EXHIBIT 12
CONTRIBUTION AND REIMBURSEMENT AGREEMENT
THIS CONTRIBUTION AND REIMBURSEMENT AGREEMENT, dated as of December 18,
2006 (this "Agreement"), is made by and among (i) Appaloosa Management L.P., a
limited partnership formed under the laws of the State of Delaware ("AMLP"),
(ii) Harbinger Capital Partners Master Fund I, Ltd., an exempted company
incorporated in the Cayman Islands ("Harbinger Master Fund"), (iii) Harbinger
Capital Partners Special Situations Fund, L.P., a limited partnership formed
under the laws of the State of Delaware ("Harbinger Special Situations," and
together with Harbinger Master Fund, "Harbinger"), (iv) Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx, Incorporated, a Delaware corporation ("Merrill"), and (v) UBS
Securities LLC, a limited liability company formed under the laws of the State
of Delaware ("UBS"). Each of AMLP, Harbinger, Merrill and UBS are sometimes
referred to herein individually as a "Contributor" and collectively as the
"Contributors." Capitalized terms used herein but not defined shall have the
meanings given to them in the Equity Purchase and Commitment Agreement (as
defined below).
W I T N E S S E T H:
WHEREAS, A-D Acquisition Holdings, LLC, a limited liability company formed
under the laws of the State of Delaware ("A-D Acquisition"), Harbinger Del-Auto
Investment Company, Ltd., an exempted company incorporated in the Cayman Islands
("Del-Auto"), Dolce Investments LLC, a limited liability company formed under
the laws of the State of Delaware ("Dolce"), Merrill, UBS and Delphi
Corporation, a Delaware corporation (as a debtor-in-possession and a reorganized
debtor, as applicable, together with its subsidiaries, the "Company") intend to
enter into that certain Equity Purchase and Commitment Agreement (the "Equity
Purchase and Commitment Agreement");
WHEREAS, (i) AMLP intends to enter into a letter agreement with A-D
Acquisition and the Company pursuant to which AMLP commits to provide, subject
to the terms and conditions of such letter agreement, funds to A-D Acquisition
in connection with the transactions contemplated by the Equity Purchase and
Commitment Agreement, and (ii) Harbinger intends to enter into a letter
agreement with Del-Auto and the Company pursuant to which Harbinger commits to
provide, subject to the terms and conditions of such letter agreement, funds to
Del-Auto in connection with the transactions contemplated by the Equity Purchase
and Commitment Agreement (the letter agreements referred to in clauses (i) and
(ii), collectively, the "Letter Agreements");
WHEREAS, the Contributors are, directly or indirectly, subject to certain
joint and several liabilities in connection with any willful breach of the
Equity Purchase and Commitment Agreement and the Letter Agreements (the
"Obligations"), pursuant to the terms thereof;
WHEREAS, on the date hereof, AMLP and Cerberus Capital Management L.P.
("Cerberus") have entered into an agreement (the "App/Cerb Contribution
Agreement") pursuant to which AMLP and Cerberus have established the manner in
which the Obligations will be allocated between them; and
WHEREAS, the Contributors desire to enter into this Agreement for the
purpose of establishing the manner in which liability for the Payments (as
defined below), if any, will be allocated among the Contributors.
NOW, THEREFORE, in order to carry out their intent as expressed above and
in consideration of the mutual agreements hereinafter contained, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Contributors hereby covenant and agree as follows:
1. Contribution and Reimbursement.
(a) If, at any time, any Contributor gives notice (a "Contribution
Notice") to the other Contributors of a Payment (which notice shall include
either (x) a written notice or invoice from the Company requesting a Payment or
(y) a certificate from the Contributor who has made all or any portion of a
Payment stating that it has made such Payment), then each Contributor (i) shall
be responsible for, and shall pay, such Contributor's Pro Rata Portion of such
Payment to the Company, and (ii) shall, without duplication, reimburse the other
Contributors (as required based on the amount of such Payment made by each such
other Contributor), in each case, in an amount equal to such Contributor's Pro
Rata Portion of such Payment. For the avoidance of doubt, the intent of this
Section 1 is to apportion the cumulative, aggregate amounts required to be paid
by, and actually paid by, any Contributor and all of the Contributors (directly
or indirectly) as or in respect of Payments on a several basis among all
Contributors in accordance with their respective Pro Rata Portions.
Without limiting the provisions of the preceding paragraph, the other
provisions of this Agreement or the rights and remedies of any Contributor with
respect thereto, if any Contributor fails to pay or reimburse all or any portion
of such Contributor's Pro Rata Portion of any Payment (any such amount, a
"Shortfall"), and such failure continues for a period of ten (10) Business Days
after the due date for such payment or reimbursement, each non-defaulting
Contributor, in addition to its respective obligations set forth above, (A)
shall be responsible for, and shall pay to the Company or, as the case may be,
such other person or entity referred to in the first sentence of this Section
1(a), its proportional share of the Shortfall based its Pro Rata Portion, but
excluding the Pro Rata Portion of the defaulting Contributor (the "Adjusted Pro
Rata Portion"), and (B) shall, without duplication, reimburse any non-defaulting
Contributor (as required based on the amount of the respective payments made by
such non-defaulting Contributors with respect to such Shortfall), in each case,
in an amount equal to the non-defaulting Contributor's Adjusted Pro Rata Portion
of such Shortfall; provided, however, that nothing contained in this sentence
shall relieve or release a defaulting Contributor from any of its obligations
and liabilities under this Agreement, including, without limitation, the
obligation to reimburse the non-defaulting Contributors for any payment or
reimbursement made by the non-defaulting Contributors with respect to any
Shortfall. Notwithstanding the foregoing, a Contributor shall only be required
to make a Payment pursuant to the terms hereof if the Obligation to which the
Contribution Notice relates arises out of circumstances existing on or prior to
the Closing Date.
(b) For purposes of this Agreement: (x) "Payment" or "Payments" means
any amount required to be paid or paid, directly or indirectly (i) (A) to the
Company by any
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Contributor in respect of the Obligations (including any liabilities, penalties,
losses, damages, deficiencies and judgments required to be paid in respect
thereto and including any payment to the Company or Cerberus made by AMLP
pursuant to the App/Cerb Contribution Agreement) or any Shortfall, or (B)
otherwise to Cerberus in respect of the Obligations (including any liabilities,
penalties, losses, damages, deficiencies and judgments required to be paid, in
respect thereto); provided, however, that in no event shall any Contributor be
required to make payments pursuant to this subsection (x)(i) for an aggregate
amount in excess of $250 million, and (ii) in respect of any interest, costs and
expenses (including reasonable attorneys' fees) for investigation, defense and
enforcement of the Equity Purchase and Commitment Agreement in respect of the
Obligations, the provisions of this Agreement and the App/Cerb Contribution
Agreement and (y) "Pro Rata Portion" with respect to any Contributor means the
percentage of the Payment payable hereunder by such Contributor, whether to the
Company or to any other entity, which percentage shall initially be the
percentage set forth next to such Contributor's name on Exhibit A attached
hereto. The Pro Rata Portion shall only be changed in connection with the
occurrence of the events set forth in Section 1(d) in which case, the percentage
for each Contributor shall be calculated by dividing (A) the aggregate amount
required to be paid by such Contributors, in each case, for (x) the Direct
Subscription Shares, (y) the Series B Preferred Stock, and (z) the Series A-2
Preferred Stock (provide that the amount required to be paid in respect of the
Series A-2 Preferred Stock shall be calculated based on each Contributor's
proposed economic interest in the Series A-2 Preferred Stock pursuant to the
certain Agreement of Limited Partnership of Del A-2 L.P. dated as of even date
herewith), by (B) the sum of the payments under subsection (A) with respect to
all Contributors.
(c) All amounts due hereunder shall be paid, or, as applicable,
reimbursed by the Contributors in immediately available funds to the Company or,
as the case may be, another Contributor within two (2) Business Days after
receipt by the Contributors of a Contribution Notice (or, with respect to
payments and reimbursements in connection with any Shortfall, within two (2)
Business Days after the expiration of the ten (10) Business Day period referred
to in Section 1(a)) and any amounts not paid within such time shall accrue
interest at a rate of fifteen percent (15%) per annum (compounded quarterly),
but in no event in excess of the maximum rate permitted by applicable law. Each
Contributor hereby waives any right to question the validity or amount of any
Payment made by any other Contributor, it being intended that the actual payment
to the Company of any Payment or the incurrence of any liabilities, losses,
damages, deficiencies, judgments and costs and expenses (including, without
limitation, interest, penalties, out-of-pocket expenses for investigation,
defense and enforcement, and reasonable attorney's fees) referred to in the
definition of "Payment" in Section 1(a) shall conclusively establish any
Contributor's (who has made a Payment) right to be reimbursed pursuant to this
Section 1.
(d) Notwithstanding the foregoing provisions of this Section 1 or any
other provision in this Agreement to the contrary, upon the valid exercise of a
Limited Termination of the Equity Purchase and Commitment Agreement, in
accordance with the terms and conditions thereof, as to itself by Del-Auto (with
respect to Harbinger), Merrill or UBS (any of Harbinger (with respect to such a
termination by Del-Auto), Merrill or UBS so terminating, the "Terminating
Contributor"), the Terminating Contributor shall have no obligations or
liabilities under this Agreement with respect to Payments to the extent arising
out of any facts or circumstances occurring entirely after the date of such
Limited Termination by the Terminating
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Contributor; provided, that, any such Terminating Contributor shall remain
obligated and liable under this Agreement with respect to Payments to the extent
arising out of any facts or circumstances occurring on or prior to the date of
such termination by the Terminating Contributor. If as a result of such Limited
Termination a Related Purchaser or an Ultimate Purchaser becomes obligated to
purchase the Available Investor Shares pursuant to the terms of the Equity
Purchase and Commitment Agreement, it shall be a condition precedent to such
Related Purchaser or Ultimate Purchaser becoming a party to the Equity Purchase
and Commitment Agreement or otherwise becoming obligated to purchase such shares
that such Related Purchaser or Ultimate Purchaser becomes a Contributor by
becoming a party to this Agreement and, upon such event, the Pro Rata Portion of
the Contributors shall be adjusted in accordance with Section 1(b).
2. Obligations Unconditional; No Prohibition on Rights and Remedies
for Breach of Transactions Agreements.
(a) The payment and reimbursement obligations of each Contributor
under this Agreement are absolute, irrevocable and unconditional, irrespective
of the value, genuineness, validity, regularity or enforceability of the
Company's rights under the Equity Purchase and Commitment Agreement and the
Letter Agreements or any agreement or instrument relating thereto, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of the
parties hereto that such obligations shall be absolute and unconditional under
any and all circumstances. With respect to its obligations hereunder, except as
set forth in the first sentence of Section 1(a) hereof, each Contributor hereby
expressly waives diligence, presentment, demand of payment, protest and all
notices whatsoever, and any requirement that any other Contributor exhaust any
right, power or remedy or proceed against any person or entity.
(b) Nothing contained in this Agreement shall preclude or prohibit any
Contributor from taking any actions and otherwise exercising any rights or
remedies, at law or in equity, against any other Contributor with respect to
such other Contributor's breach of the Letter Agreements, the Transaction
Agreements or any other documents or agreements entered into in connection
therewith. Each of the Contributors acknowledges, and agrees to, the immediately
preceding sentence.
3. Reinstatement. The payment and reimbursement obligations of each
Contributor under this Agreement shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of such Contributor in
respect of any obligation hereunder is rescinded or must be otherwise restored
by the person or entity receiving such payment, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise.
4. Representations and Warranties. Each Contributor, severally but not
jointly, represents and warrants to the other Contributors as to itself as
follows:
(a) Such Contributor has full power, authority and legal right to
execute, deliver, perform and observe the provisions of this Agreement,
including, without limitation, the payment of all moneys hereunder.
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(b) The execution, delivery and performance by such Contributor of
this Agreement has been duly authorized by all necessary action under its
constituent documents.
(c) This Agreement constitutes the legal, valid and binding obligation
of such Contributor, enforceable in accordance with its terms, subject as to
enforceability to bankruptcy, insolvency and other similar laws affecting
creditors' rights generally and general equity principles.
(d) No authorization, approval, consent or permission (governmental or
otherwise) of any court, agency, commission or other authority or entity is
required for the due execution, delivery, performance or observance by such
Contributor of this Agreement or for the payment of any sums hereunder.
(e) Neither the execution and delivery of this Agreement by such
Contributor, nor the consummation of the transactions herein contemplated, nor
compliance with the terms and provisions hereof, conflicts or will conflict with
or result in a breach of any of the terms, conditions or provisions of the
constituent documents of such Contributor, or of any law, order, writ,
injunction or decree of any court or governmental authority, or of any agreement
or instrument to which such Contributor is a party or by which it is bound, or
constitutes or will constitute a default thereunder.
5. Notices. All notices, consents, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) in accordance with
Section 13 of the Equity Purchase and Commitment Agreement (it being understood
that notice given or made to an Affiliate of a Contributor if such Affiliate is
a party to the Equity Purchase and Commitment Agreement shall be deemed to be a
notice given or made to such Contributor).
6. Taxes. To the fullest extent permitted by law, all payments to be
made pursuant to this Agreement shall be made without any withholding on account
of taxes, levies, duties or any other deduction whatsoever. If a Contributor is
required by law to withhold or deduct any sum from payments required under this
Agreement, such Contributor shall, to the extent permitted by applicable law,
increase the amount paid by it so that, after all withholdings and deductions,
the amount received by the applicable receiving party shall equal the amount
such receiving party would have received without any such deduction.
7. Governing Law; Consent to Jurisdiction. 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). In
addition, each party (i) irrevocably and unconditionally consents and submits to
the personal jurisdiction of the state and federal courts of the United States
of America located in the State of New York, New York County solely for the
purposes of any suit, action or other proceeding between any of the parties
hereto arising out of this Agreement, (ii) agrees that it will not attempt to
deny or defeat such personal jurisdiction by motion or other request for leave
from such court, (iii) waives any claim of improper venue or any claim that the
courts of the State of New York, New York County are an inconvenient forum for
any action, suit or proceeding between any of the parties hereto arising out of
this Agreement or any transaction contemplated hereby, (iv) agrees that it will
not bring
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any action relating to this Agreement in any court other than the courts of the
State of New York, New York County and (v) to the fullest extent permitted by
law, consents to service being made through the notice procedures set forth in
Section 5.
8. WAIVER OF JURY TRIAL. EACH PARTY HERETO 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 TRANSACTIONS CONTEMPLATED HEREBY.
9. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10. No Waiver; Cumulative Remedies. No party hereto shall by any act
(except by a written instrument pursuant to Section 11) of delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of any party
hereto, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy that would otherwise be available on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any rights or remedies provided by law.
11. Amendments and Waivers. None of the terms or provisions of this
Agreement may be waived, amended or supplemented or otherwise modified except by
a written instrument executed by each party hereto.
12. Assignment; Successors and Assigns; No Third-Party Rights. No
party may assign its rights nor delegate its obligations under this Agreement,
in whole or in part, without the prior written consent of each other party
hereto. Any purported assignment or delegation made without the prior written
consent of each other party hereto shall be null and void. This Agreement shall
be binding upon the successors and permitted assigns of the parties hereto and
shall inure to the benefit of each party and such successors and permitted
assigns. Nothing expressed or referred to in this Agreement will be construed to
give any person other than the parties to this Agreement any legal or equitable
right, remedy or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions are
for the sole and exclusive benefit of the parties to this Agreement and their
successors and permitted assigns and no other person or entity.
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13. Counterparts. This Agreement may be executed in any number of
separate counterparts, including by facsimile, each of which shall
be deemed an original, but all of which shall constitute one and the same
instrument.
14. No Recourse. Notwithstanding anything to the contrary herein, each
Contributor acknowledges and agrees that (i) no person or entity other than a
Contributor shall have any obligation under this Agreement, (ii) no recourse
under this Agreement shall be had against any past, current or future officer,
director, agent, employee, affiliate or advisor of any Contributor, or any past,
current or future director, officer, agent, employee, advisor, general or
limited partner, member, stockholder, affiliate, assignee or successor of any of
the foregoing (collectively, the "Relevant Persons"), as such, whether by the
enforcement of any judgment or assessment or by any legal or equitable
proceeding or by virtue of any law or otherwise and (iii) no personal liability
whatsoever shall attach to, be imposed on, or otherwise be incurred by any
Relevant Person, as such, for any obligation of the applicable Contributor under
this Agreement or for any claim relating to, based on, or in respect of or by
reason of such obligation.
15. Effectiveness. This Agreement is expressly contingent on, and
shall only become effective, and the rights hereunder enforceable, at the time
that the Equity Purchase and Commitment Agreement is executed by the parties
thereto.
[Remainder of the page intentionally left blank.]
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IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Agreement on the date first above written.
APPALOOSA MANAGEMENT L.P.
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Partner
HARBINGER CAPITAL PARTNERS
MASTER FUND I, LTD.
By: Harbinger Capital Partners Offshore
Manager, L.L.C., as investment
manager
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Managing Director
HARBINGER CAPITAL PARTNERS
SPECIAL SITUATIONS FUND, L.P.
By: Harbinger Capital Partners Special
Situations GP, LLC, as general partner
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Managing Director
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XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX, INCORPORATED
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Managing Director
UBS SECURITIES LLC
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Managing Director
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EXHIBIT A
PRO RATA PORTIONS
CONTRIBUTOR PRO RATA PORTION
Appaloosa Management L.P. 61.5101%
Harbinger Capital Partners
Master Fund I, Ltd. and 15.3771%
Harbinger Capital Partners
Special Situations Fund, X.X.
Xxxxxxx Xxxxx, Xxxxxx Xxxxxx & Xxxxx,
Incorporated 12.8154%
UBS Securities LLC 10.2974%
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