-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B7DmBstgvQw/7O0ZIv98jh8I8fxK+qekHCnqIDVXkcknL/fUsVu91v1OKW8TEdh3 f1UXR7zY03GKSEsMqw1WEQ== 0000950127-07-000789.txt : 20071212 0000950127-07-000789.hdr.sgml : 20071212 20071212161953 ACCESSION NUMBER: 0000950127-07-000789 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20071212 DATE AS OF CHANGE: 20071212 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DELPHI CORP CENTRAL INDEX KEY: 0001072342 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 383430473 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-56957 FILM NUMBER: 071302000 BUSINESS ADDRESS: STREET 1: 5725 DELPHI DRIVE CITY: TROY STATE: MI ZIP: 48098 BUSINESS PHONE: 248-813-2000 MAIL ADDRESS: STREET 1: 5725 DELPHI DRIVE CITY: TROY STATE: MI ZIP: 48098 FORMER COMPANY: FORMER CONFORMED NAME: DELPHI AUTOMOTIVE SYSTEMS CORP DATE OF NAME CHANGE: 19981020 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: APPALOOSA MANAGEMENT LP CENTRAL INDEX KEY: 0001006438 IRS NUMBER: 223220835 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 26 MAIN ST STREET 2: 1ST FLOOR CITY: CHATHAM STATE: NJ ZIP: 07928 BUSINESS PHONE: 9737017000 MAIL ADDRESS: STREET 1: 26 MAIN ST STREET 2: 1ST FLOOR CITY: CHATAM STATE: NJ ZIP: 07928 SC 13D/A 1 sc13d-a.txt THIS SCHEDULE 13D/A IS BEING RE-FILED TO CORRECT AN ERROR IN THE ORIGINAL SCHEDULE 13D/A AMENDMENT NO. 16. THE ONLY CHANGES ARE TO CHANGE THE NUMBER "16,969,728" TO "16,508,176" AND "$79.44" TO "$81.61" IN ANNEX I TO EXHIBIT A, FOUND IN BOTH EXHIBITS 99.1 AND 99.2 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- SCHEDULE 13D/A (Amendment No. 16) Under the Securities Exchange Act of 1934 DELPHI CORPORATION ------------------ (Name of Issuer) Common Stock, $0.01 Par Value Per Share --------------------------------------- (Title of Class of Securities) 247126105 -------------- (CUSIP Number) Kenneth Maiman Appaloosa Management L.P. 26 Main Street, First Floor Chatham, NJ 07928 (973) 701-7000 -------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 7, 2007 (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. ================================================================================ Page 1 of 20 SCHEDULE 13D - ------------------- CUSIP No. 247126105 - ------------------- - ------ ------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS Appaloosa Investment Limited Partnership I I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY) 22-3220838 - ------ ------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [X] (1) - ------ ------------------------------------------------------------------------- 3 SEC USE ONLY - ------ ------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------ ------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------ ------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------ ------ ------------------------------------------------ NUMBER OF SHARES 7 SOLE VOTING POWER BENEFICIALLY OWNED 0 BY EACH REPORTING ------ ------------------------------------------------ PERSON WITH 8 SHARED VOTING POWER 27,716,000 ------ ------------------------------------------------ 9 SOLE DISPOSITIVE POWER 0 ------ ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 27,716,000 - ------ ------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 101,333,062 (2) - ------ ------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------ ------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.04% (2) - ------ ------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - ------ ------------------------------------------------------------------------- - ---------- (1) Box (a) is checked with respect to the relationship of the Reporting Persons and Harbinger, Merrill, UBS, Pardus and GS as described in Item 4 and footnote (2) below. Box (b) is checked with respect to the relationship of the Reporting Persons and the New Additional Investors described in Item 4. The Reporting Persons expressly disclaim membership in a group (within the meaning of Section 13(d) of the Securities Exchange Act of 1934) with the New Additional Investors. Page 2 of 20 (2) As a result of the December 7th Investment Agreement described in Item 4, the Reporting Persons are deemed to be the beneficial owners of shares of the Issuer's Common Stock beneficially owned by Harbinger, Merrill, UBS, Pardus and GS. Based on information filed with the Securities and Exchange Commission, Harbinger Capital Partners Master Fund I, Ltd. and its related entities beneficially own 26,450,000 shares, Merrill Lynch, Pierce, Fenner & Smith Incorporated beneficially owns 1,459,280 shares, UBS AG beneficially owns 4,414,861 shares, Pardus Special Opportunities Master Fund L.P. and its related entities beneficially own 26,400,000 shares and GS beneficially owns 14,892,921 shares. Page 3 of 20 SCHEDULE 13D - ------------------- CUSIP No. 247126105 - ------------------- - ------ ------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS Palomino Fund Ltd. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY) 98-0150431 - ------ ------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [X] (1) - ------ ------------------------------------------------------------------------- 3 SEC USE ONLY - ------ ------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------ ------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------ ------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION British Virgin Islands - ------------------------ ------ ------------------------------------------------ NUMBER OF SHARES 7 SOLE VOTING POWER BENEFICIALLY OWNED 0 BY EACH REPORTING ------ ------------------------------------------------ PERSON WITH 8 SHARED VOTING POWER 24,284,000 ------ ------------------------------------------------ 9 SOLE DISPOSITIVE POWER 0 ------ ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 24,284,000 - ------ ------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 97,901,062 (2) - ------ ------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------ ------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 17.43% (2) - ------ ------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - ------ ------------------------------------------------------------------------- - ---------- (1) Box (a) is checked with respect to the relationship of the Reporting Persons and Harbinger, Merrill, UBS, Pardus and GS as described in Item 4 and footnote (2) below. Box (b) is checked with respect to the relationship of the Reporting Persons and the New Additional Investors described in Item 4. The Reporting Persons expressly disclaim membership in a group (within the meaning of Section 13(d) of the Securities Exchange Act of 1934) with the New Additional Investors. Page 4 of 20 (2) As a result of the December 7th Investment Agreement described in Item 4, the Reporting Persons are deemed to be the beneficial owners of shares of the Issuer's Common Stock beneficially owned by Harbinger, Merrill, UBS, Pardus and GS. Based on information filed with the Securities and Exchange Commission, Harbinger Capital Partners Master Fund I, Ltd. and its related entities beneficially own 26,450,000 shares, Merrill Lynch, Pierce, Fenner & Smith Incorporated beneficially owns 1,459,280 shares, UBS AG beneficially owns 4,414,861 shares, Pardus Special Opportunities Master Fund L.P. and its related entities beneficially own 26,400,000 shares and GS beneficially owns 14,892,921 shares. Page 5 of 20 SCHEDULE 13D - ------------------- CUSIP No. 247126105 - ------------------- - ------ ------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS Appaloosa Management L.P. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY) 22-3220835 - ------ ------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [X] (1) - ------ ------------------------------------------------------------------------- 3 SEC USE ONLY - ------ ------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------ ------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------ ------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------ ------ ------------------------------------------------ NUMBER OF SHARES 7 SOLE VOTING POWER BENEFICIALLY OWNED 0 BY EACH REPORTING ------ ------------------------------------------------ PERSON WITH 8 SHARED VOTING POWER 52,000,000 ------ ------------------------------------------------ 9 SOLE DISPOSITIVE POWER 0 ------ ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 52,000,000 - ------ ------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 125,617,062 (2) - ------ ------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------ ------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 22.36% (2) - ------ ------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - ------ ------------------------------------------------------------------------- - ---------- (1) Box (a) is checked with respect to the relationship of the Reporting Persons and Harbinger, Merrill, UBS, Pardus and GS as described in Item 4 and footnote (2) below. Box (b) is checked with respect to the relationship of the Reporting Persons and the New Additional Investors described in Item 4. The Reporting Persons expressly disclaim membership in a group (within the meaning of Section 13(d) of the Securities Exchange Act of 1934) with the New Additional Investors. Page 6 of 20 (2) As a result of the December 7th Investment Agreement described in Item 4, the Reporting Persons are deemed to be the beneficial owners of shares of the Issuer's Common Stock beneficially owned by Harbinger, Merrill, UBS, Pardus and GS. Based on information filed with the Securities and Exchange Commission, Harbinger Capital Partners Master Fund I, Ltd. and its related entities beneficially own 26,450,000 shares, Merrill Lynch, Pierce, Fenner & Smith Incorporated beneficially owns 1,459,280 shares, UBS AG beneficially owns 4,414,861 shares, Pardus Special Opportunities Master Fund L.P. and its related entities beneficially own 26,400,000 shares and GS beneficially owns 14,892,921 shares. Page 7 of 20 SCHEDULE 13D - ------------------- CUSIP No. 247126105 - ------------------- - ------ ------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS Appaloosa Partners Inc. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY) 22-3220833 - ------ ------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [X] (1) - ------ ------------------------------------------------------------------------- 3 SEC USE ONLY - ------ ------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------ ------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------ ------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------ ------ ------------------------------------------------ NUMBER OF SHARES 7 SOLE VOTING POWER BENEFICIALLY OWNED 0 BY EACH REPORTING ------ ------------------------------------------------ PERSON WITH 8 SHARED VOTING POWER 52,000,000 ------ ------------------------------------------------ 9 SOLE DISPOSITIVE POWER 0 ------ ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 52,000,000 - ------ ------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 125,617,062 (2) - ------ ------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------ ------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 22.36% (2) - ------ ------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - ------ ------------------------------------------------------------------------- - ---------- (1) Box (a) is checked with respect to the relationship of the Reporting Persons and Harbinger, Merrill, UBS, Pardus and GS as described in Item 4 and footnote (2) below. Box (b) is checked with respect to the relationship of the Reporting Persons and the New Additional Investors described in Item 4. The Reporting Persons expressly disclaim membership in a group (within the meaning of Section 13(d) of the Securities Exchange Act of 1934) with the New Additional Investors. Page 8 of 20 (2) As a result of the December 7th Investment Agreement described in Item 4, the Reporting Persons are deemed to be the beneficial owners of shares of the Issuer's Common Stock beneficially owned by Harbinger, Merrill, UBS, Pardus and GS. Based on information filed with the Securities and Exchange Commission, Harbinger Capital Partners Master Fund I, Ltd. and its related entities beneficially own 26,450,000 shares, Merrill Lynch, Pierce, Fenner & Smith Incorporated beneficially owns 1,459,280 shares, UBS AG beneficially owns 4,414,861 shares, Pardus Special Opportunities Master Fund L.P. and its related entities beneficially own 26,400,000 shares and GS beneficially owns 14,892,921 shares. Page 9 of 20 SCHEDULE 13D - ------------------- CUSIP No. 247126105 - ------------------- - ------ ------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS David A. Tepper I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY) - ------ ------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [X] (1) - ------ ------------------------------------------------------------------------- 3 SEC USE ONLY - ------ ------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------ ------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------ ------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - ------------------------ ------ ------------------------------------------------ NUMBER OF SHARES 7 SOLE VOTING POWER BENEFICIALLY OWNED 0 BY EACH REPORTING ------ ------------------------------------------------ PERSON WITH 8 SHARED VOTING POWER 52,000,000 ------ ------------------------------------------------ 9 SOLE DISPOSITIVE POWER 0 ------ ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 52,000,000 - ------ ------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 125,617,062 (2) - ------ ------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------ ------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 22.36% (2) - ------ ------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - ------ ------------------------------------------------------------------------- - ---------- (1) Box (a) is checked with respect to the relationship of the Reporting Persons and Harbinger, Merrill, UBS, Pardus and GS as described in Item 4 and footnote (2) below. Box (b) is checked with respect to the relationship of the Reporting Persons and the New Additional Investors described in Item 4. The Reporting Persons expressly disclaim membership in a group (within the meaning of Section 13(d) of the Securities Exchange Act of 1934) with the New Additional Investors. Page 10 of 20 (2) As a result of the December 7th Investment Agreement described in Item 4, the Reporting Persons are deemed to be the beneficial owners of shares of the Issuer's Common Stock beneficially owned by Harbinger, Merrill, UBS, Pardus and GS. Based on information filed with the Securities and Exchange Commission, Harbinger Capital Partners Master Fund I, Ltd. and its related entities beneficially own 26,450,000 shares, Merrill Lynch, Pierce, Fenner & Smith Incorporated beneficially owns 1,459,280 shares, UBS AG beneficially owns 4,414,861 shares, Pardus Special Opportunities Master Fund L.P. and its related entities beneficially own 26,400,000 shares and GS beneficially owns 14,892,921 shares. Page 11 of 20 This Amendment No. 16 (this "Amendment") to the Schedule 13D (the "Initial Schedule 13D") initially filed on March 16, 2006 by the Reporting Persons (as defined in the Initial Schedule 13D), as amended on August 1, 2006, August 29, 2006, December 19, 2006, January 18, 2007, March 2, 2007, March 12, 2007, May 15, 2007, July 6, 2007, July 10, 2007, July 20, 2007, July 23, 2007, August 3, 2007, November 2, 2007, November 8, 2007 and November 16, 2007 relates to the common stock, $0.01 par value per share (the "Common Stock"), of Delphi Corporation, a Delaware corporation (the "Issuer"), and is being filed to amend the Reporting Persons' previously-filed Schedule 13D as specifically set forth below. Certain information contained in this Schedule 13D/A relates to share ownership of persons other than the Reporting Persons. The Reporting Persons expressly disclaim any liability for any such information and for any other information provided in this Amendment that does not expressly pertain to a Reporting Person, as such term is defined in Item 2 of the Initial Schedule 13D. Unless otherwise indicated, all capitalized terms shall have the meanings ascribed to them in the Initial Schedule 13D, and unless otherwise amended hereby, all information previously filed remains in effect. Item 4 is hereby amended by adding the following: December 7th Proposal On December 7, 2007, the New Proposing Investors delivered to the Issuer a proposal, which the Issuer accepted, for a potential investment of up to $2.55 billion in the aggregate in preferred and common equity of the reorganized Issuer in connection with a proposed plan of reorganization for the Issuer (the "December 7th Proposal"). The December 7th Proposal contemplates that the New Proposing Investors would enter into an amendment (the "December 7th Amendment") to the New Investment Agreement, which contemplates a revised plan of reorganization for the Issuer. A copy of the December 7th Proposal is attached hereto as Exhibit 36. Equity Investment. Under the terms of the New Investment Agreement, as amended by the December 7th Amendment (the "December 7th Investment Agreement") on the terms and subject to the conditions of the December 7th Investment Agreement, the New Proposing Investors would purchase an aggregate of approximately $800 million of convertible preferred stock and approximately $175 million of common stock in the reorganized Issuer as follows: (i) each New Proposing Investor would purchase for $38.39 per share, each New Proposing Investor's proportionate share of 4,558,479 shares of the reorganized Issuer's new common stock (the "December 7th Direct Subscription Shares"); (ii) each Co-Investor would purchase for $42.58 per share, each Co-Investor's proportionate share of approximately $400 million of the reorganized Issuer's new Series B Senior Convertible Preferred Stock (the "December 7th Series B Preferred Stock"); and (iii) ADAH would purchase for $42.20 per share, 9,478,887 shares of the reorganized Issuer's new Series A-1 Senior Convertible Preferred Stock. The number of December 7th Direct Subscription Shares and December 7th Series B Preferred Stock to be purchased by each New Proposing Investor is set forth on Schedule 2 to the December 7th Amendment. Page 12 of 20 Additionally, on the terms and subject to the conditions of the December 7th Investment Agreement, the New Proposing Investors would purchase any shares of the reorganized Issuer's new common stock that was not subscribed for pursuant to an approximately $1.575 billion rights offering that would be made available to Eligible Holders. In accordance with the December 7th Investment Agreement, the Issuer would distribute certain rights to Eligible Holders to acquire new common stock of the reorganized Issuer. The rights, which would be separately transferable, would permit Eligible Holders to purchase their pro rata share of new common stock of the reorganized Issuer at $38.39 per share. Altogether, the New Proposing Investors could invest up to an aggregate of approximately $2.55 billion in the reorganized Issuer. The December 7th Investment Agreement is subject to satisfaction and waiver of numerous conditions and the non-exercise by either the Issuer or the New Proposing Investors of certain termination rights, all of which are more fully described in the December 7th Investment Agreement. The New Proposing Investors are entitled to payment of certain commitment fees and would be entitled to an alternate transaction fee, in amounts, at the times and under the circumstances set forth in the December 7th Investment Agreement. On December 6 and 7, 2007, the Bankruptcy Court held a hearing on Delphi's motion for the approval of the December 7th Investment Agreement and the related Disclosure Statement which describes the Issuer's plan of reorganization and contains certain other disclosures. On December 7, 2007, the Bankruptcy Court granted the motion to approve the December 7th Investment Agreement. On December 10, 2007, the Bankruptcy Court granted the motion to approve the Disclosure Statement and the New Proposing Investors and the Issuer executed the December 7th Amendment. Copies of the December 7th Amendment and commitment letters are attached hereto as Exhibit 37, Exhibit 38, Exhibit 39 and Exhibit 40, respectively. New Waiver Letter. On December 7, 2007, the New Proposing Investors and the Issuer entered into a letter agreement (the "December 7th Waiver Letter") setting forth the parties' understandings with regard to certain provisions of the New Investment Agreement. A copy of the December 7th Waiver Letter is attached hereto as Exhibit 41. Plan of Reorganization. Attached as Exhibit B to the December 7th Amendment is the Issuer's proposed plan of reorganization (the "December 7th Plan"), which includes provisions for distributions to be made to creditors and stockholders, the treatment of GM's claims, and the corporate governance of the reorganized Issuer. Corporate Governance Structure. The term sheets for the December 7th Series B Preferred Stock and the Series A-1 Senior Convertible Preferred Stock to be issued to ADAH in connection with the December 7th Plan provide for a corporate governance structure for the reorganized Issuer. The corporate governance structure for the reorganized Issuer will be the same as that set forth previously in the description of the New Investment Agreement entered into on August 3, 2007. Page 13 of 20 Revised New Investor Letter Agreement. On December 7, 2007, Appaloosa, Harbinger, Merrill, UBS, GS and Pardus agreed to make certain amendments to the Letter Agreement. A copy of the Letter Agreement as amended is attached hereto as Exhibit 42. The amended Letter Agreement replaces the Letter Agreement attached as Exhibit 21 to the Schedule 13D/A filed July 20, 2007. GS Letter Agreement. On December 7, 2007, ADAH and GS entered into a letter agreement setting forth the parties' understandings with regard to certain potential future sales of shares of the reorganized Issuer purchased by GS pursuant to the December 7th Investment Agreement. A copy of the revised GS Letter Agreement is attached hereto as Exhibit 43 and replaces the GS Letter Agreement attached as Exhibit 35 to the Schedule 13D/A filed November 16, 2007. Except as described in this Item 4 or otherwise described in this Statement, the Reporting Persons currently have no plans or proposals which relate to or would result in any transaction, event or action enumerated in paragraphs (a) through (j) of Item 4 of the form of Schedule 13D promulgated under the Securities Exchange Act of 1934, as amended. Subject to the terms of the December 7th Investment Agreement and the amended Letter Agreement, each of the Reporting Persons reserves the right, in light of its or his ongoing evaluation of the Issuer's financial condition, business, operations and prospects, the market price of the Common Stock, conditions in the securities markets generally, general economic and industry conditions, its or his business objectives and other relevant factors, to change its or his plans and intentions at any time, as it or he deems appropriate. In particular, and without limiting the generality of the foregoing (but subject to the terms of the Confidentiality Agreement, the December 7th Investment Agreement and the Letter Agreement), any one or more of the Reporting Persons (and their respective affiliates) reserves the right, in each case subject to any applicable limitations imposed on the sale of any of their Common Stock by the Securities Act of 1933, as amended, or other applicable law, to (i) purchase additional shares of Common Stock or other securities of the Issuer, (ii) sell or transfer shares of Common Stock or other securities beneficially owned by them from time to time in public or private transactions and (iii) cause any of the Reporting Persons to distribute in kind to their respective stockholders, partners or members, as the case may be, shares of Common Stock or other securities owned by such Reporting Persons. This Amendment is not a solicitation for votes on the Issuer's plan of reorganization. Item 5 is amended and restated as follows: (a) - (b) Set forth in the table below is the number and percentage of shares of Common Stock beneficially owned by each Reporting Person as of December 1, 2007. Page 14 of 20
Number of Shares Number of Shares Beneficially Beneficially Owned Aggregate Number Owned with with of Shares Sole Voting and Shared Voting and Beneficially Name Dispositive Power Dispositive Power Owned (1) - ---------------------------- ------------------ ------------------ ------------------ Appaloosa Investment Limited Partnership I 0 27,716,000 101,333,062 Palomino Fund, Ltd. 0 24,284,000 97,901,062 Appaloosa Management L.P. 0 52,000,000 125,617,062 Appaloosa Partners Inc. 0 52,000,000 125,617,062 David A. Tepper 0 52,000,000 125,617,062
Pursuant to Rule 13d-5(b)(1), the Reporting Persons are deemed to be the beneficial owner of shares of Common Stock beneficially owned by the Co-Investors. Other than as described in Item 4, the Reporting Persons do not have any agreement regarding the voting or disposition of such shares. The number of shares of Common Stock beneficially owned by each of the other New Investors, based on information filed with the Securities and Exchange Commission by each such Co-Investor, is set forth in Items 11 and 13 on the cover pages of this Amendment. (c) None of the Reporting Persons has purchased or sold Common Stock during the past sixty days. (d) Not applicable. (e) Not applicable. - ---------- (1) As a result of the December 7th Investment Agreement described in Item 4, the Reporting Persons are deemed to be the beneficial owners of shares of the Issuer's Common Stock beneficially owned by Harbinger, Merrill, UBS, Pardus and GS. Based on information filed with the Securities and Exchange Commission, Harbinger Capital Partners Master Fund I, Ltd. and its related entities beneficially own 26,450,000 shares, Merrill Lynch, Pierce, Fenner & Smith Incorporated beneficially owns 1,459,280 shares, UBS AG beneficially owns 4,414,861 shares, Pardus Special Opportunities Master Fund L.P. and its related entities beneficially own 26,400,000 shares and GS beneficially owns 14,892,921 shares. Page 15 of 20 Item 6 is hereby amended by adding the following: On December 7, 2007, the New Proposing Investors delivered the December 7th Proposal to the Issuer, which the Issuer accepted. On December 7, 2007, the New Proposing Investors and the Issuer entered into the December 7th Waiver Letter. On December 7, 2007, Appaloosa, Harbinger, Merrill, UBS, GS and Pardus entered into an amended Letter Agreement, which became effective when the December 7th Investment Agreement became effective and which supersedes the Letter Agreement. On December 7, 2007, ADAH and GS entered into the revised GS Letter Agreement which supersedes the GS Letter Agreement. On December 10, 2007, after approval by the Bankruptcy Court, the New Proposing Investors and Issuer entered into the December 7th Amendment and [ADAH and Appaloosa, Del-Auto and Harbinger, Pardus and Pardus DPH, and the Issuer] entered into certain commitment letters thereunder. Other than as described in this Statement, to the best knowledge of the Reporting Persons there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the Reporting Persons, and between any such persons and any other person, with respect to any securities of the Issuer, including but not limited to, transfer and voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, or a pledge or contingency the occurrence of which would give another person voting power or investment power over the securities of the Issuer. Item 7 is amended to add the following exhibits: 36 Proposal Letter (attaching form of Second Restated First Amendment to the Equity Purchase and Commitment Agreement, form of Equity Commitment Letters and those changed pages to the Plan and disclosure statement changed since December 3, 2007), dated December 7, 2007 among A-D Acquisition Holdings, LLC, Harbinger Del-Auto Investment Company, Ltd., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, Goldman Sachs & Co. and Pardus DPH Holding LLC. 37 Second Restated First Amendment to the Equity Purchase and Commitment Agreement, dated December 10, 2007, among A-D Acquisition Holdings, LLC, Harbinger Del-Auto Investment Company, Ltd., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, Goldman Sachs & Co., Pardus DPH Holding LLC and Delphi Corporation. Page 16 of 20 38 Letter Agreement, dated December 10, 2007, from Appaloosa Management L.P. to A-D Acquisition Holdings, LLC. 39 Letter Agreement, dated December 10, 2007, from Harbinger Capital Partners Master Fund I, Ltd. to Harbinger Del-Auto Investment Company Ltd. 40 Letter Agreement, dated December 10, 2007, from Pardus Special Opportunities Master Fund L.P. to Pardus DPH Holding LLC. 41 Equity Purchase and Commitment Agreement Waiver Letter, dated December 7, 2007, by and among A-D Acquisition Holdings, LLC, Harbinger Del-Auto Investment Company, Ltd., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, Goldman, Sachs & Co., Pardus DPH Holding LLC and Delphi Corporation. 42 Letter Agreement, dated December 7, 2007, from Appaloosa Management L.P. to Harbinger Capital Partners Master Fund I, Ltd., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, Goldman, Sachs & Co. and Pardus Special Opportunities Master Fund L.P. 43 Letter Agreement, dated December 7, 2007, from A-D Acquisition Holdings, LLC to Goldman, Sachs & Co. Page 17 of 20 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: December 12, 2007 APPALOOSA INVESTMENT LIMITED PARTNERSHIP I By: APPALOOSA MANAGEMENT L.P., Its General Partner By: APPALOOSA PARTNERS INC., Its General Partner By: /s/ David A. Tepper -------------------------- Name: David A. Tepper Title: President PALOMINO FUND LTD. By: APPALOOSA MANAGEMENT L.P., Its Investment Adviser By: APPALOOSA PARTNERS INC., Its General Partner By: /s/ David A. Tepper -------------------------- Name: David A. Tepper Title: President APPALOOSA MANAGEMENT L.P. By: APPALOOSA PARTNERS INC., Its General Partner By: /s/ David A. Tepper -------------------------- Name: David A. Tepper Title: President APPALOOSA PARTNERS INC. By: /s/ David A. Tepper -------------------------- Page 18 of 20 Name: David A. Tepper Title: President ` /s/ David A. Tepper ------------------------------ David A. Tepper Page 19 of 20 EXHIBIT INDEX 36 Proposal Letter (attaching form of Second Restated First Amendment to the Equity Purchase and Commitment Agreement, form of Equity Commitment Letters and those changed pages to the Plan and disclosure statement changed since December 3, 2007), dated December 7, 2007 among A-D Acquisition Holdings, LLC, Harbinger Del-Auto Investment Company, Ltd., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, Goldman Sachs & Co. and Pardus DPH Holding LLC. 37 Second Restated First Amendment to the Equity Purchase and Commitment Agreement, dated December 10, 2007, among A-D Acquisition Holdings, LLC, Harbinger Del-Auto Investment Company, Ltd., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, Goldman Sachs & Co., Pardus DPH Holding LLC and Delphi Corporation. 38 Letter Agreement, dated December 10, 2007, from Appaloosa Management L.P. to A-D Acquisition Holdings, LLC. 39 Letter Agreement, dated December 10, 2007, from Harbinger Capital Partners Master Fund I, Ltd. to Harbinger Del-Auto Investment Company Ltd. 40 Letter Agreement, dated December 10, 2007, from Pardus Special Opportunities Master Fund L.P. to Pardus DPH Holding LLC. 41 Equity Purchase and Commitment Agreement Waiver Letter, dated December 7, 2007, by and among A-D Acquisition Holdings, LLC, Harbinger Del-Auto Investment Company, Ltd., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, Goldman, Sachs & Co., Pardus DPH Holding LLC and Delphi Corporation. 42 Letter Agreement, dated December 7, 2007, from Appaloosa Management L.P. to Harbinger Capital Partners Master Fund I, Ltd., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, Goldman, Sachs & Co. and Pardus Special Opportunities Master Fund L.P. 43 Letter Agreement, dated December 7, 2007, from A-D Acquisition Holdings, LLC to Goldman, Sachs & Co. Page 20 of 20 EX-99.1 2 ex99-1.txt PROPOSAL LETTER WITH ANNEXES December 7, 2007 Delphi Corporation 5725 Delphi Drive Troy, MI 48098 Attn: Robert S. "Steve" Miller Chairman Re: Proposed Investment in Delphi Corporation Dear Mr. Miller: As you know, the signatories hereto have been engaged in discussions with Delphi Corporation ("Delphi" or the "Company") and various other parties in interest in the jointly administered chapter 11 cases (the "Chapter 11 Cases") pending in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court") with respect to Delphi and certain of its subsidiaries (collectively, the "Debtors") regarding certain amendments to the global resolution of the Chapter 11 Cases to be implemented pursuant to a plan of reorganization for the Debtors and be funded in part by an equity investment in Delphi (the "Investment"). Pursuant to the Company's request, the undersigned severally, not jointly, submit this proposal (the "Proposal") to amend the Equity Purchase and Commitment Agreement dated as of August 3, 2007 by and among Delphi and the undersigned (the "Investment Agreement"). Upon the entry by the Bankruptcy Court of the Subsequent Approval Order (as defined and described below) and the satisfaction of the other conditions described in this letter, the undersigned will severally, not jointly, enter into the second restated first amendment to the Investment Agreement attached hereto as Annex A (the "Amendment") and each of A-D Acquisition Holdings, LLC, Pardus DPH Holding LLC and Harbinger Del-Auto Investment Company, Ltd. will deliver an Equity Commitment Letter in the forms attached hereto as Annexes B-1, B-2 and B-3. Our several obligations to enter into the Amendment, however, are subject to your using your commercially reasonable efforts to have the Bankruptcy Court enter the Subsequent Approval Order by, among other things: (a) preparing and filing with the Bankruptcy Court, no later than December 7, 2007, the Subsequent Approval Motion referred to in the Amendment and (b) using commercially reasonable efforts to obtain a hearing on the Subsequent Approval Motion on or before December 7, 2007. Capitalized terms used herein and not otherwise defined have the meanings ascribed thereto in the Investment Agreement as amended by the Amendment. This Proposal is subject to, and expressly conditioned on, (1) the execution and delivery by all signatories thereto of the Amendment, (2) the entry by the Bankruptcy Court of an order, in form and substance reasonably satisfactory to each of us (the "Subsequent Approval Order") (i) approving and authorizing the Debtors to enter into and perform their obligations under the Investment Agreement as amended by the Amendment, (ii) authorizing the payment of the Commitment Fees, the Arrangement Fees, the Alternate Transaction Fees and the Transaction Expenses on the terms and subject to the conditions set forth in the Investment Agreement as amended by the Amendment, (iii) approving a disclosure statement which reflects the Approved Plan (as defined below) and the transactions contemplated thereby and by the Investment Agreement as amended by the Amendment as containing adequate information pursuant to Section 1125 of the Bankruptcy Code and (3) the disclosure statement referred to in the immediately preceding clause (2)(iii), which was filed by Delphi with the Bankruptcy Court on December 5, 2007, with such changed pages as are attached hereto as Annex C and other immaterial and non-substantive changes being filed with the Bankruptcy Court on the date of the entry of the Subsequent Approval Order by the Bankruptcy Court. This Proposal will remain open until 11:59 p.m., Prevailing Eastern Time on December 7, 2007, at which point it will expire unless Delphi has filed a motion, in form and substance reasonably acceptable to us, seeking entry by the Bankruptcy Court of the Subsequent Approval Order and requesting a hearing on such motion (the "Approval Motion Hearing") on or before December 7, 2007. This Proposal will also expire and terminate if the Approval Motion Hearing does not occur on or before December 7, 2007. In addition, even if accepted by Delphi this Proposal shall terminate and be of no further force or effect if, on or before December 20, 2007: (1) the Subsequent Approval Order has not been entered by the Bankruptcy Court, (2) the Amendment has not been executed and delivered to us by Delphi or (3) any of the undersigned determines in its sole discretion that either (a) the conditions to the obligations of the undersigned contained in the Investment Agreement as amended by the Amendment are incapable of being satisfied or (b) any of the undersigned is entitled to exercise a termination right contained in the Investment Agreement as amended by the Amendment. For the purpose of this Proposal, "Approved Plan" shall mean the plan of reorganization which was filed by Delphi with the Bankruptcy Court on December 5, 2007, with such changed pages as are attached hereto as Annex D and other immaterial and non-substantive changes. As agreed to by Delphi, this Proposal supersedes our proposal dated November 14, 2007, and such superseded proposal shall be of no further force or effect. * * * * We continue to be very enthusiastic about Delphi and look forward to pursuing the transactions contemplated by the Investment Agreement as amended to an expeditious and mutually successful conclusion. A-D ACQUISITION HOLDINGS, LLC By: /s/ James E. Bolin --------------------------------------- Name: James E. Bolin Title: Partner HARBINGER DEL-AUTO INVESTMENT COMPANY, LTD. By: /s/ William R. Lucas, Jr. --------------------------------------- Name: William R. Lucas, Jr. Title: Vice President MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ Graham Goldsmith --------------------------------------- Name: Graham Goldsmith Title: Managing Director UBS SECURITIES LLC By: /s/ Steven D. Smith --------------------------------------- Name: Steven D. Smith Title: Managing Director By: /s/ Andrew Kramer --------------------------------------- Name: Andrew Kramer Title: Managing Director GOLDMAN, SACHS & CO. By: /s/ Thomas A. Wagner --------------------------------------- Name: Thomas A. Wagner Title: Managing Director [Signature Page - Proposal Letter] PARDUS DPH HOLDING LLC By: /s/ Jospeh Thorton --------------------------------------- Name: Jospeh Thorton Title: [Signature Page - Proposal Letter] ANNEX A 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 [__________] 2007, is made by and among A-D Acquisition Holdings, LLC, a limited liability company formed under the laws of the State of Delaware ("ADAH"), Harbinger Del-Auto Investment Company, Ltd., an exempted company incorporated in the Cayman Islands ("Harbinger"), Merrill Lynch, Pierce, Fenner & Smith Incorporated, a Delaware corporation ("Merrill"), UBS Securities LLC, a Delaware limited liability company ("UBS"), Goldman, Sachs & 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"). ADAH, 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 [__], 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. -2- (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 -3- 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 ADAH, 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 ADAH (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 -4- 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 ADAH." and (ii) by replacing the words "Disclosure Statement Approval Date. The Arrangement Fee shall be paid to ADAH 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 -5- 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 -6- "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". -7- (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 ADAH 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 ADAH.". (z) The following paragraph should be inserted in its entirety immediately following Section 3(pp): "(qq) Debt Financing. The Company has delivered to ADAH a correct and complete copy of an executed "best efforts" financing letter (the "Financing Letter") from J.P. Morgan 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, -8- 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". -9- (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 ADAH, 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 ADAH and its counsel a copy of the Global Settlement Agreement between the Company and GM dated September 6, -10- 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 ADAH.". (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 ADAH 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 ADAH of such unavailability and the reasons therefore. The Company shall give ADAH prompt notice of any breach by any party of the Financing Letter or any termination of the Financing Letter. The Company shall keep ADAH 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 ADAH promptly upon receiving the Debt Financing and shall furnish correct and complete copies of the definitive agreements with respect thereto to ADAH promptly upon their execution. Subject to applicable regulatory or NASD requirements, Merrill and UBS (or their -11- 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 ADAH 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 ADAH and its counsel consistent with the Agreement, the Preferred Term Sheet and the Plan and any other reasonable comments of ADAH and its counsel and shall not reject such comments without first discussing the reasons therefor with ADAH or its counsel and giving due consideration to the views of ADAH and its counsel, and (iii) keep ADAH 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 ADAH 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 ADAH 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 ADAH", (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 ADAH, 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 ADAH 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 ADAH 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 ADAH prior to each Relevant Date and ADAH 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), ADAH 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 ADAH 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 ADAH by the Company prior to the date of issuance of the Confirmation Order, ADAH 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 ADAH by the Company after the date of issuance of the Confirmation Order and prior to the Closing Date, ADAH 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. ADAH 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 ADAH 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: (212) 521-6972" directly beneath the words "Attn: Philip A. Falcone". (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 "Cromwell". (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 ADAH 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: --------------------------------------- Name: Title: A-D ACQUISITION HOLDINGS, LLC By: --------------------------------------- Name: Title: HARBINGER DEL-AUTO INVESTMENT COMPANY, LTD. By: --------------------------------------- Name: Title: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: --------------------------------------- Name: Title: UBS SECURITIES LLC By: --------------------------------------- Name: Title: By: --------------------------------------- Name: Title: GOLDMAN, SACHS & CO. By: --------------------------------------- Name: Title: PARDUS DPH HOLDING LLC By: --------------------------------------- Name: Title: -23- SCHEDULE 1 Defined Term Section - --------------------------------------------------- --------------------------- ADAH............................................... 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 - ------------------ ------------- --------------- ------------- ------------------ ------------- ------------------- ADAH ............. 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 - ------------------ ------------- --------------- --------------- --------------- ----------------- ADAH.............. 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: - ------------------ ADAH.............. 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: - ------------------ ADAH.............. 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 - ------------------ ------------- -------------- ADAH.............. 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, Merrill Lynch, Pierce, Fenner & Smith Incorporated., UBS Securities, Goldman, 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"), Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill"), UBS Securities ("UBS"), Goldman, Sachs & 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) David Tepper no longer controls Appaloosa and James Bolin 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 John Opie), one (1) representative of the Unsecured Creditors Committee, being David Daigle, one (1) representative of the Co-Lead Investors other than UBS, GS and Merrill (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 Rodney O'Neal, 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 ADAH 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 16,508,176 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 $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 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 Senior Convertible Preferred Stock.(1) Any unpaid dividends to which the - ---------- (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. 2 Series C Preferred Stock is entitled shall be paid upon any such conversion. 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 ANNEX B APPALOOSA MANAGEMENT L.P. 26 Main Street Chatham, New Jersey 07928 [_________], 2007 A-D Acquisition Holdings, LLC c/o Appaloosa Management L.P. 26 Main Street Chatham, New Jersey, 07928 Attention: Jim Bolin Delphi Corporation 5725 Delphi Drive Troy, Michigan 48098 Ladies and Gentlemen: Reference is made to that certain Equity Purchase and Commitment Agreement, as amended by that certain Second Restated First Amendment to such Equity Purchase and Commitment Agreement, dated as of [_________], 2007 (as from time to time amended, restated, amended and restated, modified or supplemented in accordance with the terms thereof, the "Agreement"), by and among A-D Acquisition Holdings, LLC, a limited liability company formed under the laws of the State of Delaware (the "Investor"), Harbinger Del-Auto Investment Company, Ltd., an exempted company formed under the laws of the Cayman Islands, Merrill Lynch, Pierce Fenner & Smith Incorporated, a Delaware corporation, UBS Securities LLC, a limited liability company formed under the laws of the State of Delaware, Goldman Sachs & Co., a New York limited partnership, and Pardus DPH Holding LLC, a limited liability company formed under the laws of the State of Delaware, on the one hand, and Delphi Corporation, a Delaware corporation (as a debtor-in-possession and a reorganized debtor, as applicable, the "Company"), on the other hand. Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement. This letter will confirm the commitment of Appaloosa Management L.P. ("AMLP"), on behalf of one or more of its affiliated funds or managed accounts to be designated, to provide or cause to be provided funds (the "Funds") to the Investor in an amount up to $1,076,394,180.91, subject to the terms and conditions set forth herein. If (i) a Limited Termination has occurred, (ii) the Agreement has not been terminated by the Investor in accordance with its terms within ten (10) Business Days of the occurrence of such Limited Termination, and (iii) the Investor becomes obligated in accordance with Section 2(b) of the Agreement to purchase the Available Investor Shares as a result of such Limited Termination (an "Escalation Trigger"), the maximum amount of Funds referred to in the immediately preceding sentence shall be increased as follows: (i) by $166,866,749.19 if an Escalation Trigger arises as a result of a Limited Termination by Merrill Lynch, Pierce, Fenner & Smith Incorporated; (ii) by $166,866,749.19 if an Escalation Trigger arises as a result of a Limited Termination by UBS Securities LLC; (iii) by $397,225,891.24 if an Escalation Trigger arises as a result of a Limited Termination by A-D Acquisition Holdings, LLC Delphi Corporation [_________], 2007 Page 2 Harbinger Del-Auto Investments Company, Ltd.; (iv) by $399,999,945.75 if an Escalation Trigger arises as a result of a Limited Termination by Goldman Sachs & Co.; and (v) by $342,655,959.96 if an Escalation Trigger arises as a result of a Limited Termination by Pardus DPH Holding LLC. The Funds to be provided by or on behalf of AMLP to the Investor will be used to provide the financing for the Investor (i) to purchase the Investor Shares pursuant to the Agreement (the "Purchase Obligation") and (ii) to satisfy the Investor's other obligations under the Agreement, if any; provided, however, that the aggregate liability of AMLP under the immediately preceding clauses (i) and (ii) shall under no circumstances exceed the Cap (as defined below). AMLP shall not be liable to fund to the Investor any amounts hereunder (other than to fund the Purchase Obligation), unless and until, any party to the Agreement, other than the Company, commits a willful breach of the Agreement. For purposes of this letter agreement, the "Cap" shall mean (i) at all times on or prior to the Subsequent Approval Date, $100,000,000 and (ii) after the Subsequent Approval Date, $250,000,000. Our commitment to fund the Investor's Purchase Obligation is subject to the satisfaction, or waiver in writing by AMLP and the Investor, of all of the conditions, if any, to the Investor's obligations at such time contained in the Agreement. Notwithstanding any other term or condition of this letter agreement, (i) under no circumstances shall the liability of AMLP hereunder or for breach of this letter agreement exceed, in the aggregate, the Cap for any reason, (ii) under no circumstances shall AMLP be liable for punitive damages and (iii) the liability of AMLP shall be limited to monetary damages only. There is no express or implied intention to benefit any person or entity not party hereto and nothing contained in this letter agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, in any person or entity other than the Investor and the Company. Subject to the terms and conditions of this letter agreement, the Company shall have the right to assert its rights hereunder directly against AMLP. The terms and conditions of this letter agreement may be amended, modified or terminated only in a writing signed by all of the parties hereto. AMLP's obligations hereunder may not be assigned, except its obligations to provide the Funds may be assigned to one or more of its affiliated funds or managed accounts affiliated with AMLP, provided that such assignment will not relieve AMLP of its obligations under this letter agreement. This commitment will be effective upon the Investor's acceptance of the terms and conditions of this letter agreement (by signing below) and the execution of the Agreement by the Company and will expire on the earliest to occur of (i) the closing of the transactions contemplated by the Agreement, and (ii) termination of the Agreement in accordance with its terms; provided, however, that in the event that the Agreement is terminated, AMLP's obligations hereunder to provide funds to the Investor to fund the Investor's obligations under the Agreement on account of any willful breach of the Agreement for which the Investor would be liable shall survive; provided, further, that the Company shall provide AMLP with written notice within 90 days after the termination of the Agreement of any claim that a willful breach of the Agreement has occurred for which the Investor would be liable and if the Company fails to A-D Acquisition Holdings, LLC Delphi Corporation [_________], 2007 Page 3 timely provide such notice then all of AMLP's obligations hereunder shall terminate, this letter agreement shall expire and any claims hereunder shall forever be barred. Upon the termination or expiration of this letter agreement, all rights and obligations of the parties hereunder shall terminate and there shall be no liability on the part of any party hereto. AMLP hereby represents and warrants as follows: (a) AMLP is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. (b) AMLP has the requisite limited partnership power and authority to enter into, execute and deliver this letter agreement and to perform its obligations hereunder and all necessary action required for the due authorization, execution, delivery and performance by it of this letter agreement has been taken. (c) This letter agreement has been duly and validly executed and delivered by AMLP and constitutes its valid and binding obligation, enforceable against it in accordance with its terms. (d) AMLP has, and will have on the Closing Date, available funding necessary to provide the Funds in accordance with this letter agreement. No director, officer, employee, partner, member or direct or indirect holder of any equity interests or securities of AMLP, or any of its affiliated funds or managed accounts, and no director, officer, employee, partner or member of any such persons other than any general partner (collectively, the "Party Affiliates") shall have any liability or obligation of any nature whatsoever in connection with or under this letter or the transactions contemplated hereby, and each party hereto hereby waives and releases all claims against such Party Affiliates related to such liability or obligation. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York (without giving effect to the conflict of laws principles thereof). AMLP, THE INVESTOR AND THE COMPANY HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF, AND VENUE IN, THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS. The parties hereto acknowledge and agree that the commitment letter of AMLP in favor of the Investor and the Company, dated August 3, 2007, has been terminated and is of no further force and effect and that AMLP shall have no further liability or obligation under such commitment letter. A-D Acquisition Holdings, LLC Delphi Corporation [_________], 2007 Page 2 This letter agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and same instrument. * * * * Sincerely, APPALOOSA MANAGEMENT L.P. By: --------------------- Name: Title: Agreed to and accepted as of the date first above written: A-D ACQUISITION HOLDINGS, LLC By: ------------------------ Name: Title: DELPHI CORPORATION By: ------------------------ Name: Title: [_________], 2007 Pardus DPH Holding LLC 590 Madison Ave. Suite 25E New York, NY 10022 Delphi Corporation 5725 Delphi Drive Troy, Michigan 48098 Ladies and Gentlemen: Reference is made to that certain Equity Purchase and Commitment Agreement, as amended by that certain Second Restated First Amendment to such Equity Purchase and Commitment Agreement, dated as of [_________], 2007 (as from time to time amended, restated, amended and restated, modified or supplemented in accordance with the terms thereof, the "Agreement"), by and among A-D Acquisition Holdings, LLC, a limited liability company formed under the laws of the State of Delaware, Harbinger Del-Auto Investment Company, Ltd., an exempted company formed under the laws of the Cayman Islands, Merrill Lynch, Pierce Fenner & Smith Incorporated, a Delaware corporation, UBS Securities LLC, a limited liability company formed under the laws of the State of Delaware, Goldman Sachs & Co., a limited partnership formed under the laws of the State of New York and Pardus DPH Holding LLC, a limited liability company formed under the laws of the State of Delaware (the "Investor"), on the one hand, and Delphi Corporation, a Delaware corporation (as a debtor-in-possession and a reorganized debtor, as applicable, the "Company"), on the other hand. Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement. This letter will confirm the commitment of Pardus Special Opportunities Master Fund L.P. ("Pardus"), to provide or cause to be provided funds (the "Funds") to the Investor in an amount up to $342,655,959.96, subject to the terms and conditions set forth herein. The Funds to be provided by or on behalf of Pardus to the Investor will be used to provide the financing for the Investor (i) to purchase the Investor Shares pursuant to the Agreement (the "Purchase Obligation") and (ii) to satisfy the Investor's other obligations under the Agreement, if any; provided, however, that the aggregate liability of Pardus under the immediately preceding clauses (i) and (ii) shall under no circumstances exceed the Cap (as defined below). Pardus shall not be liable to fund to the Investor any amounts hereunder (other than to fund the Purchase Obligation), unless and until, any party to the Agreement, other than the Company, commits a willful breach of the Agreement. For purposes of this letter agreement, the "Cap" shall mean $33,593,000. Our commitment to fund the Investor's Purchase Obligation is subject to the satisfaction, or waiver in writing by Pardus and the Investor, of all of the conditions, if any, to the Investor's obligations at such time contained in the Agreement. Delphi Corporation [_________], 2007 Page 2 Notwithstanding any other term or condition of this letter agreement, (i) under no circumstances shall the liability of Pardus hereunder or for breach of this letter agreement exceed, in the aggregate, the Cap for any reason, (ii) under no circumstances shall Pardus be liable for punitive damages and (iii) the liability of Pardus shall be limited to monetary damages only. There is no express or implied intention to benefit any person or entity not party hereto and nothing contained in this letter agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, in any person or entity other than the Investor and the Company. Subject to the terms and conditions of this letter agreement, the Company shall have the right to assert its rights hereunder directly against Pardus. The terms and conditions of this letter agreement may be amended, modified or terminated only in a writing signed by all of the parties hereto. The obligations of Pardus hereunder may not be assigned, except its obligations to provide the Funds may be assigned to one or more of its affiliated funds or managed accounts affiliated with Pardus, provided that such assignment will not relieve Pardus of its obligations under this letter agreement. This commitment will be effective upon the Investor's acceptance of the terms and conditions of this letter agreement (by signing below) and the execution of the Agreement by the Company and will expire on the earliest to occur of (i) the closing of the transactions contemplated by the Agreement, and (ii) termination of the Agreement in accordance with its terms; provided, however, that in the event that the Agreement is terminated, the obligations of Pardus hereunder to provide funds to the Investor to fund the Investor's obligations under the Agreement on account of any willful breach of the Agreement for which the Investor would be liable shall survive; provided further, that the Company shall provide Pardus with written notice within 90 days after the termination of the Agreement of any claim that a willful breach of the Agreement has occurred for which the Investor would be liable and if the Company fails to timely provide such notice then all of the obligations of Pardus hereunder shall terminate, this letter agreement shall expire and any claims hereunder shall forever be barred. Upon the termination or expiration of this letter agreement, all rights and obligations of the parties hereunder shall terminate and there shall be no liability on the part of any party hereto. Pardus hereby represents and warrants as follows: (a) Pardus is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. (b) Pardus has the requisite limited partnership power and authority to enter into, execute and deliver this letter agreement and to perform its obligations hereunder and all necessary action required for the due authorization, execution, delivery and performance by it of this letter agreement has been taken. (c) This letter agreement has been duly and validly executed and delivered by Pardus and constitutes its valid and binding obligation, enforceable against it in accordance with its terms. -2- Delphi Corporation [_________], 2007 Page 3 (d) Pardus has, and will have on the Closing Date, available funding necessary to provide the Funds in accordance with this letter agreement. No director, officer, employee, partner, member or direct or indirect holder of any equity interests or securities of Pardus, or any of its affiliated funds or managed accounts, and no director, officer, employee, partner or member of any such persons other than any general partner (collectively, the "Party Affiliates") shall have any liability or obligation of any nature whatsoever in connection with or under this letter or the transactions contemplated hereby, and each party hereto hereby waives and releases all claims against such Party Affiliates related to such liability or obligation. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York (without giving effect to the conflict of laws principles thereof). PARDUS, THE INVESTOR AND THE COMPANY HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF, AND VENUE IN, THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS. The parties hereto acknowledge and agree that the commitment letter of Pardus in favor of the Investor and the Company, dated August 3, 2007, has been terminated and is of no further force and effect and that Pardus shall have no further liability or obligation under such commitment letter. This letter agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and same instrument. * * * * -3- Delphi Corporation [_________], 2007 Page 4 Sincerely, PARDUS SPECIAL OPPORTUNITIES MASTER FUND L.P. By: Pardus Capital Management L.P., its Investment Manager By: ----------------------------------- Name: Title: Agreed to and accepted as of the date first above written: PARDUS DPH HOLDING LLC By: --------------------------------- Name: Title: DELPHI CORPORATION By: --------------------------------- Name: Title: -4- Harbinger Capital Partners Master Fund I, Ltd. c/o 555 Madison Avenue New York, New York 10022 [_________], 2007 Harbinger Del-Auto Investment Company Ltd. c/o Harbinger Capital Partners Master Fund I, Ltd. 555 Madison Avenue New York, New York 10022 Delphi Corporation 5725 Delphi Drive Troy, Michigan 48098 Ladies and Gentlemen: Reference is made to that certain Equity Purchase and Commitment Agreement, as amended by that certain Second Restated First Amendment to such Equity Purchase and Commitment Agreement, dated as of [_________], 2007 (as from time to time amended, restated, amended and restated, modified or supplemented in accordance with the terms thereof, the "Agreement"), by and among A-D Acquisition Holdings, LLC, a limited liability company formed under the laws of the State of Delaware, Harbinger Del-Auto Investment Company, Ltd., an exempted company formed under the laws of the Cayman Islands (the "Investor"), Merrill Lynch, Pierce Fenner & Smith, Incorporated, a Delaware corporation, UBS Securities LLC, a limited liability company formed under the laws of the State of Delaware, Goldman Sachs & Co., a New York limited partnership, and Pardus DPH Holding LLC, a limited liability company formed under the laws of the State of Delaware, on the one hand, and Delphi Corporation, a Delaware corporation (as a debtor-in-possession and a reorganized debtor, as applicable, the "Company"), on the other hand. Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement. This letter will confirm the commitment of Harbinger Capital Partners Master Fund I, Ltd. ("Harbinger"), on behalf of one or more of its affiliated funds or managed accounts to be designated, to provide or cause to be provided funds (the "Funds") to the Investor in an amount up to $397,225,891.24, subject to the terms and conditions set forth herein. The Funds to be provided by or on behalf of Harbinger to the Investor will be used to provide the financing for the Investor (i) to purchase the Investor Shares pursuant to the Agreement (the "Purchase Obligation") and (ii) to satisfy the Investor's other obligations under the Agreement, if any; provided, however, that the aggregate liability of Harbinger under clauses (i) and (ii) shall under no circumstances exceed the Cap (as defined below). Harbinger shall not be liable to fund to the Investor any amounts hereunder (other than to fund the Purchase Obligation), unless, and until, any party to the Agreement other than the Company commits a willful breach of the Agreement. For purposes of this letter agreement, the "Cap" shall mean at all times $38,944,000. Our commitment to fund the Investor's Purchase Obligation is subject to the satisfaction, or waiver in writing by Harbinger and the Investor, of all of the conditions, if any, to the Investor's obligations at such time contained in the Agreement. Notwithstanding any other term or condition of this letter agreement, (i) under no circumstances shall the liability of Harbinger hereunder or for breach of this letter agreement Harbinger Del-Auto Investment Company Ltd. Delphi Corporation [_________], 2007 Page 2 exceed, in the aggregate, the Cap for any reason, (ii) under no circumstances shall Harbinger be liable for punitive damages, and (iii) the liability of Harbinger shall be limited to monetary damages only. There is no express or implied intention to benefit any person or entity not party hereto and nothing contained in this letter agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, in any person or entity other than the Investor and the Company. Subject to the terms and conditions of this letter agreement, the Company shall have the right to assert its rights hereunder directly against Harbinger. The terms and conditions of this letter agreement may be amended, modified or terminated only in a writing signed by all of the parties hereto. Harbinger's obligations hereunder may not be assigned, except its obligations to provide the Funds may be assigned to one or more of its affiliated funds or managed accounts affiliated with Harbinger, provided that such assignment will not relieve Harbinger of its obligations under this letter agreement. This commitment will be effective upon the Investor's acceptance of the terms and conditions of this letter agreement (by signing below) and the execution of the Agreement by the Company and will expire on the earliest to occur of (i) the closing of the transactions contemplated by the Agreement, and (ii) termination of the Agreement in accordance with its terms; provided, however, that in the event that the Agreement is terminated, Harbinger' obligations hereunder to provide funds to the Investor to fund the Investor's obligations under the Agreement on account of any willful breach of the Agreement for which the Investor would be liable shall survive; provided, further, that the Company shall provide Harbinger with written notice within 90 days after the termination of the Agreement of any claim that a willful breach of the Agreement has occurred for which the Investor would be liable and if the Company fails to timely provide such notice then all of Harbinger' obligations hereunder shall terminate, this letter agreement shall expire and any claims hereunder shall be forever barred. Upon the termination or expiration of this letter agreement all rights and obligations of the parties hereunder shall terminate and there shall be no liability on the part of any party hereto. Harbinger hereby represents and warrants as follows: (a) Harbinger is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. (b) Harbinger has the requisite corporate power and authority to enter into, execute and deliver this letter agreement and to perform its obligations hereunder and all necessary action required for the due authorization, execution, delivery and performance by it of this letter agreement has been taken. (c) This letter agreement has been duly and validly executed and delivered by Harbinger and constitutes its valid and binding obligation, enforceable against it in accordance with its terms. (d) Harbinger has, and will have on the Closing Date, available funding necessary to provide the Funds in accordance with this letter agreement. No director, officer, employee, partner, member or direct or indirect holder of any equity interests or securities of Harbinger, or any of its affiliated funds or managed accounts, and no director, officer, employee, partner or member of any such persons other than any Harbinger Del-Auto Investment Company Ltd. Delphi Corporation [_________], 2007 Page 3 general partner (collectively, the "Party Affiliates") shall have any liability or obligation of any nature whatsoever in connection with or under this letter or the transactions contemplated hereby, and each party hereto hereby waives and releases all claims against such Party Affiliates related to such liability or obligation. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York (without giving effect to the conflict of laws principles thereof). HARBINGER, THE INVESTOR AND THE COMPANY HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF, AND VENUE IN, THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS. The parties hereto acknowledge and agree that the commitment letter of Harbinger in favor of the Investor and the Company, dated August 3, 2007, has been terminated and is of no further force and effect and that Harbinger shall have no further liability or obligation under such commitment letter. This letter agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and same instrument. Harbinger Del-Auto Investment Company Ltd. Delphi Corporation [_________], 2007 Page 4 Sincerely, HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD. By: Harbinger Capital Partners Offshore Manager, L.L.C., as investment manager By: ----------------------------------- Name: Title: Agreed to and accepted as of the date first above written: Harbinger Del-Auto Investment Company, Ltd. By: --------------------------------- Name: Title: DELPHI CORPORATION By: --------------------------------- Name: Title: ANNEX C (v) Class G-1 (Existing Common Stock). Class G-1 consists of all Existing Common Stock. "Existing Common Stock" means shares of common stock of Delphi that are authorized, issued, and outstanding prior to the Effective Date. As described below, holders of Allowed Interests pertaining to Existing Common Stock will receive a distribution of (i) 461,552 shares of New Common Stock having a Plan Equity Value of $27.5 million, (ii) Par Value Rights exercisable at Plan Equity Value, (iii) Seven-Year Warrants exercisable at a 20.7% premium to the Plan Equity Value, (iv) Six-Month Warrants exercisable at a 9.0% premium to the Plan Equity Value, and (v) Ten-Year Warrants exercisable at Plan Equity Value. On the Effective Date, the Existing Common Stock will be cancelled. On the Distribution Date, or as soon thereafter as is reasonably practicable, each holder of an Allowed Interest pertaining to the Existing Common Stock will receive in exchange for such Interest its Pro Rata distribution of (i) 461,552 shares of New Common Stock, (ii) Seven-Year Warrants, (iii) Six-Month Warrants, and (iv) Ten-Year Warrants. On the commencement date of the Par Value Rights Offering and pursuant to the Registration Statement and Article 7.15(b) of the Plan, each holder of an allowed Interest pertaining to the Existing Common Stock as of the Rights Offerings Record Date will receive its Pro Rata portion of non-transferable Par Value Rights to purchase 21,680,996 shares of New Common Stock pursuant to the Par Value Rights Offering; except that Appaloosa and the other Plan Investors, if any, which have agreed to not participate in the Par Value Rights Offering may not participate in the Par Value Rights Offering and Par Value Rights that would otherwise be distributed to Appaloosa and such other Plan Investors will be instead distributed to the other holders of Existing Common Stock. As more fully set forth on the record of the hearing held on December 6, 2007, a reservation of rights was placed on the record regarding the Equity Committee's reservation of rights to assert claims, interests, defenses, offsets against any and all holders of equity in these Chapter 11 Cases solely within Class 1G-1 with respect to the allocation of Plan consideration among holders of Existing Common Stock based on the facts and circumstances in these Chapter 11 Cases and a reciprocal reservation of legal, equitable, contractual and other rights, including rights under the Investment Agreement, was placed on the record regarding the rights reserved by the Plan Investors with respect to the reservation of rights by Equity Committee. (vi) Class G-2 (Section 510(b) Equity Claims). Class G-2 consists of all Section 510(b) Equity Claims. "Section 510(b) Equity Claim" means any Cause of Action consolidated in the MDL Actions related to any claim against the Debtors (a) arising from the rescission of a purchase or sale of any Existing Common Stock, (b) for damages arising from the purchase or sale of Existing Common Stock, and (c) for alleged violations of the securities laws, misrepresentations, or any similar Claims related to the Existing Common Stock. DS-183 December 6, 2007 o The Confirmation Order must have been entered by the Bankruptcy Court and must be a Final Order, the Confirmation Date must have occurred, and no request for revocation of the Confirmation Order under section 1144 of the Bankruptcy Code may have been made, or, if made, may remain pending. (Article 12.2(d) of the Plan.) o Each Exhibit, document, or agreement to be executed in connection with the Plan must be in form and substance reasonably acceptable to the Debtors. (Article 12.2(e) of the Plan.) o The Bankruptcy Court must have entered one or more orders, which may be the Confirmation Order, approving the MDL Settlements. (Article 12.2(f) of the Plan.) o The MDL Court must have entered one or more orders approving the MDL Settlements. (Article 12.2(g) of the Plan.) o All conditions to the effectiveness of the Investment Agreement must have been satisfied or waived in accordance with the terms of the Investment Agreement. (Article 12.2(h) of the Plan.) o The aggregate amount of all Trade and Other Unsecured Claims that have been asserted or scheduled but not yet disallowed must have been allowed or estimated for distribution purposes by the Bankruptcy Court to be no more than $1.45 billion, excluding all applicable accrued Postpetition Interest thereon. (Article 12.2(i) of the Plan.) o All conditions to effectiveness in the Delphi-GM Definitive Documents must have been satisfied or waived in accordance with the terms of the Delphi-GM Definitive Documents. (Article 12.2(j) of the Plan.) C. Waiver Of Conditions To Confirmation And Consummation Of The Plan The conditions set forth in Articles 12.1(a), 12.2(c), and 12.2(e) of the Plan may be waived, in whole or in part, by the Debtors without any notice to any other parties-in-interest or the Bankruptcy Court and without a hearing; provided, however that in connection with the satisfaction or waiver of the condition set forth in Article 12.2(e) of the Plan, no material modification of the Investment Agreement, the Delphi-GM Definitive Documents and the exhibits to each such agreement (except Exhibits B and C to the Investment Agreement) that has a material adverse effect on the recoveries of unsecured creditors or existing equity holders may be made without the consent of the Creditors' Committee or the Equity Committee, as the case may be, and the respective non-Debtor counterparty to the agreement. Article 12.2(i) of the Plan may be waived jointly by the Debtors and Appaloosa (as lead Plan Investor), provided, however that no waiver of Article 12.2(i) of the Plan shall be effective unless notice is first given to the Creditors' Committee; provided further, however, that such waiver shall be effective upon the earlier of (i) the Creditors' Committee's consent and (ii) 12:00 noon New York time on the third Business Day after the notice is given to the Creditors' Committee unless the Creditors' Committee has provided written notice pursuant to Article 14.8 of the Plan that the Creditors' DS-262 December 6, 2007 ANNEX D 1.6 "Affiliates" has the meaning given such term by section 101(2) of the Bankruptcy Code. 1.7 "Allowed Claim" means a Claim, or any portion thereof, (a) that has been allowed by a Final Order of the Bankruptcy Court (or such other court or forum as the Reorganized Debtors and the holder of such Claim agree may adjudicate such Claim and objections thereto); (b) as to which a proof of claim has been timely filed with the Bankruptcy Court pursuant to the Bankruptcy Code, or is allowed by any Final Order of the Bankruptcy Court or by other applicable non-bankruptcy law, but only to the extent that such claim is identified in such proof of claim in a liquidated and noncontingent amount, and either (i) no objection to its allowance has been filed, or is intended to be filed, within the periods of limitation fixed by this Plan, the Bankruptcy Code, or by any order of the Bankruptcy Court, or (ii) any objection as to its allowance has been settled or withdrawn or has been denied by a Final Order; (c) as to which no proof of claim has been filed with the Bankruptcy Court and (i) which is Scheduled as liquidated in an amount other than zero and not contingent or disputed, but solely to the extent of such liquidated amount and (ii) no objection to its allowance has been filed, or is intended to be filed, by the Debtors or the Reorganized Debtors, within the periods of limitation fixed by this Plan, the Bankruptcy Code, or by any order of the Bankruptcy Court; (d) that is expressly allowed in a liquidated amount in this Plan; or (e) that is a Section 510(b) Note Claim, Section 510(b) Equity Claim, or Section 510(b) ERISA Claim; provided that both the Bankruptcy Court and MDL Court shall have approved the MDL Settlements, except to the extent that any such Claim is or becomes a Section 510(b) Opt Out Claim. 1.8 "Allowed Class . . . Claim" or "Allowed Class . . . Interest" means an Allowed Claim or an Allowed Interest in the specified Class. 1.9 "Allowed Interest" means an Interest in any Debtor, which has been or hereafter is listed by such Debtor in its books and records as liquidated in an amount and not disputed or contingent; provided, however, that to the extent an Interest is a Disputed Interest, the determination of whether such Interest shall be allowed and/or the amount of any such Interest shall be determined, resolved, or adjudicated, as the case may be, in the manner in which such Interest would have been determined, resolved, or adjudicated if the Chapter 11 Cases had not been commenced; and provided further, however, that proofs of Interest need not and should not be filed in the Bankruptcy Court with respect to any Interests; and provided further, however, that the Reorganized Debtors, in their discretion, may bring an objection or motion with respect to a Disputed Interest before the Bankruptcy Court for resolution; 4 December 6, 2007 5.3 Class 1C through Class 12C (General Unsecured Claims). Pursuant to clauses (a) and (b) below, holders of Allowed General Unsecured Claims shall receive, in full satisfaction, settlement, release, and discharge of, and in exchange for, such Allowed General Unsecured Claim, New Common Stock and Discount Rights equal to 100% of the Face Amount of such holders' Allowed General Unsecured Claims, in the ratio described below (it being understood that holders of TOPrS Claims shall receive such consideration equal to 90% of such holders' Allowed General Unsecured Claim, without Postpetition Interest). (a) Except as otherwise provided in and subject to Articles 7.15(b), 9.8, and 11.10 of this Plan, on the first Periodic Distribution Date occurring after the later of (a) the date when a General Unsecured Claim becomes an Allowed General Unsecured Claim or (b) the date when a General Unsecured Claim becomes payable pursuant to any agreement between the Debtors (or the Reorganized Debtors) and the holder of such General Unsecured Claim, and after giving effect to Article 11.10 of this Plan, each holder of an Allowed General Unsecured Claim shall receive the number of shares of New Common Stock (at Plan Equity Value) equal to 77.3% of the Face Amount of such Claim; provided, however, that in each case fractional shares shall be rounded, and distributions shall be made, in accordance with Article 9.10 of this Plan. The Plan equity Value is equal to the Debtors' total enterprise value of $13.3 billion, less net debt and warrant value of approximately $5.5 billion, which results in a distributable equity value of $7.8 billion, or $59.61 per share of New Common Stock based on 131,266,407 shares issued and outstanding (assuming full conversion of the New Preferred Stock) as of the Effective Date (the "Plan Equity Value"). (b) In satisfaction of the remaining portion of each holders' General Unsecured Claim (after accounting for the distributions to take place pursuant to clause(a)), on the commencement date of the Discount Rights Offering and pursuant to the Registration Statement and Article 7.15(a) of this Plan, each Discount Rights Offering Eligible Holder shall receive such holders' Pro Rata share (based upon the Face amount of General Unsecured Claims, Section 510(b) Note Claims, Section 510(b) Equity Claims, and Section 510(b) ERISA Claims eligible to participate in the Discount Rights Offering pursuant to Article 7.15(a) of the Plan) of transferable Discount Rights. In addition, (i) pursuant to the Discount Rights Offering, each Exercising Creditor shall receive the opportunity to exercise its Pro Rata portion (with respect to all Exercising Creditors) of Discount Oversubscription Rights and (ii) each Non-exercising Creditor shall receive, on the first Periodic Distribution Date occurring after the later of (a) the date when such Non-exercising Creditor's General Unsecured Claim becomes an Allowed General Unsecured Claim or (b) the date when such Non-exercising Creditor's General Unsecured Claim becomes payable pursuant to any agreement between the Debtors (or the Reorganized Debtors) and the holder of such General Unsecured Claim, such Pro Rata portion (with respect to all Non-exercising Creditors) of the Oversubscription Cash. 5.4 Class 1D through Class 12D (GM Claim). As provided in Article 7.20, this Plan constitutes a request to authorize and approve the Delphi-GM Master Restructuring Agreement ("RA") and the Delphi-GM Global Settlement Agreement ("GSA"). For good and 31 December 6, 2007 EX-99.2 3 ex99-2.txt EPCA AMENDMENT 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 ("ADAH"), Harbinger Del-Auto Investment Company, Ltd., an exempted company incorporated in the Cayman Islands ("Harbinger"), Merrill Lynch, Pierce, Fenner & Smith Incorporated, a Delaware corporation ("Merrill"), UBS Securities LLC, a Delaware limited liability company ("UBS"), Goldman, Sachs & 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"). ADAH, 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. -2- (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 -3- 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 ADAH, 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 ADAH (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 -4- 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 ADAH." and (ii) by replacing the words "Disclosure Statement Approval Date. The Arrangement Fee shall be paid to ADAH 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 -5- 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 -6- "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". -7- (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 ADAH 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 ADAH.". (z) The following paragraph should be inserted in its entirety immediately following Section 3(pp): "(qq) Debt Financing. The Company has delivered to ADAH a correct and complete copy of an executed "best efforts" financing letter (the "Financing Letter") from J.P. Morgan 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, -8- 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". -9- (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 ADAH, 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 ADAH and its counsel a copy of the Global Settlement Agreement between the Company and GM dated September 6, -10- 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 ADAH.". (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 ADAH 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 ADAH of such unavailability and the reasons therefore. The Company shall give ADAH prompt notice of any breach by any party of the Financing Letter or any termination of the Financing Letter. The Company shall keep ADAH 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 ADAH promptly upon receiving the Debt Financing and shall furnish correct and complete copies of the definitive agreements with respect thereto to ADAH promptly upon their execution. Subject to applicable regulatory or NASD requirements, Merrill and UBS (or their -11- 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 ADAH 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 ADAH and its counsel consistent with the Agreement, the Preferred Term Sheet and the Plan and any other reasonable comments of ADAH and its counsel and shall not reject such comments without first discussing the reasons therefor with ADAH or its counsel and giving due consideration to the views of ADAH and its counsel, and (iii) keep ADAH 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 ADAH 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 ADAH 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 ADAH", (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 ADAH, 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 ADAH 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 ADAH 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 ADAH prior to each Relevant Date and ADAH 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), ADAH 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 ADAH 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 ADAH by the Company prior to the date of issuance of the Confirmation Order, ADAH 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 ADAH by the Company after the date of issuance of the Confirmation Order and prior to the Closing Date, ADAH 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. ADAH 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 ADAH 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: (212) 521-6972" directly beneath the words "Attn: Philip A. Falcone". (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 "Cromwell". (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 ADAH 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/ John D. Sheehan --------------------------------------- Name: John D. Sheehan Title: VP & CRO A-D ACQUISITION HOLDINGS, LLC By: /s/ James E. Bolin --------------------------------------- Name: Title: HARBINGER DEL-AUTO INVESTMENT COMPANY, LTD. By: /s/ William R. Lucas, Jr. --------------------------------------- Name: William R. Lucas, Jr. Title: Vice President MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ Graham Goldsmith --------------------------------------- Name: Graham Goldsmith Title: Managing Director UBS SECURITIES LLC By: /s/ Steven Smith --------------------------------------- Name: Steven Smith Title: Managing Director By: /s/ Daniel Nicoloievsky --------------------------------------- Name: Daniel Nicoloievsky Title: Director GOLDMAN, SACHS & CO. By: /s/ Thomas A. Wagner --------------------------------------- Name: Thomas A. Wagner Title: Managing Director PARDUS DPH HOLDING LLC By: /s/ Joseph Thornton --------------------------------------- Name: Joseph Thornton Title: -23- SCHEDULE 1 Defined Term Section - --------------------------------------------------- --------------------------- ADAH............................................... 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 - ------------------ ------------- --------------- ------------- ------------------ ------------- ------------------- ADAH ............. 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 - ------------------ ------------- --------------- --------------- --------------- ----------------- ADAH.............. 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: - ------------------ ADAH.............. 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: - ------------------ ADAH.............. 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 - ------------------ ------------- -------------- ADAH.............. 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, Merrill Lynch, Pierce, Fenner & Smith Incorporated., UBS Securities, Goldman, 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"), Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill"), UBS Securities ("UBS"), Goldman, Sachs & 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) David Tepper no longer controls Appaloosa and James Bolin 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 John Opie), one (1) representative of the Unsecured Creditors Committee, being David Daigle, one (1) representative of the Co-Lead Investors other than UBS, GS and Merrill (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 Rodney O'Neal, 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 ADAH 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 16,508,176 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 $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 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 EX-99.3 4 ex99-3.txt COMMITMENT LETTER APPALOOSA MANAGEMENT L.P. 26 Main Street Chatham, New Jersey 07928 December 10, 2007 A-D Acquisition Holdings, LLC c/o Appaloosa Management L.P. 26 Main Street Chatham, New Jersey, 07928 Attention: Jim Bolin Delphi Corporation 5725 Delphi Drive Troy, Michigan 48098 Ladies and Gentlemen: Reference is made to that certain Equity Purchase and Commitment Agreement, as amended by that certain Second Restated First Amendment to such Equity Purchase and Commitment Agreement, dated as of December 10, 2007 (as from time to time amended, restated, amended and restated, modified or supplemented in accordance with the terms thereof, the "Agreement"), by and among A-D Acquisition Holdings, LLC, a limited liability company formed under the laws of the State of Delaware (the "Investor"), Harbinger Del-Auto Investment Company, Ltd., an exempted company formed under the laws of the Cayman Islands, Merrill Lynch, Pierce Fenner & Smith Incorporated, a Delaware corporation, UBS Securities LLC, a limited liability company formed under the laws of the State of Delaware, Goldman Sachs & Co., a New York limited partnership, and Pardus DPH Holding LLC, a limited liability company formed under the laws of the State of Delaware, on the one hand, and Delphi Corporation, a Delaware corporation (as a debtor-in-possession and a reorganized debtor, as applicable, the "Company"), on the other hand. Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement. This letter will confirm the commitment of Appaloosa Management L.P. ("AMLP"), on behalf of one or more of its affiliated funds or managed accounts to be designated, to provide or cause to be provided funds (the "Funds") to the Investor in an amount up to $1,076,394,180.91, subject to the terms and conditions set forth herein. If (i) a Limited Termination has occurred, (ii) the Agreement has not been terminated by the Investor in accordance with its terms within ten (10) Business Days of the occurrence of such Limited Termination, and (iii) the Investor becomes obligated in accordance with Section 2(b) of the Agreement to purchase the Available Investor Shares as a result of such Limited Termination (an "Escalation Trigger"), the maximum amount of Funds referred to in the immediately preceding sentence shall be increased as follows: (i) by $166,866,749.19 if an Escalation Trigger arises as a result of a Limited Termination by Merrill Lynch, Pierce, Fenner & Smith Incorporated; (ii) by $166,866,749.19 if an Escalation Trigger arises as a result of a Limited Termination by UBS Securities LLC; (iii) by $397,225,891.24 if an Escalation Trigger arises as a result of a Limited Termination by A-D Acquisition Holdings, LLC Delphi Corporation December 10, 2007 Page 2 Harbinger Del-Auto Investments Company, Ltd.; (iv) by $399,999,945.75 if an Escalation Trigger arises as a result of a Limited Termination by Goldman Sachs & Co.; and (v) by $342,655,959.96 if an Escalation Trigger arises as a result of a Limited Termination by Pardus DPH Holding LLC. The Funds to be provided by or on behalf of AMLP to the Investor will be used to provide the financing for the Investor (i) to purchase the Investor Shares pursuant to the Agreement (the "Purchase Obligation") and (ii) to satisfy the Investor's other obligations under the Agreement, if any; provided, however, that the aggregate liability of AMLP under the immediately preceding clauses (i) and (ii) shall under no circumstances exceed the Cap (as defined below). AMLP shall not be liable to fund to the Investor any amounts hereunder (other than to fund the Purchase Obligation), unless and until, any party to the Agreement, other than the Company, commits a willful breach of the Agreement. For purposes of this letter agreement, the "Cap" shall mean (i) at all times on or prior to the Subsequent Approval Date, $100,000,000 and (ii) after the Subsequent Approval Date, $250,000,000. Our commitment to fund the Investor's Purchase Obligation is subject to the satisfaction, or waiver in writing by AMLP and the Investor, of all of the conditions, if any, to the Investor's obligations at such time contained in the Agreement. Notwithstanding any other term or condition of this letter agreement, (i) under no circumstances shall the liability of AMLP hereunder or for breach of this letter agreement exceed, in the aggregate, the Cap for any reason, (ii) under no circumstances shall AMLP be liable for punitive damages and (iii) the liability of AMLP shall be limited to monetary damages only. There is no express or implied intention to benefit any person or entity not party hereto and nothing contained in this letter agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, in any person or entity other than the Investor and the Company. Subject to the terms and conditions of this letter agreement, the Company shall have the right to assert its rights hereunder directly against AMLP. The terms and conditions of this letter agreement may be amended, modified or terminated only in a writing signed by all of the parties hereto. AMLP's obligations hereunder may not be assigned, except its obligations to provide the Funds may be assigned to one or more of its affiliated funds or managed accounts affiliated with AMLP, provided that such assignment will not relieve AMLP of its obligations under this letter agreement. This commitment will be effective upon the Investor's acceptance of the terms and conditions of this letter agreement (by signing below) and the execution of the Agreement by the Company and will expire on the earliest to occur of (i) the closing of the transactions contemplated by the Agreement, and (ii) termination of the Agreement in accordance with its terms; provided, however, that in the event that the Agreement is terminated, AMLP's obligations hereunder to provide funds to the Investor to fund the Investor's obligations under the Agreement on account of any willful breach of the Agreement for which the Investor would be liable shall survive; provided, further, that the Company shall provide AMLP with written notice within 90 days after the termination of the Agreement of any claim that a willful breach of the Agreement has occurred for which the Investor would be liable and if the Company fails to A-D Acquisition Holdings, LLC Delphi Corporation December 10, 2007 Page 3 timely provide such notice then all of AMLP's obligations hereunder shall terminate, this letter agreement shall expire and any claims hereunder shall forever be barred. Upon the termination or expiration of this letter agreement, all rights and obligations of the parties hereunder shall terminate and there shall be no liability on the part of any party hereto. AMLP hereby represents and warrants as follows: (a) AMLP is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. (b) AMLP has the requisite limited partnership power and authority to enter into, execute and deliver this letter agreement and to perform its obligations hereunder and all necessary action required for the due authorization, execution, delivery and performance by it of this letter agreement has been taken. (c) This letter agreement has been duly and validly executed and delivered by AMLP and constitutes its valid and binding obligation, enforceable against it in accordance with its terms. (d) AMLP has, and will have on the Closing Date, available funding necessary to provide the Funds in accordance with this letter agreement. No director, officer, employee, partner, member or direct or indirect holder of any equity interests or securities of AMLP, or any of its affiliated funds or managed accounts, and no director, officer, employee, partner or member of any such persons other than any general partner (collectively, the "Party Affiliates") shall have any liability or obligation of any nature whatsoever in connection with or under this letter or the transactions contemplated hereby, and each party hereto hereby waives and releases all claims against such Party Affiliates related to such liability or obligation. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York (without giving effect to the conflict of laws principles thereof). AMLP, THE INVESTOR AND THE COMPANY HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF, AND VENUE IN, THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS. The parties hereto acknowledge and agree that the commitment letter of AMLP in favor of the Investor and the Company, dated August 3, 2007, has been terminated and is of no further force and effect and that AMLP shall have no further liability or obligation under such commitment letter. A-D Acquisition Holdings, LLC Delphi Corporation December 10, 2007 Page 2 This letter agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and same instrument. * * * * Sincerely, APPALOOSA MANAGEMENT L.P. By: /s/ James E. Bolin --------------------- Name: Title: Agreed to and accepted as of the date first above written: A-D ACQUISITION HOLDINGS, LLC By: /s/ James E. Bolin ------------------------ Name: Title: DELPHI CORPORATION By: /s/ John D. Sheehan ------------------------ Name: John D. Sheehan Title: VP & CRO EX-99.4 5 ex99-4.txt COMMITMENT LETTER December 10, 2007 Pardus DPH Holding LLC 590 Madison Ave. Suite 25E New York, NY 10022 Delphi Corporation 5725 Delphi Drive Troy, Michigan 48098 Ladies and Gentlemen: Reference is made to that certain Equity Purchase and Commitment Agreement, as amended by that certain Second Restated First Amendment to such Equity Purchase and Commitment Agreement, dated as of December 10, 2007 (as from time to time amended, restated, amended and restated, modified or supplemented in accordance with the terms thereof, the "Agreement"), by and among A-D Acquisition Holdings, LLC, a limited liability company formed under the laws of the State of Delaware, Harbinger Del-Auto Investment Company, Ltd., an exempted company formed under the laws of the Cayman Islands, Merrill Lynch, Pierce Fenner & Smith Incorporated, a Delaware corporation, UBS Securities LLC, a limited liability company formed under the laws of the State of Delaware, Goldman Sachs & Co., a limited partnership formed under the laws of the State of New York and Pardus DPH Holding LLC, a limited liability company formed under the laws of the State of Delaware (the "Investor"), on the one hand, and Delphi Corporation, a Delaware corporation (as a debtor-in-possession and a reorganized debtor, as applicable, the "Company"), on the other hand. Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement. This letter will confirm the commitment of Pardus Special Opportunities Master Fund L.P. ("Pardus"), to provide or cause to be provided funds (the "Funds") to the Investor in an amount up to $342,655,959.96, subject to the terms and conditions set forth herein. The Funds to be provided by or on behalf of Pardus to the Investor will be used to provide the financing for the Investor (i) to purchase the Investor Shares pursuant to the Agreement (the "Purchase Obligation") and (ii) to satisfy the Investor's other obligations under the Agreement, if any; provided, however, that the aggregate liability of Pardus under the immediately preceding clauses (i) and (ii) shall under no circumstances exceed the Cap (as defined below). Pardus shall not be liable to fund to the Investor any amounts hereunder (other than to fund the Purchase Obligation), unless and until, any party to the Agreement, other than the Company, commits a willful breach of the Agreement. For purposes of this letter agreement, the "Cap" shall mean $33,593,000. Our commitment to fund the Investor's Purchase Obligation is subject to the satisfaction, or waiver in writing by Pardus and the Investor, of all of the conditions, if any, to the Investor's obligations at such time contained in the Agreement. Delphi Corporation December 10, 2007 Page 2 Notwithstanding any other term or condition of this letter agreement, (i) under no circumstances shall the liability of Pardus hereunder or for breach of this letter agreement exceed, in the aggregate, the Cap for any reason, (ii) under no circumstances shall Pardus be liable for punitive damages and (iii) the liability of Pardus shall be limited to monetary damages only. There is no express or implied intention to benefit any person or entity not party hereto and nothing contained in this letter agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, in any person or entity other than the Investor and the Company. Subject to the terms and conditions of this letter agreement, the Company shall have the right to assert its rights hereunder directly against Pardus. The terms and conditions of this letter agreement may be amended, modified or terminated only in a writing signed by all of the parties hereto. The obligations of Pardus hereunder may not be assigned, except its obligations to provide the Funds may be assigned to one or more of its affiliated funds or managed accounts affiliated with Pardus, provided that such assignment will not relieve Pardus of its obligations under this letter agreement. This commitment will be effective upon the Investor's acceptance of the terms and conditions of this letter agreement (by signing below) and the execution of the Agreement by the Company and will expire on the earliest to occur of (i) the closing of the transactions contemplated by the Agreement, and (ii) termination of the Agreement in accordance with its terms; provided, however, that in the event that the Agreement is terminated, the obligations of Pardus hereunder to provide funds to the Investor to fund the Investor's obligations under the Agreement on account of any willful breach of the Agreement for which the Investor would be liable shall survive; provided further, that the Company shall provide Pardus with written notice within 90 days after the termination of the Agreement of any claim that a willful breach of the Agreement has occurred for which the Investor would be liable and if the Company fails to timely provide such notice then all of the obligations of Pardus hereunder shall terminate, this letter agreement shall expire and any claims hereunder shall forever be barred. Upon the termination or expiration of this letter agreement, all rights and obligations of the parties hereunder shall terminate and there shall be no liability on the part of any party hereto. Pardus hereby represents and warrants as follows: (a) Pardus is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. (b) Pardus has the requisite limited partnership power and authority to enter into, execute and deliver this letter agreement and to perform its obligations hereunder and all necessary action required for the due authorization, execution, delivery and performance by it of this letter agreement has been taken. (c) This letter agreement has been duly and validly executed and delivered by Pardus and constitutes its valid and binding obligation, enforceable against it in accordance with its terms. -2- Delphi Corporation December 10, 2007 Page 3 (d) Pardus has, and will have on the Closing Date, available funding necessary to provide the Funds in accordance with this letter agreement. No director, officer, employee, partner, member or direct or indirect holder of any equity interests or securities of Pardus, or any of its affiliated funds or managed accounts, and no director, officer, employee, partner or member of any such persons other than any general partner (collectively, the "Party Affiliates") shall have any liability or obligation of any nature whatsoever in connection with or under this letter or the transactions contemplated hereby, and each party hereto hereby waives and releases all claims against such Party Affiliates related to such liability or obligation. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York (without giving effect to the conflict of laws principles thereof). PARDUS, THE INVESTOR AND THE COMPANY HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF, AND VENUE IN, THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS. The parties hereto acknowledge and agree that the commitment letter of Pardus in favor of the Investor and the Company, dated August 3, 2007, has been terminated and is of no further force and effect and that Pardus shall have no further liability or obligation under such commitment letter. This letter agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and same instrument. * * * * -3- Delphi Corporation December 10, 2007 Page 4 Sincerely, PARDUS SPECIAL OPPORTUNITIES MASTER FUND L.P. By: Pardus Capital Management L.P., its Investment Manager By: /s/ Joseph Thornton ----------------------------------- Name: Thornton Title: Agreed to and accepted as of the date first above written: PARDUS DPH HOLDING LLC By: /s/ Joseph Thornton --------------------------------- Name: Title: DELPHI CORPORATION By: /s/ John D. Sheehan --------------------------------- Name: John D. Sheehan Title: VP & CRO -4- EX-99.5 6 ex99-5.txt COMMITMENT LETTER Harbinger Capital Partners Master Fund I, Ltd. c/o 555 Madison Avenue New York, New York 10022 December 10, 2007 Harbinger Del-Auto Investment Company Ltd. c/o Harbinger Capital Partners Master Fund I, Ltd. 555 Madison Avenue New York, New York 10022 Delphi Corporation 5725 Delphi Drive Troy, Michigan 48098 Ladies and Gentlemen: Reference is made to that certain Equity Purchase and Commitment Agreement, as amended by that certain Second Restated First Amendment to such Equity Purchase and Commitment Agreement, dated as of December 10, 2007 (as from time to time amended, restated, amended and restated, modified or supplemented in accordance with the terms thereof, the "Agreement"), by and among A-D Acquisition Holdings, LLC, a limited liability company formed under the laws of the State of Delaware, Harbinger Del-Auto Investment Company, Ltd., an exempted company formed under the laws of the Cayman Islands (the "Investor"), Merrill Lynch, Pierce Fenner & Smith, Incorporated, a Delaware corporation, UBS Securities LLC, a limited liability company formed under the laws of the State of Delaware, Goldman Sachs & Co., a New York limited partnership, and Pardus DPH Holding LLC, a limited liability company formed under the laws of the State of Delaware, on the one hand, and Delphi Corporation, a Delaware corporation (as a debtor-in-possession and a reorganized debtor, as applicable, the "Company"), on the other hand. Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement. This letter will confirm the commitment of Harbinger Capital Partners Master Fund I, Ltd. ("Harbinger"), on behalf of one or more of its affiliated funds or managed accounts to be designated, to provide or cause to be provided funds (the "Funds") to the Investor in an amount up to $397,225,891.24, subject to the terms and conditions set forth herein. The Funds to be provided by or on behalf of Harbinger to the Investor will be used to provide the financing for the Investor (i) to purchase the Investor Shares pursuant to the Agreement (the "Purchase Obligation") and (ii) to satisfy the Investor's other obligations under the Agreement, if any; provided, however, that the aggregate liability of Harbinger under clauses (i) and (ii) shall under no circumstances exceed the Cap (as defined below). Harbinger shall not be liable to fund to the Investor any amounts hereunder (other than to fund the Purchase Obligation), unless, and until, any party to the Agreement other than the Company commits a willful breach of the Agreement. For purposes of this letter agreement, the "Cap" shall mean at all times $38,944,000. Our commitment to fund the Investor's Purchase Obligation is subject to the satisfaction, or waiver in writing by Harbinger and the Investor, of all of the conditions, if any, to the Investor's obligations at such time contained in the Agreement. Notwithstanding any other term or condition of this letter agreement, (i) under no circumstances shall the liability of Harbinger hereunder or for breach of this letter agreement Harbinger Del-Auto Investment Company Ltd. Delphi Corporation December 10, 2007 Page 2 exceed, in the aggregate, the Cap for any reason, (ii) under no circumstances shall Harbinger be liable for punitive damages, and (iii) the liability of Harbinger shall be limited to monetary damages only. There is no express or implied intention to benefit any person or entity not party hereto and nothing contained in this letter agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, in any person or entity other than the Investor and the Company. Subject to the terms and conditions of this letter agreement, the Company shall have the right to assert its rights hereunder directly against Harbinger. The terms and conditions of this letter agreement may be amended, modified or terminated only in a writing signed by all of the parties hereto. Harbinger's obligations hereunder may not be assigned, except its obligations to provide the Funds may be assigned to one or more of its affiliated funds or managed accounts affiliated with Harbinger, provided that such assignment will not relieve Harbinger of its obligations under this letter agreement. This commitment will be effective upon the Investor's acceptance of the terms and conditions of this letter agreement (by signing below) and the execution of the Agreement by the Company and will expire on the earliest to occur of (i) the closing of the transactions contemplated by the Agreement, and (ii) termination of the Agreement in accordance with its terms; provided, however, that in the event that the Agreement is terminated, Harbinger' obligations hereunder to provide funds to the Investor to fund the Investor's obligations under the Agreement on account of any willful breach of the Agreement for which the Investor would be liable shall survive; provided, further, that the Company shall provide Harbinger with written notice within 90 days after the termination of the Agreement of any claim that a willful breach of the Agreement has occurred for which the Investor would be liable and if the Company fails to timely provide such notice then all of Harbinger' obligations hereunder shall terminate, this letter agreement shall expire and any claims hereunder shall be forever barred. Upon the termination or expiration of this letter agreement all rights and obligations of the parties hereunder shall terminate and there shall be no liability on the part of any party hereto. Harbinger hereby represents and warrants as follows: (a) Harbinger is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. (b) Harbinger has the requisite corporate power and authority to enter into, execute and deliver this letter agreement and to perform its obligations hereunder and all necessary action required for the due authorization, execution, delivery and performance by it of this letter agreement has been taken. (c) This letter agreement has been duly and validly executed and delivered by Harbinger and constitutes its valid and binding obligation, enforceable against it in accordance with its terms. (d) Harbinger has, and will have on the Closing Date, available funding necessary to provide the Funds in accordance with this letter agreement. No director, officer, employee, partner, member or direct or indirect holder of any equity interests or securities of Harbinger, or any of its affiliated funds or managed accounts, and no director, officer, employee, partner or member of any such persons other than any Harbinger Del-Auto Investment Company Ltd. Delphi Corporation December 10, 2007 Page 3 general partner (collectively, the "Party Affiliates") shall have any liability or obligation of any nature whatsoever in connection with or under this letter or the transactions contemplated hereby, and each party hereto hereby waives and releases all claims against such Party Affiliates related to such liability or obligation. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York (without giving effect to the conflict of laws principles thereof). HARBINGER, THE INVESTOR AND THE COMPANY HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF, AND VENUE IN, THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS. The parties hereto acknowledge and agree that the commitment letter of Harbinger in favor of the Investor and the Company, dated August 3, 2007, has been terminated and is of no further force and effect and that Harbinger shall have no further liability or obligation under such commitment letter. This letter agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and same instrument. Harbinger Del-Auto Investment Company Ltd. Delphi Corporation December 10, 2007 Page 4 Sincerely, HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD. By: Harbinger Capital Partners Offshore Manager, L.L.C., as investment manager By: /s/ Philip A. Falcone ----------------------------------- Name: Philip A. Falcone Title: Senior Managing Director Agreed to and accepted as of the date first above written: Harbinger Del-Auto Investment Company, Ltd. By: /s/ Philip A. Falcone --------------------------------- Name: Title: DELPHI CORPORATION By: /s/ John D. Sheehan --------------------------------- Name: John D. Sheehan Title: VP & CRO EX-99.6 7 ex99-6.txt WAIVER LETTER December 7, 2007 Delphi Corporation 5725 Delphi Drive Troy, Michigan 48098 Attention: John Sheehan EQUITY PURCHASE AND COMMITMENT AGREEMENT WAIVER LETTER Dear Sir: This letter, as detailed below, is a limited waiver of certain provisions of the Equity Purchase and Commitment Agreement, dated as of August 3, 2007, as amended (the "EPCA") by and among A-D Acquisition Holdings, LLC, Harbinger Del-Auto Investment Company, Ltd., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, Goldman, Sachs & Co., Pardus DPH Holding LLC, and Delphi Corporation (as a debtor-in-possession and a reorganized debtor). All capitalized terms referred to herein, but not herein defined shall have the meanings ascribed to such term in the EPCA. Since August 3, 2007, the Investors and the Company have been exploring with each other possible modifications to the EPCA and certain related transaction documents (the "Explorations"), which modifications are or were documented by (i) the documents attached to that certain proposal letter dated the date hereof, executed by the Investors and addressed to the Company, (ii) the documents attached to that certain proposal letter dated November 14, 2007 executed by the Investors and addressed to the Company and (iii) the documents attached to that certain proposal letter dated October 29, 2007 executed by certain of the Investors and addressed to the Company (collectively, the "Modifications"). The Investors and the Company confirm and agree that none of the Explorations, the Modifications or any actions taken in furtherance thereof constitutes a Change of Recommendation or a breach of the EPCA by any party. The Investors also hereby waive, pursuant to Section 9(b) of the EPCA, the conditions set forth in Sections 9(a)(v) and 9(a)(vi) to the extent the Explorations, the Modifications or any actions taken in furtherance thereof would cause either of the conditions set forth in Section 9(a)(v) or 9(a)(vi) not to be satisfied. The Investors, including ADAH, also 1 hereby waive any right to terminate the EPCA pursuant to Section 12(d)(vi) and receive any Alternate Transaction Fee pursuant to Section 12(g) to the extent such termination right or a right to an Alternate Transaction Fee is triggered or arises as a result of the Explorations, the Modifications or any actions taken in furtherance thereof. The Company hereby waives any right to terminate the EPCA pursuant to Section 12(f)(ii) to the extent such termination right is triggered or arises as a result of the Explorations, the Modifications or any actions taken in furtherance thereof. Additionally, the Company acknowledges and agrees that none of the Explorations or the Modifications or the delivery by the Investors of any documents contemplated by the Modifications shall be considered acceptance or approval for purposes of the EPCA of any Material Investment Document, financing document or the Plan at any time prior to the time that the Modifications are fully executed by all parties and have become effective. The parties hereto agree that this letter shall not be deemed to constitute a waiver of any existing right or remedy not expressly stated herein. Except to the extent expressly waived hereby, the parties hereto expressly reserve all rights and remedies available to the parties for the full protection and enforcement of their rights or remedies under the EPCA or any of the other documents referred to in the second paragraph of this letter, without prejudice to any rights or remedies that the parties may now have or may have in the future under or in connection with the EPCA or any of the other documents referred to in the second paragraph of this letter. This letter may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. THIS LETTER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. 2 Except as specifically stated herein, the EPCA shall continue in full force and effect in accordance with the provisions thereof. DELPHI CORPORATION By: /s/ John D. Sheehan ------------------------- Name: John D. Sheehan Title: VP & CRO A-D ACQUISITION HOLDINGS, LLC By: /s/ James E. Bolin ------------------------- Name: James E. Bolin Title: Partner HARBINGER DEL-AUTO INVESTMENT COMPANY, LTD. By: /s/ William R. Lucas, Jr. ------------------------- Name: William R. Lucas, Jr. Title: Vice President MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ Graham Goldsmith ------------------------- Name: Graham Goldsmith Title: Managing Director 3 UBS SECURITIES LLC By: /s/ Steven D. Smith ------------------------- Name: Steven D. Smith Title: Managing Director By: /s/ Andrew Kramer ------------------------- Name: Andrew Kramer Title: Managing Director PARDUS DPH HOLDING LLC By: /s/ Joseph Thornton ------------------------- Name: Thornton Title: GOLDMAN, SACHS & CO. By: /s/ Thomas A. Wagner ------------------------- Name: Thomas A. Wagner Title: Managing Director cc: White & Case LLP Wachovia Financial Center 200 South Biscayne Boulevard Suite 4900 Miami, Florida 33131-2352 Facsimile: (305) 358-5744/5766 Attention: Thomas E. Lauria White & Case LLP 1155 Avenue of the Americas New York, New York 10036-2787 Facsimile: (212) 354-8113 Attention: John M. Reiss Gregory Pryor 4 Harbinger Del-Auto Investment Company, Ltd. c/o Harbinger Capital Partners Offshore Manager, LLC 555 Madison Avenue, 16th Floor New York, NY 10022 Facsimile: (212) 521-6972 Attn: Philip A. Falcone Harbert Management Corp. One Riverchase Parkway South Birmingham, AL 35244 Facsimile: (205) 987-5505 Attention: General Counsel Kaye Scholer LLP 425 Park Avenue New York, NY 10022-3598 Facsimile: (212) 836-8689 Attention Benjamin Mintz and Lynn Toby Fisher Merrill Lynch, Pierce, Fenner & Smith Incorporated 4 World Financial Center New York, New York 10080 Facsimile: (212) 449-0769 Attention: Robert Spork / Rick Morris Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, New York 10019-6064 Facsimile: (212) 757-3990 Attention: Andrew N. Rosenberg UBS Securities LLC 299 Park Avenue New York, New York 10171 Facsimile: (212) 821-3008 / (212) 821-4042 Attention: Steve Smith / Osamu Watanabe Cleary Gottlieb Steen & Hamilton LLP One Liberty Plaza New York, New York 10006 Facsimile: (212) 225-3999 Attention: Leslie N. Silverman 5 Goldman, Sachs & Co. 1 New York Plaza New York, NY 10004 Facsimile: (212) 823-0145 Attention: Donald Mullen / Tom Wagner Goldman, Sachs & Co. 1 New York Plaza New York, NY 10004 Facsimile: (212) 428-4769 Attention: Sandip Khosla Sullivan & Cromwell LLP 125 Broad Street New York, NY 10004 Facsimile: (212) 558-3588 Attention: Robert Reeder Pardus DPH Holding LLC 590 Madison Avenue Suite 25E New York, NY 10022 Facsimile: (212) 381-7771 Attention: Timothy Bass Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, N.Y. 10019-6099 Facsimile: (212) 728-8111 Attention: Rachel C. Strickland Morgan D. Elwyn Delphi Corporation 5725 Delphi Drive Troy, Michigan 48098 Attention: David Sherbin / Sean Corcoran - Facsimile: (248) 813-2491 Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 Facsimile: (212) 735-2000/1 Attention: Eric L. Cochran Marie L. Gibson 6 Skadden, Arps, Slate, Meagher & Flom LLP 333 West Wacker Drive Chicago, IL 60606 Facsimile: (312) 407-0411 Attention: John Wm. Butler, Jr. George Panagakis 7 EX-99.7 8 ex99-7.txt SIDE LETTER APPALOOSA MANAGEMENT, L.P. 26 Main Street Chatham, New Jersey 07928 December 7, 2007 Harbinger Capital Partners Master Fund I, Ltd. 555 Madison Avenue, 16th Floor New York, NY 10022 Attn: Philip A. Falcone Merrill Lynch, Pierce, Fenner & Smith Incorporated 4 World Financial Center New York, New York 10080 Attention: Robert Spork / Rick Morris UBS Securities LLC 299 Park Avenue New York, New York 10171 Attention: Steve Smith / Osamu Watanabe Goldman, Sachs & Co. 1 New York Plaza New York, NY 10004 Attention: Donald Mullen / Tom Wagner Pardus Special Opportunities Master Fund L.P. 590 Madison Avenue Suite 25E New York, NY 10022 Attention: Timothy Bass Ladies and Gentlemen: Reference is made to that certain Equity Purchase and Commitment Agreement, dated August 3, 2007 (as from time to time amended, restated, amended and restated, modified or supplemented in accordance with the terms thereof, including by the Amendment, the "Agreement"), entered into by and among A-D Acquisition Holdings, LLC, a limited liability company formed under the laws of the State of Delaware ("ADAH"), Harbinger Del-Auto Investment Company, Ltd., an exempted company formed under the laws of the Cayman Islands ("Harbinger"), Merrill Lynch, Pierce, Fenner & Smith Incorporated, a Delaware corporation ("Merrill"), UBS Securities LLC, a limited liability company formed under the laws of the State of Delaware ("UBS"), Goldman, Sachs & Co., a limited partnership formed under the laws of the State of New York ("GS") and Pardus DPH Holding LLC, a limited liability company formed under the laws of the State of Delaware ("Pardus"; Harbinger, Merrill, UBS, GS and Pardus herein referred to collectively as the "Other Investors" and each individually as an "Other Investor"), on the one hand, and Delphi Corporation (the "Company"), a Delaware corporation, on the other hand. Each of ADAH, Harbinger, Merrill, UBS, GS and Pardus have proposed to the Company to amend the Agreement pursuant to an amendment thereto (as it may be modified or supplemented, the "Amendment") attached to that certain proposal letter, dated December 7, 2007 delivered to the Company (the "Proposal Letter"). Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement. 1. Appaloosa Management L.P. ("AMLP") hereby acknowledges and agrees with each Other Investor that it will cause ADAH to not approve the Disclosure Letter, Plan, Confirmation Order, Business Plan, the Rights Offering Registration Statement, Rights Offering Prospectus and Issuer Free Writing Prospectus, or GM Settlement (or amendments to the foregoing) without first providing drafts of such documents to such Other Investors for their review, to the extent practicable, consulting with such Other Investor regarding such documents and considering in good faith any reasonable comments of such other parties and their respective counsel related thereto. 2. In addition, through the Closing Date, (a) only to the extent that ADAH is entitled to deliver a deficiency notice as set forth in Section 9(a)(xxviii) of the Agreement with respect to any of the following matters, AMLP agrees that the relevant Material Investment Document will not be satisfactory to ADAH, to the extent any such Material Investment Document (i) materially and adversely (A) modifies directly (or indirectly by changing the terms of the Company's Series C Preferred Stock or otherwise) the rights of the Series B Preferred Stock as specifically set forth in the Preferred Term Sheet under the headings "Securities to be Issued", "Mandatory Conversion Into Common Stock", "Liquidation Rights", "Ranking", "Conversion of Preferred Stock Into Common Stock", "Dividends", "Preference with Respect to Dividends", "Restriction on Redemptions of Junior Stock", "Change of Control", "Registration Rights", "Preemptive Rights", or "Commitment Fee" or (B) modifies directly (or indirectly by changing the terms of the Company's Series C Preferred Stock or otherwise) the rights of the Other Investors as potential purchasers of New Common Stock or (ii) increases the consideration payable to GM as set forth in the Plan delivered by Delphi to ADAH on the date hereof (and disclosed to the Other Investors), modifies the equity capitalization of the Company as set forth in Section 3(d) of the Agreement, modifies the amount or pricing of the preferred stock to be issued by the Company in connection with the Plan, reflects a modification of the $10.25 billion total enterprise valuation of the Company upon which the Purchase Price for Unsubscribed Shares is based, increases the Purchase Price payable by Other Investors for Unsubscribed Shares to be purchased by the Other Investors or increases the number of Unsubscribed Shares to be purchased by Other Investors as set forth on Schedule 2 of the Agreement in each case referred to in this clause (ii) in a manner that materially and adversely effects the Other Investors, and in each case referred to in this clause (a) AMLP will cause ADAH to promptly issue (and not withdraw) a deficiency notice with respect thereto and AMLP shall cause ADAH to use all reasonable efforts to ensure that, if such circumstances exist, the condition set forth in Section 9(a)(xxviii) or any other relevant condition of the Agreement shall not be satisfied or waived, (b) without the prior written consent of each of the Other Investors, AMLP shall take all actions required to ensure that ADAH shall not waive the condition set forth in Section 9(a)(iv) of the Agreement and (c) without the prior written consent of each of the Other Investors, AMLP shall take all actions required to ensure that ADAH shall not waive the conditions set forth in Sections 9(a)(xx) or 9(a)(xxvii)of the Agreement (provided, that such prior written consent shall only be required in the case of a waiver of the Section 9(a)(xx) condition in which the pro forma interest expense referred to therein exceeds the $585 million referred to therein by more than $10 million). Additionally, ADAH will not determine that the Disclosure Statement to be filed with the Bankruptcy Court on or around December 5, 2007 is reasonably satisfactory to the extent that the Disclosure Statement has any of the effects described in this paragraph 2. ADAH further agrees that it will not agree (including by waiver of any condition in the Agreement) to any revisions to the Plan that would result in any decrease, or reserve any rights in the Plan or the Confirmation Order with respect to any decrease, to the pro rata distribution that any Other Investor would be entitled to receive under the Plan as a result of such Other Investor's position as a holder of Company common stock, without the prior approval of such Other Investor. 3. Additionally, AMLP hereby acknowledges and agrees with each other party that only to the extent that ADAH is entitled to deliver a deficiency notice as set forth in Section 9(a)(xxviii) of the Agreement with respect to any of the following matters, AMLP agrees that the relevant Material Investment Document will not be satisfactory to ADAH, to the extent any such Material Investment Document materially and adversely modifies the rights of the Series B Preferred Stock to appoint a member of the "Search Committee" (subject to determination by ADAH) or with respect to the "Joint Investor Director" (each as defined in the Preferred Term Sheet), the initial term of the Joint Investor Director, or the conversion rights of the Series B Preferred Stock set forth in the Preferred Term Sheet upon a "Change of Control Transaction" (as defined in the Preferred Term Sheet) under the heading "Change of Control" in the Preferred Term Sheet and AMLP will cause ADAH to promptly issue (and not withdraw) a deficiency notice with respect thereto and AMLP shall cause ADAH to use all reasonable efforts to ensure that, if such circumstances exist, the condition set forth in Section 9(a)(xxviii) or any other relevant condition of the Agreement shall not be satisfied or waived. 4. Each party hereto represents and warrants to the other parties hereto that such party (and its affiliates) is not party to any agreement with any other party to this Agreement (or its affiliates) relating to the transactions contemplated by the Agreement that has not been disclosed to each other party to this letter agreement. 5. Prior to entry of the Confirmation Order, except as set forth in Section 7 hereof, each party hereto agrees that it shall not (and shall cause its subsidiaries and controlled affiliates not to) (a) sell, transfer, assign, pledge, or otherwise dispose, directly or indirectly, of its right, title or interest in respect of its claims against or interests in any of the Debtors (to the extent held by it on the date hereof or acquired hereafter), in whole or in part, or (b) grant any proxies, deposit any such claims or interests (to the extent held by it on the date hereof or acquired hereafter) into a voting trust, or enter into a voting agreement with respect to such claims or interests, as the case may be, unless in the case of either (a) or (b), the transferee agrees in writing at the time of such transfer to be bound by all obligations of the transferor contained in Sections 5 to 8 of this letter agreement, and the transferor, within three (3) Business Days, provides written notice of such transfer to each other party, together with a copy of the written agreement of the transferee agreeing to be so bound. Each party hereto further agrees that it may not create any subsidiary or affiliate for the sole purpose of acquiring any claims against or interests in any member of the Debtors without causing such subsidiary or affiliate to become a party to this letter agreement prior to such acquisition. 6. Prior to entry of the Confirmation Order, each party hereto hereby confirms, on a several but not joint basis, that it and its affiliates remains the beneficial holder of, and/or the holder of investment authority over, the claim and interests, if any, previously disclosed in connection with its applicable non-disclosure agreement with the Debtors and that it will advise each party hereto upon any change in its or its affiliates' holdings, except with respect to any transaction covered by Section 7 hereof. 7. Notwithstanding anything contained in this letter agreement, each party hereto can, without following the procedures set forth in Sections 5 or 6 hereof, (a) purchase, sell, transfer, pledge or otherwise dispose, directly or indirectly any rights to purchase shares of New Common Stock it receives pursuant to the Rights Offering, (b) engage in market making in any of the Debtors' equity and debt securities as well as claims, and (c) engage in proprietary trading in any of the Debtors' debt securities and claims. The term "subsidiaries", "controlled affiliates" and "affiliates" shall exclude Fiduciary Affiliates. "Fiduciary Affiliates" shall mean, with respect to any party, the specific entities identified as such on Annex A hereto, who are prohibited by their fiduciary duties from complying with this letter agreement. Such Annex A to be delivered to and reasonably satisfactory to each other party within 3 Business Days of the date hereof. 8. Unless and until this letter agreement has been terminated, and subject to each party's obligations under this Section 8 of this letter agreement being subject to (a) the Plan set forth in Exhibit B to the Agreement, and (b) Delphi and GM reaching agreement on all documents pertinent in any way to GM's participation in the Plan and/or all transactions contemplated thereby, including, without limitation, definitive documentation evidencing all aspects of the commercial, business and labor-related agreements between Delphi and GM and any other Designated Issues (as defined in the Original PSA) (collectively, the "Delphi/GM Definitive Documents"), and provided that any failure by any party to take or refrain from taking, as the case may be, any actions described below in this letter agreement shall not create any claim or cause of action against them or any of their affiliates, each party agrees (and shall cause its respective subsidiaries and controlled affiliates to agree) that it will: (a) Support the entry by the Bankruptcy Court of an order approving the Disclosure Statement (the "Disclosure Statement Order"); (b) Not commence any proceeding or prosecute, join in, or otherwise support any action to oppose or object to entry of the Disclosure Statement Order; (c) Not, nor will it encourage any other person or entity to, object to, delay, impede, appeal, or take any other action, directly or indirectly, to interfere with, entry of the Disclosure Statement Order; (d) Until March 31, 2008, or such later date as may be mutually agreed by the parties to this letter agreement (such agreement not to be unreasonably withheld), not, directly or indirectly (i) initiate, solicit, knowingly cooperate with, or knowingly encourage any inquiries or the making of any proposal or offer that constitutes, or can reasonably be expected to lead to, any Alternate Transaction, (ii) engage in, continue, or otherwise participate in any negotiations regarding any Alternate Transaction, (iii) enter into any letter of intent, memorandum of understanding, agreement in principle, or other agreement relating to any Alternate Transaction or (iv) withhold, withdraw, qualify, or modify (or resolve to do so) in a manner adverse to the parties to this letter agreement its approval or recommendation of this letter agreement, the Plan or the transactions contemplated hereby and thereby; and that it will cause its subsidiaries and controlled affiliates not to undertake, directly or indirectly, any of the actions described in the immediately preceding clauses (i) through (iv); and that it will use its commercially reasonable efforts to cause its respective directors, officers, employees, investment bankers, attorneys, accountants, and other advisors or representatives not to undertake, directly or indirectly, any of such actions; provided however, that if this provision is extended beyond March 31, 2008, as provided above, from and after March 31, 2008, with AMLP's prior consent, all parties hereto may be released from any and all of the foregoing prohibitions of this letter agreement; (e) Support the Confirmation Order; provided, however, that, for the avoidance of doubt, nothing in this letter agreement is an agreement by any of the parties hereto to vote to accept or reject the Plan; (f) Not commence any proceeding or prosecute, join in, or otherwise support any action to oppose or object to the Plan; and (g) Not, nor will it encourage any other person or entity to, delay, object to, impede, appeal, or take any other action, directly or indirectly, to interfere with the acceptance, confirmation or occurrence of the effective date of the Plan. Notwithstanding any other term or provision of this letter agreement, nothing herein shall prevent any party hereto from taking any action as it determines is necessary or appropriate to protect its interests, including, without limitation, objecting (in writing or orally) or filing a response to any document, such as the Plan or Disclosure Statement, adversary proceeding or objection filed in the Chapter 11 Cases by any party in interest. 9. Other than the last sentence of Section 2, which shall be effective immediately, this letter agreement shall become effective only upon the effectiveness of the Amendment. This letter agreement shall terminate automatically upon the earliest to occur of (i) the termination of the Agreement in accordance with its terms, (ii) the Closing Date, (iii) with respect to any Other Investor exercising its rights under Section 12(d) of the Agreement, a Limited Termination and (iv) the expiration, in accordance with its terms, of the Proposal Letter if the Amendment has not then become effective. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York (without giving effect to the conflict of laws principles thereof). ADAH AND THE INVESTORS HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND WAIVE ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS. The parties hereto acknowledge and agree that, upon the effectiveness of this letter agreement in accordance with the terms hereof, (x) that certain side letter of AMLP in favor of Harbinger Capital Partners Master Fund I, Ltd., Merrill, UBS, GS and Pardus Special Opportunities Master Fund L.P., dated July 18, 2007, will be deemed immediately terminated and of no further force and effect and (y) neither AMLP nor any Other Investor shall have any further liability or obligation under such commitment letter. This letter agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and same instrument. * * * * Sincerely, APPALOOSA MANAGEMENT, L.P. By: /s/ James E. Bolin ----------------------------------- Name: James E. Bolin Title: Partner Agreed to and accepted as of the date first above written: HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD. By: Harbinger Capital Partners Offshore Manager, L.L.C., as investment manager By: /s/ William R. Lucas ----------------------------- Name: William R. Lucas Title: Executive Vice President MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ Graham Goldsmith --------------------------------- Name: Graham Goldsmith Title: Managing Director UBS SECURITIES LLC By: /s/ Steven D. Smith --------------------------------- Name: Steven D. Smith Title: Managing Director By: /s/ Andrew Kramer --------------------------------- Name: Andrew Kramer Title: Managing Director [Signature Page - Side Letter] GOLDMAN, SACHS & CO. By: /s/ Thomas A. Wagner --------------------------------- Name: Thomas A. Wagner Title: Managing Director PARDUS SPECIAL OPPORTUNITIES MASTER FUND L.P. By: PARDUS CAPITAL MANAGEMENT L.P., its investment manager By: PARDUS CAPITAL MANAGEMENT L.L.C., its general partner By: /s/ Joseph Thornton --------------------------------- Name: Thornton Title: [Signature Page - Side Letter] -----END PRIVACY-ENHANCED MESSAGE-----