whether voluntary or involuntary, each share
of Series C Preferred Stock shall receive, out of legally
available assets of the Company, a preferential distribution
in cash in an amount equal to the Stated Value plus any
unpaid dividends to which it is entitled. Consolidation or
merger or sale of all or substantially all of the assets of
the Company shall not be a liquidation, dissolution or
winding up of the Company.
Ranking: Junior to the Company's Series A-1 Senior Convertible
Preferred Stock, Series A-2 Senior Convertible Preferred
Stock and Series B Senior Convertible Preferred Stock (the
"Senior Preferred Stock") with respect to any distributions
upon liquidation, dissolution or winding up of the Company.
Senior to Common Stock with respect to any distributions
upon liquidation, dissolution, winding up of the Company.
The Company shall be permitted to issue new capital stock
that is senior to or pari passu with the Series C Preferred
Stock with respect to distributions upon liquidation,
dissolution or winding up and other rights.
While any bankruptcy event is pending: (i) there shall be no
dividends or other distributions on shares of Common Stock
or other securities that do not, by their terms, rank senior
to or pari passu with the Series C Preferred Stock ("Junior
Stock") or any purchase, redemption, retirement or other
acquisition for value or other payment in respect of Junior
Stock unless the Series C Preferred Stock is paid its Stated
Value plus any dividends to which it is entitled in full;
and (ii) there shall be no such dividends, distributions,
purchases, redemptions, retirement, acquisitions or payments
on Junior Stock in each case in cash unless the Series C
Preferred Stock has first been paid in full in cash its
Stated Value plus any unpaid dividends to which it is
entitled.
Conversion of Each share of Series C Preferred Stock shall be convertible
Preferred Stock at any time, without any payment by the Series C
into Common Stock: Preferred Stock Holder, into a number of shares of Common
Stock equal to (i) the Stated Value divided by (ii) the
Conversion Price. The Conversion Price shall initially be
$65.00, subject to adjustment from time to time pursuant to
the anti-dilution provisions of the Series C Preferred Stock
(as so adjusted, the "Conversion Price"). The anti-dilution
provisions will be identical to the anti-dilution protection
afforded to the Series B
2
Senior Convertible Preferred Stock.(1) Any unpaid dividends
to which the Series C Preferred Stock is entitled shall be
paid upon any such conversion.
----------
(1) If a "Fundamental Change" occurs (i.e., merger, consolidation, asset sale,
etc.) in which all or substantially all Common Stock is exchanged for or
converted into stock, other securities, cash or assets, the Senior Preferred
Stock has the right upon any subsequent conversion to receive the kind and
amount of stock, other securities, cash and assets that it would have received
if it had been converted immediately prior thereto. Series C Preferred Stock
will also get this.
Any Series C Preferred Stock held by GM or its affiliates
that is converted into Common Stock, whether pursuant to
this section or the section entitled "Mandatory Conversion
into Common Stock," shall be converted into shares of Common
Stock which, so long as such shares are held by GM or its
affiliates, cannot be voted other than with respect to a
merger, consolidation or sale of the Company involving a
change of control of the Company (a "Change of Control
Transaction") in which the consideration to be paid for all
Common Stock, including such shares of Common Stock held by
GM or its affiliates, is not (i) equal to or greater than
$65.00 per share of such Common Stock (with such $65.00 per
share consideration to be proportionally adjusted to reflect
any stock splits or stock recombinations effecting such
shares of Common Stock) and (ii) paid in full in cash (the
"Stated Consideration"); provided, that upon the transfer by
GM or its affiliates of such Common Stock to a transferee
that is not GM or an affiliate of GM, the restriction on
voting such Common Stock shall no longer apply.
Dividends: None, except that if any dividends are declared and paid on
the Common Stock, each share of Series C Preferred Stock
shall be entitled to receive the dividends that would have
been payable on the number of shares of Common Stock that
would have been issued with respect to such share had it
been converted into Common Stock immediately prior to the
record date for such dividend ("Dividend Participation"). At
such time as the Company has declared and paid four
consecutive quarterly cash dividends on Common Stock and
paid the Dividend Participation in full on the Series C
Preferred Stock, the Series C Preferred Stock shall no
longer be entitled to Dividend Participation.
Voting Rights: The Series C Preferred Stock will not have any
voting rights, except with respect to a Change of Control
Transaction in which the consideration to be paid to all
Common Stock, including the Common Stock into which the
Series C Preferred Stock is convertible, is not at least
equal to the Stated Consideration; provided, that
nothing shall prohibit the Series C Preferred Stock from
being voted in any manner
3
to the extent required by Section 242(b)(2) of the Delaware
General Corporation Law. With respect to such a transaction,
each share of Series C Preferred Stock shall be entitled to
a number of votes equal to the votes that it would otherwise
have on an "as converted" basis. Upon a transfer by GM or
its affiliates of the Series C Preferred Stock to someone
other than GM or its affiliates in which there is no
automatic conversion into Common Stock, as provided below
under "Transferability," the Series C Preferred Stock will
vote, on an "as converted" basis, together with the holders
of the Common Stock, on all matters submitted to the holders
of Common Stock.
Mandatory So long as no bankruptcy event is pending, the Company shall
Redemption: redeem up to $1 billion of outstanding Series C Preferred
Stock to the extent of the proceeds received from exercise,
within the six months following the effective date of the
Company's plan of reorganization, of the six-month warrants
to be issued to the existing Common Stock holders pursuant
to the Company's plan of reorganization. Any such redemption
of shares of Series C Preferred Stock shall be by payment in
cash equal to the Stated Value plus any unpaid dividends to
which it is entitled.
Transferability: Upon any direct or indirect sale, transfer, assignment,
pledge or other disposition (a "Transfer") of any Series C
Preferred Stock (other than a Transfer to an affiliate of GM
or any Transfer completed at a time when there is a pending
acceleration under the Company's exit financing facility or
any refinancing thereof), such Transferred Series C
Preferred Stock shall automatically be converted into Common
Stock at the then applicable Conversion Price.
The Series C Preferred Stock and the shares of Common Stock
underlying such Series C Preferred Stock, or any interest or
participation therein shall be subject to the same 90-day
transfer restriction applicable to Series B Senior
Convertible Preferred Stock.
Amendments: No provision of the certificate of designations for the
Series C Preferred Stock may be repealed or amended in any
respect unless such repeal or amendment is approved by the
affirmative vote of the holders of a majority in aggregate
Stated Value of the then outstanding Series C Preferred
Stock.
Registration GM shall be a party to the Registration Rights Agreement to
Rights: which the holders of the Senior Preferred Stock are a party
and GM and its affiliates shall be entitled to the same
registration rights with respect to Common Stock underlying
Series C Preferred Stock, which shall be deemed to be
registrable securities, as are available with respect to the
shares of Common Stock underlying the Series B Preferred
Stock
4
(other than with respect to the demand registration granted
to holders of a majority of shares of Series B Preferred
Stock). As a party to the Registration Rights Agreement, GM
and its affiliates shall also be entitled to one demand
registration (without the consent of any holders of the
Senior Preferred Stock) in addition to the demand
registrations after the Company is eligible to use Form S-3;
provided, however, that any transferees of the shares of
Common Stock underlying the Series C Preferred Stock, other
than GM or an affiliate of GM, shall not be entitled to such
demand registration (but shall be entitled to piggyback
rights under the Registration Rights Agreement, subject to
customary cutback provisions).
5
EXHIBIT B
The Plan
[To be attached when approved in accordance with the proposal letter and filed]
EXHIBIT C
Disclosure Statement
[To be attached when approved in accordance with the proposal letter and filed]
EXHIBIT D
[Reserved]
EXHIBIT E
EXHIBIT E
The terms of the GM Note shall be determined as follows:
o 2nd lien exit financing of $1.5 billion (net of OID(1)) having a
maturity of 8 years from the date of initial issuance, and issued
under a single credit facility, allocated as follows:
o At least $750 million (net of OID) in a note with
market clearing terms and covenants acceptable to
Delphi to be raised from a third-party financing source
prior to emergence. All cash proceeds from the 2nd lien
financing to be paid to GM.(2)
o $750 million (net of OID), as reduced by any cash
proceeds above $750 million as referred to above or as
reduced below, in a note provided to GM having the same
terms as provided in connection with the third-party
financing. The 2nd lien credit agreement will provide
that at any time that GM holds more than $500 million
(net of OID) of the Notes that any matter requiring
approval of less than 100% of the Noteholders shall
require the following approvals to be effective: (1) if
GM votes in favor of the matter, the approval of at
least one-third of the non-GM Noteholders (determined
by principal amount); or (2) if GM does not vote in
favor of the matter, the approval of at least
two-thirds of the non-GM Noteholders (determined by
principal amount). No other special voting rights shall
be included in the 2nd lien credit agreement.
o Third party financing source (i.e., the initial
purchaser or underwriter) will have the right, through
the emergence date, to replace GM on up to $500 million
(net of OID) of the note being provided to GM in which
case cash in the amount of any such replacement shall
be paid to GM and its note (net of OID) shall be
reduced by such amount.
o If the 1st lien exit financing is greater than $3.7
billion (net of OID), an amount of cash equal to such
excess (the "Excess Amount") will be paid to GM as part
of its recovery and the 2nd lien financing will be
reduced by such amount (with at least 50% of the
remaining 2nd lien financing allocated to the third
party financing source), provided that the sum of (i)
undrawn availability plus any open letters of credit up
to $100 million pursuant to an ABL revolving credit
facility and (ii) Delphi's pro forma consolidated cash
as of the Effective Date (excluding the Excess Amount
----------
(1) For all purposes of this Exhibit, OID excludes any fees paid to underwriters
or agents
(2) To the extent that the ABL revolving credit facility (to the exclusion of
any other portion of the 1st lien exit facility) has a first priority lien on
any assets and the term loan portion of the 1st lien financing has a 2nd lien,
the notes subject to the 2nd lien financing shall have a third lien on such
assets.
EXHIBIT E
and after giving pro forma effect to the $1.5 billion
cash payment to GM in connection with the 414(l)
transaction) (the "Liquidity Amount") is at least
$3.189 billion. In the event that the Liquidity Amount
is less than $3.189 billion, then any Excess Amount
shall be retained by Delphi up to the point that the
amount of such Excess Amount retained plus the
Liquidity Amount equals $3.189 billion and the
remaining amount shall be paid to GM and the 2nd lien
financing will be reduced by such amount paid to GM as
provided above.
o Delphi shall, and Appaloosa acknowledges that Delphi shall, use
its commercially reasonable efforts to sell up to $1.5 billion of
2nd lien notes to third parties. To the extent Delphi does not
raise $1.5 billion of second lien financing through its exit
financing process, GM to receive a fee equivalent to that which
Delphi is paying to its Lead Arrangers and syndicate members,
including, without limitation, all placement, commitment and
closing fees, in connection with such exit financing, pro rata
based on the amount of the 2nd lien note issued to GM.
o GM shall not have registration rights with respect to the GM
Note.
o As provided for in Section 7.18(b) of the Plan, six month
warrants for $1,000 million of common stock will be issued to
equity holders with a per share strike price equal to the
liquidation preference of the Series C Preferred Stock. The
proceeds from such issuance will be allocated: (i) first to
redeem any outstanding Series C Preferred Stock at the preferred
liquidation preference value thereof and (ii) then to redeem GM's
2nd lien notes at par including accrued and unpaid interest
o Subject to the following sentence, the collateral and guarantee
package for the 2nd lien financing will be substantially the same
as that for the 1st lien financing. The 2nd lien facility shall
not have a lien on the assets (other than the stock of the first
tier foreign subsidiaries) solely securing the European portions
of the 1st lien facility.
o The GM Note shall be subject to a 6 month lock-up from the
effectiveness of the Plan of Reorganization, provided however
that, during such lock-up period, GM shall not be restricted from
selling second lien notes if such notes are sold to investors at
a price at least equal to par less any original issue discount
(the "Threshold Price"), or below the Threshold Price, if GM
makes a pro rata payment to the other holders of 2nd lien notes
equal to the product of (i) the absolute difference (measured in
basis points) between the actual price at which GM notes are sold
by GM and the Threshold Price and (ii) the face amount of the 2nd
lien notes held by others prior to giving effect to the sale of
the GM notes.
EXHIBIT F
Net Debt Test
Net Debt as of Closing
Pension, GM-related and other cash (sources) / uses:
Pension Catch-up Contribution
Pension Normal Cost Reimbursement
OPEB Cash Cost Reimbursement - 2007 and 2008 through Closing
Pricedown True-up - 2007 and 2008 through Closing
Retro UAW Wage Subsidy - 2007 and 2008 through Closing
Retro UAW Wage Subsidy (Q4 2006)
IUE Wage Subsidy Reimbursement
IUE Deal - GM OPEB Payment
OPEB Payment - Splinter Payments
2007 Restructuring Cash Cost Variance - actual versus BBP
Total Adjustments
Adjusted Net Debt as of Closing
Maximum Amount of Adjusted Net Debt per EPCA Covenant
EPCA Covenant Net Debt in Excess/(Shortfall) of Adj. Net Debt
