Document:

exv4wxay

 

Exhibit 4(a)

AMENDMENT NO. 3 TO RIGHTS AGREEMENT

     AMENDMENT NO. 3 TO RIGHTS AGREEMENT, dated as of August 2, 2007 (this “Amendment”), to
the Rights Agreement, dated as of February 1, 1999, as amended on May 11, 2005 and January 18, 2007
(the “Rights Agreement”), by and between Delphi Corporation, formerly known as Delphi
Automotive Systems Corporation (the “Company”) and The Bank of New York, as successor in
interest to EquiServe Trust Company, N.A., as successor in interest to BankBoston, N.A., as Rights
Agent (the “Rights Agent”). Capitalized terms used herein and not otherwise defined shall
have the respective meanings ascribed to such terms in the Rights Agreement.

     WHEREAS, the Company and the Rights Agent have heretofore executed and entered into the Rights
Agreement dated as of February 1, 1999, as amended on May 11, 2005 and January 18, 2007;

     WHEREAS, pursuant to Section 26 of the Rights Agreement, the Company may from time to time
supplement or amend the Rights Agreement in accordance with the provisions of such Section 26; and

     WHEREAS, the Company has determined to amend the Rights Agreement to provide that none of A-D
Acquisition Holdings, LLC, a limited liability company formed under the laws of the State of
Delaware (“Appaloosa”), Harbinger Del-Auto Investment Company, Ltd., an exempted company
incorporated under in the Cayman Islands (“Harbinger”), Merrill Lynch, Pierce, Fenner &
Smith, Incorporated, a Delaware corporation (“Merrill”) and UBS Securities LLC, a Delaware
limited liability company (“UBS”), Goldman, Sachs & Co., a New York limited liability
company (“GS”) and Pardus DPH Holding LLC, a Delaware limited liability company
(“Pardus”) (such parties and/or their respective affiliates, as applicable, collectively,
the “Investors”) will be deemed to be an “Acquiring Person” under the Rights
Agreement, and to further amend the Rights Agreement as set forth herein.

     NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which the parties hereby acknowledge, the Company and the Rights
Agent hereby amend the Rights Agreement as follows:

     Section 1. The definition of “Acquiring Person” set forth in Section 1(a) of the
Rights Agreement is hereby modified and amended to delete the following before the last sentence of
Section 1(a):

“Notwithstanding anything to the contrary in this Agreement, none of A-D Acquisition Holdings, LLC,
a limited liability company formed under the laws of the State of Delaware (“Appaloosa”),
Harbinger Del-Auto Investment Company, Ltd., an exempted company incorporated under in the Cayman
Islands (“Harbinger”), Dolce Investments, LLC (“Cerberus”), a limited liability
company formed under the laws of the State of Delaware, Merrill Lynch, Pierce, Fenner & Smith,
Incorporated, a Delaware corporation (“Merrill”) and UBS Securities LLC, a Delaware limited
liability company (“UBS”) (such parties and/or their respective affiliates, as applicable,

 

 

collectively, the “Investors”) or any ultimate purchaser or related purchasers in
accordance with the ECPA, shall be deemed to be an “Acquiring Person” solely as a result of
(i) entering into the Plan Framework Support Agreement (the “PFSA”), attached hereto as
Annex A, as it may be amended from time to time, or consummating the transactions
contemplated thereby, (ii) entering into the Equity Purchase and Commitment Agreement (the
“EPCA”), as it may be amended from time to time, or consummating the transactions
contemplated thereby, (iii) entering into additional agreements (including, without limitation, any
agreement to resell any shares of Delphi Corporation purchased pursuant to the EPCA to any ultimate
purchaser or related parties in accordance with the EPCA or to otherwise cause such entities to
acquire such shares in accordance with the ECPA) reflecting the transactions contemplated by the
PFSA, the EPCA and the Summary of Terms of Preferred Stock (the “Term Sheet”), as they may
be amended from time to time, and consummating the transactions contemplated thereby, or (iv) any
agreement, arrangement or understanding among any of the Investors or among one or more Investors
and Delphi Corporation or its subsidiaries in furtherance of or pursuant to the PFSA, the EPCA or
the Term Sheet, as they may be amended from time to time, and the transactions contemplated thereby
(each of (i), (ii) and (iii) being a “Permitted Event”).”

and add the following before the last sentence of Section 1(a):

“Notwithstanding anything to the contrary in this Agreement, none of A-D Acquisition Holdings, LLC,
a limited liability company formed under the laws of the State of Delaware (“Appaloosa”),
Harbinger Del-Auto Investment Company, Ltd., an exempted company incorporated under in the Cayman
Islands (“Harbinger”), Merrill Lynch, Pierce, Fenner & Smith, Incorporated, a Delaware
corporation (“Merrill”) and UBS Securities LLC, a Delaware limited liability company
(“UBS”) Goldman, Sachs & Co., a New York limited liability company and Pardus DPH Holding
LLC, a Delaware limited liability company (such parties and/or their respective affiliates, as
applicable, collectively, the “Investors”) or any ultimate purchaser or related purchasers
in accordance with the ECPA, shall be deemed to be an “Acquiring Person” solely as a result
of (i) entering into the Equity Purchase and Commitment Agreement (the “EPCA”) attached
hereto as Annex A, as it may be amended from time to time, or consummating the transactions
contemplated thereby, (ii) entering into additional agreements (including, without limitation, any
agreement to resell any shares of Delphi Corporation purchased pursuant to the EPCA to any ultimate
purchaser or related parties in accordance with the EPCA or to otherwise cause such entities to
acquire such shares in accordance with the ECPA) reflecting the transactions contemplated by the
EPCA and the Summary of Terms of Preferred Stock (the “Term Sheet”) attached hereto as
Annex B as they may be amended from time to time, and consummating the transactions
contemplated thereby, or (iii) any agreement, arrangement or understanding among any of the
Investors or among one or more Investors and Delphi Corporation or its subsidiaries in furtherance
of or pursuant to the EPCA or the Term Sheet, as they may be amended from time to time, and the
transactions contemplated thereby (each of (i), (ii), (iii) and (iv) being a “Permitted
Event”).”

     Section 2. Exhibit B to the Rights Agreement, being the form of Rights Certificate, is hereby
amended and supplemented by inserting in the fifth line of the first paragraph following the words
“as further amended as of January 18, 2007” the words “and August 2, 2007”.

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     This Amendment shall be deemed to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in accordance with the laws of such State
applicable to contracts made and to be performed entirely within such State.

     Except as specifically amended by this Amendment, all other terms and conditions of the Rights
Agreement shall remain in full force and effect and are hereby ratified and confirmed.

[Signature page follows]

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     IN WITNESS WHEREOF, the Company and the Rights Agent as of the day and year first written
above have duly executed this Amendment.

	 	 	 	 	 
	 	DELPHI CORPORATION

 	 
	 	By:  	/s/ DAVID M. SHERBIN
 	 
	 	 	Name:  	David M. Sherbin 	 
	 	 	Title:  	Vice President, General Counsel, and

Chief Compliance Officer 	 
	 

	 	 	 	 	 
	 	THE BANK OF NEW YORK

 	 
	 	By:  	/s/ JOHN I. SIVERTSEN
 	 
	 	 	Name:  	John I. Sivertsen 	 
	 	 	Title:  	Vice President 	 
	 

4exv10wxdy

 

Exhibit 10(d) 
EXECUTION COPY

	 	 	 	 	 

EQUITY PURCHASE AND COMMITMENT AGREEMENT

          THIS EQUITY PURCHASE AND COMMITMENT AGREEMENT (as from time to time amended, restated, amended
and restated, modified or supplemented in accordance with the terms hereof, this
“Agreement”), dated as of August 3, 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 in the agreement have the meanings assigned thereto in the sections indicated on Schedule 1
hereto.

          WHEREAS, the Company and certain of its subsidiaries and affiliates (the “Debtors”)
commenced jointly administered cases (the “Chapter 11 Cases”) under United States
Bankruptcy Code, 11 U.S.C. §§ 101-1330, as amended and in effect on October 8, 2005 (the
“Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New
York (the “Bankruptcy Court”);

          WHEREAS, ADAH, Harbinger, UBS, Merrill, Dolce Investments LLC (“Dolce”) (collectively,
the “Original Investors”) and the Company negotiated and entered into that certain
Equity Purchase and Commitment Agreement, dated as of January 18, 2007 (the “Original
Agreement”). The Original Agreement set forth the terms on which the Original Investors would
provide certain financial accommodations that would facilitate the implementation of a plan of
reorganization under the Bankruptcy Code for the Debtors having terms consistent with the Original
Agreement and that certain Plan Framework Support Agreement, dated as of December 18, 2006 by and
among the Company, General Motors Corporation (“GM”), Appaloosa Management L.P.
(“Appaloosa”), Cerberus Capital Management, L.P. (“Cerberus”), Harbinger Capital
Partners Master Fund I, Ltd. (“Harbinger Fund”), Merrill and UBS (as previously amended by
the Amendment and Supplement to the Plan Framework Support Agreement, dated as of January 18, 2007,
the “Original PSA”);

          WHEREAS, the Company filed a motion (the “Original Approval Motion”) with the
Bankruptcy Court for entry of an order: (i) approving and authorizing the Company to enter into
the Original Agreement and the Original PSA; (ii) authorizing the Company to make certain payments
contemplated by the Original Agreement; and (iii) granting certain related relief;

 

 

           WHEREAS, after holding a contested evidentiary hearing on the Original Approval Motion on
January 11 and 12, 2007, and considering the evidentiary record, the objections to the relief
requested, and the argument of counsel, the Bankruptcy Court over-ruled such objections and entered
its order granting the relief requested by the Company in the Original Approval Motion as it was
modified at the hearing (the “Original Approval Order”);

          WHEREAS, the Original Agreement and the Original PSA were terminated by the Company on July 7,
2007;

          WHEREAS, the Company has filed its motion (the “Approval Motion”) seeking an order
(the “Approval Order”) from the Bankruptcy Court that 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 Plan Terms attached hereto as Exhibit B (the “Plan
Terms”), the parties thereto and the transactions contemplated thereby, and (ii) continue in
full force and effect with respect thereto;

          WHEREAS, the Company intends to propose and submit to the Bankruptcy Court for its approval a
plan of reorganization for the Debtors that is consistent with this Agreement and the Plan Terms;

          WHEREAS, the Company has requested that the Investors participate in the plan of
reorganization, and the Investors are willing to participate in the plan of reorganization, on the
terms and subject to the conditions contained in this Agreement; and

          WHEREAS, each of Appaloosa, Harbinger Fund and Pardus Special Opportunities Master Fund L.P.
(collectively, the “Commitment Parties”) will provide, on the date hereof, commitment
letters addressed to ADAH, Harbinger and Pardus respectively, and the Company whereby each
Commitment Party will confirm its commitment to provide equity financing to ADAH, Harbinger and
Pardus, respectively, on the terms and subject to the limitations set forth in the commitment
letters.

          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.	 	Rights Offering.

	 	(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”) whereby the Company will distribute at no charge to

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	 	 	 	each holder (each, an “Eligible Holder”) of Common Stock, including, to the
extent applicable, the Investors, that number of rights (each, a “Right”) in
respect of shares of Common Stock outstanding and held of record as of the close of
business on a record date (the “Record Date”) to be set by the Board of
Directors of the Company that will enable each Eligible Holder to purchase up to its
pro rata portion of 41,026,311 shares in the aggregate of New Common Stock (each, a
“Share”) at a purchase price of $38.39 per Share (the “Purchase
Price”).
	 
	 	(b)	 	The Company will conduct the Rights Offering pursuant to a plan of
reorganization of the Debtors (such plan of reorganization, the “Plan”), which
shall reflect the Company’s proposed restructuring transactions described in this
Agreement, the Summary of Terms of Preferred Stock attached hereto as Exhibit A
(the “Preferred Term Sheet”) and the Plan Terms.
	 
	 	(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 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
to each Eligible Holder, Rights to purchase up to its pro rata portion of
41,026,311 Shares in the aggregate (the date of such distribution, the
“Rights Distribution Date”). 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)	 	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 be transferable. “Expiration
Time” means the date that is 30 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

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	 	 	 	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 the Rights held by such Eligible
Holder and (ii) pay an amount, equal to the full Purchase Price of the
number of Shares that the Eligible Holder elects to purchase, by wire
transfer of immediately available funds by the Expiration Time to an escrow
account established for the Rights Offering.
	 
	 	(iv)	 	Unless otherwise required by ADAH, there will be no
over-subscription rights provided in connection with 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 Rights
the number of Shares to which such Eligible Holder is entitled based on such
exercise.
	 
	 	(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 pursuant to validly exercised Rights, the aggregate Purchase
Price 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.

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	2.	 	The Commitment; Fees and Expenses.

	 	(a)	 	On the terms and subject to the conditions set forth in this Agreement:

	 	(i)	 	each Investor agrees, severally and not jointly, to subscribe
for and purchase, or cause one or more Related Purchasers pursuant to the
following paragraph and otherwise in accordance with this Agreement to
subscribe for and purchase, and the Company agrees to sell and issue, on the
Closing Date (A) for the Purchase Price per Share, each Investor’s
proportionate share of 4,558,479 Shares as is set forth opposite such
Investor’s name on Schedule 2 hereto (the “Direct Subscription
Shares”) and (B) for $38.39, that number of shares of Series B Senior
Convertible Preferred Stock, par value $0.01 per share (the “Series B
Preferred Stock”), as is set forth opposite such Investor’s name on
Schedule 2 hereto, which shares shall be created pursuant to a
Certificate of Designations (the “Series B Certificate of
Designations”) that is consistent with the terms set forth in the Preferred
Term Sheet and, to the extent they have a material impact on the Investors’
proposed investment in the Company, are reasonably satisfactory to ADAH;
	 
	 	(ii)	 	[Reserved];
	 
	 	(iii)	 	ADAH agrees to subscribe for and purchase, or cause one or
more Related Purchasers pursuant to the following paragraph and otherwise in
accordance with this Agreement to subscribe for and purchase, and the Company
agrees to sell, on the Closing Date, for the purchase price of $31.28 per Share
(the “Series A Purchase Price”), 12,787,724 shares of Series A-1 Senior
Convertible Preferred Stock, par value $0.01 per share (the “Series A
Preferred Stock”) which shares shall be created pursuant to a Certificate
of Designations (the “Series A Certificate of Designations”) that is
consistent with the terms set forth in the Preferred Term Sheet and with such
other terms that, to the extent they have a material impact on the Investors’
proposed investment in the Company, are reasonably satisfactory to ADAH; and
	 
	 	(iv)	 	each Investor agrees, severally and not jointly, to purchase,
or cause one or more Related Purchasers pursuant to the following paragraph and
otherwise in accordance with this Agreement to purchase, on the Closing Date,
and the Company agrees to sell for the Purchase Price per Share that number of
Shares issuable pursuant to the aggregate number of Rights that were not
properly exercised by the Eligible Holders thereof during the Rights Exercise
Period, in proportion to the Investor’s share of the Direct Subscription Shares
(such Shares in the aggregate, the “Unsubscribed 

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	 	 	 	Shares”), rounded among the Investors as they may determine, in
their sole discretion, to avoid fractional shares.

	 	 	 	In connection with each of clauses (i) through (iv) above, subject to
delivering prior written notice to each other Investor and the prior approval of
ADAH, prior to the Securities Act Effective Date each Investor shall have the right
to arrange for one or more of its Affiliates (each a “Related Purchaser”)
(A) to purchase Investor Shares, by written notice to the Company, which notice
shall be signed by the Investor and each Related Purchaser, shall contain the
Related Purchaser’s agreement to be bound by this Agreement and shall contain a
confirmation by the Related Purchaser of the accuracy with respect to it of the
representations set forth in Section 4 or (B) to designate that some or all
of the Investor Shares be issued in the name of and delivered to, one or more
Related Purchasers which designation shall be signed by the Investor and each
Related Purchaser, shall contain the Related Purchaser’s agreement to be bound by
this Agreement and shall contain a confirmation by the Related Purchaser of the
accuracy with respect to it of the representations set forth in Section 4;
provided, that the total number of Investors, Related Purchasers and
Ultimate Purchasers shall not exceed the Maximum Number. The “Maximum
Number” shall be 35 unless the Company consents to a higher number, such consent
not to be unreasonably withheld; provided, further, that nothing in
this Agreement shall limit or restrict in any way any Investor’s ability to transfer
or otherwise dispose of any Investor’s Shares or any interests therein after the
Closing Date pursuant to an effective registration statement under the Securities
Act or an exemption from the registration requirements thereunder and subject to
applicable state securities laws. The Investors agree that each Related Purchaser
will be a “Qualified Institutional Buyer” under Rule 144A of the Securities Act.
	 
	 	 	 	The Series A Preferred Stock and the Series B Preferred Stock are referred to
herein collectively as the “Preferred Shares”. The Unsubscribed Shares, the
Direct Subscription Shares and the Preferred Shares are referred to herein
collectively as the “Investor Shares”. The term “Affiliate” shall
have the meaning ascribed to such term in Rule 12b-2 under the Securities Exchange
Act of 1934 in effect on the date hereof.
	 
	 	(b)	 	Upon the occurrence of an Investor Default or a Limited Termination, within
five (5) Business Days of the occurrence of such Investor Default or Limited
Termination, the Investors (other than any non-purchasing Investor) shall have the
right to agree to purchase on the Closing Date, in the case of a Limited Termination,
or to purchase, in the case of an Investor Default (or, in either case, arrange for the
purchase through a Related Purchaser or an Ultimate Purchaser), all but not less than
all, of the Available Investor Shares on the terms and subject to the conditions set
forth in this Agreement and in such proportions as determined by the Investors in their
sole discretion (an “Alternative Financing”);

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	 	 	 	provided, that only in the case of a Limited Termination, ADAH will be
required within ten (10) Business Days of the occurrence of such Limited Termination
to agree to purchase on the Closing Date (or arrange for the purchase through a
Related Purchaser or an Ultimate Purchaser) any Available Investor Shares
attributable to the Limited Termination and not otherwise purchased pursuant to the
Alternative Financing (unless ADAH has otherwise terminated this Agreement in
accordance with its terms); provided, further, that the total number
of Investors, Related Purchasers and Ultimate Purchasers pursuant to this Agreement
shall not exceed the Maximum Number. The term “Investor Default” shall mean
the breach by any Investor of its obligation to purchase any Investor Shares which
it is obligated to purchase under this Agreement. The term “Available Investor
Shares” shall mean any Investor Shares which any Investor is not purchasing as a
result of an Investor Default or Limited Termination. The exercise by any Investor
of the right to purchase (or arrange a purchase of) any Available Investor Shares
shall not relieve any defaulting Investor of any obligation to each other Investor
or the Company of such defaulting Investor’s breach of this Agreement.
	 
	 	(c)	 	As soon as practicable after the Expiration Time, and in any event reasonably
in advance of the Closing Date, the Company will provide a Purchase Notice or a
Satisfaction Notice to each Investor as provided above, setting forth a true and
accurate determination of the aggregate number of Unsubscribed Shares, if any;
provided, that on the Closing Date, on the terms and subject to the conditions
in this Agreement, the Investors will purchase, and the Company will sell, only such
number of Unsubscribed Shares as are listed in the Purchase Notice, without prejudice
to the rights of the Investors to seek later an upward or downward adjustment if the
number of Unsubscribed Shares in such Purchase Notice is inaccurate.
	 
	 	(d)	 	Delivery of the Investor Shares will be made by the Company to the account of
each Investor (or to such other accounts as any Investor may designate in accordance
with this Agreement) at 10:00 a.m., New York City time, on the Effective Date (the
“Closing Date”) against payment of the aggregate Purchase Price for the
Investor Shares by wire transfer of immediately available funds in U.S. dollars to the
account specified by the Company to the Investors at least 24 hours prior to the
Closing Date.
	 
	 	(e)	 	All Investor Shares will be delivered with any and all issue, stamp, transfer,
sales and use, or similar Taxes or duties payable in connection with such delivery duly
paid by the Company.
	 
	 	(f)	 	The documents to be delivered on the Closing Date by or on behalf of the
parties hereto and the Investor Shares will be delivered at the offices of White & Case

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	 	 	 	LLP, 1155 Avenue of the Americas, New York, New York 10036 on the Closing Date.
	 
	 	(g)	 	Subject to the provisions of Sections 2(a), 2(b) and
2(k) hereof, and subject to prior written notice to each other Investor and the
prior approval of ADAH, any Investor may designate that some or all of the Unsubscribed
Shares, Direct Subscription Shares or shares of Preferred Stock be issued in the name
of, and delivered to, one or more Ultimate Purchasers.
	 
	 	(h)	 	On the basis of the representations and warranties herein contained, the
Company shall pay the following fees to the Investors in accordance with Section
2(i) or 12(g), as the case may be:

	 	(i)	 	an aggregate commitment fee of eighteen million dollars
($18,000,000) to be paid to the Investors in proportion to their undertakings
herein relative to Preferred Shares as set forth in Schedule 2 (the
“Preferred Commitment Fee”);
	 
	 	(ii)	 	an aggregate commitment fee of thirty nine million, three
hundred seventy five thousand dollars ($39,375,000) to be paid to the Investors
as set forth in Schedule 2 to compensate the Investors for their
undertakings herein relative to Investor Shares other than Preferred Shares
(the “Standby Commitment Fee” and together with the Preferred
Commitment Fee, the “Commitment Fees”);
	 
	 	(iii)	 	a fee of six million, three hundred seventy five thousand
dollars ($6,375,000) to ADAH to compensate ADAH for arranging the transactions
contemplated hereby (the “Arrangement Fee”); and
	 
	 	(iv)	 	an Alternate Transaction Fee, if any, which shall be paid by
the Company as provided in Section 12(g).

	 	(i)	 	Seven million, five hundred twenty-five thousand dollars ($7,525,000) of the
Commitment Fees shall be paid on the first Business Day following the first date that
the Approval Order is issued by the Bankruptcy Court, and twenty-one million, one
hundred sixty-two thousand, five hundred dollars ($21,162,500), representing the
balance of the first fifty percent (50%) of the Commitment Fees, on the first Business
Day following the Disclosure Statement Filing Date. The balance of twenty-eight
million, six hundred eighty-seven thousand, five hundred dollars ($28,687,500),
representing the remaining fifty percent (50%) of the Commitment Fees, shall be paid on
the first Business Day following the

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	 	 	 	Disclosure Statement Approval Date. The Arrangement Fee shall be paid to ADAH upon
entry of the Approval Order. Payment of the Commitment Fees, Arrangement Fee and
the Alternate Transaction Fee, if any, will be made by wire transfer of immediately
available funds in U.S. dollars to the account specified by each Investor to the
Company at least 24 hours prior to such payment. The Commitment Fees, Arrangement
Fee and the Alternate Transaction Fee, if any, will be nonrefundable and
non-avoidable when paid. The provision for the payment of the Commitment Fees and
Arrangement Fee is an integral part of the transactions contemplated by this
Agreement and without this provision the Investors would not have entered into the
Agreement and such Commitment Fees and Arrangement Fee shall constitute an allowed
administrative expense of the Company under Section 503(b)(1) and 507(a)(1) of the
Bankruptcy Code.
	 
	 	(j)	 	The Company will reimburse or pay, as the case may be, the out-of-pocket costs
and expenses reasonably incurred by each Investor or its Affiliates (which, for the
avoidance of doubt, shall not include any Ultimate Purchaser) to the extent incurred on
or before the first to occur of the date on which this Agreement terminates in
accordance with its terms and the Effective Date (and reasonable post-closing costs and
expenses relating to the closing of the transactions contemplated hereby), including
reasonable fees, costs and expenses of counsel to each of the Investors or its
Affiliates, and reasonable fees, costs and expenses of any other professionals retained
by any of the Investors or its Affiliates in connection with the transactions
contemplated hereby (including investigating, negotiating and completing such
transactions) and the Chapter 11 Cases and other judicial and regulatory proceedings
related to such transactions and the Chapter 11 Cases other than costs and expenses
relating to any transactions with Ultimate Purchasers and, with respect to expenses
that would not otherwise be incurred by the related Investor, Related Purchasers
(collectively, “Transaction Expenses”); from and after (i) in the case of ADAH
and Harbinger, December 1, 2006, (ii) in the case of GS, July 3, 2007, in the case of
Pardus, June 18, 2007 and in the case of UBS and Merrill, July 30, 2006, promptly upon
submission to the Company of summary statements therefor by such Investor, in each
case, without Bankruptcy Court review or further Bankruptcy Court order, whether or not
the transactions contemplated hereby are consummated and, in any event, within 30 days
of the submission of such statements. Notwithstanding the foregoing, (i) Transaction
Expenses incurred by ADAH or its Affiliates on or prior to May 17, 2006 in an amount
not to exceed $5,000,000 shall be paid if and when the effective date of any plan of
reorganization for the Company occurs and only if such plan results in holders of
Common Stock receiving any recovery under such plan, (ii) Transaction Expenses incurred
by Pardus on or prior to June 18, 2007 shall be paid to the extent that they comprise
the reasonable fees, costs and expenses of legal counsel to Pardus related to the
negotiation of this Agreement, the non-disclosure agreement between Pardus and the
Company dated June 18, 2007 and the Transactions contemplated hereby or thereby, (iii)
Transaction Expenses incurred by GS on or prior to July 3, 2007 shall be paid to the
extent that they comprise the reasonable fees, costs and expenses of legal counsel to
GS related to the negotiation of this Agreement, the non-disclosure agreement between
GS and

-9-

 

	 	 	 	the Company and the Transactions contemplated hereby or thereby and (iv) the filing
fee, if any, required to be paid in connection with any filings required to be made
by any Investor or its Affiliates under the HSR Act or any other competition laws or
regulations shall be paid by the Company on behalf of the Investors or such
Affiliate when filings under the HSR Act or any other competition laws or
regulations are made, together with all expenses of the Investors or its Affiliates
incurred to comply therewith.

	 	 	The provision for the payment of the Transaction Expenses is an integral part of the
transactions contemplated by this Agreement and without this provision the Investors would
not have entered into this Agreement and such Transaction Expenses shall constitute an
allowed administrative expense of the Company under Section 503(b)(1) and 507(a)(1) of the
Bankruptcy Code. In addition, to the extent permitted under any order authorizing the
Debtors to obtain post-petition financing and/or to utilize cash collateral then or
thereafter in effect (each a “Financing Order”), the Transaction Expenses incurred
from and after the date of entry of the Original Approval Order shall be protected by and
entitled to the benefits of the carve-out for professional fees provided in any such
Financing Order.

	 	(k)	 	The Company acknowledges that the Investors and certain persons and entities
(collectively, the “Ultimate Purchasers”) have entered into an agreement and
may, prior to the Securities Act Effective Date, enter into one or more new agreements
or amend existing agreements (collectively, the “Additional Investor
Agreement”), pursuant to which the Investors have arranged for a number of Ultimate
Purchasers to purchase certain of the Unsubscribed Shares and the Direct Subscription
Shares. The Investors severally and not jointly acknowledge that they have not agreed
and, without the prior written consent of ADAH, will not prior to the Closing agree,
directly or indirectly, to sell, transfer, assign, pledge, hypothecate, donate or
otherwise encumber or dispose of any Investor Shares or any interest or participation
therein other than pursuant to the Additional Investor Agreement (as it may be amended
from time to time) and other than an arrangement that was entered into among ADAH,
Merrill, Harbinger and certain of their Affiliates regarding participation interests in
the Series A-2 Senior Convertible Preferred Stock that was to be issued pursuant to the
Original Agreement, which agreement has been terminated. The total number of
Investors, Related Purchasers and Ultimate Purchasers as of the Closing Date shall not
exceed the Maximum Number. Each Additional Investor Agreement shall contain each
Ultimate Purchaser’s agreement to be bound by this Agreement and a confirmation by each
Ultimate Purchaser of the accuracy with respect to it of the representations set forth
in Section 4 and a copy of such confirmation shall be provided to the Company
prior to the Securities Act Effective Date. Each Investor proposing to enter into an
Additional Investor Agreement with any Ultimate Purchaser or proposing to transfer
Investor Shares to, or to arrange for Investor Shares to be purchased by or delivered
to, any Related Purchaser, in either case, which would result in the Maximum Number
being exceeded agrees to notify the Company and ADAH prior to entering into such
agreement or

-10-

 

	 	 	 	effecting such transfer and will not undertake such agreement or effect such
transfer without the consent of the Company and ADAH, which shall not be
unreasonably withheld. The Investors severally and not jointly agree that with
respect to any offer or transfer to an Ultimate Purchaser prior to the Closing Date,
they have not offered and shall not offer any Investor Shares to, and they have not
entered into and shall not enter into the Additional Investor Agreement with, any
person or entity (A) on or after the Securities Act Effective Date and (B) that is
not a “Qualified Institutional Buyer” as defined in Rule 144A under the Securities
Act; provided, that the total number of Investors, Related Purchasers and
the Ultimate Purchasers pursuant to this Agreement shall not exceed the Maximum
Number; provided, further, that nothing in this Agreement shall
limit or restrict in any way any Investor’s ability to transfer or otherwise dispose
of any Investor’s Shares or any interest therein after the Closing Date pursuant to
an effective registration statement under the Securities Act or an exemption from
the registration requirements thereunder and pursuant to applicable state securities
laws.

	3.	 	Representations and Warranties of the Company. Except as set forth in a
disclosure letter to be delivered pursuant to Section 5(s) (the “Disclosure
Letter”), the Company represents and warrants to, and agrees with, each of the Investors
as set forth below. Any item disclosed in a section of the Disclosure Letter shall be
deemed disclosed in all other sections of the Disclosure Letter to the extent the relevance
of such disclosure or matter is reasonably apparent and shall qualify the representations
and warranties contained in this Section 3. Except for representations, warranties
and agreements that are expressly limited as to their date, each representation, warranty
and agreement shall be deemed made as of the date of delivery of the Disclosure Letter (the
“Disclosure Letter Delivery Date”) and as of the Closing Date:

	 	(a)	 	Organization and Qualification. The Company and each of its
Significant Subsidiaries has been duly organized and is validly existing in good
standing under the laws of its respective jurisdiction of incorporation, with the
requisite power and authority to own its properties and conduct its business as
currently conducted. Each of the Company and its Subsidiaries has been duly qualified
as a foreign corporation or organization for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such qualification, except to the
extent that the failure to be so qualified or be in good standing has not had and would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. For the purpose of this Agreement, “Material Adverse Effect”
means (i) any material adverse effect on the business, results of operations,
liabilities, property or condition (financial or otherwise) of the Company or its
Subsidiaries, taken as a whole, or (ii) any material adverse effect on the ability of
the Company, subject to the approvals and other authorizations set forth in Section
3(g) below, to consummate the transactions contemplated by this Agreement or the
Plan other than, in either case, any effect relating to or
resulting from (i) changes in general economic conditions or securities or 

-11-

 

	 	 	 	financial
markets in general that do not disproportionately impact the Company and its
Subsidiaries; (ii) general changes in the industry in which the Company and its
Subsidiaries operate and not specifically relating to, or having a disproportionate
effect on, the Companies and its Subsidiaries taken as a whole (relative to the
effect on other persons operating in such industry); (iii) any changes in law
applicable to the Company or any of its Subsidiaries or any of their respective
properties or assets or interpretations thereof by any governmental authority which
do not have a disproportionate effect on, the Company and its Subsidiaries; (iv) any
outbreak or escalation of hostilities or war (whether declared or not declared) or
any act of terrorism which do not have a disproportionate effect on, the Company and
its Subsidiaries; (v) the announcement or the existence of, or compliance with, this
Agreement and the transactions contemplated hereby (including without limitation the
impact thereof on relationships with suppliers, customers or employees); (vi) any
accounting regulations or principles or changes in accounting practices or policies
that the Company or its Subsidiaries are required to adopt, including in connection
with the audit of the Company’s financial statements in accordance with GAAP 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; or (vii) any change in the market price or trading
volumes of the Company’s securities (it being understood for the purposes of this
subclause (vii) that any facts underlying such change that are not otherwise covered
by the immediately preceding clauses (i) through (vi) may be taken into account in
determining whether or not there has been a Material Adverse Effect). For the
purposes of this Agreement, (x) a “Subsidiary” of any person means, with
respect to such person, any corporation, partnership, joint venture or other legal
entity of which such person (either alone or through or together with any other
subsidiary), owns, directly or indirectly, more than 50% of the stock or other
equity interests, has the power to elect a majority of the board of directors or
similar governing body, or has the power to direct the business and policies, and
(y) a “Significant Subsidiary” is a Subsidiary that satisfies the definition
contained in Article 1, Rule 1-02 of Regulation S-X promulgated pursuant to the
Securities Act of 1933, as amended.
	 
	 	(b)	 	Corporate Power and Authority.

	 	(i)	 	The Company has or, to the extent executed in the future, will
have when executed, the requisite corporate power and authority to enter into,
execute and deliver this Agreement and each other agreement to which it will be
a party as contemplated by this Agreement (this Agreement and such other
agreements collectively, the “Transaction Agreements”) and, subject to
entry of the Confirmation Order and the expiration, or waiver by the Bankruptcy
Court, of the 10-day period set forth in Rules 6004(h) and 3020(e) of the
Federal Rules of Bankruptcy Procedure (the “Bankruptcy 
Rules”), respectively, to perform its obligations hereunder and
thereunder,

-12-

 

	 	 	 	including the issuance of the Rights and Investor Shares. The
Company has taken or will take all necessary corporate action required for
the due authorization, execution, delivery and performance by it of this
Agreement, including the issuance of the Rights and Investor Shares.
	 
	 	(ii)	 	Prior to the execution by the Company and filing with the
Bankruptcy Court of the Plan, the Company and each Subsidiary entering into the
Plan will have the requisite corporate power and authority to execute the Plan
and to file the Plan with the Bankruptcy Court and, subject to entry of the
Confirmation Order and the expiration, or waiver by the Bankruptcy Court, of
the 10-day period set forth in Bankruptcy Rule 3020(e), to perform its
obligations thereunder, and will have taken by the Effective Date all necessary
corporate actions required for the due authorization, execution, delivery and
performance by it of the Plan.

	 	(c)	 	Execution and Delivery; Enforceability.

	 	(i)	 	Each Transaction Agreement has been, or prior to its execution
and delivery will be, duly and validly executed and delivered by the Company,
and, upon the expiration, or waiver by the Bankruptcy Court, of the 10-day
period set forth in Bankruptcy Rule 6004(h), each such document will constitute
the valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms.
	 
	 	(ii)	 	The Plan will be duly and validly filed with the Bankruptcy
Court by the Company and each of its Subsidiaries executing the Plan and, upon
the entry of the Confirmation Order and the expiration, or waiver by the
Bankruptcy Court, of the 10-day period set forth in Bankruptcy Rule 3020(e),
will constitute the valid and binding obligation of the Company and such
Subsidiary, enforceable against the Company and such Subsidiaries in accordance
with its terms.

	 	(d)	 	Authorized and Issued Capital Stock. The authorized capital stock of
the Company consists of (i) 1,350,000,000 shares of Common Stock and (ii) 650,000,000
shares of preferred stock, par value $0.10 per share. At the close of business on June
30, 2007 (the “Capital Structure Date”) (i) 561,781,500 shares of Common Stock
were issued and outstanding, (ii) no shares of the preferred stock were issued and
outstanding, (iii) 3,244,317 shares of Common Stock were held by the Company in its
treasury, (iv) 85,978,864 shares of Common Stock were reserved for issuance upon
exercise of stock options and other rights to purchase shares of Common Stock and
vesting of restricted stock units (each, an “Option” and, collectively, the
“Options”) granted under any stock option or
stock-based compensation plan of the Company or otherwise (the “Stock
Plans”),

-13-

 

	 	 	 	and (v) 200,000 shares of Series A participating preferred stock were
reserved for issuance pursuant to that certain Rights Agreement by and between the
Company and BankBoston, N.A., as Rights Agent, dated as of February 1, 1999, as
amended (the “Existing Shareholder Rights Plan”). All issued and
outstanding shares of capital stock of the Company and each of its Subsidiaries have
been duly authorized and validly issued and are fully paid and nonassessable, and
the holders thereof do not have any preemptive rights. Except as set forth in this
Section 3(d) or issuances pursuant to the Stock Plans, at the close of
business on the Capital Structure Date, no shares of capital stock or other equity
securities or voting interest in the Company were issued, reserved for issuance or
outstanding. Since the close of business on the Capital Structure Date, no shares
of capital stock or other equity securities or voting interest in the Company have
been issued or reserved for issuance or become outstanding, other than shares
described in clause (iv) of the second sentence of this Section 3(d) that
have been issued upon the exercise of outstanding Options granted under the Stock
Plans and other than the shares to be issued hereunder or pursuant to the Plan
Terms. Except as described in this Section 3(d), and except as will be
required by the Plan, neither the Company nor any of its Subsidiaries is party to or
otherwise bound by or subject to any outstanding option, warrant, call, subscription
or other right (including any preemptive right), agreement or commitment which (w)
obligates the Company or any of its Subsidiaries to issue, deliver, sell or
transfer, or repurchase, redeem or otherwise acquire, or cause to be issued,
delivered, sold or transferred, or repurchased, redeemed or otherwise acquired, any shares of the capital stock of, or other equity or voting interests 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, (x) 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, (y) restricts the transfer of any shares of capital stock of the
Company or (z) relates to the voting of any shares of capital stock of the Company.
On the Effective Date, the authorized capital stock of the Company and the issued
and outstanding shares of capital stock of the Company shall be consistent with the
description set forth in the Preferred Term Sheet, the Plan Terms and the Plan. On
the Effective Date, the authorized capital stock of the Company shall consist of
such number of shares of New Common Stock as shall be set forth in the Amended and
Restated Constituent Documents and 23,207,104 shares of new preferred stock. On the
Effective Date, assuming consummation of the transactions contemplated by this
Agreement: (i) 124,400,000 shares of New Common Stock will be outstanding; (ii)
12,787,724 shares of Series A Preferred Stock will be issued and outstanding and
(iii) 10,419,380 shares of Series B Preferred Stock will be issued and outstanding.
	 
	 	(e)	 	Issuance. The Investor Shares to be issued and sold by the Company to
the Investors hereunder, when the Investor Shares are issued and delivered against
payment therefor by the Investors hereunder, shall have been duly and validly
authorized, issued and delivered and shall be fully paid and non-assessable, and

-14-

 

	 	 	 	free and clear of all Taxes, liens, preemptive rights, rights of first refusal,
subscription and similar rights, other than (i) any rights contained in the terms of
the Preferred Shares as set forth in the Company’s Certificate of Incorporation and
(ii) any rights contained in any shareholders agreement to which one or more of the
Investors shall be a party.
	 
	 	(f)	 	No Conflict. Subject to the entry of the Confirmation Order and the
expiration, or waiver by the Bankruptcy Court, of the 10-day period set forth in
Bankruptcy Rules 6004(h) and 3020(e), as applicable, the distribution of the Rights,
the sale, issuance and delivery of the Shares upon exercise of the Rights, the
consummation of the Rights Offering by the Company and the execution and delivery (or,
with respect to the Plan, the filing) by the Company of the Transaction Agreements and
the Plan and compliance by the Company with all of the provisions hereof and thereof
and the Preferred Term Sheet and the Plan Terms and the consummation of the
transactions contemplated herein and therein (including compliance by each Investor
with its obligations hereunder and thereunder) (i) will not conflict with, or result in
a breach or violation of, any of the terms or provisions of, or constitute a default
under (with or without notice or lapse of time, or both), or result, except to the
extent to be specified in the Plan, in the acceleration of, or the creation of any lien
under, any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound or to which any of the property or assets
of the Company or any of its Subsidiaries is subject, (ii) will not result in any
violation of the provisions of the Certificate of Incorporation or Bylaws of the
Company or any of its Subsidiaries, (iii) will not result in any material violation of,
or any termination or material impairment of any rights under, any statute or any
license, authorization, injunction, judgment, order, decree, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or any of its
Subsidiaries or any of their properties, and (iv) will not trigger the distribution
under the Existing Shareholders Rights Plan of Rights Certificates (as defined therein)
or otherwise result in any Investor being or becoming an Acquiring Person, except in
any such case described in subclause (i) for any conflict, breach, violation, default,
acceleration or lien which has not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
	 
	 	(g)	 	Consents and Approvals. No consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or body
having jurisdiction over the Company or any of its Subsidiaries or any of their
properties is required for the distribution of the Rights, the sale, issuance and
delivery of Shares upon exercise of the Rights or the Investor Shares to each Investor
hereunder and the consummation of the Rights Offering by the Company and the execution
and delivery by the Company of the Transaction Agreements or the Plan
and performance of and compliance by the Company with all of the 

-15-

 

	 	 	 	provisions hereof and thereof and the Preferred Term Sheet and the Plan Terms and the
consummation of the transactions contemplated herein and therein, except (i) the
entry of the Confirmation Order and the expiration, or waiver by the Bankruptcy
Court, of the 10-day period set forth in Bankruptcy Rules 6004(h) and 3020(e), as
applicable, (ii) the registration under the Securities Act of the issuance of the
Rights and the Shares pursuant to the exercise of Rights, (iii) filings with respect
to and the expiration or termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR
Act”), and any other comparable laws or regulations in any foreign jurisdiction
relating to the sale or issuance of Investor Shares to the Investors, (iv) the
filing with the Secretary of State of the State of Delaware of the Certificate of
Incorporation to be applicable to the Company from and after the Effective Date and
(v) such consents, approvals, authorizations, registrations or qualifications (x) as
may be required under the rules and regulations of the New York Stock Exchange or
the Nasdaq Stock Exchange to consummate the transactions contemplated herein, (y) as
may be required under state securities or Blue Sky laws in connection with the
purchase of the Investor Shares by the Investors or the distribution of the Rights
and the sale of Shares to Eligible Holders or (z) the absence of which will not have
or would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
	 
	 	(h)	 	Arm’s Length. The Company acknowledges and agrees that the Investors
are acting solely in the capacity of an arm’s length contractual counterparty to the
Company with respect to the transactions contemplated hereby (including in connection
with determining the terms of the Rights Offering) and not as a financial advisor or a
fiduciary to, or an agent of, the Company or any other person or entity. Additionally,
the Investors are not advising the Company or any other person or entity as to any
legal, tax, investment, accounting or regulatory matters in any jurisdiction. The
Company shall consult with its own advisors concerning such matters and shall be
responsible for making its own independent investigation and appraisal of the
transactions contemplated hereby, and the Investors shall have no responsibility or
liability to the Company, its Affiliates, or their respective shareholders, directors,
officers, employees, advisors or other representatives with respect thereto. Any
review by the Investors of the Company, the transactions contemplated hereby or other
matters relating to such transactions will be performed solely for the benefit of the
Investors and shall not be on behalf of the Company, its Affiliates, or their
respective shareholders, directors, officers, employees, advisors or other
representatives and shall not affect any of the representations or warranties contained
herein or the remedies of the Investors with respect thereto.
	 
	 	(i)	 	Financial Statements. The financial statements and the related notes
of the Company and its consolidated Subsidiaries included or incorporated by reference
in the Company SEC Documents and the Rights Offering Registration Statement,
and to be included or incorporated by reference in the Disclosure Statement and

-16-

 

	 	 	 	the
Rights Offering Registration Statement and the Rights Offering Prospectus, comply or
will comply, as the case may be, in all material respects with the applicable
requirements of the Securities Act, the Securities Exchange Act of 1934, as amended,
and the rules and regulation of the Commission thereunder (the “Exchange
Act”) and the Bankruptcy Code, as applicable, and present fairly or will present
fairly in all material respects the financial position, results of operations and
cash flows of the Company and its Subsidiaries as of the dates indicated and for the
periods specified; such financial statements have been prepared in conformity with
U.S. generally accepting accounting principles (“GAAP”) applied on a
consistent basis throughout the periods covered thereby (except as disclosed in the
Company SEC Documents filed prior to the date hereof), and the supporting schedules
included or incorporated by reference in the Company SEC Documents and the Rights
Offering Registration Statement, and to be included or incorporated by reference in
the Disclosure Statement, the Rights Offering Registration Statement and the Rights
Offering Prospectus, present fairly or will present fairly the information required
to be stated therein; and the other financial information included or incorporated
by reference in the Company SEC Documents and the Rights Offering Registration
Statement, and to be included or incorporated by reference in the Disclosure
Statement, Rights Offering Registration Statement and the Rights Offering
Prospectus, has been or will be derived from the accounting records of the Company
and its Subsidiaries and presents fairly or will present fairly the information
shown thereby; and the pro forma financial information and the
related notes included or incorporated by reference in the Company SEC Documents and
the Rights Offering Registration Statement, and to be included or incorporated by
reference in the Disclosure Statement, Rights Offering Registration Statement and
the Rights Offering Prospectus, have been or will be prepared in accordance with the
applicable requirements of the Securities Act and the Exchange Act, as applicable,
and the assumptions underlying such pro forma financial information
are reasonable and are set forth in the Company SEC Documents and will be set forth
in the Disclosure Statement, Rights Offering Registration Statement and the Rights
Offering Prospectus.
	 
	 	(j)	 	Company SEC Documents and Disclosure Statement. The Company has filed
all required reports, schedules, forms, statements and other documents (including
exhibits and all other information incorporated therein but not including the Rights
Offering Registration Statement or the other documents referred to in Section 3(k)
below) with the Commission (“Company SEC Documents”). As of their respective
dates, each of the Company SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act and the rules and regulations of
the Commission promulgated thereunder applicable to such Company SEC Documents. The
Company has filed with the Commission all “material contracts” (as such term is defined
in Item 601(b)(10) of Regulation S-K under the Exchange Act) that are required to be
filed as exhibits to the Company SEC Documents. No Company SEC Document filed
after December 31, 2005, when filed, contained any untrue statement of a material

-17-

 

	 	 	 	fact or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they were
made, not misleading. The Disclosure Statement, when submitted to the Bankruptcy
Court and upon confirmation and effectiveness, will conform in all material respects
to the requirements of the Bankruptcy Code. The Disclosure Statement, when
submitted to the Bankruptcy Court and upon confirmation and effectiveness, and any
future Company SEC Documents filed with the Commission prior to the Closing Date,
when filed, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
	 
	 	(k)	 	Rights Offering Registration Statement and Rights Offering Prospectus.
The Rights Offering Registration Statement and any post-effective amendment thereto, as
of the applicable Securities Act Effective Date and, if applicable, as of the date of
such post-effective amendment, will comply in all material respects with the Securities
Act, and will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein
not misleading; and as of the applicable filing date of the Rights Offering Prospectus,
the Rights Offering Prospectus, and as of the filing date of any amendment or
supplement thereto and during the Rights Offering Period, and as of the Closing Date,
the Rights Offering Prospectus as so amended or supplemented, will not contain any
untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. On the Rights Distribution
Date, during the Rights Offering Period, and at the Expiration Time, the Investment
Decision Package will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
Each Issuer Free Writing Prospectus, at the time of use thereof, when considered
together with the Investment Decision Package, will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading. Each Preliminary Rights Offering Prospectus, at the
time of filing thereof, complied (in the case of a Preliminary Rights Offering
Prospectus filed prior to the date hereof) and will comply in all material respects
with the Securities Act and did not (in the case of a Preliminary Rights Offering
Prospectus filed prior to the date hereof) and will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading. Notwithstanding the foregoing, the Company makes no
representation and warranty with respect to any statements or omissions made in
reliance on and in conformity with information relating to each Investor or the
Ultimate Purchasers
furnished to the Company in writing by such Investor or the Ultimate Purchasers

-18-

 

	 	 	 	expressly for use in the Rights Offering Registration Statement and the Rights
Offering Prospectus and any amendment or supplement thereto. On March 21, 2007, the
Staff of the Commission delivered a letter to the Company which will be included in
Schedule 3(k) of the Disclosure Letter.
	 
	 	 	 	For the purposes of this Agreement, (i) the term “Rights Offering Registration
Statement” means the Registration Statement filed with the Commission relating
to the Rights Offering, including all exhibits thereto, as amended as of the
Securities Act Effective Date, and any post-effective amendment thereto that becomes
effective; (ii) the term “Rights Offering Prospectus” means the final
prospectus contained in the Rights Offering Registration Statement at the Securities
Act Effective Date (including information, if any, omitted pursuant to Rule 430A and
subsequently provided pursuant to Rule 424(b) under the Securities Act ), and any
amended form of such prospectus provided under Rule 424(b) under the Securities Act
or contained in a post-effective amendment to the Rights Offering Registration
Statement; (iii) the term “Investment Decision Package” means the Rights
Offering Prospectus, together with any Issuer Free Writing Prospectus used by the
Company to offer the Shares to Eligible Holders pursuant to the Rights Offering,
(iv) the term “Issuer Free Writing Prospectus” means each “issuer free
writing prospectus” (as defined in Rule 433 of the rules promulgated under the
Securities Act) prepared by or on behalf of the Company or used or referred to by
the Company in connection with the Rights Offering, (v) the term “Preliminary
Rights Offering Prospectus” means each prospectus included in the Rights
Offering Registration Statement (and any amendments thereto) before it becomes
effective, any prospectus filed with the Commission pursuant to Rule 424(a) under
the Securities Act and the prospectus included in the Rights Offering Registration
Statement, at the time of effectiveness that omits information permitted to be
excluded under Rule 430A under the Securities Act; and (vi) “Securities Act
Effective Date” means the date and time as of which the Rights Offering
Registration Statement, or the most recent post-effective amendment thereto, was
declared effective by the Commission which shall not be requested by the Company
before the Confirmation Order is issued without the prior consent of ADAH.
	 
	 	(l)	 	Free Writing Prospectuses. Each Issuer Free Writing Prospectus will
conform in all material respects to the requirements of the Securities Act as of the
date of first use or as otherwise provided for in Rule 433 under the Securities Act,
and the Company will comply with all prospectus delivery and all filing requirements
applicable to such Issuer Free Writing Prospectus under the Securities Act. The
Company has retained in accordance with the Securities Act all Issuer Free Writing
Prospectuses that were not required to be filed pursuant to the Securities Act.

-19-

 

	 	(m)	 	Absence of Certain Changes. Since December 31, 2006, other than as
disclosed in the Company SEC Documents filed prior to the date hereof, and except for
actions to be taken pursuant to the Transaction Agreements and the Plan:

	 	(i)	 	there has not been any change in the capital stock from that
set forth in Section 3(d) or any material change in long-term debt of
the Company or any of its Subsidiaries, or any dividend or distribution of any
kind declared, set aside for payment, paid or made by the Company on any class
of capital stock;
	 
	 	(ii)	 	no event, fact or circumstance has occurred which has had or
would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect;
	 
	 	(iii)	 	neither the Company nor any of its Subsidiaries has made any
changes with respect to accounting policies or procedures, except as required
by law or changes in GAAP;
	 
	 	(iv)	 	neither the Company nor any of its Subsidiaries has paid,
discharged, waived, compromised, settled or otherwise satisfied any material
Legal Proceeding, whether now pending or hereafter brought, (A) at a cost
materially in excess of the amount accrued or reserved for it in the Company
SEC Documents filed prior to the date hereof, (B) pursuant to terms that impose
material adverse restrictions on the business of the Company and its
Subsidiaries as currently conducted or (C) on a basis that reveals a finding or
an admission of a material violation of law by the Company or its Subsidiaries;
	 
	 	(v)	 	other than in the ordinary course of business, neither the
Company nor any of its Subsidiaries has (A) made, changed or revoked any
material Tax election, (B) entered into any settlement or compromise of any
material Tax liability, (C) filed any amended Tax Return with respect to any
material Tax, (D) changed any annual Tax accounting period, (E) entered into
any closing agreement relating to any material Tax, (F) knowingly failed to
claim a material Tax refund for which it is entitled, or (G) made material
changes to their Tax accounting methods or principles;
	 
	 	(vi)	 	there has not been (A) any increase in the base compensation
payable or to become payable to the officers or employees of the Company or any
of its Subsidiaries with annual base compensation in excess of $500,000 (except
for compensation increases in the ordinary course of business and consistent
with past practice) or (B) except in the ordinary course of

-20-

 

	 	 	 	business and consistent with past practice, any establishment, adoption,
entry into or material amendment of any collective bargaining, bonus, profit
sharing, thrift, compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of any
director, or for the benefit of a group of employees or for any individual
officer or employee with annual base compensation in excess of $500,000, in
each case;
	 
	 	(vii)	 	except in a manner consistent with (i) the Company’s
transformation plan previously disclosed in the Company SEC Documents prior to
the date hereof (the “Transformation Plan”) and (ii) (A) prior to the
satisfaction of the condition with respect to the Business Plan in accordance
with Section 9(a)(xxviii) of this Agreement, that certain draft
business plan delivered to the Investors dated February 28, 2007, as amended by
the revisions thereto delivered to the Investors dated April 5, 2007
(collectively the “Draft Business Plan”) or (B) after the satisfaction
of the condition with respect to the Business Plan in accordance with
Section 9(a)(xxviii) of this Agreement, the Business Plan approved by
ADAH in accordance with this Agreement neither the Company nor any of its
Subsidiaries have sold, transferred, leased, licensed or otherwise disposed of
any assets or properties material to the Company and its Subsidiaries, taken as
a whole, except for (A) sales of inventory in the ordinary course of business
consistent with past practice and (B) leases or licenses entered into in the
ordinary course of business consistent with past practice; and
	 
	 	(viii)	 	except in a manner consistent with (i) the Transformation Plan and (ii) (A)
prior to the satisfaction of the condition with respect to the Business Plan in
accordance with Section 9(a)(xxviii) of this Agreement, the Draft
Business Plan or (B) after the satisfaction of the condition with respect to
the Business Plan in accordance with this Section 9(a)(xxviii) of
Agreement, the Business Plan approved by ADAH in accordance with this
Agreement, neither the Company nor any of its Subsidiaries have acquired any
business or entity material to the Company and its Subsidiaries, taken as a
whole, by merger or consolidation, purchase of assets or equity interests, or
by any other manner, in a single transaction or a series of related
transactions, or entered into any contract, letter of intent or similar
arrangement (whether or not enforceable) with respect to the foregoing.

	 	(n)	 	Descriptions of the Transaction Agreement. The statements in the
Rights Offering Registration Statement and the Rights Offering Prospectus insofar as
they purport to constitute summaries of each of the Transaction Agreements, the Plan,
the Original Approval Order or the Approval Order and the Confirmation Order, or the
terms of statutes, rules or regulations, legal or governmental

-21-

 

	 	 	 	proceedings or contracts, will constitute accurate summaries in all material
respects.
	 
	 	(o)	 	No Violation or Default; Compliance with Laws. Neither the Company nor
any of its Significant Subsidiaries is in violation of its charter or by-laws or
similar organizational documents. Neither the Company nor any of its Subsidiaries is,
except as a result of the Chapter 11 Cases, in default, and no event has occurred that,
with notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries is bound or to which any of the property or assets of the Company
or any of its Subsidiaries is subject, except for any such default that has not had and
would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries is, or has been at any
time since January 1, 2002, in violation of any law or statute or any judgment, order,
rule or regulation of any court or arbitrator or governmental or regulatory authority,
except for any such violation that has not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
	 
	 	(p)	 	Legal Proceedings. Except as described in the Company SEC Documents
filed prior to the date hereof, there are no legal, governmental or regulatory actions,
suits, proceedings or, to the knowledge of the Company, investigations pending to which
the Company or any of its Subsidiaries is or may be a party or to which any property of
the Company or any of its Subsidiaries is or may be the subject that, individually or
in the aggregate, has had or, if determined adversely to the Company or any of its
Subsidiaries, would reasonably be expected to have a Material Adverse Effect, and no
such actions, suits or proceedings or, to the knowledge of the Company, investigations
are pending, threatened or contemplated, by any governmental or regulatory authority or
by others. There are no current or pending legal, governmental or regulatory actions,
suits or proceedings that are required under the Exchange Act to be described in the
Company SEC Documents or the Rights Offering Registration Statement or Rights Offering
Prospectus that are not or will not be so described, and there are no statutes,
regulations or contracts or other documents that are required under the Exchange Act to
be filed as exhibits to the Company SEC Documents or the Rights Offering Registration
Statement or Rights Offering Prospectus or described in the Company SEC Documents or
the Rights Offering Registration Statement or Rights Offering Prospectus that are not
so filed or described.
	 
	 	(q)	 	Independent Accountants. Ernst & Young LLP (“E&Y”), the
Company’s public accountants, are independent public accountants with respect to the
Company and its Subsidiaries as required by the Securities Act.

-22-

 

	 	(r)	 	Labor Relations. Except as set forth in the Company SEC Documents
filed prior to the date hereof:

	 	(i)	 	neither the Company nor any of its Subsidiaries is a party to,
or bound by, any material collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization (other than
contracts or other agreements or understandings with labor unions or labor
organizations in connection with products and services offered and sold to such
unions and organizations by the Company or its Subsidiaries);
	 
	 	(ii)	 	neither the Company nor any of its Subsidiaries is the subject
of any proceeding asserting that it or any Subsidiary has committed an unfair
labor practice or sex, age, race or other discrimination or seeking to compel
it to bargain with any labor organization as to wages or conditions of
employment, which, individually or in the aggregate, has had or would
reasonably be expected to have a Material Adverse Effect;
	 
	 	(iii)	 	there are no material current or, to the knowledge of the
Company, threatened organizational activities or demands for recognition by a
labor organization seeking to represent employees of the Company or any
Subsidiary and no such activities have occurred during the past 24 months;
	 
	 	(iv)	 	no grievance, arbitration, litigation or complaint or, to the
knowledge of the Company, investigations relating to labor or employment
matters is pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries which, except as has not had, and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect;
	 
	 	(v)	 	the Company and each of its Subsidiaries has complied and is in
compliance in all respects with all applicable laws (domestic and foreign),
agreements, contracts, and policies relating to employment, employment
practices, wages, hours, and terms and conditions of employment and is not
engaged in any material unfair labor practice as determined by the National
Labor Relations Board (or any foreign equivalent) except where the failure to
comply has not had or would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect;
	 
	 	(vi)	 	the Company has complied in all respects with its payment
obligations to all employees of the Company and its Subsidiaries in respect of
all wages, salaries, commissions, bonuses, benefits and other compensation due
and payable to such employees under any Company policy, practice,

-23-

 

	 	 	 	agreement, plan, program or any statute or other law, except to the extent
that any noncompliance, either individually or in the aggregate, has not had
and would not reasonably be expected to have a Material Adverse Effect; and
	 
	 	(vii)	 	the Company has complied and is in compliance in all material
respects with its obligations pursuant to the Worker Adjustment and Retraining
Notification Act of 1988 (and any similar state or local law) to the extent
applicable, and all material other employee notification and bargaining
obligations arising under any collective bargaining agreement or statute.

	 	(s)	 	Title to Intellectual Property. The Company and its Subsidiaries own
or possess valid and enforceable rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark registrations, service
mark registrations, copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information, systems
or procedures) (collectively, “Intellectual Property”) used in the conduct of
their respective businesses other than Intellectual Property, the failure to own or
possess which has not had and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. All registrations with and applications
to governmental or regulatory authorities in respect of such Intellectual Property are
valid and in full force and effect, have not, except in accordance with the ordinary
course practices of the Company and its Subsidiaries, lapsed, expired or been abandoned
(subject to the vulnerability of a registration for trademarks to cancellation for lack
of use), are not the subject of any opposition filed with the United States Patent and
Trademark Office or any other applicable Intellectual Property registry. The
consummation of the transaction contemplated hereby and by the Plan will not result in
the loss or impairment of any rights to use such Intellectual Property or obligate any
of the Investors to pay any royalties or other amounts to any third party in excess of
the amounts that would have been payable by Company and its Subsidiaries absent the
consummation of this transactions. The Company and its Subsidiaries have taken
reasonable security measures to protect the confidentiality and value of its and their
trade secrets (or other Intellectual Property for which the value is dependent upon its
confidentiality), and no such information, has been misappropriated or the subject of
an unauthorized disclosure, except to the extent that such misappropriation or
unauthorized disclosure has not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. The Company and its
Subsidiaries have not received any notice that it is or they are, in default (or with
the giving of notice or lapse of time or both, would be in default) under any contract
relating to such Intellectual Property. No Intellectual Property rights of the Company
or its Subsidiaries are being infringed by any other person, except to the extent that
such infringement has not had and would not have, individually or in the aggregate, a
Material Adverse Effect. The conduct of the businesses of the Company and its
Subsidiaries will

-24-

 

	 	 	 	not conflict in any respect with any Intellectual Property rights of others, and the
Company and its Subsidiaries have not received any notice of any claim of
infringement or conflict with any such rights of others which has had or would in
any such case be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect.
	 
	 	(t)	 	Title to Real and Personal Property. The Company and its Subsidiaries
have good and marketable title to all real property owned by the Company and its
Subsidiaries and good title to all other tangible and intangible properties (other than
Intellectual Property covered by Section 3(s)) owned by them, in each case,
free and clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (i) are described in the
consolidated balance sheets included in the Company SEC Documents filed prior to the
date hereof or (ii) individually and in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect. All of the leases and
subleases to which the Company or its Subsidiaries are a party are in full force and
effect and enforceable by the Company or such Subsidiary in accordance with their
terms, and neither the Company nor any Subsidiary has received any notice of any claim
of any sort that has been asserted by anyone adverse to the rights of the Company or
any Subsidiary under any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or such Subsidiary to the continued possession of
the leased or subleased property by under any such lease or sublease, except where any
such claim or failure to be enforceable would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
	 
	 	(u)	 	No Undisclosed Relationships. As of the date hereof, no relationship,
direct or indirect, exists between or among the Company or any of its Subsidiaries, on
the one hand, and the directors, officers, stockholders, customers or suppliers of the
Company or any of its Subsidiaries, on the other, that is required by the Exchange Act
to be described in the Company SEC Documents and that are not so described, except for
the transactions pursuant to this Agreement.
	 
	 	(v)	 	Investment Company Act. As of the date hereof, the Company is not and,
after giving effect to the consummation of the Plan, including the offering and sale of
the Investor Shares and Shares upon exercise of Rights, and the application of the
proceeds thereof, will not be required to register as an “investment company” or an
entity “controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder.
	 
	 	(w)	 	Licenses and Permits. The Company and its Subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and have made all
declarations and filings with, the appropriate federal, state, local or foreign

-25-

 

	 	 	 	governmental or regulatory authorities that are necessary for the ownership or lease
of their respective properties or the conduct of their respective businesses as
described in the Company SEC Documents except any such licenses, certificates,
permits or authorization the absence of which would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. Except as
described in the Company SEC Documents filed prior to the date hereof and except as,
individually and in the aggregate, has not had and would not reasonably be expected
to have a Material Adverse Effect, neither the Company nor any of its Subsidiaries
has received notice of any revocation or modification of any such license,
certificate, permit or authorization or has any reason to believe that any such
license, certificate, permit or authorization will not be renewed in the ordinary
course.
	 
	 	(x)	 	Compliance with Environmental Laws.

	 	(i)	 	The Company and its Subsidiaries have complied and are in
compliance with any and all applicable federal, state, local and foreign laws,
rules, regulations, decisions and orders, including all civil and common law,
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, “Environmental Laws”);
	 
	 	(ii)	 	the Company and its Subsidiaries have (a) received and are in
compliance with all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses, (b) are
not subject to any action to revoke, terminate, cancel, limit, amend or appeal
any such permits, licenses or approvals, and (c) have paid all fees,
assessments or expenses due under any such permits, licenses or approvals;
	 
	 	(iii)	 	the Company and its Subsidiaries have not received notice from
any governmental authority of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, or for any violation of
Environmental Laws;
	 
	 	(iv)	 	there are no facts, circumstances or conditions relating to the
past or present business or operations of the Company, its Subsidiaries or any
of their predecessors (including the disposal of any hazardous or toxic
substances or wastes, pollutants or contaminants), or to any real property
currently or formerly owned or operated by the Company, its Subsidiaries or any
of their predecessors, that would reasonably be expected to give rise to any
claim, proceeding or action, or to any liability, under any Environmental Law;

-26-

 

	 	(v)	 	neither the Company nor any of its Subsidiaries has agreed to
assume or accept responsibility for, by contract or otherwise, any liability of
any other person under Environmental Laws;
	 
	 	(vi)	 	neither the Company nor any of its Subsidiaries is required or
reasonably expected to incur material capital expenditures during the current
and the subsequent five fiscal years to reach or maintain compliance with
existing or reasonably anticipated Environmental Laws;
	 
	 	(vii)	 	none of the transactions contemplated under this Agreement
will give rise to any obligations to obtain the consent of or provide notice to
any governmental or regulatory authority under any Environmental Laws; and
	 
	 	(viii)	 	none of the Company, nor any of its subsidiaries nor their respective
predecessors has manufactured, marketed, distributed, or sold asbestos or any
products containing asbestos.

except, in the case of each of subclauses (i) through (vi) and in subclause (viii) above,
as disclosed in the Company SEC Documents filed prior to the date hereof, as have been, as
of the date of this Agreement, adequately provided for in accordance with GAAP in the
financial statements of the Company included in the Company SEC Documents filed prior to
the date hereof, or as, individually and in the aggregate, has not had and would not
reasonably be expected to have a Material Adverse Effect.

	 	(y)	 	Tax Matters. Except as described in the Company SEC Documents filed
with the Commission prior to the date hereof:

	 	(i)	 	The Company has timely filed or caused to be timely filed
(taking into account any applicable extension of time within which to file)
with the appropriate taxing authorities all material tax returns, statements,
forms and reports (including elections, declarations, disclosures, schedules,
estimates and information Tax Returns) for Taxes (“Tax Returns”) that
are required to be filed by, or with respect to, the Company and its
Subsidiaries on or prior to the Closing Date. The Tax Returns accurately
reflect all material liability for Taxes of the Company and its Subsidiaries
for the periods covered thereby;
	 
	 	(ii)	 	all material Taxes and Tax liabilities due by or with respect
to the income, assets or operations of the Company and its Subsidiaries for all
taxable years or other taxable periods that end on or before the Closing Date
have been or will, prior to the Closing, be timely paid in full or accrued and

-27-

 

	 	 	 	fully provided for in accordance with GAAP on the financial statements of
the Company included in the Company SEC Documents;
	 
	 	(iii)	 	neither the Company nor any of its Subsidiaries has received
any written notices from any taxing authority relating to any material issue
that has not been adequately provided for in accordance with GAAP in the
financial statements of the Company included in the Company SEC Documents filed
prior to the date hereof;
	 
	 	(iv)	 	all material Taxes which the Company and each or any of its
Subsidiaries is (or was) required by law to withhold or collect in connection
with amounts paid or owing to any employee, independent contractor, creditor,
stockholder or other third party have been duly withheld or collected, and have
been timely paid to the proper authorities to the extent due and payable;
	 
	 	(v)	 	neither the Company nor any of its subsidiaries has been
included in any “consolidated,” “unitary” or “combined” Tax Return provided for
under the law of the United States, any foreign jurisdiction or any state or
locality with respect to Taxes for any taxable period for which the statute of
limitations has not expired (other than a group of which the Company and/or its
subsidiaries are the only members);
	 
	 	(vi)	 	except for the tax sharing allocations and similar agreements
entered into with GM at the time of the spin-off, there are no tax sharing,
allocation, indemnification or similar agreements in effect as between the
Company or any of its Subsidiaries or any predecessor or affiliate thereof and
any other party (including any predecessors or affiliates thereof) under which
the Company or any of its Subsidiaries would be liable for any material Taxes
or other claims of any party;
	 
	 	(vii)	 	the Company has not been a “United States real property
holding corporation” within the meaning of Section 897(c)(2) of the Code at any
time during the five-year period ending on the date hereof; and
	 
	 	(viii)	 	the Company is not a party to any agreement other than certain Change In
Control Agreements in the Company SEC Documents filed prior to the date hereof
that would require the Company or any affiliate thereof to make any material
payment that would constitute an “excess parachute payment” for purposes of
Sections 280G and 4999 of the Code.

-28-

 

For purposes of this Agreement, “Taxes” shall mean all taxes, assessments, charges,
duties, fees, levies or other governmental charges, including, without limitation, all
federal, state, local, foreign and other income, franchise, profits, gross receipts,
capital gains, capital stock, transfer, property, sales, use, value-added, occupation,
property, excise, severance, windfall profits, stamp, license, payroll, social security,
withholding and other taxes, assessments, charges, duties, fees, levies or other
governmental charges of any kind whatsoever (whether payable directly or by withholding and
whether or not requiring the filing of a Tax Return), all estimated taxes, deficiency
assessments, additions to tax, penalties and interest and shall include any liability for
such amounts as a result either of being a member of a combined, consolidated, unitary or
affiliated group or of a contractual obligation to indemnify any person or other entity.

	 	(z)	 	Compliance With ERISA.

	 	(i)	 	Correct and complete copies of the following documents, with
respect to all material domestic and foreign benefit and compensation plans,
programs, contracts, commitments, practices, policies and arrangements, whether
written or oral, that have been established, maintained or contributed to (or
with respect to which an obligation to contribute has been undertaken) or with
respect to which any potential liability is borne by the Company or any of its
Subsidiaries, including, but not limited to, “employee benefit plans” within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), and deferred compensation, stock option,
stock purchase, restricted stock, stock appreciation rights, stock based,
incentive and bonus plans (the “Company Plans”), have been delivered or
made available to the Investors by the Company, to the extent applicable: (i)
all material Company Plan documents, together with all amendments and
attachments thereto (including, in the case of any Company Plan not set forth
in writing, a written description thereof); (ii) all material trust documents,
declarations of trust and other documents establishing other funding
arrangements, and all amendments thereto and the latest financial statements
thereof; (iii) the most recent annual report on IRS Form 5500 for each of the
past three years and all schedules thereto and the most recent actuarial
report; (iv) the most recent IRS determination letter; (v) summary plan
descriptions and summaries of material modifications; and (vi) the two most
recently prepared actuarial valuation reports.
	 
	 	(ii)	 	Except as has not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, or except as
described in the Company SEC Documents filed prior to the date hereof: (A) each
Company Plan, other than any “multiemployer plans” within the meaning of
Section 3(37) of ERISA (“Multiemployer Plans”), is in compliance with
ERISA, the Internal Revenue Code of 1986, as amended

-29-

 

	 	 	 	(the “Code”) and other applicable laws; (B) each Company Plan that
is intended to be a qualified plan under Section 401(a) of the Code has
received a favorable determination letter from the IRS covering all Tax law
changes prior to the Economic Growth and Tax Relief Reconciliation Act of
2001 or has applied to the IRS for such favorable determination within the
applicable remedial amendment period under Section 401(b) of the Code, and
the Company is not aware of any circumstances likely to result in the loss
of the qualification of such Company Plan under Section 401(a) of the Code;
(C) no liability under Subtitle C or D of Title IV of ERISA has been or is
reasonably expected to be incurred by the Company or any of its Subsidiaries
with respect to any ongoing, frozen or terminated “single-employer plan,”
within the meaning of Section 4001(a)(15) of ERISA (“Single-Employer
Plan”) currently maintained or contributed to (or with respect to which
an obligation to contribute has been undertaken), or the Single-Employer
Plan of any entity which is considered one employer with the Company under
Section 4001 of ERISA or Section 414 of the Code (a “Company ERISA
Affiliate”); (D) the Company and its Subsidiaries have not incurred any
withdrawal liability (including any contingent or secondary withdrawal
liability) with respect to a Multiemployer Plan under Subtitle E of Title IV
of ERISA (regardless of whether based on contributions of a Company ERISA
Affiliate) that has not been satisfied in full and no condition or
circumstance has existed that presents a risk of the occurrence of any
withdrawal from or the partition, termination, reorganization or insolvency
of any such Multiemployer Plan; (E) no notice of a “reportable event,”
within the meaning of Section 4043 of ERISA has occurred or is expected to
occur for any Company Plan or by any Company ERISA Affiliate; (F) all
contributions required to be made under the terms of any Company Plan have
been timely made or have been reflected in the financial statements of the
Company included in the Company SEC Reports filed prior to the date hereof;
and (G) there has been no amendment to, announcement by the Company or any
of its Subsidiaries relating to, or change in employee participation or
coverage under, any Company Plan which would increase the expense of
maintaining such plan above the level of the expense incurred therefor for
the most recent fiscal year.
	 
	 	(iii)	 	Except as disclosed in the Company SEC Documents filed prior
to the date hereof: (A) neither any Company Plan nor any Single-Employer Plan
of a Company ERISA Affiliate has an “accumulated funding deficiency” (whether
or not waived) within the meaning of Section 412 of the Code or Section 302 of
ERISA and neither the Company nor any of its Subsidiaries nor any Company ERISA
Affiliate has applied for or obtained a funding waiver; (B) the Company expects
that required minimum contributions to any Company Plan under Section 412 of
the Code will not be materially increased by application of Section 412(l) of
the Code; (C) neither the Company nor any of its Subsidiaries has provided, or
is required to

-30-

 

	 	 	 	provide, security to any Company Plan or to any Single-Employer Plan of a
Company ERISA Affiliate pursuant to Section 401(a)(29) of the Code; and (D)
neither the execution of this Agreement, stockholder approval of this
Agreement nor the consummation of the transactions contemplated hereby will
limit or restrict the right of the Company to merge, amend or terminate any
of the Company Plans.

	 	(aa)	 	Internal Control Over Financial Reporting. Except as set forth in the
Company SEC Documents filed prior to the date hereof, the Company and its Subsidiaries
(i) make and keep books and records that accurately and fairly represent the Company’s
transactions, and (ii) maintain and have maintained effective internal control over
financial reporting as defined in Rule 13a-15 under the Exchange Act and a system of
internal accounting controls sufficient to provide reasonable assurance that: (A)
transactions are executed in accordance with management’s general or specific
authorizations; (B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (C) access to assets is permitted only in accordance
with management’s general or specific authorization; and (D) the recorded
accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences. The Company has
disclosed, based on the most recent evaluation of its chief executive officer and its
chief financial officer prior to the date hereof, to the Company’s auditors and the
audit committee of the Company’s board of directors (i) any significant deficiencies in
the design or operation of its internal controls over financial reporting that are
reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information and has identified for the Company’s
auditors and the audit committee of the Company’s board of directors any material
weaknesses in internal control over financial reporting and (ii) any fraud, whether or
not material, that involves management or other employees who have a significant role
in the Company’s internal control over financial reporting.
	 
	 	(bb)	 	Disclosure Controls and Procedures. Except as disclosed in the Company
SEC Documents filed prior to the date hereof, the Company maintains disclosure controls
and procedures required by Rule 13a-15 or 15d-15 under the Exchange Act. Such
disclosure controls and procedures are effective to ensure that information required to
be disclosed by the Company is recorded and reported on a timely basis to the
individuals responsible for the preparation of the Company’s filings with the
Commission and other public disclosure documents.
	 
	 	(cc)	 	Insurance. The Company and its Subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, including business
interruption insurance, which insurance is in amounts and insures against such losses
and risks as are customary for companies whose businesses are similar to

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	 	 	 	the Company and its Subsidiaries. Neither the Company nor any of its Subsidiaries
has (i) received written notice from any insurer or agent of such insurer that
capital improvements or other expenditures are required or necessary to be made to
continue such insurance or (ii) any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage at reasonable cost from similar insurers as may be necessary to
continue its business.
	 
	 	(dd)	 	No Unlawful Payments. Neither the Company nor any of its Subsidiaries
nor, to the knowledge of the Company, any director, officer, agent, employee or other
person associated with or acting on behalf of the Company or any of its Subsidiaries
has: (i) used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment in each case other than clause (iii) that
has been or would reasonably be expected to be, individually or in the aggregate,
material to the Company and its Subsidiaries, taken as a whole.
	 
	 	(ee)	 	Compliance with Money Laundering Laws. The Company and its
Subsidiaries are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Bank Secrecy Act, as amended,
the money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company or any
of its Subsidiaries with respect to Money Laundering Laws is pending or, to the
knowledge of the Company, threatened.
	 
	 	(ff)	 	Compliance with Sanctions Laws. Neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company or any of its Subsidiaries is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”). The Company will not directly or indirectly use
the proceeds of the Rights Offering or the sale of the Investor Shares, or lend,
contribute or otherwise make available such proceeds to any Subsidiary, joint venture
partner or other person or entity, for the purpose of financing the activities of any
person that, to the Company’s knowledge, is currently subject to any U.S. sanctions
administered by OFAC.

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	 	(gg)	 	No Restrictions on Subsidiaries. Except as described in the Company
SEC Documents filed prior to the date hereof or otherwise set forth in the record of
the Chapter 11 Cases on or prior to the date hereof, and subject to the Bankruptcy
Code, no Subsidiary of the Company is currently prohibited, directly or indirectly,
under any agreement or other instrument to which it is a party or is subject, from
paying any dividends to the Company, from making any other distribution on such
Subsidiary’s capital stock, from repaying to the Company any loans or advances to such
Subsidiary from the Company or from transferring any of such Subsidiary’s properties or
assets to the Company or any other Subsidiary of the Company.
	 
	 	(hh)	 	No Broker’s Fees. Neither the Company nor any of its Subsidiaries is a
party to any contract, agreement or understanding with any person (other than this
Agreement) that would give rise to a valid claim against the Investors for a brokerage
commission, finder’s fee or like payment in connection with the Rights Offering or the
sale of the Investor Shares.
	 
	 	(ii)	 	No Registration Rights. Except as provided for pursuant to the
registration rights agreement contemplated by Section 8(c)(iv), no person has
the right to require the Company or any of its Subsidiaries to register any securities
for sale under the Securities Act by reason of the filing of the Rights Offering
Registration Statement with the Commission or in connection with Rights Offering or the
sale of the Investor Shares.
	 
	 	(jj)	 	No Stabilization. The Company has not taken and will not take,
directly or indirectly, any action designed to or that would reasonably be expected to
cause or result in any stabilization or manipulation of the price of the Shares.
	 
	 	(kk)	 	Margin Rules. Neither the issuance, sale and delivery of the Rights or
the Shares in connection with Rights Offering or the sale of the Investor Shares nor
the application of the proceeds thereof by the Company as described and to be described
in the Rights Offering Registration Statement and the Rights Offering Prospectus will
violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or
any other regulation of such Board of Governors.
	 
	 	(ll)	 	Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Company SEC Documents has been made or reaffirmed, and in the case of
the Rights Offering Registration Statement and the Rights Offering Prospectus, will be
made or reaffirmed, without a reasonable basis or has been disclosed other than in good
faith.

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	 	(mm)	 	Statistical and Market Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and market-related
data included and to be included in the Disclosure Statement, Rights Offering
Registration Statement and the Rights Offering Prospectus is not based on or derived
from sources that are reliable and accurate in all material respects.
	 
	 	(nn)	 	Rights Agreement. The Company and the Board of Directors of the
Company has taken all necessary action to render the Existing Shareholder Rights Plan
inapplicable to the sale and issuance of the Investor Shares and the other transactions
contemplated by the Original Agreement, this Agreement, the Original PSA, the Plan
Terms, the Plan and the Transaction Agreements (including any transfer of Investor
Shares to any Related Purchaser or Ultimate Purchaser).
	 
	 	(oo)	 	Takeover Statutes; Charter. The Company and the Board of Directors of
the Company has taken all such action necessary to render the restrictions contained in
Section 203 of the General Corporation Law of the State of Delaware (the
“DGCL”) and Article IX of the Company’s Certificate of Incorporation
inapplicable to the Investors and the sale and issuance of the Investor Shares and the
other transactions contemplated by the Original Agreement, this Agreement, the Original
PSA, the Plan Terms, the Plan and the Transaction Agreements (including any transfer of
Investor Shares to any Related Purchaser or Ultimate Purchaser). Except for Section
203 of the DGCL (which has been rendered inapplicable), no other “fair price,”
“moratorium,” “control share acquisition”, “business combination” or other similar
anti-takeover statute or regulation (a “Takeover Statute”) is applicable to the
Company, the Common Stock, the Shares, the sale and issuance of the Investor Shares or
the other transactions contemplated by the Original Agreement, this Agreement, the
Original PSA, the Plan Terms, the Plan and the Transaction Agreements. Other than
Article IX of the Company’s Certificate of Incorporation, which has been rendered
inapplicable, no anti-takeover provision in the Company’s certificate of incorporation
or by-laws is applicable to the Company, the Common Stock, the Shares, the sale and
issuance of the Investor Shares or the other transactions contemplated by the Preferred
Term Sheet, the Plan or the Transaction Agreements.
	 
	 	(pp)	 	UAW MOU. 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. The
UAW MOU has been ratified by the membership of the UAW and a true and complete copy
thereof has been made available to ADAH.

	4.	 	Representations and Warranties of the Investors. Each Investor represents and warrants as to itself only, and agrees with the Company,
severally and not jointly, as set forth

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	 	 	below. Each such representation, warranty and
agreement is made as of the date hereof and as of the Closing Date.

	 	(a)	 	Incorporation. The Investor has been duly organized and, if
applicable, is validly existing as a corporation, limited partnership or limited
liability company, in good standing under the laws of the jurisdiction of its
incorporation or organization.
	 
	 	(b)	 	Corporate Power and Authority. The Investor has the requisite
corporate, limited partnership or limited liability company power and authority to
enter into, execute and deliver this Agreement and to perform its obligations hereunder
and has taken all necessary corporate, limited partnership or limited liability company
action required for the due authorization, execution, delivery and performance by it of
this Agreement.
	 
	 	(c)	 	Execution and Delivery. This Agreement has been duly and validly
executed and delivered by the Investor and constitutes its valid and binding
obligation, enforceable against it in accordance with its terms.
	 
	 	(d)	 	No Registration. The Investor understands that the Investor Shares
have not been registered under the Securities Act by reason of a specific exemption
from the registration provisions of the Securities Act, the availability of which
depends upon, among other things, the bona fide nature of the investment intent and the
accuracy of such Investor’s representations as expressed herein or otherwise made
pursuant hereto.
	 
	 	(e)	 	Investment Intent. The Investor is acquiring the Investor Shares for
investment for its own account, not as a nominee or agent, and not with the view to, or
for resale in connection with, any distribution thereof not in compliance with
applicable securities laws, and such Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same, except in compliance
with applicable securities laws.
	 
	 	(f)	 	Securities Laws Compliance. The Investor Shares will not be offered
for sale, sold or otherwise transferred by the Investor except pursuant to a
registration statement or in a transaction exempt from, or not subject to, registration
under the Securities Act and any applicable state securities laws and any sale or
placement of Investor Shares pursuant to Sections 2(a), 2(b) or
2(k) will not affect the validity of the private placement to the Investors under
this Agreement or result in the private placement being integrated with the Rights
Offering. The Investors have not and will not solicit offers for, or offer to sell,
the Investor Shares by means of any general solicitation or general advertising within
the meaning of
Rule 502(c) under Regulation D under the Securities Act or in any manner

-35-

 

	 	 	 	involving a public offering within the meaning of the Securities Act (other than pursuant to the
Resale Registration Statement).

	 	(g)	 	Sophistication. The Investor has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and risks of
its investment in the Investor Shares being acquired hereunder. The Investor is a
“qualified institutional buyer” within the meaning of Rule 144A under the Securities
Act. The Investor understands and is able to bear any economic risks associated with
such investment (including, without limitation, the necessity of holding the Investor
Shares for an indefinite period of time).
	 
	 	(h)	 	No Conflict. The execution and delivery by the Investor of each of the
Transaction Agreements to which it is a party and the compliance by the Investor with
all of the provisions hereof and thereof and the Preferred Term Sheet and the Plan
Terms and the consummation of the transactions contemplated herein and therein (i) will
not conflict with, or result in a breach or violation of, any of the terms or
provisions of, or constitute a default under (with or without notice or lapse of time,
or both), or result, in the acceleration of, or the creation of any lien under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Investor is a party or by which the Investor is bound or to which any of the
property or assets of the Investor or any of its Subsidiaries is subject, (ii) will not
result in any violation of the provisions of the certificate of incorporation or bylaws
or similar governance documents of the Investor, and (iii) will not result in any
material violation of, or any termination or material impairment of any rights under,
any statute or any license, authorization, injunction, judgment, order, decree, rule or
regulation of any court or governmental agency or body having jurisdiction over the
Investor or any of their properties, except in any such case described in subclause (i)
for any conflict, breach, violation, default, acceleration or lien which has not and
would not reasonably be expected, individually or in the aggregate, to prohibit,
materially delay or materially and adversely impact the Investor’s performance of its
obligations under this Agreement.
	 
	 	(i)	 	Consents and Approvals. No consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or body
having jurisdiction over the Investor or any of its properties is required to be
obtained or made by the Investor for the purchase of the Investor Shares hereunder and
the execution and delivery by the Investor of this Agreement or the Transaction
Agreements to which it is a party and performance of and compliance by the Investor
with all of the provisions hereof and thereof and the Preferred Term Sheet and the Plan
Terms and the consummation of the transactions contemplated herein and therein, except
filings with respect to and the expiration or termination of the waiting period under
the HSR Act or any comparable laws or regulations in
any foreign jurisdiction relating to the purchase of Investor Shares and except for

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	 	 	 	any consent, approval, authorization, order, registration or qualification which, if
not made or obtained, has not and would not reasonably be expected, individually or
in the aggregate, to prohibit, materially delay or materially and adversely impact
the Investor’s performance of its obligations under this Agreement.

	 	(j)	 	Arm’s Length. The Investor acknowledges and agrees that the Company is
acting solely in the capacity of an arm’s length contractual counterparty to the
Investor with respect to the transactions contemplated hereby (including in connection
with determining the terms of the Rights Offering). Additionally, the Investor is not
relying on the Company for any legal, tax, investment, accounting or regulatory advice,
except as specifically set forth in this Agreement. The Investor shall consult with
its own advisors concerning such matters and shall be responsible for making its own
independent investigation and appraisal of the transactions contemplated hereby.
	 
	 	(k)	 	No Violation or Default; Compliance with Laws. The Investor is not in
default, and no event has occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term, covenant
or condition contained in any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Investor is a party or by which the Investor
is bound or to which any of the property or assets of the Investor is subject,
individually or in the aggregate, that would prohibit, materially delay or materially
and adversely impact the Investor’s performance of its obligations under this
Agreement. The Investor is not and has not been at any time since January 1, 2002, in
violation of any law or statute or any judgment, order, rule or regulation of any court
or arbitrator or governmental or regulatory authority, except for any such violation
that has not and would not reasonably be expected, individually or in the aggregate, to
prohibit, materially delay or materially and adversely impact the Investor’s
performance of its obligations under this Agreement.
	 
	 	(l)	 	Legal Proceedings. There are no actions, suits or proceedings to which
the Investor is a party or to which any property of the Investor is the subject that,
individually or in the aggregate, has or, if determined adversely to the Investor,
would reasonably be expected to prohibit, materially delay or materially and adversely
impact the Investor’s performance of its obligations under this Agreement and no such
actions, suits or proceedings are threatened or, to the knowledge of the Investor,
contemplated and, to the knowledge of the Investor, no investigations are threatened by
any governmental or regulatory authority or threatened by others that has or would
reasonably be expected, individually or in the aggregate, to prohibit, materially delay
or materially and adversely impact the Investor’s performance of its obligations under
this Agreement.

-37-

 

	 	(m)	 	No Broker’s Fees. The Investor is not a party to any contract,
agreement or understanding with any person (other than this Agreement) that would give
rise to a valid claim against the Company, other than pursuant to Section 2(j),
for a brokerage commission, finder’s fee or like payment in connection with the Rights
Offering or the sale of the Investor Shares.

	 	(n)	 	No Undisclosed Written Agreements. Other than the (i) Additional
Investor Agreement; (ii) Agreement Among Initial Investors, by and among ADAH,
Harbinger, UBS and Merrill; and (iii) that certain Letter Agreement, by and among ADAH,
Harbinger, UBS, Merrill, Pardus and GS (substantially in the form delivered to the
Company on July 17, 2007), the Investor has not entered into any material written
agreements between or among the Investors directly relating to such Investor’s Investor
Shares or the performance of the Transaction Agreements, and any such written agreement
hereafter entered into will be disclosed promptly to the Company.
	 
	 	(o)	 	Available Funds. To the extent the Investor is ADAH, Harbinger or
Pardus, the Investor has provided the Company with a true and complete copy of an
executed commitment letter from the parties signatory thereto to provide equity
financing to such Investor (the “Equity Commitment Letter”). Each such
Investor represents as to itself that its Equity Commitment Letter is in full force and
effect and is a valid and binding obligation of the parties thereto enforceable in
accordance with its terms except as the enforcement thereof is subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors rights and to general equitable
principles. The Equity Commitment Letters are not subject to any condition or
contingency with respect to financing that is not set forth in such letter other than
the terms and conditions of this Agreement.

	5.	 	Additional Covenants of the Company. The Company agrees with each of the
Investors as set forth below.

	 	(a)	 	Approval Motion and Approval Order. The Company agrees that it shall
use reasonable best efforts to cause the Approval Order to become a Final Approval
Order as soon as practicable following the filing of the Approval Motion.
	 
	 	(b)	 	Plan and Disclosure Statement. The Company shall authorize, execute,
file with the Bankruptcy Court and seek confirmation of, a Plan (and a related
disclosure statement (the “Disclosure Statement”)) (i) the terms of which are
consistent with this Agreement, the Preferred Term Sheet, the Plan Terms and the GM
Settlement, (ii) that provides for the release and exculpation of 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, the Plan

-38-

 

	 	 	 	Terms and the Plan to the fullest extent permitted under applicable law (provided,
that such release and exculpation 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) and (iii) that has conditions to confirmation and the
Effective Date of the Plan (and to what extent any such conditions can be waived and
by whom) that are consistent with this Agreement, the Preferred Term Sheet, the Plan
Terms and the GM Settlement. The Company will (i) provide to ADAH and its counsel a
copy of the Plan and the Disclosure Statement, and any amendments thereto, and a
reasonable opportunity to review and comment on such documents prior to such
documents being filed with the Bankruptcy Court, and (ii) duly consider in good
faith any comments consistent with this Agreement, the Preferred Term Sheet and the
Plan Terms, 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. In
addition, the Company will (i) provide to ADAH and its counsel a copy of the
Confirmation Order and a reasonable opportunity to review and comment on such order
prior to such order being filed with the Bankruptcy Court and (ii) duly consider in
good faith any comments consistent with this Agreement, the Preferred Term Sheet and
the Plan Terms and any other reasonable comments of each of ADAH and its counsel,
into such Confirmation Order, 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. As soon as practicable
following the 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, the Company
shall distribute ballot form(s) in connection with the solicitation of acceptance of
the Plan.

	 	(c)	 	Rights Offering. The Company shall use its reasonable best efforts to
effectuate the Rights Offering as provided herein.
	 
	 	(d)	 	Securities Laws; Rights Offering Registration Statement. The Company
shall take all action as may be necessary or advisable so that the Rights Offering and
the issuance and sale of the Investor Shares and the other transactions contemplated by
this Agreement will be effected in accordance with the Securities Act and the Exchange
Act and any state or foreign securities or Blue Sky laws. The Rights Offering
Registration Statement was filed with the Commission on March 7, 2007. As promptly as
practicable following the date the GM Settlement is agreed, the Company shall file an
amended Rights Offering Registration Statement with the Commission. The Company shall:
(i) provide ADAH with a reasonable opportunity to review the Rights Offering
Registration Statement, and any amendment or supplement thereto, before any filing with
the Commission and shall duly consider in good faith any comments consistent with this
Agreement, the Preferred Term Sheet and the Plan Terms, and any other reasonable comments

-39-

 

	 	 	 	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; (ii) advise ADAH, promptly after it receives notice
thereof, of the time when the Rights Offering Registration Statement has been filed
or has become effective or any Rights Offering Prospectus or Rights Offering
Prospectus supplement has been filed and shall furnish ADAH with copies thereof;
(iii) advise ADAH promptly after it receives notice of any comments or inquiries by
the Commission (and furnish the Investors with copies of any correspondence related
thereto), of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of the Rights Offering Prospectus or Issuer Free
Writing Prospectus, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing of
the Rights Offering Registration Statement or a Rights Offering Prospectus or for
additional information, and in each such case, provide ADAH with a reasonable
opportunity to review any such comments, inquiries, request or other communication
from the Commission and to review any amendment or supplement to the Rights Offering
Registration Statement or the Rights Offering Prospectus before any filing with the
Commission, and to duly consider in good faith any comments consistent with this
Agreement, the Preferred Term Sheet and the Plan Terms, and any other reasonable
comments of ADAH and its counsel, and 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 (iv) in the event of the
issuance of any stop order or of any order preventing or suspending the use of a
Rights Offering Prospectus or any Issuer Free Writing Prospectus or suspending any
such qualification, use promptly its reasonable best efforts to obtain its
withdrawal.

	 	(e)	 	Listing. The Company shall use its commercially reasonable efforts to
list and maintain the listing of the New Common Stock on the New York Stock Exchange
or, if approved by ADAH, the Nasdaq Global Select Market.
	 
	 	(f)	 	Rule 158. The Company will generally make available to the Company’s
security holders as soon as practicable an earnings statement of the Company covering a
twelve-month period beginning after the date of this Agreement, which shall satisfy the
provisions of Section 11(a) of the Securities Act.
	 
	 	(g)	 	Notification. The Company shall notify, or cause the Subscription
Agent to notify the Investors, on each Friday during the Rights Exercise Period and on
each Business Day during the five Business Days prior to the Expiration Time (and any
extensions thereto), or more frequently if reasonably requested by any of the
Investors, of the aggregate number of Rights known by the Company or the Subscription
Agent to have been exercised pursuant to the Rights Offering as of

-40-

 

	 	 	 	the close of business on the preceding Business Day or the most recent practicable
time before such request, as the case may be.

	 	(h)	 	Unsubscribed Shares. The Company shall determine the number of
Unsubscribed Shares, if any, in good faith, shall provide a Purchase Notice or a
Satisfaction Notice that accurately reflects the number of Unsubscribed Shares as so
determined and shall provide to ADAH a certification by the Subscription Agent of the
Unsubscribed Shares or, if such certification is not available, such written backup to
the determination of the Unsubscribed Shares as ADAH may reasonably request.

	 	(i)	 	HSR. The Company shall use its reasonable best efforts to promptly
prepare and file all necessary documentation and to effect all applications and seek
all approvals or consents that are necessary or advisable under the HSR Act and any
comparable laws or regulations in any foreign jurisdiction so that any applicable
waiting period shall have expired or been terminated thereunder with respect to the
purchase of Investor Shares hereunder, and shall not take any action that is intended
or reasonably likely to materially impede or delay the ability of the parties to obtain
any necessary approvals required for the transactions contemplated by this Agreement.
The Company shall file, to the extent that it is required to file, the Notification and
Report Form required under the HSR Act with respect to the transactions contemplated by
this Agreement with the Antitrust Division of the United States Department of Justice
and the United States Federal Trade Commission no later than the fifteenth day
following the Disclosure Statement Approval Date.
	 
	 	(j)	 	Clear Market. For a period of 180 days after the Closing Date (the
“Restricted Period”), the Company will not (i) offer, pledge, announce the
intention to sell, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of, directly or indirectly, any shares of capital
stock of the Company or any securities convertible into or exercisable or exchangeable
for capital stock of the Company or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of the
capital stock of the Company, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of capital stock of the Company or such other
securities, in cash or otherwise, without the prior written consent of ADAH, except for
(A) Rights and New Common Stock issuable upon exercise of Rights, (B) shares of New
Common Stock issued upon the exercise of any stock options outstanding as of the
Effective Date and (C) the issuance of New Common Stock and other equity interests as
set forth in the Preferred Term Sheet, the Plan Terms and pursuant to the Plan.
Notwithstanding the foregoing, if (i) during the last 17 days of the Restricted Period,
the Company issues an earnings release or material news or a material event relating to
the Company occurs or (ii)

-41-

 

	 	 	 	prior to the expiration of the Restricted Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of the
Restricted Period, the restrictions imposed by this Agreement shall continue to
apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.

	 	(k)	 	Use of Proceeds. The Company will apply the net proceeds from the sale
of the Rights and the Investor Shares as provided in the Rights Offering Prospectus.
	 
	 	(l)	 	No Stabilization. The Company will not take, directly or indirectly,
any action designed to or that would reasonably be expected to cause or result in any
stabilization or manipulation of the price of the Shares.
	 
	 	(m)	 	Reports. So long as any Investor holds Shares, the Company will
furnish to such Investor, as soon as they are available, copies of all reports or other
communications (financial or other) furnished to holders of the Rights or the Shares,
as the case may be, and copies of any reports and financial statements furnished to or
filed with the Commission or any national securities exchange or automatic quotation
system.
	 
	 	(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 accepted by ADAH in accordance with
Section 5(s) of this Agreement), the Plan Terms, 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 Draft Business Plan or the
Business Plan approved by ADAH in accordance with Section 9(a)(xxviii) of this
Agreement) 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 approved by ADAH in accordance
with Section 5(s) of this Agreement, the Company and its Subsidiaries shall
carry on their businesses in all material respects in accordance with the Draft
Business Plan (and, if amended in a manner that satisfies the condition with respect to
amendments to the Draft Business Plan set forth in Section 9(a)(xxviii), as so
amended) prior to the satisfaction of the condition with respect to the Business Plan
in accordance with Section 9(a)(xxviii) of this Agreement and at all times
after the satisfaction of the condition with respect to the Business Plan set forth in
Section 9(a)(xxviii), 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

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	 	 	 	shall not enter into any transaction that, at all times prior to the satisfaction of
the condition with respect to the Business Plan set forth in Section
9(a)(xxviii), would be inconsistent with the Draft Business Plan (and, if
amended in a manner that satisfies the condition with respect to amendments to the
Draft Business Plan set forth in Section 9(a)(xxviii), as so amended) or at
all times after the satisfaction of the condition with respect to the Business Plan
set forth in Section 9(a)(xxviii), 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 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 accepted by ADAH in accordance
with Section 5(s) of this Agreement), the Plan Terms, 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:

	 	(i)	 	(A) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock, (B) split, combine
or reclassify any of its capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for shares of
its capital stock or (C) purchase, redeem or otherwise acquire, except in connection with the Plan, any shares of capital stock of the Company or any
other securities thereof or any rights, warrants or options to
acquire any such shares or other securities;
	 
	 	(ii)	 	except for intercompany transactions and any financing
activities which are consistent with the Company’s existing financing, issue,
deliver, grant, sell, pledge, dispose of or otherwise encumber any of its
capital stock or any securities convertible into, or any rights, warrants or
options to acquire, any such capital stock at less than fair market value;
	 
	 	(iii)	 	acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial portion of the stock, or other ownership
interests in, or substantial portion of assets of, or by any other manner, any
business or any corporation, partnership, association, joint venture, limited
liability company or other entity or division thereof except in the ordinary
course of business;
	 
	 	(iv)	 	sell, lease, mortgage, pledge, grant a lien, mortgage, pledge,
security interest, charge, claim or other encumbrance of any kind or nature on
or otherwise encumber or dispose of any of its properties or assets, except (A)

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	 	 	 	in the ordinary course of business consistent with past practice and (B)
other transactions involving not in excess of $100 million in any 12 month
period;

	 	(v)	 	(A) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another individual or entity, issue or sell any debt
securities or warrants or other rights to acquire any debt securities of the
Company, guarantee any debt securities of another individual or entity, enter
into any “keep well” or other agreement to maintain any financial statement
condition of another person (other than a Subsidiary) or enter into any
arrangement having the economic effect of any of the foregoing in excess of
$100 million in any 12 month period, except for (x) working capital borrowings
and increases in letters of credit necessary in the ordinary course of business
under the Company’s existing or any amended or replacement revolving credit
facilities, and (y) indebtedness solely between the Company and its
Subsidiaries or between such Subsidiaries or (B) except for transactions
between the Company and any of its Subsidiaries or between such Subsidiaries,
make any loans, advances or capital contributions to, or investments in, any
other individual or entity, other than customary advances of business and
travel expenses to employees of the Company in the ordinary course of business
consistent with past practice;
	 
	 	(vi)	 	enter into any new, or amend or supplement any existing,
collective bargaining agreement, which is inconsistent with the Transformation
Plan or the Business Plan satisfying the condition with respect to the Business
Plan set forth in Section 9(a)(xxviii) of this Agreement , this
Agreement, the Plan Terms, the Plan and the GM Settlement; or
	 
	 	(vii)	 	authorize any of, or commit or agree to take any of, the
foregoing actions.

	 	(o)	 	Actions Regarding Conditions. During the period from the date of this
Agreement to the Closing Date, the Company shall not take any action or omit to take
any action that would reasonably be expected to result in the conditions to the
Agreement set forth in Section 9 not being satisfied.
	 
	 	(p)	 	GM Settlement. The Company shall use its reasonable best efforts to
agree on, prior to the date of filing by the Company with the Bankruptcy Court of a
Disclosure Statement (the “Disclosure Statement Filing Date”), a settlement
agreement (the “GM Settlement”) between the Company and GM that is consistent
with this Agreement, the Plan Terms, the Plan and the UAW MOU. The Company will (i)
provide to ADAH and its counsel a copy of the GM Settlement and a reasonable
opportunity to review and comment on such

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	 	 	 	documents prior to such documents being executed or delivered or filed with the
Bankruptcy Court, and (ii) duly consider in good faith any comments of ADAH and its
counsel consistent with this Agreement, the Preferred Term Sheet and the Plan Terms
and any other reasonable comments of each 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. The
Company shall not enter into any other agreement with GM that (i) is materially
inconsistent with this Agreement, the Plan Terms 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.
	 
	 	(q)	 	Access to Information. Subject to applicable law and existing
confidentiality agreements between the parties, upon reasonable notice, the Company
shall (and shall cause its Subsidiaries to) afford the Investors (and any prospective
Ultimate Purchaser that executes a confidentiality agreement reasonably acceptable to
the Company, which agreement will provide that, unless otherwise determined by the
Company, all contact between such Ultimate Purchaser and the Company shall be through
ADAH) and their directors, officers, employees, investment bankers, attorneys,
accountants and other advisors or representatives, reasonable access, throughout the
period prior to the Closing Date, to its employees, properties, books, contracts and
records and, during such period, the Company shall (and shall cause its Subsidiaries
to) furnish promptly to the Investors all information concerning its business,
properties and personnel as may reasonably be requested by any Investor;
provided, that the foregoing shall not require the Company (i) to permit any
inspection, or to disclose any information, that in the reasonable judgment of the
Company would cause the Company to violate any of its obligations with respect to
confidentiality to a third party if the Company shall have used commercially reasonable
efforts to obtain the consent of such third party to such inspection or disclosure,
(ii) to disclose any privileged information of the Company or any of its Subsidiaries
or (iii) to violate any laws; provided, further, that the Company shall
deliver to the Investors a schedule setting in forth in reasonable detail a description
of any information not provided to the Investors pursuant to subclauses (i) through
(iii) above. All requests for information and access made pursuant to this Section
5(q) shall be directed to the Chief Restructuring Officer or such other person as
may be designated by such person.
	 
	 	(r)	 	Financial Information. For each month, beginning June 2007 until the
Closing Date, the Company shall provide to each Investor an unaudited consolidated
balance sheet and related unaudited consolidated statements of operations, consolidated
statements of stockholders’ equity and consolidated statements of

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	 	 	 	cash flows for the month then ended within 30 days of the end of such month (the
“Monthly Financial Statements”). The Monthly Financial Statements, except
as indicated therein, shall be prepared in accordance with the Company’s normal
financial reporting practices. The Monthly Financial Statements shall fairly
present in all material respects the financial position, results of operations and
cash flows of the Company and its Subsidiaries as of the dates indicated and for the
periods specified.
	 
	 	(s)	 	Business Plan and Disclosure Letter. The Company shall use its
commercially reasonable efforts to provide to ADAH as soon as practicable a final
five-year business plan approved by the Company’s board of directors and prepared in
good faith and based on reasonable assumptions, which business plan shall provide for
the amount of EBITDA for each of fiscal years 2007 through 2011 (the “Business
Plan”); provided, that (i) the Company shall not be required to deliver a
Business Plan that does not reflect a final and binding GM Settlement and (ii) ADAH
shall not be required to accept the Business Plan unless it is reasonably satisfied
that such Business Plan does not amend or deviate from the Draft Business Plan in any
manner that would have a material impact on the Investors’ proposed investment in the
Company. The Company shall deliver a Disclosure Letter to ADAH in no event later than
ten (10) Business Days prior to the Disclosure Statement Filing Date which provides for
exceptions from the representations and warranties of the Company in Section 3;
provided, that ADAH shall not be required to accept any Disclosure Letter
unless it is reasonably satisfied that such Disclosure Letter does not contain any
information or exception to a representation that (i) was not disclosed to ADAH prior
to the date of this Agreement and (ii) which information or exception reflects facts or
circumstances that would have a material impact on the Investor’s proposed investment
in the Company.
	 
	 	(t)	 	Financing Assistance. The Company and its Subsidiaries shall obtain
the debt financing from financing sources consistent with those previously discussed
with ADAH and in amounts sufficient to consummate the transactions contemplated by this
Agreement, the Preferred Term Sheet, the Plan Terms, the GM Settlement and the Plan,
such financing to be on then-prevailing market terms with respect to the applicable
interest rate, redemption provisions and fees, and otherwise to be on terms that are
acceptable to ADAH not to be unreasonably withheld (the “Debt Financing”);
provided, that if the Company delivers to ADAH definitive term sheets for such
proposed debt financing that have been approved by the Company’s board of directors and
executed by the banks or other financing sources providing such debt financing
reflecting then-prevailing market terms with respect to the applicable interest rate,
redemption provisions and fees (a “Company Financing Proposal”), then ADAH
shall inform the Company in writing (a “Financing Notice”) whether or not the
Company Financing Proposal is acceptable to it within five (5) Business Days of its
receipt of the definitive term sheets for such Company Financing Proposal. If, after
the Company delivers to ADAH a Company Financing Proposal, ADAH fails to deliver a
Financing

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	 	 	 	Notice within five (5) Business Days or each of the following circumstances occurs,
then the Company may terminate this Agreement and the transactions contemplated
hereby may be abandoned: (x) ADAH delivers a Financing Notice in which it does not
approve the Company Financing Proposal, (y) ADAH does not present to the Company,
within 30 days of the delivery of the Financing Notice (the “Financing Decision
Date”), an alternative written expression of interest to provide the Debt
Financing with financing sources reasonably acceptable to the Company on terms more
favorable to the Company than the Company Financing Proposal (a “Preferred Debt
Financing”) and (z) ADAH does not provide to the Company commitment letters
executed by the banks or other financing sources providing such Preferred Debt
Financing within 60 days of the Financing Decision Date. Delphi shall use its
reasonable best efforts to implement any Preferred Debt Financing and to fulfill its
other obligations pursuant to this Section 5(t). Subject to applicable
regulatory or NASD requirements, Merrill and UBS (or their Affiliates) shall be
entitled to participate in such 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 Terms 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.
	 
	 	(u)	 	Labor Agreements. The Company and its Subsidiaries shall use their
reasonable best efforts to enter into: (A) tentative labor agreements with each of the
International Union of Electrical, Salaried, Machine and Furniture Workers –
Communications Workers of America (“IUE-CWA”) and the United Steel, Paper and
Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers
International Union, AFL-CIO/CLC (the “USW”) which adequately address, among
other things, the following matters: (i) permit achievement of the transactions
contemplated by this Agreement, the Preferred Term Sheet, the Plan Terms and the Plan
(including plant closings, asset dispositions and resolution of union claims); (ii)
permit achievement of the Business Plan; and (B) an agreement that GM will be
responsible for certain hourly labor costs (compensation, benefits and other labor
costs) at certain of the Company’s facilities. The Company will (i)

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	 	 	 	provide to ADAH and its counsel a copy of the foregoing labor agreements and a
reasonable opportunity to review and comment on such document prior to such document
being executed or delivered or filed with the Bankruptcy Court, and (ii) duly
consider in good faith any comments of ADAH and its counsel consistent with this
Agreement, the Preferred Term Sheet and the Plan Terms 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.

	 	(v)	 	Other Actions by the Company.

	 	(i)	 	Existing Shareholder Rights Plan. The Company and the
Board of Directors of the Company (A) has taken all necessary action to amend
the Existing Shareholder Rights Plan to provide that none of the Investors
(including any Related Purchaser or Ultimate Purchaser) shall be deemed an
“Acquiring Person” as defined in the Existing Shareholder Rights Plan and that
the rights will not separate from the Common Stock pursuant to the Existing
Shareholder Rights Plan as a result of entering into the Original Agreement,
this Agreement, the Original PSA, the Plan and the Transaction Agreements or
consummating the transactions contemplated hereby (including any transfer of
Investor Shares to any Related Purchaser or Ultimate Purchaser) or thereby and
(B) will take all such action as is necessary to terminate the Existing
Shareholder Rights Plan effective as of the Closing Date.
	 
	 	(ii)	 	Takeover Statutes and Charter. The Company and the
Board of Directors of the Company has taken all action necessary (A) to ensure
that no Takeover Statute or similar statue or regulation is or becomes
applicable to the Original Agreement, this Agreement, the Original PSA, the
Plan or the Transaction Agreements or any transaction contemplated hereby or
thereby (including any transfer of Investor Shares to any Related Purchaser or
Ultimate Purchaser), (B) if any Takeover Statute is or may become applicable to
the transactions contemplated by the Original Agreement, this Agreement, the
Original PSA, the Plan or the Transaction Agreements (including any transfer of
Investor Shares to any Related Purchaser or Ultimate Purchaser), to grant such
approvals and take such actions as are necessary so that such transactions may
be consummated as promptly as practicable on the terms contemplated hereby and
thereby and otherwise act to eliminate or minimize the effects of such statute
or regulation on such transactions and (C) to ensure that this Agreement or any
transaction contemplated hereby (including any transfer of Investor Shares to
any Related Purchaser or Ultimate Purchaser) or thereby are approved for
purposes of Article IX of the Company’s Amended and Restated Certificate of
Incorporation, dated January 26, 1999, as amended

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	 	 	 	to date, and that such provision shall not apply to the transactions
contemplated hereby or thereby.

	 	(w)	 	Agreement on Key Documentation. The Company shall use its commercially
reasonable efforts to agree on or prior to the Disclosure Statement Filing Date on (a)
the terms of the GM Settlement, (b) the agreements contemplated by Section
5(u), and (c) the terms of the Amended and Restated Constituent Documents, the
Series A Certificate of Designations and the Series B Certificate of Designations, the
Shareholders Agreement and the Registration Rights Agreement with ADAH.
	 
	 	(x)	 	Investment Decision Package. If at any time prior to the Expiration
Date, any event occurs as a result of which the Investment Decision Package, as then
amended or supplemented, would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if it shall
be necessary to amend or supplement the Investment Decision Package to comply with
applicable law, the Company will promptly notify the Investors of any such event and
prepare an amendment or supplement to the Investment Decision Package that is
reasonably acceptable in form and substance to ADAH that will correct such statement or
omission or effect such compliance.
	 
	 	(y)	 	Termination of Commitment Letters. The Company acknowledges and agrees
that (i) the commitment letter of Appaloosa in favor of ADAH and the Company and (ii)
the commitment letter of Harbinger Fund in favor of Harbinger and the Company, each
dated January 18, 2007 have been terminated and are of no further force or effect and
that each of Appaloosa and Harbinger Fund shall have no further liability or obligation
under those commitment letters.
	 
	 	(z)	 	Pension Plan Contributions. The Company and its Subsidiaries shall
have made all contributions to any pension plan of the Company and its Subsidiaries
required to be made prior to or contemporaneous with the Effective Time pursuant to any
law or statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority or any requirement of the GM Settlement any labor
agreement or any other contract, agreement, arrangement or understanding.

	6.	 	Additional Covenants of the Investors. Each Investor agrees, severally and not
jointly, with the Company:

	 	(a)	 	Information. To provide the Company with such information as the
Company reasonably requests regarding the Investor for inclusion in the Rights Offering
Registration Statement and the Disclosure Statement.

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	 	(b)	 	HSR Act. To use reasonable best efforts to promptly prepare and file
all necessary documentation and to effect all applications and to obtain all
authorizations, approvals and consents that are necessary or advisable under the HSR
Act and any comparable laws or regulations in any foreign jurisdiction so that any
applicable waiting period shall have expired or been terminated thereunder and any
applicable notification, authorization, approval or consent shall have been made or
obtained with respect to the purchase of Investor Shares hereunder, and not to take any
action that is intended or reasonably likely to materially impede or delay the ability
of the parties to obtain any necessary approvals required for the transactions
contemplated by this Agreement. Each Investor shall file, to the extent that it is
required to file, the Notification and Report Form required under the HSR Act with
respect to the transactions contemplated by this Agreement with the Antitrust Division
of the United States Department of Justice and the United States Federal Trade
Commission no later than the fifteenth day following the Disclosure Statement Filing
Date.
	 
	 	(c)	 	Bankruptcy Court Filings. To not file any pleading or take any other
action in the Bankruptcy Court with respect to this Agreement, the Plan, the Disclosure
Statement or the Confirmation Order or the consummation of the transactions
contemplated hereby or thereby that is inconsistent in any material respect with this
Agreement or the Company’s efforts to obtain the entry of the Confirmation Order
consistent with this Agreement.
	 
	 	(d)	 	Reasonable Best Efforts. Each Investor shall use its reasonable best
efforts to take all actions, and do all things, reasonably necessary, proper or
advisable on its part under this Agreement and applicable laws to cooperate with the
Company and to consummate and make effective the transactions contemplated by this
Agreement, the Preferred Term Sheet, the Plan Terms, the GM Settlement and the Plan.

	7.	 	Additional Joint Covenant of Company And Each Investor. Without limiting the
generality of the undertakings pursuant to Sections 5(i) and 6(b), the
Company and each Investor shall, severally and not jointly, use its reasonable best efforts
to take, or cause to be taken, all action and to do, or cause to be done, all things
necessary under the HSR Act and any comparable laws or regulations in any foreign
jurisdiction to consummate and make effective the transactions contemplated by this
Agreement and the other Transaction Agreements, including furnishing all information
required by applicable law in connection with approvals of or filings with any governmental
authority, and filing, or causing to be filed, as promptly as practicable, following the
Disclosure Statement Filing Date any required notification and report forms under other
applicable competition laws with the applicable governmental antitrust authority. Any
filings under any laws or regulations in any foreign jurisdiction comparable to the HSR Act
that are necessary to consummate and make effective the transactions contemplated by this
Agreement and the other Transaction Agreements shall
be made, to the extent permitted by law or regulation, after the filings in the United
States described in Section 5(i) and 6(b) hereof have been

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	 	 	made. The parties shall consult with each other as to the appropriate time of filing such notifications and shall agree upon
the timing of such filings. Subject to appropriate confidentiality safeguards, each party
shall: (i) respond promptly to any request for additional information made by the antitrust
agency; (ii) promptly notify counsel to the other party of, and if in writing, furnish
counsel to the other party with copies of (or, in the case of material oral communications,
advise the other party orally of) any communications from or with the antitrust agency in
connection with any of the transactions contemplated by this Agreement; (iii) not
participate in any meeting with the antitrust agency unless it consults with counsel to the
other party in advance and, to the extent permitted by the agency, give the other party a
reasonable opportunity to attend and participate thereat; (iv) furnish counsel to the other
party with copies of all correspondence, filings and communications between it and the
antitrust agency with respect to any of the transactions contemplated by this Agreement; and
(v) furnish counsel to the other party with such necessary information and reasonable
assistance as may be reasonably necessary in connection with the preparation of necessary
filings or submission of information to the antitrust agency. The Parties shall use their
reasonable best efforts to cause the waiting periods under the applicable competitions laws
to terminate or expire at the earliest possible date after the date of filing.

	 	 	Notwithstanding anything in this Agreement to the contrary, nothing shall require any
Investor or its Affiliates to dispose of any of its or its Subsidiaries’ or its Affiliates’
assets or to limit its freedom of action with respect to any of its or its Subsidiaries’
businesses, or to consent to any disposition of the Company’s or the Company Subsidiaries’
assets or limits on the Company’s or the Company Subsidiaries’ freedom of action with
respect to any of its or the Company Subsidiaries’ businesses, or to commit or agree to any
of the foregoing, and nothing in this Agreement shall authorize the Company or any Company
Subsidiary to commit or agree to any of the foregoing, to obtain any consents, approvals,
permits or authorizations to remove any impediments to the transactions contemplated hereby
or by any Transaction Agreement relating to antitrust or competition laws or to avoid the
entry of, or to effect the dissolution of, any injunction, temporary restraining order or
other order in any action relating to antitrust or competition laws.

	8.	 	Reasonable Best Efforts. The Company shall use its reasonable best efforts (and
shall cause its Subsidiaries to use their respective reasonable best efforts) to take or cause
to be taken all actions, and do or cause to be done all things, reasonably necessary, proper
or advisable on its or their part under this Agreement and applicable laws to cooperate with
the Investors and to consummate and make effective the transactions contemplated by this
Agreement, the Preferred Term Sheet, the Plan Terms, the GM Settlement and the Plan,
including:

	 	(a)	 	preparing and filing as promptly as practicable all documentation to effect all
necessary notices, reports and other filings and to obtain as promptly as
practicable all consents, registrations, approvals, permits and authorizations
necessary or advisable to be obtained from any third party or governmental entity;

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	 	 	 	provided, however, that, notwithstanding the foregoing, in
connection with obtaining such consents, the Company shall not, without the prior
written consent of ADAH in its reasonable discretion, pay or commit to pay any
person or entity whose consent is being solicited in cash or other consideration to
the extent such payment could reasonably be expected to prevent the Company from, at
all times prior to the satisfaction of the condition with respect to the Business
Plan in accordance with Section 9(a)(xxviii), complying in all material
respects with the Draft Business Plan (and, if amended in a manner that satisfies
the condition with respect to amendments to the Draft Business Plan set forth in
Section 9(a)(xxviii), as so amended) and, at all times after the
satisfaction of the condition with respect to the Business Plan in accordance with
Section 9(a)(xxviii), complying in all material respects with 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);

	 	(b)	 	defending any lawsuits or other actions or proceedings, whether judicial or
administrative, challenging this Agreement, the Preferred Term Sheet, the GM
Settlement, the Plan or the Transaction Agreements or any other agreement contemplated
by this Agreement, the Preferred Term Sheet, the PSA, the GM Settlement, the Plan or
the Transaction Agreements or the consummation of the transactions contemplated hereby
and thereby, including seeking to have any stay or temporary restraining order entered
by any court or other governmental entity vacated or reversed;
	 
	 	(c)	 	executing, delivering and filing, as applicable, any additional ancillary
instruments or agreements necessary to consummate the transactions contemplated by this
Agreement, the Preferred Term Sheet, the PSA, the GM Settlement, the Plan or the
Transaction Agreements and to fully carry out the purposes of this Agreement, the
Preferred Term Sheet, the PSA, the GM Settlement, the Plan, the Transaction Agreements
and the transactions contemplated hereby and thereby including, without limitation:
(i) employment agreements and other compensation arrangements with senior management of
the Company relating to compensation, benefits, supplemental retirement benefits, stock
options and restricted stock awards, severance and change in control provisions and
other benefits on market terms (as determined by the Company’s board of directors based
on the advice of Watson-Wyatt and reasonably acceptable to ADAH); (ii) agreements and
other arrangements acceptable to ADAH or otherwise ordered by the Bankruptcy Court with
respect to claims against the Company of former members of the Company’s management and
members of the Company’s management, if any, who are resigning or being terminated in
accordance with the implementation of the Plan; (iii) a shareholders agreement among
the Company, and certain of the Investors reasonably satisfactory to ADAH (the
“Shareholders Agreement”); (iv) a registration rights
agreement (the “Registration Rights Agreement”) among the Company and the
Investors, consistent with the Preferred Term Sheet and reasonably satisfactory to

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	 	 	 	ADAH to the extent that the material terms of such Registration Rights Agreement
would have a material impact on the Investors’ proposed investment in the Company,
and providing that the Company shall (a) as soon as practicable after the Closing
Date, and in any event no later than seven (7) days after the Closing Date, prepare
and file with the Commission a registration statement, including all exhibits
thereto, pursuant to Rule 415 under the Securities Act registering offers and sales
by the Investors, any Related Purchasers and the Ultimate Purchasers of the
Unsubscribed Shares, the Direct Subscription Shares and the Series B Preferred
Shares (the “Resale Registration Statement” and, together with the final
prospectus contained in the Resale Registration Statement as of its effective date
(including information, if any, omitted pursuant to Rule 430A and subsequently
provided pursuant to Rule 424(b) under the Securities Act), and any amended form of
such prospectus provided under Rule 424(b) under the Securities Act or contained in
a post-effective amendment to the Resale Registration Statement) and any issuer free
writing prospectus as defined in Rule 433 under the Securities Act used in
connection with the resale of such shares, the “Resale Registration
Documents”); (b) use its reasonable best efforts to cause the Resale
Registration Statement to be declared effective by the Commission as soon as
practicable after the filing thereof, and in any event no later than thirty (30)
days after the Closing Date; (c) obtain such comfort letters from the Company’s
independent certified public accountants addressed to the Investors covering such
matters of the type customarily covered by comfort letters and as ADAH reasonably
requests; and (d) obtain a customary opinion or opinions and negative assurance
statement, in customary form and scope from counsel to the Company to be furnished
to each Investor; (v) an amended and restated certificate of incorporation and
amended by-laws of the Company, in each case, that is consistent with this
Agreement, the Plan Terms and the Preferred Term Sheet; provided, that the
amended and restated certificate of incorporation of the Company to be effective
immediately following the Effective Date shall prohibit (A) for so long as ADAH or
its Affiliates, as the case may be, owns any shares of Series A-1 Preferred Stock,
any transactions between the Company or any of its Subsidiaries, on the one hand,
and ADAH or its Affiliates, as the case may be, on the other hand (including any
“going private transaction” sponsored by ADAH or its Affiliates), unless such
transaction shall have been approved by directors constituting not less than 75% of
the number of Common Directors, and (B) any transaction between the Company or any
of its Subsidiaries, on the one hand, and a director, other than a director
appointed by holders of Series A Preferred Stock, on the other hand, unless such
transaction shall have been approved by directors having no material interest in
such transaction (a “Disinterested Director”) constituting not less than 75%
of the number of Disinterested Directors (such amended and restated certificate of
incorporation and amended bylaws are herein referred to as the “Amended and
Restated Constituent Documents”); and (vi) the Series A Certificate of
Designations and the Series B Certificate of Designations, in each case, that is
consistent with the terms set forth in the
Preferred Term Sheet. Subject to applicable laws and regulations relating to the
exchange of information, the Investors and the Company shall have the right to

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	 	 	 	review in advance, and to the extent practicable each will consult with the other on
all of the information relating to Investors or the Company, as the case may be, and
any of their respective Subsidiaries, that appears in any filing made with, or
written materials submitted to, any third party and/or any governmental entity in
connection with the transactions contemplated by this Agreement or the Plan. In
exercising the foregoing rights, each of the Company and the Investors shall act
reasonably and as promptly as practicable.

	9.	 	Conditions to the Obligations of the Parties.

	 	(a)	 	Subject to Section 9(b), the obligations of each of the Investors
hereunder to consummate the transactions contemplated hereby shall be subject to the
satisfaction prior to the Closing Date of each of the following conditions:

	 	(i)	 	Approval Order. The Approval Order shall have become a
Final Approval Order. “Final Approval Order” shall mean an Approval
Order of the Bankruptcy Court, which has not been reversed, stayed, modified or
amended, and as to which (a) the time to appeal, seek certiorari or
request reargument or further review or rehearing has expired and no appeal,
petition for certiorari or request for reargument or further review or
rehearing has been timely filed, or (b) any appeal that has been or may be
taken or any petition for certiorari or request for reargument or
further review or rehearing that has been or may be filed has been resolved by
the highest court to which the order or judgment was appealed, from which
certiorari was sought or to which the request was made and no further
appeal or petition for certiorari or request for reargument or further
review or rehearing has been or can be taken or granted.
	 
	 	(ii)	 	[Reserved]
	 
	 	(iii)	 	Plan of Reorganization. The Company shall have
complied in all material respects with the terms and conditions of the Plan
that are to be performed by the Company prior to the Closing Date.
	 
	 	(iv)	 	[Reserved]
	 
	 	(v)	 	Alternate Transaction. The Company shall not have
entered into any letter of intent, memorandum of understanding, agreement in
principle or other agreement (other than a confidentiality agreement with terms
that are not materially less favorable to the Company than the terms of that certain
Amended Confidentiality Information, Standstill and Nondisclosure

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	 	 	 	Agreement,
dated July 3, 2007, among the Company, Appaloosa and Harbinger Fund, as it
may be amended from time to time) or taken any action to seek any Bankruptcy
Court approval relating to, any Alternate Transaction (an “Alternate
Transaction Agreement”). For the purpose of this Agreement, an
“Alternate Transaction” means any plan, proposal, offer or
transaction that is inconsistent with this Agreement, the Preferred Term
Sheet, the Plan Terms and the GM Settlement or the Plan, other than a
Chapter 7 liquidation.

	 	(vi)	 	Change of Recommendation. There shall not have been a
Change of Recommendation. For purposes of this Agreement, a “Change of
Recommendation” shall mean, (i) the Company or its board of directors or
any committee thereof shall have withheld, withdrawn, qualified or modified (or
resolved or proposed to withhold, withdraw, qualify or modify), in a manner
adverse to the Investors, its approval or recommendation of this Agreement, the
Preferred Term Sheet, the Plan Terms, the GM Settlement or the Plan or the
transactions contemplated hereby or thereby or (ii) the Company or its board of
directors or any committee thereof shall have approved or recommended, or
proposed to approve or recommend (including by filing any pleading or document
with the Bankruptcy Court), any Alternate Transaction.
	 
	 	(vii)	 	Confirmation Order. The Confirmation Order approving
the Plan shall have been entered by the Bankruptcy Court and such order shall
be non-appealable, shall not have been appealed within ten calendar days of
entry or, if such order is appealed, shall not have been stayed pending appeal,
and there shall not have been entered by any court of competent jurisdiction
any reversal, modification or vacation, in whole or in part, of such order (the
“Confirmation Order”); provided, that the absence of a stay
pending appeal shall be considered for purposes of determining whether the
foregoing condition has been satisfied only if ADAH concludes, in its
reasonable discretion, that the appeal would be rendered moot under the
doctrine of “equitable mootness” as a result of the occurrence of the Effective
Date.
	 
	 	(viii)	 	[Reserved]
	 
	 	(ix)	 	Conditions to Effective Date. The conditions to the
occurrence of the Effective Date of the Confirmed Plan shall have been
satisfied or waived by the Company and ADAH in accordance with the Plan.
	 
	 	(x)	 	Rights Offering Registration Statement. The Rights
Offering Registration Statement shall be effective not later than the Rights
Distribution Date and

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	 	 	 	no stop order shall have been entered by the Commission with respect
thereto.
	 
	 	(xi)	 	Rights Offering. The Rights Offering shall have been
conducted in all material respects in accordance with this Agreement and the
Disclosure Statement and the Expiration Time shall have occurred.
	 
	 	(xii)	 	Purchase Notice. Each of the Investors shall have
received a Purchase Notice from the Company, dated as of the Determination
Date, certifying as to the number of Unsubscribed Shares to be purchased or a
Satisfaction Notice.
	 
	 	(xiii)	 	Antitrust Approvals. All terminations or expirations of waiting
periods imposed by any governmental or regulatory authority necessary for the
consummation of the transactions contemplated by this Agreement, including
under the HSR Act and any comparable regulations in any foreign jurisdiction,
shall have occurred and all other notifications, consents, authorizations and
approvals required to be made or obtained from any competition or antitrust
authority shall have been made or obtained for the transactions contemplated by
this Agreement.
	 
	 	(xiv)	 	Consents. All other governmental and third party
notifications, filings, consents, waivers and approvals required for the
consummation of the transactions contemplated by this Agreement, the Preferred
Term Sheet, the Plan Terms and the Plan shall have been made or received.
	 
	 	(xv)	 	No Legal Impediment to Issuance. No action shall have
been taken and no statute, rule, regulation or order shall have been enacted,
adopted or issued by any federal, state or foreign governmental or regulatory
authority, and no judgment, injunction, decree or order of any federal, state
or foreign court shall have been issued, that prohibits the implementation of
the Plan or the Rights Offering or the transactions contemplated by this
Agreement, the Preferred Term Sheet, the Plan Terms and the GM Settlement.
	 
	 	(xvi)	 	Representations and Warranties. The representations
and warranties of Company contained in this Agreement shall be true and correct
(disregarding all qualifications and exceptions contained therein relating to
materiality, Material Adverse Effect or similar qualifications, other than such
qualifications contained in Sections 3(i) and 3(j)) as of the
Disclosure Letter Delivery Date and as of the Closing Date with the same effect
as if made on and as of the Disclosure Letter Delivery Date and the Closing
Date (except for representations and warranties made as of a specified date,

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	 	 	 	which shall be true and correct only as of the specified date), except where
the failure to be so true and correct, individually or in the aggregate, has
not had, and would not reasonably be expected to have, a Material Adverse
Effect, other than with respect to the representations in Sections
3(b), 3(c), 3(d), 3(e) and 3(m)(ii) and
3(oo), which shall be true and correct in all respects. The
representations and warranties of each Investor (other than the Investor
asserting the failure of this condition) contained in this Agreement and in
any other document delivered pursuant to this Agreement shall be true and
correct (disregarding all qualifications and exceptions contained therein
relating to materiality or material adverse effect on the Investor’s
performance of its obligations or similar qualifications) as of the
Disclosure Letter Delivery Date and as of the Closing Date with the same
effect as if made on the Disclosure Letter Delivery Date and the Closing
Date (except for the representations and warranties made as of a specified
date which shall be true and correct only as of such specified date); except
where the failure to be so true and correct, individually or in the
aggregate, has not and would not reasonably be expected, to prohibit,
materially delay or materially and adversely impact the Investor’s
performance of its obligations under this Agreement.
	 
	 	(xvii)	 	Covenants. The Company and each Investor (other than the Investor
asserting the failure of this condition) shall have performed and complied with
all of its covenants and agreements contained in this Agreement and in any
other document delivered pursuant to this Agreement (including in any
Transaction Agreement) in all material respects through the Closing Date.
	 
	 	(xviii)	 	[Reserved]
	 
	 	(xix)	 	Financing. 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 Plan
Terms, the GM Settlement (to the extent the Company is to fund such
transactions) and the Plan.
	 
	 	(xx)	 	[Reserved]
	 
	 	(xxi)	 	Management Compensation. The Company shall have (i)
entered into employment agreements and other compensation arrangements with
senior management of the Company relating to compensation, benefits,
supplemental retirement benefits, stock options and restricted stock
awards, severance and change in control provisions and other benefits on

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	 	 	 	market terms (as determined by the Company’s board of directors based on the
advice of Watson-Wyatt and reasonably acceptable to ADAH); and (ii) resolved
any claims of former executive officers, or executive officers that have
resigned or been terminated, on terms acceptable to ADAH or otherwise
ordered by the Bankruptcy Court.
	 
	 	(xxii)	 	[Reserved]
	 
	 	(xxiii)	 	[Reserved]
	 
	 	(xxiv)	 	[Reserved]
	 
	 	(xxv)	 	[Reserved]
	 
	 	(xxvi)	 	No Strike. There shall not have occurred any material strike or
material labor stoppage or slowdown involving the UAW, IUE-CWA or USW at either
GM or the Company or any of their respective Subsidiaries. There shall not
have occurred any strike, labor stoppage or slowdown involving the UAW, IUE-CWA
or USW at either Ford Motor Company or Chrysler Group (or its successors) or
any of their respective subsidiaries that would have a material impact on the
Investors’ proposed investment in the Company.
	 
	 	(xxvii)	 	Capitalization. As of the Closing Date and giving effect to the
transactions contemplated by the Plan, (i) the Company’s Net Amount shall not
exceed by more than $250 million the Net Amount set forth in the final Business
Plan satisfying the condition with respect to the Business Plan set forth in
Section 9(a)(xxviii) of this Agreement; (ii) the Company’s share
capital shall be consistent with the last three sentences of Section 3(d);
(iii) the Company’s accounts payable to trade creditors and accrued expenses
shall be in amounts consistent with the final Business Plan satisfying the
condition with respect to the Business Plan set forth in Section
9(a)(xxviii) of this Agreement, and shall have been incurred in the
ordinary course of business consistent with past practice; and (iv) ADAH shall
have received from Delphi a certificate of a senior executive officer with
knowledge of the foregoing to the effect set forth in clauses (i), (ii) and
(iii) with reasonably detailed supporting documentation to support such amount.
“Net Amount” shall mean: (i) the sum of (A) Indebtedness; (B) the
actuarially determined amount of pension plan contributions required, pursuant
to ERISA to be made by the Company to its U.S. Hourly Rate Pension Plan from
and after the Closing Date through
December 31, 2008; and (C) all other accrued or contingent liabilities

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	 	 	 	(excluding pension and salaried OPEB liabilities on the Company’s balance
sheet and accounts payable and accrued expenses referred to in the preceding
sentence); less (ii) the Company’s cash on hand as of the Closing Date. In
addition, as of the Closing Date and giving effect to the transactions
contemplated by the Plan the sum of (A) and (B), less (ii), shall not exceed
$7,159 million by more than $250 million. “Indebtedness” shall
mean: (i) indebtedness for borrowed money or indebtedness issued or incurred
in substitution or exchange for indebtedness for borrowed money, (ii)
indebtedness evidenced by any note, bond, debenture, mortgage or other debt
instrument or debt security, (iii) commitments or obligations assuring a
creditor against loss (including contingent reimbursement obligations with
respect to letters of credit), (iv) indebtedness described in clauses
(i)-(iii) secured by an encumbrance on any assets or properties of the
Company or any of its Subsidiaries, (v) guarantees or other contingent
liabilities (including so called take-or-pay or keep-well agreements) with
respect to any Indebtedness, obligation or liability of a type described in
clauses (i) through (iv) above, and (vi) for clauses (i) through (iv) above,
all accrued interest thereon and all penalty payments, premiums, charges,
yield maintenance amounts and other expenses relating to any prepayment of
any obligations related thereto. For the purpose of this Section
9(a)(xxvii) cash, Indebtedness and liabilities shall be determined in
accordance with GAAP applied on a basis consistent with the Company’s
financial statements included in the Company SEC Documents filed prior to
the date hereof, and shall be determined on the basis that all required
pension plan contributions to be made by the Company or any of its
Subsidiaries pursuant to any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory
authority or any requirement of the GM Settlement any labor agreement or any
other contract, agreement, arrangement or understanding prior to or
contemporaneous with the Effective Time, shall have been made, whether or
not they have actually been made.
	 
	 	(xxviii)	 	Plan and Material Investment Documents.

	 	(A)	 	(i) The Company shall have delivered to ADAH
and ADAH shall have made the determination referred to in Section
9(a)(xxviii)(B) with respect to, at each Relevant Date, (1) the Plan
and any related documents, agreements and arrangements (A) the terms of
which are consistent in all material respects with this Agreement, the
Preferred Term Sheet, the Plan Terms and GM Settlement, (B) that
provide for the release and exculpation of each Investor, its
Affiliates, shareholders, partners, directors, officers, employees and
advisors from any liability for participation of the transactions
contemplated by the Original Agreement, this Agreement, the
Original PSA, the Plan Terms and the Plan to the fullest extent

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	 	 	 	permitted under applicable law (provided, that such release
and exculpation 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) and (C) that have
conditions to confirmation and the Effective Date of the Plan (and to
what extent such conditions can be waived and by whom) that are
consistent with this Agreement, the Preferred Term Sheet, the Plan
Terms and the GM Settlement and (2) all Material Investment
Documents. The term “Material Investment Documents” shall
mean the Confirmation Order, the Disclosure Statement, the Rights
Offering Registration Statement, the GM Settlement, any amendments
and/or supplements to the Draft Business Plan, the Business Plan, any
amendments and/or supplements to the UAW MOU, the labor agreements
with the IUE-CWA and the USW, the Amended and Restated Constituent
Documents, the Series A Certificate of Designations, the Series B
Certificate of Designations, the Shareholders Agreement, the
Registration Rights Agreement, the Transaction Agreements and any
amendments and/or supplements to the foregoing. The term
“Relevant Date” shall mean the Disclosure Statement Filing
Date, the Disclosure Statement Approval Date, the date of issuance of
the Confirmation Order and the Closing Date.
	 
	 	 	 	(ii) With respect to any Material Investment Document entered into in
satisfaction of the condition set forth in Section
9(a)(xxviii), and the UAW MOU, at each Relevant Date (i) such
Material Investment Document, or the UAW MOU, as the case may be,
shall have been ratified by the union membership (but only with
respect to the labor agreements with IUE-CWA and USW) and 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 Material Investment Document and the UAW MOU, as
the case may be, 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
satisfying the condition with respect to the Business Plan set forth
in this Section 9(a)(xxviii) shall not have been rescinded or
repudiated in any material respect by the Company or its Board of
Directors.
	 
	 	(B)	 	With respect to the documents referred to in
Section 9(a)(xxviii)(A)(i) (other than the GM Settlement),
ADAH shall have determined 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; provided, that

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	 	 	 	with respect to the GM Settlement ADAH shall have determined
that it is satisfied with the GM Settlement 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 clause (A) above
shall be deemed to have been conclusively satisfied without further
action by any Party unless:

	 	(1)	 	with respect to the Plan, any
related documents, agreements and arrangements and any Material
Investment Documents, in each case delivered to ADAH by the
Company prior to the Disclosure Statement Filing Date, ADAH
shall have delivered (and have not withdrawn) a written
deficiency notice to the Company reasonably asserting with
reasonable specificity that such condition was not satisfied
prior to the Disclosure Statement Approval Date, and the Company
shall not have cured such deficiency within twenty (20) days of
the Company’s receipt of such notice (the “Cure
Period”);
	 
	 	(2)	 	with respect to any amendments or
supplements to the Plan, any related documents, agreements and
arrangements, or any Material Investment Documents delivered to
ADAH by the Company occurring after the Disclosure Statement
Filing Date and prior to the Disclosure Statement Approval Date,
ADAH has delivered (and has not withdrawn), a written deficiency
notice to the Company reasonably asserting with reasonable
specificity that such condition was not satisfied prior to the
Disclosure Statement Approval Date, and the Company shall not
have cured such deficiency during the Cure Period;
	 
	 	(3)	 	with respect to any amendments or
supplements to the Plan, any related documents, agreements and
arrangements, or any Material Investment Documents delivered to
ADAH by the Company after the Disclosure Statement Approval Date
and prior to the date of issuance of the Confirmation Order,
ADAH has delivered (and has not withdrawn) a written deficiency
notice to the Company asserting with reasonable specificity that
such condition was not satisfied prior to the date of issuance
of the Confirmation Order, and the

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	 	 	 	Company shall not have cured such deficiency during the Cure
Period; and
	 
	 	(4)	 	with respect to any amendments or
supplements to the Plan, any related documents, agreements and
arrangements, or any Material Investment Documents 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 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.

	 	(D)	 	The Company shall have delivered, and ADAH
shall have accepted, a Disclosure Letter in accordance with Section
5(s).

	 	(b)	 	All or any of the conditions set forth in Section 9(a) may be waived in
whole or in part with respect to all Investors by ADAH in its sole discretion.
	 
	 	(c)	 	The obligation of the Company to issue and sell the Investor Shares are subject
to the following conditions, provided that the failure of a condition set forth in
Sections 9(c)(vii) through (x) to be satisfied may not be asserted by
the Company if such failure results from the failure of the Company to fulfill an
obligation hereunder:

	 	(i)	 	Approval Order. The Approval Order shall have become a
Final Approval Order.
	 
	 	(ii)	 	Antitrust Approvals. All terminations or expirations
of waiting periods imposed by any governmental or regulatory authority
necessary for the consummation of the transactions contemplated by this
Agreement, including under the HSR Act and any comparable regulations in any
foreign jurisdiction, shall have occurred and all other notifications,
consents, authorizations and approvals required to be made or obtained from any
competition or antitrust authority shall have been made or obtained for the
transactions contemplated by this Agreement.
	 
	 	(iii)	 	No Legal Impediment to Issuance. No action shall have
been taken and no statute, rule, regulation or order shall have been enacted,
adopted or issued

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	 	 	 	by any federal, state or foreign governmental or regulatory authority, and
no judgment, injunction, decree or order of any federal, state or foreign
court shall have been issued, that prohibits the implementation of the Plan
or the Rights Offering or the transactions contemplated by this Agreement,
the Preferred Term Sheet, the Plan Terms and the GM Settlement.
	 
	 	(iv)	 	Representations and Warranties. The representations
and warranties of each Investor, each Related Purchaser and each Ultimate
Purchaser to the Company contained in this Agreement or pursuant to
Sections 2(a), 2(b) or 2(k) shall be true and correct
(disregarding all qualifications and exceptions contained therein relating to
materiality or material adverse effect on the Investor’s performance of its
obligations or similar qualifications) as of the Disclosure Letter Delivery
Date and as of the Closing Date with the same effect as if made on the
Disclosure Letter Delivery Date and the Closing Date (except for the
representations and warranties made as of a specified date, which shall be true
and correct only as of such specified date), except with respect to the
Investors’ representations in all Sections other than Sections 4(b) and
4(c) where the failure to be so true and correct, individually or in
the aggregate, has not and would not reasonably be expected, to prohibit,
materially delay or materially and adversely impact the Investor’s performance
of its obligations under this Agreement.
	 
	 	(v)	 	Covenants. Each Investor shall have performed and
complied with all of its covenants and agreements contained in this Agreement
and in any other document delivered pursuant to this Agreement (including in
any Transaction Agreement) in all material respects through the Closing Date.
	 
	 	(vi)	 	Bankruptcy Court Approval. This Agreement shall have
been approved by the Bankruptcy Court and the approval of the Bankruptcy Court
shall not have been modified, amended or withdrawn in any manner adverse to the
Company.
	 
	 	(vii)	 	Confirmation Order. The Confirmation Order approving
the Plan shall have been entered by the Bankruptcy Court and such order shall
be non-appealable, shall not have been appealed within ten calendar days of
entry or, if such order is appealed, shall not have been stayed pending appeal,
and there shall not have been entered by any court of competent jurisdiction
any reversal, modification or vacation, in whole or in part, of such order;
provided, that the absence of a stay pending appeal shall be considered for
purposes of determining whether the foregoing condition has been satisfied only
if the Company concludes, in its sole discretion, that the appeal would be
rendered moot under the doctrine of “equitable mootness” as a result of the
occurrence of the Effective Date.

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	 	(viii)	 	Conditions to Effective Date. The conditions to the occurrence of
the Effective Date of the Confirmed Plan shall have been satisfied or waived by
the Company and ADAH in accordance with the Plan.
	 
	 	(ix)	 	Rights Offering. The Rights Offering shall have been
conducted in all material respects in accordance with this Agreement and the
Disclosure Statement and the Expiration Time shall have occurred.
	 
	 	(x)	 	Financing. 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 Plan
Terms, the GM Settlement (to the extent the Company is to fund such
transactions) and the Plan.

	 	(d)	 	All of the conditions set forth in Section 9(c) may be waived in whole
or in part by the Company in its sole discretion.

10. Indemnification and Contribution.

	 	(a)	 	Whether or not the Rights Offering is consummated or this Agreement is
terminated or the transactions contemplated hereby or the Plan are consummated, the
Company (in such capacity, the “Indemnifying Party”) shall indemnify and hold
harmless each Investor and the Ultimate Purchasers, their respective Affiliates and
their respective officers, directors, employees, agents and controlling persons (each,
an “Indemnified Person”) from and against any and all losses, claims, damages,
liabilities and reasonable expenses, joint or several, arising out of circumstances
existing on or prior to the Closing Date (“Losses”) to which any such
Indemnified Person may become subject arising out of or in connection with any claim,
challenge, litigation, investigation or proceeding (“Proceedings”) instituted
by a third party with respect to the Rights Offering, this Agreement or the other
Transaction Documents, the Rights Offering Registration Statement, any Preliminary
Rights Offering Prospectus, the Rights Offering Prospectus, any Issuer Free Writing
Prospectus, the Investment Decision Package, the Resale Registration Documents, any
amendment or supplement thereto or the transactions contemplated by any of the
foregoing and shall reimburse such Indemnified Persons for any reasonable legal or
other reasonable out-of-pocket expenses as they are incurred in connection with
investigating, responding to or defending any of the foregoing; provided that
the foregoing indemnification will not apply to Losses (i) arising out of or in
connection with any Proceedings between or among any one or more Indemnified Persons,
Related Purchasers and/or Ultimate Purchasers, any Additional Investor Agreement or the
failure of such Indemnified Person to comply with the

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	 	 	 	covenants and agreements contained in this Agreement with respect to the sale or
placement of Investor Shares; or (ii) to the extent that they resulted from (a) any
breach by such Indemnified Person of this Agreement, (b) gross negligence, bad faith
or willful misconduct on the part of such Indemnified Person or (c) statements or
omissions in the Rights Offering Registration Statement, any Preliminary Rights
Offering Prospectus, the Rights Offering Prospectus, any Issuer Free Writing
Prospectus, the Resale Registration Documents or any amendment or supplement thereto
made in reliance upon or in conformity with information relating to such Indemnified
Person furnished to the Company in writing by or on behalf of such Indemnified
Person expressly for use in the Rights Offering Registration Statement, any Rights
Offering Preliminary Prospectus, the Rights Offering Prospectus, any Issuer Free
Writing Prospectus, the Resale Registration Documents or any amendment or supplement
thereto. If for any reason the foregoing indemnification is unavailable to any
Indemnified Person or insufficient to hold it harmless, then the Indemnifying Party
shall contribute to the amount paid or payable by such Indemnified Person as a
result of such Losses in such proportion as is appropriate to reflect not only the
relative benefits received by the Indemnifying Party on the one hand and such
Indemnified Person on the other hand but also the relative fault of the Indemnifying
Party on the one hand and such Indemnified Person on the other hand as well as any
relevant equitable considerations. It is hereby agreed that the relative benefits
to the Indemnifying Party on the one hand and all Indemnified Persons on the other
hand shall be deemed to be in the same proportion as (i) the total value received or
proposed to be received by the Company pursuant to the sale of the Shares and the
Investor Shares contemplated by this Agreement bears to (ii) the Commitment Fees
paid or proposed to be paid to the Investors. The indemnity, reimbursement and
contribution obligations of the Indemnifying Party under this Section 10
shall be in addition to any liability that the Indemnifying Party may otherwise have
to an Indemnified Person and shall bind and inure to the benefit of any successors,
assigns, heirs and personal representatives of the Indemnifying Party and any
Indemnified Person.
	 
	 	(b)	 	Promptly after receipt by an Indemnified Person of notice of the commencement
of any Proceedings with respect to which the Indemnified Person may be entitled to
indemnification hereunder, such Indemnified Person will, if a claim is to be made
hereunder against the Indemnifying Party in respect thereof, notify the Indemnifying
Party in writing of the commencement thereof; provided that (i) the omission so
to notify the Indemnifying Party will not relieve the Indemnifying Party from any
liability that it may have hereunder except to the extent it has been materially
prejudiced by such failure and (ii) the omission so to notify the Indemnifying Party
will not relieve it from any liability that it may have to an Indemnified Person
otherwise than on account of this Section 10. In case any such Proceedings are
brought against any Indemnified Person and it notifies the Indemnifying Party of the
commencement thereof, the Indemnifying Party will be entitled to participate therein,
and, to the extent that it may elect by written notice delivered to such Indemnified
Person, to assume the defense thereof, with counsel

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	 	 	 	reasonably satisfactory to such Indemnified Person; provided that if
the defendants in any such Proceedings include both such Indemnified Person and the
Indemnifying Party and such Indemnified Person shall have concluded that there may
be legal defenses available to it that are different from or additional to those
available to the Indemnifying Party, such Indemnified Person shall have the right to
select separate counsel to assert such legal defenses and to otherwise participate
in the defense of such Proceedings on behalf of such Indemnified Person. Upon
receipt of notice from the Indemnifying Party to such Indemnified Person of its
election so to assume the defense of such Proceedings and approval by such
Indemnified Person of counsel, the Indemnifying Party shall not be liable to such
Indemnified Person for expenses incurred by such Indemnified Person in connection
with the defense thereof (other than reasonable costs of investigation) unless (i)
such Indemnified Person shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the Indemnifying Party shall not be
liable for the expenses of more than one separate counsel in any jurisdiction,
approved by the Investors, representing the Indemnified Persons who are parties to
such Proceedings), (ii) the Indemnifying Party shall not have employed counsel
reasonably satisfactory to such Indemnified Person to represent such Indemnified
Person within a reasonable time after notice of commencement of the Proceedings or
(iii) the Indemnifying Party shall have authorized in writing the employment of
counsel for such Indemnified Person.
	 
	 	(c)	 	The Indemnifying Party shall not be liable for any settlement of any
Proceedings effected without its written consent (which consent shall not be
unreasonably withheld). If any settlement of any Proceeding is consummated with the
written consent of the Indemnifying Party or if there is a final judgment for the
plaintiff in any such Proceedings, the Indemnifying Party agrees to indemnify and hold
harmless each Indemnified Person from and against any and all Losses by reason of such
settlement or judgment in accordance with, and subject to the limitations of, the
provisions of this Section 10. Notwithstanding anything in this Section
10 to the contrary, if at any time an Indemnified Person shall have requested the
Indemnifying Party to reimburse such Indemnified Person for legal or other expenses
aggregating in excess of $250,000 in connection with investigating, responding to or
defending any Proceedings in connection with which it is entitled to indemnification or
contribution pursuant to this Section 10, the Indemnifying Party shall be
liable for any settlement of any Proceedings effected without its written consent if
(i) such settlement is entered into more than (x) 60 days after receipt by the
Indemnifying Party of such request for reimbursement and (y) 30 days after receipt by
the Indemnified Person of the material terms of such settlement and (ii) the
Indemnifying Party shall not have reimbursed such Indemnified Person in accordance with
such request prior to the date of such settlement. The Indemnifying Party shall not,
without the prior written consent of an Indemnified Person (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened Proceedings
in respect of which
indemnity has been sought hereunder by such Indemnified Person unless (i) such

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	 	 	 	settlement includes an unconditional release of such Indemnified Person in form and
substance satisfactory to such Indemnified Person from all liability on the claims
that are the subject matter of such Proceedings and (ii) such settlement does not
include any statement as to or any admission of fault, culpability or a failure to
act by or on behalf of any Indemnified Person.
	 
	 	(d)	 	All amounts paid by the Company to an Indemnified Person under this Section
10 shall, to the extent the transactions contemplated hereby or the Plan are
consummated and to the extent permitted by applicable law, be treated as adjustments to
Purchase Price for all Tax purposes.

	11.	 	Survival of Representations and Warranties, Etc.

	 	(a)	 	The representations and warranties made in this Agreement shall not survive the
Closing Date. Other than Sections 2(b), 2(c), 2(e),
2(h), 2(i), 2(j), 2(k), 5(d), 5(e),
5(f), 5(j), 5(k), 5(l), 5(m), 10,
11, 13, 14, 15, 16, 18 and 20,
which shall survive the Closing Date in accordance with their terms (except Section
5(l) which shall survive for 90 days following the Closing Date), the covenants
contained in this Agreement shall not survive the Closing Date.
	 
	 	(b)	 	Other than with respect to Sections 2(h), 2(i) and 2(j)
and Sections 10 through 18, which shall continue and survive any
termination of this Agreement, (i) none of the Investors may assert any claim against
the Company (both as Debtors-in-possession or the reorganized Debtors), and the Company
(both as Debtors-in-possession or the reorganized Debtors), may not assert any claim
against any Investor, in either case, arising from this Agreement other than for
willful breach, and (ii) the Investors hereby release the Company (both as
Debtors-in-possession and the reorganized Debtors) from any such claims, and the
Company (both as Debtors-in-possession or the reorganized Debtors) hereby releases the
Investors from any such claims. Notwithstanding the foregoing (w) the aggregate
liability of all of the Investors under this Agreement for any reason (under any legal
theory), including for any willful breach, for any act or omission occurring on or
prior to the Disclosure Statement Approval Date shall not exceed $100 million, (x) the
aggregate liability of all of the Investors under this Agreement for any reason (under
any legal theory), including for any willful breach, for any act or omission occurring
after the Disclosure Statement Approval Date shall not exceed $250 million, (y) the
aggregate liability of all of the Debtors under this Agreement for any reason (under
any legal theory), including for any willful breach, for any act or omission occurring
on or prior to the Disclosure Statement Approval Date shall not exceed $100 million,
and (z) the aggregate liability of all of the Debtors under this Agreement for any
reason (under any legal theory), including for any willful breach, for any act or
omission occurring after the Disclosure Statement Approval Date shall not exceed $250
million. Notwithstanding the foregoing, nothing
contained in this Section 11(b) shall limit the liability of the Company for any

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	 	 	 	Transaction Expenses pursuant to Section 2(j) or 12(g). The
Investors and the Company acknowledge that such liability under subclauses (w) and
(x) shall be on a several and not joint basis with respect to any willful breach
occurring on or prior to the Disclosure Statement Filing Date. The Investors and
the Company acknowledge and agree that such liability under subclauses (w) and (x)
shall be on a joint and several basis with respect to any willful breach occurring
after the Disclosure Statement Filing Date; provided, that the aggregate
liability of Harbinger shall not exceed $38,944,000, the aggregate liability of
Merrill shall not exceed $16,358,805, the aggregate liability of UBS shall not
exceed $16,358,805, the aggregate liability of GS shall not exceed $39,215,500 and
the aggregate liability of Pardus shall not exceed $33,593,000. Subject to the
terms, conditions and limitation set forth in this Section 11(b), (i) the
joint and several obligations referred to in the immediately preceding sentence mean
that each Investor (an “Assuming Investor”) assumes liability on a joint and
several basis for any willful breach of this Agreement by any other Investor (a
“Breaching Investor”), whether or not the Assuming Investor has breached
this Agreement or is in any way responsible for such willful breach by the Breaching
Investor and (ii) the Assuming Investors’ obligations shall be a commitment to
assure payment, not collection. Under no circumstances shall any Investor be liable
to the Company (as Debtors-in-possession or reorganized Debtors) for any punitive
damages under this Agreement or any Equity Commitment Letter. Under no
circumstances shall the Company (both as Debtors-in-possession and reorganized
Debtors) be liable to any Investor for any punitive damages under this Agreement.

	12.	 	Termination. This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing Date:

	 	(a)	 	by mutual written consent of the Company and ADAH;
	 
	 	(b)	 	by any Investor if any of the Chapter 11 Cases shall have been dismissed or
converted to a case under chapter 7 of the Bankruptcy Code, or an interim or permanent
trustee shall be appointed in any of the Chapter 11 Cases, or a responsible officer or
an examiner with powers beyond the duty to investigate and report (as set forth in
Sections 1106(a)(3) and (4) of the Bankruptcy Code) shall be appointed in any of the
Chapter 11 Cases;
	 
	 	(c)	 	by any party to this Agreement if any statute, rule, regulation or order shall
have been enacted, adopted or issued by any federal, state or foreign governmental or
regulatory authority or any judgment, injunction, decree or order of any federal, state
or foreign court shall have become final and non-appealable, that prohibits the
implementation of the Plan or the Rights Offering or the transactions
contemplated by this Agreement, the Preferred Term Sheet, the Plan Terms or the GM
Settlement;

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	 	(d)	 	by ADAH upon written notice to the Company and each other Investor:

	 	(i)	 	if the Approval Order has not become a Final Approval Order on
or prior to the earlier of (A) the tenth (10th) day after the Bankruptcy Court
enters the Approval Order, or, if such day is not a Business Day, the next
Business Day and (B) August 16, 2007; provided, that notice of
termination pursuant to this Section 12(d)(i) must be given on or prior
to August 31, 2007;
	 
	 	(ii)	 	at any time prior to the last date established by the
Bankruptcy Court for the filing of objections to the Disclosure Statement, if
the Company shall not have delivered a Disclosure Letter as contemplated by
Section 5(s) on or prior to the tenth (10th) Business Day
preceding the Disclosure Statement Filing Date or shall have delivered a
Disclosure Letter which shall not have satisfied the condition with respect to
the Disclosure Letter in accordance with Section 9(a)(xxviii).
	 
	 	(iii)	 	on or after March 31, 2008 (such date, being the “Closing
Date Outside Date”); provided that the Closing Date has not
occurred by such date;
	 
	 	(iv)	 	on or after January 31, 2008 (such date, being the
“Disclosure Statement Outside Date”);
provided that the Disclosure Statement has not been filed for approval with the
Bankruptcy Court by such date;
	 
	 	(v)	 	if the Company or any Investor shall have breached any
provision of this Agreement, which breach would cause the failure of any
condition set forth in Section 9(a)(xvi) or (xvii) hereof to be
satisfied, which failure cannot be or has not been cured on the earliest of (A)
the tenth (10th) Business Day after the giving of written notice thereof to the
Company or such Investor by any Investor and (B) the third (3rd) Business Day
prior to the Closing Date Outside Date; provided, that the right to
terminate this Agreement under this Section 12(d)(v) shall not be
available to any Investor whose breach is the cause of the failure of the
condition in Section 9(a)(xvi) or (xvii) to be satisfied;
provided, further, that the right to terminate under this
Section 12(d)(v) shall not be available as a result of a breach of
Section 5(o) to the extent, and only to the extent, that the
circumstances giving rise to the breach of Section 5(o) previously gave
rise to a termination right under Section 12(d)(vii) and ADAH did not
exercise such termination right under Section 12(d)(vii) by the end
of the twenty (20) day period referred to therein;

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	 	(vi)	 	(A) there shall have been a Change of Recommendation or (B) the
Company shall have entered into an Alternate Transaction Agreement; or
	 
	 	(vii)	 	for a period of twenty (20) days following any Cure Period if
ADAH has delivered a deficiency notice in accordance with Section
9(a)(xxviii)(C) and the condition set forth in Section 9(a)(xxviii)
shall not have been satisfied at the end of such Cure Period;

	 	 	 	provided, that notwithstanding anything in the foregoing to the
contrary, any Investor other than ADAH shall be entitled to terminate this Agreement
as to itself (but not as to any other party) at any time on or after June 30, 2008
(a “Limited Termination”);
	 
	 	(e)	 	[Reserved]
	 
	 	(f)	 	by the Company upon written notice to each Investor:

	 	(i)	 	subject to the establishment of Alternative Financing in
accordance with Section 2(b), if any Investor shall have breached any
provision of this Agreement, which breach would cause the failure of any
condition set forth in Section 9(c)(iv) or (v) hereof to be
satisfied, which failure cannot be or has not been cured on the earliest of (A)
the tenth (10th) Business Day after the giving of written notice thereof to the
Investors by the Company and (B) the third (3rd) Business Day prior to the
Closing Date Outside Date;
	 
	 	(ii)	 	if the Company enters into any Alternate Transaction Agreement;
provided, that the Company may only terminate this Agreement under the
circumstances set forth in this Section 12(f)(ii) if: (x) the
Company’s board of directors has determined in good faith, after having
consulted with its outside legal counsel and its independent financial
advisors, that such Alternate Transaction is a Superior Transaction and the
failure to enter into such an Alternate Transaction Agreement would result in a
breach of the applicable fiduciary duties of the board of directors, (y) before
taking such action the Company has given the Investors at least ten (10)
Business Days’ (or, in the event of any Alternate Transaction that has been
materially revised or modified, at least five (5) Business Days’) prior written
notice (the “Consideration Period”) of the terms of such
Alternate Transaction and of its intent to take such action, and, during the
Consideration Period, the Company has, if requested by any Investor, engaged
in good faith negotiations regarding any revisions to this Agreement, the
Plan or any other agreement or document proposed by

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	 	 	 	ADAH and
again has determined in good faith, after consultation with its outside
legal counsel and its independent financial advisors, that such Alternate
Transaction remains a Superior Transaction and (z) prior to or
contemporaneously with such termination the Company shall pay to the
Investors the Alternate Transaction Fee;
	 
	 	(iii)	 	on or after March 31, 2008; provided, that the Closing
Date has not occurred by such date; or
	 
	 	(iv)	 	in accordance with Section 5(t).

For the purposes of this Section 12(f), a “Superior
Transaction” shall mean an Alternate Transaction, which the board of directors
of the Company, after consultation with its outside legal counsel and its
independent financial advisors, determines in good faith to be more favorable to the
bankruptcy estate of the Company than the transactions contemplated by this
Agreement, the Preferred Term Sheet, the Plan Terms and the Plan, taking into
account, all legal, financial, regulatory and other aspects of such Alternate
Transaction, the likelihood of consummating the Alternate Transaction, the likely
consummation date of the Alternate Transaction and the identity of the parties or
proposed parties to such Alternate Transaction and after taking into account any
revisions to the terms of this Agreement, the Plan and/or any other agreement or
document proposed during the Consideration Period.

	 	(g)	 	In addition to any other rights or remedies any Investor may have under this
Agreement (for breach or otherwise), the Company shall pay a fee of $82,500,000 (the
“Alternate Transaction Fee”) to the Investors in such proportions as are set
forth on Schedule 2 hereto, and, in any case, the Company shall pay to the
Investors any Transaction Expenses and any other amounts certified by the Investors to
be due and payable hereunder that have not been paid theretofore if this Agreement is
terminated pursuant to one of the following:

	 	(i)	 	pursuant to (x) Section 12(d)(vi)(B) or (y) Section
12(f)(ii);
	 
	 	(ii)	 	pursuant to Section 12(d)(vi)(A) and, within the
twenty-four (24) month period following the date of such termination, an
Alternate Transaction Agreement is entered into or an Alternate Transaction is
consummated; or
	 
	 	(iii)	 	pursuant to Section 12(d)(v) based on a willful breach
by the Company and within the twenty-four (24) month period following the date
of such

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	 	 	 	termination, an Alternate Transaction Agreement is entered into or an
Alternate Transaction is consummated.

	 	 	 	Payment of the amounts due under this Section 12(g) will be made (i) no
later than the close of business on the next Business Day following the date of such
termination in the case of a payment pursuant to Section 12(g)(i)(x), (ii)
prior to or contemporaneously with such termination by the Company in the case of a
payment pursuant to Section 12(g)(i)(y) and (iii) prior to or
contemporaneously with the entry into an Alternate Transaction Agreement or the
consummation of an Alternate Transaction in the case of a payment pursuant to
Sections 12(g)(ii) or (iii). Under no circumstances shall the
Company be required to pay more than one Alternate Transaction Fee plus Transaction
Expenses. The provision for the payment of the Alternate Transaction Fee is an
integral part of the transactions contemplated by this Agreement and without this
provision the Investors would not have entered into this Agreement and shall
constitute an allowed administrative expense of the Company under Section 503(b)(1)
and 507(a)(1) of the Bankruptcy Code.
	 
	 	(h)	 	Upon termination under this Section 12, all rights and obligations of
the parties under this Agreement shall terminate without any liability of any party to
any other party except that (x) nothing contained herein shall release any party hereto
from liability for any willful breach and (y) the covenants and agreements made by the
parties herein in Sections 2(h), 2(i) and 2(j), and
Sections 10 through 18 will survive indefinitely in accordance with
their terms.

	13.	 	Notices. All notices and other communications in connection with this Agreement
will be in writing and will be deemed given if delivered personally, sent via electronic
facsimile (with confirmation), mailed by registered or certified mail (return receipt
requested) or delivered by an express courier (with confirmation) to the parties at the
following addresses (or at such other address for a party as will be specified by like
notice):

(a)    If to:

A-D Acquisition Holdings, LLC

c/o Appaloosa Management L.P.

26 Main Street

Chatham, New Jersey 07928

Facsimile: (973) 701-7055

Attention: James Bolin

with a copy to:

White & Case LLP

Wachovia Financial Center

200 South Biscayne Boulevard

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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

(b)    If to:

Harbinger Del-Auto Investment Company, Ltd.

c/o Harbinger Capital Partners Offshore Manager, LLC

555 Madison Avenue, 16th Floor

New York, NY 10022

Attn: Philip A. Falcone

with a copy to:

Harbert Management Corp.

One Riverchase Parkway South

Birmingham, AL 35244

Facsimile: (205) 987-5505

Attention: General Counsel

with a copy to:

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

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with a copy to:

Kaye Scholer LLP

425 Park Avenue

New York, NY 10022-3598

Facsimile: (212) 836-8689

Attention: Benjamin Mintz and Lynn Toby Fisher

(c)    If to:

Merrill Lynch, Pierce, Fenner & Smith Incorporated.

4 World Financial Center

New York, New York 10080

Facsimile: (212) 449-0769

Attention: Robert Spork / Rick Morris

with a copy to:

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

(d)   If to:

UBS Securities LLC

299 Park Avenue

New York, New York 10171

Facsimile: (212) 821-3008 / (212) 821-4042

Attention: Steve Smith / Osamu Watanabe

with a copy to:

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, New York 10006

Facsimile: (212) 225-3999

Attention: Leslie N. Silverman

(e)   If to:

Goldman Sachs & Co

1 New York Plaza

New York, NY 10004

Facsimile: (212) 823-0145

Attention: David Mullen / Tom Wagner

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with a copy to:

Goldman Sachs & Co.

1 New York Plaza

New York, NY 10004

Facsimile: (212) 428-4769

Attention: Sandip Khosla

with a copy to:

Sullivan & Cromwell

125 Broad Street

New York, NY 10004

Facsimile: (212) 558-3588

Attention: Robert Reeder

(f)    If to:

Pardus DPH Holding LLC

590 Madison Avenue

Suite 25E

New York, NY 10022

Facsimile: (212) 381-7771

Attention: Timothy Bass

with a copy to:

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, N.Y. 10019-6099

Facsimile: (212) 728-8111

Attention: Rachel C. Strickland

                Morgan D. Elwyn

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(g)   If to the Company, to:

Delphi Corporation

5725 Delphi Drive

Troy, Michigan 48098

Attention: John Sheehan – Facsimile: (248) 813-2612

                David Sherbin / Sean Corcoran – Facsimile: (248) 813-2491

with a copy to:

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

and

Skadden, Arps, Slate, Meagher & Flom LLP

333 West Wacker Drive

Chicago, IL 60606

Facsimile: (312) 407-0411

Attention: John Wm. Butler, Jr.

                George Panagakis

	14.	 	Assignment; Third Party Beneficiaries. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement 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 to an Ultimate Purchaser or to a Related Purchaser pursuant to Sections
2(a), 2(b) and 2(k). Notwithstanding the previous sentence, subject to
the provisions of Sections 2(a), 2(b) and 2(k): this Agreement, or
the Investors’ obligations hereunder, may be assigned, delegated or transferred, in whole or
in part, by any Investor to any Affiliate of such Investor over which such Investor or any
of its Affiliates exercise investment authority, including, without limitation, with respect
to voting and dispositive rights; provided, that any such assignee assumes the
obligations of such Investor hereunder and agrees in writing to be bound by the terms of
this Agreement in the same manner as such Investor. Notwithstanding the foregoing or any
other provisions herein, except pursuant to an Additional Investor Agreement acceptable to
the Company and ADAH no such assignment will relieve an Investor of its obligations
hereunder if such assignee fails to perform such obligations. Except as provided in
Section 10 with respect to the Indemnified Persons, this Agreement (including the
documents and instruments referred to in this Agreement) is not intended to and does not
confer upon any person other than the parties hereto any rights or remedies under this
Agreement.
	 
	15.	 	Prior Negotiations; Entire Agreement. This Agreement (including the agreements
attached as exhibits to and the documents and instruments referred to in this Agreement)

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	 	 	constitutes the entire agreement of the parties and supersedes all prior agreements,
arrangements or understandings, whether written or oral, between the parties with respect to
the subject matter of this Agreement,
except that the parties hereto acknowledge that any confidentiality agreements, heretofore
executed among the parties will continue in full force and effect.
	 
	16.	 	GOVERNING LAW; VENUE. THIS AGREEMENT WILL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. THE INVESTORS 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. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
	 
	17.	 	Counterparts. This Agreement may be executed in any number of counterparts, all
of which will be considered one and the same agreement and will become effective when
counterparts have been signed by each of the parties and delivered to the other party
(including via facsimile or other electronic transmission), it being understood that each
party need not sign the same counterpart.
	 
	18.	 	Waivers and Amendments. This Agreement may be amended, modified, superseded,
cancelled, renewed or extended, and the terms and conditions of this Agreement may be
waived, only by a written instrument signed by all the parties or, in the case of a waiver,
by the party waiving compliance, and subject, to the extent required, to the approval of the
Bankruptcy Court. No delay on the part of any party in exercising any right, power or
privilege pursuant to this Agreement will operate as a waiver thereof, nor will any waiver
on the part of any party of any right, power or privilege pursuant to this Agreement, nor
will any single or partial exercise of any right, power or privilege pursuant to this
Agreement, preclude any other or further exercise thereof or the exercise of any other
right, power or privilege pursuant to this Agreement. The rights and remedies provided
pursuant to this Agreement are cumulative and are not exclusive of any rights or remedies
which any party otherwise may have at law or in equity.
	 
	19.	 	Adjustment to Shares. If, in accordance with the terms of this Agreement, the
Company effects a reclassification, stock split (including a reverse stock split), stock
dividend or distribution, recapitalization, merger, issuer tender or exchange offer, or
other similar transaction with
respect to any shares of its capital stock, references to the numbers of such shares and the
prices therefore shall be equitably adjusted to reflect such change and,

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	 	 	as adjusted, shall,
from and after the date of such event, be subject to further adjustment in accordance
herewith.
	 
	20.	 	Headings. The headings in this Agreement are for reference purposes only and
will not in any way affect the meaning or interpretation of this Agreement.
	 
	21.	 	Publicity. The initial press release regarding this Agreement shall be a joint
press release. Thereafter, the Company and Investors each shall consult with each other
prior to issuing any press releases (and provide each other a reasonable opportunity to
review and comment upon such release) or otherwise making public announcements with respect
to the transactions contemplated by this Agreement and the Plan, and prior to making any
filings with any third party or any governmental entity (including any national securities
exchange or interdealer quotation service) with respect thereto, except as may be required
by law or by the request of any governmental entity.
	 
	22.	 	Knowledge; Sole Discretion. The phrase “knowledge of the Company” and
similar phrases shall mean the actual knowledge of the Chief Restructuring Officer of the
Company and such other officers as the Company and ADAH shall reasonably agree. Whenever in
this Agreement any party is permitted to take an action or make a decision in its “sole
discretion,” the parties hereto acknowledge that such party is entitled to make such decision
or take such action in such party’s sole and absolute and unfettered discretion and shall be
entitled to make such decision or take such action without regard for the interests of any
other party and for any reason or no reason whatsoever. Each party hereto acknowledges, and
agrees to accept, all risks associated with the granting to the other parties of the ability
to act in such unfettered manner.

[Signature Page Follows]

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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their
respective officers thereunto duly authorized, all as of the date first written above.

	 	 	 	 	 
	 	DELPHI CORPORATION

 	 
	 	By:  	/s/ DAVID M. SHERBIN	 
	 	 	Name:  	David M. Sherbin	 
	 	 	Title:  	Vice President, General Counsel, and 
Chief Compliance Officer	 
	 
	 	A-D ACQUISITION HOLDINGS, LLC

 	 
	 	By:  	/s/ JAMES E. BOLIN	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	HARBINGER DEL-AUTO INVESTMENT COMPANY, LTD.

 	 
	 	By:  	/s/ CHARLES D. MILLER	 
	 	 	Name:  	Charles D. Miller	 
	 	 	Title:  	Vice President	 
	 
	 	MERRILL LYNCH, PIERCE, FENNER & SMITH

INCORPORATED

 	 
	 	By:  	/s/ GRAHAM GOLDSMITH	 
	 	 	Name:  	Graham Goldsmith	 
	 	 	Title:  	Managing Director	 
	 

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	 	UBS SECURITIES LLC

 	 
	 	By:  	/s/ STEVEN SMITH	 
	 	 	Name:  	Steven Smith	 
	 	 	Title:  	Managing Director	 
	 
	 	 	 
	 	By:  	/s/ ANDREW KRAMER	 
	 	 	Name:  	Andrew Kramer	 
	 	 	Title:  	Managing Director	 
	 
	 	GOLDMAN SACHS & CO.

 	 
	 	By:  	/s/ JUSTIN SLATKY	 
	 	 	Name:  	Justin Slatky	 
	 	 	Title:  	Managing Director	 
	 
	 	PARDUS DPH HOLDING LLC

 	 
	 	By:  	/s/ JOSEPH THORNTON	 
	 	 	Name:  	Joseph Thornton	 
	 	 	Title:  	 	 

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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)
	Bankruptcy Code
	 	Recitals
	Bankruptcy Court
	 	Recitals
	Bankruptcy Rules
	 	Section 3 (b)(i)
	Breaching Investor
	 	Section 11 (b)
	Business Day
	 	Section 1 (c)(iii)
	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 Financing Proposal
	 	Section 5 (t)
	Company Plans
	 	Section 3 (z)(i)
	Company SEC Documents
	 	Section 3 (j)
	Confirmation Order
	 	Section 9 (a)(vii)
	Confirmed Plan
	 	Section 9 (a)(viii)
	Consideration Period
	 	Section 12 (f)(ii)
	Cure Period
	 	Section 9(a)(xxviii)(C)(1)
	Debt Financing
	 	Section 5 (t)
	Debtors
	 	Recitals
	Determination Date
	 	Section 1 (c)(vi)

 

 

SCHEDULE 1

Page 2

	 	 	 
	Defined Term	 	Section
	DGCL
	 	Section 3 (oo)
	Direct Subscription Shares
	 	Section 2 (a)(i)
	Disclosure Letter
	 	Section 3
	Disclosure Letter Delivery Date
	 	Section 3
	Disclosure Statement
	 	Section 5 (b)
	Disclosure Statement Approval Date
	 	Section 5 (b)
	Disclosure Statement Filing Date
	 	Section 5 (p)
	Disclosure Statement Outside Date
	 	Section 12 (d)(iv)
	Disinterested Director
	 	Section 8 (c)
	Dolce
	 	Recitals
	Draft Business Plan
	 	Section 3 (m)(vii)
	Due Diligence Expiration Date
	 	Section 12 (d)(ii)
	Effective Date
	 	Section 1 (c)(iii)
	Eligible Holder
	 	Section 1 (a)
	Environmental Laws
	 	Section 3 (x)(i)
	Equity Commitment Letter
	 	Section 4 (o)
	ERISA
	 	Section 3 (z)(i)
	Exchange Act
	 	Section 3 (i)(i)
	Existing Shareholder Rights Plan
	 	Section 3 (d)
	Expiration Time
	 	Section 1 (c)(iii)
	E&Y
	 	Section 3 (q)
	Final Approval Order
	 	Section 9 (a)(i)
	Financing Decision Date
	 	Section 5 (t)
	Financing Notice
	 	Section 5 (t)
	Financing Order
	 	Section 2 (j)
	GAAP
	 	Section 3 (i)(i)
	GM
	 	Recitals
	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)
	Investor
	 	Preamble
	Investor Default
	 	Section 2 (b)
	Investors
	 	Preamble
	Investor Shares
	 	Section 2 (a)
	Issuer Free Writing Prospectus
	 	Section 3 (k)
	IUE-CWA
	 	Section 5 (u)
	knowledge of the Company
	 	Section 22

 

 

SCHEDULE 1

Page 3

	 	 	 
	Defined Term	 	Section
	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)
	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
	Pardus
	 	Preamble
	Plan
	 	Section 1 (b)
	Plan Terms
	 	Recitals
	Preferred Commitment Fee
	 	Section 2 (h)(i)
	Preferred Debt Financing
	 	Section 5 (t)
	Preferred Shares
	 	Section 2 (a)
	Preferred Term Sheet
	 	Section 1 (b)
	Preliminary Rights Offering Prospectus
	 	Section 3 (k)
	Proceedings
	 	Section 10 (a)
	Purchase Notice
	 	Section 1 (c)(vi)
	Purchase Price
	 	Section 1 (a)
	Record Date
	 	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)(iii)
	Rights Offering
	 	Section 1 (a)
	Rights Offering Prospectus
	 	Section 3 (k)
	Rights Offering Registration Statement
	 	Section 3 (k)
	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)
	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)(iii)
	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 MOU
	 	Section 3 (pp)
	UBS
	 	Preamble
	Ultimate Purchasers
	 	Section 2 (k)
	Unsubscribed Shares
	 	Section 2 (a)(iv)
	USW
	 	Section 5 (u)

 

 

SCHEDULE 2

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Direct	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Subscription	 	 	 	 	 	 	 	 	 	 	Maximum	 	 	Maximum	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Direct	 	 	Shares	 	 	Maximum	 	 	Maximum	 	 	Total	 	 	Total Common	 	 	Series A	 	 	 	 	 	 	Series B	 	 	 	 	 	 	 
	 	 	Subscription	 	 	Purchase	 	 	Backstop	 	 	Backstop Shares	 	 	Common	 	 	Shares	 	 	Preferred	 	 	Purchase	 	 	Preferred	 	 	Purchase	 	 	Total	 
	Investor	 	Shares	 	 	Price	 	 	Shares	 	 	Purchase Price	 	 	Shares	 	 	Purchase Price	 	 	Stock1	 	 	Price	 	 	Stock2	 	 	Price	 	 	Purchase Price	 
	ADAH
	 	 	1,761,878	 	 	$	67,638,500	 	 	 	15,856,906	 	 	$	608,746,500	 	 	 	17,618,784	 	 	$	676,385,000	 	 	 	12,787,724	 	 	$	400,000,000	 	 	 	—	 	 	$	—	 	 	$	1,076,385,000	 
	Del-Auto
	 	 	702,594	 	 	$	26,972,600	 	 	 	6,323,348	 	 	$	242,753,400	 	 	 	7,025,942	 	 	$	269,726,000	 	 	 	—	 	 	 	—	 	 	 	3,321,178	 	 	$	127,500,000	 	 	$	397,226,000	 
	Merrill
	 	 	265,347	 	 	$	10,186,650	 	 	 	2,388,118	 	 	$	91,679,850	 	 	 	2,653,465	 	 	$	101,866,500	 	 	 	—	 	 	 	—	 	 	 	1,693,149	 	 	$	65,000,000	 	 	$	166,866,500	 
	UBS
	 	 	265,347	 	 	$	10,186,650	 	 	 	2,388,118	 	 	$	91,679,850	 	 	 	2,653,465	 	 	$	101,866,500	 	 	 	—	 	 	 	—	 	 	 	1,693,149	 	 	$	65,000,000	 	 	$	166,866,500	 
	GS
	 	 	950,768	 	 	$	36,500,000	 	 	 	8,556,914	 	 	$	328,500,000	 	 	 	9,507,682	 	 	$	365,000,000	 	 	 	—	 	 	 	—	 	 	 	911,696	 	 	$	35,000,000	 	 	$	400,000,000	 
	Pardus
	 	 	612,545	 	 	$	23,515,600	 	 	 	5,512,907	 	 	$	211,640,400	 	 	 	6,125,452	 	 	$	235,156,000	 	 	 	—	 	 	 	—	 	 	 	2,800,208	 	 	$	107,500,000	 	 	$	342,656,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	4,558,479	 	 	$	175,000,000	 	 	 	41,026,311	 	 	$	1,575,000,000	 	 	 	45,584,790	 	 	$	1,750,000,000	 	 	 	12,787,724	 	 	$	400,000,000	 	 	 	10,419,380	 	 	$	400,000,000	 	 	$	2,550,000,000	 
	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	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Proportionate Share
of Alternate Transaction Fee:3
	 	If full 
Commitment Fee
received	 	If no
Commitment
Fee received	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ADAH
	 	 	54.3750	%	 	 	46.8555	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Del-Auto
	 	 	15.9375	%	 	 	15.7150	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Merrill
	 	 	8.1250	%	 	 	7.1475	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	UBS
	 	 	8.1250	%	 	 	7.1475	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	GS
	 	 	0	%	 	 	9.6970	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pardus
	 	 	13.4375	%	 	 	13.4375	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	100	%	 	 	100	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

			
	1	 	Common stock equivalent units.
	 
	2	 	Common stock equivalent units.
	 
	3	 	Percentages will fluctuate depending on the
amount of any Commitment Fee received.

 

 

EXHIBIT A

SUMMARY OF TERMS OF

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
Preferred
Stock:

	 	At the Effective Date, (i) Appaloosa will purchase all of the 12,787,724 shares of Series A-1 Preferred Stock for an aggregate purchase price of $400
million and (ii) the Co-Lead Investors shall purchase all of the 10,419,880 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 

Conversion into 

Common Stock:

	 	The Company shall convert into Common Stock all, but not less than all, of the (i) Series A Preferred Stock on the first date the Mandatory Conversion
Requirements are satisfied (but in no event earlier than June 30, 20121) 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 $552
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 business 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) (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

 

			
	1	 	Assuming emergence by January 1, 2008.
Conversion date to be adjusted day-by-day to reflect any later emergence.
	 
	2	 	Equivalent to a TEV of $15.3 billion at
emergence.

3

 

	 	 	 
	 

	 	should operate so that in the event of a liquidation, dissolution or
winding up of the business of the Company, a Preferred Stock Holder shall receive a total amount 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 with respect to any
distributions upon liquidation, dissolution or winding up of the Company.
	 
	 	 
	Conversion of
Preferred Stock
into Common
Stock:

	 	Each share of Preferred Stock shall be convertible at any time, without any payment by the Preferred Stock Holder, 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 $[___]3, with respect
to the Series A Preferred Stock, and $[___]4 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.
	 
	 	 
	Conversion of
Series A-1
Preferred Stock
Into Series A-2
Preferred
Stock:

	 	If (a) Appaloosa or any Permitted Holder (as defined below) sells, transfers, assigns, pledges, donates or otherwise encumbers to any person other than a
Permitted Holder, or converts into Common Stock, shares of 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

 

			
	3	 	Equivalent to a TEV of $11.75 billion at
emergence.
	 
	4	 	Equivalent to a TEV of $12.8 billion at
emergence.

4

 

	 	 	 
	 

	 	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 6.5% 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.
	 
	 	 
	Preference with
Respect to Dividends:

	 	Each Preferred Stock Holder shall, prior to the payment of any dividend or distribution in respect of the Common Stock or any other class of capital
stock of the Company ranking junior to the Preferred Stock, be entitled to be paid in full the dividends and distributions payable in respect of the
Preferred Stock.
	 
	 	 
	Restriction on
Redemptions of
Junior Stock:

	 	So long as shares of Series A Preferred Stock having a Liquidation Value of $200 million or more remain outstanding, the Company shall not and shall not
permit any of its subsidiaries to, purchase, redeem or otherwise acquire for value any shares of Common Stock or any shares of any other class of capital
stock of the Company ranking junior to the Preferred Stock, except customary provisions with respect to repurchase of employee equity upon termination of
employment and except for

5

 

	 	 	 
	 

	 	purchases, redemptions or other acquisitions for value of Common Stock not to exceed $50 million in any calendar year.
	 
	 	 
	Governance -
Board of
Directors:

	 	A committee (the “Search Committee”) shall be appointed 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 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

6

 

	 	 	 
	 

	 	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
(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

7

 

	 	 	 
	 

	 	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 -

Executive 

Chairman:

	 	The Executive Chairman shall initially be selected by 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. 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.

8

 

	 	 	 
	 

	 	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 -

Voting Rights:

	 	Except with respect to the election of directors, who shall 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 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

9

 

	 	 	 
	 

	 	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:

	 	§	 	any action to liquidate the Company;
	 
	 	§	 	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
	 
	 	§	 	at all times that the Series A Preferred Stock is subject to the Transfer Restriction:

	 	§	 	a sale, transfer or other disposition of all or substantially all of the assets of the Company and its subsidiaries, on a consolidated basis;
	 
	 	§	 	any merger or consolidation involving a change of control of the Company; or
	 
	 	§	 	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.
	 
	 	 
	 

	 	In a merger or consolidation involving a change of control of the Company (a “Change of Control”), the Series A-1 Preferred Stock will be converted into
the greater of (i) the consideration with a value equal to the fair market value of the Series A-1 Preferred Stock (or a preferred security of equivalent
economic value), such fair market value shall not reflect the value of 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, the Series B Preferred Stock will be converted into the greater of (i) the
consideration with a value equal to the fair market value of the Series B Preferred Stock (or a preferred security of equivalent economic value) and (ii)
the Liquidation Value.
	 
	 	 
	 

	 	The special rights of the Series A-1 Preferred Stock described above in

10

 

	 	 	 	
	 

	 	this section “Governance – Voting Rights” are referred to as the “Voting Rights”.
The Series A-1 Preferred Stock Holders shall have no Voting 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 a 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.
	 
	 	 	
	Reservation of
Unissued Stock:

	 	The Company shall maintain sufficient authorized but 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:
	 
	 	 	§  to any Permitted Holder; or	 
	 
	 	 	§  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 

Rights:

	 	The Investors 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.
	 
	 	 	
	 

	 	Demand Registrations. Subject to the Transfer Restriction, the Preferred Stock Holders shall be entitled to an aggregate of five (5) demand
registrations, in addition to any shelf registration statement required by the Equity Purchase and Commitment Agreement among the Company and the
Investors (which shelf registration shall be renewed or remain available 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 holders of 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 Preferred Stock Holders shall be entitled to an unlimited number of demand registrations (without the need for Appaloosa’s consent). Any
demand registration may, at the option of the Preferred Stock Holders be a “shelf”

11

 

	 	 	 
	 

	 	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 Preferred Stock Holders shall be entitled to unlimited piggyback
registration rights, subject to customary cut-back provisions.
	 
	 	 
	 

	 	Registrable Securities: The Series B Preferred Stock, any shares of Common Stock issuable upon conversion of the Preferred Stock, any other shares of
Common Stock held by any Investor (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 securities. 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 an Investor 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, fees and expenses of one counsel for any holders selling Registrable Securities in connection with any such
registration.
	 
	 	 
	Preemptive 

Rights:

	 	So long as shares of Series A-1 Preferred Stock having a Liquidation 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

12

 

	 	 	 
	 

	 	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 Agreement:

	 	Certain of the provisions hereof will be contained in a Stockholders Agreement to be executed and delivered by ADAH and the Company on the Effective Date.
	 
	 	 
	Governing 

Law:

	 	State of Delaware

13

 

AMENDED

EXHIBIT B

PLAN FRAMEWORK AND SPECIAL STATUTORY COMMITTEE PROVISIONS

FRAMEWORK PROVISIONS

                The Plan shall contain all of the following terms; provided, however,
that nothing herein shall constitute an offer with respect to any securities or a solicitation of acceptances of a chapter 11 plan. Such offer or solicitation only will be made in compliance with
all applicable securities laws and/or provisions of the Bankruptcy Code:

                1.1      A condition precedent
to the effectiveness of the Plan (subject to the waiver provisions to be negotiated in connection with the Plan) shall be that the aggregate amount of all trade claims and other unsecured claims
(including any accrued interest) (excluding (i) unsecured funded debt claims, (ii) Flow-Through Claims (defined below), (ii) GM claims, which shall be treated as set forth below, and
(iii) securities claims, which shall be treated as set forth below) (collectively, the “Trade and Other Unsecured Claims”) that have been asserted or
scheduled but not yet disallowed as of the effective date of the Plan shall be allowed or estimated for distribution purposes by the Bankruptcy Court to be no more than $1.7 billion, excluding all
allowed accrued postpetition interest thereon.

                1.2      All senior secured debt
shall be refinanced and paid in full and all allowed administrative and priority claims shall be paid in full.

                1.3      Trade and Other
Unsecured Claims and unsecured funded debt claims shall be placed in a single class. All such
claims that are allowed (including all allowed accrued interest, which for trade claims shall be at a rate to be agreed to or determined by the Bankruptcy Court, it being understood that with
respect to trade claims, the Debtors and Plan Investors will not take the position that there should not be an entitlement to postpetition interest) shall be satisfied in full with (a) $3.48 billion of
common stock (77.3 million out of a total of 147.6 million shares, 1 at a deemed value of $45.00 per share for Plan distribution
purposes) in reorganized Delphi and (b) the balance in cash2; provided, however, that the common
stock and cash to be distributed pursuant to the immediately preceding clause shall be reduced proportionately by the amount that allowed Trade and Other Unsecured Claims are less than $1.7
billion, excluding allowed accrued postpetition interest thereon.

 

			
	1	 	Inclusive of distributions to subordinated creditors under Section 1.6 below. References herein to the total number of shares of common stock gives effect to the conversion of the
preferred stock issued pursuant to the Investment Agreement to common stock. The actual number of shares of common stock to be issued by Delphi and to be distributed to various classes
under Sections 1.3, 1.6 and 1.8 of this Exhibit B is subject to final adjustment and reconciliation as well as negotiation of plan distribution mechanics in the Plan.
	 
	2	 	Such amounts to be adjusted by proceeds from the par rights offering to be conducted by Delphi in connection with Section 1.8(iv).

 

 

                1.4      (i) Customer and
environmental obligations, (ii) employee-related (excluding collective bargaining-related obligations) and other obligations (in each instance as to be agreed by the Debtors and
Appaloosa) and (iii) litigation exposures and other liabilities that are covered by insurance (as to be agreed by the Debtors and Appaloosa and scheduled in the Plan) ((i), (ii) and (iii) together, the
“Flow-Through Claims”) will be unimpaired and will be satisfied in the ordinary course of business (subject to the preservation and flow-through of all estate rights,
claims and defenses with respect thereto which shall be fully reserved).

                1.5      GM will receive an
allowed general unsecured claim for all claims and rights of GM and its affiliates (excluding in respect of the 414(l) Assumption, all Flow Through Claims and all other
claims and amounts to be treated in the normal course or arising or paid pursuant to the Delphi/GM Definitive Documents) that will be satisfied with $2.70 billion in cash.

                1.6      All Delphi
subordinated debt claims (including all accrued interest thereon) will be allowed and, in resolution of the subordination rights of Delphi senior debt, all cash otherwise distributable to
Delphi subordinated debt claims pursuant to Section 1.3 shall be distributed to Delphi senior debt, and the allowed Delphi subordinated debt claims will be satisfied with $478 million of
common stock (10.6 million out of a total of 147.6 million shares, at a deemed value of $45.00 per share for Plan distribution purposes) in reorganized Delphi; provided,
however that the $478 million referred to above shall be increased by post-petition interest accruing after July 1, 2007 as provided for in the Plan.

                1.7      Any allowed securities
claims, including all claims in the MDL litigation pending in the United States District Court for the Eastern District of Michigan, will be satisfied solely from available insurance or as otherwise
agreed by Delphi and Appaloosa.

                1.8      The equity securities
class in the Plan shall receive, in the aggregate, (i) $66 million of common stock (1.5 million out of a total of 147.6 million shares, at a deemed value of $45.00 per share for Plan distribution
purposes) in reorganized Delphi, (ii) transferable rights to purchase 45.6 million out of a total of 147.6 million shares of common stock (to be reduced by the guaranteed minimum of 10% of the
rights for the Plan Investors) in reorganized Delphi for $1.75 billion (at an estimated exercise price of $38.39/share which is based on discounted TEV of $12.8 billion at emergence), (iii) 5-
year warrants to purchase for $45/share an additional 5% of the common stock of Delphi, and (iv) non-transferable rights to purchase, on a proportionate basis, $572 million of the common
stock that would otherwise be distributable to unsecured claims pursuant to Section 1.3 for a price of $45/share consisting of: (x) $522 million of the common stock that would otherwise be
distributable to all general unsecured claims (less the plan value of the common stock made available for the par rights offering pursuant to subparagraph (z) hereof), (y) $50 million of the
common stock in excess of subparagraph (x) hereof that would otherwise be distributable to Appaloosa, and (z) all of the common stock that would otherwise be distributable pursuant to the
claim allowed pursuant to paragraph 8 of the Order Under 11 U.S.C §§ 363, 1113, And 1114 And Fed. R. Bankr. P. 6004 And 9019 Approving Memorandum Of Understanding Among
UAW, Delphi, And General Motors Corporation Including Modification Of UAW Collective Bargaining Agreements And Retiree Welfare Benefits For Certain UAW-Represented Retirees
(Docket No. 8693, July 19, 2007) (the "par rights offering"); provided, that Appaloosa (in its capacity as a stockholder of Delphi) shall agree not to participate in the par
rights offering and shall use commercially reasonable efforts to obtain such agreement from the other Plan Investors. The record date for the rights offering and the par rights offering shall be
not earlier than the date on which the Confirmation Hearing is first scheduled to commence.3

 

			
	3	 	Inclusion in the Plan of subsections 1.8 (iii) and (iv) is conditioned upon the "Equity
Committee" (as defined below) supporting entry of the Approval Order and not subsequently appealing or seeking reconsideration or termination of such Approval Order (none of which the
Equity Committee would be entitled to seek following its support of entry of such order).

2

 

                1.9      The preferred stock to
be issued pursuant to the Plan in connection with the Investment Agreement and the corporate governance of Reorganized Delphi shall be subject to the terms listed on the term sheet attached
to the Investment Agreement (“Summary of Terms of Preferred Stock”), which are incorporated by reference herein.

                1.10    Delphi will arrange for funding as of
the effective date of the Plan for all amounts required to meet ERISA funding requirements through 2011 for its US pension obligations as estimated on the effective date of the Plan. Such
payment will include GM taking up to $2.0 billion of net pension obligations pursuant to a 414(l) transaction (the “414(l) Assumption”), which amount shall be reduced to
no less than $1.5 billion if (a) Delphi or Appaloosa determine that any greater amount will have an adverse impact on the Debtors or (b) Appaloosa determines that any greater amount will have
an adverse impact on the Plan Investors’ proposed investment in the Debtors. GM will receive a note from Delphi in the amount of the 414(l) Assumption transferred in the 414(l)
transaction, subject to agreed market terms to be specified in the Delphi/GM Definitive Documents; provided, however, that such note will be due, payable and paid
in full at par plus accrued interest in cash within ten (10) days following the effective date of the Plan.

                1.11    A joint claims oversight committee
shall be established on the effective date of the Plan or as soon thereafter as practicable to monitor claims administration, provide guidance to the Debtors, and address the Bankruptcy
Court if such post-effective date joint claims oversight committee disagrees with the Debtors’ determinations requiring claims resolution. The composition of the joint claims
oversight committee shall be reasonably satisfactory to Appaloosa, but in any case, shall include at least one representative appointed by Appaloosa.

                1.12    Ongoing management compensation,
including the SERP, stock options, restricted stock, severance, change in control provisions and all other benefits will be on market terms (as determined by the Board of Directors, based on the
advice of Watson-Wyatt, and such management compensation plan design shall be described in the Disclosure Statement and included in the Plan) and reasonably acceptable to Appaloosa;
claims of former management and terminated/resigning management will be resolved on terms acceptable to Delphi and Appaloosa or by court order. Equity awards will dilute all equity
interests pro rata.

                1.13    The amended and restated certificate
of incorporation of Delphi to be effective immediately following the effective date of the Plan shall prohibit: (A) for so long as Appaloosa owns any shares of Series A Preferred Stock, any
transactions between Delphi or any of its Subsidiaries (as defined in the Investment Agreement), on the one hand, and Appaloosa or its respective Affiliates (as defined in the Investment
Agreement), on the other hand (including any “going private transaction” sponsored by Appaloosa) unless such transaction shall have been approved by directors constituting not less
than 75% of the number of Common Directors (as defined in the Investment Agreement), and (B) any transaction between Delphi or any of its Subsidiaries, on the one hand, and a director, on
the other hand, other than a director appointed by holders of Series A Preferred Stock (as defined in the Investment Agreement), unless such transaction shall have been approved by directors
having no material interest in such transaction (a “Disinterested Director”) constituting not less than 75% of the number of Disinterested Directors.

3

 

SPECIAL STATUTORY COMMITTEE PROVISIONS

                So long as the official committee of unsecured creditors appointed on
October 17, 2005 in the Chapter 11 Cases (the “Creditors’ Committee”) and the ad hoc committee of trade creditors (the “Ad Hoc
Trade Committee”) shall support entry of the Approval Order and so long as the Creditors’ Committee shall support the implementation of the Investment Agreement, this
Exhibit B, and each of the transactions contemplated by the Investment Agreement and this Exhibit B, the following provisions shall be in effect, and to the extent such provisions are
inconsistent with any other provisions of this Exhibit B, the following provisions shall supplant and supersede such; provided, that if the Creditors’ Committee, in the exercise
of its fiduciary duties, shall subsequently withdraw, qualify or modify in a manner adverse to the Plan Investors (or resolve to do any of the foregoing) its support for the entry of the Approval
Order, the implementation of the Investment Agreement, this Exhibit B, or any of the transactions contemplated by the Investment Agreement or this Exhibit B, or shall have approved
or recommended any competing or other transaction inconsistent with the Investment Agreement or this Exhibit B (each such action, a “Withdrawal of Support”), then
Sections 2.1 (as it relates to the Creditors’ Committee) and Sections 2.2 and 2.3 shall terminate and shall be of no further force or effect; provided further, that if
the Creditors’ Committee (a) objects in any pleading to (i) any of the terms of any Plan Document solely on the basis of comments provided by the Creditors’ Committee
pursuant to Section 2.1 hereof, but rejected by the Debtors or Appaloosa, or (ii) the position that the Debtors, any Plan Investor or any other Party takes as to the appropriate rate of interest on
Trade and Other Unsecured Claims as permitted by Section 1.3 of this Exhibit B as amended hereby, or (b) unsuccessfully seeks the termination of the Investment Agreement pursuant to
Section 2.3, then in each such case such objection or action shall not be considered a Withdrawal
of Support. So long as the official committee of equity security holders appointed in the Chapter 11 Cases (the “Equity Committee”) shall support entry of the
Approval Order and so long as the Equity Committee shall support the implementation of the Investment Agreement, this Exhibit B, and each of the transactions contemplated by the
Investment Agreement and this Exhibit B, the following provision shall be in effect (as it relates to the Equity Committee), and to the extent such provision is inconsistent with any other
provisions of this Exhibit B, the following provisions shall supplant and supersede such; provided, that if the Equity Committee takes any action that constitutes a Withdrawal
of Support, then Section 2.1 (as it relates to the Equity Committee) shall terminate and shall be of no further force or effect; provided further, that if the Equity Committee
objects in any pleading to any of the terms of any Plan Document solely on the basis of comments provided by the Equity Committee pursuant to Section 2.1 hereof, but rejected by the
Debtors or Appaloosa, then such objection or action shall not be considered a Withdrawal of Support; provided further, that Section 1.8 (iii) and (iv) shall terminate and
be of no further force and effect only if the Equity Committee fails to affirmatively support entry of the Approval Order at the Bankruptcy Court hearing held with respect to entry of such order
or, following entry of such order, should the Equity Committee seek to appeal, reconsider or terminate such order.

4

 

                2.1      The Debtors will
provide Creditors’ Committee and the Equity Committee with periodic working drafts of the Plan, the Disclosure Statement, the Confirmation Order and any Plan Documents that each
such committee reasonably believes could have a material impact on the recovery of their constituents, and any amendments thereto, and with a reasonable opportunity to review and
comment on such documents prior to such documents being filed with the Bankruptcy Court. The Debtors and the Plan Investors will consider in good faith any comments consistent with the
Investment Agreement and this Exhibit B, and any other reasonable comments of the Creditors’ Committee and/or the Equity Committee, and will not reject such comments
without first discussing the reasons therefore with counsel to the Creditors’ Committee and/or the Equity Committee and giving due consideration to the views of the Creditors’
Committee and/or the Equity Committee. The Debtors will continue to consult with the Creditors’ Committee and the Equity Committee, as they have been doing, with respect to
issues relating to the MDL litigation referenced in Section 1.7 hereof, including, without limitation, any resolution and/or settlement thereof.

                2.2      The Creditors’
Committee will have consultation rights through the Confirmation Date with respect to executive compensation under the Plan and as described in the Disclosure Statement. The Creditors’
Committee shall also have one representative of the Creditors’ committee placed on the joint claims oversight committee contemplated by Section 1.11 of this Exhibit B, it being
understood that such member shall not have veto rights over any committee action.

                2.3      In the event that the
Debtors and the Plan Investors agree to (a) substantive and material changes in the overall deal as set forth in the Investment Agreement and this Exhibit B after the date of the Approval Order,
(b) Flow-Through Claims (as defined in Section 1.4 of this Exhibit B) other than claims arising out of or resulting from customer claims and environmental claims, or (c) any alternative
treatment of securities claims from estate assets other than available insurance, any of which would have a material adverse effect on the economics of the recovery of general unsecured
creditors under the plan of reorganization to be funded through the EPCA, the Creditors’ Committee shall have the right to seek termination of the EPCA by the Bankruptcy Court by
establishing by a preponderance of the evidence that there has been a material adverse effect on the economics of the recovery to general unsecured creditors under the plan of reorganization to
be funded through the EPCA as a result of such actions.

5

 

Appaloosa Management L.P.

26 Main Street

Chatham, New Jersey 07928

August 3, 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 (the
“Agreement”), dated as of the date hereof, 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 $1,076,400,000,
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 $166,860,000 if an Escalation Trigger arises as a result of a Limited Termination by Merrill
Lynch, Pierce, Fenner & Smith Incorporated; (ii) by $166,860,000 if an Escalation Trigger arises as
a result of a Limited Termination by UBS Securities LLC; (iii) by $397,230,000 if an Escalation
Trigger arises as a result of a Limited Termination by Harbinger Del-Auto Investments Company, Ltd.;
(iv) by $400,000,000 if an Escalation Trigger arises as a
result of a Limited Termination by Goldman Sachs & Co.; and (v) by $342,650,000 if an Escalation
Trigger arises as a result of a Limited Termination by Pardus DPH Holding LLC. The Funds to be

 

 

A-D Acquisition Holdings, LLC

Delphi Corporation

August 3, 2007

Page2

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 Disclosure Statement Approval Date, $100,000,000 and (ii) after the
Disclosure Statement 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 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

 

 

A-D Acquisition

Holdings, LLC

Delphi Corporation

August 3, 2007

Page3

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.

          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.

*      *      *      *

 

 

A-D Acquisition Holdings, LLC

Delphi Corporation

August 3, 2007

Page4

	 	 	 	 	 
	 	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/ DAVID M. SHERBIN	 
	Name: 
	David M. Sherbin	 
	Title:
	Vice President, General Counsel, and
Chief Compliance Officer	 

 

 

Harbinger Capital Partners Master Fund I, Ltd.

c/o 555 Madison Avenue

New York, New York 10122

August 3, 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 (the
“Agreement”), dated as of the date hereof, 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 $397,230,000, 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
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

 

 

Harbinger Del-Auto Investment Company Ltd.

Delphi Corporation

August 3, 2007

Page 2

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 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

 

 

Harbinger Del-Auto Investment Company Ltd.

Delphi Corporation

August 3, 2007

Page 3

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.

     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

August 3, 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/ MICHAEL D. LUCE	 	 
	 

	 	 	 	 	 	 

Name: Michael D. Luce
	 
	 

	 	 	 	 	 	Title: President	 	 

Agreed to and accepted as of the date first

above written:

Harbinger Del-Auto Investment Company, Ltd.

	 	 	 	 	 
	By:
	 	/s/ CHARLES D. MILLER
	 

	 	 

Name: Charles D. Miller
	 	 
	 

	 	Title: Vice President	 	 

Delphi Corporation

	 	 	 	 	 
	By:
	 	/s/ DAVID M. SHERBIN
	 

	 	 

Name: David M. Sherbin
	 	 
	 

	 	Title: Vice President, General Counsel, and
          Chief Compliance Officer	 	 

 

 

August 3, 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 (the
“Agreement”), dated as of the date hereof, 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 $342,650,000, 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.

     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

 

 

Delphi Corporation
August 3, 2007

Page 2

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.

     (d) Pardus has, and will have on the Closing Date, available funding necessary to provide the
Funds in accordance with this letter agreement.

- 2 -

 

Delphi Corporation

August 3, 2007

Page 3

     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.

     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,	 	 
	 
	 	 	 	 	 	 
	 	 	PARDUS SPECIAL OPPORTUNITIES MASTER FUND L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Pardus Capital Management L.P., its
Investment Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ JOSEPH THORNTON	 	 
	 

	 	 	 	 

Name:	 	 
	 

	 	 	 	Title:	 	 

- 3 -

 

Delphi Corporation

August 3, 2007

Page 4

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/ DAVID M. SHERBIN	 	 
	 

	 	 

Name: David M. Sherbin
	 	 
	 

	 	Title: Vice President, General Counsel, and 
          Chief Compliance Officer	 	 

- 4 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}]]