CONTRIBUTION AND LOAN AGREEMENT
dated as of ___________, 2003
by and between
DELPHI CORPORATION
as Borrower
and
DELPHI PROPERTIES, INC.
as Lender
Stock Issuance: Up to 12,420,000 shares
Membership Interest Purchase: 1% of Delphi Properties Holdings, LLC
Maximum Loan Amount: $1,000,000,000.00
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TABLE OF CONTENTS
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---- ARTICLE I PARTICULAR TERMS, DEFINITIONS AND RULES OF CONSTRUCTION.................................................1
SECTION 1.01. Definitions................................................................................1
SECTION 1.02. Rules of Construction......................................................................5
ARTICLE II CONTRIBUTION AND LOAN..................................................................................6
SECTION 2.01. The Contribution...........................................................................6
SECTION 2.02. The Loan, Generally........................................................................6
SECTION 2.03. Purpose....................................................................................6
SECTION 2.04. Procedure for Advance......................................................................6
SECTION 2.05. Notes......................................................................................7
SECTION 2.06. Payments and Distributions.................................................................7
SECTION 2.07. Interest...................................................................................7
SECTION 2.08. Voluntary Prepayments......................................................................7
ARTICLE III YIELD MAINTENANCE ETC.................................................................................8
SECTION 3.01. Additional Costs and Other Effects of Regulatory Changes; Taxes............................8
ARTICLE IV CONDITIONS PRECEDENT...................................................................................8
SECTION 4.01. Conditions Precedent to the Stock Issuance and the Initial Advance.........................8
SECTION 4.02. Conditions Precedent to Future Advances...................................................10
ARTICLE V REPRESENTATIONS AND WARRANTIES.........................................................................11
SECTION 5.01. Due Formation, Power and Authority........................................................11
SECTION 5.02. Legally Enforceable Agreements............................................................11
SECTION 5.03. Financial Statements......................................................................11
SECTION 5.04. Compliance With Laws......................................................................11
SECTION 5.05. Litigation................................................................................12
SECTION 5.06. No Conflicts or Defaults..................................................................12
(i)
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SECTION 5.07. Solvency..................................................................................12
SECTION 5.08. Governmental Regulation...................................................................12
SECTION 5.09. Insurance.................................................................................12
SECTION 5.10. No Event of Default.......................................................................12
SECTION 5.11. Separate Tax and Zoning Lot...............................................................12
SECTION 5.12. Creation of Liens.........................................................................13
SECTION 5.13. Appraisals................................................................................13
SECTION 5.14. Loan to Value Ratio.......................................................................13
ARTICLE VI COVENANTS OF BORROWER.................................................................................13
SECTION 6.01. Compliance with Laws; Payment of Taxes....................................................13
SECTION 6.02. Maintenance of Existence..................................................................13
SECTION 6.03. Continuing Accuracy of Representations and Warranties.....................................13
SECTION 6.04. Covenants, Restrictions and Easements.....................................................14
SECTION 6.05. Inspection and Cooperation................................................................14
SECTION 6.06. Payment of Costs..........................................................................14
SECTION 6.07. Brokers...................................................................................14
SECTION 6.08. Insurance.................................................................................14
SECTION 6.09. Condemnation Awards and Insurance Proceeds................................................14
SECTION 6.10. Filing and Recording of Documents.........................................................15
SECTION 6.11. Premises Documents........................................................................15
SECTION 6.12. Reporting Requirements....................................................................16
SECTION 6.13. Secondary Financing.......................................................................16
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES.......................................................................16
SECTION 7.01. Events of Default.........................................................................16
SECTION 7.02. Remedies of Lender........................................................................18
SECTION 7.03. Remedies Cumulative.......................................................................19
(ii)
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SECTION 7.04. Lender's Rights Concerning Application of Amounts Collected...............................19
ARTICLE VIII GENERAL CONDITIONS AND PROVISIONS...................................................................19
SECTION 8.01. Documentation, Etc. Satisfactory..........................................................19
SECTION 8.02. Notices...................................................................................19
SECTION 8.03. Amendments and Waivers....................................................................20
SECTION 8.04. Successors and Assigns....................................................................20
SECTION 8.05. Severability..............................................................................20
SECTION 8.06. Non-Waiver; Remedies Cumulative...........................................................20
SECTION 8.07. Certain Waivers...........................................................................20
SECTION 8.08. Expenses..................................................................................21
SECTION 8.09. General Indemnification...................................................................21
SECTION 8.10. Environmental Indemnification.............................................................22
SECTION 8.11. Partial Release of Mortgaged Property.....................................................23
SECTION 8.12. Counterparts..............................................................................23
SECTION 8.13. Governing Law; Jurisdiction...............................................................23
SECTION 8.14. Integration...............................................................................24
SECTION 8.15. Gross-Up for Taxes........................................................................24
SECTION 8.16. Assignment of Mortgages and Notes.........................................................24
SCHEDULES
IA Contributed Notes
IB Membership Interest Purchase Notes
II Initial Advance Notes
III Future Advance Notes
EXHIBITS
A Form of Mortgage Note
B Form of Mortgage
(iii)
CONTRIBUTION AND LOAN AGREEMENT (this "Agreement") dated as of ________________, 2003 by and between DELPHI CORPORATION, a Delaware corporation ("Borrower"), and DELPHI PROPERTIES, INC., a Maryland corporation ("Lender").
WHEREAS, Borrower has agreed to issue one or more Notes (as defined below) as identified on the attached SCHEDULE IA to Lender in exchange for up to 12,420,000 shares of the common stock of Lender (the "Stock Issuance");
WHEREAS, Borrower has agreed to issue one or more Notes as identified on the attached SCHEDULE IB to Lender in exchange for a one percent (1%) membership interest (the "Membership Interest Purchase") in Delphi Properties Holdings, LLC ("Holdings") ;
WHEREAS, Borrower shall issue the Notes identified on the attached SCHEDULE II to Lender to evidence the initial loan made pursuant to the terms of this Agreement in the principal amount of [$_______________] (the "Initial Loan Amount");
WHEREAS, Borrower has agreed to issue additional Notes identified on the attached SCHEDULE III (as such schedule may be amended or modified from time to time) to Lender to evidence Future Advances (as defined below) made pursuant to the terms of this Agreement;
WHEREAS, the maximum principal amount that may at any time be advanced under, and evidenced by the Notes issued pursuant to, this Agreement is $1,000,000,000.00 (the "Maximum Loan Amount"); and
WHEREAS, Borrower desires that Lender consummate the Stock Issuance, the Membership Interest Purchase and the Loan (as defined below; the Loan, the Membership Interest Purchase and the Stock Issuance are referred to herein collectively as the "Transactions"), and Lender is prepared to enter the Transactions on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained, Borrower and Lender hereby agree as follows:
ARTICLE I
PARTICULAR TERMS, DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.01. Definitions. The following terms, as used herein, shall have the following meanings:
"Additional Costs" -- Any costs, losses or expenses actually incurred by Lender which it reasonably determines are attributable to its entering into or maintaining the Transactions or any reduction in any amount receivable by any Lender under the Transaction Documents or the Notes.
"Affiliate" -- As to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person. For purposes of this definition, the term "control" (including the terms "controlling", "controlled by" and "under common control with") of a Person means the direct or indirect possession of the power to vote 5% or more of the equity interests of such Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of equity interests, by contract or otherwise.
"Appraisals" -- Has the meaning specified in Section 4.01(e)(3).
"Bankruptcy Code" -- Chapter 11 of the U.S. Bankruptcy Code (11 U.S.C.ss.ss. 101 et seq.)
"Business Day" -- Any day on which commercial banks are not authorized or required to close in New York City or Troy, Michigan.
"Code" -- The Internal Revenue Code of 1986.
"Dollars" and "$" -- Lawful money of the United States.
"Employee Benefit Plan" -- Any employee benefit or other plan established or maintained, or to which contributions have been made, by Borrower or any Mortgagor.
"Environmental Action" -- Any action, suit, demand, demand letter, claim, notice of non-compliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating in any way to any Environmental Law, any Environmental Permit or Hazardous Material or arising from alleged injury or threat to health, safety or the environment, including, without limitation, (a) by any governmental or regulatory authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any governmental or regulatory authority or third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" -- Any federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, writ, judgment, injunction, decree or judicial or agency interpretation, policy or guidance relating to pollution or protection of the environment, health, safety or natural resources, including, without limitation, those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.
"Environmental Permit" -- Any permit, approval, identification number, license or other authorization required under any Environmental Law.
"ERISA" -- The Employee Retirement Income Security Act of 1974, including the rules and regulations promulgated thereunder.
"ERISA Affiliate" -- Any corporation which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as Borrower and/or any Mortgagor, or any trade or business which is under common control (within the meaning of Section 414(c) of the Code) with Borrower and/or any Mortgagor, or, solely for purposes of Section 412 of the Code, any organization which is required to be treated as a single employer with Borrower and/or any Mortgagor under Section 414(m) or 414(o) of the Code.
"Event of Default" -- Has the meaning specified in Section 7.01.
"Excess Proceeds" - Has the meaning specified in Section 6.09(b).
"Financial Statements" -- Statements of the assets, liabilities (direct or contingent), income, expenses and cash flow of Borrower and Mortgagors, prepared on a consolidated basis in accordance with generally accepted accounting principles in the United States as in effect from time to time and consistently applied. The accounting method used in the preparation of financial statements submitted to Lender prior to the date hereof is hereby deemed acceptable.
"Future Advance" -- Has the meaning specified in Section 2.04(b).
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"Governmental Authorities" -- The United States, and, as to each of the Premises, the respective state in which such Premises are located and any political subdivision, agency, department, commission, board, bureau or instrumentality of any of them, including any local authorities, which exercises jurisdiction over Borrower, each Mortgagor, any of the Premises or any of the Improvements.
"Greater Loan to Value Ratio" has the meaning specified in Section 6.09(a).
"Hazardous Materials" -- (a) Petroleum or petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls and radon gas and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.
"Holdings" -- Has the meaning specified in the recitals.
"Improvements" -- Has the meaning given to such term in the Mortgages.
"Indemnified Party" -- Has the meaning specified in Section 8.10.
"Initial Advance" -- Has the meaning specified in Section 2.04.
"Initial Loan Amount" - Has the meaning specified in the recitals.
"Interest Rate" -- A rate of 7.75% per annum.
"Law" -- Any federal, state or local law, statute, rule, regulation, ordinance, order, decree, directive, requirement, code, notice of violation or rule of common law, now or hereafter in effect, and in each case as amended, and any judicial or administrative interpretation thereof by a Governmental Authority, including any judicial or administrative order, determination, consent decree or judgment.
"Lender's Counsel" - Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, or such other Person as is designated by Lender.
"Lender's Office" -- Lender's Office as set forth on its signature page of this Agreement, or such other address in the United States as Lender may designate by notice to Borrower.
"Lien" -- Any lien, security interest or other charge or encumbrance of any kind, or any other type of preferential arrangement, including, without limitation, the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property.
"Loan" -- The loan, in an aggregate principal amount equal to the Initial Loan Amount plus the principal amount of any Future Advances, to be made pursuant to this Agreement.
"Loan to Value Ratio" -- The ratio of the then outstanding principal balance of the Note or Notes secured by the applicable Mortgage (as indicated on SCHEDULES I, II and III) to the fair market value of the applicable Mortgaged Property based on an appraisal of such Mortgaged Property, in form and substance reasonably satisfactory to Lender. As used herein, "fair market value" shall mean the most probable price the applicable Mortgaged Property should bring in a competitive and open market under all conditions requisite to a fair sale.
"Losses" -- has the meaning specified in Section 8.09(a).
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"Material Adverse Effect" -- Means a material adverse effect on (a) the business, condition (financial or otherwise), operations, performance, properties or prospects of Borrower and its consolidated subsidiaries, taken as a whole, (b) the rights and remedies of Lender under any Transaction Document, (c) the ability of Borrower or Mortgagors to perform their respective obligations under any Transaction Document to which any of them is or is to be a party where such inability to perform would have a material adverse effect upon the aggregate underlying security for the Loan, or (d) any Mortgagor's claim of title to any of the Premises resulting in the loss or forfeiture of title to such Premises.
"Maturity Date" -- [______________, 2033].
"Maximum Loan Amount" -- has the meaning specified in the recitals.
"Membership Interest Purchase" -- has the meaning specified in the recitals.
"Mortgage" -- Any mortgage (or deed of trust), security agreement, assignment of leases and rents and fixture filing made to or for the benefit of Lender, to secure the payment and performance of Borrower's obligations hereunder, under the Notes and otherwise in respect of the Transactions, substantially in the form of EXHIBIT B attached hereto or in such other form as may be mutually agreed upon by Lender and Borrower, each acting in its reasonable discretion, in each case with such changes thereto as may be made based on local laws or customary local mortgage or deed of trust practices.
"Mortgaged Property" -- The Premises and other property constituting the "Mortgaged Property", as such term is defined in each Mortgage.
"Mortgagor" -- has the meaning ascribed to it in Section 4.01(e)(7).
"Multiemployer Plan" -- Any plan defined as such in Section 3(37) of ERISA.
"Net Proceeds" -- (i) The net amount of all proceeds of any insurance policies insuring against loss or damage to the Mortgaged Property or (ii) all awards, damages, remunerations, reimbursements, settlements or compensation made by any Governmental Authority pertaining to any condemnation or other taking (or any purchase in lieu thereof) of all or any portion of the Mortgaged Property.
"Non-Excluded Taxes" -- Has the meaning specified in Section 8.15.
"Note"; "Notes" -- Have the respective meanings specified in Section 2.05.
"Partial Release" -- Has the meaning specified in Section 8.11.
"Pension Plan" -- Any employee pension benefit plan within the meaning of Section 3(2) of ERISA with respect to which Borrower, any Mortgagor or any ERISA Affiliate at any relevant time has liability or an obligation to contribute.
"Permitted Liens" -- (a) Liens for taxes, judgments, assessments and governmental charges or levies not yet due and payable or which are not reasonably likely to result in a Material Adverse Effect; (b) Liens imposed by law, such as materialmen's, mechanics', carriers', workmen's and repairmen's Liens and other similar Liens arising in the ordinary course of business where such liens have not been the subject of a final non-appealable foreclosure action and are not, individually or in the aggregate, reasonably likely to result in a Material Adverse Effect; (c) pledges or deposits to secure
4
obligations under workers' compensation laws or similar legislation or to secure public or statutory obligations; and (d) leases, occupancy agreements, licenses, easements, rights of way and other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially adversely affect the use of such property for its present or then-existing purposes.
"Person" -- An individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other entity of whatever nature.
"Premises" -- The real property described on Exhibit A to the Mortgages and each located as indicated on SCHEDULES I, II and III hereto, upon all or part of which the Improvements are located.
"Premises Document" -- All reciprocal easement or operating agreements, declarations, development agreements, developer's or utility agreements, and any similar such agreements or declarations now or hereafter affecting any of the Premises or any part thereof.
"Principal Amount" -- At any time, the aggregate outstanding principal amount of the Notes from time to time outstanding pursuant to the terms of this Agreement.
"Regulatory Change" -- With respect to any Lender, any change after the date hereof in federal, state or foreign laws or regulations or the adoption or making after such date of any interpretations, directives or requests applying to a class of banks including such Lender under any federal, state or foreign laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof.
"Related Mortgagor" -- Any Mortgagor that is included in the Financial Statements of Borrower. All of the initial Mortgagors are Related Mortgagors.
"Released Mortgaged Property" -- Has the meaning specified in Section 8.11.
"Remedy" -- Has the meaning specified in Section 8.06.
"Restoration" -- The repair and restoration of the Mortgaged Property after a casualty occurrence or condemnation.
"Stock Issuance" - Has the meaning specified in the recitals.
"Transaction Documents" -- This Agreement, the Notes, the Mortgages (and, if required by Lender, Uniform Commercial Code financing statements in respect of the Mortgaged Property and any other collateral given as security for the Transactions), and any other documents which evidence or secure the Transactions.
"Transactions" - Has the meaning specified in the recitals.
"United States" and "U.S." -- The United States of America.
SECTION 1.02. Rules of Construction. Except as expressly provided otherwise, when used in this Agreement (i) "or" is not exclusive, (ii) "hereunder", "herein", "hereof" and the like refer to this Agreement as a whole, (iii) "Article", "Section", "Schedule" and "Exhibit" refer to Articles, Sections,
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Schedules and Exhibits of this Agreement, (iv) terms defined in the singular shall have a correlative meaning when used in the plural and vice versa, (v) a reference to a Law includes any amendment, modification or supplement to, or replacement of, such Law and (vi) a reference to a document shall mean such document as the same may be amended, modified or supplemented from time to time in accordance with its terms. The cover page and the Exhibits and Schedules annexed hereto are incorporated as a part of this Agreement with the same effect as if set forth in the body hereof. Any table of contents and all captions and headings herein are for convenience only and shall not affect the interpretation or construction hereof.
ARTICLE II
CONTRIBUT ...
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