As filed with the Securities and Exchange Commission on October 13, 2017
File No. 001-38110

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 3
to
Form 10

GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF
THE SECURITIES EXCHANGE ACT OF 1934

DELPHI TECHNOLOGIES PLC †
(Exact name of registrant as specified in its charter)

 
			
Jersey	 	98-1367514	
(State or other jurisdiction of
incorporation or organization)	 	(I.R.S. Employer
Identification No.)	
Courteney Road
Hoath Way
Gillingham, Kent ME8 0RU
United Kingdom
(Address of principal executive offices)
Registrant’s telephone number, including area code:
011-44-163-423-4422
Securities to be registered pursuant to Section 12(b) of the Act:

Title of each class to
be so registered	 	Name of each exchange on which
each class is to be registered	
Ordinary Shares, par value $0.01 per share	 	New York Stock Exchange	
Securities to be registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	 	☒	  	Accelerated filer	 	☐	
				
Non-accelerated filer	 	☐  (Do not check if a smaller reporting company)	  	Smaller reporting company	 	☐	
				
Emerging growth company	 	☐	  		 		
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

†	The registrant was formerly named Delphi Jersey Holdings plc. As of October 10, 2017, the registrant changed its name to Delphi Technologies PLC.	

 

Delphi Technologies PLC
INFORMATION REQUIRED IN REGISTRATION STATEMENT
CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT AND ITEMS OF FORM 10
Certain information required to be included in this Form 10 is incorporated by reference to specifically-identified portions of the body of the information statement filed herewith as Exhibit 99.1. None of the information contained in the information statement shall be incorporated by reference herein or deemed to be a part hereof unless such information is specifically incorporated by reference.
 
Item 1.	Business.	
The information required by this item is contained under the sections of the information statement entitled “Summary,” “Risk Factors,” “Forward-Looking Statements,” “Our Separation from Aptiv,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” “Certain Relationships and Related Transactions” and “Where You Can Find More Information.” Those sections are incorporated herein by reference.
 
Item 1A.	Risk Factors.	
The information required by this item is contained under the sections of the information statement entitled “Summary,” “Risk Factors” and “Forward-Looking Statements.” Those sections are incorporated herein by reference.
 
Item 2.	Financial Information.	
The information required by this item is contained under the sections of the information statement entitled “Summary,” “Selected Historical Combined Financial Data,” “Unaudited Pro Forma Condensed Combined Financial Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Those sections are incorporated herein by reference.
 
Item 3.	Properties.	
The information required by this item is contained under the section of the information statement entitled “Business—Properties.” That section is incorporated herein by reference.
 
Item 4.	Security Ownership of Certain Beneficial Owners and Management.	
The information required by this item is contained under the section of the information statement entitled “Principal Shareholders.” That section is incorporated herein by reference.
 
Item 5.	Directors and Executive Officers.	
The information required by this item is contained under the section of the information statement entitled “Management.” That section is incorporated herein by reference.
 
Item 6.	Executive Compensation.	
The information required by this item is contained under the section of the information statement entitled “Compensation Discussion and Analysis.” That section is incorporated herein by reference.
 
Item 7.	Certain Relationships and Related Transactions.	
The information required by this item is contained under the sections of the information statement entitled “Management,” and “Certain Relationships and Related Transactions.” Those sections are incorporated herein by reference.

Item 8.	Legal Proceedings.	
The information required by this item is contained under the section of the information statement entitled “Business—Legal Proceedings.” That section is incorporated herein by reference.
 
Item 9.	Market Price of, and Dividends on, the Registrant’s Common Equity and Related Stockholder Matters.	
The information required by this item is contained under the section of the information statement entitled “Summary,” “Our Separation from Aptiv,” “Dividend Policy,” “Capitalization” and “Description of Share Capital.” Those sections are incorporated herein by reference.
 
Item 10.	Recent Sales of Unregistered Securities.	
Not applicable.
 
Item 11.	Description of Registrant’s Securities to be Registered.	
The information required by this item is contained under the section of the information statement entitled “Our Separation from Aptiv” and “Description of Share Capital.” Those sections are incorporated herein by reference.
 
Item 12.	Indemnification of Directors and Officers.	
The information required by this item is contained under the section of the information statement entitled “Description of Share Capital—Comparison of United States and Jersey Corporate Law.” That section is incorporated herein by reference.
 
Item 13.	Financial Statements and Supplementary Data.	
The information required by this item is contained under the section of the information statement entitled “Index to Financial Statements” (and the financial statements and related notes referenced therein). That section is incorporated herein by reference.
 
Item 14.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	
Not applicable.
 
Item 15.	Financial Statements and Exhibits.	
(a) Financial Statements
The information required by this item is contained under the section of the information statement entitled “Index to Financial Statements” (and the financial statements and related noted referenced therein). That section is incorporated herein by reference.
 
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(b) Exhibits
See below.
The following documents are filed as exhibits hereto:

Exhibit
Number	  	Exhibit Description	
  2.1	  	Form of Separation and Distribution Agreement	
		
  3.1	  	Form of Memorandum and Articles of Association	
		
  4.1	  	Senior Notes Indenture, dated as of September 28, 2017, among Delphi Jersey Holdings plc, the guarantors named therein, U.S. Bank National Association as Trustee, and U.S. Bank National Association as Registrar, Paying Agent and Authenticating Agent	
		
10.1	  	Form of Transition Services Agreement	
		
10.2	  	Form of Tax Matters Agreement	
		
10.3	  	Form of Employee Matters Agreement	
		
10.4	  	Form of Contract Manufacturing Services Agreement	
		
10.5	  	Credit Agreement, dated as of September 7, 2017, among Delphi Jersey Holdings plc, Delphi Powertrain Corporation, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other lenders and agents party thereto	
		
10.6†	  	Employment Agreement, dated February 14, 2014, as amended by the Addendum to the Employment Agreement, dated February 19, 2015, between Delphi Automotive PLC and Liam Butterworth	
		
10.7†	  	Offer letter for Vivid Sehgal, dated September 19, 2017	
		
10.8†	  	Offer letter for James Harrington, dated September 1, 2017	
		
10.9†	  	Form of Long-Term Incentive Plan	
		
10.10†	  	Form of Annual Incentive Plan	
		
10.11†	  	Form of Leadership Incentive Plan	
		
21.1	  	List of subsidiaries of the registrant	
		
99.1	  	Preliminary Information Statement	

†	Management contract or compensatory plan or arrangement	
 
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

DELPHI TECHNOLOGIES PLC	
		
By:	 	/s/ David M. Sherbin	
	 	Name: David M. Sherbin	
	 	Title:   Director	
Date: October 13, 2017

Exhibit 2.1
SEPARATION AND DISTRIBUTION AGREEMENT
BY AND BETWEEN
DELPHI AUTOMOTIVE PLC
AND
DELPHI TECHNOLOGIES PLC
DATED AS OF [  🌑  ], 2017

TABLE OF CONTENTS

ARTICLE I. DEFINITIONS	  	 	2	 	
			
1.1	 	Definitions	  	 	2	 	
1.2	 	Interpretation	  	 	14	 	
		
ARTICLE II. SEPARATION	  	 	14	 	
			
2.1	 	Transfers of Assets and Assumptions of Liabilities; Delphi Technologies Assets; Aptiv Assets	  	 	14	 	
2.2	 	Nonassignable Contracts and Permits	  	 	19	 	
2.3	 	Termination of Intercompany Agreements	  	 	19	 	
2.4	 	Treatment of Shared Contracts and Shared Permits	  	 	21	 	
2.5	 	Bank Accounts; Cash Balances; Misdirected Payments.	  	 	21	 	
2.6	 	Delphi Technologies Financing Arrangements; Cash Distribution	  	 	23	 	
2.7	 	Misallocated Assets and Liabilities	  	 	23	 	
2.8	 	Disclaimer of Representations and Warranties	  	 	24	 	
		
ARTICLE III. COMPLETION OF THE DISTRIBUTION	  	 	25	 	
			
3.1	 	Actions Prior to the Distribution	  	 	25	 	
3.2	 	Effecting the Distribution	  	 	26	 	
3.3	 	Conditions to the Distribution	  	 	27	 	
3.4	 	Sole Discretion	  	 	28	 	
		
ARTICLE IV. DISPUTE RESOLUTION	  	 	29	 	
			
4.1	 	General Provisions	  	 	29	 	
4.2	 	Negotiation by Senior Executives	  	 	30	 	
4.3	 	Arbitration	  	 	30	 	
		
ARTICLE V. MUTUAL RELEASES; INDEMNIFICATION; COOPERATION; INSURANCE	  	 	31	 	
			
5.1	 	Release of Claims Prior to Distribution	  	 	31	 	
5.2	 	Indemnification by Aptiv	  	 	33	 	
5.3	 	Indemnification by Delphi Technologies	  	 	34	 	
5.4	 	Indemnification Obligations Net of Insurance Proceeds	  	 	35	 	
5.5	 	Procedures for Indemnification of Third-Party Claims	  	 	36	 	
5.6	 	Additional Matters	  	 	39	 	
5.7	 	Survival of Indemnities	  	 	41	 	
5.8	 	Right of Contribution	  	 	41	 	
5.9	 	Covenant Not to Sue (Liabilities and Indemnity)	  	 	41	 	
5.10	 	No Impact on Third Parties	  	 	42	 	
5.11	 	No Cross-Claims or Third-Party Claims	  	 	42	 	
5.12	 	Severability	  	 	42	 	
5.13	 	Specified Ancillary Agreements	  	 	42	 	

							
5.14	 	Exclusivity	  	 	42	 	
5.15	 	Cooperation in Defense and Settlement	  	 	43	 	
5.16	 	Insurance Matters	  	 	43	 	
5.17	 	Guarantees, Letters of Credit and Other Obligations	  	 	45	 	
		
ARTICLE VI. EXCHANGE OF INFORMATION; CONFIDENTIALITY	  	 	46	 	
			
6.1	 	Agreement for Exchange of Information	  	 	46	 	
6.2	 	Ownership of Information	  	 	47	 	
6.3	 	Compensation for Providing Information	  	 	47	 	
6.4	 	Record Retention	  	 	47	 	
6.5	 	Limitations of Liability	  	 	48	 	
6.6	 	Other Agreements Providing for Exchange of Information	  	 	48	 	
6.7	 	Auditors and Audits	  	 	49	 	
6.8	 	Privileged Matters	  	 	49	 	
6.9	 	Confidentiality	  	 	52	 	
6.10	 	Protective Arrangements	  	 	53	 	
		
ARTICLE VII. FURTHER ASSURANCES AND ADDITIONAL COVENANTS	  	 	54	 	
			
7.1	 	Further Assurances.	  	 	54	 	
7.2	 	Performance	  	 	55	 	
7.3	 	No Restrictions on Post-Closing Competitive Activities; Corporate Opportunities	  	 	55	 	
7.4	 	Mail Forwarding	  	 	56	 	
7.5	 	Non-Disparagement	  	 	56	 	
7.6	 	Non-Solicitation Covenant	  	 	56	 	
7.7	 	Order of Precedence	  	 	56	 	
		
ARTICLE VIII. INTELLECTUAL PROPERTY MATTERS	  	 	57	 	
			
8.1	 	License to Delphi Technologies	  	 	57	 	
8.2	 	License to Aptiv	  	 	59	 	
8.3	 	Aptiv-Formative Trademarks	  	 	61	 	
		
ARTICLE IX. TERMINATION	  	 	61	 	
			
9.1	 	Termination	  	 	61	 	
9.2	 	Effect of Termination	  	 	61	 	
		
ARTICLE X. MISCELLANEOUS	  	 	61	 	
			
10.1	 	Counterparts; Entire Agreement; Corporate Power	  	 	61	 	
10.2	 	Governing Law	  	 	62	 	
10.3	 	Assignability	  	 	62	 	
10.4	 	Third-Party Beneficiaries	  	 	62	 	
10.5	 	Notices	  	 	63	 	
10.6	 	Severability	  	 	64	 	
 
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10.7	 	Force Majeure	  	 	64	 	
10.8	 	Press Release	  	 	64	 	
10.9	 	Expenses	  	 	65	 	
10.10	 	Late Payments	  	 	65	 	
10.11	 	Headings	  	 	65	 	
10.12	 	Survival of Covenants	  	 	65	 	
10.13	 	Waivers of Default	  	 	65	 	
10.14	 	Specific Performance	  	 	65	 	
10.15	 	Amendments	  	 	65	 	
10.16	 	Construction	  	 	66	 	
10.17	 	Performance	  	 	66	 	
10.18	 	Limited Liability	  	 	66	 	
10.19	 	Exclusivity of Tax Matters	  	 	66	 	
10.20	 	Limitations of Liability	  	 	66	 	
Schedules
			
Schedule 1.1A                	 	Ancillary Agreements	
Schedule 1.1B	 	Delphi Technologies Permits	
Schedule 1.1C	 	Delphi Technologies Properties	
Schedule 1.1D	 	Excluded Intellectual Property	
Schedule 1.1E	 	Specified Ancillary Agreements	
Schedule 1.1F	 	Trade Intercompany Accounts	
Schedule 2.1(b)(iii)	 	Delphi Technologies Equity Interests	
Schedule 2.1(c)(ix)	 	Other Aptiv Assets	
Schedule 2.1(d)(xiv)	 	Other Delphi Technologies Liabilities	
Schedule 2.3(b)(iv)	 	Intercompany Agreements	
Schedule 2.4(b)	 	Shared Permits	
		
Exhibits	 		
Exhibit A	 	Amended and Restated Articles of Association	

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SEPARATION AND DISTRIBUTION AGREEMENT
This SEPARATION AND DISTRIBUTION AGREEMENT is entered into effective as of [  🌑  ] (this “ Agreement ”), by and between Delphi Automotive PLC, a public limited company formed under the laws of Jersey (“ Aptiv ”) and Delphi Technologies PLC, a public limited company formed under the laws of Jersey and wholly owned subsidiary of Aptiv (“ Delphi Technologies ”). Aptiv and Delphi Technologies are each a “ Party ” and are sometimes referred to herein collectively as the “ Parties .” Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Article I .
R E C I T A L S
WHEREAS , Aptiv owns 100% of the ordinary shares, par value $0.01 per share, of Delphi Technologies (the “ Delphi Technologies Stock ”);
WHEREAS , the Board of Directors of Aptiv (the “ Aptiv Board ”) determined on careful review and consideration that the separation of Delphi Technologies from the rest of Aptiv and the establishment of Delphi Technologies as a separate, publicly traded company to operate the Delphi Technologies Business is in the best interests of Aptiv;
WHEREAS , the Board of Directors of Delphi Technologies (the “ Delphi Technologies Board ”) determined on careful review and consideration that the separation of Delphi Technologies from the rest of Aptiv and the establishment of Delphi Technologies as a separate, publicly traded company to operate the Delphi Technologies Business is in the best interests of Delphi Technologies;
WHEREAS , in furtherance of the foregoing, the Aptiv Board has determined that it is appropriate and desirable to separate the Delphi Technologies Business from the Aptiv Business (the “ Separation ”) and, following the Separation, to make a distribution of the Delphi Technologies Business to the holders of ordinary shares, par value $0.01 per share, of Aptiv (the “ Aptiv Stock ”) on the Record Date through the distribution of ordinary shares of Delphi Technologies to holders of Aptiv on the Record Date on a pro rata basis (the “ Distribution ”), in each case, on the terms and conditions set forth in this Agreement;
WHEREAS , Aptiv and Delphi Technologies have prepared, and Delphi Technologies has filed with the SEC, the Form 10, which includes the Information Statement, and which sets forth certain disclosure concerning Delphi Technologies, the Separation and the Distribution;
WHEREAS , each of Aptiv and Delphi Technologies has determined that it is appropriate and desirable to set forth in this Agreement certain agreements that will govern certain matters relating to the Separation and the Distribution and the relationship of Aptiv, Delphi Technologies and the members of their respective Groups following the Distribution; and
WHEREAS , the Parties intend that the Distribution will qualify as a distribution under Section 355(a) of the Code.
NOW, THEREFORE , in consideration of the foregoing and the mutual agreements, provisions and covenants contained in this Agreement, the Parties hereby agree as follows:

ARTICLE I.
DEFINITIONS
1.1 Definitions . For the purpose of this Agreement, the following terms shall have the following meanings:
“ Action ” means any demand, action, claim, dispute, suit, countersuit, arbitration, inquiry, subpoena, proceeding or investigation of any nature (whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise) by or before any Governmental Authority or in any arbitration or mediation.
“ Affiliate ” means, when used with respect to a specified Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. For the purpose of this definition, “control” (including with correlative meanings, “controlled by” and “under common control with”), when used with respect to any specified Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment, undertaking or otherwise. It is expressly agreed that for purposes of this Agreement and the Ancillary Agreements, from and after the Effective Time, (i) no member of the Delphi Technologies Group shall be deemed to be an Affiliate of any member of the Aptiv Group, (ii) no member of the Aptiv Group shall be deemed to be an Affiliate of any member of the Delphi Technologies Group and (iii) no joint venture formed after the Effective Time solely between one or more members of the Delphi Technologies Group, on the one hand, and one or more members of the Aptiv Group, on the other hand, shall be deemed to be an Affiliate of, or owned or controlled by, any member of the Delphi Technologies Group or the Aptiv Group for the purposes of this Agreement.
“ Agent ” means Computershare Trust Company, N.A., as the distribution agent appointed by Aptiv to distribute to the shareholders of Distribution all of the outstanding shares of Delphi Technologies Stock pursuant to the Distribution.
“ Agreement ” shall have the meaning set forth in the Preamble.
“ Amended Financial Report ” shall have the meaning set forth in Section 6.7(b) .
“ Ancillary Agreements ” means all Contracts entered into by the Parties or the members of their respective Groups (but to which no Third Party is a party) in connection with the Separation, the Distribution and the other transactions contemplated by this Agreement, including, the Employee Matters Agreement, the Contract Manufacturing Services Agreements, the Tax Matters Agreement, the Transition Services Agreement, the Transfer Documents and the agreements set forth on Schedule 1.1A.
“ Approvals or Notifications ” means any consents, waivers, approvals, permits or authorizations to be obtained from, notices, registrations or reports to be submitted to, or other filings to be made with, any third Person, including any Governmental Authority.
 
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“ Aptiv-Formative Marks ” means all Trademarks and domain names owned by Aptiv or any of its Subsidiaries that contain the “Delphi” name, either alone or in combination with other words or elements.
“ Aptiv ” shall have the meaning set forth in the Preamble.
“ Aptiv Accounts ” shall have the meaning set forth in Section 2.5(a) .
“ Aptiv Assets ” shall have the meaning set forth in Section 2.1(c) .
“ Aptiv Board ” shall have the meaning set forth in the Recitals.
“ Aptiv Business ” means all businesses and operations (whether or not such businesses or operations are or have been terminated, divested or discontinued) conducted by Aptiv and its Subsidiaries prior to the Effective Time that are not included in the Delphi Technologies Business.
“ Aptiv Group ” means, immediately after the Effective Time, (a) Aptiv and (b) each Subsidiary of Aptiv.
“ Aptiv Indemnitees ” shall have the meaning set forth in Section 5.3 .
“ Aptiv Liabilities ” shall have the meaning set forth in Section 2.1(e) .
“ Aptiv Specified Marks ” means (a) all Aptiv-Formative Marks, other than the Delphi Technologies Specified Marks, (b) any other Trademarks and domain names of Aptiv or any of its Subsidiaries (other than the Delphi Technologies Group) that are not used or held for use primarily in the Delphi Technologies Business, and (c) all Trademarks and domain names confusingly similar to or embodying any of the foregoing either alone or in combination with other words or elements, together with the goodwill associated with any of the foregoing; in each case, excluding the Delphi Technologies Specified Marks.
“ Aptiv Stock ” shall have the meaning set forth in the Recitals.
“ Assets ” means assets, properties, claims and rights (including goodwill), wherever located (including in the possession of vendors or other third parties or elsewhere), of every kind, character and description, whether real, personal or mixed, tangible, intangible or contingent, in each case, whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of the applicable Person, including rights and benefits pursuant to any contract, license, permit, indenture, note, bond, mortgage, agreement, concession, franchise, instrument, undertaking, commitment, understanding or other arrangement.
“ Business Day ” means any day that is not a Saturday, Sunday or any other day on which banking institutions located in New York, New York are required or authorized by Law to be closed.
 
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“ Business Records ” means all files, documents, instruments, papers, books, reports, records, tapes, microfilms, photographs, letters, ledgers, journals, financial statements, technical documentation (design specifications, functional requirements, operating instructions, logic manuals, flow charts, etc.), user documentation (installation guides, user manuals, training materials, release notes, working papers, etc.), Tax Returns, other Tax work papers and files and other documents in whatever form, physical, electronic or otherwise.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Contract ” means any written, oral, implied or other contract, agreement, covenant, lease, license, guaranty, indemnity, representation, warranty, assignment, sales order, purchase order, power of attorney, instrument or other commitment, assurance, undertaking or arrangement that is binding on any Person or entity or any part of its property under applicable Law.
“ Contract Manufacturing Services Agreements ” means those certain Contract Manufacturing Services Agreements to be entered into between Aptiv and Delphi Technologies or any members of their respective Groups in connection with the Separation, the Distribution or the other transactions contemplated by this Agreement, as such agreements may be modified or amended from time to time in accordance with their respective terms.
“ Covered Matter ” shall have the meaning set forth in Section 5.16(i) .
“ Delphi Technologies ” shall have the meaning set forth in the Preamble.
“ Delphi Technologies Accounts ” shall have the meaning set forth in Section 2.5(a) .
“ Delphi Technologies Articles of Association ” shall have the meaning set forth in Section 3.1(f) .
“ Delphi Technologies Assets ” shall have the meaning set forth in Section 2.1(b) .
“ Delphi Technologies Balance Sheet ” means the unaudited pro forma condensed combined balance sheet of the Delphi Technologies Group as of September 30, 2017, including the notes thereto, included in the Information Statement.
“ Delphi Technologies Borrowing ” shall have the meaning set forth in Section 2.6(a) .
“ Delphi Technologies Business ” means (a) Aptiv’s global “Powertrain Systems” business segment, consisting of (i) the design, manufacture, sale and distribution of fuel injection systems, including injectors, rails, pumps and electronic engine control modules, powertrain products, including variable valve timing, variable valve actuation, smart remote actuators, powertrain sensors, ignition products, canisters, and fuel handling products and power electronics products, including supervisory controllers and software, and DC/DC converters and inverters, and (ii) the sale of aftermarket products, including engine control modules, pumps, injectors, fuel modules, ignition coils, smart remote actuators, exhaust gas recirculation valves, brakes, steering, suspension, and other products, and (b) without limiting the foregoing clause (a) any terminated, divested or discontinued businesses, Assets or operations that were of such a
 
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nature that they would have been part of the Delphi Technologies Business (as described in the foregoing clause (a)) had they not been terminated, divested or discontinued (regardless of whether they ever operated under the “Delphi Technologies” name); provided , however , that the Delphi Technologies Business shall exclude the original equipment service business conducted by Aptiv’s “Powertrain Systems” segment prior to the Effective Time to the extent related to the sale of products of other Aptiv segments to vehicle original equipment manufacturers or their Affiliates.
“ Delphi Technologies Business Records ” shall have the meaning set forth in Section 2.1(b)(x) .
“ Delphi Technologies Cash Distribution ” means [  🌑  ].
“ Delphi Technologies Contracts ” shall mean any contract or agreement to which either Party or any member of its Group is a party or by which it or any member of its Group or any of their respective Assets is bound, whether or not in writing, used or held for use exclusively in the conduct of the Delphi Technologies Business; provided that Delphi Technologies Contracts shall not include (a) any Contract that is contemplated to be retained by Delphi or any member of the Delphi Group from and after the Effective Time pursuant to any provision of this Agreement or any Ancillary Agreement or (b) any Contract referenced in Section 2.3(b) .
“ Delphi Technologies DEG Business ” means the Delphi Electronics Group business that manufactures electronic components at facilities in Suzhou, China, Szombathely, Hungary, Reynosa, Mexico, Singapore and Kokomo, Indiana, U.S. that are sold by Delphi Technologies as a part of the Delphi Technologies Business.
“ Delphi Technologies Financing Arrangements ” means (a) that certain Credit Agreement, dated as of September 7, 2017, among Delphi Technologies and Delphi Powertrain Corporation, a U.S. corporation, as borrowers, J.P. Morgan Chase Bank, N.A., as administrative agent, and the other parties thereto pursuant to which Delphi Technologies shall borrow $750,000,000 of term loans and enter into a $500,000,000 revolving credit facility and (b) the issuance by Delphi Technologies of $800,000,000 aggregate principal amount of 5% notes due 2025 pursuant to that certain Indenture, dated as of September 28, 2017, among Delphi Technologies, as issuer, U.S. Bank National Association, as trustee, and U.S. Bank National Association, as registered agent, paying agent and authenticating agent.
“ Delphi Technologies Group ” means, immediately after the Effective Time, (a) Delphi Technologies and (b) each Subsidiary of Delphi Technologies.
“ Delphi Technologies Indemnitees ” shall have the meaning set forth in Section 5.2 .
“ Delphi Technologies Intellectual Property ” means (a) the Intellectual Property (other than any Aptiv-Formative Marks) registered with any Governmental Authority owned by Aptiv or any of its Affiliates that is primarily used or primarily held for use in connection with the Delphi Technologies Business as of the Effective Time as documented by the books and records of Aptiv, (b) the Delphi Technologies Specified Marks, (c) all rights in any unregistered Intellectual Property, including Trademarks, that is related to the registered Intellectual Property described in (a), and (d) all other Intellectual Property owned or licensed by Aptiv or any of its
 
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Affiliates and exclusively used or exclusively held for use in connection with the Delphi Technologies Business as of the Effective Time, in each case together with all rights, priorities and privileges accruing thereunder or pertaining thereto throughout the world (including all rights to sue or otherwise recover for past, present and future infringement thereof), but excluding the Excluded Intellectual Property.
“ Delphi Technologies Leases ” means the leases covering the Leased Real Property.
“ Delphi Technologies Liabilities ” shall have the meaning set forth in Section 2.1(d) .
“ Delphi Technologies Permits ” means all Permits owned or licensed by either Party or member of its respective Group (a) exclusively used in the operation of the Delphi Technologies Business as of the Effective Time or (b) set forth on Schedule 1.1B .
“ Delphi Technologies Properties ” means the real property set forth on Schedule 1.1C under the heading “Delphi Technologies Properties”.
“ Delphi Technologies Specified Marks ” means the Aptiv-Formative Marks that are owned and used (or the subject of an intent-to-use application) by Aptiv or any of its Subsidiaries immediately prior to the Separation, but only to the extent such Trademarks are used (or the subject of an intent-to-use application) in connection with the goods and services included in the Delphi Technologies Business.
“ Delphi Technologies Stock ” shall have the meaning set forth in the Recitals.
“ Director ” shall mean, with respect to any member of the Delphi Technologies Group or the Aptiv Group, a member of the board of directors or managers, as applicable, of such entity.
“ Disclosure Document ” shall mean any registration statement (including the Form 10) filed with the SEC by or on behalf of any Party or any member of its Group, and also includes any information statement (including the Information Statement), prospectus, offering memorandum, offering circular, periodic report or similar disclosure document, whether or not filed with the SEC or any other Governmental Authority, in each case which describes the Separation or the Distribution or the Delphi Technologies Group or primarily relates to the transactions contemplated hereby, including the Separation, the Distribution, the Delphi Technologies Financing Arrangements or the Delphi Technologies Cash Distribution.
“ Dispute ” shall have the meaning set forth in Section 4.1(a) .
“ Dispute Committee ” shall have the meaning set forth in Section 4.2 .
“ Distribution ” shall have the meaning set forth in the Recitals.
“ Distribution Date ” means the date on which Aptiv, through the Agent, distributes all of the issued and outstanding shares of Delphi Technologies Stock to holders of Aptiv Stock in the Distribution.
 
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“ Effective Time ” means 11:59 p.m. New York time, or such other time as Aptiv may determine, on the Distribution Date.
“ Employee Matters Agreement ” means that certain Employee Matters Agreement to be entered into between Aptiv and Delphi Technologies or any members of their respective Groups in connection with the Separation, the Distribution or the other transactions contemplated by this Agreement, as such agreement may be modified or amended from time to time in accordance with its terms.
“ Environmental Law ” means any Law relating to pollution, protection or restoration of or prevention of harm to the environment or natural resources, including the use, handling, transportation, treatment, storage, disposal, Release or discharge of Hazardous Materials or the protection of or prevention of harm to human health and safety.
“ Environmental Liabilities ” means all Liabilities relating to, arising out of or resulting from any Hazardous Materials, Environmental Law or contract or agreement relating to environmental, health or safety matters (including all removal, remediation or cleanup costs, investigatory costs, response costs, natural resources damages, property damages, personal injury damages, costs of compliance, including with any product take-back requirements, or with any settlement, judgment or other determination of Liability and indemnity, contribution or similar obligations) and all costs and expenses, interest, fines, penalties or other monetary sanctions in connection therewith.
“ Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder, as the same shall be in effect at the time reference is made thereto.
“ Excluded Intellectual Property ” means the Intellectual Property licensed pursuant to Shared Contracts, the Aptiv Specified Marks and any Intellectual Property listed on Schedule 1.1D .
“ Force Majeure ” means, with respect to a Party, an event beyond the control of such Party (or any Person acting on its behalf), which by its nature could not have been reasonably foreseen by such Party (or such Person) or, if it could have been reasonably foreseen, was unavoidable, and includes acts of God, storms, floods, riots, labor unrest, pandemics, nuclear incidents, fires, sabotage, civil commotion or civil unrest, interference by civil or military authorities, acts of war (declared or undeclared) or armed hostilities, or other national or international calamity or one or more acts of terrorism or failure of energy sources or distribution or transportation facilities. Notwithstanding the foregoing, the receipt by a Party of an unsolicited takeover offer or other acquisition proposal, even if unforeseen or unavoidable, and such Party’s response thereto shall not be deemed an event of Force Majeure.
“ Form 10 ” means the registration statement on Form 10-12B (File No. 001-38110) filed by Delphi Technologies with the SEC to effect the registration of the Delphi Technologies Stock pursuant to Section 12(b) of the Exchange Act in connection with the Distribution, including any amendments or supplements thereto.
 
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“ Governmental Approvals ” means any notices or reports to be submitted to, or other filings to be made with, or any consents, registrations, approvals, permits or authorizations to be obtained from, any Governmental Authority.
“ Governmental Authority ” means any nation or government, any state, province, municipality or other political subdivision thereof, and any entity, body, agency, commission, department, board, bureau, court, tribunal or other instrumentality, whether federal, state, provincial, regional, local, domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory, administrative or other similar functions of, or pertaining to, government and any official thereof.
“ Group ” means either the Delphi Technologies Group or the Aptiv Group, as the context requires.
“ Hazardous Materials ” means any chemical, material, substance, waste, pollutant, emission, discharge, release or contaminant that could result in liability under, or that is prohibited, limited or regulated by or pursuant to, any Environmental Law, and any natural or artificial substance (whether solid, liquid or gas, noise, ion, vapor or electromagnetic) that could cause harm to human health or the environment, including petroleum, petroleum products and byproducts, asbestos and asbestos-containing materials, urea formaldehyde foam insulation, electronic, medical or infectious wastes, polychlorinated biphenyls, radon gas, radioactive substances, chlorofluorocarbons and all other ozone-depleting substances.
“ ICC Rules ” shall have the meaning set forth in Section 4.3(a) .
“ Indebtedness ” means (a) all obligations of such specified Person for borrowed money or arising out of any extension of credit to or for the account of such specified Person (including reimbursement or payment obligations with respect to surety bonds, letters of credit, bankers’ acceptances and similar instruments), (b) all obligations of such specified Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such specified Person upon which interest charges are customarily paid, (d) all obligations of such specified Person under conditional sale or other title retention agreements relating to Assets purchased by such specified Person, (e) all obligations of such specified Person issued or assumed as the deferred purchase price of property or services, (f) all liabilities secured by (or for which any Person to which any such liability is owed has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge or other encumbrance on property owned or acquired by such specified Person (or upon any revenues, income or profits of such specified Person therefrom), whether or not the obligations secured thereby have been assumed by the specified Person or otherwise become liabilities of the specified Person, (g) all capital lease obligations of such specified Person, (h) all securities or other similar instruments convertible or exchangeable into any of the foregoing, but excluding daily cash overdrafts associated with routine cash operations, and (i) any liability of others of a type described in any of the preceding clauses (a) through (h) in respect of which the specified Person has incurred, assumed or acquired a liability by means of a guaranty, excluding any obligations related to Taxes.
“ Indemnifying Party ” shall have the meaning set forth in Section 5.4(a) .
 
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“ Indemnitee ” shall have the meaning set forth in Section 5.4(a) .
“ Indemnity Payment ” shall have the meaning set forth in Section 5.4(a) .
“ Information ” means information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium and regardless of location, including (a) Technology and (b), to the extent not described by clause (a), technical, financial, employee or business information or data, studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names and records, supplier names and records, customer and supplier lists, customer and vendor data or correspondence, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other financial employee or business information or data, files, papers, tapes, keys, correspondence, plans, invoices, forms, product data and literature, promotional and advertising materials, operating manuals, instructional documents, quality records and regulatory and compliance records.
“ Information Statement ” means the Information Statement attached as an exhibit to the Form 10 and any related documents to be provided to the holders of Aptiv Stock in connection with the Distribution, including any amendment or supplement thereto.
“ Initial Notice ” shall have the meaning set forth in Section 4.2 .
“ Insurance Proceeds ” means those monies: (a) received by an insured Person from any insurer, insurance underwriter, mutual protection and indemnity club or other risk collective; or (b) paid on behalf of an insured Person by any insurer, insurance underwriter, mutual protection and indemnity club or other risk collective, on behalf of the insured, in either such case net of any costs or expenses incurred in the collection thereof; provided , however , that with respect to a captive insurance arrangement, Insurance Proceeds shall only include net amounts received by the captive insurer from a Third Party in respect of any captive reinsurance arrangement.
“ Intellectual Property ” means all intellectual property and industrial property in any and all jurisdictions throughout the world, including all: (a) patents, patent applications (including patents issued thereon) and statutory invention registrations, including reissues, divisions, continuations, continuations in part, substitutions, renewals, extensions and reexaminations of any of the foregoing, and all rights in any of the foregoing provided by international treaties or conventions, (b) Trademarks, (c) Internet domain names, (d) copyrights, mask works, database rights and design rights, whether or not registered, and all registrations and applications for registration of any of the foregoing, and all rights in and to any of the foregoing provided by international treaties or conventions, (e) any intellectual property rights in unpatented technology, and inventions (whether or not patentable and whether or not reduced to practice), invention disclosures, ideas, formulas, compositions, inventor’s notes, discoveries and improvements, manufacturing and production processes and techniques, testing information, research and development information, drawings, specifications, designs, plans, proposals and technical data, trade secrets, confidential information, data, know-how, product designs and development, methods and processes, testing tools and materials, customer information, marketing materials and market surveys and (f) intellectual property rights arising from or in respect of any Software or technology.
 
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“ Intended Transferee ” shall have the meaning set forth in Section 2.2 .
“ Intended Transferor ” shall have the meaning set forth in Section 2.2 .
“ Intercompany ” means, with respect to any Contract, balance, arrangement or other legal or financial relationship, established at or prior to the Effective Time, that such Contract, balance, arrangement or other legal or financial relationship is (a) between or among one or more members of the Delphi Technologies Group and one or more members of the Aptiv Group, as applicable, or (b) between or among the Delphi Technologies Business and the Aptiv Business, even if within the same legal entity (in which case the applicable Contract, balance, arrangement or other legal or financial relationship shall be deemed to be binding as if it was between separate legal entities).
“ Joint Claims ” means any claim or series of related claims under any insurance policy that results or could reasonably be expected to result in the payment of Insurance Proceeds to or for the benefit of both one or more members of the Aptiv Group and one or more members of the Delphi Technologies Group.
“ Law ” means any national, supranational, federal, state, provincial, regional, local or similar law (including common law), statute, code, order, ordinance, rule, regulation, treaty (including any income tax treaty), license, permit, authorization, approval, consent, decree, injunction, binding judicial or administrative interpretation or other legally enforceable requirement, in each case, enacted, promulgated, issued or entered by a Governmental Authority.
“ Leased Real Property ” means (a) the real property leased by Aptiv or any other member of the Aptiv Group and used exclusively in the Delphi Technologies Business and (b) the real property leased by any member of the Delphi Technologies Group, in each case as tenant.
“ Liabilities ” means any and all Indebtedness, guarantees, assurances, commitments, liabilities, responsibilities, Losses, remediation, deficiencies, reimbursement obligations in respect of letters of credit, damages, payments, fines, penalties, claims, settlements, judgments, sanctions, costs, expenses, interest and obligations of any nature or kind, whether accrued or fixed, absolute or contingent, matured or unmatured, accrued or not accrued, asserted or unasserted, liquidated or unliquidated, foreseen or unforeseen, known or unknown, reserved or unreserved, reflected on a balance sheet or otherwise, or determined or determinable, including those arising under any Law, claim (including any Third-Party Claim), demand, Action, or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority or arbitration tribunal, and those arising under any Contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment or undertaking or terms of employment, whether imposed or sought to be imposed by a Governmental Authority, another third Person, or a Party, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, or otherwise, in each case, including all costs, expenses, interest, attorneys’ fees, disbursements and expenses of counsel, expert and consulting fees and costs related thereto or to the investigation or defense thereof, in each case (a) including any fines, damages or equitable relief that is imposed in connection therewith and (b) other than Taxes.
 
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“ Licensed Intellectual Property ” means Intellectual Property (other than Trademarks) owned by the Aptiv Group and used or held for use as of the Effective Time in connection with the Delphi Technologies Business, but excluding, for the avoidance of doubt, any Delphi Technologies Intellectual Property.
“ Losses ” means any and all damages, losses (including diminution in value), deficiencies, Liabilities, obligations, penalties, judgments, settlements, claims, payments, interest costs, fines and expenses (including the costs and expenses of any and all Actions and demands, assessments, judgments, settlements and compromises relating thereto and attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or the enforcement rights hereunder), whether or not involving a Third-Party Claim, other than Taxes.
“ Misdirected Payment ” shall have the meaning set forth in Section 2.5(g) .
“ NYSE ” means the New York Stock Exchange, Inc.
“ Parties ” or “ Party ” shall have the meaning set forth in the Preamble.
“ Permit ” means all permits, licenses, franchises, authorizations, concessions, certificates, consents, exemptions, approvals, variances, registrations, or similar authorizations from any Governmental Authority.
“ Person ” means any individual, general or limited partnership, corporation, business trust, joint venture, association, company, limited liability company, unincorporated organization, a limited liability entity, any other entity and any Governmental Authority.
“ Prime Rate ” shall mean the rate that Bloomberg displays as “Prime Rate by Country United States” at www.bloomberg.com/markets/rates-bonds/key-rates/ or on a Bloomberg terminal at PRIMBB Index.
“ Privileged Information ” means any information, in written, oral, electronic or other tangible or intangible forms, including any communications by or to attorneys (including attorney-client privileged communications), memoranda and other materials prepared by attorneys or under their direction (including attorney work product), as to which a party or its respective Subsidiaries would be entitled to assert or have a privilege, including the attorney-client and attorney work product privileges.
“ Record Date ” means 5:00 p.m. New York time on the date to be determined by the Aptiv Board as the record date for determining shareholders of Aptiv entitled to receive shares of Delphi Technologies Stock in the Distribution.
“ Record Holders ” means the holders of record of Aptiv Stock as of the Record Date.
 
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“ Records Facility ” shall have the meaning set forth in Section 6.4(a) .
“ Release ” means any release, spill, emission, discharge, leaking, pumping, pouring, dumping, injection, deposit, disposal, dispersal, leaching or migration of Hazardous Materials into the environment (including ambient air, surface water, groundwater and surface or subsurface strata).
“ Representatives ” means, with respect to any Person, any of such Person’s directors, officers, employees, agents, consultants, advisors, accountants, attorneys or other representatives.
“ SEC ” means the U.S. Securities and Exchange Commission.
“ Securities Act ” means the U.S. Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder, as the same shall be in effect at the time reference is made thereto.
“ Separation ” shall have the meaning set forth in the Recitals.
“ Shared Contract ” shall have the meaning set forth in Section 2.4 .
“ Shared Permit ” shall have the meaning set forth in Section 2.4 .
“ Software ” means any and all (a) computer programs, including any and all software implementation of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, (b) databases and compilations, including any and all data and collections of data, whether machine-readable or otherwise, (c) descriptions, flow charts and other work products used to design, plan, organize and develop any of the foregoing, (d) screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons and (e) documentation, including user manuals and other training documentation, relating to any of the foregoing.
“ Specified Ancillary Agreements ” means the agreements set forth on Schedule 1.1E .
“ Specified Party ” shall have the meaning set forth in Section 2.5(g) .
“ Stored Records ” means Tangible Information held in a Records Facility maintained or arranged for by the party other than the party that owns such Tangible Information.
“ Subsidiary ” means, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) beneficially owns or controls, either directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities of such Person, (ii) the total combined equity interests or (iii) the capital or profit interests, in the case of a partnership, or (b) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.
“ Tangible Information ” means Information that is contained in written, electronic or other tangible forms.
 
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“ Tax ” shall have the meaning set forth in the Tax Matters Agreement.
“ Tax Matters Agreement ” means that certain Tax Matters Agreement to be entered into between Aptiv and Delphi Technologies in connection with the Separation, the Distribution and the other transactions contemplated by this Agreement, as such agreement may be modified or amended from time to time in accordance with its terms.
“ Tax Returns ” shall have the meaning set forth in the Tax Matters Agreement.
“ Technology ” shall mean all technology, designs, formulae, algorithms, procedures, methods, discoveries, processes, techniques, ideas, know-how, research and development, technical data, tools, materials, specifications, processes, inventions (whether patentable or unpatentable and whether or not reduced to practice), apparatus, creations, improvements, works of authorship in any media, confidential, proprietary or nonpublic information, and other similar materials, all customized applications, completely developed applications and modifications to commercial applications, and all recordings, graphs, drawings, reports, analyses and other writings, and other tangible embodiments of the foregoing in any form, in each case, other than Software.
“ Third Party ” shall have the meaning set forth in Section 5.5(a) .
“ Third-Party Claim ” shall have the meaning set forth in Section 5.5(a) .
“ Trade Intercompany Accounts ” means any Intercompany accounts with respect to (a) payables or receivables for goods with respect to the Trade Intercompany Arrangements, (b) the Delphi Electronics Group business or (c) any payables or receivables for (i) aftermarket or original equipment service sales or (ii) services except as set forth on Schedule 1.1F .
“ Trade Intercompany Arrangements ” means Intercompany transactions for the purchase or sale of products by or to the Delphi Technologies Business entered into in the ordinary course of business consistent with past practice and on arms’ length terms, excluding Intercompany transactions related to aftermarket or original equipment service sales.
“ Trademarks ” means all trademarks, service marks, trade names, trade dress, logos and other source or business identifiers, including all goodwill associated with any of the foregoing and any and all common law rights in and to any of the foregoing, registrations and applications for registration of any of the foregoing, all rights in and to any of the foregoing provided by international treaties or conventions, and all reissues, extensions and renewals of any of the foregoing.
“ Transfer Documents ” means transfer, contribution, distribution or other similar agreements, bills of sale, special warranty deeds, stock powers, certificates of title, assignments of contracts and other instruments of transfer, conveyance and assignment entered into, as of or prior to the Effective Time, between one or more members of the Aptiv Group, on the one hand, and one or more members of the Delphi Technologies Group, on the other hand, as and to the extent necessary to evidence: (a) the transfer, conveyance and assignment of all of such Party’s and the applicable members of its Group’s right, title and interest in and to the Assets to the other Party and the applicable members of its Group in accordance with Section 2.1(a) ; and (b) the valid and effective assumption of the Liabilities by such Party or the applicable members of its Group in accordance with Section 2.1(a) .
 
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“ Transition Services Agreement ” means that certain Transition Services Agreement to be entered into between Delphi Technologies and Aptiv or any members of their respective Groups in connection with the Distribution or the other transactions contemplated by this Agreement, as such agreement may be modified or amended from time to time in accordance with its terms.
1.2 Interpretation . In this Agreement and any Ancillary Agreement, (a) words in the singular shall be deemed to include the plural and vice versa and words of one gender shall be deemed to include the other genders as the context requires; (b) the terms “hereof,” “herein,” “herewith” and words of similar import, and the terms “Agreement” and “Ancillary Agreement” shall, unless otherwise stated, be construed to refer to this Agreement or the applicable Ancillary Agreement as a whole (including all of the Schedules, Exhibits, Annexes and Appendices hereto and thereto) and not to any particular provision of this Agreement or such Ancillary Agreement; (c) Article, Section, Exhibit, Schedule and Appendix references are to the Articles, Sections, Exhibits, Schedules and Appendices to this Agreement (or the applicable Ancillary Agreement) unless otherwise specified; (d) the word “including” and words of similar import when used in this Agreement (or the applicable Ancillary Agreement) shall mean “including, without limitation”; (e) the word “or” shall not be exclusive; (f) unless expressly stated to the contrary in this Agreement, all references to “the date hereof,” “the date of this Agreement,” and words of similar import shall all be references to the date first stated in the preamble to this Agreement, regardless of any amendment or restatement hereof; (g) unless otherwise provided, all references to “$” or “dollars” are to United States dollars; and (h) references to the performance, discharge or fulfillment of any Liability in accordance with its terms shall have meaning only to the extent such Liability has terms, and if the Liability does not have terms, the reference shall mean performance, discharge or fulfillment of such Liability.
ARTICLE II.
SEPARATION
2.1 Transfers of Assets and Assumptions of Liabilities; Delphi Technologies Assets; Aptiv Assets .
(a) In order to effect the Separation, the Parties shall cause, and shall cause the members of their respective Groups to cause, (i) the Delphi Technologies Group to own, to the extent it does not already own, all of the Delphi Technologies Assets and none of the Aptiv Assets, and (ii) the Delphi Technologies Group to be liable for, to the extent it is not already liable for all of the Delphi Technologies Liabilities.
(b) For purposes of this Agreement, “ Delphi Technologies Assets ” shall mean:
(i) all Assets of either Party or any member of its Group included or reflected as Assets of the Delphi Technologies Group on the Delphi Technologies Balance Sheet, subject to any dispositions of such Assets subsequent to the date of the Delphi Technologies Balance Sheet; provided , that the amounts set forth on the Delphi Technologies Balance Sheet with respect to any Assets shall not be treated as minimum amounts or limitations on the amount of such Assets that are included in the definition of Delphi Technologies Assets pursuant to this clause (i);
 
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(ii) all Assets of either Party or any member of its Group as of the Effective Time that are of a nature or type that would have resulted in such Assets being included as Assets of Delphi Technologies or members of the Delphi Technologies Group as of the Effective Time if a balance sheet, notes and subledgers were to be prepared on a basis consistent with the determination of the Assets included on the Delphi Technologies Balance Sheet, it being understood that (x) the Delphi Technologies Balance Sheet shall be used to determine the types of, and methodologies used to determine, those Assets that are included in the definition of Delphi Technologies Assets pursuant to this clause (ii) and (y) the amounts set forth on the Delphi Technologies Balance Sheet with respect to any Assets shall not be treated as minimum amounts or limitations on the amount of such Assets that are included in the definition of Delphi Technologies Assets pursuant to this clause (ii);
(iii) all issued and outstanding capital stock or other equity securities of the Persons set forth on Schedule 2.1(b)(iii) owned by either Party or a member of its respective Group as of the Effective Time;
(iv) all Delphi Technologies Contracts and all rights, interests or claims of either Party or any member of its respective Group thereunder as of the Effective Time;
(v) all Delphi Technologies Intellectual Property and all rights, interests or claims of either Party or any member of its respective Group thereunder as of the Effective Time;
(vi) all Delphi Technologies Leases and all rights, interests or claims of either Party or any member of its respective Group thereunder as of the Effective Time;
(vii) all Delphi Technologies Permits and all rights, interests or claims of either Party or any member of its respective Group thereunder as of the Effective Time;
(viii) without limiting the generality of clauses (i) and (ii), all Delphi Technologies Properties, together with all buildings, fixtures and improvements erected thereon;
(ix) all rights, claims, demands, causes of action, judgments, decrees and rights to indemnity or contribution, whether absolute or contingent, contractual or otherwise, in favor of Aptiv or any of its Subsidiaries exclusively related to the Delphi Technologies Business, including the right to sue, recover and retain such recoveries and the right to continue in the name of Delphi Technologies and its Subsidiaries any pending actions relating to the foregoing, and to recover and retain any damages therefrom;
(x) all Business Records exclusively related to the Delphi Technologies Business (the “ Delphi Technologies Business Records ”);
 
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(xi) all of the Delphi Technologies Business’s interest in the Trade Intercompany Arrangements and the Trade Intercompany Accounts; and
(xii) all Assets of either Party or any member of its respective Group as of the Effective Time that are expressly provided by this Agreement or any Ancillary Agreement as Assets to be transferred to any member of the Delphi Technologies Group.
Notwithstanding the foregoing, the Delphi Technologies Assets shall not in any event include any Asset referred to in Section 2.1(c) .
(c) For purposes of this Agreement, “ Aptiv Assets ” shall mean all Assets of either Party or the members of its Group as of the Effective Time, other than the Delphi Technologies Assets, including:
(i) all Assets of either Party or any member of its respective Group as of the Effective Time that are expressly contemplated by this Agreement or any Ancillary Agreement as Assets to be retained by any member of the Aptiv Group;
(ii) all Contracts of either Party or any member of its respective Group and all rights, interests or claims of either Party or any member of its respective Group thereunder as of the Effective Time other than the Delphi Technologies Contracts;
(iii) all Intellectual Property of either Party or any member of its respective Group and all rights, interests or claims of either Party or any member of its respective Group thereunder as of the Effective Time, including the Excluded Intellectual Property other than the Delphi Technologies Intellectual Property;
(iv) all Permits of either Party or any member of its Group and all rights, interests or claims of either Party or any member of its respective Group thereunder as of the Effective Time other than the Delphi Technologies Permits;
(v) any Contract related to the leasing or subleasing of real property and all rights, interests or claims of either Party or any member of its respective Group thereunder as of the Effective Time other than the Delphi Technologies Leases;
(vi) all of the Aptiv Business’s interest in the Trade Intercompany Arrangements and the Trade Intercompany Accounts;
(vii) all cash, cash equivalents and marketable securities on hand or in banks;
(viii) all Business Records other than the Delphi Technologies Business Records; and
(ix) all assets set forth on Schedule 2.1(c)(ix) .
(d) For the purposes of this Agreement, “ Delphi Technologies Liabilities ” shall mean all Liabilities relating to, arising out of or resulting from the actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to, at or after the
 
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Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent that such Liabilities relate to, arise out of or result from the Delphi Technologies Business or a Delphi Technologies Asset, including:
(i) all Liabilities included or reflected as liabilities or obligations of Delphi Technologies or the members of the Delphi Technologies Group on the Delphi Technologies Balance Sheet, subject to any discharge of such Liabilities subsequent to the date of the Delphi Technologies Balance Sheet; provided, that the amounts set forth on the Delphi Technologies Balance Sheet with respect to any Liabilities shall not be treated as minimum amounts or limitations on the amount of such Liabilities that are included in the definition of Delphi Technologies Liabilities pursuant to this clause (i);
(ii) all Liabilities as of the Effective Time that are of a nature or type that would have resulted in such Liabilities being included or reflected as liabilities or obligations of Delphi Technologies or the members of the Delphi Technologies Group as of the Effective Time if a balance sheet, notes and subledgers were to be prepared on a basis consistent with the determination of the Liabilities included on the Delphi Technologies Balance Sheet, it being understood that (x) the Delphi Technologies Balance Sheet shall be used to determine the types of, and methodologies used to determine, those Liabilities that are included in the definition of Delphi Technologies Liabilities pursuant to this clause (ii) and (y) the amounts set forth on the Delphi Technologies Balance Sheet with respect to any Liabilities shall not be treated as minimum amounts or limitations on the amount of such Liabilities that are included in the definition of Delphi Technologies Liabilities pursuant to this clause (ii);
(iii) any and all Liabilities that are expressly provided by this Agreement or any Ancillary Agreement as Liabilities to be assumed by Delphi Technologies or any other member of the Delphi Technologies Group, and all agreements, obligations and Liabilities of any member of the Delphi Technologies Group under this Agreement or any of the Ancillary Agreements;
(iv) all Liabilities based upon, relating to or arising from the Delphi Technologies Contracts;
(v) all Liabilities based upon, relating to or arising from Intellectual Property to the extent used or held for use in the Delphi Technologies Business;
(vi) all Liabilities based upon, relating to or arising from the Delphi Technologies Permits;
(vii) all Liabilities with respect to terminated, divested or discontinued businesses, Assets or operations that were of such a nature that they would be or would have been part of the Delphi Technologies Business had they not been terminated, divested or discontinued (regardless of whether they ever operated under the “Delphi Technologies” name), and all Liabilities of Aptiv related thereto unless such Liabilities are expressly retained by Aptiv pursuant to the terms of this Agreement or the Ancillary Agreements;
 
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(viii) all Liabilities based upon, relating to or arising from all Delphi Technologies Leases;
(ix) all Environmental Liabilities arising at, prior to or after the Effective Time to the extent based upon, relating to or arising from the conduct of the Delphi Technologies Business as currently or formerly conducted (including at any properties that were previously owned or operated in connection with the Delphi Technologies Business) or the Delphi Technologies Assets or the Delphi Technologies Properties;
(x) all Liabilities based upon, relating to or arising from the Delphi Technologies DEG Business;
(xi) all Liabilities arising out of claims made by any Third Party (including Aptiv’s or Delphi Technologies’s respective directors, officers, shareholders, employees and agents) against any member of the Aptiv Group or the Delphi Technologies Group to the extent relating to, arising out of or resulting from the Delphi Technologies Business or the Delphi Technologies Assets or the other business, operations, activities or Liabilities referred to in clauses (i) through (x) above;
(xii) all Liability based upon, relating to or arising from the Delphi Technologies Business’s interest in the Trade Intercompany Arrangements and the Trade Intercompany Accounts; and
(xiii) all Liabilities based upon, relating to or arising from the original equipment service business as conducted by Aptiv’s “Powertrain Systems” segment prior to the Effective Time, including to the extent related to the sale of products of other Aptiv segments to vehicle original equipment manufacturers or their Affiliates;
(xiv) all Liabilities set forth on Schedule 2.1(d)(xiv) .
(e) For the purposes of this Agreement, “ Aptiv Liabilities ” means the following Liabilities of either Party or the members of its respective Group:
(i) all Liabilities that are expressly provided by this Agreement or any Ancillary Agreement as Liabilities to be assumed or retained by Aptiv or any other member of the Aptiv Group, and all agreements, obligations and Liabilities of any member of the Aptiv Group under this Agreement or any of the Ancillary Agreements;
(ii) all Liabilities to the extent (and only to the extent) based upon, relating to or arising from the operation or conduct of the Aptiv Business, but excluding in all circumstances the Delphi Technologies Liabilities; and
(iii) all Liabilities arising out of claims made by any Third Party (including Aptiv’s or Delphi Technologies’s respective directors, officers, shareholders, current and former employees and agents) against any member of the Aptiv Group or the Delphi
 
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Technologies Group to the extent relating to, arising out of or resulting from the Aptiv Business or the Aptiv Assets or the Liabilities referred to in clauses (i) and (ii) above (whether such claims arise, in each case before, at or after the Effective Time).
(f) Aptiv and its Subsidiaries hereby waive compliance by each and every member of the Aptiv Group with the requirements and provisions of any “bulk-sale” or “bulk-transfer” Laws of any jurisdiction that may otherwise be applicable with respect to the transfer or sale of any or all of the Delphi Technologies Assets to any member of the Delphi Technologies Group.
2.2 Nonassignable Contracts and Permits . Notwithstanding anything to the contrary contained herein, this Agreement shall not constitute an agreement to assign any Asset or Liability if an assignment or attempted assignment of the same without the consent of another Person would constitute a breach thereof or in any way impair the rights of a Party thereunder or give to any third party any rights with respect thereto. If any such consent is not obtained or if an attempted assignment would be ineffective or would impair such party’s rights under any such Asset or Liability so that the party entitled to the benefits and responsibilities of such purported transfer (the “ Intended Transferee ”) would not receive all such rights and responsibilities, then (a) the party purporting to make such transfer (the “ Intended Transferor ”) shall use commercially reasonable efforts to provide or cause to be provided to the Intended Transferee, to the extent permitted by Law, the benefits of any such Asset or Liability and the Intended Transferor shall promptly pay or cause to be paid to the Intended Transferee when received all moneys received by the Intended Transferor with respect to any such Asset and (b) in consideration thereof the Intended Transferee shall pay, perform and discharge on behalf of the Intended Transferor all of the Intended Transferor’s Liabilities thereunder in a timely manner and in accordance with the terms thereof which it may do without breach and, at the Intended Transferor’s request, the Intended Transferee shall promptly reimburse or prepay (at the Intended Transferor’s election) the Intended Transferor for all amounts paid or due by the Intended Transferor on behalf of the Intended Transferee with respect to such non-assignable Asset or Liability. In addition, the Intended Transferor and the Intended Transferee shall each take such other actions as may be reasonably requested by the other Party in order to place the other Party, insofar as reasonably possible, in the same position as if such Asset had been transferred as contemplated hereby and so all the benefits and burdens relating thereto, including possession, use, risk of loss, Liability, potential for gain and dominion, control and command, shall inure to the Intended Transferee. If and when such consents and approvals are obtained, the transfer of the applicable Asset shall be effected in accordance with the terms of this Agreement.
2.3 Termination of Intercompany Agreements .
(a) Except as set forth in Section 2.3(b) , in furtherance of the releases and other provisions set forth in Article III , Aptiv and each member of the Aptiv Group, on the one hand, and Delphi Technologies and each member of the Delphi Technologies Group, on the other hand, hereby terminate any and all (i) Intercompany balances and accounts arising out of Intercompany Indebtedness, whether or not in writing, between or among Aptiv or any member of the Aptiv Group or any entity that shall be a member of the Aptiv Group as of the Effective Time, on the one hand, and Delphi Technologies or any other member of the Delphi Technologies Group, on the other hand, effective as of the Effective Time, such that no Party
 
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or any member of its Group shall have any continuing obligation with respect thereto and otherwise in such a manner as Aptiv shall determine in good faith (including by means of dividends, distributions, contribution, the creation or repayment of intercompany debt, increasing or decreasing of cash pool balances or otherwise), and (ii) all Intercompany agreements, arrangements, commitments or understandings, including all obligations to provide goods, services or other benefits, whether or not in writing, between or among Aptiv or any member of the Aptiv Group, on the one hand, and Delphi Technologies or any member of the Delphi Technologies Group, on the other hand (other than as set forth in Section 2.3(b)), without further payment or performance such that no party thereto shall have any further obligations therefor or thereunder. No such terminated balance, account, agreement, arrangement, commitment or understanding (including any provision thereof which purports to survive termination) shall be of any further force or effect after the Effective Time. Each Party shall, at the reasonable request of any other Party, take, or cause to be taken, such other actions as may be necessary to effect the foregoing.
(b) The provisions of Section 2.3(a) shall not apply to any of the following agreements, arrangements, commitments or understandings (or to any of the provisions thereof): (i) this Agreement and the Ancillary Agreements (and each other agreement or instrument expressly contemplated by this Agreement or any Ancillary Agreement to be entered into by any of the Parties or any of the members of their respective Groups, including, for the avoidance of doubt, those agreements and instruments entered into in connection with the Delphi Technologies Financing Arrangements); (ii) any Trade Intercompany Arrangements or Trade Intercompany Accounts; (iii) any Intercompany balances and accounts arising other than out of Intercompany Indebtedness; (iv) any agreements, arrangements, commitments or understandings filed as an exhibit, whether in preliminary or final form, to the Form 10 or otherwise listed or described on Schedule 2.3(b)(iv) ; (v) any agreements, arrangements, commitments or understandings to which any Person other than the Parties and the members of their respective Groups is a party (it being understood that to the extent that the rights and obligations of the Parties and the members of their respective Groups under any such agreements, arrangements, commitments or understandings constitute Delphi Technologies Assets, Aptiv Assets, Delphi Technologies Liabilities or Aptiv Liabilities, they shall be assigned pursuant to Section 2.1(a) to the extent they are not already held by a member of the applicable Group); (vi) any Shared Contracts; and (vii) any other agreements, arrangements, commitments or understandings that this Agreement or any Ancillary Agreement expressly contemplates shall survive the Effective Time.
(c) Each Intercompany balance and account (other than such balances and accounts arising out of Intercompany Indebtedness, which are cancelled pursuant to Section 2.3(a) ) outstanding immediately prior to the Effective Time shall be net settled and paid as of the Effective Time within ninety (90) days of the Effective Time by the Party (or the member of its Group) owing such net amount; provided, however , that any receivable or payable arising pursuant to an agreement, arrangement or understanding described in clauses (i), (ii) or (iv) of Section 2.3(b) shall not be included in such net settlement and shall instead be settled in accordance with the terms of such agreement, arrangement or understanding (but in no event later than ninety (90) days after the Effective Time) by the Party (or the member of its Group) owing such net amount.
 
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2.4 Treatment of Shared Contracts and Shared Permits . Subject to applicable Law and except as otherwise provided in any Ancillary Agreement, and without limiting the generality of the obligations set forth in Section 2.1 , unless the Parties otherwise agree or the benefits of any Contract or Permit described in this Section 2.4 are expressly conveyed to the applicable Party pursuant to this Agreement or an Ancillary Agreement, (a) any Contract entered into by a member of the Aptiv Group or the Delphi Technologies Group with a third party that is not a Delphi Technologies Asset, but pursuant to which a member of the Delphi Technologies Group, as of the Effective Time, has been provided certain revenues or other benefits or incurred any Liability (any such contract or agreement, a “ Shared Contract ”) and (b) any Permit set forth on Schedule 2.4(b) (any such permit, a “ Shared Permit ”), in each case, shall not be assigned in relevant part to the applicable members of the Delphi Technologies Group or amended to give the relevant members of the Delphi Technologies Group any entitlement to such rights and benefits thereunder; provided, however , that the Parties shall, and shall cause each of the members of their respective Groups to, take such other reasonable and permissible actions to cause to the extent permitted under applicable Law: (i) the relevant member of the Delphi Technologies Group to receive the rights and benefits previously provided in the ordinary course of business, consistent with past practice, pursuant to such Shared Contract or Shared Permit; and (ii) the relevant member of the Delphi Technologies Group to bear the burden of the applicable Liabilities under such Shared Contract or Shared Permit. Notwithstanding the foregoing, no member of the Aptiv Group shall be required by this Section 2.4 to maintain in effect any Shared Contract or Shared Permit, and no member of the Delphi Technologies Group shall have any approval or other rights with respect to any amendment, termination or other modification of any Shared Contract or Shared Permit.
2.5 Bank Accounts; Cash Balances; Misdirected Payments .
(a) Each Party agrees to take, or cause the applicable members of its respective Group to take, at the Effective Time (or such earlier time as the Parties may agree), all actions necessary to amend all Contracts governing each bank and brokerage account, including lockbox accounts, owned by Aptiv or any other member of the Aptiv Group (collectively, the “ Aptiv Accounts ”) so that such Aptiv Accounts, if currently linked (whether by automatic withdrawal, automatic deposit or any other authorization to transfer funds from or to, hereinafter “linked”) to any bank or brokerage account, including lockbox accounts, owned by any member of the Delphi Technologies Group (collectively, the “ Delphi Technologies Accounts ”) are de-linked from the Delphi Technologies Accounts.
(b) Each Party agrees to take, or cause the applicable members of its respective Group to take, at the Effective Time (or such earlier time as the Parties may agree), all actions necessary to amend all Contracts governing the Delphi Technologies Accounts so that such Delphi Technologies Accounts, if currently linked to an Aptiv Account, are de-linked from the Aptiv Accounts.
(c) It is intended that, following consummation of the actions contemplated by Sections 2.5(a) and 2.5(b) , there shall be in place a centralized cash management process pursuant to which (i) the Aptiv Accounts shall be managed centrally and funds collected shall be transferred into one or more centralized accounts maintained by Aptiv and (ii) the Delphi Technologies Accounts shall be managed centrally and funds collected shall be transferred
 
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into one or more centralized accounts maintained by Delphi Technologies. Notwithstanding Section 2.1 , all cash on hand at any member of the Aptiv Group or the Delphi Technologies Group as of the Effective Time shall be assigned, transferred or paid over to or retained by Aptiv. Any cash in the Delphi Technologies Accounts after the Effective Time that belongs to any member of the Aptiv Group shall be transferred by the applicable member of the Delphi Technologies Group to any member of the Aptiv Group designated by Aptiv.
(d) With respect to any outstanding checks issued or payments initiated by Aptiv, Delphi Technologies or any of their respective Group members prior to the Effective Time, such outstanding checks and payments shall be honored following the Effective Time by the Person or Group owning the account on which the check is drawn or from which the payment was initiated. In addition, any outstanding checks or payments issued by a third party for the benefit of Aptiv, Delphi Technologies or any of their respective Group members prior to the Effective Time shall be honored following the Effective Time and payment shall be made to the party to whom the check or payment was issued.
(e) With respect to the payments described in Section 2.5(d) , in the event that:
(i) Delphi Technologies or one of its Group members initiates a payment prior to the Effective Time that is honored following the Effective Time, and to the extent such payment relates to the Aptiv Business, then Aptiv shall reimburse Delphi Technologies for such payment as soon as reasonably practicable and in no event later than seven (7) days after such payment is honored; or
(ii) Aptiv or one of its Group members initiates a payment prior to the Effective Time that is honored following the Effective Time, and to the extent such payment relates to the Delphi Technologies Business, then Delphi Technologies shall reimburse Aptiv for such payment as soon as reasonably practicable and in no event later than seven (7) days after such payment is honored.
(f) Prior to or concurrently with the Effective Time, (i) Aptiv shall cause all Aptiv employees to be removed as authorized signatories on all bank accounts maintained by the Delphi Technologies Group and (ii) Delphi Technologies shall cause all Delphi Technologies employees to be removed as authorized signatories on all bank accounts maintained by the Aptiv Group.
(g) As between Delphi Technologies and Aptiv (for purposes of this Section 2.5(g) , each a “ Specified Party ”) (and the members of their respective Groups), all payments made to and reimbursements received by either Specified Party (or any member of its Group), in each case after the Effective Time, that relate to a business, Asset or Liability of the other Specified Party (or any member of such other Specified Party’s Group) (each, a “ Misdirected Payment ”), shall be held in trust by the recipient Specified Party for the use and benefit of the other Specified Party (or member of such other Specified Party’s Group entitled thereto) (at the expense of the party entitled thereto). Each Specified Party shall maintain an accounting of any such Misdirected Payments received by such Specified Party or any member of its Group, and the Specified Parties shall have a weekly reconciliation, whereby all such Misdirected Payments received by each Specified Party are calculated and the net amount
 
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owed to the other Specified Party (or members of the other Specified Party’s Group) shall be paid over to the other Specified Party (for further distribution to the applicable members of such other Specified Party’s Group). If at any time the net amount in respect of Misdirected Payments owed to either Specified Party exceeds $10,000,000, an interim payment of such net amount owed shall be made to the Specified Party entitled thereto within three (3) Business Days of such amount exceeding $10,000,000. Notwithstanding the foregoing, neither Specified Party (nor any of the members of its Group) shall act as collection agent for the other Specified Party (or any of the members of its Group), nor shall either Specified Party (or any members of its Group) act as surety or endorser with respect to non-sufficient funds checks, or funds to be returned in a bankruptcy or fraudulent conveyance action.
2.6 Delphi Technologies Financing Arrangements; Cash Distribution .
(a) Prior to the Effective Time, Delphi Technologies entered into the Delphi Technologies Financing Arrangements (the “ Delphi Technologies Borrowing ”). Delphi Technologies shall cause all conditions to the availability of the funding and release of funds from escrow under the Delphi Technologies Financing Agreements to be satisfied concurrently with the Effective Time. Aptiv and Delphi Technologies agree to take all necessary actions to assure the full release and discharge of Aptiv and the other members of the Aptiv Group from all obligations pursuant to the Delphi Technologies Financing Arrangements as of no later than the Effective Time.
(b) Prior to the Effective Time, Delphi Technologies shall distribute the Delphi Technologies Cash Distribution to Aptiv in consideration of the transfer of the Delphi Technologies Assets to Delphi Technologies pursuant to the Separation. In order to effectuate the Delphi Technologies Cash Distribution, Delphi Technologies shall, sufficiently prior to the Effective Time, (i) issue irrevocable instructions to each Person necessary to cause the lenders to the Delphi Technologies Borrowing to fund, on behalf of Delphi Technologies, the amount of the Delphi Technologies Cash Distribution from the proceeds of the Delphi Technologies Borrowing directly to an account of Aptiv designated by Aptiv and (ii) cause its board of directors (subject to the board of directors being able to give the solvency statement as required by Jersey Law) to take all corporate and other action, and issue irrevocable instructions to any Person, as may be necessary to declare and pay the Delphi Technologies Cash Distribution to Aptiv. From and after the Effective Time, Delphi Technologies shall, to the fullest extent not prohibited by Law, be precluded from asserting in any judicial proceeding, arbitration or otherwise that the foregoing actions and procedures regarding the Delphi Technologies Cash Distribution are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator or otherwise that Delphi Technologies is bound to have made the Delphi Technologies Cash Distribution and use best efforts to pay the Delphi Technologies Cash Distribution amount to Aptiv if such amount is not received by Aptiv prior to or at the Effective Time.
2.7 Misallocated Assets and Liabilities .
(a) In the event that, at any time from and after the Effective Time, either Party discovers that it or another member of its Group is the owner of, receives or otherwise comes to possess or benefit from any Asset (including the receipt of payments made pursuant to
 
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Contracts and proceeds from accounts receivable with respect to such Asset) that should have been allocated to a member of the other Group pursuant to this Agreement or any Ancillary Agreement (except in the case of any deliberate acquisition of Assets from a member of the other Group for value subsequent to the Effective Time), such Party shall promptly transfer, or cause to be transferred, such Asset to such member of the other Group, and such member of the other Group shall accept such Asset for no further consideration other than that set forth in this Agreement and such Ancillary Agreement. Prior to any such transfer, such Asset shall be held in accordance with Section 2.2 .
(b) In the event that, at any time from and after the Effective Time, either Party discovers that it or another member of its Group is liable for any Liability that should have been allocated to a member of the other Group pursuant to this Agreement or any Ancillary Agreement (except in the case of any deliberate assumption of Liabilities from a member of the other Group for value subsequent to the Effective Time), such Party shall promptly transfer, or cause to be transferred, such Liability to such member of the other Group and such member of the other Group shall assume such Liability for no further consideration than that set forth in this Agreement and such Ancillary Agreement. Prior to any such assumption, such Liabilities shall be held in accordance with Section 2.2 .
2.8 Disclaimer of Representations and Warranties . EACH OF APTIV (ON BEHALF OF ITSELF AND EACH MEMBER OF THE APTIV GROUP) AND DELPHI TECHNOLOGIES (ON BEHALF OF ITSELF AND EACH MEMBER OF THE DELPHI TECHNOLOGIES GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, NO PARTY TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS, BUSINESSES OR LIABILITIES TRANSFERRED, ASSUMED OR LICENSED AS CONTEMPLATED HEREBY OR THEREBY (INCLUDING, WITHOUT LIMITATION, ANY ASSETS, BUSINESSES OR LIABILITIES TRANSFERRED, ASSUMED OR LICENSED UNDER THIS ARTICLE II AND ARTICLE VIII), AS TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AS TO ANY CONSENTS OR APPROVALS REQUIRED IN CONNECTION THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, AS TO, IN THE CASE OF INTELLECTUAL PROPERTY, NON-INFRINGEMENT OR ANY WARRANTY THAT ANY SUCH INTELLECTUAL PROPERTY IS “ERROR FREE,” OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SET-OFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY CLAIM OR OTHER ASSET, INCLUDING ANY ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY ASSIGNMENT, DOCUMENT OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED OR LICENSED, AS APPLICABLE, ON AN “AS IS,” “WHERE IS” BASIS (AND, IN THE CASE OF ANY REAL PROPERTY, EXCEPT AS OTHERWISE AGREED, BY MEANS OF A QUITCLAIM DEED OR CONVEYANCE) AND THE
 
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RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE WILL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD AND MARKETABLE TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST, AND (II) ANY NECESSARY APPROVALS OR NOTIFICATIONS ARE NOT OBTAINED OR MADE OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED WITH.
ARTICLE III.
COMPLETION OF THE DISTRIBUTION
3.1 Actions Prior to the Distribution . Following the Separation and prior to the Effective Time, subject to the terms and conditions set forth herein, the Parties shall take, or cause to be taken, the following actions in connection with the Distribution:
(a) Notice to NYSE . Aptiv shall, to the extent possible, give the NYSE not less than ten (10) days’ advance notice of the Record Date in compliance with Rule 10b-17 under the Exchange Act.
(b) Securities Law Matters . Delphi Technologies shall file with the SEC any amendments or supplements to the Form 10 as may be necessary or advisable in order to cause the Form 10 to become and remain effective as required by the SEC or federal, state or other applicable securities Laws. Aptiv and Delphi Technologies shall cooperate in preparing, filing with the SEC and causing to become effective registration statements or amendments thereof which are required to reflect the establishment of, or amendments to, any employee benefit and other plans necessary or advisable in connection with the transactions contemplated by this Agreement and the Ancillary Agreements. Aptiv and Delphi Technologies shall take all such action as may be necessary or advisable under the securities or “blue sky” Laws of the United States (and any comparable Laws under any non-U.S. jurisdiction) in connection with the transactions contemplated by this Agreement and the Ancillary Agreements.
(c) Availability of Information Statement . Aptiv shall, as soon as is reasonably practicable after the Form 10 is declared effective under the Exchange Act and the Aptiv Board has approved the Distribution, cause the Information Statement to be mailed to the Record Holders or, in connection with the delivery of a notice of Internet availability of the Information Statement to such holders, posted on the Internet.
(d) The Distribution Agent . Aptiv shall enter into a distribution agent agreement with the Agent or otherwise provide instructions to the Agent regarding the Distribution.
(e) Stock-Based Employee Benefit Plans . At or prior to the Effective Time, Aptiv and Delphi Technologies shall take all actions as may be necessary to approve the stock-based employee benefit plans of Delphi Technologies in order to satisfy the requirements of Rule 16b-3 under the Exchange Act and the applicable rules and regulations of the NYSE.
(f) Amended and Restated Articles of Association . Aptiv and Delphi Technologies shall take all necessary action that may be required to provide for the adoption by Delphi Technologies of the Amended and Restated Articles of Association of Delphi Technologies substantially in the form attached hereto as Exhibit A (the “ Delphi Technologies Articles of Association ”).
 
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(g) Officers and Directors . At the Effective Time, the Parties shall take all necessary action so that, as of the Effective Time, the executive officers and directors of Delphi Technologies will be as set forth in the Information Statement.
(h) Financings . Prior to or on the Distribution Date, Delphi Technologies and each member of the Delphi Technologies Group designated by Delphi Technologies shall cause all conditions to the availability of the funding and release of funds from escrow under the Delphi Technologies Financing Arrangements to be satisfied.
(i) Satisfying Conditions to the Distribution . Aptiv and Delphi Technologies shall cooperate to cause the conditions to the Distribution set forth in Section 3.3 to be satisfied and to effect the Distribution at the Effective Time.
3.2 Effecting the Distribution .
(a) Delivery of Delphi Technologies Stock . On or prior to the Distribution Date, Aptiv shall deliver to the Agent, for the benefit of the Record Holders, duly executed transfer forms for such number of the outstanding shares of Delphi Technologies Stock as is necessary to effect the Distribution.
(b) Distribution of Shares and Cash . Aptiv shall instruct the Agent to distribute, as soon as practicable following the Effective Time, to each Record Holder the following: (i) [  🌑  ] share of Delphi Technologies Stock for every [  🌑  ] share of Aptiv Stock held by such Record Holder as of the Record Date and (ii) cash, if applicable, in lieu of fractional shares obtained in the manner provided in Section 3.2(c) . All of the shares of Delphi Technologies Stock distributed will be validly issued, fully paid and non-assessable.
(c) No Fractional Shares . No fractional shares shall be distributed or credited to book-entry accounts in connection with the Distribution. As soon as practicable after the Effective Time, Aptiv shall direct the Agent to determine the number of whole shares and fractional shares of Delphi Technologies Stock allocable to each holder of record or beneficial owner of Aptiv Stock as of the Record Date, to aggregate all such fractional shares and to sell the whole shares obtained thereby in open market transactions (with the Agent, in its sole and absolute discretion, determining when, how and through which broker-dealer and at what price to make such sales), and to cause to be distributed to each such holder or for the benefit of each such beneficial owner, in lieu of any fractional share, such holder’s or owner’s ratable share of the proceeds of such sale, after deducting any taxes required to be withheld and after deducting an amount equal to all brokerage charges, commissions and transfer taxes attributed to such sale. Neither Aptiv nor Delphi Technologies shall be required to guarantee any minimum sale price for the fractional shares of Delphi Technologies Stock. Neither Aptiv nor Delphi Technologies shall be required to pay any interest on the proceeds from the sale of fractional shares.
(d) Beneficial Owners . Solely for purposes of computing fractional share interests pursuant to Section 3.2(c) , the beneficial owner of Aptiv Stock held of record in the name of a nominee in any nominee account shall be treated as the holder of record with respect to such shares.
 
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(e) Transfer Authorizations . Delphi Technologies agrees to update its register of members in relation to the transfers of Delphi Technologies Stock that Aptiv or the Agent shall require in order to effect the Distribution.
(f) Treatment of Delphi Technologies Stock . Until the Delphi Technologies Stock is duly transferred in accordance with this Section 3.2 and applicable Law, from and after the Effective Time, Delphi Technologies will regard the Persons entitled to receive such Delphi Technologies Stock as record holders of Delphi Technologies Stock in accordance with the terms of the Distribution without requiring any action on the part of such Persons. Delphi Technologies and Aptiv agree that from and after the Effective Time each such holder will be entitled to receive all dividends payable on, and exercise voting rights and all other rights and privileges with respect to, the Delphi Technologies Stock then deemed to be held by such holder.
3.3 Conditions to the Distribution . The consummation of the Distribution shall be subject to the satisfaction or waiver by Aptiv in its sole and absolute discretion, of the following conditions:
(a) Approval by Aptiv Board . This Agreement and the transactions contemplated hereby, including the declaration of the Distribution (and the giving of the associated solvency statement as required by Jersey Law) shall have been approved by the Aptiv Board, and such approval shall not have been withdrawn.
(b) Approval by Delphi Technologies Board . This Agreement and the transactions contemplated hereby, including the Distribution and the declaration of the Delphi Technologies Cash Distribution (and the giving of the associated solvency statement as required by Jersey Law), shall have been approved by the Delphi Technologies Board, and such approval shall not have been withdrawn.
(c) Effectiveness of Form 10; Mailing of Information Statement . The Form 10 registering the Delphi Technologies Stock shall be effective under the Exchange Act, with no stop order in effect with respect thereto, and the Information Statement included therein shall have been mailed to Aptiv’s shareholders as of the Record Date.
(d) Listing on NYSE . The Delphi Technologies Stock to be distributed to the Aptiv shareholders in the Distribution shall have been accepted for listing on the NYSE, subject to official notice of distribution.
(e) Securities Laws . The actions and filings necessary or appropriate under applicable securities Laws in connection with the Distribution shall have been taken or made, and, where applicable, have become effective or been accepted by the applicable Governmental Authority.
(f) Completion of the Separation . The Separation shall have been completed and Aptiv shall be satisfied in its sole discretion that, as of the Effective Time, it shall have no further Liability whatsoever under the Delphi Technologies Financing Arrangements (including in connection with any guarantees provided by any member of the Aptiv Group).
 
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(g) Payment of the Delphi Technologies Cash Distribution . The Delphi Technologies Cash Distribution shall have been validly declared and paid by Delphi Technologies.
(h) Delphi Officer and Director Resignations. Aptiv will have requested the resignation of each person who is an officer or director of Delphi Technologies prior to the Distribution Date and who will continue solely as an officer or director of Aptiv following the Distribution Date.
(i) Distribution Agent Agreement. Aptiv will have entered into a Distribution Agent Agreement with, or provided instructions regarding the Distribution to, the Agent.
(j) Execution of Ancillary Agreements . Each of the Ancillary Agreements shall have been duly executed and delivered by the parties thereto.
(k) Governmental Approvals . All material Governmental Approvals necessary to consummate the Distribution and to permit the operation of the Delphi Technologies Business after the Effective Time substantially as it is conducted at the date hereof shall have been obtained and be in full force and effect.
(l) No Order or Injunction . No order, injunction or decree issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Distribution or any of the related transactions shall be in effect, and no other event outside the control of Aptiv shall have occurred or failed to occur that prevents the consummation of the Distribution or any of the related transactions.
(m) No Circumstances Making Distribution Inadvisable . No events or developments shall have occurred or exist that, in the judgment of the Aptiv Board, in its sole and absolute discretion, make it inadvisable to effect the Distribution or the other transactions contemplated hereby, or would result in the Distribution or the other transactions contemplated hereby not being in the best interest of Aptiv or its shareholders.
3.4 Sole Discretion . The foregoing conditions are for the sole benefit of Aptiv and shall not give rise to or create any duty on the part of Aptiv or the Aptiv Board to waive or not waive such conditions or in any way limit Aptiv’s right to terminate this Agreement as set forth in Article IX or alter the consequences of any such termination from those specified in such Article. Any determination made by the Aptiv Board prior to the Distribution concerning the satisfaction or waiver of any or all of the conditions set forth in Section 3.3 shall be conclusive.
 
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ARTICLE IV.
DISPUTE RESOLUTION
4.1 General Provisions .
(a) Any dispute, controversy or claim arising out of or relating to this Agreement or the Ancillary Agreements, including with respect to (i) the validity, interpretation, performance, breach or termination thereof or (ii) whether any Asset or Liability not specifically characterized in this Agreement or its Schedules, whose proper characterization is disputed, is a Delphi Technologies Asset, Aptiv Asset, Delphi Technologies Liability or Aptiv Liability, shall be resolved in accordance with the procedures set forth in this Article IV (a “ Dispute ”), which shall be the sole and exclusive procedures for the resolution of any such Dispute unless otherwise specified in this Article IV or Article V ; provided, however, notwithstanding the foregoing, this Article IV shall not apply to any Ancillary Agreement regarding the lease or sublease of real property following an assignment of such agreement or any of the rights or obligations thereunder to a Third Party.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE ANCILLARY AGREEMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY BASED UPON, RELATING TO OR ARISING FROM THIS AGREEMENT AND ANY OF THE ANCILLARY AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (III) IT MAKES SUCH WAIVER VOLUNTARILY AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4.1(B) .
(c) The specific procedures set forth in this Article IV , including the time limits referenced herein, may be modified by agreement of both of the Parties in writing.
(d) Commencing with the Initial Notice contemplated by Section 4.2 , all applicable statutes of limitations and defenses based upon the passage of time shall be tolled while the procedures specified in this Article IV are pending. The Parties shall take any necessary or appropriate action required to effectuate such tolling.
(e) Commencing with the Initial Notice contemplated by Section 4.2 , any communications between the Parties or their representatives in connection with the attempted negotiation of any Dispute shall be deemed to have been delivered in furtherance of a Dispute settlement and shall be exempt from disclosure and production, and shall not be admissible into evidence for any reason (whether as an admission or otherwise), in any arbitral or other proceeding for the adjudication of any Dispute; provided , that evidence that is otherwise subject to disclosure or admissible shall not be rendered outside the scope of disclosure or inadmissible as a result of its use in the negotiation.
 
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4.2 Negotiation by Senior Executives . The Parties shall seek to settle amicably all Disputes by negotiation. The Parties shall first attempt in good faith to resolve the Dispute by negotiation in the normal course of business at the operational level within thirty (30) days after written notice is received by either Party regarding the existence of a Dispute (the “ Initial Notice ”). If the Parties are unable to resolve the Dispute within such thirty (30)-day period, the Parties shall then attempt in good faith to resolve the Dispute by negotiation between executives designated by the Parties who hold, at a minimum, the office of Senior Vice President and/or General Counsel (such designated executives, the “ Dispute Committee ”). The Parties agree that the members of the Dispute Committee shall have full and complete authority on behalf of their respective Parties to resolve any Disputes submitted pursuant to this Section 4.2 . Such Dispute Committee members and other applicable executives shall meet in person or by teleconference or video conference within forty (40) days of the date of the Initial Notice to seek a resolution of the Dispute. In the event that the Dispute Committee and other applicable executives are unable to agree to a format for such meeting, the meeting shall be convened in person at a mutually acceptable location in New York, New York.
4.3 Arbitration .
(a) Any Dispute not finally resolved pursuant to Section 4.2 within sixty (60) days from the delivery of the Initial Notice shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce (the “ ICC Rules ”).
(b) Unless otherwise agreed by the Parties in writing, any Dispute to be decided in arbitration hereunder shall be decided (i) before a sole arbitrator if the amount in dispute, inclusive of all claims and counterclaims, totals less than $10,000,000; or (ii) by an arbitral tribunal of three (3) arbitrators if the amount in dispute, inclusive of all claims and counterclaims, is equal to or greater than $10,000,000.
(c) The language of the arbitration shall be English. The place of arbitration shall be New York, New York. Unless the Parties agree otherwise in writing, the Parties shall conduct the arbitration as quickly as is reasonably practicable and shall use commercially reasonable efforts to ensure that the time between the date on which the sole arbitrator is confirmed or the tribunal is constituted, as the case may be, and the date of the commencement of the evidentiary hearing does not exceed one-hundred and eighty (180) days. Failure to meet the foregoing timeline will not render the award invalid, unenforceable or subject to being vacated, but the arbitrators may impose appropriate sanctions and draw appropriate adverse inferences against the Party primarily responsible for such failure.
(d) The sole arbitrator or arbitral tribunal shall not award any relief not specifically requested by the Parties and, in any event, shall not award any damages of the types prohibited under Section 10.20 .
(e) In addition to the ICC Rules, the Parties agree that the arbitration shall be conducted according to the IBA Rules of Evidence.
 
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(f) The agreement to arbitrate any Dispute set forth in this Section 4.3 shall continue in full force and effect subsequent to, and notwithstanding the completion, expiration or termination of, this Agreement.
(g) Without prejudice to this binding arbitration agreement, each Party to this Agreement irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the courts of the State of New York and the federal courts sitting within the State of New York in connection with any post-award proceedings or court proceedings in aid of arbitration that are authorized by the Federal Arbitration Act (9 U.S.C. §§ 1-16) or Article 75 of the New York Civil Practice Law and Rules. Judgment upon any awards rendered by the arbitrator may be entered in any court having jurisdiction thereof. The Parties waive all objections that they may have at any time to the laying of venue of any proceedings brought in such courts, waive any claim that such proceedings have been brought in an inconvenient forum and further waive the right to object with respect to such proceedings that any such court does not have jurisdiction over such Party.
(h) It is the intent of the Parties that the agreement to arbitrate any Dispute set forth in this Section 4.3 shall be interpreted and applied broadly such that all reasonable doubts as to arbitrability of a Dispute shall be decided in favor of arbitration.
(i) The Parties agree that any Dispute submitted to arbitration shall be governed by, and construed and interpreted in accordance with Laws of the State of New York, as provided in Section 7.2 and, except as otherwise provided in this Article IV or mutually agreed to in writing by the Parties, the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq., shall govern any arbitration between the Parties pursuant to this Section 4.3 .
(j) The sole arbitrator or arbitral tribunal shall award to the prevailing Party, if any, the costs of the arbitrator or tribunal, expert witness fees, and attorneys’ fees reasonably incurred by such prevailing Party or its Affiliates in connection with the arbitration.
(k) The Parties undertake to keep confidential all awards in their arbitration, together with all materials in the proceedings created for the purpose of the arbitration and all other documents produced by another Party in the proceedings not otherwise in the public domain, save and to the extent that disclosure may be required of a Party by legal duty, to protect or pursue a legal right or to enforce or challenge an award in legal proceedings before a court or other judicial authority.
ARTICLE V.
MUTUAL RELEASES; INDEMNIFICATION; COOPERATION; INSURANCE
5.1 Release of Claims Prior to Distribution .
(a) Except as provided in Section 5.1(c) , effective as of the Effective Time, Aptiv does hereby, for itself and each other member of the Aptiv Group, their respective Affiliates, successors and assigns, and, to the extent permitted by Law, all Persons who at any time prior to the Effective Time have been shareholders, directors, officers, agents or employees of any member of the Aptiv Group (in each case, in their respective capacities as such), surrender, relinquish, release and forever discharge (i) Delphi Technologies, the respective members of
 
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the Delphi Technologies Group, their respective Affiliates, successors and assigns, and (ii) all Persons who at any time prior to the Effective Time have been shareholders, directors, officers, agents or employees of any member of the Delphi Technologies Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, in each case from (A) all Aptiv Liabilities whatsoever, (B) all Liabilities arising from, or in connection with, the transactions and all other activities to implement the Separation and Distribution and (C) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent relating to, arising out of or resulting from the Aptiv Business, the Aptiv Assets or Aptiv Liabilities.
(b) Except as provided in Section 5.1(c) , effective as of the Effective Time, Delphi Technologies does hereby, for itself and each other member of the Delphi Technologies Group, their respective Affiliates, successors and assigns, and, to the extent permitted by Law, all Persons who at any time prior to the Effective Time have been shareholders, directors, officers, agents or employees of any member of the Delphi Technologies Group (in each case, in their respective capacities as such), surrender, relinquish, release and forever discharge (i) Aptiv, the respective members of the Aptiv Group, their respective Affiliates (other than any member of the Delphi Technologies Group), successors and assigns, and (ii) all Persons who at any time prior to the Effective Time have been shareholders, directors, officers, agents or employees of any member of the Aptiv Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, in each case from (A) all Delphi Technologies Liabilities whatsoever, (B) all Liabilities arising from, or in connection with, the transactions and all other activities to implement the Separation and Distribution and (C) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case of this clause (C), to the extent relating to, arising out of or resulting from the Delphi Technologies Business, the Delphi Technologies Assets or the Delphi Technologies Liabilities.
(c) Nothing contained in Section 5.1(a) or (b)  shall impair any right of any Person to enforce this Agreement, any Ancillary Agreement or any agreements, arrangements, commitments or understandings that are specified in Section 2.3(b) or (c)  or the applicable schedules hereto as not to terminate as of the Effective Time, in each case in accordance with its terms. Nothing contained in Section 5.1(a) or (b)  shall release any Person from:
(i) any Liability provided in or resulting from any agreement among any members of the Delphi Technologies Group or the Aptiv Group that is specified in Section 2.3(b) or (c)  as not to terminate as of the Effective Time, or any other Liability specified in such Section 2.3(b) or (c)  as not to terminate as of the Effective Time, including, for the avoidance of doubt, resulting from the Trade Intercompany Accounts and Trade Intercompany Arrangements;
 
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(ii) any Liability provided in or resulting from any Contract or understanding that is entered into after the Effective Time between any member of the Aptiv Group, on the one hand, and any member of the Delphi Technologies Group, on the other hand;
(iii) any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with this Agreement or any Ancillary Agreement (including any Aptiv Liability and any Delphi Technologies Liability, as applicable); or
(iv) any Liability that the Parties may have with respect to indemnification or contribution pursuant to this Agreement, any Specified Ancillary Agreement or otherwise for claims brought against the Parties by third Persons, which Liability shall be governed by the provisions of this Article V and Article VI and any other applicable provisions of this Agreement or the applicable Specified Ancillary Agreement.
(d) In addition, nothing contained in Section 5.1(a) or (b)  shall release Aptiv from honoring its obligations to indemnify any person who was a director, officer or employee of a member of the Aptiv Group or the Delphi Technologies Group on or prior to the Effective Time, to the extent that such director, officer or employee becomes a named defendant in any Action with respect to which such director, officer or employee was entitled to indemnification by Aptiv immediately prior to the Effective Time pursuant to indemnification obligations existing as of the Effective Time; it being understood that, if the underlying obligation giving rise to such Action is a Delphi Technologies Liability, Delphi Technologies shall indemnify Aptiv for such Liability (including Aptiv’s costs to indemnify the director, officer or employee) in accordance with the provisions set forth in this Article V .
(e) Aptiv shall not make, and shall not permit any member of the Aptiv Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Delphi Technologies or any member of the Delphi Technologies Group, or any other Person released pursuant to Section 5.1(a) , with respect to any Liabilities released pursuant to Section 5.1(a) . Delphi Technologies shall not make, and shall not permit any member of the Delphi Technologies Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Aptiv or any member of the Aptiv Group, or any other Person released pursuant to Section 5.1(b) , with respect to any Liabilities released pursuant to Section 5.1(b) .
(f) Notwithstanding Section 4.3(j) , any breach of the provisions of this Section 5.1 by either Aptiv or Delphi Technologies shall entitle the other Party to recover reasonable fees and expenses of counsel in connection with such breach or any Action resulting from such breach.
5.2 Indemnification by Aptiv . Except as otherwise specifically set forth in this Agreement or any Specified Ancillary Agreement, to the fullest extent permitted by Law, Aptiv shall, and shall cause the other members of the Aptiv Group to, indemnify, defend and hold harmless Delphi Technologies, each member of the Delphi Technologies Group and each of their respective past, present and future directors, officers, employees and agents, in each case in their
 
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respective capacities as such, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “ Delphi Technologies Indemnitees ”), from and against any and all Liabilities of the Delphi Technologies Indemnitees relating to, arising out of or resulting from, directly or indirectly, any of the following items (without duplication):
(a) any Aptiv Liabilities, including any failure of Aptiv or any other member of the Aptiv Group or any other Person to pay, perform or otherwise promptly discharge any Aptiv Liabilities in accordance with their respective terms, whether prior to or after the Effective Time or the date hereof;
(b) any breach by Aptiv or any member of the Aptiv Group of this Agreement or any of the Ancillary Agreements (other than the Specified Ancillary Agreements);
(c) any third-party claims that the use of the Delphi Technologies Intellectual Property by any member of the Aptiv Group (or their permitted sublicensees) infringes the Intellectual Property rights of such third party, other than any such claims in connection with the performance by the Aptiv Group under the Contract Manufacturing Services Agreements or other Ancillary Agreements;
(d) except to the extent that it relates to a Delphi Technologies Liability, any guarantee, indemnification or contribution obligation, letter of credit reimbursement obligations, surety, bond or other credit support agreement, arrangement, commitment or understanding for the benefit of Aptiv or any member of the Aptiv Group by Delphi Technologies or any member of the Delphi Technologies Group that survives following the Effective Time; and
(e) any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in the Form 10, the Information Statement (as amended or supplemented if Delphi Technologies shall have furnished any amendments or supplements thereto) or any other Disclosure Document specifically relating to (i) the Aptiv Business, Aptiv Assets or Aptiv Liabilities or (ii) the Aptiv Group as of and after the Effective Time.
Notwithstanding the foregoing, in no event shall Aptiv or any other member of the Aptiv Group have any obligations under this Section 5.2 with respect to Liabilities subject to indemnification pursuant to Section 5.3 .
5.3 Indemnification by Delphi Technologies . Except as otherwise specifically set forth in this Agreement or any Specified Ancillary Agreement, to the fullest extent permitted by Law, Delphi Technologies shall, and shall cause the other members of the Delphi Technologies Group to, indemnify, defend and hold harmless Aptiv, each member of the Aptiv Group and each of their respective past, present and future directors, officers, employees and agents, in each case in their respective capacities as such, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “ Aptiv Indemnitees ”), from and against any and all Liabilities of the Aptiv Indemnitees relating to, arising out of or resulting from, directly or indirectly, any of the following items (without duplication):
 
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(a) any Delphi Technologies Liabilities, including any failure of Delphi Technologies or any other member of the Delphi Technologies Group or any other Person to pay, perform or otherwise promptly discharge any Delphi Technologies Liabilities in accordance with their respective terms, whether prior to or after the Effective Time or the date hereof;
(b) any breach by Delphi Technologies or any member of the Delphi Technologies Group of this Agreement or any Ancillary Agreements, including the failure by Delphi Technologies to pay the Delphi Technologies Cash Distribution to Aptiv (other than the Specified Ancillary Agreements);
(c) any third-party claims that the use of the Licensed Intellectual Property by any member of the Delphi Technologies Group (or their permitted sublicensees) infringes the Intellectual Property rights of such third party;
(d) any guarantee, indemnification or contribution obligation, letter of credit reimbursement obligations, surety, bond or other credit support agreement, arrangement, commitment or understanding for the benefit of Delphi Technologies or any member of the Delphi Technologies Group by Aptiv or any member of the Aptiv Group that survives following the Effective Time; and
(e) any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in the Form 10, the Information Statement (as amended or supplemented if Delphi Technologies shall have furnished any amendments or supplements thereto) or any other Disclosure Document, other than the matters described in Section 5.2(e) .
5.4 Indemnification Obligations Net of Insurance Proceeds .
(a) The Parties intend that any Liability subject to indemnification or contribution pursuant to this Article V shall be net of Insurance Proceeds that actually reduce the amount of the Liability. Accordingly, the amount that any Party (an “ Indemnifying Party ”) is required to pay to any Person entitled to indemnification or contribution hereunder (an “ Indemnitee ”) shall be reduced by any Insurance Proceeds theretofore actually recovered by or on behalf of the Indemnitee in respect of the related Liability. If an Indemnitee receives a payment (an “ Indemnity Payment ”) required by this Agreement from an Indemnifying Party in respect of any Liability and subsequently receives Insurance Proceeds, then the Indemnitee shall pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if the Insurance Proceeds had been received, realized or recovered before the Indemnity Payment was made.
(b) It is expressly agreed and understood that all rights to indemnification, contribution and reimbursement pursuant to this Article V are in excess of all available insurance. Without limiting the foregoing, the Parties agree that an insurer who would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of any provision contained in this Agreement or any Ancillary
 
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Agreement, have any subrogation rights with respect thereto, it being expressly understood and agreed that no insurer or any other Third Party shall be entitled to a “windfall” (i.e., a benefit they would not be entitled to receive in the absence of the indemnification provisions hereof) by virtue of the Liability allocation, indemnification and contribution provisions hereof. Accordingly, any provision herein that could have the result of giving any insurer or other Third Party such a “windfall” shall be suspended or amended to the extent necessary to not provide such “windfall.” Each Party shall, and shall cause the members of its Group to, use commercially reasonable efforts (taking into account the probability of success on the merits and the cost of expending such efforts, including attorney’s fees and expenses) to collect or recover, or allow the Indemnifying Party to collect or recover, any Insurance Proceeds that may be collectible or recoverable respecting the Liabilities for which indemnification or contribution may be available under this Article V . The Indemnitee shall make available to the Indemnifying Party and its counsel all employees, books and records, communications, documents, items or matters within its knowledge, possession or control that are necessary, appropriate or reasonably deemed relevant by the Indemnifying Party with respect to the recovery of such Insurance Proceeds; provided, however , that nothing in this sentence shall be deemed to require a Party to make available books and records, communications, documents or items that (i) in such Party’s good faith judgment could result in a waiver of any privilege even if the Parties cooperated to protect such privilege as contemplated by this Agreement or (ii) such Party is not permitted to make available because of any Law or any confidentiality obligation to a Third Party, in which case such Party shall use commercially reasonable efforts to seek a waiver of or other relief from such confidentiality restriction. Notwithstanding the foregoing, an Indemnifying Party may not delay making any indemnification payment required under the terms of this Agreement, or otherwise satisfying any indemnification obligation, pending the outcome of any Action to collect or recover Insurance Proceeds, and an Indemnitee need not attempt to collect any Insurance Proceeds prior to making a claim for indemnification or contribution or receiving any Indemnity Payment otherwise owed to it under this Agreement or any Ancillary Agreement.
(c) Each of Delphi Technologies and Aptiv shall, and shall cause the members of its Group to, when appropriate, use commercially reasonable efforts to obtain waivers of subrogation for each of the insurance policies described in Section 5.16. Each of Delphi Technologies and Aptiv hereby waives, for itself and each member of its Group, its rights to recover against the other Party in subrogation or as subrogee for a third Person.
(d) For all claims as to which indemnification is provided under Section 5.2 or 5.3 other than Third-Party Claims (as to which Section 5.5 shall apply), the reasonable fees and expenses of counsel to the Indemnitee for the enforcement of the indemnity obligations shall be borne by the Indemnifying Party.
5.5 Procedures for Indemnification of Third-Party Claims .
(a) If, at or after the date of this Agreement, an Indemnitee shall receive written notice from, or otherwise learn of the assertion by, a Person (including any Governmental Authority) who is not a member of the Aptiv Group or the Delphi Technologies Group (a “ Third Party ”) of any claim or of the commencement by any such Person of any Action
 
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(collectively, a “ Third-Party Claim ”) with respect to which an Indemnifying Party may be obligated to provide indemnification to such Indemnitee pursuant to Section 5.2 or 5.3 , or any other Section of this Agreement or, subject to Section 5.13 , any Specified Ancillary Agreement, such Indemnitee shall give such Indemnifying Party written notice thereof within fourteen (14) days of receipt of such written notice. Any such notice shall describe the Third-Party Claim in reasonable detail and include copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. Notwithstanding the foregoing, the failure of an Indemnitee to provide notice in accordance with this Section 5.5(a) shall not relieve an Indemnifying Party of its indemnification obligations under this Agreement, except to the extent to which the Indemnifying Party shall demonstrate that it was materially prejudiced by the Indemnitee’s failure to provide notice in accordance with this Section 5.5(a) .
(b) Subject to the terms and conditions of any applicable insurance policy in place after the Effective Time, an Indemnifying Party may elect to defend (and to seek to settle or compromise), at such Indemnifying Party’s own expense and by such Indemnifying Party’s own counsel; provided, that the Indemnifying Party will not select counsel without the Indemnitee’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed); provided, further , an Indemnifying Party may not elect to defend such Third-Party Claim in the event that defense of such Third Party Claim would void or otherwise adversely impact the Indemnitee’s insurance policy. Within thirty (30) days after the receipt of notice from an Indemnitee in accordance with Section 5.5(a) (or sooner, if the nature of such Third-Party Claim so requires), the Indemnifying Party shall notify the Indemnitee of its election whether the Indemnifying Party shall assume responsibility for defending such Third-Party Claim. After notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise, or settlement thereof, but the fees and expenses of such counsel shall be the expense of such Indemnitee except as otherwise expressly set forth herein.
(c) If an Indemnifying Party has elected to assume the defense of a Third-Party Claim, then such Indemnifying Party shall be solely liable for all fees and expenses incurred by it in connection with the defense of such Third-Party Claim and shall not be entitled to seek any indemnification or reimbursement from the Indemnitee for any such fees or expenses incurred during the course of its defense of such Third Party Claim, regardless of any subsequent decision by the Indemnifying Party to reject or otherwise abandon its assumption of such defense. If an Indemnifying Party elects not to assume responsibility for defending any Third-Party Claim, is not permitted to elect to defend a Third-Party Claim pursuant to Section 5.5(b) , or fails to notify an Indemnitee of its election within thirty (30) days after receipt of a notice from an Indemnitee, such Indemnitee shall have the right to control the defense of such Third-Party Claim, in which case the Indemnifying Party shall be liable for all reasonable fees and expenses incurred by the Indemnitee in connection with the defense of such Third-Party Claim.
(d) Notwithstanding an election by an Indemnifying Party to defend a Third-Party Claim in circumstances where an Indemnifying Party is permitted to make such an election pursuant to Section 5.5(b) , an Indemnitee may, upon notice to the Indemnifying Party, elect to
 
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take over the defense of such Third-Party Claim if (i) in its exercise of reasonable business judgment, the Indemnitee determines that the Indemnifying Party is not defending such Third-Party Claim competently or in good faith, (ii) the Indemnitee determines in its exercise of reasonable business judgment that there exists a compelling business reason for such Indemnitee to defend such Third-Party Claim (other than as contemplated by the foregoing clause (i)), (iii) the Indemnifying Party makes a general assignment for the benefit of creditors, has filed against it or files a petition in bankruptcy or insolvency or is declared bankrupt or insolvent or declares that it is bankrupt or insolvent, or (iv) there occurs a change of control of the Indemnifying Party. In addition to the foregoing and the last sentence of Section 5.2(b) , if any Indemnitee determines in good faith that such Indemnitee and the Indemnifying Party have actual or potential differing defenses or conflicts of interest between them that make joint representation inappropriate, then the Indemnitee shall have the right to employ separate counsel (including local counsel as appropriate) and to participate in (but not control) the defense, compromise, or settlement of the applicable Third-Party Claim, and the Indemnifying Party shall bear the reasonable fees and expenses of one such counsel and local counsel (as appropriate) for all Indemnitees.
(e) An Indemnitee that does not conduct and control the defense of any Third-Party Claim, or an Indemnifying Party that has failed to elect to defend or that is not permitted to elect or defend pursuant to Section 5.5(b) , any Third-Party Claim as contemplated hereby, nevertheless shall have the right to employ separate counsel (including local counsel as appropriate) of its own choosing to monitor and participate in (but not control) the defense of any Third-Party Claim for which it is a potential Indemnitee or Indemnifying Party, but the fees and expenses of such counsel shall be at the expense of such Indemnitee or Indemnifying Party, as the case may be, and the provisions of Section 5.5(c) shall not apply to such fees and expenses. Notwithstanding the foregoing, such Party shall cooperate with the Party entitled to conduct and control the defense of such Third-Party Claim in such defense and make available to the controlling Party, at the non-controlling Party’s expense, all witnesses, information and materials in such Party’s possession or under such Party’s control relating thereto as are reasonably required by the controlling Party. In addition to the foregoing and the last sentence of Section 5.2(b) , if any Indemnitee shall in good faith determine that such Indemnitee and the Indemnifying Party have actual or potential differing defenses or conflicts of interest between them that make joint representation inappropriate, then the Indemnitee shall have the right to employ separate counsel (including local counsel as appropriate) and to participate in (but not control) the defense, compromise or settlement thereof, and the Indemnifying Party shall bear the reasonable fees and expenses of one such counsel and local counsel (as appropriate) for all Indemnitees.
(f) Neither Party may settle or compromise any Third-Party Claim for which either Party is seeking to be indemnified hereunder without the prior written consent of the other Party, which consent may not be unreasonably withheld, unless such settlement or compromise is solely for monetary damages, does not involve any finding or determination of Liability, wrongdoing or violation of Law by the other Party and provides for a full, unconditional and irrevocable release of the other Party, the members of the other Party’s respective Group and each of their respective past, present and future directors, officers, employees and agents, in each case in their respective capacities as such, and each of the heirs, executors, successors and assigns of any of the foregoing from all Liability in
 
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connection with the Third-Party Claim. The Parties hereby agree that if a Party presents the other Party with a written notice containing a proposal to settle or compromise a Third-Party Claim for which either Party is seeking to be indemnified hereunder and the Party receiving such Proposal does not respond in any manner to the Party presenting such proposal within thirty (30) days (or within any such shorter time period that may be required by applicable Law or court order) of receipt of such proposal, then the Party receiving such proposal shall be deemed to have consented to the terms of such proposal.
(g) The provisions of this Section 5.5 (other than this Section 5.5(g)) and the provisions of Section 5.6 (other than Section 5.6(f)) shall not apply to Taxes (Taxes being governed by the Tax Matters Agreement).
(h) The Indemnifying Party shall establish a procedure reasonably acceptable to the Indemnitee to keep the Indemnitee reasonably informed of the progress of the Third-Party Claim and to notify the Indemnitee when any such Third-Party Claim is closed, regardless of whether such Third-Party Claim was resolved by settlement, verdict, dismissal or otherwise.
5.6 Additional Matters .
(a) Indemnification payments in respect of any Liabilities for which an Indemnitee is entitled to indemnification under this Article V shall be paid by the Indemnifying Party to the Indemnitee as such Liabilities are incurred upon demand by the Indemnitee, including reasonably satisfactory documentation setting forth the basis for the amount of such indemnification payment, including documentation with respect to calculations made and consideration of any Insurance Proceeds that actually reduce the amount of such Liabilities. THE COVENANTS AND OBLIGATIONS CONTAINED IN THIS ARTICLE V SHALL REMAIN OPERATIVE AND IN FULL FORCE AND EFFECT, REGARDLESS OF (I) ANY INVESTIGATION MADE BY OR ON BEHALF OF ANY INDEMNITEE AND (II) THE KNOWLEDGE BY THE INDEMNITEE OF LIABILITIES FOR WHICH IT MIGHT BE ENTITLED TO INDEMNIFICATION HEREUNDER.
(b) Any claim on account of a Liability that does not result from a Third-Party Claim shall be asserted by written notice given by the Indemnitee to the related Indemnifying Party. Such Indemnifying Party shall have a period of thirty (30) days after the receipt of such notice within which to respond thereto. If after such thirty (30)-day period, such claim is not resolved, Indemnitee shall be free to pursue such remedies as may be available to such party as contemplated by this Agreement and the Specified Ancillary Agreements. Notwithstanding the foregoing, the failure of an Indemnitee to provide notice in accordance with this Section 5.6(b) shall not relieve an Indemnifying Party of its indemnification obligations under this Agreement, except to the extent to which the Indemnifying Party shall demonstrate that it was materially prejudiced by the Indemnitee’s failure to provide notice in accordance with this Section 5.6(b) .
(c) In the event of payment by or on behalf of any Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim
 
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relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim or against any other Person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.
(d) In the event of an Action for which indemnification is sought pursuant to Section 5.2 or 5.3 and in which the Indemnifying Party is not a named defendant, if either the Indemnitee or Indemnifying Party shall so request, the Parties shall use commercially reasonable efforts to substitute the Indemnifying Party for the named defendant for the portion of the Action related to such indemnification claim.
(e) In the event that Delphi Technologies establishes a risk accrual in an amount of at least $1,000,000 with respect to any Third-Party Claim for which Aptiv has sought indemnification pursuant to Section 5.3 , Delphi Technologies shall notify Aptiv of the existence and amount of such risk accrual (i.e., when the accrual is recorded in the financial statements as an accrual for a potential liability), subject to the Parties entering into an appropriate agreement with respect to the confidentiality and/or privilege thereof.
(f) Unless otherwise required by applicable Law, the Parties will treat any indemnity payment made pursuant to this Agreement or any Ancillary Agreement by Aptiv to Delphi Technologies, or vice versa, in the same manner as if such payment were a non-taxable distribution or capital contribution, as the case may be, made immediately prior to the Distribution, except to the extent that Aptiv and Delphi Technologies treat a payment as the settlement of an Intercompany liability; provided , however , that any such payment that is made or received by a Person other than Aptiv or Delphi Technologies, as the case may be, shall be treated as if made or received by the payor or the recipient as agent for Aptiv or Delphi Technologies, in each case as appropriate.
(g) In the case of any Action involving a matter contemplated by Section 5.15(c) , (i) if there is a conflict of interest that under applicable rules of professional conduct would preclude legal counsel for one Party or one of its Subsidiaries representing another Party or one of its Subsidiaries or (ii) if any Third-Party Claim seeks equitable relief that would restrict or limit the future conduct of the non-responsible Party or one of its Subsidiaries or the business or operations of such non-responsible Party or one of its Subsidiaries, then the non-responsible Party shall be entitled to retain, at its expense, separate legal counsel to represent its interest and to participate in the defense, compromise, or settlement of that portion of the Third-Party Claim against that Party or one of its Subsidiaries.
(h) THE RELEASES AND INDEMNIFICATION OBLIGATIONS OF THE PARTIES IN THIS AGREEMENT ARE EXPRESSLY INTENDED, AND SHALL OPERATE AND BE CONSTRUED, TO APPLY EVEN WHERE THE LIABILITIES FOR WHICH THE RELEASE AND/OR INDEMNITY ARE GIVEN ARE CAUSED, IN WHOLE OR IN PART, BY THE SOLE, JOINT, JOINT AND SEVERAL, CONCURRENT, CONTRIBUTORY, ACTIVE OR PASSIVE NEGLIGENCE OR THE STRICT LIABILITY OR FAULT OF THE PARTY BEING RELEASED OR INDEMNIFIED.
 
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5.7 Survival of Indemnities . The rights and obligations of each of Delphi Technologies and Aptiv and their respective Indemnitees under this Article V shall survive (a) the sale or other transfer by any Party of any Assets or businesses or the assignment by it of any Liabilities, and (b) any merger, consolidation, business combination, sale of all or substantially all of the Assets, restructuring, recapitalization, reorganization or similar transaction involving either Party or any of its respective Subsidiaries.
5.8 Right of Contribution .
(a) Contribution . If any right of indemnification contained in this Article V is held unenforceable or is unavailable for any reason, or is insufficient to hold harmless an Indemnitee in respect of any Liability for which such Indemnitee is entitled to indemnification hereunder, then the Indemnifying Party shall contribute to the amounts (including any costs, expenses, attorneys’ fees, disbursements and expenses of counsel, expert and consulting fees and costs related thereto or to the investigation or defense thereof) paid or payable by the Indemnitees as a result of such Liability (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and the members of its Group, on the one hand, and the Indemnitees entitled to contribution, on the other hand, as well as any other relevant equitable considerations.
(b) Allocation of Relative Fault . Solely for purposes of determining relative fault pursuant to this Section 5.8 in circumstances in which the indemnification is unavailable because of a fault associated with the business conducted by Delphi Technologies, Aptiv or a member of their respective Groups, (i) any fault associated with the business conducted with the Aptiv Assets or Aptiv Liabilities (except (x) to the extent associated with the Delphi Technologies DEG Business or (y) for the gross negligence or intentional misconduct of Delphi Technologies or a member of the Delphi Technologies Group) or with the ownership, operation or activities of the Aptiv Business shall be deemed to be the fault of Aptiv and the members of the Aptiv Group, and no such fault shall be deemed to be the fault of Delphi Technologies or a member of the Delphi Technologies Group; and (ii) any fault associated with the business conducted with the Delphi Technologies Assets, the Delphi Technologies Liabilities or the Delphi Technologies DEG Business (except for the gross negligence or intentional misconduct of Aptiv or the members of the Aptiv Group other than with respect to the Delphi Technologies DEG Business ) or with the ownership, operation or activities of the Delphi Technologies Business shall be deemed to be the fault of Delphi Technologies and the members of the Delphi Technologies Group, and no such fault shall be deemed to be the fault of Delphi or the members of the Aptiv Group.
(c) Contribution Procedures . The provisions of Sections 5.5 and 5.6 shall govern any contribution claims.
5.9 Covenant Not to Sue (Liabilities and Indemnity) . Each Party hereby covenants and agrees that none of it, the members of such Party’s Group or any Person claiming through it shall bring suit or otherwise assert any claim against any Indemnitee, or assert a defense against any claim asserted by any Indemnitee, before any court, arbitrator, mediator or administrative agency anywhere in the world, alleging that: (a) the assumption of any Delphi Technologies Liabilities by Delphi Technologies or a member of the Delphi Technologies Group on the terms and conditions set forth in this Agreement and the Ancillary Agreements is void or unenforceable for any reason; or (b) the provisions of this Article V are void or unenforceable for any reason.
 
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5.10 No Impact on Third Parties . For the avoidance of doubt, except as expressly set forth in this Agreement, the indemnifications provided for in this Article V are made only for purposes of allocating responsibility for Liabilities between the Delphi Technologies Group, on the one hand, and the Aptiv Group, on the other hand, and are not intended to, and shall not, affect any obligations to, or give rise to any rights of, any third parties.
5.11 No Cross-Claims or Third-Party Claims . Each of Aptiv and Delphi Technologies agrees that it shall not, and shall not permit the members of its respective Group to, in connection with any Third-Party Claim, assert as a counterclaim or third-party claim against any member of the Delphi Technologies Group or Aptiv Group, respectively, any claim (whether sounding in contract, tort or otherwise) that arises out of or relates to this Agreement, any breach or alleged breach hereof, the transactions contemplated hereby (including all actions taken in furtherance of the transactions contemplated hereby on or prior to the date hereof), or the construction, interpretation, enforceability or validity hereof, which in each such case shall be asserted only as contemplated by Article IV .
5.12 Severability . If any indemnification provided for in this Article V is determined by the sole arbitrator or arbitral tribunal (as the case may be) to be invalid, void or unenforceable, the liability shall be apportioned between the Indemnitee and the Indemnifying Party as determined in a separate proceeding in accordance with Article IV .
5.13 Specified Ancillary Agreements . Notwithstanding anything in this Agreement to the contrary, to the extent any Specified Ancillary Agreement contains any indemnification obligation or contribution obligation relating to any Delphi Technologies Liability, Aptiv Liability, Delphi Technologies Asset or Aptiv Asset contributed, assumed, retained, transferred, delivered, conveyed or governed pursuant to such Specified Ancillary Agreement or any Loss under such Specified Ancillary Agreement, as applicable, the indemnification obligations and contribution obligations contained herein shall not apply to such Delphi Technologies Liability, Aptiv Liability, Delphi Technologies Asset or Aptiv Asset or to such Loss and instead the indemnification obligations and/or contribution obligations set forth in such Specified Ancillary Agreement, as applicable, shall govern with regard to such Delphi Technologies Liability, Aptiv Liability, Delphi Technologies Asset or Aptiv Asset or such Loss.
5.14 Exclusivity . Except as otherwise provided in Section 10.14 , the sole and exclusive remedy for any and all claims, Liabilities or other matters based upon, relating to or arising from this Agreement or any Ancillary Agreement (other than the Specified Ancillary Agreements) or the transactions contemplated hereby or thereby shall be the rights of indemnification set forth in in this Article V , and no Person shall have any other entitlement, remedy or recourse, whether in contract, tort, strict liability, equitable remedy or otherwise, it being agreed that all of such other remedies, entitlements and recourse are expressly waived and released by the Parties to the fullest extent permitted by Law. This Section 5.14 shall not operate to interfere with or impede the operation of the covenants contained in this Agreement or any Ancillary Agreement (other than the Specified Ancillary Agreements), with respect to a Party’s right to seek equitable remedies (including specific performance or injunctive relief).
 
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5.15 Cooperation in Defense and Settlement .
(a) With respect to any Third-Party Claim that implicates both Parties in a material fashion due to the allocation of Liabilities, responsibilities for management of defense and related indemnities pursuant to this Agreement or any of the Ancillary Agreements, the Parties agree to use commercially reasonable efforts to cooperate fully and maintain a joint defense (in a manner that will preserve for the Parties the attorney-client privilege, joint defense or other privilege with respect thereto).
(b) To the extent there are documents, other materials, access to employees or witnesses related to or from a Party that is not responsible for the defense or Liability of a particular Action, such Party shall provide to the other Party (at such other Party’s cost and expense) reasonable access to documents, other materials, employees, and shall permit employees, officers and directors to cooperate as witnesses in the defense of such Action.
(c) Each of Delphi Technologies and Aptiv agrees that at all times from and after the Effective Time, if an Action currently exists or is commenced by a Third Party with respect to which a Party (or the members of its Group) is a named defendant, but the defense of such Action and any recovery in such Action is otherwise not a Liability allocated under this Agreement or any Ancillary Agreement to that Party, then the other Party shall use commercially reasonable efforts to cause the named but not liable defendant to be removed from such Action and such defendants shall not be required to make any payments or contributions therewith.
5.16 Insurance Matters .
(a) The Parties intend by this Agreement that, to the extent permitted under the terms of any applicable insurance policy, Delphi Technologies, each other member of the Delphi Technologies Group and each of their respective directors, officers and employees will be successors in interest and/or additional insureds and will have and be fully entitled to continue to exercise all rights that any of them may have as of the Effective Time (with respect to events occurring or claimed to have occurred before the Effective Time) as a Subsidiary, Affiliate, division, director, officer or employee of Aptiv before the Effective Time under any insurance policy, including any rights that Delphi Technologies, any other member of the Delphi Technologies Group or any of its or their respective directors, officers, or employees may have as an insured or additional named insured, Subsidiary, Affiliate, division, director, officer or employee to avail itself, himself or herself of any policy of insurance or any agreements related to the policies in effect before the Effective Time, with respect to events occurring before the Effective Time.
(b) After the Effective Time, Aptiv (and each other member of the Aptiv Group) and Delphi Technologies (and each other member of the Delphi Technologies Group) shall not, without the consent of Delphi Technologies or Aptiv, respectively (such consent not to be unreasonably withheld, conditioned or delayed), provide any insurance carrier with a release
 
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or amend, modify or waive any rights under any insurance policy if such release, amendment, modification or waiver thereunder would materially adversely affect any rights of any member of the Group of the other Party with respect to insurance coverage otherwise afforded to such other Party for pre-Distribution claims; provided , however , that the foregoing shall not (i) preclude any member of any Group from presenting any claim or from exhausting any policy limit, (ii) require any member of any Group to pay any premium or other amount or to incur any Liability or (iii) require any member of any Group to renew, extend or continue any policy in force.
(c) The provisions of this Agreement are not intended to relieve any insurer of any Liability under any policy.
(d) No member of the Aptiv Group or any Aptiv Indemnitee will have any Liabilities whatsoever as a result of the insurance policies as in effect at any time before the Effective Time, including as a result of (i) the level or scope of any insurance, (ii) the creditworthiness of any insurance carrier, (iii) the terms and conditions of any policy, or (iv) the adequacy or timeliness of any notice to any insurance carrier with respect to any claim or potential claim.
(e) Except to the extent otherwise provided in Section 5.16(b) , in no event will Aptiv, any other member of the Aptiv Group or any Aptiv Indemnitee have any Liability or obligation whatsoever to any member of the Delphi Technologies Group if any insurance policy is terminated or otherwise ceases to be in effect for any reason, is unavailable or inadequate to cover any Liability of any member of the Delphi Technologies Group for any reason whatsoever or is not renewed or extended beyond the current expiration date of any such insurance policy.
(f) This Agreement shall not be considered as an attempted assignment of any policy of insurance or as a contract of insurance and shall not be construed to waive any right or remedy of any members of the Aptiv Group in respect of any insurance policy or any other contract or policy of insurance.
(g) Nothing in this Agreement will be deemed to restrict any member of the Delphi Technologies Group from acquiring at its own expense any other insurance policy in respect of any Liabilities or covering any period.
(h) To the extent that any insurance policy provides for the reinstatement of policy limits, and both Aptiv and Delphi Technologies desire to reinstate such limits, the cost of reinstatement will be shared by Aptiv and Delphi Technologies as the Parties may agree. If either Party, in its sole discretion, determines that such reinstatement would not be beneficial, that Party shall not contribute to the cost of reinstatement and will not make any claim thereunder nor otherwise seek to benefit from the reinstated policy limits.
(i) For purposes of this Agreement, “ Covered Matter ” shall mean any matter, whether arising before or after the Effective Time, with respect to which any Delphi Technologies Indemnitee may seek to exercise any right under any insurance policy pursuant to this Section 5.16 . If Delphi Technologies receives notice or otherwise learns of any
 
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Covered Matter, Delphi Technologies shall promptly give Aptiv written notice thereof. Any such notice shall describe the Covered Matter in reasonable detail. With respect to each Covered Matter and any Joint Claim, Delphi Technologies shall have sole responsibility for reporting the claim to the insurance carrier and will provide a copy of such report to Delphi Technologies. If Aptiv or another member of the Aptiv Group fails to notify Delphi Technologies within fifteen (15) days that it has submitted an insurance claim with respect to a Covered Matter or Joint Claim, Delphi Technologies shall be permitted to submit (on behalf of the applicable Delphi Technologies Indemnitee) such insurance claim.
(j) Each of Delphi Technologies and Aptiv will share such information as is reasonably necessary in order to permit the other Party to manage and conduct its insurance matters in an orderly fashion and provide the other Party with any assistance that is reasonably necessary or beneficial in connection with such Party’s insurance matters.
5.17 Guarantees, Letters of Credit and Other Obligations .
(a) On or prior to the Effective Time or as soon as practicable thereafter, Aptiv shall (with the reasonable cooperation of the applicable members of the Aptiv Group) use its commercially reasonable efforts to have any members of the Delphi Technologies Group removed as guarantor of or obligor for any Aptiv Liability. On or prior to the Effective Time or as soon as practicable thereafter, Delphi Technologies shall (with the reasonable cooperation of the applicable members of the Delphi Technologies Group) use its commercially reasonable efforts to have any members of the Aptiv Group removed as guarantor of or obligor for any Delphi Technologies Liabilities.
(b) On or prior to the Effective Time or as soon as practicable thereafter, (i) to the extent required to obtain a release from a guarantee, letter of credit or other obligation of any member of the Delphi Technologies Group with respect to Aptiv Liabilities, Aptiv shall execute a substitute document in the form of any such existing guarantee or letter of credit, as applicable, or such other form as is agreed to by the relevant parties to such guarantee agreement, letter of credit or other obligation, except to the extent that such existing guarantee contains representations, covenants or other terms or provisions either (A) with which Aptiv would be reasonably unable to comply or (B) which would be reasonably expected to be breached and (ii) to the extent required to obtain a release from a guarantee, letter of credit or other obligation of any member of the Aptiv Group with respect to Delphi Technologies Liabilities, Delphi Technologies shall execute a substitute document in the form of any such existing guarantee or letter of credit, as applicable, or such other form as is agreed to by the relevant parties to such guarantee agreement, letter of credit or other obligation, except to the extent that such existing guarantee contains representations, covenants or other terms or provisions either (A) with which Delphi Technologies would be reasonably unable to comply or (B) which would be reasonably expected to be breached.
(c) If the Parties are unable to obtain, or to cause to be obtained, any such required removal as set forth in clauses (a) and (b) of this Section 5.17 , (i) with respect to Aptiv Liabilities, (A) Aptiv shall, and shall cause the other members of the Aptiv Group to, indemnify, defend and hold harmless each of the Delphi Technologies Indemnitees from and against any Liability arising from or relating to such guarantee, letter of credit or other
 
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obligation, as applicable, and shall, as agent or subcontractor for the applicable Delphi Technologies Group guarantor or obligor, pay, perform and discharge fully all of the obligations or other Liabilities of such guarantor or obligor thereunder, and (B) Aptiv shall not, and shall cause the other members of the Aptiv Group not to, agree to renew or extend the term of, increase any obligations under, or transfer to a third Person, any loan, guarantee, letter of credit, lease, contract or other obligation for which a member of the Delphi Technologies Group is or may be liable unless all obligations of the members of the Delphi Technologies Group with respect thereto are thereupon terminated by documentation satisfactory in form and substance to Delphi Technologies in its sole and absolute discretion and (ii) with respect to Delphi Technologies Liabilities, (A) Delphi Technologies shall, and shall cause the other members of the Delphi Technologies Group to, indemnify, defend and hold harmless each of the Aptiv Indemnitees for any Liability arising from or relating to such guarantee, letter of credit or other obligation, as applicable, and shall, as agent or subcontractor for the applicable Aptiv Group guarantor or obligor, pay, perform and discharge fully all of the obligations or other Liabilities of such guarantor or obligor thereunder, and (B) Delphi Technologies shall not, and shall cause the other members of the Delphi Technologies Group not to, agree to renew or extend the term of, increase any obligations under, or transfer to a third Person, any loan, guarantee, letter of credit, lease, contract or other obligation for which a member of the Aptiv Group is or may be liable unless all obligations of the members of the Aptiv Group with respect thereto are thereupon terminated by documentation satisfactory in form and substance to Aptiv in its sole and absolute discretion.
ARTICLE VI.
EXCHANGE OF INFORMATION; CONFIDENTIALITY
6.1 Agreement for Exchange of Information . Except as otherwise provided in any Ancillary Agreement, each of Aptiv and Delphi Technologies, on behalf of itself and the members of its respective Group, shall use commercially reasonable efforts to provide or make available, or cause to be provided or made available, to the other Party, at any time before or after the Effective Time, as soon as reasonably practicable after written request therefor, any Information (or a copy thereof) in the possession or under the control of either Party or any of the members of its Group to the extent that: (i) such Information relates to the Delphi Technologies Business or any Delphi Technologies Asset or Delphi Technologies Liability, if Delphi Technologies is the requesting party, or to the Aptiv Business or any Aptiv Asset or Aptiv Liability, if Aptiv is the requesting party; (ii) such Information is required by the requesting party to comply with its obligations under this Agreement or any Ancillary Agreement; or (iii) such Information is required by the requesting party to comply with any obligation imposed by any Governmental Authority; provided , however , that, in the event that the Party to whom the request has been made determines that any such provision of Information could be commercially detrimental, violate any Law or agreement or waive any attorney-client privilege, then the Parties shall use commercially reasonable efforts to permit compliance with such obligations to the extent and in a manner that avoids any such harm or consequence. The Party providing Information pursuant to this Section 6.1 shall only be obligated to provide such Information in the form, condition and format in which it then exists and in no event shall such Party be required to perform any improvement, modification, conversion, updating or reformatting of any such Information, and nothing in this Section 6.1 shall expand the obligations of the Parties under Section 6.4 .
 
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6.2 Ownership of Information . Any Information owned by one Group that is provided to a requesting Party pursuant to Section 6.1 or 6.7 shall remain the property of the providing Party. Unless specifically set forth herein, nothing contained in this Agreement shall be construed as granting or conferring rights of license or otherwise in any such Information.
6.3 Compensation for Providing Information . The Party requesting Information agrees to reimburse the other Party for the reasonable out-of-pocket costs, if any, of gathering, copying, transporting and otherwise complying with the request with respect to such Information (including any costs and expenses incurred in any review of Information for purposes of protecting the privileged Information of the providing Party or in connection with the restoration of backup media for purposes of providing the requested Information). Except as may be otherwise specifically provided elsewhere in this Agreement, any Ancillary Agreement or any other agreement between the Parties, such costs shall reflect the providing Party’s actual costs and expenses.
6.4 Record Retention .
(a) The Parties agree and acknowledge that following the Effective Time, it is likely that each Party will have some of the Tangible Information of the other Party stored at its facilities or at Third Party records storage locations arranged for by such Party (each, a “ Records Facility ”) and the cost of any Third Party Records Facility where Tangible Information belonging to both members of the Delphi Technologies Group, on the one hand, and members of the Aptiv Group, on the other hand, is stored shall be split equitably between the Delphi Technologies Group and the Aptiv Group.
(b) Each Party shall use the same degree of care (but no less than a reasonable degree of care) as it takes to preserve confidentiality for its own similar Information: (i) to maintain the Stored Records at its Record Facility in accordance with its regular records retention policies and procedures and the terms of this Section 6.4 ; and (ii) to comply with the requirements of any “litigation hold” that relates to Stored Records at its Record Facility that relates to (x) any Action that is pending as of the Effective Time or (y) any Action that arises or becomes threatened or reasonably anticipated after the Effective Time as to which the Party storing such Stored Records has received a written notice of the applicable “litigation hold” from the other Party; provided , that such other Party shall be obligated to provide the Party storing such Stored Records with timely notice of the termination of such “litigation hold.”
(c) In addition to the retention requirements of Sections 6.4(a) and (b) , for a period no less than five (5) years longer than the period of time that a product is manufactured by Aptiv, Delphi Technologies or any member of their respective Groups plus the useful life of such product as defined in such product’s specifications (or such longer period of time as may be required by applicable Law), Delphi Technologies, at its sole cost and expense, shall use its commercially reasonable efforts to maintain and make available to Aptiv all technical documentation in its possession or in the possession of any member of the Delphi Technologies Group applicable to such product and such product’s design, test, release, and validation; provided , however , Delphi Technologies shall not destroy, or permit any member of the Delphi Technologies Group to destroy, any such technical documentation without first notifying Aptiv of the proposed destruction and giving Aptiv the opportunity to take possession or make copies of such technical documentation prior to such destruction.
 
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(d) Delphi Technologies shall, from time to time, at the reasonable request of Aptiv, provide Aptiv with technical assistance and information in respect to any claims brought against Aptiv involving the conduct of the Delphi Technologies Business prior to the Effective Time, including by making available employees of the Delphi Technologies Group and consultation and appearances of such persons on a reasonable basis as expert or fact witnesses in trials or administrative proceedings. Aptiv shall reimburse Delphi Technologies for its reasonable out-of-pocket costs (travel, hotels, etc.) of providing such services, consistent with Aptiv’s policies and practices regarding such expenditures. Additionally, Aptiv shall, from time to time, at the reasonable request of Delphi Technologies, provide Delphi Technologies, to the extent reasonably possible through applicable Aptiv employees, with technical assistance and information in respect to any claims brought against Delphi Technologies involving the conduct of the Delphi Technologies Business prior to the Effective Time, including consultation and appearances of such persons on a reasonable basis as expert or fact witnesses in trials or administrative proceedings. Delphi Technologies shall reimburse Aptiv for its reasonable out-of-pocket costs (travel, hotels, etc.) of providing such services, consistent with Aptiv’s policies and practices regarding such expenditures.
6.5 Limitations of Liability . No Party shall have any liability to any other Party relating to or arising out of (a) any Information exchanged or provided pursuant to Section 6.1 that is found to be inaccurate in the absence of willful misconduct by the Party providing such Information or (b) the destruction of any Information after commercially reasonable efforts by such Party to comply with the provisions of Section 6.4 .
6.6 Other Agreements Providing for Exchange of Information .
(a) The rights and obligations granted under this Article VI are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange, retention or confidential treatment of Information set forth herein or any Ancillary Agreement.
(b) Either Party that receives, pursuant to a request for Information in accordance with this Article VI , Tangible Information that is not relevant to its request shall (i) return it to the providing Party or, at the providing Party’s request, destroy such Tangible Information and (ii) deliver to the providing Party a certificate certifying that such Tangible Information was returned or destroyed, as the case may be, which certificate shall be signed by an authorized Representative of the requesting Party.
(c) When any Tangible Information provided by one Party to the other Party (other than Tangible Information provided pursuant to Section 6.4 ) is no longer needed for the purposes contemplated by this Agreement or any Ancillary Agreement or is no longer required to be retained by applicable Law, the receiving Party shall promptly, after request of the other Party, either return to the other Party all Tangible Information in the form in which it was originally provided (including all copies thereof and all notes, extracts or summaries based thereon) or, if the providing Party has requested that the other Party destroy such Tangible Information, certify to the other Party that it has destroyed such Tangible
 
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Information (and such copies thereof and such notes, extracts or summaries based thereon); provided , that this obligation to return or destroy such Tangible Information shall not apply to any Tangible Information solely related to the receiving Party’s business, Assets, Liabilities, operations or activities.
6.7 Auditors and Audits
(a) Until the first Delphi Technologies fiscal year end occurring after the Effective Time and for a reasonable period of time afterwards as required for each Party to prepare consolidated financial statements or complete a financial statement audit for the fiscal year during which the Distribution Date occurs, each Party shall provide or provide access to the other Party on a timely basis, all information reasonably required to meet its schedule for the preparation, printing, filing, and public dissemination of its annual financial statements and for management’s assessment of the effectiveness of its disclosure controls and procedures and its internal control over financial reporting in accordance with Items 307 and 308, respectively, of Regulation S-K promulgated by the SEC and, to the extent applicable to such Party, its auditor’s audit of its internal control over financial reporting and management’s assessment thereof in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and the SEC’s and Public Company Accounting Oversight Board’s rules and auditing standards thereunder.
(b) In the event a Party restates any of its financial statements that include such Party’s audited or unaudited financial statements with respect to any balance sheet date or period of operation as of the end of and for the 2017 fiscal year and the five (5) year period ending December 31, 2017, such Party will deliver to the other Party a substantially final draft, as soon as the same is prepared, of any report to be filed by such first Party with the SEC that includes such restated audited or unaudited financial statements (the “ Amended Financial Report ”); provided , however , that such first Party may continue to revise its Amended Financial Report prior to its filing thereof with the SEC, which changes will be delivered to the other Party as soon as reasonably practicable; provided, further , however, that such first Party’s financial personnel will actively consult with the other Party’s financial personnel regarding any changes which such first Party may consider making to its Amended Financial Report and related disclosures prior to the anticipated filing of such report with the SEC, with particular focus on any changes which would have an effect upon the other Party’s financial statements or related disclosures. Each Party will reasonably cooperate with, and permit and make any necessary employees available to, the other Party, in connection with the other Party’s preparation of any Amended Financial Reports.
6.8 Privileged Matters .
(a) The Parties recognize that legal and other professional services that have been and shall be provided prior to the Effective Time have been and shall be rendered for the collective benefit of each of the members of the Aptiv Group and the Delphi Technologies Group, and that each of the members of the Aptiv Group and the Delphi Technologies Group should be deemed to be the client with respect to such services for the purposes of asserting all privileges and immunities that may be asserted under applicable Law in connection therewith. The Parties recognize that legal and other professional services will be provided after the Effective Time, which services will be rendered solely for the benefit of the Aptiv Group or the Delphi Technologies Group, as the case may be.
 
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(b) The Parties agree as follows:
(i) Aptiv shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to the Aptiv Business, whether or not the Privileged Information is in the possession or under the control of a member of the Aptiv Group or the Delphi Technologies Group; Aptiv shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to any Aptiv Liabilities resulting from any Actions that are now pending or may be asserted in the future, whether or not the Privileged Information is in the possession or under the control of a member of the Aptiv Group or the Delphi Technologies Group;
(ii) Delphi Technologies shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to the Delphi Technologies Business, whether or not the Privileged Information is in the possession or under the control of a member of the Aptiv Group or the Delphi Technologies Group; Delphi Technologies shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to any Delphi Technologies Liabilities resulting from any Actions that are now pending or may be asserted in the future, whether or not the Privileged Information is in the possession or under the control of a member of the Aptiv Group or the Delphi Technologies Group; and
(iii) If the Parties do not agree as to whether certain information is Privileged Information, then such information shall be treated as Privileged Information, and the Party that believes that such information is Privileged Information shall be entitled to control the assertion or waiver of all privileges and immunities in connection with any such information until such time as it is finally judicially determined that such information is not Privileged Information or unless the Parties otherwise agree. The Parties shall use the procedures set forth in Article IV to resolve any Disputes as to whether any information relates solely to the Aptiv Business, solely to the Delphi Technologies Business, or to both the Aptiv Business and the Delphi Technologies Business.
(c) Subject to Sections 6.8(d) and 6.8(e) , the Parties agree that they shall have a shared privilege or immunity with respect to all privileges not allocated pursuant to Section 6.8(b) and all privileges and immunities relating to any Actions or other matters that involve both Parties (or one or more members of their respective Groups) and in respect of which both Parties have Liabilities under this Agreement, and that no such shared privilege or immunity may be waived by either Party without the written consent of the other Party.
 
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(d) If any dispute arises between the Parties, or any member of their respective Groups, regarding whether a privilege or immunity should be waived to protect or advance the interests of either Party and/or any member of their respective Groups, each Party agrees that it shall: (i) negotiate with the other Party in good faith, (ii) endeavor to minimize any prejudice to the rights of the other Party and (iii) not unreasonably withhold consent to any request for waiver by the other Party. Further, each Party specifically agrees that it shall not withhold its consent to the waiver of a privilege or immunity for any purpose except to protect its own legitimate interests.
(e) Upon receipt by any member of the Delphi Technologies Group of any subpoena, discovery or other request that may reasonably be expected to result in the production or disclosure of Information subject to a shared privilege or immunity or as to which Aptiv or any of its Subsidiaries has the sole right hereunder to assert a privilege or immunity, or if Delphi Technologies obtains knowledge that any of its, or any member of the Delphi Technologies Group’s, current or former directors, officers, agents or employees have received any subpoena, discovery or other requests that may reasonably be expected to result in the production or disclosure of such Privileged Information, Delphi Technologies shall promptly provide written notice to Aptiv of the existence of the request (which notice shall be delivered to Aptiv no later than five (5) Business Days following the receipt of any such subpoena, discovery or other request) and shall provide Aptiv a reasonable opportunity to review the Information and to assert any rights it or they may have, including under this Section 6.8 or otherwise, to prevent the production or disclosure of such Privileged Information.
(f) Upon receipt by any member of the Aptiv Group of any subpoena, discovery or other request that may reasonably be expected to result in the production or disclosure of Information subject to a shared privilege or immunity or as to which Delphi Technologies or any member of the Delphi Technologies Group has the sole right hereunder to assert a privilege or immunity, or if Aptiv obtains knowledge that any of its, or any member of the Aptiv Group’s, current or former directors, officers, agents or employees have received any subpoena, discovery or other requests that may reasonably be expected to result in the production or disclosure of such Privileged Information, Aptiv shall promptly provide written notice to Delphi Technologies of the existence of the request (which notice shall be delivered to Delphi Technologies no later than five (5) Business Days following the receipt of any such subpoena, discovery or other request) and shall provide Delphi Technologies a reasonable opportunity to review the Information and to assert any rights it or they may have, including under this Section 6.8 or otherwise, to prevent the production or disclosure of such Privileged Information.
(g) Any furnishing of, or access to, Information pursuant to this Agreement and the transfer of the Asset and retention of the Delphi Technologies Assets by Delphi Technologies are made and done in reliance on the agreement of the Parties set forth in this Section 6.8 and in Section 6.9 to maintain the confidentiality of Privileged Information and to assert and maintain all applicable privileges and immunities. The Parties agree that their respective rights to any access to information, witnesses and other Persons, the furnishing of notices and documents and other cooperative efforts between the Parties contemplated by this Agreement, and the transfer of Privileged Information between the Parties and members of their respective Groups pursuant to this Agreement, shall not be deemed a waiver of any privilege that has been or may be asserted under this Agreement or otherwise. The Parties
 
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further agree that: (i) the exchange or retention by one Party to the other Party of any Privileged Information that should not have been transferred or retained, as the case may be, pursuant to the terms of this Article VI shall not be deemed to constitute a waiver of any privilege or immunity that has been or may be asserted under this Agreement or otherwise with respect to such Privileged Information; and (ii) the Party receiving or retaining such Privileged Information shall promptly return or transfer, as the case may be, such Privileged Information to the Party who has the right to assert the privilege or immunity.
(h) In furtherance of, and without limitation to, the Parties’ agreement under this Section 6.8 , Aptiv and Delphi Technologies shall, and shall cause their applicable Subsidiaries to, use reasonable efforts to maintain their respective separate and joint privileges and immunities, including by executing joint defense and/or common interest agreements where necessary or useful for this purpose.
6.9 Confidentiality .
(a) Confidentiality . From and after the Effective Time, subject to Section 6.10 and except as contemplated by or otherwise provided in this Agreement or any Ancillary Agreement, Aptiv, on behalf of itself and each of its Subsidiaries, and Delphi Technologies, on behalf of itself and each of its Subsidiaries, agrees to hold, and to cause its respective Representatives to hold, in strict confidence, with at least the same degree of care that applies to Aptiv’s confidential and proprietary information pursuant to policies in effect as of the Effective Time, all confidential or proprietary Information concerning the other Party (or its business) and the other Party’s Subsidiaries (or their respective businesses) that is either in its possession (including confidential or proprietary Information in its possession prior to the Effective Time) or furnished by the other Party or the other Party’s Subsidiaries or their respective Representatives at any time pursuant to this Agreement or any Ancillary Agreement, and shall not use any such confidential or proprietary Information other than for such purposes as may be expressly permitted hereunder or thereunder, except, in each case, to the extent that such confidential or proprietary Information has been: (i) in the public domain or generally available to the public, other than as a result of a disclosure by such Party or any of its Subsidiaries or any of their respective Representatives in violation of this Agreement, (ii) later lawfully acquired from other sources by such Party or any of its Subsidiaries, which sources are not themselves bound by a confidentiality obligation or other contractual, legal or fiduciary obligation of confidentiality with respect to such confidential or proprietary Information or (iii) independently developed or generated without reference to or use of the respective proprietary or confidential Information of the other Party or any of its Subsidiaries. The foregoing restrictions shall not apply in connection with the enforcement of any right or remedy relating to this Agreement or the Ancillary Agreements or the transactions contemplated hereby or thereby. If any confidential or proprietary Information of one Party or any of its Subsidiaries is disclosed to another Party or any of its Subsidiaries in connection with providing services to such first Party or any of its Subsidiaries under this Agreement or any Ancillary Agreement, then such disclosed confidential or proprietary Information shall be used only as required to perform such services.
 
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(b) No Release; Return or Destruction . Each Party agrees not to release or disclose, or permit to be released or disclosed, any confidential or proprietary Information of the other Party addressed in Section 6.9(a) to any other Person, except its Representatives who need to know such Information in their capacities as such (who shall be advised of their obligations hereunder with respect to such Information), and except in compliance with Section 6.10 . Without limiting the foregoing, when any Information furnished by the other Party after the Effective Time pursuant to this Agreement or any Ancillary Agreement is no longer needed for the purposes contemplated by this Agreement or any Ancillary Agreement, each Party shall, at its option, promptly after receiving a written notice from the disclosing Party, either return to the disclosing Party all such Information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or certify to the disclosing Party that it has destroyed such Information (and such copies thereof and such notes, extracts or summaries based thereon); provided , however , that a Party shall not be required to destroy or return any such Information to the extent that (i) the Party is required to retain the Information in order to comply with any applicable Law, (ii) the Information has been backed up electronically pursuant to the Party’s standard document retention policies and will be managed and ultimately destroyed consistent with such policies or (iii) it is kept in the Party’s legal files for purposes of resolving any dispute that may arise under this Agreement or any Ancillary Agreement.
(c) Third-Party Information; Privacy or Data Protection Laws . Each Party acknowledges that it and its respective Subsidiaries may presently have and, after the Effective Time, may gain access to or possession of confidential or proprietary Information of, or personal Information relating to, Third Parties: (i) that was received under confidentiality or non-disclosure agreements entered into between such Third Parties, on the one hand, and the other Party or the other Party’s Subsidiaries, on the other hand, prior to the Effective Time or (ii) that, as between the two parties, was originally collected by the other Party or the other Party’s Subsidiaries and that may be subject to and protected by privacy, data protection or other applicable Laws. Each Party agrees that it shall hold, protect and use, and shall cause its Subsidiaries and its and their respective Representatives to hold, protect and use, in strict confidence the confidential and proprietary Information of, or personal Information relating to, Third Parties in accordance with privacy, data protection or other applicable Laws and the terms of any agreements that were either entered into before the Effective Time or affirmative commitments or representations that were made before the Effective Time by, between or among the other Party or the other Party’s Subsidiaries, on the one hand, and such Third Parties, on the other hand.
6.10 Protective Arrangements . In the event that either Party or any of its Subsidiaries is requested or required (by oral question, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) by any Governmental Authority or pursuant to applicable Law or the rules of any stock exchange on which the shares of the Party or any member of its Group are traded to disclose or provide any confidential or proprietary Information of the other Party (other than with respect to any such Information furnished pursuant to the provisions of Section 6.1 or 6.7 , as applicable) that is subject to the confidentiality provisions hereof, such Party shall provide the other Party with written notice of such request or demand (to the extent legally permitted) as promptly as practicable under the circumstances so that such other Party shall have an opportunity to seek an appropriate protective order, at such other Party’s own cost and expense. In the event that such other Party fails to receive such appropriate protective order in a timely manner and the Party receiving the request
 
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or demand reasonably determines that its failure to disclose or provide such Information shall actually prejudice the Party receiving the request or demand, then the Party that received such request or demand may thereafter disclose or provide Information to the extent required by such Law (as so advised by its counsel) or by lawful process or such Governmental Authority, and the disclosing Party shall promptly provide the other Party with a copy of the information so disclosed, in the same form and format so disclosed, together with a list of all Persons to whom such information was disclosed, in each case to the extent legally permitted.
ARTICLE VII.
FURTHER ASSURANCES AND ADDITIONAL COVENANTS
7.1 Further Assurances .
(a) In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties hereto shall use its commercially reasonable efforts, prior to, on and after the Effective Time, to take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable on its part under applicable Laws, regulations and agreements, to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements.
(b) Without limiting the foregoing, prior to, on and after the Effective Time, each Party hereto shall cooperate with each other Party hereto, and without any further consideration, but at the expense of the requesting Party, to execute and deliver, or use its commercially reasonable efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain or make any Approvals or Notifications of, any Governmental Authority or any other Person under any permit, license, agreement, indenture or other instrument (including any Third-Party consents or Governmental Approvals), and to take all such other actions as such Party may reasonably be requested to take by any other Party hereto from time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements and the transfers of the Delphi Technologies Assets and the assignment and assumption of the Delphi Technologies Liabilities and the other transactions contemplated hereby and thereby. Without limiting the foregoing, each Party shall, at the reasonable request, cost and expense of any other Party, take such other actions as may be reasonably necessary to vest in such other Party all of the transferring Party’s right, title and interest to the Assets allocated to such Party by this Agreement or any Ancillary Agreement, in each case, if and to the extent it is practicable to do so.
(c) On or prior to the Effective Time, Aptiv and Delphi Technologies in their respective capacities as direct and indirect shareholders of their respective Subsidiaries, shall each ratify any actions that are reasonably necessary or desirable to be taken by any Subsidiary of Aptiv or Subsidiary of Delphi Technologies, as the case may be, to effectuate the transactions contemplated by this Agreement and the Ancillary Agreements.
 
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7.2 Performance . Aptiv shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any Ancillary Agreement to be performed by any member of the Aptiv Group. Delphi Technologies shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any Ancillary Agreement to be performed by any member of the Delphi Technologies Group. Each Party (including its permitted successors and assigns) further agrees that it shall (a) give timely notice of the terms, conditions and continuing obligations contained in this Section 7.2 to all of the other members of its Group, and (b) cause all of the other members of its Group not to take, or omit to take, any action which action or omission would violate or cause such Party to violate this Agreement or any Ancillary Agreement or materially impair such Party’s ability to consummate the transactions contemplated hereby or thereby.
7.3 No Restrictions on Post-Closing Competitive Activities; Corporate Opportunities .
(a) Each of the Parties agrees that this Agreement shall not include any noncompetition or other similar restrictive arrangements with respect to the range of business activities that may be conducted, or investments that may be made, by the Groups. Accordingly, each of the Parties acknowledges and agrees that nothing set forth in this Agreement shall be construed to create any explicit or implied restriction or other limitation on the ability of any Group to engage in any business or other activity that overlaps or competes with the business of the other Group. Except as expressly provided herein, or in the Ancillary Agreements, each Group shall have the right to, and shall have no duty to abstain from exercising such right to, (i) engage or invest, directly or indirectly, in the same, similar or related business activities or lines of business as the other Group, (ii) make investments in the same or similar types of investments as the other Group, (iii) do business with any client, customer, vendor or lessor of any of the other Group or (iv) subject to Section 7.6 , employ or otherwise engage any officer, director or employee of the other Group.
(b) Except as expressly provided herein, or in the Ancillary Agreements, the Parties hereby acknowledge and agree that if any Person that is a member of a Group, including any officer or director thereof, acquires knowledge of a potential transaction or matter that may be a corporate opportunity for either or both Groups, the other Group shall not have an interest in, or expectation that such opportunity be offered to it or that it be offered an opportunity to participate therein, and any such expectation with respect to such opportunity, is hereby renounced by such Group. Accordingly, except as expressly provided herein, or in the Ancillary Agreements, (i) neither Group will be under any obligation to present, communicate or offer any such opportunity to the other Group and (ii) each Group has the right to hold any such opportunity for its own account, or to direct, recommend, sell, assign or otherwise transfer such opportunity to any Person or Persons other than the other Group, and, to the fullest extent permitted by Law, neither Group shall have or be under any duty to the other Group and shall not be liable to the other Group for any breach or alleged breach thereof or for any derivation of personal economic gain by reason of the fact that such Group or any of its officers or directors pursues or acquires the opportunity for itself, or directs, recommends, sells, assigns or otherwise transfers the opportunity to another Person, or such Group does not present, offer or communicate information regarding the opportunity to the other Group.
 
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(c) For the purposes of this Section 7.3 , “corporate opportunities” of a Group shall include business opportunities that such Group is financially able to undertake, that are, by their nature, in a line of business of such Group, are of practical advantage to it and are ones in which any member of the Group has an interest or a reasonable expectancy, and in which, by embracing the opportunities, the self-interest of a Person or any of its officers or directors will be brought into conflict with that of such Group.
7.4 Mail Forwarding . (a) Aptiv agrees that following the Effective Time it shall use its commercially reasonable efforts to forward to Delphi Technologies any correspondence relating to the Delphi Technologies Business (or a copy thereof to the extent such correspondence relates to both the Delphi Technologies Business and the Aptiv Business) that is delivered to Aptiv and (b) Delphi Technologies agrees that following the Effective Time it shall use its commercially reasonable efforts to forward to Aptiv any correspondence relating to the Aptiv Business (or a copy thereof to the extent such correspondence relates to both the Aptiv Business and the Delphi Technologies Business) that is delivered to Delphi Technologies.
7.5 Non-Disparagement . Each of the Parties shall not, and shall cause their respective Groups and their respective officers and employees not to, make, or cause to be made, any statement or communicate any information (whether oral or written) that disparages the other Group or any of their respective officers, directors or employees.
7.6 Non-Solicitation Covenant . For a period of one (1) year from and after the Effective Time, neither Party shall, and shall ensure that the other members of such Party’s Group shall not, directly or indirectly, solicit or hire any executives, officers or engineers of the other Party’s Group without the prior written consent of Aptiv or Delphi Technologies, as applicable; provided , however , that this Section 7.6 shall not prohibit any general offers of employment to the public, including through a bona fide search firm, so long as it is not specifically targeted toward employees of the Aptiv Group or Delphi Technologies Group, as applicable.
7.7 Order of Precedence .
(a) Notwithstanding anything to the contrary in this Agreement or any Specified Ancillary Agreement, in the case of any conflict between the provisions of this Agreement and any Specified Ancillary Agreement, the provisions of such Specified Ancillary Agreement shall prevail.
(b) The Parties acknowledge and confirm that, notwithstanding anything to the contrary in the Transfer Documents, (i) to the extent that any provision of the Transfer Documents conflicts with this Agreement, this Agreement shall be deemed to control with respect to the subject matter thereof and (ii) the Transfer Documents shall not be deemed in any way to amend, expand, restrict or otherwise modify such parties’ rights and obligations set forth in this Agreement.
 
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ARTICLE VIII.
INTELLECTUAL PROPERTY MATTERS
8.1 License to Delphi Technologies .
(a) Licensed Intellectual Property. Aptiv, on behalf of itself and the Aptiv Group, hereby grants to the Delphi Technologies Group a perpetual, irrevocable, royalty-free, fully paid up, non-transferrable (except as permitted pursuant to Section 8.1(h)) , non-exclusive license to use the Licensed Intellectual Property in connection with any business conducted by the Delphi Technologies Group. The foregoing license includes the right (i) to make, have made, use, sell, offer for sale, and import products and services, and (ii) to publish, display, reproduce, copy, create derivative works of, enhance, and otherwise exploit such Licensed Intellectual Property.
(b) Ownership of Improvements . As between the Parties, any derivative works, enhancements or other improvements to the Licensed Intellectual Property made or created by or on behalf of any member of the Delphi Technologies Group shall be owned by Delphi Technologies or its applicable Affiliate.
(c) Sublicensing . The license to the Delphi Technologies Group pursuant to Section 8.1(a) shall be sublicensable solely as and to the extent necessary (i) to service providers of the Delphi Technologies Group in connection with the provision of services to the Delphi Technologies Group, which services require the use of the Licensed Intellectual Property, but not for the benefit of such service providers, and (ii) to customers of the Delphi Technologies Group in connection with their purchase of products and services from the Delphi Technologies Group. Delphi Technologies shall require such permitted sublicensees in writing to comply with the limited scope of any such sublicense, and with confidentiality obligations consistent with Article VI .
(d) Limitations . All Licensed Intellectual Property is licensed as such Intellectual Property exists as of the Effective Time and subject to any and all licenses that have been granted by Aptiv, its Affiliates or its or their predecessors-in-interest with respect thereto prior to the Effective Time. There is no obligation to provide upgrades, updates, enhancements, improvements, support or maintenance to any of the Licensed Intellectual Property. Without limiting the generality of the foregoing, nothing contained in this Section 8.1 shall be construed as:
(i) requiring the filing of any patent application or application to register any other Intellectual Property, the securing of any patent or Intellectual Property registration, or the maintaining of any patent or Intellectual Property in force;
(ii) an agreement to bring or prosecute actions or suits against third parties for infringement or misappropriation; or
(iii) an obligation to furnish any assistance or any technical support.
(e) Duration . The license to any item of Licensed Intellectual Property granted herein shall expire upon the expiration of the term of such Intellectual Property.
 
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(f) Notification of Infringement. Delphi Technologies shall promptly notify Aptiv if Delphi Technologies or any of its Affiliates becomes aware of any activities of a third party that reasonably appear to be an infringement of any item of Licensed Intellectual Property.
(g) Confidentiality . Delphi Technologies shall maintain the confidentiality of trade secrets and other non-public Intellectual Property included in the Licensed Intellectual Property in accordance with Article VI .
(h) Assignment .
(i) Except as set forth in Section 8.1(c) and in this Section 8.1(h)(i) , the license granted pursuant to Section 8.1(a) may not, without the prior written consent of Aptiv, be assigned, sublicensed or otherwise transferred in whole or in part by any member of the Delphi Technologies Group, by operation of Law or otherwise (which shall be deemed to include a change of control of any member of the Delphi Technologies Group), and any attempt to do so shall be null and void; provided, however, that any member of the Delphi Technologies Group may (A) transfer all or a part of its rights and obligations under this Section 8.1 to its Affiliates for so long as they remain Affiliates of Delphi Technologies; (B) transfer all of its rights and obligations under this Section 8.1 to any third party in connection with an acquisition of all or substantially all of the Delphi Technologies Business (whether by merger, consolidation, sale of assets, sale or exchange of stock, or otherwise), provided that, from and after the date of such assignment or transfer, the license under Section 8.1(a) shall be limited to use of the Licensed Intellectual Property solely in connection with the manufacture, provision, sale and distribution of the products and services of the Delphi Technologies Business as such products and services exist as of the date of such assignment or transfer and any improvements thereto that are in production or planned for production as of the date of such assignment or transfer; and (C) transfer all or part of its rights and obligations under this Section 8.1 or sublicense any of the licenses granted hereunder to any third party in connection with an acquisition of any discrete operating business unit or division of the Delphi Technologies Business (whether by merger, consolidation, sale of assets, sale or exchange of stock, or otherwise); provided that, from and after the date of such assignment or transfer, the license under Section 8.1(a) shall be limited to use of the Licensed Intellectual Property solely in connection with the manufacture, provision, sale and distribution of the products and services of the Delphi Technologies Business as such products and services exist as of the date of such assignment or transfer and any improvements thereto that are in production or planned for production as of the date of such assignment or transfer; provided further , that (x) upon such transfer, the license is used only in connection with the operation of such business unit or division, and (y) the transfer is limited solely to such business unit or division; and provided further that, in each of the cases (A) – (C), such transferee, assignee or successor agrees to be bound by this Section 8.1 .
(ii) For the avoidance of doubt, Aptiv and its Affiliates shall be free to transfer the Licensed Intellectual Property without any consent or sell, transfer, assign, dispose of in any way, license, sublicense and grant any kind of rights with respect to any Licensed Intellectual Property to any Person and impose any kind of restrictions to any Person
 
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relating to or in connection with any Licensed Intellectual Property; provided, however, in each case, that the license and rights granted to the Delphi Technologies Group under and pursuant to this Agreement remain in full force and effect and continue to inure to the benefit of the Delphi Technologies Group without any restriction or alteration.
8.2 License to Aptiv .
(a) Delphi Technologies Intellectual Property. Delphi Technologies acknowledges that the Delphi Technologies Intellectual Property is transferred to Delphi Technologies subject to, and the Aptiv Group is hereby granted, a perpetual, irrevocable, royalty-free, fully paid up, non-transferrable (except as permitted pursuant to Section 8.2(h)) , non-exclusive license to use, in connection with any business conducted by the Aptiv Group, the Delphi Technologies Intellectual Property (other than Trademarks) used or held for use as of the Effective Time in connection with the Aptiv Business. The foregoing license includes the right (i) to make, have made, use, sell, offer for sale, and import products and services, and (ii) to publish, display, reproduce, copy, create derivative works of, enhance, and otherwise exploit such Delphi Technologies Intellectual Property.
(b) Ownership of Improvements . As between the Parties, any derivative works, enhancements or other improvements to the Delphi Technologies Intellectual Property made or created by or on behalf of any member of the Aptiv Group shall be owned by Aptiv or its applicable Affiliate.
(c) Sublicensing . The license to the Aptiv Group pursuant to Section 8.2(a) shall be sublicensable solely as and to the extent necessary (i) to service providers of the Aptiv Group in connection with the provision of services to the Aptiv Group, which services require the use of the Delphi Technologies Intellectual Property, but not for the benefit of such service providers, and (ii) to customers of the Aptiv Group in connection with their purchase of products and services from the Aptiv Group. Aptiv shall require such permitted sublicensees in writing to comply with the limited scope of any such sublicense, and with confidentiality obligations consistent with Article VI .
(d) Limitations . All Delphi Technologies Intellectual Property is licensed as such Intellectual Property exists as of the Effective Time and subject to any and all licenses that have been granted by Aptiv, its Affiliates or its or their predecessors-in-interest with respect thereto prior to the Effective Time. There is no obligation to provide upgrades, updates, enhancements, improvements, support or maintenance to any of the Delphi Technologies Intellectual Property. Without limiting the generality of the foregoing, nothing contained in this Section 8.2 shall be construed as:
(i) requiring the filing of any patent application or application to register any other Intellectual Property, the securing of any patent or Intellectual Property registration, or the maintaining of any patent or Intellectual Property in force;
(ii) an agreement to bring or prosecute actions or suits against third parties for infringement or misappropriation; or
(iii) an obligation to furnish any assistance or any technical support.
 
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(e) Duration . The license to any item of Delphi Technologies Intellectual Property granted herein shall expire upon the expiration of the term of such Intellectual Property.
(f) Notification of Infringement. Aptiv shall promptly notify Delphi Technologies if Aptiv or any of its Affiliates becomes aware of any activities of a third party that reasonably appear to be an infringement of any item of Delphi Technologies Intellectual Property.
(g) Confidentiality . Aptiv shall maintain the confidentiality of trade secrets and other non-public Intellectual Property included in the Delphi Technologies Intellectual Property in accordance with Article VI .
(h) Assignment .
(i) Except as set forth in Section 8.2(c) and in this Section 8.2(h)(i) , the license granted pursuant to Section 8.2(a) may not, without the prior written consent of Delphi Technologies, be assigned, sublicensed or otherwise transferred in whole or in part by any member of the Aptiv Group, by operation of Law or otherwise, and any attempt to do so shall be null and void; provided, however, that any member of the Aptiv Group may (A) transfer all or a part of its rights and obligations under this Section 8.2 to its Affiliates for so long as they remain Affiliates of Aptiv; (B) transfer all of its rights and obligations under this Section 8.2 to any third party in connection with an acquisition of all or substantially all of the Aptiv Business (whether by merger, consolidation, sale of assets, sale or exchange of stock, or otherwise); and (C) transfer all or part of its rights and obligations under this Section 8.2 or sublicense any of the licenses granted hereunder to any third party in connection with an acquisition of any discrete operating business unit or division of the Aptiv Business (whether by merger, consolidation, sale of assets, sale or exchange of stock, or otherwise); provided, however, (x) that upon such transfer, the license is used only in connection with the operation of such business unit or division; and (y) the transfer is limited solely to such business unit or division; and provided, further, that, in each of the cases in (A) – (C), such transferee, assignee or successor agrees to be bound by this Section 8.2 .
(ii) For the avoidance of doubt, Delphi Technologies and its Affiliates shall be free to transfer the Delphi Technologies Intellectual Property without any consent or sell, transfer, assign, dispose of in any way, license, sublicense and grant any kind of rights with respect to any Delphi Technologies Intellectual Property to any Person and impose any kind of restrictions to any Person relating to or in connection with any Delphi Technologies Intellectual Property; provided, however, in each case, that the license and rights granted to the Aptiv Group under and pursuant to this Agreement remain in full force and effect and continue to inure to the benefit of the Aptiv Group without any restriction or alteration.
 
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8.3 Aptiv-Formative Trademarks .
(a) Limitations on Use by Aptiv . Aptiv shall not use the Aptiv-Formative Marks other than in connection with the Aptiv Business, and will use commercially reasonable efforts to phase out its use of the “Delphi” name in connection with the operation of the Aptiv Business.
(b) Limitations on Use by Delphi Technologies . Delphi Technologies shall not use the Aptiv-Formative Marks in connection with any goods or services related to the Aptiv Business.
(c) Treatment of Shared Trademark Registrations . With respect to applications or registrations for Aptiv-Formative Marks that apply to the goods and services included in both the Aptiv Business and the Delphi Technologies Business, the Parties shall, and shall cause each of the members of their respective Groups to, take such reasonable and permissible actions to cause the legal rights to be separated and allocated according to the intent of Section 2.1 .
ARTICLE IX.
TERMINATION
9.1 Termination . This Agreement and any Ancillary Agreement may be terminated and the terms and conditions of the Separation and the Distribution may be amended, modified or abandoned at any time prior to the Effective Time by and in the sole and absolute discretion of the Aptiv Board without the approval of any other Person, including the shareholders of Aptiv, Delphi Technologies or Aptiv. In the event that this Agreement is terminated, this Agreement shall become null and void and no Party, nor any Party’s directors, officers or employees, shall have any liability of any kind to any Person by reason of this Agreement. After the Distribution, this Agreement may not be terminated except by an agreement in writing signed by Aptiv and Delphi Technologies.
9.2 Effect of Termination . In the event of any termination of this Agreement prior to the Effective Time, no Party (nor any of its directors, officers or employees) shall have any Liability or further obligation to the other Party by reason of this Agreement.
ARTICLE X.
MISCELLANEOUS
10.1 Counterparts; Entire Agreement; Corporate Power .
(a) This Agreement and each Ancillary Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each Party and delivered to each other Party.
(b) This Agreement, the Ancillary Agreements and the exhibits, annexes and schedules hereto and thereto, contain the entire agreement between the Parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter and there are no agreements or understandings between the Parties with respect to such subject matter other than those set forth or referred to herein or therein.
 
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(c) Aptiv represents on behalf of itself and each other member of the Aptiv Group, and Delphi Technologies represents on behalf of itself and each other member of the Delphi Technologies Group, as follows:
(i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and each Ancillary Agreement to which it is a party and to consummate the transactions contemplated hereby; and
(ii) this Agreement and each Ancillary Agreement to which it is a party has been or will be duly executed and delivered by it and constitutes or will constitute a valid and binding agreement of it enforceable in accordance with the terms thereof.
(d) Each Party acknowledges that it and each other Party may execute this Agreement by facsimile, stamp or mechanical signature. Each Party expressly adopts and confirms each such facsimile, stamp or mechanical signature made in its respective name as if it were a manual signature, agrees that it shall not assert that any such signature is not adequate to bind such Party to the same extent as if it were signed manually and agrees that at the reasonable request of any other Party at any time it shall as promptly as reasonably practicable cause this Agreement to be manually executed (any such execution to be as of the date of the initial date thereof).
10.2 Governing Law . This Agreement (and any claims or Disputes arising out of or related hereto or to the transactions contemplated hereby or to the inducement of any Party to enter herein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by and construed and interpreted in accordance with the Laws of the State of New York, irrespective of the choice of laws principles of the State of New York, including all matters of validity, construction, effect, enforceability, performance and remedies.
10.3 Assignability . Except as set forth in any Ancillary Agreement, this Agreement and each Ancillary Agreement shall be binding upon and inure to the benefit of the other Party or the other parties hereto and thereto, respectively, and their respective successors and permitted assigns; provided , however , that no Party or party thereto may assign its respective rights or delegate its respective obligations under this Agreement without the express prior written consent of the other Party or other parties thereto, as applicable. Notwithstanding the foregoing, no such consent shall be required for the assignment of a party’s rights and obligations under this Agreement or the Ancillary Agreements (except as may be otherwise provided in any such Ancillary Agreement) in whole in connection with a change of control of a Party so long as the resulting, surviving or transferee Person assumes all the obligations of the relevant party thereto by operation of Law or pursuant to an agreement in form and substance reasonably satisfactory to the other Party. Nothing herein is intended to, or shall be construed to, prohibit either Party or any member of its Group from being party to or undertaking a change of control.
10.4 Third-Party Beneficiaries . Except for the release and indemnification rights under this Agreement of any Aptiv Indemnitee or Delphi Technologies Indemnitee in their respective capacities as such, and the provisions of Section 5.1(d) as to directors and officers of
 
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Aptiv Group and Delphi Technologies Group: (a) the provisions of this Agreement and each Ancillary Agreement are solely for the benefit of the Parties and are not intended to confer upon any Person (including, without limitation, any shareholders of Aptiv or shareholders of Delphi Technologies) except the Parties hereto any rights or remedies hereunder; and (b) there are no third-party beneficiaries of this Agreement or any Ancillary Agreement and neither this Agreement nor any Ancillary Agreement shall provide any third Person (including, without limitation, any shareholders of Aptiv or shareholders of Delphi Technologies) with any remedy, claim, Liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement or any Ancillary Agreement.
10.5 Notices . All notices, requests, claims, demands or other communications under this Agreement and, to the extent applicable, and unless otherwise provided thereunder, under each of the Ancillary Agreements shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by facsimile or electronic transmission with receipt confirmed (followed by delivery of an original via overnight courier service), or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 10.5) :
If to Aptiv, to:
Delphi Automotive PLC
5725 Delphi Drive
Troy, MI 48098
Attention: Joseph Massaro, Senior Vice President and Chief Financial Officer
Facsimile No.: 1.248.813.2648
with a copy (which shall not constitute notice) to:
Delphi Automotive PLC
5725 Delphi Drive
Troy, MI 48098
Attention: David Sherbin, Senior Vice President, General Counsel, Secretary and Chief Compliance Officer
Facsimile No.: 1.248.813.2491
with a copy (which shall not constitute notice) to:
Latham & Watkins LLP
330 North Wabash Avenue, Suite 2800
Chicago, IL 60611
Attention: Mark D. Gerstein
Attention: Christopher R. Drewry
Facsimile No.: 1.312.993.9767
 
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If to Delphi Technologies, to:
Delphi Technologies PLC
[Address]
Attention: Liam Butterworth, President and Chief Executive Officer
Facsimile No.: [  🌑  ]
with a copy (which shall not constitute notice) to:
Delphi Technologies PLC
5820 Delphi Drive
Troy, MI 48098
Attention: James Harrington, General Counsel
Facsimile No.: [  🌑  ]
Any Party may, by notice to the other Party, change the address and contact person to which any such notices are to be given.
10.6 Severability . If any provision of this Agreement or any Ancillary Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or thereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties.
10.7 Force Majeure . No Party shall be deemed in default of this Agreement or, unless otherwise provided therein, any Ancillary Agreement for any delay or failure to fulfill any obligation, other than a delay or failure to make a payment, so long as and to the extent to which any delay or failure in the fulfillment of such obligations is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. In the event of any such excused delay, the time for performance shall be extended for a period equal to the time lost by reason of the delay. A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event, (a) provide written notice to the other Party of the nature and extent of any such Force Majeure condition; and (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement and the Ancillary Agreements, as applicable, as soon as reasonably practicable.
10.8 Press Release . No later than one (1) Business Day after the Effective Time, Delphi Technologies and Aptiv shall issue a joint press release regarding the consummation of the Separation and Distribution.
 
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10.9 Expenses . Delphi Technologies shall be responsible for paying all costs and expenses incurred in connection with the transactions contemplated by this Agreement, the Ancillary Agreements and the Delphi Technologies Financing Arrangements, whether incurred and payable prior to, on or after the Distribution Date, including investment banking, legal, accounting advisory work, loan restructuring and listing-related fees. To the extent such fees were incurred prior to the Distribution Date and paid by Aptiv, Delphi Technologies will reimburse Aptiv for such fees.
10.10 Late Payments . Except as expressly provided to the contrary in this Agreement, any amount not paid when due pursuant to this Agreement (and any amounts billed or otherwise invoiced or demanded and properly payable that are not paid within thirty (30) days of such bill, invoice or other demand) shall accrue interest at a rate per annum equal to the Prime Rate plus one and one-half percent (1.5%) or the maximum rate permitted by Law, whichever is less.
10.11 Headings . The article, section and paragraph headings contained in this Agreement or any Ancillary Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement or any Ancillary Agreement.
10.12 Survival of Covenants . Except as expressly set forth in this Agreement or any Ancillary Agreement, the covenants, representations and warranties contained in this Agreement and the Ancillary Agreements, and liability for the breach of any obligations contained herein or therein, shall survive the Separation and the Distribution and shall remain in full force and effect in accordance with their terms.
10.13 Waivers of Default . Waiver by a Party of any default by the other Party of any provision of this Agreement or any Ancillary Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default, nor shall it prejudice the rights of the other Party. No failure or delay by a Party in exercising any right, power or privilege under this Agreement or any Ancillary Agreement shall operate as a waiver thereof nor shall a single or partial exercise thereof prejudice any other or further exercise thereof or the exercise of any other right, power or privilege.
10.14 Specific Performance . Subject to Article IV , in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement or any Ancillary Agreement, the Party or Parties who are, or are to be, thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief (on an interim or permanent basis) in respect of its or their rights under this Agreement or such Ancillary Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived by each of the Parties.
10.15 Amendments . No provisions of this Agreement or any Ancillary Agreement shall be deemed waived, amended, supplemented or modified by a Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom it sought to enforce such waiver, amendment,
 
65

supplement or modification is sought to be enforced; provided , at any time prior to the Effective Time, the terms and conditions of this Agreement, including terms relating to the Separation and the Distribution, may be amended, modified or abandoned by and in the sole and absolute discretion of the Aptiv Board without the approval of any Person, including Delphi Technologies or Aptiv.
10.16 Construction . This Agreement shall be construed as if jointly drafted by the Parties and no rule of construction or strict interpretation shall be applied against either Party. The Parties represent that this Agreement is entered into with full consideration of any and all rights which the Parties may have. The Parties have conducted such investigations they thought appropriate, and have consulted with such advisors as they deemed appropriate regarding this Agreement and their rights and asserted rights in connection therewith. The Parties are not relying upon any representations or statements made by the other Party, or such other Party’s employees, agents, representatives or attorneys, regarding this Agreement, except to the extent such representations are expressly set forth or incorporated in this Agreement. The Parties are not relying upon a legal duty, if one exists, on the part of the other Party (or such other Party’s employees, agents, representatives or attorneys) to disclose any information in connection with the execution of this Agreement or their preparation, it being expressly understood that neither Party shall ever assert any failure to disclose information on the part of the other Party as a ground for challenging this Agreement.
10.17 Performance . Each Party shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary or Affiliate of such Party.
10.18 Limited Liability . Notwithstanding any other provision of this Agreement, no individual who is a shareholder, director, employee, officer, agent or representative of Aptiv or Delphi Technologies, in such individual’s capacity as such, shall have any liability in respect of or relating to the covenants or obligations of Aptiv or Delphi Technologies, as applicable, under this Agreement or any Ancillary Agreement or in respect of any certificate delivered with respect hereto or thereto and, to the fullest extent legally permissible, each of Aptiv or Delphi Technologies, for itself and its respective Subsidiaries and its and their respective shareholders, directors, employees and officers, waives and agrees not to seek to assert or enforce any such liability that any such Person otherwise might have pursuant to applicable Law.
10.19 Exclusivity of Tax Matters . Notwithstanding any other provision of this Agreement (other than Sections 3.2(c) , 5.5(g) and 5.6(f)) , the Tax Matters Agreement shall exclusively govern all matters related to Taxes (including allocations thereof) addressed therein.
10.20 Limitations of Liability . NOTWITHSTANDING ANYTHING IN THIS AGREEMENT OR ANY ANCILLARY AGREEMENT TO THE CONTRARY, NEITHER DELPHI TECHNOLOGIES NOR ITS AFFILIATES, ON THE ONE HAND, NOR APTIV NOR ITS AFFILIATES, ON THE OTHER HAND, SHALL BE LIABLE UNDER THIS AGREEMENT OR ANY ANCILLARY AGREEMENT TO THE OTHER FOR ANY INCIDENTAL CONSEQUENTIAL, SPECIAL, INDIRECT, PUNITIVE, EXEMPLARY, REMOTE, SPECULATIVE OR SIMILAR DAMAGES IN EXCESS OF COMPENSATORY
 
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DAMAGES OF THE OTHER ARISING IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (OTHER THAN ANY SUCH LIABILITY WITH RESPECT TO INDEMNIFICATION OF SUCH DAMAGES PAID BY AN INDEMNITEE IN RESPECT OF A THIRD-PARTY CLAIM).
[Signature Page to Follow.]
 
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.

DELPHI AUTOMOTIVE PLC	
	
By:                                                                                                  	
Name:                                                                                             	
Its:                                                                                                  	
	
DELPHI TECHNOLOGIES PLC	
	
By:                                                                                                  	
Name:                                                                                             	
Its:                                                                                                  	
Signature Page to Separation and Distribution Agreement

Exhibit 3.1
 
COMPANIES (JERSEY) LAW 1991
MEMORANDUM
AND
ARTICLES OF ASSOCIATION
OF
DELPHI TECHNOLOGIES PLC
a par value public limited company
Company number: 123729
Adopted by special resolution on [    ] 2017

COMPANIES (JERSEY) LAW 1991 (the “Law”)
MEMORANDUM OF ASSOCIATION
OF
DELPHI TECHNOLOGIES PLC
(the “Company”)
a par value public limited company
 
1.	INTERPRETATION	
Words and expressions contained in this Memorandum of Association have the same meanings as in the Law.
 
2.	COMPANY NAME	
The name of the Company is Delphi Technologies PLC .
 
3.	TYPE OF COMPANY	
 
3.1	The Company is a public company.	
 
3.2	The Company is a par value company.	
 
4.	NUMBER OF SHARES	
The share capital of the Company is US$12,500,000 divided into 1,200,000,000 ordinary shares of US$0.01 each and 50,000,000 preferred shares of US$0.01 each (which may be issued in such class or classes as the Directors may determine in accordance with the Articles of Association of the Company).
 
5.	LIABILITY OF MEMBERS	
The liability of a member arising from the holding of a share in the Company is limited to the amount (if any) unpaid on it.

COMPANIES (JERSEY) LAW 1991
ARTICLES OF ASSOCIATION
OF
DELPHI TECHNOLOGIES PLC

a par value public limited company	
CONTENTS

1.	 	INTERPRETATION	  	 	1	 	
			
2.	 	SHARE CAPITAL	  	 	4	 	
			
3.	 	SHARE PREMIUM ACCOUNT	  	 	7	 	
			
4.	 	ALTERATION OF SHARE CAPITAL	  	 	8	 	
			
5.	 	VARIATION OF RIGHTS	  	 	8	 	
			
6.	 	REGISTER OF MEMBERS	  	 	9	 	
			
7.	 	SHARE CERTIFICATES	  	 	9	 	
			
8.	 	LIEN	  	 	10	 	
			
9.	 	CALLS ON SHARES	  	 	10	 	
			
10.	 	FORFEITURE OF SHARES	  	 	12	 	
			
11.	 	TRANSFER OF SHARES	  	 	13	 	
			
12.	 	TRANSMISSION OF SHARES	  	 	15	 	
			
13.	 	GENERAL MEETINGS	  	 	15	 	
			
14.	 	CLASS MEETINGS	  	 	16	 	
			
15.	 	NOTICE OF GENERAL MEETINGS	  	 	16	 	
			
16.	 	PROCEEDINGS AT GENERAL MEETINGS	  	 	17	 	
			
17.	 	VOTES OF MEMBERS	  	 	19	 	

							
18.	  	CORPORATE MEMBERS	  	 	21	 	
			
19.	  	DIRECTORS	  	 	21	 	
			
20.	  	ALTERNATE DIRECTORS	  	 	21	 	
			
21.	  	POWERS OF DIRECTORS	  	 	22	 	
			
22.	  	DELEGATION OF DIRECTORS’ POWERS	  	 	22	 	
			
23.	  	APPOINTMENT OF DIRECTORS	  	 	23	 	
			
24.	  	RESIGNATION, DISQUALIFICATION AND REMOVAL OF DIRECTORS	  	 	26	 	
			
25.	  	REMUNERATION AND EXPENSES OF DIRECTORS	  	 	27	 	
			
26.	  	EXECUTIVE DIRECTORS	  	 	27	 	
			
27.	  	DIRECTORS’ INTERESTS	  	 	28	 	
			
28.	  	PROCEEDINGS OF DIRECTORS	  	 	29	 	
			
29.	  	MINUTE BOOK	  	 	31	 	
			
30.	  	SECRETARY	  	 	31	 	
			
31.	  	THE SEAL	  	 	32	 	
			
32.	  	AUTHENTICATION OF DOCUMENTS	  	 	32	 	
			
33.	  	DIVIDENDS	  	 	32	 	
			
34.	  	CAPITALISATION OF PROFITS	  	 	34	 	
			
35.	  	ACCOUNTS AND AUDIT	  	 	35	 	
			
36.	  	NOTICES	  	 	36	 	
			
37.	  	WINDING UP	  	 	37	 	
			
38.	  	INDEMNITY	  	 	37	 	
			
39.	  	FIXING RECORD DATE & JURISDICTION	  	 	37	 	
			
40.	  	NON-APPLICATION OF STANDARD TABLE	  	 	38	 	

COMPANIES (JERSEY) LAW 1991
ARTICLES OF ASSOCIATION
OF
DELPHI TECHNOLOGIES PLC
a par value public limited company
 
1.	INTERPRETATION	
 
1.1	In these Articles, unless the context or law otherwise requires, the following words and expressions shall have the meanings respectively assigned to them below:	
 
 	1.1.1	“ Annual General Meeting ” has the meaning ascribed to it in Article 13.2;	
 
 	1.1.2	“ these Articles ” means these Articles of Association in their present form or as from time to time amended;	
 
 	1.1.3	“ Auditors ” means the auditors of the Company appointed pursuant to these Articles;	
 
 	1.1.4	“ Bankrupt ” has the meaning ascribed to it in the Interpretation (Jersey) Law, 1954;	
 
 	1.1.5	“ Clear Days ” means in relation to the period of a Notice that period excluding the day when the Notice is served or deemed to be served and the day for which it is given or on which it is to take effect;	
 
 	1.1.6	“ Company ” means the company incorporated under the Law in respect of which these Articles have been registered;	
 
 	1.1.7	“ Directors ” or “ Board of Directors ” means the directors of the Company for the time being;	
 
 	1.1.8	“ Exchange Act ” has the meaning ascribed to it in Article 23.6;	
 
 	1.1.9	“ Extraordinary General Meeting ” has the meaning ascribed to it in Article 13.2;	
 
 	1.1.10	“ Holder ” means in relation to shares the Member whose name is entered in the Register as the holder of the shares;	
 
 	1.1.11	“ the Law ” means the Companies (Jersey) Law 1991 and any subordinate legislation from time to time made thereunder, including any statutory modifications or re-enactments for the time being in force;	
 
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 	1.1.12	“ Member ” means the subscribers to the Memorandum of Association of the Company and any other Person whose name is entered in the Register as the Holder of shares in the Company;	
 
 	1.1.13	“ Month ” means calendar month;	
 
 	1.1.14	“ Notice ” means a notice in Writing unless otherwise specifically stated;	
 
 	1.1.15	“ Office ” means the registered office of the Company;	
 
 	1.1.16	“ Officer ” includes a Secretary but otherwise has the meaning ascribed to it in the Law;	
 
 	1.1.17	“ Ordinary Resolution ” means a resolution of the Company in general meeting adopted by a simple majority of the votes cast at that meeting;	
 
 	1.1.18	“ Ordinary Share ” means an ordinary share in the capital of the Company with a nominal value of US$0.01 and having the rights attaching thereto prescribed in these Articles;	
 
 	1.1.19	“ Paid Up ” includes credited as paid up;	
 
 	1.1.20	“ Persons ” includes associations and bodies of persons, whether corporate or unincorporate;	
 
 	1.1.21	“ Preferred Share ” means a preferred share in the capital of the Company with a nominal value of US$0.01 designated as a Preferred Share by the Directors and allotted and issued in one or more classes in accordance with the provisions of the Law and these Articles and having the rights provided for in these Articles and in any Statement of Rights. In these Articles, except when referred to under their separate classes, the term Preferred Shares shall mean all such shares;	
 
 	1.1.22	“ Present ” in relation to general meetings of the Company and to meetings of the Holders of any class of shares includes present in person or present by attorney or by proxy or in the case of a corporate shareholder by representative;	
 
 	1.1.23	“ Register ” means the register of Members required to be kept pursuant to Article 41 of the Law;	
 
 	1.1.24	“ Seal ” means the common seal of the Company;	
 
 	1.1.25	“ Secretary ” means any Person appointed to perform any of the duties of secretary of the Company (including an assistant or deputy secretary) and in the event of two or more Persons being appointed as joint secretaries any one or more of the Persons so appointed;	
 
2

 	1.1.26	“ Signed ” includes a signature or representation of a signature affixed by mechanical or other means or any other means of signifying agreement permitted by law and where a document is to be signed by a company, an association or a body of Persons the word “ Signed ” shall be construed as including the signature of a duly authorised representative on its behalf as well as any other means by which it would normally execute the document;	
 
 	1.1.27	“ Special Resolution ” means a resolution of the Company passed as a special resolution in accordance with the Law;	
 
 	1.1.28	“ Statement of Rights ” in relation to each class of Preferred Share, a memorandum approved by the Directors setting out the specific rights and obligations attaching to the Preferred Shares of such class which are in addition to those rights and obligations contained in and determined in accordance with these Articles; and	
 
 	1.1.29	“ in Writing ” includes written, printed, telexed, electronically transmitted or represented or reproduced by any other mode of representing or reproducing words in a visible form.	
 
1.2	Save as defined herein and unless the context otherwise requires, words or expressions contained in these Articles shall bear the same meaning as in the Law but excluding any statutory modification thereof not in force when these Articles become binding on the Company.	
 
1.3	In these Articles, unless the context or law otherwise requires:	
 
 	1.3.1	words and expressions which are cognate to those defined in Article 1.1 shall be construed accordingly;	
 
 	1.3.2	the word “ may ” shall be construed as permissive and the word “ shall ” shall be construed as imperative;	
 
 	1.3.3	words importing the singular number only shall be construed as including the plural number and vice versa ;	
 
 	1.3.4	words importing the masculine gender only shall be construed as including the feminine and neuter genders;	
 
 	1.3.5	the word “ dividend ” has the meaning ascribed to the word “distribution” in Article 114 of the Law;	
 
 	1.3.6	references to enactments are to such enactments as are from time to time modified, re-enacted or consolidated and shall include any enactment made in substitution for an enactment that is repealed; and	
 
 	1.3.7	references to a numbered Article are to the Article so numbered of these Articles.	
 
3

1.4	The clause and paragraph headings in these Articles are for convenience only and shall not be taken into account in the construction or interpretation of these Articles.	
 
2.	SHARE CAPITAL	
 
2.1	The share capital of the Company is as specified in the Memorandum of Association and the shares of the Company shall have the rights and be subject to the conditions contained in these Articles and, in the case of any Preferred Share of any class to the Statement of Rights relating thereto.	
 
2.2	The rights attaching to Ordinary Shares are as follows:	
 
 	2.2.1	As regards income – Subject to the Law and the provisions of these Articles, each Ordinary Share shall confer on the Holder thereof the right to receive such profits of the Company available for distribution as the Directors may declare or the Members may resolve by Ordinary Resolution after any payment to the Members holding shares of any other class other than Ordinary Shares of any amount then payable in accordance with the relevant Statement of Rights or other terms of issue of that class.	
 
 	2.2.2	As regards capital – If the Company is wound up, the Holder of an Ordinary Share shall be entitled, following payment to the Members holding shares of any other class other than Ordinary Shares of all amounts then payable to them in accordance with the relevant Statement of Rights or other terms of issue of that class, to repayment of the nominal amount of the capital paid up thereon and thereafter any surplus assets of the Company then remaining shall be distributed pari passi among the Holders of the Ordinary Shares in proportion to the amounts paid up thereon (whether on account of the nominal value of the shares or by way of premium).	
 
 	2.2.3	As regards voting – At any general meeting of the Company and any separate class meeting of the Holders of Ordinary Shares every Holder of Ordinary Shares who is present in person or by proxy shall have one vote for every Ordinary Share of which he is the Holder.	
 
 	2.2.4	As regards redemption – the Ordinary Shares are not redeemable (without prejudice to Articles 2.8 and 2.14).	
 
2.3	Subject to the provisions of these Articles, the rights and obligations attaching to any Preferred Share shall be determined at the time of issue by the Directors in their absolute discretion. Each Preferred Share shall be issued by the Directors on behalf of the Company as part of a class. The rights and obligations attaching to each class of Preferred Shares in addition to those set out in these Articles shall be set out in a Statement of Rights.	
 
4

2.4	The Statement of Rights in respect of each class of Preferred Shares may, without limitation, comprise or include:-	
 
 	2.4.1	the class to which each Preferred Share shall belong, such class to be designated with a class number and, if the Directors so determine, title;	
 
 	2.4.2	details of any dividends payable in respect of the relevant class;	
 
 	2.4.3	details of rights attaching to shares of the relevant class to receive a return of capital on a winding up of the Company;	
 
 	2.4.4	details of the voting rights attaching to shares of the relevant class (which may provide, without limitation, that each Preferred share shall have more than one vote on a poll at any general meeting of the Company);	
 
 	2.4.5	a statement as to whether shares of the relevant class are redeemable (either at the option of the Holder and/or the Company) and, if so, on what terms such shares are redeemable (including, without limitation, and only if so determined by the Directors, the amount for which such shares shall be redeemed (or a method or formula for determining the same) and the date on which they shall be redeemed);	
 
 	2.4.6	a statement as to whether shares of the relevant class are convertible (either at the option of the Holder and/or the Company) and, if so, on what terms such shares are convertible;	
 
 	2.4.7	any other rights, obligations and restrictions attaching to Preferred Shares of any class as the Directors may determine in their discretion; and/or	
 
 	2.4.8	the price at which shares of the relevant class shall be issued.	
 
2.5	Once a Statement of Rights has been adopted for a class of Preferred Share, then:-	
 
 	2.5.1	it shall be binding on Members and Directors as if contained in these Articles;	
 
 	2.5.2	the provisions of Article 5.1 shall apply to any variation or abrogation thereof that may be effected by the Company;	
 
 	2.5.3	each Statement of Rights shall be filed on behalf of the Company with the Registrar of Companies in Jersey pursuant to and in accordance with Article 54 of the Law;	
 
 	2.5.4	all moneys payable on or in respect of any Preferred Share which is the subject thereof (including, without limitation, the subscription and any redemption moneys in respect thereof) shall be paid in the currency for which such Preferred Share is issued; and	
 
 	2.5.5	upon the redemption of a Preferred Share (if it is redeemable) pursuant to the Statement of Rights relating thereto, the Holder thereof shall cease to be entitled to any rights in respect thereof and accordingly his name shall be removed from the Register and the share shall thereupon be cancelled.	
 
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2.6	Without prejudice to any special rights for the time being conferred on the Holders of any shares or class of shares (which special rights shall not be varied or abrogated except with such consent or sanction as is hereinafter provided) any share or class of shares in the capital of the Company may be issued with such preferred, deferred or other special rights or such restrictions whether in regard to dividends, return of capital, voting or otherwise as the Directors may from time to time determine.	
 
2.7	The Company may issue fractions of shares in accordance with and subject to the provisions of the Law provided that:	
 
 	2.7.1	a fraction of a share shall be taken into account in determining the entitlement of a Member as regards dividends or on a winding up; and	
 
 	2.7.2	a fraction of a share shall not entitle a Member to a vote in respect thereof.	
 
2.8	Otherwise than as set out in Article 2.14 and subject to the provisions of the Law, the Company may from time to time:	
 
 	2.8.1	issue; or	
 
 	2.8.2	convert any existing non-redeemable shares (whether issued or not) into,	
shares which are to be redeemed or are liable to be redeemed at the option of the Company or at the option of the Holder thereof and on such terms and in such manner as may be determined by Special Resolution.
 
2.9	Subject to the provisions of the Law, the Company may purchase its own shares of any class (including redeemable shares) and in relation thereto, neither the Company nor the Directors shall be required to select the shares to be purchased rateably or in any other particular manner as between the holders of shares of the same class or as between them and the holders of shares of any other class or in accordance with the rights as to dividends or capital conferred by any class of shares.	
 
2.10	Subject to the provisions of these Articles, the unissued shares for the time being in the capital of the Company shall be at the disposal of the Directors who may allot, grant options over or otherwise dispose of them to such Persons at such times and generally on such terms and conditions as they think fit. Securities, contracts, warrants or other instruments evidencing any Preferred or Ordinary Shares, option rights, securities having conversion or option rights or obligations may also be issued by the Directors without the approval of the Members or entered into by the Company upon a resolution of the Directors to that effect on such terms, conditions and other provisions as are fixed by the Directors including, without limitation, conditions that	
 
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 	preclude or limit any person owning or offering to acquire a specified number or percentage of the shares of the Company in issue, other shares, option rights, securities having conversion or option rights or obligations of the Company or the transferee of such person from exercising, converting, transferring or receiving the shares, option rights, securities having conversion or option rights or obligations.	
 
2.11	The Directors may allot and issue shares in the Company to any person without any obligation to offer such shares to the Members (whether in proportion to the existing shares held by them or otherwise).	
 
2.12	The Company may pay commissions as permitted by the Law. Subject to the provisions of the Law any such commission may be satisfied by the payment of cash or by the allotment of fully or partly paid shares or partly in one way and partly in the other.	
 
2.13	Except as otherwise provided by these Articles or by law, no Person shall be recognised by the Company as holding any share upon any trust and the Company shall not be bound by or be compelled in any way to recognise any equitable, contingent, future or partial interest in any share or any interest in any fraction of a share or any other right in respect of any share except an absolute right to the entirety thereof in the Holder.	
 
2.14	Notwithstanding any other provision of these Articles, and subject to the provisions of the Law, where the Company wishes to purchase its own shares the Directors shall have the authority to instead elect to convert any or all of those shares into redeemable shares that shall be redeemed by the Company upon such terms and conditions as the Directors may decide at the relevant time. The Directors may convert, and the Company may redeem, any relevant shares in accordance with this Article as they in their absolute discretion decide and there shall be no obligation on the Directors or Company to offer to convert and redeem any other shares held by any other Members and no Member shall have any rights to require their shares to be considered for conversion and redemption.	
 
2.15	Subject to the provisions of the Law, the Company may hold as treasury shares any shares purchased or redeemed by it.	
 
3.	SHARE PREMIUM ACCOUNT	
 
3.1	Except as provided in Article 3.2, where the Company issues shares at a premium, the amount or value (as determined by the Directors) of any premiums shall be transferred, as and when the premiums are Paid Up, to a share premium account which shall be kept in the books of the Company in the manner required by the Law. The sums for the time being standing to the credit of the share premium account shall be applied only in accordance with the Law.	
 
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3.2	Where the Law permits the Company to refrain from transferring any amount to a share premium account, that amount need not be so transferred; but the Directors may if they think fit nevertheless cause all or any part of such amount to be transferred to the relevant share premium account.	
 
3.3	The Directors may transfer an amount to a share premium account of the Company from any other account of the Company (other than the capital redemption reserve or the nominal capital account).	
 
4.	ALTERATION OF SHARE CAPITAL	
 
4.1	The Company may by Special Resolution alter its share capital as stated in the Memorandum of Association in any manner permitted by the Law.	
 
4.2	Any new shares created on an increase or other alteration of share capital shall be issued upon such terms and conditions as the Company may by Ordinary Resolution determine.	
 
4.3	Any capital raised by the creation of new shares shall, unless otherwise provided by the conditions of issue of the new shares, be considered as part of the original capital and the new shares shall be subject to the provisions of these Articles with reference to the payment of calls, transfer and transmission of shares, lien or otherwise applicable to the existing shares in the Company.	
 
4.4	Subject to the provisions of the Law the Company may by Special Resolution reduce its share capital and its share premium account in any way.	
 
5.	VARIATION OF RIGHTS	
 
5.1	Whenever the capital of the Company is divided into different classes of shares the special rights attached to any class may (unless otherwise provided by the terms of issue of the shares of that class) be varied or abrogated either whilst the Company is a going concern or during or in contemplation of a winding up with the sanction of a Special Resolution passed at a separate meeting of the Holders of shares of that class.	
 
5.2	To every such separate meeting all the provisions of these Articles and of the Law relating to general meetings of the Company or to the proceedings thereat shall apply mutatis mutandis except that the necessary quorum shall be a Person or Persons together holding or representing a majority of the issued shares of that class but so that if at any adjourned meeting of such Holders a quorum as above defined is not Present those Holders who are Present shall be a quorum.	
 
5.3	The special rights conferred upon the Holders of any shares or class of shares issued with preferred, deferred or other special rights shall (unless otherwise expressly provided by the conditions of issue of such shares) be deemed not to be varied by the creation or issue of further shares ranking ahead, after or pari passu therewith. The rights conferred upon the Holders of Ordinary Shares shall be deemed not to be varied by the creation or issue of any Preferred Shares or any other class of	
 
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 	preferred or preference share with such special rights attaching to them as may be set out in a Statement of Rights or other terms of issue or the redemption or conversion of Preferred Shares of any class or preferred or preference shares of any class in accordance with the applicable Statement of Rights or other terms of issue. The rights conferred upon the Holders of Ordinary Shares shall be deemed not to be varied by the conversion and redemption of Ordinary Shares in accordance with Article 2.14 or any purchase or redemption by the Company of its own shares.	
 
6.	REGISTER OF MEMBERS	
 
6.1	The Directors shall maintain or cause to be maintained a Register in the manner required by the Law. The Register shall be kept at the Office or at such other place in the Island of Jersey as the Directors from time to time determine. In each year the Directors shall prepare or cause to be prepared and filed an annual return containing the particulars required by the Law.	
 
6.2	The Company shall not be required to enter the names of more than four joint Holders in the Register.	
 
7.	SHARE CERTIFICATES	
 
7.1	Every Member shall be entitled on application to the Company in Writing:	
 
 	7.1.1	without payment upon becoming the Holder of any shares to one certificate for all the shares of each class held by him and upon transferring a part only of the shares comprised in a certificate to a new certificate for the remainder of the shares so comprised; or	
 
 	7.1.2	upon payment of such reasonable sum for each certificate as the Directors shall from time to time determine to several certificates each for one or more of his shares of any class.	
 
7.2	Following an application to the Company in Writing by the Member pursuant to Article 7.1, a certificate shall be issued within two Months after allotment or lodgment of transfer (or within such other period as the conditions of issue shall provide) and shall be executed by the Company. A certificate may be executed:	
 
 	7.2.1	if the Company has a Seal, by causing a seal of the Company to be affixed to the certificate in accordance with these Articles; or	
 
 	7.2.2	whether or not the Company has a Seal, by the signature on behalf of the Company of two Directors or one Director and the Secretary or two authorised persons and such signature may be affixed to any certificate by facsimile or any other electronic or mechanical means, or by printing the signature on it.	
Every certificate shall further specify the shares to which it relates and the amount Paid Up thereon and if so required by the Law the distinguishing numbers of such shares.
 
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7.3	The Company shall not be bound to issue more than one certificate in respect of a share held jointly by several Persons and delivery of a certificate for a share to one of several joint Holders shall be sufficient delivery to all such Holders.	
 
7.4	If a share certificate shall be worn out, defaced, lost or destroyed a duplicate certificate may be issued on payment of such reasonable fee and on such terms (if any) as to evidence and indemnity and the payment of out-of-pocket expenses of the Company in relation thereto as the Directors think fit.	
 
8.	LIEN	
 
8.1	The Company shall have a first and paramount lien on every share (not being a fully paid share) for all monies (whether presently payable or not) called or payable at a fixed time in respect of that share. The Company’s lien (if any) on a share shall extend to all dividends or other monies payable thereon or in respect thereof. The Directors may resolve that any share shall for such period as they think fit be exempt from the provisions of this Article.	
 
8.2	The Company may sell in such manner as the Directors think fit any shares on which the Company has a lien but no sale shall be made unless the monies in respect of which such lien exists or some part thereof are or is presently payable nor until fourteen Clear Days have expired after a Notice stating and demanding payment of the monies presently payable and giving Notice of intention to sell in default shall have been served on the Holder for the time being of the shares or the Person entitled thereto by reason of the death, bankruptcy or incapacity of such Holder.	
 
8.3	To give effect to any such sale the Directors may authorise some Person to execute an instrument of transfer of the shares sold to the purchaser thereof. The purchaser shall be registered as the Holder of the shares so transferred and he shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale.	
 
8.4	The net proceeds of such sale after payment of the costs of such sale shall be applied in or towards payment or satisfaction of the debt or liability in respect of which the lien exists so far as the same is presently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the shares prior to the sale) be paid to the Person entitled to the shares at the time of the sale.	
 
9.	CALLS ON SHARES	
 
9.1	The Directors may subject to the provisions of these Articles and to any conditions of allotment from time to time make calls upon the Members in respect of any monies unpaid on their shares (whether on account of the nominal value of the shares or by way of premium) and each Member shall (subject to being given at least fourteen Clear Days’ Notice specifying the time or times and place of payment) pay to the Company at the time or times and place so specified the amount called on his shares.	
 
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9.2	A call may be required to be paid by instalments.	
 
9.3	A call may before receipt by the Company of any sum due thereunder be revoked in whole or in part and payment of a call may be postponed in whole or in part.	
 
9.4	A Person upon whom a call is made shall remain liable for calls made upon him notwithstanding the subsequent transfer of the shares in respect whereof the call was made.	
 
9.5	A call shall be deemed to have been made at the time when the resolution of the Directors authorising the call was passed.	
 
9.6	The joint Holders of a share shall be jointly and severally liable to pay all calls and all other payments to be made in respect of such share.	
 
9.7	If a sum called in respect of a share is not paid before or on the day appointed for payment thereof the Person from whom the sum is due may be required to pay interest on the sum from the day appointed for payment thereof to the time of actual payment at a rate determined by the Directors but the Directors shall be at liberty to waive payment of such interest wholly or in part.	
 
9.8	Any sum which by or pursuant to the terms of issue of a share becomes payable upon allotment or at any fixed date whether on account of the nominal value of the share or by way of premium shall for the purposes of these Articles be deemed to be a call duly made and payable on the date on which by or pursuant to the terms of issue the same becomes payable and in case of non-payment all the relevant provisions of these Articles as to payment of interest, forfeiture, surrender or otherwise shall apply as if such sum had become due and payable by virtue of a call duly made and notified.	
 
9.9	The Directors may on the issue of shares differentiate between the Holders as to the amount of calls to be paid and the times of payment.	
 
9.10	The Directors may if they think fit receive from any Member an advance of monies which have not yet been called on his shares or which have not yet fallen due for payment. Such advance payments shall, to their extent, extinguish the liability in respect of which they are paid. The Company may pay interest on any such advance, at such rate as the Directors think fit, for the period covering the date of payment to the date (the “ Due Date ”) when the monies would have been due had they not been paid in advance. For the purposes of entitlement to dividends, monies paid in advance of a call or instalment shall not be treated as paid until the Due Date.	
 
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10.	FORFEITURE OF SHARES	
 
10.1	If a Member fails to pay any call or instalment of a call on or before the day appointed for payment thereof the Directors may at any time thereafter during such time as any part of such call or instalment remains unpaid serve a Notice on him requiring payment of so much of the call or instalment as is unpaid together with any interest which may have accrued and any costs, charges and expenses which may have been incurred by the Company by reason of such non-payment.	
 
10.2	The Notice shall name a further day (not earlier than the expiration of fourteen Clear Days from the date of service of such Notice) on or before which the payment required by the Notice is to be made and the place where payment is to be made and shall state that in the event of non-payment at or before the time appointed and at the place appointed the shares in respect of which the call was made will be liable to be forfeited.	
 
10.3	If the requirements of any such Notice as aforesaid are not complied with any share in respect of which such Notice has been given may at any time thereafter before payment of all calls and interest due in respect thereof has been made be forfeited by a resolution of the Directors to that effect and such forfeiture shall include all dividends which shall have been declared on the forfeited shares and not actually paid before the forfeiture.	
 
10.4	When any share has been forfeited in accordance with these Articles, Notice of the forfeiture shall forthwith be given to the Holder of the share or the Person entitled to the share by transmission as the case may be and an entry of such Notice having been given and of the forfeiture with the date thereof shall forthwith be made in the Register opposite to the entry of the share but no forfeiture shall be invalidated in any manner by any omission or neglect to give such Notice or to make such entry as aforesaid.	
 
10.5	The Directors may, at any time after serving a Notice in accordance with Article 10.1, accept from the Member concerned the surrender of such shares as are the subject of the Notice, without the need otherwise to comply with the provisions of Articles 10.1 to 10.4. Any such shares shall be surrendered immediately and irrevocably upon the Member delivering to the Company the share certificate for the shares and such surrender shall also constitute a surrender of all dividends declared on the surrendered shares but not actually paid before the surrender. The Company shall, upon such surrender forthwith make an entry in the Register of the surrender of the share with the date thereof but no surrender shall be invalidated in any manner by any omission or neglect to make such entry as aforesaid.	
 
10.6	A forfeited or surrendered share shall become the property of the Company and may be sold, re-allotted or otherwise disposed of either to the Person who was before forfeiture or surrender the Holder thereof or entitled thereto or to any other Person upon such terms and in such manner as the Directors think fit and at any time before a sale, re-allotment or other disposition the forfeiture or surrender may be cancelled on such terms as the Directors think fit. Where for the purposes of its disposal a forfeited or surrendered share is to be transferred to any Person the Directors may authorise some Person to execute an instrument of transfer of the share to that Person.	
 
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10.7	A Member whose shares have been forfeited or surrendered shall cease to be a Member in respect of the forfeited or surrendered shares and shall (if he has not done so already) surrender to the Company for cancellation the certificate for the shares forfeited or surrendered. Notwithstanding the forfeiture or the surrender such Member shall remain liable to pay to the Company all monies which at the date of forfeiture or surrender were presently payable by him in respect of those shares with interest thereon at the rate at which interest was payable before the forfeiture or surrender or at such rate as the Directors may determine from the date of forfeiture or surrender until payment, provided that the Directors may waive payment wholly or in part or enforce payment without any allowance for the value of the shares at the time of forfeiture or surrender or for any consideration received on their disposal.	
 
10.8	A declaration under oath by a Director or the Secretary (or by an Officer of a corporate Secretary) that a share has been duly forfeited or surrendered on a specified date shall be conclusive evidence of the facts therein stated as against all Persons claiming to be entitled to the share. The declaration and the receipt of the Company for the consideration (if any) given for the share on the sale re-allotment or disposal thereof together with the certificate for the share delivered to a purchaser or allottee thereof shall (subject to the execution of an instrument of transfer if the same be so required) constitute good title to the share. The Person to whom the share is sold, re-allotted or disposed of shall be registered as the Holder of the share and shall not be bound to see to the application of the consideration (if any) nor shall his title to the share be affected by any irregularity in or invalidity of the proceedings in respect of the forfeiture, surrender, sale, re-allotment or disposal of the share.	
 
11.	TRANSFER OF SHARES	
 
11.1	Save as otherwise permitted under the provisions of the Law, all transfers of shares shall be effected using an instrument of transfer.	
 
11.2	Save as otherwise permitted under the provisions of the Law, the instrument of transfer of any share shall be in Writing in any usual common form or any form approved by the Directors.	
 
11.3	The instrument of transfer of any share shall be Signed by or on behalf of the transferor and in the case of an unpaid or partly paid share by the transferee. The transferor shall be deemed to remain the Holder of the share until the name of the transferee is entered in the Register in respect thereof.	
 
11.4	The Directors may in their absolute discretion and without assigning any reason therefor:	
 
 	11.4.1	refuse to register any transfer of partly paid shares or any transfer of shares on which the Company has a lien; and	
 
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 	11.4.2	refuse to register any transfer if such transfer is:	
 
 	(a)	of shares that were not registered under the U.S. Securities law and such transfer is being made pursuant to an exemption from registration under the U.S. securities laws unless the transferor provides evidence satisfactory to the Directors that such transfer satisfies the terms of such exemption; or	
 
 	(b)	prohibited by the terms of any contract or undertaking to which the transferor is a party of which the Company is aware,	
but shall not otherwise refuse to register a transfer of shares made in accordance with these Articles.
 
11.5	The Directors may also refuse to register the transfer of a share unless the instrument of transfer:	
 
 	11.5.1	is lodged at the Office or at such other place as the Directors may appoint accompanied by the certificate for the shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer;	
 
 	11.5.2	is in respect of only one class of shares; and	
 
 	11.5.3	is in favour of not more than four transferees.	
 
11.6	If the Directors refuse to register a transfer of a share they shall within two Months after the date on which the instrument of transfer was lodged with the Company send to the proposed transferor and transferee Notice of the refusal.	
 
11.7	All instruments of transfer relating to transfers of shares which are registered shall be retained by the Company but any instrument of transfer relating to transfers of shares which the Directors decline to register shall (except in any case of fraud) be returned to the Person depositing the same.	
 
11.8	The registration of transfers of shares or of transfers of any class of shares may not be suspended.	
 
11.9	Unless otherwise decided by the Directors in their sole discretion no fee shall be charged in respect of the registration of any instrument of transfer or other document relating to or affecting the title to any share.	
 
11.10	In respect of any allotment of any share the Directors shall have the same right to decline to approve the registration of any renouncee of any allottee as if the application to allot and the renunciation were a transfer of a share under these Articles.	
 
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12.	TRANSMISSION OF SHARES	
 
12.1	In the case of the death of a Member the survivor or survivors where the deceased was a joint Holder and the executors or administrators of the deceased where he was a sole or only surviving Holder shall be the only Persons recognised by the Company as having any title to his interest in the shares but nothing in this Article shall release the estate of a deceased joint Holder from any liability in respect of any share which had been jointly held by him.	
 
12.2	Any Person becoming entitled to a share in consequence of the death, bankruptcy or incapacity of a Member may upon such evidence as to his title being produced as may from time to time be required by the Directors and subject as hereinafter provided elect either to be registered himself as the Holder of the share or to have some Person nominated by him registered as the Holder thereof.	
 
12.3	If the Person so becoming entitled shall elect to be registered himself he shall deliver or send to the Company a Notice Signed by him stating that he so elects. If he shall elect to have another Person registered he shall testify his election by an instrument of transfer of the share in favour of that Person. All the limitations restrictions and provisions of these Articles relating to the right to transfer and the registration of transfers of shares shall be applicable to any such Notice or instrument of transfer as aforesaid as if it were an instrument of transfer executed by the Member and the death, bankruptcy or incapacity of the Member had not occurred.	
 
12.4	A Person becoming entitled to a share by reason of the death, bankruptcy or incapacity of a Member shall be entitled to the same dividends and other advantages to which he would be entitled if he were the Holder of the share except that he shall not before being registered as the Holder of the share be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company provided always that the Directors may at any time give Notice requiring any such Person to elect either to be registered himself or to transfer the share and if the Notice is not complied with within one Month such Person shall be deemed to have so elected to be registered himself and all the restrictions on the transfer and transmission of shares contained in these Articles shall apply to such election.	
 
13.	GENERAL MEETINGS	
 
13.1	Unless all of the Members agree in Writing to dispense with the holding of Annual General Meetings and any such agreement remains valid in accordance with the Law the Company shall in each calendar year hold a general meeting as its Annual General Meeting at such time and place as may be determined by the Directors provided that so long as the Company holds its first Annual General Meeting within eighteen Months of its incorporation it need not hold it in the year of its incorporation or in the following year.	
 
13.2	The above mentioned general meeting shall be called the “ Annual General Meeting ”. All other general meetings shall be called “ Extraordinary General Meetings ”.	
 
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13.3	The Directors may whenever they think fit, and upon a requisition of Members made in accordance with the Law the Directors shall, convene an Extraordinary General Meeting of the Company.	
 
13.4	At any Extraordinary General Meeting called pursuant to a requisition unless such meeting is called by the Directors no business other than that stated in the requisition as the objects of the meeting shall be transacted.	
 
14.	CLASS MEETINGS	
Save as otherwise provided in these Articles or in any Statement of Rights, all the provisions of these Articles and of the Law relating to general meetings of the Company and to the proceedings thereat shall apply mutatis mutandis to every class meeting. A Director who is entitled to receive Notice of general meetings of the Company in accordance with Article 15.4 shall also be entitled, unless he has notified the Secretary in Writing of his contrary desire, to receive Notice of all class meetings. Subject to the provisions of these Articles and any Statement of Rights, at any class meeting the Holders of shares of the relevant class shall on a poll have one vote in respect of each share of that class held by them.
 
15.	NOTICE OF GENERAL MEETINGS	
 
15.1	At least fourteen Clear Days’ Notice shall be given of every Annual General Meeting and of every Extraordinary General Meeting, including without limitation, every general meeting called for the passing of a Special Resolution.	
 
15.2	A meeting of the Company shall notwithstanding that it is called by shorter Notice than that specified in Article 15.1 be deemed to have been duly called if it is so agreed:	
 
 	15.2.1	in the case of an Annual General Meeting by all the Members entitled to attend and vote thereat; and	
 
 	15.2.2	in the case of any other meeting by a majority in number of the Members having a right to attend and vote at the meeting being a majority together holding not less than ninety-five per cent in nominal value of the shares giving that right.	
 
15.3	Every Notice shall specify the place the day and the time of the meeting and the general nature of the business to be transacted and in the case of an Annual General Meeting shall specify the meeting as such.	
 
15.4	Subject to the provisions of these Articles and to any restrictions imposed on any shares, Notice of every general meeting shall be given to all the Members, to all Persons entitled to a share in consequence of the death, bankruptcy or incapacity of a Member, to the Auditors (if any) and to every Director who has notified the Secretary in Writing of his desire to receive Notice of general meetings.	
 
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15.5	In every Notice calling a meeting of the Company there shall appear with reasonable prominence a statement that a Member entitled to attend and vote is entitled to appoint one or more proxies to attend and vote instead of him and that a proxy need not also be a Member.	
 
15.6	The accidental omission to give Notice of a meeting to or the non-receipt of Notice of a meeting by any Person entitled to receive Notice shall not invalidate the proceedings at that meeting.	
 
16.	PROCEEDINGS AT GENERAL MEETINGS	
 
16.1	The business of an Annual General Meeting shall be to receive and consider the accounts of the Company and the reports of the Directors and Auditors (if any), to elect Directors (if proposed), to elect Auditors (if proposed) and fix their remuneration, to sanction a dividend (if thought fit so to do) and to transact any other business of which Notice has been given by the Directors.	
 
16.2	No business shall be transacted at any general meeting except the adjournment of the meeting unless a quorum of Members is Present at the time when the meeting proceeds to business. Such quorum shall consist of one or more Members Present who hold or represent shares conferring not less than a majority of the total voting rights of all the Members entitled to vote at the general meeting provided that where the Company has more than one Member, if only one Member is Present at a meeting in order for the meeting to be quorate, the chairman of the meeting must be a person other than the Member Present, and provided that if at any time all of the issued shares in the Company are held by one Member such quorum shall consist of that Member Present.	
 
16.3	If a Member is by any means in communication with one or more other Members so that each Member participating in the communication can hear what is said by any other of them each Member so participating in the communication is deemed to be Present at a meeting with the other Members so participating notwithstanding that all the Members so participating are not Present together in the same place. A meeting at which any or all of the Members participate as aforesaid shall be deemed to be a general meeting of the Company for the purposes of these Articles notwithstanding any other provisions of these Articles and all of the provisions of these Articles and of the Law relating to general meetings of the Company and to the proceedings thereat shall apply mutatis mutandis to every such meeting.	
 
16.4	If within half-an-hour from the time appointed for the meeting a quorum is not Present or if during the meeting a quorum ceases to be Present the meeting shall stand adjourned to the same day in the next week at the same time and place or to such other time and place as the Directors shall determine and if at such adjourned meeting a quorum is not Present within half-an-hour from the time appointed for the holding of the meeting those Members Present shall constitute a quorum.	
 
16.5	The chairman (if any) of the Directors shall preside as chairman at every general meeting of the Company or if there is no such chairman or if he shall not be Present within fifteen minutes after the time appointed for the holding of the meeting or is unwilling to act, the Directors shall select one of their number to be chairman of the meeting.	
 
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16.6	If at any meeting no Director is willing to act as chairman or if no Director is Present within fifteen minutes after the time appointed for holding the meeting, the Members Present shall choose one of their number to be chairman of the meeting.	
 
16.7	The chairman may without the consent of any meeting at which a quorum is Present (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting is adjourned for thirty days or more Notice of the adjourned meeting shall be given as in the case of the original meeting. Save as aforesaid it shall not be necessary to give any Notice of any adjourned meeting or of the business to be transacted at an adjourned meeting.	
 
16.8	At any general meeting a resolution put to the vote of the meeting shall be decided in the first instance on a show of hands unless before or on the declaration of the result of the show of hands a poll is demanded.	
 
16.9	Subject to the provisions of the Law, a poll may be demanded:	
 
 	16.9.1	by the chairman;	
 
 	16.9.2	by at least two Members having the right to vote on the resolution; or	
 
 	16.9.3	by a Member or Members representing not less than one tenth of the total voting rights of all the Members having the right to vote on the resolution.	
 
16.10	Unless a poll is duly demanded, a declaration by the chairman that a resolution has on a show of hands been carried or carried unanimously or by a particular majority or lost or not carried by a particular majority and an entry to that effect in the minutes of the meeting shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour or against such resolution.	
 
16.11	If a poll is duly demanded it shall be taken at such time and in such manner as the chairman directs and the results of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded.	
 
16.12	In the event of an equality of votes at any general meeting the chairman shall not be entitled to a second or casting vote.	
 
16.13	A poll demanded on the election of the chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken either forthwith or on such day and at such time and place as the chairman directs not being more than twenty-one days after the poll is demanded.	
 
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16.14	A demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll has been demanded.	
 
16.15	The Members may not pass Ordinary or Special Resolutions in Writing and any written resolutions of the Members shall be void and of no effect.	
 
17.	VOTES OF MEMBERS	
 
17.1	Subject to any special rights restrictions or prohibitions as regards voting for the time being attached to any shares as may be specified in the terms of issue thereof, any Statement of Rights or these Articles:	
 
 	17.1.1	on a show of hands, every Member Present including by proxy shall have one vote; and	
 
 	17.1.2	on a poll, every Member Present (including by proxy) shall have one vote for each share of which he is the Holder.	
 
17.2	In determining the number of votes cast for or against a proposal or a nominee, shares abstaining from voting on any resolution and votes by a broker that have not been directed by the beneficial owner to vote on any resolution in any particular manner will be counted for purposes of determining a quorum but not for purposes of determining the number of votes cast.	
 
17.3	In the case of joint Holders of any share such Persons shall not have the right of voting individually in respect of such share but shall elect one of their number to represent them and to vote whether personally or by proxy in their name. In default of such election the Person whose name appears first in order in the Register in respect of such share shall be the only Person entitled to vote in respect thereof.	
 
17.4	A Member in respect of whom an order has been made by any court having jurisdiction (whether in the Island of Jersey or elsewhere) in matters concerning legal incapacity or interdiction may vote, whether on a show of hands or a poll, by his attorney, curator, receiver or other Person authorised in that behalf appointed by that court and any such attorney, curator, receiver or other Person may vote by proxy. Evidence to the satisfaction of the Directors of the authority of such attorney, curator, receiver or other Person may be required by the Directors prior to any vote being exercised by such attorney, curator, receiver or other Person.	
 
17.5	No Member shall be entitled to vote at any general meeting unless all calls or other sums presently payable by him in respect of shares in the Company of which he is Holder or one of the joint Holders have been paid.	
 
17.6	No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the vote objected to is given or tendered and every vote not disallowed at such meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the chairman of the meeting whose decision shall be final and conclusive.	
 
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17.7	On a poll votes may be given either personally or by proxy.	
 
17.8	The Directors may at the expense of the Company send by post or otherwise to the Members instruments of proxy (with or without provision for their return prepaid) for use at any general meeting or at any separate meeting of the Holders of any class of shares of the Company either in blank or nominating in the alternative any one or more of the Directors or any other Persons. If for the purpose of any meeting invitations to appoint as proxy a Person or one or more of a number of Persons specified in the invitations are issued at the Company’s expense they shall be issued to all (and not to some only) of the Members entitled to be sent a Notice of the meeting and to vote thereat by proxy.	
 
17.9	The instrument appointing a proxy shall be in Writing in any common form or as approved by the Directors and shall be executed or authenticated by the appointor in any manner as the Directors may approve or be Signed by the appointor or by his attorney or agent duly authorised in Writing or if the appointor is a corporation either under seal or Signed by a duly authorised officer, attorney or other representative. A proxy need not be a Member.	
 
17.10	The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is Signed or a notarially certified copy of that power or authority shall:	
 
 	17.10.1	be deposited at such place and by such time as is specified for that purpose by the Notice convening the meeting at which the Person named in the instrument proposes to vote or at such place and by such time as may be specified in relation to an adjourned meeting;	
 
 	17.10.2	in the case of a poll taken more than forty-eight hours after it is demanded, be deposited as aforesaid after the poll has been demanded and not less than twenty-four hours before the time appointed for taking the poll; or	
 
 	17.10.3	where the poll is not taken forthwith but is taken not more than forty-eight hours after it was demanded, be delivered at the meeting at which the poll was demanded to the chairman or the Secretary or to any Director.	
An instrument of proxy which is not deposited in the manner so required shall be valid only if it is approved by the Directors or all the other Members who are Present at the meeting.
 
17.11	Unless the contrary is stated thereon the instrument appointing a proxy shall be as valid as well for any adjournment of the meeting as for the meeting to which it relates.	
 
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17.12	A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed, provided that no Notice in Writing of such death, insanity or revocation shall have been received by the Company at the Office before the commencement of the meeting or adjourned meeting at which such vote is cast.	
 
17.13	Notwithstanding any other provision of these Articles, the Directors may utilise, or approve the utilisation of, any telephone or internet based systems or any other electronic systems as they in their absolute discretion may think fit with respect to the appointment of proxies and/or the receipt of proxy forms and/or receipt of, or processing of, voting instructions for use at any Annual General Meetings or Extraordinary General Meetings.	
 
18.	CORPORATE MEMBERS	
 
18.1	Any body corporate which is a Member may by resolution of its directors or other governing body authorise such Person as it thinks fit to act as its representative at any meeting of Members (or of any class of Members) and the Person so authorised shall be entitled to exercise on behalf of the body corporate which he represents the same powers as that body corporate could exercise if it were an individual.	
 
18.2	Where a Person is authorised to represent a body corporate at a general meeting of the Company the Directors or the chairman of the meeting may require him to produce a certified copy of the resolution from which he derives his authority.	
 
19.	DIRECTORS	
 
19.1	The Directors shall determine the maximum and minimum number of Directors and unless and until otherwise so determined, and subject to the provisions of the Law, the minimum number of Directors shall be two.	
 
19.2	A Director need not be a Member but provided he has notified the Secretary in Writing of his desire to receive Notice of general meetings in accordance with Article 15.4 he shall be entitled to receive Notice of any general meeting and, subject to Article 14, all separate meetings of the Holders of any class of shares in the Company. Whether or not a Director is entitled to receive such Notice, he may nevertheless attend and speak at any such meeting.	
 
20.	ALTERNATE DIRECTORS	
 
20.1	Any Director (other than an alternate Director) may at his sole discretion and at any time and from time to time appoint any other Director or any other Person (other than one disqualified or ineligible by law to act as a director of a company) as an alternate Director to attend and vote in his place at any meetings of Directors at which he is not personally present. Each Director shall be at liberty to appoint under this Article more than one alternate Director provided that only one such alternate Director may at any one time act on behalf of the Director by whom he has been appointed.	
 
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20.2	An alternate Director while he holds office as such shall be entitled to receive Notice (which need not be in Writing) of all meetings of Directors and of all meetings of committees of Directors of which his appointor is a member and to attend and to exercise all the rights and privileges of his appointor at all such meetings at which his appointor is not personally present and generally to perform all the functions of his appointor as a Director in his absence.	
 
20.3	An alternate Director shall ipso facto vacate office if and when his appointment expires or the Director who appointed him ceases to be a Director of the Company or removes the alternate Director from office by Notice under his hand served upon the Company.	
 
20.4	An alternate Director shall be entitled to be paid all travelling and other expenses reasonably incurred by him in attending meetings. The remuneration (if any) of an alternate Director shall be payable out of the remuneration payable to the Director appointing him as may be agreed between them.	
 
20.5	Where a Director acts as an alternate Director for another Director he shall be entitled to vote for such other Director as well as on his own account, but no Director shall at any meeting be entitled to act as alternate Director for more than one Director.	
 
20.6	A Director who is also appointed an alternate Director shall be considered as two Directors for the purpose of making a quorum of Directors when such quorum shall exceed two.	
 
21.	POWERS OF DIRECTORS	
 
21.1	The business of the Company shall be managed by the Directors who may pay all expenses incurred in promoting and registering the Company and may exercise all such powers of the Company as are not by the Law or these Articles required to be exercised by the Company in general meeting.	
 
21.2	The Directors’ powers shall be subject to the provisions of these Articles, to the provisions of the Law and to such regulations (being not inconsistent with the aforesaid regulations or provisions) as may be prescribed by the Company in general meeting pursuant to a Special Resolution but no regulations made by the Company in general meeting shall invalidate any prior act of the Directors which would have been valid if such regulations had not been made.	
 
21.3	The Directors may by power of attorney, mandate or otherwise appoint any Person to be the agent of the Company for such purposes and on such conditions as they determine including authority for the agent to delegate all or any of his powers.	
 
22.	DELEGATION OF DIRECTORS’ POWERS	
 
22.1	The Directors may delegate any of their powers to committees consisting of such Director or Directors or such other Persons as they think fit. Any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors.	
 
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22.2	The meetings and proceedings of any such committee consisting of two or more Persons shall be governed by the provisions of these Articles regulating the meetings and proceedings of the Directors so far as the same are applicable and are not superseded by any regulations made by the Directors under this Article.	
 
23.	APPOINTMENT OF DIRECTORS	
 
23.1	Subject to the provisions of Articles 19.1, 23.2 and 28.9 only the Directors shall have power at any time and from time to time to appoint any person to be a Director as an addition to the existing Directors and vacancies on the Board of Directors resulting from death, disability, resignation, removal or otherwise and newly created directorships resulting from any increase in the number of Directors may be filled solely by a majority of the Directors then in office. Subject to Article 24, any Director who is appointed shall hold office until the next annual general meeting whereupon he shall be eligible for re-election in accordance with Article 23.2.	
 
23.2	At each annual general meeting all of the Directors shall retire and the Company shall by Ordinary Resolution elect or re-elect those persons proposed in the Notice of the annual general meeting for election or re-election as Directors to fill the vacancies.	
 
23.3	Where the number of persons validly proposed for election or re-election as a Director is greater than the number of Directors to be elected, the persons receiving the most votes (up to the number of Directors to be elected) shall be elected as Directors and an absolute majority of the votes cast shall not be a pre-requisite to the election of such Directors.	
 
23.4	No more than one hundred and fifty and at least fifty clear days’ Notice expiring on the anniversary of the preceding annual general meeting of the Company and containing the information set out in Article 23.6 shall be given to the Company of the intention of any Member or Members holding at least one-tenth of the total voting rights of the Members who have the right to vote at general meetings to propose any person for election to the office of Director at the annual general meeting in that year provided always that the chairman of such meeting may waive the said notice and submit to the meeting the name of any person duly qualified and willing to act and provided that in the event that the date of any such meeting is advanced more than thirty days prior to such anniversary date or delayed more than seventy days after such anniversary date such notice must be received by the Company no earlier than one hundred and twenty days prior to any meeting and no later than the later of seventy days prior to the date of the meeting or the tenth day following the day on which public announcement of the date of the meeting was first made by the Company.	
 
23.5	In no event shall the adjournment or postponement of any meeting, or any announcement thereof, commence a new time period (or extend any time period) for the giving of Notice as described in Article 23.4 above.	
 
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23.6	Notice to the Company from any relevant Member or Members sent pursuant to Article 23.4 shall set forth each person whom the Member or Members propose to nominate for election or re-election as a Director and all information relating to such person that is required to be disclosed in solicitations of proxies for election of Directors, or is otherwise required, in each case pursuant to Regulation 14A under the United States Securities Exchange Act of 1934 (the “ Exchange Act ”) (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a Director if elected). In addition, the notice shall set forth (i) a reasonably detailed description of any compensatory, payment or other financial agreement, arrangement or understanding that such person has with any other person or entity other than the Company (a “ Third Party Compensation Agreement ”) including the amount of any payment or payments received or receivable thereunder, in each case in connection with candidacy or service as a director of the Company and (ii) as to the Member giving the notice and (where applicable) the beneficial owner of any shares, on whose behalf the proposal is made and in respect of which the relevant Member holds legal title to such shares:	
 
 	23.6.1	the name and address of such Member (as they appear on the Company’s books) and any such beneficial owner;	
 
 	23.6.2	for each class or series, the number of shares in the share capital of the Company that are held of record or are beneficially owned by such Member and by any such beneficial owner;	
 
 	23.6.3	a description of any agreement, arrangement or understanding between or among such Member and any such beneficial owner, any of their respective affiliates or associates, and any other person or persons (including their names) in connection with the proposal of such nomination or other business;	
 
 	23.6.4	a description of any agreement, arrangement or understanding (including, regardless of the form of settlement, any derivative, long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to create or mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such Member or any such beneficial owner or any such nominee with respect to the Company’s securities;	
 
 	23.6.5	a representation that the Member is a holder of record of shares in the share capital of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to bring such nomination or other business before the meeting;	
 
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 	23.6.6	a representation as to whether such Member or any such beneficial owner intends or is part of a group that intends: (i) deliver a proxy statement and/or form of proxy to holders of at least the percentage of the voting power of the Company’s outstanding share capital required to approve or adopt the proposal or to elect each such nominee and/or (ii) otherwise to solicit proxies from Holders in support of such proposal or nomination;	
 
 	23.6.7	any other information relating to such Member, beneficial owner, if any, or director nominee or proposed business that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies in support of such nominee or proposal pursuant to Section 14 of the Exchange Act; and	
 
 	23.6.8	such other information relating to any proposed item of business as the Company may reasonably require to determine whether such proposed item of business is a proper matter for Member action.	
 
23.7	If requested by the Company, the information required under the preceding section shall be supplemented by such Member and any such beneficial owner not later than 10 days after the record date for the meeting to disclose such information as of the record date	
 
23.8	To be eligible to be a nominee for election as a director, the proposed nominee must provide to the Secretary of the Company, in accordance with the applicable time periods prescribed for delivery of notice under Article 23.4, (i) a completed D&O questionnaire (in the form provided by the secretary of the Company at the request of the nominating Member) containing information regarding the nominee’s background and qualifications and such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as a director of the Company or to serve as an independent director of the Company, (2) a written representation that, unless previously disclosed to the Company, the nominee is not and will not become a party to any voting agreement, arrangement or understanding with any person or entity as to how such nominee, if elected as a director, will vote on any issue or that could interfere with such person’s ability to comply, if elected as a director, with his/her fiduciary duties under applicable law, (3) a written representation and agreement that, unless previously disclosed to the Company pursuant to Article 23.6(i), the nominee is not and will not become a party to any Third-Party Compensation Agreement and (4) a written representation that, if elected as a director, such nominee would be in compliance and will continue to comply with the Company’s corporate governance guidelines as disclosed on the Company’s website, as amended from time to time. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Company the information that is required to be set forth in a Member’s notice of nomination that pertains to the nominee..	
 
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23.9	At the request of the Board of Directors, any person nominated by the Board of Directors for election as a Director shall furnish to the Company the information that is required to be set forth in a member’s notice set out in Article 23.6 that pertains to the nominee. No person shall be eligible to be nominated by a Member to serve as a Director unless nominated in accordance with the procedures set forth in this Article 23. The chairman of the annual general meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed hereby, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. Notwithstanding the foregoing provisions, unless otherwise required by Law, if the Member (or a qualified representative of the Member) does not appear at any such meeting of the Company to present a nomination such nomination shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the Company and counted for purposes of determining a quorum. For purposes of this Article 23.7, to be considered a qualified representative of the Member, a person must be a duly authorised officer, manager or partner of such Member or must be authorised in Writing by such Member or an electronic transmission delivered by such Member to act for such Member as proxy at the meeting of Members and such person must produce such Writing or electronic transmission, or a reliable reproduction of the Writing or electronic transmission, at the meeting.	
 
23.10	Without limiting the foregoing provisions, a Member shall also comply with all applicable requirements of the Exchange Act, and the rules and regulations thereunder with respect to the matters set forth in this Article 23 provided that any references in these Articles to the Exchange Act or such rules and regulations are not intended to and shall not limit any requirements applicable to nominations pursuant to this Article 23, and compliance with this Article 23 shall be the exclusive means for a Member to make nominations.	
 
23.11	The Company shall keep or cause to be kept a register of particulars with regard to its Directors in the manner required by the Law.	
 
24.	RESIGNATION, DISQUALIFICATION AND REMOVAL OF DIRECTORS	
 
 	24.1	The office of a Director shall be vacated if the Director:	
 
 	24.1.1	resigns his office by Notice to the Company;	
 
 	24.1.2	ceases to be a Director by virtue of any provision of the Law or he becomes prohibited or disqualified by law from being a Director;	
 
 	24.1.3	becomes Bankrupt or makes any arrangement or composition with his creditors generally;	
 
 	24.1.4	becomes of unsound mind;	
 
 	24.1.5	is removed from office by Ordinary Resolution of the Company as a result of:	
 
 	(a)	the Director’s conviction (with a nolo contendere plea deemed to be a conviction) of a serious felony involving:	
 
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 	(i)	moral turpitude; or	
 
 	(ii)	a violation of United States federal or state securities laws,	
but specifically excluding any conviction based entirely on vicarious liability; or
 
 	(b)	the Director’s commission of any material act of dishonesty (such as embezzlement) resulting or intended to result in material personal gain or enrichment of such Director at the expense of the company or any of its subsidiaries and which act, if made the subject of criminal charges, would be reasonably likely to be charged as a felony, and for these purposes nolo contendere , felony and moral turpitude shall have the meanings given to them by the laws of the United States of America or any relevant state thereof and shall include any equivalent acts in any other jurisdiction; or	
 
 	24.1.6	receives Notice signed by not less than three quarters of the other Directors stating that he should cease to be a Director. In calculating the number of Directors who are required to give Notice to the Director, (i) an alternate director appointed by him acting in his capacity as such shall be excluded; and (ii) a Director and any alternate director appointed by him and acting in his capacity as such shall constitute a single Director for this purpose, so that Notice by either shall be sufficient	
 
24.2	Notwithstanding any other provision of these Articles, whenever the holders of one or more classes or series of Preferred Shares shall have the right, voting separately as a class or series, to elect Directors, the election, term of office, filling of vacancies, removal and other features of such directorships shall be governed by the terms of the Statement of Rights applicable thereto, and such Directors so elected shall not be subject to the provisions of Articles 23 and 24 unless otherwise provided therein.	
 
25.	REMUNERATION AND EXPENSES OF DIRECTORS	
 
25.1	The Directors shall be entitled to such remuneration as the Directors may determine subject to any limitation as the Company may by Ordinary Resolution determine.	
 
25.2	The Directors shall be paid out of the funds of the Company their travelling hotel and other expenses properly and necessarily incurred by them in connection with their attendance at meetings of the Directors or Members or otherwise in connection with the discharge of their duties.	
 
26.	EXECUTIVE DIRECTORS	
 
26.1	The Directors may from time to time appoint one or more of their number to the office of managing director or to any other executive office under the Company on such terms and for such periods as they may determine.	
 
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26.2	The appointment of any Director to any executive office shall be subject to termination if he ceases to be a Director but without prejudice to any claim for damages for breach of any contract of service between him and the Company.	
 
26.3	The Directors may entrust to and confer upon a Director holding any executive office any of the powers exercisable by the Directors upon such terms and conditions and with such restrictions as they think fit and either collaterally with or to the exclusion of their own powers and may from time to time revoke withdraw alter or vary all or any of such powers.	
 
27.	DIRECTORS’ INTERESTS	
 
27.1	A Director who has, directly or indirectly, a material interest in a transaction entered into or proposed to be entered into by the Company or by a subsidiary of the Company which to a material extent conflicts or may conflict with the interests of the Company and of which he is aware, shall disclose to the Company the nature and extent of his interest.	
 
27.2	For the purposes of Article 27.1:	
 
 	27.2.1	the disclosure shall be made at the first meeting of the Directors at which the transaction is considered after the Director concerned becomes aware of the circumstances giving rise to his duty to make it or, if for any reason he fails to do so at such meeting, as soon as practical after the meeting, by Notice in Writing delivered to the Secretary;	
 
 	27.2.2	the Secretary, where the disclosure is made to him shall inform the Directors that it has been made and shall in any event table the Notice of the disclosure at the next meeting after it is made;	
 
 	27.2.3	a disclosure to the Company by a Director in accordance with Article 27.1 that he is to be regarded as interested in a transaction with a specified Person is sufficient disclosure of his interest in any such transaction entered into after the disclosure is made; and	
 
 	27.2.4	any disclosure made at a meeting of the Directors shall be recorded in the minutes of the meeting.	
 
27.3	Subject to the provisions of the Law, a Director may hold any other office or place of profit under the Company (other than the office of Auditor) in conjunction with his office of Director for such period and on such terms as to tenure of office, remuneration and otherwise as the Directors may determine.	
 
27.4	Subject to the provisions of the Law, and provided that he has disclosed to the Company the nature and extent of any of his material interests in accordance with Article 27.1, a Director notwithstanding his office:	
 
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 	27.4.1	may be a party to or otherwise interested in any transaction or arrangement with the Company or in which the Company is otherwise interested;	
 
 	27.4.2	may be a director or other officer of or employed by or a party to any transaction or arrangement with or otherwise interested in any body corporate promoted by the Company or in which the Company is otherwise interested;	
 
 	27.4.3	shall not by reason of his office be accountable to the Company for any benefit which he derives from any such office or employment or from any such transaction or arrangement or from any interest in any such body corporate and no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit; and	
 
 	27.4.4	may act by himself or his firm in a professional capacity for the Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director.	
 
28.	PROCEEDINGS OF DIRECTORS	
 
28.1	The Directors may meet together for the despatch of business adjourn and otherwise regulate their meetings as they think fit.	
 
28.2	A Director may at any time and the Secretary at the request of a Director shall summon a meeting of the Directors by giving to each Director and alternate Director not less than twenty-four hours’ Notice of the meeting provided that any meeting may be convened at shorter Notice and in such manner as each Director or his alternate Director shall approve and provided further that unless otherwise resolved by the Directors Notices of Directors’ meetings need not be in Writing.	
 
28.3	Questions arising at any meeting shall be determined by a majority of votes.	
 
28.4	In the case of an equality of votes the chairman shall not have a second or casting vote.	
 
28.5	A Director who is also an alternate Director shall be entitled to a separate vote for each Director for whom he acts as alternate in addition to his own vote.	
 
28.6	A meeting of the Directors at which a quorum is present shall be competent to exercise all powers and discretions for the time being exercisable by the Directors. The quorum necessary for the transaction of the business of the Directors may be fixed by the Directors and unless so fixed at any other number shall be such number that represents a majority of the Directors then in office. For the purposes of this Article and subject to the provisions of Article 28.7 an alternate Director shall be counted in a quorum but so that not less than two individuals will constitute the quorum.	
 
28.7	A Director notwithstanding his interest may be counted in the quorum present at any meeting at which any contract or arrangement in which he is interested is considered and, provided he has made the disclosure required by Article 27.1, he may vote in respect of any such contract or arrangement except those concerning his own terms of appointment.	
 
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28.8	If a Director is by any means in communication with one or more other Directors so that each Director participating in the communication can hear what is said by any other of them each Director so participating in the communication is deemed to be present at a meeting with the other Directors so participating notwithstanding that all the Directors so participating are not present together in the same place.	
 
28.9	The continuing Directors or Director may act notwithstanding any vacancies in their number but if the number of Directors is less than the number fixed as the quorum or becomes less than the number required by the Law the continuing Directors or Director may act only for the purpose of filling vacancies or of calling a general meeting of the Company. If there are no Directors or no Director is able or willing to act then any Member or the Secretary may summon a general meeting for the purpose of appointing Directors.	
 
28.10	The Directors may from time to time elect from their number, and remove, a chairman and/or deputy chairman and/or vice-chairman of the Board of Directors and determine the period for which they are to hold office.	
 
28.11	The chairman, or in his absence the deputy chairman, or in his absence the vice-chairman, shall preside at all meetings of the Directors but if no such chairman, deputy chairman or vice-chairman be elected or if at any meeting the chairman, deputy chairman or vice-chairman be not present within five minutes after the time appointed for holding the same, the Directors present may choose one of their number to be the chairman of the meeting.	
 
28.12	A resolution in Writing Signed by all the Directors entitled to receive Notice of a meeting of Directors or of a committee of Directors shall be valid and effectual as if it had been passed at a meeting of the Directors or of a committee of Directors duly convened and held and may consist of several documents in like form each Signed by one or more Directors but a resolution Signed by an alternate Director need not also be Signed by his appointor and if it is Signed by a Director who has appointed an alternate Director it need not be Signed by the alternate Director in that capacity.	
 
28.13	All acts done bona fide by any meeting of Directors or of a committee appointed by the Directors or by any Person acting as a Director shall notwithstanding that it is afterwards discovered that there was some defect in the appointment of any such Director or committee or Person acting as aforesaid or that they or any of them were disqualified or had vacated office or were not entitled to vote be as valid as if every such Person had been duly appointed and was qualified and had continued to be a Director or a member of a committee appointed by the Directors and had been entitled to vote.	
 
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29.	MINUTE BOOK	
 
29.1	The Directors shall cause to be entered in books kept for the purpose:	
 
 	29.1.1	the minutes of all proceedings at general meetings, class meetings, Directors’ meetings and meetings of committees appointed by the Directors;	
 
 	29.1.2	all resolutions in Writing passed in accordance with these Articles;	
 
 	29.1.3	every memorandum in Writing of a Sole Member-Director Contract (as defined in Article 29.3) which is drawn up pursuant to Article 29.3;	
 
 	29.1.4	every record in Writing of a Sole Member’s Decision (as defined in Article 29.4); and	
 
 	29.1.5	all such other records as are from time to time required by the Law or, in the opinion of the Directors, by good practice to be minuted or retained in the books of the Company.	
 
29.2	Any minutes of a meeting if purporting to be Signed by the chairman of the meeting at which the proceedings were had or by the chairman of the next succeeding meeting shall be conclusive evidence of the proceedings.	
 
29.3	This Article 29.3 applies where the Company has only one Member and that Member is also a Director. If the Company, acting otherwise than in the ordinary course of its business, enters into a contract with such Member (a “ Sole Member-Director Contract ”) and that Sole Member-Director Contract is not in Writing, the terms thereof shall be:	
 
 	29.3.1	set out in a memorandum in Writing;	
 
 	29.3.2	recorded in the minutes of the first meeting of the Directors following the making of the contract; or	
 
 	29.3.3	recorded in such other manner or on such other occasion as may for the time being be permitted or required by the Law.	
 
29.4	This Article 29.4 applies where the Company has only one Member and that Member has taken a decision which may be taken by the Company in general meeting and which has effect in law as if agreed by the Company in general meeting (a “ Sole Member’s Decision ”). A Sole Member’s Decision may (without limitation) be taken by way of resolution in Writing but if not so taken, the sole Member shall provide the Company with a record in Writing of his decision as soon as practicable thereafter.	
 
30.	SECRETARY	
 
30.1	Subject to the provisions of the Law, the Secretary shall be appointed by the Directors for such term at such remuneration and upon such conditions as they may think fit and any Secretary so appointed may be removed by the Directors.	
 
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30.2	Anything required or authorised to be done by or to the Secretary may if the office is vacant or there is for any other reason no secretary capable of acting be done by or to any assistant or deputy secretary or if there is no assistant or deputy secretary capable of acting by or to any Person authorised generally or specifically in that behalf by the Directors.	
 
30.3	The Company shall keep or cause to be kept at the Office a register of particulars with regard to its Secretary in the manner required by the Law.	
 
31.	THE SEAL	
 
31.1	The Directors may determine that the Company shall have a Seal. Subject to the Law, if the Company has a Seal the Directors may determine that it shall also have an official seal for use outside of the Island and an official seal for sealing securities issued by the Company or for sealing documents creating or evidencing securities so issued.	
 
31.2	The Directors shall provide for the safe custody of all seals and no seal shall be used except by the authority of a resolution of the Directors or of a committee of the Directors authorised in that behalf by the Directors.	
 
31.3	The Directors may from time to time make such regulations as they think fit determining the Persons and the number of such Persons who shall sign every instrument to which a seal is affixed and until otherwise so determined every such instrument shall be Signed by one Director and by the Secretary or by a second Director.	
 
31.4	The Company may authorise an agent appointed for the purpose to affix any seal of the Company to a document to which the Company is a party.	
 
32.	AUTHENTICATION OF DOCUMENTS	
 
32.1	Any Director or the Secretary or any Person appointed by the Directors for the purpose shall have power to authenticate any documents affecting the constitution of the Company (including the Memorandum of Association and these Articles), any resolutions passed by the Company or the Directors and any books, records, documents and accounts relating to the business of the Company and to certify copies thereof or extracts therefrom as true copies or extracts.	
 
32.2	Where any books, records, documents or accounts of the Company are situated elsewhere than at the Office the local manager or other Officer or the company having the custody thereof shall be deemed to be a Person appointed by the Directors for the purposes set out in Article 32.1.	
 
33.	DIVIDENDS	
 
33.1	Subject to each Statement of Rights and the provisions of the Law, the Company may by Ordinary Resolution declare dividends in accordance with the respective rights of the Members but no dividend shall exceed the amount recommended by the Directors.	
 
32

33.2	Subject to the provisions of the Law and any Statement of Rights, the Directors may if they think fit from time to time pay to the Members such interim dividends as they may determine.	
 
33.3	Subject to the provisions of the Law, these Articles and any Statement of Rights, if at any time the share capital of the Company is divided into different classes the Directors may pay such interim dividends in respect of those shares which confer on the Holders thereof deferred or non-preferred rights as well as in respect of those shares which confer on the Holders thereof preferential rights with regard to dividend.	
 
33.4	Subject to the provisions of the Law, the Directors may also pay half-yearly or at other suitable intervals to be settled by them any dividend which may be payable at a fixed rate.	
 
33.5	Provided the Directors act bona fide they shall not incur any personal liability to the Holders of shares conferring a preference for any damage that they may suffer by reason of the payment of an interim dividend on any shares having deferred or non-preferred rights.	
 
33.6	Subject to any particular rights or limitations as to dividend for the time being attached to any shares as may be specified in these Articles or in any Statement of Rights or upon which such shares may be issued, all dividends shall be declared apportioned and paid pro rata according to the amounts Paid Up on the shares on which the dividend is paid (otherwise than in advance of calls) provided that if any share is issued on terms providing that it shall rank for dividend as if Paid Up (in whole or in part) or as from a particular date (either past or future) such share shall rank for dividend accordingly.	
 
33.7	The Directors may before recommending any dividend set aside such sums as they think proper as a reserve or reserves which shall at the discretion of the Directors be applicable for any purpose to which such sums may be properly applied and pending such application may at the like discretion be employed in the business of the Company or be invested in such investments as the Directors may from time to time think fit.	
 
33.8	The Directors may carry forward to the account of the succeeding year or years any balance which they do not think fit either to dividend or to place to reserve.	
 
33.9	A general meeting declaring a dividend may upon the recommendation of the Directors direct that payment of such dividend shall be satisfied wholly or in part by the distribution of specific assets and in particular of Paid-Up shares or debentures of any other company and the Directors shall give effect to such resolution. Where any difficulty arises in regard to the distribution the Directors may settle the same as they think expedient and in particular may:	
 
 	33.9.1	issue certificates representing part of a shareholding or fractions of shares and may fix the value for distribution of such specific assets or any part thereof;	
 
 	33.9.2	determine that cash payment shall be made to any Members on the basis of the value so fixed in order to adjust the rights of Members;	
 
33

 	33.9.3	vest any specific assets in trustees upon trust for the Persons entitled to the dividend as may seem expedient to the Directors; and	
 
 	33.9.4	generally make such arrangements for the allotment, acceptance and sale of such specific assets or certificates representing part of a shareholding or fractions of shares or any part thereof or otherwise as they think fit.	
 
33.10	Any resolution declaring a dividend on the shares of any class whether a resolution of the Company in general meeting or a resolution of the Directors or any resolution of the Directors for the payment of a fixed dividend on a date prescribed for the payment thereof may specify that the same shall be payable to the Persons registered as the Holders of shares of the class concerned at the close of business on a particular date notwithstanding that it may be a date prior to that on which the resolution is passed (or as the case may be that prescribed for payment of a fixed dividend) and thereupon the dividend shall be payable to them in accordance with their respective holdings so registered but without prejudice to the rights inter se in respect of such dividend of transferors and transferees of any shares of the relevant class.	
 
33.11	The Directors may deduct from any dividend or other monies payable to any Member on or in respect of a share all sums of money (if any) presently payable by him to the Company on account of calls or otherwise in relation to the shares of the Company.	
 
33.12	Any dividend or other monies payable in respect of a share may be paid by cheque or warrant sent through the post to the registered address of the Member or Person entitled thereto and in the case of joint Holders to any one of such joint Holders or to such Person and to such address as the Holder or joint Holders may in Writing direct. Every such cheque or warrant shall be made payable to the order of the Person to whom it is sent or to such other Person as the Holder or joint Holders may in Writing direct and payment of the cheque or warrant shall be a good discharge to the Company. Every such cheque or warrant shall be sent at the risk of the Person entitled to the money represented thereby.	
 
33.13	All unclaimed dividends may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed. No dividend shall bear interest as against the Company.	
 
33.14	Any dividend which has remained unclaimed for a period of ten years from the date of declaration thereof shall if the Directors so resolve be forfeited and cease to remain owing by the Company and shall thenceforth belong to the Company absolutely.	
 
34.	CAPITALISATION OF PROFITS	
The Directors may with the authority of an Ordinary Resolution of the Company:
 
34.1	subject as hereinafter provided, resolve that it is desirable to capitalise any undistributed profits of the Company (including profits carried and standing to any reserve or reserves) not required for paying any fixed dividends on any shares entitled to fixed preferential dividends with or	
 
34

 	without further participation in profits or to capitalise any sum carried to reserve as a result of the sale or revaluation of the assets of the Company (other than goodwill) or any part thereof or to capitalise any sum standing to the credit of the Company’s share premium account or capital redemption reserve fund;	
 
34.2	appropriate the profits or sum resolved to be capitalised to the Members in the proportion in which such profits or sum would have been divisible amongst them had the same been applicable and had been applied in paying dividends and to apply such profits or sum on their behalf either in or towards paying up any amount for the time being unpaid on any shares held by such Members respectively or in paying up in full either at par or at such premium as the said resolution may provide any unissued shares or debentures of the Company such shares or debentures to be allotted and distributed credited as fully Paid Up to and amongst such Members in the proportions aforesaid or partly in one way and partly in the other provided that the share premium account and the capital redemption reserve fund and any unrealised profits may for the purposes of this Article only be applied in the paying up of unissued shares to be allotted to Members credited as fully Paid Up;	
 
34.3	make all appropriations and applications of the profits or sum resolved to be capitalised thereby and all allotments and issues of fully paid shares or debentures if any and generally shall do all acts and things required to give effect thereto with full power to the Directors to make such provision by the issue of certificates representing part of a shareholding or fractions of shares or by payments in cash or otherwise as they think fit in the case of shares or debentures becoming distributable in fractions; and	
 
34.4	authorise any Person to enter on behalf of all the Members entitled to the benefit of such appropriations and applications into an agreement with the Company providing for the allotment to them respectively credited as fully Paid Up of any further shares or debentures to which they may be entitled upon such capitalisation and any agreement made under such authority shall be effective and binding on all such Members.	
 
35.	ACCOUNTS AND AUDIT	
 
35.1	The Company shall keep accounting records which are sufficient to show and explain the Company’s transactions and are such as to:	
 
 	35.1.1	disclose with reasonable accuracy at any time the financial position of the Company at that time; and	
 
 	35.1.2	enable the Directors to ensure that any accounts prepared by the Company comply with requirements of the Law.	
 
35.2	The Directors shall prepare accounts of the Company made up to such date in each year as the Directors shall from time to time determine in accordance with and subject to the provisions of the Law.	
 
35

35.3	No Member shall (as such) have any right to inspect any accounting records or other book or document of the Company except as conferred by the Law or authorised by the Directors or by Ordinary Resolution of the Company.	
 
35.4	The Directors shall deliver to the Registrar of Companies a copy of the accounts of the Company signed on behalf of the Directors by one of them together with a copy of the report thereon by the Auditors in accordance with the Law.	
 
35.5	The Directors or the Company by Ordinary Resolution shall appoint Auditors for any period or periods to examine the accounts of the Company and to report thereon in accordance with the Law.	
 
36.	NOTICES	
 
36.1	In the case of joint Holders of a share all Notices shall be given to that one of the joint Holders whose name stands first in the Register in respect of the joint holding and Notice so given shall be sufficient Notice to all the joint Holders.	
 
36.2	A Notice may be given to any Person either personally or by sending it by post to him at his registered address. Where a Notice is sent by post service of the Notice shall be deemed to be effected by properly addressing prepaying and posting a letter containing the Notice and to have been effected one Clear Day after the day it was posted.	
 
36.3	Any Member Present at any meeting of the Company shall for all purposes be deemed to have received due Notice of such meeting and where requisite of the purposes for which such meeting was convened.	
 
36.4	A Notice may be given by the Company to the Persons entitled to a share in consequence of the death, bankruptcy or incapacity of a Member by sending or delivering it in any manner authorised by these Articles for the giving of Notice to a Member addressed to them by name or by the title of representatives of the deceased or trustee of the Bankrupt or curator of the Member or by any like description at the address if any supplied for that purpose by the Persons claiming to be so entitled. Until such an address has been supplied a Notice may be given in any manner in which it might have been given if the death, bankruptcy or incapacity had not occurred. If more than one Person would be entitled to receive a Notice in consequence of the death, bankruptcy or incapacity of a Member Notice given to any one of such Persons shall be sufficient Notice to all such Persons.	
 
36.5	Notwithstanding any of the provisions of these Articles any Notice to be given by the Company to a Director or to a Member may be given in any manner agreed in advance by any such Director or Member.	
 
36

37.	WINDING UP	
 
37.1	Subject to any particular rights or limitations for the time being attached to any shares as may be specified in these Articles or in any Statement of Rights or upon which such shares may be issued if the Company is wound up, the assets available for distribution among the Members shall be applied first in repaying to the Members the amount Paid Up on their shares respectively and if such assets shall be more than sufficient to repay to the Members the whole amount Paid Up on their shares the balance shall be distributed among the Members in proportion to the amount which at the time of the commencement of the winding up had been actually Paid Up on their said shares respectively.	
 
37.2	If the Company is wound up, the Company may with the sanction of a Special Resolution and any other sanction required by the Law divide the whole or any part of the assets of the Company among the Members in specie and the liquidator or where there is no liquidator the Directors may for that purpose value any assets and determine how the division shall be carried out as between the Members or different classes of Members and with the like sanction vest the whole or any part of the assets in trustees upon such trusts for the benefit of the Members as the liquidator or the Directors (as the case may be) with the like sanction determine but no Member shall be compelled to accept any assets upon which there is a liability.	
 
38.	INDEMNITY	
 
38.1	In so far as the Law allows, every present or former director, officer or employee of the Company shall be indemnified out of the assets of the Company against any loss or liability incurred by him by reason of being or having been such a director, officer or employee.	
 
38.2	The Directors may without sanction of the Company in general meeting authorise the purchase or maintenance by the Company for any director, officer or employee or former director, officer or employee of the Company of any such insurance as is permitted by the Law in respect of any liability which would otherwise attach to such director, officer or employee or former director, officer or employee.	
 
39.	FIXING RECORD DATE  & JURISDICTION	
 
39.1	For the purpose of determining Members entitled to Notice of or to vote at any meeting of Members or any adjournment thereof or in order to make a determination of Members for any other proper purpose including, without limitation, for any dividend, distribution, allotment or issue, the Directors may fix a date as the record date for any such determination of Members.	
 
39.2	A record date for any dividend, distribution, allotment or issue may be on or at any time before any date on which such dividend, distribution, allotment or issue is paid or made and on or at any time before or after any date on which such dividend, distribution, allotment or issue is declared.	
 
37

39.3	If no record date is fixed for the determination of Members entitled to Notice of or to vote at a meeting of Members, the date on which Notice of the meeting is sent shall be the record date for such determination of Members. When a determination of Members entitled to vote at any meeting has been made in the manner provided in this Article such determination shall apply to any adjournment thereof.	
 
39.4	Unless the Company consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s Holders, (iii) any action asserting a claim arising pursuant to any provision of the Law or these Articles (in each case, as they may be amended from time to time), or (iv) any action asserting a claim governed by the internal affairs doctrine shall be the courts of the Island of Jersey in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.	
 
40.	NON-APPLICATION OF STANDARD TABLE	
The regulations constituting the Standard Table prescribed pursuant to the Law shall not apply to the Company and are hereby expressly excluded in their entirety.
 
38

Exhibit 4.1
EXECUTION VERSION

 
DELPHI JERSEY HOLDINGS PLC,
as Issuer
THE GUARANTORS PARTY HERETO,
as Guarantors
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
AND
U.S. BANK NATIONAL ASSOCIATION,
as Registrar, Paying Agent and Authenticating Agent
5.00% SENIOR NOTES DUE 2025
INDENTURE DATED AS OF
SEPTEMBER 28, 2017

 

TABLE OF CONTENTS

 	 	 	  	Page	 	
ARTICLE 1	 	
ESTABLISHMENT; DEFINITIONS AND INCORPORATION BY REFERENCE	 	
			
SECTION 1.01.	 	Definitions	  	 	1	 	
SECTION 1.02.	 	Other Definitions	  	 	15	 	
SECTION 1.03.	 	[Reserved]	  	 	16	 	
SECTION 1.04.	 	Rules of Construction	  	 	16	 	
SECTION 1.05.	 	Limited Condition Transactions	  	 	16	 	
	
ARTICLE 2	 	
THE NOTES	 	
			
SECTION 2.01.	 	Form and Dating	  	 	17	 	
SECTION 2.02.	 	Execution and Authentication	  	 	18	 	
SECTION 2.03.	 	Registrar and Paying Agent	  	 	18	 	
SECTION 2.04.	 	Paying Agent to Hold Money in Trust	  	 	18	 	
SECTION 2.05.	 	Holder Lists	  	 	19	 	
SECTION 2.06.	 	Transfer and Exchange	  	 	19	 	
SECTION 2.07.	 	Replacement Notes	  	 	27	 	
SECTION 2.08.	 	Outstanding Notes	  	 	27	 	
SECTION 2.09.	 	Treasury Notes	  	 	28	 	
SECTION 2.10.	 	Temporary Notes	  	 	28	 	
SECTION 2.11.	 	Cancellation	  	 	28	 	
SECTION 2.12.	 	Defaulted Interest	  	 	28	 	
SECTION 2.13.	 	CUSIP or ISIN Numbers	  	 	29	 	
SECTION 2.14.	 	Additional Notes	  	 	29	 	
	
ARTICLE 3	 	
REDEMPTION AND PREPAYMENT	 	
			
SECTION 3.01.	 	Notices to Trustee	  	 	29	 	
SECTION 3.02.	 	Selection of Notes to Be Redeemed	  	 	30	 	
SECTION 3.03.	 	Notice of Redemption	  	 	30	 	
SECTION 3.04.	 	Effect of Notice Upon Redemption	  	 	31	 	
SECTION 3.05.	 	Deposit of Redemption Price	  	 	31	 	
SECTION 3.06.	 	Notes Redeemed in Part	  	 	31	 	
SECTION 3.07.	 	Optional Redemption	  	 	31	 	
SECTION 3.08.	 	Tax Redemption	  	 	32	 	
SECTION 3.09.	 	Special Mandatory Redemption	  	 	32	 	
SECTION 3.10.	 	Mandatory Redemption	  	 	33	 	
	
ARTICLE 4	 	
COVENANTS	 	
			
SECTION 4.01.	 	Payment of Notes	  	 	33	 	
SECTION 4.02.	 	Maintenance of Office or Agency	  	 	33	 	
SECTION 4.03.	 	Reports	  	 	33	 	
SECTION 4.04.	 	Compliance Certificate	  	 	34	 	
SECTION 4.05.	 	Payment of Additional Amounts	  	 	34	 	
SECTION 4.06.	 	Activities Prior to Release Date	  	 	36	 	
 
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SECTION 4.07.	 	Incurrence of Non-Guarantor Indebtedness and Issuance of Non-Guarantor Preferred Stock	  	 	36	 	
SECTION 4.08.	 	Limitation on Sale and Leaseback Transactions	  	 	38	 	
SECTION 4.09.	 	[Reserved]	  	 	39	 	
SECTION 4.10.	 	Liens	  	 	39	 	
SECTION 4.11.	 	Offer to Repurchase Upon Change of Control Triggering Event	  	 	41	 	
SECTION 4.12.	 	Corporate Existence	  	 	42	 	
SECTION 4.13.	 	Additional Guarantors	  	 	42	 	
	
ARTICLE 5	 	
SUCCESSORS	 	
			
SECTION 5.01.	 	Merger, Consolidation, or Sale of Assets	  	 	43	 	
SECTION 5.02.	 	Successor Corporation Substituted	  	 	44	 	
	
ARTICLE 6	 	
DEFAULTS AND REMEDIES	 	
			
SECTION 6.01.	 	Events of Default	  	 	44	 	
SECTION 6.02.	 	Acceleration	  	 	45	 	
SECTION 6.03.	 	Other Remedies	  	 	46	 	
SECTION 6.04.	 	Waiver of Past Defaults	  	 	46	 	
SECTION 6.05.	 	Control by Majority	  	 	46	 	
SECTION 6.06.	 	Limitation on Suits	  	 	46	 	
SECTION 6.07.	 	Rights of Holders of Notes to Receive Payment	  	 	47	 	
SECTION 6.08.	 	Collection Suit by Trustee	  	 	47	 	
SECTION 6.09.	 	Trustee May File Proofs of Claim	  	 	47	 	
SECTION 6.10.	 	Priorities	  	 	48	 	
SECTION 6.11.	 	Undertaking for Costs	  	 	48	 	
	
ARTICLE 7	 	
TRUSTEE	 	
			
SECTION 7.01.	 	Duties of Trustee	  	 	48	 	
SECTION 7.02.	 	Rights of the Trustee	  	 	49	 	
SECTION 7.03.	 	Individual Rights of Trustee	  	 	50	 	
SECTION 7.04.	 	Trustee’s Disclaimer	  	 	50	 	
SECTION 7.05.	 	Notice of Defaults	  	 	51	 	
SECTION 7.06.	 	[Reserved]	  	 	51	 	
SECTION 7.07.	 	Compensation and Indemnity	  	 	51	 	
SECTION 7.08.	 	Replacement of Trustee	  	 	52	 	
SECTION 7.09.	 	Successor Trustee by Merger, Etc.	  	 	52	 	
SECTION 7.10.	 	Eligibility; Disqualification	  	 	53	 	
	
ARTICLE 8	 	
LEGAL DEFEASANCE AND COVENANT DEFEASANCE	 	
			
SECTION 8.01.	 	Option to Effect Legal Defeasance or Covenant Defeasance	  	 	53	 	
SECTION 8.02.	 	Legal Defeasance and Discharge	  	 	53	 	
SECTION 8.03.	 	Covenant Defeasance	  	 	53	 	
SECTION 8.04.	 	Conditions to Legal or Covenant Defeasance	  	 	54	 	
SECTION 8.05.	 	Deposited Money and U.S. Government Securities to Be Held in Trust; Other Miscellaneous Provisions	  	 	55	 	
SECTION 8.06.	 	Satisfaction and Discharge	  	 	55	 	
 
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SECTION 8.07.	 	Repayment to Issuer	  	 	56	 	
SECTION 8.08.	 	Reinstatement	  	 	56	 	
SECTION 8.09.	 	Survival	  	 	56	 	
	
ARTICLE 9	 	
AMENDMENT, SUPPLEMENT AND WAIVER	 	
			
SECTION 9.01.	 	Without Consent of Holder	  	 	56	 	
SECTION 9.02.	 	With Consent of Holders of Notes	  	 	57	 	
SECTION 9.03.	 	[Reserved]	  	 	58	 	
SECTION 9.04.	 	Revocation and Effect of Consents	  	 	58	 	
SECTION 9.05.	 	Trustee and Agents to Sign Amendments	  	 	59	 	
	
ARTICLE 10	 	
NOTE GUARANTEES	 	
			
SECTION 10.01.	 	Note Guarantees	  	 	59	 	
SECTION 10.02.	 	Limitation on Liability	  	 	60	 	
SECTION 10.03.	 	Successors and Assigns	  	 	60	 	
SECTION 10.04.	 	No Waiver	  	 	60	 	
SECTION 10.05.	 	Release of Guarantor	  	 	60	 	
SECTION 10.06.	 	Contribution	  	 	61	 	
	
ARTICLE 11	 	
MISCELLANEOUS	 	
			
SECTION 11.01.	 	[Reserved]	  	 	61	 	
SECTION 11.02.	 	Notices	  	 	61	 	
SECTION 11.03.	 	[Reserved]	  	 	63	 	
SECTION 11.04.	 	Certificate and Opinion as to Conditions Precedent	  	 	63	 	
SECTION 11.05.	 	Statements Required in Certificate or Opinion	  	 	63	 	
SECTION 11.06.	 	Rules by Trustee and Agents	  	 	63	 	
SECTION 11.07.	 	No Personal Liability of Directors, Officers, Employees and Stockholders	  	 	63	 	
SECTION 11.08.	 	Governing Law; Waiver of Jury Trial	  	 	63	 	
SECTION 11.09.	 	No Adverse Interpretation of Other Agreements	  	 	64	 	
SECTION 11.10.	 	Successors	  	 	64	 	
SECTION 11.11.	 	Severability	  	 	64	 	
SECTION 11.12.	 	Counterpart Originals	  	 	64	 	
SECTION 11.13.	 	Table of Contents, Headings, Etc.	  	 	64	 	
SECTION 11.14.	 	Force Majeure	  	 	64	 	
SECTION 11.15.	 	Patriot Act	  	 	64	 	
	
ARTICLE 12	 	
ESCROW MATTERS	 	
			
SECTION 12.01.	 	Escrow Account	  	 	64	 	
SECTION 12.02.	 	Special Mandatory Redemption	  	 	65	 	
SECTION 12.03.	 	Release of Escrowed Property	  	 	65	 	
SECTION 12.04.	 	Trustee Direction to Execute Escrow Agreement	  	 	65	 	

EXHIBITS	 		
Exhibit A	 	Form of Note	
Exhibit B	 	Form of Certificate of Transfer	
Exhibit C	 	Form of Certificate of Exchange	
Exhibit D	 	Form of Supplemental Indenture to Be Delivered by Subsequent Guarantors	
 
-iii-

This INDENTURE, dated as of September 28, 2017 (this “ Indenture ”), is by and among Delphi Jersey Holdings plc, a Jersey public limited company (the “ Issuer ”), the other guarantors listed herein (the “ Guarantors ”) party hereto, U.S. Bank National Association, a national banking association, as trustee (the “ Trustee ”) and U.S. Bank National Association, a national banking association, as registrar (“ Registrar ”), paying agent (“ Paying Agent ”) and authenticating agent (“ Authenticating Agent ”).
WITNESSETH:
WHEREAS, the Issuer is entering into this Indenture to establish the form and terms of its 5.00% Senior Notes due 2025 (the “ Notes ”); and
WHEREAS, all conditions necessary to authorize the execution and delivery of this Indenture and to make it a valid and binding obligation of the Issuer and the Guarantors have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Issuer, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Notes.
ARTICLE 1
ESTABLISHMENT; DEFINITIONS AND INCORPORATION BY REFERENCE
 
SECTION 1.01.	Definitions .	
(a)    The following are definitions used in this Indenture.
“ 144A Global Note ” means a Global Note substantially in the form of Exhibit A hereto, bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.
“ Acquired Debt ” means, with respect to any specified Person:
(1)    Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, or to provide all or any portion of the funds or credit support utilized in connection with, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and
(2)    Indebtedness secured by an existing Lien encumbering any asset acquired by such specified Person.
“ Additional Notes ” means 5.00% Senior Notes due 2025 issued from time to time after the Issue Date pursuant to Section 2.14 of this Indenture, and any Notes issued in exchange or replacement therefor.
“ Affiliate ” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “ control ” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “ controlling ” and “ controlled ” have meanings correlative to the foregoing.
“ Agent ” means any Registrar, Paying Agent or Authenticating Agent.
“ Applicable Premium ” means, with respect to any Note on any applicable redemption date, the greater of:
(a)    1% of the then-outstanding principal amount of such Note; and

(b)    the excess, if any, of:
(1)    the present value at such redemption date of all required principal and interest payments due on the Note through the maturity date of the Notes (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over
(2)    the then-outstanding principal amount of the Note.
“ Applicable Procedures ” means, with respect to any transfer, redemption or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary that apply to such transfer, redemption or exchange.
“ Attributable Debt ” means, with respect to any Sale and Leaseback Transaction that does not result in a Capitalized Lease Obligation, the present value (computed in accordance with GAAP) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction (including any period for which such lease has been extended). In the case of any lease which is terminable by the lessee upon payment of a penalty, the Attributable Debt shall be the lesser of:
(1)    the Attributable Debt determined assuming termination upon the first date such lease may be terminated (in which case the Attributable Debt shall also include the amount of the penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated); and
(2)    the Attributable Debt determined assuming no such termination.
“ Attributable Receivables Indebtedness ” at any time means the principal amount of Indebtedness which (i) if a Permitted Receivables Facility is structured as a secured lending agreement, would constitute the principal amount of such Indebtedness or (ii) if a Permitted Receivables Facility is structured as a purchase agreement or factoring arrangement, would be outstanding at such time under the Permitted Receivables Facility if the same were structured as a secured lending agreement rather than a purchase agreement.
“ Bankruptcy Law ” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors, or the law of any other jurisdiction relating to bankruptcy, insolvency, winding up, liquidation, reorganization or the relief of debtors.
“ Board of Directors ” means the board of directors of the Issuer or any committee thereof duly authorized to act on behalf of the board of directors of the Issuer.
“ Business Day ” means each day which is not a Legal Holiday.
“ Capital Stock ” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.
“ Capitalized Lease Obligations ” means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP.
“ Cash Equivalents ” means:
(a)    Dollars, euros, pound sterling or other money in other currencies received in the ordinary course of business;
 
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(b)    securities with maturities of one (1) year or less from the date of acquisition issued or fully guaranteed or insured by the United States federal government or any agency thereof;
(c)    securities with maturities of one (1) year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s;
(d)    demand deposit, certificates of deposit and time deposits with maturities of one (1) year or less from the date of acquisition and overnight bank deposits of any commercial bank, supranational bank or trust company having capital and surplus in excess of $500,000,000;
(e)    repurchase obligations with respect to securities of the types (but not necessarily maturity) described in clauses (b) and (c) above, having a term of not more than ninety (90) days, of banks (or bank holding companies) or subsidiaries of such banks (or bank holding companies) and non-bank broker-dealers listed on the Federal Reserve Bank of New York’s list of primary and other reporting dealers (“ Repo Counterparties ”) which Repo Counterparties have capital, surplus and undivided profits aggregating in excess of $500,000,000 (or the foreign equivalent thereof) and which Repo Counterparties or their parents (if the Repo Counterparties are not rated) will at the time of the transaction be rated A-1 by S&P (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization;
(f)    commercial paper rated at least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s and in either case maturing within one (1) year after the day of acquisition;
(g)    short-term marketable securities of comparable credit quality to those described in clauses (a) through (f) above;
(h)    shares of money market mutual or similar funds that invest at least 95% in assets satisfying the requirements of clauses (a) through (g) of this definition;
(i)    in the case of the Issuer or a Subsidiary, substantially similar investments, of comparable credit quality, denominated in the currency of any jurisdiction in which the Issuer or such Subsidiary conducts business; and
(j)    any other investment treated as a “cash equivalent” pursuant to GAAP.
“ Cash Management Obligations ” means obligations in respect of overdraft and related liabilities arising from treasury, depositary and cash management services or any automated clearing house transfers of funds or participating in commercial (or purchasing) card programs.
“ Certificated Note ” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Article 2 hereof, in substantially the form of Exhibit A hereto, except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Increases or Decreases in the Global Note” attached thereto.
“ Change of Control ” means the occurrence of any of the following:
(1)    any transaction occurs (including a merger or consolidation of the Issuer) following which any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Issuer; or
 
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(2)    any sale, lease or transfer (for the avoidance of doubt, other than a transfer to the Issuer or one of its Subsidiaries), in one or a series of related transactions, of all or substantially all the assets of the Issuer and its Subsidiaries, taken as a whole, to a Person in which any person (as defined above) holds or acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of 50% or more of the total voting power of the Voting Stock of such transferee Person.
Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (1) the Issuer becomes a direct or indirect Subsidiary of a holding company and (2) no person (as defined above) (other than a holding company) owns, directly or indirectly, a majority of the voting power of the Equity Interests of such holding company.
“ Change of Control Triggering Event ” means, in each case, after the Release Date, the occurrence of both (i) a Change of Control and (ii) a Rating Event.
“ Code ” means the U.S. Internal Revenue Code of 1986, as amended.
“ Consolidated EBITDA ” means Consolidated Net Income plus, without duplication and to the extent deducted from revenues in determining Consolidated Net Income (except with respect to clause (viii)), (i) Consolidated Interest Expense and charges, deferred financing fees and milestone payments in connection with any investment or series of related investments, losses on hedging obligations or other derivative instruments entered into for the purpose of hedging interest rate risk, net of gains on such hedging obligations, and costs of surety bonds in connection with financing activities, (ii) expense and provision for taxes paid or accrued, (iii) depreciation, (iv) amortization (including amortization of intangibles, including, but not limited to goodwill), (v) non-cash charges recorded in respect of purchase accounting or impairment of goodwill, intangibles or long-lived assets and non-cash exchange, translation or performance losses relating to any foreign currency hedging transactions or currency fluctuations except to the extent representing an accrual for future cash outlays, (vi) any other non-cash items except to the extent representing an accrual for future cash outlays, (vii) any unusual, infrequent, extraordinary, restructuring, business optimization or similar expense, loss or charge (including, without limitation, the amount of any restructuring, integration, transition, spinoff, severance, facility closing, new facility start-up, similar losses expenses or charges accrued during such period and any charges to establish accruals and reserves or to make payments associated with the reassessment or realignment of the business and operations of the Issuer and its Subsidiaries, including, without limitation, the sale or closing of facilities, severance, stay bonuses and curtailments or modifications to pension and post-retirement employee benefit plans, asset write-downs or asset disposals (including leased facilities), write-downs for purchase and lease commitments, start-up costs for new facilities, writedowns of excess, obsolete or unbalanced inventories, relocation costs which are not otherwise capitalized and any related promotional costs of exiting products or product lines), (viii) “run-rate” cost savings, synergies, operating expense reductions and operating improvements projected by the Issuer in good faith to result from actions taken or to be taken prior to or during such period (which cost savings, synergies, operating expense reductions and operating improvements shall be calculated on a pro forma basis as though such cost savings, synergies, operating expense reductions and operating improvements had been realized on the first day of such period), net of the amount of actual benefits realized prior to or during such period from such actions; provided that (x) such cost savings or synergies are reasonably anticipated to be realizable as a result of such actions (as determined in good faith by the Issuer) and (y) such actions have been taken or are to be taken within eighteen (18) months from the date of determination, (ix) restructuring costs and expenses incurred, (x) costs and expenses incurred in connection with the Spinoff during the fiscal years ended December 31, 2017 and December 31, 2018 of the Issuer, (xi) without duplication, income of any non-wholly-owned Subsidiaries and deductions attributable to minority interests, (xii) any non-cash costs or expenses incurred by the Issuer or a Subsidiary pursuant to any employee or management equity plan or stock plan with respect to Equity Interests of Issuer, (xiii) expenses with respect to casualty events, (xiv) to the extent actually reimbursed, expenses incurred to the extent covered by indemnification provisions in any agreement in connection with any acquisition, investment or disposition and (xv) non-cash charges pursuant to SFAS 158, minus, to the extent included in Consolidated Net Income, the sum of (x) any unusual, infrequent or extraordinary income or gains and (y) any other non-cash income (except to the extent representing an accrual for future cash income), all calculated for the Issuer and its Subsidiaries in accordance with GAAP on a consolidated basis; provided that, to the extent included in Consolidated Net Income, (A) there shall be excluded in determining Consolidated EBITDA currency translation gains and losses related to currency remeasurements of Indebtedness (including the net loss or gain resulting from Swap Agreements for currency
 
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exchange risk) and (B) there shall be excluded in determining Consolidated EBITDA for any period any adjustments resulting from the application of SFAS 133. Consolidated EBITDA shall be determined on a pro forma basis with such adjustments as are consistent with those set forth in the definition of “Consolidated Non-Guarantor Debt Ratio.”
“ Consolidated Interest Expense ” means, with reference to any period, the interest expense whether or not paid in cash (including, without limitation, interest expense under Capitalized Lease Obligations that is treated as interest in accordance with GAAP) of the Issuer and its Subsidiaries calculated on a consolidated basis for such period in accordance with GAAP plus, without duplication: (a) imputed interest attributable to Capitalized Lease Obligations of the Issuer and its Subsidiaries for such period, (b) commissions, discounts and other fees and charges owed by the Issuer or any of its Subsidiaries with respect to letters of credit securing financial obligations, bankers’ acceptance financing and receivables financings for such period, (c) amortization or write-off of debt discount and debt issuance costs, premium, commissions, discounts and other fees and charges associated with Indebtedness of the Issuer and its Subsidiaries for such period, (d) cash contributions to any employee stock ownership plan or similar trust made by the Issuer or any of its Subsidiaries to the extent such contributions are used by such plan or trust to pay interest or fees to any person (other than the Issuer or a wholly-owned Subsidiary) in connection with Indebtedness incurred by such plan or trust for such period, (e) all interest paid or payable with respect to discontinued operations of the Issuer or any of its Subsidiaries for such period, (f) the interest portion of any deferred payment obligations of the Issuer or any of its Subsidiaries for such period, and (g) the interest component of all Attributable Receivables Indebtedness of the Issuer and its Subsidiaries.
“ Consolidated Net Income ” means, with reference to any period, the net income (or loss) of the Issuer and its Subsidiaries calculated in accordance with GAAP on a consolidated basis (without duplication) for such period; provided that, in calculating Consolidated Net Income of the Issuer and its Subsidiaries for any period, there shall be excluded (a) extraordinary items, (b) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary of the Issuer or is merged into or consolidated with the Issuer or any of its Subsidiaries (except to the extent required for any calculation of Consolidated EBITDA on a pro forma basis), (c) the income (or deficit) of any Person (other than a Subsidiary of the Issuer) in which the Issuer or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Issuer or such Subsidiary in the form of dividends or similar distributions, (d) any fees and expenses incurred during such period, or any amortization thereof for such period, in connection with the consummation of any acquisition, investment, asset disposition, issuance or repayment of Indebtedness, purchase, issuance or sale of equity securities, refinancing transaction or amendment or other modification of any debt instrument (in each case, including any such transaction undertaken but not completed) and any charges or non-recurring merger costs incurred during such period as a result of any such transaction, (e) any income (loss) for such period attributable to the early extinguishment of Indebtedness and (f) the cumulative effect of a change in accounting principles.
“ Consolidated Non-Guarantor Debt Ratio ” means, as of any date of determination, the ratio of (a) Consolidated Total Indebtedness of the Subsidiaries of the Issuer on the date of determination that constitutes Non-Guarantor Indebtedness or Non-Guarantor Preferred Stock (excluding any such amounts owing to the Issuer or a Subsidiary) to (b) the aggregate amount of Consolidated EBITDA for the then most recent four full fiscal quarters for which financial statements of the Issuer are available. For purposes of calculating this ratio:
(a)    if since the beginning of such period the Issuer or any Subsidiary shall have disposed of any Person or business, the Consolidated EBITDA for such period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) directly attributable to the assets disposed for such period or increased by an amount equal to the Consolidated EBITDA (if negative) directly attributable thereto for such period;
(b)    if since the beginning of such period the Issuer or any Subsidiary (by merger or otherwise) shall have made an investment in any Subsidiary (or any Person that becomes a Subsidiary) or an acquisition of assets constituting a Person or business, including any acquisition of assets occurring in connection with a transaction causing a calculation to be made hereunder, which constitutes a business, Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such investment or acquisition occurred on the first day of such period; and
 
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(c)    if since the beginning of such period any Person that subsequently became a Subsidiary or was merged with or into the Issuer or any Subsidiary since the beginning of such period shall have made any disposition or any investment or acquisition of assets that would have required an adjustment pursuant to clause (a) or (b) above if made by the Issuer or a Subsidiary during such period, Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto as if such disposition, investment or acquisition of assets occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets, disposition or other investment, the amount of income, Consolidated EBITDA or earnings relating thereto, the pro forma calculations shall be determined in good faith by a responsible Financial Officer of the Issuer.
Notwithstanding anything herein to the contrary, with respect to any Indebtedness incurred in reliance on Section 4.07 that does not require compliance with a financial ratio or test (including, without limitation, any tests based on the Consolidated Non-Guarantor Debt Ratio, Consolidated Total Assets or Consolidated EBITDA) (any such amounts, the “ Fixed Amounts ”) substantially concurrently with any Indebtedness incurred in reliance on Section 4.07 that requires compliance with a financial ratio or test (including any tests based on the Consolidated Non-Guarantor Debt Ratio, Consolidated Total Assets or Consolidated EBITDA) (any such amounts, the “ Incurrence-Based Amounts ”), it is understood and agreed that the Fixed Amounts shall be disregarded in the calculation of the financial ratio or test applicable to the incurrence of the Incurrence-Based Amounts.
“ Consolidated Secured Indebtedness ” means, as of any date of determination, Consolidated Total Indebtedness as of such date that is secured by a Lien on any property of the Issuer or any Guarantor as of such date.
“ Consolidated Secured Leverage Ratio ” means, for any four-quarter period, the ratio of (a) Consolidated Secured Indebtedness as of the last day of the latest four full fiscal quarters for which financial statements of the Issuer are available to (b) Consolidated EBITDA for the latest four full fiscal quarters for which financial statements of the Issuer are available with such pro forma adjustments as are consistent with those set forth under the definition of “Consolidated Non-Guarantor Debt Ratio,” including the last paragraph thereof.
“ Consolidated Total Assets ” means, at any time, the total consolidated assets of the Issuer and its Subsidiaries, as shown on the most recent balance sheet of the Issuer that is available at such time calculated on a pro forma basis to give effect to any acquisition or disposition of any Person or line of business after the date thereof.
“ Consolidated Total Indebtedness ” means at any time the sum, without duplication, of the aggregate principal amount of Indebtedness for borrowed money of the Issuer and its Subsidiaries outstanding as of such time of a type required to be reflected on a balance sheet prepared at such time on a consolidated basis in accordance with GAAP minus the aggregate amount of unrestricted cash and Cash Equivalents of the Issuer and its Subsidiaries.
“ Corporate Trust Office of the Trustee ” shall be at the address of the Trustee specified in Section 11.02 hereof, or such other address as to which the Trustee may give notice to the Issuer.
“ Credit Agreement ” means that certain Credit Agreement, to be dated on or before the Release Date by and among the Issuer, certain Subsidiaries of the Issuer, the several lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent (including, without limitation, any guarantee agreements and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), supplemented, extended or otherwise modified from time to time.
“ Credit Facilities ” means (1) the Credit Agreement and (2) one or more debt facilities, indentures or other agreements refinancing, replacing, amending, restating or supplementing (whether or not contemporaneously and whether or not related to the agreements specified above) or otherwise restructuring or increasing the amount of available borrowings or other credit extensions under or making Subsidiaries of the Issuer a borrower, additional borrower or guarantor under, all or any portion of the Indebtedness under such agreement or any successor, replacement or supplemental agreement and whether including any additional obligors or with the same or any other agent, lender or group of lenders or with other financial institutions or lenders.
 
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“ Currency Agreement ” means, with respect to any Person any foreign exchange contract, currency swap agreements or other similar agreement or arrangement to which such Person is a party or of which it is a beneficiary.
“ Custodian ” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03(c) as Custodian with respect to the Notes, and any and all successors thereto appointed as custodian hereunder and having become such pursuant to the applicable provisions of this Indenture.
“ Default ” means any event which is, or after notice or passage of time or both would be, an Event of Default.
“ Delphi Automotive ” means Delphi Automotive PLC, a Jersey public limited company.
“ Depositary ” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03(b) hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provisions of this Indenture.
“ Equity Interests ” means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.
“ Escrow Account ” has the meaning set forth in the Escrow Agreement.
“ Escrow Agent ” means JPMorgan Chase Bank, N.A., as agent under the Escrow Agreement, and any and all successors thereto appointed pursuant to the terms and conditions set forth in the Escrow Agreement.
“ Escrow Agreement ” means the Escrow Agreement dated the date hereof by and among the Issuer, the Trustee and the Escrow Agent, relating to the Initial Notes, as amended, modified or supplemented from time to time.
“ Escrow End Date ” means June 30, 2018.
“ Escrow Funds ” has the meaning set forth in the Escrow Agreement.
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.
“ Financial Officer ” means the Chief Financial Officer, the Treasurer or the Chief Accounting Officer of the Issuer.
“ Fitch ” means Fitch Ratings, Inc. and any successor to its rating business.
“ GAAP ” means generally accepted accounting principles in the United States of America as in effect as of the Issue Date set forth in:
(1)    the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants,
(2)    statements and pronouncements of the Financial Accounting Standards Board,
(3)    such other statements by such other entities as approved by a significant segment of the accounting profession, and
 
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(4)    the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC.
“ Global Note Legend ” means the legend set forth in Section 2.06(g)(ii) hereof, which is required to be placed on all Global Notes issued under this Indenture.
“ Global Notes ” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, in the form of Exhibit  A hereto issued in accordance with Article 2 hereof.
“ Guarantee ” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:
(1)     to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or
(2)     entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);
provided , however , that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.
“ Guarantor ” means each Subsidiary of the Issuer that provides a Note Guarantee under this Indenture.
“ Holder ” means the Person in whose name a Note is registered on the Registrar’s books.
“ Incur ” means issue, assume, Guarantee, incur or otherwise become liable for; provided , however , that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary. The term “ Incurrence ” when used as a noun shall have a correlative meaning. The accretion of principal of a non-interest bearing or other discount security shall not be deemed the Incurrence of Indebtedness.
“ Indebtedness ” means the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money.
Notwithstanding the foregoing, (i) in connection with the purchase by the Issuer or any Subsidiary of any business, the term “Indebtedness” will exclude bona fide post-closing payment adjustments to which the seller may become entitled to the extent such payment is determined by a final closing balance sheet or such payment depends on the performance of such business after the closing; provided , however , that, at the time of closing, the amount of any such payment is not determinable and, to the extent such payment thereafter becomes fixed and determined, the amount is paid within 30 days thereafter and (ii) Swap Agreements, Cash Management Obligations and other obligations in respect of card obligations, netting services, overdraft protections, cash management services and similar arrangements shall not constitute Indebtedness.
The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above; provided , however , that in the case of Indebtedness sold at a discount, the amount of such Indebtedness at any time will be the accreted value thereof at such time.
“ Indirect Participant ” means a Person who holds a beneficial interest in a Global Note through a Participant.
 
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“ Initial Notes ” means $800,000,000 in aggregate principal amount of the Notes issued under this Indenture on the Issue Date.
“ Initial Purchasers ” means Barclays Capital Inc., Goldman Sachs & Co. LLC, Citigroup Global Markets Inc.. Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, BNP Paribas Securities Corp., Morgan Stanley & Co. LLC, SMBC Nikko Securities America, Inc., SG Americas Securities, LLC, TD Securities (USA) LLC, UniCredit Capital Markets LLC and U.S. Bancorp Investments, Inc.
“ interest ” means, with respect to the Notes, interest on the Notes.
“ Interest Payment Date ” has the meaning set forth in paragraph 1 of the applicable Notes.
“ Investment Grade ” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s, BBB- (or the equivalent) by Standard & Poor’s and BBB- (or the equivalent) by Fitch, or if Moody’s, Standard & Poor’s or Fitch shall cease to provide a rating of the Notes, an equivalent rating by any other Rating Agency substituted for Moody’s, S&P or Fitch pursuant to clause (b) of the definition of “Rating Agency.”
“ Issue Date ” means September 28, 2017.
“ Legal Holiday ” means a Saturday, Sunday or other day on which the Trustee, Registrar and Paying Agent or banking institutions are not required by law or regulation to be open in the State of New York.
“ Lien ” means any mortgage, pledge, security interest, encumbrance, lien or charge in the nature of an encumbrance of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof); provided that any obligation in respect of an operating lease shall not be deemed a lien.
“ Limited Condition Transaction ” means any acquisition or other similar investment, including by means of a merger, amalgamation or consolidation, by the Issuer or one or more of its Subsidiaries, the consummation of which is not conditioned upon the availability of, or on obtaining, third party financing or in connection with which any fee or expense would be payable by the Issuer or its Subsidiaries to the seller or target in the event financing to consummate the acquisition is not obtained as contemplated by the definitive acquisition agreement.
“ Moody’s ” means Moody’s Investors Service, Inc. and any successor to its rating business.
“ Non-Guarantor Indebtedness ” means any Indebtedness of a Subsidiary that is not a Guarantor.
“ Note Guarantee ” means each Guarantee of the obligations with respect to the Notes issued by a Guarantor pursuant to the terms of this Indenture.
“ Offering Memorandum ” means the offering memorandum dated September 14, 2017 relating to the initial Notes.
“ Officer ” means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary of the Issuer. “ Officer ” of any Guarantor has a correlative meaning.
“ Officer’s Certificate ” means a certificate signed by an Officer.
“ Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer or a Guarantor.
“ Participant ” means, with respect to the Depositary, a Person who has an account with the Depositary.
 
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“ Permitted Receivables Facility ” means the receivables facility or facilities created under the Permitted Receivables Facility Documents, providing for (a) the factoring, sale or pledge by one or more Receivables Sellers of Permitted Receivables Facility Assets and Permitted Receivables Related Assets (thereby providing financing to the Issuer and the Receivables Sellers) to the Receivables Entity (either directly or through another Receivables Seller), which in turn shall sell or pledge interests in the respective Permitted Receivables Facility Assets to third-party lenders or investors pursuant to the Permitted Receivables Facility Documents (with the Receivables Entity permitted to issue investor certificates, purchased interest certificates or other similar documentation evidencing interests in the Permitted Receivables Facility Assets and Permitted Receivables Related Assets) in return for the cash used by the Receivables Entity to purchase the Permitted Receivables Facility Assets from the respective Receivables Sellers or (b) the factoring, sale or pledge by one or more Receivables Sellers of Permitted Receivables Facility Assets and Permitted Receivables Related Assets to third-party lenders or investors pursuant to the Permitted Receivables Facility Documents in connection with Receivables-backed financing programs, in each case as more fully set forth in the Permitted Receivables Facility Documents.
“ Permitted Receivables Facility Assets ” means (i) Receivables (whether now existing or arising in the future) which are transferred or pledged to the Receivables Entity pursuant to the Permitted Receivables Facility and any related Permitted Receivables Related Assets which are also so transferred or pledged to the Receivables Entity and all proceeds thereof and (ii) loans to Subsidiaries secured by Receivables (whether now existing or arising in the future) of such Subsidiaries which are made pursuant to the Permitted Receivables Facility.
“ Permitted Receivables Facility Documents ” means each of the documents and agreements entered into in connection with the Permitted Receivables Facility, including all documents and agreements relating to the issuance, funding and/or purchase of certificates and purchased interests, all of which documents and agreements shall be in form and substance reasonably customary for transactions of this type (in the good faith determination of the Issuer), in each case as such documents and agreements may be amended, modified, supplemented, refinanced or replaced from time to time so long as (in the good faith determination of the Issuer) either (i) the terms as so amended, modified, supplemented, refinanced or replaced are reasonably customary for transactions of this type or (ii)(x) any such amendments, modifications, supplements, refinancings or replacements do not impose any conditions or requirements on the Issuer or any of its Subsidiaries that are more restrictive in any material respect than those in existence immediately prior to any such amendment, modification, supplement, refinancing or replacement, and (y) any such amendments, modifications, supplements, refinancings or replacements are not adverse in any material respect to the interests of the Holders of the Notes.
“ Permitted Receivables Related Assets ” means any other assets that are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization or Receivables-backed financing programs involving accounts receivable and any collections or proceeds of any of the foregoing.
“ Person ” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
“ Powertrain Business ” means the business constituting the powertrain systems business of Delphi Automotive and certain of its other assets and liabilities, in each case, as described in the Offering Memorandum.
“ Preferred Stock ” means any Equity Interest with preferential rights of payment of dividends upon liquidation, dissolution or winding up.
“ principal ” of a Note means the principal of the Note plus the premium, if any, payable on the Note which is due or overdue or is to become due at the relevant time.
“ Private Placement Legend ” means the legend set forth in Section 2.06(g)(i) hereof to be placed on all Notes issued under this Indenture, except where otherwise permitted by the provisions of this Indenture.
“ QIB ” means a “qualified institutional buyer” as defined in Rule 144A.
 
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“ Rating Agency ” means (a) Standard & Poor’s, Moody’s and Fitch or (b) if Standard & Poor’s, Moody’s or Fitch or any or all of them shall not make a rating on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Issuer (as certified by a resolution of the Board of Directors) which shall be substituted for Standard & Poor’s, Moody’s or Fitch or any or all of them, as the case may be.
“ Rating Event ” means:
(1)    if the Notes are rated Investment Grade by all three of the Rating Agencies on the first day of the Trigger Period, such Notes are downgraded to below Investment Grade (i.e. below BBB- or Baa3) and/or cease to be rated by two of the Rating Agencies on any date during the Trigger Period;
(2)    if the Notes are rated (A) below Investment Grade by two of the Rating Agencies on the first day of the Trigger Period and (B) Investment Grade by one of the Rating Agencies on the first day of the Trigger Period, then both of the following occur: (i) in the case of the Rating Agencies referred to in clause (A), such Notes are downgraded by at least one rating category (e.g., from BB+ to BB or Ba1 to Ba2) from the applicable rating of such Notes on the first day of the Trigger Period by at least one of such Rating Agencies and/or at least one of such Rating Agency ceases to rate such Notes on any date during the Trigger Period and (ii) in the case of the Rating Agency referred to in clause (B), such Notes are downgraded to below Investment Grade (i.e. below BBB- or Baa3) and/or cease to be rated by such Rating Agency on any date during the Trigger Period;
(3)    if the Notes are rated (A) below Investment Grade by one of the Rating Agencies on the first day of the Trigger Period and (B) Investment Grade by two of the Rating Agencies on the first day of the Trigger Period, then both of the following occur: (i) in the case of the Rating Agency referred to in clause (A), such Notes are downgraded by at least one rating category (e.g., from BB+ to BB or Ba1 to Ba2) from the applicable rating of such Notes on the first day of the Trigger Period and/or cease to be rated by such Rating Agency on any date during the Trigger Period and (ii) in the case of the Rating Agencies referred to in clause (B), such Notes are downgraded to below Investment Grade (i.e. below BBB- or Baa3) by at least one such Rating Agency and/or at least one of such Rating Agency ceases to rate such Notes on any date during the Trigger Period; or
(4)    if the Notes are rated below Investment Grade by all three of the Rating Agencies on the first day of the Trigger Period, such Notes are downgraded by at least one rating category (e.g., from BB+ to BB or Ba1 to Ba2) from the applicable rating of such Notes on the first day of the Trigger Period and/or cease to be rated by two of the Rating Agencies on any date during the Trigger Period;
provided that a Rating Event will not be deemed to have occurred in respect of a particular Change of Control if each applicable downgrading Rating Agency does not publicly announce or confirm or inform the Trustee in writing at the Issuer’s request that the reduction was the result of the Change of Control (whether or not the applicable Change of Control has occurred at the time of the Change of Control Triggering Event). Notwithstanding the foregoing, no Rating Event will be deemed to have occurred in connection with any particular Change of Control unless and until such Change of Control has actually been consummated; provided further that in the event that a Rating Agency does not provide a rating of Notes on the first day of the Trigger Period, such absence of rating shall be treated as both a downgrade in the rating of such Notes by such Rating Agency and a downgrade that results in such Notes no longer being rated Investment Grade by such Rating Agency, in each case, for purposes of clauses (1), (2), (3) and (4) above and shall not be subject to the immediately preceding proviso.
“ Receivables ” means all accounts receivable (including, without limitation, all rights to payment created by or arising from sales of goods, leases of goods or the rendition of services rendered no matter how evidenced whether or not earned by performance).
“ Receivables Entity ” means a Subsidiary of the Issuer which engages in no activities other than in connection with the financing of accounts receivable of the Receivables Sellers and which is designated (as provided below) as the “Receivables Entity” (a) no portion of the Indebtedness or any other obligations (contingent or otherwise)
 
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of which (i) is guaranteed by the Issuer or any other Subsidiary of the Issuer (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the Issuer or any other Subsidiary of the Issuer in any way (other than pursuant to Standard Securitization Undertakings) or (iii) subjects any property or asset of the Issuer or any other Subsidiary of the Issuer, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings, (b) with which neither the Issuer nor any of its Subsidiaries has any contract, agreement, arrangement or understanding (other than pursuant to the Permitted Receivables Facility Documents (including with respect to fees payable in the ordinary course of business in connection with the servicing of accounts receivable and related assets)) on terms less favorable to the Issuer or such Subsidiary than those that might be obtained at the time from persons that are not Affiliates of the Issuer, and (c) to which neither the Issuer nor any other Subsidiary of the Issuer has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results other than pursuant to Standard Securitization Undertakings.
“ Receivables Sellers ” means Subsidiaries (other than Receivables Entities) that are from time to time party to the Permitted Receivables Facility Documents.
“ Refinance ” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for, such Indebtedness, including, in any such case from time to time, after the discharge of the Indebtedness being Refinanced. “ Refinanced ” and “ Refinancing ” shall have correlative meanings.
“ Refinancing Indebtedness ” means Indebtedness that is incurred to Refinance (including pursuant to any defeasance or discharge mechanism) any Indebtedness of the Issuer or any Subsidiary incurred in compliance with this Indenture (including Indebtedness that Refinances Refinancing Indebtedness); provided , however , such Refinancing Indebtedness is incurred in an aggregate principal amount (or if incurred with original issue discount, an aggregate issue price) that is equal to or less than (i) the aggregate principal amount of the Indebtedness being refinanced (or if issued with original issue discount, the aggregate accreted value) then outstanding plus (ii) fees and expenses, including any premium and defeasance costs and accrued interest.
“ Regular Record Date ” for the interest payable on any Interest Payment Date means the applicable date specified as a “Record Date” on the face of the Note.
“ Regulation S ” means Regulation S promulgated under the Securities Act.
“ Regulation S Global Note ” means a Global Note in the form of Exhibit  A hereto, bearing the Global Note Legend, the Private Placement Legend and the Regulation S Global Note Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903.
“ Regulation S Global Note Legend ” means the legend set forth in Section 2.06(g)(iii) hereof.
“ Release Date ” means the date of the Release (as defined in the Escrow Agreement).
“ Release Request ” has the meaning set forth in the Escrow Agreement.
“ Restricted Certificated Note ” means a Certificated Note bearing, or that is required to bear, the Private Placement Legend.
“ Restricted Global Note ” means a Global Note bearing, or that is required to bear, the Private Placement Legend.
“ Restricted Period ” means, in respect of any Note issued pursuant to Regulation S, the 40-day distribution compliance period as defined in Regulation S applicable to such Note.
“ Rule 144 ” means Rule 144 promulgated under the Securities Act.
 
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“ Rule 144A ” means Rule 144A promulgated under the Securities Act.
“ Sale and Leaseback Transaction ” means an arrangement relating to property now owned or hereafter acquired by the Issuer or a Guarantor whereby the Issuer or a Guarantor transfers such property to a Person and the Issuer or such Guarantor leases it from such Person, other than (i) leases between the Issuer and a Subsidiary or between Subsidiaries or (ii) any such transaction entered into with respect to any property, plant or equipment or any improvements thereto at the time of, or within 180 days after, the acquisition or completion of construction of such property, plant or equipment or such improvements (or, if later, the commencement of commercial operation of any such property, plant or equipment), as the case may be, to finance the cost of such property, plant or equipment or such improvements, as the case may be.
“ SEC ” means the United States Securities and Exchange Commission.
“ Securities Act ” means the Securities Act of 1933, as amended.
“ Significant Subsidiary ” means any Subsidiary that would be a “ Significant Subsidiary ” of the Issuer within the meaning of Rule 1-02(w)(1) or (2) under Regulation S-X promulgated by the SEC as in effect on the Issue Date.
“ Special Mandatory Redemption ” means the redemption of the Notes by the Issuer at the Special Mandatory Redemption Price following a Special Mandatory Redemption Event.
“ Special Mandatory Redemption Date ” means the date specified by the Issuer in a notice of Special Mandatory Redemption delivered pursuant to Section 3.09, which date shall be no later than the third Business Day following the date of the applicable Special Mandatory Redemption Event.
“ Special Mandatory Redemption Event ” means (i) the Escrow Agent has not received a Release Request on or prior to the Escrow End Date or (ii) the Issuer notifies the Escrow Agent and the Trustee in writing that Delphi Automotive is no longer pursuing the Spinoff.
“ Special Mandatory Redemption Price ” means a redemption price equal to 100% of the issue price of the Notes, as set forth on the cover of the Offering Memorandum, plus accrued and unpaid interest from the Issue Date, or the most recent date on which interest has been paid or provided for, to, but excluding, the Special Mandatory Redemption Date.
“ Spinoff ” means the transfer by Delphi Automotive of the Powertrain Business to the Issuer and its Subsidiaries, and the subsequent distribution by Delphi Automotive of 100% of the stock of the Issuer to Delphi Automotive’s existing shareholders.
“ Standard  & Poor’s ” means Standard & Poor’s Ratings Services LLC, a division of S&P Global Inc., and any successor to its rating business.
“ Standard Securitization Undertakings ” means representations, warranties, covenants and indemnities entered into by the Issuer or any Subsidiary thereof in connection with the Permitted Receivables Facility which are reasonably customary in an accounts receivable financing transaction, as determined in good faith by the Issuer.
“ Stated Maturity ” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).
“ Subsidiary ” of any Person means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership
 
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interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by:
(1)     such Person,
(2)     such Person and one or more Subsidiaries of such Person or
(3)     one or more Subsidiaries of such Person.
“ Swap Agreement ” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Issuer or the Subsidiaries shall be a Swap Agreement.
“ TIA ” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb).
“ Transactions ” means (a) the issuance and sale of the Notes pursuant to the Offering Memorandum, (b) the entering into of the Credit Agreement and the making of borrowings thereunder, (c) the Spinoff (and the transactions related thereto) and (d) the entry into the Escrow Agreement, and, in each case, the transactions related thereto.
“ Treasury Rate ” means, as of the applicable redemption date, the weekly average rounded to the nearest 1/100th of a percentage point (for the most recently completed week for which such information is available as of the date that is two Business Days prior to the redemption date or, in the case of a satisfaction and discharge or defeasance, at least two Business Days prior to the date on which the Issuer deposits the amounts required under this Indenture) of the yield to maturity of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 with respect to each applicable day during such week (or, if such Statistical Release is no longer published or no market data appears thereon, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to October 1, 2025; provided , however , that if the period from such redemption date to October 1, 2025 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
“ Trigger Period ” means the 60-day period commencing on the earlier of (i) the occurrence of a Change of Control or (ii) the first public announcement of the occurrence of a Change of Control or the Issuer’s intention to effect a Change of Control (which Trigger Period will be extended so long as the ratings of the Notes are under publicly announced consideration for possible downgrade by any two of the three Rating Agencies); provided that the Trigger Period will terminate with respect to each Rating Agency when such Rating Agency takes action (including affirming its existing ratings) with respect to such Change of Control.
“ Trust Officer ” means the Chairman of the Board, the President or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters and who shall have direct responsibility for the administration of this Indenture.
“ Trustee ” means the party named as such in this Indenture until a successor or assignee replaces it and, thereafter, means the successor or assignee.
“ Unrestricted Certificated Note ” means one or more Certificated Notes that do not bear and are not required to bear the Private Placement Legend.
“ Unrestricted Global Note ” means a permanent Global Note, substantially in the form of Exhibit A hereto, that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing Notes that do not bear the Private Placement Legend.
 
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“ U.S.  Dollar Equivalent ” means, with respect to any monetary amount in a currency other than U.S. dollars, at any time for determination thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable foreign currency as published in The Wall Street Journal in the “Exchange Rates” column under the heading “Currency Trading” on the date two Business Days prior to such determination.
Except as otherwise set forth in Section 4.07(c), whenever it is necessary to determine whether the Issuer has complied with any covenant in this Indenture or a Default has occurred and an amount is expressed in a currency other than U.S. dollars, such amount will be treated as the U.S. Dollar Equivalent determined as of the date such amount is initially determined in such currency.
“ U.S. Government Obligations ” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer’s option.
“ Voting Stock ” of a Person means all classes of Capital Stock or other interests (including partnership interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.
 
SECTION 1.02.	Other Definitions .	

Term	  	Defined in Section	
Acceleration Notice	  	6.02	
Additional Amounts	  	4.05(b)	
Applicable Premium Deficit	  	8.06	
Authenticating Agent	  	Preamble	
Authentication Order	  	2.02(d)	
Change in Tax Law	  	3.08(b)	
Change of Control Offer	  	4.11(a)	
Change of Control Payment	  	4.11(a)	
Change of Control Payment Date	  	4.11(a)	
City Code	  	1.05	
Covenant Defeasance	  	8.03	
DTC	  	2.03(b)	
Event of Default	  	6.01	
Future Guarantor	  	10.02	
Global Note Legend	  	2.06(g)(ii)	
Guaranteed Obligations	  	10.01	
Guarantors	  	Preamble	
incur	  	4.07(a)	
Indenture	  	Preamble	
Initial Lien	  	4.10(a)	
Issuer	  	Preamble	
LCT Election	  	1.05	
LCT Test Date	  	1.05	
Legal Defeasance	  	8.02	
Material Indebtedness	  	4.13	
Non-Guarantor Preferred Stock	  	4.07(a)	
Notes	  	Recitals	
Note Register	  	2.03(a)	
Paying Agent	  	2.03(a)	
Permitted Liens	  	4.10(a)	
Private Placement Legend	  	2.06(g)(i)(1)	
Redemption Date	  	2.08(d)	
 
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Term	  	Defined in Section	
Registrar	  	2.03(a)	
Regulation S Global Note Legend	  	2.06(g)(iii)	
Relevant Jurisdiction	  	4.05(b)	
Successor Company	  	5.01(a)(1)	
Successor Guarantor	  	5.01(b)(1)	
Taxes	  	4.05(a)	
Tax Redemption Date	  	3.08(b)	
Trustee	  	Preamble	
 
SECTION 1.03.	[ Reserved ].	
 
SECTION 1.04.	Rules of Construction .	
(a)    Unless the context otherwise requires:
(i)    a term has the meaning assigned to it;
(ii)    an accounting term not otherwise defined herein has the meaning assigned to it in accordance with GAAP;
(iii)    “or” is not exclusive;
(iv)    words in the singular include the plural, and in the plural include the singular;
(v)    all references in this instrument to “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and subdivisions of this instrument as originally executed;
(vi)    the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;
(vii)    “including” means “including without limitation”,
(viii)    provisions apply to successive events and transactions; and
(ix)    references to sections of or rules under the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time thereunder.
(b)    Unless otherwise expressly specified, references in this Indenture to specific Article numbers or Section numbers refer to Articles and Sections contained in this Indenture and not to any other document.
 
SECTION 1.05.	Limited Condition Transactions .	
Notwithstanding anything in this Indenture to the contrary, when calculating any applicable financial ratio or test or determining other compliance with this Indenture or the Notes (including the determination of compliance with any provision of this Indenture or the Notes which requires that no Default or Event of Default has occurred, is continuing or would result therefrom) in connection with any transaction undertaken in connection with the consummation of a Limited Condition Transaction, the date of determination of such ratio or test and determination of whether any Default or Event of Default has occurred, is continuing or would result therefrom or from any other applicable covenant shall, at the option of the Issuer (the Issuer’s election to exercise such option in connection with any Limited Condition Transaction, an “ LCT Election ”), be deemed to be the date the definitive agreements for such Limited Condition Transaction are entered into (the “ LCT Test Date ”) and if, after such financial ratios and tests and other provisions are measured on a pro forma basis after giving effect to such Limited Condition Transaction and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness
 
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and the use of proceeds thereof) as if they occurred at the beginning of the relevant test period being used to calculate such financial ratio ending prior to the LCT Test Date, the Issuer could have taken such action on the relevant LCT Test Date in compliance with such ratios and provisions, such provisions shall be deemed to have been complied with. For the avoidance of doubt, (x) if any of such financial ratios or tests are exceeded as a result of fluctuations in such ratio or test (including due to fluctuations in Consolidated EBITDA of the Issuer) at or prior to the consummation of the relevant Limited Condition Transaction, such financial ratios and tests and other provisions will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether the Limited Condition Transaction is permitted under this Indenture and the Notes and (y) such financial ratios and tests and other provisions shall not be tested at the time of consummation of such Limited Condition Transaction or related transactions. For the avoidance of doubt, if the Issuer has made an LCT Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any financial ratio or test or basket availability with respect to any other transaction on or following the relevant LCT Test Date and prior to the earlier of the date on which such Limited Condition Transaction is consummated or the date that the definitive agreement for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction, for purposes of determining whether such subsequent transaction is permitted under this Indenture or the Notes, any such ratio, test or basket shall be required to comply with any such ratio, test or basket on a pro forma basis assuming such Limited Condition Transaction and any other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) have been consummated. For purposes of the foregoing, solely in connection with an acquisition with respect to which the United Kingdom City Code on Takeovers and Mergers (the “ City Code ”) applies, the date on which a “Rule 2.7 announcement” of a firm intention to make an offer in respect of the applicable target company is made in compliance with the City Code shall be deemed to be the date on which the definitive agreements for such Limited Condition Transaction are entered into.
ARTICLE 2
THE NOTES
 
SECTION 2.01.	Form and Dating .	
(a)     General . The Authenticating Agent shall initially authenticate the Notes for original issue on the Issue Date in an aggregate principal amount of $800,000,000, upon a written order of the Issuer (other than as provided in Section 2.07 hereof). The Notes and the Authenticating Agent’s certificate of authentication shall be substantially in the form of Exhibit  A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rules or usage. Each Note shall be dated the date of its authentication and shall bear interest from the date of original issuance thereof or from the most recent date to which interest has been paid or duly provided for. The Notes shall be issued initially in minimum denominations of $2,000 and any integral multiple of $1,000 in excess of $2,000.
(b)     Global Notes . Notes issued in global form shall be substantially in the form of Exhibit  A hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit  A hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified in the “Schedule of Exchanges of Interests in the Global Note” attached thereto and each shall provide that it shall represent up to the aggregate principal amount of Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as applicable, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Registrar or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.
(c)     Temporary Global Notes . Notes offered and sold in reliance on Regulation S shall be issued initially in the form of the Regulation S Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Custodian and registered in the name of the Depositary, duly executed by the Issuer and authenticated by the Authenticating Agent as hereinafter provided.
 
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The aggregate principal amount of a Regulation S Global Note may from time to time be increased or decreased by adjustments made on the records of the Registrar and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.
 
SECTION 2.02.	Execution and Authentication .	
(a)    One Officer shall sign the Notes for the Issuer by manual or facsimile signature.
(b)    If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid.
(c)    A Note shall not be valid until authenticated by the manual signature of the Trustee or the Authenticating Agent. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.
(d)    The Trustee or the Authenticating Agent shall, upon a written order of the Issuer signed by one Officer (an “ Authentication Order ”), authenticate Notes for original issue.
(e)    The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Notes. Unless otherwise provided in the appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Issuer or any of their respective Subsidiaries. The Trustee hereby appoints U.S. Bank National Association as Authenticating Agent and U.S. Bank National Association hereby accepts such appointment.
 
SECTION 2.03.	Registrar and Paying Agent .	
(a)    The Issuer shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“ Registrar ”) and an office or agency where Notes may be presented for payment (“ Paying Agent ”). The Registrar shall keep a register of the Notes (“ Note Register ”) and of their transfer and exchange. The Issuer may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Issuer may change any Paying Agent or Registrar without notice to any Holder. The Issuer shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Issuer or any of its Subsidiaries may act as Paying Agent or Registrar.
(b)    The Issuer initially appoints The Depository Trust Company (“ DTC ”) to act as Depositary with respect to the Global Notes.
(c)    The Issuer initially appoints U.S. Bank National Association to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Notes, and U.S. Bank National Association hereby initially agrees so to act. The Registrar and Paying Agent have engaged, currently are engaged, and may in the future engage in financial or other transactions with the Issuer and the other Guarantors and their and our affiliates in the ordinary course of their respective businesses.
 
SECTION 2.04.	Paying Agent to Hold Money in Trust .	
The Issuer shall require each Paying Agent other than the Trustee or U.S. Bank National Association (which by its execution of this Indenture hereby agrees) to agree in writing that the Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and shall notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary) shall have no further liability
 
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for the money. If the Issuer or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee shall serve as Paying Agent for the Notes.
 
SECTION 2.05.	Holder Lists .	
The Trustee shall preserve, or shall cause the Registrar to preserve, in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders. If the Paying Agent is not the same entity as the Registrar, the Issuer shall furnish or cause the Registrar to furnish, to the Paying Agent, at least seven Business Days before each Interest Payment Date and at such other times as the Paying Agent may request in writing, a list in such form and as of such date or such shorter time as the Registrar may allow, as the Paying Agent may reasonably require of the names and addresses of the Holders.
 
SECTION 2.06.	Transfer and Exchange .	
(a)     Transfer and Exchange of Global Notes . Except as otherwise set forth in this Section 2.06, a Global Note may be transferred, in whole and not in part, only to another nominee of the Depositary or to a successor thereto or a nominee of such successor thereto. A beneficial interest in a Global Note may not be exchanged for a Certificated Note of the same series unless (A) the Depositary (x) notifies the Issuer that it is unwilling or unable to continue as Depositary for such Global Note or (y) has ceased to be a clearing agency registered under the Exchange Act, and, in either case, a successor Depositary is not appointed by the Issuer within 120 days or (B) upon the request of a Holder if there shall have occurred and be continuing a Default or Event of Default with respect to the Notes. Upon the occurrence of any of the preceding events in (A) above, Certificated Notes delivered in exchange for any Global Note of the same series or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depositary (in accordance with its customary procedures). Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note of the same series or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note, except for Certificated Notes issued subsequent to any of the preceding events in (A) or (B) above and pursuant to Section 2.06(c) hereof. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); provided , however , beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b) or (c) hereof.
(b)     Transfer and Exchange of Beneficial Interests in the Global Notes . The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
(i)     Transfer of Beneficial Interests in the Same Global Note . Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided that prior to the expiration of the applicable Restricted Period, transfers of beneficial interests in the Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person other than pursuant to Rule 144A; provided that such interest is then transferred to the Rule 144A Global Note. Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i).
(ii)     All Other Transfers and Exchanges of Beneficial Interests in Global Notes . In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i) hereof, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant or Indirect Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing
 
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the Depositary to cause to be issued a Certificated Note of the same series in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Certificated Note shall be registered to effect the transfer or exchange referred to in (1) above; provided that in no event shall Certificated Notes be issued upon the transfer or exchange of beneficial interests in a Regulation S Global Note prior to (A) the expiration of the applicable Restricted Period therefor and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B). Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Registrar shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.
(iii)     Transfer of Beneficial Interests to Another Restricted Global Note . A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) hereof and the Registrar receives the following:
(1)    if the transferee will take delivery in the form of a beneficial interest in a 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; or
(2)    if the transferee will take delivery in the form of a beneficial interest in a Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof.
(iv)     Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note . A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) hereof and the Registrar receives the following:
(1)    if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note of the same series, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or
(2)    if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note of the same series, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to this Section 2.06(b)(iv) at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Authenticating Agent shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to this Section 2.06(b)(iv).
 
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Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.
(c)     Transfer or Exchange of Beneficial Interests for Certificated Notes .
(i)     Beneficial Interests in Restricted Global Notes to Restricted Certificated Notes . If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Certificated Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Certificated Note, then, upon the occurrence of any of the events in subsection (A) or (B) of Section 2.06(a) hereof and receipt by the Registrar of the following documentation:
(1)    if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Certificated Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;
(2)    if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;
(3)    if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;
(4)    if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(a) thereof; or
(5)    if such beneficial interest is being transferred to the Issuer or any of its Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(b) thereof.
Upon satisfaction of the conditions of this Section 2.06(c)(i), the Registrar shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuer shall execute and the Authenticating Agent shall authenticate and mail to the Person designated in the instructions a Certificated Note in the applicable principal amount. Any Certificated Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Registrar shall mail such Certificated Notes to the Persons in whose names such Notes are so registered. Any Certificated Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.
(ii)     Beneficial Interests in Regulation S Global Note to Certificated Notes . Notwithstanding Sections 2.06(c)(i)(1) and (3) hereof, a beneficial interest in the Regulation S Global Note may not be exchanged for a Certificated Note or transferred to a Person who takes delivery thereof in the form of a Certificated Note prior to (A) the expiration of the applicable Restricted Period therefor and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B), except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904.
(iii)     Beneficial Interests in Restricted Global Notes to Unrestricted Certificated Notes . A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Certificated Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an
 
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Unrestricted Certificated Note only upon the occurrence of any of the events in subsection (A) of Section 2.06(a) hereof and if the Registrar receives the following:
(1)    if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Certificated Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or
(2)    if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Certificated Note, a certificate from such holder substantially in the form of Exhibit  B hereto, including the certifications in item (4) thereof;
and, in each such case, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
(iv)     Beneficial Interests in Unrestricted Global Notes to Unrestricted Certificated Notes . If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Certificated Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Certificated Note, then, upon the occurrence of any of the events in subsection (A) of Section 2.06(a) hereof and satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Registrar shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuer shall execute and the Authenticating Agent shall authenticate and mail to the Person designated in the instructions a Certificated Note in the applicable principal amount. Any Certificated Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from or through the Depositary and the Participant or Indirect Participant. The Registrar shall mail such Certificated Notes to the Persons in whose names such Notes are so registered. Any Certificated Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall not bear the Private Placement Legend.
(d)     Transfer and Exchange of Certificated Notes for Beneficial Interests .
(i)     Restricted Certificated Notes to Beneficial Interests in Restricted Global Notes . If any Holder of a Restricted Certificated Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Certificated Note to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:
(1)    if the Holder of such Restricted Certificated Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;
(2)    if such Restricted Certificated Note is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;
(3)    if such Restricted Certificated Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;
(4)    if such Restricted Certificated Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(a) thereof; or
 
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(5)    if such Restricted Certificated Note is being transferred to the Issuer or any of its Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(b) thereof.
Upon satisfaction of the conditions of this Section 2.06(d)(i) the Registrar shall cancel the Restricted Certificated Note and increase or cause to be increased the aggregate principal amount of, in the case of clause (1), (4), or (5) above, the applicable Restricted Global Note, in the case of clause (2) above, the applicable 144A Global Note, and in the case of clause (3) above, the applicable Regulation S Global Note.
(ii)     Restricted Certificated Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of a Restricted Certificated Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Certificated Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the Registrar receives the following:
(1)    if the Holder of such Certificated Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or
(2)    if the Holder of such Certificated Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of this Section 2.06(d)(ii), the Registrar shall cancel the Restricted Certificated Note and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.
(iii)     Unrestricted Certificated Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of an Unrestricted Certificated Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Certificated Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Registrar shall cancel the applicable Unrestricted Certificated Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Certificated Note to a beneficial interest is effected pursuant to subparagraph (ii) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Authenticating Agent shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Certificated Notes so transferred.
(e)     Transfer and Exchange of Certificated Notes for Certificated Notes . Upon request by a Holder of Certificated Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Certificated Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Certificated Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e):
(i)     Restricted Certificated Notes to Restricted Certificated Notes . Any Restricted Certificated Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Certificated Note if the Registrar receives the following:
(1)    if the transfer will be made pursuant to a QIB in accordance with Rule 144A, then the transferor must deliver a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;
 
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(2)    if the transfer will be made pursuant to Rule 903 or Rule 904 then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; or
(3)    if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications required by item (3) thereof, if applicable.
(ii)     Restricted Certificated Notes to Unrestricted Certificated Notes . Any Restricted Certificated Note may be exchanged by the Holder thereof for an Unrestricted Certificated Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Certificated Note if the Registrar receives the following:
(1)    if the Holder of such Restricted Certificated Notes proposes to exchange such Notes for an Unrestricted Certificated Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or
(2)    if the Holder of such Restricted Certificated Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Certificated Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case, if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
(iii)     Unrestricted Certificated Notes to Unrestricted Certificated Notes . A Holder of Unrestricted Certificated Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Certificated Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Certificated Notes pursuant to the instructions from the Holder thereof.
(f)     [Reserved] .
(g)     Legends . The following legends shall appear on the face of all Global Notes and Certificated Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture:
(i)     Private Placement Legend .
(1)    Except as permitted by subparagraph (2) below, each Global Note and each Certificated Note (and all Notes issued in exchange therefor or substitution thereof) shall bear a legend in substantially the following form (the “ Private Placement Legend ”):
“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL
 
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OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS IN THE CASE OF RULE 144A NOTES: ONE YEAR (OR SUCH SHORTER PERIOD THEN REQUIRED UNDER RULE 144 OR ITS SUCCESSOR RULE) OR IN THE CASE OF REGULATION S NOTES: 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.”
(2)    Notwithstanding the foregoing, any Global Note or Certificated Note issued pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii) or (e)(iii) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend. In addition, the Issuer may remove the Private Placement Legend from any Note if it determines that such legend is no longer required to comply with the securities laws of the United States.
(ii)     Global Note Legend . Each Global Note shall bear a legend in substantially the following form (with appropriate changes in the last sentence if DTC is not the Depositary) (the “ Global Note Legend ”):
“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE REGISTRAR MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06(h) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE REGISTRAR FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
 
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IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”
(iii)     Regulation S Global Note Legend . The Regulation S Global Note shall bear a legend in substantially the following form (the “ Regulation S Global Note Legend ”):
“THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.”
(h)     Cancellation and/or Adjustment of Global Notes . At such time as all beneficial interests in a particular Global Note have been exchanged for Certificated Notes or a particular Global Note has been redeemed, repurchased or cancelled in whole and not in part, each such Global Note shall be returned to or retained and cancelled by the Registrar in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Certificated Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Registrar or by the Depositary at the direction of the Registrar to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Registrar or by the Depositary at the direction of the Registrar to reflect such increase.
(i)     Obligations with Respect to Transfers and Exchanges of Notes .
(i)    To permit registrations of transfers and exchanges, the Issuer shall execute and the Authenticating Agent shall authenticate Certificated Notes and Global Notes at the Registrar’s request.
(ii)    No service charge shall be made for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith.
(iii)    The Registrar shall not be required to register the transfer of or exchange of (a) any Note selected for redemption in whole or in part pursuant to Article 3, except the unredeemed portion of any Note being redeemed in part, or (b) any Note for a period beginning 15 days before the mailing of a notice of an offer to repurchase or redeem Notes or 15 days before an Interest Payment Date (whether or not an Interest Payment Date or other date determined for the payment of interest), and ending on such mailing date or Interest Payment Date, as the case may be.
(iv)    Prior to the due presentation for registration of transfer of any Note, the Issuer, the Trustee, the Paying Agent or the Registrar may deem and treat the person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuer, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.
 
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(v)    All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.
(j)     No Obligation of the Trustee, Registrar and Paying Agent .
(i)    The Trustee, Registrar and Paying Agent shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depositary or other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depositary or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note in global form shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary. The Trustee, Registrar and Paying Agent may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners.
(ii)    The Trustee, Registrar and Paying Agent shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including without limitation any transfers between or among Depositary participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
 
SECTION 2.07.	Replacement Notes .	
If any mutilated Note is surrendered to the Registrar or the Issuer and the Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Issuer shall issue and the Authenticating Agent, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Registrar’s requirements are met. If required by the Registrar or the Issuer, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Registrar and the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuer may charge for its expenses in replacing a Note.
In case any such mutilated, destroyed, lost or stolen Note had become or is about to become due and payable, the Issuer, in its discretion, may, instead of issuing a new Note, pay such Note, upon satisfaction of the conditions set forth in the preceding paragraph.
Every replacement Note is an additional obligation of the Issuer and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.
The provisions of this Section 2.07 are exclusive and shall preclude (to the extent lawful) all other rights and remedies of any Holder with respect to the replacement or payment of mutilated, destroyed, lost or stolen Note.
 
SECTION 2.08.	Outstanding Notes .	
(a)    The Notes outstanding at any time are all the Notes authenticated by the Authenticating Agent except for those cancelled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Registrar in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. A Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Note; however, Notes held by the Issuer or a Subsidiary of the Issuer shall not be deemed to be outstanding for purposes of Section 2.09 hereof.
 
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(b)    If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Registrar receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.
(c)    If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
(d)    If the Paying Agent (other than the Issuer or a Subsidiary thereof) segregates and holds in trust, in accordance with this Indenture, on a date of redemption (a “ Redemption Date ”) or maturity date, money sufficient to pay all principal, premium, if any, and interest payable on that date with respect to the Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.
 
SECTION 2.09.	Treasury Notes .	
In determining whether the Holders of the required principal amount of Notes have concurred in any direction, amendment, supplement, waiver or consent, Notes owned by the Issuer or a Subsidiary of the Issuer, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, amendment, supplement, waiver or consent, only Notes that the Trustee knows are so owned shall be so disregarded.
 
SECTION 2.10.	Temporary Notes .	
Until certificates representing Notes are ready for delivery, the Issuer may prepare and the Authenticating Agent, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of Certificated Notes but may have variations that the Issuer considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare and the Authenticating Agent shall authenticate Certificated Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this Indenture.
 
SECTION 2.11.	Cancellation .	
The Issuer at any time may deliver Notes to the Registrar for cancellation. The Trustee and Paying Agent shall forward to the Registrar any Notes surrendered to them for registration of transfer, exchange or payment. The Registrar, upon direction by the Issuer and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall dispose of such cancelled Notes in accordance with its customary procedures (subject to the record retention requirements of the Exchange Act). Certification of the destruction of all cancelled Notes shall be delivered to the Issuer from time to time upon written request. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the Registrar for cancellation.
 
SECTION 2.12.	Defaulted Interest .	
If the Issuer defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Issuer may pay the defaulted interest to the Persons who are Holders on a subsequent special record date. The Issuer shall notify the Trustee and Paying Agent in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Issuer shall deposit with the Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Trustee and Paying Agent for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such defaulted interest as provided in this Section 2.12. The Trustee shall fix or cause to be fixed any such special record date and payment date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. The Trustee shall promptly notify the Issuer of any such special record date. At least 15 days before any such special record date, the Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) shall mail or cause to be mailed, first-class postage prepaid, to each Holder, with a copy to the Trustee, a notice at his or her address as it appears in the Note Register that states the special record date, the related payment date and the amount of such interest to be paid.
 
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Subject to the foregoing provisions of this Section 2.12 and for greater certainty, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.
 
SECTION 2.13.	CUSIP or ISIN Numbers .	
The Issuer in issuing the Notes may use “CUSIP” or “ISIN” numbers (if then generally in use), and, if so, the Trustee and Registrar, as applicable, shall use “CUSIP” or “ISIN” numbers in notices of redemption as a convenience to Holders; provided , however , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will promptly notify the Trustee and Registrar of any change in the “CUSIP” or “ISIN” numbers.
 
SECTION 2.14.	Additional Notes .	
The Issuer shall be entitled to issue Additional Notes under this Indenture in an unlimited aggregate principal amount, each of which shall have identical terms as the Initial Notes, respectively, other than with respect to the date of issuance and issue price and first payment of interest (and, if such Additional Notes shall be issued in the form of Restricted Global Notes or Restricted Certificated Notes, other than with respect to transfer restrictions with respect thereto). The Initial Notes and any Additional Notes shall be treated as a single class, in each case for all purposes under this Indenture, including without limitation, waivers, amendments, redemptions and offers to purchase.
With respect to any Additional Notes, the Issuer shall set forth in a resolution of its Board of Directors and an Officer’s Certificate, a copy of each which shall be delivered to the Trustee and the Agent, the following information:
(a)    the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture; and
(b)    the issue price, the issue date and the CUSIP number(s) of such Additional Notes; provided , however , that if such Additional Notes are not fungible with the other Notes of the same series for U.S. federal income tax purposes, such Additional Notes shall not have the same “CUSIP” number or other applicable identification number as the other Notes.
ARTICLE 3
REDEMPTION AND PREPAYMENT
 
SECTION 3.01.	Notices to Trustee .	
If the Issuer elects to redeem any Notes pursuant to the optional redemption provisions of Section 3.07 or 3.08 hereof and paragraph 5 of the Notes, it shall furnish to the Trustee and the applicable Agent an Officer’s Certificate setting forth (i) the Redemption Date, (ii) the principal amount of the Notes to be redeemed, and (iii) the redemption price. The Issuer shall furnish such Officer’s Certificate to the Trustee and the applicable Agent at least 15 days but not more than 60 days before a Redemption Date unless a shorter notice shall be reasonably satisfactory to the Trustee. Any such notice may be cancelled at any time prior to notice of such redemption being mailed to any Holder and shall, therefore, be void and of no effect.
 
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SECTION 3.02.	Selection of Notes to Be Redeemed .	
If less than all of the Notes are to be redeemed or purchased at any time, the Registrar and Paying Agent shall select the Notes to be redeemed or purchased, (i) if the Notes are listed, in compliance with the requirements of the principal national securities exchange on which the applicable Notes are listed, or (ii) if the Notes are not so listed, on a pro rata basis, by lot or by such method as the Registrar and Paying Agent in its sole discretion shall deem to be fair and appropriate. In the event of partial redemption, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 15 nor more than 60 days prior to the Redemption Date by the Registrar and Paying Agent from the outstanding Notes not previously called for redemption.
The Paying Agent and Registrar shall promptly notify the Issuer in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected shall be in amounts of $2,000 or whole multiples of $1,000 in excess thereof; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.
 
SECTION 3.03.	Notice of Redemption .	
At least 15 days but not more than 60 days before a Redemption Date, the Issuer shall mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed (including the CUSIP or ISIN number) and shall state:
(a)    the Redemption Date;
(b)    the redemption price;
(c)    any condition to such redemption;
(d)    if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the Redemption Date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note;
(e)    the name and address of the Paying Agent;
(f)    that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
(g)    that, unless the Issuer defaults in making such redemption payment and subject to satisfaction of any conditions specified therein, interest on Notes called for redemption ceases to accrue on and after the Redemption Date;
(h)    the paragraph of the Notes and Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and
(i)    that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Issuer’s request, the Registrar shall give the notice of redemption in the Issuer’s name and at its expense, provided , however , that the Issuer gives the Registrar at least 3 Business Days prior notice of such request.
 
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SECTION 3.04.	Effect of Notice Upon Redemption .	
Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the Redemption Date at the redemption price stated in the notice except that any redemption and notice thereof may, in the Issuer’s discretion, be subject to the satisfaction of one or more conditions precedent. Subject to the foregoing, upon surrender to the Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus accrued interest to the Redemption Date (subject to the right of Holders of record on the relevant Regular Record Date to receive interest due on the related Interest Payment Date). Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.
 
SECTION 3.05.	Deposit of Redemption Price .	
On or before 11:00 a.m. Eastern Time on any Redemption Date, the Issuer shall deposit with the Paying Agent money sufficient to pay the redemption price of and accrued and unpaid interest on all Notes (or portions of Notes) to be redeemed on that date. Upon written instructions of the Issuer, the Paying Agent shall promptly return to the Issuer any money deposited with the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption price of, and accrued interest on, all Notes to be redeemed.
If the Issuer complies with the provisions of the preceding paragraph, on and after the Redemption Date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption, whether or not such Notes are presented for payment. If a Note is redeemed on or after a Regular Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such Regular Record Date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Issuer to comply with the preceding paragraph, interest shall be paid on the unpaid principal from the Redemption Date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.
 
SECTION 3.06.	Notes Redeemed in Part .	
Upon surrender of a Note that is redeemed in part, the Issuer shall issue and, upon the Issuer’s written request, the Authenticating Agent shall authenticate for the Holder at the expense of the Issuer a new Note equal in principal amount to the unredeemed portion of the Note surrendered.
 
SECTION 3.07.	Optional Redemption .	
(a)    At any time, the Issuer may at its option redeem the Notes, in whole or in part, at a redemption price equal to 100% of the issue price of the Notes (including any Additional Notes) being redeemed plus the Applicable Premium as of, and accrued and unpaid interest to, the Redemption Date (subject to the right of Holders on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date). Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.
(b)    In the event that Holders of not less than 90% of the principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuer, or any third party making a Change of Control Offer in lieu of the Issuer pursuant to Section 4.11, purchase all of the Notes validly tendered and not withdrawn by such Holders, the Issuer will have the right, on not less than 15 nor more than 60 days’ prior notice, given not more than 30 days following the purchase pursuant to the Change of Control Offer, to redeem all of the Notes that remain outstanding following such purchase at the purchase price specified in the Change of Control Offer plus, to the extent not included in the purchase price specified in the Change of Control Offer, accrued and unpaid interest thereon, to, but excluding, the date of redemption (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date falling on or prior to the redemption date).
 
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SECTION 3.08.	Tax Redemption .	
(a)    The Issuer may redeem the Notes as a whole but not in part, at its option at any time prior to maturity, upon the giving of a notice of redemption to the holders, if it determines that, as a result of:
(1)    any change in or amendment to the laws, or any regulations or rulings promulgated under the laws, of a Relevant Jurisdiction affecting taxation, or
(2)    any change in or amendment to an official position regarding the application or interpretation of the laws, regulations or rulings referred to above,
(b)    which change or amendment is announced and becomes effective after the Issue Date (or, if the Relevant Jurisdiction becomes a Relevant Jurisdiction on a date after the Issue Date, after such later date) (each of the foregoing, a “ Change in Tax Law ”), the Issuer or any Guarantor is or will become obligated to pay Additional Amounts with respect to the Notes or the Note Guarantees on the next succeeding interest payment date, pursuant to Section 4.05 (but in the case of a Guarantor, only if the payments giving rise to such obligation cannot be made by the Issuer or another Guarantor without the obligation to pay Additional Amounts) and the payment of such Additional Amounts cannot be avoided by the use of reasonable measures available to the Issuer or the Guarantor. The redemption price will be equal to 100% of the principal amount of the Notes plus accrued and unpaid interest to but excluding the date fixed for redemption (a “ Tax Redemption Date ”), and all Additional Amounts (if any) then due or which will become due on the Tax Redemption Date as a result of the redemption or otherwise (subject to the right of Holders of the Notes on any record date occurring prior to the Tax Redemption Date to receive interest due on the relevant interest payment date and Additional Amounts (if any) in respect thereof). The date and the applicable redemption price will be specified in the notice of tax redemption. Notice of such redemption will be irrevocable, and must be mailed by first-class mail to each Holder’s registered address, or delivered electronically if held by any depositary in accordance with such depositary’s customary procedures, not less than 15 nor more than 60 days prior to the earliest date on which the Issuer would be obligated to pay such Additional Amounts if a payment in respect of the Notes were actually due on such date. No such notice of redemption will be given unless, at the time such notification of redemption is given, such obligation to pay such Additional Amounts remains in effect.
(c)    Prior to giving the notice of tax redemption, the Issuer will deliver to the Trustee:
(1)    a certificate signed by a duly authorized officer stating that the Issuer is entitled to effect the redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer to so redeem have occurred; and
(2)    an opinion of independent tax counsel of recognized standing qualified under the laws of the Relevant Jurisdiction, selected by us, to the effect that the Issuer is or would be obligated to pay Additional Amounts as a result of a Change in Tax Law.
(d)    The foregoing provisions shall apply mutatis mutandis to any successor to the Issuer.
 
SECTION 3.09.	Special Mandatory Redemption .	
(a)    If a Special Mandatory Redemption Event occurs, then the Issuer will redeem the aggregate principal amount of the Notes outstanding on the Special Mandatory Redemption Date at the Special Mandatory Redemption Price (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).
(b)    The Issuer will cause a notice of Special Mandatory Redemption to be mailed to the Trustee and mailed, or delivered electronically if held by any depositary, to the Holders at their registered addresses no later than the Business Day following the Special Mandatory Redemption Event, which shall provide for the redemption of the Notes on the Special Mandatory Redemption Date following the date of the applicable Special Mandatory Redemption Event. Upon the deposit of funds sufficient to pay the Special Mandatory Redemption Price of all Notes to be redeemed on the Special Mandatory Redemption Date
 
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with the applicable paying agent on or before such Special Mandatory Redemption Date, the Notes will cease to bear interest and all rights under the Notes shall terminate (except the obligations of the Issuer and/or the Guarantors described under Section 4.05). After payment of the Special Mandatory Redemption Price to the Holders, any excess Escrow Funds will be returned to the Issuer.
(c)    Any redemption pursuant to this Section 3.09 shall follow procedures set forth in Article 3 to the extent not inconsistent herewith.
 
SECTION 3.10.	Mandatory Redemption .	
Except as set forth in Sections 3.09 and 4.11 hereof, the Issuer shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes.
ARTICLE 4
COVENANTS
 
SECTION 4.01.	Payment of Notes .	
The Issuer shall pay or cause to be paid the principal of, premium, if any, interest on, the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Issuer or a Subsidiary thereof, holds as of 11:00 a.m. Eastern Time on the due date money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due and the Paying Agent is not prohibited from paying such money to the Holders on that date. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.
 
SECTION 4.02.	Maintenance of Office or Agency .	
(a)    The Issuer shall maintain an office or agency (which may be an office or drop facility of the Trustee or an affiliate of the Trustee or Registrar) where Notes may be presented or surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Issuer hereby appoints U.S. Bank National Association as its agent to receive all such presentations, surrenders, notices and demands.
(b)    The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations. The Issuer shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
(c)    The Issuer hereby designates the address of U.S. Bank National Association set forth in Section 11.02 as one such office, drop facility or agency of the Issuer in accordance with Section 4.02(a).
 
SECTION 4.03.	Reports .	
From and after the consummation of the Spinoff, whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, the Issuer will provide the Trustee and Holders and prospective Holders within the time periods specified in the SEC’s rules and regulations for non-accelerated filers, copies of:
(1)    annual reports on Form 10-K, or any successor or comparable form, of the Issuer containing the information required to be contained therein, or required in such successor or comparable form;
(2)    quarterly reports on Form 10-Q of the Issuer, containing the information required to be contained therein, or any successor or comparable form; and
 
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(3)    from time to time after the occurrence of an event required to be therein reported, such other reports on Form 8-K, or any successor or comparable form, of the Issuer.
Notwithstanding whether the Issuer is subject to the periodic reporting requirements of the Exchange Act, the Issuer will nevertheless continue filing the reports specified above unless the SEC will not accept such a filing. The Issuer will not take any action for the purpose of causing the SEC not to accept any such filings. Notwithstanding the foregoing, to the extent the Issuer files the information and reports referred to in the preceding paragraph with the SEC and such information is publicly available on the Internet, the Issuer shall be deemed to be in compliance with its obligations to furnish such information to the Holders of the Notes. If, notwithstanding the foregoing, the SEC will not accept the Issuer’s filings for any reason, the Issuer will post the reports referred to in the preceding paragraph on its website within the time periods that would apply if the Issuer were required to file those reports with the SEC.
In addition, the Issuer shall furnish to the Holders of the Notes and to prospective investors, upon the request of such Holders, any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the Notes are not freely transferable under the Securities Act by Persons who are not “affiliates” under the Securities Act.
In the event that any direct or indirect parent company of the Issuer (of which the Issuer is a wholly-owned Subsidiary) is or becomes a Guarantor of the Notes, the Issuer may satisfy its obligations under this Section 4.03 by furnishing information (or filing it with the SEC) relating to such direct or indirect parent company.
Any such reports delivered or filed by the Issuer with the Trustee shall be considered for informational purposes only and the Trustee’s receipt of such reports shall not constitute notice or actual knowledge of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate).
 
SECTION 4.04.	Compliance Certificate .	
(a)    The Issuer shall deliver to the Trustee, within 120 days after the end of each fiscal year, an Officer’s Certificate stating that a review of the activities of the Issuer and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officer with a view to determining whether the Issuer has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to the Officer signing such certificate, that to the best of his or her knowledge the Issuer has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Issuer is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Issuer is taking or proposes to take with respect thereto. For the purposes of this paragraph, such compliance shall be determined without regard to any grace period or requirement of notice provided under this Indenture.
(b)    The Issuer shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith and in any event within 30 days upon any Officer becoming aware of any Default or Event of Default or an event which, with notice or the lapse of time or both, would constitute an Event of Default, an Officer’s Certificate specifying such Default or Event of Default and what action the Issuer is taking or proposes to take with respect thereto.
 
SECTION 4.05.	Payment of Additional Amounts .	
(a)    Payments made by the Issuer, a Guarantor or a paying agent, as applicable, on the Notes or in respect of a Note Guarantee will be made free and clear of, and without withholding or deduction for or on account of, any present or future income, stamp or other tax, duty, levy, impost, assessment or other governmental charge of any nature whatsoever (“ Taxes ”), unless the Issuer, a Guarantor or a paying agent is required to withhold or deduct Taxes by law.
 
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(b)    If any withholding or deduction for or on account of Taxes imposed or levied by or on behalf of the United Kingdom, Jersey, any other jurisdiction in which the Issuer or any Guarantor is incorporated, organized, engaged in business or otherwise resident for tax purposes, or any other jurisdiction from or through which such payment is made, or in each case any political subdivision or taxing authority or agency thereof or therein (each, a “ Relevant Jurisdiction ”) is at any time required by law to be made from any payment made with respect to the Notes or the Note Guarantee, the Issuer or the applicable Guarantor, as applicable, will pay such additional amounts (“ Additional Amounts ”) on the Notes or in respect of the applicable Note Guarantee as may be necessary so that the net amount received by each holder of the Notes (including Additional Amounts) after such withholding or deduction will not be less than the amount the holder would have received if such Taxes had not been withheld or deducted; provided that no Additional Amounts will be payable with respect to Taxes:
(1)    that would not have been imposed but for the Holder or the beneficial owner of such Note (or a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder or beneficial owner, if such Holder or beneficial owner is an estate, trust, partnership or corporation) being considered as having a present or former connection with a Relevant Jurisdiction (other than a connection arising solely as a result of the acquisition, ownership or disposition of the Notes, the receipt of any payment under or with respect to the Notes or any Note Guarantee, or the exercise or enforcement of any rights under or with respect to the Notes, this Indenture or any Note Guarantee), including, without limitation, such Holder or beneficial owner (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident thereof or treated as a resident thereof or domiciled therein or a national thereof or being or having been engaged in a trade or business therein or having or having had a permanent establishment therein;
(2)    that would not have been imposed but for the failure of the Holder or any other person to comply with certification, identification or information reporting requirements concerning the nationality, residence, identity or connection with the Relevant Jurisdiction of the Holder or beneficial owner, if compliance is required by statute, by regulation of the Relevant Jurisdiction by an applicable income tax treaty to which the Relevant Jurisdiction is a party as a precondition to exemption from such Tax;
(3)    payable other than by withholding from payments of principal of or interest on the Notes or from payments in respect of a Note Guarantee;
(4)    that would not have been imposed but for a change in law, regulation or administrative or judicial interpretation that becomes effective more than 15 days after the payment becomes due or is duly provided for, whichever occurs later;
(5)    that are estate, inheritance, gift, sales, excise, transfer, wealth, capital gains or personal property or similar Taxes;
(6)    required to be withheld by any paying agent from any payment of principal of or interest on any Note, if such payment can be made without such withholding by at least one other paying agent;
(7)    that would not have been imposed but for the presentation by the holder of any Note, where presentation is required, for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof was duly provided for, whichever occurred later (except to the extent that the holder would have been entitled to Additional Amounts had the Note been presented on the last day of such 30-day period);
(8)    that are imposed under Sections 1471 through 1474 of the Code as of the Issue Date (or any amended or successor provision that is substantively comparable), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code as of the Issue Date (or any amended or successor provision that is substantively comparable) or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such sections of the Code; or
 
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(9)    in the case of any combination of clauses (1), (2), (3), (4), (5), (6), (7) and (8) above;
nor shall Additional Amounts be paid with respect to any payment of the principal of or interest, if any, on any Note or any payment in respect of a Note Guarantee to any such holder who is a fiduciary or a partnership or a beneficial owner that is not the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been entitled to such Additional Amounts had it been the holder of the Note.
(c)    The Issuer, a Guarantor or the paying agent, as applicable, will (i) make any required withholding or deduction, and (ii) remit the full amount deducted or withheld by it to the Relevant Jurisdiction in accordance with applicable law.
(d)    All references in this Indenture, other than under Sections 8.02, 8.03 and 8.06 of this Indenture, to the payment of the principal or interest, if any, on or the net proceeds received on the sale or exchange of, any Notes or any payment made under the Note Guarantee shall be deemed to include Additional Amounts to the extent that, in that context, Additional Amounts are, were or would be payable.
(e)    In addition, the Issuer shall pay any present or future stamp, issue, registration, court, documentary, excise, property, or similar Taxes (i) imposed by any Relevant Jurisdiction in respect of the execution, issuance, delivery, or registration of the Notes, any Note Guarantee, this Indenture, or any other document or instrument referred to therein, or the receipt of any payments with respect to the Notes, or (ii) imposed by any jurisdiction in respect of the enforcement of the Notes, any Note Guarantee, this Indenture, or any other document or instrument referred to therein.
(f)    The Issuer’s and a Guarantor’s obligations to pay Additional Amounts if and when due will survive the termination of this Indenture and the payment of all other amounts in respect of the Notes and shall apply mutatis mutandis to any successor of the Issuer or any Guarantor, and to any jurisdiction in which such successor is incorporated, organized, engaged in business or otherwise resident for tax purposes, and any political subdivision or governmental authority thereof or therein.
 
SECTION 4.06.	Activities Prior to Release Date .	
Prior to the Release Date, each of the Issuer’s and the Issuer’s Subsidiaries’ primary activities will be restricted to (a) issuing the Notes and the Guarantees, as applicable, (b) issuing Capital Stock to, and receiving capital contributions (and assuming certain liabilities) from, Delphi Automotive and its Subsidiaries, (c) performing its obligations, as applicable, under the Notes, the Guarantees, this Indentures, the Escrow Agreement and the Credit Agreement, (d) consummating the Spinoff or redeeming the Notes pursuant to Section 3.09, as applicable, (e) performing its obligations, if any, under the Credit Agreement, (f) conducting such other activities as are necessary or appropriate to maintain its existence and carry out the activities described above and (g) such other activities as are necessary or appropriate to facilitate the Spinoff (including conducting the operations, business and activities of the Powertrain Business).
 
SECTION 4.07.	Incurrence of Non-Guarantor Indebtedness and Issuance of Non-Guarantor Preferred Stock .	
(a)    From and after the consummation of the Spinoff, the Issuer shall not permit any of its Subsidiaries that are not Guarantors to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively “ incur ”) any Non-Guarantor Indebtedness (including Acquired Debt) and shall not permit any of its Subsidiaries that are not Guarantors to issue any shares of Preferred Stock (“ Non-Guarantor Preferred Stock ”); provided , however , that any Subsidiary that is not a Guarantor may incur Non-Guarantor Indebtedness (including Acquired Debt) and issue Non-Guarantor Preferred Stock if after giving pro forma effect thereto (including the application of proceeds therefrom), the Consolidated Non-Guarantor Debt Ratio would be no greater than 1.50 to 1.00.
 
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(b)    The foregoing paragraph (a) shall not apply to the following items:
(1)    any Indebtedness or Non-Guarantor Preferred Stock of any Subsidiaries in existence on the Release Date;
(2)    Indebtedness owing to the Issuer or any Subsidiary and Non-Guarantor Preferred Stock issued to the Issuer or any Subsidiary;
(3)    Guarantees of Indebtedness of any other Subsidiary that is not a Guarantor;
(4)    Indebtedness in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance in the ordinary course of business;
(5)    Indebtedness under Swap Agreements entered into in the ordinary course of business and not for speculative purposes;
(6)    Indebtedness in respect of bid, performance, surety, stay, customs, appeal or replevin bonds or performance and completion guarantees and similar obligations issued or incurred in the ordinary course of business;
(7)    Indebtedness in respect of judgments, decrees, attachments or awards;
(8)    Indebtedness consisting of bona fide purchase price adjustments, earn-outs, indemnification obligations, obligations under deferred compensation or similar arrangements and similar items incurred in connection with acquisitions and asset sales;
(9)    Cash Management Obligations and other Indebtedness in respect of card obligations, netting services, overdraft protections, cash management services and similar arrangements, in each case, in the ordinary course of business;
(10)    Indebtedness consisting of (x) the financing of insurance premiums with the providers of such insurance or their affiliates or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(11)    Indebtedness supported by a letter of credit, in a principal amount not to exceed the face amount of such letter of credit;
(12)    all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (1) through (11) above;
(13)    Indebtedness under Permitted Receivables Facilities; provided that the aggregate principal amount of such Indebtedness, when taken together with (but not in duplication of) any Liens on Receivables and Permitted Receivables Facility Assets securing Indebtedness arising under Permitted Receivables Facilities incurred or permitted to exist pursuant to Section 4.10(a)(6), shall not exceed the greater of (x) $420,000,000 and (y) 60% of Consolidated EBITDA for the Issuer for the then most recent four full fiscal quarters for which financial statements of the Issuer are available (measured at the time of incurrence of any such Indebtedness);
(14)    Indebtedness incurred in the ordinary course of business to finance working capital and other cash management needs of such Subsidiaries;
(15)    other Indebtedness in an aggregate principal amount outstanding at any time not to exceed the greater of (x) $215,000,000 and (y) 9% of Consolidated Total Assets for the Issuer as of the most recently ended fiscal quarter for which financial statements of the Issuer are available (measured at the time of incurrence of any such Indebtedness);
 
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(16)    (A) Indebtedness assumed in connection with an acquisition, including Indebtedness of a Person that is acquired by, or merged with or into, the Issuer or a Subsidiary (but not incurred in contemplation thereof); provided that the aggregate principal amount of outstanding Indebtedness permitted by this clause (16)(A) shall not exceed the greater of (x) $250,000,000 and (y) 35% of Consolidated EBITDA for the Issuer for the then most recent four full fiscal quarters for which financial statements of the Issuer are available (measured at the time of incurrence of any such Indebtedness) at any time outstanding and (B) Indebtedness incurred to finance the acquisition, construction, repair, replacement or improvement of any fixed or capital assets and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof; provided that (i) the aggregate principal amount of outstanding Indebtedness permitted by this clause (16)(B) shall not exceed the greater of (x) $300,000,000 and (y) 42% of Consolidated EBITDA for the Issuer for the then most recent four full fiscal quarters for which financial statements of the Issuer are available (measured at the time of incurrence of any such Indebtedness) at any time outstanding, (ii) such Indebtedness (other than any Refinancing Indebtedness in respect thereof) is incurred prior to or within two hundred seventy (270) days after such acquisition or the completion of such construction, repair or replacement or improvement and (iii) such Indebtedness does not exceed the cost of acquiring, constructing or improving such fixed or capital assets; and
(17)    any Refinancing Indebtedness in respect of Indebtedness incurred under clause (a) above or clauses (1), (13), (14), (15) and (16) of this clause (b) or this clause (17); provided that in the case of any Refinancing of Indebtedness initially incurred pursuant to clause (13), (15) or (16)(A) or (B), the principal amount of such “Refinancing Indebtedness” (exclusive of principal in respect of amounts referred to in clause (ii) of the definition of Refinancing Indebtedness) shall be deemed to be incurred under such clause for purposes of calculating future incurrences under such baskets. For the avoidance of doubt, if any Indebtedness was initially incurred in reliance of a basket based on a percentage of Consolidated EBITDA, any Refinancing shall be permitted even if Consolidated EBITDA is lower at the time of such refinancing.
(c)    For purposes of determining compliance with any U.S. dollar restriction on (i) the incurrence of Indebtedness or (ii) the incurrence or existence of any Lien pursuant to Section 4.10, in each case, where the Indebtedness incurred is denominated in a different currency, the amount of such Indebtedness will be the U.S. Dollar Equivalent determined on the date of the incurrence of such Indebtedness; provided , however , that if any such Indebtedness denominated in a different currency is subject to a Currency Agreement with respect to U.S. dollars covering all principal, premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be as provided in such Currency Agreement. The principal amount of any refinancing Indebtedness incurred in the same currency as the Indebtedness being refinanced will be the U.S. Dollar Equivalent of the Indebtedness being refinanced, except to the extent that (1) such U.S. Dollar Equivalent was determined based on a Currency Agreement, in which case the refinancing Indebtedness will be determined in accordance with the preceding sentence, and (2) the principal amount of the refinancing Indebtedness exceeds the principal amount of the Indebtedness being refinanced, in which case the U.S. Dollar Equivalent of such excess will be determined on the date such refinancing Indebtedness is incurred. The maximum amount of Indebtedness that the Subsidiaries may incur pursuant to this Section 4.07 or Liens that may be incurred or exist pursuant to Section 4.10 shall not be deemed to be exceeded, with respect to any outstanding Indebtedness or Liens thereon, solely as a result of fluctuations in the exchange rate of currencies.
 
SECTION 4.08.	Limitation on Sale and Leaseback Transactions .	
(a)    From and after the consummation of the Spinoff, the Issuer will not, and will not permit any Guarantor to, enter into any Sale and Leaseback Transaction with respect to any property unless:
(1)    the Sale and Leaseback Transaction is solely with the Issuer or a Subsidiary of the Issuer;
(2)    the lease is for a period not in excess of 24 months, including renewals;
 
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(3)    the Issuer or such Subsidiary would (at the time of entering into such arrangement) be entitled as described in clauses (1) through (18) of Section 4.10(a) without equally and ratably securing the Notes then outstanding under this Indenture, to create, incur, issue, assume or guarantee Indebtedness secured by a Lien on such property in the amount of the Attributable Debt arising from such Sale and Leaseback Transaction; or
(4)    the Issuer or such Subsidiary within 360 days after the sale of such property in connection with such Sale and Leaseback Transaction is completed, applies an amount equal to the net proceeds of the sale of such property to (i) the permanent retirement of Notes, other Indebtedness of the Issuer ranking on a parity with the Notes in right of payment or Indebtedness of the Issuer or a Subsidiary of the Issuer or (ii) the purchase of property.
 
SECTION 4.09.	[Reserved] .	
 
SECTION 4.10.	Liens .	
(a)    From and after the consummation of the Spinoff, the Issuer will not, and will not permit any Guarantor to, directly or indirectly, Incur or permit to exist any Lien (the “ Initial Lien ”) of any nature whatsoever on any of its property or assets (including Capital Stock of a Subsidiary), whether owned at the Issue Date or thereafter acquired, which Initial Lien secures any Indebtedness, without effectively providing that the Notes shall be secured equally and ratably with (or prior to) the obligations so secured for so long as such obligations are so secured, other than the following (“ Permitted Liens ”):
(1)    Liens securing Indebtedness under the Credit Agreement and other Credit Facilities in an aggregate principal amount not to exceed $2,170 million;
(2)    any Lien on any property of the Issuer or any Subsidiary (other than with respect to any obligations under the Credit Agreement) existing on the Release Date and any modifications, replacements, renewals or extensions thereof; provided that (i) such Lien shall not apply to any other property of the Issuer or any Subsidiary other than (A) improvements and after-acquired property that is affixed or incorporated into the property covered by such Lien, and (B) proceeds and products thereof, and (ii) such Lien shall secure only those obligations which it secures on the Release Date and any Refinancing Indebtedness in respect thereof so long as such Liens are not extended to any other property of the Issuer or any of its Subsidiaries (other than pursuant to blanket lien or after acquired property clauses existing in the applicable agreements (including any obligation to have new guarantors provide Liens on the same assets owned by it);
(3)    any Lien existing on any property prior to the acquisition thereof by the Issuer or any Subsidiary or existing on any property of any Person that becomes a Subsidiary after the Release Date prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property of the Issuer or any other Subsidiary (other than the proceeds or products thereof and other than improvements and after-acquired property that is affixed or incorporated into the property covered by such Lien) and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and any Refinancing Indebtedness in respect thereof so long as such Liens are not extended to any other property of the Issuer or any of its Subsidiaries (other than pursuant to blanket lien or after acquired property clauses existing in the applicable agreements (including any obligation to have new guarantors provide liens on the same assets owned by it);
(4)    Liens on fixed or capital assets acquired, constructed, repaired, replaced or improved by the Issuer or any Subsidiary; provided that (i) such security interests secure Indebtedness not to exceed the greater of (x) $300,000,000 and (y) 42% of Consolidated EBITDA for the Issuer for the then most recent four full fiscal quarters for which financial statements of the Issuer are available (measured at the time of incurrence of any such Indebtedness) at any time outstanding, (ii) such security interests and the Indebtedness
 
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secured thereby (other than any Refinancing Indebtedness in respect thereof so long as such Liens are not extended to any other property of the Issuer or any of its Subsidiaries (other than pursuant to blanket lien or after acquired property clauses existing in the applicable agreements (including any obligation to have new guarantors provide liens on the same assets owned by it)) are incurred prior to or within two hundred seventy (270) days after such acquisition or the completion of such construction, repair or replacement or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other property of the Issuer or any Subsidiary except for accessions to such property, property financed by such Indebtedness and the proceeds and products thereof; provided further that individual financings of equipment provided by one lender may be cross-collateralized to other financings of equipment provided by such lender;
(5)    rights of setoff and similar arrangements and Liens in respect of Cash Management Obligations and in favor of depository and securities intermediaries to secure obligations owed in respect of card obligations or any overdraft and related liabilities arising from treasury, depository and cash management services or any automated clearing house transfers of funds and fees and similar amounts related to bank accounts or securities accounts (including Liens securing letters of credit, bank guarantees or similar instruments supporting any of the foregoing);
(6)    Liens on Receivables, Permitted Receivables Facility Assets and Permitted Receivables Related Assets securing Indebtedness arising under Permitted Receivables Facilities; provided that the aggregate principal amount of such Indebtedness secured by such Liens, when taken together with (but not in duplication of) any Indebtedness under Permitted Receivables Facilities pursuant to Section 4.07(b)(13), shall not exceed the greater of (x) $420,000,000 and (y) 60% of Consolidated EBITDA for the Issuer for the then most recent four full fiscal quarters for which financial statements of the Issuer are available (measured at the time of incurrence of any such Indebtedness);
(7)    Liens (i) on “earnest money” or similar deposits or other cash advances in connection with acquisitions or (ii) consisting of an agreement to sell or otherwise dispose of any property in a transaction not otherwise prohibited under this Indenture;
(8)    Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection and (ii) attaching to commodity trading accounts or other commodities brokerage accounts incurred in the ordinary course of business, including Liens encumbering reasonable customary initial deposits and margin deposits;
(9)    Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by the Issuer or any Subsidiary in the ordinary course of business permitted by this Indenture and Liens in favor of customs and revenue authorities;
(10)    Liens deemed to exist in connection with investments in repurchase agreements;
(11)    ground leases in respect of real property on which facilities owned or leased by the Issuer or any of its Subsidiaries are located and other Liens affecting the interest of any landlord (and any underlying landlord) of any real property leased by the Issuer or any Subsidiary;
(12)    any restriction or encumbrance with respect to the pledge or transfer of the Equity Interests of a Person that is not a Subsidiary;
(13)    Liens not otherwise constituting Permitted Liens, provided that a Lien shall be permitted to be incurred pursuant to this clause (13) only if at the time such Lien is incurred the aggregate principal amount of the obligations secured at such time (including such Lien) by Liens outstanding pursuant to this clause (13) would not exceed the greater of (x) $600,000,000 and (y) 90% of Consolidated EBITDA for the Issuer for the then most recent four full fiscal quarters for which financial statements of the Issuer are available (measured at the time of incurrence of any such Liens);
 
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(14)    Liens securing Indebtedness or other obligations of the Issuer or a Subsidiary owing to the Issuer or a Subsidiary of the Issuer;
(15)    Liens securing Indebtedness or other obligations of the Issuer or a Subsidiary in an aggregate principal amount such that, on a pro forma basis (including a pro forma application of the net proceeds therefrom but excluding the cash proceeds thereof), the Consolidated Secured Leverage Ratio would be less than or equal to 1.50 to 1.00 as of the last day of the most recent fiscal quarter of Issuer;
(16)    Liens securing Indebtedness (i) under Swap Agreements entered into in the ordinary course of business and not for speculative purposes and (ii) in respect of card obligations, netting services, overdraft protections, cash management services and similar arrangements, in each case, in the ordinary course of business;
(17)    Liens on the assets or Equity Interests of a Subsidiary that is not a Guarantor to secure Indebtedness of such Subsidiary that is otherwise permitted by this Indenture; and
(18)    Liens to secure any Refinancing (or successive Refinancings) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (1), (2), (3), (4), (6), (13) and (15); provided , that (a) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements, accessions, proceeds, dividends or distributions in respect thereof) and (b) in the case of any Refinancing of Indebtedness secured by Liens referred to in the foregoing clause (1), (4), (6) or (13), the principal amount of such Refinancing Indebtedness (exclusive of principal in respect of amounts referred to in clause (ii) of the definition thereof) shall be deemed to be incurred under such clause for purposes of calculating future incurrences under such baskets. For the avoidance of doubt, if any Indebtedness was initially incurred in reliance of a basket based on a percentage of Consolidated EBITDA, any Refinancing shall be permitted even if Consolidated EBITDA is lower at the time of such refinancing.
(b)    Any Lien created for the benefit of the Holders of the Notes pursuant to Section 4.10(a) above shall provide by its terms that such Lien shall be automatically and unconditionally released and discharged upon the release and discharge of the Initial Lien.
(c)    For purposes of determining compliance with this Section 4.10, (A) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens described in Section 4.10(a) but may be permitted in part under any combination thereof and (B) in the event that a Lien securing an item of Indebtedness (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens described in Section 4.10(a), the Issuer shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this Section 4.10 and will only be required to include the amount and type of such Lien or such item of Indebtedness secured by such Lien in one of the clauses of Section 4.10(a) and such Lien securing such item of Indebtedness will be treated as being Incurred or existing pursuant to only one of such clauses; provided , that all Liens on Indebtedness outstanding under the Credit Agreement on the Release Date (after giving effect to the Transactions) will be treated as incurred on the Release Date under clause (1) of Section 4.10(a) and the Issuer shall not be permitted to reclassify all or any portion of the Liens on such Indebtedness outstanding on the Release Date.
 
SECTION 4.11.	Offer to Repurchase Upon Change of Control Triggering Event .	
(a)    Upon the occurrence of a Change of Control Triggering Event, each Holder shall have the right to require the Issuer to purchase all or any part of such Holder’s Notes (provided that no notes of $2,000 or less can be redeemed in part) pursuant to the Change of Control described below at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date). Within 30 days following any Change of Control Triggering Event, Issuer shall (unless prior to such date such Change of Control Triggering Event ceases to exist) deliver by mail or electronic means, pursuant to the procedures as required by this Indenture, a notice to each Holder with a copy to the Trustee (the “ Change of Control Offer ”), stating: (i) that a Change of Control Triggering Event has occurred and that such Holder has the right to require the Issuer to purchase
 
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all or a portion of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase (the “ Change of Control Payment ”) (subject to the right of Holders of record on the relevant Regular Record Date to receive interest on the relevant Interest Payment Date), (ii) the circumstances and relevant facts and financial information regarding such Change of Control Triggering Event, (iii) the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is delivered) (the “ Change of Control Payment Date ”) and (iv) the instructions determined by the Issuer, consistent with this Section 4.11, that a Holder must follow in order to have its Notes purchased. Holders electing to have a Note purchased pursuant to a Change of Control Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Change of Control Payment Date.
(b)    On the Change of Control Payment Date, the Issuer shall, to the extent lawful, (1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered and (3) deliver or cause to be delivered to the applicable Trustee or Registrar the Notes so accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Issuer. The Paying Agent shall promptly mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Authenticating Agent shall promptly authenticate and mail or deliver (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. The Issuer shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.
(c)    The Issuer will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the purchase of Notes pursuant to this Section 4.11. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.11, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.11 by virtue thereof.
(d)    Notwithstanding anything to the contrary in this Section 4.11, the Issuer shall not be required to make a Change of Control Offer upon a Change of Control Triggering Event if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.11 and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. In addition, the Issuer will not be required to make a Change of Control Offer upon a Change of Control Triggering Event if the Notes have been or are called for redemption by the Issuer prior to it being required to deliver notice of the Change of Control Offer, and thereafter redeems all Notes called for redemption in accordance with the terms set forth in such redemption notice. Notwithstanding anything to the contrary contained herein, a revocable Change of Control Offer may be made in advance of a Change of Control Triggering Event, conditioned upon the consummation of the relevant Change of Control, if a definitive agreement is in place for such Change of Control at the time the Change of Control Offer is made.
(e)    The provisions under this Section 4.11 related to the Issuer’s obligations to make a Change of Control Offer may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes.
 
SECTION 4.12.	Corporate Existence	
Except as otherwise permitted by Article 5 hereof, the Issuer will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.
 
SECTION 4.13.	Additional Guarantors .	
From and after the consummation of the Spinoff, the Issuer will cause each Subsidiary of the Issuer that is (i) an obligor or guarantor of Indebtedness under the Credit Agreement or (ii) that is an obligor or guarantor of any Indebtedness of the Issuer or a Guarantor (other than Indebtedness owing to the Issuer or a Guarantor), in each case, with an aggregate principal amount of at least $200 million (“ Material Indebtedness ”) to execute and deliver to the Trustee a supplemental indenture in the form of Exhibit D hereto, pursuant to which such Subsidiary will provide a Note Guarantee.
 
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ARTICLE 5
SUCCESSORS
 
SECTION 5.01.	Merger, Consolidation, or Sale of Assets .	
(a)    The Issuer will not, directly or indirectly, consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets in one or a series of related transactions to, any Person, unless:
(1)    the resulting, surviving or transferee Person (the “ Successor Company ”) will be a corporation, limited liability company, limited liability partnership, limited company, or other similar organization organized and existing under the laws of (x) the United States of America or any State thereof or the District of Columbia or (y) the United Kingdom, Jersey and any other jurisdiction in the Channel Islands, any member state of the European Union as in effect on the Issue Date, Switzerland, Bermuda, The Cayman Islands or Singapore; provided that, the Successor Company (if not the Issuer) will expressly assume, by a supplemental indenture, executed and delivered to the Trustee, all the obligations of the Issuer under this Indenture and the Notes (and, if the Successor Company is not a corporation, the Issuer shall cause a corporate co-issuer to become a co-obligor on the Notes);
(2)    immediately after giving effect to such transaction, no Default shall have occurred and be continuing; and
(3)    the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, upon which the Trustee may conclusively rely, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture and that all conditions precedent relating to such consolidation, merger or transfer have been fulfilled. Further, the Opinion of Counsel shall state that such supplemental indenture, if any, has been duly authorized, executed and delivered and is a legal, valid and binding agreement enforceable against the Issuer.
(b)    The Issuer will not permit any other Guarantor to, directly or indirectly, consolidate with or merge with or into, or convey, transfer or lease all or substantially all of its assets in one or a series of related transactions to, any Person, unless:
(1)    (A) the resulting, surviving or transferee Person (the “ Successor Guarantor ”) will be a corporation, limited liability partnership, limited liability company, limited company, or other similar organization (and in the case of any such transaction involving the Issuer, such Successor Guarantor shall be organized under the laws of the jurisdiction of organization of the United States of America (or any state thereof or the District of Columbia), the United Kingdom, Jersey and any other jurisdiction in the Channel Islands, any member state of the European Union as in effect on the Issue Date, Switzerland, Bermuda, The Cayman Islands or Singapore), and such Person (if not such Guarantor) will expressly assume, by a supplemental indenture, executed and delivered to the Trustee, or other documents or instruments in form reasonably satisfactory to the Trustee, all the obligations of such Guarantor under its Note Guarantee;
(B)     immediately after giving effect to such transaction, no Default shall have occurred and be continuing; and
(C)    the Issuer will have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, upon which the Trustee may conclusively rely, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture and that all conditions precedent relating to such consolidation, merger or transfer have been fulfilled. Further, the Opinion of Counsel shall state that such supplemental indenture, if any, has been duly authorized, executed and delivered and is a legal, valid and binding agreement enforceable against the Issuer; or
 
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(2)    such Guarantor will be released from its Note Guarantee in connection therewith as provided in this Indenture.
(c)    Notwithstanding Section 5.01(a) or Section 5.01(b):
(1)    any Subsidiary of the Issuer may consolidate with, merge into or transfer all or part of its properties and assets to the Issuer or any Guarantor; and
(2)    the Issuer and any Guarantor may merge with an Affiliate organized solely for the purpose of reorganizing the Issuer or such Guarantor in another jurisdiction.
 
SECTION 5.02.	Successor Corporation Substituted .	
Upon any consolidation, merger or any transfer of all or substantially all of the assets of the Issuer in accordance with Section 5.01 hereof, in which the Issuer is not the continuing Person, the successor Person formed by such consolidation or into which the Issuer is merged or to which such conveyance, lease or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of the Issuer under this Indenture and the Notes with the same effect as if such surviving entity had been named as such and that, in the event of a conveyance or transfer (but not a lease), the conveyor or transferor (but not a lessor) shall be released from the provisions of this Indenture and the obligation to pay the principal of and interest on the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
 
SECTION 6.01.	Events of Default .	
Each of the following is an “ Event of Default ” with respect to the Notes:
(a)    a default in any payment of interest on the Notes when due and payable continues for a period of 30 days;
(b)    a default in the payment of principal of any Note when due and payable at its Stated Maturity, upon optional redemption or required repurchase, upon declaration of acceleration or otherwise;
(c)    the failure by the Issuer or any Guarantor to comply with its obligations under Section 5.01 above;
(d)    the failure by the Issuer or any Subsidiary to comply with any of its obligations under Section 4.03, 4.07, 4.08, 4.10, 4.11 or 4.13 for 60 days (or 120 days in the case of Section 4.03) after the Issuer receives written notice specifying the default (and demanding that such default be remedied) from the Trustee or the Holders of at least 25% of the outstanding principal amount of the Notes;
(e)    the failure by the Issuer or any Subsidiary to comply with its other agreements contained in this Indenture for 90 days after the Issuer receives written notice specifying the default (and demanding that such default be remedied) from the Trustee or the Holders of at least 25% of the outstanding principal amount of the Notes;
(f)    the failure by the Issuer or any Subsidiary to pay the principal amount of any Indebtedness (other than Indebtedness owing to the Issuer or a Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the Holders thereof because of a default if the total amount of such Indebtedness unpaid or accelerated exceeds $120 million or its foreign currency equivalent;
(g)    [reserved];
(h)    any Note Guarantee by any Significant Subsidiary (or group of Subsidiaries that together would constitute a Significant Subsidiary) ceases to be in full force and effect in all material respects (except as contemplated by the terms thereof) or any Guarantor denies or disaffirms such Guarantor’s obligations under this Indenture or any Note Guarantee and such Default continues for 10 days after receipt of the notice as specified in this Indenture;
 
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(i)    the Issuer or any of its Subsidiaries that is a Significant Subsidiary, within the meaning of Bankruptcy Law:
(i)    commences a voluntary case,
(ii)    consents to the entry of an order for relief against it in an involuntary case,
(iii)    consents to the appointment of a custodian of it or for all or substantially all of its property, or
(iv)    makes a general assignment for the benefit of its creditors; or
(j)    a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i)    is for relief against the Issuer or any of its Subsidiaries that is a Significant Subsidiary in an involuntary case;
(ii)    appoints a custodian of the Issuer or any of its Subsidiaries that is a Significant Subsidiary, or for all or substantially all of the property of the Issuer or any of its Subsidiaries that is a Significant Subsidiary; or
(iii)    orders the liquidation of the Issuer or any of its Subsidiaries that is a Significant Subsidiaries,
and the order or decree remains unstayed and in effect for 60 consecutive days.
The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.
However, a default under clause (d), (e), (f) or (h) above will not constitute an Event of Default with respect to the Notes until the Trustee notifies the Issuer or the Holders of at least 25% in principal amount of the outstanding Notes notify the Issuer and the Trustee of the default and the Issuer or the Guarantor, as applicable, does not cure such default within the time specified in clause (d), (e), (f) or (h) hereof after receipt of such notice.
 
SECTION 6.02.	Acceleration .	
If an Event of Default (other than an Event of Default specified in clause (i) or (j) of Section 6.01 hereof with respect to the Issuer) occurs and is continuing, the Trustee (at the direction of the Holders) or the Holders of at least 25% in principal amount of the then outstanding Notes may declare the principal of and accrued but unpaid interest on all the Notes to be due and payable immediately by notice in writing to the Issuer and the Trustee (if given by the Holders) specifying the respective Event of Default and that it is a “notice of acceleration” (the “ Acceleration Notice ”), and the same shall become immediately due and payable. If an Event of Default specified in clause (i) or (j) of Section 6.01 hereof with respect to the Issuer occurs and is continuing, then all unpaid principal of, and premium, if any, and accrued and unpaid interest on all the outstanding Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.
In the event of a declaration of acceleration of the Notes solely because an Event of Default described in Section 6.01(f) above has occurred and is continuing, the declaration of acceleration of the Notes shall be automatically rescinded and annulled if the event of default or payment default triggering such Event of Default pursuant to Section 6.01(f) shall be remedied or cured by the Issuer or a Subsidiary of the Issuer or waived (and the related declaration of acceleration rescinded or annulled) by the holders of the relevant Indebtedness within 20 Business Days
 
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after the declaration of acceleration with respect to the Notes and if the rescission and annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction obtained by the Trustee for the payment of amounts due on the Notes.
At any time after a declaration of acceleration with respect to the Notes as described in the second preceding paragraph, the Holders of a majority in principal amount of the Notes may rescind and cancel such declaration with respect to the Notes and its consequences (i) if the rescission would not conflict with any judgment or decree, (ii) if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration, (iii) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid, (iv) if the Issuer has paid the Trustee and the Agents their compensation and reimbursed the Trustee for its reasonable expenses, disbursements and advances; and (v) in the event of the cure or waiver of an Event of Default of the type described in clause (i) or (j) of Section 6.01 hereof, the Trustee shall have received an Officer’s Certificate and an Opinion of Counsel that such Event of Default has been cured or waived. No such rescission shall affect any subsequent Default or impair any right consequent thereto.
 
SECTION 6.03.	Other Remedies .	
If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.
 
SECTION 6.04.	Waiver of Past Defaults .	
Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium and interest on the Notes (including in connection with an offer to purchase) ( provided , however , that the Holders of a majority in aggregate principal amount at maturity of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
 
SECTION 6.05.	Control by Majority .	
Holders of a majority in principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee with respect to the Notes. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holders of Notes or that would involve the Trustee in personal liability.
 
SECTION 6.06.	Limitation on Suits .	
A Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if:
(a)    the Holder of a Note gives to the Trustee written notice of a continuing Event of Default;
(b)    the Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;
 
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(c)    such Holder of a Note or Holders of Notes offer to the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense;
(d)    the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and
(e)    within such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.
 
SECTION 6.07.	Rights of Holders of Notes to Receive Payment .	
Notwithstanding any other provision of this Indenture, the contractual right of any Holder of a Note to receive payment of principal, premium, if any, and interest on the Note, on or after the respective due dates expressed in the Note, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
 
SECTION 6.08.	Collection Suit by Trustee .	
If an Event of Default specified in Section 6.01(a) or (b) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount of principal of, premium on, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
 
SECTION 6.09.	Trustee May File Proofs of Claim .	
The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
 
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SECTION 6.10.	Priorities .	
If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order:
First: to the Trustee, the Agents, their respective agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, respectively; and
Third: to the Issuer or to such party as a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10.
 
SECTION 6.11.	Undertaking for Costs .	
In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.06 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
 
SECTION 7.01.	Duties of Trustee .	
(a)    If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.
(b)    Except during the continuance of an Event of Default:
(i)    the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(ii)    in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of certificates or opinions specifically required by any provision hereof to be furnished to it, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
(c)    The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(i)    this paragraph does not limit the effect of paragraph (b) of this Section 7.01;
(ii)    the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and
(iii)    the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.
 
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(d)    Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e)    No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.
(f)    The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g)    The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default or Event of Default is received by the Trustee as set forth in Section 6.01 and such notice references this Indenture.
(h)    In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(i)    The Trustee shall have no duty to inquire as to the performance of, or otherwise monitor compliance with, the Issuer’s covenants herein.
(j)    Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.
 
SECTION 7.02.	Rights of the Trustee .	
(a)    The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in any such document.
(b)    Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel, or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel of its own selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
(c)    The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.
(d)    The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture, provided that the Trustee’s conduct does not constitute willful misconduct or negligence.
(e)    Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer shall be sufficient if signed by an Officer of the Issuer.
(f)    The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.
 
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(g)    The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its reasonable discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall reasonably determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer during normal business hours and upon reasonable notice, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.
(h)    The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Trustee shall not be responsible for any willful misconduct or gross negligence on the part of any agent or attorney appointed with due care by it under this Indenture.
(i)    The Trustee shall not be required to give any bond or surety in respect of the performance of its power and duties hereunder.
(j)    Notwithstanding anything in this Indenture to the contrary, the rights, privileges, protections, immunities and benefits given to the Trustee under this Article 7, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, U.S. Bank National Association in each of its capacities hereunder as an Agent, and to each agent, Custodian and other Person employed to act hereunder.
(k)    The permissive right of the Trustee to take or refrain from taking any actions enumerated in this Indenture shall not be construed as a duty.
(l)    The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunctions of utilities, computer (hardware or software) or communication services; accidents; labor disputes; acts of civil or military authority and governmental action.
(m)    Anything in this Indenture notwithstanding, in no event shall the Trustee be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to loss of profit), even if the Issuer has been advised as to the likelihood of such loss or damage and regardless of the form of action.
 
SECTION 7.03.	Individual Rights of Trustee .	
The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as Trustee or resign. Any Agent may do the same with like rights and duties. The Trustee shall also be subject to Sections 7.10 hereof.
 
SECTION 7.04.	Trustee ’ s Disclaimer .	
The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuer’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.
 
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SECTION 7.05.	Notice of Defaults .	
(a)    The Trustee shall not be deemed to have notice of any Default with respect to Notes unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by a Responsible Officer of the Trustee at the Corporate Trust Office of the Trustee from the Issuer or the Holders of 25% in aggregate principal amount of the outstanding Notes, and such notice references the specific Default or Event of Default, the Notes and this Indenture.
(b)    If a Default occurs and is continuing and is actually known to the Trustee, the Trustee shall deliver to Holders of the Notes, notice of the Default within the earlier of 90 days after the occurrence of a Default or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee, unless such Default shall have been cured or waived. Except in the case of a Default in the payment of principal of, premium, if any, or interest on any Note (including payments pursuant to the redemption provisions of the Notes), the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes.
 
SECTION 7.06.	[Reserved] .	
 
SECTION 7.07.	Compensation and Indemnity .	
The Issuer and the Guarantors shall pay to U.S. Bank National Association, in each of its capacities as Agent, and through U.S. Bank National Association to Trustee from time to time reasonable compensation for its and Trustee’s services hereunder (it being understood all amounts set forth in the fee letter dated September 26, 2017, between the Issuer and U.S. Bank National Association shall be deemed reasonable). The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer and the Guarantors shall reimburse the Trustee and the Agents promptly upon request for all reasonable disbursements, advances and expenses incurred or made by such party in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s and Agents’ respective agents and counsel.
The Issuer and the Guarantors shall, jointly and severally, indemnify the Trustee against any and all losses, liabilities or expenses (including reasonable attorneys’ fees and expenses) incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Issuer and the Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted by the Issuer and the Guarantors or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith. The Trustee shall notify the Issuer and the Guarantors promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Issuer shall pay the reasonable fees and expenses of such counsel. The Issuer and the Guarantors need not pay for any settlement made without their consent, which consent shall not be unreasonably withheld.
The obligations of the Issuer and the Guarantors under this Section 7.07 shall survive the resignation or removal of the Trustee or the Agents, as applicable, the satisfaction and discharge and the termination of this Indenture.
To secure the Issuer’s and the Guarantors’ payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the resignation or removal of the Trustee, the satisfaction and discharge and the termination of this Indenture.
In addition, and without prejudice to the rights provided to the Trustee under any of the provisions of this Indenture, when the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(f) or (g) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.
 
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“ Trustee ” for purposes of this Section shall include any predecessor Trustee and the Trustee in each of its capacities hereunder and each agent, custodian and other person employed to act hereunder; provided , however , that the negligence, willful misconduct or bad faith of any Trustee hereunder shall not affect the rights of any other Trustee hereunder.
 
SECTION 7.08.	Replacement of Trustee .	
A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Holders of Notes of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuer in writing. The Issuer may remove the Trustee if:
(a)    the Trustee fails to comply with Section 7.10 hereof;
(b)    the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c)    a custodian or public officer takes charge of the Trustee or its property; or
(d)    the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.
If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuer, or the Holders of Notes of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been a Holder of a Note for at least six months, fails to comply with Section 7.10, such Holder of a Note may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of the Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.
 
SECTION 7.09.	Successor Trustee by Merger, Etc .	
If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or banking association, the successor corporation or banking association without any further act shall, if such successor corporation or banking association is otherwise eligible hereunder, be the successor Trustee.
 
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Subject to Section 7.10, any business entity into which the Trustee may be merged or converted or with which it may be consolidated, or any entity resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any entity succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto.
 
SECTION 7.10.	Eligibility; Disqualification .	
There shall at all times be a Trustee hereunder that is a Person organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100.0 million as set forth in its most recent published annual report of condition.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
 
SECTION 8.01.	Option to Effect Legal Defeasance or Covenant Defeasance .	
The Issuer may, at the option of its Board of Directors evidenced by a resolution set forth in an Officer’s Certificate, at any time, elect to have either Section 8.02 or 8.03 hereof applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.
 
SECTION 8.02.	Legal Defeasance and Discharge .	
Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Issuer and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes on the date the conditions set forth below are satisfied (hereinafter, “ Legal Defeasance ”). For this purpose, Legal Defeasance means that the Issuer shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (a) and (b) below, and to have satisfied all its other obligations under such Notes and this Indenture (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments in respect of the principal amount of, premium, if any, and interest on such Notes when such payments are due, (b) the Issuer’s obligations with respect to such Notes under Article 2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee and Agents hereunder and the Issuer’s obligations in connection therewith and (d) the provisions of this Article 8 with respect to Legal Defeasance. Subject to compliance with this Article 8, the Issuer may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.
 
SECTION 8.03.	Covenant Defeasance .	
Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Issuer and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants contained in Sections 4.03 through 4.13 hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “ Covenant Defeasance ”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of
 
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Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(d), (e), (f) and, other than with respect to the Issuer, (i) and (j) hereof shall not constitute Events of Default.
 
SECTION 8.04.	Conditions to Legal or Covenant Defeasance .	
The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a)    the Issuer must deposit with the Paying Agent, in trust, for the benefit of the Holders, cash in United States dollars, U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient, without consideration of any reinvestment of such principal and interest, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay the principal amount at maturity of, premium, if any, and interest on the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be;
(b)    in the case of an election under Section 8.02 hereof, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United States of America reasonably acceptable to the Trustee confirming that (A) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this Indenture, there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the beneficial holders of the outstanding Notes will not recognize income, gain or loss for Federal income tax purposes as a result of such Legal Defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(c)    in the case of an election under Section 8.03 hereof, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United States of America reasonably acceptable to the Trustee confirming that the beneficial owners of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(d)    no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness all or a portion of the proceeds of which will be used to defease the Notes pursuant to this Article 8 concurrently with such incurrence and the grant of a Lien to secure such Indebtedness);
(e)    such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under this Indenture (other than a Default or an Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing) or any other material agreement or instrument to which the Issuer or any of its Subsidiaries is a party or by which the Issuer or any of its Subsidiaries is bound;
(f)    the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with; and
(g)    the Issuer shall have paid or duly provided for payment of all amounts then due to the Trustee pursuant to Section 7.07 hereof.
Notwithstanding the foregoing, the Opinion of Counsel required by clause (b) above with respect to a Legal Defeasance need not be delivered if all Notes not therefor delivered to the Registrar for cancellation (A) have become due and payable, or (B) will become due and payable on the maturity date or upon redemption within one year under arrangements satisfactory to the Trustee for giving of notice of redemption by the Trustee or Registrar in the name, and at the expense, of the Issuer.
 
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SECTION 8.05.	Deposited Money and U.S. Government Securities to Be Held in Trust; Other Miscellaneous Provisions .	
All cash and non-callable U.S. Government Obligations (including the proceeds thereof) deposited with the Paying Agent (or other qualifying trustee, collectively for purposes of this Section 8.05, the “ Trustee ”) pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as Paying Agent) as the Trustee may determine, to the Holders of the Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such cash and securities need not be segregated from other funds except to the extent required by law.
The Issuer shall pay and indemnify the Trustee and Paying Agent, as applicable, against any tax, fee or other charge imposed on or assessed against the cash or non-callable U.S. Government Obligations deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Paying Agent shall deliver or pay to the Issuer from time to time upon the request of the Issuer any money or non-callable U.S. Government Obligations held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
 
SECTION 8.06.	Satisfaction and Discharge .	
This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights or registration of transfer or exchange of the Notes, as expressly provided for in this Indenture) as to all outstanding Notes when (i) either (a) all the Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust) have been delivered to the Trustee or Registrar and Paying Agent for cancellation or (b) all Notes not theretofore delivered to the Trustee or Registrar and Paying Agent for cancellation have become due and payable or will become due and payable within one year, whether at maturity or on a redemption date, pursuant to an irrevocable optional redemption notice, and the Issuer has deposited or caused to be deposited with the Trustee or Registrar and Paying Agent funds or U.S. Government Obligations in an amount sufficient to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee or Registrar and Paying Agent for cancellation, for principal of, premium, if any, and interest on the Notes to the date of deposit together with irrevocable instructions from the Issuer directing the Trustee or Registrar and Paying Agent to apply such funds to the payment thereof at maturity or redemption, as the case may be; (ii) the Issuer has paid all other sums due and payable under this Indenture by the Issuer; and (iii) the Issuer has delivered to the Trustee or Registrar and Paying Agent an Officer’s Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with; provided that in a discharge in connection with any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of this Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the notice of redemption, with any deficit on the date of redemption (the “ Applicable Premium Deficit ”) only required to be deposited with the Trustee on or prior to the date of the redemption. Any Applicable Premium Deficit shall be set forth in an Officer’s Certificate delivered to the Trustee simultaneously with the deposit of such Applicable Premium Deficit that confirms that such Applicable Premium Deficit shall be applied toward such redemption. The Trustee’s rights shall survive termination of this Indenture.
 
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In addition, the Issuer shall deliver to the Trustee an Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions) each stating that all conditions precedent to satisfaction and discharge have been satisfied.
 
SECTION 8.07.	Repayment to Issuer .	
Any cash or non-callable U.S. Government Obligations deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium, if any, or interest on, any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Issuer on its request or (if then held by the Issuer) shall be discharged from such trust; and the Holder shall thereafter, as an unsecured creditor, look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such cash and securities, and all liability of the Issuer as trustee thereof, shall thereupon cease; provided , however , that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuer cause to be published once, in The New York Times and The Wall Street Journal (national edition), notice that such cash and securities remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such cash and securities then remaining will be repaid to the Issuer.
 
SECTION 8.08.	Reinstatement .	
If the Trustee or Paying Agent is unable to apply any cash or non-callable U.S. Government Obligations in accordance with Section 8.02 or 8.03, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuer’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 until such time as the Trustee or Paying Agent is permitted to apply all such cash and securities in accordance with Section 8.02 or 8.03, as the case may be; provided , however , that, if the Issuer makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders to receive such payment from the cash and securities held by the Trustee or Paying Agent.
 
SECTION 8.09.	Survival .	
The Trustee’s rights under this Article 8 shall survive termination of this Indenture or the resignation of the Trustee.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
 
SECTION 9.01.	Without Consent of Holder .	
Notwithstanding Section 9.02 of this Indenture, the Issuer, the Guarantors and the Trustee may amend or supplement this Indenture, the Escrow Agreement, the Note Guarantees or the Notes without the consent of any Holder of a Note to:
(a)    cure any ambiguity, omission, defect or inconsistency;
(b)    provide for the assumption by a successor entity of the obligations of the Issuer or any Guarantor under this Indenture;
(c)    provide for uncertificated Notes in addition to or in place of certificated Notes ( provided , however , that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code);
(d)    add additional Note Guarantees or to confirm and evidence the release, termination or discharge of any Guarantee when such release, termination or discharge is permitted under this Indenture;
 
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(e)    add to the covenants of the Issuer for the benefit of the Holders of Notes or to surrender any right or power conferred upon the Issuer;
(f)    make any amendment to the provisions of this Indenture relating to the form, authentication, transfer and legending of Notes; provided , however , that
(A) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any other applicable securities law; and
(B) such amendment does not materially affect the rights of Holders to transfer Notes;
(g)    comply with any requirement of the SEC in connection with the qualification of this Indenture under the TIA;
(h)    to establish the form or forms or terms of notes of any series as permitted under the provisions of the Indenture relating to the issuance of notes in series;
(i)    convey, transfer, assign, mortgage or pledge as security for the Notes any property or assets in accordance with Section 4.10;
(j)    conform any provision of this Indenture, the Notes or the Escrow Agreement to the “Description of Notes” section of the Offering Memorandum; or
(k)    make any other change that does not adversely affect the rights of any Holder in any material respect.
Upon the request of the Issuer, and upon receipt by the Trustee of the documents described in Section 9.05 hereof, the Trustee and the Agents shall join with the Issuer and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but neither the Trustee nor the Agents shall be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.
It shall not be necessary for the consent of the Holders of Notes under this Section 9.01 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. A consent to any amendment or waiver under either this Indenture, the Notes, as applicable, any Notes Guarantee or the Escrow Agreement, by any Holder given in connection with a tender or exchange of such Holder’s Notes will not be rendered invalid by such tender or exchange.
After an amendment, supplement or waiver under this Section 9.01 becomes effective, the Issuer shall deliver (by means of electronic transmission in accordance with the applicable procedures of DTC) to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.
 
SECTION 9.02.	With Consent of Holders of Notes .	
Except as provided below in this Section 9.02, this Indenture, the Escrow Agreement, the Notes Guarantees and the Notes may be amended or supplemented with the written consent of the Holders of at least a majority in principal amount of the Notes then outstanding voting as a single class, and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Escrow Agreement, the Note Guarantees or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes voting as a single class.
 
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Upon the request of the Issuer accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.05 hereof, the Trustee shall join with the Issuer in the execution of such amended or supplemental indenture unless such amended or supplemental Indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. A consent to any amendment or waiver under either this Indenture, the Notes, as applicable, any Notes Guarantee or the Escrow Agreement, by any Holder given in connection with a tender or exchange of such Holder’s Notes will not be rendered invalid by such tender or exchange.
After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer shall deliver (by means of electronic transmission in accordance with the applicable procedures of DTC) to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding voting as a single class may waive compliance in a particular instance by the Issuer with any provision of this Indenture or the Notes with respect. However, without the consent of each Holder affected, an amendment or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):
(a)    reduce the amount of Notes whose Holders must consent to an amendment, supplement or waiver;
(b)    reduce the rate of or extend the time for payment of interest on any Note;
(c)    reduce the principal of or extend the Stated Maturity of any Note;
(d)    reduce the premium payable upon the redemption of any Note or change the scheduled date at which any Note may be redeemed as set forth in Sections 3.07 and 3.08;
(e)    make any Notes payable in money other than that stated in the Notes;
(f)    impair the contractual right of any Holder of Notes to receive payment of principal of and interest on such Note on or after the due dates therefore or to institute suit for the enforcement of such payment on or with respect to such Holder’s Notes;
(g)    make any change in the amendment provisions which require each Holder’s consent or in the waiver provisions; or
(h)    except as expressly permitted by this Indenture, modify the Note Guarantee of any Significant Subsidiary in any manner materially adverse to the Holders.
Notwithstanding anything herein or otherwise, the provisions under this Indenture relative to the Issuer’s obligation to make a Change of Control Offer pursuant to Section 4.11 may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes.
 
SECTION 9.03.	[Reserved] .	
 
SECTION 9.04.	Revocation and Effect of Consents .	
Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion thereof that evidences the same
 
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debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder or subsequent Holder may revoke the consent as to its Note or portion thereof if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver shall become effective in accordance with its terms and thereafter shall bind every Holder.
 
SECTION 9.05.	Trustee and Agents to Sign Amendments .	
The Trustee and Agents shall sign any amended or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee and Agents, as applicable. In executing any amended or supplemental indenture, the Trustee and Agents shall be provided with and (subject to Section 7.01 hereof) shall be fully protected in relying upon an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and that such amended or supplemental indenture is the legal, valid and binding obligations of the Issuer enforceable against it in accordance with its terms, subject to customary exceptions and that such amended or supplemental indenture complies with the provisions hereof.
ARTICLE 10
NOTE GUARANTEES
 
SECTION 10.01.	Note Guarantees .	
Each Guarantor, by executing a supplementary indenture in the form of Exhibit D hereto, as a primary obligor and not merely as a surety, hereby fully, unconditionally and irrevocably guarantees on a senior unsecured basis, jointly and severally, to each Holder and to the Trustee, the Agents and their respective successors and assigns (a) the full and punctual payment of principal of and interest on the Notes when due, whether at Stated Maturity, by acceleration or otherwise, and all other monetary obligations of the Issuer under this Indenture and the Notes and (b) the full and punctual performance within applicable grace periods of all other obligations of the Issuer under this Indenture and the Notes (all such obligations set forth in clauses (a) and (b) above being hereinafter collectively called the “ Guaranteed Obligations ”). Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from such Guarantor and that such Guarantor will remain bound under this Article 10 notwithstanding any extension or renewal of any Guaranteed Obligation.
Each Guarantor waives presentation to, demand of, payment from and protest to the Issuer of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Guarantor waives notice of any default under the Notes or the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be affected by (a) the failure of any Holder, the Trustee or Agents to assert any claim or demand or to enforce any right or remedy against the Issuer, any other Guarantor or any other Person under this Indenture, the Notes or any other agreement or otherwise; (b) any extension or renewal of any obligation of the Issuer under this Indenture or any Note, by operation of law or otherwise; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes or any other agreement; or (d) except as set forth in Section 10.05, any change in the ownership of such Guarantor.
Each Guarantor further agrees that its Note Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder, the Trustee or Agents to any security held for payment of the Guaranteed Obligations.
Each Guarantor further agrees that its Note Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder, the Trustee or Agents upon the bankruptcy or reorganization of the Issuer or otherwise.
Each Guarantor further agrees that, as between it, on the one hand, and the Holders, the Trustee and the Agents, on the other hand, (x) the maturity of the Guaranteed Obligations may be accelerated as provided in Article 6 for the purposes of such Guarantor’s Note Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations, and (y) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article 6, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of this Section.
 
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Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or the Agents in enforcing any rights under this Section.
 
SECTION 10.02.	Limitation on Liability .	
Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor (a) not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent applicable to any Note Guarantee, and (b) not result in a distribution to shareholders not permitted under the applicable foreign or state law. Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the obligations guaranteed hereunder by any Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering the Note Guarantee, as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. If following the date of this Indenture and notwithstanding anything in Section 9.02 to the contrary, any Subsidiary incorporated, organized or formed, as the case may be, under the laws of any jurisdiction outside the United States of America (a “ Future Guarantor ”) shall be required to execute a Note Guarantee and the Issuer shall reasonably determine that the preceding limitations shall not adequately address the limitations on such Note Guarantee imposed by applicable law of the jurisdiction of incorporation, organization or formation, as the case may be, of any such Future Guarantor then upon the delivery of an Officer’s Certificate and Opinion of Counsel, the Issuers shall be entitled to amend such clauses or add such additional provisions (including any related modifications to a supplement to this Indenture or a Note Guarantee), as the case may be, in order for the Note Guarantee of a Guarantor to adequately address the limitations imposed by applicable law.
 
SECTION 10.03.	Successors and Assigns .	
This Article 10 shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee, the Agents and the Holders and, in the event of any transfer or assignment of rights by any Holder, the Trustee or the Agents, the rights and privileges conferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.
 
SECTION 10.04.	No Waiver .	
Neither a failure nor a delay on the part of either the Trustee, the Agents or the Holders in exercising any right, power or privilege under this Article 10 shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee, the Agents and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article 10 at law, in equity, by statute or otherwise.
 
SECTION 10.05.	Release of Guarantor .	
The Note Guarantee of a Guarantor will be released with respect to the Notes under this Article 10 without any further action required on the part of the Trustee, the Agents or any Holder:
(a)    upon (i) the sale or other disposition (including by way of consolidation, merger, dissolution or otherwise) of the Capital Stock of such Guarantor such that it is no longer a Subsidiary of the Issuer or (ii) the sale or other disposition of all or substantially all of the assets of such Guarantor;
(b)    when such Guarantor no longer guarantees or is otherwise obligated under (or concurrently with such release, will no longer guarantee or otherwise be obligated under) the Credit Agreement or any other Material Indebtedness of the Issuer or any Guarantor; or
 
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(c)    if the Issuer exercises its Legal Defeasance option or its Covenant Defeasance option in accordance with Article 8 hereof or if the Issuer’s obligations with respect to the Notes are discharged in accordance with the terms of Section 8.06.
 
SECTION 10.06.	Contribution .	
Each Guarantor that makes a payment under its Note Guarantee shall be entitled upon payment in full of all Guaranteed Obligations to contribution from each Guarantor, as applicable, in an amount equal to such Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.
ARTICLE 11
MISCELLANEOUS
 
SECTION 11.01.	[Reserved] .	
 
SECTION 11.02.	Notices .	
Any notice or communication by the Issuer, the Trustee or an Agent to the other parties is duly given if in writing and delivered in person or mailed by first class mail (registered or certified, return receipt requested), facsimile or electronic transmission or overnight air courier guaranteeing next-day delivery, to the other’s address:
If to the Issuer:
Delphi Jersey Holdings plc
c/o Delphi Automotive Systems, LLC
5725 Delphi Drive
Troy, Michigan 48098
Facsimile: 248-813-2648
Attention: Vice President and Chief Financial Officer
With a copy to:
Delphi Jersey Holdings plc
c/o Delphi Automotive Systems, LLC
5725 Delphi Drive
Troy, Michigan 48098
Facsimile: 248-813-2491
Attention: Vice President, General Counsel and Secretary
With a copy to:
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
Facsimile: (212) 701-5111
Attention: Michael Kaplan
If to the Trustee:
U.S. Bank National Association
535 Griswold Street, Suite 550
Detroit, MI 48226
Attn: James Kowalski
Tel: (313) 234-4716
Fax: (313) 963-9428
 
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With a copy to (which shall not constitute notice):
Stinson Leonard Street LLP
50 South Sixth Street, Suite 2600
Minneapolis, MN 55402
Attn: Adam D. Maier
Tel: (612) 335-1412
Fax: (612) 335-1657
If to the Registrar, Paying Agent or Authenticating Agent:
U.S. Bank National Association
535 Griswold Street, Suite 550
Detroit, MI 48226
Attn: James Kowalski
Tel: (313) 234-4716
Fax: (313) 963-9428
With a copy to (which shall not constitute notice):
Stinson Leonard Street LLP
50 South Sixth Street, Suite 2600
Minneapolis, MN 55402
Attn: Adam D. Maier
Tel: (612) 335-1412
Fax: (612) 335-1657
The Issuer, the Trustee or the Agents, by notice to the other, may designate additional or different addresses for subsequent notices or communications.
The Trustee and the Agents, as applicable, agree to accept and act upon facsimile transmission of written instructions pursuant to this Indenture; provided , however , that (a) the party providing such written instructions, subsequent to such transmission of written instructions, shall provide the originally executed instructions in a timely manner and (b) such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions or directions.
All notices and communications (other than those sent to the Trustee, Agents or Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if sent by facsimile transmission; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next-day delivery. All notices and communications to the Trustee, Agents or Holders shall be deemed duly given and effective only upon receipt. Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the security register for the Notes. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.
If the Issuer mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.
 
-62-

SECTION 11.03.	[Reserved] .	
 
SECTION 11.04.	Certificate and Opinion as to Conditions Precedent .	
Upon any request or application by the Issuer to the Trustee or an Agent to take any action under any provision of this Indenture, the Issuer shall furnish to the Trustee and/or Agent, as applicable:
(a)    an Officer’s Certificate in form and substance reasonably satisfactory to the Trustee and/or Agent, as applicable, (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(b)    an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee and/or Agent, as applicable, (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with.
 
SECTION 11.05.	Statements Required in Certificate or Opinion .	
Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to Section 4.04 hereof) and shall include:
(a)    a statement that the Person making such certificate or opinion has read such covenant or condition;
(b)    a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(c)    a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable such Person to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(d)    a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.
 
SECTION 11.06.	Rules by Trustee and Agents .	
The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar, Paying Agent or Authenticating Agent may make reasonable rules and set reasonable requirements for its functions.
 
SECTION 11.07.	No Personal Liability of Directors, Officers, Employees and Stockholders .	
No past, present or future director, officer, employee, incorporator or stockholder of the Issuer, any Guarantor or the Trustee, as such, shall have any liability for any obligations of the Issuer or of the Guarantors under the Notes, this Indenture, the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
 
SECTION 11.08.	Governing Law; Waiver of Jury Trial .	
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE AND THE NOTES.
EACH OF THE ISSUER, THE GUARANTORS AND THE TRUSTEE IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
 
-63-

SECTION 11.09.	No Adverse Interpretation of Other Agreements .	
This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuer or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.
 
SECTION 11.10.	Successors .	
All covenants and agreements of the Issuer in this Indenture and the Notes shall bind its successors. All covenants and agreements of the Trustee and the Agents in this Indenture shall bind their respective successors.
 
SECTION 11.11.	Severability .	
In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
 
SECTION 11.12.	Counterpart Originals .	
The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
 
SECTION 11.13.	Table of Contents, Headings, Etc .	
The Table of Contents, Cross-Reference Table and Headings in this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.
 
SECTION 11.14.	Force Majeure .	
In no event shall the Trustee or the Agents be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee and the Agents, as applicable, shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
 
SECTION 11.15.	Patriot Act .	
The parties hereto acknowledge that in accordance with Section 326 of the USA Patriot Act the Trustee and the Agents, like all financial institutions and in order to help fight the funding of terrorism and money laundering, are required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account. The parties to this agreement agree that they will provide the Trustee and the Agents with such information as they may request in order to satisfy the requirements of the USA Patriot Act.
ARTICLE 12
ESCROW MATTERS
 
SECTION 12.01.	Escrow Account .	
On the Issue Date, the Issuer, the Escrow Agent and the Trustee will enter into the Escrow Agreement, and on the Issue Date, the Issuer will deposit (or cause to be deposited) the gross proceeds of the offering of the Notes sold on the Issue Date into the Escrow Account.
 
-64-

Other than as permitted under the Escrow Agreement, the Issuer will only be entitled to direct the Escrow Agent to release Escrowed Property (as defined in the Escrow Agreement) (in which case the Escrowed Property will be paid to or as directed by the Issuer) upon delivery to the Escrow Agent and the Trustee, on or prior to June 30, 2018, of an Officer’s Certificate (as defined in the Escrow Agreement), certifying that the Escrow Conditions (as defined in the Escrow Agreement) have been, or substantially concurrently with the release of the Escrowed Property, will be, satisfied.
 
SECTION 12.02.	Special Mandatory Redemption .	
If a Special Mandatory Redemption of the Notes is to occur pursuant to Section 3.09 hereof, the Escrow Agent will cause the liquidation of all Escrowed Property then held by it and cause the release of the proceeds of such liquidated Escrowed Property to the Trustee in accordance with the terms of the Escrow Agreement. The Trustee shall apply such proceeds to the payment of the Special Mandatory Redemption Price, as set forth in Section 3.09 hereof.
 
SECTION 12.03.	Release of Escrowed Property .	
Upon the satisfaction of the Escrow Conditions, the Escrow Agreement provides that the Escrow Agent will cause the liquidation of all Escrowed Property then held by it and cause the release of the proceeds of such liquidated Escrowed Property to or on the order of the Issuer on the Release Date (as defined in the Escrow Agreement) in accordance with the terms of the Escrow Agreement.
 
SECTION 12.04.	Trustee Direction to Execute Escrow Agreement .	
The Trustee is hereby authorized and directed to execute and deliver the Escrow Agreement.
[Signatures on following page]
 
-65-

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

ISSUER:	
	
DELPHI JERSEY HOLDINGS PLC	
		
By:	 	/s/ David M. Sherbin	
	 	Name: David M. Sherbin	
	 	Title:   Director, Vice President, General Counsel and
  Secretary	
 
[Signature Page for Indenture]

			
TRUSTEE: U.S. BANK NATIONAL ASSOCIATION	
		
By:	 	/s/ James Kowalski	
	 	Name: James Kowalski	
	 	Title:   Vice President	
 
[Signature Page for Indenture]

			
REGISTRAR, PAYING AGENT AND AUTHENTICATING AGENT: U.S. BANK NATIONAL ASSOCIATION	
		
By:	 	/s/ James Kowalski	
	 	Name: James Kowalski	
	 	Title:   Vice President	
 
[Signature Page for Indenture]

EXHIBIT A
[FORM OF FACE OF NOTE]
[Global Note Legend]
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE REGISTRAR MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06(h) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE REGISTRAR FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
[Private Placement Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS IN THE CASE OF RULE 144A NOTES: ONE YEAR (OR SUCH SHORTER PERIOD THEN REQUIRED UNDER RULE 144 OR ITS SUCCESSOR RULE) OR IN THE CASE OF REGULATION S NOTES: 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
 
A-1

SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
[Regulation S Global Note Legend]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.
 
A-2

			
CUSIP:             	  	ISIN:             	
[RULE 144A][REGULATION S] GLOBAL NOTE
5.00% Senior Notes due 2025

No.     	  	$[              ]	
DELPHI JERSEY HOLDINGS PLC
promises to pay to Cede & Co., or registered assigns, the principal sum of          DOLLARS on October 1, 2025, as such amount may be changed from time to time pursuant to the Schedule of Exchanges of Interests attached hereto.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
 
A-3

Dated:            , 20    

DELPHI JERSEY HOLDINGS PLC	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
A-4

			
This is one of the Notes referred to in the within-mentioned Indenture:	
	
U.S. BANK NATIONAL ASSOCIATION,
as Authenticating Agent	
		
By:	 	                                                                                             	
	 	Name:	
	 	Title:	
 
A-5

[FORM OF REVERSE SIDE OF NOTE]
5.00% Senior Note due 2025
Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.
1.    INTEREST. Delphi Jersey Holdings plc (the “ Issuer ”), promises to pay interest on the principal amount of this Note at a rate per annum of 5.00% from September 28, 2017 until maturity or earlier redemption or repayment of the Note. The Issuer will pay interest on this Note semi-annually in arrears on April 1 and October 1 of each year, commencing on April 1, 2018, or, if any such day is not a Business Day, on the next succeeding Business Day (each, an “ Interest Payment Date ”). The Issuer will make each interest payment to the Holder of record of this Note on the immediately preceding March 15 and September 15 (each, a “ Regular Record Date ”). Interest on this Note will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including September 28, 2017. The Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the rate borne by this Note; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the rate borne by this Note. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.
2.    METHOD OF PAYMENT. The Issuer will pay interest on this Note to the Person who is the registered Holder of this Note at the close of business on the Record Date (whether or not a Business Day) next preceding the Interest Payment Date, even if this Note is cancelled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Payment of interest may be made by check mailed to the Holders at their addresses set forth in the Note Register of Holders, provided that (a) all payments of principal, premium, if any, and interest on, Notes represented by Global Notes registered in the name of or held by DTC or its nominee will be made by wire transfer of immediately available funds to the accounts specified by the Holder or Holders thereof and (b) all payments of principal, premium, if any, and interest with respect to certificated Notes will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee or the Paying Agent may accept in its discretion). Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
3.    AUTHENTICATING AGENT, PAYING AGENT AND REGISTRAR. Initially, U.S. Bank National Association will act as Authenticating Agent, Paying Agent and Registrar. The Issuer may change any Authenticating Agent, Paying Agent or Registrar without notice to the Holders. The Issuer or any of its Subsidiaries may act in any such capacity.
4.    INDENTURE. The Issuer issued the Notes under an Indenture, dated as of September 28, 2017 (the “ Indenture ”), among the Issuer, the Guarantors party thereto, U.S. Bank National Association, as trustee (the “ Trustee ”) and U.S. Bank National Association, as authenticating agent (“ Authenticating Agent ”), registrar (“ Registrar ”) and paying agent (“ Paying Agent ”). The Issuer shall be entitled to issue Additional Notes pursuant to Section 2.14 of the Indenture. The terms of the Notes include those stated in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.
 
A-6

5.    OPTIONAL REDEMPTION.
At any time, the Issuer may, at its option, redeem all or part of the Notes (calculated after giving effect to any issuance of Additional Notes), at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium, as of, and accrued and unpaid interest, if any, to, but not including, the Redemption Date (subject to the rights of Holders of Notes on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date). Any redemption pursuant to this Section 5 shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.
6.    OFFERS TO REPURCHASE.
Upon the occurrence of a Change of Control Triggering Event, the Issuer shall make a Change of Control Offer in accordance with Section 4.11 of the Indenture.
7.    TAX REDEMPTION. The Issuer may redeem the Notes as a whole but not in part, at its option at any time prior to maturity, upon the giving of a notice of redemption to the holders, if it determines that certain tax law changes have occurred as described in the Indenture.
8.    MANDATORY REDEMPTION. Except as set forth in Sections 3.09 regarding special mandatory redemption if escrow conditions are not satisfied and 4.11 of the Indenture, the Issuer shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes.
9.    NOTICE OF REDEMPTION. At least 15 days but not more than 60 days before a Redemption Date, the Issuer shall mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address. Any redemption and notice thereof may, in the Issuer’s discretion, be subject to the satisfaction of one or more conditions precedent.
10.    DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $2,000 and any integral multiple of $1,000 in excess of $2,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Registrar shall not be required to register the transfer of or exchange of (a) any Note selected for redemption in whole or in part pursuant to Article 3 of the Indenture, except the unredeemed portion of any Note being redeemed in part, or (b) any Note for a period beginning 15 days before the mailing of a notice of an offer to repurchase or redeem Notes or 15 days before an Interest Payment Date (whether or not an Interest Payment Date or other date determined for the payment of interest), and ending on such mailing date or Interest Payment Date, as the case may be.
11.    PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.
12.    AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Note Guarantees or the Notes may be amended or supplemented as provided in the Indenture.
13.    DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default (other than an Event of Default arising from certain events of bankruptcy or insolvency) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare the principal of and accrued but unpaid interest on all the Notes to be due and payable immediately by notice in writing to the Issuer and the Trustee (if given by the Holders) specifying the respective Event of Default and that it is a “notice of acceleration”, and the same shall become immediately due and payable. If an Event of Default arising from certain events of bankruptcy or insolvency occurs and is continuing, then all unpaid principal of, and premium, if any, and accrued and unpaid interest on all the outstanding Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. Holders may not enforce the Indenture, the Notes or the Note Guarantees except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from
 
A-7

Holders of the Notes notice of any continuing Default (except a Default relating to the payment of principal, premium, if any, or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or and its consequences under the Indenture except a continuing Default in payment of the principal of, premium, if any, or interest on, any of the Notes held by a non-consenting Holder. The Issuer is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required within 30 Business Days after becoming aware of any Default, to deliver to the Trustee a statement specifying such Default and what action the Issuer proposes to take with respect thereto.
14.    AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee or Authenticating Agent.
15.    GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE NOTE GUARANTEES.
16.    CUSIP AND ISIN NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP and ISIN numbers to be printed on the Notes and the Trustee or Registrar may use CUSIP and ISIN numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to the Issuer at the following address:
Delphi Jersey Holdings plc
c/o Delphi Automotive Systems, LLC
5725 Delphi Drive
Troy, Michigan 48098
Facsimile: 248-813-2648
Attention: Vice President and Chief Financial Officer
With a copy to:
Delphi Jersey Holdings plc
c/o Delphi Automotive Systems, LLC
5725 Delphi Drive
Troy, Michigan 48098
Facsimile: 248-813-2491
Attention: Vice President, General Counsel and Secretary
 
A-8

ASSIGNMENT FORM
To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:	 	 	
	 	(Insert assignee’s legal name)	

(Insert assignee’s soc. sec. or tax I.D. no.)	

	

 	

(Print or type assignee’s name, address and zip code)	
and irrevocably appoint                                                                                                                                                                                      
to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.
Date:                                     

Your Signature:	 	                                                              	
	 	(Sign exactly as your name appears on the face of this Note)	
Signature Guarantee*:                                                                      
 
*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).	
 
A-9

OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.11 of the Indenture, check the box below:
[    ] Section 4.11
If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.11 of the Indenture, state the amount you elect to have purchased:
$         
Date:                                 

	 	Your Signature:	  	 	
	 		  	(Sign exactly as your name appears on the face of this Note)	
	 	Tax Identification No.:                                                                                        	
Signature Guarantee*:                                                                      
 
*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).	
 
A-10

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The initial outstanding principal amount of this Global Note is $        . The following exchanges of a part of this Global Note for an interest in another Global Note or for a Certificated Note, or exchanges of a part of another Global or Certificated Note for an interest in this Global Note, have been made:

Date of Exchange	 	Amount of
decrease in
Principal
Amount of this Global
Note	 	Amount of
increase in
Principal
Amount of this
Global Note	 	Principal
Amount of this
Global Note
following such
decrease or
increase	 	Signature of
authorized
officer of Trustee
or Custodian	

	 		 		 		 		

*	This schedule should be included only if the Note is issued in global form.	
 
A-11

EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Delphi Jersey Holdings plc
c/o Delphi Automotive Systems, LLC
5725 Delphi Drive
Troy, Michigan 48098
Facsimile: 248-813-2648
Attention: Vice President and Chief Financial Officer
U.S. Bank National Association
535 Griswold Street, Suite 550
Detroit, Michigan 48226
Attn: James Kowalski
Tel: 313-234-4716
Fax: 313-963-9428
Re:    5.00% Senior Notes due 2025
Reference is hereby made to the Indenture, dated as of September 28, 2017 (the “ Indenture ”), among Delphi Jersey Holdings plc, the Guarantors party thereto, U.S. Bank National Association, as trustee (the “ Trustee ”) and U.S. Bank National Association, as registrar, paying agent and authenticating agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
                     (the “ Transferor ”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $         in such Note[s] or interests (the “ Transfer ”), to                      (the “ Transferee ”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1.    ☐ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT 144A GLOBAL NOTE OR RELEVANT CERTIFICATED NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the “ Securities Act ”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Certificated Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Certificated Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States.
2.    ☐ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT REGULATION S GLOBAL NOTE OR RELEVANT CERTIFICATED NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, (iii) the transaction is not part of a plan or scheme to
 
B-1

evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the applicable Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Certificated Note will be subject to the restrictions on Transfer enumerated in the Indenture and the Securities Act.
3.    ☐ CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT CERTIFICATED NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Certificated Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):
(a)    ☐ such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or
(b)    ☐ such Transfer is being effected to the Issuer or a subsidiary thereof.
4.    ☐ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED CERTIFICATED NOTE.
(a)    ☐ CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Certificated Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Certificated Notes and in the Indenture.
(b)    ☐ CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Certificated Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Certificated Notes and in the Indenture.
(c)    ☐ CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Certificated Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Certificated Notes and in the Indenture.
This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer.
[Insert Name of Transferor]
 
B-2

			
By:	 	 	
	 	Name:	
	 	Title:	

Dated:	 	 	
 
B-3

ANNEX A TO CERTIFICATE OF TRANSFER
 
 	1.	The Transferor owns and proposes to transfer the following:	
[CHECK ONE OF (a) OR (b)]
 
 	(a)	☐ a beneficial interest in the:	
 
 	(i)	☐ 144A Global Note ([CUSIP:                    ]), or	
 
 	(ii)	☐ Regulation S Global Note ([CUSIP:                    ]), or	
 
 	(b)	☐ a Restricted Certificated Note.	
 
 	2.	After the Transfer the Transferee will hold:	
[CHECK ONE]
 
 	(a)	☐ a beneficial interest in the:	
 
 	(i)	☐ 144A Global Note ([CUSIP:                    ]), or	
 
 	(ii)	☐ Regulation S Global Note ([CUSIP:                    ])or	
 
 	(iii)	☐ Unrestricted Global Note ([    ] [        ]); or	
 
 	(b)	☐ a Restricted Certificated Note; or	
 
 	(c)	☐ an Unrestricted Certificated Note, in accordance with the terms of the Indenture.	
 
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EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Delphi Jersey Holdings plc
c/o Delphi Automotive Systems, LLC
5725 Delphi Drive
Troy, Michigan 48098
Facsimile: 248-813-2648
Attention: Vice President and Chief Financial Officer
U.S. Bank National Association
535 Griswold Street, Suite 550
Detroit, Michigan 48226
Attn: James Kowalski
Tel: 313-234-4716
Fax: 313-963-9428
Re:    5.00% Senior Notes due 2025
Reference is hereby made to the Indenture, dated as of September 28, 2017 (the “ Indenture ”), among Delphi Jersey Holdings plc, the Guarantors party thereto, U.S. Bank National Association, as trustee (the “ Trustee ”) and U.S. Bank National Association, as registrar, paying agent and authenticating agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
                     (the “ Owner ”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $        in such Note[s] or interests (the “ Exchange ”). In connection with the Exchange, the Owner hereby certifies that:
1)    EXCHANGE OF RESTRICTED CERTIFICATED NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED CERTIFICATED NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE OF THE SAME SERIES
a)    ☐ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OF THE SAME SERIES. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note of the same series in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the “ Securities Act ”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
b)    ☐ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED CERTIFICATED NOTE OF THE SAME SERIES. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Certificated Note of the same series, the Owner hereby certifies (i) the Certificated Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Certificated Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
 
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c)    ☐ CHECK IF EXCHANGE IS FROM RESTRICTED CERTIFICATED NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OF THE SAME SERIES. In connection with the Owner’s Exchange of a Restricted Certificated Note for a beneficial interest in an Unrestricted Global Note of the same series, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Certificated Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
d)    ☐ CHECK IF EXCHANGE IS FROM RESTRICTED CERTIFICATED NOTE TO UNRESTRICTED CERTIFICATED NOTE OF THE SAME SERIES. In connection with the Owner’s Exchange of a Restricted Certificated Note for an Unrestricted Certificated Note of the same series, the Owner hereby certifies (i) the Unrestricted Certificated Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Certificated Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Certificated Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
2)    EXCHANGE OF RESTRICTED CERTIFICATED NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED CERTIFICATED NOTES OF THE SAME SERIES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES OF THE SAME SERIES
a)    ☐ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED CERTIFICATED NOTE OF THE SAME SERIES. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Certificated Note of the same series with an equal principal amount, the Owner hereby certifies that the Restricted Certificated Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Certificated Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Certificated Note and in the Indenture and the Securities Act.
b)    ☐ CHECK IF EXCHANGE IS FROM RESTRICTED CERTIFICATED NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE OF THE SAME SERIES. In connection with the Exchange of the Owner’s Restricted Certificated Note for a beneficial interest in the [CHECK ONE] [ ] 144A Global Note [ ] Regulation S Global Note of the same series, with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and are dated                     .
[Insert Name of Transferor]
 
C-2

			
By:	 	 	
	 	Name:	
	 	Title:	

Dated:	 	 	
 
C-3

EXHIBIT D
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
Supplemental Indenture (this “ Supplemental Indenture ”), dated as of                     , among                      (the “ Guaranteeing Party ”), U.S. Bank National Association, as trustee (the “ Trustee ”) and U.S. Bank National Association, as authenticating agent (“ Authenticating Agent ”), registrar (“ Registrar ”) and paying agent (“ Paying Agent ”).
W I T N E S S E T H
WHEREAS, Delphi Jersey Holdings plc, a Jersey public limited company (the “ Issuer ”), has heretofore executed and delivered to the Trustee that certain Indenture (the “ Indenture ”), dated as of September 28, 2017, providing for the issuance of an unlimited aggregate principal amount of 5.00% Senior Notes due 2025 (the “ Notes ”);
WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Party shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Party shall fully and unconditionally guarantee all of the Issuer’s obligations under the Notes and the Indenture, jointly and severally with each other Guarantor, on the terms and conditions set forth herein and under the Indenture (the “ Note Guarantee ”); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders as follows:
(1)     Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
(2)     Agreement to Guarantee . The Guaranteeing Party hereby agrees as follows:
(a)    Along with all other Guarantors named in the Indenture (including pursuant to any supplemental indentures), as primary obligor and not merely as surety, to fully, unconditionally and irrevocably guarantee on a senior unsecured basis, jointly and severally, to each Holder and to the Trustee, the Agents and their respective successors and assigns (a) the full and punctual payment of principal of and interest on the Notes when due, whether at Stated Maturity, by acceleration or otherwise, and all other monetary obligations of the Issuer under this Indenture and the Notes and (b) the full and punctual performance within applicable grace periods of all other obligations of the Issuer under this Indenture and the Notes (all such obligations set forth in clauses (a) and (b) above being hereinafter collectively called the “ Guaranteed Obligations ”). Such Note Guarantee shall remain in full force and effect until payment in full of all Guaranteed Obligations. The Guaranteeing Party further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from Guaranteeing Party and that Guaranteeing Party will remain bound under this Article 10 notwithstanding any extension or renewal of any Guaranteed Obligation.
(b)    The Guaranteeing Party waives presentation to, demand of, payment from and protest to the Issuer of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. The Guaranteeing Party waives notice of any default under the Notes or the Guaranteed Obligations. The obligations of the Guaranteeing Party hereunder shall not be affected by (a) the failure of any Holder, the Trustee or Agents to assert any claim or demand or to enforce any right or remedy against the Issuer or any other
 
D-1

Person under this Supplemental Indenture, the Indenture, the Notes or any other agreement or otherwise; (b) any extension or renewal of any thereof; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Supplemental Indenture, the Indenture, the Notes or any other agreement; (d) the release of any security held by any Holder, the Trustee or Agents for the Guaranteed Obligations or any of them; (e) the failure of any Holder, the Trustee or Agents to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (f) except as set forth in Section 10.06 of the Indenture, any change in the ownership of such Guarantor.
(c)    The Guaranteeing Party further agrees that its Note Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder, the Trustee or Agents to any security held for payment of the Guaranteed Obligations.
(d)    The Guaranteeing Party further agrees that its Note Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder, the Trustee or Agents upon the bankruptcy or reorganization of the Issuer or otherwise.
(e)    The Guaranteeing Party further agrees that, as between it, on the one hand, and the Holders, the Trustee and the Agents, on the other hand, (x) the maturity of the Guaranteed Obligations may be accelerated as provided in Article 6 of the Indenture for the purposes of the Guaranteeing Party’s Note Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations, and (y) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article 6 of the Indenture, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Guaranteeing Party for the purposes of Section 10.01 of the Indenture and this Supplemental Indenture.
(f)    The Guaranteeing Party also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or the Agents in enforcing any rights under Section 10.01 of the Indenture or this Supplemental Indenture.
(3)    Limitation on Liability. The Guaranteeing Party hereby confirms that it is the intention of all parties that the Note Guarantee of the Guaranteeing Party (a) not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent applicable to any Note Guarantee, and (b) not result in a distribution to shareholders not permitted under the applicable foreign or state law. Any term or provision of this Supplemental Indenture or the Indenture to the contrary notwithstanding, the maximum aggregate amount of the obligations guaranteed hereunder by the Guaranteeing Party shall not exceed the maximum amount that can be hereby guaranteed without rendering this Note Guarantee, as it relates to the Guaranteeing Party, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.
(4)     Successors and Assigns . This Supplemental Indenture and Article 10 of the Indenture shall be binding upon the Guaranteeing Party and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee, the Agents and the Holders and, in the event of any transfer or assignment of rights by any Holder, the Trustee or the Agents, the rights and privileges conferred upon that party in this Supplemental Indenture, in the Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of the Indenture.
(5)     No Waiver . Neither a failure nor a delay on the part of either the Trustee, the Agents or the Holders in exercising any right, power or privilege under this Supplemental Indenture or Article 10 of the Indenture shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee, the Agents and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Supplemental Indenture and Article 10 of the Indenture at law, in equity, by statute or otherwise
 
D-2

(6)     Merger, Consolidation or Sale of All or Substantially All Assets .
(a)    Except as otherwise provided in clause (b) below, the Guaranteeing Party may not, directly or indirectly, consolidate with or merge with or into, or convey, transfer or lease all or substantially all of its assets in one or a series of related transactions to, any Person, unless:
(1)    (A) the resulting, surviving or transferee Person (the “ Successor Guarantor ”) will be a corporation, limited liability partnership, limited liability company, limited company, or other similar organization (and in the case of any such transaction involving the Issuer, such Successor Guarantor shall be organized under the laws of the jurisdiction of organization of the United States of America (or any state thereof or the District of Columbia), the United Kingdom, Jersey and any other jurisdiction in the Channel Islands, any member state of the European Union as in effect on the Issue Date, Switzerland, Bermuda, The Cayman Islands or Singapore), and such Person (if not such Guarantor) will expressly assume, by a supplemental indenture, executed and delivered to the Trustee, all the obligations of such Guarantor under its Note Guarantee;
(B)     immediately after giving effect to such transaction, no Default shall have occurred and be continuing; and
(C)    the Issuer will have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture; or
(2)    such Guarantor will be released from its Note Guarantee in connection therewith as provided in this Indenture.
(b)    Notwithstanding clause (a) above:
(1)    any Subsidiary of the Issuer may consolidate with, merge into or transfer all or part of its properties and assets to the Issuer or any Guarantor; and
(2)    the Issuer and any Guarantor may merge with an Affiliate organized solely for the purpose of reorganizing the Issuer or such Guarantor in another jurisdiction.
(7)     Releases .
The Note Guarantee of the Guaranteeing Party will be released with respect to the Notes under this Supplemental Indenture and Article 10 of the Indenture without any further action required on the part of the Trustee, the Agents or any Holder:
(a)    upon (i) the sale or other disposition (including by way of consolidation, merger, dissolution or otherwise) of the Capital Stock of such Guaranteeing Party such that it is no longer a Subsidiary of the Issuer or (ii) the sale or other disposition of all or substantially all of the assets of such Guarantor;
(b)    when such Guaranteeing Party no longer guarantees or is otherwise obligated under (or concurrently with such release, will no longer guarantee or otherwise be obligated under) the Credit Agreement or any other Material Indebtedness of the Issuer or any other Guarantor; or
(c)    if the Issuer exercises its Legal Defeasance option or its Covenant Defeasance option in accordance with Article 8 of the Indenture or if the Issuer’s obligations with respect to such series of Notes are discharged in accordance with the terms of Section 8.06 of the Indenture.
(8)    Contribution. If the Guaranteeing Party makes a payment under its Note Guarantee, it shall be entitled upon payment in full of all Guaranteed Obligations to contribution from each other Guarantor, as applicable, in an amount equal to such Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.
 
D-3

(9)     No Recourse Against Others . No director, officer, employee, incorporator or stockholder of the Guaranteeing Party shall have any liability for any obligations of the Issuer or the Guarantors (including the Guaranteeing Party) under the Notes, any Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
(10)     Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(11)     Counterparts . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
(12)     Effect of Headings . The section headings herein are for convenience only and shall not affect the construction hereof.
(13)     The Trustee and the Agents . The Trustee and the Agents shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Party.
 
D-4

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

[GUARANTEEING PARTY]	
		
By:	 	                                          	
	 	Name:	
	 	Title:	
	
U.S. BANK NATIONAL ASSOCIATION, as Trustee	
		
By:	 	                                          	
	 	Name:	
	 	Title:	
	
U.S. BANK NATIONAL ASSOCIATION, as Paying Agent, Registrar and Authenticating Agent 	
		
By:	 	                                          	
	 	Name:	
	 	Title:	
 
D-5

Exhibit 10.1
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this “ Agreement ”), dated as of [●], [●], by and between Delphi Automotive PLC, a public limited company formed under the laws of Jersey (“ Aptiv ”) and Delphi Technologies PLC, a public limited company formed under the laws of Jersey (“ Delphi Technologies ”). Each of Delphi Technologies and Aptiv is referred to herein as a “ Party ” and collectively as the “ Parties ”.
WITNESSETH
WHEREAS , Aptiv and Delphi Technologies have entered into that certain Separation and Distribution Agreement, dated as of [●], [●] (the “ Separation and Distribution Agreement ”), pursuant to which, among other things, Aptiv and Delphi Technologies have agreed that Aptiv will transfer the Delphi Technologies Business to Delphi Technologies and distribute the shares in Delphi Technologies to the shareholders of Aptiv on the terms and conditions set forth in the Separation and Distribution Agreement;
WHEREAS , solely in order to facilitate the orderly transfer and continuation of the Delphi Technologies Business and the operation of the Delphi Technologies Business by Delphi Technologies for a transitional period not to exceed the Term, Aptiv has agreed to, and has agreed to cause certain of its Affiliates to, provide Delphi Technologies and its Subsidiaries certain administrative and transition services;
WHEREAS , solely in order to facilitate the operation of the Aptiv Business by Aptiv and its Affiliates, Delphi Technologies has agreed to, and has agreed to cause its Subsidiaries to, provide Aptiv and its Affiliates certain administrative and transition services during the Term;
WHEREAS , neither Delphi Technologies nor Aptiv intends, by the terms and conditions hereof, to create an ongoing service relationship with the other with respect to the Services for a duration of time exceeding the Term; and
WHEREAS , Delphi Technologies and Aptiv intend to terminate the Service relationships contemplated hereby no later than expiration of the Term.
NOW, THEREFORE , in consideration of entering into the Separation and Distribution Agreement and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions . For purposes of this Agreement, capitalized terms shall have the meaning set forth in the body of this Agreement or as set forth below in this Section  1.1 . To the extent any capitalized terms are not defined herein, they shall have the meanings set forth in the Separation and Distribution Agreement.
“ Cost ” means, with respect to a Service, either (a) the monthly service fees and other amounts set forth in Exhibit 2.1(a) or Exhibit 2.1(b) or (b) for Services contained in Exhibit
 
1

2.1(a) or Exhibit 2.1(b) for which prices are specified as “billed as incurred”, their actual cost based on the cost matrix set forth in Exhibit 2.1(c) , including where applicable, the increase in the monthly service fees for the relevant Service as provided in Exhibit 2.1(a) or Exhibit 2.1(b) and the increase set forth in Section 2.3 of the Agreement.
“ Service ” means (a) each service provided by Aptiv or its Affiliates to Delphi Technologies or its Subsidiaries pursuant to Section  2.1(a) , and (b) each service provided by Delphi Technologies or its Subsidiaries to Aptiv or its Affiliates pursuant to Section  2.1(b) , in each case, as separately identified in Exhibit 2.1(a) or Exhibit 2.1(b) , as applicable.
“ Service Provider ” means (a) Aptiv or its applicable Affiliate, in connection with Services provided by such Person pursuant to Section  2.1(a) of this Agreement, and (b) Delphi Technologies or its applicable Subsidiary, in connection with Services provided by such Person pursuant to Section  2.1(b) of this Agreement.
“ Service Recipient ” means (a) Delphi Technologies or its applicable Subsidiary, in connection with Services received by such Person pursuant to Section  2.1(a) of this Agreement, and (b) Aptiv or its applicable Affiliate, in connection with Services received by such Person pursuant to Section  2.1(b) of this Agreement.
ARTICLE 2
SERVICES
2.1 Types of Services .
(a) For up to [●] months from the Distribution Date (the “ Term ”), Aptiv will, and will cause certain of its Affiliates to, provide to Delphi Technologies and its Subsidiaries certain Services, in each case: (i) only as described in Exhibit  2.1(a) to this Agreement; (ii) only to the extent necessary for the continued operation of the Delphi Technologies Business, in the ordinary course consistent with past practice and the Level of Services existing during the Service Baseline Period (except that, Aptiv and its Affiliates shall be excused from performing to the extent that Services cannot be performed as a result of (x) Delphi Technologies’ or its applicable Subsidiary’s failure to perform, or failure to cause to be performed, any necessary Excluded Services and (y) changes in the operation of the Delphi Technologies Business after the Distribution Date); (iii) only as offered by Aptiv and its Affiliates to their own operations at the time the applicable Services are provided under this Agreement (provided that Aptiv and its Affiliates will not eliminate a Service prior to the end of the Period set forth in Exhibit 2.1(a) , unless otherwise agreed in writing by the relevant Service Recipient, and will use commercially reasonable efforts to provide the relevant Service Recipient at least thirty (30) days advance notice of any significant changes); (iv) in a manner consistent with that which Aptiv or its applicable Affiliate provided such Services for or within its own organization or group during the Service Baseline Period; and (v) for a period not to exceed the Term or such shorter period as may be set forth in Exhibit 2.1(a) for a particular Service.
(b) During the Term, Delphi Technologies will, and will cause its Subsidiaries to, provide to Aptiv and its Affiliates, certain Services, in each case: (i) only as described on Exhibit 2.1(b) to this Agreement; (ii) only to the extent necessary for the continued operation of
 
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the Aptiv Business, in the ordinary course consistent with past practice and the Level of Services as existed during the Service Baseline Period (except that, Delphi Technologies and its Affiliates shall be excused from performing to the extent that Services cannot be performed as a result of (x) Aptiv’s or its applicable Subsidiary’s failure to perform, or failure to cause to be performed, any necessary Excluded Services and (y) changes in the operation of the Aptiv Business after the Distribution Date); (iii) only as offered by Delphi Technologies and its Affiliates to their own operations at the time the applicable Services are provided under this Agreement (provided that Delphi Technologies and its Affiliates will not eliminate a Service prior to the end of the period set forth in Exhibit 2.1(b) , unless otherwise agreed in writing by the relevant Service Recipient, and will use commercially reasonable efforts to provide the relevant Service Recipient at least thirty (30) days advance notice of any significant changes); (iv) in a manner consistent with that which Aptiv or its applicable Affiliate provided such Services for or within its own organization or group during the Service Baseline Period; and (v) for a period not to exceed the Term or such shorter period as may be set forth in Exhibit 2.1(b) for a particular Service.
(c) In no event shall the Services include the following (collectively, “ Excluded Services ”): (i) any services that are not expressly set forth in Exhibit 2.1(a) to this Agreement, including those services set forth in Exhibit 2.1(c) (in each case, with respect to the Services provided to Delphi Technologies or its Subsidiaries) or Exhibit 2.1(b) to this Agreement (with respect to the Services provided to Aptiv or its Affiliates) as included Services; and (ii) unless extended by the written agreement of Aptiv and Delphi Technologies in accordance with Section  2.3 below, Services whose term has expired in accordance with the terms of this Agreement.
(d) Service Provider shall not be obligated to perform or to cause to be performed any Service in a manner that is materially more burdensome (with respect to service quality or quantity) than analogous services provided by Aptiv for or within its own organization or group (collectively referred to as the “ Level of Service ”) during the six (6) month period preceding the Distribution Date (the “ Service Baseline Period ”). A Service shall be deemed materially more burdensome if, among other items, its usage or the resources necessary to provide the Service exceed the usage or the resources required to provide analogous services to Service Provider’s own organization during the Service Baseline Period, or if Service Provider is required to hire new employees, engage new contractors or make capital investments in respect of such Service greater than the maximum number of employees or contractors dedicated at any time to analogous services, or investments made by Service Provider with respect to analogous services, during the Service Baseline Period. If Service Recipient requests that Service Provider perform or cause to be performed any Service that exceeds the Level of Service during the Service Baseline Period, including any acquisition or upgrade of technology, software or information systems, then the Parties shall cooperate and act in good faith to determine (i) whether Service Provider will provide such requested higher Level of Service and (ii) the Cost of providing such requested Higher Level of Service. If and to the extent that the Parties determine that Service Provider shall provide the requested higher Level of Service, then such higher Level of Service shall be documented in a supplement to the Exhibits hereto, reflecting the scope of such Service and the Cost thereof. Each such supplement, as agreed to in writing by the Parties, shall be deemed part of this Agreement as of the date of such written agreement and the Level of Service increases set forth in such written agreement shall be deemed a part of the Services provided under this Agreement, in each case subject to the terms and conditions of this Agreement.
 
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(e) In the event that Delphi Technologies and Aptiv agree that for the provision of local country Services it is necessary or desirable to enter into a local contract, then, at the request of either Delphi Technologies or Aptiv, Delphi Technologies or Aptiv shall procure that the applicable Service Provider and Service Recipient in each such country shall execute a “ Participation Agreement ” in a form materially consistent with the template attached hereto as Exhibit  2.1(e) .
2.2 Additional Services .
(a) Both Parties, working together and using commercially reasonable efforts, have attempted to identify and specifically enumerate in Exhibits  2.1(a) and 2.1(b) all Services necessary to be provided to Service Recipients in order to ensure the uninterrupted operation of the Delphi Technologies Business and the Aptiv Business following the Distribution Date.
(b) If a Service Recipient requires Excluded Services to support the continued operation of the Delphi Technologies Business or the Aptiv Business, as applicable, and a Service Provider is willing to consider providing such services (the “ Additional Services ”), Aptiv and Delphi Technologies will negotiate in good faith to determine if a Service Provider can provide the Additional Services upon mutually agreed terms and conditions; provided , however , that Service Provider shall have no obligation to provide Additional Services unless and until it agrees to do so in writing and that if terms satisfactory to the relevant Service Provider have not been agreed to within thirty (30) days after commencing such negotiations, Service Provider shall have no further obligation to negotiate with respect to such Additional Services.
(c) Other than as expressly agreed in writing by the Parties, and subject to Section  2.3 , in no event shall the provision of Additional Services pursuant to this Section  2.2 extend the length of any Service otherwise provided under Section  2.1 , nor shall any Additional Service provided pursuant to this Section  2.2 be provided beyond the end of the Term. In addition, unless otherwise agreed in writing by the Parties, the performance of Excluded Services or Additional Services, and the performance of any Services from and after the scheduled date of expiration of the term for such Services set forth on Exhibit 2.1(a) or 2.1(b) (as applicable), shall not create any obligations to continue providing such Excluded Services, Additional Services or Services of extended duration.
(d) In the event that due to extenuating circumstances, such as a need to maintain the operation of the Delphi Technologies Business or Aptiv Business, (i) either (x) Service Recipient requests any Additional Services or (y) Service Provider notifies Service Recipient that it believes such Additional Services are required and Service Recipient does not object to the provision of such Additional Services in writing within five (5) Business Days (any such Additional Service, an “ Emergency Service ”) and (ii) there is insufficient time or opportunity (as determined Service Provider in its reasonable discretion) to negotiate the price and terms of such Emergency Service in accordance with the provisions hereof, then Service Provider may, in its sole discretion, elect to provide such Emergency Service without the Parties’
 
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prior agreement on the price and terms thereof. Until such time as Service Provider and Service Recipient agree in writing to the price of such Emergency Service, the price therefor shall be (x) cost thereof, as determined by Service Provider in its reasonable discretion, plus (y) ten percent (10%) of such cost. If Service Provider and Service Recipient have not agreed in writing to the price of such Emergency Service within thirty (30) days of such Emergency Service initially being provided to Service Recipient (or such earlier time upon the request of either Party), then the price determination for such Emergency Service shall be resolved as promptly as reasonably practicable in accordance with the dispute resolution provisions hereof set forth in Section  13.4 .
2.3 Price of Services . Services shall be provided by a Service Provider, and Service Recipient shall pay the relevant Service Provider for the Services, at Cost, in accordance with Exhibit 2.1(a) or Exhibit 2.1(b) , except that if a Service Provider provides any Service at the request of or with the written consent of the Service Recipient following the expiration of the term with respect to such Service, in each case, as set forth on Exhibit 2.1(a) or 2.1(b ), the Cost of such Service shall be increased as follows: (a) for the first three (3) months after the expiration of the term of such Service, the Cost shall be increased by twelve and one-half percent (12.5%) above the Cost set forth on Exhibit 2.1(a) or 2.1(b ), as applicable, (b) for the following three (3) months, the Cost shall be increased by twenty five percent (25%) above the Cost set forth on Exhibit 2.1(a) or 2.1(b ), as applicable, (c) for the following three (3) months the Cost shall be increased by fifty percent (50%) above the Cost set forth on Exhibit 2.1(a) or 2.1(b ), as applicable, and (d) thereafter the Cost shall be increased by one hundred percent (100%) above the Cost set forth on Exhibit 2.1(a) or 2.1(b ), as applicable.
2.4 Terms of Payment .
(a) Generally . Any invoice for amounts owed by a Party to another hereunder shall be paid by the relevant Service Recipient within thirty (30) days after receipt of such invoice from Service Provider. For Services that include variable costs, the respective Service Provider will provide the respective Service Recipient with a reconciliation of amounts owed based on actual Services provided during the preceding month. If the estimated amounts paid with respect to Services that include variable costs exceed the actual amount owed with respect to such Services provided during a given month, Service Recipient will receive a credit for such excess amount paid in the next month’s invoice (or if all Services have terminated, such amount shall be paid within thirty (30) days after termination). Likewise, if the estimated amounts paid with respect to Services that include variable costs are less than the actual amount owed with respect to such Services provided during a given month, Service Recipient will pay such deficiency as part of the next month’s invoice (that will include such deficiency) or as part of the final invoice issued after all Services used by Service Recipient have terminated. All payments under this Agreement shall be made by electronic funds transfer of immediately available funds to such bank account of the respective Service Provider as identified by Aptiv (for Services provided by Aptiv or its Affiliates) or by Delphi Technologies (for Services provided by Delphi Technologies or its Subsidiaries). All amounts due for Services rendered pursuant to this Agreement shall be invoiced and paid in the currency in which the rate for such Service is quoted, as set forth in Exhibit 2.1(a) or Exhibit 2.1(b) .
(b) Dispute Resolution . A Service Recipient may not withhold any payments to a Service Provider under this Agreement, notwithstanding any dispute that may be pending
 
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between the Parties, whether under this Agreement or otherwise (any required adjustment being made on subsequent invoices). If there is a dispute between a Service Recipient and a Service Provider regarding the amounts shown as billed to a Service Recipient on any invoice, such Service Provider shall furnish to the respective Service Recipient reasonable documentation to substantiate the amounts billed, including listings of the dates, times and amounts of the Services in question where applicable and practicable. Upon delivery of such documentation, Service Recipient and Service Provider shall cooperate and use commercially reasonable efforts to resolve such dispute among themselves. If such disputing Parties are unable to resolve the dispute within thirty (30) days of the initiation of such resolution procedures, and Service Recipient believes in good faith and with a reasonable basis that the amounts shown as billed to Service Recipient are inaccurate or are otherwise not in accordance with the terms of this Agreement, then the Parties will resolve such dispute pursuant to the general dispute resolution procedures set forth in Section  13.4 .
2.5 Disbursements, Advances . Any necessary disbursements to third party vendors, employees (of a Service Recipient) or suppliers (including prepayments) to be made by a Service Provider on behalf of a Service Recipient in connection with the performance of the Services (“ Disbursements ”) will be included in the invoice for the month in which such Disbursements will be paid. Notwithstanding the foregoing, Disbursements greater than one hundred thousand U.S. Dollars ($100,000) per country that are due in a given month, must, at Service Provider’s election, be paid in advance in order for the Services to be provided. Service Provider shall provide Service Recipient with written notice of any such projected Disbursements, including the projected due date for such Disbursements. For a Service Provider to pay such Disbursements, a Service Recipient shall transfer, on or before the projected due date of a Disbursement, immediately available funds to a bank account identified by Service Provider. For the avoidance of doubt, any and all amounts to be paid by Aptiv on behalf of Service Recipient pursuant to the payroll function referred to in Exhibit 2.1(a) , if any, shall be included in the Disbursements referred to herein and Aptiv or its Affiliates will under no circumstances be liable to fund any such payable to employees of Service Recipient unless Aptiv has received from Service Recipient the funds necessary to enable Aptiv to make such Disbursement. If any Service requires travel by a Service Provider, Service Recipient will be notified in advance, and travel expenses will be separately billed.
2.6 Performance of Excluded Services . The relevant Service Recipient shall, at its sole cost and expense, perform, or cause to be performed, all Excluded Services which are necessary to its continued operation or the performance of the Services by the applicable Service Provider(s); provided , however , that a Service Recipient may elect not to perform, or cause to be performed, any Excluded Service, if such nonperformance would not: (a) increase the Cost of any Service provided by a Service Provider under this Agreement, a Participation Agreement or a similar agreement between the Parties or their Affiliates; (b) increase the resources required to perform any Service; or (c) result in any increased liability exposure to any Service Provider or any of its Affiliates or any other party other than a Service Recipient or its Affiliates. Notwithstanding anything herein to the contrary, no Service Provider shall have any obligation to perform any Service to the extent that such Service is dependent in a material respect upon the performance of an Excluded Service that a Service Recipient elects not to perform or cause to be performed.
 
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2.7 Correction of Processing Errors . Each Service Recipient is responsible from and after the Distribution Date for: (a) the accuracy and completeness of all data or information submitted by a Service Recipient to the applicable Service Provider for processing or transmission in connection with the Services (“ Data ”); and (b) any errors in and with respect to data or information obtained from Service Provider to the extent caused by any inaccurate or incomplete Data submitted by a Service Recipient.
2.8 Service Recipient’s Obligations .
(a) General . Service Recipient shall: (i) maintain in good operating condition all equipment, software and operational features maintained or controlled by a Service Recipient and used in the provision of, or necessary for the receipt or delivery of, the Services, in a manner consistent with the practice for maintenance of all equipment, software and operational features as of the Distribution Date; (ii) appropriately enhance (i.e., improve or upgrade and not fix or patch) any equipment, software and operational features maintained or controlled by a Service Recipient, as may be necessary for such equipment, software and operational features to be compatible with any systems used by the applicable Service Provider after the Distribution Date in connection with providing Services in a manner consistent with provision of such Services during the Service Baseline Period, provided that: (a) within ten (10) days after the applicable Service Provider has notified Service Recipient that an enhancement is necessary in order to maintain the required compatibility, Service Recipient shall develop and deliver to Service Provider a plan, for Service Provider’s approval, to complete all such enhancements (at Service Recipient’s sole cost and expense) within the time required by Service Provider; provided , further , that where either Party believes that an enhancement will result in material expenditure by Service Recipient, the Parties shall discuss in good faith the proposed timing of any necessary enhancement with Service Recipient in an effort to avoid unnecessary expense on the part of Service Recipient, provided that Service Provider makes no assurances that timing considerations will be accommodated, (b) Service Recipient shall complete such enhancements in accordance with the plan approved by Service Provider and (c) if Service Recipient has not implemented the enhancements necessary to permit it to receive the relevant Services by the time Service Provider has notified Service Recipient that the enhancements must be implemented, Service Provider shall have no obligation to provide Services until Service Recipient has made the necessary enhancements; (iii) be solely responsible for all costs and expenses, if any, incurred by Service Recipient or Service Provider resulting from any termination of a Service prior to the expiration of the term for such Service as set forth on Exhibit 2.1(a) or 2.1(b) , as applicable, including any severance costs and expenses incurred resulting or arising from or in connection with the early termination of any Service; (iv) comply with any policies and reasonable instructions provided by the applicable Service Provider that are necessary or desirable for Service Provider to provide the Services in accordance with this Agreement; (v) in the case of Delphi Technologies and its Subsidiaries, make available to Aptiv the books and records that were transferred to Delphi Technologies by Aptiv or its Affiliates pursuant to the Separation and Distribution Agreement to the extent necessary for Aptiv or its Affiliates to perform its obligations under this Agreement; (vi) be responsible for its pro-rata share (as determined by Service Provider in its reasonable discretion) of the costs of replacement, repair and maintenance of any equipment or other assets provided by a Service Provider (and owned by a Service Provider or a third party) to a Service Recipient which are necessary for the provision of Services hereunder; (vii) be solely responsible for all costs and expenses associated with the
 
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preparation of Service Provider’s systems for Service Recipient’s migration off of those systems, including, but not limited to, the creation and installation of redundant or alternative programs or systems, carve-outs, separations and firewalls; and (viii) be solely responsible for all costs and expenses, if any, incurred by Service Recipient or Service Provider associated with migration off of Service Provider systems, including, but not limited to out-of-pocket costs of data extraction, software licenses and system deinstallation.
(b) Monitoring of Replacement Programs . The relevant Service Recipient shall provide updates as reasonably requested by Service Provider to allow the relevant Service Provider to monitor the current status of Service Recipient’s efforts to establish replacement or alternative programs and services in substitution for all Services provided by the relevant Service Providers to assure timely completion of such efforts.
2.9 Nature of Services; Limitations on Performance .
(a) The Parties acknowledge and agree that the Services are transitional in nature. Service Recipient agrees to cooperate in good faith and to use commercially reasonable efforts to effectuate a smooth transition of the Services from Service Provider to Service Recipient (or its designee) as soon as commercially practicable after the Distribution Date, but in any event before the end of the Service period for such Service. The Parties agree to use reasonable efforts to assist and cooperate in good faith with each other in order to effectuate such transition of the Services from Service Provider to Service Recipient (or its designee) in a timely and orderly manner.
(b) Nothing in this Agreement shall require Service Provider to perform or cause to be performed any Service to the extent that Service Provider reasonably believes that the manner of such performance would constitute (i) a breach, violation or infringement of, or a default under, any of the terms, conditions or provisions of any agreement, instrument, contract, obligation or undertaking which was entered into by such Service Provider prior to the date of this Agreement or (ii) a violation of any applicable Law. If Service Provider is or becomes aware of any potential violation on the part of Service Provider, Service Provider shall use commercially reasonable efforts to promptly advise Service Recipient of such potential violation, and Service Provider and Service Recipient will use their commercially reasonable efforts to jointly seek an alternative that addresses such potential violation. The Parties agree to cooperate in good faith and use commercially reasonable efforts to obtain any necessary third party consents required under any existing contract or agreement with a third party or under applicable Law to allow Service Provider to perform, or cause to be performed, all Services to be provided by Service Provider hereunder in accordance with the standards set forth in this Agreement. Without limiting the foregoing, neither Party shall under any circumstance be required to (and Service Provider shall not, without the prior written consent of Service Recipient) pay or commit to pay any amount or incur any obligation in favor of or offer or grant any accommodation (financial or otherwise, including any requirements for the securing or posting of any bonds, letters of credit or similar instruments, or the furnishing of any guarantees) to obtain any such third party consent. Unless otherwise agreed in writing in advance by the Parties, all reasonable out-of-pocket costs and expenses (if any) incurred by Service Recipient or any of its Subsidiaries or, with Service Recipient’s prior written consent, Service Provider or any of its Subsidiaries in connection with obtaining any such third party consent that is required to allow Service Provider
 
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to perform or cause to be performed such Services shall be borne solely by Service Recipient; provided , however , that in the event Service Recipient does not consent to bear the foregoing third-party consent fees payable by Service Provider or any of its Subsidiaries, then Service Provider and its Subsidiaries shall be relieved of their obligations to perform or cause to be performed any Services requiring such consent. If, with respect to a Service, the Parties, despite the use of such commercially reasonable efforts, are unable to obtain a required third party consent, or the performance of such Service by Service Provider would constitute a violation of any applicable Law, the Parties shall use commercially reasonable efforts to develop an alternative arrangement that is reasonably acceptable to each Party and that enables Service Provider to perform or cause to be performed such Service or an analogous service without obtaining such required third party consent or violating any applicable Law.
ARTICLE 3
CONSENTS; HARDWARE AND SOFTWARE
3.1 Required Consents . The applicable Service Provider shall use commercially reasonable efforts to obtain any consents, approvals or amendments to existing agreements of any Service Provider necessary to allow a Service Provider to provide the Services to a Service Recipient (the “ Consents ”). The applicable Service Recipient shall pay, or, at Service Provider’s request, reimburse Service Provider for, the cost of obtaining the Consents and any fees or charges associated with the Consents or with any transfers of computer equipment leases or software licenses to a Service Recipient, including, but not limited to, any additional license, sublicense, access or transfer fees. Service Recipient acknowledges that there can be no assurance that Service Provider will be able to obtain the Consents. In the event that any Consents are not obtained, upon Service Recipient’s request, Service Provider will reasonably cooperate with Service Recipient to identify, and if commercially feasible, to implement, a work-around or other alternative arrangement for any affected Service(s), provided that (i) Service Recipient shall be responsible for all fees and costs associated with any such work-around or alternative arrangement, (ii) Service Provider shall not be required to undertake any activities that increase, in any material respect, the resources required of it to perform the Service(s), and (iii) Service Recipient acknowledges that any such work-around or alternative arrangement may adversely impact the standards for provision of the Services set forth in Section  2.1(a) , and Service Provider shall not be liable for any breach of this Agreement that results from the adoption of any such work-around or alternative arrangement.
3.2 Additional Hardware and Software . No Service Provider shall be obligated to purchase, license, lease or otherwise obtain the right to use any hardware or software in order to provide Services that exceed the level of such Services during the Service Baseline Period. Service Recipient shall be responsible for obtaining, at Service Recipient’s sole expense, any software or other licenses it needs in order to receive the Services.
ARTICLE 4
DATA AND THIRD PARTY ASSETS
4.1 All data provided by a Service Provider hereunder shall be in the form used by the applicable Service Provider as of the Distribution Date, except to the extent such form may be altered by modifications or enhancements of Service Provider’s systems. Unless furnished to
 
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Service Provider by a Service Recipient, all media upon which Service Recipient’s Data is stored is and shall remain the property of Service Provider. Special reports and other non-conforming data requests will be provided only if Service Provider and Service Recipient enter into a separate agreement with respect thereto.
ARTICLE 5
SHARED FACILITIES
5.1 Shared Facilities .
(a) Aptiv shall provide Services relating to certain facilities as further described in Exhibit 2.1(a) and Exhibit 5.1(a) . In case of any conflict between the terms and conditions set forth in Exhibit 2.1(a) and Exhibit 5.1(a) , Exhibit 2.1(a) shall prevail.
(b) Delphi Technologies shall provide Services relating to certain facilities as further described in Exhibit 2.1(b) and Exhibit 5.1(b) . In case of any conflict between the terms and conditions set forth in Exhibit 2.1(b) and Exhibit 5.1(b) , Exhibit 2.1(b) shall prevail.
ARTICLE 6
DISCLAIMER
6.1 EXCEPT FOR THE INDEMNITY EXPRESSLY SET FORTH IN SECTION  7.1 , THE SERVICES SHALL BE PROVIDED BY EACH SERVICE PROVIDER “AS-IS”, AND EACH SERVICE PROVIDER EXPRESSLY DISCLAIMS TO THE FULL EXTENT PERMISSIBLE BY LAW ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AS TO THE NATURE OR STANDARD OF THE SERVICES OR PRODUCTS OF THE SERVICES WHICH ANY OF THEM MAY PROVIDE HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER DELPHI TECHNOLOGIES NOR ITS AFFILIATES, ON THE ONE HAND, NOR APTIV NOR ITS AFFILIATES, ON THE OTHER HAND, SHALL BE LIABLE UNDER THIS AGREEMENT TO THE OTHER FOR ANY CONSEQUENTIAL, SPECIAL, INDIRECT, PUNITIVE, EXEMPLARY, REMOTE, SPECULATIVE OR SIMILAR DAMAGES OR ANY LOST PROFITS OR DAMAGES CALCULATED BASED ON A MULTIPLE OF PROFITS, REVENUE OR ANY OTHER FINANCIAL METRIC, IN EACH CASE, ARISING IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY (OTHER THAN ANY SUCH LIABILITY WITH RESPECT TO A THIRD-PARTY CLAIM).
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification . Subject to the next sentence, Delphi Technologies and Aptiv, as applicable, shall cause each Service Recipient to defend, indemnify and hold the relevant Service Provider harmless from any and all Liabilities suffered or incurred by Service Provider in
 
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connection with any and all demands, audits, Actions and causes of action to the extent arising from or relating to: (a) the Services provided to such Service Recipient pursuant to this Agreement; (b) any actions taken by any Service Provider in connection with such Services or this Agreement; (c) a Service Recipient’s failure to perform, or cause to be performed, any Excluded Services; or (d) the actions of any employee, representative or agent of a Service Recipient (including death, personal injury and/or property damage), in each case except to the extent that such Liabilities arose solely from the gross negligence or willful misconduct of any Service Provider or their respective Representatives (any demands, audits, Actions and causes of action to the extent arising under paragraphs (a) through (d) above, a “ Claim ”). Delphi Technologies and Aptiv, as applicable, shall cause each Service Provider to indemnify the applicable Service Recipient to the extent of Liabilities caused by such gross negligence or willful misconduct; provided , however , that each Party and its respective Service Providers’ aggregate maximum liability to the other Party and its respective Service Recipients under this Agreement shall not exceed the aggregate fees received by Aptiv and its affiliated Service Providers pursuant to this Agreement.
Notwithstanding the foregoing, neither Party and its respective Service Providers or Service Recipients, as applicable, shall have any liability to each other under this Agreement arising from or relating to a Claim if the underlying facts, event (or series of events) or circumstances underlying the Claim have had an adverse effect on both Parties and/or their respective Service Providers or Service Recipients, as applicable (regardless of whether such facts, event (or series of events) or circumstances gave rise to a Claim in favor of the other Party).
7.2 Sole and Exclusive Remedy . Each Party acknowledges and agrees that (i) the indemnification provided in Article 7 , and (ii) the specific performance provided in Section 13.9 shall be the sole and exclusive remedies of the Parties hereto and their Affiliates and their respective successors or assigns in respect of any claim for Liabilities arising under or out of this Agreement.
7.3 Procedures . The provisions of Section 5.5 of the Separation and Distribution Agreement shall apply to indemnification claims under this Agreement mutatis mutandis .
ARTICLE 8
FORCE MAJEURE
8.1 Except for any payment obligations of either Party, in case a Service Provider or Service Recipient shall be hindered, delayed or prevented from performing its obligations under this Agreement (other than its payment obligation), or if such performance is rendered impossible by reason of any force majeure event including fire, explosion, earthquake, storm, flood, drought, embargo, pandemic, wars or other hostilities, strike, lockout or other labor disturbance, mechanical breakdown, governmental action, or any other cause that is beyond the reasonable control of a Service Provider or Service Recipient, then the Party so hindered, delayed or prevented shall not be liable to the other Party for the resulting failure to carry out its obligations hereunder.
 
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ARTICLE 9
TERM AND TERMINATION
9.1 Term . Unless earlier terminated pursuant to the provisions of this Article  9 , or extended by written agreement of the Parties with respect to any one or more of the Services, or parts thereof, this Agreement shall expire at the end of the Term.
9.2 Termination for Default . If either Party fails to perform any of its material duties or obligations pursuant to this Agreement and such breach is not cured within fifteen (15) days, in the event such breach involves the payment of money, or within thirty (30) days, with respect to any other breach, after notice to such Party specifying the nature of such failure, the other Party may terminate this Agreement in its entirety, or with respect to any or all of the Services provided by such Party, upon further notice to the defaulting Party.
9.3 Termination for Convenience . A Service Recipient may terminate this Agreement in respect of any or all of the Services provided to such Service Recipient by a Service Provider, effective on the first day of any calendar month, by providing a minimum of forty-five (45) days (or such longer period as may be set forth in Exhibit 2.1(a) or Exhibit 2.1(b) with respect to a particular Service) prior written notice to the applicable Service Provider in the form of a Service cancellation notice in a form materially consistent with the format attached as Exhibit  9.3 (“ Cancellation Notice Form ”); provided , however , that if a Service Recipient provides such Cancellation Notice Form to the applicable Service Provider with respect to any Service, Service Recipient may not request Service Provider to provide such Service beyond the date specified in such Cancellation Notice Form. Notwithstanding the foregoing, a Service Recipient may not terminate this Agreement as set forth in this Section  9.3 with respect to (i) a portion of (but not all of) a particular Service nor (ii) with respect to a particular Service if such Service is interdependent with other Services, unless all such interdependent Services are simultaneously terminated. Notwithstanding a Service Recipient’s right to terminate this Agreement with respect to any particular Service as set forth in this Section  9.3 , the relevant Service Recipient shall work with the relevant Service Provider to develop a plan for the timing and coordination of the orderly discontinuance of each Service and Service Recipient shall bear all documented out-of-pocket costs and expenses incurred by Service Provider in connection with such discontinuance of Service.
9.4 Effect of Termination .
(a) Upon: (a) the expiration or termination of this Agreement; (b) termination of the provision of any Services pursuant to Section  9.2 ; or (c) the termination of any Services pursuant to Section  9.3 , the Parties shall pay all costs and other sums owed to the other for the terminated Services provided or reimbursement of excess payments through the date of such expiration or termination on the payment terms set forth in Section  2.4 ; provided, that any costs which are thereafter determined to be due and payable with respect to such Services shall be invoiced to the owing Party and paid on the payment terms set forth in Section  2.4 .
(b) Upon the expiration or termination of this Agreement in respect of a Facility Transition Services listed in Exhibit 2.1(a) , Delphi Technologies shall, and shall cause the relevant Service Recipient to (i) complete the removal of all its assets from Aptiv’s or its
 
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Services Providers’ premises at the latest on the expiration or termination date of the relevant Facility Transition Services, (ii) repair or reimburse Service Provider for repairing all damage caused by any such removal and (iii) leave the applicable premises broom-clean and in good order and working condition (ordinary wear and tear excepted), provided that at the latest nine (9) months prior to the expiration date of the relevant Facility Transition Service, Delphi Technologies shall provide Aptiv with a reasonably detailed written plan describing the steps leading to a vacation of the relevant premises occupied by the relevant Service Recipient on the relevant termination or expiration date and, after delivering such notice, shall provide monthly updates to Aptiv regarding plans to vacate the premises. Any asset that is not removed from the relevant Aptiv’s or its Service Providers’ premises in violation of this provision shall be deemed to be abandoned by Delphi Technologies or its Services Recipients, as the case may be, and may be disposed of, or scrapped by Aptiv or the relevant Service Provider, at Aptiv’s or the relevant Service Provider’s discretion and at Delphi Technologies’ or the relevant Service Recipient’s cost and expenses.
ARTICLE 10
CONFIDENTIALITY
10.1 All written confidential or proprietary information and documentation clearly marked “Proprietary” or other similar marking and all employee and payroll data or other information that would reasonably be understood to be confidential (the “ Confidential Information ”) relating to either Party or its Affiliates shall be held in confidence by the other Party or its Affiliates to the same extent and in at least the same manner as such Party protects its own confidential or proprietary information of a similar nature. Subject to the exceptions provided in this Article 10 , neither Party shall disclose, publish, release, transfer or otherwise make available Confidential Information of the other Party in any form to, or for the use or benefit of, any Person without the other Party’s approval. Each Party shall, however, be permitted to disclose relevant aspects of the other Party’s Confidential Information to its officers, agents and employees and to the officers, agents and employees of its Affiliates to the extent that such disclosure is reasonably necessary to the performance of its duties and obligations or the exercise of its rights under this Agreement; provided , that such Party shall take all reasonable measures to ensure that Confidential Information of the other Party is not disclosed or duplicated in contravention of the provisions of this Agreement by such officers, agents and employees. The obligations in this Article 10 shall not: (a) restrict any disclosure by either Party pursuant to any applicable Law of any Governmental Authority (provided that the disclosing Party shall endeavor to give such notice to the non-disclosing Party as may be reasonable under the circumstances); and (b) apply with respect to information that: (i) is independently developed by the other Party; (ii) becomes part of the public domain (other than through unauthorized disclosure); (iii) is disclosed by the owner of such information to a third party free of any obligation of confidentiality; or (iv) either Party gained knowledge of, or possession of, free of any obligation of confidentiality.
ARTICLE 11
GOVERNANCE
11.1 TSA and Service Manager . Each of Aptiv and Delphi Technologies shall designate a person within their respective organization to be the person responsible for all matters
 
13

relating to the consummation of this Agreement (the “ Delphi Technologies TSA Manager ” and the “ Aptiv TSA Manager ”). The Parties may also agree for one or more Services to designate a person responsible for all matters and communication concerning the respective Service (“ Service Manager ”), including for managing and coordinating the performance of the respective Service. Aptiv and Delphi Technologies, and each Service Provider and Service Recipient may change its designated TSA Manager or Service Manager from time to time, and inform the respective other Party, Service Provider or Service Recipient, as the case may be, in writing about such change.
ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1 Notices . All notices, requests, claims, demands or other communications under this Agreement shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by facsimile or electronic transmission with receipt confirmed (followed by delivery of an original via overnight courier service), or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section  13.1 ):
if to Delphi Technologies, to:
Delphi Technologies PLC
[Address]
Attention: Liam Butterworth, President and Chief Executive Officer
Facsimile No.: [●]
With a copy (which shall not constitute notice) to:
Delphi Technologies PLC
5820 Delphi Drive
Troy, MI 48098
Attention: James Harrington, General Counsel
Facsimile No.: [●]
if to Aptiv, to:
Delphi Automotive PLC
5725 Delphi Drive
Troy, MI 48098
Attention: Joseph Massaro, Senior Vice President and Chief Financial Officer
Facsimile No.: 1.248.813.2648
With a copy (which shall not constitute notice) to:
Delphi Automotive PLC
5725 Delphi Drive
Troy, MI 48098
 
14

Attention: David Sherbin, Senior Vice President, General Counsel, Secretary and Chief Compliance Officer
Facsimile No.: 1.248.813.2491
Any Party may, by notice to the other Party, change the address and contact person to which any such notices are to be given.
12.2 Amendment and Waivers .
(a) No provisions of this Agreement shall be waived, amended, supplemented or modified by a Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom such waiver, amendment, supplement or modification is sought to be enforced.
(b) No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law.
12.3 Expenses . Except as otherwise expressly provided herein, each Party shall pay its own expenses incident to this Agreement and the transactions contemplated herein.
12.4 Governing Law; Dispute Resolution; WAIVER OF JURY TRIAL .
(a) This Agreement (and any claims or disputes arising out of or related hereto or to the transactions contemplated hereby or to the inducement of any Party to enter herein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by and construed and interpreted in accordance with the Laws of the State of Delaware, irrespective of the choice of laws principles of the State of Delaware, including all matters of validity, construction, effect, enforceability, performance and remedies.
(b) Article IV of the Separation and Distribution Agreement shall apply to all Disputes arising out of or relating to this Agreement, mutatis mutandis .
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY BASED UPON, RELATING TO OR ARISING FROM THIS AGREEMENT AND ANY OF THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
 
15

EITHER OF SUCH WAIVERS, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION  13.4(c) .
12.5 Assignment; Successors and Assigns; No-Third Party Beneficiaries . This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns; provided , however , that no Party may assign its respective rights or delegate its respective obligations under this Agreement without the express prior written consent of the other Party. Notwithstanding the foregoing, no such consent shall be required for the assignment of a Party’s rights and obligations under this Agreement in whole in connection with a change of control of a Party so long as the resulting, surviving or transferee Person assumes all the obligations of the relevant party thereto by operation of Law or pursuant to an agreement in form and substance reasonably satisfactory to the other Party. Nothing herein is intended to, or shall be construed to, prohibit either Party or any member of its Group from being party to or undertaking a change of control. No provision of this Agreement is intended to confer any rights, benefits, remedies or Liabilities hereunder upon any person other than the Parties and their respective successors and permitted assigns.
12.6 Counterparts; Effectiveness .
(a) This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each Party and delivered to each other Party.
(b) Each Party acknowledges that it and each other Party may execute this Agreement by facsimile, stamp or mechanical signature. Each Party expressly adopts and confirms each such facsimile, stamp or mechanical signature made in its respective name as if it were a manual signature, agrees that it shall not assert that any such signature is not adequate to bind such Party to the same extent as if it were signed manually and agrees that at the reasonable request of any other Party at any time it shall as promptly as reasonably practicable cause this Agreement to be manually executed (any such execution to be as of the date of the initial date thereof).
12.7 Entire Agreement . This Agreement and the exhibits, annexes and schedules hereto contain the entire agreement between the Parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter and there are no agreements or understandings between the Parties with respect to such subject matter other than those set forth or referred to herein.
12.8 Severability . If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or thereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired
 
16

or invalidated thereby. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties.
12.9 Specific Performance .
(a) The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that any breach of this Agreement would not be adequately compensated by monetary damages. The Parties agree that, prior to the valid termination of this Agreement pursuant to Article 9 , Delphi Technologies, on the one hand, and Aptiv, on the other hand, shall, in the event of any breach or threatened breach by Aptiv, on the one hand, or Delphi Technologies, on the other hand, of any of their respective covenants or agreements set forth in this Agreement, be entitled to equitable relief, including an injunction or injunctions to prevent or restrain breaches or threatened breaches of this Agreement, by the other, as applicable, and to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and agreements of the other under this Agreement. The Parties have specifically bargained for the right to specific performance of the obligations hereunder, in accordance with the terms and conditions of this Section  13.9 .
(b) Each Party hereby agrees not to raise any objections to the availability of the equitable remedy of specific performance when available pursuant to the terms of this Agreement to prevent or restrain breaches of this Agreement by such Party, and to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and agreements of such Party under this Agreement in accordance with the terms of this Section  13.09 . Any Party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement shall not be required to provide any bond or other security in connection with such order or injunction, all in accordance with the terms of this Section  13.9 . Each Party further agrees that (i) by seeking the remedies provided for in this Section  13.9 , a Party shall not in any respect waive its right to seek any other form of relief that may be available to such Party under this Agreement in the event that this Agreement has been terminated or in the event that the remedies provided for in this Section  13.9 are not available or otherwise are not granted and (ii) nothing set forth in this Section  13.9 shall require any Party to institute any Action for (or limit any Party’s right to institute any Action for) specific performance under this Section  13.9 prior or as a condition to exercising any termination right under Article 9 , nor shall the commencement of any Action pursuant to this Section  13.9 or anything set forth in this Section  13.9 restrict or limit any Party’s right to terminate this Agreement in accordance with the terms of Article 9 or pursue any other remedies under this Agreement that may be available then or thereafter.
12.10 Relationship of the Parties . The relationship of the Parties, or any Service Provider and any Service Recipient, to each other is that of independent contractors and neither Party nor its agents or employees shall be considered employees or agents of the other Party. This Agreement does not constitute and shall not be construed as constituting a partnership or joint venture or grant of a franchise between Aptiv and Delphi Technologies or any Service Provider and any Recipient. Neither Party shall have the right to bind the other Party to any obligations to third parties.
 
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12.11 Access to Aptiv IT Systems . In the event that employees of Delphi Technologies or any of its Subsidiaries are provided access to the information technology systems of Aptiv or any of its Affiliates in connection with the provision or receipt of Services, Delphi Technologies will cause such employees to sign and deliver to Aptiv a reasonable confidentiality agreement acceptable to Aptiv, and an agreement to abide by Aptiv’s rules, regulations and policies applicable to such employees’ access to and use of such information technology systems (copies of which will be provided to Delphi Technologies and such employees). Delphi Technologies shall ensure that all such employees comply with such agreements, and shall be jointly and severally liable with such employees for any breaches thereof.
12.12 Headings . The article, section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this.
12.13 Conflict . In case of any conflict between the terms and conditions of this Agreement and any Exhibit , the terms and conditions of the Exhibit shall govern.
12.14 Survival . The provisions of Section  2.3 , Section  2.4 , Section  2.9, Section  2.5 , Section  3.1 , Article  6 , Article  7 , Article 8 , Section  9.4 , Article  10 , and Article  13 shall survive the expiration or the termination of this Agreement.
12.15 Taxes . All sums payable under this Agreement are exclusive of value added tax, sales tax, service tax and turnover tax that may be levied in any jurisdiction which shall (if and to the extent applicable with respect to a Service) be payable by Service Recipient of such Service. Each of Service Providers and Service Recipients shall be liable for its own income taxes. Delphi Technologies and Aptiv agree to cooperate (to the extent that it is possible) in order to resolve tax issues associated with this Agreement.
[ Signature page follows. ]
 
18

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.

DELPHI AUTOMOTIVE PLC	
	
By:                                                                                                 	
Name:                                                                                            	
Its:                                                                                                  	
	
DELPHI TECHNOLOGIES PLC	
	
By:                                                                                                 	
Name:                                                                                            	
Its:                                                                                                  	
[ Signature Page to TSA ]

Exhibit 10.2
TAX MATTERS AGREEMENT
BY AND BETWEEN
DELPHI AUTOMOTIVE PLC
AND
DELPHI TECHNOLOGIES PLC
DATED AS OF [  🌑  ], 2017

TABLE OF CONTENTS

 	  	Page	 	
Section 1. Definition of Terms	  	 	1	 	
		
Section 2. Allocation of Tax Liabilities and Tax-Related Losses	  	 	10	 	
Section 2.01 General Rule	  	 	10	 	
Section 2.02 General Allocation Principles	  	 	10	 	
Section 2.03 Allocation Conventions	  	 	11	 	
		
Section 3. Preparation and Filing of Tax Returns	  	 	11	 	
Section 3.01 Aptiv Separate Returns and Joint Returns	  	 	11	 	
Section 3.02 Delphi Technologies Separate Returns	  	 	12	 	
Section 3.03 Tax Reporting Practices	  	 	12	 	
Section 3.04 Protective Section 336(e) Election.	  	 	12	 	
Section 3.05 Delphi Technologies Carrybacks and Claims for Refund	  	 	13	 	
Section 3.06 Apportionment of Tax Attributes	  	 	14	 	
Section 3.07 UK Group Relief	  	 	15	 	
Section 3.08 Equity Compensation	  	 	15	 	
		
Section 4. Tax Payments	  	 	15	 	
Section 4.01 Taxes Shown on Tax Returns	  	 	15	 	
Section 4.02 Adjustments Resulting in Underpayments	  	 	16	 	
Section 4.03 Indemnification Payments.	  	 	16	 	
		
Section 5. Tax Benefits	  	 	16	 	
Section 5.01 Tax Refunds	  	 	16	 	
Section 5.02 Other Tax Benefits	  	 	17	 	
		
Section 6. Intended Tax Treatment	  	 	17	 	
Section 6.01 Restrictions on Members of the Delphi Technologies Group	  	 	17	 	
Section 6.02 Restrictions on Members of the Aptiv Group.	  	 	19	 	
Section 6.03 Procedures Regarding Opinions and Rulings	  	 	20	 	
Section 6.04 Liability for Specified Separation Taxes and Tax-Related Losses	  	 	20	 	
		
Section 7. Assistance and Cooperation	  	 	21	 	
Section 7.01 Assistance and Cooperation	  	 	21	 	
Section 7.02 Tax Return Information	  	 	22	 	
Section 7.03 Reliance by Aptiv	  	 	22	 	
Section 7.04 Reliance by Delphi Technologies	  	 	22	 	
Section 7.05 Other Separation Taxes	  	 	23	 	
		
Section 8. Tax Records	  	 	23	 	
Section 8.01 Retention of Tax Records	  	 	23	 	
Section 8.02 Access to Tax Records	  	 	23	 	
Section 8.03 Preservation of Privilege	  	 	24	 	
		
Section 9. Tax Contests	  	 	24	 	
Section 9.01 Notice	  	 	24	 	
Section 9.02 Control of Tax Contests	  	 	24	 	
 
i

					
Section 10. Survival of Obligations	  	 	26	 	
		
Section 11. Tax Treatment of Interest	  	 	26	 	
		
Section 12. Gross-Up of Indemnification Payments	  	 	27	 	
		
Section 13. Dispute Resolution	  	 	27	 	
		
Section 14. General Provisions	  	 	27	 	
Section 14.01 Entire Agreement; Construction; Corporate Power	  	 	27	 	
Section 14.02 Other Agreements	  	 	28	 	
Section 14.03 Governing Law	  	 	28	 	
Section 14.04 Construction	  	 	28	 	
Section 14.05 Performance	  	 	28	 	
Section 14.06 Payment Terms	  	 	28	 	
Section 14.07 No Admission of Liability	  	 	29	 	
 
ii

TAX MATTERS AGREEMENT
This TAX MATTERS AGREEMENT (this “ Agreement ”) is entered into effective as of [  🌑  ], by and between Delphi Automotive PLC, a public limited company formed under the laws of Jersey (“ Aptiv ”) and Delphi Technologies PLC, a public limited company formed under the laws of Jersey and wholly owned subsidiary of Aptiv (“ Delphi Technologies ”). Aptiv and Delphi Technologies are each a “ Party ” and are sometimes referred to herein collectively as the “ Parties .” Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Section 1 of this Agreement.
RECITALS
WHEREAS , Aptiv, acting together with its Subsidiaries, currently conducts the Aptiv Business and the Delphi Technologies Business;
WHEREAS , Aptiv and Delphi Technologies have entered into a Separation and Distribution Agreement, dated as of [  🌑  ] (the “ Separation Agreement ”) pursuant to which the Separation will be consummated;
WHEREAS , the Parties intend that (i) the Distribution will qualify as a distribution under Section 355(a) of the Internal Revenue Code of 1986, as amended (the “ Code ”) and (ii) the Internal Distribution will qualify for tax-free treatment under Sections 368(a)(1)(D) and 355 of the Code; and
WHEREAS , Aptiv and Delphi Technologies desire to set forth their agreement on the rights and obligations of Aptiv and Delphi Technologies and the members of the Aptiv Group and the Delphi Technologies Group, respectively, with respect to (A) the administration and allocation of federal, state, local, and foreign Taxes incurred in Tax Periods beginning prior to the Distribution Date, (B) Taxes resulting from the Distribution and transactions effected in connection with the Distribution and (C) various other Tax matters.
NOW , THEREFORE , in consideration of the foregoing and the mutual agreements, provisions and covenants contained in this Agreement, the Parties hereby agree as follows:
Section  1. Definition of Terms . For purposes of this Agreement (including the recitals hereof), the following terms have the following meanings:
“ Active Trade or Business ” means (i) with respect to the Delphi Technologies SAG, the active conduct (as defined in Section 355(b)(2) of the Code and the Treasury Regulations thereunder) of the US Powertrain Business as conducted immediately prior to the Distribution by the Delphi Technologies SAG, and (ii) with respect to the Internal SpinCo SAG, the active conduct (as defined in Section 355(b)(2) of the Code and the Treasury Regulations thereunder) of the US Powertrain Business as conducted immediately prior to the Internal Distribution by the Internal SpinCo SAG.
“ Adjusted Grossed-Up Basis ” has the meaning set forth in Section 3.04(b) of this Agreement.
 
1

“ Adjustment Request ” means any formal or informal claim or request filed with any Tax Authority, or with any administrative agency or court, for the adjustment, refund, or credit of Taxes, including (i) any amended Tax Return claiming adjustment to the Taxes as reported on the Tax Return or, if applicable, as previously adjusted, (ii) any claim for equitable recoupment or other offset, and (iii) any claim for refund or credit of Taxes previously paid.
“ Affiliate ” has the meaning set forth in the Separation Agreement.
“ Aggregate Deemed Asset Disposition Price ” has the meaning set forth in Section 3.04(b) of this Agreement.
“ Agreement ” means this Tax Matters Agreement.
“ Ancillary Agreement ” has the meaning set forth in the Separation Agreement; provided, however, that for purposes of this Agreement, this Agreement shall not constitute an Ancillary Agreement.
“ Aptiv ” has the meaning set forth in the preamble to this Agreement.
“ Aptiv Business ” has the meaning set forth in the Separation Agreement.
“ Aptiv Equity Compensation Award ” has the meaning set forth in the Employee Matters Agreement.
“ Aptiv Group ” has the meaning set forth in the Separation Agreement.
“ Aptiv Separate Return ” means any Tax Return of or including any member of the Aptiv Group (including any consolidated, combined or unitary return) that does not include any member of the Delphi Technologies Group.
“ Aptiv Stock ” has the meaning set forth in the Separation Agreement.
“ Aptiv Disqualifying Act ” means, with respect to any Specified Separation Taxes, (a) any act, or failure or omission to act, by any member of the Aptiv Group following the Distribution that results in any Party (or any of its Affiliates) being liable for such Specified Separation Taxes pursuant to a Final Determination, (b) the direct or indirect acquisition of all or a portion of the shares of Internal Distributing (or any transaction or series of related transactions that is deemed to be such an acquisition for purposes of Section 355(e) of the Code and the Treasury Regulations promulgated thereunder) by any means whatsoever by any Person, including pursuant to an issuance of shares by Internal Distributing or Aptiv, (c) any event (or series of events) involving Capital Stock of Aptiv or any assets of any member of the Aptiv Group or (d) any failure to be true, inaccuracy in, or breach of any of the representations or statements contained in the Representation Letters.
“ Assets ” has the meaning set forth in the Separation Agreement.
“ Business Day ” has the meaning set forth in the Separation Agreement.
 
2

“ Capital Stock ” means all classes or series of capital stock of a corporation, including (i) common stock, (ii) all options, warrants and other rights to acquire such capital stock and (iii) all instruments properly treated as stock in such corporation for U.S. federal Income Tax purposes.
“ Closing of the Books Method ” means the apportionment of items between portions of a Tax Period based on a closing of the books and records on the close of the Distribution Date (in the event that the Distribution Date is not the last day of the Tax Period, as if the Distribution Date were the last day of the Tax Period), subject to adjustment for items accrued on the Distribution Date that are properly allocable to the Tax Period following the Distribution, as jointly determined by Aptiv and Delphi Technologies; provided that any items not susceptible to such apportionment shall be apportioned on the basis of elapsed days during the relevant portion of the Tax Period.
“ Code ” has the meaning set forth in the recitals to this Agreement.
“ Controlling Party ” has the meaning set forth in Section 9.02(c) of this Agreement.
“ Delphi Technologies ” has the meaning provided in the preamble to this Agreement.
“ Delphi Technologies Business ” has the meaning set forth in the Separation Agreement.
“ Delphi Technologies Carryback ” means any net operating loss, net capital loss, excess Tax credit, or other similar Tax item of any member of the Delphi Technologies Group which may or must be carried from one Tax Period to another prior Tax Period under the Code or other applicable Tax Law.
“ Delphi Technologies Disqualifying Act ” means, with respect to any Specified Separation Taxes, following the Distribution, (a) any act, or failure or omission to act, including, without limitation, the breach of any covenant contained herein, by any member of the Delphi Technologies Group that results in any Party (or any of its Affiliates) being liable for such Specified Separation Taxes pursuant to a Final Determination, regardless of whether such act or failure to act is covered by a Ruling or Unqualified Tax Opinion, (b) the direct or indirect acquisition of all or a portion of the shares of Internal SpinCo (or any transaction or series of related transactions that is deemed to be such an acquisition for purposes of Section 355(e) of the Code and the Treasury Regulations promulgated thereunder) by any means whatsoever by any Person, including pursuant to an issuance of shares by Internal SpinCo or Delphi Technologies or (c) any event (or series of events) involving Capital Stock of Delphi Technologies or any assets of any member of the Delphi Technologies Group.
“ Delphi Technologies Equity Award s ” means options, share appreciation rights, restricted shares, share units or other compensatory rights with respect to Delphi Technologies Stock.
“ Delphi Technologies Equity Compensation Award ” has the meaning set forth in the Employee Matters Agreement.
“ Delphi Technologies Group ” has the meaning set forth in the Separation Agreement.
 
3

“ Delphi Technologies SAG ” means the separate affiliated group of Delphi Technologies, within the meaning of Section 355(b)(3)(B) of the Code.
“ Delphi Technologies Separate Return ” means any Tax Return of or including any member of the Delphi Technologies Group (including any consolidated, combined or unitary return) that does not include any member of the Aptiv Group.
“ Delphi Technologies Stock ” has the meaning set forth in the Separation Agreement.
“ Dispute ” has the meaning set forth in the Separation Agreement.
“ Distribution ” means the issuance of ordinary shares of Delphi Technologies to holders of Aptiv ordinary shares on the Record Date on a pro rata basis.
“ Distribution Date ” has the meaning set forth in the Separation Agreement.
“ Effective Time ” has the meaning set forth in the Separation Agreement.
“ Employee Matters Agreement ” has the meaning set forth in the Separation Agreement.
“ Final Allocation ” has the meaning set forth in Section 3.06(b) of this Agreement.
“ Final Determination ” means the final resolution of liability for any Tax, which resolution may be for a specific issue or adjustment or for any Tax Period, (i) by IRS Form 870 or 870-AD (or any successor forms thereto), on the date of acceptance by or on behalf of the taxpayer, or by a comparable form under the laws of a state, local, or foreign taxing jurisdiction, except that a Form 870 or 870-AD or comparable form shall not constitute a Final Determination to the extent that it reserves (whether by its terms or by operation of law) the right of the taxpayer to file a claim for refund or the right of the Tax Authority to assert a further deficiency in respect of such issue or adjustment or for such Tax Period (as the case may be); (ii) by a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable; (iii) by a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code, or a comparable agreement under the laws of a state, local, or foreign taxing jurisdiction; (iv) by any allowance of a refund or credit in respect of an overpayment of a Tax, but only after the expiration of all periods during which such refund may be recovered (including by way of offset) by the jurisdiction imposing such Tax; (v) by a final settlement resulting from a treaty-based competent authority determination; or (vi) by any other final disposition, including by reason of the expiration of the applicable statute of limitations, the execution of a pre-filing agreement with the IRS or other Tax Authority, or by mutual agreement of the Parties.
“ Governmental Authority ” has the meaning set forth in the Separation Agreement.
“ Group ” means (a) with respect to Aptiv, the Aptiv Group, and (b) with respect to Delphi Technologies, the Delphi Technologies Group, as the context requires.
 
4

“ Income Tax ” means all U.S. federal, state, local and foreign income, franchise or similar Taxes imposed on (or measured by) net income or net profits, and any interest, penalties, additions to Tax or additional amounts in respect of the foregoing.
“ Intended Tax Treatment ” means the qualification of (i) the Distribution as a distribution under Section 355(a) of the Code, (ii) the Internal Distribution for tax-free treatment under Sections 368(a)(1)(D) and 355 of the Code and (iii) the IP Transfer as a transaction to which Section 367(d) of the Code applies.
“ Internal Distributing ” means Delphi Corporation, a Delaware corporation.
“ Internal Distribution ” means the distribution by Internal Distributing of its shares in Internal SpinCo to Internal Distributing’s shareholder in connection with the Separation.
“ Internal SpinCo ” means Delphi Powertrain Systems, LLC, a Delaware limited liability company.
“ Internal SpinCo SAG ” means the separate affiliated group of Internal SpinCo, within the meaning of Section 355(b)(3)(B) of the Code.
“ IP Transfer ” means, collectively, any transfers of intellectual property from the United States (or a United States entity) to Barbados (or a Barbados entity) to facilitate, or otherwise in connection with, the Separation.
“ IRS ” means the U.S. Internal Revenue Service or any successor agency.
“ Joint Return ” means any Tax Return that includes, by election or otherwise, one or more members of the Aptiv Group together with one or more members of the Delphi Technologies Group.
“ Law ” has the meaning set forth in the Separation Agreement.
“ Liabilities ” has the meaning set forth in the Separation Agreement.
“ Loss ” has the meaning set forth in Section 5.02 of this Agreement.
“ Non-Controlling Party ” has the meaning set forth in Section 9.02(c) of this Agreement.
“ Notified Action ” shall have the meaning set forth in Section 6.03(a) of this Agreement.
“ Other Separation Taxes ” means any Taxes imposed on the Aptiv Group or the Delphi Technologies Group in connection with the transactions comprising the Separation, other than Specified Separation Taxes.
“ Parties ” and “ Party ” have the meaning set forth in the preamble to this Agreement.
“ Past Practices ” has the meaning set forth in Section 3.03(a) of this Agreement.
 
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“ Payment Date ” means, with respect to a Tax Return, (A) the due date for any required installment of estimated Taxes, (B) the due date (determined without regard to extensions) for filing such Tax Return, or (C) the date such Tax Return is filed, as the case may be.
“ Payor ” has the meaning set forth in Section 4.03(a) of this Agreement.
“ Person ” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a Governmental Authority or any department, agency or political subdivision thereof, without regard to whether any entity is treated as disregarded for U.S. federal Income Tax purposes.
“ Post-Distribution Period ” means any Tax Period beginning after the Distribution Date and, in the case of any Straddle Period, the portion of such Tax Period beginning on the day after the Distribution Date.
“ Pre-Distribution Period ” means any Tax Period ending on or before the Distribution Date and, in the case of any Straddle Period, the portion of such Straddle Period ending on and including the Distribution Date.
“ Prime Rate ” has the meaning set forth in the Separation Agreement.
“ Prior Group ” means any group that filed or was required to file (or will file or be required to file) a Tax Return, for a Tax Period or portion thereof ending at the close of the Distribution Date, on an affiliated, consolidated, combined, unitary, fiscal unity or other group basis (including as permitted by Section 1501 of the Code) that includes at least one member of the Delphi Technologies Group.
“ Privilege ” means any privilege that may be asserted under applicable law, including, any privilege arising under or relating to the attorney-client relationship (including the attorney-client and work product privileges), the accountant-client privilege and any privilege relating to internal evaluation processes.
“ Proposed Acquisition Transaction ” means a transaction or series of transactions (or any agreement, understanding or arrangement, within the meaning of Section 355(e) of the Code and Treasury Regulations § 1.355-7, or any other regulations promulgated thereunder, to enter into a transaction or series of transactions), whether such transaction is supported by Delphi Technologies management or shareholders, is a hostile acquisition, or otherwise, as a result of which any Person or any group of related Persons would directly or indirectly, including through an acquisition of Capital Stock of Delphi Technologies, acquire, or have the right to acquire, a number of shares of Capital Stock of Internal SpinCo that would, when combined with any other direct or indirect changes in ownership of Capital Stock of Internal SpinCo pertinent for purposes of Section 355(e) of the Code, comprise forty percent (40%) or more of (i) the value of all outstanding shares of stock of Internal SpinCo as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series, or (ii) the total combined voting power of all outstanding shares of voting shares of Internal SpinCo as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series. Notwithstanding the foregoing, a Proposed Acquisition Transaction shall not include (i) the adoption by Internal SpinCo or Delphi Technologies of a shareholder rights plan, (ii) issuances
 
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by Internal SpinCo or Delphi Technologies that satisfy Safe Harbor VIII (relating to acquisitions in connection with a person’s performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulations § 1.355-7(d), including such issuances net of exercise price and/or tax withholding ( provided , however , that any sale of such stock in connection with a net exercise or tax withholding is not exempt under this clause (ii) unless it satisfies the requirements of Safe Harbor VII of Treasury Regulations § 1.355-7(d)) or (iii) acquisitions that satisfy Safe Harbor VII of Treasury Regulations § 1.355-7(d). For purposes of determining whether a transaction constitutes an indirect acquisition, any recapitalization resulting in a shift of voting power or any redemption of shares shall be treated as an indirect acquisition of shares by the non-exchanging shareholders. For purposes of this definition, each reference to Internal SpinCo shall include a reference to any entity treated as a successor thereto. This definition and the application thereof is intended to monitor compliance with Section 355(e) of the Code and shall be interpreted accordingly. Any clarification of, or change in, the statute or regulations promulgated under Section 355(e) of the Code or official IRS guidance with respect thereto shall be incorporated in this definition and its interpretation.
“ Proposed Allocation ” shall have the meaning set forth in Section 3.06(b) of this Agreement.
“ Protective Section  336(e) Election ” has the meaning set forth in Section 3.04(a) of this Agreement.
“ Record Date ” has the meaning set forth in the Separation Agreement.
“ Representation Letters ” means the statements of facts and representations, officer’s certificates, representation letters and any other materials delivered or deliverable by Aptiv, and any of its Affiliates, in connection with the rendering by Tax Advisors of the Tax Opinions.
“ Required Party ” has the meaning set forth in Section 4.03(a) of this Agreement.
“ Responsible Party ” means, with respect to any Tax Return, the Party having responsibility for preparing and filing such Tax Return under this Agreement.
“ Retention Date ” has the meaning set forth in Section 8.01 of this Agreement.
“ Ruling ” has the meaning set forth in Section 6.01(b) of this Agreement.
“ Section  336(e) Allocation Statement ” has the meaning set forth in Section 3.04(b) of this Agreement.
“ Section  336(e) Tax Benefit Percentage ” means, with respect to any Specified Separation Taxes and Tax-Related Losses related to the Internal Distribution, the percentage equal to one hundred percent (100%) minus the percentage of such Specified Separation Taxes and Tax-Related Losses related to the Internal Distribution for which Aptiv is entitled to indemnification under this Agreement.
“ Separation ” means, collectively, all of the transactions undertaken to separate the Delphi Technologies Business from the Aptiv Business in connection with the Distribution.
 
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“ Separation Agreement ” has the meaning set forth in the recitals to this Agreement.
“ Shared Contract ” has the meaning set forth in the Separation Agreement.
“ Specified Separation Taxes ” means any and all Taxes incurred by the Aptiv Group or the Delphi Technologies Group as a result of the failure of the Intended Tax Treatment.
“ Straddle Period ” means any Tax Period that begins before and ends after the Distribution Date.
“ Subsidiary ” has the meaning set forth in the Separation Agreement.
“ Tax ” or “ Taxes ” means any income, gross income, gross receipts, profits, capital stock, franchise, withholding, payroll, social security, workers compensation, unemployment, disability, property, ad valorem, value added, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer, import, export, escheat, alternative minimum, universal service fund, estimated or other tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax), imposed by any Governmental Authority or political subdivision thereof, and any interest, penalty, additions to tax or additional amounts in respect of the foregoing.
“ Tax Advisor ” means a Tax counsel or accountant, in each case of recognized national standing.
“ Tax Attribute ” means a net operating loss, net capital loss, unused investment credit, unused foreign Tax credit (including credits of a foreign company under Section 902 of the Code), excess charitable contribution, general business credit, research and development credit, earnings and profits, basis, or any other Tax Item that could reduce a Tax or create a Tax Benefit.
“ Tax Authority ” means, with respect to any Tax, the Governmental Authority or political subdivision thereof that imposes such Tax, and the agency (if any) charged with the collection of such Tax for such entity or subdivision.
“ Tax Benefit ” means any refund, credit, or other item that causes reduction in otherwise required liability for Taxes.
“ Tax Contest ” means an audit, review, examination, contest, litigation, investigation or any other administrative or judicial proceeding with the purpose or effect of redetermining Taxes (including any administrative or judicial review of any claim for refund).
“ Tax Item ” means, with respect to any Income Tax, any item of income, gain, loss, deduction, or credit.
“ Tax Law ” means the Law of any Governmental Authority or political subdivision thereof relating to any Tax.
“ Tax Opinions ” means any opinions of Tax Advisors deliverable to Aptiv in connection with the Internal Distribution and the Distribution.
 
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“ Tax Period ” means, with respect to any Tax, the period for which the Tax is reported as provided under the Code or other applicable Tax Law.
“ Tax Records ” means any (i) Tax Returns, (ii) Tax Return workpapers, (iii) documentation relating to any Tax Contests, and (iv) any other books of account or records (whether or not in written, electronic or other tangible or intangible forms and whether or not stored on electronic or any other medium) maintained or required to be maintained under the Code or other applicable Tax Laws or under any record retention agreement with any Tax Authority, in each case filed or required to be filed with respect to or otherwise relating to Taxes.
“ Tax-Related Losses ” means, with respect to any Specified Separation Taxes, (i) all accounting, legal and other professional fees, and court costs incurred in connection with such Specified Separation Taxes, as well as any other out-of-pocket costs incurred in connection with such Specified Separation Taxes; and (ii) all costs, expenses and damages associated with shareholder litigation or controversies and any amount paid by Aptiv (or any Aptiv Affiliate) or Delphi Technologies (or any Delphi Technologies Affiliate) in respect of the liability of shareholders, whether paid to shareholders or to the IRS or any other Tax Authority.
“ Tax Return ” means any report of Taxes due, any claim for refund of Taxes paid, any information return with respect to Taxes, or any other similar report, statement, declaration, or document filed or required to be filed under the Code or other Tax Law with respect to Taxes, including any attachments, exhibits, or other materials submitted with any of the foregoing, and including any amendments or supplements to any of the foregoing.
“ Third Party ” means any Person other than the Parties or any of their respective Subsidiaries.
“ Treasury Regulations ” means the regulations promulgated from time to time under the Code as in effect for the relevant Tax Period.
“ UK Group Relief ” means (i) group relief capable of being surrendered or claimed pursuant to Part 5 of the UK Corporation Tax Act 2010, or (ii) the notional transfer of an asset or reallocation of a gain or loss pursuant to section 171A or section 179A of the UK Taxation of Chargeable Gains Act 1992 and the notional reallocation of a gain pursuant to section 792 of the UK Corporation Tax Act 2009.
“ Unqualified Tax Opinion ” means an unqualified “will” opinion of a Tax Advisor, which Tax Advisor is reasonably acceptable to Aptiv, on which Aptiv may rely to the effect that a transaction will not adversely affect the Intended Tax Treatment. Any such opinion must assume that the Distribution, the Internal Distribution and the IP Transfer would have qualified for the Intended Tax Treatment if the transaction in question did not occur.
“ US Powertrain Business ” means the portion of the Delphi Technologies Business conducted within the United States.
“ Valuations ” means the valuations and methodologies prepared for Aptiv to facilitate, or otherwise in connection with, the Separation and the carrying values reflected on Delphi Technologies’ opening balance sheet following the Distribution.
 
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Section 2. Allocation of Tax Liabilities and Tax-Related Losses.
Section  2.01 General Rule .
(a) Aptiv Liability . Except with respect to Taxes and Tax-Related Losses described in Section 2.01(b) of this Agreement, Aptiv shall be liable for, and shall indemnify and hold harmless the Delphi Technologies Group from and against any liability for:
(i) Taxes that are allocated to Aptiv under this Section 2 ;
(ii) any Tax resulting from a breach of any of Aptiv’s covenants in this Agreement, the Separation Agreement or any Ancillary Agreement;
(iii) Specified Separation Taxes and Tax-Related Losses that are allocated to Aptiv under Section 6.04(a) of this Agreement;
(iv) Other Separation Taxes; and
(v) Taxes imposed on Delphi Technologies or any member of the Delphi Technologies Group pursuant to the provisions of Treasury Regulations § 1.1502-6 (or similar provisions of state, local, or foreign Tax Law) as a result of any such member being or having been a member of a Prior Group.
(b) Delphi Technologies Liability . Delphi Technologies shall be liable for, and shall indemnify and hold harmless the Aptiv Group from and against any liability for:
(i) Taxes which are allocated to Delphi Technologies under this Section 2 ;
(ii) any Tax resulting from a breach of any of Delphi Technologies’ covenants in this Agreement, the Separation Agreement or any Ancillary Agreement; and
(iii) any Specified Separation Taxes and Tax-Related Losses that are allocated to Delphi Technologies under Section 6.04(a) of this Agreement.
(c) In furtherance of Section 2.01(a)(iv) and the allocation of Other Separation Taxes to Aptiv, both Parties understand that the transactions comprising the Separation will trigger the Other Separation Taxes (the amount of which has not been definitively quantified yet) and Delphi Technologies hereby agrees that, in lieu of any responsibility for such Taxes, it will, as part of the Separation, pay Aptiv $180 million and, in exchange, Aptiv will assume all responsibility for the Other Separation Taxes and Delphi Technologies will have no liability therefor and is hereby released from any claim or liability in respect of the Other Separation Taxes.
Section  2.02 General Allocation Principles . Except as otherwise provided in this Section 2 or in Section 6.04(a) of this Agreement, all Taxes shall be allocated as follows:
(a) Allocation of Taxes for Joint Returns . Aptiv shall be responsible for all Taxes reported, or required to be reported, on any Joint Return that any member of the Aptiv Group files or is required to file under the Code or other applicable Tax Law; provided, however, that to the extent any such Joint Return includes any Tax Item attributable to any member of the Delphi Technologies Group or to the Delphi Technologies Business for any Post-Distribution Period, Delphi Technologies shall be responsible for all Taxes attributable to such Tax Items, computed in a manner reasonably determined by Aptiv.
 
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(b) Allocation of Taxes for Separate Returns .
(i) Aptiv shall be responsible for all Taxes reported, or required to be reported, on an Aptiv Separate Return.
(ii) Delphi Technologies shall be responsible for all Taxes reported, or required to be reported, on a Delphi Technologies Separate Return.
(c) Taxes Not Reported on Tax Returns .
(i) Aptiv shall be responsible for any Tax attributable to any member of the Aptiv Group or to the Aptiv Business that is not required to be reported on a Tax Return.
(ii) Delphi Technologies shall be responsible for any Tax attributable to any member of the Delphi Technologies Group or to the Delphi Technologies Business that is not required to be reported on a Tax Return.
Section  2.03 Allocation Conventions .
(a) All Taxes allocated pursuant to Section 2.02 of this Agreement shall be allocated in accordance with the Closing of the Books Method; provided , however , that if applicable Tax Law does not permit a Delphi Technologies Group member to close its Tax Period on the Distribution Date, the Tax attributable to the operations of the members of the Delphi Technologies Group for any Pre-Distribution Period shall be the Tax computed using the Closing of the Books Method.
(b) Any Tax Item of Delphi Technologies or any member of the Delphi Technologies Group arising from a transaction engaged in outside of the ordinary course of business on the Distribution Date after the Effective Time shall be properly allocable to Delphi Technologies and any such transaction by or with respect to Delphi Technologies or any member of the Delphi Technologies Group occurring after the Effective Time shall be treated for all Tax purposes (to the extent permitted by applicable Tax Law) as occurring at the beginning of the day following the Distribution Date in accordance with the principles of Treasury Regulation § 1.1502-76(b) or any similar provisions of state, local or foreign Law.
Section  3. Preparation and Filing of Tax Returns .
Section  3.01 Aptiv Separate Returns and Joint Returns .
(a) Aptiv shall prepare and file, or cause to be prepared and filed, all Aptiv Separate Returns and Joint Returns, and each member of the Delphi Technologies Group to which any such Joint Return relates shall execute and file such consents, elections and other documents as Aptiv may determine, after consulting with Delphi Technologies in good faith, are required or appropriate, or otherwise requested by Aptiv in connection with the filing of such Joint Return. Delphi Technologies will elect and join, and will cause its respective Affiliates to elect and join, in filing any Joint Returns that Aptiv determines are required to be filed or that Aptiv elects to file, in each case pursuant to this Section 3.01(a) .
 
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(b) The Parties and their respective Affiliates shall elect to close the Tax Period of each Delphi Technologies Group member on the Distribution Date, to the extent permitted by applicable Tax Law.
Section  3.02 Delphi Technologies Separate Returns . Delphi Technologies shall prepare and file (or cause to be prepared and filed) all Delphi Technologies Separate Returns.
Section  3.03 Tax Reporting Practices .
(a) General Rule . Except as provided in Section 3.03(b) of this Agreement, Aptiv shall prepare any Straddle Period Joint Return in accordance with past practices, permissible accounting methods, elections or conventions (“ Past Practices ”) used by the members of the Aptiv Group and the members of the Delphi Technologies Group prior to the Distribution Date with respect to such Tax Return, and to the extent any items, methods or positions are not covered by Past Practices, then Aptiv shall prepare such Tax Return in accordance with reasonable Tax accounting practices selected by Aptiv. With respect to any Tax Return that Delphi Technologies has the obligation and right to prepare, or cause to be prepared, under this Section 3 , to the extent such Tax Return could affect Aptiv, such Tax Return shall be prepared in accordance with Past Practices used by the members of the Aptiv Group and the members of the Delphi Technologies Group prior to the Distribution Date with respect to such Tax Return, and to the extent any items, methods or positions are not covered by Past Practices, such Tax Return shall be prepared in accordance with reasonable Tax accounting practices selected by Delphi Technologies.
(b) Consistency with Intended Tax Treatment . The Parties shall prepare all Tax Returns consistent with (i) the Intended Tax Treatment and (ii) the Valuations unless, in each case, and then only to the extent, an alternative position is required pursuant to a Final Determination.
(c) Shared Contracts . Each of Delphi Technologies and Aptiv shall, and shall cause the members of its Group to, (i) treat for all Tax purposes the portion of each Shared Contract inuring to its respective businesses as Assets owned by, and/or Liabilities of, as applicable, such Party, or its Subsidiaries, as applicable, not later than the Effective Time, and (ii) neither report nor take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment (unless required by applicable Law).
Section  3.04 Protective Section  336(e) Election .
(a) General. The Parties hereby agree to make a timely protective election under Section 336(e) of the Code and Treasury Regulations § 1.336-2(j) (and any similar provision of applicable state or local Tax Law) for each applicable member of the Aptiv Group and Delphi Technologies Group with respect to the Internal Distribution (the “ Protective Section  336(e) Election ”) in accordance with Treasury Regulations § 1.336-2(h). For the avoidance of doubt, (i) this Section 3.04(a) is intended to constitute a written, binding agreement to make the Protective Section 336(e) Election within the meaning of Treasury Regulations § 1.336-2(h)(1)(i), and (ii) it is intended that the Protective Section 336(e) Election will have no effect unless, pursuant to a Final Determination, the Internal Distribution is treated as a “qualified stock disposition” within the meaning of Treasury Regulations § 1.336-1(b)(6).
 
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(b) Cooperation and Reporting . Aptiv and Delphi Technologies shall cooperate in making the Protective Section 336(e) Election, including filing any statements, amending any Tax Returns or undertaking such other actions reasonably necessary to carry out the Protective Section 336(e) Election. Aptiv and Delphi Technologies shall jointly determine the “ Aggregate Deemed Asset Disposition Price ” and the “ Adjusted Grossed-Up Basis ” (each as defined under applicable Treasury Regulations) and the allocation of such Aggregate Deemed Asset Disposition Price and Adjusted Grossed-Up Basis among the disposition date assets of Internal SpinCo and its Subsidiaries, each in accordance with the applicable provisions of Section 336(e) of the Code and applicable Treasury Regulations (the “ Section  336(e) Allocation Statement ”). To the extent the Protective Section 336(e) Election becomes effective, each Party agrees not to take any position (and to cause each of its Affiliates not to take any position) that is inconsistent with the Protective Section 336(e) Election, including the Section 336(e) Allocation Statement, on any Tax Return, in connection with any Tax Contest or for any other Tax purposes (in each case, excluding any position taken for financial accounting purposes), except as may be required by a Final Determination.
(c) Tax Benefit Payment by Delphi Technologies . In the event that the Internal Distribution fails to qualify for the Intended Tax Treatment and Aptiv is not entitled to indemnification for one hundred percent (100%) of any Specified Separation Taxes and Tax-Related Losses relating to the Internal Distribution arising from such failure, Aptiv shall be entitled to quarterly payments from Delphi Technologies equal to the Section 336(e) Tax Benefit Percentage of the actual Tax savings if, as and when realized by the Delphi Technologies Group arising from the step up in Tax basis (including, for the avoidance of doubt, any such step up attributable to payments made pursuant to this Section 3.04(c) ) resulting from the Protective Section 336(e) Election, determined on a “with and without” basis (treating any deductions or amortization attributable to the step up in Tax basis resulting from the Protective 336(e) Election, or any other recovery of such step up, as the last items claimed for any taxable year, including after the utilization of any available net operating loss carryforwards); provided , however , that such payments: (i) shall be reduced by all reasonable costs incurred by any member of the Delphi Technologies Group to amend any Tax Returns or other governmental filings related to such Protective Section 336(e) Election; and (ii) shall not exceed the amount of any Specified Separation Taxes and Tax-Related Losses relating to the Internal Distribution incurred by the Aptiv Group (not taking into account this Section 3.04(c) ) as a result of such failure for which Aptiv is not entitled to indemnification under this Agreement.
Section  3.05 Delphi Technologies Carrybacks and Claims for Refund .
(a) Delphi Technologies hereby agrees that, unless Aptiv consents in writing (which consent may not be unreasonably withheld, conditioned, or delayed) or as required by Law, (i) no member of the Delphi Technologies Group (nor its successors) shall file any Adjustment Request with respect to any Tax Return that could affect any Joint Return or any other Tax Return reflecting Taxes that are allocated to Aptiv under Section 2 and (ii) any available elections to waive the right to claim any Delphi Technologies Carryback in any Joint Return or any other Tax Return reflecting Taxes that are allocated to Aptiv under Section 2 shall be made,
 
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and no affirmative election shall be made to claim any such Delphi Technologies Carryback. In the event that Delphi Technologies (or the appropriate member of the Delphi Technologies Group) is prohibited by applicable Law from waiving or otherwise forgoing a Delphi Technologies Carryback or Aptiv consents to a Delphi Technologies Carryback (which consent may not be unreasonably withheld, conditioned, or delayed), Aptiv shall cooperate with Delphi Technologies, at Delphi Technologies’ expense, in seeking from the appropriate Tax Authority such Tax Benefit as reasonably would result from such Delphi Technologies Carryback, to the extent that such Tax Benefit is directly attributable to such Delphi Technologies Carryback, and shall pay over to Delphi Technologies the amount of such Tax Benefit within ten (10) days after such Tax Benefit is recognized by the Aptiv Group; provided , however , that Delphi Technologies shall indemnify and hold the members of the Aptiv Group harmless from and against any and all collateral Tax consequences resulting from or caused by any such Delphi Technologies Carryback, including, without limitation, the loss or postponement of any benefit from the use of Tax Attributes generated by a member of the Aptiv Group if (i) such Tax Attributes expire unused, but would have been utilized but for such Delphi Technologies Carryback, or (ii) the use of such Tax Attributes is postponed to a later Tax Period than the Tax Period in which such Tax Attributes would have been used but for such Delphi Technologies Carryback.
(b) Aptiv hereby agrees that, unless Delphi Technologies consents in writing (which consent may not be unreasonably withheld, conditioned, or delayed) or as required by Law, no member of the Aptiv Group shall file any Adjustment Request with respect to any Delphi Technologies Separate Return.
Section  3.06 Apportionment of Tax Attributes .
(a) Tax Attributes arising in a Pre-Distribution Period will be allocated to (and the benefits and burdens of such Tax Attributes will inure to) the members of the Aptiv Group and the members of the Delphi Technologies Group in accordance with the Code, Treasury Regulations, and any other applicable Tax Law, and, in the absence of controlling legal authority or unless otherwise provided under this Agreement, including pursuant to Section 3.07 , Tax Attributes shall be allocated to the legal entity that created such Tax Attributes.
(b) Except as provided in Section 3.07 , on or before the first anniversary of the Distribution Date, Aptiv shall deliver to Delphi Technologies its determination in writing of the portion, if any, of any earnings and profits, Tax Attributes, overall foreign loss or other affiliated, consolidated, combined, unitary, fiscal unity or other group basis Tax Attribute which is allocated or apportioned to the members of the Delphi Technologies Group under applicable Tax Law and this Agreement (“ Proposed Allocation ” ) . Delphi Technologies shall have sixty (60) days to review the Proposed Allocation and provide Aptiv any comments with respect thereto. Aptiv shall accept any such comments that are reasonable, and such resulting determination will become final (“ Final Allocation ”). All members of the Aptiv Group and Delphi Technologies Group shall prepare all Tax Returns in accordance the Final Allocation. In the event of an adjustment to the earnings and profits, any Tax Attributes, overall foreign loss or other affiliated, consolidated, combined, unitary, fiscal unity or other group basis attribute, Aptiv shall promptly notify Delphi Technologies in writing of such adjustment. For the avoidance of doubt, Aptiv shall not be liable to any member of the Delphi Technologies Group for any failure of any determination under this Section 3.06(b) to be accurate under applicable Tax Law; provided such determination was made in good faith.
 
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(c) Except as otherwise provided herein, to the extent that the amount of any Tax Attribute is later reduced or increased by a Tax Authority or Tax Proceeding, such reduction or increase shall be allocated to the Party to which such Tax Attribute was allocated pursuant to Section 3.06(a) of this Agreement, as agreed by the Parties.
Section  3.07 UK Group Relief .
(a) Aptiv shall determine the amounts for purposes of UK Group Relief available to be surrendered (i) by any member of the Aptiv Group to any member of the Delphi Technologies Group, or (ii) by any member of the Delphi Technologies Group to any member of the Aptiv Group, as the case may be.
(b) The Parties shall make, or shall cause to be made, such elections and shall take such other actions that are necessary or appropriate to give effect to the surrender of any amounts referred to in Section 3.07(a) to the extent permitted under applicable Law, and to ensure that such surrenders are allowed in full by HM Revenue & Customs.
(c) In consideration of such surrenders as are referred to in Section 3.07(a)(i) , Delphi Technologies shall procure that the relevant member of the Delphi Technologies Group shall pay to the relevant member of the Aptiv Group such amount of UK corporation Tax as is saved by the relevant member of the Delphi Technologies Group (including where UK corporation Tax previously paid has been refunded) as a result of the relevant surrender, such amount to be paid no later than the time which such UK corporation Tax saved would otherwise have been paid to a Tax Authority.
(d) In consideration of such surrenders as are referred to in Section 3.07(a)(ii) , Aptiv shall procure that the relevant member of the Aptiv Group shall pay to the relevant member of the Delphi Technologies Group such amount of UK corporation Tax as is saved by the relevant member of the Aptiv Group (including where UK corporation Tax previously paid has been refunded) as a result of the relevant surrender, such amount to be paid no later than the time which such UK corporation Tax saved would otherwise have been paid to a Tax Authority.
Section  3.08 Equity Compensation . Tax deductions with respect to Aptiv Equity Compensation Awards and Delphi Technologies Equity Compensation Awards shall be allocated to the members of the Aptiv Group and the members of the Delphi Technologies Group in accordance with the Code, Treasury Regulations, and any other applicable Tax Law.
Section  4. Tax Payments .
Section  4.01 Taxes Shown on Tax Returns . Aptiv shall pay (or cause to be paid) to the proper Tax Authority the Tax shown as due on any Tax Return that a member of the Aptiv Group is responsible for preparing under Section 3 of this Agreement, and Delphi Technologies shall pay (or cause to be paid) to the proper Tax Authority the Tax shown as due on any Tax Return that a member of the Delphi Technologies Group is responsible for preparing under Section 3 of this Agreement. At least seven (7) Business Days prior to any Payment Date for any Straddle Period Joint Return, Delphi Technologies shall pay to Aptiv the amount Delphi Technologies is responsible for under the provisions of Section 2 as calculated pursuant to this Agreement.
 
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Section  4.02 Adjustments Resulting in Underpayments . In the case of any adjustment pursuant to a Final Determination with respect to any Tax, the Party to which such Tax is allocated pursuant to this Agreement shall pay to the applicable Tax Authority when due any additional Tax required to be paid as a result of such adjustment.
Section 4.03 Indemnification Payments.
(a) Except as provided in the last sentence of Section 4.01 or Section 6.04(b) of this Agreement, if any Party (the “ Payor ”) is required under applicable Tax Law to pay to a Tax Authority a Tax that another Party (the “ Required Party ”) is liable for under this Agreement, the Required Party shall reimburse the Payor within twenty (20) Business Days of delivery by the Payor to the Required Party of an invoice for the amount due, accompanied by evidence of payment and a statement detailing the Taxes paid and describing in reasonable detail the particulars relating thereto. The reimbursement shall include interest on the Tax payment computed at the Prime Rate based on the number of days from the date of the Payor’s payment to the Tax Authority to the date of reimbursement by the Required Party under this Section 4.03 . Except as otherwise provided in the following sentence, the Required Party shall also pay to the Payor any reasonable costs and expenses related to the foregoing (including reasonable attorneys’ fees and expenses) within five (5) days after the Payor’s written demand therefor. If and to the extent any Specified Separation Taxes are determined regarding the failure of the Intended Tax Treatment, the Party allocated responsibility for Tax-Related Losses associated with such Specified Separation Taxes under Section 2.01 of this Agreement shall pay such Tax-Related Losses to Aptiv (if such responsible Party is Delphi Technologies) or Delphi Technologies (if such responsible Party is Aptiv) within five (5) days after written demand therefor.
(b) All indemnification payments under this Agreement shall be made by Aptiv directly to Delphi Technologies and by Delphi Technologies directly to Aptiv; provided , however , that if the Parties mutually agree for administrative convenience with respect to any such indemnification payment, any member of the Aptiv Group, on the one hand, may make such indemnification payment to any member of the Delphi Technologies Group, on the other hand, and vice versa.
Section  5. Tax Benefits .
Section  5.01 Tax Refunds . Aptiv shall be entitled (subject to the limitations provided in Section 3.05 of this Agreement) to any refund (and any interest thereon received from the applicable Tax Authority) of Taxes for which Aptiv is liable hereunder, and Delphi Technologies shall be entitled (subject to the limitations provided in Section 3.05 of this Agreement) to any refund (and any interest thereon received from the applicable Tax Authority) of Taxes for which Delphi Technologies is liable hereunder. A Party receiving a refund to which another Party is entitled hereunder shall pay over such refund to such other Party within twenty (20) Business Days after such refund is received (together with interest computed at the Prime Rate based on the number of days from the date the refund was received to the date the refund was paid over).
 
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Section  5.02 Other Tax Benefits .
(a) If (i) a member of the Delphi Technologies Group actually realizes any Tax Benefit, other than a Tax Benefit resulting from a Protective Section 336(e) Election, as a result of any liability, obligation, loss or payment (each, a “ Loss ”) for which a member of the Aptiv Group is required to indemnify any member of the Delphi Technologies Group pursuant to this Agreement, the Separation Agreement or any Ancillary Agreement (in each case, without duplication of any amounts payable or taken into account under this Agreement, the Separation Agreement or any Ancillary Agreement), or (ii) if a member of the Aptiv Group actually realizes any Tax Benefit as a result of any Loss for which a member of the Delphi Technologies Group is required to indemnify any member of the Aptiv Group pursuant to this Agreement, the Separation Agreement or any Ancillary Agreement (in each case, without duplication of any amounts payable or taken into account under this Agreement, the Separation Agreement or any Ancillary Agreement), and, in each case, such Tax Benefit would not have arisen but for such adjustment or Loss (determined on a “with and without” basis), Delphi Technologies (in the case of the foregoing clause (i)) or Aptiv (in the case of the foregoing clause (ii)), as the case may be, shall make a payment to the other Party in an amount equal to the amount of such actually realized Tax Benefit in cash within ten (10) Business Days of actually realizing such Tax Benefit. To the extent that any Tax Benefit (or portion thereof) in respect of which any amounts were paid over pursuant to the foregoing provisions of this Section 5.02(a) is subsequently disallowed by the applicable Tax Authority, the Party that received such amounts shall promptly repay such amounts (together with any penalties, interest or other charges imposed by the relevant Tax Authority) to the other Party.
(b) No later than ten (10) Business Days after a Tax Benefit described in Section 5.02(a) is actually realized by a member of the Aptiv Group or a member of the Delphi Technologies Group, Aptiv or Delphi Technologies, as the case may be, shall provide the other Party with a written calculation of the amount payable to such other Party pursuant to Section 5.02(a) . In the event that Aptiv or Delphi Technologies, as the case may be, disagrees with any such calculation described in this Section 5.02(b) , such Party shall so notify the other Party in writing within twenty (20) Business Days of receiving such written calculation. The Parties shall endeavor in good faith to resolve such disagreement, and, failing that, the amount payable under this Section 5.02 shall be determined in accordance with Section 13 of this Agreement.
Section  6. Intended Tax Treatment .
Section  6.01 Restrictions on Members of the Delphi Technologies Group .
(a) Delphi Technologies will not, and will not permit any other member of the Delphi Technologies Group to, take or fail to take, as applicable, (i) any action where such action or failure to act would be inconsistent with or cause to be untrue any statement, information, covenant or representation in the Representation Letters or Valuations, (ii) any action which could reasonably be expected to adversely affect the Intended Tax Treatment or (iii) any position on a Tax Return which could reasonably be expected to adversely affect any member of the Aptiv Group.
 
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(b) Delphi Technologies and each other member of the Delphi Technologies Group agrees that, from the Distribution Date until the first Business Day after the two-year anniversary of the Distribution Date:
(i) Delphi Technologies will continue and cause to be continued the Active Trade or Business of the Delphi Technologies SAG and cause Internal SpinCo to continue the Active Trade or Business of the Internal SpinCo SAG;
(ii) Delphi Technologies will not enter into any Proposed Acquisition Transaction or, to the extent Delphi Technologies or any other member of the Delphi Technologies Group has the right to prohibit any Proposed Acquisition Transaction, permit any Proposed Acquisition Transaction to occur (whether by (A) redeeming rights under a shareholder rights plan, (B) finding a tender offer to be a “permitted offer” under any such plan or otherwise causing any such plan to be inapplicable or neutralized with respect to any Proposed Acquisition Transaction, (C) approving any Proposed Acquisition Transaction, whether for purposes of Section 203 of the General Corporation Law of the State of Delaware or any similar corporate statute, any “fair price” or other provision of the charter or bylaws of Delphi Technologies or Internal SpinCo, as applicable, (D) amending its certificate of incorporation to declassify its Board of Directors or approving any such amendment, or otherwise);
(iii) Delphi Technologies will not, nor will it agree to, merge, consolidate or amalgamate with any other Person, unless, in the case of a merger, consolidation, Delphi Technologies is the survivor of the merger or consolidation; and Internal SpinCo will not, nor will it agree to, merge, consolidate or amalgamate with any other Person, unless, in the case of a merger, consolidation, Internal SpinCo is the survivor of the merger or consolidation;
(iv) Delphi Technologies will not in a single transaction or series of transactions sell, transfer or otherwise dispose of (including any transaction treated for U.S. federal Income Tax purposes as a sale, transfer or disposition), or permit any other member of the Delphi Technologies Group to sell, transfer or otherwise dispose of, 30% or more of the gross assets of any Active Trade or Business (such percentage to be measured based on fair market value as of the Distribution Date), in each case other than (A) sales, transfers or other dispositions of assets in the ordinary course of business, (B) any cash paid to acquire assets from an unrelated Person in an arm’s-length transaction, (C) any assets transferred to a Person that is disregarded as an entity separate from the transferor for U.S. federal Income Tax purposes, (D) any mandatory or optional repayment (or pre-payment) of any indebtedness of Delphi Technologies or any member of the Delphi Technologies Group, or (E) any sales, transfers or other dispositions of assets within the Delphi Technologies SAG or the Internal SpinCo SAG;
 
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(v) Delphi Technologies will not redeem or otherwise repurchase (directly or through an Affiliate) any stock, or rights to acquire stock, of Delphi Technologies, except (A) to the extent such repurchases satisfy Section 4.05(1)(b) of Revenue Procedure 96-30 (as in effect prior to the amendment of such Revenue Procedure by Revenue Procedure 2003-48), (B) to the extent reasonably necessary to pay the total tax liability arising from the vesting of a Delphi Technologies Equity Award, or (C) through a net exercise of a Delphi Technologies Equity Award;
(vi) Delphi Technologies will not amend, or permit any other member of the Delphi Technologies Group to amend, its certificate of incorporation (or other organizational documents), or take any other action, whether through a shareholder vote or otherwise, affecting the voting rights of the Capital Stock of Delphi Technologies or Internal SpinCo (including, without limitation, through the conversion of one class of Capital Stock of Delphi Technologies or Internal SpinCo into another class of Capital Stock of Delphi Technologies or Internal SpinCo); and
(vii) Delphi Technologies will not take, or permit any other member of the Delphi Technologies Group to take, any other action or actions (including any action or transaction that would be reasonably likely to be inconsistent with any representation made in the Representation Letters or with the Valuations) which in the aggregate (and taking into account any other transactions described in this subparagraph (b)) would reasonably be expected to result in a failure to preserve the Intended Tax Treatment;
unless prior to taking any such action set forth in the foregoing clauses (i) through (vii), (A) Delphi Technologies shall have obtained a ruling from the IRS (“ Ruling ”) to the effect that a transaction will not affect the Intended Tax Treatment, and Aptiv shall have received such a Ruling in form and substance satisfactory to Aptiv in its reasonable discretion, which discretion shall be exercised in good faith solely to preserve the Intended Tax Treatment, (B) Delphi Technologies shall have provided Aptiv with an Unqualified Tax Opinion in form and substance satisfactory to Aptiv in its reasonable discretion (and in determining whether an opinion is satisfactory, Aptiv may consider, among other factors, the appropriateness of any underlying assumptions and management’s representations if used as a basis for the opinion) or (C) Aptiv shall have waived the requirement to obtain such Ruling or Unqualified Tax Opinion.
Section  6.02 Restrictions on Members of the Aptiv Group . Aptiv will not, and will not permit any other member of the Aptiv Group to, take or fail to take, as applicable, any action where such action or failure to act would be inconsistent with or cause to be untrue any statement, information, covenant or representation in any Representation Letters or Tax Opinions. Aptiv agrees that it will not take or fail to take, or permit any member of the Aptiv Group, as the case may be, to take or fail to take, any action which could reasonably be expected to adversely affect the Intended Tax Treatment of the Distribution.
 
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Section  6.03 Procedures Regarding Opinions and Rulings .
(a) If Delphi Technologies notifies Aptiv that it desires to take one of the actions described in Section 6.01(b) of this Agreement (a “ Notified Action ”), Aptiv shall cooperate with Delphi Technologies and use its commercially reasonable efforts to seek to obtain a Ruling or Unqualified Tax Opinion for the purpose of permitting Delphi Technologies to take the Notified Action unless Aptiv shall have waived the requirement to obtain such Ruling or Unqualified Tax Opinion. If such a Ruling is to be sought, Aptiv shall apply for such ruling and Aptiv and Delphi Technologies shall jointly control the process of obtaining such Ruling. In no event shall Aptiv be required to file any request for a Ruling under this Section 6.03(a) unless Delphi Technologies represents that (i) it has read such request, and (ii) all information and representations, if any, relating to any member of the Delphi Technologies Group, contained in such request documents are (subject to any qualifications therein) true, correct and complete. Delphi Technologies shall reimburse Aptiv for all reasonable costs and expenses incurred by the Aptiv Group in connection with such cooperation within thirty (30) Business Days after receiving an invoice from Aptiv therefor.
(b) Aptiv shall have the right to obtain a Ruling or tax opinion at any time in its sole and absolute discretion. If Aptiv determines to obtain a Ruling or tax opinion, Delphi Technologies shall (and shall cause its Affiliates to) cooperate with Aptiv and take any and all actions reasonably requested by Aptiv in connection with obtaining the Ruling or tax opinion (including, without limitation, by making any reasonable representation or covenant or providing any materials or information requested by the IRS or any Tax Advisor. Aptiv shall reimburse Delphi Technologies for all reasonable costs and expenses incurred by the Delphi Technologies Group in connection with such cooperation within thirty (30) Business Days after receiving an invoice from Delphi Technologies therefor.
(c) Following the Effective Time, Delphi Technologies shall not, nor shall Delphi Technologies permit any of its Affiliates to, seek any guidance from the IRS or any other Tax Authority (whether written, verbal or otherwise) at any time concerning the Separation (including the impact of any transaction on the Intended Tax Treatment) without obtaining Aptiv’s prior written consent, such consent not to be unreasonably withheld, conditioned or delayed.
Section  6.04 Liability for Specified Separation Taxes and Tax-Related Losses .
(a) In the event that Specified Separation Taxes become due and payable to a Tax Authority pursuant to a Final Determination, then, notwithstanding anything to the contrary in this Agreement:
(i) if such Specified Separation Taxes are attributable to a Delphi Technologies Disqualifying Act, then Delphi Technologies shall be responsible for such Specified Separation Taxes and corresponding Tax-Related Losses;
(ii) if such Specified Separation Taxes are attributable to an Aptiv Disqualifying Act, then Aptiv shall be responsible for such Specified Separation Taxes and corresponding Tax-Related Losses; and
 
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(iii) if such Specified Separation Taxes are attributable to both a Delphi Technologies Disqualifying Act and an Aptiv Disqualifying Act, or are not attributable to either a Delphi Technologies Disqualifying Act or an Aptiv Disqualifying Act, then responsibility for such Specified Separation Taxes and corresponding Tax-Related Losses shall be shared by Delphi Technologies and Aptiv in proportion to their respective fair market values as of the day after the Distribution Date (determined using the closing Delphi Technologies Stock and Aptiv Stock prices as of such date).
(b) Delphi Technologies shall pay Aptiv the amount of any Specified Separation Taxes for which Delphi Technologies is responsible under this Section 6.04 as a result of a Final Determination no later than two (2) Business Days after the date such Specified Separation Taxes are determined as a result of a Final Determination to be due. Notwithstanding the foregoing, Delphi Technologies shall pay Aptiv the amount of any Specified Separation Taxes for which Delphi Technologies is responsible under this Section 6.04 within seven (7) Business Days of written demand therefor by Aptiv if Aptiv determines that the payment of Specified Separation Taxes earlier than a Final Determination with respect to such Specified Separation Taxes is necessary or prudent to obtain a favorable resolution of a Tax Contest relating to Specified Separation Taxes.
Section  7. Assistance and Cooperation .
Section  7.01 Assistance and Cooperation .
(a) The Parties shall cooperate (and cause their respective Affiliates to cooperate) with each other and with each other’s agents, including accounting firms and legal counsel, in connection with Tax matters relating to the Parties and their Affiliates, including (i) preparation and filing of Tax Returns, (ii) determining the liability for and amount of any Taxes due (including estimated Taxes) or the right to and amount of any refund of Taxes, (iii) examinations of Tax Returns, and (iv) any administrative or judicial proceeding in respect of Taxes assessed or proposed to be assessed. Such cooperation shall include making all information and documents in their possession relating to any other Party and its Affiliates reasonably available to such other Party as provided in Section 8 of this Agreement. Each of the Parties shall also make available to any other Party, as reasonably requested and available, personnel (including officers, directors, employees and agents of the Parties or their respective Affiliates) responsible for preparing, maintaining, and interpreting information and documents relevant to Taxes, and personnel reasonably required as witnesses or for purposes of providing information or documents in connection with any administrative or judicial proceedings relating to Taxes. Delphi Technologies and each other member of the Delphi Technologies Group shall cooperate with Aptiv and take any and all actions reasonably requested by Aptiv in connection with obtaining the Tax Opinions (including, without limitation, by making any new representation or covenant, confirming any previously made representation or covenant or providing any materials or information requested by any Tax Advisor; provided that neither Delphi Technologies nor any other member of the Delphi Technologies Group shall be required to make or confirm any representation or covenant that is inconsistent with historical facts or as to future matters or events over which it has no control).
 
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(b) Any information or documents provided under this Agreement shall be kept confidential by the Party receiving the information or documents, except as may otherwise be necessary in connection with the filing of Tax Returns or in connection with any administrative or judicial proceedings relating to Taxes. In addition, in the event that Aptiv determines that the provision of any information or documents to Delphi Technologies or any of its Affiliates, or Delphi Technologies determines that the provision of any information or documents to Aptiv or any Aptiv Affiliate, could be commercially detrimental, violate any Law or agreement or waive any Privilege, the Parties shall use commercially reasonable efforts to permit each other’s compliance with its obligations under this Section 7 in a manner that avoids any such harm or consequence.
Section  7.02 Tax Return Information . Each of Aptiv and Delphi Technologies, and each member of their respective Groups, acknowledges that time is of the essence in relation to any request for information, assistance or cooperation made pursuant to Section 7.01 of this Agreement or this Section 7.02 . Each of Aptiv and Delphi Technologies, and each member of their respective Groups, acknowledges that failure to conform to the reasonable deadlines set by the Party making such request could cause irreparable harm. Each Party shall provide to the other Party information and documents relating to its Group reasonably required by the other Party to prepare Tax Returns, including any pro forma returns required by the Responsible Party for purposes of preparing such Tax Returns. Any information or documents the Responsible Party requires to prepare such Tax Returns shall be provided in such form as the Responsible Party reasonably requests and at or prior to the time reasonably specified by the Responsible Party so as to enable the Responsible Party to file such Tax Returns on a timely basis.
Section  7.03 Reliance by Aptiv . If any member of the Delphi Technologies Group supplies information to a member of the Aptiv Group in connection with a Tax liability and an officer of a member of the Aptiv Group signs a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then upon the written request of such member of the Aptiv Group identifying the information being so relied upon, the chief financial officer of Delphi Technologies (or any officer of Delphi Technologies as designated by the chief financial officer of Delphi Technologies) shall certify in writing that to his or her knowledge (based upon consultation with appropriate employees) the information so supplied is accurate and complete. Delphi Technologies agrees to indemnify and hold harmless each member of the Aptiv Group and its directors, officers and employees from and against any fine, penalty or other cost or expense of any kind attributable to a member of the Delphi Technologies Group having supplied, pursuant to this Section 7 , a member of the Aptiv Group with inaccurate or incomplete information in connection with a Tax liability.
Section  7.04 Reliance by Delphi Technologies . If any member of the Aptiv Group supplies information to a member of the Delphi Technologies Group in connection with a Tax liability and an officer of a member of the Delphi Technologies Group signs a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then upon the written request of such member of the Delphi Technologies Group identifying the information being so relied upon, the chief financial officer of Aptiv (or any officer of Aptiv as designated by the chief financial officer of Aptiv) shall certify in writing that to his or her knowledge (based upon consultation with appropriate employees) the information so supplied is accurate and complete. Aptiv agrees to indemnify and hold harmless each member of the Delphi
 
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Technologies Group and its directors, officers and employees from and against any fine, penalty or other cost or expense of any kind attributable to a member of the Aptiv Group having supplied, pursuant to this Section 7 , a member of the Delphi Technologies Group with inaccurate or incomplete information in connection with a Tax liability.
Section  7.05 Other Separation Taxes . Delphi Technologies shall (and shall cause its Affiliates to) reasonably cooperate with Aptiv to correct any errors in the chronology or completion of any transactions intended to facilitate, or otherwise effectuated in connection with, the Separation, and take any and all commercially reasonable actions requested by Aptiv to minimize any Other Separation Taxes.
Section  8. Tax Records .
Section  8.01 Retention of Tax Records . Each of Aptiv and Delphi Technologies shall preserve and keep all Tax Records exclusively relating to the assets and activities of its Group for Pre-Distribution Periods, and Aptiv shall preserve and keep all other Tax Records relating to Taxes of the Aptiv and Delphi Technologies Groups for Pre-Distribution Periods, for so long as the contents thereof may be or become material in the administration of any matter under the Code or other applicable Tax Law, but in any event until the later of (i) the expiration of any applicable statutes of limitations, or (ii) seven (7) years after the Distribution Date (such later date, the “ Retention Date ”). After the Retention Date, each of Aptiv and Delphi Technologies may dispose of such Tax Records upon sixty (60) Business Days’ prior written notice to the other Party. If, prior to the Retention Date, (a) Aptiv or Delphi Technologies reasonably determines that any Tax Records which it would otherwise be required to preserve and keep under this Section 8 are no longer material in the administration of any matter under the Code or other applicable Tax Law and the other Party agrees, then such first Party may dispose of such Tax Records upon sixty (60) Business Days’ prior notice to the other Party. Any notice of an intent to dispose given pursuant to this Section 8.01 shall include a list of the Tax Records to be disposed of describing in reasonable detail each file, book, or other record accumulation being disposed. The notified Parties shall have the opportunity, at their cost and expense, to copy or remove, within such sixty (60) Business Day period, all or any part of such Tax Records. If, at any time prior to the Retention Date, a Party or any of its Affiliates determines to decommission or otherwise discontinue any computer program or information technology system used to access or store any Tax Records, then such program or system may be decommissioned or discontinued upon ninety (90) Business Days’ prior notice to the other Party and the other Party shall have the opportunity, at its cost and expense, to copy, within such ninety (90) Business Day period, all or any part of the underlying data relating to the Tax Records accessed by or stored on such program or system.
Section  8.02 Access to Tax Records . The Parties and their respective Affiliates shall make available to each other for inspection and copying during normal business hours upon reasonable notice all Tax Records (and, for the avoidance of doubt, any pertinent underlying data accessed or stored on any computer program or information technology system) in their possession pertaining to (i) in the case of any Tax Return of the Aptiv Group, the portion of such return that relates to Taxes for which the Delphi Technologies Group may be liable pursuant to this Agreement or (ii) in the case of any Tax Return of the Delphi Technologies Group, the portion of such return that relates to Taxes for which the Aptiv Group may be liable pursuant to
 
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this Agreement, and shall permit the other Party and its Affiliates, authorized agents and representatives and any representative of a Tax Authority or other Tax auditor direct access, at the cost and expense of the requesting Party, during normal business hours upon reasonable notice to any computer program or information technology system used to access or store any Tax Records, in each case to the extent reasonably required by the other Party in connection with the preparation of Tax Returns or financial accounting statements, audits, litigation, or the resolution of items under this Agreement.
Section  8.03 Preservation of Privilege . The Parties and their respective Affiliates shall not provide access to, copies of, or otherwise disclose to any Person any documentation relating to Taxes existing prior to the Distribution Date to which Privilege may reasonably be asserted without the prior written consent of the other Party, such consent not to be unreasonably withheld, conditioned or delayed.
Section  9. Tax Contests .
Section  9.01 Notice . Each Party shall provide prompt notice to the other Party of any written communication from a Tax Authority regarding any pending Tax audit, assessment or proceeding or other Tax Contest of which it becomes aware (i) related to Taxes for Tax Periods for which it is indemnified by the other Party hereunder or for which it may be required to indemnify the other Party hereunder, (ii) relating to a Delphi Technologies Separate Return for a Pre-Distribution Period or Straddle Period that could reasonably be expected to adversely affect any member of the Aptiv Group or for any other Tax Period that could reasonably be expected to materially adversely affect any member of the Aptiv Group, or (iii) otherwise relating to the Intended Tax Treatment or the Separation (including the resolution of any Tax Contest relating thereto). Such notice shall attach copies of the pertinent portion of any written communication from a Tax Authority and contain factual information (to the extent known) describing any asserted Tax liability in reasonable detail and shall be accompanied by copies of any notice and other documents received from any Tax Authority in respect of any such matters. If an indemnified Party has knowledge of an asserted Tax liability with respect to a matter for which it is to be indemnified hereunder and such Party fails to give the indemnifying Party prompt notice of such asserted Tax liability and the indemnifying Party is entitled under this Agreement to contest the asserted Tax liability, then (x) to the extent the indemnifying Party is precluded from contesting the asserted Tax liability in any forum as a result of the failure to give prompt notice, the indemnifying Party shall have no obligation to indemnify the indemnified Party for any Taxes arising out of such asserted Tax liability, and (y) to the extent the indemnifying Party is not precluded from contesting the asserted Tax liability in any forum, but such failure to give prompt notice results in a material monetary detriment to the indemnifying Party, then any amount which the indemnifying Party is otherwise required to pay the indemnified Party pursuant to this Agreement shall be reduced by the amount of such detriment.
Section  9.02 Control of Tax Contests .
(a) Aptiv Control . Notwithstanding anything in this Agreement to the contrary, Aptiv shall have the right to control any Tax Contest with respect to any Tax matters relating to (i) a Joint Return, (ii) an Aptiv Separate Return, (iii) Specified Separation Taxes and (iv) Other Separation Taxes. Subject to Section 9.02(c) and Section 9.02(d) of this Agreement, Aptiv shall have absolute discretion with respect to any decisions to be made, or the nature of any action to be taken, with respect to any such Tax Contest.
 
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(b) Delphi Technologies Control. Except as otherwise provided in this Section 9.02 , Delphi Technologies shall have the right to control any Tax Contest with respect to any Delphi Technologies Separate Return. Subject to Section 9.02(c) and Section 9.02(d) of this Agreement, Delphi Technologies shall have reasonable discretion, after consultation with Aptiv, with respect to any decisions to be made, or the nature of any action to be taken, with respect to any such Tax Contest relating to a Delphi Technologies Separate Return for a Pre-Distribution Period or Straddle Period that could reasonably be expected to adversely affect any member of the Aptiv Group or for any other Tax Period that could reasonably be expected to materially adversely affect any member of the Aptiv Group, and absolute discretion with respect to any decisions to be made, or the nature of any action to be taken, with respect to any other such Tax Contest.
(c) Settlement Rights . The Controlling Party shall have the sole right to contest, litigate, compromise and settle any Tax Contest without obtaining the prior consent of the Non-Controlling Party; provided , that to the extent any such Tax Contest (i) could give rise to a claim for indemnity by the Controlling Party or its Affiliates against the Non-Controlling Party or its Affiliates under this Agreement, or (ii) is with respect to a Delphi Technologies Separate Return for a Pre-Distribution Period or Straddle Period and could reasonably be expected to adversely affect any member of the Aptiv Group or for any other Tax Period that could reasonably be expected to materially adversely affect any member of the Aptiv Group, then the Controlling Party shall not settle any such Tax Contest without the Non-Controlling Party’s prior written consent (which consent may not be unreasonably withheld, conditioned, or delayed and, in the case of a Tax Contest relating to Specified Separation Taxes, must take into account the reasonable likelihood of success of such Tax Contest on its merits without regard to the ability of Delphi Technologies to pay). Subject to Section 9.02(e) of this Agreement, and unless waived by the Parties in writing, in connection with any potential adjustment in a Tax Contest as a result of which adjustment the Non-Controlling Party may reasonably be expected to become liable to make any indemnification payment to the Controlling Party under this Agreement: (I) the Controlling Party shall keep the Non-Controlling Party informed in a timely manner of all actions taken or proposed to be taken by the Controlling Party with respect to such potential adjustment in such Tax Contest; (II) the Controlling Party shall timely provide the Non-Controlling Party copies of any written materials relating to such potential adjustment in such Tax Contest received from any Tax Authority; (III) the Controlling Party shall timely provide the Non-Controlling Party with copies of any correspondence or filings submitted to any Tax Authority or judicial authority in connection with such potential adjustment in such Tax Contest; (IV) the Controlling Party shall consult with the Non-Controlling Party and offer the Non-Controlling Party a reasonable opportunity to comment before submitting any written materials prepared or furnished in connection with such potential adjustment in such Tax Contest; and (V) the Controlling Party shall defend such Tax Contest diligently and in good faith. The failure of the Controlling Party to take any action specified in the preceding sentence with respect to the Non-Controlling Party shall not relieve the Non-Controlling Party of any liability and/or obligation which it may have to the Controlling Party under this Agreement except to the extent that the Non-Controlling Party was actually harmed by such failure, and in no event shall such failure relieve the Non-Controlling Party from any other liability or obligation which it may have to the Controlling Party. In the case of any Tax Contest described in this Section 9 , “ Controlling Party ” means the Party entitled to control the Tax Contest under such Section and “ Non-Controlling Party ” means (x) Aptiv if Delphi Technologies is the Controlling Party and (y) Delphi Technologies if Aptiv is the Controlling Party.
 
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(d) Tax Contest Participation . Subject to Section 9.02(e) of this Agreement, and unless waived by the Parties in writing, the Controlling Party shall provide the Non-Controlling Party with written notice reasonably in advance of, and the Non-Controlling Party shall have the right to attend, any formally scheduled meetings with Tax Authorities or hearings or proceedings before any judicial authorities in connection with any potential adjustment in a Tax Contest (i) pursuant to which the Non-Controlling Party may reasonably be expected to become liable to make any indemnification payment to the Controlling Party under this Agreement or (ii) that is with respect to a Delphi Technologies Separate Return for a Pre-Distribution Period or Straddle Period and could reasonably be expected to adversely affect any member of the Aptiv Group or for any other Tax Period and could reasonably be expected to materially adversely affect any member of the Aptiv Group. The failure of the Controlling Party to provide any notice specified in this Section 9.02(d) to the Non-Controlling Party shall not relieve the Non-Controlling Party of any liability or obligation which it may have to the Controlling Party under this Agreement except to the extent that the Non-Controlling Party was actually harmed by such failure, and in no event shall such failure relieve the Non-Controlling Party from any other liability or obligation which it may have to the Controlling Party.
(e) Joint Returns . Notwithstanding anything in this Section 9 to the contrary, in the case of a Tax Contest related to a Joint Return, the rights of Delphi Technologies and its Affiliates under Section 9.02(c) and Section 9.02(d) of this Agreement shall be limited in scope to the portion of such Tax Contest relating to Taxes for which Delphi Technologies may reasonably expected to become liable to make any indemnification payment to Aptiv under this Agreement.
(f) Power of Attorney . Each member of the Delphi Technologies Group shall execute and deliver to Aptiv (or such member of the Aptiv Group as Aptiv shall designate) any power of attorney or other similar document reasonably requested by Aptiv (or such designee) in connection with any Tax Contest (as to which Aptiv is the Controlling Party) described in this Section 9 . Each member of the Aptiv Group shall execute and deliver to Delphi Technologies (or such member of the Delphi Technologies Group as Delphi Technologies shall designate) any power of attorney or other similar document requested by Delphi Technologies (or such designee) in connection with any Tax Contest (as to which Delphi Technologies is the Controlling Party) described in this Section 9 .
Section  10. Survival of Obligations . The representations, warranties, covenants and agreements set forth in this Agreement shall be unconditional and absolute and shall remain in effect without limitation as to time.
Section  11. Tax Treatment of Interest . Anything herein or in the Separation Agreement to the contrary notwithstanding, to the extent one Party makes a payment of interest to the other Party under this Agreement with respect to the period from the date that the Party receiving the interest payment made a payment of Tax to a Tax Authority to the date that the Party making the interest payment reimbursed the Party receiving the interest payment for such
 
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Tax payment, the interest payment shall be treated as interest expense to the Party making such payment (deductible to the extent provided by Law) and as interest income by the Party receiving such payment (includible in income to the extent provided by Law). The amount of the payment shall not be adjusted to take into account any associated Tax Benefit to the Party making such payment or increase in Tax to the Party receiving such payment.
Section  12. Gross-Up of Indemnification Payments . Except to the extent provided in Section 11 , any Tax indemnity payment made by a Party under this Agreement shall be increased as necessary so that after making all payments in respect to Taxes imposed on or attributable to such indemnity payment, the recipient Party receives an amount equal to the sum it would have received had no such Taxes been imposed.
Section  13. Dispute Resolution . Any and all Disputes arising hereunder shall be resolved through the procedures provided in Article IV of the Separation Agreement.
Section  14. General Provisions .
Section  14.01 Entire Agreement; Construction; Corporate Power .
(a) This Agreement, the Ancillary Agreements and the exhibits, annexes and schedules hereto and thereto, contain the entire agreement between the Parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter and there are no agreements or understandings between the Parties with respect to such subject matter other than those set forth or referred to herein or therein; for the avoidance of doubt, the preceding clause shall apply to all other agreements, whether or not written, in respect of any Tax between or among any member or members of the Aptiv Group, on the one hand, and any member or members of the Delphi Technologies Group, on the other hand, which agreements shall be of no further effect between the parties thereto and any rights or obligations existing thereunder shall be fully and finally settled, calculated as of the date hereof. Except as expressly set forth in the Separation Agreement or any Ancillary Agreement: (i) all matters relating to Taxes and Tax Returns of the Parties and their respective Subsidiaries, to the extent such matters are the subject of this Agreement, shall be governed exclusively by this Agreement; and (ii) for the avoidance of doubt, in the event of any conflict between the Separation Agreement or any Ancillary Agreement, on the one hand, and this Agreement, on the other hand, with respect to such matters, the terms and conditions of this Agreement shall govern.
(b) Each Party acknowledges that it and each other Party may execute this Agreement by facsimile, stamp or mechanical signature. Each Party expressly adopts and confirms each such facsimile, stamp or mechanical signature made in its respective name as if it were a manual signature, agrees that it shall not assert that any such signature is not adequate to bind such Party to the same extent as if it were signed manually and agrees that at the reasonable request of any other Party at any time it shall as promptly as reasonably practicable cause this Agreement to be manually executed (any such execution to be as of the date of the initial date thereof).
 
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Section  14.02 Other Agreements . Except as expressly set forth herein, this Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Separation Agreement or the Ancillary Agreements.
Section  14.03 Governing Law . This Agreement (and any claims or Disputes arising out of or related hereto or to the transactions contemplated hereby or to the inducement of any Party to enter herein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by and construed and interpreted in accordance with the Laws of the State of New York, irrespective of the choice of laws principles of the State of New York, including all matters of validity, construction, effect, enforceability, performance and remedies.
Section  14.04 Construction . This Agreement shall be construed as if jointly drafted by the Parties and no rule of construction or strict interpretation shall be applied against either Party. The Parties represent that this Agreement is entered into with full consideration of any and all rights which the Parties may have. The Parties have conducted such investigations they thought appropriate, and have consulted with such advisors as they deemed appropriate regarding this Agreement and their rights and asserted rights in connection therewith. The Parties are not relying upon any representations or statements made by the other Party, or such other Party’s employees, agents, representatives or attorneys, regarding this Agreement, except to the extent such representations are expressly set forth or incorporated in this Agreement. The Parties are not relying upon a legal duty, if one exists, on the part of the other Party (or such other Party’s employees, agents, representatives or attorneys) to disclose any information in connection with the execution of this Agreement or their preparation, it being expressly understood that neither Party shall ever assert any failure to disclose information on the part of the other Party as a ground for challenging this Agreement.
Section  14.05 Performance . Each Party shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary or Affiliate of such Party.
Section  14.06 Payment Terms .
(a) Except as otherwise expressly provided to the contrary in this Agreement, any amount to be paid or reimbursed by a Party (where applicable, or a member of such Party’s Group) to the other Party (where applicable, or a member of such other Party’s Group) under this Agreement shall be paid or reimbursed hereunder within sixty (60) days after presentation of an invoice or a written demand therefor, in either case setting forth, or accompanied by, reasonable documentation or other reasonable explanation supporting such amount.
(b) Except as expressly provided to the contrary in this Agreement, any amount not paid when due pursuant to this Agreement (and any amount billed or otherwise invoiced or demanded and properly payable that is not paid within sixty (60) days of such bill, invoice or other demand) shall bear interest at a rate per annum equal to the Prime Rate, from time to time in effect, plus two percent (2%), calculated for the actual number of days elapsed, accrued from the date on which such payment was due up to the date of the actual receipt of payment.
 
28

(c) Without the consent of the Party receiving any payment under this Agreement specifying otherwise, all payments to be made by either Aptiv or Delphi Technologies under this Agreement shall be made in U.S. dollars. Except as expressly provided herein, any amount which is not expressed in U.S. dollars shall be converted into U.S. dollars by using the exchange rate published on Bloomberg at 5:00 pm, Eastern time, on the day before the relevant date, or in The Wall Street Journal on such date if not so published on Bloomberg. Except as expressly provided herein, in the event that any Tax indemnity payment required to be made hereunder may be denominated in a currency other than U.S. dollars, the amount of such payment shall be converted into U.S. dollars on the date in which notice of the claim is given to the indemnifying Party.
Section  14.07 No Admission of Liability . The allocation of assets and liabilities herein is solely for the purpose of allocating such assets and liabilities between Aptiv and Delphi Technologies and is not intended as an admission of liability or responsibility for any alleged liabilities vis-à-vis any Third Party, including with respect to the liabilities of any non-wholly owned subsidiary of Aptiv or Delphi Technologies.
[Signature Page Follows]
 
29

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year first above written.

DELPHI AUTOMOTIVE PLC	
	
By:                                                                                                   	
Name:                                                                                             	
Its:                                                                                                   	
	
DELPHI TECHNOLOGIES PLC	
	
By:                                                                                                   	
Name:                                                                                             	
Its:                                                                                                   	

EXHIBIT 10.3
EMPLOYEE MATTERS AGREEMENT
between
DELPHI AUTOMOTIVE PLC
and
DELPHI TECHNOLOGIES PLC
Dated as of [                        ]

																			
ARTICLE I	 	DEFINITIONS	  	 	1	 	
	 	Section 1.1	 		 	    Certain Defined Terms	  	 	1	 	
	 	Section 1.2	 		 	    Other Capitalized Terms	  	 	8	 	
ARTICLE II	 	GENERAL PRINCIPLES; EMPLOYEE TRANSFERS	  	 	9	 	
	 	Section 2.1	 		 	    Aptiv Group Employee Liabilities	  	 	9	 	
	 	Section 2.2	 		 	    Delphi Technologies Group Employee Liabilities	  	 	9	 	
	 	Section 2.3	 		 	    Aptiv Benefit Plans/Delphi Technologies Benefit Plans	  	 	9	 	
	 	Section 2.4	 		 	    Employee Transfers	  	 	10	 	
	 	Section 2.5	 		 	    Delayed Transfer Employees under Contract Manufacturing Services Agreements	  	 	10	 	
ARTICLE III	 	NON-U.S. RETIREMENT AND BENEFIT PLANS AND NON-U.S. EMPLOYEE TRANSFERS	  	 	11	 	
	 	Section 3.1	 		 	    Non-U.S. Plans Generally	  	 	11	 	
	 	Section 3.2	 		 	    Non-U.S. Employees	  	 	16	 	
	 	Section 3.3	 		 	    Delphi Technologies Spinoff Non-U.S. Welfare Plans	  	 	18	 	
ARTICLE IV	 	SERVICE CREDIT	  	 	18	 	
	 	Section 4.1	 		 	    Service Credit for Employee Transfers	  	 	18	 	
ARTICLE V	 	LITIGATION AND COMPENSATION	  	 	19	 	
	 	Section 5.1	 		 	    Employee-Related Litigation	  	 	19	 	
	 	Section 5.2	 		 	    Vacation	  	 	19	 	
	 	Section 5.3	 		 	    Annual Bonuses	  	 	19	 	
	 	Section 5.4	 		 	    Employment Agreements	  	 	20	 	
ARTICLE VI	 	CERTAIN WELFARE BENEFIT PLAN MATTERS	  	 	21	 	
	 	Section 6.1	 		 	    Delphi Technologies Spinoff Welfare Plans	  	 	21	 	
	 	Section 6.2	 		 	    Continuation of Elections	  	 	22	 	
	 	Section 6.3	 		 	    Deductibles, Cost-Sharing Provisions, and Coverage Maximums	  	 	22	 	
	 	Section 6.4	 		 	    Flexible Spending Account Treatment	  	 	22	 	
	 	Section 6.5	 		 	    Workers’ Compensation	  	 	23	 	
	 	Section 6.6	 		 	    COBRA	  	 	23	 	
ARTICLE VII	 	U.S. TAX-QUALIFIED DEFINED CONTRIBUTION PLANS	  	 	24	 	
	 	Section 7.1	 		 	    Delphi Technologies Spinoff DC Plans	  	 	24	 	
	 	Section 7.2	 		 	    Continuation of Elections	  	 	25	 	
 
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	 	Section 7.3	 		 	    Contributions Due	  	 	25	 	
ARTICLE VIII	 	NONQUALIFIED RETIREMENT PLANS	  	 	25	 	
	 	Section 8.1	 		 	    Delphi Technologies Spinoff Nonqualified Plans	  	 	26	 	
	 	Section 8.2	 		 	    No Distributions on Separation	  	 	26	 	
	 	Section 8.3	 		 	    Section 409A	  	 	27	 	
	 	Section 8.4	 		 	    Continuation of Elections	  	 	27	 	
	 	Section 8.5	 		 	    Delayed Transfer Employees	  	 	27	 	
ARTICLE IX	 	APTIV EQUITY COMPENSATION AWARDS	  	 	27	 	
	 	Section 9.1	 		 	    Outstanding Aptiv Equity Compensation Awards	  	 	27	 	
	 	Section 9.2	 		 	    Conformity with Non-U.S. Laws	  	 	30	 	
	 	Section 9.3	 		 	    Tax Withholding and Reporting	  	 	30	 	
	 	Section 9.4	 		 	    Employment Treatment	  	 	31	 	
	 	Section 9.5	 		 	    Equity Award Administration	  	 	31	 	
	 	Section 9.6	 		 	    Registration	  	 	32	 	
ARTICLE X	 	BENEFIT PLAN REIMBURSEMENTS, BENEFIT PLAN THIRD-PARTY CLAIMS	  	 	32	 	
	 	Section 10.1	 		 	    General Principles	  	 	32	 	
	 	Section 10.2	 		 	    Benefit Plan Third-Party Claims	  	 	32	 	
ARTICLE XI	 	INDEMNIFICATION	  	 	32	 	
	 	Section 11.1	 		 	    Indemnification	  	 	32	 	
ARTICLE XII	 	COOPERATION	  	 	32	 	
	 	Section 12.1	 		 	    Cooperation	  	 	32	 	
ARTICLE XIII	 	MISCELLANEOUS	  	 	33	 	
	 	Section 13.1	 		 	    Vendor Contracts	  	 	33	 	
	 	Section 13.2	 		 	    Employment Taxes Withholding Reporting Responsibility	  	 	33	 	
	 	Section 13.3	 		 	    Data Privacy	  	 	33	 	
	 	Section 13.4	 		 	    Third Party Beneficiaries	  	 	34	 	
	 	Section 13.5	 		 	    Effect if Distribution Does Not Occur	  	 	34	 	
	 	Section 13.6	 		 	    Incorporation of Separation Agreement Provisions	  	 	34	 	
	 	Section 13.7	 		 	    No Representation or Warranty	  	 	34	 	
			
Schedule 1.1:	  	Certain Plan Split Dates	
Schedule 2.2:	  	Former Delphi Technologies Business Employee Liabilities Retained by Aptiv	
 
-ii-

			
Schedule 2.3(a):	  	Country Exceptions to Aptiv Benefit Plan Allocation	
Schedule 2.3(b):	  	Country Exceptions to Delphi Technologies Benefit Plan Allocation	
Schedule 2.5:	  	Contract Manufacturing Services Agreements	
Schedule 3.1:	  	Aptiv Non-U.S. Benefit Plans That Will Automatically Apply to Delphi Technologies or be Assumed by Delphi Technologies	
Schedule 3.1(b):	  	Split Non-U.S. DC Plans	
Schedule 3.2:	  	Exceptions to Automatic Transfers of Employment	
Schedule 3.2(b):	  	Countries Where CBAs Will Automatically Apply	
Schedule 3.2(c):	  	Countries Where CBAs Will Not Apply to New Hires	
Schedule 3.2(c)(i):	  	People’s Republic of China CBAs and Mexico CBAs	
Schedule 3.3:	  	Split Non-U.S. Welfare Plans	
Schedule 5.4:	  	Employment Agreements	
Schedule 6.1(a):	  	Split Welfare Plans	
Schedule 7.1(a):	  	Split DC Plans	
Schedule 8.1(a):	  	Split Nonqualified Plans	
Schedule 8.1(c):	  	Nonqualified Plans retained by Aptiv	
 
-iii-

EMPLOYEE MATTERS AGREEMENT
EMPLOYEE MATTERS AGREEMENT, dated as of [                                  ] (this “ Employee Matters Agreement ”), between Delphi Automotive PLC, a Jersey public limited company (“ Aptiv ”), and Delphi Technologies PLC, a public limited company formed under the laws of Jersey and a preexisting, wholly owned subsidiary of Aptiv (“ Delphi Technologies ”).
RECITALS
A.    The parties to this Employee Matters Agreement have entered into the Separation and Distribution Agreement (the “ Separation Agreement ”), dated as of the date hereof, pursuant to which Aptiv intends to distribute to its shareholders, on a pro rata basis, all the outstanding ordinary shares, par value $0.01 per share, of Delphi Technologies then owned by Aptiv (the “ Distribution ”).
B.    The parties wish to set forth their agreements as to certain matters regarding the treatment of, and the compensation and employee benefits provided to, current and former employees of Aptiv and Delphi Technologies and their Subsidiaries.
AGREEMENT
In consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1     Certain Defined Terms . For the purposes of this Employee Matters Agreement:
“ 2017 DLIP Award ” has the meaning set forth in Section 5.3(c) .
“ Adjusted Aptiv Performance-Based RSU ” means a performance-based restricted stock unit award with respect to Aptiv Stock resulting from the adjustment of Aptiv Performance-Based RSUs as described in Section 9.1(a)(ii)(A) .
“ Adjusted Aptiv Time-Based RSU ” means a time-based restricted stock unit award with respect to Aptiv Stock resulting from the adjustment of Aptiv Time-Based RSUs as described in Section 9.1(a)(i)(A) .
“ AIP ” has the meaning set forth in Section 5.3(b) .
“ Applicable Transfer Date ” means the date on which a Delayed Transfer Employee actually transfers employment to Delphi Technologies Group or Aptiv Group, as applicable.
“ Aptiv ” has the meaning set forth in the preamble.
 
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“ Aptiv Benefit Plans ” means any Benefit Plan that, as of the close of business on the day before the Distribution Date, is sponsored or maintained solely by any member of the Aptiv Group. Aptiv Benefit Plan will also mean any multiemployer plan (as defined in Section 3(37) of ERISA) to which any member of the Aptiv Group contributes for the benefit of its employees. For the avoidance of doubt, no member of the Aptiv Group will be deemed to sponsor or maintain any Benefit Plan if its relationship to such Benefit Plan is solely to administer such Benefit Plan or provide to Delphi Technologies any reimbursement in respect of such Benefit Plan.
“ Aptiv Compensation Committee ” means the Compensation and Human Resources Committee of the Board of Directors of Aptiv.
“ Aptiv Employee ” means each individual who, as of the close of business on the Distribution Date, is employed by a member of the Aptiv Group (including, for the avoidance of doubt, any such individual who is on a leave of absence, whether paid or unpaid). Aptiv Employees also include Aptiv Transferees, effective as of the Applicable Transfer Date.
“ Aptiv Entity ” means a member of the Aptiv Group.
“ Aptiv Equity Compensation Award ” means each Aptiv Performance-Based RSU and Aptiv Time-Based RSU.
“ Aptiv Flexible Account Plan ” has the meaning set forth in Section 6.4 .
“ Aptiv LTIP ” means either of the Delphi Automotive PLC Long-Term Incentive Plan (amended and restated as of April 23, 2015) or the Delphi Automotive PLC Long-Term Incentive Plan, as applicable.
“ Aptiv Non-U.S. Benefit Plans ” means the Non-U.S. Benefit Plans sponsored or maintained by a member of the Aptiv Group. For the avoidance of doubt, such plans do not include any statutory programs, including retirement, severance, termination or insurance benefits required by applicable Law.
“ Aptiv Non-U.S. Welfare Plan ” means each Aptiv Non-U.S. Benefit Plan that is a Welfare Plan that is not statutorily mandated.
“ Aptiv Participants ” means any Aptiv Employee, Former Aptiv Business Employee, or Former Delphi Technologies Business Employee who immediately prior to the Distribution Date holds Aptiv Equity Compensation Awards, or a beneficiary, dependent or alternate payee of such person.
“ Aptiv Performance-Based RSU ” means a performance-based restricted stock unit award with respect to Aptiv Stock granted by Aptiv under an Aptiv LTIP before the Distribution Date.
“ Aptiv Time-Based RSU ” means a time-based restricted stock unit award with respect to Aptiv Stock granted by Aptiv under an Aptiv LTIP before the Distribution Date.
 
-2-

“ Aptiv Transferees ” means the Delayed Transfer Employees who transfer from the Delphi Technologies Group to the Aptiv Group.
“ Aptiv Welfare Plan ” means each Aptiv Benefit Plan that is a Welfare Plan.
“ Benefit Plan ” means, with respect to an entity, each plan, program, policy, agreement, arrangement or understanding that is maintained primarily for the benefit of employees in the United States and is a deferred compensation, executive compensation, incentive bonus or other bonus, pension, profit sharing, savings, retirement, severance pay, salary continuation, life, death benefit, health, hospitalization, sick leave, vacation pay, disability or accident insurance or other employee benefit plan, program, agreement or arrangement, including any “employee benefit plan” (as defined in Section 3(3) of ERISA) sponsored, maintained or contributed to by such entity or to which such entity is a party or under which such entity has any obligation; provided that no Aptiv Equity Compensation Award, nor any plan under which any such Aptiv Equity Compensation Award is granted, will constitute a “Benefit Plan” under this Employee Matters Agreement. In addition, no Employment Agreement will constitute a Benefit Plan for purposes hereof.
“ COBRA ” means the continuation coverage requirements under Code Section 4980B and ERISA Sections 601-608.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Collective Bargaining Agreement ” means (a) any agreement between Aptiv or an Affiliate of Aptiv and a trade union, works council or trade representative that sets forth the terms and conditions of employment relating to Non-U.S. Delphi Technologies Employees and (b) any terms and conditions that apply to Non-U.S. Delphi Technologies Employees by virtue of Aptiv or an Affiliate of Aptiv’s membership in a union or participation in a particular trade, industry or economic sector.
“ Damages ” means all losses, claims, demands, damages, Liabilities, judgments, dues, penalties, assessments, fines (civil, criminal or administrative), costs, liens, forfeitures, settlements, fees or expenses (including reasonable attorneys’ fees and expenses and any other expenses reasonably incurred in connection with investigating, prosecuting or defending a claim or Action), of any nature or kind, whether or not the same would properly be reflected on any financial statements or the footnotes thereto.
“ Delayed Transfer Employee ” has the meaning set forth in Section 2.4 .
“ Delphi Technologies ” has the meaning set forth in the preamble.
“ Delphi Technologies Benefit Plan ” means any Benefit Plan sponsored or maintained by any member of the Delphi Technologies Group. Delphi Technologies Benefit Plan will also mean any multiemployer plan (as defined in Section 3(37) of ERISA) to which any member of the Delphi Technologies Group contributes for the benefit of its employees. For the avoidance of doubt, no member of the Delphi Technologies Group will be deemed to sponsor or maintain any Benefit Plan if its relationship to such Benefit Plan is solely to administer such Benefit Plan or provide to the Aptiv Group any reimbursement in respect of such Benefit Plan.
 
-3-

“ Delphi Technologies Employee ” means each individual who, as of the close of business on the Distribution Date, is employed by a member of the Delphi Technologies Group (including, for the avoidance of doubt, any such individual who is on a leave of absence, whether paid or unpaid). Delphi Technologies Employees also include Delphi Technologies Transferees, effective as of the Applicable Transfer Date.
“ Delphi Technologies Employment Agreement ” has the meaning set forth in Section 5.4 .
“ Delphi Technologies Entity ” means a member of the Delphi Technologies Group.
“ Delphi Technologies Equity Compensation Award ” means each Delphi Technologies Performance-Based RSU or Delphi Technologies Time-Based RSU.
“ Delphi Technologies Flexible Account Plan ” has the meaning set forth in Section 6.4 .
“ Delphi Technologies LTIP ” means the Delphi Technologies PLC Long Term Incentive Plan and any stock-based or other incentive plan identified by Delphi Technologies before the Distribution Date.
“ Delphi Technologies Non-U.S. Benefit Plan ” means any Non-U.S. Benefit Plan sponsored or maintained by a member of the Delphi Technologies Group, including the terms of any Aptiv Benefit Plan that will apply to Non-U.S. Delphi Technologies Employees after the Distribution by operation of applicable Law. For the avoidance of doubt, such plans do not include any statutory programs, including retirement, severance, termination or insurance benefits required by applicable Law.
“ Delphi Technologies Participants ” means any Delphi Technologies Employee who immediately prior to the Distribution Date holds Aptiv Equity Compensation Awards, or a beneficiary, dependent or alternate payee of such person.
“ Delphi Technologies Performance-Based RSU ” means a performance-based restricted stock unit award with respect to Delphi Technologies Stock subject to the Delphi Technologies LTIP and resulting from the adjustment of Aptiv Performance-Based RSUs as described in Section 9.1(a)(ii)(B) .
“ Delphi Technologies Price ” means the opening sale price of Delphi Technologies Stock solely on the New York Stock Exchange on the Trading Day immediately following the Distribution (as traded on the “regular way” market) as reported by Bloomberg L.P. or any successor thereto.
“ Delphi Technologies Spinoff DC Plans ” has the meaning set forth in Section 7.1(a) .
 
-4-

“ Delphi Technologies Spinoff Nonqualified Plans ” has the meaning set forth in Section 8.1(a) .
“ Delphi Technologies Spinoff Non-U.S. DC Plans ” has the meaning set forth in Section 3.1(b) .
“ Delphi Technologies Spinoff Non-U.S. Welfare Plan ” has the meaning set forth in Section 3.3 .
“ Delphi Technologies Spinoff Welfare Plan ” has the meaning set forth in Section 6.1(a) .
“ Delphi Technologies Stock ” means the ordinary shares, par value $0.01 per share, of Delphi Technologies.
“ Delphi Technologies Time-Based RSU ” means a time-based restricted stock unit award with respect to Delphi Technologies Stock subject to the Delphi Technologies LTIP and resulting from the adjustment of Aptiv Time-Based RSUs as described in Section 9.1(a)(i)(B) .
“ Delphi Technologies Transferees ” means the Delayed Transfer Employees who transfer from the Aptiv Group to the Delphi Technologies Group.
“ Delphi Technologies Welfare Claims ” has the meaning set forth in Section 6.1(a) .
“ Delphi Technologies Workers’ Compensation Claim ” has the meaning set forth in Section 6.5 .
“ Distribution ” has the meaning set forth in the Recitals.
“ DLIP ” has the meaning set forth in Section 5.3(c) .
“ DPSS ” means the Delphi Product & Services Solutions business.
“ Employee Matters Agreement ” has the meaning set forth in the preamble.
“ Employment Agreement ” means any individual employment, offer, retention, consulting, change in control, sale bonus, incentive bonus, severance or other individual compensatory agreement between any current or former employee and Aptiv or any of its Affiliates.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.
“ Former Aptiv Business Employee ” means any individual who (i) on or before the close of business on the Distribution Date retired or otherwise separated from service from Aptiv and its Affiliates, and (ii) is not a Former Delphi Technologies Business Employee.
 
-5-

“ Former Delphi Technologies Business Employee ” means any individual (i) who on or before the close of business on the Distribution Date retired or otherwise separated from service from Aptiv and its Affiliates, and (ii) whose last day worked with Aptiv and its Affiliates prior to the close of business on the Distribution Date was with (A) the Delphi Technologies Business, (B) DPSS, or (C) any Person that will be a direct or indirect Subsidiary of Delphi Technologies immediately after the Distribution.
“ France Spinoff Pension Plan ” has the meaning set forth in Section 3.1(a)(iii) .
“ France Split Pension Plan ” has the meaning set forth in Section 3.1(a)(iii) .
“ German Spinoff Pension Plan ” has the meaning set forth in Section 3.1(a)(iv) .
“ German Split Pension Plan ” has the meaning set forth in Section 3.1(a)(iv) .
“ Group ” means the Aptiv Group or the Delphi Technologies Group, as the context requires.
“ Japan Spinoff Pension Plan ” has the meaning set forth in Section 3.1(a)(ii) .
“ Japan Split Pension Plan ” has the meaning set forth in Section 3.1(a)(ii) .
“ Mexico CBAs ” has the meaning set forth in Section 3.2(c)(ii) .
“ Mexico Spinoff Pension Plan ” has the meaning set forth in Section 3.1(a)(i)(A) .
“ Mexico Split Pension Plans ” has the meaning set forth in Section 3.1(a)(i)(A) .
“ Non-U.S. Benefit Plan ” means, with respect to an entity, each plan, program, policy, agreement, arrangement or understanding that is maintained primarily for the benefit of employees outside of the United States and is a deferred compensation, executive compensation, incentive bonus or other bonus, pension, profit sharing, savings, retirement, severance pay, salary continuation, life, death benefit, health, hospitalization, sick leave, vacation pay, disability or accident insurance or other employee benefit plan, program, agreement or arrangement, sponsored, maintained or contributed to by such entity or to which such entity is a party or under which such entity has any obligation; provided that no Aptiv Equity Compensation Award, nor any plan under which any such Aptiv Equity Compensation Award is granted, will constitute a “ Non-U.S. Benefit Plan ” under this Employee Matters Agreement. In addition, no Employment Agreement will constitute a Non-U.S. Benefit Plan for purposes hereof.
“ Non-U.S. Delphi Technologies Employee ” means each Delphi Technologies Employee whose employment is based outside of the United States. Non-U.S. Delphi Technologies Employees also include Delayed Transfer Employees whose employment is based outside of the United States and who are Delphi Technologies Transferees, effective as of the Applicable Transfer Date.
 
-6-

“ Plan Payee ” means, as to an individual who participates in a Benefit Plan, such individual’s dependents, beneficiaries, alternate payees and alternate recipients, as applicable under such Benefit Plan.
“ Plan Split Date ” means December 1, 2017 for the Split DC Plans and the Split Nonqualified Plans and the date set forth on Schedule 1.1 for each of the countries listed thereon.
“ Post-Distribution Aptiv Price ” means the opening sale price of Aptiv Stock solely on the New York Stock Exchange on the Trading Day immediately following the Distribution (as traded on the “regular way” market) as reported by Bloomberg L.P. or any successor thereto.
“ PRC CBAs ” has the meaning set forth in Section 3.2(c)(i) .
“ Pre-Distribution Action ” means an Action by any Third Party with respect to a Split Plan, Aptiv Employee, Former Aptiv Business Employee, Delphi Technologies Employee, or Former Delphi Technologies Business Employee that arises from an act, omission, or event that occurred prior to the Distribution.
“ Pre-Distribution Aptiv Price ” means the closing sale price of Aptiv Stock solely on the New York Stock Exchange on the Distribution Date (as traded on the “regular way” market) as reported by Bloomberg L.P. or any successor thereto.
“ Production Employee ” has the meaning set forth in Section 2.5(a) .
“ Retained Severance Benefits ” has the meaning set forth in Section 6.1(a) .
“ Separation Agreement ” has the meaning set forth in the Recitals.
“ Split DC Plans ” has the meaning set forth in Section 7.1(a) .
“ Split Nonqualified Plans ” has the meaning set forth in Section 8.1(a) .
“ Split Non-U.S. Plan ” means a Non-U.S. Benefit Plan sponsored, maintained or contributed to by the Aptiv Group that transferred liabilities to a Non-U.S. Benefit Plan sponsored, maintained or contributed to by the Delphi Technologies Group in connection with the Distribution.
“ Split Plans ” means the Split Welfare Plans, Split DC Plans, Split Nonqualified Plans, and Split Non-U.S. Plans.
“ Split Welfare Plans ” has the meaning set forth in Section 6.1(a) .
“ Trading Day ” means the period of time during any given calendar day, beginning at 9:30 a.m. (New York time) (or such other time as the New York Stock Exchange publicly announces is the official open of trading), and ending at 4:01 p.m. (New York time) (or one minute after such other time as the New York Stock Exchange publicly announces is the official close of trading), in which trading and settlement in Aptiv Stock or Delphi Technologies Stock is permitted on the New York Stock Exchange.
 
-7-

“ Vendor Contract ” has the meaning set forth in Section 13.1 .
“ Welfare Plan ” means each Benefit Plan that provides life insurance, health care, dental care, vision care, employee assistance programs (EAP), accidental death and dismemberment insurance, disability, severance, vacation or other group welfare or fringe benefits or is otherwise an “employee welfare benefit plan” as described in Section 3(1) of ERISA.
“ Workers’ Compensation Event ” means the event, injury, illness or condition giving rise to a workers’ compensation claim.
Section 1.2     Other Capitalized Terms . Capitalized terms not defined in this Employee Matters Agreement, including the following, will have the meanings ascribed to them in the Separation Agreement:
 
 	•	 	Action	
 
 	•	 	Affiliate	
 
 	•	 	Ancillary Agreements	
 
 	•	 	Aptiv Group	
 
 	•	 	Aptiv Stock	
 
 	•	 	Contract Manufacturing Services Agreements	
 
 	•	 	Delphi Technologies Business	
 
 	•	 	Delphi Technologies Group	
 
 	•	 	Distribution Date	
 
 	•	 	Governmental Authority	
 
 	•	 	Law	
 
 	•	 	Liability	
 
 	•	 	Person	
 
 	•	 	Subsidiary	
 
 	•	 	Tax	
 
 	•	 	Tax Matters Agreement	
 
 	•	 	Third Party	
 
 	•	 	Third-Party Claim	
 
 	•	 	Transition Services Agreement	
ARTICLE II
GENERAL PRINCIPLES; EMPLOYEE TRANSFERS
Section 2.1     Aptiv Group Employee Liabilities . Except as specifically provided in this Employee Matters Agreement, the Aptiv Group will be solely responsible for (i) all employment, compensation and employee benefits Liabilities relating to Aptiv Employees and Former Aptiv Business Employees, (ii) all Liabilities arising under each Aptiv Benefit Plan, and (iii) any other Liabilities expressly assigned or allocated to an Aptiv Group member under this Employee Matters Agreement, whether arising before, on or after the Distribution Date.
 
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Section 2.2     Delphi Technologies Group Employee Liabilities . Except as specifically provided in this Employee Matters Agreement, the Delphi Technologies Group will be solely responsible for (i) all employment, compensation and employee benefits Liabilities relating to Delphi Technologies Employees, (ii) all employment, compensation and employee benefits Liabilities relating to Former Delphi Technologies Business Employees, except as otherwise required by Law or provided in Schedule 2.2 , (iii) all Liabilities arising under each Delphi Technologies Benefit Plan, and (iv) any other Liabilities expressly assigned or allocated to a Delphi Technologies Group member under this Employee Matters Agreement, whether arising before, on or after the Distribution Date.
Section 2.3     Aptiv Benefit Plans/Delphi Technologies Benefit Plans .
(a)    Except as otherwise provided herein or as set forth on Schedule 2.3(a) , effective as of the Plan Split Date, in the case of the Split DC Plans and the Split Nonqualified Plans, and the Distribution Date, in the case of all other Aptiv Benefit Plans and Aptiv Non-U.S. Benefit Plans, the Aptiv Group will be exclusively responsible for administering each Aptiv Benefit Plan and Aptiv Non-U.S. Benefit Plan in accordance with its terms and for all obligations and liabilities with respect to the Aptiv Benefit Plans and Aptiv Non-U.S. Benefit Plans and all benefits owed to participants in the Aptiv Benefit Plans and Aptiv Non-U.S. Benefit Plans, whether arising before, on or after the Distribution Date.
(b)    Except as otherwise provided herein or as set forth on Schedule 2.3(b) , effective as of the Plan Split Date in the case of the Delphi Technologies Spinoff DC Plans and the Delphi Technologies Spinoff Nonqualified Plans, and the Distribution Date, in the case of all other Delphi Technologies Benefit Plans and Delphi Technologies Non-U.S. Benefit Plans, the Delphi Technologies Group will be exclusively responsible for administering each Delphi Technologies Benefit Plan and Delphi Technologies Non-U.S. Benefit Plan in accordance with its terms and for all obligations and liabilities with respect to the Delphi Technologies Benefit Plans and Delphi Technologies Non-U.S. Benefit Plans and all benefits owed to participants in the Delphi Technologies Benefit Plans and Delphi Technologies Non-U.S. Benefit Plans, whether arising before, on or after the Distribution Date or Plan Split Date, as applicable.
Section 2.4     Employee Transfers . Any employee whose employment transfers pursuant to one of the following categories will be a “ Delayed Transfer Employee ” provided such employee was continuously employed by a member of the Delphi Technologies Group or the Aptiv Group (as applicable) from the Distribution Date through the date of the employment transfer: (a) within 6 months after the Distribution Date from the Aptiv Group to the Delphi Technologies Group or from the Delphi Technologies Group to the Aptiv Group because such employee was inadvertently and
 
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erroneously treated as employed by the wrong employer on the Distribution Date; (b) within 30 months after the Distribution Date from the Aptiv Group to the Delphi Technologies Group if such employee was on disability leave on the Distribution Date and such transfer occurs immediately upon the employee returning to work; or (c) before or, at the expiration of, as determined by Aptiv, the applicable period of the Transition Services Agreement or Contract Manufacturing Services Agreements under which such employee provides services. Notwithstanding anything herein to the contrary, no employee will be considered a Delayed Transfer Employee unless the mutual agreement with respect to, and the Applicable Transfer Date of, the Delayed Transfer Employee occurs on or before the end of the maximum period during which the transfer is permitted to occur, as detailed above. With respect to any employees whose employment transfers prior to the Distribution Date in accordance with a local asset or stock transfer agreement (“ Early Transfer Employees ”), the treatment of Liabilities set forth in this Employee Matters Agreement that applies to employees who transfer employment on the Distribution Date shall also apply to such Early Transfer Employees.
Section 2.5     Delayed Transfer Employees under Contract Manufacturing Services Agreements .
(a)    Delphi Technologies or another member of the Delphi Technologies Group that is party to a Contract Manufacturing Services Agreement listed on Schedule 2.5 shall make an offer of employment to each salaried and hourly Aptiv Group employee allocable to the provision of manufacturing services for the Delphi Technologies Group under the Contract Manufacturing Services Agreement as determined by Aptiv (“ Production Employee ”). The employment of each Production Employee shall be transferred to Delphi Technologies or another member of the Delphi Technologies Group at such time as determined by Aptiv during the transition of production to Delphi Technologies following the Distribution Date. The Production Employee’s employment shall be considered continuous and uninterrupted under applicable Law and the terms and conditions applicable to the Production Employee’s employment after such transfer shall be, in the aggregate, substantially comparable to those terms and conditions of service applicable immediately before such transfer.
(b)    Delphi Technologies or another member of the Delphi Technologies Group shall assume all Liabilities with respect to Production Employees who accept an offer of employment by, or who are transferred to, Delphi Technologies or another member of the Delphi Technologies Group. Delphi Technologies or a member of the Delphi Technologies Group shall reimburse the Aptiv Group for any severance payable by Aptiv or a member of the Aptiv Group under any severance arrangements with respect to each Production Employee who is not offered employment by Delphi Technologies or a member of the Delphi Technologies Group or who refuses to enter into a new employment agreement or accept employment with Delphi Technologies or any member of the Delphi Technologies Group upon presentation of an offer of employment by Delphi Technologies or a member of the Delphi Technologies Group. Notwithstanding the foregoing, if Aptiv or a member of the Aptiv Group, rather than taking any action to sever the employment relationship continues to continuously employ the Production Employee who is either not offered employment by Delphi
 
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Technologies or a member of the Delphi Technologies Group or who refuses to enter into a new employment agreement with Delphi Technologies or a member of the Delphi Technologies Group, Delphi Technologies shall no longer be liable for any costs associated with the continuous employment of such Production Employee including, but not limited to, the salary, benefits or any applicable severance payments.
ARTICLE III
NON-U.S. RETIREMENT AND BENEFIT PLANS AND NON-U.S. EMPLOYEE TRANSFERS
Section 3.1     Non-U.S. Plans Generally . Except as otherwise provided below, effective as of the Distribution Date, (i) Aptiv or a member of the Aptiv Group will retain each Aptiv Non-U.S. Benefit Plan and (ii) Delphi Technologies or a member of the Delphi Technologies Group will retain or assume each Delphi Technologies Non-U.S. Benefit Plan. To the extent that the applicable Law of any jurisdiction requires that, in connection with the transactions contemplated by this Employee Matters Agreement, the Separation Agreement or the other Ancillary Agreements, all or a portion of the Aptiv Non-U.S. Benefit Plans listed on Schedule 3.1 will be assumed by a member of the Delphi Technologies Group or be applicable to the Non-U.S. Delphi Technologies Employees on and after the Distribution Date for such period of time permitted or required under applicable Law, Delphi Technologies will cause the Delphi Technologies Group to assume such Aptiv Non-U.S. Plans or apply the terms of such Aptiv Non-U.S. Benefit Plan to Non-U.S. Delphi Technologies Employees.
(a)     Non-U.S. Pension Plans .
(i)     Mexico Pension Plan .
(A)    Effective as of the Plan Split Date, Delphi Diesel Systems S. de R.L. de C.V. has established and adopted a defined benefit pension plan (the “ Mexico Spinoff Pension Plan ”) to provide retirement benefits to certain Non-U.S. Delphi Technologies Employees in Mexico who participated in the Delphi Diesel Systems S. de R.L. de C.V. Pension Plan, Delphi Sistemas de Energia S. de R.L. de C.V. Pension Plan, Sistemas Electricos y Conmutadores S. de R.L. de C.V. Pension Plan, Delphi Automotive Systems S. de R.L. de C.V. or Delphi Delco Electronics de Mexico S. de R.L. de C.V. Pension Plan (the “ Mexico Split Pension Plans ”) prior to the Plan Split Date. The Mexico Spinoff Pension Plan assumed liability for all benefits accrued or earned by Non-U.S. Delphi Technologies Employees and their Plan Payees under the Mexico Split Pension Plans as of the Plan Split Date. As of the Plan Split Date, Delphi Technologies or a member of the Delphi Technologies Group is solely responsible for taking all necessary, reasonable, and appropriate actions to maintain and administer the Mexico Spinoff Pension Plan so that it complies with applicable local law. As of the Plan Split Date, the liabilities under the Mexico
 
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Split Pension Plans relating to Delphi Technologies Employees, Former Delphi Technologies Business Employees, and their Plan Payees have ceased to be liabilities of the Mexico Split Pension Plans, and have been assumed by the Mexico Spinoff Pension Plan, and the Aptiv Group and the Mexico Split Pension Plans will retain all liabilities with respect to Aptiv Employees and Former Aptiv Business Employees.
(B)    On the Plan Split Date, Aptiv or a member of the Aptiv Group caused the Mexico Split Pension Plans (or any applicable trust related thereto) to transfer to the Mexico Spinoff Pension Plan (or any applicable trust related thereto) a portion of the assets of the Mexico Split Pension Plans, in cash or in kind, equal to the assets associated with the Sistemas Electricos y Conmutadores S. de R.L. de C.V. Pension Plan, the Delphi Sistemas de Energia S. de R.L. de C.V. Pension Plan and the Delphi Diesel Systems S. de R.L. de C.V. Pension Plan that are fully being assumed by the Mexico Spinoff Pension Plan and for the Delphi Automotive Systems S. de R.L. de C.V. and the Delphi Delco Electronics de Mexico S. de R.L. de C.V. Pension Plan where only a portion of the liabilities are assumed, assets will transfer with the projected benefit obligation as of the Distribution Date on a pro-rata basis pursuant to Section 3.1(a)(i)(A) .
(ii)     Japan Pension Plan .
(A)    Effective as of the Plan Split Date, Delphi Powertrain Systems Japan, Ltd. has established and adopted a defined benefit pension plan (the “ Japan Spinoff Pension Plan ”) to provide retirement benefits to certain Non-U.S. Delphi Technologies Employees in Japan who participated in the Delphi Automotive Systems Japan, Ltd. Pension Plan (the “ Japan Split Pension Plan ”) prior to the Plan Split Date. The Japan Spinoff Pension Plan assumed liability for all benefits accrued or earned by Delphi Technologies Employees and their Plan Payees under the Japan Split Pension Plan as of the Plan Split Date. As of the Plan Split Date, Delphi Technologies or a member of the Delphi Technologies Group is solely responsible for taking all necessary, reasonable, and appropriate actions to maintain and administer the Japan Spinoff Pension Plan so that it complies with applicable local law. As of the Plan Split Date, the liabilities under the Japan Split Pension Plan relating to Delphi Technologies Employees, Former Delphi Technologies Business Employees, and their Plan Payees have ceased to be liabilities of the Japan Split Pension Plan, and have been assumed by the Japan Spinoff Pension Plan, and the Aptiv Group and the Japan Split Pension Plan will retain all liabilities with respect to Aptiv Employees and Former Aptiv Business Employees.
 
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(B)    On the Plan Split Date, because the Japan Split Pension Plan is unfunded, no assets have been transferred to the Japan Spinoff Pension Plan.
(iii)     France Pension Plan .
(A)    Effective as of the Plan Split Date, Delphi Automotive France SAS has established and adopted a defined benefit pension plan (the “ France Spinoff Pension Plan ”) to provide retirement benefits to certain Non-U.S. Delphi Technologies Employees in France who participated in the France Executive Plan (the “ France Split Pension Plan ”) prior to the Plan Split Date. The France Spinoff Pension Plan assumed liability for all benefits accrued or earned by Delphi Technologies Employees and their Plan Payees under the France Split Pension Plan as of the Plan Split Date. As of the Plan Split Date, Delphi Technologies or a member of the Delphi Technologies Group is solely responsible for taking all necessary, reasonable, and appropriate actions to maintain and administer the France Spinoff Pension Plan so that it complies with applicable local law. As of the Plan Split Date, the liabilities under the France Split Pension Plan relating to Delphi Technologies Employees, Former Delphi Technologies Business Employees, and their Plan Payees have ceased to be liabilities of the France Split Pension Plan, and have been assumed by the France Spinoff Pension Plan, and the Aptiv Group and the France Split Pension Plan will retain all liabilities with respect to Aptiv Employees and Former Aptiv Business Employees.
(B)    On the Plan Split Date, because the France Split Pension Plan is unfunded, no assets have been transferred to the France Spinoff Pension Plan.
(iv)     Germany Pension Plan .
(A)    Effective as of the Plan Split Date, Delphi Powertrain Systems Deutschland GmbH has established and adopted a defined benefit pension plan (the “ German Spinoff Pension Plan ”) to provide retirement benefits to certain Non-U.S. Delphi Technologies Employees in Germany who participated in the Germany Delphi Deutschland GmbH Pension Plan (the “ German Split Pension Plan ”) prior to the Plan Split Date. The German Spinoff Pension Plan assumed liability for all benefits accrued or earned by Delphi Technologies Employees and their Plan Payees under the German Split Pension Plan as of the Plan Split Date. As
 
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of the Plan Split Date, Delphi Technologies or a member of the Delphi Technologies Group is solely responsible for taking all necessary, reasonable, and appropriate actions to maintain and administer the German Spinoff Pension Plan so that it complies with applicable local law. As of the Plan Split Date, the liabilities under the German Split Pension Plan relating to Delphi Technologies Employees have ceased to be liabilities of the German Split Pension Plan, and have been assumed by the German Spinoff Pension Plan, and the Aptiv Group and the German Split Pension Plan will retain all liabilities with respect to Aptiv Employees and Former Aptiv Business Employees.
(B)    On the Plan Split Date, because the German Split Pension Plan is unfunded, no assets have been transferred to the German Spinoff Pension Plan.
          (v)     Top-Hat Pan European Plan . No later than the Distribution Date, Delphi Technologies or another member of the Delphi Technologies Group shall assume all Liabilities with respect to the Delphi Pan-European Executive Retirement Plan (the “ Top-Hat Pan European Plan ”) for an employee who transfers employment to Delphi Technologies or another member of the Delphi Technologies Group.
(b)     Non-U.S. Defined Contribution Plans .
          (i)    Effective as of the Distribution Date, Delphi Technologies or another member of the Delphi Technologies Group will adopt and establish certain defined contribution plans , and, if applicable, a related master trust or trust (such plans and trusts, the “ Delphi Technologies Spinoff Non-U.S. DC Plans ”). Each Delphi Technologies Spinoff Non-U.S. DC Plan will have terms and features (including employer contribution provisions) that are substantially similar to one of the Non-U.S. Benefit Plans listed on Schedule 3.1(b) (such Benefit Plans, the “ Split Non-U.S. DC Plans ”) such that (for the avoidance of doubt) each Split Non-U.S. DC Plan is substantially replicated by a corresponding Delphi Technologies Spinoff Non-U.S. DC Plan. Delphi Technologies or a member of the Delphi Technologies Group will be solely responsible for taking all necessary, reasonable, and appropriate actions to establish, maintain and administer the Delphi Technologies Spinoff Non-U.S. DC Plans so that they comply with applicable Laws. Each Delphi Technologies Spinoff Non-U.S. DC Plan will assume liability for all benefits accrued or earned (whether or not vested) by Delphi Technologies Employees and Former Delphi Technologies Business Employees under the corresponding Split Non-U.S. DC Plan as of the Distribution Date or Applicable Transfer Date, except for Brazil, in which case the liabilities will transfer the day after the receipt of the applicable regulatory approvals.
 
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          (ii)    On or as soon as reasonably practicable following the Distribution Date or Applicable Transfer Date (but not later than 30 days thereafter, except for Brazil which will occur within 30 days after receipt of the applicable regulatory approvals), Aptiv or another member of the Aptiv Group will cause each Split Non-U.S. DC Plan to transfer to the applicable Delphi Technologies Spinoff Non-U.S. DC Plan, and Delphi Technologies or another member of the Delphi Technologies Group will cause such Delphi Technologies Spinoff Non-U.S. DC Plan to accept the transfer of, the accounts, liabilities and related assets in such Split Non-U.S. DC Plan attributable to Delphi Technologies Employees. The transfer of assets will be in cash or in-kind (as determined by the transferor) and include outstanding loan balances.
          (iii)    On or as soon as reasonably practicable following the Applicable Transfer Date (but not later than 30 days thereafter), Delphi Technologies or a member of the Delphi Technologies Group will cause the accounts, related liabilities, and related assets in the corresponding Delphi Technologies Spinoff Non-U.S. DC Plan(s) attributable to any Aptiv Transferees and their respective Plan Payees (including any outstanding loan balances) to be transferred in cash or in-kind to the applicable Split Non-U.S. DC Plan(s). Aptiv or another member of the Aptiv Group will cause the applicable Split Non-U.S. DC Plan(s) to accept such transfer of accounts, liabilities and assets.
          (iv)    From and after the Distribution Date, except as specifically provided in paragraph (iii) above, Delphi Technologies and the Delphi Technologies Group will be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the Delphi Technologies Spinoff Non-U.S. DC Plans, whether accrued before, on or after the Distribution Date. For the avoidance of doubt, the Delphi Technologies Spinoff Non-U.S. DC Plans will, to the extent required by Law and the terms of the applicable Delphi Technologies Spinoff Non-U.S. DC Plans, have the sole and exclusive obligation to restore the unvested portion of any account attributable to any individual who becomes employed by a member of the Delphi Technologies Group and whose employment with Aptiv or any of its Affiliates, or a member of the Aptiv Group, terminated on or before the Distribution at a time when such individual’s benefits under the Split Non-U.S. DC Plans were not fully vested.
          (v)     Continuation of Elections . As of the Distribution Date, or Applicable Transfer Date, Delphi Technologies (acting directly or through a member of the Delphi Technologies Group) will cause the Delphi Technologies Spinoff Non-U.S. DC Plans to recognize and maintain all elections (to the extent still applicable and reasonable), including investment and payment form elections, beneficiary designations, and the rights of alternate payees under qualified domestic relations orders with respect to Delphi Technologies Employees and their respective Plan Payees under the corresponding Split Non-U.S. DC Plan.
 
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          (vi)     Contributions Due . All amounts payable to the Split Non-U.S. DC Plans with respect to employee deferrals, matching contributions and employer contributions for Delphi Technologies Employees and Former Delphi Technologies Business Employees relating to a time period ending on or prior to the Distribution Date, determined in accordance with the terms and provisions of the Split Non-U.S. DC Plans and applicable Law will be paid by Aptiv or another member of the Aptiv Group to the appropriate Split Non-U.S. DC Plan prior to the date of any asset transfer described in Section 3.1(b) .
Section 3.2     Non-U.S. Employees . Notwithstanding anything to the contrary contained in this Employee Matters Agreement, except as otherwise provided on Schedule 3.2 , any employee who is employed by a member of the Aptiv Group in a non-U.S. jurisdiction immediately prior to the Distribution Date, and who is required by applicable Law to transfer, or who has accepted a transfer of employment (on the same or different terms that applied prior to the Distribution), to a member of the Delphi Technologies Group in connection with the transactions contemplated by this Employee Matters Agreement, the Separation Agreement or the other Ancillary Agreements, will transfer automatically on the Distribution Date to Delphi Technologies or a member of the Delphi Technologies Group in accordance with such applicable Law and will be deemed to be a Delphi Technologies Employee and a Non-U.S. Delphi Technologies Employee for purposes of this Employee Matters Agreement. Notwithstanding anything to the contrary herein, the following terms will apply to all Non-U.S. Delphi Technologies Employees:
(a)    To the extent that (i) the applicable Law of any jurisdiction, (ii) any applicable Collective Bargaining Agreement or other applicable agreement with a works council or economic committee, or (iii) any applicable employment agreement would require Delphi Technologies or its Affiliates (including a member of the Delphi Technologies Group) to provide any terms of employment to any Non-U.S. Delphi Technologies Employee that are more favorable than those otherwise provided for in this Employee Matters Agreement in connection with the Distribution, then Delphi Technologies will cause a member of the Delphi Technologies Group to provide such Non-U.S. Delphi Technologies Employee with such more favorable terms. Delphi Technologies will be responsible for liabilities for, and will cause the Delphi Technologies Group to provide all compensation or benefits (whether statutory, contractual or otherwise) to, each Non-U.S. Delphi Technologies Employee arising from or related to the transactions contemplated by this Employee Matters Agreement, the Separation Agreement, or the other Ancillary Agreements, or the related transfer of the employee to Delphi Technologies or a member of the Delphi Technologies Group.
(b)    Aptiv and Delphi Technologies agree that, to the extent provided or required under the applicable Laws of certain foreign jurisdictions and except as provided below, the Collective Bargaining Agreements as set forth on Schedule 3.2(b) that are applicable to the Non-U.S. Delphi Technologies Employees in such jurisdictions, will have effect after the Distribution as if originally made between a member of the Delphi Technologies Group (or a union, works council, or trade organization of which a Delphi Technologies Group entity is a member) and the other parties to the Collective Bargaining Agreement until the earlier of the expiration of the original term of such agreement or the date on which a new, negotiated agreement becomes effective.
 
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(c)    Notwithstanding the foregoing, the terms of the Collective Bargaining Agreements in the countries listed on Schedule 3.2(c) shall not apply to any employee hired by Delphi Technologies or a member of the Delphi Technologies Group following the Distribution whose employment is based outside of the United States. Furthermore, the following Collective Bargaining Agreements will be treated as follows on and after the Distribution Date:
(i)    The Collective Bargaining Agreements designated as People’s Republic of China CBAs on Schedule 3.2(c)(i) (the “ PRC CBAs ”) will not automatically apply to Non-U.S. Delphi Technologies Employees in China after the Distribution. Delphi Technologies or a member of the Delphi Technologies Group in China shall either negotiate and adopt new collective bargaining agreements that will apply to the Non-U.S. Delphi Technologies Employees in China or obtain approval from the other parties to the PRC CBAs for the terms of the PRC CBAs to apply to the Non-U.S. Delphi Technologies Employees in China after the Distribution until the expiration of the original terms of the PRC CBAs or such earlier time as agreed upon by the parties.
(ii)    The Collective Bargaining Agreements designated as Mexico CBAs on Schedule 3.2(c)(i) (the “ Mexico CBAs ”) will not automatically apply to Non-U.S. Delphi Technologies Employees in Mexico after the Distribution. Aptiv shall cause Delphi Technologies or a member of the Delphi Technologies Group in Mexico to negotiate and adopt a new collective bargaining agreement with the trade union/employee representative that will apply to the Non-U.S. Delphi Technologies Employees in Mexico after the Distribution.
(d)    Aptiv and Delphi Technologies agree that, to the extent provided or required under the applicable Laws of certain foreign jurisdictions, any employment agreements between Aptiv or one of its Affiliates and any Non-U.S. Delphi Technologies Employee will have effect after the Distribution (or transfer date, as applicable) as if originally made between the Delphi Technologies Group and the other parties to such employment agreement until the earlier of the expiration of the original term of such agreement or the date on which a new, negotiated agreement becomes effective.
Section 3.3     Delphi Technologies Spinoff Non-U.S. Welfare Plans . Effective as of the Distribution Date or Applicable Transfer Date, as applicable, Delphi Technologies or a member of the Delphi Technologies Group will provide all welfare benefits required under the applicable Laws of certain foreign jurisdictions to Non-U.S. Delphi
 
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Technologies Employees and, if necessary, establish certain welfare benefit plans (such plans, the “ Delphi Technologies Spinoff Non-U.S. Welfare Plans ”). Delphi Technologies will cause each Delphi Technologies Spinoff Non-U.S. Welfare Plan to have terms and features (including benefit coverage options and employer contribution provisions) that are substantially similar to one of the Aptiv Benefit Plans listed on Schedule 3.3 (such Aptiv Benefit Plans, the “ Split Non-U.S. Welfare Plans ”) such that (for the avoidance of doubt) each Split Non-U.S. Welfare Plan is substantially replicated by a Delphi Technologies Spinoff Non-U.S. Welfare Plan, except as otherwise provided on Schedule 3.3 . From and after the Distribution Date or Applicable Transfer Date, as applicable, Delphi Technologies will cause each Delphi Technologies Spinoff Non-U.S. Welfare Plan to cover those Non-U.S. Delphi Technologies Employees and their Plan Payees who immediately prior to the Distribution or Applicable Transfer Date were participating in, or entitled to present or future benefits under, the corresponding Split Non-U.S. Welfare Plan, except as otherwise provided in the Transition Services Agreement.
ARTICLE IV
SERVICE CREDIT
Section 4.1     Service Credit for Employee Transfers . The Benefit Plans will provide the following service crediting rules effective as of the Distribution Date:
(a)    From and after the Distribution Date, in the case of all Delphi Technologies Benefit Plans, Delphi Technologies will, and will cause its Affiliates and successors to, provide credit under the Delphi Technologies Benefit Plans to each Delphi Technologies Employee (and Former Delphi Technologies Business Employee, if applicable) for all service with the Aptiv Group prior to the Distribution Date or Plan Split Date, as applicable, for purposes of eligibility, vesting, and benefit service under the appropriate Delphi Technologies Benefit Plans in which the Delphi Technologies Employee (and Former Delphi Technologies Business Employee, if applicable) is otherwise eligible, subject to the terms of those plans; provided , however , that service will not be recognized to the extent that such recognition would result in the duplication of benefits taking into account both Aptiv Benefit Plans and Delphi Technologies Benefit Plans.
(b)    A Delayed Transfer Employee’s service with the Delphi Technologies Group or the Aptiv Group (as applicable) following the Distribution will be recognized for purposes of eligibility, vesting and benefit service under the appropriate Aptiv Benefit Plans or Delphi Technologies Benefit Plans in which they are otherwise eligible, subject to the terms of those plans; provided , however , that service will not be recognized to the extent that such recognition would result in the duplication of benefits taking into account both Aptiv Benefit Plans and Delphi Technologies Benefit Plans.
(c)    Except as provided in Section 4.1(b) , with respect to an employee hired by the Delphi Technologies Group or the Aptiv Group after the Distribution Date, the Benefit Plans of the Delphi Technologies Group for employees hired by the Delphi Technologies Group or Aptiv Group for employees hired by the Aptiv Group will not recognize such employee’s service with the Aptiv Group for employees hired by the Delphi Technologies Group or the Delphi Technologies Group for employees hired by the Aptiv Group unless required by Law.
 
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ARTICLE V
LITIGATION AND COMPENSATION
Section 5.1     Employee-Related Litigation .
(a)    Notwithstanding any provision of this Employee Matters Agreement to the contrary, Liability with respect to any Pre-Distribution Action: (i) will be a Delphi Technologies Liability if it relates to Delphi Technologies Employees and/or Former Delphi Technologies Business Employees; (ii) will be an Aptiv Liability if it relates to Aptiv Employees and/or Former Aptiv Business Employees; and (iii) will be a shared Liability between Aptiv and Delphi Technologies to the extent it cannot be readily attributed to Aptiv Employees and Former Aptiv Business Employees, on the one hand, or Delphi Technologies Employees and Former Delphi Technologies Business Employees, on the other hand, as described in clauses (i) and (ii) .
Section 5.2     Vacation . Except to the extent not permitted by applicable law, the Aptiv Group will assume or retain, as applicable, responsibility for accrued vacation attributable to Aptiv Employees as of the Distribution Date, or Applicable Transfer Date. Except to the extent not permitted by applicable law, the Delphi Technologies Group will assume or retain, as applicable, responsibility for accrued vacation attributable to Delphi Technologies Employees as of the Distribution Date, or Applicable Transfer Date.
Section 5.3     Annual Bonuses .
(a)    As of the Distribution Date, Aptiv will determine the projected level of achievement for the applicable performance objectives under the AIP and the DLIP for 2017 based on (i) actual performance measured as of the most recent practicable date preceding the Distribution Date and (ii) projected performance for the remainder of the applicable performance period.
(b)    Eligible employees of the Aptiv Group and Delphi Technologies Group will continue to participate in the Aptiv Annual Incentive Plan (“ AIP ”) through December 31, 2017. The Aptiv Group will determine the awards earned under the AIP for 2017 for all Aptiv Employees and Former Aptiv Business Employees (including with reference to the level of achievement described in Section 5.3(a) and taking into account actual performance during the period from the Distribution Date through the end of the applicable performance period), and be responsible for and pay any such awards. Delphi Technologies will determine the awards earned under the AIP for 2017 for all Delphi Technologies Employees and Former Delphi Technologies Business Employees (including with reference to the level of achievement described in Section 5.3(a) and taking into account actual performance during the period from the Distribution Date through the end of the applicable performance period), and be responsible for and pay any such awards.
 
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(c)    Eligible employees of the Aptiv Group and the Delphi Technologies Group will continue to participate in the Delphi Automotive PLC Leadership Incentive Plan (the “ DLIP ”) through December 31, 2017. The determination of whether any portion of an award under the DLIP with respect to the 2017 fiscal year (a “ 2017 DLIP Award ”) has been earned will be made based upon the achievement of the applicable management objectives measured as of December 31, 2017. Such determination will be made by the Aptiv Compensation Committee in accordance with the DLIP; provided , however , that, except as otherwise determined by the Aptiv Compensation Committee in compliance with applicable Law or the DLIP, the portion of each 2017 DLIP Award deemed earned will be determined taking into account actual performance during the period from the Distribution Date through the end of the applicable performance period. With respect to Delphi Technologies Employees, the amount of any 2017 DLIP Award will be based on the full 2017 fiscal year. Notwithstanding any provision of the DLIP, the Aptiv Group will pay each 2017 DLIP Award held by an Aptiv Employee or a Former Aptiv Business Employee, and Delphi Technologies will pay each 2017 DLIP Award held by a Delphi Technologies Employee or a Former Delphi Technologies Business Employee.
(d)    The Aptiv Group will be responsible for establishing and paying any annual bonus for its employees for performance periods commencing in 2018 or, for any Aptiv Transferee whose Applicable Transfer Date is in a year after 2017, the year in which the Applicable Transfer Date occurs, and the Delphi Technologies Group will be responsible for establishing and paying any annual bonus for its employees for performance periods commencing in 2018 or, for any Delphi Technologies Transferee whose Applicable Transfer Date is in a year after 2017, the year in which the Applicable Transfer Date occurs.
Section 5.4     Employment Agreements . Effective as of the Distribution, Delphi Technologies or a member of the Delphi Technologies Group will assume and be solely responsible for any Employment Agreement to which a Delphi Technologies Employee is a party (a “ Delphi Technologies Employment Agreement ”), including the agreements listed on Schedule 5.4 , and the Aptiv Group will have no liabilities with respect thereto. Notwithstanding any provision to the contrary, (i) the Delphi Technologies Employment Agreements will be the responsibility of one or more members of the Delphi Technologies Group following the Distribution Date; and (ii) except as otherwise set forth in Article III , Aptiv or the Aptiv Group, as applicable, will retain and be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, any Employment Agreement that is not a Delphi Technologies Employment Agreement.
ARTICLE VI
CERTAIN WELFARE BENEFIT PLAN MATTERS
Section 6.1     Delphi Technologies Spinoff Welfare Plans .
(a)    Effective not later than the Distribution, Delphi Technologies or a member of the Delphi Technologies Group will establish certain other welfare benefit
 
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plans (such plans, the “ Delphi Technologies Spinoff Welfare Plans ”). Delphi Technologies will cause each Delphi Technologies Spinoff Welfare Plan to have terms and features (including benefit coverage options and employer contribution provisions) that are substantially similar to one of the Aptiv Benefit Plans listed on Schedule 6.1(a) (such Aptiv Benefit Plans, the “ Split Welfare Plans ”) such that (for the avoidance of doubt) each Split Welfare Plan is substantially replicated by a Delphi Technologies Spinoff Welfare Plan, except as otherwise provided on Schedule 6.1(a) . From and after the Distribution Date or Applicable Transfer Date, Delphi Technologies will cause each Delphi Technologies Spinoff Welfare Plan, subject to the terms of such plans, to cover those Delphi Technologies Employees and their Plan Payees who immediately prior to the Distribution or Applicable Transfer Date were participating in, or entitled to present or future benefits under, the corresponding Split Welfare Plan, except as otherwise provided in the Transition Services Agreement. Notwithstanding the foregoing, with respect to any severance benefits owed to any Aptiv Employee or Former Aptiv Business Employee as a result of a termination of employment occurring on or prior to the Distribution Date (the “ Retained Severance Benefits ”), the Aptiv Group and the applicable Aptiv Welfare Plans (including the Split Welfare Plans) will be solely responsible for all such Retained Severance Benefits. With respect to any severance benefits owed to any Delphi Technologies Employee or Former Delphi Technologies Business Employee as a result of a termination of employment occurring on or prior to the Distribution Date, the Delphi Technologies Group and the applicable Delphi Technologies Spinoff Welfare Plans will be solely responsible for all such severance benefits. The Delphi Technologies Group and the Delphi Technologies Spinoff Welfare Plans will be solely responsible for all claims incurred by Delphi Technologies Employees and their Plan Payees under the Delphi Technologies Spinoff Welfare Plans and Split Welfare Plans that are unpaid as of the Distribution Date or Applicable Transfer Date, as applicable, (except with respect to Retained Severance Benefits or as otherwise provided in the Transition Services Agreement) (“ Delphi Technologies Welfare Claims ”) before, on and after the Distribution Date or Applicable Transfer Date, but only to the extent such claims are not otherwise payable under an insurance policy held by the Aptiv Group. To the extent any Delphi Technologies Welfare Claims are payable under an insurance policy held by the Aptiv Group, Aptiv will take all commercially reasonable actions necessary to process such claim and obtain payment under the applicable insurance policy. Effective as of the Distribution Date or Applicable Transfer Date, Aptiv will cause Delphi Technologies Employees (and Former Delphi Technologies Business Employees, if applicable) and their Plan Payees to cease to be covered by the Aptiv Welfare Plans (including the Split Welfare Plans), except as otherwise provided in the Transition Services Agreement. The Aptiv Group and the Aptiv Welfare Plans will remain solely responsible for all claims incurred by Aptiv Employees, Former Aptiv Business Employees and their Plan Payees, whether incurred before, on, or after the Distribution Date.
(b)    For purposes of Article VI , a claim will be deemed “incurred” on the date that the event that gives rise to the claim occurs (for purposes of life insurance, severance, sickness, accident, and disability programs) or on the date that treatment or services are provided (for purposes of health care programs).
 
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Section 6.2     Continuation of Elections . As of the Distribution Date, or Applicable Transfer Date, Delphi Technologies will cause the Delphi Technologies Spinoff Welfare Plans to recognize elections and designations (including, without limitation, all coverage and contribution elections and beneficiary designations, all continuation coverage and conversion elections, and all qualified medical child support orders and other orders issued by courts of competent jurisdiction) in effect with respect to Delphi Technologies Employees (or Former Delphi Technologies Business Employees, if applicable) prior to the Distribution Date, or Applicable Transfer Date, under the corresponding Split Welfare Plan, to the extent such elections and designations and orders are applicable to such Split Welfare Plan, and apply and maintain in force comparable elections and designations and orders under the Delphi Technologies Spinoff Welfare Plans for the remainder of the period or periods for which such elections or designations are by their original terms effective.
Section 6.3     Deductibles, Cost-Sharing Provisions, and Coverage Maximums . As of the Distribution Date, or Applicable Transfer Date, Delphi Technologies will cause the Delphi Technologies Spinoff Welfare Plans to recognize all amounts applied to deductibles, co-payments and out-of-pocket maximums with respect to Delphi Technologies Employees (and Former Delphi Technologies Business Employees, if applicable) under the corresponding Split Welfare Plan during the plan year in which the Distribution or Applicable Transfer Date occurs, and the Delphi Technologies Spinoff Welfare Plans will not impose any limitations on coverage for preexisting conditions other than such limitations as were applicable under the corresponding Split Welfare Plan prior to the Distribution Date or Applicable Transfer Date. As of the Distribution Date, or Applicable Transfer Date, Delphi Technologies will cause the Delphi Technologies Spinoff Welfare Plans to recognize all amounts (e.g., days or dollars) accrued towards coverage maximums with respect to Delphi Technologies Employees (and Former Delphi Technologies Business Employees, if applicable) under the corresponding Split Welfare Plan during the plan year in which the Distribution or Applicable Transfer Date occurs.
Section 6.4     Flexible Spending Account Treatment . Notwithstanding anything in Sections 6.2 and 6.3 to the contrary, with respect to the portion of a Split Welfare Plan that consists of medical and dependent care flexible spending accounts (the “ Aptiv Flexible Account Plan ”), as of the Distribution Date or Applicable Transfer Date, Delphi Technologies will be solely responsible for all liabilities with respect to Delphi Technologies Employees and Former Delphi Technologies Business Employees, if applicable, and the applicable Delphi Technologies Spinoff Welfare Plan (the “ Delphi Technologies Flexible Account Plan ”) will, as required under Section 6.2 , give effect to the elections of Delphi Technologies Employees (and Former Delphi Technologies Business Employees, if applicable) that were in effect under the corresponding Split Welfare Plan as of the Distribution Date or Applicable Transfer Date. After the Distribution Date or Applicable Transfer Date, the Delphi Technologies Flexible Account Plan will be responsible for reimbursement of all previously reimbursable medical expense and dependent care claims incurred by Delphi Technologies Employees (and Former Delphi Technologies Business Employees, if applicable), regardless of when the claims were incurred. Notwithstanding the foregoing, if a Delayed Transfer Employee returning from disability leave has no election in place under the Aptiv Flexible Account Plan, such employee may make a new election under the Delphi Technologies Flexible Account Plan as of the Applicable Transfer Date.
 
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Section 6.5     Workers’ Compensation . The Aptiv Group will be solely responsible for all United States (including its territories) workers’ compensation claims of Aptiv Employees and Former Aptiv Business Employees, regardless of when the Workers’ Compensation Events to which such claims relate occur. The Aptiv Group will have sole authority for administering, making decisions with respect to, and paying all United States (including its territories) workers’ compensation claims of Delphi Technologies Employees with respect to Workers’ Compensation Events occurring before the Distribution Date or Applicable Transfer Date (“ Delphi Technologies Workers’ Compensation Claims ”), subject to the prior consent of Delphi Technologies, which consent shall not be unreasonably withheld. The consent described in the immediately preceding sentence will be evidenced in writing with respect to any decision relating to (a) the settlement of a Delphi Technologies Workers’ Compensation Claim, (b) the designation of an “allowed condition,” or (c) the administration of ongoing litigation. Delphi Technologies will, and will cause any other Delphi Technologies Entity (and each of their respective successors and assigns) to, jointly and severally indemnify, defend and hold harmless Aptiv and each member of the Aptiv Group and each of their respective successors and assigns from and against any and all Damages incurred by Aptiv arising out of or in connection with a Delphi Technologies Workers’ Compensation Claim, only if such Damages arise after the Distribution Date, and only to the extent such Damages are not payable under an insurance policy held by the Aptiv Group. To the extent any such Damages are payable under an insurance policy held by the Aptiv Group, Aptiv will take all commercially reasonable actions necessary to obtain payment of such Damages under the applicable insurance policy. The Delphi Technologies Group will be solely responsible for all workers’ compensation claims of Delphi Technologies Employees (and Former Delphi Technologies Business Employees, if applicable) with respect to Workers’ Compensation Events occurring on or after the Distribution Date.
Section 6.6     COBRA . Effective as of the Distribution Date or Applicable Transfer Date, Delphi Technologies or a member of the Delphi Technologies Group will assume or will cause the Delphi Technologies Spinoff Welfare Plans to assume sole responsibility for compliance with COBRA after the Distribution Date or Applicable Transfer Date for all Delphi Technologies Employees (and Former Delphi Technologies Business Employees, if applicable) and their “qualified beneficiaries” for whom a “qualifying event” occurs on or after the Distribution Date or the Applicable Transfer Date; provided , however , that Aptiv or a member of the Aptiv Group will be responsible for furnishing any election notice required under COBRA to any Delphi Technologies Transferee. Aptiv, the Aptiv Group, or a Split Welfare Plan will remain solely responsible for compliance with COBRA before, on and after the Distribution Date or Applicable Transfer Date for Aptiv Employees, Former Aptiv Business Employees, and their “qualified beneficiaries”; provided , however , that Delphi Technologies or a member of the Delphi Technologies Group will be responsible for furnishing any election notice required under COBRA to any Aptiv Transferee. The terms “qualified beneficiaries” and
 
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“qualifying event” will have the meanings given to them under Code Section 4980B and ERISA Sections 601-608. For the avoidance of doubt, Section 6.1(a) will govern whether the Delphi Technologies Spinoff Welfare Plans or Split Welfare Plans are responsible for claims incurred by Delphi Technologies Employees or their qualified beneficiaries while receiving continuation coverage under COBRA.
ARTICLE VII
U.S. TAX-QUALIFIED DEFINED CONTRIBUTION PLANS
Section 7.1     Delphi Technologies Spinoff DC Plans .
(a)    Effective as of the Plan Split Date, Delphi Technologies or another member of the Delphi Technologies Group will adopt and establish certain defined contribution plans that are intended to qualify under Code Section 401(a), and a related master trust or trusts exempt under Code Section 501(a) (such plans and trusts, the “ Delphi Technologies Spinoff DC Plans ”). Each Delphi Technologies Spinoff DC Plan will have terms and features (including employer contribution provisions) that are substantially similar to one of the Benefit Plans listed on Schedule 7.1(a) (such Benefit Plans, the “ Split DC Plans ”) such that (for the avoidance of doubt) each Split DC Plan is substantially replicated by a corresponding Delphi Technologies Spinoff DC Plan. Delphi Technologies or a member of the Delphi Technologies Group will be solely responsible for taking all necessary, reasonable, and appropriate actions (including the submission of the Delphi Technologies Spinoff DC Plans to the Internal Revenue Service for a determination of tax-qualified status) to establish, maintain and administer the Delphi Technologies Spinoff DC Plans so that they are qualified under Section 401(a) of the Code and that the related trusts thereunder are exempt under Section 501(a) of the Code. Each Delphi Technologies Spinoff DC Plan will assume liability for all benefits accrued or earned (whether or not vested) by Delphi Technologies Employees and Former Delphi Technologies Business Employees, as applicable, under the corresponding Split DC Plan as of the Plan Split Date or Applicable Transfer Date.
(b)    On or as soon as reasonably practicable following the Plan Split Date or Applicable Transfer Date (but not later than 30 days thereafter), Aptiv or another member of the Aptiv Group will cause each Split DC Plan to transfer to the applicable Delphi Technologies Spinoff DC Plan, and Delphi Technologies or another member of the Delphi Technologies Group will cause such Delphi Technologies Spinoff DC Plan to accept the transfer of, the accounts, liabilities and related assets in such Split DC Plan attributable to Delphi Technologies Employees and Former Delphi Technologies Business Employees, if applicable, and their respective Plan Payees. The transfer of assets will be in cash or in kind (as determined by the transferor) and include outstanding loan balances.
(c)    On or as soon as reasonably practicable following the Applicable Transfer Date (but not later than 30 days thereafter), Delphi Technologies or a member of the Delphi Technologies Group will cause the accounts, related liabilities, and related assets in the corresponding Delphi Technologies Spinoff DC Plan(s) attributable to any Aptiv Transferees and their respective Plan Payees (including any outstanding loan
 
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balances) to be transferred in cash or in-kind (as determined by the transferor) in accordance with Code Section 414(l) and Treasury Regulation Section 1.414(l)-1 and Section 208 of ERISA to the applicable Split DC Plan(s). Aptiv or another member of the Aptiv Group will cause the applicable Split DC Plan(s) to accept such transfer of accounts, liabilities and assets.
(d)    From and after the Plan Split Date, except as specifically provided in paragraph (c)  above, Delphi Technologies and the Delphi Technologies Group will be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the Delphi Technologies Spinoff DC Plans, whether accrued before, on or after the Plan Split Date. For the avoidance of doubt, the Delphi Technologies Spinoff DC Plans will, to the extent required by Law and the terms of the applicable Delphi Technologies Spinoff DC Plans, have the sole and exclusive obligation to restore the unvested portion of any account attributable to any individual who becomes employed by a member of the Delphi Technologies Group and whose employment with Aptiv or any of its Affiliates, or a member of the Aptiv Group, terminated on or before the Plan Split Date at a time when such individual’s benefits under the Split DC Plans were not fully vested.
Section 7.2     Continuation of Elections . As of the Plan Split Date, or Applicable Transfer Date, as applicable, Delphi Technologies (acting directly or through a member of the Delphi Technologies Group) will cause the Delphi Technologies Spinoff DC Plans to recognize and maintain all elections (to the extent still applicable and reasonable), including investment and payment form elections, beneficiary designations, and the rights of alternate payees under qualified domestic relations orders with respect to Delphi Technologies Employees and their respective Plan Payees under the corresponding Split DC Plan.
Section 7.3     Contributions Due . All amounts payable to the Split DC Plans with respect to employee deferrals, matching contributions and employer contributions for Delphi Technologies Employees and Former Delphi Technologies Business Employees, if applicable, relating to a time period ending on or prior to the Plan Split Date, determined in accordance with the terms and provisions of the Split DC Plans, ERISA and the Code, will be paid by Aptiv or another member of the Aptiv Group to the appropriate Split DC Plan prior to the date of any asset transfer described in Section 7.1(b) .
ARTICLE VIII
NONQUALIFIED RETIREMENT PLANS
Section 8.1     Delphi Technologies Spinoff Nonqualified Plans .
(a)    Effective as of the Plan Split Date, Delphi Technologies or another member of the Delphi Technologies Group will establish certain nonqualified retirement plans (such plans, the “ Delphi Technologies Spinoff Nonqualified Plans ”). Each Delphi Technologies Spinoff Nonqualified Plan will have terms and features (including employer contribution provisions) that are substantially similar to one of the Aptiv
 
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Benefit Plans listed on Schedule 8.1(a) (such plans, the “ Split Nonqualified Plans ”) such that (for the avoidance of doubt), each Split Nonqualified Plan is substantially replicated by a corresponding Delphi Technologies Spinoff Nonqualified Plan. Delphi Technologies or a member of the Delphi Technologies Group will be solely responsible for taking all necessary, reasonable, and appropriate actions to establish, maintain and administer the Delphi Technologies Spinoff Nonqualified Plans so that they do not result in adverse Tax consequences under Code Section 409A. Each Delphi Technologies Spinoff Nonqualified Plan will assume liability for all benefits accrued or earned (whether or not vested) by Delphi Technologies Employees and their respective Plan Payees under the corresponding Split Nonqualified Plan as of the Plan Split Date. From and after the Plan Split Date, Delphi Technologies and the Delphi Technologies Group will be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the Delphi Technologies Spinoff Nonqualified Plans, whether accrued before, on or after the Plan Split Date.
(b)    From and after the Plan Split Date, Aptiv and the Aptiv Group will be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, the nonqualified retirement plans sponsored or maintained by a member of the Aptiv Group (including, but not limited to, the Split Nonqualified Plans) to the extent such obligations and liabilities are not specifically assumed by a Delphi Technologies Group member or the Delphi Technologies Spinoff Nonqualified Plans pursuant to Section 8.1(a) .
(c)    Aptiv will retain and be solely and exclusively responsible for all obligations and liabilities with respect to, or in any way related to, any arrangements between Aptiv or its Affiliates and certain service providers and former service providers with respect to the plans set forth on Schedule 8.1(c) .
Section 8.2     No Distributions on Separation . Aptiv and Delphi Technologies acknowledge that neither the Distribution nor any of the other transactions contemplated by this Employee Matters Agreement (including the split of certain plans as of the Plan Split Date), the Separation Agreement, or the other Ancillary Agreements will trigger a payment or distribution of compensation under any Benefit Plan that is a nonqualified retirement plan for any Aptiv Employee, Delphi Technologies Employee, Former Aptiv Business Employee or Former Delphi Technologies Business Employee and, consequently, that the payment or distribution of any compensation to which any Aptiv Employee, Delphi Technologies Employee, Former Aptiv Business Employee or Former Delphi Technologies Business Employee is entitled under any such Benefit Plan will occur upon such individual’s separation from service from the Aptiv Group or the Delphi Technologies Group, as applicable, or at such other time as specified in the applicable Benefit Plan.
Section 8.3     Section 409A . Aptiv and Delphi Technologies will cooperate in good faith so that the Distribution will not result in adverse Tax consequences under Code Section 409A to any current or former employee of any member of the Aptiv Group or any member of the Delphi Technologies Group, or their respective Plan Payees, in respect of his or her benefits under any Aptiv Benefit Plan or Delphi Technologies Benefit Plan.
 
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Section 8.4     Continuation of Elections . As of the Plan Split Date, or Applicable Transfer Date and as permitted by Code Section 409A, Delphi Technologies (acting directly or through a member of the Delphi Technologies Group) will cause each Delphi Technologies Spinoff Nonqualified Plan to recognize and maintain all elections (to the extent still applicable and reasonable), including deferral, investment and payment form elections, beneficiary designations, and the rights of alternate payees under qualified domestic relations orders with respect to Delphi Technologies Employees and their Plan Payees under the corresponding Split Nonqualified Plan.
Section 8.5     Delayed Transfer Employees .
(a)    Any Delphi Technologies Transferee will be treated in the same manner as a Delphi Technologies Employee under this Article VIII , except that such Delphi Technologies Transferee may experience a separation from service from Aptiv (within the meaning of Code Section 409A) on his or her Applicable Transfer Date. Such a Delphi Technologies Transferee’s Applicable Transfer Date will be treated as the Distribution Date.
(b)    The Aptiv Group will assume and be solely responsible, pursuant to the terms of the applicable Split Nonqualified Plan, for any benefits accrued by any Aptiv Transferee under any Delphi Technologies Spinoff Nonqualified Plan, and the Delphi Technologies Group will have no liability with respect thereto. Any Aptiv Transferee will be treated in the same manner as an Aptiv Employee under this Article VIII , except that such Aptiv Transferee may experience a separation from service from Delphi Technologies (within the meaning of Code Section 409A) on his or her Applicable Transfer Date. Such an Aptiv Transferee’s Applicable Transfer Date will be treated as the Distribution Date.
ARTICLE IX
APTIV EQUITY COMPENSATION AWARDS
Section 9.1     Outstanding Aptiv Equity Compensation Awards .
(a)    Each Aptiv Equity Compensation Award that is outstanding as of the Distribution Date will be adjusted as described below, so that each Aptiv Equity Compensation Award held by an Aptiv Participant will be adjusted to be an Adjusted Aptiv Equity Compensation Award, and each Aptiv Equity Compensation Award held by a Delphi Technologies Participant will be adjusted to be a Delphi Technologies Equity Compensation Award, unless otherwise provided in this Section 9.1(a) ; provided , however , that, effective immediately prior to the Distribution, the Aptiv Compensation Committee may provide for different adjustments with respect to some or all of a holder’s Aptiv Equity Compensation Awards. For greater certainty, any adjustments made by the Aptiv Compensation Committee will be deemed incorporated by reference herein as if fully set forth below and will be binding on the parties hereto and their respective Subsidiaries.
 
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(i)    With respect to Aptiv Time-Based RSUs:
(A)    Aptiv Time-Based RSUs held by each Aptiv Participant will be adjusted, effective as of the Distribution Date and immediately prior to the Distribution, pursuant to the adjustment provisions of the applicable Aptiv LTIP, to be Adjusted Aptiv Time-Based RSUs. Subject to the adjustment provisions of the applicable Aptiv LTIP, the Adjusted Aptiv Time-Based RSUs otherwise will be subject to substantially the same terms, vesting conditions and other restrictions, if any, that were applicable to the respective Aptiv Time-Based RSUs immediately prior to the Distribution Date. The number of such Adjusted Aptiv Time-Based RSUs for each such Aptiv Participant will be equal to the product (rounded up to the nearest whole unit) of (1) the number of such Aptiv Time-Based RSUs held by such Aptiv Participant immediately prior to the Distribution Date and (2) a fraction, (a) the numerator of which is the Pre-Distribution Aptiv Price and (b) the denominator of which is the Post-Distribution Aptiv Price.
(B)    Aptiv Time-Based RSUs held by each Delphi Technologies Participant will be adjusted, effective as of the Distribution Date and immediately prior to the Distribution, pursuant to the adjustment provisions of the applicable Aptiv LTIP, to be Delphi Technologies Time-Based RSUs. Subject to the adjustment provisions of the applicable Aptiv LTIP, the Delphi Technologies Time-Based RSUs otherwise will be subject to substantially the same terms, vesting conditions and other restrictions, if any, that were applicable to the respective Aptiv Time-Based RSUs immediately prior to the Distribution Date. The number of such Delphi Technologies Time-Based RSUs for each such Delphi Technologies Participant will be equal to the product (rounded up to the nearest whole unit) of (1) the number of such Aptiv Time-Based RSUs held by such Delphi Technologies Participant immediately prior to the Distribution Date and (2) a fraction, the numerator of which is the Pre-Distribution Aptiv Price and the denominator of which is the Delphi Technologies Price.
(ii)    With respect to Aptiv Performance-Based RSUs:
(A)    Aptiv Performance-Based RSUs held by each Aptiv Participant will be adjusted, effective as of the Distribution Date and immediately prior to the Distribution, pursuant to the adjustment provisions of the applicable Aptiv LTIP, to be Adjusted Aptiv Performance-Based RSUs. The target number of such Adjusted
 
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Aptiv Performance-Based RSUs will be equal to the product (which will be rounded up to the nearest whole unit) of (1) the target number of such Aptiv Performance-Based RSUs held by such Aptiv Participant immediately prior to the Distribution and (2) a fraction, (a) the numerator of which is the Pre-Distribution Aptiv Price and (b) the denominator of which is the Post-Distribution Aptiv Price. Subject to the adjustment provisions of the applicable Aptiv LTIP, the Adjusted Aptiv Performance-Based RSUs otherwise will be subject to substantially the same terms, vesting conditions and other restrictions, if any, that were applicable to the respective Aptiv Performance-Based RSUs immediately prior to the Distribution Date. The determination of whether any portion of an Adjusted Aptiv Performance-Based RSU award held by an Aptiv Participant has been earned will be made by the Aptiv Compensation Committee based upon the achievement of the applicable management objectives for the applicable performance period during the first quarter of the calendar year following the calendar year in which the applicable performance period ends, subject to the terms of the Adjusted Aptiv Performance-Based RSU award.
(B)    Aptiv Performance-Based RSUs held by each Delphi Technologies Participant will be adjusted, effective as of the Distribution Date and immediately prior to the Distribution, pursuant to the adjustment provisions of the applicable Aptiv LTIP, to be Delphi Technologies Performance-Based RSUs. The target number of such Delphi Technologies Performance-Based RSUs will be equal to the product (which will be rounded up to the nearest whole unit) of (1) the target number of such Aptiv Performance-Based RSUs held by such Delphi Technologies Participant immediately prior to the Distribution and (2) a fraction, (a) the numerator of which is the Pre-Distribution Aptiv Price and (b) the denominator of which is the Delphi Technologies Price. Subject to the adjustment provisions of the applicable Aptiv LTIP, the Delphi Technologies Performance-Based RSUs otherwise will be subject to substantially the same terms, vesting conditions and other restrictions, if any, that were applicable to the respective Aptiv Performance-Based RSUs immediately prior to the Distribution Date. The determination of whether any portion of a Delphi Technologies Performance-Based RSU award held by a Delphi Technologies Participant has been earned will be made by the Delphi Technologies Compensation Committee based upon the achievement of the applicable management objectives for the applicable performance period during the first quarter of the calendar year following the calendar year in which the applicable performance period ends, in accordance with the terms of the Delphi Technologies Performance-Based RSU award. References to the Delphi Technologies Compensation Committee in this Section 9.1(a)(ii)(B) will be deemed references to the Aptiv Compensation Committee to the extent necessary to comply with Section 162(m) of the Code.
 
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(b)    Prior to the Distribution Date, Delphi Technologies will establish equity compensation plans, including the Delphi Technologies LTIP, so that upon the Distribution, Delphi Technologies will have in effect an equity compensation plan that allows grants of equity compensation awards subject to substantially the same terms as those that apply to the applicable Aptiv Equity Compensation Awards. From and after the Distribution Date, each Delphi Technologies Equity Compensation Award will be subject to the terms of the applicable Delphi Technologies equity compensation plan, the award agreement and such other applicable writings governing such Delphi Technologies Equity Compensation Award and any Employment Agreement to which the applicable holder is a party. From and after the Distribution Date, Delphi Technologies will retain, pay, perform, fulfill and discharge all Liabilities arising out of or relating to the Delphi Technologies Equity Compensation Awards. Aptiv will retain, pay, perform, fulfill and discharge all Liabilities arising out of or relating to the Aptiv Equity Compensation Awards.
(c)    In all events, the adjustments provided for in this Section 9.1 will be made in a manner that, as determined by Aptiv, avoids adverse Tax consequences to holders under Code Section 409A.
Section 9.2     Conformity with Non-U.S. Laws . Notwithstanding anything to the contrary in this Agreement, (i) to the extent any of the provisions in this Article IX (or any equity award described herein) do not conform with applicable non-U.S. laws (including provisions for the collection of withholding taxes), such provisions shall be modified to the extent necessary to conform with such non-U.S. laws in such manner as is equitable and to preserve the intent hereof, as determined by the parties in good faith, and (ii) the provisions of this Article IX may be modified to the extent necessary to avoid undue cost or administrative burden arising out of the application of this Article IX to awards subject to non-U.S. laws.
Section 9.3     Tax Withholding and Reporting .
(a)    Except as otherwise required by applicable non-U.S. law, the appropriate member of the Aptiv Group will be responsible for all payroll taxes, withholding and reporting with respect to Aptiv Equity Compensation Awards held by Aptiv Employees, Former Aptiv Business Employees and Former Delphi Technologies Business Employees. Except as otherwise required by applicable non-U.S. law, the appropriate member of the Delphi Technologies Group will be responsible for all payroll taxes, withholding and reporting with respect to Delphi Technologies Equity Compensation Awards held by Delphi Technologies Employees.
(b)    If Aptiv or Delphi Technologies determines in its reasonable judgment that any action required under this Article IX will not achieve the intended tax, accounting and legal results, including, without limitation, the intended results under Code Section 409A or FASB ASC Topic 718 – Stock Compensation, then at the request of Aptiv or Delphi Technologies, as applicable, Aptiv and Delphi Technologies will mutually cooperate in taking such actions as are necessary or appropriate to achieve such results, or most nearly achieve such results if the originally-intended results are not fully attainable.
 
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(c)    Tax deductions with respect to Aptiv Equity Compensation Awards and Delphi Technologies Equity Compensation Awards will be allocated in accordance with the Tax Matters Agreement.
Section 9.4     Employment Treatment .
(a)    Continuous employment with the Delphi Technologies Group and the Aptiv Group following the Distribution Date will be deemed to be continuing service for purposes of vesting for the Delphi Technologies Equity Compensation Awards and the Aptiv Equity Compensation Awards. However, in the event that a Delphi Technologies Employee terminates employment after the Distribution Date and becomes employed by the Aptiv Group, for purposes of Article IX , the Delphi Technologies Employee will be deemed terminated and the terms and conditions of the applicable performance incentive plan under which grants were made will apply. Similarly, in the event that an Aptiv Employee terminates employment after the Distribution Date and becomes employed by the Delphi Technologies Group, for purposes of Article IX , the Aptiv Employee will be deemed terminated and the terms and conditions of the performance incentive plan under which grants were made will apply. Notwithstanding the foregoing, for purposes of this Article IX only, if an individual is a Delayed Transfer Employee, such individual will not be considered to have terminated on his or her Applicable Transfer Date. In addition, a non-employee member of the board of directors of Aptiv or Delphi Technologies will be treated in a similar manner to that described in this Section 9.4(a) .
(b)    If, after the Distribution Date, Aptiv or Delphi Technologies identifies an administrative error in the individuals identified as holding Aptiv Equity Compensation Awards and Delphi Technologies Equity Compensation Awards, the amount of such awards so held, the vesting level of such awards, or any other similar error, Aptiv and Delphi Technologies will mutually cooperate in taking such actions as are necessary or appropriate to place, as nearly as reasonably practicable, the individual and Aptiv and Delphi Technologies in the position in which they would have been had the error not occurred.
Section 9.5     Equity Award Administration . Delphi Technologies and Aptiv agree that Fidelity Brokerage Services LLC will be the administrator and recordkeeper for the Delphi Technologies and Aptiv Equity Compensation Awards outstanding as of the Distribution for the life of the relevant awards, unless the parties mutually agree otherwise.
Section 9.6     Registration . Delphi Technologies will register the Delphi Technologies Stock relating to the Delphi Technologies Equity Compensation Awards and make any necessary filings with the appropriate Governmental Authorities as required under U.S. and foreign securities Laws.
 
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ARTICLE X
BENEFIT PLAN REIMBURSEMENTS, BENEFIT PLAN THIRD-PARTY CLAIMS
Section 10.1     General Principles . From and after the Distribution Date, any services that a member of the Delphi Technologies Group will provide to the members of the Aptiv Group or that a member of the Aptiv Group will provide to the members of the Delphi Technologies Group relating to any Benefit Plans will be set forth in the Transition Services Agreements (and, to the extent provided therein, a member of the Delphi Technologies Group or the Aptiv Group will provide administrative services referred to in this Employee Matters Agreement).
Section 10.2     Benefit Plan Third-Party Claims . Any Third-Party Claim relating to the matters addressed in this Agreement shall be governed by the applicable provisions of the Separation Agreement.
ARTICLE XI
INDEMNIFICATION
Section 11.1     Indemnification . All Liabilities assumed by or allocated to Delphi Technologies or the Delphi Technologies Group pursuant to this Employee Matters Agreement will be deemed to be Delphi Technologies Liabilities for purposes of Article V of the Separation Agreement, and all Liabilities retained or assumed by or allocated to Aptiv or the Aptiv Group pursuant to this Employee Matters Agreement will be deemed to be Aptiv Liabilities for purposes of Article V of the Separation Agreement. All such Delphi Technologies Liabilities and Aptiv Liabilities shall be governed by the applicable indemnification terms of the Separation Agreement.
ARTICLE XII
COOPERATION
Section 12.1     Cooperation . Following the date of this Employee Matters Agreement, Aptiv and Delphi Technologies will, and will cause their respective Subsidiaries, agents and vendors to, use commercially reasonable efforts to cooperate with respect to any employee compensation, benefits or human resources systems matters that Aptiv or Delphi Technologies, as applicable, reasonably determines require the cooperation of both Aptiv and Delphi Technologies in order to accomplish the objectives of this Employee Matters Agreement. Without limiting the generality of the preceding sentence, (a) Aptiv and Delphi Technologies will cooperate in coordinating each of their respective payroll systems in connection with the transfers of Aptiv Employees to the Aptiv Group and the Distribution, (b) Aptiv will, and will cause its Subsidiaries to, transfer records to Delphi Technologies as reasonably necessary for the proper administration of the Delphi Technologies Benefit Plans, to the extent such records are in Aptiv’s possession, (c) Aptiv and Delphi Technologies will share, with
 
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each other and with their respective agents and vendors (without obtaining releases), all employee, participant and beneficiary information necessary for the efficient and accurate administration of the Benefit Plans, and (d) Aptiv and Delphi Technologies will share such information as is necessary to administer equity awards pursuant to Article IX , to provide any required information to holders of such equity awards, and to make any governmental filings with respect thereto.
ARTICLE XIII
MISCELLANEOUS
Section 13.1     Vendor Contracts . Prior to the Distribution, Aptiv and Delphi Technologies will use reasonable best efforts to (a) negotiate with the current Third Party providers to separate and assign the applicable rights and obligations under each group insurance policy, health maintenance organization, administrative services contract, Third Party administrator agreement, letter of understanding or arrangement that pertains to one or more Aptiv Benefit Plans and one or more Delphi Technologies Benefit Plans (each, a “ Vendor Contract ”) to the extent that such rights or obligations pertain to Delphi Technologies Employees and their respective Plan Payees or, in the alternative, to negotiate with the current Third Party providers to provide substantially similar services to the Delphi Technologies Benefit Plans on substantially similar terms under separate contracts with Delphi Technologies or the Delphi Technologies Benefit Plans and (b) to the extent permitted by the applicable Third Party provider, obtain and maintain pricing discounts or other preferential terms under the Vendor Contracts.
Section 13.2     Employment Taxes Withholding Reporting Responsibility . Delphi Technologies and Aptiv hereby agree to follow the standard procedure for United States employment Tax withholding as provided in Section 4 of Rev. Proc. 2004-53, I.R.B. 2004-34. Aptiv will withhold and remit all employment taxes for the last payroll date preceding the Distribution Date with respect to all current and former employees of Aptiv and Delphi Technologies who receive wages on such payroll date.
Section 13.3     Data Privacy . The parties agree that any applicable data privacy Laws and any other obligations of the Delphi Technologies Group and the Aptiv Group to maintain the confidentiality of any employee information or information held by any benefit plans in accordance with applicable Law will govern the disclosure of employee information among the parties under this Employee Matters Agreement. Delphi Technologies and Aptiv will ensure that they each have in place appropriate technical and organizational security measures to protect the personal data of the Delphi Technologies Employees, Former Delphi Technologies Business Employees, Aptiv Employees and Former Aptiv Business Employees.
Section 13.4     Third Party Beneficiaries . Nothing contained in this Employee Matters Agreement will be construed to create any third-party beneficiary rights in any Person, including without limitation any Delphi Technologies Employee, Aptiv Employee, Former Aptiv Business Employee, or Former Delphi Technologies Business Employee (including any dependent or beneficiary thereof) nor will this Employee Matters Agreement be deemed to amend any Benefit Plan of Aptiv, Delphi Technologies, or their Affiliates or to prohibit Aptiv, Delphi Technologies or their respective Affiliates from amending or terminating any Benefit Plan.
 
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Section 13.5     Effect if Distribution Does Not Occur . If the Distribution does not occur, then all actions and events that are, under this Employee Matters Agreement, to be taken or occur effective as of the Distribution, or otherwise in connection with the Distribution will not be taken or occur except to the extent specifically agreed by the parties.
Section 13.6     Incorporation of Separation Agreement Provisions . The following provisions of the Separation Agreement are hereby incorporated herein by reference, and unless otherwise expressly specified herein, such provisions will apply as if fully set forth herein (references in this Section 13.6 to an “Article” or “Section” will mean Articles or Sections of the Separation Agreement, and references in the material incorporated herein by reference will be references to the Separation Agreement): Article IV (relating to Dispute Resolution); Article V (relating to Mutual Releases; Indemnification; Cooperation; Insurance); Article VI (relating to Exchange of Information; Confidentiality); Article VII (relating to Further Assurances and Additional Covenants); and Article X (relating to Miscellaneous).
Section 13.7     No Representation or Warranty . Each of Aptiv (on behalf of itself and each other Aptiv Entity) and Delphi Technologies (on behalf of itself and each other Delphi Technologies Entity) understands and agrees that, except as expressly set forth in this Employee Matters Agreement, the Separation Agreement or in any other Ancillary Agreement, no party (including its Affiliates) to this Employee Matters Agreement, the Separation Agreement or any other Ancillary Agreement, makes any representation or warranty with respect to any matter in this Employee Matters Agreement, including, without limitation, any representation or warranty with respect to the legal or Tax status or compliance of any Benefit Plan, compensation arrangement or Employment Agreement, and Aptiv disclaims any and all liability with respect thereto. Except as expressly set forth in this Employee Matters Agreement, the Separation Agreement or any other Ancillary Agreement, none of Aptiv, Delphi Technologies or any of their respective Subsidiaries (including their respective Affiliates) makes any representation or warranty about and will not have any Liability for the accuracy of or omissions from any information, documents or materials made available in connection with entering into this Employee Matters Agreement, the Separation Agreement or any other Ancillary Agreement or the transactions contemplated hereby or thereby.
 
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IN WITNESS WHEREOF, the parties have caused this Employee Matters Agreement to be executed on the date first written above by their respective duly authorized officers.

DELPHI AUTOMOTIVE PLC	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
DELPHI TECHNOLOGIES PLC	
		
By:	 	 	
	 	Name:	
	 	Title:	
[Signature Page to Employee Matters Agreement]
 
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Exhibit 10.4
CONTRACT MANUFACTURING SERVICES AGREEMENT
THIS CONTRACT MANUFACTURING SERVICES AGREEMENT (this “ Agreement ”), dated as of [ ● ], [ ● ] (the “ Effective Date ”), by and between [ ● ], a [ ● ] (“ Supplier ”), and [ ● ] , a [ ● ] (“ Customer ”). Each of Supplier and Customer is referred to herein as a “ Party ” and collectively as the “ Parties ”.
WITNESSETH
WHEREAS , Delphi Automotive PLC (“ Aptiv ”) and Delphi Technologies PLC (“ Delphi Technologies ”) have entered into that certain Separation and Distribution Agreement, dated as of [●], [ ● ] (the “ Separation and Distribution Agreement ”), pursuant to which, among other things, Aptiv and Delphi Technologies have agreed that Aptiv will transfer the Delphi Technologies Business to Delphi Technologies and distribute the shares in Delphi Technologies to the shareholders of Aptiv on the terms and conditions set forth in the Separation and Distribution Agreement.
WHEREAS , in order to facilitate the operation of the Delphi Technologies Business by Delphi Technologies and its Affiliates, Supplier has agreed to manufacture, at Supplier’s Facility, Customer’s requirements for the products identified in Exhibit A (the “ Products ”), utilizing production assets owned by Supplier or Customer, as the case may be, and raw materials, components and other supplies purchased by or on behalf of Customer, in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE , in consideration of entering into the Separation and Distribution Agreement, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 For purposes of this Agreement, capitalized terms shall have the meaning set forth in the body of this Agreement or as set forth below in this ARTICLE 1. To the extent any capitalized terms are not defined herein, they shall have the meanings set forth in the Separation and Distribution Agreement.
(a) “ Cost of Engineering Support ” means all cash expenditures, accruals or cost allocations, arising from, relating to or in connection with providing Engineering Support, including all cash expenditures, accruals and cost allocations relating to: (i) procurement of materials, goods and services, including life-time buys of materials or goods from suppliers and all applicable premiums; (ii) labor costs and expenses (including wages, salaries, benefits, overtime charges and severance expenses), whether attributable to hourly or salaried employees and including all such costs and expenses arising in connection with the cancellation by Customer of any Engineering Support; (iii) operating supplies, maintenance, repair, replacement and acquisition of machinery and equipment, including related tooling, jigs, dies, gauges,
 
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fixtures, molds, patterns and other accessories; (iv) general or administrative functions; (v) export, logistics, personnel lodging and transportation expenses; (vi) building, storage and management of raw material, works-in-process and finished goods inventory; (vii) obsolescence of material, work-in-progress and finished goods, whether sold at a loss or scrapped; and (viii) use, maintenance and operation of the applicable facility hosting the personnel providing, or the operations of, the Engineering Support, including factory overhead, rental and leasehold payments, taxes, insurance premiums, information technology system costs allocable to the operation of the applicable manufacturing facility.
(b) “ Customer Production Assets ” means the machinery and equipment, including related tooling, jigs, dies, gauges, fixtures, molds, patterns and other accessories owned by Customer that are used by Supplier in connection with the manufacturing of Products for Customer.
(c) “ Engineering Support ” means, with respect to a Product, all activities arising from, relating to or in connection with: (i) Product design or specifications changes, Product manufacturing process changes or any other changes; (ii) building of Product prototypes; (iii) customer validation; (iv) manufacturing engineering support; (v) product quality issues; and (vi) testing related to items (i) through (v).
(d) “ Ex Works ” has the meaning as defined in Incoterms 2010.
(e) “ Losses ” means any liability, loss, cost, expense, debt or obligation of any kind, character or description, and whether known or unknown, accrued, absolute, contingent or otherwise, and regardless of when asserted or by whom.
(f) “ Order Lead Time ” means, with respect to a Product, the period of time preceding the scheduled delivery date of such Product that is specified in Exhibit A , as changed from time to time by Supplier in its reasonable discretion.
(g) “ Product Cost ” means, with respect to a Product, Supplier’s cost of manufacturing such Product as determined by Supplier in accordance with Exhibit  B .
(h) “ Production Assets ” means collectively the Customer Production Assets and Supplier Production Assets.
(i) “ Production Lead Time ” means, with respect to a Product, the period of time preceding the scheduled delivery date of such Product that is specified in Exhibit A , as changed from time to time by Supplier in its reasonable discretion.
(j) “ Production Materials ” means raw materials, components, subassemblies, parts, other supplies and any industrial services required for the manufacturing of Products, including Shared Production Materials.
 
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(k) “ Purchasing Collaboration Agreement ” means that certain Purchasing Collaboration Agreement entered into by and between Aptiv and Delphi Technologies on or around the date hereof.
(l) “ Service Parts ” means products that are no longer required for regular vehicle production.
(m) “ Shared Production Materials ” means Production Materials that are required for the manufacturing of: (i) Products for Customer’s customers; and (ii) other products for Supplier’s other customers.
(n) “ Supplier Production Assets ” means the machinery and equipment, including related tooling, jigs, dies, gauges, fixtures, molds, patterns and other accessories owned by Supplier that is used for the production of both: (i) Products for Customer; and (ii) other products for Supplier’s customers.
(o) “ Supplier’s Facility ” means Supplier’s manufacturing facility located at [ ● ] .
(p) “ Termination Charges ” means, with respect to a Product, all expenditures, accruals or cost allocations arising from, relating to or incurred in connection with Supplier’s end of production of such Product earlier than the Contractual Expiration Date, including all those relating to: (i) the termination or cancellation of procurement of materials, goods and services, including supplier compensation payments, cancellation penalties, payments for obsolescence of material, work-in-progress and finished goods (whether sold at a loss or scrapped) or life-time buys of materials or goods from suppliers and all applicable premiums; (ii) the termination of employees or contract employees, including any wages, salaries and benefits through the earlier of the Contractual Termination Date and the date the obligation to pay such wages, salary and benefits expires, severance costs, relocation costs, outplacement services, training costs and other termination-related payments; (iii) any overtime charges incurred in connection with last-time buys or building of a bank of materials; (iv) the disposal or scrapping of materials, work-in-progress or finished goods; (v) machinery and equipment, including related tooling, jigs, dies, gauges, fixtures, molds, patterns and other accessories, whether incurred as a result of the disposal or scrapping thereof, an adjustment in the allocable share of depreciation and amortization or otherwise; (vi) the surrender or vacation of unused manufacturing space dedicated to the relevant Product, including rental and leasehold payments, an allocable share of depreciation and amortization taxes and insurance premiums through the Contractual Expiration Date; and (vii) the write-off of net book value of production assets upon disposal or destruction of these production assets, in each case, regardless of whether such cash expenditures, accruals and cost allocations are incurred or disbursed prior or after the end of production of the relevant Product.
(q) “ Transfer Date ” means the earlier of: (i) April 1, 2018; and (ii) the date that Customer’s information technology systems are capable of processing customer and supplier orders.
 
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1.2 Each of the following terms is defined in the Section set forth opposite such term:

Term	  	Article / Section	
Agreement	  	Preamble	
Change Proposal	  	3.2	
Claim	  	12.1	
Contractual Expiration Date	  	2.8	
Customer	  	Preamble	
Customer’s Property	  	10.1	
Delivery Date	  	7.2	
Dispute	  	15.4	
Dispute Committee	  	15.4	
Effective Date	  	Preamble	
End-of-Manufacturing Date	  	2.8	
Equitable Adjustments	  	3.2	
Final Offer	  	2.9	
Force Majeure	  	14.1	
Forecasts	  	2.3	
Manufacturing Service Fee	  	4.1	
OEM	  	2.8	
Offer	  	2.9	
Operational Committee	  	15.1	
Parties	  	Preamble	
Party	  	Preamble	
Products	  	Recitals	
Reduced Order	  	2.7	
Repossessed Property	  	10.3(a)	
Separation and Distribution Agreement	  	Recitals	
Supplier	  	Preamble	
Supplier’s Quote	  	2.9	
Technical Manufacturing Documents	  	ARTICLE 11	
Total Product Cost	  	Exhibit B	
Warranty Period	  	7.2	
1.3 The table of contents, titles, headings and captions contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Unless otherwise indicated to the contrary herein by the context or use thereof: (a) the words “hereby,” “herewith,” “herein,” “hereto,” “hereof” and words of similar import refer to this Agreement as a whole and not to any particular Section or paragraph hereof; (b) the words “include,” “includes” or “including” shall be deemed to be followed by the words “without limitation”; (c) masculine gender shall also include the feminine and neutral genders, and vice versa; (d) words importing the singular shall also include the plural, and vice versa; (e) references to “Articles,” “Sections,” “Exhibits,” “Annexes” or “Schedules” shall be to articles, sections, exhibits, annexes or schedules of or to this Agreement; (f) all Exhibits, Annexes or Schedules are hereby incorporated in and made a part of this Agreement as if set forth in full herein, and any capitalized terms used in such Exhibits, Annexes or Schedules and not otherwise
 
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defined therein shall have the meaning set forth in this Agreement; (g) “writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form; (h) all references to “days” mean calendar days unless otherwise indicated; (i) derivative forms of defined terms shall have correlative meanings; and (j) the term “or” shall not be deemed to be exclusive.
ARTICLE 2
MANUFACTURING SERVICES
2.1 Customer appoints Supplier as a contract manufacturer for the purpose of providing services necessary for the manufacture for Customer of Products on the terms and conditions set forth in this Agreement. Supplier accepts such appointment and agrees to manufacture the Products in accordance with the terms of this Agreement.
2.2 Customer agrees to purchase manufacturing services, and Supplier agrees to provide manufacturing services, utilizing the Production Assets and Production Materials, for one hundred (100%) percent of Customer’s requirements for each Product from the Effective Date until the Contractual Expiration Date of such Product, except as specifically provided otherwise herein.
2.3 Customer shall provide Supplier with three (3) months’ rolling forecasts (using an EDI format) of its requirements for the Products (“ Forecasts ”), provided that Customer may not change Forecasts relating to a specific delivery date within the applicable Production Lead Time, and will issue binding instructions to release Products no later than the applicable Order Lead Time before the Customer’s desired delivery date for the Product. Supplier shall deliver ordered Products in the quantities, on the dates, and at the times specified by Customer in releases issued in accordance with the terms of this Section. Supplier shall be relieved from any obligation to fulfill Customer’s requirements for a Product to the extent that: (i) the quantities of Production Materials consigned by Customer and delivered to Supplier’s Facility are insufficient to fulfill Customer’s requirements for Products; or (ii) such requirements exceed the lesser of: (x) Supplier’s maximum production capacity for such Products as set forth on Exhibit A or as subsequently agreed by Supplier and Customer, provided that for any Products that are manufactured on Supplier Production Assets, Supplier shall be responsible for ensuring that it has production capacity that is sufficient to satisfy contractual commitments by Customer to supply Products to its customers as set forth on Exhibit  A ; and (y) the requirements for such Products specified by Customer in the last Forecasts provided by Customer to Supplier prior to the beginning of the applicable Production Lead Time. Supplier, at no incremental cost to it, will use good faith efforts to meet Customer’s requirements in excess of the applicable maximum production capacity or requirements specified in the last Forecasts issued prior to the beginning of the applicable Production Lead Time. However, if Supplier determines in good faith that it will need to incur additional costs, including for overtime or for investments in machinery, equipment, tooling and test equipment in order to fulfill Customer’s forecasted requirements, then Supplier shall promptly notify Customer and Customer shall determine whether or not to pay such costs or make such investments at its own cost or to revise its forecasts in accordance with Supplier’s applicable maximum production capacity. Supplier shall have no liability to Customer for any failure or delay in satisfying orders for Products that exceed the applicable maximum production capacity or the requirements specified in the last relevant Forecasts issued prior to the beginning of the applicable Production Lead Time.
 
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2.4 Supplier may change unilaterally and in its reasonable discretion the Production Lead Time or Order Lead Time applicable to a Product. Supplier shall promptly notify Customer in writing of such change. Notwithstanding the foregoing, if a change in the Production Lead Time or Order Lead Time, as the case may be, applicable to a Product is likely, in Supplier’s reasonable opinion, to cause material costs and expenses to Customer, including premium freight, Supplier shall obtain Customer’s written consent (not to be unreasonably withheld, delayed or withdrawn) before Supplier can implement the new Production Lead Time or Order Lead Time, as the case may be, in respect of the relevant Product.
2.5 Customer will be and will remain the owner of the Products and all work-in-progress with respect thereto while they remain in Supplier’s Facility. Customer will bear the risk of loss, theft and damage to the Products, work-in-progress and finished goods while they are in the custody or control of Supplier or any of Supplier’s suppliers, subcontractors or agents. Customer will be responsible for the cost of repairing or replacing the Products if they are stolen, worn out, damaged or destroyed other than due to Supplier’s gross negligence or willful misconduct.
2.6 Supplier will pay or reimburse Customer for the cost of any premium (more expeditious) method of transportation that is required to allow delivery of Products to Customer’s end customers in accordance with Customer’s applicable delivery schedules only to the extent that Supplier’s failure to have Products ready for shipment on the applicable delivery date and time to meet Customer’s delivery schedules using the method of transportation originally specified or utilized by Customer is caused by Supplier’s failure to comply with the terms of this Agreement. In particular, Supplier shall not be liable for any premium freight charge associated with emergency orders, a failure of a supplier of Production Materials to deliver such Production Materials in a timely manner or in the ordered quantities or that may be caused by a change in the delivery date or time of the ordered Products after Customer has instructed Supplier to release Products in accordance with Section 2.3.
2.7 If Customer places and Supplier accepts an order with Supplier for less than one hundred (100%) percent of Customer’s requirements for any or all Products (“ Reduced Order ”), Supplier shall only be obligated to provide manufacturing services for the lower percentage of Customer’s requirements for such Products as set forth on the Reduced Order, from the date that the Reduced Order is placed with Supplier through the remainder of this Agreement.
2.8 The expiration date of Customer’s contractual commitment as of the Effective Date to supply each Product to the relevant vehicle manufacturer (“ OEM ”) for regular vehicle production (not Service Parts) (the “ Contractual Expiration Date ”) is specified in Exhibit  A . Customer shall notify Supplier in writing of any change in the Contractual Expiration Date for a Product immediately after it has been informed thereof by the relevant OEM, and in any event no later than thirty (30) days after becoming aware thereof. Supplier will have no obligation to continue manufacturing any product after the original Contractual Expiration Date but Customer may place a one-time final order for production and service parts related to such Product at a
 
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price equal to the then-applicable Manufacturing Service Fee; provided , that , any such order from Customer must be issued to Supplier by the earlier of: (x) six (6) months prior to the original Contractual Expiration Date; and (y) four (4) months after Supplier receives Customer’s notice. Supplier will have no obligation to fulfill any order that is received by Supplier after the date required under the preceding sentence. If Customer provides Supplier with a final order in accordance with this Section 2.8, Supplier shall manufacture the Products ordered under the final order and deliver them to Customer as Customer requires over a period of up to six (6) months after the date of receipt of the final order by Supplier (the “ End-of-Manufacturing Date ”). All Products ordered from Supplier under the final order that have not been delivered to Customer on the End-of-Manufacturing Date will be delivered to Customer in one final shipment from Supplier within seven (7) days after the End-of-Manufacturing Date or any other date agreed upon between Customer and Supplier. Supplier shall thereafter have no further obligation to provide such Products to Customer.
2.9 Notwithstanding the terms of Section 2.8, if an OEM desires to extend the production of any Product beyond the Contractual Expiration Date for that Product, Customer shall: (i) notify Supplier of such proposed extension promptly after having been notified thereof; (ii) provide Supplier with all relevant information known to Customer regarding such proposed extension, including but not limited to, the length of the proposed extension for the relevant Product, any change in the prices paid by the OEM to Customer and any new anticipated capital expenditures that would be required for the continued production of Products during the extension period; and (iii) offer Supplier the opportunity to continue to supply the Product during the proposed extension period (the “ Offer ”). If Supplier desires to continue to supply the Product during the proposed extension period, Supplier will notify Customer, within fifteen (15) days of Supplier’s receipt of the Offer, of the terms on which Supplier is willing to continue to supply the relevant Product to Customer (the “ Supplier’s Quote ”). Customer will inform Supplier whether Customer accepts such terms within ten (10) days after Customer receives Supplier’s Quote. If Customer does not accept Supplier’s Quote, Customer is free to award the business to a third party, on terms and conditions that are more favorable to Customer than those set forth in Supplier’s Quote but before awarding the business to a third party on terms that are less favorable to Customer than Supplier’s Quote, Customer shall offer Supplier, in writing (the “ Final Offer ”), an opportunity to supply the Product on the terms that Customer is prepared to award the business to another supplier (which terms shall be set forth in the notice from Customer to Supplier). Supplier shall have ten (10) days after it receives the Final Offer to accept or reject such offer, it being understood that any failure to accept the Final Offer in writing shall constitute a rejection by Supplier. If Supplier rejects the Final Offer, Customer shall have the right to award the business to a third-party on terms at least as favorable to Customer as those it offered to Supplier but not on terms that are less favorable to Customer.
ARTICLE 3
ENGINEERING SUPPORT; SPECIFICATION, DESIGN, MANUFACTURING
PROCESSES AND PLACE OF DELIVERY CHANGES
3.1 Upon Customer’s written request, Supplier shall use commercially reasonable efforts to provide Engineering Support for Customer. Customer shall pay Supplier a fee equal to the Cost of Engineering Support PLUS ten percent (10%) of such Cost of Engineering Support. Notwithstanding the foregoing, Customer will have no obligation to pay for Engineering Support which is required to remedy Supplier’s breach of the warranty set forth in Section 7.1.
 
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3.2 If, as a result of Engineering Support provided or otherwise, Customer decides to make any changes to the specifications or design of, or the manufacturing processes applicable to a Product (“ Change Proposal ”), Customer and Supplier will equitably determine any adjustment in the Manufacturing Service Fee for the relevant Product or in other terms of this Agreement that may be affected by the Change Proposal, including (without limitation) Customer’s payment of the costs of modifications to any Production Asset necessary to implement such changes (“ Equitable Adjustments ”). Upon Customer’s request, Supplier will provide Customer with reasonable supporting information for the determination of any such Equitable Adjustments, including documentation reasonably substantiating changes in Customer’s cost of production and the time to implement such changes. Supplier and Customer will work to resolve any disagreement arising out of such changes in good faith. Supplier will not be required to implement any Change Proposal until Supplier and Customer mutually agree upon the nature and scope of the changes to be made and any equitable Adjustments required.
ARTICLE 4
MANUFACTURING SERVICE FEE; PAYMENT
4.1 In consideration for the services of manufacturing Products pursuant to this Agreement, Customer shall pay Supplier on a monthly basis a manufacturing service fee determined as set forth on Exhibit B (the “ Manufacturing Service Fee ”).
4.2 Customer shall pay any invoice for: (a) Manufacturing Service Fees; (b) Engineering Support; (c) Termination Charges; (d) Production Materials ordered by Supplier as an agent for Customer in accordance with Section 8.2; or (e) otherwise issued in accordance with the terms of this Agreement within thirty (30) days after the receipt date of such invoice.
4.3 Supplier may suspend performance of any order or require payment in cash, security or other adequate assurance satisfactory to Supplier when, in Supplier’s reasonable opinion, the financial condition of Customer or other reasonable grounds for insecurity warrant such action. If Customer fails to comply with Supplier’s requirement for a change in the form of payment or provide Supplier in writing with the required assurance within a reasonable time after receipt of Supplier’s demand by Customer, Supplier will be entitled to terminate this Agreement in accordance with the terms of Section 17.3.
ARTICLE 5
DELIVERY
5.1 All Products shall be delivered by Supplier to Customer on an Ex Works, Supplier’s Facility basis, unless agreed otherwise in writing by the Parties. Nothing contained in the standard Ex Works terms shall limit or modify Customer’s responsibilities under Section 2.5.
5.2 Supplier shall pack and mark the Products in accordance with current practice as of the Effective Date, unless agreed otherwise between the Parties.
 
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ARTICLE 6
INCORRECT QUANTITIES OR TYPE
6.1 If Customer discovers any discrepancy between: (i) the quantity or type of Products ordered by Customer and that received by Customer; or (ii) the quantity or type of Products invoiced by Supplier and that received by Customer, Customer will immediately notify Supplier thereof, and in any event in less than thirty (30) days.
6.2 If the discrepancy is a shortage and Supplier invoiced Customer for services related to the full amount of Products ordered, Supplier shall, at Customer’s option: (i) adjust the invoice; (ii) make a cash refund to adjust for such shortage; or (iii) as quickly as commercially and reasonably practicable, on Customer’s demand and at Supplier’s cost and expense, supply the number of units in such shortage to Customer. Supplier shall be entitled to any insurance proceeds paid to Customer in respect of a shortage for which it replaces units or compensates Customer.
6.3 In case of an overage in any shipment, irrespective of when and by which Party discovered, Customer shall keep such quantity and pay the amount invoiced or the amount to be invoiced if the invoice did not include such overage, and Supplier shall take reasonable actions to try to prevent such overages from occurring in future shipments.
6.4 For purposes of verifying and substantiating any claim(s) for compensation made by Customer under this Agreement, Customer shall provide to Supplier reasonable access to Customer’s premises and such information as Supplier shall reasonably request.
6.5 Supplier shall not be obligated to make cash refunds or provide additional products for shortages when the notice of the shortage is not delivered within thirty (30) days as provided in Section 6.1 above.
ARTICLE 7
QUALITY
7.1 Supplier warrants to Customer, its successors and assigns that the Products delivered to Customer in accordance with the terms of this Agreement will be free from defects in workmanship. Supplier does not make any warranty with respect to any Engineering Support provided by Supplier to Customer.
7.2 The period for each of the warranties set forth in Section 7.1 with respect to a specific Product (the “ Warranty Period ”) will commence upon delivery of such Product to Customer (“ Delivery Date ”) and end twenty-four (24) months after such Delivery Date, unless Supplier and Customer have agreed otherwise in writing.
7.3 In the event Customer discovers any quality problems with the Products delivered hereunder, Customer shall promptly advise Supplier and the Parties shall seek to remedy any such problems from occurring in the future. If Customer can reasonably demonstrate that a
 
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Product fails to conform to the warranties set forth in Section 7.1 of this Agreement and provide reasonable supporting evidence for such failure, Supplier, at its sole option, will either repair or replace the non-conforming Products as Customer’s sole and exclusive remedy. For the avoidance of doubt, Supplier shall not be liable for any breach of the warranties set forth in Section 7.1 and Customer will have no legal remedy from Supplier for the relevant non-conforming Products if such breach is caused by Customer’s Property or a failure of a supplier of Production Materials to comply with its obligations under its supply contracts with Customer. The Warranty Period for any repaired or replacement Product will be the balance of the Warranty Period for the original non-conforming Product remaining from the date Supplier was notified of the warranty claim of the Product.
7.4 EXCEPT FOR THE WARRANTIES SET FORTH IN SECTION 7.1, SUPPLIER EXPRESSLY DISCLAIMS TO THE FULL EXTENT PERMISSIBLE BY LAW ANY WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AS TO THE NATURE OR STANDARD OF THE SERVICES OR PRODUCTS WHICH SUPPLIER MAY PROVIDE HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE AND ALL WARRANTIES ARISING FROM ANY COURSE OF DEALING OR USAGE OF TRADE.
7.5 SECTION 7.3 CONSTITUTES CUSTOMER’S SOLE AND EXCLUSIVE REMEDIES FOR A BREACH OF THE WARRANTIES SET FORTH IN SECTION 7.1. SUPPLIER WILL HAVE A REASONABLE TIME TO PROVIDE A REMEDY IN ACCORDANCE WITH SECTION 7.3.
ARTICLE 8
PRODUCTION MATERIALS; PROCUREMENT AGENCY;
PRODUCTION SCRAP; INSPECTIONS
8.1 Except as set forth in Section 8.2, Customer shall be exclusively responsible for all supply activities related to Production Materials (other than their receipt by Supplier and handling inside of Supplier’s Facility), including but not limited to:
(a) source-selecting all Production Materials;
(b) procuring all Production Materials including: (i) negotiating the price and all other terms applicable to the supply of Production Materials to Customer; (ii) placing orders (including last-time buy orders) providing for delivery of Production Materials directly to Supplier’s Facility with, and issuing production forecasts and delivery releases to, the relevant suppliers; (iii) arranging for delivery of Production Materials directly to Supplier’s Facility in timely fashion at no cost to Supplier and paying for all related logistics cost (including any premium freight charge that would be incurred to arrange for the delivery of Production Materials at Supplier’s Facility in timely fashion); and (iv) receiving and settling all supplier invoices for Production Materials; and
 
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(c) handling any warranty claims and other claims related to Production Materials, cost recoveries and termination and resourcing processes against the relevant suppliers.
Supplier and Customer acknowledge that: (i) certain of the activities necessary to fulfill Customer’s obligations under this ARTICLE 8 will be provided by Supplier or its affiliates to Customer or its affiliates under a Transition Services Agreement between Aptiv and Delphi Technologies, dated as of the Effective Date, for the period set forth in the Transition Services Agreement; and (ii) Aptiv and Delphi Technologies have agreed to endeavor to jointly conduct certain of their procurement activities in accordance with the terms of the Purchasing Collaboration Agreement. Nothing contained in this Agreement increases Supplier’s obligations or liability under the Transition Services Agreement and nothing contained in the Transition Services Agreement relieves Customer of any obligations or reduces Customer’s liability under this Agreement.
8.2 Notwithstanding the provisions of Section 8.1, Customer appoints Supplier as its agent, and Supplier agrees to its appointment as an agent for Customer, for the following activities:
(a) until the Transfer Date, on behalf of Customer, ordering and paying for all Production Materials required by Supplier for fulfilling Customer’s requirements for Products based on Forecasts; and
(b) after the Transfer Date and for the remaining term of this Agreement, on behalf of Customer, ordering and paying for all Shared Production Materials required by Supplier for fulfilling Customer’s requirements for Products based on Forecasts.
8.3 The Production Materials ordered by Supplier as an agent for Customer will be and remain the sole property of Customer in accordance with the terms of Section 10.1 and Customer shall bear the risk of loss, theft and damage of and to ordered Production Materials in accordance with the terms of Section 10.2.
8.4 Customer shall establish a SAP/ERP system that allows Customer, among other things, to order Production Materials from its suppliers and process orders from, and generate invoices to, its customers, as soon as reasonably feasible after the Effective Date but in any case no later than April 1, 2018.
8.5 Supplier shall be liable to Customer for the cost of production scrap related to a Product only to the extent that the level of production scrap related to such Product materially exceeds the production scrap level specified in Exhibit A for such Products.
8.6 Notwithstanding the terms of Section 10.2, Supplier shall be responsible for any incoming inspections in accordance with Supplier’s standard processes, provided that such inspection shall be limited to identifying: (i) any discrepancy between the quantity or type of Production Materials ordered by Customer and that received by Supplier; or (ii) any apparent damage to the condition of the Production Materials received by Supplier. Supplier shall promptly advise Customer of any such discrepancy or damage.
 
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8.7 Production Materials will be consigned by Customer with Supplier in accordance with the terms of ARTICLE 10.
ARTICLE 9
CUSTOMER UNDERTAKINGS
9.1 Until the Transfer Date, Customer appoints Supplier as its agent, and Supplier agrees to its appointment as an agent for Customer, for, on behalf of Customer: (i) receiving and processing purchase orders for Products from Customer’s end customers; and (ii) issuing invoices for the ordered Products to, and collecting on such invoices from, Customer’s end customers. Supplier shall transfer the cash or cash equivalents received as an agent from Customer’s end customers in accordance with Section 2.5(g) of the Separation and Distribution Agreement.
9.2 Customer shall have sole responsibility for the customer relationships related to Products, including customer satisfaction, warranty and other customer obligations. Supplier shall have no contractual relationship with, and no responsibility to, the end customers of the Products with respect to the Products.
ARTICLE 10
BAILMENT OF CUSTOMER PRODUCTION ASSETS
AND PRODUCTION MATERIALS
10.1 All Products and work-in-progress with respect thereto, Customer Production Assets, Production Materials and all other materials and items (whether or not such materials are in any way modified, altered or processed) that Customer furnishes to Supplier and all refurbishments or replacements of any of the foregoing items, in each case whether in the custody or control of Supplier or Supplier’s suppliers, subcontractors or agents (collectively, “ Customer’s Property ”) are, will be and will remain the property of Customer and are and will be held by Supplier on a bailment basis. Title to all replacement parts, additions, improvements and accessories of the Customer’s Property will vest in Customer immediately upon attachment to or incorporation into Customer’s Property. Customer will provide Supplier, upon Customer’s request, with a written inventory or other accounting of all Customer’s Property.
10.2 While Customer’s Property is in the custody or control of Supplier or any Supplier’s supplier, subcontractor or agent and until Supplier delivers Customer’s Property to Customer, Customer bears the risk of loss, theft and damage to Customer’s Property. Customer will be responsible for the cost of repairing or replacing Customer’s Property if it is stolen, worn out, damaged or destroyed other than due to Supplier’s gross negligence or willful misconduct. Supplier will: (a) perform maintenance of Customer’s Property but solely to the extent such maintenance is routine or preventive; (b) repair Customer’s Property or replace malfunctioning or defective Customer’s Property that either is not reparable or the cost of repair of which exceeds the cost of replacement, in each case at Customer’s expense, provided that if the cost of such
 
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repair or replacement exceeds U.S. $10,000, Supplier shall first seek Customer’s prior written consent; (c) deem Customer’s Property to be Customer’s personal property, including in connection with any agreements between Supplier and any third party; and (d) not move Customer’s Property from Supplier’s Facility without prior written approval from Customer. Supplier will not sell, lend, rent, encumber, pledge, lease, transfer or otherwise dispose of Customer’s Property. With respect to provision (b), until Customer agrees to pay the cost of repairing or replacing the Customer’s Property, Supplier shall be relieved from any obligation to provide Products for the manufacturing of which the relevant Customer’s Property is necessary and Supplier shall have no liability hereunder for its failure to deliver such Products in accordance with the terms of this Agreement.
10.3   Return of Customer’s Property
(a) Supplier agrees that Customer has the right, subject to reasonable prior notice, to take possession of or to require that Supplier delivers, Customer’s Property to Customer (the “ Repossessed Property ”) prior to the Contractual Expiration Date, provided that: (i) the repossession of Repossessed Property shall be deemed to be a termination of this Agreement by Customer in accordance with the terms of Section 17.6 with respect to all Products for the manufacturing of which the Repossessed Property is necessary; (ii) Supplier shall be immediately relieved from any obligation hereunder to deliver Products for the manufacturing of which the Repossessed Property is necessary; and (iii) Supplier will have no obligation to deliver the Repossessed Property to Customer, unless Customer has fully paid all amounts owed to Supplier in connection with the Repossessed Property in accordance with the terms of this ARTICLE 10.
(b) Upon occurrence of the Contractual Expiration Date for a Product, Customer shall pick up Customer’s Property which is exclusively used for the manufacturing of such Product within forty-five (45) days: (i) after the relevant Contractual Expiration Date if Customer has not placed an end-of-production order for service parts related to such Product in accordance with the terms of Section 2.8; or (ii) after the End-of-Manufacturing Date if Customer has placed an end-of-production order for service parts related to such Product. Supplier will have no obligation to deliver the relevant Customer’s Property to Customer, unless Customer has fully paid all amounts owed to Supplier in connection with Customer’s Property in accordance with the terms of this ARTICLE 10. Any failure by Customer to pick up Customer’s Property within the aforementioned applicable period will be deemed to be an authorization granted to Supplier, at its option, to arrange for pick-up and transportation of the Customer’s Property to Customer’s main facility or to dispose of the Customer’s Property, in each case at Customer’s sole cost and expense.
(c) Any Customer’s Property (including Repossessed Property) returned to Customer in accordance with the terms of this ARTICLE 10 will be delivered to Customer Ex Works at Supplier’s Facility. Customer shall be responsible for all costs and expenses of dismantling, packaging and preparing for shipment or relocating, and loading (including, without limitation, skidding, movement to and removal from or within Supplier’s Facility) the relevant Customer’s Property. Customer shall perform such work in a careful and workmanlike manner without damage to Supplier’s Facility and at such times and in such manner reasonably approved
 
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by Supplier so as to not interfere with or disrupt production or other operations at Supplier’s Facility. Customer shall be solely responsible for repairing any damage to Supplier’s Facility resulting from the removal of the Customer’s Property. Customer, its employees, agents, representatives and contractors, shall comply with all applicable laws, ordinances, regulations and standards and all applicable Supplier safety rules and regulations while on Supplier’s Facility. Customer shall defend and indemnify Supplier from and against all Losses arising from, related to or caused by the performance of any work or obligation under this Agreement by Customer or its employees, agents, representatives and subcontractors on Supplier’s Facility or the use of the property of Supplier.
10.4 THE CUSTOMER’S PROPERTY (INCLUDING THE REPOSSESSED PROPERTY) RETURNED TO CUSTOMER BY SUPPLIER HEREUNDER ARE RETURNED ON AN “AS-IS – WHERE-IS” BASIS, WITH ALL FAULTS, AND SUPPLIER MAKES NO WARRANTIES OR REPRESENTATIONS WHATSOEVER, EXPRESS OR IMPLIED, CONCERNING ANY OF THE CUSTOMER’S PROPERTY.
ARTICLE 11
TECHNICAL DOCUMENTS
Customer hereby grants to Supplier, or undertakes to ensure that Supplier is granted, as the case may be, a non-exclusive, non-transferable right to use all patents, technical information and other forms of intellectual property rights associated with the Products for the purposes of fulfilling its obligations under this Agreement. Customer shall from time to time furnish to Supplier all drawings, specifications, assembly instructions, quality standards and other documentary information (collectively, the “ Technical Manufacturing Documents ”) which are necessary to provide the service of manufacturing Products pursuant to the terms of this Agreement. Customer shall have full responsibility for the design of Products and related manufacturing processes. Customer represents that it has the full right under its license agreements to have Supplier provide such manufacturing services to it under this Agreement.
ARTICLE 12
INDEMNIFICATION
12.1 Customer shall defend, indemnify and hold Supplier harmless from any and all Losses suffered or incurred by Supplier in connection with any and all demands, audits, actions and causes of action to the extent arising from or relating to: (a) any Products or Engineering Support, including any product liability or similar claims, any claims by Customer’s OEM customers, and any actual or alleged infringement of any third party intellectual property by reason of the design, manufacture, sale or use of Products or provision of Engineering Support; provided that Supplier shall remain liable for its obligations under Section 7.3 of this Agreement; (b) any Customer’s Property or Technical Manufacturing Documents, including any actual or alleged infringement of any third party intellectual property by reason of the consignment or use of Customer’s Property or processing or incorporation into the Products of Production Materials or use of Customer’s Technical Manufacturing Documents or any claims by a supplier of Production Materials related to the supply of Production Materials in accordance with the terms of Section 8.2; (c) any and all actions taken by Supplier as an agent for Customer in accordance
 
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with the terms of Sections 8.2 and 9.1; (d) any and all actions taken by Customer in connection with the Products or Engineering Support or this Agreement; (e) the actions of any employee, representative, subcontractor (including suppliers of Production Materials) or agent of Customer (including death, personal injury and/or property damage); or (f) Customer’s negligence or willful misconduct, in each case except to the extent that such Losses arose solely from the gross negligence or willful misconduct of Supplier or its Representatives (any demands, audits, actions and causes of action to the extent arising under paragraphs (a) through (f) above, a “ Claim ”).
12.2 Supplier shall defend, indemnify and hold Customer harmless from any and all Losses suffered or incurred by Customer in connection with Supplier’s gross negligence or willful misconduct; provided, however, that Supplier’s aggregate maximum liability to Customer under this Agreement shall not exceed the aggregate amount of fees received pursuant to this Agreement in connection with the supply of Products and provision of Engineering Support.
12.3 Each Party acknowledges and agrees that the contractual remedies provided hereunder for failure to comply with the terms of this Agreement shall be the sole and exclusive remedies of the Parties and their Affiliates and their respective successors or assigns in respect of any claim arising under or out of this Agreement.
12.4 The provisions of Section 5.5 of the Separation and Distribution Agreement shall apply to indemnification claims under this Agreement, mutatis mutandis .
ARTICLE 13
LIMITATION OF LIABILITY
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER SUPPLIER NOR CUSTOMER SHALL BE LIABLE UNDER THIS AGREEMENT TO THE OTHER FOR ANY CONSEQUENTIAL, SPECIAL, INDIRECT, PUNITIVE, EXEMPLARY, REMOTE, SPECULATIVE OR SIMILAR DAMAGES OR ANY LOST PROFITS OR DAMAGES CALCULATED BASED ON A MULTIPLE OF PROFITS, REVENUE OR ANY OTHER FINANCIAL METRICS IN EXCESS OF COMPENSATORY DAMAGES OF THE OTHER ARISING IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY (OTHER THAN ANY SUCH LIABILITY WITH RESPECT TO A THIRD-PARTY CLAIM AS TO WHICH A PARTY IS ENTITLED TO BE INDEMNIFIED HEREUNDER).
ARTICLE 14
FORCE MAJEURE
14.1 Except for the payment obligations of either Party, each Party shall be temporarily excused from performing its obligations under this Agreement for so long as such performance is prevented or delayed by any event of Force Majeure. The term “ Force Majeure ” shall, for purposes of this Agreement, be defined as: (i) any acts of God, natural disasters or wars; (ii) any strike, lockout or labor dispute at the plant of a Party or its suppliers; (iii) any shortage or curtailment of utilities, materials or transportation; (iv) any act or omission of any government authority; or (v) any other cause beyond the reasonable control of a Party.
 
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14.2 A Party affected by an event of Force Majeure shall promptly notify the other party and shall use commercially reasonable efforts to overcome and mitigate such event of Force Majeure. Without limiting the foregoing, if Supplier is unable to supply any Products due to Force Majeure, Customer shall be free to purchase such Products from other suppliers for so long as Supplier remains unable to do so.
ARTICLE 15
OPERATIONAL COMMITTEE; DISPUTE COMMITTEE
15.1 Each Party shall designate their respective employees identified below to conduct the activities described in Section 15.3 (such designated employees, collectively, the “ Operational Committee ”):
(a) Customer’s Plant Manager; and
(b) Supplier’s Plant Manager.
Each Party may elect from time to time, upon reasonable prior notice to the other Party, to have employees who are not members of the Operational Committee attend meetings of the Operational Committee to participate in discussions of specific topics scheduled for discussion during such meeting. Each Party may change from time to time in its discretion its members of the Operational Committee; provided that it shall inform the other Party in writing and shall ensure that the newly appointed member has comparable expertise to the replaced employee.
15.2 Members of the Operational Committee will meet either physically or telephonically, as is acceptable to a majority of the members of the Operational Committee, as follows:
(a) within the first two (2) months after the Effective Date, once a week;
(b) within the last ten (10) months of the twelve (12) month period after the Effective Date, every other week; and
(c) during the remainder of the term of this Agreement, once per calendar quarter.
Notwithstanding the foregoing, each Party may at any time elect to convene an ad hoc meeting of the Operational Committee; provided that: (i) it has submitted in writing to the other Party a description of the matters it would like to discuss during such ad hoc meeting; and (ii) the other Party agrees these matters should be discussed ahead of the next regularly scheduled meeting of the Operational Committee. The Parties will jointly determine the date and the format of such meeting.
Each Party shall cause its members of the Operational Committee to participate in the meetings of the Operational Committee in accordance with the schedule set forth above;
 
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provided that a Party may elect in its discretion to refer any matter falling within the responsibility of the Operational Committee as set forth in Section 15.3 to the Dispute Committee if the members of the Operational Committee of the other Party with the expertise to address the relevant matters repeatedly fail to be available to discuss such matters in a meeting of the Operational Committee.
15.3 The Operational Committee is responsible for the following activities:
(a) reviewing and discussing all matters that require the Parties’ cooperation or consultation with each other hereunder or joint actions from the Parties;
(b) reviewing and discussing appropriate actions with respect to any operational day-to-day matter for the management or resolution of which the Agreement provides no guidance;
(c) reviewing and discussing all claims, issues, disagreements or disputes that may arise from, under or in connection with this Agreement; and
(d) reviewing and discussing all matters that a Party elects to refer to the Operational Committee.
15.4 Any matter described in Section 15.3 that the Operational Committee fails to address or resolve to the satisfaction of both Parties within sixty (60) days after the circumstances leading to the dispute have first been discussed during a meeting of the Operational Committee (a “ Dispute ”) may be referred by any Party to Supplier’s Vice President, Electronic Controls and Customer’s Vice President, Powertrain Electronics & Electrification (such designed executives, the “ Dispute Committee ”). The Parties shall attempt in good faith to resolve the dispute by negotiation between their respective representatives on the Dispute Committee. The Parties agree that the members of the Dispute Committee shall have full and complete authority on behalf of their respective Parties to resolve any Disputes submitted to the Dispute Committee pursuant to this Section 15.4. If the Dispute Committee fails to reach agreement on a satisfactory resolution of the Disputes within thirty (30) days of the date of referral of the relevant Dispute to the Dispute Committee by the Operational Committee, such Dispute shall be resolved by arbitration in accordance with the terms of Section 4.2 of the Separation and Distribution Agreement.
ARTICLE 16
GOVERNING LAW; DISPUTE RESOLUTION
16.1 This Agreement (and any claims or disputes arising out of or related hereto or to the transactions contemplated hereby or to the inducement of any Party to enter herein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by and construed and interpreted in accordance with the Laws of [ ● ] , irrespective of the choice of laws principles of [ ● ] , including all matters of validity, construction, effect, enforceability, performance and remedies.
 
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16.2 Article IV of the Separation and Distribution Agreement shall apply to all Disputes arising out of or relating to this Agreement, mutatis mutandis .
ARTICLE 17
TERM AND TERMINATION
17.1 This Agreement shall become effective on the Effective Date and shall remain in effect, in respect of each Product, until the Contractual Expiration Date of such Product, except that this Agreement shall terminate in respect of each Product with respect to which Customer has placed a one-time final order in accordance with Section 2.8 of this Agreement, on the date of receipt of such order by Supplier. Supplier will have no obligation under this Agreement to continue to supply a Product beyond the Contractual Expiration Date of such Product (as set forth in Exhibit  A ), even if Customer and its OEM customer agree to extend the duration of series production of such Product beyond its Contractual Expiration Date. Any service part obligation of Customer to its OEM customers for the Products on Exhibit  A shall be governed, as far as Supplier is concerned, by the terms of Section 2.7. Notwithstanding the foregoing, the provisions of ARTICLE 4, ARTICLE 7, ARTICLE 10, ARTICLE 12, ARTICLE 13, ARTICLE 16 and ARTICLE 18 shall survive the expiration or termination by any reason whatsoever.
17.2 Notwithstanding any provision to the contrary and unless terminated earlier in accordance with the terms of this ARTICLE 17, this Agreement will terminate of its own accord with respect to all Products on [ ● ] .
17.3 If either Party fails to perform any of its material duties or obligations pursuant to this Agreement and such breach is not cured within fifteen (15) days, in the event such breach involves the payment of money, or within thirty (30) days, with respect to any other breach, after notice to such Party specifying the nature of such failure, the other Party may terminate this Agreement in its entirety, or with respect to any or all of the services provided to the defaulting Party, upon further notice to the defaulting Party.
17.4 Either Party may terminate this Agreement immediately upon the occurrence of any of the following events:
(a) the other Party: (i) is prevented from performing its obligations by reason of an event of Force Majeure for a period of six (6) months or more; (ii) becomes insolvent; or (iii) enters bankruptcy, receivership, liquidation, composition of creditors, dissolution or similar proceeding; or
(b) a significant portion of the assets of the other Party necessary for the performance of this Agreement becomes subject to attachment, embargo or expropriation; or
(c) the performance of this Agreement becomes in any material respect impossible or commercially impracticable by virtue of any order, action, regulation, interference or intervention of any government or agency thereof.
 
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17.5 Supplier may terminate this Agreement in respect of a Product if, during a six (6) month period, Supplier receives from Customer, with respect to such Product, no orders or orders for less than 1,000 pieces in total.
17.6 Customer may terminate this Agreement without cause upon six (6) months’ notice to Supplier in respect of one, several or all Products prior to the relevant Contractual Expiration Date, provided that: (i) Customer shall be liable for any Termination Charges related to the terminated Product(s); and that (ii) Supplier may adjust in its reasonable discretion the Service Manufacturing Fee for the non-terminated Products if Supplier reasonably determines that the termination of the supply of the relevant Product(s) will increase the cost of production of the non-terminated Products.
17.7 The provisions of this Article are without prejudice to any other rights or remedies either Party may have by reason of the default of the other Party.
ARTICLE 18
GENERAL PROVISIONS
18.1   Government Approvals . All the Parties shall be responsible for compliance with and for the obtaining of such approvals and/or permits as may be required under national, state and local laws, ordinances, regulations and rules as may be applicable to the performance of their respective responsibilities and obligations under this Agreement.
18.2   Relationship of the Parties . The relationship of the Parties to one another is that of independent contractors and no Party nor its agents or employees shall be considered employees or agents of another Party, unless specifically provided otherwise herein. This Agreement does not constitute and shall not be construed as constituting a partnership or joint venture or grant of a franchise between Supplier and Customer. Neither Party shall have the right to bind the other Party to any obligations to third parties, unless specifically provided otherwise herein.
18.3   Assignment; Successors and Assigns; No-Third Party Beneficiaries . This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns; provided , however , that no Party may assign its respective rights or delegate its respective obligations under this Agreement without the express prior written consent of the other Party. Notwithstanding the foregoing, no such consent shall be required for the assignment of a Party’s rights and obligations under this Agreement in whole in connection with a change of control of a Party so long as the resulting, surviving or transferee person assumes all the obligations of the relevant party thereto by operation of law or pursuant to an agreement in form and substance reasonably satisfactory to the other Party. Nothing herein is intended to, or shall be construed to, prohibit either Party or any member of its Affiliates from being party to or undertaking a change of control. No provision of this Agreement is intended to confer any rights, benefits, remedies or Losses hereunder upon any person other than the Parties and their respective successors and permitted assigns.
 
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18.4   Amendments and Waivers
(a) No provisions of this Agreement shall be waived, amended, supplemented or modified by a Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Party.
(b) No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
18.5  N otices . All notices, requests, claims, demands or other communications under this Agreement shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by facsimile or electronic transmission with receipt confirmed (followed by delivery of an original via overnight courier service), or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 18.5):
If to Customer, to :
Delphi Technologies PLC
[Address]
Attention: Liam Butterworth, President and Chief Executive Officer
Facsimile No.: [●]
With a copy (which shall not constitute notice) to :
Delphi Technologies PLC
5820 Delphi Drive
Troy, MI 48098
Attention: James Harrington, General Counsel
Facsimile No.: [●]
If to Supplier, to :
Delphi Automotive PLC
5725 Delphi Drive
Troy, MI 48098
Attention: Joseph Massaro, Senior Vice President and Chief Financial Officer
Facsimile No.: 1.248.813.2648
 
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With a copy (which shall not constitute notice) to :
Delphi Automotive PLC
5725 Delphi Drive
Troy, MI 48098
Attention: David Sherbin, Senior Vice President, General Counsel, Secretary and Chief Compliance Officer
Facsimile No.: 1.248.813.2491
Any Party may, by notice to the other Party, change the address and contact person to which any such notices are to be given.
18.6   Headings . The article, section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
18.7   Severability . If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or thereof, or the application of such provision to persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties.
18.8   Controlling Terms . Unless provided otherwise herein, the provisions of this Agreement shall govern Supplier’s manufacture of Products for Customer. This Agreement contains all the representations and agreements between the Parties and there are no other agreements or understandings, oral or in writing, regarding the matters covered hereby, except for those orders issued by Customer to Supplier pursuant to Section 2.4 and accepted by Supplier. Any terms submitted by Customer, including on any document or form submitted by Customer which are in addition to or inconsistent with those set forth herein, are hereby expressly rejected by Supplier and shall not apply to Customer’s purchase of Products from Supplier unless agreed to in a writing signed by both Parties.
18.9   Counterparts; Effectiveness . This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each Party shall have received a counterpart hereof signed by all of the other Parties. The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission in .PDF or other equivalent format or by facsimile shall be sufficient to bind the Parties to the terms and conditions of this Agreement.
18.10   Entire Agreement . This Agreement, the Separation and Distribution Agreement and the exhibits, annexes and schedules hereto and thereto contain the entire agreement between the Parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter and there are no agreements or understandings between the Parties with respect to such subject matter other than those set forth or referred to herein.
 
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in duplicate by their duly authorized representatives as of the day and year first above written.

[SUPPLIER]	
	
By:                                                                                                 	
Name:                                                                                            	
Its:                                                                                                  	
	
[CUSTOMER]	
	
By:                                                                                                 	
Name:                                                                                            	
Its:                                                                                                  	
 
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Exhibit 10.5
Execution Version
CREDIT AGREEMENT
dated as of September 7, 2017
among
DELPHI JERSEY HOLDINGS PLC,
as Parent,
DELPHI POWERTRAIN CORPORATION,
as U.S. Parent Borrower,
The Subsidiary Borrowers Party Hereto,
The Lenders Party Hereto,
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent,
GOLDMAN SACHS BANK USA
and
BARCLAYS BANK PLC,
as Co-Syndication Agents,
BANK OF AMERICA, N.A.
CITIBANK, N.A.
and
DEUTSCHE BANK SECURITIES INC.,
as Co-Documentation Agents

JPMORGAN CHASE BANK, N.A.,
BARCLAYS BANK PLC,
GOLDMAN SACHS BANK USA,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
CITIGROUP GLOBAL MARKETS INC.
and
DEUTSCHE BANK SECURITIES INC.,
as Joint Bookrunners and Joint Lead Arrangers

TABLE OF CONTENTS

 	 	 	  	Page	 	
ARTICLE I	 	
	
Definitions	 	
			
SECTION 1.01.	 	Defined Terms	  	 	1	 	
SECTION 1.02.	 	Classification of Loans and Borrowings	  	 	46	 	
SECTION 1.03.	 	Terms Generally	  	 	46	 	
SECTION 1.04.	 	Accounting Terms; GAAP	  	 	47	 	
SECTION 1.05.	 	Payments on Business Days	  	 	48	 	
SECTION 1.06.	 	Times of Day	  	 	48	 	
SECTION 1.07.	 	Currency Translation; Change of Currency	  	 	48	 	
SECTION 1.08.	 	Certain Calculations and Tests	  	 	49	 	
	
ARTICLE II	 	
	
The Credits	 	
			
SECTION 2.01.	 	Commitments	  	 	50	 	
SECTION 2.02.	 	Loans and Borrowings	  	 	50	 	
SECTION 2.03.	 	Requests for Borrowings	  	 	51	 	
SECTION 2.04.	 	Swingline Loans	  	 	52	 	
SECTION 2.05.	 	Letters of Credit	  	 	54	 	
SECTION 2.06.	 	Funding of Borrowings	  	 	58	 	
SECTION 2.07.	 	Interest Elections	  	 	59	 	
SECTION 2.08.	 	Termination and Reduction of Commitments	  	 	61	 	
SECTION 2.09.	 	Repayment of Loans and B/As; Evidence of Debt	  	 	62	 	
SECTION 2.10.	 	Prepayment of Loans and B/As	  	 	63	 	
SECTION 2.11.	 	Fees	  	 	66	 	
SECTION 2.12.	 	Interest	  	 	67	 	
SECTION 2.13.	 	Alternate Rate of Interest	  	 	68	 	
SECTION 2.14.	 	Increased Costs	  	 	69	 	
SECTION 2.15.	 	Break Funding Payments	  	 	70	 	
SECTION 2.16.	 	Taxes	  	 	70	 	
SECTION 2.16A.	 	VAT	  	 	77	 	
SECTION 2.17.	 	Payments Generally; Pro Rata Treatment; Sharing of Setoffs	  	 	77	 	
SECTION 2.18.	 	Mitigation Obligations; Replacement of Lenders	  	 	79	 	
SECTION 2.19.	 	Expansion Option	  	 	80	 	
SECTION 2.20.	 	Extended Term Loans and Extended Revolving Commitments	  	 	82	 	
SECTION 2.21.	 	Judgment Currency	  	 	84	 	
SECTION 2.22.	 	Defaulting Lenders	  	 	84	 	
SECTION 2.23.	 	Bankers’ Acceptances	  	 	86	 	
SECTION 2.24.	 	Circumstances Making Bankers’ Acceptances Unavailable	  	 	89	 	
SECTION 2.25.	 	Borrower Agent	  	 	90	 	
 
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 	 	 	  	Page	 	
ARTICLE III	 	
	
Representations and Warranties	 	
			
SECTION 3.01.	 	Organization; Powers; Subsidiaries	  	 	90	 	
SECTION 3.02.	 	Authorization; Enforceability	  	 	90	 	
SECTION 3.03.	 	Governmental Approvals; No Conflicts	  	 	91	 	
SECTION 3.04.	 	Financial Statements; Financial Condition; No Material Adverse Change	  	 	91	 	
SECTION 3.05.	 	Properties	  	 	91	 	
SECTION 3.06.	 	Litigation and Environmental Matters	  	 	92	 	
SECTION 3.07.	 	Compliance with Laws	  	 	92	 	
SECTION 3.08.	 	Investment Company Status	  	 	92	 	
SECTION 3.09.	 	Taxes	  	 	92	 	
SECTION 3.10.	 	Solvency	  	 	92	 	
SECTION 3.11.	 	Labor Matters	  	 	92	 	
SECTION 3.12.	 	Disclosure	  	 	93	 	
SECTION 3.13.	 	Anti-Corruption Laws; Sanctions	  	 	93	 	
SECTION 3.14.	 	Federal Reserve Regulations	  	 	93	 	
SECTION 3.15.	 	Security Interests	  	 	93	 	
	
ARTICLE IV	 	
	
Conditions	 	
			
SECTION 4.01.	 	Effective Date	  	 	94	 	
SECTION 4.02.	 	Closing Date	  	 	94	 	
SECTION 4.03.	 	Each Credit Event	  	 	96	 	
	
ARTICLE V	 	
	
Affirmative Covenants	 	
			
SECTION 5.01.	 	Financial Statements and Other Information	  	 	97	 	
SECTION 5.02.	 	Notices of Material Events	  	 	98	 	
SECTION 5.03.	 	Existence; Conduct of Business	  	 	98	 	
SECTION 5.04.	 	Payment of Taxes	  	 	99	 	
SECTION 5.05.	 	Maintenance of Properties; Insurance	  	 	99	 	
SECTION 5.06.	 	Inspection Rights	  	 	99	 	
SECTION 5.07.	 	Compliance with Laws	  	 	99	 	
SECTION 5.08.	 	Use of Proceeds and Letters of Credit	  	 	99	 	
SECTION 5.09.	 	Further Assurances; Additional Security and Guarantees	  	 	100	 	
SECTION 5.10.	 	Maintenance of Ratings	  	 	101	 	
SECTION 5.11.	 	Collateral Suspension Period	  	 	101	 	
SECTION 5.12.	 	Guaranty Release During Covenant Suspension Period	  	 	102	 	
SECTION 5.13.	 	Unrestricted Subsidiaries	  	102	 	
 
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 	 	 	  	Page	 	
ARTICLE VI	 	
	
Negative Covenants	 	
			
SECTION 6.01.	 	Indebtedness	  	 	103	 	
SECTION 6.02.	 	Liens	  	 	107	 	
SECTION 6.03.	 	Fundamental Changes	  	 	109	 	
SECTION 6.04.	 	Restricted Payments	  	 	110	 	
SECTION 6.05.	 	Investments	  	 	111	 	
SECTION 6.06.	 	Prepayments, Etc., of Indebtedness	  	 	113	 	
SECTION 6.07.	 	Transactions with Affiliates	  	 	113	 	
SECTION 6.08.	 	Changes in Fiscal Year	  	 	114	 	
SECTION 6.09.	 	Financial Covenant	  	 	114	 	
SECTION 6.10.	 	Restrictive Agreements	  	 	114	 	
SECTION 6.11.	 	Dispositions	  	 	115	 	
SECTION 6.12.	 	Lines of Business	  	 	116	 	
SECTION 6.13.	 	Anti-Corruption Laws and Sanctions	  	 	117	 	
	
ARTICLE VII	 	
	
Events of Default	 	
	
ARTICLE VIII	 	
	
The Administrative Agent	 	
	
ARTICLE IX	 	
	
Miscellaneous	 	
			
SECTION 9.01.	 	Notices	  	 	126	 	
SECTION 9.02.	 	Waivers; Amendments	  	 	128	 	
SECTION 9.03.	 	Expenses; Indemnity; Damage Waiver	  	 	131	 	
SECTION 9.04.	 	Successors and Assigns	  	 	133	 	
SECTION 9.05.	 	Survival	  	 	136	 	
SECTION 9.06.	 	Counterparts; Integration; Effectiveness; Effect of Restatement	  	 	136	 	
SECTION 9.07.	 	Severability	  	 	136	 	
SECTION 9.08.	 	Right of Setoff	  	 	137	 	
SECTION 9.09.	 	Governing Law; Jurisdiction; Consent to Service of Process	  	 	137	 	
SECTION 9.10.	 	WAIVER OF JURY TRIAL	  	 	138	 	
SECTION 9.11.	 	Headings	  	 	138	 	
SECTION 9.12.	 	Confidentiality	  	 	138	 	
SECTION 9.13.	 	USA PATRIOT Act	  	 	139	 	
SECTION 9.14.	 	Interest Rate Limitation	  	 	139	 	
SECTION 9.15.	 	No Fiduciary Duty	  	 	139	 	

SCHEDULES:	
			
Schedule 1.01	 	–  	  	Existing Letters of Credit	
Schedule 2.01	 	–  	  	Commitments	
Schedule 3.01	 	–  	  	Subsidiaries	
Schedule 5.09(b)	 	–  	  	Mortgaged Property	
Schedule 6.01	 	–  	  	Existing Indebtedness	
Schedule 6.02	 	–  	  	Existing Liens	
Schedule 6.04	 	–  	  	Existing Benefit Plans	
 
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Schedule 6.05	 	–  	  	Investments	
Schedule 6.07	 	–  	  	Affiliate Transactions	
Schedule 6.11	 	–  	  	Contemplated Asset Sales	
Schedule 9.01	 	–  	  	Issuing Bank Addresses for Notice	
	
EXHIBITS:	
			
Exhibit A	 	–  	  	Form of Assignment and Assumption	
Exhibit B-1	 	–  	  	Form of Borrowing Request	
Exhibit B-2	 	–  	  	Form of Interest Election Request	
Exhibit B-3	 	–  	  	Form of Letter of Credit Issuance Request	
Exhibit B-4	 	–  	  	Form of Discount Note	
Exhibit B-5	 	–  	  	Form of Swingline Loan Borrowing Request	
Exhibit C	 	–  	  	Form of First Lien Intercreditor Agreement	
Exhibit D-1	 	–  	  	Form of U.S. Tax Compliance Certificate (Foreign Lenders not Partnerships)	
Exhibit D-2	 	–  	  	Form of U.S. Tax Compliance Certificate (Foreign Lenders Partnerships)	
Exhibit D-3	 	–  	  	Form of U.S. Tax Compliance Certificate (Foreign Participants not Partnerships)	
Exhibit D-4	 	–  	  	Form of U.S. Tax Compliance Certificate (Foreign Participant Partnerships)	
Exhibit E	 	–  	  	Form of Discounted Prepayment Option Notice	
Exhibit F	 	–  	  	Form of Lender Participation Notice	
Exhibit G	 	–  	  	Form of Discounted Voluntary Prepayment Notice	
Exhibit H	 	–  	  	Form of Guaranty	
Exhibit I	 	–  	  	Form of Pledge and Security Agreement	
Exhibit J	 	–  	  	Form of Joinder Agreement	
 
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CREDIT AGREEMENT dated as of September 7, 2017, (this “ Agreement ”) among DELPHI JERSEY HOLDINGS PLC, a public limited company incorporated under the laws of Jersey (“ Parent ”), DELPHI POWERTRAIN CORPORATION, a Delaware corporation, and a wholly owned subsidiary of Parent (the “ U.S. Parent Borrower ”), the SUBSIDIARY BORROWERS (as defined herein) from time to time party hereto, the LENDERS from time to time party hereto, the ISSUING BANKS from time to time party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.
Delphi Automotive PLC (“ Delphi Automotive ”) intends to transfer the business constituting its powertrain systems business as contemplated by the Parent’s Form 10 filed with the SEC (as defined herein) on June 9, 2017, as amended on August 11, 2017 and September 7, 2017 (and as may be further amended by any further amendments that, in each case, would not cause the failure of the condition set forth in Section 4.02(i)(i) to be satisfied as of the Closing Date, the “ Form 10 ”) (collectively, the “ Spin-Off Business ”) to Parent and its Subsidiaries and, on the Closing Date (as defined herein) Delphi Automotive will distribute 100% of the stock of Parent to Delphi Automotive’s existing shareholders (collectively, the “ Spin-Off ”). In connection with the Spin-Off, the Borrowers have requested that (a) the Tranche A Term Lenders (as hereinafter defined) collectively lend to the Borrowers on the Closing Date Tranche A Term Loans in an aggregate amount of $750,000,000, the net proceeds of which, together with the net proceeds of the Senior Notes (as hereinafter defined), will be used (i) to finance a distribution (the “ Distribution ”) by Parent to Delphi Automotive of up to $1,400,000,000 in connection with the Spin-Off, (ii) for general corporate purposes and (iii) to pay fees and expenses in connection with the foregoing and (b) the Revolving Lenders (as hereinafter defined) provide Revolving Commitments to the Borrowers in an aggregate amount of $500,000,000.
ARTICLE I
Definitions
SECTION 1.01.     Defined Terms . As used in this Agreement, the following terms have the meanings specified below:
“ ABR ,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.
“ Acceptable Discount ” has the meaning provided in Section 2.10(c)(iii).
“ Acceptance Date ” has the meaning provided in Section 2.10(c)(ii).
“ Acceptance Fee ” has the meaning assigned to such term in Section 2.23(m).
“ Acquired Entity or Business ” means each Person, property, business or assets acquired by the Parent Entity or a Restricted Subsidiary, to the extent not subsequently sold, transferred or otherwise disposed of by the Parent Entity or such Restricted Subsidiary.
“ Act ” has the meaning assigned to such term in Section 9.13.
“ Additional Credit Extension Amendment ” means an amendment to this Agreement (which may, at the option of the Administrative Agent, be in the form of an amendment and restatement of this Agreement) providing for any Incremental Term Loans, Replacement Term Loans, Extended Term Loans or Extended Revolving Commitments, which shall be consistent with the applicable provisions of this Agreement relating to Incremental Term Loans, Replacement Term Loans, Extended Term Loans or Extended Revolving Commitments and otherwise reasonably satisfactory to the Administrative Agent.

“ Adjusted LIBO Rate ” means, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Eurocurrency Borrowing for such Interest Period, multiplied by (b) the Statutory Reserve Rate.
“ Administrative Agent ” means JPMorgan Chase Bank, N.A. (including its branches and Affiliates), in its capacity as administrative agent for the Lenders hereunder, or any successor administrative agent.
“ Administrative Questionnaire ” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“ Affiliate ” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“ Affiliate Transaction ” has the meaning assigned to such term in Section 6.07.
“ Agents ” means the Administrative Agent, the Arrangers, the Co-Syndication Agents and the Co-Documentation Agents.
“ Agreement ” has the meaning set forth in the preamble to this Agreement.
“ Agreement Currency ” has the meaning assigned to it in Section 2.21.
“ Alternate Base Rate ” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus  1 ⁄ 2 of 1% and (c) the Adjusted LIBO Rate for Dollars for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that, for the purpose of this definition, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen Rate (or if the LIBO Screen Rate is not available for such one month Interest Period, the Interpolated Rate) at approximately 11:00 a.m. London time on such day. Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate, respectively.
“ Alternative Currency ” means Euro, Sterling, Canadian Dollars and any other currencies (other than Dollars) as shall be agreed from time to time among the Administrative Agent, each applicable Lender, each Issuing Bank and the Borrower Agent.
“ Alternative Currency Letter of Credit ” means a Letter of Credit denominated in an Alternative Currency.
“ Anti-Corruption Laws ” means all laws, rules, and regulations of any jurisdiction applicable to the Parent Entity, the Borrowers or any of their respective Restricted Subsidiaries from time to time concerning or relating to bribery or corruption or money laundering.
“ Applicable Creditor ” has the meaning assigned to it in Section 2.21.
 
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“ Applicable Participants ” means with respect to any Swingline Loan or Letter of Credit, the Revolving Lenders.
“ Applicable Percentage ” means, at any time (a) with respect to any Revolving Lender, the percentage equal to a fraction the numerator of which is the amount of such Lender’s Revolving Commitment and the denominator of which is the aggregate Revolving Commitments; provided that in the case of Section 2.22 when a Defaulting Lender shall exist, “Applicable Percentage” shall mean the percentage equal to a fraction the numerator of which is the amount of such Lender’s Revolving Commitment, and the denominator of which is the aggregate Revolving Commitments (disregarding any Defaulting Lender’s Revolving Commitment) and (b) with respect to the Term Loans of any Class, a percentage equal to a fraction the numerator of which is such Lender’s outstanding principal amount of the Term Loans of such Class and the denominator of which is the aggregate outstanding amount of the Term Loans of such Class. If the Revolving Commitments have terminated or expired, the Applicable Percentages of the Revolving Lenders shall be determined based upon the Revolving Commitments most-recently in effect, giving effect to any assignments of Revolving Loans, LC Exposures and Swingline Exposures and to any Revolving Lender’s status as a Defaulting Lender that occur after such termination or expiration.
“ Applicable Rate ” means with respect to Tranche A Term Loans, Revolving Loans, Swingline Loans and facility fees with respect to the Revolving Facilities, the applicable rate determined as follows based on the Corporate Ratings:

Pricing
Level	  	Corporate Ratings	  	Facility Fee	 	 	Applicable Rate for
Eurocurrency
Loans and BA
Drawings	 	 	Applicable Rate for
ABR Loans, and
Canadian Prime
Rate Loans	 	
 	  	 	  	 	 	 	Tranche
A Term
Facility	 	 	Revolving
Facility	 	 	Tranche
A Term
Facility	 	 	Revolving
Facility	 	
1	  	At least BBB- (stable or better) or at least Baa3 (stable or better)	  	 	0.20	% 	 	 	1.50	% 	 	 	1.30	% 	 	 	0.50	% 	 	 	0.30	% 	
2	  	Pricing Level 1 does not apply but at least BB+ (stable or better) or at least Ba1 (stable or better)	  	 	0.25	% 	 	 	1.625	% 	 	 	1.375	% 	 	 	0.625	% 	 	 	0.375	% 	
3	  	Neither Pricing Level 1 nor Pricing Level 2 applies but at least BB (stable or better) or at least Ba2 (stable or better)	  	 	0.30	% 	 	 	1.75	% 	 	 	1.45	% 	 	 	0.75	% 	 	 	0.45	% 	
4	  	Pricing Levels 1, 2 and 3 do not apply but at least BB- (stable or better) or at least Ba3 (stable or better)	  	 	0.35	% 	 	 	1.875	% 	 	 	1.525	% 	 	 	0.875	% 	 	 	0.525	% 	
5	  	None of Pricing Levels 1, 2, 3 or 4 applies	  	 	0.45	% 	 	 	2.00	% 	 	 	1.55	% 	 	 	1.00	% 	 	 	0.55	% 	
For purposes of the foregoing (i) if the Corporate Ratings shall fall within the same Pricing Level, the Applicable Rate shall be determined by reference to such Pricing Level, (ii) if both Corporate Ratings are in effect and if such Corporate Ratings shall fall within different Pricing Levels, the Applicable Rate shall
 
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be based on (a) the higher of the two ratings if one rating is one Pricing Level lower than the other, (b) one category next below that of the higher rating if one rating is two Pricing Levels lower than the other and (c) one Pricing Level higher than the lower rating if one rating is more than two Pricing Levels lower than the other, (iii) if only one (but not both) Corporate Rating is in effect, the Applicable Rate shall be determined by reference to the Pricing Level in which such rating falls, (iv) if no Corporate Rating is in effect (other than by reason of the circumstances referred to in the last sentence of this definition), then each Rating Agency shall be deemed to have established a rating in Pricing Level 5 and (v) if the Corporate Ratings established or deemed to have been established by a Rating Agency, shall be changed (other than as a result of a change in the rating system of such Rating Agency), such change shall be effective as of the date on which it is first announced by such Rating Agency, irrespective of when notice of such change shall have been furnished by the Borrower Agent to the Administrative Agent and the Lenders. If the rating system of any Rating Agency shall change, or if any Rating Agency shall cease to be in the business of rating corporate obligors, the Borrower Agent and the Lenders shall negotiate in good faith to amend the definition of the “Applicable Rate” to reflect such changed rating system or the unavailability of ratings from such Rating Agency and, pending the effectiveness of any such amendment, the Applicable Rate shall, at the option of the Borrower Agent, be determined (i) as set forth above using the rating from such Rating Agency most recently in effect prior to such change or cessation or (ii) disregarding the rating from such Rating Agency. References in this paragraph to Applicable Rate include the rate applicable to the facility fees payable pursuant to Section 2.11(a).
“ Approved Fund ” has the meaning assigned to such term in Section 9.04(b).
“ Arrangers ” means JPMCB, Barclays Bank PLC, Goldman Sachs Bank USA, Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any other registered broker-dealer wholly-owned by Bank of America Corporation to which all or substantially all of Bank of America Corporation’s or any of its subsidiaries’ investment banking, commercial lending services or related businesses may be transferred following the date of this Agreement), Citigroup Global Markets Inc., and Deutsche Bank Securities Inc. in their respective capacities as joint lead arrangers and joint bookrunners for this Agreement.
“ Asset Sale ” means any Disposition of Property or series of related Dispositions of Property pursuant to clause (j) of Section 6.11 which yields Net Cash Proceeds to the Parent Entity or any of its Restricted Subsidiaries in excess of (i) $15,000,000 in the aggregate for any such Disposition or series of related Dispositions and (ii) $75,000,000 when aggregated with all other Dispositions pursuant to clause (j) of Section 6.11 following the Effective Date (or if a Covenant Suspension Period has been in effect, following the most recent Reversion Date), other than Dispositions that are excluded as Asset Sales as a result of clause (i) of this definition.
“ Assignment and Assumption ” means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04 of this Agreement), and accepted by the Administrative Agent, in the form of Exhibit  A or any other form approved by the Administrative Agent.
“ Assignment Tax ” has the meaning assigned to it in the definition of “Other Taxes.”
“ Attributable Receivables Indebtedness ” at any time means the principal amount of Indebtedness which (i) if a Permitted Receivables Facility is structured as a secured lending agreement, would constitute the principal amount of such Indebtedness or (ii) if a Permitted Receivables Facility is structured as a purchase agreement or factoring arrangement, would be outstanding at such time under the Permitted Receivables Facility if the same were structured as a secured lending agreement rather than a purchase agreement.
 
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“ Augmenting Lender ” has the meaning assigned to such term in Section 2.19.
“ Availability Period ” means, with respect to any Revolving Facility, the period from and including the Closing Date to but excluding the earlier of the Revolving Credit Maturity Date and the date of termination of the Revolving Commitments under such Revolving Facility in accordance with the provisions of this Agreement.
“ Available Amount ” means, at any time (the “ Reference Time ”), an amount (which may not be negative) equal to:
(a)    the sum, without duplication, of:
(i)    $150,000,000, plus
(ii)    an amount (if positive) equal to 50% of Consolidated Net Income for the period (taken as a single accounting period) commencing on the first day of the first fiscal quarter of Parent following the Closing Date through the end of the most recent fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or (b) prior to the Reference Time (excluding amounts of Consolidated Net Income for any fiscal quarter during which a Covenant Suspension Period was in effect), plus
(iii)    the amount of any cash or Cash Equivalents received by the Parent Entity (other than from a Restricted Subsidiary) from and including the Closing Date through and including the Reference Time (excluding any such amounts received during a Covenant Suspension Period) from the issuance and sale of its Qualified Equity Interests except to the extent applied pursuant to Section 6.06(a)(vi), plus
(iv)    the amount of net cash proceeds received by the Parent Entity and its Restricted Subsidiaries following the Closing Date through and including the Reference Time of any Indebtedness of Parent or its Restricted Subsidiaries issued after the Effective Date that has been converted into or exchanged for Qualified Equity Interests (excluding any such net cash proceeds received (a) during a Covenant Suspension Period or (b) from the Parent Entity or a Restricted Subsidiary) except to the extent applied pursuant to Section 6.06(a)(ii); plus
(v)    the amount of any distribution in cash or Cash Equivalents received by the Parent Entity or any Restricted Subsidiary or received by the Parent Entity or any Restricted Subsidiary upon any Disposition following the Closing Date through and including the Reference Time (excluding any such amounts received during a Covenant Suspension Period), in each case, in respect of any Investment made in reliance on Section 6.05(i) (not to exceed the original amount of such Investment), plus
(vi)    upon a redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (excluding any such redesignation made during a Covenant Suspension Period), the Fair Market Value of the Parent Entity’s proportionate interest in such Subsidiary immediately following such redesignation, in each case, in respect of any Investment made in reliance on Section 6.05(i) (not to exceed the original amount of such Investment), minus
 
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(b)    the sum, without duplication, of:
(i)    the aggregate amount of Restricted Payments made pursuant to Sections 6.04(g) on or after the Closing Date and prior to the Reference Time; plus
(ii)    the aggregate amount of Investments made on or after the Closing Date in reliance on Sections 6.05(i) prior to the Reference Time; plus
(iii)    the aggregate amount of prepayments of Subordinated Indebtedness made in reliance on Section 6.06(a)(iv) on or after the Closing Date and prior to the Reference Time.
“ BA Drawing ” means B/As accepted and purchased, and any BA Equivalent Loan made in lieu of such acceptance and purchase, on the same date and as to which a single Contract Period is in effect.
“ BA Equivalent Loan ” has the meaning assigned to such term in Section 2.23(j).
“ Bail-In Action ” means, as to any EEA Financial Institution, the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of such EEA Financial Institution.
“ Bail-In Legislation ” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“ Bankers’ Acceptance ” and “ B/A ” mean a bill of exchange, including a depository bill issued in accordance with the Depository Bills and Notes Act (Canada), denominated in Canadian Dollars, drawn by the applicable Borrower and accepted by a Revolving Lender (the foregoing to include a Discount Note except where the context otherwise requires).
“ Bankruptcy Code ” means Title 11 of the United States Code entitled “Bankruptcy,” as now or hereafter in effect, and any successor thereto.
“ Bankruptcy Event ” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided , further , that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.
“ Board ” means the Board of Governors of the Federal Reserve System of the United States of America.
 
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“ board of directors ” means:
(a)    with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;
(b)    with respect to a partnership, the board of directors of the general partner of the partnership;
(c)    with respect to a limited liability company, the managing member or members or any controlling committee of managers or members thereof or any board or committee serving a similar management function; and
(d)    with respect to any other Person, the individual or board or committee of such Person serving a management function similar to those described in clauses (a), (b) or (c) of this definition.
“ Borrower Agent ” has the meaning assigned to such term in Section 2.25.
“ Borrowers ” means the Foreign Borrowers and the Domestic Subsidiary Borrowers; and each, a “ Borrower ”.“ Borrowing ” means (a) Revolving Loans of the same Type and currency, made, converted or continued on the same date and, in the case of Eurocurrency Loans, as to which a single Interest Period is in effect and, in the case of BA Drawings, as to which a single Contract Period is in effect, (b) Term Loans of a single Class made on the same date and, in the case of Eurocurrency Loans, as to which a single Interest Period is in effect or (c) a Swingline Loan of the same Class.
“ Borrowing Minimum ” means (a) in the case of a Borrowing denominated in Dollars, $5,000,000, (b) in the case of a Borrowing denominated in Euro, €5,000,000, (c) in the case of a Borrowing denominated in Sterling, £3,000,000, and (d) in the case of a Borrowing denominated in Canadian Dollars, CAD$5,000,000.
“ Borrowing Multiple ” means (a) in the case of a Borrowing denominated in Dollars, $1,000,000, (b) in the case of a Borrowing denominated in Euro, €1,000,000, (c) in the case of a Borrowing denominated in Sterling, £1,000,000, and (d) in the case of a Borrowing denominated in Canadian Dollars, CAD$1,000,000.
“ Borrowing Request ” means a request by a Borrower for a Borrowing in accordance with Section 2.03.
“ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that (a) when used in connection with a Eurocurrency Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in Dollar deposits in the London interbank market, (b) when used in connection with any Loan or Letter of Credit denominated in any Alternative Currency, the term “Business Day” shall also exclude any day on which banks are not open for dealings in deposits in such Alternative Currency in London and the principal financial center for such Alternative Currencies, as reasonably determined by the Administrative Agent and notified to the Borrower Agent in writing from time to time, (c) when used in connection with a Loan or Letter of Credit denominated in Euro, the term “Business Day” shall also exclude any day on which the Trans-European Automated Real Time Gross Settlement Express Transfer (TARGET) payment system is not open for the settlement of payments in Euro, (d) when used in connection with any Loan or any Letter of Credit denominated in Canadian Dollars, the term “Business Day” shall also exclude any day in which commercial banks in Toronto, Canada are
 
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authorized or required by law to remain closed, and (e) when used in connection with any Loan or Letter of Credit denominated in Sterling, the term “Business Day” shall also exclude any day on which commercial banks in London, England are authorized or required by law to remain closed.
“ Canada ” means the country of Canada and any province or territory thereof.
“ Canadian Dollars ” or “ CAD$ ” refers to lawful money of Canada.
“ Canadian Funding Office ” means the office as may be specified as such from time to time by the Administrative Agent by written notice to the Borrower Agent and the Revolving Lenders.
“ Canadian Prime Rate ” means on any day, the greater of (a) the annual rate of interest announced from time to time by JPMCB, Toronto Branch as being its reference rate then in effect for determining interest rates on Canadian Dollar-denominated commercial loans made by it in Canada and (b) the CDOR Rate for a one-month term in effect from time to time plus 0.75% per annum.
“ Canadian Prime Rate Loan ” means a Loan denominated in Canadian Dollars the rate of interest applicable to which is based upon the Canadian Prime Rate.
“ Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations as of any date shall be the capitalized amount thereof determined in accordance with GAAP that would appear on a balance sheet of such Person prepared as of such date.
“ Cash Equivalents ” means
(a)    Dollars or money in other currencies received in the ordinary course of business;
(b)    securities with maturities of one (1) year or less from the date of acquisition issued or fully guaranteed or insured by the United States federal government or any agency thereof;
(c)    securities with maturities of one (1) year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s;
(d)    demand deposit, certificates of deposit and time deposits with maturities of one (1) year or less from the date of acquisition and overnight bank deposits of any commercial bank, supranational bank or trust company having capital and surplus in excess of $500,000,000;
(e)    repurchase obligations with respect to securities of the types (but not necessarily maturity) described in clauses (b) and (c) above, having a term of not more than ninety (90) days, of banks (or bank holding companies) or subsidiaries of such banks (or bank holding companies) and non-bank broker-dealers listed on the Federal Reserve Bank of New York’s list of primary and other reporting dealers (“ R epo Counterparties ”) which Repo Counterparties have capital, surplus and undivided profits aggregating in excess of $500,000,000 (or the foreign equivalent
 
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thereof) and which Repo Counterparties or their parents (if the Repo Counterparties are not rated) will at the time of the transaction be rated A-1 by S&P (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization;
(f)    commercial paper rated at least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s and in either case maturing within one (1) year after the day of acquisition;
(g)    short-term marketable securities of comparable credit quality to those described in clauses (a) through (f) above;
(h)    shares of money market mutual or similar funds that invest at least 95% in assets satisfying the requirements of clauses (a) through (g) of this definition; and
(i)    in the case of the Parent Entity or a Foreign Subsidiary, substantially similar investments, of comparable credit quality, denominated in the currency of any jurisdiction in which the Parent Entity or such Subsidiary conducts business.
“ Cash Management Bank ” means any Person that is the Administrative Agent, a Lender or an Affiliate of a Lender (i) on the Effective Date or at the time it enters into an agreement with the Parent Entity or any Restricted Subsidiary with respect to Cash Management Obligations or (ii) at the time the Borrower Agent notifies the Administrative Agent that such Person and its Affiliates are “Cash Management Banks” hereunder.
“ Cash Management Obligations ” means obligations owed by the Parent Entity or any Restricted Subsidiary to any Cash Management Bank in respect of (1) any overdraft and related liabilities arising from treasury, depository and cash management services, any automated clearing house transfers of funds or any commercial cards, (2) letter of credit facilities in favor of or on behalf of Foreign Subsidiaries designated in writing delivered to the Administrative Agent by the Borrower Agent as “Cash Management Obligations” in an aggregate principal amount not to exceed $15,000,000 at any time outstanding and (3) the Parent Entity’s or any Restricted Subsidiary’s participation in commercial (or purchasing) card programs at any Cash Management Bank (“ card obligations ”).
“ Casualty Event ” means any event that gives rise to the receipt by the Parent Entity or any Restricted Subsidiary of any insurance proceeds or condemnation awards in respect of any Property in excess of (i) $15,000,000 for any individual event or series of related events and (ii) $75,000,000 when aggregated with all events that are excluded as “Casualty Events” following the Effective Date (or if a Covenant Suspension Period has been in effect, following the most recent Reversion Date), other than any such events that are excluded as a result of clause (i) of this definition.
“ CDOR Rate ” means on any day, with respect to a particular term as specified herein, the annual rate of discount or interest which is the arithmetic average of the discount rates for such term applicable to Canadian Dollar bankers’ acceptances identified as such on the Reuters Screen CDOR Page at approximately 10:00 a.m. on such day, or if such day is not a Business Day, then on the immediately preceding Business Day (as adjusted by the Administrative Agent after 10:00 a.m. to reflect any error in any posted rate or in the posted average annual rate). If such rate does not appear on the Reuters Screen CDOR Page as provided in preceding sentence, the Administrative Agent may elect (i) the CDOR Rate on any day shall be calculated as the arithmetic average of the annual discount rates for such term applicable to Canadian Dollar bankers’ acceptances of, and as quoted by, the reference banks reasonably selected by the Administrative Agent and notified to the Borrower Agent, as of 10:00 a.m. on that day, or if that day is not a Business Day, then on the immediately preceding Business Day, or (ii) then the Canadian deposit
 
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offered rate component of such rate on that day shall be calculated as the cost of funds quoted by the Administrative Agent to raise Canadian Dollars for the applicable Contract Period as of 10:00 a.m. Toronto local time on such day for commercial loans or other extensions of credit to businesses of comparable credit risk; or if such day is not a Business Day, then as quoted by the Administrative Agent on the immediately preceding Business Day. Notwithstanding the foregoing, in the event that the CDOR Rate for any period as determined above would be less than zero, the CDOR Rate for such period shall be deemed to be zero.
“ Change in Control ” means the occurrence of any event, transaction or occurrence following the Spin-Off as a result of which:
(a)    any “person” or “group” (within the meaning of the Securities Exchange Act of 1934 and the rules and regulations of the SEC thereunder) has the ability to appoint the majority of the members of the Parent Entity’s board of directors (or comparable governing body) (it being understood and agreed that the formation of a Permitted Parent Holding Company shall not constitute a Change in Control under this clause (a)); or
(b)    the Parent Entity ceases to own, directly or indirectly through any one or more wholly-owned Restricted Subsidiaries, 100% of the Equity Interests of U.S. Parent Borrower and each Subsidiary Borrower (if any).
“ Change in Law ” means (a) the adoption of any law, treaty, rule or regulation after the Effective Date, (b) any change in any law, treaty, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the Effective Date or (c) compliance by any Lender or any Issuing Bank (or, for purposes of Section 2.14(b), by any lending office of such Lender or by such Lender’s or such Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the Effective Date; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.
“ Charges ” has the meaning assigned to such term in Section 9.14.
“ Class ,” when used in reference to (i) any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Tranche A Term Loans, Incremental Term Loans of any series, Extended Term Loans of any series, Replacement Term Loans of any series or Swingline Loans and (ii) any Commitment, refers to whether such Commitment is a Revolving Commitment, Extended Revolving Commitment or Tranche A Term Commitment.
“ Closing Date ” means the date on which each of the conditions set forth in Section 4.02 has been satisfied.
“ Co-Documentation Agents ” means Bank of America, N.A., Citibank, N.A. and Deutsche Bank Securities Inc., in their capacities as co-documentation agents for this Agreement.
“ Co-Syndication Agents ” means Goldman Sachs Bank USA and Barclays Bank PLC in their capacities as co-syndication agents for this Agreement.
 
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“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.
“ Collateral ” means all Property and interests in Property and proceeds thereof now owned or hereafter acquired by any Loan Party in or upon which a Lien is granted under any Collateral Document.
“ Collateral Documents ” means the Pledge and Security Agreement, the Mortgages, the Foreign Security Agreement and each other document executed and delivered by a Loan Party granting a Lien on any of its property to secure payment of all or any part of the Obligations and, during any Collateral Reinstatement Period, any New Collateral Documents delivered to the Administrative Agent pursuant to Section 5.11(b) with respect to such Collateral Reinstatement Period, and each other document that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.
“ Collateral Reinstatement Date ” has the meaning specified in Section 5.11(b).
“ Collateral Reinstatement Event ” has the meaning specified in Section 5.11(b).
“ Collateral Reinstatement Period ” means each period commencing on the Collateral Reinstatement Date with respect to such period and ending on any Collateral Suspension Date occurring after such Collateral Reinstatement Date.
“ Collateral Suspension Date ” means the first date following the Effective Date or any Collateral Reinstatement Date on which: (i) at least one of the Corporate Ratings is an Investment Grade Rating, (ii) no Default or Event of Default has occurred and is continuing under this Agreement, (iii) no Indebtedness secured by Liens on the Collateral permitted by Section 6.02(v) is outstanding (unless the Liens securing such Indebtedness are contemporaneously released) and (iv) a Responsible Officer of the Borrower Agent has delivered an officer’s certificate to the Administrative Agent that (1) certifies to the satisfaction or concurrent satisfaction of the foregoing and (2) requests the Administrative Agent to take any reasonably requested actions to evidence such release of Collateral in accordance with the second sentence under Section 5.11(a).
“ Collateral Suspension Period ” means each period commencing on the Collateral Suspension Date with respect to such period and ending on any Collateral Reinstatement Date occurring after such Collateral Suspension Date.
“ Commitment ” means a Revolving Commitment, Extended Revolving Commitment or Tranche A Term Commitment.
“ Commodity Exchange Act ” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
“ Consolidated EBITDA ” means Consolidated Net Income plus , without duplication and to the extent deducted from revenues in determining Consolidated Net Income (except with respect to clause (viii) below), (i) Consolidated Interest Expense and charges, deferred financing fees and milestone payments in connection with any investment or series of related investments, losses on hedging obligations or other derivative instruments entered into for the purpose of hedging interest rate risk, net of gains on such hedging obligations, and costs of surety bonds in connection with financing activities, (ii) expense and provision for taxes paid or accrued, (iii) depreciation, (iv) amortization (including amortization of intangibles, including, but not limited to goodwill), (v) non-cash charges recorded in respect of purchase accounting or impairment of goodwill, intangibles or long-lived assets and non-cash exchange, translation or performance losses relating to any foreign currency hedging transactions or currency fluctuations except to the extent representing an accrual for future cash outlays, (vi) any other non-cash items except to
 
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the extent representing an accrual for future cash outlays, (vii) any unusual, infrequent, extraordinary, restructuring, business optimization or similar expense, loss or charge (including, without limitation, the amount of any (x) restructuring, integration, transition, spin-off, severance, facility closing, new facility start-up and similar losses, expenses or charges and (y) charges to establish accruals and reserves or to make payments associated with the reassessment or realignment of the business and operations of the Parent Entity and its Restricted Subsidiaries, including, without limitation, the sale or closing of facilities, severance, stay bonuses and curtailments or modifications to pension and post-retirement employee benefit plans, asset write-downs or asset disposals (including leased facilities), write-downs for purchase and lease commitments, start-up costs for new facilities, writedowns of excess, obsolete or unbalanced inventories, relocation costs which are not otherwise capitalized and any related promotional costs of exiting products or product lines); provided , however , the aggregate amount added back pursuant to this clause (vii) and clause (viii) below for any Test Period shall not exceed 20% of total Consolidated EBITDA for such period (calculated prior to giving effect to any increase pursuant to this clause (vii) and clause (viii) below), (viii) “run-rate” cost savings, synergies, operating expense reductions and operating improvements projected by the Borrower Agent in good faith to result from actions taken or expected to be taken (which cost savings or synergies shall be subject only to certification by a Responsible Officer of the Borrower Agent and shall be calculated on a Pro Forma Basis as though such cost savings, synergies, operating expense reductions and operating improvements had been realized on the first day of such period), net of the amount of actual benefits realized prior to or during such period from such actions; provided that (A) a Responsible Officer of the Borrower Agent shall have in good faith certified to the Administrative Agent that (x) such cost savings or synergies are reasonably anticipated to be realizable as a result from such actions and (y) such actions have been taken or are to be taken within eighteen (18) months from the date of determination; provided , however , the aggregate amount added back pursuant to clause (vii) above and this clause (viii) for any Test Period shall not exceed 20% of total Consolidated EBITDA for such period (calculated prior to giving effect to any increase pursuant to clause (vii) and this clause (viii)), (ix) restructuring costs and expenses incurred (x) during the fiscal year of the Parent Entity ending December 31, 2017, in an amount not to exceed $125 million during such period and (y) during the fiscal year of the Parent Entity ended December 31, 2018 in an amount not to exceed $50 million during such period, (x) costs and expenses incurred in connection with the Spin-Off during the fiscal years of the Parent Entity ended December 31, 2017 and December 31, 2018, (xi) without duplication, income of any non-wholly owned Restricted Subsidiaries and deductions attributable to minority interests, (xii) any non-cash costs or expenses incurred by the Parent Entity or a Restricted Subsidiary pursuant to any employee or management equity plan or stock plan with respect to Equity Interests of the Parent Entity, (xiii) expenses with respect to casualty events, (xiv) to the extent actually reimbursed, expenses incurred to the extent covered by indemnification provisions in any agreement in connection with any permitted acquisition, investment or disposition permitted hereunder and (xv) non-cash charges pursuant to SFAS 158, minus , to the extent included in Consolidated Net Income, the sum of (x) any unusual, infrequent or extraordinary income or gains and (y) any other non-cash income (except to the extent representing an accrual for future cash income), all calculated for the Parent Entity and its Restricted Subsidiaries in accordance with GAAP on a consolidated basis; provided that, to the extent included in Consolidated Net Income, (A) there shall be excluded in determining Consolidated EBITDA currency translation gains and losses related to currency remeasurements of Indebtedness (including the net loss or gain resulting from Swap Agreements for currency exchange risk) and (B) there shall be excluded in determining Consolidated EBITDA for any period any adjustments resulting from the application of SFAS 133.
“ Consolidated Interest Expense ” means, with reference to any period, the interest expense whether or not paid in cash (including, without limitation, interest expense under Capital Lease Obligations that is treated as interest in accordance with GAAP) of the Parent Entity and its Restricted Subsidiaries calculated on a consolidated basis for such period in accordance with GAAP plus , without duplication: (a) imputed interest attributable to Capital Lease Obligations of the Parent Entity and its Restricted Subsidiaries for such period, (b) commissions, discounts and other fees and charges owed by the Parent Entity or any
 
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of its Restricted Subsidiaries with respect to letters of credit securing financial obligations, bankers’ acceptance financing and receivables financings for such period, (c) amortization or write-off of debt discount and debt issuance costs, premium, commissions, discounts and other fees and charges associated with Indebtedness of the Parent Entity and its Restricted Subsidiaries for such period, (d) cash contributions to any employee stock ownership plan or similar trust made by the Parent Entity or any of its Restricted Subsidiaries to the extent such contributions are used by such plan or trust to pay interest or fees to any person (other than the Parent Entity or a wholly owned Restricted Subsidiary) in connection with Indebtedness incurred by such plan or trust for such period, (e) all interest paid or payable with respect to discontinued operations of the Parent Entity or any of its Restricted Subsidiaries for such period, (f) the interest portion of any deferred payment obligations of the Parent Entity or any of its Restricted Subsidiaries for such period, (g) all interest on any Indebtedness of the Parent Entity or any of its Restricted Subsidiaries of the type described in clause (e) or (f) of the definition of “Indebtedness” for such period and (h) the interest component of all Attributable Receivables Indebtedness of the Parent Entity and its Restricted Subsidiaries.
“ Consolidated Leverage Ratio ” means, for any Test Period, the ratio of (a) Consolidated Total Indebtedness as of the last day of such Test Period to (b) Consolidated EBITDA for such Test Period.
“ Consolidated Net Income ” means, with reference to any period, the net income (or loss) of the Parent Entity and its Restricted Subsidiaries calculated in accordance with GAAP on a consolidated basis (without duplication) for such period; provided that, in calculating Consolidated Net Income of the Parent Entity and its Restricted Subsidiaries for any period, there shall be excluded (a) extraordinary items, (b) the income (or deficit) of any Person accrued prior to the date it becomes a Restricted Subsidiary of the Parent Entity or is merged into or consolidated with the Parent Entity or any of its Restricted Subsidiaries (except to the extent required for any calculation of Consolidated EBITDA on a Pro Forma Basis), (c) the income (or deficit) of any Person (other than a Restricted Subsidiary of the Parent Entity) in which the Parent Entity or any of its Restricted Subsidiaries has an ownership interest (including any Unrestricted Subsidiary), except to the extent that any such income is actually received by the Parent Entity or such Restricted Subsidiary in the form of dividends or similar distributions, (d) any fees and expenses incurred during such period, or any amortization thereof for such period, in connection with the consummation of any acquisition, investment, asset disposition, issuance or repayment of Indebtedness, purchase, issuance or sale of equity securities, refinancing transaction or amendment or other modification of any debt instrument (in each case, including any such transaction undertaken but not completed) and any charges or non-recurring merger costs incurred during such period as a result of any such transaction, (e) any income (loss) for such period attributable to the early extinguishment of Indebtedness and (f) the cumulative effect of a change in accounting principles.
“ Consolidated Secured Indebtedness ” means, as of any date of determination, Consolidated Total Indebtedness as of such date, excluding any amount of Indebtedness included therein that is not secured by a Lien on any Property of the Parent Entity or any Restricted Subsidiary as of such date (except that Indebtedness under this Agreement and any Indebtedness (and Permitted Refinancing Indebtedness in respect thereof) incurred in reliance on compliance with a maximum Consolidated Secured Leverage Ratio shall be deemed to be secured by Liens on the assets of the Loan Parties for purposes of determining the Consolidated Secured Leverage Ratio).
“ Consolidated Secured Leverage Ratio ” means, for any Test Period, the ratio of (a) Consolidated Secured Indebtedness as of the last day of such Test Period to (b) Consolidated EBITDA for such Test Period.
“ Consolidated Subsidiaries ” means Subsidiaries that would be consolidated with the Parent Entity in accordance with GAAP.
 
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“ Consolidated Total Assets ” means, as of the date of any determination thereof, total assets of the Parent Entity and its Restricted Subsidiaries calculated in accordance with GAAP on a consolidated basis as of such date.
“ Consolidated Total Indebtedness ” means at any time the sum, without duplication, of (i) the aggregate principal amount of Indebtedness for borrowed money of the Parent Entity and its Restricted Subsidiaries outstanding as of such time of a type required to be reflected on a balance sheet prepared at such time on a consolidated basis in accordance with GAAP minus (ii) the lesser of (x) $350,000,000 and (y) the aggregate amount of unrestricted cash and Cash Equivalents of the Parent Entity and its Restricted Subsidiaries.
“ Contract Period ” means the term selected by the Borrower Agent applicable to Bankers’ Acceptances in accordance with Section 2.23(b).
“ Control ” means, with respect to any Person, the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.
“ Corporate Ratings ” means (i) the Parent Entity’s or the U.S. Parent Borrower’s corporate credit rating from S&P and (ii) the Parent Entity’s or the U.S. Parent Borrower’s corporate family rating from Moody’s, or, in each case, an equivalent rating by any other Rating Agency; provided that, in each case, if there are ratings in effect for both the Parent Entity and the U.S. Parent Borrower from a single Rating Agency, then the “Corporate Ratings” from such Rating Agency shall be based on the lower rating.
“ Covenant Suspension Period ” means each period (i) commencing on the first date following the Effective Date or any Reversion Date that both Corporate Ratings are Investment Grade Ratings and no Default or Event of Default has occurred and is continuing and (ii) ending on the date that either Corporate Rating ceases to be an Investment Grade Rating (any such date, a “ Reversion Date ”).
“ Credit Exposure ” means, as to any Lender at any time, the sum of (a) such Lender’s Revolving Exposure at such time, plus (b) an amount equal to the aggregate principal amount of its Term Loans outstanding at such time.
“ CTA ” means the Corporation Tax Act 2010 of the United Kingdom.
“ Default ” means any event or condition, which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“ Defaulting Lender ” means any Revolving Lender that (a) has failed, within three Business Days of the date required to be funded or paid, to (i) fund any portion of its Revolving Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to the Administrative Agent, any Issuing Bank, the Swingline Lender or any other Lender any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Revolving Lender notifies the Administrative Agent in writing that such failure is the result of such Revolving Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified any Borrower or the Administrative Agent, any Issuing Bank, the Swingline Lender or any other Lender in writing, or has made a public statement to the effect, that it does not intend or expect to comply with (i) any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Revolving Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or (ii) its funding obligations generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after
 
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written request by the Administrative Agent, acting in good faith, to provide a certification in writing from an authorized officer of such Revolving Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Revolving Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Revolving Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Loan Party’s receipt of such certification in form and substance reasonably satisfactory to it and the Administrative Agent, (d) has become the subject of a Bankruptcy Event or (e) has become the subject of a Bail-In Action.
“ Delphi Automotive ” has the meaning set forth in the preamble to this Agreement.
“ Designated Non-Cash Consideration ” means the Fair Market Value of non-cash consideration received by the Parent Entity or any of its Restricted Subsidiaries in connection with a Disposition that is so designated as Designated Non-Cash Consideration pursuant to a certificate of a Responsible Officer of the Borrower Agent, setting forth such valuation, less the amount of cash or Cash Equivalents received in connection with a subsequent disposition of such Designated Non-Cash Consideration.
“ Designated Person List ” has the meaning assigned to it in the definition of “Eligible Assignee.”
“ Direction ” has the meaning provided in Section 2.16(i)(i)(3)(A).
“ Discount Note ” means a non-interest bearing promissory note denominated in Canadian Dollars, substantially in the form of Exhibit B -4 , issued by the applicable Borrower to a Non BA Lender to evidence a BA Equivalent Loan.
“ Discount Proceeds ” means for any Bankers’ Acceptance issued hereunder, an amount calculated on the applicable date of Borrowing or conversion or continuation by multiplying (a) the face amount of the Bankers’ Acceptance by (b) the quotient obtained by dividing (i) one by (ii) the sum of one plus the product of (A) the Discount Rate applicable to the Bankers’ Acceptance and (B) a fraction, the numerator of which is the applicable Contract Period and the denominator of which is 365, with the quotient being rounded up or down to the fifth decimal place and.00005 being rounded up.
“ Discount Range ” has the meaning provided in Section 2.10(c)(ii).
“ Discount Rate ” means with respect to an issue of Bankers’ Acceptances with the same maturity date, (a) for a Revolving Lender which is a Schedule I Lender, the CDOR Rate for the appropriate term, and (b) for a Revolving Lender which is not a Schedule I Lender, the sum of (I) the greater of (i) 0% and (ii) arithmetic average (rounded upwards to the nearest multiple of 0.01%) of the actual discount rates (expressed as annual rates) for B/As for such term accepted by three Schedule I banks (that are acceptable to the Administrative Agent) in accordance with their normal practices at or about 10:00 a.m. (Local Time) on the date of issuance but not to exceed the actual rate of discount applicable to B/As established pursuant to clause (a) for the same B/A issue plus (II) 0.1% per annum.
“ Discounted Prepayment Option Notice ” has the meaning provided in Section 2.10(c)(ii).
“ Discounted Voluntary Prepayment ” has the meaning provided in Section 2.10(c)(i).
“ Discounted Voluntary Prepayment Notice ” has the meaning provided in Section 2.10(c)(v).
“ Disposition ” means, with respect to any Property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof; and the terms “ Dispose ” and “ Disposed of ” shall have correlative meanings; provided that “Dispositions” shall exclude any Disposition or series of related of Dispositions relating to Property with a Fair Market Value of $10,000,000 or less.
 
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“ Disqualified Equity Interests ” means any Equity Interest which, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control, public equity offering or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control, public equity offering or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments and the expiration, cancellation, termination or cash collateralization of any Letters of Credit in accordance with the terms hereof), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests and except as permitted in clause (a) above), in whole or in part, (c) requires the scheduled payments of dividends in cash (for this purpose, dividends shall not be considered required if the issuer has the option to permit them to accrue, cumulate, accrete or increase in liquidation preference or if the Parent Entity has the option to pay such dividends solely in Qualified Equity Interests), or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 91 days after the Term Loan A Maturity Date; provided that only the portion of such Equity Interest that is required to be redeemed, is so redeemable or is so convertible at the option of the holder thereof before such date will be deemed to be Disqualified Equity Interests.
“ Distribution ” has the meaning set forth in the preamble to this Agreement.
“ Dollar Equivalent ” means, on any date of determination, (a) with respect to any amount in Dollars, such amount, and (b) with respect to any amount in any other currency, the equivalent in Dollars of such amount, determined by the Administrative Agent pursuant to Section 1.07 using the Exchange Rate with respect to such currency at the time in effect under the provisions of such Section.
“ Dollars ” or “ $ ” refers to lawful money of the United States of America.
“ Domestic Subsidiary ” means a Restricted Subsidiary organized under the Laws of the United States of America, any state thereof or the District of Columbia.
“ Domestic Subsidiary Borrower ” means (i) the U.S. Parent Borrower and (ii) any other Subsidiary Borrower that is a Domestic Subsidiary.
“ Draft ” means (a) a blank bill of exchange, within the meaning of the Bills of Exchange Act (Canada), drawn by the applicable Borrower on a Revolving Lender, denominated in Canadian Dollars and bearing such distinguishing letters and numbers as such Revolving Lender may determine, but which at such time, except as otherwise provided herein, has not been completed or accepted by such Revolving Lender, or (b) a depository bill within the meaning of the Depository Bills and Notes Act (Canada); provided , however , that the Administrative Agent may require such Revolving Lender to use a general form of Bankers’ Acceptance satisfactory to the Borrower Agent and such Revolving Lender, each acting reasonably, provided by the Administrative Agent for such purpose in place of each Revolving Lender’s own form.
“ EEA Financial Institution ” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clause (a) or (b) of this definition and is subject to consolidated supervision with its parent.
 
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“ EEA Member Country ” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“ EEA Resolution Authority ” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“ Effective Date ” means the date on which each of the conditions set forth in Section 4.01 has been satisfied.
“ Eligible Assignee ” means (a) in the case of the Revolving Loans and Revolving Commitments, a Lender under the Revolving Facilities or an Affiliate of a Lender under the Revolving Facilities that is customarily engaged in the business of extending credit or investing in bank loans and (b) in the case of the Term Loans and the Tranche A Term Commitments, (i) a Lender, (ii) an Affiliate of a Lender that is customarily engaged in the business of extending credit or investing in bank loans or (iii) an Approved Fund of a Lender and (c) any financial company or financial institution that extends credit or invests in bank loans as one of its businesses approved (each such approval not to be unreasonably withheld or delayed) by (A) the Administrative Agent, (B) in the case of the Revolving Commitments under any Revolving Facility, the Swingline Lender and each applicable Issuing Bank under such Revolving Facility and (C) unless a Specified Event of Default has occurred and is continuing, the Borrower Agent; provided that (1) it shall be deemed to be reasonable for the Borrower Agent to withhold consent to Persons that (x) are competitors of the Parent Entity and its Restricted Subsidiaries or (y) invest, as a substantial part of their funds, in companies that are in financial distress (as determined by the Borrower Agent in good faith) (any such Persons under clause (x) or (y), “ Designated Persons ”) and (2) notwithstanding clause (C) of this definition, during the continuation of a Specified Event of Default, the Borrower Agent’s consent shall be required for an assignment to a Designated Person solely to the extent that such Designated Person is included on the list of Designated Persons (such list, the “ Designated Person List ”) that has been previously sent to the Administrative Agent by email to JPMDQ_Contact@jpmorgan.com prior to the date that the relevant trade has been entered into. The Administrative Agent shall (a) post the Designated Person List provided by the Borrower Agent and any updates thereto from time to time on the Platform to “public siders” and/or “private siders,” provided , that no such updates pursuant to this clause (a) shall be deemed to retroactively disqualify any parties that have previously acquired an assignment or participation interest in respect of the Loans from continuing to hold or vote such previously acquired assignments and participations on the terms set forth herein for Lenders that are not Designated Persons, (b) provide the Designated Person List to each Lender requesting the same, and/or (c) provide the Designated Person List to any potential assignee under Section 9.04(b) requesting the same (but solely to the extent that such potential assignee is subject to customary confidentiality obligations relating to the Designated Person List); provided , however , the Administrative Agent shall not be responsible or have any liability for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions relating to the Designated Person List.
“ EMU Legislation ” means the legislative measures of the European Union for the introduction of, changeover to or operation of the Euro in one or more member states.
“ Engagement Letter ” means the letter agreement, dated as of August 24, 2017, by and among Parent and the Arrangers.
 
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“ Environmental Laws ” means all applicable laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, imposing liability or standards of conduct concerning protection of the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or the effect of Hazardous Materials or the environment on health and safety matters.
“ Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Parent Entity or any Restricted Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with the Parent Entity, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
“ ERISA Event ” means (a) any “reportable event,” as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the occurrence with respect to any Plan of a failure to satisfy the minimum funding standard under Section 412 of the Code or Section 302 of ERISA, whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the U.S. Parent Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan pursuant to Sections 4041(c) or 4042 of ERISA; (e) the receipt by the U.S. Parent Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the U.S. Parent Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal of the U.S. Parent Borrower or any ERISA Affiliate from any Plan or Multiemployer Plan; or (g) the receipt by the U.S. Parent Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the U.S. Parent Borrower or any ERISA Affiliate of any notice, concerning the imposition upon the U.S. Parent Borrower or any ERISA Affiliate of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
“ EU Bail-In Legislation Schedule ” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“ Euro ” or “ € ” refers to the currency constituted by the Treaty on the European Union and as referred to in the EMU Legislation.
 
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“ Eurocurrency ,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
“ European Union ” means the region comprised of member states of the European Union pursuant to the Treaty establishing the European Community (signed in Rome on 25 March 1967) as amended by the Treaty on the European Union (signed in Maastricht on 7 February 1992).
“ Event of Default ” has the meaning assigned to such term in Article VII.
“ Exchange Rate ” means, on any day, for purposes of determining the Dollar Equivalent of any other currency, the rate at which such other currency may be exchanged into Dollars at or about 11:00 a.m. (Local Time) on the date of determination on the Reuters WRLD Page for such currency. In the event that such rate does not appear on any Reuters WRLD Page, the Exchange Rate shall be determined by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agent and the Borrower Agent, or, in the absence of such an agreement, such Exchange Rate shall instead be the arithmetic average of the spot rates of exchange of the Administrative Agent in the market where its foreign currency exchange operations in respect of such currency are then being conducted, at or about such time as the Administrative Agent shall elect after determining that such rates shall be the basis for determining the Exchange Rate, on such date for the purchase of Dollars for delivery two Business Days later, provided that if at the time of any such determination, for any reason, no such spot rate is being quoted, the Administrative Agent may use any reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error.
“ Excluded Swap Obligation ” means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the guarantee of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guarantee of such Loan Party or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.
“ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender, any Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of any Loan Party under any Loan Document, (a) Taxes imposed on (or measured by) its net or overall gross income (or capital, net worth and similar Taxes imposed in lieu thereof) and franchise Taxes, in each case, imposed by a jurisdiction as a result of such recipient being organized in or having its principal office or applicable lending office in, such jurisdiction, or as a result of any other present or former connection between such recipient and such jurisdiction, other than any connection arising from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, or enforced, any Loan Documents, (b) any branch profits taxes under Section 884(a) of the Code, or any similar Tax, imposed by any jurisdiction described in (a), (c) in the case of a Lender (other than an assignee pursuant to a request by a Borrower under Section 2.18(b)), with respect to any Loan made to the U.S. Parent Borrower or any Domestic Subsidiary Borrower, any U.S. federal withholding tax that is imposed pursuant to a Law in effect at the time such Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Lender (or its assignor, if any) was entitled, immediately prior to the
 
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time of designation of a new lending office (or assignment), to receive additional amounts from a Loan Party with respect to such withholding tax pursuant to Section 2.16(a), (d) with respect to any Loan made to a UK Borrower, any UK Tax Deduction regarded as an Excluded Tax pursuant to Section 2.16(i), (e) with respect to any Loan made to an Irish Borrower, any Tax imposed by Ireland for which an increased payment is not required under Section 2.16 pursuant to Section 2.16(j), (f) any withholding tax attributable to a Lender’s failure to comply with Section 2.16(e), (g) any Tax imposed pursuant to current Sections 1471 through 1474 of the Code (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future Treasury regulations promulgated thereunder or official interpretations thereof, any agreement entered into pursuant to current Section 1471(b)(1) of the Code (or any amended or successor version described above), any intergovernmental agreement implementing the foregoing and any related laws, regulations or official administrative practices implementing the foregoing, (h) any loss or liability suffered or incurred with respect to any UK Bank Levy (or any payment attributable to, or liability arising as a consequence of a UK Bank Levy) in respect of a Loan made to a UK Borrower, (i) any Luxembourg registration duties (droits d’enregistrement) payable as a result of a voluntary registration of a Loan Document or of any document in connection with a Loan Document with the Administration de l’Enregistrement et des Domaines in Luxembourg where such registration is not required to maintain, preserve, or enforce the rights of a Lender under such document and (j) any interest, additions to Taxes and penalties with respect to any Taxes described in clauses (a) through (i) of this definition.
“ Existing Letters of Credit ” means each Letter of Credit outstanding on the Closing Date and listed on Schedule 1.01 .
“ Existing Term Loan Class ” has the meaning provided in Section 2.20(a).
“ Extended Revolving Commitments ” means revolving credit commitments established pursuant to Section 2.20 that are substantially identical to the Revolving Commitments except that such Revolving Commitments may have a later maturity date and different provisions with respect to interest rates and fees than those applicable to the Revolving Commitments.
“ Extended Term Loans ” has the meaning provided in Section 2.20(a).
“ Extending Term Lender ” has the meaning provided in Section 2.20(c).
“ Extension Election ” has the meaning provided in Section 2.20(c).
“ Extension Request ” has the meaning provided in Section 2.20(a).
“ Facility ” means each of the Revolving Facility and the Term Loan A Facility.
“ Fair Market Value ” means, with respect to any asset or property, the price that could be negotiated in an arm’s-length transaction between a willing seller and a willing buyer, neither of whom is under undue pressure or compulsion to complete the transaction (as determined in good faith by the Borrower Agent), including reliance on the most recent real property tax bill or assessment in the case of real property.
“ Federal Funds Effective Rate ” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as the NYFRB shall set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as the federal funds effective rate; provided that, if negative, such rate shall be deemed to be 0.00%.
 
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“ Fee Letter ” means the letter agreement, dated as of August 24, 2017 by and among Parent, the Administrative Agent and JPMCB.
“ Finance Party ” means the Agent, each Arranger, each Co-Documentation Agent, each Co-Syndication Agents, each Lender and each Issuing Bank.
“ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower Agent or the Parent Entity, as the context requires.
“ First Lien Intercreditor Agreement ” means an Intercreditor Agreement, substantially in the form of Exhibit C (with such changes thereto as are reasonably acceptable to the Administrative Agent and the Borrower Agent), by and between the Administrative Agent and the collateral agent for one or more classes of Permitted Secured Notes that are intended to be secured by Liens ranking pari passu with the Liens securing the Obligations.
“ Flood Insurance Laws ” means, collectively, (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statute thereto, (iii) the National Flood Insurance Reform Act of 1994 as now or hereafter in effect or any successor statute thereto, (iv) the Flood Insurance Reform Act of 2004 as now or hereafter in effect or any successor statute thereto and (v) the Biggert-Waters Flood Insurance Reform Act of 2012 as now or hereafter in effect or any successor statute thereto.
“ Foreign Borrower ” means (i) Parent (unless Parent has ceased to be a Borrower), (ii) any Parent Entity (other than Parent) that has become a Foreign Borrower in accordance with Section 9.02(c)(i), and (iii) any Foreign Subsidiary Borrower.
“ Foreign Guarantor ” means (i) the Parent Entity (other than with respect to its own obligations), so long as the Parent Entity is not organized under the laws of the United States, any State thereof or the District of Columbia, (ii) any Foreign Borrower (other than with respect to its own obligations) and (iii) any Foreign Subsidiary of the Parent Entity that directly owns Equity Interests of the U.S. Parent Borrower.
“ Foreign Guarantor Collateral Requirement ” means a perfected first priority pledge of (a) the Equity Interests in the U.S. Parent Borrower and any other Domestic Subsidiary Borrower, if applicable, and (b) each intercompany note in an aggregate principal amount of greater than $15,000,000 owned by each Foreign Guarantor.
“ Foreign Lender ” means any Lender that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code.
“ Foreign Security Agreement ” means, collectively, each local law security agreement, pledge agreement or other document executed and delivered pursuant to Section 5.09 in order to secure the Obligations by the assets of a Foreign Guarantor.
“ Foreign Subsidiary ” means any direct or indirect Restricted Subsidiary of the Parent Entity that is not a Domestic Subsidiary.
“ Foreign Subsidiary Borrower ” means any Subsidiary Borrower that is not a Domestic Subsidiary.
“ Form 10 ” has the meaning set forth in the preamble to this Agreement.
 
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“ GAAP ” means generally accepted accounting principles in the United States of America.
“ Governmental Authority ” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government and any group or body charged with setting regulatory capital rules or standards (including, without limitation, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).
“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other monetary obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other monetary obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or monetary obligation; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation, or portion thereof, in respect of which such Guarantee is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee, unless such primary obligation or the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower Agent in good faith.
“ Guarantors ” means the U.S. Guarantors and the Foreign Guarantors.
“ Guaranty ” means (i) the guaranty, dated as of the Closing Date and as amended and supplemented from time to time, executed by each of the Guarantors, and substantially in the form attached as Exhibit H attached hereto and (ii) each New Guaranty delivered to the Administrative Agent pursuant to Section 5.12(b).
“ Hazardous Materials ” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated as “hazardous” or “toxic,” or as a “pollutant” or a “contaminant,” pursuant to any Environmental Law.
“ Hedge Bank ” means any Person that is a Lender, the Administrative Agent or an Affiliate of a Lender (i) on the Effective Date or at the time it enters into a Swap Agreement with the Parent Entity or any Restricted Subsidiary (regardless of whether such Person subsequently ceases to be the Administrative Agent, a Lender or an Affiliate of a Lender) or (ii) at the time the Borrower notifies the Administrative Agent that such Person and its Affiliates are “Hedge Banks” hereunder.
“ HMRC ” means Her Majesty’s Revenue and Customs in the United Kingdom.
 
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“ Impacted Interest Period ” has the meaning assigned to it in the definition of “LIBO Rate.”
“ Increased Commitments ” has the meaning assigned to such term in Section 2.19.
“ Increasing Lender ” has the meaning assigned to such term in Section 2.19.
“ Incremental Basket Amount ” has the meaning assigned to such term in Section 2.19(a).
“ Incremental Term Loan ” has the meaning assigned to such term in Section 2.19.
“ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding accounts payable incurred in the ordinary course of business, milestone payments incurred in connection with any investment or series of related investments, any earn-out obligation except to the extent such obligation is a liability on the balance sheet of such Person in accordance with GAAP at the time initially incurred and deferred or equity compensation arrangements payable to directors, officers or employees), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on Property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, but limited to the Fair Market Value of such Property (except to the extent otherwise provided in this definition), (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (j) the principal amount of obligations of such Person under any Swap Agreement, as determined in a manner consistent with the definition of “Material Indebtedness” and (k) all Attributable Receivables Indebtedness. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor; provided that “Indebtedness” shall not include current intercompany liabilities and advances incurred in the ordinary course of business.
“ Indemnified Taxes ” means all (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.
“ Indemnitees ” has the meaning set forth in Section 9.03(b).
“ Information ” has the meaning specified in Section 9.12.
“ Initial Investing Person ” has the meaning assigned to it in the definition of “Investment.”
“ Interest Election Request ” means a request by the applicable Borrower to convert or continue a Revolving Borrowing in accordance with Section 2.07.
“ Interest Payment Date ” means (a) with respect to any ABR Loan (other than a Swingline Loan) or Canadian Prime Rate Loans, the last day of each March, June, September and December, (b) with respect to any Eurocurrency Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest Period of more than
 
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three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid.
“ Interest Period ” means, with respect to any Eurocurrency Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months, or any other period as may be agreed to by the Administrative Agent and all applicable Lenders, thereafter, as the applicable Borrower may elect; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurocurrency Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a Eurocurrency Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.
“ Intermediate Investing Person ” has the meaning assigned to it in the definition of “Investment.”
“ Interpolated Rate ” means, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the LIBO Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest period for which the LIBO Screen Rate is available for the applicable currency that is shorter than the Impacted Interest Period; and (b) the LIBO Screen Rate for the shortest period for which that LIBO Screen Rate is available for the applicable currency that exceeds the Impacted Interest Period, in each case, at such time.
“ Invested Amount ” has the meaning assigned to it in the definition of “Investment.”
“ Investment ” means, as to any Person, any acquisition of, or investment by such Person in, any other Person, whether by means of (a) the purchase or other acquisition of Equity Interests or debt or other securities of another Person or (b) a loan, advance or capital contribution to, Guarantee of monetary obligations of, assumption of Indebtedness of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person; provided that “Investments” shall not include intercompany current liabilities and advances incurred in the ordinary course of business. For purposes of Section 6.05, (i) the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, and (ii) in the event the Parent Entity or any Restricted Subsidiary (an “ Initial Investing Person ”) transfers an amount of cash or other Property (the “ I n vested Amount ”) for purposes of permitting the Parent Entity or one or more other Restricted Subsidiaries to ultimately make an Investment of the Invested Amount in the Parent Entity, any Restricted Subsidiary or any other Person (the Person in which such Investment is ultimately made, the “ Subject Person ”) through a series of substantially concurrent intermediate transfers of the Invested Amount to the Parent Entity or one or more other Restricted Subsidiaries other than the Subject Person (each, an “ Intermediate Investing Person ”), including through the incurrence or repayment of intercompany Indebtedness, capital contributions or redemptions of Equity Interests, then, for all purposes of Section 6.05, any transfers of the Invested Amount to Intermediate Investing Persons in connection therewith shall be disregarded and such transaction, taken as a whole, shall be deemed to have been solely an Investment of the Invested Amount by the Initial Investing Person in the Subject Person and not an Investment in any Intermediate Investing Person.
 
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“ Investment Grade Rating ” means (i) the Parent Entity’s or the U.S. Parent Borrower’s, as applicable, corporate credit rating is equal to or higher than BBB- (with a stable or better outlook) (or the equivalent) by S&P and (ii) the Parent Entity’s or the U.S. Parent Borrower’s, as applicable, corporate family rating is equal to or higher than Baa3 (with a stable or better outlook) (or the equivalent) by Moody’s, or if S&P or Moody’s cease to provide ratings an equivalent rating by any replaced Rating Agency, in each case with a stable or better outlook.
“ Ireland ” means Ireland exclusive of Northern Ireland.
“ Irish Borrower ” means any Borrower that becomes a Borrower after the Closing Date and that is a resident for tax purposes in Ireland.
“ Irish Qualifying Lender ” means a Lender which is beneficially entitled to all payments made to it and which at the time the payment is made is:
(i)    a bank within the meaning of Section 246 of the TCA which is carrying on a bona fide banking business in Ireland for the purposes of Section 246(3) of the TCA; or
(ii)    a body corporate which is resident for tax purposes in a Relevant Territory (for these purposes residence is determined under the tax laws of the Relevant Territory) and either (i) that Relevant Territory imposes a tax that generally applies to interest receivable in that jurisdiction by companies from sources outside that jurisdiction; or (ii) the interest is exempted from Irish income tax pursuant to the terms of a tax treaty that is in force on the date the relevant interest is paid (or would be so exempted if such Treaty, which had been signed on or before that date, had the force of law by virtue of Section 826(1) of the TCA); provided in each case that such body corporate does not have its applicable lending office in Ireland and does not carry on a trade through an Irish branch with which the interest is connected; or
(iii)    a company incorporated in the United States that is subject to tax in the United States on its worldwide income; provided that such corporation does not have its applicable lending office located in Ireland and does not carry on a trade through an Irish branch to which the interest is connected; or
(iv)    a limited liability company organized in the United States, the ultimate recipients of the interest payable to it are Irish Qualifying Lenders within paragraph (ii) or (iii) of this definition and the business conducted through such limited liability company is so structured for market reasons and not for tax avoidance purposes; provided that such limited liability company does not have its applicable lending office located in Ireland and the ultimate recipients of the interest do not carry on a trade through an Irish branch to which the interest is connected;
(v)    a qualifying company within the meaning of Section 110 of the TCA; or
(vi)    a body corporate:
(A)    which advances money in the ordinary course of a trade which includes the lending of money;
 
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(B)    in whose hands any interest payable in respect of monies so advanced is taken into account in computing the trading income of such body corporate; and
(C)    which has made the appropriate notifications under Section 246(5)(a) of the TCA;
(vii)    an Irish Treaty Lender; or
(viii)    an investment undertaking within the meaning of section 739B of the TCA.
“ Irish Treaty ” has the meaning assigned to it in the definition of “Irish Treaty State.”
“ Irish Treaty Lender ” means, in respect of an Irish Borrower, a Lender which:
(a)    is treated as a resident of an Irish Treaty State for the purposes of the Irish Treaty; and
(b)    does not carry on a business in Ireland through a permanent establishment with which that Lender’s participation in the Loan is effectively connected.
“ Irish Treaty State ” means a jurisdiction having a tax treaty with Ireland (an “ Irish Treaty ”) which makes provision for full exemption from tax imposed by Ireland on interest, subject to the completion of procedural formalities.
“ IRS ” means the U.S. Internal Revenue Service.
“ Issuing Bank ” means (i) each Person party hereto with an LC Commitment and (ii) each other Person that becomes an Issuing Bank in accordance with Section 2.05(i), in each case in its capacity as an issuer of Letters of Credit hereunder, and any successors in such capacity as provided in Section 2.05(i).
“ ITA ” means the Income Tax Act 2007 of the United Kingdom.
“ Joinder Agreement ” has the meaning assigned to such term in Section 9.02.
“ JPMCB ” means JPMorgan Chase Bank, N.A. in its individual capacity.
“ Judgment Currency ” has the meaning assigned to it in Section 2.21.
“ Junior Liens ” means Liens on the Collateral that are junior to the Liens thereon securing the Obligations pursuant to a Second Lien Intercreditor Agreement (it being understood that Junior Liens are not required to rank equally and ratably with other Junior Liens, and that Indebtedness secured by Junior Liens may be secured by Liens that are senior in priority to, or rank equally and ratably with, or junior in priority to, other Liens constituting Junior Liens), which Second Lien Intercreditor Agreement (together with such amendments to the Collateral Documents and any other Intercreditor Agreements, if any, as are reasonably necessary or advisable (and reasonably acceptable to the Administrative Agent and the Borrower Agent) to give effect to such Liens) shall be entered into in connection with a permitted incurrence of any such Liens (unless a Second Lien Intercreditor Agreement and/or Collateral Documents (as applicable) covering such Liens are already in effect).
“ Laws ” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities.
 
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“ LC Commitment ” means, with respect to each Issuing Bank, the commitment, if any, of such Issuing Bank to issue Letters of Credit as indicated on Schedule 2.01 , as such commitment may be reduced or increased from time to time pursuant to Section 2.05(i). The initial amount of each Issuing Bank’s LC Commitment is set forth on Schedule  2.01 , or shall be set forth in the assignment or joinder documentation pursuant to which such Issuing Bank shall have assumed its LC Commitment, as the case may be. The initial aggregate amount of the Issuing Banks’ LC Commitments on the Effective Date is equal to the LC Exposure Sublimit.
“ LC Disbursement ” means a payment made by an Issuing Bank pursuant to a Letter of Credit. The amount of any LC Disbursement made by an Issuing Bank in an Alternative Currency and not reimbursed by the applicable Borrower shall be determined as set forth in paragraph (e) of Section 2.05.
“ LC Exposure ” means, at any time, the sum of (a) the Dollar Equivalent of the aggregate undrawn amount of all outstanding Letters of Credit at such time, and (b) the Dollar Equivalent of the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrowers at such time. The LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the aggregate LC Exposure at such time.
“ LC Exposure Sublimit ” means $100,000,000.
“ LCT Election ” has the meaning assigned to such term in Section 1.08.
“ LCT Test Date ” has the meaning assigned to such term in Section 1.08.
“ Lender Participation Notice ” has the meaning provided in Section 2.10(c)(iii).
“ Lenders ” means the Persons listed on Schedule 2.01 to this Agreement and any other Person that shall have become a Lender hereunder pursuant to Section 2.19 or pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.
“ Letter of Credit ” means any letter of credit issued or deemed issued pursuant to this Agreement provided that any letters of credit issued hereunder by Barclays Bank PLC or Deutsche Bank AG New York Brank, in each case, in its capacity as an Issuing Bank, will only be standby letters of credit.
“ LIBO Rate ” means with respect to any Eurocurrency Borrowing for any applicable currency for any Interest Period, the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate) (the “ LIBO Screen Rate ”) for the relevant currency for a period equal in length to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate), or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion at approximately 11:00 a.m., London time, on the Quotation Date; provided that if the LIBO Screen Rate for any currency shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement; provided further that if the LIBO Screen Rate shall not be available at such time for such Interest Period (an “ Impacted Interest Period ”) with respect to the applicable currency then the LIBO Rate for such currency shall be the Interpolated Rate; pr o vided that if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“ LIBO Screen Rate ” has the meaning assigned to it in the definition of “LIBO Rate.”
 
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“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, and (b) the interest of a vendor or a lessor under any conditional sale agreement or title retention agreement (or any capital lease having substantially the same economic effect as any of the foregoing) relating to such asset.
“ Limited Condition Transaction ” means any (i) acquisition or other similar Investment, including by means of a merger, amalgamation or consolidation, by the Parent Entity or one or more of its Restricted Subsidiaries, the consummation of which is not conditioned upon the availability of, or on obtaining, third party financing or in connection with which any fee or expense would be payable by the Parent Entity or its Restricted Subsidiaries to the seller or target in the event financing to consummate the acquisition is not obtained as contemplated by the definitive acquisition agreement, (ii) any Restricted Payment consisting of a dividend on the common shares of the Parent Entity and (iii) any redemption of Indebtedness of the Parent Entity or any Restricted Subsidiary that is not conditioned upon the availability of financing and which requires irrevocable prior notice of redemption.
“ Loan Documents ” means this Agreement, the Guaranty (other than during a Covenant Suspension Period as it relates to the Guaranty by Guarantors other than the Parent Entity), the Collateral Documents (other than during a Collateral Suspension Period), any promissory notes executed and delivered pursuant to Section 2.09(e), and any amendments, waivers, supplements or other modifications to any of the foregoing.
“ Loan Parties ” means, collectively, the Borrowers and the Guarantors.
“ Loans ” means the loans made by the Lenders to the Borrowers pursuant to this Agreement.
“ Local Time ” means (a) local time in New York City, with respect to the times for (i) the determination of “Dollar Equivalent”; (ii) the receipt and sending of notices by and to, and the disbursement by or payment to, the Administrative Agent, any Lender or any Issuing Bank domiciled in the U.S.; (b) local time in Toronto, Canada, with respect to the time for the receipt and sending of notices by and to, and the disbursement by or payment to, the Administrative Agent, any Revolving Lender with respect to Revolving Loans denominated in Canadian Dollars or any Issuing Bank issuing Letters of Credit denominated in Canadian Dollars; (c) local time in London, England, with respect to the times for the determination of “LIBO Rate” and with respect to the receipt and sending of disbursements or payments in Sterling or Euro; (d) local time at the place of determination, if such local time as of such place for determination is specified herein; and (e) in all other circumstances, New York, New York time.
“ LTM EBITDA ” means, at any time, Consolidated EBITDA for the Parent Entity for the most recently ended Test Period for which financial statements have been delivered pursuant to Section 5.01(a) or (b).
“ Luxembourg ” means the Grand Duchy of Luxembourg.
“ Material Adverse Effect ” means a material adverse effect on (a) the business, assets, property or financial condition of the Parent Entity and the Restricted Subsidiaries taken as a whole or (b) the validity or enforceability of this Agreement or any and all other Loan Documents or the rights and remedies of the Administrative Agent and the Lenders thereunder.
“ Material Indebtedness ” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Parent Entity and its Restricted Subsidiaries in an aggregate principal amount exceeding $100,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Parent Entity or any
 
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Restricted Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Parent Entity or such Restricted Subsidiary would be required to pay if such Swap Agreement were terminated at such time.
“ Material Real Property ” means, on any date, any real property owned by any Loan Party (a) with a Fair Market Value as of such date in excess of $15,000,000 and (b) not located in an area that has been identified by the Federal Emergency Management Agency (or any successor agency) as a special flood hazard area within the meaning of the Flood Insurance Laws.
“ Material Subsidiary ” means any Restricted Subsidiary (or group of Restricted Subsidiaries as to which a specified condition applies) that would be a “significant subsidiary” under Rule 1-02(w) of Regulation S-X.
“ Maximum Rate ” has the meaning assigned to such term in Section 9.14.
“ Moody’s ” means Moody’s Investors Service, Inc. and any successor thereto.
“ Mortgage ” means, collectively, the deeds of trust, trust deeds, deeds to secure debt, security deeds, hypothecs and mortgages made by the Loan Parties in favor or for the benefit of the Administrative Agent on behalf of the Secured Parties in form and substance reasonably satisfactory to the Administrative Agent, and any other mortgages executed and delivered pursuant to Section 5.09.
“ Mortgaged Property ” means (a) each Material Real Property identified as a Mortgaged Property on Schedule 5.09(b) and (b) each Material Real Property, if any, which shall be subject to a Mortgage delivered after the Effective Date pursuant to Section 5.09(b)(D).
“ Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“ Net Cash Proceeds ” means (a) with respect to any Asset Sale or any Casualty Event, an amount equal to (i) the sum of cash and Cash Equivalents received in connection with such Asset Sale or Casualty Event (including any cash or Cash Equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received and, with respect to any Casualty Event, any insurance proceeds or condemnation awards in respect of such Casualty Event actually received by or paid to or for the account of the Parent Entity or any Restricted Subsidiary) less (ii) the sum of (A) the principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness that is secured by the Property subject to such Asset Sale or Casualty Event and that is required to be repaid (and is repaid) in connection with such Asset Sale or Casualty Event (other than Indebtedness under the Loan Documents and Indebtedness secured by Liens that are subject to the First Lien Intercreditor Agreement or the Second Lien Intercreditor Agreement), (B) the out-of-pocket expenses (including attorneys’ fees, investment banking fees, accounting fees and other professional and transactional fees, survey costs, title insurance premiums, and related search and recording charges, transfer taxes, deed or mortgage recording taxes, other expenses and brokerage, consultant and other commissions and fees) actually incurred by the Parent Entity or such Restricted Subsidiary in connection with such Asset Sale or Casualty Event, (C) taxes paid or reasonably estimated to be actually payable in connection therewith and (D) the Borrower Agent’s reasonable estimate of payments required to be made with respect to unassumed liabilities relating to the Property involved within one year of such Asset Sale or Casualty Event; provided that “Net Cash Proceeds” shall include (i) any cash or Cash Equivalents received upon the Disposition of any non-cash consideration received by the Parent Entity or any Restricted Subsidiary in any such Asset Sale, (ii) an amount equal to any reversal (without the satisfaction of any applicable liabilities in cash in a corresponding amount) of any reserve described in clause (C) above at the time of such reversal and (iii) an amount equal to any estimated liabilities described in clause (D) above that have not been satisfied in cash
 
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within three hundred and sixty-five (365) days after such Asset Sale or Casualty Event; and (b) with respect to the incurrence or issuance of any Indebtedness by the Parent Entity or any Restricted Subsidiary, an amount equal to (i) the sum of the cash received in connection with such incurrence or issuance less (ii) the attorneys’ fees, investment banking fees, accountants’ fees, underwriting or other discounts, commissions, costs and other fees, transfer and similar taxes and other out-of-pocket expenses actually incurred by the Parent Entity or such Restricted Subsidiary in connection with such incurrence or issuance.
“ New Collateral Documents ” has the meaning specified in Section 5.11(b).
“ New Guaranty ” has the meaning specified in Section 5.12(b).
“ Non BA Lender ” means a Revolving Lender that cannot or does not as a matter of policy accept bankers’ acceptances.
“ Non-Consenting Lender ” has the meaning assigned to such term in Section 2.18(b).
“ NYFRB ” means the Federal Reserve Bank of New York.
“ NYFRB Rate ” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received to the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided , further , that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“ Obligations ” means all indebtedness (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) and other monetary obligations of any of the Parent Entity and its Restricted Subsidiaries to any of the Issuing Banks, the Lenders, their Affiliates, the Administrative Agent, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Article III and Hedge Banks, individually or collectively (direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured), arising or incurred under this Agreement or any of the other Loan Documents or any Secured Hedge Agreement (excluding with respect to any Loan Party, Excluded Swap Obligations of such Loan Party) (including under any of the Loans made or reimbursement or other monetary obligations incurred or any of the Letters of Credit or other instruments at any time evidencing any thereof) and all Cash Management Obligations, in each case whether now existing or hereafter arising, whether all such obligations arise or accrue before or after the commencement of any bankruptcy, insolvency or receivership proceedings (and whether or not such claims, interest, costs, expenses or fees are allowed or allowable in any such proceeding).
“ OFAC ” has the meaning assigned to such term in Section 9.04.
“ Offered Loans ” has the meaning provided in Section 2.10(c)(iii).
“ Other Taxes ” means any and all present or future stamp or documentary Taxes or any other excise or property Taxes arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document, excluding (i) any Luxembourg registration duties (droits d’enregistrement) payable as a result of a voluntary registration of a Loan Document or of any document in connection with a Loan Document with the Administration de l’Enregistrement et des Domaines in Luxembourg where such registration is not
 
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required to maintain, preserve, or enforce the rights of a Lender under such document and (ii) any such Tax imposed as a result of an assignment (other than an assignment made at the request of a Borrower pursuant to Section 2.18) by a Lender (an “ Assignment Tax ”), if such Assignment Tax is imposed as a result of the assignor or assignee being organized in or having its principal office or applicable lending office in the taxing jurisdiction, or as a result of any other present or former connection between the assignor or assignee and the taxing jurisdiction, other than a connection arising from having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, or enforced, any Loan Documents.
“ Overnight Bank Funding Rate ” means, for any day, the rate comprised of both overnight federal funds and overnight Eurodollar borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate (from and after such date as the NYFRB shall commence to publish such composite rate).
“ Parallel Debt ” has the meaning set forth in Article VIII.
“ Parent ” has the meaning set forth in the preamble to this Agreement.
“ Parent Entity ” means Parent, or following the assumption of Parent’s obligations hereunder by a Permitted Parent Holding Company pursuant to a supplement in form reasonably satisfactory to the Administrative Agent and such Permitted Parent Holding Company having become a Guarantor, such Permitted Parent Holding Company (it being understood that Parent shall not be released as a Guarantor in connection with any such assumption unless otherwise expressly permitted hereunder); provided that in connection with the substitution of a Permitted Parent Holding Company as the Parent Entity the Borrower Agent shall have (A) given the Administrative Agent and the Lenders at least ten Business Days (or such lesser period as may be agreed by the Administrative Agent) prior notice (such notice to contain the name, primary business address and taxpayer identification number of such Permitted Parent Holding Company), (B) delivered to the Administrative Agent corporate or other applicable resolutions, other corporate or other applicable documents, certificates and legal opinions in respect of such Permitted Parent Holding Company reasonably equivalent to comparable documents delivered on the Effective Date and the Closing Date, as applicable and (C) delivered to the Administrative Agent any documentation or other information reasonably requested by the Administrative Agent and necessary to satisfy obligations of the Lenders described in Section 9.13 or any applicable “know your customer” or other anti-money laundering Laws.“ Participant ” has the meaning set forth in Section 9.04(c)(i).
“ Participant Register ” has the meaning set forth in Section 9.04(c)(ii).
“ PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
“ Perfection Certificate ” shall mean the Perfection Certificate with respect to the Loan Parties in a form reasonably satisfactory to the Administrative Agent, as the same may be supplemented from time to time.
“ Permitted Debt Securities ” means the Senior Notes and any other Indebtedness consisting of notes or loans under credit agreements, indentures other similar agreements or instruments incurred or Guaranteed by Loan Parties following the Effective Date, including Indebtedness of a Restricted Subsidiary incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by the Parent Entity or a Restricted Subsidiary; provided that (i) (A) in the case of unsecured Indebtedness, such Indebtedness does not mature or have scheduled amortization or scheduled payments of principal
 
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and is not subject to mandatory redemption, repurchase, prepayment or sinking fund obligation (other than customary offers to repurchase upon a change of control, asset sale or casualty event and customary acceleration rights after an event of default) prior to the 91st day after the Term Loan A Maturity Date and (B) in the case of secured Indebtedness, (1) such Indebtedness does not mature, (x) in the case of Indebtedness secured by a first priority lien, prior to the Term Loan A Maturity Date and (y) in the case of Indebtedness secured by a Junior Lien, prior to the 91st day after the Term Loan A Maturity Date and (2) such Indebtedness does not have Weighted Average Life to Maturity that is shorter than the Weighted Average Life to Maturity of the Tranche A Term Loans; provided that the requirements set forth in this clause (i) shall not apply to any Indebtedness consisting of a customary bridge facility so long as such bridge facility automatically converts into long-term Indebtedness that satisfies the requirements of this clause (i), (ii) except for Permitted Secured Notes, such Indebtedness is not secured by any assets of the Parent Entity or any of its Restricted Subsidiaries, (iii) such Indebtedness is not incurred or guaranteed by any Restricted Subsidiaries that are not Loan Parties, and (iv) the other terms and conditions relating to such debt securities or loans (other than pricing, interest rate margins, rate floors, discounts, premiums, fees, and optional prepayment or optional redemption terms and provisions, all of which shall be determined by the Borrower Agent) are (x) in the case of secured loans, in the aggregate, not materially more restrictive than the terms of this Agreement as determined in good faith by the Borrower Agent, except for covenants or other provisions applicable only to periods after the then Term Loan A Maturity Date at the time such Indebtedness is incurred or added to this Agreement for the benefit of the Lenders hereunder (it being understood that no consent shall be required by Lenders for terms or conditions that are more restrictive than this Agreement if such terms or conditions are added to this Agreement) and (y) in the case of unsecured loans and debt securities, on market terms at the time of issuance or incurrence thereof, as determined in good faith by the Borrower Agent (but with such terms in no event to include a more restrictive financial maintenance covenant than any financial maintenance covenant then applicable under this Agreement).
“ Permitted Encumbrances ” means:
(a)    Liens imposed by law for Taxes, assessments or other governmental charges that (i) are not yet due and payable or (ii) are being contested in compliance with Section 5.04;
(b)    carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlords’, workmen’s, suppliers’ and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than sixty (60) days or are being contested in compliance with Section 5.04;
(c)    (i) Liens, pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations (including to support letters of credit or bank guarantees) and (ii) Liens, pledges or deposits in the ordinary course of business securing liability for premiums or reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing insurance to the Parent Entity or any Restricted Subsidiary;
(d)    Liens or deposits to secure the performance of bids, trade contracts, governmental contracts, tenders, statutory bonds, leases, statutory obligations, surety, stay, customs, appeal and replevin bonds, performance bonds and other obligations of a like nature (including those to secure health, safety and environmental obligations), in each case in the ordinary course of business;
 
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(e)    Liens in respect of judgments, decrees, attachments or awards that do not constitute an Event of Default under clause (k) of Article VII;
(f)    easements, restrictions (including zoning restrictions), rights-of-way, covenants, licenses, encroachments, oil and gas leases, protrusions and similar encumbrances and minor title defects affecting real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially interfere with the ordinary conduct of business of the Parent Entity or any Restricted Subsidiary;
(g)    any interest or title of a lessor, sublessor, licensor or sublicensor under any lease, sublease, license or sublicense entered into by the Parent Entity or any other Restricted Subsidiary in the ordinary course of its business and covering only the assets so leased;
(h)    Liens in favor of a banking or other financial institution arising as a matter of law or in the ordinary course of business under customary general terms and conditions encumbering deposits or other funds maintained with a financial institution (including the right of set-off) and that are within the general parameters customary in the banking industry or arising pursuant to such banking institution’s general terms and conditions;
(i)    Liens on specific items of inventory or other goods (other than fixed or capital assets) and proceeds thereof of any Person securing such Person’s obligations in respect of bankers’ acceptances or letters of credit issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods in the ordinary course of business; and
(j)    Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;
provided that, except as expressly set forth in this definition, the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.
“ Permitted Foreign Borrower Jurisdictions ” means, with respect to the Revolving Facility (x) the United Kingdom, Jersey, Ireland, Luxembourg and the Netherlands and (y) each other jurisdiction approved by the Administrative Agent and the Lenders under the applicable Facility, such approval not to be unreasonably withheld or delayed; provided that in connection with the addition of any Borrower pursuant to clause (y), without any further consent of any Lender (but with prior written notice to the Lenders), the Administrative Agent and the Borrowers may enter into an amendment to this Agreement and any other Loan Documents to include applicable local law provisions (including with respect to the Tax gross-up provisions) as are mutually agreed to be customary for facilities similar to this Agreement with borrowers that are organized in such jurisdictions.
“ Permitted Parent Borrower Release ” means the release of Parent as a Borrower hereunder (but not as a Guarantor under the Guaranty to the extent Parent remains the Parent Entity after giving effect to such release) which shall be permitted at any time (i) no Event of Default has occurred and is continuing, (ii) Parent does not have outstanding any Loans or Letters of Credit under this Agreement and (iii) a Responsible Officer of Parent delivers a certificate to the Administrative Agent stating that Parent is requesting to be released as a “Borrower” hereunder in compliance with Section 9.02(c).
“ Permitted Parent Guarantor Jurisdictions ” means the United Kingdom, a member of the European Union (as in effect on the Effective Date), Ireland, Bermuda, the Cayman Islands, the Channel Islands
 
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(including Jersey), Luxembourg, the Netherlands, Singapore or Switzerland; provided that the Borrower Agent shall have consulted with the Administrative Agent with respect to the transfer of Parent’s jurisdiction of organization to such jurisdiction prior to Parent reorganizing to such jurisdiction or prior to a Permitted Parent Holding Company becoming the Parent Entity hereunder and shall have delivered a certificate of a Responsible Officer to the Administrative Agent stating that the transfer of Parent’s jurisdiction of organization to such jurisdiction or such Permitted Parent Holding Company being organized in such jurisdiction is not adverse, in any material respect, to the value to the Lenders of Parent’s obligations under the Guaranty or will not result in such Permitted Parent Holding Company’s obligations under the Guaranty and this Agreement being limited in a manner materially adverse to the Lenders compared to the obligations of Parent under the Guaranty as in effect on the Closing Date, as the case may be.
“ Permitted Parent Holding Company ” means a newly organized entity (i) to which 100% of the outstanding Equity Interests of Parent (other than nominal interests directly or indirectly held by directors, officers and Affiliates of Parent) are transferred or exchanged, or into which Parent is merged, consolidated or liquidated, so long as, immediately following such transfer, exchange, merger, consolidation or liquidation, the holders of the Equity Interests of Parent (other than nominal interests directly or indirectly held by directors, officers and Affiliates of Parent) hold Equity Interests in such Permitted Parent Holding Company in the same proportions and with the same respective percentages of the voting rights as they held in Parent immediately prior to such transfer and (ii) becomes a party to the Guaranty (except during a Covenant Suspension Period, unless such entity becomes the Parent Entity after giving effect to such transaction) and the Pledge and Security Agreement (except during a Collateral Suspension Period) pursuant to a joinder agreement in form reasonably satisfactory to the Administrative Agent and otherwise satisfies the requirements of Section 5.09 applicable thereto.
“ Permitted Receivables Facilit y” means the receivables facility or facilities created under the Permitted Receivables Facility Documents providing for (a) the factoring, sale or pledge by one or more Receivables Sellers of Permitted Receivables Facility Assets (thereby providing financing to the Parent Entity and the Receivables Sellers) to the Receivables Entity (either directly or through another Receivables Seller), which in turn shall sell or pledge interests in the respective Permitted Receivables Facility Assets to third-party lenders or investors pursuant to the Permitted Receivables Facility Documents (with the Receivables Entity permitted to issue investor certificates, purchased interest certificates or other similar documentation evidencing interests in the Permitted Receivables Facility Assets) in return for the cash used by the Receivables Entity to purchase the Permitted Receivables Facility Assets from the respective Receivables Sellers or (b) the factoring, sale or pledge by one or more Receivables Sellers of Permitted Receivables Facility Assets to third-party lenders or investors pursuant to the Permitted Receivables Facility Documents in connection with Receivables-backed financing programs, in each case as more fully set forth in the Permitted Receivables Facility Documents.
“ Permitted Receivables Facility Assets ” means (i) Receivables (whether now existing or arising in the future) of Foreign Subsidiaries which are transferred or pledged to the Receivables Entity pursuant to the Permitted Receivables Facility and any related Permitted Receivables Related Assets which are also so transferred or pledged to the Receivables Entity and all proceeds thereof and (ii) loans to Subsidiaries secured by Receivables (whether now existing or arising in the future) of the Parent Entity and its Restricted Subsidiaries which are made pursuant to the Permitted Receivables Facility.
“ Permitted Receivables Facility Documents ” means each of the documents and agreements entered into in connection with the Permitted Receivables Facility, including all documents and agreements relating to the issuance, funding and/or purchase of certificates and purchased interests, all of which documents and agreements shall be in form and substance reasonably customary for transactions of this type, in each case as such documents and agreements may be amended, modified, supplemented, refinanced or replaced from time to time so long as (in the good faith determination of the Borrower Agent) either (i)
 
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the terms as so amended, modified, supplemented, refinanced or replaced are reasonably customary for transactions of this type or (ii)(x) any such amendments, modifications, supplements, refinancings or replacements do not impose any conditions or requirements on the Parent Entity or any of its Restricted Subsidiaries that are more restrictive in any material respect than those in existence immediately prior to any such amendment, modification, supplement, refinancing or replacement, and (y) any such amendments, modifications, supplements, refinancings or replacements are not adverse in any material respect to the interests of the Lenders.
“ Permitted Receivables Related Assets ” means any other assets that are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization or Receivables-backed financing programs involving accounts receivable and any collections or proceeds of any of the foregoing.
“ Permitted Refinancing Indebtedness ” means, with respect to any Person, any modification, refinancing, refunding, renewal, replacement or extension of any Indebtedness of such Person; provided that (a) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so modified, refinanced, refunded, renewed, replaced or extended except by an amount equal to unpaid accrued interest and premium thereon plus other reasonable amounts paid, and fees and expenses reasonably incurred, in connection with such modification, refinancing, refunding, renewal or extension, (b) other than with respect to Permitted Refinancing Indebtedness in respect of Indebtedness permitted pursuant to Section 6.01(e), such modification, refinancing, refunding, renewal or extension has a final maturity date equal to or later than the earlier of (x) the final maturity date of the Indebtedness so modified, refinanced, refunded, renewed or extended and (y) the date which is 91 days after the Term Loan A Maturity Date or, in the case of Permitted Refinancing Indebtedness secured by a first priority lien, the Term Loan A Maturity Date, (c) other than with respect to Permitted Refinancing Indebtedness in respect of Indebtedness permitted pursuant to Section 6.01(e), such modification, refinancing, refunding, renewal or extension has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of, the Indebtedness being modified, refinanced, refunded, renewed or extended, or, in the case of Permitted Refinancing Indebtedness secured by a first priority lien, the Tranche A Term Loans, (d) to the extent such Indebtedness being modified, refinanced, refunded, renewed or extended is subordinated in right of payment to the Obligations, such modification, refinancing, refunding, renewal or extension is subordinated in right of payment to the Obligations on terms at least as favorable to the Lenders (in the good faith determination of the Borrower Agent) as those contained in the documentation governing the Indebtedness being modified, refinanced, refunded, renewed or extended and (e) if the Indebtedness being modified, refinanced, refunded, renewed or extended is secured by Liens that are subject to the terms of the First Lien Intercreditor Agreement or the Second Lien Intercreditor Agreement, then any Liens securing the modified, refinanced, refunded, renewed or extended Indebtedness do not have a higher priority compared to the Liens securing the Obligations than the Liens securing the Indebtedness being modified, refinanced, refunded, renewed or extended; provided that the requirements set forth in clauses (b) and (c) above shall not apply to any Indebtedness consisting of a customary bridge facility so long as such bridge facility automatically converts into long-term Indebtedness that satisfies the requirements of such clauses (b) and (c).
“ Permitted Secured Notes ” means (i) Refinancing Debt Securities, (ii) Permitted Debt Securities issued or incurred pursuant to Section 6.01(r) and (iii) any Permitted Refinancing Indebtedness in respect of the Indebtedness described in the foregoing clauses (i) and (ii), in each case, that are secured by a Lien permitted by Section 6.02(v).
“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
 
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“ Plan ” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Parent Entity or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“ Pledge and Security Agreement ” means, collectively, the Pledge and Security Agreement, dated as of the Closing Date and as amended and supplemented from time to time, executed by certain of the Loan Parties, substantially in the form of Exhibit I attached hereto, together with each other security agreement supplement executed and delivered pursuant to Section 5.09; provided that at all times during a Collateral Reinstatement Period, “Pledge and Security Agreement” shall be deemed to refer to any new substantially similar security agreement required to be delivered on the Collateral Reinstatement Date with respect to such Collateral Reinstatement Period pursuant to Section 5.11(b).
“ Prime Rate ” means the rate of interest per annum publicly announced from time to time by JPMCB as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.
“ Pro Forma Adjustment ” means, for any applicable period of measurement with respect to the Consolidated EBITDA of the applicable Acquired Entity or Business or the Consolidated EBITDA of the Parent Entity, the pro forma increase or decrease in such Consolidated EBITDA that is (i) consistent with Regulation S-X or (ii) otherwise permitted by the definition of “Consolidated EBITDA”; provided that any such pro forma increase or decrease to such Consolidated EBITDA shall be without duplication for cost savings or additional costs already included in such Consolidated EBITDA for such period of measurement.
“ Pro Forma Basis ” means with respect to compliance with any test or covenant hereunder, that (A) to the extent applicable, the Pro Forma Adjustment shall have been made and (B) all Specified Transactions and the following transactions in connection therewith shall be deemed to have occurred as of the first day of the applicable period of measurement in such test or covenant: (a) income statement items (whether positive or negative) attributable to the Property or Person subject to such Specified Transaction, (i) in the case of a Disposition described in the definition of “Specified Transaction,” shall be excluded, and (ii) in the case of an acquisition or Investment described in the definition of “Specified Transaction,” shall be included, (b) any retirement of Indebtedness and (c) any Indebtedness incurred or assumed by the Parent Entity or any of the Restricted Subsidiaries and if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination.
“ Property ” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Equity Interests.
“ Proposed Discounted Prepayment Amount ” has the meaning provided in Section 2.10(c)(ii).
“ Public Lender ” has the meaning assigned to it in Section 5.01.
“ Qualified Equity Interests ” means Equity Interests of the Parent Entity other than Disqualified Equity Interests.
“ Qualifying Lender ” has the meaning provided in Section 2.10(c)(iv).
“ Qualifying Loans ” has the meaning provided in Section 2.10(c)(iv).
 
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“ Quotation Date ” means, in respect of the determination of the Adjusted LIBO Rate for any Interest Period for a Eurocurrency Loan (a) in Sterling, the day that is the first Business Day of such Interest Period, (b) in Euro, the day that is two TARGET Days prior the first day of such Interest Period and (c) in Dollars, the day that is two Business Days prior to the first day of such Interest Period.
“ Rating Agencies ” means Moody’s and S&P or if Moody’s or S&P or both shall not make a corporate family or corporate credit rating on the Parent Entity or U.S. Parent Borrower publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Borrower Agent and reasonably satisfactory to the Administrative Agent, which shall be substituted for Moody’s or S&P or both, as the case may be.
“ Receivables ” means all accounts receivable (including, without limitation, all rights to payment created by or arising from sales of goods, leases of goods or the rendition of services rendered no matter how evidenced whether or not earned by performance).
“ Receivables Entity ” means a wholly owned Subsidiary of the Parent Entity which engages in no activities other than in connection with the financing of accounts receivable of the Receivables Sellers and which is designated (as provided below) as the “Receivables Entity” (a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by the Parent Entity or any other Restricted Subsidiary of the Parent Entity (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness)) pursuant to Standard Securitization Undertakings, (ii) is recourse to or obligates the Parent Entity or any other Restricted Subsidiary of the Parent Entity in any way (other than pursuant to Standard Securitization Undertakings) or (iii) subjects any property or asset of the Parent Entity or any other Restricted Subsidiary of the Parent Entity, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings, (b) with which neither the Parent Entity nor any of its Restricted Subsidiaries has any contract, agreement, arrangement or understanding (other than pursuant to the Permitted Receivables Facility Documents (including with respect to fees payable in the ordinary course of business in connection with the servicing of accounts receivable and related assets)) on terms less favorable to the Parent Entity or such Restricted Subsidiary than those that might be obtained at the time from persons that are not Affiliates of the Parent Entity, and (c) to which neither the Parent Entity nor any other Restricted Subsidiary of the Parent Entity has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results. Any such designation shall be evidenced to the Administrative Agent by a certificate of a Responsible Officer of the Borrower Agent certifying that, to the best of such officer’s knowledge and belief after consultation with counsel, such designation complied with the foregoing conditions.
“ Receivables Sellers ” means the Parent Entity and its Restricted Subsidiaries (other than Receivables Entities) that are from time to time party to the Permitted Receivables Facility Documents.
“ Recipient ” has the meaning provided in Section 2.16A(b).
“ Reference Time ” has the meaning assigned to it in the definition of “Available Amount.”
“ Refinanced Revolving Loans ” has the meaning assigned to such term in Section 9.02(b).
“ Refinanced Term Loans ” has the meaning assigned to such term in Section 9.02(b).
“ Refinancing Debt Securities ” means any Permitted Debt Securities that are designated as “Refinancing Debt Securities” in a certificate of a Responsible Officer of the Borrower delivered to the Administrative Agent on or prior to the date such Permitted Debt Securities are issued.
 
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“ Refinancing Indebtedness ” means (i) any Refinancing Term Loans and (ii) any Refinancing Debt Securities.
“ Refinancing Term Loans ” means Incremental Term Loans that are designated by a Responsible Officer of the Borrower as “Refinancing Term Loans” in a certificate of a Responsible Officer of the Borrower delivered to the Administrative Agent on or prior to the date of incurrence.
“ Register ” has the meaning set forth in Section 9.04(b)(iv).
“ Regulation S -X ” means Regulation S-X under the Securities Act of 1933, as amended.
“ Related Parties ” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person.
“ Relevant Territory ” means:
(i)    a member state of the European Communities (other than Ireland); or
(ii)    to the extent not a member state of the European Communities, a jurisdiction with which Ireland has entered into a tax treaty that either has force of law by virtue of Section 826(1) of the TCA or which will have the force of law on completion of the procedures set out in Section 826(1) of the TCA.
“ Replacement Revolving Loans ” has the meaning assigned to such term in Section 9.02(b).
“ Replacement Term Loans ” has the meaning assigned to such term in Section 9.02(b).
“ Repo Counterparties ” has the meaning assigned to it in the definition of “Cash Equivalents.”
“ Required Facility Lenders ” means, with respect to any Facility, at any time, Lenders having Credit Exposure and unused Commitments in respect of such Facility representing more than 50% of the sum of the total Credit Exposure and unused Commitments in respect of such Facility at such time.
“ Required Lenders ” means, at any time, Lenders having Credit Exposure and unused Commitments representing more than 50% of the sum of the total Credit Exposure and unused Commitments at such time.
“ Required Revolving Lenders ” means, at any time, Lenders having Revolving Exposures and unused Revolving Commitments representing more than 50% of the sum of the total Revolving Exposures and unused Revolving Commitments at such time.
“ Responsible Officer ” of any Person shall mean any executive officer or Financial Officer of such Person and any other officer or similar official thereof with responsibility for the administration of the obligations of such Person in respect of this Agreement.
“ Restricted Payments ” means any dividend or other distribution (whether in cash, securities or other property (other than Qualified Equity Interests)) with respect to any Equity Interests in the Parent Entity or any Restricted Subsidiary, or any payment (whether in cash, securities or other property (other than Qualified Equity Interests)), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Parent Entity or any Restricted Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Parent Entity or any Restricted Subsidiary.
 
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“ Restricted Subsidiary ” means any Subsidiary of the Parent Entity other than an Unrestricted Subsidiary.
“ Reversion Date ” has the meaning set forth in the definition “Covenant Suspension Period.”
“ Revolving Commitment ” means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans, expressed as an amount representing the maximum possible aggregate amount of such Lender’s Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b) increased from time to time pursuant to Section 2.19. The initial amount of each Lender’s Revolving Commitment on the Effective Date is set forth on Schedule 2.01 of this Agreement, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Revolving Commitment, as the case may be. The initial aggregate amount of the Lenders’ Revolving Commitments on the Effective Date is $500,000,000.
“ Revolving Credit Maturity Date ” means the date that is the fifth anniversary of the Closing Date.
“ Revolving Exposure ” means, at any time, the sum of (a) the Dollar Equivalent amount of the Revolving Loans outstanding at such time, (b) the LC Exposure at such time and (c) the Swingline Exposure at such time. The Revolving Exposure of any Lender at any time shall be its Applicable Percentage of the Revolving Exposure at such time.
“ Revolving Facility ” means the Revolving Commitments and the extension of credit made hereunder by the Revolving Lenders.
“ Revolving Lender ” means a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Exposure.
“ Revolving Loan ” means a Loan made pursuant to Section 2.01(b).
“ S&P ” means Standard & Poor’s Global Ratings, a division of The McGraw-Hill Companies, Inc., and any successor thereto.
“ Sanctioned Country ” means, at any time, a country, region or territory which is, or whose government is, itself the subject or target of any Sanctions that broadly prohibit dealings with that country, region or territory (as of the Effective Date, Cuba, Iran, North Korea, Sudan, Syria and Crimea).
“ Sanctioned Person ” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the U.S. Department of Commerce, or by the United Nations Security Council, the European Union or any European Union member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clause (a) or (b).
“ Sanctions ” means, economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of Commerce or the
 
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U.S. Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state or Her Majesty’s Treasury of the United Kingdom, in each case, to the extent applicable to the Parent Entity and its Subsidiaries.
“ SEC ” means the Securities and Exchange Commission, any successor thereto and any analogous Governmental Authority succeeding to any of its principal functions.
“ Second Lien Intercreditor Agreement ” means an Intercreditor Agreement, in form and substance reasonably acceptable to the Administrative Agent and the Borrower Agent, by and between the Administrative Agent and the collateral agent for one or more classes of Permitted Secured Notes that are intended to be secured by Junior Liens.
“ Secured Hedge Agreement ” means any Swap Agreement that is entered into by and between the Parent Entity or any Restricted Subsidiary and any Hedge Bank.
“ Secured Parties ” means, collectively, the Administrative Agent, the Issuing Banks, the Lenders, the Hedge Banks, the Cash Management Banks and any Affiliate of a Lender to which Obligations are owed, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Article VIII.
“ Senior Notes ” means up to $800 million principal amount of senior notes of Parent issued on or prior to the Closing Date and maturing not earlier than 91 days after the Term Loan A Maturity Date.
“ series ” means, with respect to any Extended Term Loans, Incremental Term Loans or Replacement Term Loans, all such Term Loans that have the same maturity date, amortization and interest rate provisions and that are designated as part of such “series” pursuant to the applicable Additional Credit Extension Amendment.
“ Solvent ” and “ Solvency ” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they become absolute and matured and (d) such Person is not engaged in any business, as conducted on such date and as proposed to be conducted following such date, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
“ Specified Domestic Subsidiary ” means (a) any wholly owned Domestic Subsidiary of the Parent Entity that is the direct parent of the U.S. Parent Borrower and (b) each wholly owned Domestic Subsidiary of a Domestic Subsidiary Borrower, in each case formed or acquired after the Effective Date other than (i) any Receivables Entity, (ii) any Domestic Subsidiary that is a subsidiary of a Foreign Subsidiary of a Domestic Subsidiary Borrower, (iii) any Domestic Subsidiary that has no material assets other than Equity Interests or Indebtedness of one or more Foreign Subsidiaries (other than the direct parent of the U.S. Parent Borrower), (iv) any Unrestricted Subsidiary, (v) any Domestic Subsidiary that on a consolidated basis with its Restricted Subsidiaries did not have consolidated revenues in excess of 1% of the Parent Entity’s consolidated revenues for the most recently ended four fiscal quarter period of the Parent Entity for which financial statements have been delivered pursuant to Section 5.01(a) or (b) and did not have consolidated total assets in excess of 1% of Consolidated Total Assets as of the most recently ended fiscal
 
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quarter of the Parent Entity for which financial statements have been delivered on or prior to the Effective Date or pursuant to Section 5.01(a) or (b), (vi) any Domestic Subsidiary that is prohibited by Law or contractual obligations existing on the Closing Date or on the date such Person becomes a Subsidiary (and not created in anticipation thereof) from providing a Guaranty or that would require a governmental (including regulatory) consent, approval, license or authorization to provide such Guaranty, unless such consent, approval, license or authorization has been obtained and (vii) any Domestic Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent and the Borrower Agent, the burden or cost of providing a Guaranty shall outweigh the benefits to the Lenders to be afforded thereby; provided that upon any wholly owned Domestic Subsidiary ceasing to meet the criteria for exclusion pursuant to each of clauses (i) through (vii) above, the Parent Entity shall be deemed to have acquired a Specified Domestic Subsidiary at such time and shall cause such Domestic Subsidiary to comply with the applicable provisions of Section 5.09.
“ Specified Event of Default ” means any Event of Default under clause (a), (b), (h) or (i) of Article VII.
“ Specified Foreign Subsidiary ” means each Foreign Subsidiary of the Parent Entity that is a direct parent company of the U.S. Parent Borrower.
“ Specified Transaction ” means, with respect to any Test Period, any of the following events occurring after the first day of such Test Period and on or prior to the applicable date of determination: (i) any Investment by the Parent Entity or any Restricted Subsidiary (x) in any Person (including in connection with an acquisition), other than a Person that was a wholly-owned Restricted Subsidiary on the first day of such period or (y) pursuant to Section 6.05(i), (ii) any Asset Sale or Casualty Event, (iii) any Disposition of all or substantially all Equity Interests in any Restricted Subsidiary of the Parent Entity owned by the Parent Entity or any of its Restricted Subsidiaries or any division, product line, or facility used for operations of the Parent Entity or any of its Restricted Subsidiaries, (iv) any incurrence or repayment of Indebtedness (in each case, other than Revolving Loans, Swingline Loans and borrowings and repayments of Indebtedness in the ordinary course of business under revolving credit facilities except to the extent there is a reduction in the related Revolving Commitments or other revolving credit commitment), (v) any Restricted Payment, (vi) any designation of a Restricted Subsidiary as an Unrestricted Subsidiary or of an Unrestricted Subsidiary as a Restricted Subsidiary and (vii) any other transaction that by the terms of the Loan Documents requires pro forma compliance with a test or covenant hereunder or requires such test or covenant to be calculated on a Pro Forma Basis; provided that the Parent Entity may elect to exclude any transaction described in this definition as a Specified Transaction solely for purposes of the calculation of Consolidated EBITDA if such transaction involves consideration of less than $15,000,000.
“ Spin-Off ” has the meaning set forth in the preamble to this Agreement.
“ Spin-Off Business ” has the meaning set forth in the preamble to this Agreement.
“ Standard Securitization Undertakings ” means representations, warranties, covenants and indemnities entered into by the Parent Entity or any Restricted Subsidiary thereof in connection with the Permitted Receivables Facility which are reasonably customary in an accounts receivable financing transaction.
“ Statutory Reserve Rate ” means, with respect to any currency, a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve, liquid asset, fees or similar requirements (including any marginal, special, emergency or supplemental reserves or other requirements) established by any central bank, monetary authority, the Board, the Financial Services Authority, the European Central Bank or other
 
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Governmental Authority for any category of deposits or liabilities customarily used to fund loans in such currency, expressed in the case of each such requirement as a decimal. Such reserve percentages shall, in the case of Dollar denominated Loans, include those imposed pursuant to Regulation D of the Board. Eurocurrency Loans shall be deemed to be subject to such reserve, liquid asset or similar requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under any applicable law, rule or regulation, including Regulation D. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve, liquid asset or similar requirement.
“ Sterling ” or “ £ ” refers to lawful money of the United Kingdom.
“ Subject Party ” has the meaning provided in Section 2.16A(b).
“ Subject Person ” has the meaning assigned to it in the definition of “Investment.”
“ Subordinated Indebtedness ” means Indebtedness of any Loan Party that is expressly subordinated in right of payment to such Loan Party’s payment obligations under the Loan Documents.
“ subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the ordinary voting power for the election of directors or other governing body are at the time beneficially owned, directly or indirectly, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
“ Subsidiary ” means any subsidiary of the Parent Entity (including, without limitation, the U.S. Parent Borrower).
“ Subsidiary Borrower ” means each Restricted Subsidiary that becomes a party hereto pursuant to Section 9.02(c) until such time as such Subsidiary Borrower is removed as a party hereto pursuant to Section 9.02(c).
“ Supplier ” has the meaning provided in Section 2.16A(b).
“ Swap Agreement ” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Parent Entity or the Subsidiaries shall be a Swap Agreement.
“ Swap Obligation ” means, with respect to any Loan Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“ Swingline Exposure ” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the total Swingline Exposure at such time.
“ Swingline Lender ” means JPMCB, in its capacity as lender of Swingline Loans hereunder, or any successor swingline lender hereunder.
 
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“ Swingline Loan ” means a Loan made pursuant to Section 2.04.
“ Swingline Loan Sublimit ” means $100,000,000.
“ TARGET Day ” means any day on which (i) TARGET2 is open for settlement of payments in Euro and (ii) banks are open for dealings in deposits in Euro in the London interbank market.
“ TARGET2 ” means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilizes a single shared platform and which was launched on November 19, 2007.
“ Tax Indemnitee ” has the meaning provided in Section 2.16(c).
“ Taxes ” means any and all present or future taxes, levies, imposts, duties, assessments or withholdings and similar charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“ TCA ” means the Taxes Consolidation Act 1997 of Ireland, as amended.
“ Term Loan A Facility ” means the Tranche A Term Commitments and the Tranche A Term Loans.
“ Term Loan A Maturity Date ” means the date that is the fifth anniversary of the Closing Date.
“ Term Loans ” means the Tranche A Term Loans, the Incremental Term Loans of each series and the Extended Term Loans of each series, collectively.
“ Test Period ” means the period of four fiscal quarters of the Parent Entity ending on a specified date.
“ Tranche A Term Commitment ” means, as to each Tranche A Term Lender, its obligation to make a Tranche A Term Loan on the Closing Date pursuant to Section 2.01(a) in an aggregate amount not to exceed the amount set forth opposite such Tranche A Term Lender’s name on Schedule 2.01 to this Agreement under the caption “Tranche A Term Commitment” or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement. The initial aggregate amount of the Tranche A Term Commitments on the Effective Date is $750,000,000.
“ Tranche A Term Lender ” means, at any time, any Lender that has a Tranche A Term Commitment or a Tranche A Term Loan at such time.
“ Tranche A Term Loan ” means an advance made by a Tranche A Term Lender to the Parent Entity under the Tranche A Term Commitments.
“ Transactions ” means the execution, delivery and performance by the Loan Parties of this Agreement and the other Loan Documents, the borrowing of Loans, the issuance of the Senior Notes, the use of the proceeds thereof on the Closing Date (including the consummation of the Distribution), the consummation of the Spin-Off and related transactions and the payment of fees and expenses in connection with the foregoing.
 
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“ Type ,” when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate, the Alternate Base Rate, the Canadian Prime Rate or the CDOR Rate.
“ UK Bank Levy ” means the bank levy provided for in Section 73 and Schedule 19 of the Finance Act 2011 (as amended and re-enacted from time to time), and the bank surcharge provided for in Section 269DA Corporation Tax Act 2010.
“ UK Borrower ” means any Borrower incorporated in the United Kingdom and, to the extent constituting a Borrower hereunder and resident for tax purpose in the United Kingdom, the Parent.
“ UK Loan Party ” means any Loan Party incorporated in the United Kingdom and, to the extent constituting a Borrower or Guarantor and resident for tax purpose in the United Kingdom, the Parent.
“ UK Qualifying Lender ” means a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Loan Document to a UK Borrower and is:
(a)    a Lender:
(i)    which is a bank (as defined for the purpose of section 879 ITA) making an advance under a Loan Document and is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance or would be within such charge as respects such payment apart from section 18A CTA; or
(ii)    in respect of an advance made under a Loan Document by a person that was a bank (as defined for the purposes of section 879 ITA) at the time that advance was made and within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; or
(b)    a Lender which is:
(i)    a company resident in the United Kingdom for United Kingdom tax purposes; or
(ii)    a partnership each member of which is:
(A)    a company so resident in the United Kingdom;
(B)    a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
(iii)    a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company;
(c)    a UK Treaty Lender; or
 
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(d)    a Lender which is a building society (as defined for the purpose of section 880 of the ITA) making an advance under a Loan Document.
“ UK Tax Confirmation ” means a confirmation by a Lender that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Loan Document to a UK Borrower is: (a) a company resident in the United Kingdom for United Kingdom tax purposes; (b) a partnership each member of which is either: (i) a company resident in the United Kingdom for United Kingdom tax purposes; or (ii) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or (c) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing its chargeable profits (within the meaning of section 19 of the CTA).
“ UK Tax Deduction ” means a deduction or withholding for or on account of Indemnified Tax imposed by the United Kingdom from a payment under a Loan Document in respect of an advance to a UK Borrower.
“ UK Treaty ” has the meaning assigned to it in the definition of “UK Treaty State.”
“ UK Treaty Lender ” means, in respect of an advance to a UK Borrower, a Lender which (a) is treated as a resident of a UK Treaty State for the purposes of the relevant UK Treaty; (b) does not carry on a business in the United Kingdom through a permanent establishment with which that Lender’s participation in the Loan or Letter of Credit is effectively connected.
“ UK Treaty State ” means a jurisdiction having a double taxation agreement (a “UK Treaty”) with the United Kingdom which makes provision for full exemption from tax imposed by the United Kingdom on interest.
“ Uniform Commercial Code ” or “ UCC ” means the Uniform Commercial Code as the same may from time to time be in effect in the State of New York.
“ Unrestricted Incremental Amount ” has the meaning assigned to such term in Section 2.19(a).
“ Unrestricted Subsidiary ” means each Subsidiary of the Parent Entity designated by the Parent Entity as an Unrestricted Subsidiary pursuant to Section 5.13 subsequent to the Effective Date, in each case, until such Person ceases to be an Unrestricted Subsidiary of the Parent Entity in accordance with Section 5.13 or ceases to be a Subsidiary of the Parent Entity.
“ U.S. Guarantor ” means (i) the U.S. Parent Borrower (other than with respect to its own obligations), (ii) any Subsidiary Borrower that is a Domestic Subsidiary (other than with respect to its own obligations), (iii) each Domestic Subsidiary that is a direct parent of a Domestic Subsidiary Borrower, (iv) each Domestic Subsidiary that from time to time is a party to the Guaranty, pursuant to Section 5.09 or otherwise, and (v) any Parent Entity that is organized under the laws of the United States, any State thereof or the District of Columbia (other than with respect to its own obligations).
“ U.S. Loan Parties ” means the U.S. Parent Borrower and the U.S. Guarantors.
“ U.S. Parent Borrower ” has the meaning set forth in the preamble to this Agreement.
 
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“ U.S. Tax Compliance Certificate ” has the meaning provided in Section 2.16(e)(2)(C).
“ VAT ” means: (a) any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and (b) any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.
“ Weighted Average Life to Maturity ” means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the then outstanding aggregate principal amount of such Indebtedness into (b) the sum of the total of the products obtained by multiplying (i) the amount of each then remaining scheduled installment, sinking fund, serial maturity or other required payment of principal including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) which will elapse between such date and the making of such payment.
“ wholly owned ” means, with respect to a subsidiary of a Person, a subsidiary of such Person all of the outstanding Equity Interests of which (other than (x) director’s qualifying shares and (y) shares issued to foreign nationals to the extent required by applicable Law) are owned by such Person and/or by one or more wholly owned subsidiaries of such Person.
“ Withdrawal Liability ” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“ Write-Down and Conversion Powers ” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
SECTION 1.02.     Classification of Loans and Borrowings . For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by Class and Type (e.g., a “Eurocurrency Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurocurrency Borrowing”) or by Class and Type (e.g., a “Eurocurrency Revolving Borrowing”).
SECTION 1.03.     Terms Generally .
(a)    Unless separate definitions are provided for the singular and plural forms of a specified term, the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented, refinanced, restated, replaced or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles, Sections, Exhibits and Schedules of this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties,
 
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including cash, securities, accounts and contract rights. A Letter of Credit shall be deemed at a particular time to be “outstanding,” and not to have “terminated,” in each case regardless of the expiration date of the Letter of Credit, if (i) a presentation made at such time under such Letter of Credit would be required to be honored if otherwise made in accordance with the terms and conditions of such Letter of Credit, or (ii) a presentation made on or before the latest date for presentation under such Letter of Credit has not yet been honored and under the applicable letter of credit practice rules or applicable law the time to give timely notice of refusal of such presentation for documentary discrepancies has not yet passed.
(b)     Luxembourg Terms . In this Agreement, a reference to:
(i)    a “liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrator receiver, administrator or similar officer” includes any:
(A)     juge-commissaire and/or insolvency receiver ( curateur ) appointed under the Luxembourg Commercial Code;
(B)     liquidateur appointed under Articles 141 to 151 of the Luxembourg Act dated 10 August 1915;
(C)     juge-commissaire and/or liquidateur appointed under Article 203 of the Luxembourg Act dated 10 August 1915 on commercial companies;
(D)     commissaire appointed under the Grand-Ducal Decree dated 24 May 1935 or under Articles 593 to 614 of the Luxembourg Commercial Code; and
(E)     juge délégué appointed under the Luxembourg Act dated 14 April 1886;
(ii)    a “winding-up, administration or dissolution” includes, without limitation, bankruptcy ( faillite ), liquidation, composition with creditors ( concordat préventif de faillite ), moratorium or reprieve from payment ( sursis de paiement ) and controlled management ( gestion contrôlée ); and
(iii)    a person being “unable to pay its debts” includes that person being in a state of cessation of payments ( cessation de paiements ).
SECTION 1.04.     Accounting Terms; GAAP .
(a)    Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower Agent notifies the Administrative Agent that the Borrower Agent requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Effective Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower Agent that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. In addition, notwithstanding any other provision contained herein, (i) the definitions set forth in the Loan Documents and any financial calculations required by the Loan Documents shall be computed to exclude any change to lease accounting rules from those in effect pursuant to Financial Accounting Standards Board Accounting Standards Codification 840 (Leases) and other related lease accounting guidance as in effect on the Effective Date; provided that ASU No. 2016-02
 
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Leases (Topic 842) (or any other Financial Accounting Standard having a similar result or effect) shall be deemed a change in GAAP after the Effective Date, regardless of the date enacted, adopted or issued and regardless of any delayed implementation thereof and (ii) all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Financial Accounting Standards Board Accounting Standards Codification 825 (or any other Financial Accounting Standard having a similar result or effect) to value any assets or liabilities of the Parent Entity, any Borrower or any Restricted Subsidiary at “fair value,” as defined therein.
(b)    Notwithstanding anything to the contrary herein, (i) for purposes of determining compliance with any test or covenant or the compliance with or availability of any basket contained in this Agreement with respect to any Test Period, the Consolidated Leverage Ratio, Consolidated Total Assets, Consolidated EBITDA and Consolidated Secured Leverage Ratio shall be calculated with respect to such period on a Pro Forma Basis and (ii) for purposes of calculating any consolidated amounts necessary to determine compliance by any Person and, if applicable, its Restricted Subsidiaries with any ratio or other financial covenant in this Agreement, Unrestricted Subsidiaries shall be excluded.
SECTION 1.05.     Payments on Business Days . When the payment of any Obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment or performance shall extend to the immediately succeeding Business Day and such extension of time shall be reflected in computing interest or fees, as the case may be; provided that, with respect to any payment of interest on or principal of Eurocurrency Loans, if such extension would cause any such payment to be made in the next succeeding calendar month, such payment shall be made on the immediately preceding Business Day.
SECTION 1.06.     Times of Day . Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).
SECTION 1.07.     Currency Translation; Change of Currency .
(a)    The Administrative Agent shall determine the Dollar Equivalent of any Alternative Currency Letter of Credit as of each date (with such date to be reasonably determined by the Administrative Agent) that is on or about the date of each request for the issuance, amendment, renewal or extension of such Alternative Currency Letter of Credit, using the Exchange Rate for the applicable currency in relation to Dollars in effect on the date of determination, and each such amount shall be the Dollar Equivalent of such Letter of Credit until the next required calculation thereof pursuant to this Section 1.07(a).
(b)    The Administrative Agent shall determine the Dollar Equivalent of any Borrowing denominated in any Alternative Currency as of each date (with such date to be reasonably determined by the Administrative Agent) that is on or about the date of a Borrowing Request or Interest Election Request with respect to such Borrowing, in each case using the Exchange Rate for the applicable currency in relation to Dollars in effect on the date of determination, and each such amount shall be the Dollar Equivalent of such Borrowing until the next required calculation thereof pursuant to this Section 1.07(b).
(c)    The Dollar Equivalent of any LC Disbursement made by any Issuing Bank in any Alternative Currency and not reimbursed by the applicable Borrowers shall be determined as set forth in paragraph (e) of Section 2.05. In addition, the Dollar Equivalent of the LC Exposure shall be determined as set forth in paragraph (j) of Section 2.05, at the time and in the circumstances specified therein.
 
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(d)    The Administrative Agent shall notify the applicable Borrowers, the applicable Lenders and the applicable Issuing Bank of each calculation of the Dollar Equivalent of each Letter of Credit, Borrowing and LC Disbursement with respect to Alternative Currency Letters of Credit.
(e)    Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognized by the central bank of Canada as the lawful currency of that country, then:
(i)    any reference in the Loan Documents to, and any obligations arising under the Loan Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Administrative Agent; and
(ii)    any translation from one currency or currency unit to another shall be at the official rate of exchange recognized by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Administrative Agent.
(f)    If a change in any currency of a country occurs as contemplated by the foregoing clause (e), this Agreement will, to the extent the Administrative Agent reasonably determines necessary, be amended in a manner reasonably acceptable to the Borrower Agent (and without the consent of any other Person) to comply with any generally accepted conventions and market practice in the relevant interbank market and otherwise to reflect the change in currency.
SECTION 1.08.     Certain Calculations and Tests . (a) Notwithstanding anything in this Agreement or any Loan Document to the contrary, when calculating any applicable financial ratio or test or determining other compliance with this Agreement (including the determination of compliance with any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom) in connection with a Specified Transaction undertaken in connection with the consummation of a Limited Condition Transaction, the date of determination of such ratio and determination of whether any Default or Event of Default has occurred, is continuing or would result therefrom or other applicable covenant shall, at the option of the Borrower Agent (the Borrower Agent’s election to exercise such option in connection with any Limited Condition Transaction, an “ LCT Election ”), be deemed to be (i) in the case of a Limited Condition Transaction described in clause (i) of the definition thereof, the date the definitive agreements for such Limited Condition Transaction are entered into, (ii) in the case of a Limited Condition Transaction described in clause (ii) of the definition thereof, the date of declaration of the relevant Restricted Payment and (iii) in the case of a Limited Condition Transaction described in clause (iii) of the definition thereof, the date of giving of the notice of redemption therefor (the “ LCT Test Date ”) and if, after such financial ratios and tests and other provisions are measured on a Pro Forma Basis after giving effect to such Limited Condition Transaction and the other Specified Transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) as if they occurred at the beginning of the Test Period being used to calculate such financial ratio ending prior to the LCT Test Date, the Borrower Agent could have taken such action on the relevant LCT Test Date in compliance with such ratios and provisions, such provisions shall be deemed to have been complied with. For the avoidance of doubt, (x) if any of such financial ratios or tests are exceeded as a result of fluctuations in such ratio or test (including due to fluctuations in Consolidated EBITDA of the Borrower Agent) at or prior to the consummation of the relevant Limited Condition Transaction, such financial ratios and tests and other provisions will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether the Limited Condition Transaction is permitted hereunder and (y) such financial ratios and tests and other provisions shall not be tested at the time of consummation of such Limited Condition Transaction or related Specified Transactions. For the avoidance of doubt, if the Borrower Agent has made an LCT Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any financial ratio or test (excluding, for the avoidance of doubt, any ratio contained in Section 6.09) or basket availability with
 
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respect to any other Specified Transaction on or following the relevant LCT Test Date and prior to the earlier of the date on which such Limited Condition Transaction is consummated or, in the case of a Limited Condition Transaction described in clause (i) thereof, the date that the definitive agreement for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction, for purposes of determining whether such subsequent transaction is permitted under this Agreement or any Loan Document, any such ratio, test or basket shall be required to comply with any such ratio, test or basket both (i) on a Pro Forma Basis assuming such Limited Condition Transaction and the other Specified Transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) have been consummated and (ii) on a Pro Forma Basis but without giving effect to such Limited Condition Transaction and the other Specified Transactions in connection therewith. For purposes of this Section 1.08, solely in connection with an acquisition with respect to which the United Kingdom City Code on Takeovers and Mergers (the “ City Code ”) applies, the date on which a “Rule 2.7 announcement” of a firm intention to make an offer in respect of the applicable target company is made in compliance with the City Code shall be deemed to be the date on which the definitive agreements for such Limited Condition Transaction are entered into.
(b)    Notwithstanding anything to the contrary herein, with respect to any Indebtedness or Liens incurred in reliance on a provision of this Agreement that does not require compliance with a financial ratio or test (including, without limitation, any tests based on the Consolidated Leverage Ratio, Consolidated Total Assets, Consolidated EBITDA or the Consolidated Secured Leverage Ratio) (any such amounts, the “ Fixed Amounts ”) substantially concurrently with any Indebtedness or Liens incurred in reliance on a provision of this Agreement that requires compliance with a financial ratio or test (including any tests based on the Consolidated Leverage Ratio, Consolidated Total Assets, Consolidated EBITDA or the Consolidated Secured Leverage Ratio) (any such amounts, the “ Incurrence-Based Amounts ”), it is understood and agreed that the Fixed Amounts shall be disregarded in the calculation of the financial ratio or test applicable to the incurrence of the Incurrence-Based Amounts.
ARTICLE II
The Credits
SECTION 2.01.     Commitments .
(a)     The Term Borrowings . Subject to the terms and conditions set forth herein, each Tranche A Term Lender hereby severally agrees to make a Tranche A Term Loan to the Parent Entity on the Closing Date in Dollars in an amount equal to such Tranche A Term Lender’s Tranche A Term Commitment. Tranche A Term Loans repaid or prepaid may not be reborrowed.
(b)     The Revolving Credit Borrowings . Subject to the terms and conditions set forth herein, each Revolving Lender severally agrees to make Revolving Loans to the Borrowers from time to time during the Availability Period in Dollars or in any Alternative Currency in an aggregate principal amount that will not result in such Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Revolving Loans.
SECTION 2.02.     Loans and Borrowings .
(a)    Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments of the applicable Class. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required. Any Swingline Loan shall be made in accordance with the procedures set forth in Section 2.04.
 
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(b)    Subject to Sections 2.13 and 2.23, (i) each Revolving Borrowing denominated in Sterling or Euro shall be comprised entirely of Eurocurrency Loans, (ii) each Revolving Borrowing denominated in Dollars shall be comprised entirely of ABR Loans or Eurocurrency Loans as the Borrower Agent may request in accordance herewith and (iii) each Revolving Borrowing that is denominated in Canadian Dollars shall be comprised entirely of Canadian Prime Rate Loans or, pursuant to Section 2.23, BA Drawings as the Borrower Agent may request in accordance herewith. Each Swingline Loan shall be an ABR Loan. Each Lender at its option may make any Eurocurrency Loan or any Loan to a Foreign Borrower by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrowers to repay such Loan in accordance with the terms of this Agreement.
(c)    At the commencement of each Interest Period for any Eurocurrency Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of the Borrowing Multiple and not less than the Borrowing Minimum. At the time that each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of the Borrowing Multiple and not less than the Borrowing Minimum; provided that (i) an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the aggregate Revolving Commitments, and (ii) a Swingline Loan may be in an aggregate amount that is equal to the entire unused balance of the aggregate Revolving Commitments, or that is required to finance the reimbursement of an LC Disbursement with respect to Letters of Credit, as contemplated by Section 2.05(e). Each Swingline Loan shall be in an amount that is an integral multiple of $100,000 and not less than $500,000. At the time that each Canadian Prime Rate Loan Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of the Borrowing Multiple and not less than the Borrowing Minimum. At the commencement of each Contract Period for any BA Drawing of Revolving Loans denominated in Canadian Dollars, such Borrowing shall be in an aggregate face amount that is an integral multiple of the Borrowing Multiple and not less than the Borrowing Minimum. Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of (x) twenty (20) Eurocurrency Borrowings outstanding and (y) two (2) BA Drawings outstanding.
(d)    Notwithstanding any other provision of this Agreement, the Borrower Agent shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested (i) with respect to a Revolving Borrowing would end after the Revolving Credit Maturity Date or (ii) with respect to a Tranche A Term Loan would end after the Term Loan A Maturity Date.
SECTION 2.03.    R equests for Borrowings . To request a Borrowing, the Borrower Agent shall notify the Administrative Agent, of such request either by telephone or in writing (delivered by hand, facsimile, or via a pdf or similar file attached to an email), substantially in the form attached hereto as Exhibit B -1 and signed by the Borrower Agent (a) with respect to Revolving Loans denominated in Dollars, (i) in the case of a Eurocurrency Borrowing, not later than noon, Local Time, three (3) Business Days before the date of the proposed Borrowing, or (ii) in the case of an ABR Borrowing, not later than noon, Local Time, on the date of the proposed Borrowing; (b) with respect to Revolving Loans denominated in Canadian Dollars, (i) in the case of a BA Drawing, not later than 3:00 p.m., Local Time, three (3) Business Days before the date of the proposed Borrowing, and (ii) in the case of a Canadian Prime Rate Borrowing, not later than 8:00 a.m., Local Time, one Business Day before the date of the proposed Borrowing and (c) with respect to Revolving Loans denominated in Sterling or Euro, not later than 11:00 a.m., Local Time, three (3) Business Days before the date of the proposed Borrowing. Each Borrowing Request shall be irrevocable and, in the case of a telephonic Borrowing Request, shall be confirmed promptly by hand delivery or telecopy or transmission by electronic communication in accordance with Section 9.01(b) to the
 
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Administrative Agent of a written Borrowing Request in a form attached hereto as Exhibit B -1 and signed by the applicable Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:
(i)    the identity of the Borrower;
(ii)    the currency and aggregate amount of the requested Borrowing and the Class of Loans being borrowed;
(iii)    the date of such Borrowing, which shall be a Business Day;
(iv)    the Facility under which such Borrowing will be made;
(v)    whether such Borrowing is to be an ABR Borrowing, a Canadian Prime Rate Borrowing, a BA Drawing or a Eurocurrency Borrowing;
(vi)    in the case of a Eurocurrency Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”;
(vii)    the location and number of the applicable Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06; and
(viii)    in the case of a BA Drawing, the initial Contract Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Contract Period.”
If no currency is specified with respect to any Eurocurrency Revolving Borrowing, then the applicable Borrower shall be deemed to have selected Dollars. If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be (i) in the case of a Borrowing denominated in Dollars, an ABR Borrowing, (ii) in the case of a Borrowing denominated in Canadian Dollars, a Canadian Prime Rate Borrowing, and (iii) in the case of a Borrowing denominated in an Alternative Currency (other than Canadian Dollars), a Eurocurrency Borrowing. If no Interest Period is specified with respect to any requested Eurocurrency Borrowing, then the applicable Borrower shall be deemed to have selected an Interest Period of one month’s duration. If no Contract Period is specified with respect to a BA Drawing, then the applicable Borrower shall be deemed to have selected a Contract Period of 30 days. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each applicable Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.
SECTION 2.04.     Swingline Loans .
(a)    Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to any Borrower from time to time during the Availability Period in Dollars, in an aggregate principal amount at any time outstanding that will not result in (x) the aggregate principal amount of outstanding Swingline Loans exceeding the Swingline Loan Sublimit or (y) the aggregate principal amount of the total Revolving Exposures exceeding the total Revolving Commitments; provided that (I) the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan and (II) the Swingline Lender shall not be required to make any Swingline Loan to the extent the aggregate principal amount of the Revolving Loans made by the Lender acting as Swingline Lender that are then outstanding, when aggregated with the aggregate principal amount of Swingline Loans, would exceed the amount of such Lender’s Revolving Commitment. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Swingline Loans.
 
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(b)    To request a Swingline Loan, the Borrower Agent shall notify the Administrative Agent of such request by telephone (confirmed by telecopy or transmission by electronic communication), not later than 12:00 noon, New York City time, on the day of a proposed Swingline Loan. Each such notice shall be in the form attached hereto as Exhibit B -5 and shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The Administrative Agent will promptly advise the Swingline Lender of any notice of a request for a Swingline Loan Borrowing received from the applicable Borrower. The Swingline Lender shall make each Swingline Loan available to the applicable Borrower by means of a credit to the general deposit account of such Borrower with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(e), by remittance to the relevant Issuing Bank or, to the extent that the Applicable Participants have made payments pursuant to Section 2.05(e) to reimburse the applicable Issuing Bank, to such Applicable Participants and such Issuing Bank as their interests may appear) by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.
(c)    The Swingline Lender may by written notice given to the Administrative Agent not later than 10:00 a.m., New York City time, on any Business Day require the Applicable Participants to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Each such notice shall specify the aggregate amount of Swingline Loans in which the Applicable Participants will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Applicable Participant, specifying in such notice such Applicable Participant’s Applicable Percentage of such Swingline Loan or Swingline Loans. Each Applicable Participant hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Applicable Participant’s Applicable Percentage of such Swingline Loan or Swingline Loans. Each Applicable Participant acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Applicable Participant shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.06 with respect to Loans made by such Applicable Participant (and Section 2.06 shall apply, mutatis mutandis , to the payment obligations of the Applicable Participants), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Applicable Participants. The Administrative Agent shall notify the Borrower Agent of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the applicable Borrower (or other party on behalf of such Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Applicable Participants that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to a Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve any Borrower of any default in the payment thereof.
(d)    Any Swingline Lender may be replaced at any time by written agreement among the Borrower Agent, the Administrative Agent, the replaced Swingline Lender and the successor Swingline Lender. The Administrative Agent shall notify the Lenders of any such replacement of a Swingline
 
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Lender. At the time any such replacement shall become effective the Borrower Agent shall pay all unpaid interest accrued for the account of the replaced Swingline Lender pursuant to Section 2.12(a). From and after the effective date of any such replacement, (x) the successor Swingline Lender shall have all the rights and obligations of the replaced Swingline Lender under this Agreement with respect to Swingline Loans made thereafter and (y) references herein to the term “Swingline Lender” shall be deemed to refer to such successor or to any previous Swingline Lender, or to such successor and all previous Swingline Lenders, as the context shall require. After the replacement of a Swingline Lender hereunder, the replaced Swingline Lender shall remain a party hereto and shall continue to have all the rights and obligations of a Swingline Lender under this Agreement with respect to Swingline Loans made by it prior to its replacement, but shall not be required to make additional Swingline Loans.
(e)    Subject to the appointment and acceptance of a successor Swingline Lender, any Swingline Lender may resign as a Swingline Lender at any time upon thirty days’ prior written notice to the Administrative Agent, the Borrower Agent and the Lenders, in which case, such Swingline Lender shall be replaced in accordance with Section 2.04(d) above.
SECTION 2.05.     Letters of Credit .
(a)     General . Subject to the terms and conditions set forth herein, each Borrower may request the issuance of Letters of Credit denominated in Dollars or Alternative Currencies ( provided that any Letter of Credit may be provided on behalf of the Parent Entity or any Restricted Subsidiary of the Parent Entity; provided that in each such case, the Borrowers (i) will be primarily liable for any such Letters of Credit and (ii) shall be required to reimburse any LC Disbursement issued for the account of a Restricted Subsidiary to the same extent as if such LC Disbursement was issued for the account of the Borrowers), in a form reasonably acceptable to the relevant Issuing Bank, at any time and from time to time during the Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the applicable Borrower to, or entered into by the applicable Borrower with, an Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.
(b)     Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions . To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower Agent shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the relevant Issuing Bank) to the relevant Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice in the form attached hereto as Exhibit B -3 requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the currency in which such Letter of Credit is to be denominated, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. The relevant Issuing Bank shall promptly notify the Administrative Agent of, and the Administrative Agent shall in turn promptly furnish to the Lenders notice of, any such issuance. If requested by the relevant Issuing Bank, the applicable Borrower also shall submit a letter of credit application on such Issuing Bank’s standard form in connection with any request for a Letter of Credit; provi d ed that such letter of credit application shall not contain terms inconsistent with the terms of this Agreement and shall not impose any additional obligations, liabilities or Liens on any Loan Party during the term of this Agreement. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit, the applicable Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed the LC Exposure Sublimit, (ii) unless otherwise agreed by
 
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the relevant Issuing Bank in its sole discretion, the LC Exposure of each Issuing Bank shall not exceed such Issuing Bank’s LC Commitment and (iii) subject to Section 2.04, the total Revolving Exposures shall not exceed the total Revolving Commitments. The Borrower Agent may, at any time and from time to time, reduce the LC Commitment of any Issuing Bank with the consent of such Issuing Bank; provided that the Borrower Agent shall not reduce the LC Commitment of any Issuing Bank if, after giving effect of such reduction, the conditions set forth in clauses (i) through (iii) above shall not be satisfied.
(c)     Expiration Date . Each Letter of Credit shall, unless otherwise agreed by the relevant Issuing Bank, expire at or prior to the close of business on the earlier of (i) the date that is one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five (5) Business Days prior to the Revolving Credit Maturity Date, or, in each case, such later date as the relevant Issuing Bank may agree to the extent such Letters of Credit are cash collateralized or backstopped in a manner reasonably acceptable to the Issuing Bank; provided that in the event that an Issuing Bank consents to an expiration date for any Letter of Credit that is following the Revolving Credit Maturity Date, the Applicable Participants shall cease to have risk participations therein on (x) the day following the Revolving Credit Maturity Date or (y) on such later date through which such Letter of Credit is deemed to be outstanding in accordance with Section 1.03.
(d)     Participations . By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof or renewing such Letter of Credit or extending the expiration thereof) and without any further action on the part of the relevant Issuing Bank or the Revolving Lenders, such Issuing Bank hereby grants to each Applicable Participant, and each Applicable Participant hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Applicable Participant’s Applicable Percentage of the aggregate amount from time to time available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Applicable Participant hereby absolutely, irrevocably and unconditionally agrees to pay to the Administrative Agent in Dollars (in the case of an LC Disbursement in an Alternative Currency, based on the Dollar Equivalent amount thereof at the time of drawing), for the account of the relevant Issuing Bank, such Applicable Participant’s Applicable Percentage of each LC Disbursement made by such Issuing Bank to the extent not reimbursed by the applicable Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the applicable Borrower for any reason. Each Applicable Participant acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment made in accordance with this Section 2.05(d) by the Applicable Participant for the account of the relevant Issuing Bank shall be made without any offset, abatement, withholding or reduction whatsoever.
(e)     Reimbursement . If an Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the applicable Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement, in Dollars using the Exchange Rate for the applicable Alternative Currency in relation to Dollars in effect on the date of determination (or such other applicable currency as the applicable Borrower and the applicable Issuing Bank may agree in writing), on (i) the Business Day that the applicable Borrower receives such notice, if such notice is received prior to 10:00 a.m., Local Time, on the day of receipt or (ii) the Business Day immediately following the day that the applicable Borrower receives such notice, if such notice is not received prior to such time on the day of receipt; provided that unless the applicable Borrower elects otherwise, the applicable Borrower shall be deemed, subject to the conditions to borrowing set forth herein, to have requested in accordance with Section 2.03 or 2.05 that such payment be financed with an ABR Revolving Borrowing or, if such amount is less than the Borrowing Multiple, a Swingline Loan issued in the Dollar Equivalent amount of such LC
 
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Disbursement and, to the extent so financed, the applicable Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If a Borrower fails to make such payment when due (or if any such reimbursement payment is required to be refunded to the applicable Borrower for any reason), then (A) if such payment relates to an Alternative Currency Letter of Credit, automatically and with no further action required, the applicable Borrower’s or such other Person’s obligation to reimburse the applicable LC Disbursement shall be permanently converted into an obligation to reimburse the Dollar Equivalent, calculated using the Exchange Rate on the date when such payment was due, of such LC Disbursement and (B) in the case of each LC Disbursement, the Administrative Agent shall notify the applicable Issuing Bank and each Applicable Participant of the applicable LC Disbursement, the payment then due from the applicable Borrower in respect thereof and such Applicable Participant’s Applicable Percentage thereof. Promptly following receipt of such notice, each Applicable Participant shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the applicable Borrower in Dollars using the Exchange Rate for the applicable Alternative Currency in relation to Dollars in effect on the date of determination, in the same manner as provided in Section 2.06 with respect to Loans made by such Applicable Participant (and Section 2.06 shall apply, mutatis mutandis , to the payment obligations of the Applicable Participants), and the Administrative Agent shall promptly pay to the relevant Issuing Bank the amounts so received by it from the Applicable Participants. Promptly following receipt by the Administrative Agent of any payment from the applicable Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the relevant Issuing Bank or, to the extent that the Applicable Participants have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Applicable Participants and such Issuing Bank as their interests may appear. Any payment made by an Applicable Participant pursuant to this paragraph to reimburse an Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve any Borrower of its obligation to reimburse such LC Disbursement.
(f)     Obligations Absolute . The Borrowers’ respective obligations to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the relevant Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, any Borrower’s obligations hereunder. Neither the Administrative Agent, the Revolving Lenders nor the Issuing Banks, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the relevant Issuing Bank; provided that the foregoing shall not be construed to excuse the relevant Issuing Bank from liability to the Borrowers to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by applicable law) suffered by any Borrower that are caused by the relevant Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of bad faith, gross negligence or willful misconduct on the part of the relevant Issuing Bank (as finally determined by a court of competent jurisdiction), such Issuing Bank shall be deemed to have
 
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exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the relevant Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.
(g)     Disbursement Procedures . The relevant Issuing Bank shall, within the period as per terms and conditions of Letter of Credit but in any event promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. After examination of such documents, the relevant Issuing Bank shall promptly notify the Administrative Agent and the Borrower Agent by telephone (confirmed by telecopy or transmission by electronic communication in accordance with Section 9.01(b)) of such demand for payment and whether such Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the applicable Borrower of its obligation to reimburse the relevant Issuing Bank and the Applicable Participants with respect to any such LC Disbursement (other than with respect to the timing of such reimbursement obligation set forth in clause (e) of this Section).
(h)     Interim Interest . If an Issuing Bank shall make any LC Disbursement, then, unless the applicable Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the applicable Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that, if the applicable Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.12(d) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the relevant Issuing Bank, except that interest accrued on and after the date of payment by any Applicable Participant pursuant to paragraph (e) of this Section to reimburse such Issuing Bank shall be for the account of such Applicable Participant to the extent of such payment.
(i)     Replacement or Addition of Issuing Bank . (i) Any Issuing Bank may be replaced, or the LC Commitment of any Issuing Bank assigned, at any time by written agreement among the applicable Borrowers, the Administrative Agent and the successor or assignee Issuing Bank. The Administrative Agent shall notify the Revolving Lenders of any such replacement of an Issuing Bank. At the time any such replacement or assignment shall become effective, the applicable Borrowers shall pay all unpaid fees accrued for the account of the replaced or assigning Issuing Bank pursuant to Section 2.11(b). From and after the effective date of any such replacement or assignment, (i) the successor or assignee Issuing Bank shall have all the rights and obligations of the assigning Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or assignee or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank or the assignment of an LC Commitment hereunder, the replaced or assigning Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement or with respect to its remaining LC Commitment (if any), but, in the case of a replacement, shall not be required to issue additional Letters of Credit. A Lender may become an additional Issuing Bank hereunder at any time by written agreement among the applicable Borrowers, the Administrative Agent and such Lender. The Administrative Agent shall notify the Revolving Lenders of any such additional Issuing Bank.
(ii)    Subject to the appointment and acceptance of a successor Issuing Bank, any Issuing Bank may resign as an Issuing Bank at any time upon thirty days’ prior written notice to the Administrative Agent, the Borrower Agent and the Lenders, in which case, such Issuing Bank shall be replaced in accordance with Section 2.05(i)(i) above.
 
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(j)     Cash Collateralization . If any Event of Default shall occur and be continuing, on the Business Day that the Borrower Agent receives notice from the Administrative Agent or the Required Lenders demanding the deposit of cash collateral pursuant to this paragraph, the applicable Borrowers shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Applicable Participants, an amount in cash and in the relevant currencies equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon, provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to a Borrower or the Parent Entity described in paragraph (h) or (i) of Article VII. The applicable Borrowers also shall deposit cash collateral pursuant to this paragraph as and to the extent required by Section 2.22(a)(iii). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrowers under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investments shall be made at the Borrowers’ risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Monies in such account shall be applied by the Administrative Agent to reimburse the relevant Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the applicable Borrowers for the LC Exposure, at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of the Required Revolving Lenders), be applied to satisfy other obligations of the applicable Borrowers under the Loan Documents. If any Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default or pursuant to Section 2.10(b), such amount plus any accrued interest or realized profits with respect to such amounts (to the extent not applied as aforesaid) shall be returned to such Borrower within three Business Days after all Events of Default have been cured or waived or such collateral is no longer required pursuant to 2.11(a), as applicable.
(k)     Rollover of Existing Letters of Credit and Other Letters of Credit . Each of the Existing Letters of Credit outstanding on the Closing Date issued by a Revolving Lender shall remain outstanding as (i) in the case of Letters of Credit denominated in Dollars for the account of the U.S. Parent Borrower, Letters of Credit and (ii) in the case of Letters of Credit denominated in any other currency, Letters of Credit under this Agreement until otherwise returned or expired (in each case without any pending drawing). Any letter of credit that was issued by an Issuing Bank and is not a Letter of Credit will be deemed to be a Letter of Credit issued under this Agreement on the date that the applicable Borrower, the Issuing Bank with respect to such letter of credit and the Administrative Agent sign an instrument identifying such letter of credit as a Letter of Credit under this Agreement; provided that such instrument may only be executed if such letter of credit would be permitted to be issued under this Agreement as a Letter of Credit on such date.
SECTION 2.06.     Funding of Borrowings .
(a)    Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by (x) in the case of Loans denominated in Dollars, 2:00 p.m., New York City time and (y) in the case of Loans denominated in Alternative Currencies, 12:00 noon, Local Time, in the city of the Administrative Agent’s applicable payment office for such Alternative Currency, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders in an amount equal to such Lender’s Loan to be made on such date; pr o vided that Swingline Loans shall be made as provided in Section 2.04. Except in respect of the provisions
 
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of this Agreement covering the reimbursement of Letters of Credit, the Administrative Agent will make such Loans available to the applicable Borrower by promptly crediting the funds so received in the aforesaid account of the Administrative Agent, to an account designated by the Borrower Agent in the applicable Borrowing Request (i) in the case of Loans denominated in Dollars, in New York City, (ii) in the case of Loans denominated in Euro or Sterling, in London, and (iii) in the case of Loans denominated in Canadian Dollars, in Toronto, Canada, and in each case designated by the Borrower Agent in the applicable Borrowing Request, provided that (x) Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be remitted by the Administrative Agent to the applicable Issuing Bank or, to the extent that Applicable Participants have made payments pursuant to Section 2.05(e) to reimburse such Issuing Bank, then to such Applicable Participants and the applicable Issuing Bank as their interests may appear and (y) proceeds of Tranche A Term Loans made pursuant to the Tranche A Term Commitments shall be made available to the Parent Entity on the Closing Date.
(b)    Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the applicable Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the applicable Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the applicable Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, (x) if such Borrowing is denominated in Dollars, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, and (y) if such Borrowing is denominated in an Alternative Currency, the rate reasonably determined by the Administrative Agent to be the cost to it of funding such amount, or (ii) in the case of the Borrowers, the interest rate applicable to (i) in the case of Loans denominated in Dollars, ABR Loans and (ii) in the case of Loans denominated in Alternative Currencies, such Loan. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.
SECTION 2.07.     Interest Elections .
(a)    Subject to Section 2.02(b), each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, (i) in the case of a Eurocurrency Borrowing, shall have an initial Interest Period as specified in such Borrowing Request and (ii) in the case of BA Drawings, shall have an initial Contract Period as specified in such Borrowing Request. Thereafter, the Borrower Agent may elect to convert such Borrowing to a different Type, to convert BA Drawings to Canadian Prime Rate Loans, to convert Canadian Prime Rate Loans into BA Drawings, or to continue such Borrowing and, in the case of a Eurocurrency Borrowing, may elect Interest Periods therefor, all as provided in this Section; provided that the Borrowers may not elect to convert any Borrowing denominated in an Alternative Currency to an ABR Borrowing and may not change the currency in which any Borrowing is denominated. The Borrowers may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Loans, which may not be converted or continued.
(b)    To make an election pursuant to this Section, the Borrower Agent shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower Agent were requesting a Revolving Borrowing of the Type resulting from such election to be made on the effective date of such election, subject to paragraph (f) below in the
 
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case of BA Drawings. Each such telephonic Interest Election Request shall be confirmed promptly by hand delivery or telecopy or transmission by electronic communication in accordance with Section 9.01(b) to the Administrative Agent of a written Interest Election Request in a form attached hereto as Exhibit B -2 or such other form approved by the Administrative Agent and signed by the Borrower Agent. Notwithstanding any contrary provision herein, this Section 2.07 shall not be construed to permit a Borrower to (i) elect an Interest Period for Eurocurrency Loans that does not comply with Section 2.02(d) or a Contract Period for a BA Drawing that does not comply with Section 2.02(d) or (ii) convert any Borrowing to a Borrowing of a Type not available under the Class of Commitments pursuant to which such Borrowing was made.
(c)    Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:
(i)    the Facility and the Borrowing to which such Interest Election Request applies, the relevant currency, and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
(ii)    the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii)    whether the resulting Borrowing is to be an ABR Borrowing, a Eurocurrency Borrowing, a Canadian Prime Rate Borrowing or a BA Drawing;
(iv)    if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which Interest Period shall be a period contemplated by the definition of the term “Interest Period”; and
(v)    if the resulting Borrowing is a BA Drawing, the Contract Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of “Contract Period.”
If any such Interest Election Request requests a Eurocurrency Borrowing but does not specify an Interest Period, then the Borrower Agent shall be deemed to have selected an Interest Period of one month’s duration. If any such Interest Election Request requests a BA Drawing but does not specify a Contract Period, the applicable Borrower shall be deemed to have selected a Contract Period of 30 days.
(d)    Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each applicable Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.
(e)    If a Borrower fails to deliver a timely Interest Election Request with respect to a Eurocurrency Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period, such Borrowing shall be converted to an ABR Borrowing (unless such Borrowing is denominated in an Alternative Currency, in which case such Borrower shall be deemed to have selected an Interest Period of one month for such Borrowing). Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower Agent, then, so long as an Event of Default is continuing (i) no outstanding Revolving Borrowing denominated in an Alternative Currency (other than Canadian Dollars) may be continued for an Interest Period of more than
 
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one month’s duration, (ii) no outstanding Borrowing denominated in Dollars may be converted to or continued as a Eurocurrency Borrowing, (iii) no outstanding Loans denominated in Canadian Dollars may be converted to or continued as BA Drawings and (iv) unless repaid, (A) each Eurocurrency Borrowing denominated in Dollars shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto, (B) each BA Drawing shall be converted to, or repaid with the proceeds of, a Canadian Prime Rate Borrowing at the end of the Contract Period applicable thereto, and (C) each Eurocurrency Borrowing denominated in Euro or Sterling shall be converted at the end of the Interest Period applicable thereto to a Eurocurrency Borrowing with an Interest Period of one month (or such shorter period as may be determined by the Administrative Agent in its discretion).
(f)    At or before 12:00 noon (Local Time) three Business Days before the last day of the Contract Period of any BA Drawing, the applicable Borrower shall give to the Administrative Agent its written Interest Election Request in respect of such BA Drawing which shall specify either that such Borrower intends to repay the maturing B/As on such date or to continue to issue B/As on such date to provide for the payment of the maturing B/As. If such Borrower fails to deliver such timely notice with respect to a BA Drawing prior to the end of the Contract Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Contract Period such Borrowing shall be converted to Canadian Prime Rate Loans. Upon the conversion to or continuation of any Borrowing or portion thereof as a BA Drawing, the Discount Proceeds that would otherwise be payable to the applicable Borrower by each Revolving Lender pursuant to Section 2.23(d) in respect of such new BA Drawing shall be applied against the principal amount of such Borrowing (in the case of a conversion) or the reimbursement obligation owed to such Lender in respect of such maturing B/As (in the case of a continuation) (collectively, the “ maturing amounts ”) and such Borrower shall pay to such Revolving Lender an amount equal to the excess of the maturing amounts over such Discount Proceeds.
SECTION 2.08.     Termination and Reduction of Commitments .
(a)    The Tranche A Term Commitment shall terminate on the Closing Date upon the borrowing of the Tranche A Term Loans. Unless previously terminated, all Revolving Commitments shall terminate on the Revolving Credit Maturity Date. The Extended Revolving Commitments shall terminate on the respective maturity dates applicable thereto.
(b)    The Borrower Agent may at any time terminate, or from time to time reduce, the Revolving Commitments of any Class; provided that (i) each reduction of the Revolving Commitments of any Class shall be in an amount that is an integral multiple of $1,000,000 and not less than $10,000,000 (or, if less, the remaining amount of such Commitments), and (ii) the Borrower Agent shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.10, the aggregate Revolving Exposures (excluding, the portion of the Revolving Exposures attributable to outstanding Letters of Credit, if and to the extent that the applicable Borrowers have made arrangements satisfactory to the Administrative Agent and the applicable Issuing Bank with respect to such Letters of Credit, and such Issuing Bank has released the Applicable Participants from their participation obligations with respect to such Letters of Credit) would exceed the aggregate Revolving Commitments.
(c)    The Borrower Agent shall notify the Administrative Agent of any election to terminate or reduce the Revolving Commitments under paragraph (b) of this Section at least three (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower Agent pursuant to this Section 2.08 shall be irrevocable; provided that a notice of termination of the Revolving Commitments delivered by the Borrower Agent may state that such notice is conditioned upon the effectiveness of other credit facilities or
 
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instruments of Indebtedness or other transaction, in which case such notice may be revoked by the Borrower Agent (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Revolving Commitments of any Class shall be permanent. Each reduction of the Revolving Commitments of any Class shall, except as provided in Section 2.20, be made ratably among the Lenders in accordance with their respective Revolving Commitments of such Class.
SECTION 2.09.     Repayment of Loans and B/As; Evidence of Debt .
(a)    Each Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender, the then unpaid principal amount of each Revolving Loan made to such Borrower on the Revolving Credit Maturity Date in the currency in which such Loan is denominated and to the Swingline Lender the then unpaid principal amount of each Swingline Loan in Dollars on the earlier of the Revolving Credit Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least three (3) Business Days after such Swingline Loan is made; provided that on each date that a Revolving Loan is made, the applicable Borrowers shall repay all Swingline Loans then outstanding.
(b)    (i) The Parent Entity promises to repay in Dollars the Tranche A Term Loans on the last Business Day of each fiscal quarter (commencing with the first full fiscal quarter following the Closing Date), an aggregate amount equal to (1) for the first (1st) full fiscal quarter following the Closing Date and for the next three (3) fiscal quarters thereafter, 0.625% of the original principal amount of the Tranche A Term Loans borrowed, (2) for the fifth (5th) fiscal quarter following the Closing Date and for the next seven (7) fiscal quarters thereafter, 1.25% of the original principal amount of the Tranche A Term Loans borrowed, (3) for the thirteenth (13th) fiscal quarter following the Closing Date and for the next six (6) fiscal quarters thereafter, 2.50% of the original principal amount of the Tranche A Term Loans borrowed, and (4) at the Term Loan A Maturity Date, 70.0% of the original principal amount of the Tranche A Term Loans borrowed; provided , however , that the Parent Entity shall repay the entire unpaid principal amount of the Tranche A Term Loans on the Term Loan A Maturity Date.
(ii)    Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrowers to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(c)    The Administrative Agent shall maintain accounts in which it shall record (i) the amount and currency of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder and (iii) the amount and currency of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
(d)    The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein absent manifest error; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of any Borrower to repay the Loans in accordance with the terms of this Agreement.
(e)    Any Lender may request that Loans made by it be evidenced by promissory notes. In such event, the applicable Borrowers shall prepare, execute and deliver to such Lender promissory notes payable to such Lender and its registered assigns and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory notes and interest thereon shall at all times (including after assignment pursuant to Section 9.04 of this Agreement) be represented by one or more promissory notes in such form payable to the payee named therein and its registered assigns.
 
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SECTION 2.10.     Prepayment of Loans and B/As .
(a)     Optional Prepayments .
(i)    The Borrowers shall have the right at any time and from time to time to prepay any Borrowing of any Class in whole or in part, without premium or penalty, subject to prior notice in accordance with paragraph (a)(ii) of this Section except that the Borrowers shall not prepay any BA Drawings except on the last day of the Contract Period applicable thereto (subject to any mandatory prepayment requirements hereunder); provided , however , that no prepayment of any Extended Term Loans of any series shall be permitted pursuant to this Section 2.10(a) so long as any Term Loans of any Existing Term Loan Class from which such Extended Term Loans were converted remain outstanding unless such prepayment is accompanied by a pro rata (or greater proportionate) prepayment of Term Loans of such Existing Term Loan Class.
(ii)    The Borrower Agent shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy or transmission by electronic communication in accordance with Section 9.01(b)) of any prepayment hereunder (x) in the case of prepayment of a Eurocurrency Borrowing, not later than 11:00 a.m., New York City time, three (3) Business Days before the date of prepayment (or, in the case of a Eurocurrency Borrowing denominated in an Alternative Currency, not later than 11:00 a.m., Local Time, four (4) Business Days before the date of prepayment), (y) in the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time, on the date of prepayment or (z) in the case of prepayment of a Swingline Loan, not later than 12:00 noon, New York City time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date, the Class or Classes of Loans to be repaid and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, a notice of prepayment delivered by a Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities or instruments of Indebtedness or other transaction, in which case such notice may be revoked by the Borrower Agent (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type as provided in Section 2.02. Each prepayment of Term Loans pursuant to this Section 2.10(a) shall be applied to repayments thereof required pursuant to Section 2.09(b) in the order selected by the Borrower Agent. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the notice of prepayment. Prepayments pursuant to this Section 2.10(a) shall be accompanied by accrued interest to the extent required by Section 2.12 and shall be subject to Section 2.15.
(b)     Mandatory Prepayments .
(i)    In the event and on such occasion that the aggregate Revolving Exposures exceed the aggregate Revolving Commitments, the applicable Borrowers shall prepay Revolving Borrowings of such Class or, if applicable, Swingline Loans of such Class (or, if no such Borrowings are outstanding, deposit cash collateral in an account with the Administrative Agent pursuant to Section 2.05(j)) in an aggregate amount equal to such excess; provided that if any such excess shall result from a change in the applicable exchange rates relating to Alternative Currencies, then such prepayment and/or cash collateralization shall only be required to be made by the applicable Borrowers upon one Business Day’s notice from the Administrative Agent.
 
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(ii)    Other than during a Covenant Suspension Period, (A) if the Parent Entity or any Restricted Subsidiary receives any Net Cash Proceeds from any Asset Sale or Casualty Event, the Borrower Agent shall apply an amount equal to 100% of such Net Cash Proceeds to prepay the Term Loans in accordance with Section 2.10(b)(v) on or prior to the date that is ten (10) Business Days after the date of the realization or receipt of such Net Cash Proceeds; provided that no such prepayment shall be required pursuant to this Section 2.10(b)(ii)(A) with respect to such Net Cash Proceeds that the Parent Entity or any Restricted Subsidiary shall reinvest in accordance with Section 2.10(b)(ii)(B); provided that to the extent required by the terms of any Permitted Secured Notes that are secured by Liens subject to the First Lien Intercreditor Agreement, the Borrower Agent may, in lieu of prepaying Term Loans with such portion of the Net Cash Proceeds of any Asset Sale or Casualty Event, apply a portion of such Net Cash Proceeds (based on the respective principal amounts at such time of (A) such Permitted Secured Notes and (B) the Term Loans) to repurchase or redeem Permitted Secured Notes that are secured by Liens subject to the First Lien Intercreditor Agreement with the remaining amount of such Net Cash Proceeds to be applied to prepay Term Loans; and (B) with respect to any Net Cash Proceeds realized or received with respect to any Asset Sale or Casualty Event, at the option of the Borrower Agent, the Parent Entity or any Restricted Subsidiary may reinvest all or any portion of such Net Cash Proceeds in assets useful for the Parent Entity’s or a Restricted Subsidiary’s business within (x) twelve (12) months following receipt of such Net Cash Proceeds or (y) if the Parent Entity or a Restricted Subsidiary enters into a legally binding commitment to reinvest such Net Cash Proceeds within twelve (12) months following receipt thereof, within six (6) months following the last day of such twelve month period; provided that any such Net Cash Proceeds that are not so reinvested within the applicable time period set forth above shall be applied as set forth in Section 2.10(b)(ii)(A) within five (5) Business Days after the end of the applicable time period set forth above.
(iii)    If, following the Effective Date, the Parent Entity or any Restricted Subsidiary incurs or issues (x) any Refinancing Indebtedness or (y) any Indebtedness not expressly permitted to be incurred or issued pursuant to Section 6.01 (without prejudice to the restrictions therein), the Borrowers shall apply an amount equal to 100% of such Net Cash Proceeds received by the Parent Entity or any Restricted Subsidiary therefrom to the prepayment of the Term Loans in accordance with Section 2.10(b)(v) on or prior to the date which is three (3) Business Days after the receipt of such Net Cash Proceeds.
(iv)    The Borrower Agent shall notify the Administrative Agent in writing of any mandatory prepayment of Term Loans required to be made pursuant to clauses (i) through (iii) of this Section 2.10(b) at least three (3) Business Days prior to the date of such prepayment. Each such notice shall specify the date of such prepayment and provide a reasonably detailed calculation of the amount of such prepayment.
(v)    Each prepayment of Term Loans pursuant to this Section 2.10(b) shall be applied pro rata to each Class of Term Loans (on a pro rata basis to the Term Loans of the Lenders with such Class of Term Loans), except to the extent that any Class of Term Loans is entitled to receive a lesser amount, and shall be further applied to such Class of Term Loans in direct order of maturity to repayments thereof required pursuant to Section 2.09(b).
(vi)    Any prepayment of Term Loans pursuant to this Section 2.10(b) shall be accompanied by accrued interest to the extent required by Section 2.12 and shall be subject to Section 2.15.
(c)    (i) Notwithstanding anything to the contrary in Section 2.10(a) (which provisions shall not be applicable to this Section 2.10(c)), the Borrowers shall have the right at any time and from time to time to prepay Term Loans from Lenders electing to participate in such prepayments at a discount to the par value of such Term Loans and on a non-pro rata basis (each, a “ Discounted Voluntary Prepayment ”) pursuant to the procedures described in this Section 2.10(c); provided that no Discounted Voluntary Prepayment shall be made unless (A) immediately after giving effect to such Discounted Voluntary
 
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Prepayment, (i) no Event of Default has occurred and is continuing, (ii) the Parent Entity and its Restricted Subsidiaries are in compliance on a Pro Forma Basis with the covenant contained in Section 6.09 as of the last day of the most recent fiscal quarter of the Parent Entity for which financial statements have been delivered pursuant to Section 5.01(a) or (b) and (iii) no proceeds of Revolving Loans or Swingline Loans shall be utilized to make any Discounted Voluntary Prepayment, (B) any Discounted Voluntary Prepayment shall be offered to all Lenders with Term Loans on a pro rata basis and (C) the applicable Borrower on the date such Discounted Voluntary Prepayment is made shall deliver to the Administrative Agent a certificate of a Responsible Officer of such Borrower stating (1) that no Default or Event of Default has occurred and is continuing or would result from the Discounted Voluntary Prepayment and (2) that each of the conditions to such Discounted Voluntary Prepayment contained in this Section 2.10(c) has been satisfied or waived.
(ii)    To the extent a Borrower seeks to make a Discounted Voluntary Prepayment, such Borrower will provide written notice to the Administrative Agent substantially in the form of Exhibit E hereto (each, a “ Discounted Prepayment Option Notice ”) that such Borrower desires to prepay Term Loans in an aggregate principal amount specified therein by such Borrower (each, a “ Proposed Discounted Prepayment Amount ”), in each case at a discount to the par value of such Term Loans as specified below. The Proposed Discounted Prepayment Amount of Term Loans shall not be less than $50,000,000. The Discounted Prepayment Option Notice shall further specify with respect to the proposed Discounted Voluntary Prepayment: (A) the Proposed Discounted Prepayment Amount for Term Loans and the Class of Term Loans to which such offer relates, (B) a discount range (which may be a single percentage) selected by the applicable Borrower with respect to such proposed Discounted Voluntary Prepayment equal to a percentage of par of the principal amount of such Term Loans (the “ Discount Range ”) and (C) the date by which Lenders are required to indicate their election to participate in such proposed Discounted Voluntary Prepayment which shall be at least five Business Days following the date of the Discounted Prepayment Option Notice (the “ Acceptance Date ”).
(iii)    Upon receipt of a Discounted Prepayment Option Notice in accordance with Section 2.10(c)(ii), the Administrative Agent shall promptly notify each applicable Lender thereof. On or prior to the Acceptance Date, each Lender with Term Loans may specify by written notice substantially in the form of Exhibit F hereto (each, a “ Lender Participation Notice ”) to the Administrative Agent (A) a maximum discount to par (the “ Acceptable Discount ”) within the Discount Range (for example, a Lender specifying a discount to par of 20% would accept a prepayment price of 80% of the par value of the Term Loans to be prepaid) and (B) a maximum principal amount (subject to rounding requirements specified by the Administrative Agent) of Term Loans of each Class held by such Lender with respect to which such Lender is willing to permit a Discounted Voluntary Prepayment at the Acceptable Discount (“ Offered Loans ”). Based on the Acceptable Discounts and principal amounts of Term Loans specified by the Lenders in Lender Participation Notices, the Administrative Agent, in consultation with the applicable Borrower, shall calculate the applicable discount for Term Loans (the “ Applicable Discount ”), which Applicable Discount shall be (A) the percentage specified by such Borrower if such Borrower has selected a single percentage pursuant to Section 2.10(c)(ii) for the Discounted Voluntary Prepayment or (B) otherwise, the highest Acceptable Discount at which such Borrower can pay the Proposed Discounted Prepayment Amount in full (determined by adding the principal amounts of Offered Loans commencing with the Offered Loans with the highest Acceptable Discount); provided , however , that in the event that such Proposed Discounted Prepayment Amount cannot be repaid in full at any Acceptable Discount, the Applicable Discount shall be the lowest Acceptable Discount specified by the Lenders that is within the Discount Range. The Applicable Discount shall be applicable for all Lenders who have offered to participate in the Discounted Voluntary Prepayment and have Qualifying Loans (as defined below). Any Lender with outstanding Term Loans under the applicable Class whose Lender Participation Notice is not received by the Administrative Agent by the Acceptance Date shall be deemed to have declined to accept a Discounted Voluntary Prepayment of any of its Term Loans at any discount to their par value within the Applicable Discount.
 
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(iv)    The applicable Borrower shall make a Discounted Voluntary Prepayment by prepaying those Term Loans (or the respective portions thereof) offered by the Lenders (“ Qualifying Lenders ”) that specify an Acceptable Discount that is equal to or greater than the Applicable Discount (“ Qualifying Loans ”) at the Applicable Discount; provided that if the aggregate proceeds required to prepay all Qualifying Loans (disregarding any interest payable at such time) would exceed the amount of aggregate proceeds required to prepay the Proposed Discounted Prepayment Amount, such amounts in each case calculated by applying the Applicable Discount, the applicable Borrower shall prepay such Qualifying Loans ratably among the Qualifying Lenders based on their respective principal amounts of such Qualifying Loans (subject to rounding requirements specified by the Administrative Agent). If the aggregate proceeds required to prepay all Qualifying Loans (disregarding any interest payable at such time) would be less than the amount of aggregate proceeds required to prepay the Proposed Discounted Prepayment Amount, such amounts in each case calculated by applying the Applicable Discount, the applicable Borrower shall prepay all Qualifying Loans.
(v)    Each Discounted Voluntary Prepayment shall be made within five Business Days of the Acceptance Date, without premium or penalty (and without any amounts due under Section 2.15), upon irrevocable notice substantially in the form of Exhibit G hereto (each a “ Discounted Voluntary Prepayment Notice ”), delivered to the Administrative Agent no later than 1:00 p.m. Local Time, two Business Days prior to the date of such Discounted Voluntary Prepayment, which notice shall specify the date and amount of the Discounted Voluntary Prepayment and the Applicable Discount determined by the Administrative Agent. Upon receipt of any Discounted Voluntary Prepayment Notice the Administrative Agent shall promptly notify each relevant Lender thereof. If any Discounted Voluntary Prepayment Notice is given, the amount specified in such notice shall be due and payable to the applicable Lenders, subject to the Applicable Discount on the applicable Term Loans, on the date specified therein together with accrued interest (on the par principal amount) to, but not including, such date on the amount prepaid.
(vi)    To the extent not expressly provided for herein, each Discounted Voluntary Prepayment shall be consummated pursuant to reasonable procedures (including as to timing, rounding, minimum amounts, Type and Interest Periods and calculation of Applicable Discount in accordance with Section 2.10(c)(iii) above) reasonably established by the Administrative Agent and the Borrower Agent.
(vii)    Prior to the delivery of a Discounted Voluntary Prepayment Notice, upon written notice to the Administrative Agent, the applicable Borrower may withdraw its offer to make a Discounted Voluntary Prepayment pursuant to any Discounted Prepayment Option Notice.
(d)    To the extent the Term Loans are prepaid pursuant to Section 2.10(c), scheduled amortization amounts for the Term Loans of such Class under Section 2.09 shall be reduced on such basis as shall be directed by the Borrower Agent.
SECTION 2.11.     Fees .
(a)    The Borrowers agree to pay to the Administrative Agent in Dollars for the account of each Revolving Lender a facility fee, which shall accrue at the Applicable Rate on the average daily amount of the Revolving Commitment of such Lender (or, if the Revolving Commitment of such Lender has terminated, on the average daily amount of the Revolving Exposure of such Lender) during the period from and including the Closing Date to but excluding the date on which such Revolving Commitment terminates and such Lender’s Revolving Exposure has been reduced to zero. Accrued facility fees shall be payable in arrears on the last day of March, June, September and December of each year and on the
 
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date on which the Revolving Commitments terminate and the Revolving Exposure is reduced to zero, commencing on the first such date to occur after the Closing Date. All facility fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(b)    The Borrowers agree to pay (i) to the Administrative Agent in Dollars for the account of each Revolving Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the same Applicable Rate used to determine the interest rate applicable to Eurocurrency Revolving Loans on the average daily amount of such Revolving Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements with respect to Letters of Credit following the date of the applicable LC Disbursement) during the period from and including the Closing Date to but excluding the later of the date on which such Revolving Lender’s Revolving Commitment terminates and the date on which such Revolving Lender ceases to have any LC Exposure and (ii) to each Issuing Bank a fronting fee in Dollars, which shall accrue at the rate of 0.125% per annum on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) attributable to Letters of Credit issued by such Issuing Bank during the period from and including the Closing Date to but excluding the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure with respect to Letters of Credit issued by such Issuing Bank, as well as such Issuing Bank’s standard fees and commissions with respect to the issuance, amendment, cancellation, negotiation, transfer, presentment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Unless otherwise specified above, participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third (3rd) Business Day following such last day, commencing on the first such date to occur after the Closing Date; provided that all such fees shall be payable on the date on which such Revolving Commitments terminate and any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand. Any other fees payable to an Issuing Bank pursuant to this paragraph shall be payable within ten (10) days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). In addition to the foregoing fees and to the extent required to be paid under Section 9.03(a), the Borrower Agent shall pay or reimburse the Issuing Bank for such normal and customary costs and expenses as are incurred or charged by the Issuing Bank in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit.
(c)    All fees payable hereunder shall be paid on the dates due, in Dollars and immediately available funds, to the Administrative Agent (or to the relevant Issuing Bank, in the case of fees payable to it) for distribution, in the case of facility fees and participation fees, to the Lenders. Fees paid shall not be refundable under any circumstances.
SECTION 2.12.     Interest .
(a)    The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate in effect from time to time plus the Applicable Rate.
(b)    The Loans comprising each Eurocurrency Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.
(c)    The Loans comprising each Canadian Prime Rate Borrowing shall bear interest at the Canadian Prime Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.
 
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(d)    Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by a Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, 2% plus (w) if such amount is denominated in Dollars, the rate applicable to ABR Loans as provided in paragraph (a) of this Section, (x) if such amount is denominated in Canadian Dollars, the rate applicable to Canadian Prime Rate Loans as provided in paragraph (c) of this Section, or (y) in the case of non-Dollar denominated amounts Eurocurrency Loans denominated in such currency with a one month Interest Period.
(e)    Accrued interest on each Loan shall be payable in the currency in which such Loan is denominated in arrears on each Interest Payment Date for such Loan and, in the case of Revolving Loans of any Class, upon termination of the Revolving Commitments of such Class; provided that (i) interest accrued pursuant to paragraph (d) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan or Canadian Prime Rate Loan prior to the end of the Availability Period or a Swingline Loan), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurocurrency Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.
(f)    All interest hereunder shall be computed on the basis of a year of 360 days, except that the Acceptance Fee, and interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate and interest on Loans denominated in Canadian Dollars or Sterling shall be computed on the basis of a year of 365 days (or, except in the case of the Acceptance Fee, 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate, Canadian Prime Rate, Discount Rate, Adjusted LIBO Rate, LIBO Rate or Euro LIBO Rate shall be determined by the Administrative Agent in accordance with the provisions of this Agreement, and such determination shall be conclusive absent manifest error.
SECTION 2.13.     Alternate Rate of Interest . If prior to the commencement of any Interest Period for a Eurocurrency Borrowing denominated in any currency:
(a)    the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate, LIBO Rate for such Interest Period or currency; or
(b)    the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate, LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower Agent and the Lenders by telephone or telecopy or transmission by electronic communication in accordance with Section 9.01(b) as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower Agent and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing denominated in such currency to, or continuation of any Borrowing denominated in such currency as, a Eurocurrency Borrowing shall be ineffective, and any Eurocurrency Borrowing denominated in such currency that is requested to be continued (A) if such currency is the Dollar, shall be converted to an ABR Borrowing on the last day of the Interest Period
 
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applicable thereto and (B) if such currency is an Alternative Currency, shall be repaid on the last day of the Interest Period applicable thereto, and (ii) if any Borrowing Request requests a Eurocurrency Borrowing denominated in such currency (A) if such currency is the Dollar, such Borrowing shall be made as an ABR Borrowing and (B) if such currency is an Alternative Currency, such Borrowing Request shall be ineffective.
SECTION 2.14.     Increased Costs .
(a)    If any Change in Law shall:
(i)    impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or any Issuing Bank; or
(ii)    impose on any Lender or any Issuing Bank or the London interbank market any other condition or Tax affecting this Agreement, Loans, Bankers’ Acceptances or BA Equivalent Loans made by such Lender or any Letter of Credit or participation therein (other than any Excluded Taxes or any Indemnified Taxes, which are governed solely by Section 2.16);
and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan or of maintaining its obligation to make any Loan to increase the cost to such Lender or such Issuing Bank of participating in, issuing or maintaining any Letter of Credit, or to reduce the amount of any sum received or receivable by such Lender or such Issuing Bank hereunder, whether of principal, interest or otherwise, in each case by an amount deemed by such Lender or such Issuing Bank to be material in the context of its making of, and participation in, extensions of credit under this Agreement, then, upon the request of such Lender or such Issuing Bank, the applicable Borrowers will pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.
(b)    If any Lender or any Issuing Bank determines in good faith that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or such Issuing Bank’s capital or on the capital of such Lender’s or such Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a level below that which such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such Issuing Bank’s policies and the policies of such Lender’s or such Issuing Bank’s holding company with respect to capital adequacy), then from time to time, upon the request of such Lender or such Issuing Bank, the applicable Borrowers will pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company for any such reduction suffered.
(c)    A certificate of a Lender or an Issuing Bank setting forth in reasonable detail the amount or amounts necessary to compensate such Lender or such Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower Agent and shall be conclusive absent manifest error. The applicable Borrowers shall pay such Lender or such Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.
 
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(d)    Failure or delay on the part of any Lender or any Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or such Issuing Bank’s right to demand such compensation; provided that no Borrower shall be required to compensate a Lender or an Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or such Issuing Bank, as the case may be, notifies the Borrower Agent of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.
(e)    Notwithstanding the foregoing, no Lender or Issuing Bank shall be entitled to seek compensation under this Section 2.14 based on the occurrence of a Change in Law arising solely from the Dodd-Frank Wall Street Reform and Consumer Protection Act or any requests, rules, guidelines or directives thereunder or issued in connection therewith, unless such Lender or Issuing Bank is generally seeking compensation from other borrowers with respect to its similarly affected commitments, loans and/or participations under agreements with such borrowers having provisions similar to this Section 2.14.
SECTION 2.15.     Break Funding Payments . In the event of (a) the payment of any principal of any Eurocurrency Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default or as a result of any prepayment pursuant to Section 2.10), (b) the conversion of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurocurrency Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.10 and is revoked in accordance therewith) or (d) the assignment of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto as a result of a request by a Borrower pursuant to Section 2.18, then, in any such event, such Borrower shall compensate each Lender for the loss, cost and expense (excluding loss of anticipated profit) attributable to such event. Such loss, cost or expense to any Lender may be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan (and excluding any Applicable Rate), for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for deposits in the relevant currency of a comparable amount and period from other banks in the eurocurrency market. A certificate of any Lender setting forth in reasonable detail any amount or amounts that such Lender is entitled to receive pursuant to this Section 2.15 shall be delivered to the Borrower Agent and shall be conclusive absent manifest error. The applicable Borrowers shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.
SECTION 2.16.     Taxes .
(a)    Any and all payments by or on account of any obligation of any Loan Party hereunder or under any other Loan Document shall be made free and clear of and without deduction or withholding for any Taxes unless otherwise required by applicable law. If any Loan Party or other applicable withholding agent shall be required by applicable Law to deduct or withhold any Taxes from any such payments (as determined in the good faith discretion of the applicable withholding agent), then (i) the applicable withholding agent shall make such deductions or withholdings and timely pay any such Taxes to the relevant Governmental Authority in accordance with applicable Law, and (ii) if the Tax in question is an Indemnified Tax, the sum payable by the applicable Loan Party shall be increased as necessary so that after all required deductions or withholdings for Indemnified Taxes (including deductions or withholdings
 
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applicable to additional sums payable under this Section 2.16) have been made, the Lender (or, in the case of a payment to the Administrative Agent for its own account, the Administrative Agent) receives on the due date a net sum equal to the sum it would have received had no such deductions or withholdings been made.
(b)    In addition, without duplication of Section 2.16(a) the Borrowers shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.
(c)    The Loan Parties shall, jointly and severally, indemnify each Lender and the Administrative Agent (each a “ Tax Indemnitee ”), within 10 days after written demand therefor, for the full amount of any Indemnified Taxes, payable by such Tax Indemnitee (including Indemnified Taxes imposed on or attributable to amounts payable under this Section 2.16) other than any penalties arising as a result of the gross negligence or willful misconduct of such Lender or Agent (as determined by a final nonappealable judgment of a court of competent jurisdiction), and any reasonable out-of-pocket expenses related thereto, whether or not such Taxes were correctly or legally imposed or asserted by the applicable Governmental Authority; provided , however , that if the Lender or Administrative Agent does not notify the Borrower Agent of any indemnification claim under this Section 2.16 within 180 days after such Lender or Administrative Agent has received notice of the specific assessment or deficiency giving rise to such indemnification claim, the Loan Parties shall not be required to indemnify such Lender or Administrative Agent for any incremental interest or penalties resulting from such Lender’s or Administrative Agent’s failure to notify the Loan Parties within the 180 day period. A certificate as to the amount of such payment or liability prepared in good faith and delivered by the Tax Indemnitee or by the Agent on its own behalf or on behalf of another Tax Indemnitee, accompanied by reasonable supporting documentation, shall be conclusive absent manifest error.
(d)    As soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Loan Party to a Governmental Authority, and in any event within 30 days of any such payment, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e)    Each Lender shall, at such times as are reasonably requested by the Borrower Agent or the Administrative Agent, provide the Borrower Agent and the Administrative Agent with any documentation prescribed by Law or reasonably requested by the Borrower Agent or the Administrative Agent certifying as to any entitlement of such Lender to an exemption from, or reduction in, any withholding Tax with respect to any payments to be made to such Lender under any Loan Document. In addition, each Lender, if reasonably requested by any Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by such Borrower or the Administrative Agent as will enable such Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Each such Lender shall, whenever a lapse in time or change in circumstances renders any of the foregoing documentation (including any specific documentation required below in this Section 2.16(e)) obsolete, expired or inaccurate in any material respect, deliver promptly to the Borrower Agent and the Administrative Agent updated or other appropriate documentation (including any new documentation reasonably requested by the Borrower Agent or the Administrative Agent) or promptly notify the Borrower Agent and the Administrative Agent in writing of its legal ineligibility to do so.
Without limiting the foregoing:
(1)    Each Lender that is not a Foreign Lender shall deliver to the Borrower Agent (as an agent for all of the Borrowers) and the Administrative Agent on or before the date on which it becomes a party to this Agreement two properly completed and duly signed original copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding.
 
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(2)    Each Foreign Lender shall deliver to the Borrower Agent (as an agent for the U.S. Parent Borrower and all of the Domestic Subsidiary Borrowers) and the Administrative Agent on or before the date on which it becomes a party to this Agreement (and from time to time thereafter upon the request of any Borrower or the Administrative Agent) whichever of the following is applicable:
(A)    two properly completed and duly signed original copies of IRS Form W-8BEN or W-8BEN-E (or any successor forms) claiming eligibility for the benefits of an income tax treaty to which the United States is a party, and such other documentation as required under the Code,
(B)    two properly completed and duly signed original copies of IRS Form W-8ECI (or any successor forms),
(C)    in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 871(h) or Section 881(c) of the Code, (x) two properly completed and duly signed certificates substantially in the form of Exhibit  D-1 , D-2 , D-3 and D-4 , as applicable, (any such certificate, a “ U.S. Tax Compliance Certificate ”) and (y) two properly completed and duly signed original copies of IRS Form W-8BEN or W-8BEN-E (or any successor forms),
(D)    to the extent a Foreign Lender is not the beneficial owner (for example, where the Foreign Lender is a partnership or a participating Lender), two properly completed and duly signed original copies of IRS Form W-8IMY (or any successor forms) of the Foreign Lender, accompanied by a Form W-8ECI, Form W-8BEN or W-8BEN-E, U.S. Tax Compliance Certificate, Form W-9, Form W-8IMY or any other required information (or any successor forms) from each beneficial owner that would be required under this Section 2.16(e) if such beneficial owner were a Lender, as applicable ( provided that, if the Foreign Lender is a partnership for U.S. federal income tax purposes (and not a participating Lender) and one or more beneficial owners are claiming the portfolio interest exemption, the U.S. Tax Compliance Certificate may be provided by such Foreign Lender on behalf of such beneficial owner(s)), or
(E)    two properly completed and duly signed original copies of any other form prescribed by applicable U.S. federal income tax laws as a basis for claiming a complete exemption from, or a reduction in, U.S. federal withholding tax on any payments to such Lender under the Loan Documents.
(3)    Each Foreign Lender shall deliver to the Borrower Agent (as agent for all of the Foreign Subsidiary Borrowers) and the Administrative Agent on or before the date on which it becomes a party to this Agreement (and from time to time thereafter upon the request of any Borrower or the Administrative Agent) two properly completed and duly signed original copies of an applicable IRS Form W-8 (or any successor form) certifying such Foreign Lender’s non-U.S. status.
(4)    If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding tax imposed by Sections 1471 through 1474 of the Code if such Lender were to fail to comply with the applicable reporting requirements of those Sections (including
 
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those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower Agent (as agent for all of the Borrowers) and the Administrative Agent at the time or times prescribed by applicable Law and at such time or times reasonably requested by the Borrower Agent or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower Agent or the Administrative Agent as may be necessary for such Borrower Agent and the Administrative Agent to comply with their obligations under Sections 1471 through 1474 of the Code, to determine whether such Lender has or has not complied with such Lender’s obligations under such Sections and, if necessary, to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (4), Section 1471 through 1474 of the Code shall include any amendments made to such sections after the date of this Agreement and any intergovernmental agreement (and any related Laws, regulations or official administrative practices) implementing the foregoing.
Notwithstanding any other provision of this clause (e), a Lender shall not be required to deliver any documentation that such Lender is not legally eligible to deliver. Each Lender hereby authorizes the Administrative Agent to deliver to the Loan Parties and to any successor Administrative Agent any documentation provided by such Lender to the Administrative Agent pursuant to this Section 2.16(e).
(f)    If the Administrative Agent or a Lender receives a refund of any Indemnified Taxes as to which it has been indemnified by a Loan Party or with respect to which a Loan Party has paid additional amounts or indemnification payments pursuant to this Section 2.16, it shall promptly pay over such refund to the Borrower Agent (but only to the extent of indemnity payments made, or additional amounts paid, by the applicable Loan Parties under this Section 2.16 with respect to the Indemnified Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender (including any Taxes) and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that each Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to such Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to any Borrower or any other Person.
(g)    For the avoidance of doubt, the term “Lender,” for purposes of this Section 2.16, shall include any Swingline Lender and any Issuing Bank.
(h)    The Administrative Agent and each Lender shall use commercially reasonable efforts to cooperate with the Borrowers in attempting to recover any Indemnified Taxes that the Borrowers reasonably assert were improperly imposed if (i) in the reasonable judgment of the Administrative Agent or such Lender, as applicable, such cooperation shall not subject the Administrative Agent or such Lender, as applicable, to any unreimbursed third party cost or expense or otherwise be materially disadvantageous to the Administrative Agent or such Lender, as applicable, and (ii) based on advice of the applicable Borrower’s (or applicable Loan Party’s) independent accountants or external legal counsel, there is a reasonable basis for such Loan Party to contest with the applicable Governmental Authority the imposition of such Indemnified Taxes or Other Taxes; provided , however , that any such attempts shall be at the sole cost of the Borrowers and the Borrowers shall indemnify the Administrative Agent and each Lender for any costs it incurs in connection with complying with this Section 2.16(h). The Borrowers shall have the right to dispute or challenge in a reasonable manner and only to the extent necessary to protect its rights under applicable law, and at its sole cost and expense, the imposition of Indemnified Taxes with the relevant Governmental Authority. In no event will this Section 2.16(h) relieve any Borrower of its obligation to pay additional amounts or indemnification payments to the Administrative Agent or any Lender under this Section 2.16. Any refund obtained shall be repaid to the applicable Borrower to the extent provided in Section 2.16(f).
 
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(i)    (i) A UK Tax Deduction on a payment made by a UK Loan Party under a Loan Document shall be regarded as an Excluded Tax if:
(1)    on the date on which the relevant payment falls due, the payment could have been made to the relevant Lender without any UK Tax Deduction if such Lender had been a UK Qualifying Lender but on that date that Lender is not or has ceased to be a UK Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration or application of) any Law or treaty or any published practice or published concession of any relevant taxing authority;
(2)    the relevant Lender is a UK Treaty Lender and the UK Loan Party making the payment is able to demonstrate that the payment could have been made to the Lender without any UK Tax Deduction had that Lender duly complied with its obligations under Section 2.16(i)(ii) and Section 2.16(i)(iii); or
(3)    the relevant Lender is a UK Qualifying Lender solely by virtue of paragraph (b) of the definition of UK Qualifying Lender; and:
(A)    an officer of HMRC has given (and not revoked) a direction (a “ Direction ”) under section 931 of the ITA which relates to the payment and that Lender has received from the UK Loan Party making the payment or the Borrower Agent a certified copy of that Direction; and
(B)    the payment could have been made to the Lender without any UK Tax Deduction if that Direction had not been made; or
(4)    the relevant Lender is a UK Qualifying Lender solely by virtue of paragraph (b) of the definition of UK Qualifying Lender and:
(A)    the relevant Lender has not given a UK Tax Confirmation to the UK Loan Party making the payment; and
(B)    the payment could have been made to the Lender without any UK Tax Deduction if the Lender had given a UK Tax Confirmation to the UK Loan Party, on the basis that the UK Tax Confirmation would have enabled the UK Loan Party to have formed a reasonable belief that the payment was an “excepted payment” for the purpose of section 930 of the ITA.
(ii)    Subject to paragraph (iii) below, a UK Treaty Lender and each UK Loan Party which makes a payment to which that UK Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for that UK Loan Party to obtain authorization to make that payment without any UK Tax Deduction.
(iii)    A UK Treaty Lender which becomes a party hereto (x) on the day on which this Agreement is entered into or (y) on a day after the date of this Agreement, that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence, in the case of a UK Treaty Lender
 
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falling within (x) above, in this Agreement or in writing to the UK Borrower and Administrative Agent within ten (10) Business Days of the date of this Agreement or, in the case of a UK Treaty Lender falling within (y) above, in writing to the UK Borrower and Administrative Agent on the date on which it becomes a UK Treaty Lender. Where the UK Treaty Lender has supplied its HMRC DT Treaty Passport scheme reference number and its jurisdiction of tax residence in this Agreement or in writing to the UK Borrower and Administrative Agent: (a) the relevant UK Borrower shall take all reasonable steps to promptly file a completed HMRC Form DTTP2 in respect of that UK Treaty Lender; and (b) the relevant UK Treaty Lender shall be under no further obligation pursuant to paragraph (ii) above and this paragraph (iii) unless and until (i) the relevant UK Borrower notifies the relevant UK Treaty Lender in writing that (A) the UK Borrower has not submitted a HMRC Form DTTP2 in respect of that UK Treaty Lender; or (B) the UK Borrower’s HMRC Form DTTP2 has been rejected by HMRC; or (C) HMRC has not given the relevant UK Borrower authority to make payment to that UK Treaty Lender without a UK Tax Deduction within 60 days of the date of the UK Borrower submitting the HMRC Form DTTP2; or (ii) the relevant UK Borrower had received authority from HMRC to make payments to such Lender without a UK Tax Deduction as a result of submitting a Form DTTP2, but a Party becomes aware that as a result of (A) a withdrawal or expiry of that authority; or (B) a withdrawal or cessation of the HMRC DTTP Passport scheme due to any change in Law or change in practice of HMRC, it is no longer possible for such Loan Party to make payments to the Lender without a UK Tax Deduction by virtue of that authority, in which case that Party shall notify the other relevant Party, and (in each such case) that UK Treaty Lender and UK Borrower shall co-operate in completing any additional procedural formalities necessary for that UK Borrower to obtain authorization to make that payment without a UK Tax Deduction. If a UK Treaty Lender has not confirmed its HMRC DT Treaty Passport scheme reference number and jurisdiction of tax residence in accordance with this paragraph (iii), no UK Loan Party shall make a HMRC Borrower DTTP Filing or file any other form relating to the HMRC DT Treaty Passport scheme in respect of that UK Treaty Lender or its participation in any Loan unless the UK Treaty Lender otherwise agrees.
(iv)    Each Lender which becomes a party to this Agreement after the date of this Agreement shall confirm in the documentation it executes on becoming a party hereto, and for the benefit of the Administrative Agent and without any liability to any Loan Party, which of the following categories it falls in for the purposes of that Loan:
(1)    not a UK Qualifying Lender;
(2)    a UK Qualifying Lender (other than a UK Treaty Lender); or
(3)    a UK Treaty Lender.
If a Lender which becomes a party to this Agreement after the date of this Agreement in respect of an advance to a UK Borrower fails to indicate its status pursuant to the previous sentence, then such Lender shall be treated for the purposes of this Agreement (including by each UK Loan Party) as if it is not a UK Qualifying Lender until such time as it notifies the Administrative Agent which category applies (and the Administrative Agent, upon receipt of such notification, shall promptly inform the Borrower Agent). For the avoidance of doubt, any document pursuant to which a Lender becomes party to this Agreement shall not be invalidated by any failure of a Lender to comply with this paragraph (iv).
(v)    A Lender which has given a UK Tax Confirmation shall promptly notify the Administrative Agent if there is any change in the position from that set out in the UK Tax Confirmation, following which the Administrative Agent shall notify the Borrower Agent.
 
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(vi)    A UK Loan Party shall promptly upon becoming aware that it has to make a UK Tax Deduction (or that there is any change in the rate or the basis of a UK Tax Deduction) promptly notify the Administrative Agent accordingly. Similarly, a Lender shall notify the Administrative Agent on becoming so aware in respect of a payment payable to that Lender, and the Administrative Agent shall notify the Borrower Agent.
(j)    Notwithstanding any other provision of this Agreement except as otherwise provided in Section 2.16(l), no Irish Borrower shall be required to make an increased payment to any Lender pursuant to this Section 2.16 for Taxes in respect of any Tax imposed by Ireland from a payment of interest if on the date on which the payment falls due:
(i)    the payment could have been made to the relevant Lender without a deduction for Tax imposed by Ireland if such Lender was an Irish Qualifying Lender, but on that date such Lender is not or has ceased to be an Irish Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or tax treaty, or any practice or concession of any relevant taxing authority; or
(ii)    the relevant Lender is an Irish Treaty Lender and the payment could have been made to the Lender without a deduction for Tax had that Lender complied with its obligations under paragraph (k) below.
(k)    A Lender which is an Irish Treaty Lender and any Irish Borrower which makes a payment to which that Lender is entitled shall co-operate promptly in completing any procedural formalities necessary for such Borrower to obtain authorization to make that payment without a Tax deduction.
(l)    Notwithstanding anything herein to the contrary, any Irish Borrower shall remain liable for any Taxes incurred by any Irish Qualifying Lender resulting from such Irish Borrower’s failure to provide any forms or exemption certificate or other documentation it is legally required to provide to entitle any Irish Qualifying Lender to an exemption from or reduction of withholding tax under the law of Ireland, or any Irish Treaty.
(m)    Each Lender which becomes a party to this Agreement and makes a Loan to any Loan Party after the date of this Agreement shall confirm in the documentation it executes on becoming a party hereto, and for the benefit of the Administrative Agent and any Loan Party, which of the following categories it falls in for the purposes of that Loan:
(i)    not an Irish Qualifying Lender;
(ii)    an Irish Qualifying Lender (other than an Irish Treaty Lender); or
(iii)    an Irish Treaty Lender.
(n)    If a Lender which becomes a party to this Agreement after the date of this Agreement fails to indicate its status pursuant to Section 2.16(m), then such Lender shall be treated for the purposes of this Agreement (including by each Loan Party) as if it is not an Irish Qualifying Lender until such time as it notifies the Administrative Agent which category applies (and the Administrative Agent, upon receipt of such notification, shall inform the Irish Borrower). For the avoidance of doubt, any document pursuant to which a Lender becomes party to this Agreement shall not be invalidated by any failure of a Lender to comply with Section 2.16(m). Any Lender which ceases to be an Irish Qualifying Lender shall on ceasing to be an Irish Qualifying Lender, promptly notify each Loan Party that it has ceased to be an Irish Qualifying Lender.
 
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(o)    On or before the date it becomes a party to this Agreement, any Administrative Agent that is a U.S. Person shall deliver to the Borrower two duly completed copies of IRS Form W-9, or any subsequent versions or successors to such form, certifying that such Administrative Agent is exempt from U.S. federal backup withholding. Any Administrative Agent, and any successor or supplemental Administrative Agent, that is not a U.S. Person, shall deliver to the Borrower (A) two duly completed copies of IRS Form W-8IMY certifying that, with respect to payments received by it (on behalf of the Lenders) from the U.S. Parent Borrower or any Domestic Subsidiary Borrower, it is a “U.S. branch”, the payments are not effectively connected with the conduct of a trade or business in the United States, and it is using such form as evidence of its agreement with the Borrower to be treated as a U.S. Person with respect to such payments and (B) with respect to payments received for its own account, two duly completed copies of IRS Form W-8ECI. Notwithstanding anything to the contrary in this Section 2.16(o), no Administrative Agent shall be required to provide any documentation it is legally ineligible to provide as a result of a Change in Law after the date hereof.
SECTION 2.16A     VAT .
(a)    All amounts set out or expressed in a Loan Document to be payable by any party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, if VAT is or becomes chargeable on any supply made by any Finance Party to any Loan Party under a Loan Document, that party shall pay to the Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such party).
(b)    If VAT is or becomes chargeable on any supply made by any Finance Party (the “ Suppl i er ”) to any Finance Party (for purposes of this Section 2.16A, the “ Recipient ”) under a Loan Document, and any party other than the Recipient (the “ Subject Party ”) is required by the terms of any Loan Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT. The Recipient will promptly pay to the Subject Party an amount equal to any credit or repayment obtained by the Recipient from the relevant tax authority which the Recipient reasonably determines is in respect of such VAT.
(c)    Where a Loan Document requires any party to reimburse or indemnify a Finance Party for any cost or expense, that party shall reimburse or indemnify (as the case may be) such Loan Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
SECTION 2.17.     Payments Generally; Pro Rata Treatment; Sharing of Setoffs .
(a)    Each Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.14, 2.15 or 2.16, or otherwise) prior to 2:00 p.m., Local Time, on the date when due, in immediately available funds, without setoff or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the
 
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Administrative Agent at its offices referred to in Section 9.01 (or as otherwise directed by the Administrative Agent), except payments to be made directly to an Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.14, 2.15, 2.16 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and (x), in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension and (y) in the case of any payment of fees, such fees shall be payable for the period of such extension. All payments under each Loan Document of principal or interest in respect of any Loan (or of any breakage indemnity in respect of any Loan) shall be made in the currency of such Loan, and, except as otherwise expressly set forth in any Loan Document, all other payments under each Loan Document shall be made in Dollars.
(b)    If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, required cash collateral, interest and fees then due hereunder, such funds shall be applied (i)  first , towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii)  second , towards payment of principal and unreimbursed LC Disbursements and cash collateral then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements and cash collateral then due to such parties.
(c)    If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by a Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements and Swingline Loans to any assignee or participant in accordance with the terms of this Agreement. Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.
(d)    Unless the Administrative Agent shall have received notice from a Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the relevant Issuing Bank hereunder that such Borrower will not make such payment, the Administrative Agent may assume that such Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or such Issuing Bank, as the case may be, the amount due. In such event, if the applicable Borrower has not in fact made such payment, then each of the Lenders or the relevant Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest
 
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thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
(e)    If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.17(d) or 9.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.18.     Mitigation Obligations; Replacement of Lenders .
(a)    If any Lender requests compensation under Section 2.14, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the good faith judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.14 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable out-of-pocket costs and expenses incurred by any Lender in connection with any such designation or assignment. Any Lender claiming reimbursement of such costs and expenses shall deliver to the Borrower Agent a certificate setting forth such costs and expenses in reasonable detail which shall be conclusive absent manifest error.
(b)    If any Lender requests compensation under Section 2.14, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, or if any Lender becomes a Defaulting Lender, or any Lender is unable to fund its portion of any Loan as a result of any applicable law or regulation prohibiting, or any order, judgment or decree of any Governmental Authority enjoining, prohibiting or restraining, any Lender from making any Loan requested by any Borrower or any Issuing Bank or any Lender from issuing, renewing, extending or increasing the face amount of or participating in the Letter of Credit requested to be issued, renewed, extended or increased by any Borrower or if any Lender (a “ Non-Consenting Lender ”) fails to grant a consent (x) in connection with any proposed change, waiver, discharge or termination of the provisions of this Agreement as contemplated by Section 9.02 for which the consent of each Lender or each affected Lender is required but the consent of the Required Lenders is obtained or (y) to extend Loans or Commitments pursuant to Section 2.20, then the applicable Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under the Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower Agent shall have received the prior written consent of the Administrative Agent, each Issuing Bank and the Swingline Lender, which consent shall not unreasonably be withheld, to the extent required by Section 9.04, and (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest) or the applicable Borrower (in the case of all fees and other amounts).
 
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SECTION 2.19.     Expansion Option .
(a)    The Borrowers may from time to time after the Closing Date elect to increase the Revolving Commitments or any Extended Revolving Commitments or enter into one or more new Classes of Revolving Commitments (“ Increased Commitments ”) or enter into one or more tranches of term loans (each, an “ Incremental Term Loan ”), in each case in an aggregate principal amount of not less than $25,000,000 (or such lesser amount as may be reasonably agreed by the Administrative Agent) so long as, after giving effect thereto, the aggregate amount of all such Increased Commitments and all such Incremental Term Loans (other than Refinancing Term Loans) established following the Closing Date does not exceed the sum of (x) $720,000,000 less the aggregate principal amount of Indebtedness incurred under Section 6.01(r) and 6.01(w) in reliance on the “Unrestricted Incremental Amount”, plus (y) the amount of any voluntary prepayments of the Tranche A Term Loans and reductions in the amount of the Revolving Commitments, in each case, to the extent not funded with long term Indebtedness (this clause (y) together with clause (x), the “ Unrestricted Incremental Amount ”), plus (z) an amount so long as, in the case of this clause (z), at the time of incurrence thereof, on a Pro Forma Basis (assuming all Increased Commitments were fully drawn and excluding the cash proceeds of such Incremental Term Loans and Increased Commitments from cash and Cash Equivalents), but excluding from such calculation any amounts incurred substantially concurrently in reliance on the Unrestricted Incremental Amount, the Consolidated Secured Leverage Ratio would be less than or equal to 1.50 to 1.0 as of the last day of the most recent fiscal quarter of the Parent Entity for which financial statements have been delivered pursuant to Section 5.01(a) or (b) (this clause (z), the “ Ratio Incremental Amount ”) ((the aggregate amount under clauses (x), (y) and (z), the “ Incremental Basket Amount ”). The Borrower may arrange for any such increase or tranche to be provided by one or more Lenders (each Lender so agreeing to an increase in its Revolving Commitment or Extended Revolving Commitment, or to enter into one or more new Classes of Revolving Commitments, or to participate in such Incremental Term Loan, an “ Increasing Lender ”), or by one or more new banks, financial institutions or other entities (each such new bank, financial institution or other entity, an “ Augmenting Lender ”), to increase their existing Revolving Commitment or Extended Revolving Commitment, or to enter into one or more new Classes of Revolving Commitments, or to participate in such Incremental Term Loan, or extend Revolving Commitments or Extended Revolving Commitments, as the case may be; provided that each Augmenting Lender (and, in the case of an Increased Commitment, each Increasing Lender) shall be subject to the approval of the Borrower Agent and the Administrative Agent and, in the case of an Increased Commitment, each Issuing Bank and Swingline Lender (such consents not to be unreasonably withheld). Without the consent of any Lenders other than the relevant Increasing Lenders or Augmenting Lenders, this Agreement and the other Loan Documents may be amended pursuant to an Additional Credit Extension Amendment as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower Agent, to effect the provisions of this Section 2.19. Increases and new Revolving Commitments and Incremental Term Loans created pursuant to this Section 2.19 shall become effective on the date agreed by Parent, the applicable Borrower, the Administrative Agent and the relevant Increasing Lenders or Augmenting Lenders and the Administrative Agent shall notify each Lender thereof. Notwithstanding the foregoing, no increase in the Revolving Commitments or Extended Revolving Commitments or Incremental Term Loan shall be permitted under this paragraph unless on the proposed date of the effectiveness of such increase in the Revolving Commitments or Extended Revolving Commitments or borrowing of such Incremental Term Loan, the conditions set forth in paragraphs (a) and (b) of Section 4.03 shall be satisfied and the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Financial Officer of the Borrower Agent; provided that if the proceeds of any Incremental Term Loans are being used to finance an acquisition or other permitted Investment, (x) the reference in Section 4.03(a) to the accuracy of the representations and warranties shall refer to the accuracy of the representations and warranties contained in Sections 3.01 with respect to the Loan Parties (limited to the first sentence thereof), 3.02, 3.03(b)(ii), 3.08, 3.10, 3.13, 3.14 and 3.15 and (y) Section 4.03(b) shall apply solely to Specified Events of Default. On the effective date of any increase in the Revolving Commitments or Extended Revolving Commitments or any Incremental
 
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Term Loans being made, (i) each relevant Increasing Lender and Augmenting Lender shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase and the use of such amounts to make payments to such other Lenders, each Lender’s portion of the outstanding Loans of all the Lenders to equal its Applicable Percentage of such outstanding Loans, and (ii) except in the case of any Incremental Term Loans, if, on the date of such increase, there are any Revolving Loans outstanding, such Revolving Loans shall on or prior to the effectiveness of such Increased Commitments be prepaid to the extent necessary from the proceeds of additional Revolving Loans made hereunder by the Increasing Lenders and Augmenting Lenders, so that, after giving effect to such prepayments and any borrowings on such date of all or any portion of such Increased Commitments, the principal balance of all outstanding Revolving Loans owing to each Lender with a Revolving Commitment is equal to such Lender’s pro rata share (after giving effect to any nonratable Increased Commitment pursuant to this Section 2.19) of all then outstanding Revolving Loans. The Administrative Agent and the Lenders hereby agree that the borrowing notice, minimum borrowing, pro rata borrowing and pro rata payment requirements contained elsewhere in this Agreement shall not apply to the transactions effected pursuant to the immediately preceding sentence. The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Eurocurrency Loan, shall be subject to indemnification by the Borrowers pursuant to the provisions of Section 2.15 if the deemed payment occurs other than on the last day of the related Interest Periods. The terms of any Incremental Term Loans shall be as set forth in the amendment to this Agreement providing for such Incremental Term Loans; provided that (i) the final maturity date of any Incremental Term Loans shall be no earlier than the Term Loan A Maturity Date, (ii) the Weighted Average Life to Maturity of such Incremental Term Loans shall not be shorter than the then remaining Weighted Average Life to Maturity of the Tranche A Term Loans, (iii) Incremental Term Loans shall not participate on a greater than pro rata basis with the Tranche A Term Loans in any optional or mandatory prepayment hereunder, (iv) the provisions with respect to payment of interest, prepayments, original issue discount and upfront fees shall be as set forth in the amendment providing for such Incremental Term Loans; and (v) all other terms applicable to such Incremental Term Loans (other than provisions specified in clauses (i) through (iv) above and other than pricing, interest rate margins, rate floors, currency (which may be an Alternative Currency), discounts, premiums, fees, and optional prepayment terms and provisions, all of which shall be determined by the Borrower Agent and the Lenders providing such Incremental Term Loans) shall be, in the aggregate not materially more restrictive than the terms of this Agreement as determined in good faith by the Borrower Agent, except for covenants or other provisions applicable only to periods after the then Term Loan A Maturity Date at the time such Indebtedness is incurred or added to this Agreement for the benefit of the Lenders hereunder (it being understood that no consent shall be required by Lenders for terms or conditions that are more restrictive than this Agreement if such terms or conditions are added to this Agreement); provided further that the requirements set forth in the foregoing clauses (i) and (ii) shall not apply to any Indebtedness consisting of a customary bridge facility so long as such bridge facility automatically converts into long-term Indebtedness that satisfies such clauses (i) and (ii). The terms of any Increased Commitments shall be as set forth in the amendment to this Agreement providing for such Increased Commitments; provided that (i) the maturity date of any Increased Commitments shall be no earlier than the Revolving Credit Maturity Date and such Increased Commitments shall require no scheduled amortization or mandatory commitment reduction prior to the Revolving Credit Maturity Date, (ii) the provisions with respect to payment of interest and fees shall be as set forth in the amendment providing for such Increased Commitments; and (iii) all other terms applicable to such Increased Commitments (other than provisions specified in clauses (i) and (ii) above and other than pricing, interest rate margins, rate floors, currency (which may be an Alternative Currency) and fees) shall be, in the aggregate, not materially more restrictive than the terms of this Agreement as determined in good faith by the Borrower Agent, except for covenants or other provisions applicable only to periods after the then Revolving Credit Maturity Date at the time such Indebtedness is incurred or added to this Agreement for the benefit of the Lenders hereunder (it being understood that no consent shall be required by Lenders for terms or conditions that are more restrictive than this Agreement if such terms or conditions are added to this Agreement).
 
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(b)    This Section 2.19 shall override any provisions in Section 9.02 to the contrary.
(c)    If, on the effective date of any Increased Commitments, there are any Revolving Loans of the applicable Class outstanding, such Revolving Loans shall on or prior to the effectiveness of such Increased Commitments be prepaid to the extent necessary from the proceeds of additional Revolving Loans made hereunder by the relevant Increasing Lenders or Augmenting Lenders, so that, after giving effect to such prepayments and any borrowings on such date of all or any portion of such Increased Commitments, the principal balance of all outstanding Revolving Loans owing to each Lender with a Revolving Commitment of such Class is equal to such Lender’s pro rata share of all then outstanding Revolving Loans. The Administrative Agent and the Lenders hereby agree that the borrowing notice, minimum borrowing, pro rata borrowing and pro rata payment requirements contained elsewhere in this Agreement shall not apply to the transactions effected pursuant to the immediately preceding sentence and the deemed payments made pursuant the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Eurocurrency Loan, shall be subject to indemnification by the Borrower pursuant to the provisions of Section 2.15 if the deemed payment occurs other than on the last day of the related Interest Periods.
SECTION 2.20.     Extended Term Loans and Extended Revolving Commitments .
(a)    Any Borrower may at any time and from time to time request that all or a portion of the Term Loans of any Class (an “ Existing Term Loan Class ”) be converted to extend the scheduled maturity date(s) of any payment of principal with respect to all or a portion of any principal amount of such Term Loans (any such Term Loans which have been so converted, “ Extended Term Loans ”) and to provide for other terms consistent with this Section 2.20. In order to establish any Extended Term Loans, the Borrower Agent shall provide a notice to the Administrative Agent (who shall provide a copy of such notice to each of the Lenders under the Existing Term Loan Class) (an “ Extension Request ”) setting forth the proposed terms of the Extended Term Loans to be established, which shall be consistent with the Term Loans under the Existing Term Loan Class from which such Extended Term Loans are to be converted except that:
(i)    all or any of the scheduled amortization payments of principal of the Extended Term Loans may be delayed to later dates than the scheduled amortization payments of principal of the Term Loans of such Existing Term Loan Class to the extent provided in the applicable Additional Credit Extension Amendment;
(ii)    the interest margins with respect to the Extended Term Loans may be different than the Applicable Rate for the Term Loans of such Existing Term Loan Class and upfront fees may be paid to the Extending Term Lenders to the extent provided in the applicable Additional Credit Extension Amendment; and
(iii)    the Additional Credit Extension Amendment may provide for other covenants and terms that apply only after the Term Loan A Maturity Date.
(b)    Any Extended Term Loans converted pursuant to any Extension Request shall be designated a series of Extended Term Loans for all purposes of this Agreement; provided that, subject to the limitations set forth in clause (a) above, any Extended Term Loans converted from an Existing Term Loan Class may, to the extent provided in the applicable Additional Credit Extension Amendment and consistent with the requirements set forth above, be designated as an increase in any previously established Class of Term Loans.
 
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(c)    The Borrower Agent shall provide the applicable Extension Request at least five (5) Business Days prior to the date on which Lenders under the applicable Existing Term Loan Class are requested to respond. No Lender shall have any obligation to agree to have any of its Term Loans of any Existing Term Loan Class converted into Extended Term Loans pursuant to any Extension Request. Any Lender wishing to have all or a portion of its Term Loans under the Existing Term Loan Class subject to such Extension Request (such Lender an “ Extending Term Lender ”) converted into Extended Term Loans shall notify the Administrative Agent (an “ Extension Election ”) on or prior to the date specified in such Extension Request of the amount of its Term Loans under the Existing Term Loan Class which it has elected to request be converted into Extended Term Loans (subject to any minimum denomination requirements reasonably imposed by the Administrative Agent and acceptable to the Borrower Agent). In the event that the aggregate amount of Term Loans under the Existing Term Loan Class subject to Extension Elections exceeds the amount of Extended Term Loans requested pursuant to an Extension Request, Term Loans of the Existing Term Loan Class subject to Extension Elections shall be converted to Extended Term Loans on a pro rata basis based on the amount of Term Loans included in each such Extension Election (subject to any minimum denomination requirements reasonably imposed by the Administrative Agent and acceptable to the Borrower Agent).
(d)    The Borrower Agent may, with the consent of each Person providing an Extended Revolving Commitment, the Administrative Agent and any Person acting as swingline lender or issuing bank under such Extended Revolving Commitments, amend this Agreement pursuant to an Additional Credit Extension Amendment to provide for Extended Revolving Commitments and to incorporate the terms of such Extended Revolving Commitments into this Agreement on substantially the same basis as provided with respect to the Revolving Commitments; provided that (i) the establishment of any such Extended Revolving Commitments shall be accompanied by a corresponding reduction in the Revolving Commitments and (ii) any reduction in the Revolving Commitments may, at the option of the Borrower Agent, be directed to a disproportional reduction of the Revolving Commitments of any Lender providing an Extended Revolving Commitment. No Lender shall have any obligation to agree to have any of its Revolving Loans of any Class converted into Extended Revolving Commitments.
(e)    Any Extended Term Loans and any Extended Revolving Commitments shall be established pursuant to an Additional Credit Extension Amendment to this Agreement among the Borrower Agent, the applicable Borrower, the Administrative Agent and each Extending Term Lender or Lender providing an Extended Revolving Commitment which shall be consistent with the provisions set forth above (but which shall not require the consent of any other Lender other than those consents provided pursuant to this Agreement). Each Additional Credit Extension Amendment shall be binding on the Lenders, the Loan Parties and the other parties hereto. In connection with any Additional Credit Extension Amendment, the Loan Parties and the Administrative Agent shall enter into such amendments to the Collateral Documents (other than during a Collateral Suspension Period) as may be reasonably requested by the Administrative Agent (which shall not require any consent from any Lender other than those consents provided pursuant to this Agreement) in order to ensure that the Extended Term Loans or Extended Revolving Commitments are provided with the benefit of the applicable Collateral Documents (other than during a Collateral Suspension Period) and shall deliver such other documents, certificates and opinions of counsel in connection therewith as may be reasonably requested by the Administrative Agent.
(f)    The provisions of this Section 2.20 shall override any provision of Section 9.02 to the contrary.
 
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SECTION 2.21.     Judgment Currency . If for the purposes of obtaining judgment in any court it is necessary to convert a sum due from a Borrower hereunder in one currency into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures in the relevant jurisdiction the first currency could be purchased by the Administrative Agent with such other currency on the Business Day immediately preceding the day on which final, non-appealable judgment is given. The obligations of the Borrowers in respect of any sum due to any party hereto or any holder of the obligations owing hereunder (the “ Applicable Creditor ”) shall, notwithstanding any judgment in a currency (the “ Judgment Currency ”) other than the currency in which such sum is stated to be due hereunder (the “ Agreement Currency ”), be discharged, to the fullest extent permitted by applicable law, only to the extent that, on the Business Day following receipt by the Applicable Creditor of any sum adjudged to be so due in the Judgment Currency, the Applicable Creditor may in accordance with normal banking procedures in the relevant jurisdiction purchase the Agreement Currency with the Judgment Currency; if the amount of the Agreement Currency so purchased is less than the sum originally due to the Applicable Creditor in the Agreement Currency, each applicable Borrower agrees, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify the Applicable Creditor against such loss, and if the amount of the specified currency so purchased exceeds (a) the sum originally due to any Lender or the Administrative Agent, as the case may be, in the Agreement Currency and (b) any amounts shared with other Lenders as a result of allocations of such excess as a disproportionate payment to such Lender under Section 2.17, such Lender or the Administrative Agent, as the case may be, agrees to remit such excess to the applicable Borrowers.
SECTION 2.22.     Defaulting Lenders .
(a)    Notwithstanding any provision of this Agreement to the contrary, if any Revolving Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(i)    fees shall cease to accrue on the unfunded portion of the Revolving Commitment of such Defaulting Lender pursuant to Section 2.11(a);
(ii)    the Revolving Commitment and Revolving Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 9.02); provided that this clause (ii) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender affected thereby;
(iii)    if any Swingline Exposure or LC Exposure exists at the time such Lender becomes a Defaulting Lender then:
(1)    so long as no Event of Default has occurred and is continuing as to which the Administrative Agent has received written notice from a Borrower or a Revolving Lender at the time of any such reallocation, all or any part of the Swingline Exposure and LC Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages (disregarding for this purpose the Revolving Commitments of any Defaulting Lenders for all purposes of such calculation) but only to the extent that the sum of all non-Defaulting Lenders’ Revolving Exposures plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total of all non-Defaulting Lenders’ Revolving Commitments;
 
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(2)    if the reallocation described in clause (1) above cannot, or can only partially, be effected, the applicable Borrowers shall within one Business Day following notice by the Administrative Agent (x)  first , prepay such Swingline Exposure and (y)  second , cash collateralize for the benefit of the Issuing Bank only the applicable Borrowers’ obligations corresponding to such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (1) above) in accordance with the procedures set forth in Section 2.05(j) for so long as such LC Exposure is outstanding;
(3)    if the Borrowers cash collateralize any portion of such Defaulting Lender’s LC Exposure pursuant to clause (2) above, the Borrowers shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.11(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;
(4)    if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (1) above, then the fees payable to the Lenders pursuant to Section 2.11(a) and Section 2.11(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and
(5)    if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (1) or (2) above, then, without prejudice to any rights or remedies of the Issuing Bank or any other Lender hereunder, all fees that otherwise would have been payable to such Defaulting Lender (solely with respect to the portion of such Defaulting Lender’s Commitment that was utilized by such LC Exposure) and letter of credit fees payable under Section 2.11(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and
(iv)    so long as such Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure and the Defaulting Lender’s then outstanding LC Exposure under such Revolving Facility will be 100% covered by the Revolving Commitments under such Revolving Facility of the non-Defaulting Lenders and/or cash collateral will be provided by the applicable Borrowers in accordance with Section 2.22(a)(iii), and participating interests in any newly made Swingline Loan or any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.22(a)(iii)(1) (and such Defaulting Lender shall not participate therein).
(b)    If (i) a Bankruptcy Event with respect to a parent entity of any Lender shall occur following the Effective Date and for so long as such event shall continue or (ii) the Swingline Lender or the Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless the Swingline Lender or the Issuing Bank, as the case may be, shall have entered into arrangements with the applicable Borrowers or such Lender, satisfactory to the Swingline Lender or the Issuing Bank, as the case may be, to defease any risk to it in respect of such Lender hereunder.
(c)    In the event that the Administrative Agent, the Borrower Agent, the Swingline Lender and the Issuing Bank each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the
 
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Revolving Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Commitment and on such date such Lender shall purchase at par such of the Revolving Loans and participations in then outstanding Letters of Credit of the other Revolving Lenders as the Administrative Agent shall determine may be necessary in order for such Lender to hold Revolving Loans in accordance with its Applicable Percentage (whereupon such Lender shall cease to be a Defaulting Lender).
(d)     Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties hereto, each such party hereto acknowledges that any liability of any Lender or Agent that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(i)    the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender or Agent that is an EEA Financial Institution; and
(ii)    the effects of any Bail-in Action on any such liability, including, if applicable:
(A)    a reduction in full or in part or cancellation of any such liability;
(B)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(C)    the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.
SECTION 2.23.     Bankers ’ Acceptances .
(a)    The Borrowers may issue Bankers’ Acceptances denominated in Canadian Dollars for acceptance and purchase by the Revolving Lenders in accordance with the provisions of Section 2.01, Section 2.03 and this Section 2.23.
(b)    Each Bankers’ Acceptance shall have a Contract Period of approximately 30, 60 or 90 days or such other terms as available. No Contract Period shall extend beyond the Revolving Credit Maturity Date. If such Contract Period would otherwise end on a day that is not a Business Day, such Contract Period shall end on the next preceding day that is a Business Day.
(c)    On each Borrowing date on which Bankers’ Acceptances are to be accepted, the Administrative Agent shall advise the Borrower Agent as to the Administrative Agent’s determination of the applicable Discount Rate for the Bankers’ Acceptances which any of the Revolving Lenders have agreed to purchase.
(d)    Each Revolving Lender agrees to purchase a Bankers’ Acceptance accepted by it. The applicable Borrower shall sell, and such Revolving Lender shall purchase, the Bankers’ Acceptance at the applicable Discount Rate. Such Revolving Lender shall provide to the Canadian Funding Office the Discount Proceeds less the Acceptance Fee payable by the applicable Borrower with respect to such Bankers’ Acceptance. Such proceeds will then be made available to the applicable Borrower by the Administrative Agent crediting an account as directed by such Borrower with the aggregate of the amounts made available to the Administrative Agent by such Revolving Lenders and in like funds as received by the Administrative Agent.
 
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(e)    Each Revolving Lender may from time to time hold, sell, rediscount or otherwise dispose of any or all Bankers’ Acceptances accepted and purchased by it.
(f)    To facilitate Borrowings denominated in Canadian Dollars under the Revolving Facility to the Borrowers by way of B/As, the Borrowers hereby appoint each Revolving Lender as its attorney to sign and endorse on its behalf, in handwriting or by facsimile or mechanical signature as and when deemed necessary by such Revolving Lender, blank forms of B/As reasonably acceptable to the Borrower Agent. In this respect, it is each Revolving Lender’s responsibility to maintain an adequate supply of blank forms of B/As for acceptance under this Agreement. Each Borrower recognizes and agrees that all B/As required to be accepted and purchased by any Revolving Lender and which are signed and/or endorsed on its behalf by a Revolving Lender shall bind such Borrower as fully and effectually as if signed in the handwriting of and duly issued by the proper signing officers of such Borrower. Each Revolving Lender is hereby authorized to issue such B/As endorsed in blank in such face amounts as may be determined by such Revolving Lender; provided that the aggregate amount thereof is equal to the aggregate amount of B/As required to be accepted and purchased by such Revolving Lender. No Revolving Lender shall be liable for any damage, loss or other claim arising by reason of any loss or improper use of any such instrument except the gross negligence or willful misconduct of such Revolving Lender or its officers, employees, agents or representatives. On request by the Borrower Agent, each Revolving Lender shall cancel all forms of B/As which have been pre-signed or pre-endorsed by or on behalf of such Borrower and which are held by such Revolving Lender and have not yet been issued in accordance herewith. Each Revolving Lender shall maintain a record with respect to B/As held by it in blank hereunder, voided by it for any reason, accepted and purchased by it hereunder, and cancelled at their respective maturities. Each Revolving Lender agrees to provide such records to the Borrower Agent at the Borrowers’ expense upon request.
(g)    Drafts drawn by a Borrower to be accepted as Bankers’ Acceptances shall be signed by a duly authorized officer or officers of such Borrower or by its attorneys, including attorneys appointed pursuant to Section 2.21(f) above. Notwithstanding that any Person whose signature appears on any Bankers’ Acceptance may no longer be an authorized signatory for a Borrower, as applicable, at the time of issuance of a Bankers’ Acceptance, that signature shall nevertheless be valid and sufficient for all purposes as if the authority had remained in force at the time of issuance and any Bankers’ Acceptance so signed shall be binding on such Borrower.
(h)    The Administrative Agent, promptly following receipt of a notice of Borrowing, continuation or conversion by way of Bankers’ Acceptances, shall advise the applicable Revolving Lenders of the notice and shall advise each such Revolving Lender of the face amount of Bankers’ Acceptances to be accepted by it and the applicable Contract Period (which shall be identical for all Revolving Lenders). The aggregate face amount of Bankers’ Acceptances to be accepted by a Revolving Lender shall be determined by the Administrative Agent by reference to such Revolving Lender’s Applicable Percentage of the issue of Bankers’ Acceptances, except that, if the face amount of a Bankers’ Acceptance which would otherwise be accepted by a Revolving Lender would not be CAD$100,000, or a whole multiple thereof, the face amount shall be increased or reduced by the Administrative Agent in its sole discretion to CAD$l00,000, or the nearest whole multiple of that amount, as appropriate.
(i)    Each Borrower waives presentment for payment and any other defense to payment of any amounts due to a Revolving Lender in respect of a Bankers’ Acceptance accepted and purchased by it pursuant to this Agreement which might exist solely by reason of the Bankers’ Acceptance being held, at
 
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the maturity thereof, by such Revolving Lender in its own right. On the specified maturity date of a B/A, or the date of any prepayment thereof in accordance with this Agreement, if earlier, the applicable Borrower shall pay to such Revolving Lender that has accepted such B/A the full face amount of such B/A (or shall make provision for payment by way of conversion or continuation in accordance with Section 2.07) in full and absolute satisfaction of its obligations with respect to such B/A, and after such payment, the applicable Borrower shall have no further liability in respect of such B/A (except to the extent that any such payment is rescinded or reclaimed by operation of law or otherwise) and such Revolving Lender shall be entitled to all benefits of, and will make and otherwise be responsible for all payments due to the redeeming holder or any third parties under, such B/A.
(j)    Whenever a Borrower requests a borrowing by way of Bankers’ Acceptances, each Non BA Lender shall, in lieu of accepting and purchasing any B/As, make a Loan (a “ BA Equivalent Loan ”) to such Borrower in the amount and for the same term as each Draft which such Lender would otherwise have been required to accept and purchase hereunder. Each such Lender will provide to the Administrative Agent the amount of Discount Proceeds of such BA Equivalent Loan for the account of the applicable Borrower in the same manner as such Lender would have provided the Discount Proceeds in respect of the Draft which such Lender would otherwise have been required to accept and purchase hereunder. Each such BA Equivalent Loan will bear interest at the same rate that would result if such Lender had accepted (and been paid an acceptance fee) and purchased (on a discounted basis) a B/A for the relevant Contract Period (it being the intention of the parties that each such BA Equivalent Loan shall have the same economic consequences for the relevant Lenders and the applicable Borrower as the B/A that such BA Equivalent Loan replaces). All such interest shall be paid in advance on the date such BA Equivalent Loan is made, and will be deducted from the principal amount of such BA Equivalent Loan in the same manner in which the discounted portion of a B/A would be deducted from the face amount of the B/A. Subject to the repayment requirements of this Agreement, on the last day of the relevant Contract Period for such BA Equivalent Loan, the applicable Borrower shall be entitled to convert each such BA Equivalent Loan into another type of Loan, or to roll over each such BA Equivalent Loan into another BA Equivalent Loan, all in accordance with the applicable provisions of this Agreement. Each Non BA Lender may, at its discretion, request in writing to the Administrative Agent and the applicable Borrower that BA Equivalent Loans made by it shall be evidenced by Discount Notes.
(k)    For greater certainty, all provisions of this Agreement that are applicable to B/As shall also be applicable, mutatis mutandis , to BA Equivalent Loans, and notwithstanding any other provision of this Agreement, all references to principal amounts or any repayment or prepayment of any Loans that are applicable to B/As or BA Drawings shall be deemed to refer to the full face amount thereof in the case of B/As and to the principal amount of any portion thereof consisting of BA Equivalent Loans. As set out in the definition of “Bankers’ Acceptances,” that term includes Discount Notes and all terms of this Agreement applicable to Bankers’ Acceptances (including the provisions of Section 2.23(f) relating to their execution by the Revolving Lenders under power of attorney) shall apply equally to Discount Notes evidencing BA Equivalent Loans with such changes as may in the context be necessary. For greater certainty:
(i)    the term of a Discount Note shall be the same as the Contract Period for Bankers’ Acceptances accepted and purchased on the same Borrowing date in respect of the same borrowing;
(ii)    an acceptance fee will be payable in respect of a Discount Note and shall be calculated at the same rate and in the same manner as the Acceptance Fee in respect of a Bankers’ Acceptance; and
 
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(iii)    the Discount Rate applicable to a Discount Note shall be the Discount Rate applicable to Bankers’ Acceptances accepted by a Revolving Lender that is not a Schedule I Lender in accordance with the definition of “Discount Rate” on the same Borrowing date or date of continuation or conversion, as the case may be, in respect of the same borrowing for the relevant Contract Period.
(l)    At the option of the applicable Borrower and any Revolving Lender, Bankers’ Acceptances under this Agreement to be accepted by such Revolving Lender may be issued in the form of depository bills for deposit with The Canadian Depository for Securities Limited pursuant to the Depository Bills and Notes Act (Canada). All depository bills so issued shall be governed by the provisions of this Section 2.23.
(m)    Upon acceptance of a Bankers’ Acceptance by a Revolving Lender, the applicable Borrower shall pay to the Administrative Agent on behalf of such Revolving Lender a fee (the “ Acceptance Fee ”) calculated on the face amount of the Bankers’ Acceptance at a rate per annum equal to the Applicable Rate on the basis of the number of days in the Contract Period for such Bankers’ Acceptance. Any adjustment to the Acceptance Fee (including any adjustment as necessary to reflect the operation of Section 2.12(d)) shall be computed based on the number of days remaining in the Contract Period of such Bankers’ Acceptances from and including the effective date of any change in the Applicable Rate. Any increase in such Acceptance Fee shall be paid by the applicable Borrower to the Administrative Agent on behalf of the Revolving Lenders on the last day of the Contract Period of the relevant Bankers’ Acceptance. Any decrease in such Acceptance Fee shall be paid by each Revolving Lender to the applicable Borrower, through the Administrative Agent, on the last day of the Contract Period of the relevant Bankers’ Acceptance.
SECTION 2.24.     Circumstances Making Bankers ’ Acceptances Unavailable .
(a)    If prior to the commencement of any Contract Period, (i) the Administrative Agent determines in good faith, which determination shall be conclusive and binding on the applicable Borrowers, and notifies the Borrower Agent that, by reason of circumstances affecting the money market, there is no readily available market for Bankers’ Acceptances, or (ii) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Discount Rate or CDOR Rate, as applicable, for such Contract Period; or (iii) the Administrative Agent is advised by one or more Revolving Lenders that the Discount Rate or CDOR Rate, as applicable, for such Contract Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their portion of such BA Drawings included in such Borrowing for such Contract Period then:
(i)    the right of the Borrowers to request a borrowing by way of BA Drawing shall be suspended until the Administrative Agent determines that the circumstances causing such suspension no longer exist and the Administrative Agent so notifies the Borrower Agent; and
(ii)    any notice relating to a borrowing by way of BA Drawing which is outstanding at such time shall be deemed to be a notice requesting a borrowing by way of Canadian Prime Rate Loans (all as if it were a notice given pursuant to Section 2.03).
(b)    The Administrative Agent shall promptly notify the Borrower Agent and the Revolving Lenders of the suspension in accordance with Section 2.24(a) of the Borrowers’ right to request a borrowing by way of BA Drawing and of the termination of such suspension.
 
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SECTION 2.25.     Borrower Agent . Each of the other Borrowers appoints the Parent Entity (in such capacity, the “ Borrower Agent ”) as its agent for all purposes relevant to this Agreement and the other Loan Documents, including the giving and receipt of notices and execution and delivery of all documents, instruments, and certificates contemplated herein and all modifications hereto. The Borrowers may from time to time appoint a new entity as Borrower Agent with the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed). Any acknowledgment, consent, direction, certification, or other action which might otherwise be valid or effective only if given or taken by all or any of the Borrowers or acting singly, shall be valid and effective if given or taken only by the Borrower Agent, whether or not any of the other Borrowers join therein, and the Administrative Agent and the Lenders shall have no duty or obligation to make further inquiry with respect to the authority of the Borrower Agent under this Section 2.25; provided that nothing in this Section 2.25 shall limit the effectiveness of, or the right of the Administrative Agent and the Lenders to rely upon, any notice (including without limitation a Borrowing Request or other request for any credit extension or notices of conversion or continuation of Loans), document, instrument, certificate, acknowledgment, consent, direction, certification or other action delivered by any Borrower pursuant to this Agreement.
ARTICLE III
Representations and Warranties
The Borrowers, jointly and severally, represent and warrant to the Lenders as of the Closing Date and (except as to representations and warranties made as of a certain date) as of the date such representations and warranties are deemed to be made under Section 4.03 of this Agreement that:
SECTION 3.01.     Organization; Powers; Subsidiaries . Each of the Parent Entity and its Material Subsidiaries and each Borrower is duly organized, validly existing and in good standing (to the extent such concept is applicable in the relevant jurisdiction) under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing (to the extent such concept is applicable) in, every jurisdiction where such qualification is required. Schedule 3.01 hereto identifies each Subsidiary of the Parent Entity on the Effective Date, if such Subsidiary is a Specified Domestic Subsidiary or a Specified Foreign Subsidiary, the jurisdiction of its incorporation or organization, as the case may be, the percentage of issued and outstanding shares of its capital stock or other equity interests owned by the Parent Entity and the other Subsidiaries. All of the outstanding shares of capital stock and other equity interests, to the extent owned by the Parent Entity or any Restricted Subsidiary, of each Restricted Subsidiary are validly issued and outstanding and fully paid and nonassessable and all such shares and other equity interests indicated on Schedule 3.01 as owned by the Parent Entity or another Restricted Subsidiary were owned, beneficially and of record, by the Parent Entity or such Restricted Subsidiary on the Effective Date free and clear of all Liens, other than Liens permitted under Section 6.02. As of the Effective Date, there were no outstanding commitments or other obligations of any Subsidiary to issue, and no options, warrants or other rights of any Person to acquire, any shares of any class of capital stock or other equity interests of any Subsidiary, except as disclosed on Schedule 3.01 .
SECTION 3.02.     Authorization; Enforceability . The execution and delivery of the Loan Documents by each Loan Party party thereto and the performance by such Loan Party thereof are within such Loan Party’s corporate, limited liability company or partnership powers and have been duly authorized by all necessary corporate or other organizational and, if required, stockholder action. The Loan Documents have been duly executed and delivered by the Loan Parties party thereto and constitute legal, valid and binding obligations of the Loan Parties party thereto, enforceable against such Loan Parties in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
 
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SECTION 3.03.     Governmental Approvals; No Conflicts . The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except for (A) filings necessary to perfect or maintain the perfection of the Liens on the Collateral granted by the Loan Parties in favor of the Administrative Agent, (B) the approvals, consents, registrations, actions and filings which have been duly obtained, taken, given or made and are in full force and effect and (C) those approvals, consents, registrations or other actions or filings, the failure of which to obtain or make could not reasonably be expected to have a Material Adverse Effect, (b) will not violate (i) any applicable law or regulation or order of any Governmental Authority or (ii) the charter, by-laws or other organizational documents of any Loan Party, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Loan Party or its assets, or give rise to a right thereunder to require any payment to be made by any Loan Party, and (d) will not result in the creation or imposition of any Lien on any material asset of any Loan Party (other than pursuant to the Loan Documents (other than during a Collateral Suspension Period) and Liens permitted by Section 6.02); except with respect to any violation or default referred to in clause (b)(i) or (c) above, to the extent that such violation or default could not reasonably be expected to have a Material Adverse Effect.
SECTION 3.04.     Financial Statements; Financial Condition; No Material Adverse Change .
(a)    The Borrower Agent has heretofore furnished to the Lenders the consolidated balance sheet and statements of earnings, stockholders equity and cash flows of Parent as of and for (i) the years ended December 31, 2016 and December 31, 2015 reported on by Ernst & Young LLP, independent public accountants and (ii) the six months ended June 30, 2016 and June 30, 2017, which financial statements present fairly, in all material respects, the consolidated financial position and results of operations and cash flows of Parent as of such dates and for such periods in accordance with GAAP.
(b)    Since December 31, 2016, there has been no material adverse change in the business, assets, properties or financial condition of the Parent Entity and its Restricted Subsidiaries, taken as a whole.
SECTION 3.05.     Properties .
(a)    Each Loan Party has title to, or valid leasehold interests in, all its material real and personal property material to its business, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes and except where the failure to have such title or interest could not reasonably be expected to have a Material Adverse Effect. There are no Liens on any of the real or personal properties of the Parent Entity or any Restricted Subsidiary except for Liens permitted by Section 6.02. No Mortgage encumbers improved real property that is located in an area that has been identified by the Federal Emergency Management Agency (or any successor agency) as a special flood hazard area with respect to which flood insurance has been made available under the Flood Insurance Laws.
(b)    Each of the Parent Entity and its Restricted Subsidiaries owns, or is licensed or possesses the right to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to the operation of the business of the Parent Entity, the Borrowers and the Restricted Subsidiaries, taken as a whole, and, to the knowledge of the Borrower Agent, the use thereof by the Parent Entity and its Restricted Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
 
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SECTION 3.06.     Litigation and Environmental Matters .
(a)    There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower Agent, threatened against or affecting the Parent Entity or any of its Restricted Subsidiaries as to which there is a reasonable possibility of an adverse determination and that could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. There are no labor controversies pending against or, to the knowledge of the Borrowers, threatened against or affecting the Parent Entity or any of its Subsidiaries which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(b)    Except with respect to any matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Parent Entity nor any of its Restricted Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.
SECTION 3.07.     Compliance with Laws . Each of the Parent Entity and its Restricted Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.08.     Investment Company Status . Neither the Parent Entity nor any of its Restricted Subsidiaries is required to register as an “investment company” as defined in the Investment Company Act of 1940.
SECTION 3.09.     Taxes . The Parent Entity and each of its Restricted Subsidiaries (including the U.S. Parent Borrower) has timely filed or caused to be filed (taking into account extensions) all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes levied or imposed upon them or their properties, income or assets otherwise due and payable (including in its capacity as a withholding agent), except, in each case, (a) Taxes that are being contested in good faith by appropriate proceedings that stay the enforcement of the tax in question and for which the Parent Entity, the U.S. Parent Borrower or such Restricted Subsidiary, as applicable, has set aside on its books reserves to the extent required by GAAP or (b) to the extent that the failure to make such filing or payment could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. There is no current, proposed or, to the Borrower Agent’s knowledge any pending, Tax assessment, deficiency or other claim against the Parent Entity or any of its Restricted Subsidiaries (including the U.S. Parent Borrower) except (i) those being actively contested by the Parent Entity, the U.S. Parent Borrower, or such Restricted Subsidiary in good faith and by appropriate proceedings that stay the enforcement of the tax in question and for which adequate reserves have been provided in accordance with GAAP or (ii) those would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.
SECTION 3.10.     Solvency . On the Closing Date after giving effect to the Transactions, the Parent Entity and its Restricted Subsidiaries, on a consolidated basis, are Solvent.
SECTION 3.11.     Labor Matters . Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect, (a) there are no strikes or other labor disputes against the Parent Entity or any Restricted Subsidiary pending or, to the knowledge of the Borrowers, threatened; (b) hours worked by and payment made to employees of the Parent Entity and its Restricted Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Laws dealing with such matters; and (c) all payments due from the Parent Entity and its Restricted Subsidiaries on account of employee health and
 
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welfare insurance have been paid or accrued as a liability on the books of the relevant party. The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which the Parent Entity or any Restricted Subsidiary is bound, except as could not reasonably be expected to have a Material Adverse Effect.
SECTION 3.12.     Disclosure . As of the Effective Date, none of the reports, financial statements, certificates or other written information (excluding any financial projections or pro forma financial information) furnished by or on behalf of the Parent Entity or any Borrower to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished), when taken as a whole, contains as of the date of such statement, information, document or certificate was so furnished any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading. The projections and pro forma financial information contained in the materials referenced above have been prepared in good faith based upon assumptions believed by management of the Borrower to be reasonable at the time made, it being recognized by the Lenders that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered by such financial information may differ from the projected results set forth therein by a material amount.
SECTION 3.13.     Anti-Corruption Laws; Sanctions . The Parent Entity and the other Borrowers have implemented and maintain in effect policies and procedures designed to ensure compliance by Parent, each Borrower, their respective Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Parent Entity, the Borrowers, their respective Subsidiaries and, to the knowledge of the Responsible Officers of Parent, their respective officers, employees, directors and agents, are in compliance with Anti-Corruption Laws, except for violations that are not material. None of the Parent Entity, any Borrower, any Subsidiary or to the knowledge of the Parent Entity, any of their respective directors, officers or employees or agents, is a Sanctioned Person.
SECTION 3.14.     Federal Reserve Regulations . No part of the proceeds of any Loan have been used or will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X. Neither the Parent Entity nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying margin stock (as defined in Regulation U).
SECTION 3.15.     Security Interests . Other than during a Collateral Suspension Period, the provisions of each Collateral Document are (or, at the time delivered, will be) effective to create legal and valid Liens on all the Collateral in respect of which and to the extent such Collateral Document purports to create Liens in favor of the Administrative Agent, for the benefit of the Secured Parties; and upon the proper filing of UCC financing statements, the proper filing of Mortgages with respect to Material Real Properties and the taking of all other actions to be taken pursuant to the terms of the Collateral Documents, such Liens constitute perfected and continuing Liens on the Collateral, securing the Obligations, enforceable against the applicable Loan Party and all third parties to the extent required by the Collateral Documents.
 
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ARTICLE IV
Conditions
SECTION 4.01.     Effective Date . The effectiveness of this Agreement is subject to the satisfaction of the following conditions (the date such conditions are satisfied, the “ Effective Date ”):
(a)    The Administrative Agent (or its counsel) shall have received from the U.S. Parent Borrower, the Parent Entity and each Person listed on Schedule 2.01 either (A) a counterpart of this Agreement signed on behalf of such party or (B) written evidence reasonably satisfactory to the Administrative Agent that such party signed a counterpart of this Agreement.
(b)    The Administrative Agent shall have received the executed legal opinions of (i) Paul Hastings LLP, special New York counsel to the Borrowers and (ii) Carey Olsen, local counsel to the Parent, in each case, in form reasonably satisfactory to the Administrative Agent. The Borrower Agent hereby requests such counsel to deliver such opinions.
(c)    The Administrative Agent shall have received such customary closing documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of Parent and the U.S. Parent Borrower, the authorization of the Transactions and any other legal matters relating to such Loan Parties, the Loan Documents or the Transactions, all in form and substance reasonably satisfactory to the Administrative Agent and its counsel.
(d)    To the extent reasonably requested in writing by the Administrative Agent (or the Lenders acting through the Administrative Agent) at least five Business Days prior to the Effective Date, the Administrative Agent shall have received on or prior to the Effective Date all documentation and other information in order to allow the Administrative Agent and the Lenders to comply with the USA PATRIOT Act and other applicable KYC requirements.
(e)    The Administrative Agent and the Arrangers shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced a reasonable period of time before the Effective Date, reimbursement or payment of all reasonable out-of-pocket expenses required to be reimbursed or paid by the Borrowers hereunder.
SECTION 4.02.     Closing Date . The initial Borrowings under this Agreement are subject to the satisfaction of the following conditions on or prior to June 30, 2018 (the date such conditions are satisfied, the “ Closing Date ”):
(a)    The Administrative Agent (or its counsel) shall have received from each U.S. Loan Party either (A) a counterpart of the Pledge and Security Agreement and the Guaranty signed on behalf of such U.S. Loan Party or (B) written evidence reasonably satisfactory to the Administrative Agent (which may include telecopy or electronic mail transmission in accordance with Section 9.01(b) of a signed signature page of the Pledge and Security Agreement and the Guaranty) that such party signed a counterpart of the Pledge and Security Agreement and the Guaranty.
(b)    The Administrative Agent (or its counsel) shall have received from each Foreign Guarantor either (A) a counterpart of the Pledge and Security Agreement and Guaranty signed on behalf of such Foreign Guarantor or (B) written evidence reasonably satisfactory to the Administrative Agent (which may include telecopy or electronic mail transmission in accordance with Section 9.01(b) of a signed signature page of the Pledge and Security Agreement and Guaranty) that such party signed a counterpart of the Pledge and Security Agreement and Guaranty;
 
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(c)    The Administrative Agent shall have received a signed certificate of a Responsible Officer of the Borrower Agent stating that the conditions set forth in Section 4.03 are satisfied as of such date.
(d)    The Administrative Agent shall have received the executed legal opinions of (i) Paul Hastings LLP, special New York counsel to the Borrowers and (ii) Carey Olsen, local counsel to the Parent, in each case, in form reasonably satisfactory to the Administrative Agent. The Borrower Agent hereby requests such counsel to deliver such opinions.
(e)    The Administrative Agent shall have received such customary closing documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the Loan Parties (other than Parent and the U.S. Parent Borrower), the authorization of the Transactions and any other legal matters relating to such Loan Parties, all in form and substance reasonably satisfactory to the Administrative Agent and its counsel.
(f)    The Administrative Agent shall have received a certificate attesting to the Solvency of Parent and its Subsidiaries (taken as a whole) (including, without limitation, the U.S. Parent Borrower) on the Closing Date after giving effect to the Transactions, from a Financial Officer of Parent.
(g)    The Administrative Agent shall have received (i) copies of recent UCC Lien searches in each jurisdiction reasonably requested by the Administrative Agent with respect to the Loan Parties, (ii) a completed Perfection Certificate, dated the Closing Date and signed by a Responsible Officer of the Parent, together with all attachments contemplated thereby, (iii) the certificates or instruments representing or evidencing the Collateral required to be delivered to the Administrative Agent pursuant to the Collateral Documents accompanied by instruments of transfer and stock powers undated and endorsed in blank and (iv) to the extent reasonably requested by the Administrative Agent, all documents and instruments, including Uniform Commercial Code financing statements and filings with the United States Copyright Office and the United States Patent and Trademark Office and all other actions required by the applicable Requirement of Law and the applicable Collateral Documents to be delivered, filed, registered or recorded to create or perfect the Liens intended to be created by the Collateral Documents.
(h)    The Administrative Agent and the Arrangers shall have received all fees and other amounts due and payable on or prior to the Closing Date, including (i) those fees and expenses due to the Arrangers under the Engagement Letter and (ii) to the extent invoiced a reasonable period of time before the Closing Date, reimbursement or payment of all reasonable out-of-pocket expenses required to be reimbursed or paid by the Borrowers hereunder.
(i)    The Administrative Agent shall be reasonably satisfied that prior to or substantially concurrently with the initial funding of the Tranche A Term Loans (i) the Form 10, as in effect on the Effective Date, shall not have been amended (A) to modify the transfer of the business, property or other assets or liabilities contemplated under the Form 10, as in effect on the Effective Date, in a manner that is materially adverse to the Lenders or (B) to be inconsistent, in a manner that is materially adverse to the Lenders, with the nature of the pro forma adjustments to the historical financials included in the Form 10, as in effect on the Effective Date, (ii) the Form 10 shall have become effective and the Spin-Off shall be consummated in accordance with the
 
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Form 10 in all material respects, (iii) Parent shall receive the net cash proceeds of the Senior Notes, (iv) Parent will make the Distribution to Delphi Automotive in connection with the Spin-Off, (v) Delphi Automotive shall have transferred the Spin-Off Business to Parent and its Subsidiaries and (vi) except to the extent permitted under Section 6.01, Parent and its Subsidiaries shall be released as obligors with respect to all Material Indebtedness (determined, for this purpose, as if references to the “Parent Entity and its Restricted Subsidiaries” in the definition thereof are to “Delphi Automotive and its subsidiaries”) of Delphi Automotive and its subsidiaries after giving effect to the Spin-Off.
(j)    The Administrative Agent shall have received financial statements of the Parent Entity and its Consolidated Subsidiaries (i) for each quarter ended after June 30, 2017 and at least forty-five (45) days prior to the Closing Date setting forth the information in Section 5.01(b) and (ii) for each year ended at least ninety (90) days prior to the Closing Date setting forth the information in Section 5.01(a).
(k)    The Parent Entity shall be in compliance, on a Pro Forma Basis, with Section 6.09 as of the last day of the most recent fiscal quarter for which financial statements have been delivered pursuant to Section 4.02(j).
SECTION 4.03.     Each Credit Event . The obligation of each Lender to make a Loan on the occasion of any Borrowing (but not a conversion or continuation of Loans), and of the Issuing Banks to issue, amend, renew or extend any Letter of Credit (including the initial Loans made on the Closing Date) is subject to the satisfaction of the following conditions:
(a)    Except as provided in Section 2.19, the representations and warranties of the Loan Parties set forth in this Agreement and the other Loan Documents shall be true and correct in all material respects on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable, except where any representation and warranty is expressly made as of a specific earlier date, such representation and warranty shall be true in all material respects as of any such earlier date; provided that during any Covenant Suspension Period the representations and warranties set forth in Sections 3.04(b) and 3.06 shall not be required to be made.
(b)    At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing; and
(c)    The Borrower Agent shall have provided any required notice of such Borrowing or issuance, amendment, renewal or extension pursuant to Section 2.03, 2.04 or 2.05, as applicable.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrowers on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section 4.03.
 
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ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrowers covenant and agree with the Lenders that:
SECTION 5.01.     Financial Statements and Other Information . The Borrower Agent will furnish to the Administrative Agent for distribution to the Lenders:
(a)    as soon as available, but in any event within ninety (90) days (or to the extent that the SEC grants an extension of such period, such longer period as may be extended by the SEC, not to exceed one-hundred and five (105) days) after the end of each fiscal year of the Parent Entity, the audited consolidated balance sheet of the Parent Entity and its Consolidated Subsidiaries and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Ernst & Young LLP or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial position and results of operations of the Parent Entity and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP;
(b)    as soon as available, but in any event within forty-five (45) days (or to the extent that the SEC grants an extension of such period, such longer period as may be extended by the SEC, not to exceed sixty (60) days) after the end of each of the first three fiscal quarters of each fiscal year of the Parent Entity, the unaudited consolidated balance sheet of the Parent Entity and its Consolidated Subsidiaries and related statements of operations and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of the Parent Entity’s Financial Officers as presenting fairly in all material respects the financial position and results of operations of the Parent Entity and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes;
(c)    concurrently with any delivery of financial statements under clause (a) above or except in the case of subclause (y) below, (b) above, a certificate substantially in form and substance reasonably acceptable to Administrative Agent and executed by a Financial Officer of such Parent Entity (x) certifying as to whether, to the knowledge of such Financial Officer after reasonable inquiry, a Default has occurred and is continuing and, if so, specifying the details thereof and any action taken or proposed to be taken with respect thereto; and (y) setting forth reasonably detailed calculations demonstrating compliance with Section 6.09 as of the last day of the period covered by such financial statements;
(d)    simultaneously with the delivery of the financial statements referred to in Sections 5.01(a) and (b) above, consolidating financial statements reflecting the adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if any) from such consolidated financial statements;
(e)    promptly after the same become publicly available, copies of all annual, quarterly and current reports and proxy statements filed by the Parent Entity or any Restricted Subsidiary with the SEC, or any Governmental Authority succeeding to any or all of the functions of the SEC; and
 
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(f)    promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Parent Entity or any Restricted Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender (through the Administrative Agent) may reasonably request.
Financial statements and other information required to be delivered pursuant to Sections 5.01(a), 5.01(b) and 5.01(f) shall be deemed to have been delivered if such statements and information shall have been posted by the Parent Entity on its website or shall have been posted on IntraLinks or similar site to which all of the Lenders have been granted access or are publicly available on the SEC’s website pursuant to the EDGAR system.
The Borrowers acknowledge that (a) the Administrative Agent will make available information to the Lenders by posting such information on IntraLinks or similar electronic means and (b) certain of the Lenders may be “public side” Lenders ( i.e ., Lenders that do not wish to receive material non-public information with respect to the Parent Entity, its Subsidiaries or their securities) (each, a “ Public Lender ”). The Borrower Agent agrees to identify that portion of the information to be provided to Public Lenders hereunder as “PUBLIC” and that such information will not contain material non-public information (for purposes of United States federal and state securities laws) relating to the Parent Entity or its Subsidiaries (or any of their securities).
SECTION 5.02.     Notices of Material Events . The Borrower Agent will furnish to the Administrative Agent (for prompt notification to each Lender) prompt (but in any event within five (5) Business Days) written notice after any Financial Officer of the Borrower Agent obtains knowledge of the following:
(a)    the occurrence of any continuing Default;
(b)    the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Parent Entity, any Restricted Subsidiary or any Affiliate thereof that could reasonably be expected to result in a Material Adverse Effect;
(c)    the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; and
(d) (i) any material labor dispute to which the Parent Entity or any Subsidiary is, or is reasonably likely to become a party, including any strikes, lockouts or any Subsidiary is, or is reasonably likely to become, a party, including any strikes, lockouts or other disputes relating to any of the Parent Entity’s or such Subsidiary’s plants and other facilities and (ii) any Worker Adjustment and Retraining Notification Act or related liability incurred with respect to the closing of any plant or other facility of the Parent Entity or any such Subsidiary, in each case that could be reasonably be expected to result in a Material Adverse Effect.
Each notice delivered under this Section 5.02 shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower Agent setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.03.     Existence; Conduct of Business . The Parent Entity will, and will cause each of its Material Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect (i) its legal existence, and (ii) the rights, licenses, permits, privileges and franchises
 
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material to the conduct of its business, except, in the case of the preceding clause (ii), to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit any transaction permitted under Section 6.03 or 6.11.
SECTION 5.04.     Payment of Taxes . Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, each Loan Party will, and will cause each of its Restricted Subsidiaries to, pay all of its Taxes (including Taxes imposed upon it or any of its properties or assets or in respect of any of its income, businesses or franchises) before any penalty or fine accrues thereon; provided that no such Tax or claim need be paid if it is being contested in good faith by appropriate proceedings, so long as adequate reserves or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor.
SECTION 5.05.     Maintenance of Properties; Insurance . The Parent Entity will, and will cause each of its Restricted Subsidiaries to, (a) keep and maintain all Property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted and casualty or condemnation excepted, except if the failure to do so could not reasonably be expected to have a Material Adverse Effect, and (b) maintain, with financially sound and reputable insurance companies or through self-insurance, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations. Except during a Collateral Suspension Period, all property and liability insurance relating to Collateral, including insurance requested in connection with any after-acquired Material Real Property, if any, which shall be subject to a Mortgage delivered after the Effective Date pursuant to Section 5.09(b), shall, as reasonably requested by the Administrative Agent, name the Administrative Agent as mortgagee (in the case of property insurance), if applicable, or additional insured on behalf of the Secured Parties (in the case of liability insurance) or loss payee (in the case of property insurance), as applicable.
SECTION 5.06.     Inspection Rights . The Parent Entity will, and will cause each of its Restricted Subsidiaries to, permit any representatives designated by the Administrative Agent or, during the continuance of an Event of Default, any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and use commercially reasonable efforts to make its independent accountants available to discuss the affairs, finances and condition of the Parent Entity and the Borrowers, all at such reasonable times and as often as reasonably requested and in all cases subject to applicable Law and the terms of applicable confidentiality agreements; provided that (i) the Lenders will conduct such requests for visits and inspections through the Administrative Agent and (ii) unless an Event of Default has occurred and is continuing, such visits and inspections can occur no more frequently than once per year and the costs and expenses of only one such visit or inspection per year shall be required to be reimbursed by the Borrowers pursuant to Section 9.03.
SECTION 5.07.     Compliance with Laws . The Parent Entity will, and will cause each of its Restricted Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property (including without limitation Environmental Laws), in each case except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.08.     Use of Proceeds and Letters of Credit . The Borrowers shall use (x) the Term Loans issued on the Closing Date (i) to pay a portion of the Distribution, (ii) for general corporate purposes (including acquisitions and other investments), and (iii) to pay fees and expenses in connection with the Transactions and (y) the Letters of Credit and the proceeds of the Revolving Loans and other credit extensions made under this Agreement only to finance the working capital needs, and for general corporate purposes (including refinancing of existing Indebtedness, acquisitions and other investments), of the
 
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Parent Entity and its Restricted Subsidiaries. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X, or of any Anti-Corruption Law or applicable Sanctions.
SECTION 5.09.     Further Assurances; Additional Security and Guarantees .
(a)    Except during any Collateral Suspension Period, the Borrower Agent shall, and shall cause the Parent Entity and each applicable Restricted Subsidiary to, at the Borrower Agent’s expense, comply with the requirements of the Collateral Documents and take all action reasonably requested by the Administrative Agent to carry out more effectively the purposes of the Collateral Documents.
(b)    Upon the formation or acquisition of any Specified Domestic Subsidiary or Specified Foreign Subsidiary by the Parent Entity or any Restricted Subsidiary (and, in the case of clause (D) below, upon the acquisition of any Material Real Property by any U.S. Loan Party), the Borrowers shall, and shall cause the Parent Entity and each applicable Restricted Subsidiary to, at the Borrower Agent’s expense within thirty (30) days (ninety (90) days in the case of a Specified Foreign Subsidiary or in the case of clause (D) below) after such formation or acquisition or such longer period as may be reasonably acceptable to the Administrative Agent:
(A)    except during any Collateral Suspension Period, deliver all certificated Equity Interests of such Restricted Subsidiary held by any Loan Party that are required to be delivered pursuant to the Collateral Documents to the Administrative Agent together with appropriately completed stock powers or other instruments of transfer executed in blank by a duly authorized officer of such Loan Party and all intercompany notes owing from such Restricted Subsidiary to any Loan Party required to be delivered pursuant to the Collateral Documents together with instruments of transfer executed and delivered in blank by a duly authorized officer of such Loan Party;
(B)    cause each such Specified Domestic Subsidiary to execute a supplement to the Guaranty (except during any Covenant Suspension Period) and Pledge and Security Agreement (except during any Collateral Suspension Period) and, except during any Collateral Suspension Period, take all actions reasonably requested by the Administrative Agent in order to cause the Lien created by the Pledge and Security Agreement to be duly perfected to the extent required by such agreement in accordance with all applicable requirements of Law, including the filing of financing statements in such jurisdictions as may be reasonably requested by the Administrative Agent;
(C)    cause each such Specified Foreign Subsidiary to execute a supplement to the Guaranty (except during any Covenant Suspension Period) and, except during a Collateral Suspension Period, any Pledge and Security Agreement and/or Foreign Security Agreement reasonably requested by the Administrative Agent and, except during any Collateral Suspension Period, to take the actions reasonably requested by the Administrative Agent in order to satisfy the Foreign Guarantor Collateral Requirement;
(D)    except during any Collateral Suspension Period, cause any such Specified Domestic Subsidiary or the applicable Loan Party to deliver to the Administrative Agent to the extent reasonably requested by the Administrative Agent (i) counterparts of a Mortgage with respect to any Material Real Property, duly executed and delivered by the record owner of such property, (ii) a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such Mortgage as a valid Lien on the property described therein, together with such endorsements as the Administrative Agent may reasonably request and in an
 
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amount reasonably satisfactory to the Administrative Agent and (iii) such existing surveys, if any, UCC-1 fixture filings, existing appraisals, if any, legal opinions, “life-of-loan” flood hazard determinations, evidence of insurance, affidavits and other documents as the Administrative Agent may reasonably request with respect to any such Material Real Property; and
(E)    if requested by the Administrative Agent, deliver a customary opinion of counsel to the Borrower Agent with respect to the guarantee (except during any Covenant Suspension Period) and security (except during any Collateral Suspension Period) provided by such Specified Domestic Subsidiary or Specified Foreign Subsidiary (except, in the case of opinions in respect of any Collateral or Guaranty, to the extent such opinions are customarily delivered by lender’s counsel in the applicable jurisdiction).
(c)    Notwithstanding anything to the contrary herein or in any other Loan Document, (i) the Administrative Agent may grant extensions of time for the creation and perfection of security interests in, or obtaining of title insurance, legal opinions, surveys or other deliverables with respect to, particular assets or the provision of any Guaranty by any Restricted Subsidiary (in connection with assets acquired, or Restricted Subsidiaries formed or acquired, after the Closing Date) where it reasonably determines, in consultation with the Borrower Agent, that such action cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or the Collateral Documents, and each Lender hereby consents to any such extension of time, (ii) any Lien required to be granted from time to time pursuant to the provisions hereof shall be subject to the exceptions and limitations set forth in the Collateral Documents, (iii) perfection by control shall not be required with respect to assets requiring perfection through control agreements or other control arrangements, including deposit accounts, securities accounts and commodities accounts (other than control of pledged Equity Interests and/or Indebtedness or, to the extent (if any) expressly required hereunder, in connection with the delivery of cash collateral), (iv) no Loan Party shall be required to seek any landlord lien waiver, bailee letter, estoppel, warehouseman waiver or other collateral access or similar letter or agreement, and notices shall not be required to be sent to account debtors or other contractual third parties except during a continuing Event of Default, (v) except pursuant to the Foreign Guarantor and Collateral Requirement, no Loan Party will be required to (1) take any action outside of the U.S. to perfect any security interest in any asset located outside of the U.S. or (2) execute any foreign law security agreement, pledge agreement, mortgage, deed or charge, (vi) no action shall be required to perfect any Lien with respect to any vehicle or other asset subject to a certificate of title to the extent that a security interest therein cannot be perfected by filing a Form UCC-1 (or similar) financing statement and (vii) the Administrative Agent shall not require the taking of a Lien on, or require the perfection of any Lien granted in, those assets as to which the cost of obtaining or perfecting such Lien (including any mortgage, stamp, intangibles or other tax or expenses relating to such Lien) is excessive in relation to the benefit to the Lenders of the security afforded thereby as reasonably determined by the Borrower Agent and the Administrative Agent.
SECTION 5.10.     Maintenance of Ratings . The Borrowers shall use commercially reasonable efforts to maintain (i) Corporate Ratings and (ii) a public rating in respect of the Term Loans from each of S&P and Moody’s.
SECTION 5.11.     Collateral Suspension Period .
(a)    Notwithstanding anything to the contrary contained in this Agreement or any Loan Document, if a Collateral Suspension Date occurs then upon delivery to the Administrative Agent of the officer’s certificate set forth in clause (iv) of the definition of “Collateral Suspension Date,” all of the Liens granted pursuant to the Collateral Documents on the Collateral, shall be automatically released and terminated at such time. In connection with the foregoing, the Administrative Agent shall, within a reasonable
 
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period of time following delivery of such officer’s certificate, and at the Borrower Agent’s sole cost and expense, (x) assign, transfer and deliver to the applicable Loan Parties, without recourse to or warranty by the Administrative Agent, such of the Collateral or any part thereof to be released as may be in possession of the Administrative Agent and as shall not have been sold or otherwise applied pursuant to the terms hereof and (y) with respect to any other Collateral, deliver such documents and instruments (including UCC-3 termination financing statements or releases) and take such other actions, as the Borrower Agent shall reasonably request to evidence such termination and release.
(b)    Notwithstanding clause (a) above, if, after any Collateral Suspension Date, (i) either (x) the Corporate Ratings are downgraded by both S&P or Moody’s such that neither Corporate Rating is an Investment Grade Rating or (y) upon neither the Parent Entity nor the U.S. Parent Borrower having (i) a corporate credit rating by S&P (or a successor or replacement thereto or an alternative Rating Agency in accordance with the definition thereof) and (ii) a corporate family rating by Moody’s (or a successor or replacement thereto or an alternate Rating Agency in accordance with the definition thereof) (the occurrence of the events in clause (x) or (y), a “ Collateral Reinstatement Event ”) and (ii) the Required Lenders request the reinstatement of the Collateral, the Collateral Suspension Period with respect to such Collateral Suspension Date shall automatically terminate and all Collateral and Collateral Documents, and all Liens granted or purported to be granted therein, released pursuant to clause (a) above shall be required to be reinstated on the same terms as of the applicable Collateral Reinstatement Date (as defined below) and the Loan Parties shall take all actions and deliver all documents (collectively, the “ New Collateral Documents ”) reasonably requested by the Administrative Agent as necessary to create and perfect the Liens of the Administrative Agent in such Collateral, substantially consistent with all such actions taken as of the Closing Date, in form and substance reasonably satisfactory to the Administrative Agent, within 60 days of such Collateral Reinstatement Event (or such longer period as the Administrative Agent may agree in its reasonable discretion) (the first date on which a new security agreement is required to be delivered pursuant to the foregoing, the “ Collateral Reinstatement Date ”). The Administrative Agent is hereby authorized to enter into any New Collateral Documents in connection with any Collateral Reinstatement Event.
SECTION 5.12.     Guaranty Release During Covenant Suspension Period.
(a)    Notwithstanding anything to the contrary contained in this Agreement or any Loan Document, if a Covenant Suspension Period occurs, upon delivery of a written request by the Borrower Agent to the Administrative Agent, each Guarantor (other than the Parent Entity and each Borrower) shall be automatically released from its obligations under the applicable Guaranty to the extent that such Guarantors are not required (or substantially concurrently or after giving effect to this Section 5.12, will not be required) to Guarantee any Material Indebtedness of any Borrower or the Parent Entity.
(b)    Notwithstanding clause (a) above, upon termination of a Covenant Suspension Period, and if requested by the Required Lenders, the Guaranties released pursuant to clause (a) above shall be required to be reinstated within 60 days (or such longer period as the Administrative Agent may agree in its reasonable discretion) after the last day of such Covenant Suspension Period, pursuant to guaranty agreements (the “ New Guaranty ”) substantially consistent with the Guaranty delivered on the Closing Date and otherwise in form and substance reasonably satisfactory to the Administrative Agent.
SECTION 5.13.     Unrestricted Subsidiaries.
(a)    The Parent Entity may at any time designate any Restricted Subsidiary (other than a Borrower) as an Unrestricted Subsidiary or designate (or re-designate, as the case may be) any Unrestricted Subsidiary as a Restricted Subsidiary; provided , that:
(i)    immediately before and after such designation (or re-designation), no Event of Default shall be continuing, unless such re-designation is otherwise required under this Agreement;
 
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(ii)    the Parent Entity shall be in compliance, on a Pro Forma Basis, with Section 6.09 as of the last day of the most recent fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or (b);
(iii)    no Subsidiary may be designated as an Unrestricted Subsidiary if such Subsidiary or any of its Subsidiaries owns any Equity Interests of, or owns or holds any Lien on any property of, any Borrower or any Restricted Subsidiary of the Parent Entity that is not a Subsidiary of the Subsidiary to be so designated or if such Subsidiary has Indebtedness outstanding that is recourse to the Parent Entity or any Restricted Subsidiary; and
(iv)    no Subsidiary may be designated as an Unrestricted Subsidiary if, after such designation, it would be a “Restricted Subsidiary” for the purpose of any Material Indebtedness of any Loan Party.
(b)    The designation of a Restricted Subsidiary as an Unrestricted Subsidiary shall be deemed to be an Investment by the Parent Entity in an Unrestricted Subsidiary in an amount equal to the Fair Market Value of such Unrestricted Subsidiary at the time of such designation. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary will constitute (i) a deemed return of Investment to the Parent Entity in an amount equal to the lesser of (x) the original amount of all Investments made by the Parent Entity and its Restricted Subsidiaries in such Unrestricted Subsidiary and (y) the Fair Market Value of the Parent Entity’s and is Restricted Subsidiaries’ Investments in such Unrestricted Subsidiary at such time and (ii) the incurrence at the time of designation of any Indebtedness and Liens of such Subsidiary existing at such time.
ARTICLE VI
Negative Covenants
From the Effective Date until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrowers covenant and agree with the Lenders that:
SECTION 6.01.     Indebtedness . The Parent Entity will not create, incur, assume or permit to exist, and will not permit any of its Restricted Subsidiaries to create, incur, assume or permit to exist, any Indebtedness, except:
(a)    Indebtedness created under the Loan Documents;
(b)    (i) the Senior Notes and (ii) Indebtedness existing on the Effective Date and set forth in Schedule 6.01 (other than Indebtedness under Permitted Receivables Facilities); and Permitted Refinancing Indebtedness in respect of Indebtedness permitted by this clause (b);
(c)    Indebtedness of the Parent Entity or any Restricted Subsidiary owing to the Parent Entity or any Restricted Subsidiary; provided , that any Indebtedness outstanding pursuant to this clause (c) which is owed by a Loan Party to any Restricted Subsidiary that is not a Loan Party shall be subordinated in right of payment to the Obligations under this Agreement on customary terms;
 
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(d)    Guarantees of Indebtedness of the Parent Entity or any other Restricted Subsidiary, all to the extent permitted by Section 6.05; provided that no Guarantee of Indebtedness of a Loan Party by a Restricted Subsidiary that is not a Loan Party will be permitted under this clause (d);
(e)    Indebtedness incurred to finance the acquisition, construction, repair, replacement or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and any Permitted Refinancing Indebtedness in respect of Indebtedness permitted by this clause (e); provided that (i) such Indebtedness (other than Permitted Refinancing Indebtedness permitted above in this clause (e)) is incurred prior to or within two hundred seventy (270) days after such acquisition or the completion of such construction, repair, replacement or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e) shall not exceed at any time outstanding the greater of (x) $250,000,000 and (y) 35% of LTM EBITDA (measured at the time of incurrence of any such Indebtedness);
(f)    Indebtedness in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance in the ordinary course of business;
(g)    Indebtedness incurred pursuant to Permitted Receivables Facilities; provided that the Attributable Receivables Indebtedness thereunder shall not exceed the greater of (x) $350,000,000 and (y) 50% of LTM EBITDA (measured at the time of incurrence of any such Indebtedness);
(h)    Indebtedness of Foreign Subsidiaries and Restricted Subsidiaries which are not Guarantors, provided that, such Indebtedness shall be permitted to be incurred pursuant to this clause (h) only if (x) at the time such Indebtedness is incurred the aggregate principal amount of Indebtedness outstanding pursuant to this clause (h) at such time (including such Indebtedness) would not exceed the greater of (x) $180,000,000 and (y) 7.5% of Consolidated Total Assets (for this purpose, including only amounts attributable to the Foreign Subsidiaries) as of the most recently ended fiscal quarter of the Parent Entity for which financial statements have been delivered pursuant to Section 5.01(a) or (b) (measured at the time of incurrence of any such Indebtedness) or (y) such Indebtedness is incurred in the ordinary course of business to finance working capital and other cash management needs of such Restricted Subsidiaries;
(i)    Indebtedness under Swap Agreements entered into in the ordinary course of business and not for speculative purposes;
(j)    Indebtedness in respect of bid, performance, surety, stay, customs, appeal or replevin bonds or performance and completion guarantees and similar obligations issued or incurred in the ordinary course of business;
(k)    Indebtedness in respect of judgments, decrees, attachments or awards that do not constitute an Event of Default under clause (k) of Article VII;
 
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(l)    Indebtedness consisting of bona fide purchase price adjustments, earn-outs, indemnification obligations, obligations under deferred compensation or similar arrangements and similar items incurred in connection with acquisitions and asset sales not prohibited by Section 6.05 or 6.11;
(m)    Indebtedness in the form of (x) guarantees of loans and advances to officers, directors, consultants and employees, in an aggregate amount not to exceed $10,000,000 at any one time outstanding, and (y) reimbursements owed to officers, directors, consultants and employees;
(n)    Indebtedness consisting of obligations to make payments to current or former officers, directors and employees, their respective estates, spouses or former spouses with respect to the cancellation, or to finance the purchase or redemption, of Equity Interests of the Parent Entity permitted by Section 6.04;
(o)    Cash Management Obligations and other Indebtedness in respect of card obligations, netting services, overdraft protections, cash management services and similar arrangements, in each case, in the ordinary course of business;
(p)    Indebtedness consisting of (x) the financing of insurance premiums with the providers of such insurance or their affiliates or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(q)    Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(r)    (x) Permitted Debt Securities so long as no Event of Default has occurred and is continuing or would arise after giving effect thereto and such Indebtedness does not exceed the then-available Incremental Basket Amount (with any Permitted Debt Securities incurred in reliance on the “Unrestricted Incremental Amount” outstanding under this clause (x) (and any Permitted Refinancing Indebtedness in respect thereof) reducing the Unrestricted Incremental Amount on a dollar-for-dollar basis) and (y) any Permitted Refinancing Indebtedness in respect of Indebtedness permitted by this clause (r);
(s)    other Indebtedness of the Loan Parties; provided that Indebtedness shall be permitted to be incurred pursuant to this clause (s) only if at the time such Indebtedness is incurred the aggregate principal amount of Indebtedness outstanding pursuant to this clause (s) at such time (including such Indebtedness) would not exceed (x) the greater of $500,000,000 and (y) 75% of LTM EBITDA (measured at the time of incurrence of any such Indebtedness);
(t)    letters of credit denominated in foreign currencies in an aggregate face amount outstanding at any time not to exceed $25,000,000;
(u)    [reserved];
(v)    (x) Indebtedness of the Loan Parties incurred during a Covenant Suspension Period and (y) any Permitted Refinancing Indebtedness in respect of Indebtedness permitted by this clause (v);
(w)     (A) Permitted Debt Securities of the Parent Entity or any Restricted Subsidiary; and (B) Indebtedness of any Restricted Subsidiary that is not a Loan Party (including Indebtedness of a Restricted Subsidiary incurred and outstanding on or prior to the date on which such
 
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Restricted Subsidiary was acquired by the Parent Entity or a Restricted Subsidiary); provided that, the aggregate principal amount of such Indebtedness shall not exceed (x) the then-available Unrestricted Incremental Amount at the time of incurrence thereof (provided that any such Indebtedness (and any Permitted Refinancing Indebtedness in respect thereof) shall reduce the Unrestricted Incremental Amount on a dollar-for-dollar basis) plus (y) an amount, such that in each case, on a Pro Forma Basis on the date of incurrence thereof, the Parent Entity would have a Consolidated Leverage Ratio equal to or less than 2.50 to 1.00 as of the last day of the most recent fiscal year or fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or 5.01(b) (“ Ratio Debt ”); provided , however that for any such Indebtedness incurred or assumed in connection with an acquisition or other permitted Investment, such Indebtedness shall be permitted if, either (1) the Parent Entity would have a Consolidated Leverage Ratio on a Pro Forma Basis equal to or less than 2.50 to 1.0 as of the last day of the most recent fiscal year or fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or 5.01(b), or (2) the Consolidated Leverage Ratio of the Parent Entity would be equal to or be less than the Consolidated Leverage Ratio of the Parent Entity immediately prior to giving effect thereto; provided , further that the aggregate amount of Ratio Debt issued by Restricted Subsidiaries of the Parent Entity that are not Loan Parties shall not exceed the greater of (x) $250,000,000 and (y) 35% of LTM EBITDA (measured at the time of incurrence of any such Indebtedness) at any time outstanding;
(x)    all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (w) above.
Indebtedness permitted by this Section 6.01 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 6.01 permitting such Indebtedness. In the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in this Section 6.01, the Borrower Agent, in its sole discretion, shall classify such Indebtedness (or any portion thereof) as of the time of Incurrence and will only be required to include the amount of such Indebtedness in one of such clauses.
For purposes of determining compliance with any U.S. dollar denominated restriction on the incurrence of Indebtedness where the Indebtedness incurred is denominated in a different currency, the amount of such Indebtedness will be the Dollar Equivalent determined on the date of the incurrence of such Indebtedness; provided , however , that (i) if any such Indebtedness denominated in a different currency is subject to a Swap Agreement with respect to U.S. dollars covering all principal, premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be as provided in such Swap Agreement and (ii) if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding the foregoing, the maximum amount of Indebtedness that may be incurred pursuant to this Section 6.01 shall not be deemed to be exceeded with respect to any outstanding Indebtedness due solely to the fluctuations in the exchange rates of currencies.
 
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SECTION 6.02.     Liens . The Parent Entity will not, and will not permit any of its Restricted Subsidiaries to, create, incur, assume or permit to exist any Lien on any Property now owned or hereafter acquired by it, except:
(a)    Permitted Encumbrances;
(b)    Liens pursuant to any Loan Document;
(c)    any Lien on any Property of the Parent Entity or any Restricted Subsidiary existing on the Effective Date and set forth in Schedule 6.02 and any modifications, replacements, renewals or extensions thereof; provided that (i) such Lien shall not apply to any other Property of the Parent Entity or any Restricted Subsidiary other than (A) improvements and after-acquired Property that is affixed or incorporated into the Property covered by such Lien, and (B) proceeds and products thereof, and (ii) such Lien shall secure only those obligations which it secures on the Effective Date and any Permitted Refinancing Indebtedness in respect thereof;
(d)    any Lien existing on any Property prior to the acquisition thereof by the Parent Entity or any Restricted Subsidiary or existing on any Property of any Person that becomes a Subsidiary after the Effective Date prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other Property of the Parent Entity or any other Restricted Subsidiary (other than the proceeds or products thereof and other than improvements and after-acquired property that is affixed or incorporated into the Property covered by such Lien) and (iii) such Lien shall secure only those obligations which it secures on the date of such and Permitted Refinancing Indebtedness in respect thereof;
(e)    Liens on fixed or capital assets acquired, constructed, repaired, replaced or improved by the Parent Entity or any Restricted Subsidiary; provided that (i) such security interests secure Indebtedness permitted by clause (e) of Section 6.01 or, during a Covenant Suspension Period, shall secure Indebtedness not to exceed the greater of (x) $250,000,000 and (y) 35% of LTM EBITDA (measured at the time of incurrence of such Indebtedness) at any time outstanding, (ii) such security interests and the Indebtedness secured thereby (other than Permitted Refinancing Indebtedness permitted by clause (e) of Section 6.01 or, during a Covenant Suspension Period, refinancing Indebtedness in respect of such initial Indebtedness) are incurred prior to or within two hundred seventy (270) days after such acquisition or the completion of such construction, repair or replacement or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other Property of the Parent Entity or any Restricted Subsidiary except for accessions to such Property, Property financed by such Indebtedness and the proceeds and products thereof; provided further that individual financings of equipment provided by one lender may be cross-collateralized to other financings of equipment provided by such lender;
(f)    rights of setoff and similar arrangements and Liens in respect of Cash Management Obligations and in favor of depository and securities intermediaries to secure obligations owed in respect of card obligations or any overdraft and related liabilities arising from treasury, depository and cash management services or any automated clearing house transfers of funds and fees and similar amounts related to bank accounts or securities accounts (including Liens securing letters of credit, bank guarantees or similar instruments supporting any of the foregoing);
 
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(g)    Liens on Receivables and Permitted Receivables Facility Assets, in each case, securing Indebtedness permitted by Section 6.01(g);
(h)    (i) Liens on assets of a Restricted Subsidiary that is not a Loan Party securing Indebtedness of such Subsidiary permitted pursuant to Section 6.01 and (ii) Liens securing Indebtedness permitted under Section 6.01(p)(x) and applying only to the proceeds of the insurance policy;
(i)    Liens (i) on “earnest money” or similar deposits or other cash advances in connection with acquisitions permitted by Section 6.05 or (ii) consisting of an agreement to Dispose of any Property in a Disposition permitted under Section 6.11;
(j)    leases, licenses, subleases or sublicenses granted to others in the ordinary course of business which do not (i) interfere in any material respect with the business of the Parent Entity or any Restricted Subsidiary or (ii) secure any Indebtedness;
(k)    Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business;
(l)    Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection and (ii) attaching to commodity trading accounts or other commodities brokerage accounts incurred in the ordinary course of business, including Liens encumbering reasonable customary initial deposits and margin deposits;
(m)    Liens on property or Equity Interests (i) of any Foreign Subsidiary that is not a Loan Party and (ii) that do not constitute Collateral, which Liens secure Indebtedness of such Foreign Subsidiary permitted under Section 6.01;
(n)    Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by the Parent Entity or any Restricted Subsidiary in the ordinary course of business permitted by this Agreement;
(o)    Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 6.05;
(p)    rights of setoff relating to purchase orders and other agreements entered into with customers of the Parent Entity or any Restricted Subsidiary in the ordinary course of business;
(q)    ground leases in respect of real property on which facilities owned or leased by the Parent Entity or any of its Restricted Subsidiaries are located and other Liens affecting the interest of any landlord (and any underlying landlord) of any real property leased by the Parent Entity or any Restricted Subsidiary;
(r)    Liens on equipment owned by the Parent Entity or any Restricted Subsidiary and located on the premises of any supplier and used in the ordinary course of business and not securing Indebtedness;
(s)    any restriction or encumbrance with respect to the pledge or transfer of the Equity Interests of a Person that is not a Restricted Subsidiary;
 
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(t)    Liens not otherwise permitted by this Section 6.02, provided that a Lien shall be permitted to be incurred pursuant to this clause (t) only if at the time such Lien is incurred the aggregate principal amount of the obligations secured at such time (including such Lien) by Liens outstanding pursuant to this clause (t) would not exceed the greater of (x) $500,000,000 and (y) 75% of LTM EBITDA (measured at the time of incurrence of any such Liens);
(u)    Liens on any Property of (i) any U.S. Loan Party in favor of any U.S. Loan Party, (ii) any Foreign Guarantor in favor of any Loan Party, (iii) any Restricted Subsidiary that is not a Loan Party in favor of the Parent Entity or any other Restricted Subsidiary and (iv) during a Covenant Suspension Period, of the Parent and its Restricted Subsidiaries in favor of the Parent Entity or any of its Restricted Subsidiaries;
(v)    other than during a Collateral Suspension Period (unless the Obligations are equally and ratably secured therewith), Liens on the Collateral securing Permitted Secured Notes; provided that the collateral agent for such Permitted Secured Notes has entered into the First Lien Intercreditor Agreement or Second Lien Intercreditor Agreement, as applicable;
(w)    during a Collateral Suspension Period, Liens securing Indebtedness (i) under Swap Agreements entered into in the ordinary course of business and not for speculative purposes and (ii) in respect of card obligations, netting services, overdraft protections, cash management services and similar arrangements, in each case, in the ordinary course of business; and
(x)    Liens arising from UCC financing statement filings regarding leases and consignments entered into by the Parent Entity and its Restricted Subsidiaries in the ordinary course of business.
For purposes of determining compliance with this Section 6.02, (A) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens described in this Section 6.02 but may be permitted in part under any combination thereof and (B) in the event that a Lien securing an item of Indebtedness (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens described under this Section 6.02, the Borrower Agent shall, in its sole discretion, classify such Lien (or any portion thereof) in any manner that complies with this Section 6.02 and will only be required to include the amount and type of such Lien or such item of Indebtedness secured by such Lien in one of the clauses of this Section 6.02 and such Lien securing such item of Indebtedness will be treated as being incurred or existing pursuant to only one of such clauses.
SECTION 6.03.     Fundamental Changes . The Parent Entity will not, and will not permit any of its Restricted Subsidiaries to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing:
(a)    any Restricted Subsidiary (other than any Borrower) may be merged or consolidated with or into any Person and any Restricted Subsidiary may be liquidated or dissolved or change its legal form, in each case in order to consummate any Investment otherwise permitted by Section 6.05 or Disposition otherwise permitted by Section 6.11;
(b)     (i) any U.S. Loan Party may merge or consolidate with any other Person in a transaction in which a U.S. Loan Party is the surviving Person in such merger or consolidation, (ii) any Foreign Guarantor may merge or consolidate with any other Person in a transaction where a Foreign Guarantor is the surviving Person in such merger or consolidation and (iii) during any
 
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Covenant Suspension Period, any Restricted Subsidiary of Parent may merge or consolidate with any other Restricted Subsidiary of Parent ( provided that if any such Subsidiary is a Loan Party, the surviving Person in such merger or consolidation shall be a Loan Party); and
(c)    any Borrower (other than the Parent Entity) may be consolidated with or merged into any Person; provided that any Investment in connection therewith is otherwise permitted by Section 6.05; and provided further that, simultaneously with such transaction, (x) the Person formed by such consolidation or into which such Borrower is merged shall expressly assume all obligations of such Borrower under the Loan Documents, (y) the Person formed by such consolidation or into which the Borrower is merged shall be a corporation organized under the laws of the jurisdiction of such Borrower and shall take all actions as may be required to preserve the enforceability of the Loan Documents and validity and perfection of the Liens of the Collateral Documents (other than during a Collateral Suspension Period) and (z) such Borrower shall have delivered to the Administrative Agent an officer’s certificate and an opinion of counsel, each stating that such merger or consolidation and such supplement to this Agreement or any Collateral Document (other than during a Collateral Suspension Period) comply with this Agreement.
(d)    The Parent Entity will not merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto, no Event of Default shall have occurred and be continuing, (x) the Parent Entity may be consolidated with, merged into, or liquidated or dissolved into, any Person and (y) a Permitted Parent Holding Company may be substituted for Parent as the Parent Entity as contemplated by the definition of “Parent Entity”; provided that, simultaneously with such transaction, (i) the Person formed by such consolidation or into which the Parent Entity is merged, liquidated or dissolved or substituted shall expressly assume all obligations of the Parent Entity under the Loan Documents and shall take all actions as may be required to preserve the enforceability of the Loan Documents and validity and perfection of the Liens of the Collateral Documents (other than during a Collateral Suspension Period), (y) the Person formed by such consolidation or into which the Parent Entity is merged, liquidated or dissolved or substituted shall be a corporation organized under the laws of a State in the United States of America or a Permitted Foreign Borrower Jurisdiction (or, following a Permitted Parent Borrower Release, a Permitted Parent Guarantor Jurisdiction) and (z) the Parent Entity shall have delivered to the Administrative Agent an officer’s certificate and an opinion of counsel, each stating that such merger, consolidation, liquidation or dissolution or substitution and such supplement to this Agreement comply with this Agreement or any Collateral Document (other than during a Collateral Suspension Period) comply with this Agreement.
SECTION 6.04.     Restricted Payments . The Parent Entity will not, and will not permit any of its Restricted Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except (a) the Parent Entity or any Restricted Subsidiary may declare and pay dividends or other distributions with respect to its Equity Interests payable solely in shares of its Qualified Equity Interests or options to purchase Qualified Equity Interests; (b) Restricted Subsidiaries may declare and make Restricted Payments ratably with respect to their Equity Interests; (c) the Parent Entity may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for present or former officers, directors, consultants or employees of the Parent Entity and its Restricted Subsidiaries (i) in existence on the Effective Date and listed on Schedule 6.04 and (ii) other such plans adopted following the Effective Date in an aggregate amount pursuant to this subclause (ii) not to exceed $25,000,000 in any fiscal year (with unused amounts of such base amount available for use succeeding fiscal years so long as the aggregate amount expended pursuant to this subclause (ii) in any fiscal year does not exceed $50,000,000); (d) Restricted Payments made to consummate the Transactions, including the Distribution; (e) to the extent constituting Restricted Payments, the Parent Entity and the Restricted
 
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Subsidiaries may enter into and consummate transactions expressly permitted by any provision of Section 6.07 (other than Section 6.07(a)); (f) repurchases of Equity Interests in the Parent Entity or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants; (g) the Parent Entity and its Restricted Subsidiaries may make other Restricted Payments in an aggregate amount not to exceed the Available Amount; provided that no Restricted Payments shall be permitted under the foregoing clause (g) unless (i) no Event of Default has occurred and is continuing or would arise after giving effect thereto and (ii) on a Pro Forma Basis the Borrower would be in compliance with Section 6.09 as of the last day of the most recent fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or (b); (h) the Parent Entity may pay dividends on, or repurchase or redeem, its Equity Interests in an aggregate amount not to exceed $75,000,000 in any fiscal year, (i) other Restricted Payments so long as (x) no Event of Default has occurred and is continuing and (y) after giving effect to such Restricted Payment, on a Pro Forma Basis the Consolidated Leverage Ratio would be less than or equal to 1.5 to 1.0 as of the last day of the most recent fiscal year or fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or 5.01(b), (j) other Restricted Payments by the Parent Entity or any Restricted Subsidiary in an aggregate amount not to exceed, together with the aggregate amount of Investments made pursuant to Section 6.05(t) and the aggregate amount of prepayments, redemptions, purchases, defeasances or other satisfaction of Subordinated Indebtedness made pursuant to Section 6.06(a)(vii), $500,000,000 and (k) any Restricted Payments made during a Covenant Suspension Period.
SECTION 6.05.     Investments . The Parent Entity will not, and will not allow any of its Restricted Subsidiaries to make or hold any Investments, except:
(a)    Investments by the Parent Entity or a Restricted Subsidiary in cash and Cash Equivalents (or that were Cash Equivalents at the time the Investment was made);
(b)    loans or advances to officers, directors, consultants and employees of the Parent Entity and the Restricted Subsidiaries (i) for reasonable and customary business-related travel, entertainment, relocation and analogous ordinary business purposes, (ii) in connection with such Person’s purchase of Equity Interests of Parent, provided that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity, and (iii) for purposes not described in the foregoing subclauses (i) and (ii), in an aggregate principal amount outstanding not to exceed $10,000,000;
(c)    Investments (i) by the Parent Entity or any Restricted Subsidiary in the Parent Entity or any Restricted Subsidiary and (ii) by the Parent Entity or any Restricted Subsidiary in any Person (or assets, as applicable) that is or will become immediately after such Investment a Restricted Subsidiary or that will merge or consolidate into (or such assets will be transferred to) the Parent Entity or a Restricted Subsidiary;
(d)    (i) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and (ii) Investments (including debt obligations and Equity Interests) received in satisfaction or partial satisfaction thereof from financially troubled account debtors and other credits to suppliers in the ordinary course of business or received in connection with the bankruptcy or reorganization of suppliers and customers or in settlement of delinquent obligations of, or other disputes with, customers and suppliers arising in the ordinary course of business or upon the foreclosure with respect to any secured Investment or other transfer of title with respect to any secured Investment;
(e)    Investments resulting from the receipt of promissory notes and other non-cash consideration in connection with any Disposition permitted by Section 6.11(c)(i), (i) or (j);
 
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(f)    Investments existing on the Effective Date in Restricted Subsidiaries or as set forth on Schedule 6.05 and any modification, replacement, renewal, reinvestment or extension thereof; provided that the amount of the original Investment is not increased except by the terms of such Investment or as otherwise permitted by this Section 6.05;
(g)    Investments in Swap Agreements permitted under Section 6.01(i);
(h)    [reserved];
(i)    other Investments so long as (x) no Specified Event of Default (or, in the case of Investments in Unrestricted Subsidiaries, no Event of Default) has occurred and is continuing and (y) after giving effect to such Investment, on a Pro Forma Basis the Consolidated Leverage Ratio would be less than or equal to 1.5 to 1.0 as of the last day of the most recent fiscal year or fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or 5.01(b);
(j)    Investments in the ordinary course of business consisting of endorsements for collection or deposit;
(k)    any other Investment, provided that an Investment shall be permitted to be made pursuant to this clause (k) only if at the time such Investment is made the aggregate amount of Investments outstanding at such time (including such Investment) pursuant to this clause (k) (valued at cost and net of any return representing a return of capital in respect of any such Investment) would not exceed the greater of (x) $500,000,000 and (y) 75% of LTM EBITDA (measured at the time of any such Investment);
(l)    any Investment; provided that the amount of such Investment (valued at cost) does not exceed the Available Amount at the time such Investment is made; provided that no such Investments shall be permitted under this clause (l) unless (i) no Specified Event of Default has occurred and is continuing or would arise after giving effect thereto and (ii) on a Pro Forma Basis the Borrower would be in compliance with Section 6.09 as of the last day of the most recent fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or (b).
(m)    advances of payroll payments, fees or other compensation to officers, directors, consultants or employees, in the ordinary course of business;
(n)    Investments to the extent that payment for such Investments is made solely with Qualified Equity Interests;
(o)    Investments held by a Restricted Subsidiary acquired after the Effective Date or of a corporation merged into Parent or merged or consolidated with a Restricted Subsidiary in accordance with Section 6.03 after the Effective Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(p)    lease, utility and other similar deposits in the ordinary course of business;
(q)    Investments resulting from the creation of a Lien permitted under Section 6.02 and Investments resulting from Dispositions permitted under clause (j) of Section 6.11 or Restricted Payments permitted under Section 6.04 or Indebtedness permitted under Section 6.01; and
 
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(r)    customary Investments in connection with Permitted Receivables Facilities;
(s)    customer financing in an amount not to exceed $20,000,000 at any time outstanding;
(t)    Investments by the Parent Entity or any Restricted Subsidiary in an aggregate amount not to exceed, together with the aggregate amount of Restricted Payments made pursuant to Section 6.04(j) and the aggregate amount of prepayments, redemptions, purchases, defeasances or other satisfaction of Subordinated Indebtedness made pursuant to Section 6.06(a)(vii), $500,000,000; and
(u)    any Investments (other than an Investment in an Unrestricted Subsidiary) made during a Covenant Suspension Period.
SECTION 6.06.     Prepayments, Etc., of Indebtedness .
(a)    The Parent Entity will not, and will not permit any of its Restricted Subsidiaries to, prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner (it being understood that payments of regularly scheduled interest shall be permitted) any Subordinated Indebtedness or make any payment in violation of any subordination terms of any Subordinated Indebtedness, except (i) refinancing of Subordinated Indebtedness with the Net Cash Proceeds of any Permitted Refinancing Indebtedness in respect thereof, (ii) the conversion of any Subordinated Indebtedness to Equity Interests (other than Disqualified Equity Interests) of the Parent Entity, (iii) the prepayment of Subordinated Indebtedness of the Parent Entity or any Restricted Subsidiary to the Parent Entity or any Restricted Subsidiary to the extent permitted by the Collateral Documents, (iv) prepayments, redemptions, purchases, defeasances and other payments in respect of Subordinated Indebtedness in an aggregate amount not to exceed the Available Amount so long as (1) no Event of Default has occurred and is continuing and (2) after giving effect to such prepayment, on a Pro Forma Basis the Parent Entity would be in compliance with Section 6.09 as of the last day of the most recent fiscal year or fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or 5.01(b), (v) prepayments, redemptions, purchases, defeasances and other payments in respect of Subordinated Indebtedness so long as (x) no Event of Default has occurred and is continuing and (y) after giving effect to such prepayment, on a Pro Forma Basis the Consolidated Leverage Ratio would be less than or equal to 1.5 to 1.0 as of the last day of the most recent fiscal year or fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or 5.01(b), (vi) prepayments, redemptions, purchases or defeasances of Subordinated Indebtedness out of the net cash proceeds of a sale of Qualified Equity Interests (other than a sale to the Parent Entity or a Restricted Subsidiary) to the extent such net cash proceeds are excluded from the calculation of the Available Amount, (vii) prepayments, redemptions, purchases, defeasances and other payments in an aggregate amount not to exceed, together with the aggregate amount of Restricted Payments made pursuant to Section 6.04(j) and the aggregate amount of Investments made pursuant to Section 6.05(t), $500,000,000 and (viii) any prepayments, redemptions, purchases, defeasances and other payments in respect of Subordinated Indebtedness made during a Covenant Suspension Period.
(b)    Except during a Covenant Suspension Period, Parent will not, and will not permit any of its Restricted Subsidiaries to, amend, modify or change in any manner materially adverse to the interests of the Lenders any term or condition of any Subordinated Indebtedness.
SECTION 6.07.     Transactions with Affiliates . The Parent Entity will not, and will not permit any of its Restricted Subsidiaries to, sell, lease or otherwise transfer any Property to, or purchase, lease or otherwise acquire any Property from, or otherwise engage in any other transactions with, any of its Affiliates, in each case involving aggregate consideration with a Fair Market Value in excess of $2,000,000
 
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(any such transaction, an “ Affiliate Transaction ”), except (a) at prices and on terms and conditions substantially as favorable to the Parent Entity or such Restricted Subsidiary (in the good faith determination of the Parent Entity) as could reasonably be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among (i) the Parent Entity and/or its Restricted Subsidiaries and (ii) the Parent Entity and/or its Restricted Subsidiaries and any entity that becomes a Restricted Subsidiary as a result of such transaction so long as such transaction does not involve any other Affiliate, (c) the payment of customary compensation and benefits and reimbursements of out-of-pocket costs to, and the provision of indemnity on behalf of, directors, officers, consultants, employees and members of the boards of directors of the Parent Entity or such Restricted Subsidiary, (d) loans and advances to officers, directors, consultants and employees in the ordinary course of business, (e) Restricted Payments and other payments permitted under Section 6.04 or 6.06, (f) employment, incentive, benefit, consulting and severance arrangements entered into in the ordinary course of business with officers, directors, consultants and employees of the Parent Entity or its Restricted Subsidiaries, (g) the transactions pursuant to the agreements set forth in Schedule 6.07 or described in the Form 10 or in each case any amendment thereto to the extent such an amendment is not adverse to the Lenders in any material respect, (h) the Transactions and the payment of fees and expenses related to the Transactions, (i) the issuance of Qualified Equity Interests and the granting of registration or other customary rights in connection therewith, (j) the existence of, and the performance by the Parent Entity or any Restricted Subsidiary of its obligations under the terms of, any limited liability company agreement, limited partnership or other organizational document or securityholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party on the Effective Date and which is set forth on Schedule 6.07 , and similar agreements that it may enter into thereafter, provided that the existence of, or the performance by the Parent Entity or any Restricted Subsidiary of obligations under, any amendment to any such existing agreement or any such similar agreement entered into after the Effective Date shall only be permitted by this Section 6.07(j) to the extent not more adverse to the interest of the Lenders in any material respect when taken as a whole (in the good faith determination of Parent) than any of such documents and agreements as in effect on the Effective Date, (k) consulting services to joint ventures in the ordinary course of business and any other transactions between or among the Parent Entity, its Restricted Subsidiaries and joint ventures that are Affiliates of the Parent Entity solely as a result of the Parent Entity’s or a Restricted Subsidiary’s Investments therein in the ordinary course of business, (l) transactions with landlords, customers, clients, suppliers, joint venture partners or purchasers or sellers of goods and services, in each case in the ordinary course of business and not otherwise prohibited by this Agreement and (m) any Affiliate Transaction made during a Covenant Suspension Period.
SECTION 6.08.     Changes in Fiscal Year . The Parent Entity will cause its fiscal year to end on December 31 of each calendar year.
SECTION 6.09.     Financial Covenant . The Parent Entity will not permit the Consolidated Leverage Ratio as of the last day of any fiscal quarter, commencing with the first full fiscal quarter ending after the Closing Date, to be greater than 3.50 to 1.0.
SECTION 6.10.     Restrictive Agreements . The Parent Entity will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon the ability of any Restricted Subsidiary that is not a U.S. Guarantor to pay dividends or other distributions with respect to holders of its Equity Interests; provided that the foregoing shall not apply to (i) prohibitions, restrictions and conditions imposed by law or by this Agreement, (ii) prohibitions, restrictions and conditions arising in connection with any Disposition permitted by Section 6.11 with respect to the Property subject to such Disposition, (iii) customary prohibitions, restrictions and conditions contained in agreements relating to a Permitted Receivables Facility, (iv) agreements or arrangements binding on a Restricted Subsidiary at the time such Restricted Subsidiary becomes a Restricted Subsidiary of the Parent Entity or any permitted
 
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extension, refinancing or renewal of, or any amendment or modification to, any such agreement or arrangement so long as any such extension, refinancing, renewal, amendment or modification is not materially more restrictive (in the good faith determination of the Borrower Agent) than such agreement or arrangement, (v) prohibitions, restrictions and conditions set forth in Indebtedness of a Restricted Subsidiary that is not a Loan Party which is permitted by this Agreement, (vi) agreements or arrangements that are customary provisions in joint venture agreements and other similar agreements or arrangements applicable to joint ventures, (vii) prohibitions, restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such prohibitions, restrictions or conditions apply only to the Restricted Subsidiaries incurring or Guaranteeing such Indebtedness, (viii) customary provisions in leases, subleases, licenses, sublicenses or permits so long as such prohibitions, restrictions or conditions relate only to the property subject thereto, (ix) customary provisions in leases restricting the assignment or subletting thereof, (x) customary provisions restricting assignment or transfer of any contract entered into in the ordinary course of business or otherwise permitted hereunder, (xi) prohibitions, restrictions or conditions on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business, (xii) prohibitions, restrictions or conditions imposed by a Lien permitted by Section 6.02 with respect to the transfer of the Property subject thereto and (xiii) prohibitions, restrictions and conditions imposed, or contained in any agreement entered into, or otherwise existing, during a Covenant Suspension Period.
SECTION 6.11.     Dispositions . The Parent Entity will not, and will not permit any of its Restricted Subsidiaries to, make any Disposition, except:
(a)    Dispositions of obsolete or worn out Property and Dispositions of property no longer used or useful in the conduct of the business of the Parent Entity and the Restricted Subsidiaries, in each case, in the ordinary course of business;
(b)    Dispositions of inventory and immaterial assets in the ordinary course of business;
(c)    Dispositions of Property to the extent that (i) such Property is exchanged for credit against the purchase price of similar replacement Property or (ii) the proceeds of such Disposition are promptly applied to the purchase price of such replacement Property;
(d)    Dispositions of Property to the Parent Entity or to a Restricted Subsidiary;
(e)    Dispositions permitted by Sections 6.03 and 6.04 and Liens permitted by Section 6.02 and Dispositions of Receivables and Related Assets in connection with Permitted Receivables Facilities;
(f)    Dispositions of cash and Cash Equivalents;
(g)    Dispositions of accounts receivable in connection with the collection or compromise thereof (other than in connection with financing transactions);
(h)    leases, subleases, licenses or sublicenses, in each case in the ordinary course of business and which do not materially interfere with the business of Parent and the Restricted Subsidiaries;
(i)    transfers of Property to the extent subject to Casualty Events;
 
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(j)    any Disposition of Property; provided that (i) at the time of such Disposition (other than any such Disposition made pursuant to a legally binding commitment entered into at a time when no Event of Default exists), no Event of Default shall exist or would result from such Disposition, (ii) at the time of any such Disposition, the aggregate net book value of all property Disposed of in reliance on this clause (j) in any four fiscal quarter period of Parent (including such Disposition) would not exceed 15.0% of Consolidated Total Assets as of the most recently ended fiscal quarter of Parent for which financial statements have been delivered pursuant to Section 5.01(a) or (b) and (iii) with respect to any Disposition pursuant to this clause (j) for a purchase price in excess of $10,000,000, the Parent Entity or a Restricted Subsidiary shall receive not less than 75% of such consideration in the form of cash or Cash Equivalents; provided , however , that for the purposes of this clause (iii), each of the following shall be deemed to be cash: (a) any liabilities (as shown on the Parent Entity’s most recent consolidated balance sheet provided hereunder or in the footnotes thereto) of the Parent Entity or such Restricted Subsidiary, other than Subordinated Indebtedness or liabilities that are by their terms subordinated to the payment in cash of the Obligations, that are assumed by the transferee with respect to the applicable Disposition and for which the Parent Entity and all of the Restricted Subsidiaries shall have been validly released by all applicable creditors in writing, and (b) any Designated Non-Cash Consideration received by the Parent Entity or any of its Restricted Subsidiaries in such Disposition or any series of related Dispositions, having an aggregate Fair Market Value not to exceed, in the aggregate, the greater of $110,000,000 and 15% of LTM EBITDA when received (with the Fair Market Value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value);
(k)    Dispositions of Investments in, and issuances of any Equity Interests in, joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth in joint venture arrangements and similar binding arrangements;
(l)    Dispositions described on Schedule 6.11 ; and
(m)    any Disposition made during a Covenant Suspension Period, other than any Disposition of all or substantially all Property of the U.S. Parent Borrower or any of its direct or indirect parent companies (in each case, on a consolidated basis); provided that any Disposition of Property by the Parent Entity or any direct or indirect parent company of the U.S. Parent Borrower to any other Restricted Subsidiary of Parent made during a Covenant Suspension Period shall be permitted;
provided that any Disposition of any Property classified under Sections 6.11(j) and (l) shall be for no less than the Fair Market Value of such Property at the time of such Disposition in the good faith determination of the Borrower Agent.
SECTION 6.12.     Lines of Business .
(a)    The Parent Entity will not, and will not permit any of its Restricted Subsidiaries to, engage to any material extent in any business substantially different from the businesses of the type conducted by the Parent Entity and its Restricted Subsidiaries on the date of execution of this Agreement and businesses reasonably related, ancillary or complementary thereto and reasonable extensions thereof.
(b)    The Parent Entity and any other direct or indirect parent company of the U.S. Parent Borrower will not engage in any material business other than the management and ownership of Equity Interests of their Subsidiaries, the incurrence of Indebtedness, making of Restricted Payments and Investments and other transactions permitted by this Article VI and other activities reasonably related thereto.
 
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SECTION 6.13.     Anti-Corruption Laws and Sanctions . No Borrower will request any Borrowing or Letter of Credit, and no Borrower shall use the proceeds of any Borrowing or Letter of Credit (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws or (ii) in any manner that would result in the violation of any Sanctions applicable to any party hereto.
ARTICLE VII
Events of Default
If any of the following events (“ Events of Default ”) shall occur and be continuing:
(a)    any Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;
(b)    any Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five (5) Business Days;
(c)    any representation or warranty made or deemed made by or on behalf of the Parent Entity, any Borrower or any Restricted Subsidiary in this Agreement or any other Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document required to be delivered in connection with this Agreement or any other Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;
(d)    any Borrower shall fail to observe or perform any covenant, condition or agreement contained in Article VI;
(e)    any Loan Party, as applicable, shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article) or any other Loan Document, and such failure shall continue unremedied for a period of thirty (30) days after written notice thereof from the Administrative Agent to the Borrower Agent;
(f)    the Parent Entity or any Material Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable, or if a grace period shall be applicable to such payment under the agreement or instrument under which such Indebtedness was created, beyond such applicable grace period;
(g)    the Parent Entity or any Material Subsidiary shall default in the performance of any obligation in respect of any Material Indebtedness or any “change of control” (or equivalent term) shall occur with respect to any Material Indebtedness, in each case, that results in such Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both, but after giving effect to any applicable grace period) the holder or holders of such Material Indebtedness or any trustee or agent on its or their behalf to cause such Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity (other than solely in Equity Interests); provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
 
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(h)    an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Parent Entity, any Borrower or any Material Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Parent Entity, any Borrower or any Material Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed or unstayed or unrecalled for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;
(i)    the Parent Entity, any Borrower or any Material Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Parent Entity, any Borrower or any Material Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any corporate action for the purpose of effecting any of the foregoing;
(j)    the Parent Entity or any Material Subsidiary shall become generally unable, admit in writing its inability generally or fail generally to pay its debts as they become due;
(k)    one or more final, non-appealable judgments for the payment of money in an aggregate amount in excess $100,000,000 (to the extent due and payable and not covered by insurance as to which the relevant insurance company has not denied coverage) shall be rendered against the Parent Entity, any Material Subsidiary or any combination thereof and the same shall remain unpaid or undischarged for a period of thirty (30) consecutive days during which execution shall not be bonded or effectively stayed, or any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the assets of the Parent Entity and the Material Subsidiaries, taken as a whole, and is not released, vacated or fully bonded within thirty (30) days after its issue or levy;
(l)    an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;
(m)    a Change in Control shall occur;
(n)    except during a Collateral Suspension Period, (i) any material provision of any Collateral Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder (including as a result of a transaction permitted under Section 6.03 or 6.11) or as a result of acts or omissions by the Administrative Agent or any Lender or the satisfaction in full of all the Obligations (other than contingent indemnification or reimbursement obligations) ceases to be in full force and effect; or (ii) any Loan Party contests in writing the validity or enforceability of any provision of any Collateral Document; or (iii) any
 
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Loan Party denies in writing that it has any or further liability or obligation under any Collateral Document (other than as a result of repayment in full of the Obligations (other than contingent indemnification or reimbursement obligations) and termination of the Commitments), or purports in writing to revoke or rescind any Collateral Document, in each case with respect to a material portion of the Collateral purported to be covered by the Collateral Documents, or
(o)    except with respect to the Guaranty of any Guarantor released pursuant to Section 5.12(a) that has not been reinstated pursuant to Section 5.12(b) (other than with respect to any Borrower), (i) any material provision of the Guaranty, at any time after its execution and delivery and for any reason other than as permitted hereunder or thereunder (including as a result of a transaction permitted under Section 6.03 or 6.11) or as a result of acts or omissions by the Administrative Agent or any Lender or the satisfaction in full of all the Obligations (other than contingent indemnification or reimbursement obligations) ceases to be in full force and effect; or (ii) any Loan Party contests in writing the validity or enforceability of any provision of the Guaranty; or (iii) any Guarantor denies in writing that it has any or further liability or obligation under the Guaranty (other than as a result of repayment in full of the Obligations (other than contingent indemnification or reimbursement obligations) and termination of the Commitments), or purports in writing to revoke or rescind the Guaranty,
then, and in every such event (other than an event with respect to the Parent Entity or any Borrower described in clause (h) or (i) of this Article VII), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower Agent, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder and under the other Loan Documents, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers; and in case of any event with respect to the Parent Entity or any Borrower described in clause (h) or (i) of this Article VII, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other Obligations accrued hereunder and under the other Loan Documents, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers.
In addition to any other rights and remedies granted to the Administrative Agent and the Secured Parties in the Loan Documents, upon the occurrence and during the continuation of an Event of Default, the Administrative Agent on behalf of the Secured Parties may exercise all rights and remedies of a secured party under the New York Uniform Commercial Code or any other applicable law. Without limiting the generality of the foregoing, upon the occurrence and during the continuation of an Event of Default, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Loan Party or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, or consent to the use by the Loan Party of any cash collateral arising in respect of the Collateral on such terms as the Administrative Agent deems reasonable, and/or may forthwith sell, lease, assign give an option or options to purchase or otherwise dispose of and deliver, or acquire by credit bid on behalf of the Secured Parties, the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the Administrative Agent or any Secured Party or elsewhere, upon such terms and
 
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conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery, all without assumption of any credit risk. The Administrative Agent or any Secured Party shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Loan Party, which right or equity is hereby waived and released. Each Loan Party further agrees, at the Administrative Agent’s reasonable request and upon reasonable advance notice, to assemble the Collateral and make it available to the Administrative Agent at places which the Administrative Agent shall reasonably select, whether at such Loan Party’s premises or elsewhere. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this Article VII or in respect of any sale of, collection from or other realization upon all or any part of the Collateral as follows:
First , to the payment of all reasonable costs and expenses, fees, commissions and taxes of such sale, collection or other realization including compensation to the Administrative Agent and its agents and counsel, and all expenses, liabilities and advances made or incurred by the Administrative Agent in connection therewith and all amounts for which the Administrative Agent is entitled to indemnification pursuant to the provisions of any Loan Document, together with interest on each such amount at the highest rate then in effect under this Agreement from and after the date such amount is due, owing or unpaid until paid in full;
Second , to the payment of all other reasonable costs and expenses of such sale, collection or other realization including compensation to the other Secured Parties and their agents and counsel and all costs, liabilities and advances made or incurred by the other Secured Parties in connection therewith, together with interest on each such amount at the highest rate then in effect under this Agreement from and after the date such amount is due, owing or unpaid until paid in full;
Third , without duplication of amounts applied pursuant to clauses (a) and (b) above, to the indefeasible payment in full in cash, pro rata, of interest and other amounts constituting Obligations (other than principal, reimbursement obligations with respect to LC Disbursements and obligations to cash collateralize Letters of Credit) and any fees, premiums and scheduled periodic payments due in respect of Cash Management Obligations or under any Secured Hedge Agreements constituting Obligations and any interest accrued thereon, in each case equally and ratably in accordance with the respective amounts thereof then due and owing;
Fourth , to the indefeasible payment in full in cash, pro rata, of principal amount of the Obligations and any premium thereon (including reimbursement obligations with respect to LC Disbursements and obligations to cash collateralize Letters of Credit) and any breakage, termination or other payments due to in respect of Cash Management Obligations and under any Secured Hedge Agreements constituting Obligations and any interest accrued thereon; and
Fifth , the balance, if any, to the person lawfully entitled thereto (including the applicable Loan Party or its successors or assigns) or as a court of competent jurisdiction may direct.
In the event that any such proceeds are insufficient to pay in full the items described in clauses (a) through (e) of above, the Loan Parties shall remain liable, jointly and severally, for any deficiency.
Notwithstanding the foregoing, amounts received from any Loan Party shall not be applied to any Excluded Swap Obligation of such Loan Party.
If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other
 
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disposition. In the event of any conflict between this paragraph and the provisions of any Collateral Document, the provisions of such Collateral Document shall control. The Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Cash Management Obligations or Obligations arising under Secured Hedge Agreements except to the extent expressly provided herein and unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be.
ARTICLE VIII
The Administrative Agent
(a)    Each of the Lenders and the Issuing Banks hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof and the other Loan Documents, together with such actions and powers as are reasonably incidental thereto.
(b)    The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (including in its capacities as a potential Hedge Bank and a potential Cash Management Bank) and the Issuing Banks hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and such Issuing Bank for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant hereto for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent, shall be entitled to the benefits of all provisions of this Article VIII and Article IX (including Section 9.03, as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.
(c)    The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Parent Entity, any Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.
(d)    To the extent required by any applicable laws, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any applicable withholding Tax. Without limiting or expanding the provisions of Section 2.16, each Lender shall indemnify and hold harmless the Administrative Agent against, within 10 days after written demand therefor, any and all Taxes and any and all related losses, claims, liabilities and expenses (including fees, charges and disbursements of any counsel for the Administrative Agent) incurred by or asserted against the Administrative Agent as a result of the failure of the Administrative Agent to properly withhold any Tax from amounts paid to or for the account of such Lender for any reason (including, without limitation, because the appropriate form was not delivered or not properly executed, or because such Lender failed to notify the Administrative Agent of a change in circumstance that rendered the exemption from, or reduction of, withholding Tax ineffective). A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Document against any amount due the Administrative Agent under this clause (d). The
 
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agreements in this clause (d) shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all other Obligations. The term “Lender” shall, for purposes of this clause (d), include any Issuing Bank and any Swingline Lender.
(e)    The Administrative Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided herein), and (c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Parent Entity or any of the Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided herein) or in the absence of its own bad faith, gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents or the value or the sufficiency of any Collateral, or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
(f)    The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts in the absence of gross negligence or willful misconduct.
(g)    The Administrative Agent may perform any and all of its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
(h)    Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign upon thirty (30) days’ notice to the Lenders, the Issuing Banks and the Borrower Agent. Upon any such resignation, the Required Lenders shall have
 
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the right, in consultation with the Borrower Agent and (unless an Event of Default shall have occurred and be continuing) with the consent of the Borrower Agent (which consent of the Borrower Agent shall not be unreasonably withheld or delayed), to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative Agent from among the Lenders which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.
(i)    Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder.
(j)    The Lenders irrevocably agree:
(i)    that any Lien on any Property granted to or held by the Administrative Agent under any Loan Document shall be automatically released (A) upon termination of the Commitments and payment in full of all Obligations (other than (x) obligations under Secured Hedge Agreements, (y) Cash Management Obligations and (z) contingent reimbursement and indemnification obligations not yet accrued and payable) and the expiration or termination of all Letters of Credit, (B) at the time the Property subject to such Lien is transferred or to be transferred as part of or in connection with any transfer permitted hereunder or under any other Loan Document to any Person (other than (x) in the case of a transfer by a U.S. Loan Party, any transfer to another U.S. Loan Party and (y) in the case of a transfer by a Foreign Guarantor, any transfer to a Loan Party), (C) subject to Section 9.02, if the release of such Lien is approved, authorized or ratified in writing by the Required Lenders (or such greater number of Lenders as may be required pursuant to Section 9.02), (D) if the Property subject to such Lien is owned by a Guarantor, upon release of such Guarantor from its obligations under its Guarantee under the applicable Guaranty pursuant to clause (iii) below or (E) upon the occurrence of a Collateral Suspension Period;
(ii)    (A) to release or subordinate any Lien on any Property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 6.02(e) and in connection with securitizations and factorings of accounts receivable not otherwise prohibited by this Agreement and (B) that the Administrative Agent is authorized (but not required) to (x) release or subordinate any Lien on any Property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such Property that is permitted by any other clause of Section 6.02 and (y) release any Lien on any Property granted to or held by the Administrative Agent under any Collateral Document during a Collateral Suspension Period, pursuant to Section 5.11(a);
 
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(iii)    that any Guarantor (other than the Parent Entity) shall be automatically released from its obligations under the applicable Guaranty (1) if such Person ceases to be a Restricted Subsidiary of the Parent Entity pursuant to a transaction permitted hereunder, (2) in the case of Parent, solely in the event that Parent is not then the Parent Entity, if Parent is not otherwise required to be a Guarantor under Section 5.12, (3) in the case of any direct or indirect parent of the U.S. Parent Borrower, such Person ceases to be a direct or indirect parent of the U.S. Parent Borrower, in each case as a result of a transaction permitted hereunder or (4) to the extent set forth in Section 5.12; and
(iv)    except during a Collateral Suspension Period, the Administrative Agent may enter into the First Lien Intercreditor Agreement and the Second Lien Intercreditor Agreement, without any further consent from any Secured Party, in connection with any incurrence by the Borrower of Permitted Debt Securities and bind the Secured Parties thereby.
Other than in connection with a Collateral Suspension Period (as it relates to Collateral Documents) or a Covenant Suspension Period (as it relates to the Guaranty (other than the Guarantees by the Parent Entity)), upon request by the Administrative Agent at any time, the Required Lenders (or such greater number of Lenders as may be required pursuant to Section 9.02) will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of Property, or to release any Guarantor from its obligations under the applicable Guaranty and Collateral Documents pursuant to this paragraph (j). In each case as specified in this paragraph (j), the Administrative Agent will (and each Lender irrevocably authorizes the Administrative Agent to), at the Borrowers’ expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release or subordination of such item of Collateral from the assignment and security interest granted under the Collateral Documents, or to evidence the release of such Guarantor from its obligations under the applicable Guaranty, in each case in accordance with the terms of the Loan Documents and this paragraph (j). The Lenders irrevocably agree that the Parent Entity shall cease to be a Borrower hereunder upon the occurrence of a Permitted Parent Borrower Release.
(k)    None of the Persons identified in this Agreement as an “arranger,” “bookrunner,” “co-documentation agent” or “syndication agent” shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than, if applicable, those applicable to all Lenders as such. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender. Each Lender hereby makes the same acknowledgments with respect to the relevant Persons in their respective capacities as an Arranger, Co-Documentation Agent and Co-Syndication Agents as it makes with respect to the Administrative Agent in paragraph (i) of this Article VIII.
(l)     Parallel Debt . For purposes of Luxembourg and Netherlands law Collateral Documents only:
(i)    The Borrower Agent irrevocably and unconditionally undertakes, as far as necessary in advance, to pay to the Administrative Agent an amount equal to the aggregate of all Obligations to all the Lenders and all the Issuing Banks from time to time due in accordance with the terms and conditions of this Agreement (such payment undertaking and the obligations and liabilities which are the result thereof are referred to as “ Parallel Debt ”).
(ii)    Each of the parties to this Agreement acknowledges that (i) for this purpose, the Parallel Debt of the Borrowers constitutes undertakings, obligations and liabilities of the Borrowers to the Administrative Agent which are separate and independent from, and without prejudice to, the Obligations which the Borrower Agent owes to any Lender or any Issuing Bank and (ii) that the Parallel Debt represents the Administrative Agent’s own claim to receive payment of
 
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such Parallel Debt by the Borrower Agent; provided that the total amount which may become due under the Parallel Debt of the Borrower Agent under this clause (l) shall never exceed the total amount which may become due under all the Obligations of the Borrower to all the Lenders and the Issuing Bank.
(iii)    (A) The total amount due by any Borrower as the Parallel Debt under this clause (l) shall be decreased to the extent that the Borrower Agent shall have irrevocably and unconditionally paid any amounts to the Lenders and the Issuing Banks or any of them to reduce the Borrower Agent’s outstanding Obligations or any Lender or any Issuing Bank otherwise receives any amount in irrevocable and unconditional payment of such Obligations (other than by virtue of paragraph (B) hereafter); and (B) to the extent that the Borrower Agent shall have irrevocably and unconditionally paid any amounts to the Administrative Agent under the Parallel Debt or the Administrative Agent shall have otherwise received monies in irrevocable and unconditional payment of such Parallel Debt, the total amount due under the Obligations shall be decreased.
(m)     Administrative Agent as Joint and Several Creditor . For purposes of Luxembourg law Collateral Documents only:
(i)    Each party hereto agrees that the Administrative Agent:
(A)    will be the joint and several creditor (together with the relevant Lenders and the Issuing Banks) of each and every obligation of the Borrower Agent towards each Lender and each Issuing Bank under this Agreement; and
(B)    will have its own independent right to demand performance by the Borrower Agent of those obligations.
(ii)    Discharge by the Borrower Agent of any obligation owed to the Administrative Agent or another Lender and any Issuing Bank shall, to the same extent, discharge the corresponding obligation owing to the other.
(iii)    Without limiting or affecting the Administrative Agent’s rights against the Borrower Agent (whether under this Article VIII or under any other provision of this Agreement), the Administrative Agent agrees with each other Lender and each Issuing Bank (on a several and divided basis) that, subject to paragraph (iv) below, it will not exercise its rights as a joint and several creditor with a Lender or an Issuing Bank except with the consent of the relevant Lender or the relevant Issuing Bank.
(iv)    Nothing in paragraph (iii) above shall in any way limit the Administrative Agent’s right to act in the protection or preservation of rights under or to enforce any Collateral Document as contemplated by this Agreement and/or the relevant Collateral Document (or to do any act reasonably incidental to any of the above), other than during a Collateral Suspension Period.
(n)     Credit Bidding . The Secured Parties hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Obligations (including by accepting some or all of the Collateral in satisfaction of some or all of the Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of the Bankruptcy Code, or any similar laws in any other jurisdictions to which a Loan Party is subject, or (b) at any other sale,
 
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foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable law. In connection with any such credit bid and purchase, the Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid by the Administrative Agent at the direction of the Required Lenders on a ratable basis (with Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that shall vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) for the asset or assets so purchased (or for the equity interests or debt instruments of the acquisition vehicle or vehicles that are issued in connection with such purchase). In connection with any such bid (i) the Administrative Agent shall be authorized to form one or more acquisition vehicles and to assign any successful credit bid to such acquisition vehicle or vehicles (ii) each of the Secured Parties’ ratable interests in the Obligations which were credit bid shall be deemed without any further action under this Agreement to be assigned to such vehicle or vehicles for the purpose of closing such sale, (iii) the Administrative Agent shall be authorized to adopt documents providing for the governance of the acquisition vehicle or vehicles ( provided that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or equity interests thereof, shall be governed, directly or indirectly, by, and the governing documents shall provide for, control by the vote of the Required Lenders or their permitted assignees under the terms of this Agreement or the governing documents of the applicable acquisition vehicle or vehicles, as the case may be, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in Section 9.02 of this Agreement), (iv) the Administrative Agent on behalf of such acquisition vehicle or vehicles shall be authorized to issue to each of the Secured Parties, ratably on account of the relevant Obligations which were credit bid, interests, whether as equity, partnership, limited partnership interests or membership interests, in any such acquisition vehicle and/or debt instruments issued by such acquisition vehicle, all without the need for any Secured Party or acquisition vehicle to take any further action, and (v) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds the amount of Obligations credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Secured Parties pro rata and the equity interests and/or debt instruments issued by any acquisition vehicle on account of such Obligations shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action. Notwithstanding that the ratable portion of the Obligations of each Secured Party are deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each Secured Party shall execute such documents and provide such information regarding the Secured Party (and/or any designee of the Secured Party which will receive interests in or debt instruments issued by such acquisition vehicle) as the Administrative Agent may reasonably request in connection with the formation of any acquisition vehicle, the formulation or submission of any credit bid or the consummation of the transactions contemplated by such credit bid.
ARTICLE IX
Miscellaneous
SECTION 9.01.     Notices .
(a)    Except in the case of notices and other communications expressly permitted to be given by telephone or other electronic communications (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy or transmission by electronic communication, as follows:
(i)    if to a Borrower, to Delphi Jersey Holdings plc at 5725 Delphi Drive, Troy, Michigan 48098, Attention of Treasurer (email james.holms@delphi.com) and Deputy General Counsel (Telecopy No. (248) 813-3445 and email sean.p.corcoran@delphi.com; and (in the case of a notice of a Default) with a copy to Paul Hastings LLP, 200 Park Avenue, New York, New York 10166, Attention of Randal Palach (email randalpalach@paulhastings.com);
 
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(ii)    if to the Administrative Agent, to JPMorgan Chase Bank, National Association, Wholesale Lending Services, 500 Stanton Christiana Road, NCC5, Floor 1, Newark, DE 19713-2107, Attention of Joe Aftanis (Email: joe.aftanis@jpmorgan.com );
(iii)    if to JPMCB in its capacity as the Issuing Bank, (x) in the case of Letters of Credit (other than Letters of Credit denominated in Canadian Dollars), to it at JPMorgan Chase Bank, National Association, Wholesale Lending Services, 500 Stanton Christiana Road, NCC5, Floor 1, Newark, DE 19713-2107, Attention of Joe Aftanis (Email: joe.aftanis@jpmorgan.com ), (y) in the case of Letters of Credit issued by a branch or Affiliate of JPMCB, to it at the address, facsimile number, electronic mail address or telephone number as shall be designated by the Administrative Agent;
(iv)    if to any other Issuing Bank to it at the address, facsimile number, electronic mail address or telephone number as set forth on Schedule 9.01;
(v)    if to the Swingline Lender, to it at JPMorgan Chase Bank, National Association, Wholesale Lending Services, 500 Stanton Christiana Road, NCC5, Floor 1, Newark, DE 19713-2107, Attention of Joe Aftanis (Email: joe.aftanis@jpmorgan.com ) with a copy to JPMorgan Chase Bank, National Association, 383 Madison Avenue, 24th floor, New York, NY 10179, Attention of Richard Duker (Telecopy No. 212-270-5100);
(vi)    Notwithstanding the foregoing, any notices relating to Borrowings denominated in Alternative Currencies, should also be sent to J.P. Morgan Europe Limited, 25 Bank Street, Canary Wharf, London E14 5JP, Attention of The Manager, Loan & Agency Services (Telecopy No. 44 207 777 2360); and
(vii)    if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.
(b)    Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower Agent may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
(c)    Any party hereto may change its address, electronic mail address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of delivery, or three Business Days after being deposited in the mail, postage prepaid.
 
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SECTION 9.02.     Waivers; Amendments .
(a)    No failure or delay by the Administrative Agent, any Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Banks and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or any Issuing Bank may have had notice or knowledge of such Default at the time.
(b)    Except as otherwise set forth in this Agreement or any other Loan Document (with respect to such Loan Document) or the Fee Letter (with respect to any Loan Document), neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) extend or increase the Commitment of any Lender or any Issuing Bank without the written consent of each Lender and Issuing Bank directly and adversely affected thereby, it being understood that a waiver of any condition precedent set forth in Section 4.02 or Section 4.03 or the waiver of any Default or mandatory prepayment shall not constitute an increase of any Commitment of any Lender, but that any waiver of any condition set forth in Section 4.03 following the Closing Date shall require the consent of the Required Facility Lenders with respect to the Facility under which an extension of credit is to be made, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest or premium thereon, or reduce any fees payable hereunder, without the written consent of each Lender and Issuing Bank directly and adversely affected thereby, it being understood that any change to the definition of “Consolidated Leverage Ratio” or in the component definitions thereof shall not constitute a reduction in the rate; provided that only the consent of the Required Lenders shall be necessary to amend Section 2.12(d) or to waive any obligation of the Borrowers to pay interest at the rate set forth therein, (iii) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender and Issuing Bank directly and adversely affected thereby, it being understood that the waiver of (or amendment to the terms of) any mandatory prepayment of the Term Loans shall not constitute a postponement of any date scheduled for the payment of principal or interest, (iv) change Section 2.17(b) or (c), or the provisions of Article VII, in each case, with respect to the pro rata application of payments required thereby, without the written consent of each adversely affected Lender and each adversely affected Issuing Bank, (v) change any of the provisions of this Section or the definition of “Required Lenders,” “Required Revolving Lenders,” “Required Facility Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder without the written consent of each Lender directly and adversely affected thereby, (vi) release all or substantially all of the Guarantors from their obligations under the applicable Guaranty and Collateral Documents without the written consent of each Lender (except in a transaction permitted hereunder); provided that during a Covenant Suspension Period, (x) the Administrative Agent may release all or substantially all of the Guarantors (other than the Parent Entity), without the consent of any Lender and (y) the Required Lenders may waive or amend any requirement to reinstate the guarantee obligations of released Guarantors in the
 
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future, or (vii) release all or substantially all of the Collateral from the Lien of the Collateral Documents, without the written consent of each Lender; provided that during a Collateral Suspension Period, (x) the Administrative Agent may release all or substantially all of the of the Collateral from any Lien granted to or held by the Administrative Agent under the Collateral Documents, without the consent of any Lender and (y) the Required Lenders may waive or amend any requirement to reinstate Collateral in the future; provided further that no such agreement shall amend, modify or otherwise affect the rights, obligations or duties of the Administrative Agent, any Issuing Bank or the Swingline Lender hereunder without the prior written consent of the Administrative Agent, the relevant Issuing Bank or the Swingline Lender, as the case may be.
Notwithstanding the foregoing, this Agreement and the other Loan Documents may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrowers (i) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Term Loans and Revolving Exposures and the accrued interest and fees in respect thereof and (ii) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders.
In addition, notwithstanding the foregoing, this Agreement and the other Loan Documents may be amended with the written consent of the Administrative Agent, the Borrowers and the Lenders providing the Replacement Term Loans (as defined below) to permit the refinancing of all outstanding Term Loans of any Class (“ Refinanced Term Loans ”) with a replacement term loan tranche (“ Replacement Term Loans ”) hereunder; provided that (a) the aggregate principal amount of such Replacement Term Loans shall not exceed the aggregate principal amount (or accreted value, if applicable) of such Refinanced Term Loans except by an amount equal to unpaid accrued interest and premium thereon plus other reasonable amounts paid, and fees and expenses reasonably incurred, in connection with such refinancing, (b) the Weighted Average Life to Maturity of such Replacement Term Loans shall not be shorter than the Weighted Average Life to Maturity of such Refinanced Term Loans at the time of such refinancing (except to the extent of nominal amortization for periods where amortization has been eliminated as a result of prepayment of the Term Loans) and (c) all other terms applicable to such Replacement Term Loans (other than pricing, interest rate margins, rate floors, discounts, premiums, fees, and optional prepayment or optional redemption terms and provisions, all of which shall be determined by the Borrower Agent) shall be substantially identical to, or less favorable to the Lenders providing such Replacement Term Loans than, those applicable to such Refinanced Term Loans, except to the extent necessary to provide for covenants and other terms applicable to any period after the latest final maturity of the Term Loans in effect immediately prior to such refinancing or added to this Agreement for the benefit of the Lenders hereunder (it being understood that no consent shall be required by Lenders for terms or conditions that are more restrictive than this Agreement if such terms or conditions are added to this Agreement); provided that the requirements set forth in clause (b) above shall not apply to any Indebtedness consisting of a customary bridge facility so long as such bridge facility automatically converts into long-term Indebtedness that satisfies the requirements of such clause (b).
In addition, notwithstanding the foregoing, this Agreement and the other Loan Documents may be amended with the written consent of the Administrative Agent, the Borrowers and the Lenders providing the Replacement Revolving Loans (as defined below) to permit the refinancing of all outstanding Revolving Loans of any Class (“ Refinanced Revolving Loans ”) with a replacement term loan tranche (“ R e placement Revolving Loans ”) hereunder; provided that (a) the aggregate principal amount of such Replacement Revolving Loans shall not exceed the aggregate principal amount (or accreted value, if applicable) of such Refinanced Revolving Loans except by an amount equal to unpaid accrued interest and premium thereon plus other reasonable amounts paid, and fees and expenses reasonably incurred, in connection with such refinancing, (b) the maturity date of any Replacement Revolving Loans shall be no
 
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earlier than the Revolving Credit Maturity Date and such Replacement Revolving Loans shall require no scheduled amortization or mandatory commitment reduction prior to the Revolving Credit Maturity Date, and (c) all other terms applicable to such Replacement Revolving Loans (other than pricing, interest rate margins, rate floors, discounts, premiums, fees, and optional prepayment or optional redemption terms and provisions, all of which shall be determined by the Borrower Agent) shall be substantially identical to, or less favorable to the Lenders providing such Replacement Revolving Loans than, those applicable to such Refinanced Revolving Loans, except to the extent necessary to provide for covenants and other terms applicable to any period after the latest final maturity of the Revolving Loans in effect immediately prior to such refinancing or added to this Agreement for the benefit of the Lenders hereunder (it being understood that no consent shall be required by Lenders for terms or conditions that are more restrictive than this Agreement if such terms or conditions are added to this Agreement).
Notwithstanding anything in this Section 9.02 to the contrary, (a) modifications to the Loan Documents may be made with the consent of the Borrower Agent and the Administrative Agent to the extent necessary or appropriate (i) to integrate any Incremental Term Loans, any Increased Commitments, any Extended Term Loans or any Extended Revolving Commitments; provided that, without limitation of the foregoing, any such amendment may, (x) increase the interest rates, fees and other amounts payable to any Class or Classes of Loans or Commitments hereunder, (y) increase, expand and/or extend any “most favored nation” provisions benefiting any Class or Classes of Loans or Commitments hereunder and (z) modify any other provision hereunder or under any other Loan Document in connection with the implementation of any Indebtedness permitted hereunder, where the terms of any such Indebtedness are more favorable to the lenders or holders thereof than the corresponding terms applicable to Loans and Commitments then existing hereunder, (ii) to integrate borrowings and issuances of Letters of Credit in Alternative Currencies or additional Borrowers organized in jurisdictions other than the United States, (iii) to cure any ambiguity, omission, defect or inconsistency and (iv) as contemplated by the definition of Permitted Foreign Borrower Jurisdiction and (b) without the consent of any Lender or any Issuing Bank, the Loan Parties and the Administrative Agent or any collateral agent may (in their respective sole discretion, or shall, to the extent required by any Loan Document) enter into (x) any amendment, modification or waiver of any Loan Document, or enter into any new agreement or instrument, to effect the granting, perfection, protection, expansion or enhancement of any security interest in any Collateral or additional property to become Collateral for the benefit of the Secured Parties or as required by local law to give effect to, or protect any security interest for benefit of the Secured Parties, in any property or so that the security interests therein comply with applicable law or this Agreement or in each case to otherwise enhance the rights or benefits of any Lender under any Loan Document and (y) any First Lien Intercreditor Agreement and/or Second Lien Intercreditor Agreement with the holders of Permitted Debt Securities (or any amendment or supplement thereto with respect to additional Permitted Debt Securities).
(c)    In addition, notwithstanding anything in this Agreement to the contrary, this Agreement may be amended after the Effective Date without consent of the Lenders, so long as no Event of Default shall have occurred and be continuing, as follows:
(i)    to designate (X) any Domestic Subsidiary of the Parent Entity that is a Restricted Subsidiary as a Domestic Subsidiary Borrower or (Y) the Parent Entity or any Subsidiary of the Parent Entity that is a Restricted Subsidiary, in each case, that is organized under the laws of a Permitted Foreign Borrower Jurisdiction as a Foreign Borrower, upon (A) ten Business Days (or such lesser period as may be agreed by the Administrative Agent) prior notice to the Administrative Agent (such notice to contain the name, primary business address and taxpayer identification number (or equivalent), if any, of such Subsidiary), (B) the execution and delivery by the Parent Entity or such Subsidiary, the Borrower Agent and the Administrative Agent of a Joinder Agreement, substantially in the form of Exhibit  J (each, a “ Joinder Agreement ”), providing for the Parent Entity or such Subsidiary to become a Domestic Subsidiary Borrower or Foreign Borrower, as
 
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applicable, (C) the agreement and acknowledgement by the Parent Entity and each other Guarantor that the Guaranty covers the Obligations of such additional Borrower, (D) the delivery to the Administrative Agent of corporate or other applicable resolutions, other corporate or other applicable documents, certificates and legal opinions in respect of such Parent Entity or Subsidiary reasonably equivalent to comparable documents delivered on the Effective Date and the Closing Date and (E) the delivery to the Administrative Agent of any documentation or other information reasonably requested by the Administrative Agent and necessary to satisfy obligations of the Lenders described in Section 9.13 or any applicable “know your customer” or other anti-money laundering Laws; and
(ii)    to remove the Parent Entity or any Subsidiary (other than the U.S. Parent Borrower) as a Borrower upon (A) execution and delivery by the Parent Entity and the Borrower Agent to the Administrative Agent of a written notification to such effect, (B) repayment in full of all Loans made to such Borrower, (C) repayment in full of all other amounts owing by such Borrower under this Agreement and the other Loan Documents and (D) the deposit in a cash collateral account opened by the Administrative Agent of an amount equal to the aggregate then undrawn and unexpired amount of all Letters of Credit issued for the account of such Borrower (calculated, in the case of Letters of Credit denominated in Alternative Currencies, at the Dollar Equivalent thereof on the date of removal) (it being agreed that any such repayment shall be in accordance with the other terms of this Agreement).
SECTION 9.03.     Expenses; Indemnity; Damage Waiver .
(a)    The Borrowers shall pay (i) all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent, the Arrangers and their Affiliates, limited, in the case of legal expenses, to the reasonable and documented fees, charges and disbursements of a single counsel for the Arrangers and the Administrative Agent (and, if necessary, one local counsel in each applicable jurisdiction and regulatory counsel), in connection with the syndication of the credit facilities provided for herein, the preparation and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable and documented out-of-pocket expenses incurred by the relevant Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent, any Issuing Bank or any Lender, limited, in the case of legal expenses, to the reasonable and documented fees, charges and disbursements of a single counsel (and, if necessary, one local counsel in each applicable jurisdiction and regulatory counsel), in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such reasonable and documented out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit. For the avoidance of doubt, this Section 9.03(a) shall not apply to Taxes, except any Taxes that represent losses, claims, damages or liabilities arising from any non-Tax claim.
(b)    The Borrowers shall indemnify, on a joint and several basis, each Agent, each Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related reasonable and documented out-of-pocket expenses, limited, in the case of legal expenses, to the reasonable and documented fees, charges and disbursements of a single counsel for the Indemnitees (and, if necessary, one local counsel in each applicable jurisdiction and one additional counsel for each Indemnitee in the event of conflicts of interest), incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this
 
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Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby and the syndication of the Revolving Commitments and Term Loans by the Arrangers, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by any Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) to the extent relating to or arising from any of the foregoing, any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Parent Entity or any of its Restricted Subsidiaries, or any Environmental Liability related in any way to the Parent Entity or any of its Restricted Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (i) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnitee or any of its officers, directors, employees, Affiliates or controlling Persons or (ii) except in the case of any Agent (in its capacity as such), arise from disputes solely among Indemnitees and do not involve any conduct by the Borrowers or any of their respective Affiliates. For the avoidance of doubt, this Section 9.03(b) shall not apply to Taxes, except any Taxes that represent losses, claims, damages or liabilities arising from any non-Tax claim.
(c)    To the extent that a Borrower fails to pay any amount required to be paid by it to the Administrative Agent, an Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, the relevant Issuing Bank or the Swingline Lender, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, such Issuing Bank or the Swingline Lender in its capacity as such.
(d)    To the extent permitted by applicable law, no party hereto shall assert, and each other party hereby waives, any claim against any party, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof; provided that this sentence shall not limit the Borrowers’ indemnification obligations set forth above to the extent the relevant special, indirect, consequential or punitive damages are included in any third party claim in connection with which the relevant Indemnitee is entitled to indemnification hereunder. No Indemnitee referred to in paragraph (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby except to the extent resulting from its or its Related Parties’ gross negligence, bad faith or willful misconduct.
(e)    All amounts due under this Section shall be payable not later than fifteen (15) days after written demand therefor; provided , however , that an Indemnitee shall promptly refund any amount received under this Section 9.03 to the extent that there is a final judicial or arbitral determination that such Indemnitee was not entitled to indemnification rights with respect to such payment pursuant to the express terms of this Section 9.03.
 
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SECTION 9.04.     Successors and Assigns .
(a)    The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) except as expressly permitted hereunder, no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by a Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Banks and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b)    (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Persons that is an Eligible Assignee (other than any Borrower, their respective Affiliates and natural persons) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:
(A)    to the extent required by the definition of “Eligible Assignee,” the Borrower Agent; provided that the Borrower Agent shall be deemed to have consented to an assignment unless it shall have objected thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof; provided further that no consent of the Parent Entity shall be required for (i) an assignment of a Term Loan to a Lender, an Affiliate of a Lender, or Approved Fund, (ii) an assignment of a Revolving Commitment to a Revolving Lender or an Affiliate of a Revolving Lender or (iii) if a Specified Event of Default has occurred and is continuing, any other assignment;
(B)    to the extent required by the definition of “Eligible Assignee,” the Administrative Agent; and
(C)    to the extent required by the definition of “Eligible Assignee,” the Issuing Banks and Swingline Lender; provided that no consent of any Issuing Bank or Swingline Lender shall be required for an assignment of all or any portion of a Term Loan.
(ii)    Assignments shall be subject to the following additional conditions:
(A)    except in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 or, in the case of a Term Loan, $1,000,000, unless each of the Borrower Agent and the Administrative Agent otherwise consent;
(B)    each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement, provided that this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender’s rights and obligations in respect of one Class of Commitments or Loans;
 
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(C)    the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500;
(D)    the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and
(E)    subject to Section 2.10(c), the assignee shall not be (i) a Borrower or any of the Borrowers’ Affiliates or Subsidiaries, (ii) a Defaulting Lender or (iii) a natural person.
For the purposes of this Section 9.04(b) and the definition of “Eligible Assignee,” the term “Approved Fund” has the following meaning:
“ Approved Fund ” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
(iii)    Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 9.03 with respect to facts and circumstances occurring prior to the effective date of such assignment). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.
(iv)    The Administrative Agent, acting for this purpose as an agent of each Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount (and related interest amounts) of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive, absent manifest error, and the Borrowers, the Administrative Agent, the Issuing Banks and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by any Borrower, any Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(v)    Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in clause (ii)(C) of this Section 9.04(b) and any written consent to such assignment required by this paragraph (b), the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.17(d) or 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
 
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(c)    (i) Any Lender may, without the consent of or notice to the Borrowers, the Administrative Agent, the Issuing Banks or the Swingline Lender, sell participations to one or more banks or other entities that would meet the requirements of an “Eligible Assignee” (other than with respect to any required consents and other than any person that, at the time of such participation, is (I) a Defaulting Lender or (II) the Borrowers or any of their Subsidiaries or any of their respective Affiliates (a “ Participant ”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrowers, the Administrative Agent, the Issuing Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and the other Loan Documents and to approve any amendment, modification or waiver of any provision of this Agreement or the other Loan Documents; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that directly affects such Participant. Subject to paragraph (c)(iii) of this Section, the Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 (subject to the requirements and limitations of such Sections (it being agreed that any documentation required to be provided pursuant to Section 2.16(e) shall be provided solely to the participating Lender) and Section 2.18) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.16(c) as though it were a Lender.
(ii)    Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of each Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and related interest amounts) of each participant’s interest in the Loans or other obligations under this Agreement (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any participant or any information relating to a participant’s interest in any Commitments, Loans or its other obligations under this Agreement) except to the extent that the relevant parties, acting reasonably and in good faith, determine that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. Unless otherwise required by the IRS, any disclosure required by the foregoing sentence shall be made by the relevant Lender directly and solely to the IRS. The entries in the Participant Register shall be conclusive absent manifest error, and each Borrower, the Administrative Agent and each Lender shall treat each person whose name is recorded in the Participant Register as the owner of the participation in question for all purposes of this Agreement notwithstanding any notice to the contrary.
(iii)    A Participant shall not be entitled to receive any greater payment under Section 2.14, 2.15 or 2.16 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, except to the extent that (i) such entitlement to a greater payment results from a change in any Law after the sale of the participation takes place and (ii) the participating Lender notifies the Borrower of such participation no later than one hundred twenty (120) days after such Change in Law becomes effective.
 
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(iv)    Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank or a central bank having jurisdiction over it, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
(v)    Notwithstanding any other provision of this Agreement, no Lender will assign its rights and obligations under this Agreement, or sell participations in its rights and/or obligations under this Agreement, to any Person who is (i) listed on the Specially Designated Nationals and Blocked Persons List maintained by the U.S. Department of Treasury Office of Foreign Assets Control (“ OFAC ”) and/or on any other similar list maintained by OFAC pursuant to any authorizing statute, executive order or regulation or (ii) either (A) included within the term “designated national” as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515 or (B) designated under Sections 1(a), 1(b), 1(c) or 1(d) of Executive Order No. 13224, 66 Fed. Reg. 49079 (published September 25, 2001) or similarly designated under any related enabling legislation or any other similar executive orders.
SECTION 9.05.     Survival . All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, any Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any other Loan Document or any provision hereof or thereof.
SECTION 9.06.     Counterparts; Integrat i on; Effectiveness ; Effect of Restatement . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or pdf shall be effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07.     Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
 
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SECTION 9.08.     Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final and in whatever currency denominated) at any time held and other obligations (in whatever currency) at any time owing by such Lender or Affiliate to or for the credit or the account of any Borrower against any of and all the Obligations of such Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured; provided that, in the case of any deposits or other obligations for the credit or the account of any Foreign Subsidiary, such setoff may only be against any Obligations of Foreign Subsidiaries. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have. Each Lender and its Affiliates agrees to notify the Borrower Agent and the Administrative Agent promptly after any such setoff and application, provided , that the failure to give such notice shall not affect the validity of such setoff and application.
SECTION 9.09.     Governing Law; Jurisdiction; Consent to Service of Process .
(a)    This Agreement shall be construed in accordance with and governed by the law of the State of New York (without regard to the conflict of law principles thereof to the extent that the application of the laws of another jurisdiction would be required thereby).
(b)    Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding shall be heard and determined in such New York State or, to the extent permitted by law, in such Federal court except that nothing in this Section 9.09 shall limit the ability of the Administrative Agent to enforce the provisions of any Loan Document against any Loan Party in any other jurisdiction. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. The foregoing shall not affect any right that any party hereto may otherwise have to bring any action or proceeding relating to this Agreement against any other party or its properties in the courts of any jurisdiction.
(c)    Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d)    Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law. Each Borrower that is not organized under the laws of any state of the United States or the District of Columbia hereby irrevocably designates, appoints and empowers the U.S. Parent Borrower, in the case of any suit, action or proceeding brought in the United States of America, as its designee, appointee and agent to
 
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receive, accept and acknowledge for and on its behalf, and in respect of its property, service of any and all legal process, summons, notices and documents that may be served in any action or proceeding arising out of, or in connection with, this Agreement or any other Loan Document. Such service may be made by mailing (by registered or certified mail, postage prepaid) of copies of such process to the U.S. Parent Borrower at the U.S. Parent Borrower’s address specified in Section 9.01 or at such other address as the U.S. Parent Borrower may specify pursuant to Section 9.01.
SECTION 9.10.     WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11.     Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 9.12.     Confidentiality . Each of the Administrative Agent, the Issuing Banks and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, partners, members, employees, managers, administrators, trustees and agents, including accountants, legal counsel and other advisors solely for the purpose of, or otherwise directly in connection with this Agreement (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential pursuant to the terms hereof), (b) to the extent requested or required by any Governmental Authority or by the National Association of Insurance Commissioners or any representative thereof, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process ( provided , however , that, to the extent practicable and permitted by law, the Borrower Agent has been notified prior to such disclosure so that the Borrower Agent may seek, at the Borrower Agent’s sole expense, a protective order or other appropriate remedy), (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder ( provided , however , to the extent practicable and permitted by law, the Borrower Agent is notified prior to such disclosure so that the Borrower Agent may seek, at the Borrower Agent’s sole expense, a protective order or other appropriate remedy), (f) subject to an agreement for the benefit of the Borrowers containing provisions at least as restrictive as those of this Section, to (i) any assignee or any prospective assignee of any of its rights or obligations under this Agreement (and to any Participant or prospective Participant in any of its rights or obligations under this Agreement) so long as such Lender believes such assignee, Participant or prospective assignee or Participant is, or will be, an Eligible Assignee or (ii) any direct or indirect actual or prospective party (or its managers, administrators, trustees, partners, directors, officers, employees, agents, advisors and other representatives) to any swap or derivative, credit insurance or similar transaction under which payments are to be made by reference to the Borrowers and their obligations, this Agreement or payments hereunder, (g) with the consent of the Borrower Agent or (h) to any ratings agency or the CUSIP Bureau or any similar organization or to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or, to the
 
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knowledge of such disclosing person, as a result of a breach of a confidentiality agreement with any other Person or (ii) that is or becomes available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other than the Parent Entity or any Borrower not in violation of any obligation of confidentiality. For the purposes of this Section, “ Information ” means all information received from the Parent Entity or any Borrower relating to the Parent Entity and its Subsidiaries and their respective businesses, other than any such information that is publicly available (other than as a result of a breach of this Section) to the Administrative Agent, any Issuing Bank or any Lender prior to disclosure by the Parent Entity or such Borrower.
EACH LENDER ACKNOWLEDGES THAT INFORMATION FURNISHED TO IT PURSUANT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWERS, THE OTHER LOAN PARTIES AND THEIR AFFILIATES AND RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED CUSTOMARY PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION INTENDED TO COMPLY WITH APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS, AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH SUCH CUSTOMARY PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS. NOTHING IN THE FOREGOING SHALL PREVENT ANY LENDER FROM DISCLOSING INFORMATION TO THE EXTENT PERMITTED BY THE IMMEDIATELY PRECEDING PARAGRAPH.
SECTION 9.13.     USA PATRIOT Act . Each Lender that is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Act ”) hereby notifies each Loan Party that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the Act.
SECTION 9.14.     Interest Rate Limitation . Notwithstanding anything to the contrary contained in any Loan Document, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable Law (collectively the “ Charges ”), shall exceed the maximum lawful rate (the “ Maximum Rate ”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable Law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.
SECTION 9.15.     No Fiduciary Duty . In connection with all aspects of each transaction contemplated by this Agreement, each Borrower acknowledges and agrees, and acknowledges the other Loan Parties’ understanding, that (i) each transaction contemplated by this Agreement is an arm’s-length commercial transaction, between the Loan Parties, on the one hand, and the Agents and the Lenders, on the other hand, (ii) in connection with each such transaction and the process leading thereto, the Agents and the Lenders will act solely as principals and not as agents or fiduciaries of the Loan Parties or any of their stockholders, affiliates, creditors, employees or any other party, (iii) neither any Agent nor any Lender will assume an advisory or fiduciary responsibility in favor of any Borrower or any of their respective Affiliates with respect to any of the transactions contemplated hereby or the process leading thereto
 
-139-

(irrespective of whether the Agents or any Lender has advised or is currently advising any Loan Party on other matters) and neither any Agent nor any Lender will have any obligation to any Loan Party or any of its Affiliates with respect to the transactions contemplated in this Agreement except the obligations expressly set forth herein, (iv) each Agent and each Lender may be engaged in a broad range of transactions that involve interests that differ from those of the Loan Parties and their affiliates, and (v) neither any Agent nor any Lender has provided or will provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby and the Loan Parties have consulted and will consult their own legal, accounting, regulatory, and tax advisors to the extent it deems appropriate. The matters set forth in this Agreement and the other Loan Documents reflect an arm’s-length commercial transaction between the Loan Parties, on the one hand, and the Agents and the Lenders, on the other hand. The Borrowers agree that the Loan Parties shall not assert any claims against any Agent or any Lender based on any breach or alleged breach of fiduciary duty.
 
-140-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

DELPHI POWERTRAIN CORPORATION, as U.S. Parent Borrower	
		
By:	 	/s/ David M. Sherbin	
	 	Name: David M. Sherbin	
	 	Title:   Vice President, General Counsel and Secretary	
	
DELPHI JERSEY HOLDINGS PLC, as Parent	
		
By:	 	/s/ David M. Sherbin	
	 	Name: David M. Sherbin	
	 	Title:   President and Secretary	

			
JPMORGAN CHASE BANK, N.A., individually as a Lender, as the Swingline Lender, as the Issuing Bank and as Administrative Agent	
		
By:	 	/s/ Robert D. Bryant	
	 	Name: Robert D. Bryant	
	 	Title:   Executive Director	
	
BARCLAYS BANK PLC, as Lender and Issuing Bank	
		
By:	 	/s/ Craig Malloy	
	 	Name: Craig Malloy	
	 	Title:   Director	
	
GOLDMAN SACHS BANK USA, as Lender and Issuing Bank	
		
By:	 	/s/ Ryan Durkin	
	 	Name: Ryan Durkin	
	 	Title:   Authorized Signatory	
	
BANK OF AMERICA, N.A., as Lender and an Issuing Bank	
		
By:	 	/s/ Brian Lukehart	
	 	Name: Brian Lukehart	
	 	Title:   Director	
	
BANK OF AMERICA, N.A., Canada Branch, as Lender	
		
By:	 	/s/ Medina Sales de Andrade	
	 	Name: Medina Sales de Andrade	
	 	Title:   Vice President	
	
CITIBANK, N.A., as Lender and Issuing Bank	
		
By:	 	/s/ Tim Jones	
	 	Name: Tim Jones	
	 	Title:   Vice President	

			
DEUTSCHE BANK AG NEW YORK BRANCH, as Lender and Issuing Bank	
		
By:	 	/s/ Marcus Tarkington	
	 	Name: Marcus Tarkington	
	 	Title:   Director	
		
By:	 	/s/ Dusan Lazarov	
	 	Name: Dusan Lazarov	
	 	Title:   Director	

 

			
SUMITOMO MITSUI BANKING CORPORATION, as Lender	
		
By:	 	/s/ Katsuyuki Kubo	
	 	 
Name: Katsuyuki Kubo	
	 	Title:   Managing Director	
 
[Signature Page to Credit Agreement]

			
BNP Paribas, as Lender	
		
By:	 	/s/ Nader Tannous	
	 	 
Name: Nader Tannous	
	 	Title:   Managing Director	
		
By:	 	/s/ Tony Baratta	
	 	 
Name: Tony Baratta	
	 	Title:   Managing Director	
 
[Signature Page to Credit Agreement]

					
The Toronto-Dominion Bank, New York Branch, as Lender	
		
By:	 	/s/ Savo Bozic	
	 	 
Name: Savo Bozic	
	 	Title:   Authorized Signatory	
[Signature Page to Credit Agreement]

					
UniCredit Bank AG, New York Branch, as Lender	
		
By:	 	/s/ Kelly Milton	
	 	 
Name: Kelly Milton	
	 	Title:   Director	
		
By:	 	/s/ Betsy Briggs	
	 	 
Name: Betsy Briggs	
	 	Title:   Associate Director	
[Signature Page to Credit Agreement]

					
SOCIETE GENERALE, as Lender	
		
By:	 	/s/ Nigel Elvey	
	 	 
Name: Nigel Elvey	
	 	Title:   Director	
[Signature Page to Credit Agreement]

					
The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Lender	
		
By:	 	/s/ Eric Hill	
	 	 
Name: Eric Hill	
	 	Title:   Authorized Signatory	
[Signature Page to Credit Agreement]

					
MORGAN STANLEY BANK, N.A., as Lender	
		
By:	 	/s/ Michael King	
	 	 
Name: Michael King	
	 	Title:   Authorized Signatory	
[Signature Page to Credit Agreement]

			
INTESA SANPAOLO S.P.A – NEW YORK BRANCH, as Lender	
		
By:	 	/s/ Francesco Calcara	
	 	 
Name: Francesco Calcara	
	 	Title:   VP – Relationship Manager	
		
By:	 	/s/ Francesco Di Mario	
	 	 
Name: Francesco Di Mario	
	 	Title:   FVP – Head of Credit	
[Signature Page to Credit Agreement]

			
U.S. BANK NATIONAL ASSOCIATION, as Lender	
		
By:	 	/s/ Jeffrey S. Johnson	
	 	 
Name: Jeffrey S. Johnson	
	 	Title: Senior Vice President	
[Signature Page to Credit Agreement]

					
Industrial & Commercial Bank of China (ICBC) New York Branch, as Lender	
		
By:	 	/s/ Christie Cai	
	 	 
Name: Christie Cai	
	 	Title:   Vice President	
		
By:	 	/s/ Day Lin	
	 	 
Name: Day Lin	
	 	Title:   Director	
[Signature Page to Credit Agreement]

					
Banco de Sabadell, S.A. – Miami Branch, as Lender	
		
By:	 	/s/ Maurici Llado	
	 	 
Name: Maurici Llado	
	 	Title:   Director	
[Signature Page to Credit Agreement]

 

EXHIBIT A
FORM OF ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the “ Assignment and Assumption ”) is dated as of the Effective Date set forth below and is entered into by and between [ Insert name of Assignor ] (the “ Assignor ”) and [ Insert name of Assignee ] (the “ Assignee ”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “ Credit Agreement ”), receipt of a copy of which is hereby acknowledged by the Assignee.The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit, guarantees, and swingline loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “ Assigned Interest ”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

1.	  	Assignor:	  	                                                     	
			
2.	  	Assignee:	  	                                                     	
	  		  	[and is an Eligible Assignee]	
			
3.	  	Borrower(s):	  	Delphi Jersey Holdings PLC, Delphi Powertrain Corporation and [Other Subsidiary Borrower[s]]                               	
			
4.	  	Administrative Agent:	  	JPMorgan Chase Bank, N.A., as Administrative Agent under the Credit Agreement	
 
A-1

					
5.	  	Credit Agreement:	  	The Credit Agreement, dated as of September 7, 2017 as may be amended, restated, supplemented or otherwise modified from time to time, among Delphi Jersey Holdings PLC, Delphi Powertrain Corporation, the Subsidiary Borrowers from time to time party thereto, the Lenders from time to time party thereto, the Issuing Banks from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent	
			
6.	  	Assigned Interest:	  		

Facility
Assigned	 	Aggregate Amount of
Commitment/Loans for all Lenders	 	Amount of Commitment/
Loans Assigned	 	Percentage Assigned of
Commitment/Loans 1	 	
Revolving Commitment	 	[$][€][£][CAD$]	 	[$][€][£][CAD$]	 	 	    	% 	
Tranche A Term Loans	 	$            	 	$            	 	 	    	% 	
Incremental Term Loans	 	$            	 	$            	 	 	    	% 	
Extended Term Loans	 	$            	 	$            	 	 	    	% 	
Extended Revolving Commitments	 	$            	 	$            	 	 	    	% 	
Effective Date:              , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR	
	
[NAME OF ASSIGNOR]	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
ASSIGNEE	
	
[NAME OF ASSIGNEE]	
		
By:	 	 	
	 	Name:	
	 	Title:	

1  	Set forth, so at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.	
 
A-2

			
Consented to and Accepted:	
	
JPMORGAN CHASE BANK, N.A, as Administrative Agent	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
[Consented to:] 2	
	
[[ISSUING BANK], as Issuing Bank	
		
By:	 	 	
	 	Name:	
	 	Title:]	
	
[DELPHI JERSEY HOLDINGS PLC	
		
By:	 	 	
	 	Name:	
	 	Title:]	

2  	To be added only if the consent of an Issuing Bank or the Parent, as applicable, is required by the terms of the Credit Agreement.	
 
A-3

ANNEX I
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION 3
1. Representations and Warranties .
1.1 Assignor . The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Company, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Company, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2. Assignee . The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section  5.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

3	Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement dated as of September 7, 2017 and as may be amended, restated, supplemented or otherwise modified from time to time, among Delphi Jersey Holdings PLC, Delphi Powertrain Corporation, the Subsidiary Borrowers from time to time party thereto, the Lenders from time to time party thereto, the Issuing Banks from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.	
 
A-I-1

2. Payments . From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3. General Provisions . This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and permitted assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy or by electronic transmission such as a .pdf shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.
 
A-I-2

EXHIBIT B-1
FORM OF BORROWING REQUEST
JPMorgan Chase Bank, N.A.,
as Administrative Agent for the Lenders referred to below,
Loan and Agency Services Group
500 Stanton Christiana Road, Ops 2
Newark, DE 19713-2107
Attention: [                    ]
Telecopy No. [                    ]
Email: [                    ]
 
 	Re:	Delphi Jersey Holdings PLC	
[Date]
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of September 7, 2017 (as may be amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Delphi Jersey Holdings PLC (the “ Company ”), Delphi Powertrain Corporation, the Subsidiary Borrowers from time to time thereto, the Lenders from time to time party thereto, the Issuing Banks from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. The Company hereby gives you notice pursuant to Section  2.03 of the Credit Agreement that it requests on its behalf a Borrowing under the Credit Agreement, and in connection therewith sets forth below the terms on which such Borrowing is requested to be made:

(A)	  	Identity of Borrower	  	                    	
			
(B)	  	Aggregate principal amount and currency of Borrowing	  	[$][€][£][CAD$]                     	
			
(C)	  	Class of Borrowing	  	                    	
			
(D)	  	Date of Borrowing (which is a Business Day)	  	                    	
			
(E)	  	Type of Borrowing	  	[ABR] [Eurocurrency] [Canadian Prime Rate] [BA Drawing] Borrowing	
 
B-1-1

					
(E)	  	[Interest Period and the last day thereof (which shall be subject to the definition of “Interest Period” in the Credit Agreement)] 4 [Contract Period (which shall be subject to the definition of “Contract Period” in the Credit Agreement] 5	  	                    	
		
(F)	  	Funds are requested to be disbursed to Company to [location/number of account].	

4	To be included in the case of a Eurocurrency Borrowing.	
5	To be included in the case of BA Drawings.	
 
B-1-2

The undersigned hereby represents and warrants to the Administrative Agent and the Lenders that the conditions to lending specified in Sections 4.02 and 4.03 of the Credit Agreement will be satisfied as of the date of the Borrowing set forth above.

DELPHI JERSEY HOLDINGS PLC	
		
By:	 	                     	
	 	Name:	
	 	Title:	
 
B-1-3

EXHIBIT B-2
FORM OF INTEREST ELECTION REQUEST
JPMorgan Chase Bank, N.A.,
as Administrative Agent for the Lenders referred to below,
Loan and Agency Services Group
500 Stanton Christiana Road, Ops 2
Newark, DE 19713-2107
Attention: [                    ]
Telecopy No. [                    ]
Email: [                    ]
 
 	Re:	Delphi Jersey Holdings PLC	
[Date]
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of September 7, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Delphi Jersey Holdings PLC (the “ Company ”), Delphi Powertrain Corporation, the Subsidiary Borrowers from time to time thereto, the Lenders from time to time party thereto, the Issuing Banks from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. The Company hereby gives you notice pursuant to Section  2.07 of the Credit Agreement that it requests to [convert][continue] an existing Borrowing under the Credit Agreement, and in connection therewith sets forth below the terms on which such Borrowing is requested to be [converted][continued]:

(A)	  	List date, Facility, Class, Type, principal amount, currency and [Interest Period] 6 [Contract Period] 7 of existing Borrowing 8	  	                    	
			
(B)	  	Aggregate principal amount of resulting Borrowing	  	$             	
			
(C)	  	Effective Date of interest election (which is a Business Day)	  	                    	

6  	To be included in the case of Eurocurrency Borrowings.	
7  	To be included in the case of BA Drawings.	
8  	The Parent may elect to convert initial Borrowings to a different Type, to convert BA Drawings to Canadian Prime Rate Loans, to convert Canadian Prime Rate Loans into BA Drawings or to continue such Borrowing. The Parent may not elect to convert any Borrowing denominated in an Alternative Currency to an ABR Borrowing and may not change the currency in which any Borrowing is denominated.	
 
B-2-1

					
(D)	  	Type of Borrowing	  	[ABR] [Eurocurrency] [Canadian Prime Rate] [BA Drawing] Borrowing	
			
(E)	  	[Interest Period and the last day thereof (which shall be subject to the definition of “Interest Period” in the Credit Agreement)] 9 [Contract Period (which shall be subject to the definition of “Contract Period”)] 10	  	                    	

9  	To be included if the resulting Borrowing is a Eurocurrency Borrowing.	
10  	To be included if the resulting Borrowing is a BA Drawing.	
 
B-2-2

			
DELPHI JERSEY HOLDINGS PLC	
		
By:	 	                     	
	 	Name:	
	 	Title:	
 
B-2-3

EXHIBIT B-3
FORM OF LETTER OF CREDIT ISSUANCE REQUEST
JPMorgan Chase Bank, N.A.,
as Administrative Agent for the Lenders referred to below,
Loan and Agency Services Group
500 Stanton Christiana Road, Ops 2
Newark, DE 19713-2107
Attention: [                    ]
Telecopy No. 302-634-4250
Email: [                    ]
 
 	Re:	Delphi Jersey Holdings PLC	
[Date]
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of September 7, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Delphi Jersey Holdings PLC (the “ Company ”), Delphi Powertrain Corporation, the Subsidiary Borrowers from time to time thereto, the Lenders from time to time party thereto, the Issuing Banks from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. The Company hereby gives you notice pursuant to Section 2.05(b) of the Credit Agreement that it requests that the Issuing Bank issue a Letter of Credit under the Credit Agreement on behalf of [the Company] [specify applicable Subsidiary], and in connection therewith sets forth below the terms on which such Letter of Credit is requested to be issued:

(A)	  	Issuance date of such Letter of Credit (which shall be a Business Day)	  	                    	
			
(B)	  	Expiration date of such Letter of Credit 11	  	                    	
			
(C)	  	Amount and currency of such Letter of Credit	  	[$][€][£][CAD$]                      Letter of Credit	
			
(D)	  	Name/address of beneficiary of such Letter of Credit	  	                    	
			
(E)	  	[any other information required in connection with the issuance of such Letter of Credit]	  	                    	

11  	Such date to be in accordance with Section 2.05(c) of the Credit Agreement.	
 
B-3-1

The Company hereby represents and warrants that the conditions to lending specified in Sections 4.03 of the Credit Agreement are satisfied as of the date hereof.

DELPHI JERSEY HOLDINGS PLC	
		
By:	 	                     	
	 	Name:	
	 	Title:	
 
B-3-2

EXHIBIT B-4
FORM OF DISCOUNT NOTE

CAD $        	  		  	Date:                     	
FOR VALUE RECEIVED, the undersigned unconditionally promises to pay on             , 20    , to JPMorgan Chase Bank, N.A. (the “ Holder ”), the sum of CAD$ with no interest thereon.
The undersigned hereby waives presentment, protest and notice of every kind and waives any defenses based upon indulgences which may be granted by the Holder to any party liable hereon and any days of grace.
This promissory note evidences a BA Equivalent Loan, as defined in the Credit Agreement, dated as of September 7, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among DELPHI JERSEY HOLDINGS PLC, a public limited company incorporated under the laws of Jersey (the “ Parent ”), DELPHI POWERTRAIN CORPORATION, a Delaware corporation (the “ U.S. Parent Borrower ”), the Subsidiary Borrowers from time to time party thereto, the Lenders from time to time party thereto, the Issuing Banks from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “ Administrative Agent ”) and constitutes indebtedness to the Holder arising under the BA Equivalent Loan. Payment of this note shall be made at the offices of the Administrative Agent at 383 Madison Avenue, 24th Floor, New York, NY, 10179. Capitalized terms used and not defined herein have the meanings given to them in the Credit Agreement.

DELPHI JERSEY HOLDINGS PLC,
as Parent	
		
By:	 	                     	
	 	Name:	
	 	Title:	
 
B-4-1

EXHIBIT B-5
FORM OF SWINGLINE LOAN BORROWING REQUEST
JPMorgan Chase Bank, N.A,
as Administrative Agent for the Lenders referred to below,
Loan and Agency Services Group
500 Stanton Christiana Road, Ops 2
Newark, DE 19713-2107
Attention: [                    ]
Telecopy No. [                    ]
Email: [                    ]
 
 	Re:	Delphi Jersey Holdings PLC	
[Date]
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of September 7, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Delphi Jersey Holdings PLC (the “ Company ”), Delphi Powertrain Corporation, the Subsidiary Borrowers from time to time thereto, the Lenders from time to time party thereto, the Issuing Banks from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. The Company hereby gives you notice pursuant to Section  2.04(b) of the Credit Agreement that it requests a Swingline Loan Borrowing under the Credit Agreement, and in connection therewith sets forth below the terms on which such Swingline Loan Borrowing is requested to be made:

(A)	  	Aggregate principal amount of Borrowing	  	$                     	
			
(B)	  	Date of Borrowing (which is a Business Day)	  	                      	
			
(C)	  	Facility	  	Revolving Facility	
			
(D)	  	Funds are requested to be disbursed to: 12	  	                      	
The Company hereby represents and warrants that the conditions to lending specified in Section  4.03 of the Credit Agreement are satisfied as of the date hereof.

12  	Company to indicate whether such Swingline Loan Borrowing shall be made available to the Company by means of a credit to the general deposit account of the Parent with the Swingline Lender or remitted to the Issuing Bank if such Swingline Loan Borrowing is being requested to finance an LC Disbursement as provided in Section 2.05(e) of the Credit Agreement or, to the extent that the Applicable Participants have made payments pursuant to Section 2.05(e) of the Credit Agreement to reimburse the applicable Issuing Bank, to such Applicable Participants and such Issuing Bank as their interest may appear.	
 
B-5-1

			
DELPHI JERSEY HOLDINGS PLC	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
B-5-2

EXHIBIT C
FORM OF FIRST LIEN INTERCREDITOR AGREEMENT
[attached hereto]
 
ANNEX C-1

EXHIBIT C
FORM OF FIRST LIEN INTERCREDITOR AGREEMENT
Among
DELPHI POWERTRAIN CORPORATION,
DELPHI JERSEY HOLDINGS PLC,
[                    ],
the other Grantors party hereto,
JPMORGAN CHASE BANK, N.A.,
as Credit Agreement Agent for the Credit Agreement Secured Parties,
JPMORGAN CHASE BANK, N.A.,
as Authorized Representative for the Credit Agreement Secured Parties,
[                    ]
as the Additional Pari Debt Agent,
[                    ]
as the Initial Additional Authorized Representative,
and
each additional Authorized Representative from time to time party hereto
dated as of [            ], 20[    ]
 
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FIRST LIEN INTERCREDITOR AGREEMENT, dated as of [            ], 20[    ] (as amended, restated, amended and restated, extended, renewed, replaced, refinanced, supplemented or otherwise modified from time to time, this “ Agreement ”), among DELPHI JERSEY HOLDINGS PLC, a public limited company organized under the laws of Jersey (“ Parent ”), DELPHI POWERTRAIN CORPORATION, a Delaware corporation (the “ U.S. Parent Borrower ”), [the Subsidiary Borrowers (together with the U.S. Parent Borrower, the “ Borrowers ”),] 1 the other Grantors (as defined below) from time to time party hereto, JPMORGAN CHASE BANK, N.A. (“ JPMCB ”), as collateral agent for the Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Credit Agreement Agent ”), JPMCB, as Authorized Representative for the Credit Agreement Secured Parties (as each such term is defined below), [                    ], as collateral agent for the Additional Pari Debt Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Additional Pari Debt Agent ”), [                    ], as Authorized Representative for the Initial Additional Pari Debt Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Initial Additional Authorized Representative ”), and each additional Authorized Representative from time to time party hereto for the other Additional Pari Debt Secured Parties of the Series (as defined below) with respect to which it is acting in such capacity.
In consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Credit Agreement Agent (for itself and on behalf of the Credit Agreement Secured Parties), the Initial Additional Authorized Representative (for itself and on behalf of the Initial Additional Pari Debt Secured Parties) and each additional Authorized Representative (for itself and on behalf of the Additional Pari Debt Secured Parties of the applicable Series) agree as follows:
ARTICLE I
Definitions
SECTION 1.01 Certain Defined Terms . Capitalized terms used but not otherwise defined herein have the meanings set forth in the Credit Agreement or, if defined in the New York UCC, the meanings specified therein. As used in this Agreement, the following terms have the meanings specified below:
“ Additional Pari Debt Agent ” has the meaning assigned to such term in the introductory paragraph of this Agreement.
“ Additional Pari Debt Documents ” means, with respect to the Initial Additional Pari Debt Obligations or any Series of Additional Senior Class Debt and any Refinancing of such debt, the notes, indentures, security documents and other operative agreements evidencing or governing such indebtedness and liens securing such indebtedness, including the Initial Additional Pari Debt Documents and the Additional Pari Security Documents and each other agreement entered into for the purpose of securing the Initial Additional Pari Debt Obligations or any Series of Additional Senior Class Debt; provided that, in each case, the Indebtedness thereunder (other than the Initial Additional Pari Debt Obligations) has been designated as Additional Pari Debt Obligations pursuant to Section 5.13 hereto.

1  	Insert if applicable.	
 
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“ Additional Pari Debt Obligations ” means all amounts owing to any Additional Pari Debt Secured Party (including the Initial Additional Pari Debt Secured Parties) pursuant to the terms of any Pari Debt Document (including the Initial Additional Pari Debt Documents), including, without limitation, all amounts in respect of any principal, premium, interest (including any interest accruing subsequent to the commencement of an Insolvency or Liquidation Proceeding at the rate provided for in the respective Additional Pari Debt Document, whether or not such interest is an allowed claim under any such proceeding or under applicable state, federal or foreign law), penalties, fees, expenses, indemnifications, reimbursements, damages and other liabilities, and guarantees of the foregoing amounts.
“ Additional Pari Debt Secured Party ” means the holders of any Additional Pari Debt Obligations and any Authorized Representative with respect thereto, and shall include the Initial Additional Pari Debt Secured Parties.
“ Additional Pari Security Documents ” means any collateral agreement, security agreement or any other document now existing or entered into after the date hereof that create Liens on any assets or properties of any Grantor to secure the Additional Pari Debt Obligations.
“ Additional Senior Class  Debt ” has the meaning assigned to such term in Section 5.13.
“ Additional Senior Class  Debt Parties ” has the meaning assigned to such term in Section 5.13.
“ Additional Senior Class  Debt Representative ” has the meaning assigned to such term in Section 5.13.
“ Administrative Agent ” has the meaning assigned to such term in the definition of “Credit Agreement.”
“ Agreement ” has the meaning assigned to such term in the introductory paragraph of this Agreement.
“ Applicable Authorized Representative ” means, with respect to any Shared Collateral, (i) until the earlier of (x) the Discharge of Credit Agreement Debt and (y) the Non-Controlling Authorized Representative Enforcement Date, the Administrative Agent and (ii) from and after the earlier of (x) the Discharge of Credit Agreement Debt and (y) the Non-Controlling Authorized Representative Enforcement Date, the Major Non-Controlling Authorized Representative.
“ Applicable Collateral Agent ” means (i) until the earlier of (x) the Discharge of Credit Agreement Debt and (y) the Non-Controlling Authorized Representative Enforcement Date, the Credit Agreement Agent and (ii) from and after the earlier of (x) the Discharge of Credit Agreement Debt and (y) the Non-Controlling Authorized Representative Enforcement Date, the Additional Pari Debt Agent.
 
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“ Authorized Representative ” means, at any time, (i) in the case of any Credit Agreement Debt or the Credit Agreement Secured Parties, the Administrative Agent, (ii) in the case of the Initial Additional Pari Debt Obligations or the Initial Additional Pari Debt Secured Parties, the Initial Additional Authorized Representative, and (iii) in the case of any Additional Senior Class Debt or Additional Senior Class Debt Parties that become subject to this Agreement after the date hereof, the Additional Senior Debt Class Representative named as the “New Representative” for such Series in the applicable Joinder Agreement.
“ Bankruptcy Case ” has the meaning assigned to such term in Section 2.05(b).
“ Bankruptcy Code ” means Title 11 of the United States Code, as amended.
“ Bankruptcy Law ” means the Bankruptcy Code and any similar federal, state or foreign law for the relief of debtors.
“ Borrowers ” has the meaning assigned to such term in the introductory paragraph of this Agreement.
“ Collateral ” means all assets and properties subject to any Lien created pursuant to any Pari Debt Security Document to secure one or more Series of Pari Debt Obligations.
“ Collateral Agent ” means (i) in the case of any Credit Agreement Debt, the Credit Agreement Agent and (ii) in the case of the Additional Pari Debt Obligations, the Additional Pari Debt Agent.
“ Controlling Secured Parties ” means, with respect to any Shared Collateral, (i) at any time when the Credit Agreement Agent is the Applicable Collateral Agent, the Credit Agreement Secured Parties and (ii) at any other time, the Series of Pari Debt Secured Parties whose Authorized Representative is the Applicable Authorized Representative for such Shared Collateral.
“ Credit Agreement Agent ” has the meaning assigned to such term in the introductory paragraph of this Agreement.
“ Credit Agreement ” means that certain Credit Agreement, dated as of September 7, 2017 (as amended, restated, amended and restated, extended, renewed, replaced, refinanced, supplemented or otherwise modified in writing from time to time) among Parent, the U.S. Parent Borrower, the Subsidiary Borrowers, the Lenders from time to time party thereto, and JPMCB, as administrative agent (in such capacity and together with its successors in such capacity, the “ Administrative Agent ”), and the other parties thereto.
“ Credit Agreement Collateral Documents ” means the Credit Agreement Security Agreement, the other Collateral Documents (as defined in the Credit Agreement) and each other agreement entered into in favor of the Credit Agreement Agent for the purpose of securing any Credit Agreement Debt.
“ Credit Agreement Debt ” means all “Obligations” as defined in the Credit Agreement.
 
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“ Credit Agreement Secured Parties ” means the “Secured Parties” as defined in the Credit Agreement.
“ Credit Agreement Security Agreement ” that certain Pledge and Security Agreement, dated as of [            ], 2017, among Parent, the U.S. Parent Borrower, [the Subsidiary Borrowers,] the other Grantors party thereto and the Credit Agreement Agent, as amended, restated, amended and restated, extended, renewed, replaced, refinanced, supplemented or otherwise modified from time to time.
“ DIP Financing ” has the meaning assigned to such term in Section 2.05(b).
“ DIP Financing Liens ” has the meaning assigned to such term in Section 2.05(b).
“ DIP Lenders ” has the meaning assigned to such term in Section 2.05(b).
“ Discharge ” means, with respect to any Shared Collateral and any Series of Pari Debt Obligations, the date on which such Series of Pari Debt Obligations is no longer secured by such Shared Collateral pursuant to the terms of the documentation governing such Series of Pari Debt Obligations. The term “Discharged” shall have a corresponding meaning.
“ Discharge of Credit Agreement Debt ” means, with respect to any Shared Collateral, the Discharge of the Credit Agreement Debt with respect to such Shared Collateral; provided that the Discharge of Credit Agreement Debt shall not be deemed to have occurred in connection with a Refinancing of such Credit Agreement Debt with Additional Pari Debt Obligations secured by such Shared Collateral under an Additional Pari Debt Document which has been designated in writing by the Administrative Agent (under the Credit Agreement so Refinanced) to the Additional Pari Debt Agent and each other Authorized Representative as the “Credit Agreement” for purposes of this Agreement.
“ Event of Default ” means an “Event of Default” (or similarly defined term) as defined in any Secured Credit Document.
“ Grantors ” means the U.S. Parent Borrower, [the Subsidiary Borrowers,] Parent and each other Subsidiary of Parent that has granted a security interest pursuant to any Pari Debt Security Document to secure any Series of Pari Debt Obligations (including any Subsidiary that becomes a party to this Agreement as contemplated by Section 5.16). The Grantors existing on the date hereof are set forth in Annex I hereto.
“ Impairment ” has the meaning assigned to such term in Section 1.03.
“ Initial Additional Authorized Representative ” has the meaning assigned to such term in the introductory paragraph of this Agreement.
“ Initial Additional Pari Agreement ” mean that certain [Indenture] [Other Agreement], dated as of [                    ], among [the Borrowers], [the Guarantors identified therein] and [                    ], as [trustee], as amended, restated, amended and restated, extended, supplemented, Refinanced or otherwise modified from time to time.
 
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“ Initial Additional Pari Debt Documents ” means the Initial Additional Pari Agreement, the debt securities issued thereunder, the Initial Additional Pari Security Agreement and any security documents and other operative agreements evidencing or governing the Indebtedness thereunder, and the Liens securing such Indebtedness, including any agreement entered into for the purpose of securing the Initial Additional Pari Debt Obligations.
“ Initial Additional Pari Debt Obligations ” means the [“Obligations”] as such term is defined in the Initial Additional Pari Security Agreement.
“ Initial Additional Pari Debt Secured Parties ” means the Additional Pari Debt Agent, the Initial Additional Authorized Representative and the holders of the Initial Additional Pari Debt Obligations issued pursuant to the Initial Additional Pari Agreement.
“ Initial Additional Pari Security Agreement ” means the [security agreement], dated as of the date hereof, among [the Borrowers], the Additional Pari Debt Agent and the other parties thereto, as amended, restated, amended and restated, extended, supplemented or otherwise modified from time to time.
“ Insolvency or Liquidation Proceeding ” means:
(1) any case or proceeding commenced by or against a Borrower or any other Grantor under any Bankruptcy Law, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of a Borrower or any other Grantor, any receivership or assignment for the benefit of creditors relating to a Borrower or any other Grantor or any similar case or proceeding relative to a Borrower or any other Grantor or its creditors, as such, in each case whether or not voluntary;
(2) any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to a Borrower or any other Grantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or
(3) any other proceeding of any type or nature in which substantially all claims of creditors of a Borrower or any other Grantor are determined and any payment or distribution is or may be made on account of such claims.
“ Intervening Creditor ” has the meaning assigned to such term in Section 2.01(a).
“ Joinder Agreement ” means a joinder to this Agreement in the form of Annex II hereto required to be delivered by an Authorized Representative to each Collateral Agent and each Authorized Representative pursuant to Section 5.13 hereof in order to establish an additional Series of Additional Pari Debt Obligations and add Additional Pari Debt Secured Parties hereunder.
“ JPMCB ” has the meaning assigned to such term in the introductory paragraph of this Agreement.
“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge, trust (deemed or statutory) or security interest in, on or of
 
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such asset, whether or not filed, recorded or otherwise perfected under applicable law, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities; provided that in no event shall an operating lease be deemed to be a Lien.
“ Major Non-Controlling Authorized Representative ” means, with respect to any Shared Collateral, the Authorized Representative of the Series of Additional Pari Debt Obligations that constitutes the largest outstanding principal amount of any then outstanding Series of Pari Debt Obligations with respect to such Shared Collateral.
“ New York UCC ” means the Uniform Commercial Code as from time to time in effect in the State of New York.
“ Non-Controlling Authorized Representative ” means, at any time with respect to any Shared Collateral, any Authorized Representative that is not the Applicable Authorized Representative at such time with respect to such Shared Collateral.
“ Non-Controlling Authorized Representative Enforcement Date ” means, with respect to any Non-Controlling Authorized Representative, the date which is 90 days (throughout which 90-day period such Non-Controlling Authorized Representative was the Major Non-Controlling Authorized Representative) after the occurrence of both (i) an Event of Default (under and as defined in the Additional Pari Debt Document under which such Non-Controlling Authorized Representative is the Authorized Representative) and (ii) each Collateral Agent’s and each other Authorized Representative’s receipt of written notice from such Non-Controlling Authorized Representative certifying that (x) such Non-Controlling Authorized Representative is the Major Non-Controlling Authorized Representative and that an Event of Default (under and as defined in the Additional Pari Debt Document under which such Non-Controlling Authorized Representative is the Authorized Representative) has occurred and is continuing and (y) the Additional Pari Debt Obligations of the Series with respect to which such Non-Controlling Authorized Representative is the Authorized Representative are currently due and payable in full (whether as a result of acceleration thereof or otherwise) in accordance with the terms of the applicable Additional Pari Debt Document; provided that the Non-Controlling Authorized Representative Enforcement Date shall be stayed and shall not occur and shall be deemed not to have occurred with respect to any Shared Collateral (1) at any time the Administrative Agent or the Credit Agreement Agent has commenced and is diligently pursuing any enforcement action with respect to such Shared Collateral or (2) at any time the Grantor that has granted a security interest in such Shared Collateral is then a debtor under or with respect to (or otherwise subject to) any Insolvency or Liquidation Proceeding.
“ Non-Controlling Secured Parties ” means, with respect to any Shared Collateral, the Pari Debt Secured Parties which are not Controlling Secured Parties with respect to such Shared Collateral.
“ Pari Debt Documents ” means, collectively, (i) the Credit Agreement and Credit Agreement Collateral Documents and (ii) the Additional Pari Debt Documents.
 
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“ Pari Debt Obligations ” means, collectively, (i) the Credit Agreement Debt and (ii) each Series of Additional Pari Debt Obligations.
“ Pari Debt Secured Parties ” means (i) the Credit Agreement Secured Parties and (ii) the Additional Pari Debt Secured Parties with respect to each Series of Additional Pari Debt Obligations.
“ Possessory Collateral ” means any Shared Collateral in the possession of a Collateral Agent (or its agents or bailees), to the extent that possession thereof perfects a Lien thereon under the Uniform Commercial Code of any jurisdiction. Possessory Collateral includes, without limitation, any Certificated Securities, Promissory Notes, Instruments and Chattel Paper, in each case, delivered to or in the possession of the Collateral Agent under the terms of the Pari Debt Documents.
“ Post-Petition Interest ” means any interest or entitlement to fees or expenses or other charges that accrue after the commencement of any Insolvency or Liquidation Proceeding, whether or not allowed or allowable as a claim in any such Insolvency or Liquidation Proceeding.
“ Proceeds ” has the meaning assigned to such term in Section 2.01(a).
“ Refinance ” means, in respect of any indebtedness, to refinance, extend, renew, defease, amend, increase, modify, supplement, restructure, refund, replace or repay such indebtedness, or to issue other indebtedness or enter alternative financing arrangements, in exchange or replacement for such indebtedness (in whole or in part), including by adding or replacing lenders, creditors, agents, borrowers and/or guarantors, and including in each case, but not limited to, after the original instrument giving rise to such indebtedness has been terminated and including, in each case, through any credit agreement, indenture or other agreement. “ Refinanced ” and “ Refinancing ” have correlative meanings.
“ Secured Credit Document ” means (i) the Credit Agreement and each Loan Document (as defined in the Credit Agreement), (ii) each Initial Additional Pari Debt Document, and (iii) each Additional Pari Debt Document.
“ Series ” means (a) with respect to the Pari Debt Secured Parties, each of (i) the Credit Agreement Secured Parties (in their capacities as such), (ii) the Initial Additional Pari Debt Secured Parties (in their capacities as such), and (iii) the Additional Pari Debt Secured Parties that become subject to this Agreement after the date hereof that are represented by a common Authorized Representative (in its capacity as such for such Additional Pari Debt Secured Parties) and (b) with respect to any Pari Debt Obligations, each of (i) the Credit Agreement Debt, (ii) the Initial Additional Pari Debt Obligations, and (iii) the Additional Pari Debt Obligations incurred pursuant to any Additional Pari Debt Document, which pursuant to any Joinder Agreement are to be represented hereunder by a common Authorized Representative (in its capacity as such for such Additional Pari Debt Obligations).
“ Shared Collateral ” means, at any time, Collateral in which the holders (or their Collateral Agent) of two or more Series of Pari Debt Obligations hold a valid and perfected security interest at such time. If more than two Series of Pari Debt Obligations are outstanding at
 
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any time and the holders of less than all Series of Pari Debt Obligations hold a valid and perfected security interest in any Collateral at such time, then such Collateral shall constitute Shared Collateral for those Series of Pari Debt Obligations that hold a valid and perfected security interest in such Collateral at such time and shall not constitute Shared Collateral for any Series which does not have a valid and perfected security interest in such Collateral at such time.
SECTION 1.02 Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument, other document, statute or regulation herein shall be construed as referring to such agreement, instrument, other document, statute or regulation as from time to time amended, supplemented or otherwise modified, (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, but shall not be deemed to include the subsidiaries of such Person unless express reference is made to such subsidiaries, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Articles, Sections and Annexes shall be construed to refer to Articles, Sections and Annexes of this Agreement, (v) unless otherwise expressly qualified herein, the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and (vi) the term “or” is not exclusive.
SECTION 1.03 Impairments . It is the intention of the Pari Debt Secured Parties of each Series that the holders of Pari Debt Obligations of such Series (and not the Pari Debt Secured Parties of any other Series) bear the risk of (i) any determination by a court of competent jurisdiction that (x) any of the Pari Debt Obligations of such Series are unenforceable under applicable law or are subordinated to any other obligations (other than another Series of Pari Debt Obligations), (y) any of the Pari Debt Obligations of such Series do not have an enforceable security interest in any of the Collateral securing any other Series of Pari Debt Obligations and/or (z) any intervening security interest exists securing any other obligations (other than another Series of Pari Debt Obligations) on a basis ranking prior to the security interest of such Series of Pari Debt Obligations but junior to the security interest of any other Series of Pari Debt Obligations or (ii) the existence of any Collateral for any other Series of Pari Debt Obligations that is not Shared Collateral for such Series (any such condition referred to in the foregoing clause (i) or (ii) with respect to any Series of Pari Debt Obligations, an “ Impairment ” of such Series). In the event of any Impairment with respect to any Series of Pari Debt Obligations, the results of such Impairment shall be borne solely by the holders of such Series of Pari Debt Obligations, and the rights of the holders of such Series of Pari Debt Obligations (including, without limitation, the right to receive distributions in respect of such Series of Pari Debt Obligations pursuant to Section 2.01) set forth herein shall be modified to the extent necessary so that the effects of such Impairment are borne solely by the holders of the Series of such Pari Debt Obligations subject to such Impairment. Additionally, in the event the Pari Debt Obligations of any Series are modified pursuant to applicable law (including, without limitation, pursuant to Section 1129 of the Bankruptcy Code), any reference to such Pari Debt Documents or the Pari Debt Obligations governing such Pari Debt Obligations shall refer to such obligations or such documents as so modified.
 
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ARTICLE II
Priorities and Agreements with Respect to Shared Collateral
SECTION 2.01 Priority of Claims .
(a) Anything contained herein or in any of the Secured Credit Documents to the contrary notwithstanding (but subject to Section 1.03), if an Event of Default has occurred and is continuing, and the Applicable Collateral Agent or any Pari Debt Secured Party is taking action to enforce rights in respect of any Shared Collateral, or any distribution is made in respect of any Shared Collateral in any Insolvency or Liquidation Proceeding of a Borrower or any other Grantor (including any adequate protection payments) or any Pari Debt Secured Party receives any payment pursuant to any intercreditor agreement (other than this Agreement) with respect to any Shared Collateral, the proceeds of any sale, collection or other liquidation of any such Shared Collateral by any Pari Debt Secured Party or received by the Applicable Collateral Agent or any Pari Debt Secured Party pursuant to any such intercreditor agreement with respect to such Shared Collateral and proceeds of any such distribution (subject, in the case of any such distribution, payments, or proceeds to the sentence immediately following) (all proceeds of any sale, collection or other liquidation of any Shared Collateral and all proceeds of any such payment or distribution being collectively referred to as “ Proceeds ”) shall be applied (i) FIRST, to the payment of all amounts owing to each Collateral Agent (in its capacity as such) pursuant to the terms of any Secured Credit Document, (ii) SECOND, subject to Section 1.03, to the payment in full of the Pari Debt Obligations of each Series on a ratable basis, with such Proceeds to be applied to the Pari Debt Obligations of a given Series in accordance with the terms of the applicable Secured Credit Documents, provided that following the commencement of any Insolvency or Liquidation Proceeding with respect to a Borrower or any other Grantor, solely as among the Pari Debt Secured Parties and solely for purposes of this clause SECOND and not any Secured Credit Documents, in the event the value of the Shared Collateral is not sufficient for the entire amount of Post-Petition Interest on the Pari Debt Obligations, to be allowed under Section 506(a) and (b) of the Bankruptcy Code or any other applicable provision of the Bankruptcy Code or other Bankruptcy Law in such Insolvency or Liquidation Proceeding, the amount of Pari Debt Obligations of each Series of Pari Debt Obligations shall include only the maximum amount of Post-Petition Interest on the Pari Debt Obligations allowable under Section 506(a) and (b) of the Bankruptcy Code or any other applicable provision of the Bankruptcy Code or other Bankruptcy Law in such Insolvency or Liquidation Proceeding; and (iii) THIRD, after payment of all Pari Debt Obligations, to the Borrowers and the other Grantors or their successors or assigns, as their interests may appear, or to whosoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct. If, despite the provisions of this Section 2.01(a), any Pari Debt Secured Party shall receive any payment or other recovery in excess of its portion of payments on account of the Pari Debt Obligations to which it is then entitled in accordance with this Section 2.01(a), such Pari Debt Secured Party shall hold such payment or recovery in trust for the benefit of all Pari Debt Secured Parties for distribution in accordance with this Section 2.01(a). Notwithstanding the foregoing, with respect to any Shared Collateral upon which a third party (other than a Pari Debt Secured Party) has a lien or security interest that is junior in priority
 
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to the security interest of any Series of Pari Debt Obligations but senior (as determined by appropriate legal proceedings in the case of any dispute) to the security interest of any other Series of Pari Debt Obligations (such third party, an “ Intervening Creditor ”), the value of any Shared Collateral or Proceeds which are allocated to such Intervening Creditor shall be deducted on a ratable basis solely from the Shared Collateral or Proceeds to be distributed in respect of the Series of Pari Debt Obligations with respect to which such Impairment exists.
(b) It is acknowledged that the Pari Debt Obligations of any Series may, subject to the limitations set forth in the then extant Secured Credit Documents, be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded, Refinanced or otherwise amended or modified from time to time, all without affecting the priorities set forth in Section 2.01(a) or the provisions of this Agreement defining the relative rights of the Pari Debt Secured Parties of any Series.
(c) Notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Liens securing any Series of Pari Debt Obligations granted on the Shared Collateral and notwithstanding any provision of the Uniform Commercial Code of any jurisdiction, any applicable real estate laws, or any other applicable law or the Secured Credit Documents or any defect or deficiencies in the Liens securing the Pari Debt Obligations of any Series or any other circumstance whatsoever (but, in each case, subject to Section 1.03), each Pari Debt Secured Party hereby agrees that the Liens securing each Series of Pari Debt Obligations on any Shared Collateral shall be of equal priority.
(d) Notwithstanding anything in this Agreement or any other Pari Debt Documents to the contrary, Collateral consisting of cash and cash equivalents pledged to secure Credit Agreement Debt held by the Administrative Agent or the Collateral Agent pursuant to Section 2.05(j) or Section 2.22 of the Credit Agreement (or any equivalent successor provision) shall be applied as specified in the Credit Agreement and will not constitute Shared Collateral.
SECTION 2.02 Actions with Respect to Shared Collateral; Prohibition on Contesting Liens .
(a) Only the Applicable Collateral Agent shall act or refrain from acting with respect to any Shared Collateral (including with respect to any intercreditor agreement with respect to any Shared Collateral). At any time when the Credit Agreement Agent is the Applicable Collateral Agent, no Additional Pari Debt Secured Party shall, or shall instruct any Collateral Agent to, and no Collateral Agent that is not the Applicable Collateral Agent shall, commence any judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its security interest in or realize upon, or take any other action available to it in respect of, any Shared Collateral (including with respect to any intercreditor agreement with respect to any Shared Collateral), whether under any Additional Pari Debt Security Document, applicable law or otherwise, it being agreed that only the Credit Agreement Agent, acting in accordance with the Credit Agreement Collateral Documents, shall be entitled to take any such actions or exercise any such remedies with respect to Shared Collateral at such time.
 
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(b) With respect to any Shared Collateral at any time when the Additional Pari Debt Agent is the Applicable Collateral Agent, (i) the Applicable Collateral Agent shall act only on the instructions of the Applicable Authorized Representative, (ii) the Applicable Collateral Agent shall not follow any instructions with respect to such Shared Collateral (including with respect to any intercreditor agreement with respect to any Shared Collateral) from any Non-Controlling Authorized Representative (or any other Pari Debt Secured Party other than the Applicable Authorized Representative) and (iii) no Non-Controlling Authorized Representative or other Pari Debt Secured Party (other than the Applicable Authorized Representative) shall, or shall instruct the Applicable Collateral Agent to, commence any judicial or non-judicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its security interest in or realize upon, or take any other action available to it in respect of, any Shared Collateral (including with respect to any intercreditor agreement with respect to any Shared Collateral), whether under any Pari Debt Security Document, applicable law or otherwise, it being agreed that only the Applicable Collateral Agent, acting on the instructions of the Applicable Authorized Representative and in accordance with the Additional Pari Security Documents, shall be entitled to take any such actions or exercise any such remedies with respect to Shared Collateral.
(c) Notwithstanding the equal priority of the Liens with respect to the Shared Collateral securing each Series of Pari Debt Obligations, the Applicable Collateral Agent (in the case of the Additional Pari Debt Agent, acting on the instructions of the Applicable Authorized Representative) may deal with the Shared Collateral as if such Applicable Collateral Agent had a senior Lien on such Collateral. No Non-Controlling Authorized Representative or Non- Controlling Secured Party will contest, protest or object to any foreclosure proceeding or action brought by the Applicable Collateral Agent, the Applicable Authorized Representative or the Controlling Secured Party or any other exercise by the Applicable Collateral Agent, the Applicable Authorized Representative or the Controlling Secured Party of any rights and remedies relating to the Shared Collateral, or to cause the Applicable Collateral Agent to do so. The foregoing shall not be construed to limit the rights and priorities of any Pari Debt Secured Party, the Applicable Collateral Agent or any Authorized Representative with respect to any Collateral not constituting Shared Collateral.
(d) Each of the Pari Debt Secured Parties agrees that it will not (and hereby waives any right to) question or contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the perfection, priority, validity, attachment or enforceability of a Lien held by or on behalf of any of the Pari Debt Secured Parties on all or any part of the Collateral, or the provisions of this Agreement; provided that nothing in this Agreement shall be construed to prevent or impair the rights of any Collateral Agent or any Authorized Representative to enforce this Agreement.
SECTION 2.03 No Interference; Payment Over .
(a) Each Pari Debt Secured Party agrees that (i) it will not (and shall be deemed to have waived any right to) challenge, contest, or question, or support any other Person in challenging, contesting, or questioning, in any proceeding (including any Insolvency or Liquidation Proceeding) the validity, allowability or enforceability of any Pari Debt Obligations
 
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of any Series or any Pari Debt Security Document or the validity, attachment, perfection or priority of any Lien under any Pari Debt Security Document or the validity or enforceability of the priorities, rights or duties established by or other provisions of this Agreement, (ii) it will not take or cause to be taken any action the purpose or intent of which is, or could be, to interfere, hinder or delay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other disposition of the Shared Collateral by the Applicable Collateral Agent, (iii) except as provided in Section 2.02, it shall have no right to (A) direct the Applicable Collateral Agent or any other Pari Debt Secured Party to exercise any right, remedy or power with respect to any Shared Collateral (including pursuant to any intercreditor agreement) or (B) consent to the exercise by the Applicable Collateral Agent or any other Pari Debt Secured Party of any right, remedy or power with respect to any Shared Collateral, (iv) it will not institute any suit or assert in any suit, Insolvency or Liquidation Proceeding or other proceeding any claim against the Applicable Collateral Agent or any other Pari Debt Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to any Shared Collateral, and none of the Applicable Collateral Agent, any Applicable Authorized Representative or any other Pari Debt Secured Party shall be liable for any action taken or omitted to be taken by the Applicable Collateral Agent, such Applicable Authorized Representative or other Pari Debt Secured Party with respect to any Shared Collateral in accordance with the provisions of this Agreement, (v) it will not seek, and hereby waives any right, to have any Shared Collateral or any part thereof marshalled upon any foreclosure or other disposition of such Collateral and (vi) it will not attempt, directly or indirectly, whether by judicial proceedings or otherwise, to challenge the enforceability of any provision of this Agreement; provided that nothing in this Agreement shall be construed to prevent or impair the rights of the Applicable Collateral Agent or any other Pari Debt Secured Party to enforce this Agreement.
(b) Each Pari Debt Secured Party hereby agrees that if it shall obtain possession of any Shared Collateral or shall realize any Proceeds or payment in respect of any such Shared Collateral, pursuant to any Pari Debt Security Document or by the exercise of any rights available to it under applicable law or in any Insolvency or Liquidation Proceeding or through any other exercise of remedies (including pursuant to any intercreditor agreement, other than this Agreement), at any time prior to the Discharge of each of the Pari Debt Obligations, then it shall hold such Shared Collateral, Proceeds or payment in trust for the other Pari Debt Secured Parties and promptly transfer such Shared Collateral, Proceeds or payment, as the case may be, to the Applicable Collateral Agent, to be distributed in accordance with the provisions of Section 2.01.
SECTION 2.04 Automatic Release of Liens .
(a) If at any time the Applicable Collateral Agent forecloses upon or otherwise exercises remedies against any Shared Collateral resulting in a sale or disposition thereof, then (whether or not any Insolvency or Liquidation Proceeding is pending at the time) the Liens in favor of the other Collateral Agent for the benefit of each Series of Pari Debt Secured Parties upon such Shared Collateral will automatically be released and discharged as and when, but only to the extent, such Liens of the Applicable Collateral Agent on such Shared Collateral are released and discharged; provided that any proceeds of any Shared Collateral realized therefrom shall be applied pursuant to Section 2.01.
 
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(b) Each Collateral Agent and Authorized Representative agrees to execute and deliver (at the sole cost and expense of the Grantors) all such authorizations and other instruments as shall reasonably be requested by the Applicable Collateral Agent to evidence and confirm any release of Shared Collateral provided for in this Section.
SECTION 2.05 Certain Agreements with Respect to Bankruptcy or Insolvency Proceedings .
(a) This Agreement shall continue in full force and effect notwithstanding the commencement of any Insolvency or Liquidation Proceeding, including any proceeding under the Bankruptcy Code or any other Bankruptcy Law by or against a Borrower or any of its Subsidiaries. Without limiting the generality of the foregoing, it is acknowledged and agreed that this Agreement constitutes an agreement within the scope of Section 510(a) of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law, including with respect to the provisions of this Article II, and all references to “Grantor” shall include any Grantor as debtor and debtor in possession (and any receiver, trustee, or other estate representative for such Grantor, as the case may be) in any Insolvency or Liquidation Proceeding.
(b) If a Borrower and/or any other Grantor shall become subject to a case (a “ Bankruptcy Case ”) under the Bankruptcy Code or any other applicable Bankruptcy Law and shall, as debtor(s)-in-possession, move for approval of financing (“ DIP Financing ”) to be provided by one or more lenders (the “DIP Lenders ”) under Section 364 of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law and/or the use of cash collateral under Section 363 of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law, each Pari Debt Secured Party (other than any Controlling Secured Party or Authorized Representative of any Controlling Secured Party) agrees that it will raise no objection to any such financing or to the Liens on the Shared Collateral securing the same (“ DIP Financing Liens ”) or to any use of cash collateral that constitutes Shared Collateral, unless any Controlling Secured Party, or an Authorized Representative of any Controlling Secured Party, shall then oppose or object to such DIP Financing or such DIP Financing Liens and/or use of cash collateral (and (i) to the extent that such DIP Financing Liens are senior to the Liens on any such Shared Collateral for the benefit of the Controlling Secured Parties, each Non-Controlling Secured Party will subordinate its Liens with respect to such Shared Collateral on the same terms as the Liens of the Controlling Secured Parties (other than any Liens of any Pari Debt Secured Parties constituting DIP Financing Liens) are subordinated thereto, and (ii) to the extent that such DIP Financing Liens rank pari passu with the Liens on any such Shared Collateral granted to secure the Pari Debt Obligations of the Controlling Secured Parties, each Non-Controlling Secured Party will confirm the priorities with respect to such Shared Collateral as set forth herein), in each case so long as (A) the Pari Debt Secured Parties of each Series retain the benefit of their Liens on all such Shared Collateral pledged to the DIP Lenders, including proceeds thereof arising after the commencement of such proceeding, with the same priority vis-à-vis all the other Pari Debt Secured Parties (other than any Liens of the Pari Debt Secured Parties constituting DIP Financing Liens) as existed prior to the commencement of the Bankruptcy Case, (B) the Pari Debt Secured Parties of each Series are granted Liens on any additional collateral pledged to any Pari Debt Secured Parties as adequate protection or otherwise in connection with such DIP Financing and/or use of cash collateral, with the same priority vis-à-vis the Pari Debt
 
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Secured Parties as set forth in this Agreement (other than any Liens of the Pari Debt Secured Parties constituting DIP Financing Liens), (C) if any amount of such DIP Financing and/or cash collateral is applied to repay any of the Pari Debt Obligations, such amount is applied pursuant to Section 2.01, and (D) if any Pari Debt Secured Parties are granted adequate protection, including in the form of periodic payments, in connection with such DIP Financing and/or use of cash collateral, the proceeds of such adequate protection are applied pursuant to Section 2.01; provided that the Pari Debt Secured Parties of each Series shall have a right to object to the grant of a Lien to secure the DIP Financing over any Collateral subject to Liens in favor of the Pari Debt Secured Parties of such Series or their Authorized Representative that shall not constitute Shared Collateral; and provided , further , that the Pari Debt Secured Parties receiving adequate protection shall not object to any other Pari Debt Secured Party receiving adequate protection comparable to any adequate protection granted to such Pari Debt Secured Parties in connection with a DIP Financing and/or use of cash collateral.
SECTION 2.06 Reinstatement . In the event that any of the Pari Debt Obligations shall be paid in full and such payment or any part thereof shall subsequently, for whatever reason (including an order or judgment for disgorgement or avoidance of a preference or fraudulent transfer under the Bankruptcy Code, any other applicable Bankruptcy Law, or any similar law, or the settlement of any claim in respect thereof), be required to be returned or repaid, the terms and conditions of this Article II shall be fully applicable thereto until all such Pari Debt Obligations shall again have been paid in full in cash.
SECTION 2.07 Insurance . As between the Pari Debt Secured Parties, the Applicable Collateral Agent (and in the case of the Additional Pari Debt Agent, acting at the direction of the Applicable Authorized Representative) shall have the right to adjust or settle any insurance policy or claim covering or constituting Shared Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding affecting the Shared Collateral.
SECTION 2.08 Refinancings . The Pari Debt Obligations of any Series may be Refinanced, in whole or in part, in each case, without notice to, or the consent (except to the extent a consent is otherwise required to permit the Refinancing transaction under any Secured Credit Document of such debt being Refinanced) of, any Pari Debt Secured Party of any other Series, all without affecting the priorities provided for herein or the other provisions hereof; provided that the Authorized Representative of the holders of any such Refinancing indebtedness shall have executed a Joinder Agreement on behalf of the holders of such Refinancing indebtedness.
SECTION 2.09 Possessory Collateral Agent as Gratuitous Bailee for Perfection .
(a) The Possessory Collateral shall be delivered to the Credit Agreement Agent and the Credit Agreement Agent agrees to hold any Shared Collateral constituting Possessory Collateral that is part of the Collateral in its possession or control (or in the possession or control of its agents or bailees) as gratuitous bailee for the benefit of each other Pari Debt Secured Party and any assignee solely for the purpose of perfecting the security interest granted in such Possessory Collateral, if any, pursuant to the applicable Pari Debt Documents, in each case, subject to the terms and conditions of this Section 2.09; provided that at any time the Credit
 
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Agreement Agent is not the Applicable Collateral Agent, the Credit Agreement Agent shall, at the request of the Applicable Pari Debt Agent, promptly deliver all Possessory Collateral to the Applicable Pari Debt Agent together with any necessary endorsements (or otherwise allow the Applicable Pari Debt Agent to obtain control of such Possessory Collateral). Each Borrower shall take such further action as is required to effectuate the transfer contemplated hereby and shall indemnify each Collateral Agent for loss or damage suffered by such Collateral Agent as a result of such transfer except for loss or damage suffered by such Collateral Agent as a result of its own willful misconduct, gross negligence or bad faith as determined by a final non-appealable judgment of a court of competent jurisdiction.
(b) The Applicable Collateral Agent agrees to hold any Shared Collateral constituting Possessory Collateral, from time to time in its possession, as gratuitous bailee for the benefit of each other Pari Debt Secured Party and any assignee, solely for the purpose of perfecting the security interest granted in such Possessory Collateral, if any, pursuant to the applicable Pari Debt Documents, in each case, subject to the terms and conditions of this Section 2.09.
(c) The duties or responsibilities of each Collateral Agent under this Section 2.09 shall be limited solely to holding any Shared Collateral constituting Possessory Collateral as gratuitous bailee for the benefit of each other Pari Debt Secured Party for purposes of perfecting the Lien held by such Pari Debt Secured Parties thereon.
(d) In furtherance of the foregoing, each Grantor hereby grants a security interest in the Shared Collateral to each Collateral Agent that controls Shared Collateral for the benefit of all Pari Debt Secured Parties which have been granted a Lien on the Shared Collateral controlled by such Collateral Agent.
SECTION 2.10 Amendments to Security Documents .
(a) Without the prior written consent of the Credit Agreement Agent, the Additional Pari Debt Agent agrees that no Additional Pari Debt Security Document may be amended, supplemented or otherwise modified or entered into to the extent such amendment, supplement or modification, or the terms of any new Additional Pari Debt Security Document, would be prohibited by, or would require any Grantor to act or refrain from acting in a manner that would violate, any of the terms of this Agreement.
(b) Without the prior written consent of the Additional Pari Debt Agent, the Credit Agreement Agent agrees that no Credit Agreement Collateral Document may be amended, supplemented or otherwise modified or entered into to the extent such amendment, supplement or modification, or the terms of any new Credit Agreement Collateral Document, would be prohibited by, or would require any Grantor to act or refrain from acting in a manner that would violate, any of the terms of this Agreement.
(c) In making determinations required by this Section 2.10, each Collateral Agent may conclusively rely on an officer’s certificate of the U.S. Parent Borrower.
 
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ARTICLE III
Existence and Amounts of Liens and Obligations
SECTION 3.01 Determinations with Respect, to Amounts of Liens and Obligations . Whenever a Collateral Agent or any Authorized Representative shall be required, in connection with the exercise of its rights or the performance of its obligations hereunder, to determine the existence or amount of any Pari Debt Obligations of any Series, or the Shared Collateral subject to any Lien securing the Pari Debt Obligations of any Series, it may request that such information be furnished to it in writing by each other Authorized Representative or Collateral Agent and shall be entitled to make such determination or not make any determination on the basis of the information so furnished; provided , however , that if an Authorized Representative or a Collateral Agent shall fail or refuse reasonably promptly to provide the requested information, the requesting Collateral Agent or Authorized Representative shall be entitled to make any such determination by such method as it may, in the exercise of its good faith judgment, determine, including by reliance upon a certificate of the U.S. Parent Borrower. Each Collateral Agent and each Authorized Representative may rely conclusively, and shall be fully protected in so relying, on any determination made by it in accordance with the provisions of the preceding sentence (or as otherwise directed by a court of competent jurisdiction) and shall have no liability to any Grantor, any Pari Debt Secured Party or any other Person as a result of such determination.
ARTICLE IV
The Applicable Collateral Agent
SECTION 4.01 Authority .
(a) Notwithstanding any other provision of this Agreement, nothing herein shall be construed to impose any fiduciary or other duty on any Applicable Collateral Agent to any Non-Controlling Secured Party or give any Non-Controlling Secured Party the right to direct any Applicable Collateral Agent, except that each Applicable Collateral Agent shall be obligated to distribute proceeds of any Shared Collateral in accordance with Section 2.01.
(b) In furtherance of the foregoing, each Non-Controlling Secured Party acknowledges and agrees that the Applicable Collateral Agent shall be entitled, for the benefit of the Pari Debt Secured Parties, to sell, transfer or otherwise dispose of or deal with any Shared Collateral as provided herein and in the Pari Debt Documents, as applicable, pursuant to which the Applicable Collateral Agent is the collateral agent for such Shared Collateral, without regard to any rights to which the Non-Controlling Secured Parties would otherwise be entitled as a result of the Pari Debt Obligations held by such Non-Controlling Secured Parties. Without limiting the foregoing, each Non-Controlling Secured Party agrees that none of the Applicable Collateral Agent, the Applicable Authorized Representative or any other Pari Debt Secured Party shall have any duty or obligation first to marshal or realize upon any type of Shared Collateral (or any other Collateral securing any of the Pari Debt Obligations), or to sell, dispose of or otherwise liquidate all or any portion of such Shared Collateral (or any other Collateral securing any Pari Debt Obligations), in any manner that would maximize the return to the Non-Controlling Secured Parties, notwithstanding that the order and timing of any such realization, sale, disposition or liquidation may affect the amount of proceeds actually received by the Non-Controlling Secured Parties from such realization, sale, disposition or liquidation. Each of the Pari Debt Secured Parties waives any claim it may now or hereafter have against any Collateral
 
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Agent or the Authorized Representative of any other Series of Pari Debt Obligations or any other Pari Debt Secured Party of any other Series arising out of (i) any actions which any Collateral Agent, Authorized Representative or the Pari Debt Secured Parties take or omit to take (including actions with respect to the creation, perfection or continuation of Liens on any Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to realize upon, any of the Collateral and actions with respect to the collection of any claim for all or any part of the Pari Debt Obligations from any account debtor, guarantor or any other party) in accordance with the Pari Debt Documents or any other agreement related thereto or to the collection of the Pari Debt Obligations or the valuation, use, protection or release of any security for the Pari Debt Obligations, (ii) any election by any Applicable Authorized Representative or any holders of Pari Debt Obligations, in any Insolvency or Liquidation Proceeding, of the application of Section 1111(b) of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law or (iii) subject to Section 2.05, any borrowing by, or grant of a security interest or administrative expense priority under Section 364 of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law, a Borrower or any of its Subsidiaries, as debtor-in-possession. Notwithstanding any other provision of this Agreement, the Applicable Collateral Agent shall not accept any Shared Collateral in full or partial satisfaction of any Pari Debt Obligations pursuant to Section 9-620 of the Uniform Commercial Code of any jurisdiction, without the consent of each Authorized Representative representing holders of Pari Debt Obligations for which such Collateral constitutes Shared Collateral.
SECTION 4.02 Rights as a Pari Debt Secured Party . The Person serving as the Applicable Authorized Representative hereunder shall have the same rights and powers in its capacity as a Pari Debt Secured Party under any Series of Pari Debt Obligations that it holds as any other Pari Lien Secured Party of such Series and may exercise the same as though it were not the Applicable Authorized Representative and the term “Pari Debt Secured Party” or “Pari Debt Secured Parties” or (as applicable) “Credit Agreement Secured Party,” “Credit Agreement Secured Parties,” “Additional Pari Debt Secured Party” or “Additional Pari Debt Secured Parties” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Applicable Authorized Representative hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Grantors or any Subsidiary or other Affiliate thereof as if such Person were not the Applicable Authorized Representative hereunder and without any duty to account therefor to any other Pari Debt Secured Party.
SECTION 4.03 Exculpatory Provisions . The Applicable Authorized Representative shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, the Applicable Authorized Representative:
(i) shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing;
(ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby; provided that the Applicable Authorized Representative shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Applicable Authorized Representative to liability or that is contrary to this Agreement or applicable law;
 
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(iii) shall not, except as expressly set forth herein, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to a Grantor or any of its Affiliates that is communicated to or obtained by the Person serving as the Applicable Authorized Representative or any of its Affiliates in any capacity;
(iv) shall not be liable for any action taken or not taken by it (1) in the absence of its own gross negligence or willful misconduct or (2) in reliance on a certificate of an authorized officer of a Borrower stating that such action is permitted by the terms of this Agreement. The Applicable Authorized Representative shall be deemed not to have knowledge of any Event of Default under any Series of Pari Debt Obligations unless and until notice describing such Event of Default and referencing applicable agreement is given to the Applicable Authorized Representative;
(v) shall not be responsible for or have any duty to ascertain or inquire into (1) any statement, warranty or representation made in or in connection with this Agreement or any other Pari Debt Document, (2) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (3) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (4) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Pari Debt Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Pari Debt Documents, (5) the value or the sufficiency of any Collateral for any Series of Pari Debt Obligations, or (6) the satisfaction of any condition set forth in any Secured Credit Document, other than to confirm receipt of items expressly required to be delivered to the Applicable Authorized Representative; and
(vi) need not segregate money held hereunder from other funds except to the extent required by law. The Applicable Authorized Representative shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing.
ARTICLE V
Miscellaneous
SECTION 5.01 Notices . All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to the Credit Agreement Agent or the Administrative Agent, as set forth in Section 9.01 of the Credit Agreement;
 
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(b) if to the Additional Pari Debt Agent or the Initial Additional Authorized Representative, to it at [●];
(c) if to any Grantor, as set forth in Section 9.01 of the Credit Agreement; and
(d) if to any other Additional Authorized Representative, to it at the address set forth in the applicable Joinder Agreement.
Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt (if a Business Day) and on the next Business Day thereafter (in all other cases) if delivered by hand or overnight courier service or sent by telecopy or on the date three Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 5.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 5.01. As agreed to in writing among each Collateral Agent and each Authorized Representative from time to time, notices and other communications may also be delivered by e-mail to the e-mail address of a representative of the applicable Person provided from time to time by such Person.
SECTION 5.02 Waivers; Amendment; Joinder Agreements .
(a) No failure or delay on the part of any party hereto in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereto are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any party therefrom shall in any event be effective unless the same shall be permitted by Section 5.02(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any party hereto in any case shall entitle such party to any other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be terminated, waived, amended or modified (other than pursuant to any Joinder Agreement) except pursuant to an agreement or agreements in writing entered into by each Authorized Representative and each Collateral Agent (and with respect to any such termination, waiver, amendment or modification which by the terms of this Agreement requires the Borrowers’ consent or which increases the obligations or reduces the rights of the Borrowers or any other Grantor, with the consent of the Borrowers).
(c) Notwithstanding the foregoing, without the consent of any Pari Debt Secured Party, any Authorized Representative may become a party hereto by execution and delivery of a Joinder Agreement in accordance with Section 5.13 and upon such execution and delivery, such Authorized Representative and the Additional Pari Debt Secured Parties and Additional Pari Debt Obligations of the Series for which such Authorized Representative is acting shall be subject to the terms hereof and the terms of the Additional Pari Security Documents applicable thereto.
 
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(d) Notwithstanding the foregoing, without the consent of any other Authorized Representative or Pari Debt Secured Party, the Collateral Agents may effect amendments and modifications to this Agreement to the extent necessary to reflect any incurrence of any Additional Pari Debt Obligations in compliance with the Credit Agreement and the other Secured Credit Documents.
SECTION 5.03 Parties in Interest . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, as well as the other Pari Debt Secured Parties, all of which are intended to be bound by, and to be third party beneficiaries of, this Agreement.
SECTION 5.04 Survival of Agreement . All covenants, agreements, representations and warranties made by any party in this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement.
SECTION 5.05 Counterparts . This Agreement may be executed in e or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile or other electronic transmission shall be as effective as delivery of a manually executed counterpart hereof.
SECTION 5.06 Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 5.07 GOVERNING LAW . THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 5.08 Submission to Jurisdiction Waivers; Consent to Service of Process . Each Collateral Agent and each Authorized Representative, on behalf of itself and the Pari Debt Secured Parties of the Series for which it is acting, irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the Pari Debt Documents, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the courts of the State of New York located in the Borough of Manhattan, the courts of the United States for the Southern District of New York, and appellate courts from any thereof;
 
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(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient forum and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Person (or its Authorized Representative) at the address set forth in Section 5.01;
(d) agrees that nothing herein shall affect the right of any other party hereto (or any Pari Debt Secured Party) to effect service of process in any other manner permitted by law or shall limit the right of any party hereto (or any Pari Debt Secured Party) to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 5.08 any special, exemplary, punitive or consequential damages.
SECTION 5.09 WAIVER OF JURY TRIAL . EACH PARTY (ON BEHALF OF ITSELF, ANY PERSON CLAIMING BY, ON BEHALF, OR THROUGH SUCH PARTY, OR ANY PERSON ON WHOSE BEHALF SUCH PARTY IS ACTING) HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 5.10 Headings . Article, Section and Annex headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.
SECTION 5.11 Conflicts . In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of any of the Pari Debt Documents or any of the other Secured Credit Documents, the provisions of this Agreement shall control.
SECTION 5.12 Provisions Solely to Define Relative Rights . The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the Pari Debt Secured Parties in relation to one another. None of the Borrowers, any other Grantor or any creditor thereof shall have any rights or obligations hereunder, except as expressly provided in this Agreement ( provided that nothing in this Agreement (other than Section 2.04, 2.05, 2.08, 2.09 or Article V) is intended to or will amend, waive or otherwise modify the provisions of the Credit Agreement or any Additional Pari Debt Documents), and none of the Borrowers or any other Grantor may rely on the terms hereof (other than Sections 2.04, 2.05, 2.08, 2.09, 2.10 and Article V). Nothing in this Agreement is intended to or shall impair the obligations of any Grantor, which are absolute and unconditional, to pay the Pari Debt Obligations as and when the same shall become due and payable in accordance with their terms.
 
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SECTION 5.13 Additional Senior Debt . To the extent, but only to the extent, permitted by the provisions of the then extant Credit Agreement and the Additional Pari Debt Documents, the Borrowers may incur additional indebtedness after the date hereof that is permitted by the then extant Credit Agreement and the Additional Pari Debt Documents to be incurred and secured on an equal and ratable basis by the Liens securing the Pari Debt Obligations (such indebtedness referred to as “ Additional Senior Class Debt ”). Any such Additional Senior Class Debt may be secured by a Lien and may be Guaranteed by the Grantors on a senior basis, in each case under and pursuant to the Additional Pari Debt Documents, if and subject to the condition that the Authorized Representative of any such Additional Senior Class Debt (each “an “ Additional Senior Class Debt Representative ”), acting on behalf of the holders of such Additional Senior Class Debt (such Authorized Representative and holders in respect of any Additional Senior Class Debt being referred to as the “ Additional Senior Class Debt Parties ”), becomes a party to this Agreement by satisfying the conditions set forth in clauses (i) through (iv) of the immediately succeeding paragraph.
In order for an Additional Senior Class Debt Representative to become a party to this Agreement,
(i) such Additional Senior Class Debt Representative, each Collateral Agent, each Authorized Representative and each Grantor shall have executed and delivered an instrument substantially in the form of Annex II (with such changes as may be reasonably approved by such Collateral Agent and Additional Senior Class Debt Representative, and, to the extent such changes increase the obligations or reduce the rights of a Grantor, by such Grantor) pursuant to which such Additional Senior Class Debt Representative becomes an Authorized Representative hereunder, and the Additional Senior Class Debt in respect of which such Additional Senior Class Debt Representative is the Authorized Representative and the related Additional Senior Class Debt Parties become subject hereto and bound hereby;
(ii) the U.S. Parent Borrower shall have (x) delivered to each Collateral Agent true and complete copies of each of the Additional Pari Debt Documents relating to such Additional Senior Class Debt, certified as being true and correct by a Responsible Officer of the U.S. Parent Borrower, and (y) identified in a certificate of an authorized officer the obligations to be designated as Additional Pari Debt Obligations and the initial aggregate principal amount or face amount thereof;
(iii) all filings, recordations and/or amendments or supplements to the Pari Debt Documents necessary or desirable in the reasonable judgment of the Additional First Lien Collateral Agent to confirm and perfect the Liens securing the relevant obligations relating to such Additional Senior Class Debt shall have been made, executed and/or delivered (or, with respect to any such filings or recordations, acceptable provisions to perform such filings or recordations shall have been taken in the reasonable judgment of the Additional First Lien Collateral Agent), and all fees and taxes in connection therewith shall have been paid (or acceptable provisions to make such payments shall have been taken in the reasonable judgment of the Additional First Lien Collateral Agent); and
 
C-23

(iv) the Additional Pari Debt Documents, as applicable, relating to such Additional Senior Class Debt shall provide, in a manner reasonably satisfactory to each Collateral Agent, that each Additional Senior Class Debt Party with respect to such Additional Senior Class Debt will be subject to and bound by the provisions of this Agreement in its capacity as a holder of such Additional Senior Class Debt.
Each Authorized Representative acknowledges and agrees that upon execution and delivery of a Joinder Agreement substantially in the form of Annex II by an Additional Senior Class Debt Representative and each Grantor in accordance with this Section 5.13, the Additional Pari Debt Agent will continue to act in its capacity as Additional Pari Debt Agent in respect of the then existing Authorized Representatives (other than the Administrative Agent) and such additional Authorized Representative.
SECTION 5.14 Agent Capacities . Except as expressly provided herein or in the Credit Agreement Collateral Documents, JPMCB is acting in the capacities of Administrative Agent and Credit Agreement Agent solely for the Credit Agreement Secured Parties. Except as expressly provided herein or in the Additional Pari Security Documents, [                    ] is acting in the capacity of Additional Pari Debt Agent solely for the Additional Pari Debt Secured Parties. Except as expressly set forth herein, none of the Administrative Agent, the Credit Agreement Agent or the Additional Pari Debt Agent shall have any duties or obligations in respect of any of the Collateral, all of such duties and obligations, if any, being subject to and governed by the applicable Secured Credit Documents.
SECTION 5.15 Integration . This Agreement together with the other Secured Credit Documents and the Pari Debt Documents represents the agreement of each of the Grantors and the Pari Debt Secured Parties with respect to the subject matter hereof and there are no promises, undertakings, representations or warranties by any Grantor, the Credit Agreement Agent or any other Pari Debt Secured Party relative to the subject matter hereof not expressly set forth or referred to herein or in the other Secured Credit Documents or the Pari Debt Documents.
SECTION 5.16 Additional Grantors . In the event any Subsidiary or a Grantor shall have granted a Lien on any of its assets to secure any Pari Debt Obligations, such Grantor shall cause such Subsidiary, if not already a party hereto, to become a party hereto as a “Grantor”. Upon the execution and delivery by any Subsidiary of a Grantor of a joinder agreement reasonably acceptable to the Applicable Authorized Representative, any such Subsidiary shall become a party hereto and a Grantor hereunder with the same force and effect as if originally named as such herein. The execution and delivery of any such instrument shall not require the consent of any other party hereto (except to the extent obtained on or prior to such date). The rights and obligations of each party hereto shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.
 
C-24

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

JPMORGAN CHASE BANK, N.A.,	
as Credit Agreement Agent for the Credit Agreement Secured Parties	
		
By:	 	 	
Name:	 		
Title:	 		
		
By:	 	                                          	
Name:	 		
Title:	 		
	
JPMORGAN CHASE BANK, N.A.,	
as Authorized Representative for the Credit Agreement Secured Parties	
		
By:	 	 	
Name:	 		
Title:	 		
	
[                                          ],	
as Additional Pari Debt Agent	
		
By:	 	 	
Name:	 		
Title:	 		
	
[                                          ],	
as Initial Additional Authorized Representative	
 
C-25

			
By:	 	 	
Name:	 		
Title:	 		
	
DELPHI POWERTRAIN CORPORATION	
		
By:	 	                                          	
Name:	 		
Title:	 		
	
DELPHI JERSEY HOLDINGS PLC	
		
By:	 	 	
Name:	 		
Title:	 		
	
[GRANTORS]	
		
By:	 	 	
Name:	 		
Title:	 		
 
C-26

ANNEX II
Grantors
 
ANNEX II-1

ANNEX III
[FORM OF] JOINDER NO. [    ] dated as of [            ], 20[    ] to FIRST LIEN INTERCREDITOR AGREEMENT by and among, DELPHI JERSEY HOLDINGS PLC, a public limited company organized under the laws of Jersey (“ Parent ”), DELPHI POWERTRAIN CORPORATION, a Delaware corporation (the “ U.S. Parent Borrower ”), [the Subsidiary Borrowers,] the other Grantors (as defined below) from time to time party hereto, JPMORGAN CHASE BANK, N.A. (“ JPMCB ”), as Credit Agreement Agent for the Credit Agreement Secured Parties under the Pari Debt Documents (in such capacity, the “ Credit Agreement Agent ”), JPMCB, as Authorized Representative for the Credit Agreement Secured Parties, [                    ], as Additional Pari Debt Agent, [    ], as Initial Additional Authorized Representative, and the additional Authorized Representatives from time to time a party thereto.2
A.    Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the First Lien Intercreditor Agreement.
B.    As a condition to the ability of the Borrowers to incur Additional Pari Debt Obligations and to secure such Additional Senior Class Debt with the liens and security interests created by the Additional Pari Security Documents, the Additional Senior Class Debt Representative in respect of such Additional Senior Class Debt is required to become an Authorized Representative, and such Additional Senior Class Debt and the Additional Senior Class Debt Parties in respect thereof are required to become subject to and bound by the First Lien Intercreditor Agreement. Section 5.13 of the First Lien Intercreditor Agreement provides that such Additional Senior Class Debt Representative may become an Authorized Representative, and such Additional Senior Class Debt and such Additional Senior Class Debt Parties may become subject to and bound by the First Lien Intercreditor Agreement, upon the execution and delivery by the Senior Debt Class Representative of an instrument in the form of this Joinder Agreement and the satisfaction of the other conditions set forth in Section 5.13 of the First Lien Intercreditor Agreement. The undersigned Additional Senior Class Debt Representative (the “ New Representative ”) is executing this Joinder Agreement in accordance with the requirements of the First Lien Intercreditor Agreement and the Pari Debt Documents.
Accordingly, each Collateral Agent, each Authorized Representative and the New Representative agree as follows:
SECTION 1. In accordance with Section 5.13 of the First Lien Intercreditor Agreement, the New Representative by its signature below becomes an Authorized Representative under, and the related Additional Senior Class Debt and Additional Senior Class Debt Parties become subject to and bound by, the First Lien Intercreditor Agreement with the same force and effect as if the New Representative had originally been named therein as an Authorized Representative and the New Representative, on its behalf and on behalf of such Additional Senior Class Debt Parties, hereby agrees to all the terms and provisions of the First Lien Intercreditor Agreement applicable to it as Authorized Representative and to the Additional Senior Class Debt Parties that it represents as Additional Pari Debt Secured Parties. Each reference to an “ Authorized Representative ” in the First Lien Intercreditor Agreement shall be deemed to include the New Representative. The First Lien Intercreditor Agreement is hereby incorporated herein by reference.

2  	In the event of the Refinancing of the Credit Agreement Obligations, revise to reflect joinder by a new Credit Agreement Collateral Agent	
 
ANNEX III-1

SECTION 2. The New Representative represents and warrants to each Collateral Agent, each Authorized Representative and the other Pari Debt Secured Parties, individually, that (i) it has full power and authority to enter into this Joinder, in its capacity as [agent] [trustee], (ii) this Joinder has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, and (iii) the Additional Pari Debt Documents relating to such Additional Senior Class Debt provide that, upon the New Representative’s entry into this Joinder Agreement, the Additional Senior Class Debt Parties in respect of such Additional Senior Class Debt will be subject to and bound by the provisions of the First Lien Intercreditor Agreement as Additional Pari Debt Secured Parties.
SECTION 3. This Joinder may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Joinder shall become effective when each Collateral Agent shall have received a counterpart of this Joinder that bears the signatures of the New Representative. Delivery of an executed signature page to this Joinder by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Joinder.
SECTION 4. Except as expressly supplemented hereby, the First Lien Intercreditor Agreement shall remain in full force and effect.
SECTION 5. THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this Joinder should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the First Lien Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in writing and given as provided in Section 5.01 of the First Lien Intercreditor Agreement. All communications and notices hereunder to the New Representative shall be given to it at its address set forth below its signature hereto.
SECTION 8. The U.S. Parent Borrower agrees to reimburse each Collateral Agent and each Authorized Representative for its reasonable and documented out-of-pocket expenses in connection with this Joinder, including the reasonable and documented fees, other charges and disbursements of counsel, in each case as and to the extent provided in each applicable Secured Credit Document.
 
ANNEX III-2

IN WITNESS WHEREOF, the New Representative has duly executed this Joinder to the First Lien Intercreditor Agreement as of the day and year first above written.

[NAME OF NEW REPRESENTATIVE], as [                    ] for the holders of [                ],	
By:	 	                                                                       	
Name:	 		
Title:	 		
Address for notices:	

attention of:                                                                     	
Telecopy:                                                                        	
 
ANNEX III-3

Acknowledged by:
JPMORGAN CHASE BANK, N.A.,
as the Credit Agreement Agent and Authorized Representative,

	 	By:	 	                     	
	 		 	Name:	
	 		 	Title:	
			
	 	By:	 	                     	
	 		 	Name:	
	 		 	Title:	
[                                         ],
as the Additional Pari Debt Agent and Initial Additional Authorized Representative,

	 	By:	 	                     	
	 		 	Name:	
	 		 	Title:	
[OTHER AUTHORIZED REPRESENTATIVES]
 
ANNEX III-4

			
Acknowledged by:	
	
DELPHI POWERTRAIN CORPORATION	
		
By:	 	                     	
Name:	 		
Title:	 		
	
DELPHI JERSEY HOLDINGS PLC	
		
By:	 	                     	
Name:	 		
Title:	 		
	
[GRANTORS]	
		
By:	 	                     	
Name:	 		
Title:	 		
 
ANNEX III-5

EXHIBIT D-1
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is made to that certain Credit Agreement, dated as of September 7, 2017 (as it may be amended, supplemented, restated or otherwise modified from time to time, the “ Credit Agreement ,” by and among Delphi Jersey Holdings PLC (the “ Parent ”), Delphi Powertrain Corporation (the “ Parent ”), the Subsidiary Borrowers from time to time party thereto, the Lenders party thereto, the Issuing Banks from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. Capitalized terms used herein that are not defined herein shall have the meanings ascribed to them in the Credit Agreement.
Pursuant to the provisions of Section 2.16(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Parent within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Parent as described in Section 881(c)(3)(C) of the Code, and (v) the interest payments on the Loan(s) are not effectively connected with the undersigned’s conduct of a U.S. trade or business.
The undersigned has furnished the Administrative Agent and the Parent with a certificate of its non-U.S. person status on Internal Revenue Service Form W-8BEN or W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, or if a lapse in time or change in circumstances renders the information on this certificate obsolete, expired or inaccurate in any material respect, the undersigned shall promptly so inform the Parent and the Administrative Agent and deliver promptly to the Parent and the Administrative Agent an updated certificate or other appropriate documentation (including any new documentation reasonably requested by the Parent or the Administrative Agent) or promptly notify the Parent or the Administrative Agent of its inability to do so, and (2) the undersigned shall have at all times furnished the Parent and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned or at such times are as reasonably requested by the Parent and the Administrative Agent.

[NAME OF LENDER]	
		
By:	 	                     	
	 	Name:	
	 	Title:	
Date:             , 20[    ]
 
D-1-1

EXHIBIT D-2
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is made to that certain Credit Agreement, dated as of September 7, 2017 (as it may be amended, supplemented, restated or otherwise modified from time to time, the “ Credit Agreement ,” by and among Delphi Jersey Holdings PLC (the “ Parent ”), Delphi Powertrain Corporation (the “ U.S. Parent Borrower ”), the Subsidiary Borrowers from time to time party thereto, the Lenders party thereto, the Issuing Banks from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. Capitalized terms used herein that are not defined herein shall have the meanings ascribed to them in the Credit Agreement.
Pursuant to the provisions of 2.16(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) neither the undersigned nor any of its direct or indirect partners/members is a bank within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Parent within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Parent as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments on the Loan(s) are not effectively connected with the undersigned’s or its direct or indirect partners/members’ conduct of a U.S. trade or business.
The undersigned has furnished the Administrative Agent and the Parent with Internal Revenue Service Form W-8IMY accompanied by an Internal Revenue Service Form W-8BEN or W- 8BEN-E, as applicable, from each of its partners/members claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, or if a lapse in time or change in circumstances renders the information on this certificate obsolete, expired or inaccurate in any material respect, the undersigned shall promptly so inform the Parent and the Administrative Agent and deliver promptly to the Parent and the Administrative Agent an updated certificate or other appropriate documentation (including any new documentation reasonably requested by the Parent or the Administrative Agent) or promptly notify the Parent or the Administrative Agent of its inability to do so, and (2) the undersigned shall have at all times furnished the Parent and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned or at such times are as reasonably requested by the Parent and the Administrative Agent.

[NAME OF LENDER]	
		
By:	 	                     	
	 	Name:	
	 	Title:	
Date:              , 20[    ]
 
D-2-1

EXHIBIT D-3
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is made to that certain Credit Agreement, dated as of September 7, 2017 (as it may be amended, supplemented, restated or otherwise modified from time to time, the “ Credit Agreement ,” by and among Delphi Jersey Holdings PLC (the “ Parent ”), Delphi Powertrain Corporation (the “ U.S. Parent Borrower ”), the Subsidiary Borrowers from time to time party thereto, the Lenders party thereto, the Issuing Banks from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. Capitalized terms used herein that are not defined herein shall have the meanings ascribed to them in the Credit Agreement.
Pursuant to the provisions of Section 2.16(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Parent within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Parent as described in Section 881(c)(3)(C) of the Code, and (v) the interest payments with respect to such participation are not effectively connected with the undersigned’s conduct of a U.S. trade or business.
The undersigned has furnished its participating Lender with a certificate of its non- U.S. person status on an Internal Revenue Service Form W-8BEN or W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, or if a lapse in time or change in circumstances renders the information on this certificate obsolete, expired or inaccurate in any material respect, the undersigned shall promptly so inform such Lender and deliver promptly to such Lender an updated certificate or other appropriate documentation (including any new documentation reasonably requested by such Lender) or promptly notify such Lender of its inability to do so, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned or at such times are as reasonably requested by such Lender.

[NAME OF PARTICIPANT]	
		
By:	 	                     	
	 	Name:	
	 	Title:	
Date:              , 20[    ]
 
D-3-1

EXHIBIT D-4
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is made to that certain Credit Agreement, dated as of September 7, 2017 (as it may be amended, supplemented, restated or otherwise modified from time to time, the “ Credit Agreement ,” by and among Delphi Jersey Holdings PLC (the “ Parent ”), Delphi Powertrain Corporation (the “ U.S. Parent Borrower ”), the Subsidiary Borrowers from time to time party thereto, the Lenders party thereto, the Issuing Banks from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. Capitalized terms used herein that are not defined herein shall have the meanings ascribed to them in the Credit Agreement.
Pursuant to the provisions of 2.16(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) neither the undersigned nor any of its direct or indirect partners/members is a bank within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of Parent within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Parent as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments with respect to such participation are not effectively connected with the undersigned’s or its direct or indirect partners/members’ conduct of a U.S. trade or business.
The undersigned has furnished its participating Lender with Internal Revenue Service Form W-8IMY accompanied by an Internal Revenue Service Form W-8BEN or W-8BEN-E, as applicable, from each of its partners/members claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, or if a lapse in time or change in circumstances renders the information on this certificate obsolete, expired or inaccurate in any material respect, the undersigned shall promptly so inform such Lender and deliver promptly to such Lender an updated certificate or other appropriate documentation (including any new documentation reasonably requested by such Lender) or promptly notify such Lender of its inability to do so, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned or at such times are as reasonably requested by such Lender.

[NAME OF PARTICIPANT]	
		
By:	 	                     	
	 	Name:	
	 	Title:	
Date:              , 20[    ]
 
D-4-1

EXHIBIT E
FORM OF DISCOUNTED PREPAYMENT OPTION NOTICE
Date:             
JPMorgan Chase Bank, N.A.
As Administrative Agent for the Lenders referred to below,
Loan and Agency Services Group
500 Stanton Christiana Road, Ops 2
Newark, DE 19713-2107
Attention: [                    ]
Telecopy No. [                    ]
Email: [                    ]
Ladies and Gentlemen:
This Discounted Prepayment Option Notice is delivered to you pursuant to Section 2.10(c)(ii) of that certain Credit Agreement, dated as of September 7, 2017 (as amended, restated, extended, supplemented or otherwise modified from time to time, the “ Agreement ”, the terms defined therein being used herein as therein defined), among Delphi Jersey Holdings PLC (the “ Parent ”), Delphi Powertrain Corporation (the “ U.S. Parent Borrower ”), the Subsidiary Borrowers from time to time party thereto, the Lenders from time to time party thereto, the Issuing Banks from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.
The [Borrower] 13 hereby notifies you that, effective as of [            , 20    ], pursuant to Section 2.10(c)(ii) of the Agreement, the [Borrower] 14 hereby notifies each Lender that it is seeking:
 
 	1.	to prepay Loans at a discount in an aggregate principal amount of [$        ] 15 (the “ Proposed Discounted Prepayment Amount ”);	
 
 	2.	a percentage discount to the par value of the principal amount of Loans greater than or equal to    % of par value but less than or equal to [    ]% of par value (the “ Discount Range ”).	
 
 	3.	a Lender Participation Notice on or before [            , 20    ], as determined pursuant to Section 2.10(c)(iii) of the Agreement (as such date may be extended pursuant to Section 2.10(c)(ii) of the Agreement, the “ Acceptance Date ”), and	

13  	Insert applicable.	
14  	Insert applicable.	
15  	Insert amount that is minimum of $50 million.	
 
E-1

The source of the proceeds to be used to make such Discounted Voluntary Prepayment is not from the proceeds of any Revolving Loan or Swingline Loan.
The [Borrower] 16 expressly agrees that this Discounted Prepayment Option Notice is subject to the provisions of Section  2.10(c) of the Agreement.
The [Borrower] 17 hereby represents and warrants to the Administrative Agent on behalf of the Administrative Agent and the Lenders as follows:
 
 	1.	Parent Entity and its Restricted Subsidiaries are in compliance on a Pro Forma Basis with the covenants contained in Section  6.09 of the Credit Agreement as of the last day of the most recent fiscal quarter of Parent Entity for which financial statements have been delivered pursuant to Section  5.01(a) or (b) .	
 
 	2.	No Event of Default has occurred and is continuing.	
The [Borrower] 18 respectfully requests that Administrative Agent promptly notify each of the Lenders party to the Agreement of this Discounted Prepayment Option Notice.

16	Insert applicable.	
17	Insert applicable.	
18	Insert applicable.	
 
E-2

IN WITNESS WHEREOF , the undersigned has executed this Discounted Prepayment Option Notice as of the date first above written.

[BORROWER] 19	 		

	 	            By:	 	 	
	 		 	Name:	
	 		 	Title:	

19  	Insert applicable.	
 
E-3

EXHIBIT F
FORM OF LENDER PARTICIPATION NOTICE
Date:             
JPMorgan Chase Bank, N.A.
As Administrative Agent for the Lenders referred to below,
Loan and Agency Services Group
500 Stanton Christiana Road, Ops 2
Newark, DE 19713-2107
Attention: [                    ]
Telecopy No. [                    ]
Email: [                    ]
Ladies and Gentlemen:
Reference is made to (a) that certain Credit Agreement, dated as of September 7, 2017 (as amended, restated, extended, supplemented or otherwise modified from time to time, the “ Agreement ”, the terms defined therein being used herein as therein defined), among Delphi Jersey Holdings PLC (the “ Parent ”), Delphi Powertrain Corporation (the “ U.S. Parent Borrower ”), the Subsidiary Borrowers from time to time party thereto, the Lenders from time to time party thereto, the Issuing Banks from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, and (b) that certain Discounted Prepayment Option Notice, dated            , 20    , from [Borrower] 20 (the “ Discounted Prepayment Option Notice ”). Capitalized terms used herein and not defined herein or in the Agreement shall have the meaning ascribed to such terms in the Discounted Prepayment Option Notice.
The undersigned Lender hereby gives you notice, pursuant to Section 2.10(c)(ii) of the Agreement, that it is willing to accept a Discounted Voluntary Prepayment on Loans held by such Lender:
 
 	1.	in a maximum aggregate principal amount of $         of Tranche A Term Loans (the “ Offered Loans ”), and	
 
 	2.	at a percentage discount to par value of the principal amount of Offered Loans equal to [    ]% of par value (the “ Acceptable Discount ”).	

20	Insert applicable.	
 
F-1

The undersigned Lender acknowledges that the submission of this Lender Participation Notice, to be held in escrow by the Administrative Agent, irrevocably obligates the Lender to sell the entirety or its ratable portion of the Offered Loans in accordance with Section  2.10(c) of the Agreement. The undersigned Lender expressly agrees that this offer is subject to the provisions of Section  2.10(c ) of the Agreement. Furthermore, conditioned upon the Applicable Discount determined pursuant to Section 2.10(c)(ii) of the Agreement being a percentage of par value less than or equal to the Acceptable Discount, the undersigned Lender hereby expressly consents and agrees to a prepayment of its Loans pursuant to Section  2.10(c) of the Agreement in an aggregate principal amount equal to the Offered Loans, as such principal amount may be reduced if the aggregate proceeds required to prepay Qualifying Loans (disregarding any interest payable in connection with such Qualifying Loans) would exceed the Proposed Discounted Prepayment Amount for the relevant Discounted Voluntary Prepayment, and acknowledges and agrees that such prepayment of its Loans will be allocated at par value, but the actual payment made to such Lender will be reduced in accordance with the Applicable Discount.
 
F-2

IN WITNESS WHEREOF , the undersigned has executed this Lender Participation Notice as of the date first above written.

[NAME OF LENDER]	
		
By:	 	 	
	 	Name:	
	 	Title:	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
F-3

EXHIBIT G
FORM OF DISCOUNTED VOLUNTARY PREPAYMENT NOTICE
Date:             , 20    
JPMorgan Chase Bank, N.A.
As Administrative Agent for the Lenders referred to below,
Loan and Agency Services Group
500 Stanton Christiana Road, Ops 2
Newark, DE 19713-2107
Attention: [                    ]
Ladies and Gentlemen:
Reference is made to (a) that certain Credit Agreement, dated as of September 7, 2017 (as amended, restated, extended, supplemented or otherwise modified from time to time, the “ Credit Agreement ”, the terms defined therein being used herein as therein defined), among Delphi Jersey Holdings PLC (the “ Parent ”), Delphi Powertrain Corporation (the “ U.S. Parent Borrower ”), the Subsidiary Borrowers from time to time party thereto, the Lenders from time to time party thereto, the Issuing Banks from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “ Administrative Agent ”), and (b) each Lender Participation Notice submitted by a Lender to the Administrative Agent by the Acceptance Date in response to the Discounted Prepayment Option Notice, dated [            ], 20[    ] (collectively, the “ Lender Participation Notices ”). Capitalized terms used herein and not defined herein shall have the meaning ascribed to such terms in the Credit Agreement.
[Borrower] 21 hereby irrevocably notifies you pursuant to Section 2.10(c)(v) of the Credit Agreement that (a) [Borrower] 22 selects an Applicable Discount equal to     % of par for an Offered Voluntary Prepayment, (b) [Borrower] 23 accepts all Lender Participation Notices specifying an Acceptable Discount therein that is less than or equal to the Applicable Discount, which may be subject to proration pursuant to Section 2.10(c)(iv) of the Credit Agreement, and (c) that pursuant to Section 2.10(c)(v) of the Credit Agreement, [Borrower] 24 shall make a Discounted Prepayment Option Notice Voluntary Prepayment in an amount of $         on or
before [            , 20    ], 25 (the “ Offered Prepayment Effective Date ”) as more fully described below.
[Borrower] 26 expressly agrees that this acceptance of Qualifying Loans and notice of prepayment shall be irrevocable and is subject to the provisions of Sections 2.10(c) of the Credit Agreement. [Borrower] 27 expressly and irrevocably agrees to make a payment to the

21  	Insert applicable.	
22  	Insert applicable.	
23  	Insert applicable.	
24  	Insert applicable.	
25  	Insert date that is no earlier than two Business Days after date of this notice.	
26  	Insert applicable.	
27  	Insert applicable.	
 
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Administrative Agent, for the benefit of the Lenders whose Loans have been accepted in this offer, on the Offered Prepayment Effective Date consisting of (a) the prepayment of Qualifying Loans, payable at the Acceptable Discount, to such Lenders in an aggregate principal amount of outstanding Loans of the applicable Class equal to the Proposed Discounted Prepayment Amount subject to proration pursuant to Section  2.10(d) of the Credit Agreement, plus (b) all accrued but unpaid interest and fees with respect thereto and any amounts due in accordance Section  2.15(a) of the Credit Agreement (to the extent such amounts are due in accordance with such Section 2.15(a) ).
[Borrower] 28 acknowledges that the Administrative Agent and Lenders are relying on the truth and accuracy of the foregoing in connection with the participating Lenders’ acceptance of the Discount Voluntary Prepayment made as a result of this Discount Voluntary Prepayment Notice.
[Borrower] 29 respectfully requests that Administrative Agent notify each of the Lenders of holding Loans of the applicable Class of this Discounted Voluntary Prepayment Notice.

28  	Insert applicable.	
29  	Insert applicable.	
 
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IN WITNESS WHEREOF , the undersigned has executed this Discounted Voluntary Prepayment Notice as of the date first above written.

[BORROWER] 30	
		
By:	 	 	
	 	Name:	
	 	Title	

30  	Insert applicable.	
 
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EXHIBIT H
FORM OF GUARANTY
[attached hereto]
 
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GUARANTY
dated as of
[            ], 2017
among
DELPHI JERSEY HOLDINGS PLC,
DELPHI POWERTRAIN CORPORATION,
THE OTHER GUARANTORS PARTY HERETO FROM TIME TO TIME,
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

 

Table of Contents

 	 	 	  	Page	 	
ARTICLE I DEFINITIONS	  	 	H-1	 	
Section 1.01	 	Credit Agreement Definitions	  	 	H-1	 	
Section 1.02	 	Other Defined Terms	  	 	H-1	 	
		
ARTICLE II GUARANTEE	  	 	H-2	 	
Section 2.01	 	Guarantee	  	 	H-2	 	
Section 2.02	 	Guarantee of Payment	  	 	H-2	 	
Section 2.03	 	No Limitations	  	 	H-3	 	
Section 2.04	 	Reinstatement	  	 	H-5	 	
Section 2.05	 	Agreement To Pay; Subrogation	  	 	H-5	 	
Section 2.06	 	Information	  	 	H-5	 	
		
ARTICLE III INDEMNITY, SUBROGATION AND SUBORDINATION	  	 	H-6	 	
		
ARTICLE IV MISCELLANEOUS	  	 	H-6	 	
Section 4.01	 	Notices	  	 	H-6	 	
Section 4.02	 	Waivers; Amendment	  	 	H-6	 	
Section 4.03	 	Administrative Agent’s Fees and Expenses; Indemnification	  	 	H-7	 	
Section 4.04	 	Successors and Assigns	  	 	H-7	 	
Section 4.05	 	Survival of Agreement	  	 	H-7	 	
Section 4.06	 	Counterparts; Effectiveness; Several Agreement	  	 	H-7	 	
Section 4.07	 	Severability	  	 	H-8	 	
Section 4.08	 	GOVERNING LAW, ETC	  	 	H-8	 	
Section 4.09	 	WAIVER OF RIGHT TO TRIAL BY JURY	  	 	H-8	 	
Section 4.10	 	Headings	  	 	H-9	 	
Section 4.11	 	Obligations Absolute	  	 	H-9	 	
Section 4.12	 	Termination or Release	  	 	H-9	 	
Section 4.13	 	Additional Restricted Subsidiaries	  	 	H-10	 	
Section 4.14	 	Recourse; Limited Obligations	  	 	H-10	 	

SCHEDULES	
			
Schedule I	 	 	—	 	  	Initial Guarantors	
	
EXHIBITS	
			
Exhibit I	 	 	—	 	  	Form of Guaranty Supplement	
 
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This GUARANTY, dated as of [            ], 2017 is among DELPHI JERSEY HOLDINGS PLC (“ Parent ”), a public limited company incorporated under the laws of Jersey, DELPHI POWERTRAIN CORPORATION (the “ U.S. Parent Borrower ”), a Delaware corporation, the other Guarantors set forth on Schedule I hereto or otherwise from time to time party hereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent for the Guaranteed Parties (as defined below) (together, with its successors and assigns, the “ Administrative Agent ”).
Reference is made to the Credit Agreement, dated as of September 7, 2017 (as amended, restated, amended and restated, modified or supplemented from time to time, the “ Credit Agreement ”), by and among Parent, the U.S. Parent Borrower, the Administrative Agent, the Lenders and Issuing Banks from time to time party thereto and the other agents and arrangers party thereto.
The Lenders have agreed to extend credit to the Borrowers and the Issuing Banks have indicated their willingness to issue Letters of Credit on the terms and conditions set forth in the Credit Agreement. The obligations of the Lenders and Issuing Banks to extend such credit are, in each case, conditioned upon, among other things, the execution and delivery of this Agreement by each Guarantor (as defined below). The Guarantors are Affiliates of one another and will derive substantial direct and indirect benefits from the extensions of credit to the Borrowers pursuant to the Credit Agreement, and are willing to execute and deliver this Agreement in order to induce the Lenders and Issuing Banks to extend such credit. Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01     Credit Agreement Definitions . Capitalized terms used in this Agreement, including the preamble and introductory paragraphs hereto, and not otherwise defined herein have the meanings specified in Section 1.01 of the Credit Agreement.
The rules of construction specified in Sections 1.02 through 1.08 (inclusive) of the Credit Agreement also apply to this Agreement.
Section 1.02     Other Defined Terms . As used in this Agreement, the following terms have the meanings specified below:
“ Accommodation Payment ” has the meaning assigned to such term in Article III .
“ Agreement ” means this Guaranty (as amended, restated, amended and restated, supplemented or otherwise modified from time to time).
“ Allocable Amount ” has the meaning assigned to such term in Article III .
“ Credit Agreement ” has the meaning assigned to such term in the preliminary statement of this Agreement.
“ Debtor Relief Laws ” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“ Guaranteed Obligations ” mean the “Obligations” as defined in the Credit Agreement.
 
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“ Guaranteed Parties ” means, collectively, the Administrative Agent, the Issuing Banks, the Lenders, any Affiliate of a Lender to which Obligations are owed and each co-agent or sub-agent appointed by the Administrative Agent pursuant to Article VIII of the Credit Agreement.
“ Guarantors ” means, collectively, (a) the Parent Entity (other than with respect to its own obligations), (b) the U.S. Parent Borrower (other than with respect to its own obligations) and (c) each Restricted Subsidiary listed on Schedule I hereto, and any other Person that becomes a party to this Agreement after the Effective Date pursuant to Section  4.13 ; provided that if any such Guarantor is released from its obligations hereunder as provided in Section  4.12 , such Person shall cease to be a Guarantor hereunder and for all purposes effective upon such release.
“ Guaranty Supplement ” means an instrument substantially in the form of Exhibit I hereto.
“ Qualified ECP Grantor ” means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant Guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
“ Termination Conditions ” means (a) the payment in full in cash of the Obligations (other than (x) Obligations under Secured Hedge Agreements, (y) Cash Management Obligations and (z) contingent reimbursement and indemnification obligations not yet accrued and payable) and (b) the termination of the Commitments and the termination or expiration of all Letters of Credit (unless backstopped or cash collateralized in accordance with Section 2.05(j) of the Credit Agreement or in a manner reasonably acceptable to the applicable Issuing Banks).
“ UFCA ” has the meaning assigned to such term in Article III .
“ UFTA ” has the meaning assigned to such term in Article III .
ARTICLE II
Guarantee
Section 2.01     Guarantee . Each Guarantor irrevocably, absolutely and unconditionally guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, the due and punctual payment and performance of the Guaranteed Obligations, in each case, whether such Guaranteed Obligations are now existing or hereafter incurred under, arising out of or in connection with any Loan Document and whether at maturity, by acceleration or otherwise. Each of the Guarantors further agrees that the Guaranteed Obligations may be extended, increased or renewed, amended or modified, in whole or in part, without notice to, or further assent from, such Guarantor and that such Guarantor will remain bound upon its guarantee hereunder notwithstanding any such extension, increase, renewal, amendment or modification of any Guaranteed Obligation. Each of the Guarantors waives promptness, presentment to, demand of payment from, and protest to, any Guarantor or any other Loan Party of any of the Guaranteed Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment.
Section 2.02     Guarantee of Payment . Each of the Guarantors further agrees that its guarantee hereunder constitutes a guarantee of payment when due (whether or not any proceeding under any Debtor Relief Law shall have stayed the accrual of collection of any of the Guaranteed Obligations or operated as a discharge thereof) and not of collection, and waives any right to require that any resort be
 
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had by the Administrative Agent or any other Guaranteed Party to any security held for the payment of any of the Guaranteed Obligations, or to any balance of any deposit account or credit on the books of the Administrative Agent or any other Guaranteed Party in favor of any other Guarantor or any other Person. The obligations of each Guarantor hereunder are independent of the obligations of any other Guarantor or any Borrower, and a separate action or actions may be brought and prosecuted against each Guarantor whether or not action is brought against any other Guarantor or the Borrowers and whether or not any other Guarantor or the Borrowers be joined in any such action or actions. Any payment required to be made by a Guarantor hereunder may be required by the Administrative Agent or any other Guaranteed Party on any number of occasions.
Section 2.03     No Limitations . (a) Except for termination or release of a Guarantor’s obligations hereunder as expressly provided in Section  4.12 , to the fullest extent permitted by applicable Law, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of any of the Guaranteed Obligations, any impossibility in the performance of any of the Guaranteed Obligations, or otherwise. Without limiting the generality of the foregoing, to the fullest extent permitted by applicable Law and except for termination or release of a Guarantor’s obligations hereunder in accordance with the terms of Section  4.12 (but without prejudice to Section  2.04 ), the obligations of each Guarantor hereunder shall not be discharged, impaired or otherwise affected by, and to the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of, (i) the failure of the Administrative Agent, any other Guaranteed Party or any other Person to assert any claim or demand or to enforce any right or remedy under the provisions of any Loan Document or otherwise; (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, any Loan Document or any other agreement, including with respect to any other Guarantor under this Agreement; (iii) the release of, or any impairment of any security held by the Administrative Agent or any other Guaranteed Party for the Guaranteed Obligations; (iv) any default, failure or delay, willful or otherwise, in the performance of the Guaranteed Obligations; (v) the failure to perfect any security interest in, or the release of, any security held by or on behalf of the Administrative Agent or any other Guaranteed Party; (vi) any change in the corporate existence, structure or ownership of any Loan Party, the lack of legal existence of any Borrower or any other Guarantor or legal obligation to discharge any of the Guaranteed Obligations by any Borrower or any other Guarantor for any reason whatsoever, including, without limitation, in any insolvency, bankruptcy or reorganization of any Loan Party; (vii) the existence of any claim, set-off or other rights that any Guarantor may have at any time against any Borrower, the Administrative Agent, any other Guaranteed Party or any other Person, whether in connection with the Agreement, the other Loan Documents or any unrelated transaction; (viii) this Agreement having been determined (on whatsoever grounds) to be invalid, non-binding or unenforceable against any other Guarantor ab initio or at any time after the Effective Date or (ix) any other circumstance (including statute of limitations), any act or omission that may or might in any manner or to any extent vary the risk of any Guarantor or otherwise operate as a defense to, or discharge of, any Borrower, any Guarantor or any other guarantor or surety as a matter of law or equity (in each case, other than the satisfaction of the Termination Conditions). Anything contained in this Agreement to the contrary notwithstanding, the obligations of each Guarantor under this Agreement shall be limited to an aggregate amount equal to the largest amount that would not render its obligations under this Agreement subject to avoidance as a fraudulent transfer or conveyance under Section 548 of the Bankruptcy Code of the United States or any comparable provisions of any similar federal or state law.
(b)    To the fullest extent permitted by applicable Law and except for termination or release of a Guarantor’s obligations hereunder in accordance with the terms of Section  4.12 (but without prejudice to Section  2.04 ), each Guarantor waives any defense based on or arising out of any defense of
 
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any Borrower or any other Guarantor or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any Borrower or any other Guarantor, other than the satisfaction of the Termination Conditions. The Administrative Agent and the other Guaranteed Parties may in accordance with the terms of the Loans Documents, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Borrower or any other Guarantor or exercise any other right or remedy available to them against any Guarantor, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Termination Conditions have been satisfied. To the fullest extent permitted by applicable Law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable Law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against any Borrower or any other Guarantor, as the case may be, or any security. To the fullest extent permitted by applicable Law, each Guarantor waives any and all suretyship defenses.
(c)    Each Guarantor, and by its acceptance of this Agreement, the Administrative Agent, hereby confirms that it is the intention of all such Persons that this Agreement and the Obligations of each Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of Debtor Relief Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or similar foreign, federal or state law to the extent applicable to this Agreement and the Obligations of each Guarantor hereunder. To effectuate the foregoing intention, the Administrative Agent and the Guarantors hereby irrevocably agree that the Obligations of each Guarantor under this Agreement at any time shall be limited to the maximum amount as will result in the Obligations of such Guarantor under this Agreement not constituting a fraudulent transfer or conveyance.
(d)    Each Guarantor acknowledges that it will receive direct or indirect benefits from the financing arrangements contemplated by the Loan Documents and that the waivers set forth in this Agreement are knowingly made in contemplation of such benefits
(e)    Each Qualified ECP Grantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under this Agreement in respect of Swap Obligations (provided, however, that each Qualified ECP Grantor shall only be liable under this Section 2.03(e) for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 2.03(e), or otherwise under this Agreement, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Grantor under this Section 2.03(e) shall remain in full force and effect until the Termination Conditions have been satisfied. Each Qualified ECP Grantor intends that this Section 2.03(e) constitute, and this Section 2.03(e) shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
(f)    Notwithstanding anything to the contrary contained in this Agreement, each Guarantor waives any right it may have under the present or future laws of the Island of Jersey to (i) whether by virtue of the droit de discussion or otherwise, require that recourse be had to the assets of any other person before any claim is enforced against it in respect of the obligations or liabilities assumed by it under this Agreement or any other Loan Document and (ii) whether by virtue of the droit de division or otherwise to require that any obligation or liability under this Agreement or any other Loan Document be divided or apportioned with any other person or reduced in any manner whatsoever.
 
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Section 2.04     Reinstatement . Notwithstanding anything to the contrary contained in this Agreement, each of the Guarantors agrees that (a) its guarantee hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Guaranteed Obligation is rescinded or must otherwise be restored by the Administrative Agent or any other Guaranteed Party upon the bankruptcy or reorganization (or any analogous proceeding in any jurisdiction) of any Borrower or any other Guarantor or otherwise and (b) the provisions of this Section  2.04 shall survive the termination of this Agreement.
Section 2.05     Agreement To Pay; Subrogation . In furtherance of the foregoing and not in limitation of any other right that the Administrative Agent or any other Guaranteed Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of any Borrower or any other Guarantor to pay any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Administrative Agent for distribution to the applicable Guaranteed Parties in cash the amount of such unpaid Guaranteed Obligation. Upon payment by any Guarantor of any sums to the Administrative Agent as provided above, all rights of such Guarantor against any Borrower or any other Guarantor arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subject to Article III .
Section 2.06     Information . Each Guarantor assumes all responsibility for being and keeping itself informed of each Borrower’s and each other Guarantor’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Administrative Agent or the other Guaranteed Parties will have any duty to advise such Guarantor of information known to it or any of them regarding such circumstances or risks.
Section 2.07     Representations and Warranties . Each Guarantor hereby represents and warrants that this Agreement (i) has been duly executed and delivered by each Guarantor that is party hereto and (ii) constitutes a legal, valid and binding obligation of such Guarantor, enforceable against each Guarantor that is party hereto in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws relating to or affecting creditors’ rights generally and by general principles of equity (whether considered in a proceeding in equity or law).
 
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ARTICLE III
Indemnity, Subrogation and Subordination
Upon payment by any Guarantor of any Guaranteed Obligations, all rights of such Guarantor against any Borrower or any other Guarantor arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the payments that must be made in order for the Termination Conditions to be satisfied. If any amount shall be paid to any Borrower or any other Guarantor in violation of the foregoing restrictions on account of (i) such subrogation, contribution, reimbursement, indemnity or similar right or (ii) any such indebtedness of any Borrower or any other Guarantor, such amount shall be held in trust for the benefit of the Guaranteed Parties and shall forthwith be paid to the Administrative Agent to be credited against the payment of the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Credit Agreement and the other Loan Documents. Subject to the foregoing, to the extent that any Guarantor shall, under this Agreement or the Credit Agreement as a joint and several obligor, repay any of the Guaranteed Obligations constituting Loans or other advances made to another Loan Party under the Credit Agreement (an “ Accommodation Payment ”), then the Guarantor making such Accommodation Payment shall be entitled to contribution and indemnification from, and be reimbursed by, each of the other Guarantors in an amount equal to a fraction of such Accommodation Payment, the numerator of which fraction is such other Guarantor’s Allocable Amount and the denominator of which is the sum of the Allocable Amounts of all of the Guarantors; provided that such rights of contribution and indemnification shall be subordinated to the prior payment of the payments that must be made in order for the Termination Conditions to be satisfied. As of any date of determination, the “ Allocable Amount ” of each Guarantor shall be equal to the maximum amount of liability for Accommodation Payments which could be asserted against such Guarantor hereunder and under the Credit Agreement without (a) rendering such Guarantor “insolvent” within the meaning of Section 101 (31) of the Bankruptcy Code of the United States, Section 2 of the Uniform Fraudulent Transfer Act (“ UFTA ”) or Section 2 of the Uniform Fraudulent Conveyance Act (“ UFCA ”), (b) leaving such Guarantor with unreasonably small capital or assets, within the meaning of Section 548 of the Bankruptcy Code of the United States, Section 4 of the UFTA, or Section 5 of the UFCA, or (c) leaving such Guarantor unable to pay its debts as they become due within the meaning of Section 548 of the Bankruptcy Code of the United States or Section 4 of the UFTA, or Section 5 of the UFCA.
ARTICLE IV
Miscellaneous
Section 4.01     Notices . All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 9.01 of the Credit Agreement. All communications and notices hereunder to a Guarantor shall be given in care of the Borrower Agent.
Section 4.02     Waivers; Amendment . (a) No failure by any Guaranteed Party to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by Law. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section  4.02 , and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any other Agent or any Lender may have had notice or knowledge of such Default at the time. No notice or demand on any Guaranty Party in any case shall entitle any Guaranty Party to any other or further notice or demand in similar or other circumstances.
 
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(b)    Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Section 9.02 of the Credit Agreement.
Section 4.03     Administrative Agent’s Fees and Expenses; Indemnification . (a) Each Guarantor, jointly with the other Guarantors and severally, agrees to reimburse the Administrative Agent for its fees and expenses incurred hereunder to the extent provided in Section 9.03 of the Credit Agreement; provided that each reference therein to each “Borrower” shall be deemed for this purpose to also be a reference to each “Guarantor.”
(b)    Any such amount payable as provided hereunder shall be additional Obligations guaranteed hereby. The provisions of this Section 4.03 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Loan Document, the consummation of the transactions contemplated hereby, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Administrative Agent. All amounts due under this Section 4.03 shall be payable within fifteen Business Days of written demand therefor.
Section 4.04     Successors and Assigns . Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party permitted under the Credit Agreement; and all covenants, promises and agreements by or on behalf of any Guarantor or any Guaranteed Party that are contained in this Agreement shall bind and inure to the benefit of their respective permitted successors and assigns. Except in a transaction expressly permitted under the Credit Agreement, no Guarantor may assign any of its rights or obligations hereunder without the written consent of the Administrative Agent.
Section 4.05     Survival of Agreement . All covenants, agreements, indemnities, representations and warranties made by the Guarantors in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Guaranteed Parties and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any Guaranteed Party or on its behalf and notwithstanding that any Guaranteed Party may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended under the Credit Agreement or any other Loan Document, and shall continue in full force and effect until this Agreement is terminated as provided in Section  4.12 hereof, or with respect to any individual Guarantor until such Guarantor is otherwise released from its obligations under this Agreement in accordance with the terms hereof.
Section 4.06     Counterparts; Effectiveness; Several Agreement . This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement shall become effective when it shall have been executed by the Guarantors and the Administrative Agent and thereafter shall be binding upon and inure to the benefit of each Guarantor, the Administrative Agent, the other Guaranteed Parties and their respective permitted successors and assigns, subject to Section  4.04 hereof. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means (including in.pdf or .tif format via electronic mail) shall be
 
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effective as delivery of a manually executed counterpart of this Agreement. This Agreement shall be construed as a separate agreement with respect to each Guarantor and may be amended, restated, amended and restated, modified, supplemented, waived or released with respect to any Guarantor without the approval of any other Guarantor and without affecting the obligations of any other Guarantor hereunder.
Section 4.07     Severability . If any provision of this Agreement is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 4.08     GOVERNING LAW, ETC . (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(b)    BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH GUARANTOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY IN THE BOROUGH OF MANHATTAN AND OF ANY UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK SITTING IN NEW YORK CITY IN THE BOROUGH OF MANHATTAN, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH PARTY HERETO AGREES THAT THE ADMINISTRATIVE AGENT AND THE OTHER GUARANTEED PARTIES RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS UNDER THIS AGREEMENT OR THE ENFORCEMENT OF ANY JUDGMENT.
(c)    EACH GUARANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION 4.08. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
Section 4.09     WAIVER OF RIGHT TO TRIAL BY JURY . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
 
H-8

DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4.09.
Section 4.10     Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.
Section 4.11     Obligations Absolute . To the extent permitted by Law, all rights of the Administrative Agent and the other Guaranteed Parties hereunder and all obligations of each Guarantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any agreement with respect to any of the Guaranteed Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document, or any other agreement or instrument, (c) any release or amendment or waiver of or consent under or departure from any guarantee guaranteeing all or any of the Guaranteed Obligations or (d) subject only to termination or release of a Guarantor’s obligations hereunder in accordance with the terms of Section  4.12 , but without prejudice to reinstatement rights under Section  2.04 , any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Guarantor in respect of the Guaranteed Obligations or this Agreement.
Section 4.12     Termination or Release .
(a)     This Agreement and the Guarantees made herein shall terminate with respect to all Guaranteed Obligations when the Termination Conditions have been satisfied.
(b)     A Guarantor shall automatically be released (i) in the circumstances set forth in Section 5.09 of the Credit Agreement and in paragraph (i) of Article VIII of the Credit Agreement or (ii) upon consummation of any transaction or designation permitted under the Credit Agreement pursuant to which such Guarantor ceases to be a Restricted Subsidiary.
(c)    If a Covenant Suspension Period occurs, a Guarantor shall automatically be released pursuant to and in accordance with the provisions of Section 5.12 of the Credit Agreement.
(d)    In connection with any termination or release pursuant to this Section  4.12 , the Administrative Agent shall execute and deliver to any Guarantor, at such Guarantor’s expense, all documents that such Guarantor shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to paragraphs (a), (b) or (c) above shall be without recourse, representation or warranty of any kind (whether express or implied) by the Administrative Agent.
(e)    At any time that the respective Guarantor desires that the Administrative Agent take any of the actions described in immediately preceding paragraph (d), it shall deliver to the Administrative Agent an officer’s certificate certifying that the release of the respective Guarantor is permitted pursuant to paragraphs (a), (b) or (c) above. The Administrative Agent shall have no liability whatsoever to any Guaranteed Party as a result of any release of any Guarantor by it as permitted (or which the Administrative Agent in good faith believes to be permitted) by this Section  4.12 .
 
H-9

Section 4.13     Additional Restricted Subsidiaries . To the extent required by Section 5.09 of the Credit Agreement, a Restricted Subsidiary shall be a Guarantor hereunder with the same force and effect as if originally named as a Guarantor herein, and such Restricted Subsidiary shall execute and deliver to the Administrative Agent a Guaranty Supplement. Upon execution and delivery by the Administrative Agent and a Restricted Subsidiary of a Guaranty Supplement, such Restricted Subsidiary shall become a Guarantor hereunder with the same force and effect as if originally named as a Guarantor herein. The execution and delivery of any such instrument shall not require the consent of any other Guarantor hereunder. The rights and obligations of each Guarantor hereunder shall remain in full force and effect notwithstanding the addition of any new Guarantor as a party to this Agreement.
Section 4.14     Recourse; Limited Obligations . This Agreement is made with full recourse to each Guarantor and pursuant to and upon all the warranties, representations, covenants and agreements on the part of such Guarantor contained herein, in the Credit Agreement and the other Loan Documents and otherwise in writing in connection herewith or therewith. It is the desire and intent of each Guarantor and each applicable Guaranteed Party that this Agreement shall be enforced against each Guarantor to the fullest extent permissible under applicable Law applied in each jurisdiction in which enforcement is sought.
Section 4.15     Right of Set-Off . In addition to any rights and remedies of the Lenders provided by Law, upon the occurrence and during the continuance of any Event of Default, each Lender is authorized at any time and from time to time, without prior notice to any Guarantor, any such notice being waived by each Guarantor to the fullest extent permitted by applicable Law, to set-off and apply any and all deposits (general or special, time or demand, provisions or final) at any time held by, and other Indebtedness at any time owing by such Lender to or for the credit or the account of the respective Guarantor against any and all obligations owing to such Lender hereunder, now or hereafter existing, irrespective of whether or not such Lender shall have made demand under this Agreement and although such obligations may be contingent or unmatured or denominated in a currency different from that of the applicable deposit or Indebtedness. Each Lender agrees promptly to notify the relevant Guarantor and the Administrative Agent after any such set-off and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such setoff and application. The rights of each Lender under this Section 4.15 are in addition to other rights and remedies (including other rights of setoff) that the Administrative Agent and such Lender may have.
[Signature Pages Follow]
 
H-10

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

GUARANTORS :	
	
DELPHI JERSEY HOLDINGS PLC, as Parent	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
DELPHI POWERTRAIN CORPORATION, as U.S. Parent Borrower	
		
By:	 	                                          	
	 	Name:	
	 	Title:	
	
[                    ], as a Guarantor	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
[SIGNATURE PAGE TO GUARANTY]

					
ACCEPTED AND AGREED:	
		
	 	ADMINISTRATIVE AGENT:	
		
	 	JPMORGAN CHASE BANK, N.A. , as Administrative Agent	
			
	 	By:	 	                                          	
	 		 	Name:	
	 		 	Title:	
 
[SIGNATURE PAGE TO GUARANTY]

SCHEDULE I TO GUARANTY
INITIAL GUARANTORS
[None.]

EXHIBIT I TO GUARANTY
FORM OF GUARANTY SUPPLEMENT
SUPPLEMENT NO.      dated as of          , 20     , to the Guaranty dated as of [            ], 2017, among Delphi Jersey Holdings PLC, Delphi Powertrain Corporation, the other Guarantors party thereto from time to time and JPMorgan Chase Bank, N.A., as Administrative Agent on behalf of the Guaranteed Parties (together, with its successors and assigns, the “ Administrative Agent ”) (as amended, restated, modified or supplemented from time to time, the “ Guaranty ”).
A.    Reference is made to the Credit Agreement, dated as of September 7, 2017 (as amended, restated, amended and restated, modified or supplemented from time to time, the “ Credit Agreement ”), by, among others, Delphi Jersey Holdings PLC (the “ Parent ”), Delphi Powertrain Corporation (the “ U.S. Parent Borrower ”), the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders, each Lender and Issuing Bank from time to time party thereto and the other agents and arrangers party thereto.
B.    Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement and the Guaranty, as applicable.
C.    The Guarantors have entered into the Guaranty in order to induce the Lenders and Issuing Banks to extend such credit. Section 4.13 of the Guaranty provides that additional Restricted Subsidiaries may become Guarantors under the Guaranty by execution and delivery of an instrument in the form of this Guaranty Supplement. The undersigned Restricted Subsidiary (the “ New Guarantor ”) is executing this Guaranty Supplement in accordance with the requirements of the Credit Agreement to become a Guarantor under the Guaranty as consideration for Loans and Letters of Credit previously made.
Accordingly, the Administrative Agent and the New Guarantor agree as follows:
Section  1 . In accordance with Section 4.13 of the Guaranty, the New Guarantor by its signature below becomes a Guarantor under the Guaranty with the same force and effect as if originally named therein as a Guarantor and the New Guarantor hereby agrees to all the terms and provisions of the Guaranty applicable to it as a Guarantor thereunder. Each reference to a “Guarantor” in the Guaranty shall be deemed to include the New Guarantor as if originally named therein as a Guarantor. The Guaranty is hereby incorporated herein by reference.
Section  2 . The New Guarantor represents and warrants to the Administrative Agent and the other Guaranteed Parties that this Guaranty Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and by general principles of equity and principles of good faith and fair dealing.
Section  3 . This Guaranty Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Guaranty Supplement shall become effective when the Administrative Agent shall have received a counterpart of this Guaranty Supplement that bears the signature of the New Guarantor and the Administrative Agent has executed a counterpart hereof. Delivery of an executed counterpart of a signature page of this Guaranty Supplement by telecopy or other electronic imaging means (including in .pdf or .tif format via electronic mail) shall be effective as delivery of a manually executed counterpart of this Guaranty Supplement.
 
I-1

Section  4 . Except as expressly supplemented hereby, the Guaranty shall remain in full force and effect, subject to the termination of the Guaranty pursuant to Section 4.12 thereof.
Section  5 .
(a)     THIS GUARANTY SUPPLEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(b)    BY EXECUTING AND DELIVERING THIS GUARANTY SUPPLEMENT, THE NEW GUARANTOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY IN THE BOROUGH OF MANHATTAN AND OF ANY UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK SITTING IN NEW YORK CITY IN THE BOROUGH OF MANHATTAN, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY SUPPLEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH PARTY HERETO AGREES THAT THE ADMINISTRATIVE AGENT AND THE OTHER GUARANTEED PARTIES RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST THE NEW GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS UNDER THIS GUARANTY SUPPLEMENT OR THE ENFORCEMENT OF ANY JUDGMENT.
(c)    THE NEW GUARANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY SUPPLEMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d)    EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY SUPPLEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
 
I-2

ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS GUARANTY SUPPLEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section  6 . If any provision of this Guaranty Supplement is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Guaranty Supplement shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section  7 . All communications and notices hereunder shall be in writing and given as provided in Section 4.01 of the Guaranty.
Section  8 . The New Guarantor agrees to reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Guaranty Supplement, as provided in Section 4.03 of the Guaranty.
Section  9 . For purposes of New York General Obligations Law §5-1105, the parties hereto agree that the promise by the New Guarantor contained herein is a Guaranty (as defined in the Credit Agreement) and that (i) the consideration for this Guaranty, which is hereby expressed in writing, is the making of the Loans to the applicable Borrowers on the Closing Date and from time to time thereafter, the making of Commitments with respect to the Loans on the Effective Date and from time to time thereafter and the other extensions of credit that constitute Obligations under the Credit Agreement from time to time outstanding, and (ii) such Loans, Commitments and other extensions of credit have been given and/or performed and would be valid consideration for this Guaranty Supplement but for the time that they were given (i.e., would have been valid consideration for this Guaranty if the New Guarantor had entered into this Guaranty contemporaneously with the initial making of the Loans, Commitments and other extensions of credit on the Closing Date).
 
I-3

IN WITNESS WHEREOF, the New Guarantor has duly executed this Guaranty Supplement as of the day and year first above written.

[NAME OF NEW GUARANTOR]	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
JPMORGAN CHASE BANK, N.A., as Administrative Agent	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
I-4

EXHIBIT I
FORM OF PLEDGE AND SECURITY AGREEMENT
[attached hereto]
 
I-1

PLEDGE AND SECURITY AGREEMENT
Dated as of [            ], 2017
among
D ELPHI J ERSEY H OLDINGS PLC,
D ELPHI P OWERTRAIN C ORPORATION ,
each as Grantor
and
Each other Grantor
From Time to Time Party Hereto
and
JPM ORGAN C HASE B ANK , N.A.
as Administrative Agent

TABLE OF CONTENTS

 	 	 	  	Page	 	
ARTICLE I	 	D EFINED T ERMS	  	 	1 1	 	
			
Section 1.1	 	Definitions	  	 	1	 	
			
ARTICLE II	 	G RANT OF S ECURITY I NTEREST	  	 	I-5	 	
			
Section 2.1	 	Collateral	  	 	I-5	 	
Section 2.2	 	Grant of Security Interest in Collateral	  	 	I-6	 	
Section 2.3	 	[Reserved]	  	 	I-7	 	
Section 2.4	 	Foreign Grantors	  	 	I-7	 	
			
ARTICLE III	 	R EPRESENTATIONS AND W ARRANTIES	  	 	I-7	 	
			
Section 3.1	 	Title; No Other Liens	  	 	I-7	 	
Section 3.2	 	Perfection and Priority	  	 	I-7	 	
Section 3.3	 	Jurisdiction of Organization; Chief Executive Office	  	 	I-8	 	
Section 3.4	 	Perfection Certificate	  	 	I-8	 	
Section 3.5	 	Pledged Collateral	  	 	I-9	 	
Section 3.6	 	[Reserved]	  	 	I-9	 	
Section 3.7	 	Intellectual Property	  	 	I-9	 	
Section 3.8	 	Commercial Tort Claims	  	 	I-9	 	
			
ARTICLE IV	 	C OVENANTS	  	 	I-9	 	
			
Section 4.1	 	Generally	  	 	I-10	 	
Section 4.2	 	Maintenance of Perfected Security Interest; Further Documentation	  	 	I-10	 	
Section 4.3	 	Changes in Locations, Name, Etc	  	 	I-10	 	
Section 4.4	 	Pledged Collateral	  	 	I-12	 	
Section 4.5	 	Accounts	  	 	I-12	 	
Section 4.6	 	Delivery of Instruments and Chattel Paper	  	 	I-12	 	
Section 4.7	 	Intellectual Property	  	 	I-13	 	
Section 4.8	 	Notice of Commercial Tort Claims	  	 	I-14	 	
			
ARTICLE V	 	R EMEDIAL P ROVISIONS	  	 	I-15	 	
			
Section 5.1	 	Code and Other Remedies	  	 	I-15	 	
Section 5.2	 	Accounts and Payments in Respect of General Intangibles	  	 	I-15	 	
Section 5.3	 	Pledged Collateral	  	 	I-16	 	
Section 5.4	 	Grant of Intellectual Property License	  	 	I-17	 	
Section 5.5	 	Registration Rights	  	 	I-17	 	
Section 5.6	 	Deficiency	  	 	I-17	 	

1  	NTD: To be updated.	
 
i

TABLE OF CONTENTS
(continued)

 	 	 	  	Page	 	
ARTICLE VI	 	T HE A DMINISTRATIVE A GENT	  	 	I-17	 	
			
Section 6.1	 	Administrative Agent’s Appointment as Attorney-in-Fact	  	 	I-17	 	
Section 6.2	 	Duty of Administrative Agent	  	 	I-19	 	
Section 6.3	 	Authorization of Financing Statements	  	 	I-19	 	
Section 6.4	 	Authority of Administrative Agent	  	 	I-20	 	
			
ARTICLE VII	 	M ISCELLANEOUS	  	 	I-20	 	
			
Section 7.1	 	Amendments in Writing	  	 	I-20	 	
Section 7.2	 	Notices	  	 	I-20	 	
Section 7.3	 	No Waiver by Course of Conduct; Cumulative Remedies	  	 	I-20	 	
Section 7.4	 	Successors and Assigns	  	 	I-21	 	
Section 7.5	 	Counterparts	  	 	I-21	 	
Section 7.6	 	Severability	  	 	I-21	 	
Section 7.7	 	Section Headings	  	 	I-21	 	
Section 7.8	 	Entire Agreement	  	 	I-21	 	
Section 7.9	 	Governing Law; Waiver of Jury Trial	  	 	I-22	 	
Section 7.10	 	Additional Grantors	  	 	I-22	 	
Section 7.11	 	Release of Collateral	  	 	I-22	 	
Section 7.12	 	Reinstatement	  	 	I-23	 	
Section 7.13	 	Administrative Agent	  	 	I-23	 	
 
ii

TABLE OF CONTENTS
(continued)

Annexes	
		
Annex 1	  	Form of Joinder Agreement	
Annex 2	  	Form of Short Form Copyright Security Agreement	
Annex 3	  	Form of Short Form Patent Security Agreement	
Annex 4	  	Form of Short Form Trademark Security Agreement	
 
iii

P LEDGE AND S ECURITY A GREEMENT , dated as of [            ], 2017 (this “ Agreement ”), among DELPHI JERSEY HOLDINGS PLC, a public limited company incorporated under the laws of Jersey (“ Parent ”), DELPHI POWERTRAIN CORPORATION, a Delaware corporation (the “ U.S. Parent Borrower ”), and each of the other entities listed on the signature pages hereof or that becomes a party hereto pursuant to Section  7.10 ( Additional Grantors ) (each a “ Grantor ” and, collectively, the “ Grantors ”), in favor of JPMORGAN CHASE BANK, N.A., as administrative agent and collateral agent (in such capacities together with its successors in such capacity, the “ Administrative Agent ”) for the Secured Parties (as defined in the Credit Agreement referred to below).
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, dated as of [            ], 2017 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”) by and among the U.S. Parent Borrower, the Subsidiary Borrowers, Parent, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, the Lenders have severally agreed to make extensions of credit to the Borrowers upon the terms and subject to the conditions set forth therein;
WHEREAS, the Grantors are party to the Guaranty pursuant to which they have guaranteed the Obligations (other than each Borrower with respect to its own obligations); and
WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrowers under the Credit Agreement that the Grantors shall have executed and delivered this Agreement to the Administrative Agent.
NOW, THEREFORE, in consideration of the premises, the Administrative Agent and each Grantor hereby agree as follows:
ARTICLE I    D EFINED T ERMS
Section 1.1    Definitions
(a)    Unless otherwise defined herein, terms defined in the Credit Agreement and used herein have the meanings given to them in the Credit Agreement. The rules of construction specified in Sections 1.03, 1.05, 1.06 and 1.07 of the Credit Agreement shall also apply to this Agreement.
(b)    The Perfection Certificate delivered on the Closing Date and all descriptions of Collateral, schedules, amendments and supplements thereto are and shall at all times remain a part of this Agreement.
(c)    Terms used herein without definition that are defined in the UCC have the meanings given to them in the UCC, including the following terms (which are capitalized herein):
“ Account Debtor ”
“ Account ”

“ Certificated Security ”
“ Chattel Paper ”
“ Commercial Tort Claim ”
“ Commodity Account ”
“ Deposit Account ”
“ Documents ”
“ Entitlement Holder ”
“ Entitlement Order ”
“ Equipment ”
“ Financial Asset ”
“ General Intangible ”
“ Goods ”
“ Instruments ”
“ Inventory ”
“ Investment Property ”
“ Letter-of-Credit Right ”
“ Proceeds ”
“ Securities Account ”
“ Securities Intermediary ”
“ Security ”
“ Security Entitlement ”
(d)    The following terms shall have the following meanings:
“ Additional Pledged Collateral ” means any Pledged Collateral acquired by any Grantor after the date hereof and in which a security interest is granted pursuant to Section  2.2 ( Grant of Security Interest in Collateral ), including, to the extent a security interest is granted therein pursuant to Section  2.2 ( Grant of Security Interest in Collateral ), (i) all Equity Interests of any Restricted Subsidiary that are acquired by any Grantor after the date hereof, together with all certificates, instruments or other documents representing any of the foregoing and all rights and Security Entitlements of any Grantor in respect of any of the foregoing, (ii) all additional Indebtedness from time to time owed to any Grantor by any obligor on the Pledged Debt Instruments and the Instruments evidencing such Indebtedness and (iii) all interest, cash, Instruments and other property or Proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any of the foregoing. Additional Pledged Collateral may be General Intangibles, Instruments or Investment Property.
“ Agreement ” means this Pledge and Security Agreement.
“ Collateral ” has the meaning specified in Section  2.1 ( Collateral ).
“ Copyright Licenses ” means any written agreement naming any Grantor as licensor or licensee granting any right under any Copyright, including the grant of any right to copy, publicly perform, create derivative works, manufacture, distribute, exploit, use or sell materials derived from any Copyright.
 
I-2

“ Copyrights ” means (a) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof and all applications in connection therewith, including all registrations, recordings and applications in the United States Copyright Office or in any foreign counterparts thereof, and (b) the right to obtain all renewals thereof.
“ Domestic Person ” means any “ United States person ” under and as defined in Section 7701(a)(30) of the Code.
“ Excluded Equity ” means (i) any Equity Interests in excess of 65% of the total outstanding Equity Interests of (a) any direct Foreign Subsidiary (other than a Foreign Subsidiary that is the direct equity owner of Equity Interests of a Domestic Subsidiary Borrower) of any Grantor or (b) any direct Domestic Subsidiary that has no material assets other than Equity Interests (or Equity Interests and Indebtedness) of one or more Foreign Subsidiaries, (ii) margin stock, (iii) Equity Interests in Unrestricted Subsidiaries and (iv) Equity Interests in Receivables Entities.
“ Excluded Property ” means, collectively, (i) Excluded Equity, (ii) any rights under any permit, lease, license, contract, instrument or other agreement held by any Grantor that prohibits or requires the consent of any Person other than a Loan Party or any Subsidiary of a Loan Party as a condition to the creation by such Grantor of a Lien thereon, but only, in each case, to the extent, and for so long as, such prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by the UCC or any other applicable Law, (iii) Equipment owned by any Grantor that is subject to a Capitalized Lease Obligation or purchase money Lien permitted by clause (c) , (d) or (e)  of Section  6.02 of the Credit Agreement if the contract or other agreement in which such Lien is granted (or in the documentation providing for such Capitalized Lease Obligation) prohibits or requires the consent of any Person other than a Loan Party or any Subsidiary of a Loan Party as a condition to the creation of any other Lien on such Equipment (iv) any U.S. “intent to use” Trademark applications for which a statement of use has not been filed (but only until such statement is filed), (v) motor vehicles and other assets subject to certificates of title, letter of credit rights (except to the extent perfection can be obtained by filing of uniform commercial code financing statements) and commercial tort claims with a value of less than $15 million, (vi) Equity Interests in any Person other than the Borrowers and wholly-owned Restricted Subsidiaries to the extent not permitted by the terms of such Subsidiary’s organizational or joint venture documents, (vii) all leasehold interests in real property and any fee-owned real property other than Material Real Property, (viii) pledges and security interests prohibited by applicable law, rule or regulation after giving effect to the applicable anti-assignment provisions of the UCC and the other applicable law, (ix) assets to the extent a security interest in such assets would result in material adverse tax consequences (including as a result of the operation of Section 956 of the IRS Code), as determined by the Borrower Agent in good faith in consultation with the Administrative Agent and (ix) those assets as to which the Administrative Agent and the Borrower Agent reasonably agree that the cost of obtaining such a security interest or perfection thereof are excessive in relation to the benefit to the Lenders of the security to be afforded thereby; provided , however , “ Excluded Property ” shall not include any Proceeds, substitutions or replacements of Excluded Property (unless such Proceeds, substitutions or replacements would constitute Excluded Property).
 
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“ Foreign Grantors ” means, collectively, the Parent Entity, each Foreign Borrower and any other Foreign Subsidiary of the Parent Entity that is required to become a party hereto pursuant to Section 5.09 of the Credit Agreement.
“ Intellectual Property ” means, collectively, all rights, priorities and privileges of any Grantor relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses, trade secrets and Internet domain names, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.
“ Intercompany Note ” means any promissory note evidencing loans made by any Grantor or any of its Restricted Subsidiaries to any of its Restricted Subsidiaries or another Grantor.
“ Material Intellectual Property ” means Intellectual Property owned by or licensed to a Grantor and material to the conduct of such Grantor’s business.
“ Patents ” means (a) all patents of the United States, any other country or any political subdivision thereof and all reissues, reexaminations and extensions thereof, (b) all applications for patents of the United States or any other country and all divisionals, continuations and continuations-in-part thereof and (c) all rights to obtain any reissues, continuations or continuations-in-part of the foregoing.
“ Patent License ” means all written agreements providing for the grant by or to any Grantor of any right to manufacture, have manufactured, use, import, sell or offer for sale any invention or design covered in whole or in part by a Patent.
“ Pledged Certificated Stock ” means all Certificated Securities and any other Equity Interests of a Restricted Subsidiary evidenced by a certificate, Instrument or other equivalent document, in each case owned by any Grantor (except to the extent constituting Excluded Property), including all Equity Interests listed on Schedule 9 to the Perfection Certificate.
“ Pledged Collateral ” means, collectively, the Pledged Stock and the Pledged Debt Instruments.
“ Pledged Debt Instruments ” means all right, title and interest of any Grantor in Intercompany Notes and other Instruments evidencing any Indebtedness owed to such Grantor in an individual amount greater than or equal to $5,000,000 (except to the extent constituting Excluded Property), including all Indebtedness described on Schedule 10 to the Perfection Certificate, issued by the obligors named therein.
“ Pledged Stock ” means all Pledged Certificated Stock and all Pledged Uncertificated Stock. For purposes of this Agreement, the term “ Pledged Stock ” shall not include any Excluded Property.
 
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“ Pledged Uncertificated Stock ” means any Equity Interests of any Restricted Subsidiary held by a Grantor that is not a Pledged Certificated Stock (except to the extent constituting Excluded Property), including all right, title and interest of any Grantor as a limited or general partner in any partnership or as a member of any limited liability company.
“ Secured Obligations ” means the Obligations.
“ Securities Act ” means the Securities Act of 1933, as amended.
“ Trademark License ” means any written agreement providing for the grant by or to any Grantor of any right to use any Trademark.
“ Trademarks ” means (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and, in each case, all goodwill associated therewith, whether now existing or hereafter adopted or acquired, all registrations and recordings thereof and all applications in connection therewith, in each case whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and all common-law rights related thereto, and (b) the right to obtain all renewals thereof.
“ UCC ” means the Uniform Commercial Code as from time to time in effect in the State of New York; provided , however , that, in the event that, by reason of mandatory provisions of law, any of the attachment, perfection or priority of the Administrative Agent’s and the Secured Parties’ security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.
ARTICLE II    G RANT OF S ECURITY I NTEREST
Section 2.1    Collateral
For the purposes of this Agreement, all of the following property now owned or at any time hereafter acquired by a Grantor or in which a Grantor now has or at any time in the future may acquire any right, title or interests is collectively referred to as the “ Collateral ”:
(a)    all Accounts;
(b)    all Chattel Paper;
(c)    all Deposit Accounts; (d) all Documents;
(e)    all Goods and all Equipment;
 
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(f)    all General Intangibles;
(g)    all Instruments;
(h)    all Intellectual Property;
(i)    all Inventory;
(j)    all Investment Property;
(k)    all Letter-of-Credit Rights;
(l)    all Pledged Collateral;
(m)     the Commercial Tort Claims described on Schedule 12 to the Perfection Certificate and on any supplement thereto received by the Administrative Agent pursuant to Section  4.8 ( Notice of Commercial Tort Claims ) ;
(n)    all books and records pertaining to the other property described in this Section 2.1 ;
(o)    all property of any Grantor held by the Administrative Agent or any other Secured Party, including all property of every description, in the possession or custody of or in transit to the Administrative Agent or such Secured Party for any purpose, including safekeeping, collection or pledge, for the account of such Grantor or as to which such Grantor may have any right or power;
(p)    all Supporting Obligations and all other Goods and personal property of such Grantor, whether tangible or intangible and wherever located; and
(q)    to the extent not otherwise included, all Proceeds;
provided, however , that “ Collateral ” shall not include any Excluded Property; and provided, further , that if and when any property shall cease to be Excluded Property, such property shall be deemed at all times from and after the date thereof to constitute Collateral.
Section 2.2    Grant of Security Interest in Collateral
Each Grantor, as collateral security for the full, prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations, hereby mortgages, pledges and hypothecates to the Administrative Agent for the benefit of the Secured Parties, and grants to the Administrative Agent for the benefit of the Secured Parties a lien on and security interest in, all of its right, title and interest in, to and under the Collateral of such Grantor; provided , however , that, if and when any property that at any time constituted Excluded Property becomes Collateral, the Administrative Agent shall have, and at all times from and after the date thereof be deemed to have had, a security interest in such property.
 
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Section 2.3    [Reserved]
Section 2.4    Foreign Grantors
(a)    Anything herein to the contrary notwithstanding and solely in the case of each Foreign Grantor, the grant of security interest in the Collateral contained in Section  2.2 hereof shall be limited to the Pledged Collateral, the Additional Pledged Collateral and all Proceeds and books and records pertaining to the foregoing of such Foreign Grantor.
(b)    Anything herein to the contrary notwithstanding, Sections 3.7, 3.8, 4.5, 4.7 and 4.8 shall not apply to the Foreign Grantors.
(c)     Pursuant to Section  5.09 of the Credit Agreement, certain of the Foreign Grantors are required to enter into security agreements, pledge agreements or other documents, governed by the laws of the relevant jurisdiction (such agreements, the “ Local Law Pledge Agreements ”), in order to secure the Secured Obligations by the Equity Interests owned by such Foreign Grantor. In the event of any conflict between a Local Law Pledge Agreement and the provisions of this Agreement, the provisions of such Local Law Pledge Agreement shall control with respect to the Collateral pledged thereunder.
ARTICLE III    R EPRESENTATIONS AND W ARRANTIES
To induce the Lenders and the Administrative Agent to enter into the Credit Agreement, each Grantor hereby represents and warrants each of the following to the Administrative Agent and the other Secured Parties:
Section 3.1    Title; No Other Liens
Except for the Lien granted to the Administrative Agent pursuant to this Agreement and the other Liens permitted to exist on the Collateral under the Credit Agreement, such Grantor (a) is the record and beneficial owner of the Pledged Collateral pledged by it hereunder constituting Instruments or Certificated Securities and (b) has rights in or the power to transfer each other item of Collateral in which a Lien is granted by it hereunder, free and clear of any other Lien.
Section 3.2    Perfection and Priority
The security interest granted pursuant to this Agreement shall constitute a valid and continuing perfected security interest in favor of the Administrative Agent for the benefit of the Secured Parties in the Collateral for which perfection is governed by the UCC, recordal with the United States Patent and Trademark Office, or recordal with the United States Copyright Office upon (i) in the case of all Collateral in which a security interest may be perfected by filing a financing statement under the UCC, the completion of the filings and other actions specified on Schedule 5 to the Perfection Certificate (which, in the case of all filings and other documents referred to on such schedule, have been delivered to the Administrative Agent in completed and duly executed form), (ii) the delivery to the Administrative Agent of all Collateral consisting of Instruments and Certificated Securities, in each case properly endorsed for transfer to the Administrative Agent or in blank, (iii) the delivery to the Administrative Agent of control
 
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(within the meaning of UCC Section 8-106) over Collateral consisting of Pledged Uncertificated Securities and (iv) all appropriate filings having been made with the United States Patent and Trademark Office and the United States Copyright Office. Such security interest shall be prior to all other Liens on the Collateral other than Liens permitted under Section 6.02 of the Credit Agreement.
Section 3.3    Jurisdiction of Organization; Chief Executive Office
On the Closing Date, or with respect to a Grantor who becomes a party hereto after the Closing Date, the date on which such Grantor becomes a party hereto, such Grantor’s jurisdiction of organization, legal name, organizational identification number, if any, and the location of such Grantor’s chief executive office and/or sole place of business, in each case as of such date, is specified on Schedule 1(a) and Schedule 2 to the Perfection Certificate and Schedule 1(b) and 1(c) to the Perfection Certificate lists all changes to jurisdictions of incorporation in the four months preceding such date and all legal names used in the five years preceding such date.
Section 3.4    Perfection Certificate
On the Closing Date, or with respect to a Grantor who becomes a party hereto after the Closing Date, the date on which such Grantor becomes a party hereto, all information in the Perfection Certificate and the schedules thereto, is accurate and complete in all material respects.
Section 3.5    Pledged Collateral
(a)    On the Closing Date, the Pledged Stock pledged hereunder by such Grantor is listed on Schedule 9 to the Perfection Certificate and constitutes that percentage of the issued and outstanding equity of all classes of each issuer thereof as set forth on Schedule 9 to the Perfection Certificate.
(b)    All of the Pledged Stock has been duly authorized, validly issued and is fully paid and nonassessable.
(c)    Each of the Intercompany Notes constituting a Pledged Debt Instrument constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms, subject to the effects of applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, and general equitable principles (whether considered in a proceeding in equity or at law).
(d)    All Pledged Collateral, and, if applicable, any Additional Pledged Collateral, consisting of Certificated Securities or Instruments has been delivered to the Administrative Agent in accordance with Section  4.4(a) (Pledged Collateral ) hereof and Section  5.09 of the Credit Agreement.
 
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Section 3.6    [Reserved]
Section 3.7    Intellectual Property
(a)     Schedule 11 to the Perfection Certificate lists all or substantially all Material Intellectual Property registrations and applications therefor owned by each Grantor in its own name on the Closing Date. To the knowledge of such Grantor, on the Closing Date, such Grantor owns or has the right to use all Material Intellectual Property necessary to conduct its business. The listing of Intellectual Property on Schedule 11 to the Perfection Certificate shall in no way limit the grant of security interest made in Section  2.1 of this Agreement.
(b)    All Material Intellectual Property owned by such Grantor is valid, subsisting, unexpired and enforceable, has not been adjudged invalid and has not been abandoned and, to the knowledge of such Grantor, the use thereof in the business of such Grantor does not infringe, misappropriate, dilute or violate the intellectual property rights of any other Person, except in each case as could not individually or in the aggregate reasonably be expected to result in a Material Adverse Effect.
(c)     Except as set forth in Schedule 11 to the Perfection Certificate, none of the Material Intellectual Property owned by such Grantor is the subject of any exclusive licensing or franchise agreement pursuant to which such Grantor is the licensor or franchisor on the Closing Date.
(d)    No action or proceeding seeking to limit, cancel or question the validity of any Material Intellectual Property owned by such Grantor or such Grantor’s ownership interest therein is pending or, to the knowledge of such Grantor, threatened that would reasonably be expected to result in a Material Adverse Effect.
Section 3.8    Commercial Tort Claims
The only Commercial Tort Claims of any Grantor with a maximum estimated value in excess of $5,000,000 existing on the Closing Date are those listed on Schedule 12 to the Perfection Certificate, which sets forth such information separately for each Grantor.
ARTICLE IV    C OVENANTS
Until the Commitments have expired or been terminated and the principal of and interest on each Loan, all fees payable hereunder and all Obligations (other than (x) obligations under Secured Hedge Agreements, (y) Cash Management Obligations and (z) contingent reimbursement and indemnification obligations not yet accrued and payable) shall have been paid in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, each Grantor covenants and agrees with the Administrative Agent that:
Section 4.1    Generally
Such Grantor shall (a) except for the security interest created by this Agreement, not create or suffer to exist any Lien upon or with respect to any Collateral, except Liens permitted under Section  6.02 of the Credit Agreement, (b) not use or permit any Collateral to be used in violation of any provision of this Agreement or any other Loan Document and (c) except in connection with a transaction permitted by the Credit Agreement, not sell, transfer or assign (by operation of law or otherwise) any Collateral.
 
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Section 4.2    Maintenance of Perfected Security Interest; Further Documentation
(a)    Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section  3.2 ( Perfection and Priority ) and Section  2.2 ( Grant of Security Interest in Collateral ) and shall use its commercially reasonable efforts to defend such security interest and such priority against the claims and demands of all Persons.
(b)     At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of such Grantor, such Grantor shall promptly and duly execute and deliver, and have recorded, such further instruments and documents and take such further action as is necessary to obtain or preserve the full benefits of this Agreement and of the rights and powers herein granted, including the filing of any financing or continuation statement under the UCC (or other similar laws) in effect in any jurisdiction with respect to the security interest created hereby, and filings with the United States Patent and Trademark Office and the United States Copyright Office.
Section 4.3    Changes in Locations, Name, Etc.
Each Grantor agrees to promptly (and, in any event, within 30 days of the relevant change, or a later date if the Administrative Agent so agrees) notify Administrative Agent and deliver to the Administrative Agent all additional financing statements and other documents reasonably requested by the Administrative Agent to maintain the validity, perfection and priority of the security interests provided for herein, if a Grantor should do any of the following:
(i)    change its jurisdiction of organization or location of its chief executive office, in each case from that referred to in Section  3.3 ( Jurisdiction of Organization; Chief Executive Office ) ; or
(ii)    change its legal name or organizational identification number, if any, or corporation, limited liability company or other organizational structure to such an extent that any financing statement filed in connection with this Agreement would become misleading.
Section 4.4    Pledged Collateral
(a)    Such Grantor shall (i) deliver to the Administrative Agent, all certificates and Instruments representing or evidencing any Pledged Collateral (including Additional Pledged Collateral) constituting Equity Interests in Restricted Subsidiaries and Pledged Debt Instruments, whether now existing or here-after acquired, in suitable form for transfer by delivery or, as applicable, accompanied by such Grantor’s endorsement, where necessary, or duly executed instruments of transfer or assignment in blank, all in agreed form and substance and (ii) with respect to uncertificated Pledged Collateral, not grant “control” over such Pledged Uncertificated Stock to any Person other than the Administrative Agent or permit such Collateral
 
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to become represented by Certificated Securities unless such Certificated Securities are promptly delivered to the Administrative Agent together with appropriate instruments of transfer or assignment in blank, all in agreed form and substance. With respect to the Pledged Collateral in existance on the date hereof such Pledged Collateral shall be delivered to the Administrative Agent in accordance with this Section 4.4 on the date hereof and with respect to any Pledged Collateral not in existence on the date hereof, the applicable Grantor shall take all actions necessary to comply with this Section  4.4(a) in accordance with Section  5.09 of the Credit Agreement. The Administrative Agent shall have the right, following an Event of Default that is continuing and upon notice to the Grantor, to transfer to or to register in its name or in the name of its nominees any Pledged Collateral. The Administrative Agent shall have the right, at any time following an Event of Default that is continuing, to exchange any certificate or instrument representing or evidencing any Pledged Collateral for certificates or instruments of smaller or larger denominations.
(b)    Except as provided in Article V ( Remedial Provisions ), such Grantor shall be entitled to receive all dividends paid in respect of the Pledged Collateral with respect to the Pledged Collateral; provided that any non-cash dividends constituting Pledged Collateral shall be forthwith delivered to the Administrative Agent pursuant to Sections 4.4 and 4.6 of this Agreement or otherwise as required hereby. Upon the occurrence and during the continuation of an Event of Default, any sums paid upon or in respect of any Pledged Collateral upon the liquidation or dissolution or any issuer of any Pledged Collateral, any distribution of capital made on or in respect of any Pledged Collateral or any property distributed upon or with respect to any Pledged Collateral pursuant to the recapitalization or reclassification of the capital of any issuer of Pledged Collateral pursuant to the reorganization thereof or otherwise shall be delivered to the Administrative Agent to be held by it hereunder as additional collateral security for the Secured Obligations. Upon the occurrence and during the continuation of an Event of Default, if any sum of money or property so paid or distributed in respect of any Pledged Collateral shall be received by such Grantor, such Grantor shall, until such money or property is paid or delivered to the Administrative Agent, hold such money or property in trust for the Administrative Agent, segregated from other funds of such Grantor, as additional security for the Secured Obligations.
(c)    Except as provided in Article V ( Remedial Provisions ), such Grantor shall be entitled to exercise all voting, consent and corporate, partnership, limited liability company and similar rights with respect to the Pledged Collateral; provided , however , that no vote shall be cast, consent given or right exercised or other action taken by such Grantor that would be inconsistent with or result in any violation of any provision of the Credit Agreement, this Agreement or any other Loan Document.
(d)    [Reserved]
(e)    In the case of each Grantor that is an issuer of Pledged Collateral, such Grantor agrees to be bound by the terms of this Agreement relating to the Pledged Collateral issued by it and shall comply with such terms insofar as such terms are applicable to it. In the case of any Grantor that is a holder of any Equity Interests in any Person that is an issuer of Pledged Collateral, such Grantor consents to (i) the exercise of the rights granted to the Administrative Agent hereunder (including those described in Section  5.3 ( Pledged Collateral )), and (ii) the pledge by each other Grantor, pursuant to the terms hereof, of the Pledged Stock in
 
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such Person and to the transfer of such Pledged Stock to the Administrative Agent or its nominee and to the substitution of the Administrative Agent or its nominee as a holder of such Pledged Stock with all the rights, powers and duties of other holders of Pledged Stock of the same class and, if the Grantor having pledged such Pledged Stock hereunder had any right, power or duty at the time of such pledge or at the time of such substitution beyond that of such other holders, with all such additional rights, powers and duties. Such Grantor agrees to execute and deliver to the Administrative Agent such certificates, agreements and other documents as may be necessary to evidence, formalize or otherwise give effect to the consents given in this clause (e ).
(f)    Except in connection with a transaction permitted by the Credit Agreement, such Grantor shall not, without the consent of the Administrative Agent, agree to any amendment of any organizational document that in any way adversely affects the perfection of the security interest of the Administrative Agent in the Pledged Collateral pledged by such Grantor hereunder, including any amendment electing to treat any membership interest or partnership interest that is part of the Pledged Collateral as a “security” under Section 8-103 of the UCC, or any election to turn any previously uncertificated Stock that is part of the Pledged Collateral into certificated Stock, in each case except as permitted by clause (a) above.
Section 4.5    Accounts
(a)    Upon the occurrence and during the continuation of an Event of Default, on the written request of the Administrative Agent, no Grantor shall, other than in the ordinary course of business consistent with its past practice, (i) grant any extension of the time of payment of any Account, (ii) compromise or settle any Account for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any Account, (iv) allow any credit or discount on any Account or (v) amend, supplement or modify any Account in any manner that could adversely affect the value thereof.
(b)    Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent shall have the right to make test verifications of the Accounts in any manner and through any medium that it reasonably considers advisable, and such Grantor shall furnish all such assistance and information as the Administrative Agent may reasonably require in connection therewith. Upon the occurrence and during the continuation of an Event of Default, upon the Administrative Agent’s reasonable request and at the expense of the relevant Grantor, such Grantor shall cause independent public accountants to furnish to the Administrative Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Accounts.
Section 4.6    Delivery of Instruments and Chattel Paper
If any amount payable under or in connection with any Collateral owned by such Grantor shall be or become evidenced by an Instrument or Chattel Paper, such Grantor shall promptly notify the Administrative Agent and at the Administrative Agent’s request, deliver such Instrument or Chattel Paper to the Administrative Agent, duly indorsed; provided , however , that Instruments in the individual amount of $5,000,000 and Chattel Paper in the individual amount of $10,000,000 shall not be required to be delivered under this Section  4.6 and provided, further , that this Section  4.6 shall not apply to Pledged Collateral (which Pledged Collateral shall be governed by Section  4.4 ).
 
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Section 4.7    Intellectual Property
(a)    Except in each case where such Grantor reasonably determines that doing so or not doing so, as the case may be, could reasonably be expected to result in a Material Adverse Effect:
(i)    Such Grantor (either itself or through licensees) shall (1) continue to use each Trademark that is Material Intellectual Property in order to maintain such Trademark in full force and effect with respect to each class of goods for which such Trademark is currently used, free from any claim of abandonment for non-use, (2) maintain as in the past the quality of products and services offered under such Trademark, (3) use such Trademark with the appropriate notice of registration and all other notices and legends required by applicable Law, (4) not adopt or use any mark that is confusingly similar or a colorable imitation of such Trademark unless the Administrative Agent shall obtain a perfected security interest in such mark pursuant to this Agreement and (5) not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby such Trademark (or any goodwill associated therewith) may become destroyed, invalidated, impaired or harmed in any way;
(ii)    Such Grantor (either itself or through licensees) shall not do any act, or omit to do any act, whereby any Patent that is Material Intellectual Property may become forfeited, abandoned or dedicated to the public;
(iii)     Such Grantor (either itself or through licensees) (i) shall not (and shall not permit any licensee or sublicensee thereof to) do any act or omit to do any act whereby any portion of the Copyrights that is Material Intellectual Property may become invalidated or otherwise impaired and (ii) shall not (either itself or through licensees) do any act whereby any portion of the Copyrights that is Material Intellectual Property may fall into the public domain; and
(iv)     Such Grantor (either itself or through licensees) shall not do any act, or omit to do any act, whereby any trade secret that is Material Intellectual Property may become publicly available or otherwise unprotectable.
(b)    Except in each case where such Grantor reasonably determines that doing so could not reasonably be expected to result in a Material Adverse Effect, such Grantor (either itself or through licensees) shall not knowingly do any act that uses any Material Intellectual Property to infringe, misappropriate, or violate the intellectual property rights of any other Person.
(c)    Annually, with each Compliance Certificate delivered by the Borrower Agent to the Administrative Agent pursuant to Section 5.01(c) of the Credit Agreement, the Grantors shall deliver to the Administrative Agent an update of Schedule 11 to the Perfection Certificate or confirm in writing that there have been no material changes to such schedules since the previously delivered annual report.     Such Grantor shall, contemporaneously with such
 
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update, execute and deliver, and have recorded, all agreements, instruments, documents and papers necessary to evidence the Administrative Agent’s security interest in any registered and applied for Copyright, Patent and Trademarks of such Grantor relating thereto or represented thereby in accordance with Section  4.7(e); provided that the provisions hereof shall automatically apply thereto and any such item shall automatically constitute Collateral as if such would have constituted Collateral at the time of execution hereof and be subject to the Lien and security interest created by this Agreement without further action by any party.
(d)    Promptly after the date hereof and thereafter, with respect to any subsequently acquired registered or applied for Material Intellectual Property (including any U.S. “intent-to Use” trademark applications for which a statement of use has been filed), each applicable Grantor shall annually with each Compliance Certificate delivered by the Borrower Agent to the Administrative Agent pursuant to Section 5.01(c) of the Credit Agreement execute and deliver to the Administrative Agent, and shall promptly file (i) in the United States Copyright Office a short-form copyright security agreement in the form attached hereto as Annex 6 ( Form of Short Form Copyright Security Agreement ), (ii) in the United States Patent and Trademark Office and with the Secretary of State of all appropriate States of the United States a short-form patent security agreement in the form attached hereto as Annex 7 ( Form of Short Form Patent Security Agreement ) and (iii) in the United States Patent and Trademark Office a short-form trademark security agreement in form attached hereto as Annex 8 ( Form of Short Form Trademark Security Agreement ), including all of the Intellectual Property consisting of registered and applied for Copyrights and the Intellectual Property consisting of registered and applied for Patents and Trademarks.
Section 4.8    Notice of Commercial Tort Claims
Such Grantor agrees that, if it shall acquire during any fiscal year any interest in any Commercial Tort Claim (whether from another Person or because such Commercial Tort Claim shall have come into existence) with a good faith estimated value in excess of $5,000,000, at the time that the Borrower Agent delivers a Compliance Certificate to the Administrative Agent pursuant to Section 5.01(c) of the Credit Agreement for such fiscal year, (i) such Grantor shall deliver to the Administrative Agent a sufficiently detailed notice of the existence and nature of such Commercial Tort Claim and deliver a supplement to Schedule 12 to the Perfection Certificate containing a specific description of such Commercial Tort Claim, (ii) the provision of Section  2.1 ( Collateral ) shall apply to such Commercial Tort Claim and (iii) such Grantor shall execute and deliver to the Administrative Agent any certificate, agreement and other document, and take all other action reasonably necessary or appropriate for the Administrative Agent to obtain, on behalf of the Lenders, a first-priority, perfected security interest in all such Commercial Tort Claims. Any supplement to Schedule 12 to the Perfection Certificate delivered pursuant to this Section  4.8 ( Notice of Commercial Tort Claims ) shall, after the receipt thereof by the Administrative Agent, become part of Schedule 12 to the Perfection Certificate for all purposes hereunder other than in respect of representations and warranties made prior to the date of such receipt.
 
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ARTICLE V    R EMEDIAL P ROVISIONS
Section 5.1    Code and Other Remedies
During the continuance of an Event of Default, the Administrative Agent may exercise, in addition to all other rights and remedies granted to it in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Secured Obligations, all rights and remedies of a secured party under the UCC or any other applicable law. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon any Collateral, and may forthwith sell, lease, license, assign, give option or options to purchase, or otherwise dispose of and deliver any Collateral (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the Administrative Agent or any Lender or elsewhere upon such terms and conditions as the Administrative Agent may deem advisable and at such prices as the Administrative Agent may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Administrative Agent or its agent shall have the right upon any such public sale or sales, and, to the extent permitted by the UCC and other applicable law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption of any Grantor, which right or equity is hereby waived and released. Each Grantor further agrees, at the Administrative Agent’s request, to assemble the Collateral and make it available to the Administrative Agent at places that the Administrative Agent shall reasonably select, whether at such Grantor’s premises or elsewhere.
The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this Section  5.1 in the manner set forth in Article VII of the Credit Agreement.
Section 5.2    Accounts and Payments in Respect of General Intangibles
(a)     Upon the request of the Administrative Agent at any time during the continuance of an Event of Default, each Grantor shall notify Account Debtors that the Accounts or General Intangibles have been collaterally assigned to the Administrative Agent and that payments in respect thereof shall be made directly to the Administrative Agent. In addition, the Administrative Agent may at any time during the continuance of an Event of Default enforce such Grantor’s rights against such Account Debtors and obligors of General Intangibles.
(b)    Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of the Accounts and payments in respect of General Intangibles to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. Neither the Administrative Agent nor any other Secured Party shall have any obligation or liability under any agreement giving rise to an Account or a payment in respect of a General Intangible by reason of or arising out of this Agreement or the receipt by the Administrative Agent or any other Secured Party of any payment relating thereto, nor shall the Administrative Agent nor any other Secured Party be obligated in any manner to perform any obligation of any Grantor under or pursuant to any agreement giving rise to an Account or a payment in respect of a General Intangible, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.
 
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Section 5.3    Pledged Collateral
(a)    During the continuance of an Event of Default, upon reasonable prior written notice by the Administrative Agent to the relevant Grantor or Grantors, (i) the Administrative Agent shall have the right to receive any Proceeds of the Pledged Collateral and make application thereof to the Obligations in the order set forth in the Credit Agreement and (ii) the Administrative Agent or its nominee may exercise (A) any voting, consent, corporate and other right pertaining to the Pledged Collateral at any meeting of shareholders, partners or members, as the case may be, of the relevant issuer or issuers of Pledged Collateral or otherwise and (B) any right of conversion, exchange and subscription and any other right, privilege or option pertaining to the Pledged Collateral as if it were the absolute owner thereof (including the right to exchange any of the Pledged Collateral upon the merger, amalgamation, consolidation, reorganization, recapitalization or other fundamental change in the corporate or equivalent structure of any issuer of Pledged Stock, the right to deposit and deliver any Pledged Collateral with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it; provided , however , that the Administrative Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.
(b)    In order to permit the Administrative Agent to exercise the voting and other consensual rights that it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions that it may be entitled to receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to the Administrative Agent all such proxies, dividend payment orders and other instruments as the Administrative Agent may from time to time reasonably request and (ii) without limiting the effect of clause (i)  above, such Grantor hereby grants to the Administrative Agent an irrevocable proxy to vote all or any part of the Pledged Collateral and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Collateral would be entitled (including giving or withholding written consents of shareholders, partners or members, as the case may be, calling special meetings of shareholders, partners or members, as the case may be, and voting at such meetings), which proxy shall be effective, automatically and without the necessity of any action (including any transfer of any Pledged Collateral on the record books of the issuer thereof) by any other person (including the issuer of such Pledged Collateral or any officer or agent thereof) during the continuance of an Event of Default and which proxy shall only terminate upon the termination of this Agreement.
(c)     During the continuation of an Event of Default, each Grantor hereby expressly authorizes and instructs each issuer of any Pledged Collateral pledged hereunder by such Grantor to (i) comply with any instruction received by it from the Administrative Agent in writing that (A) states that an Event of Default has occurred and is continuing and (B) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that such issuer shall be fully protected in so complying and (ii) unless otherwise expressly permitted hereby, pay any dividend or other payment with respect to the Pledged Collateral directly to the Administrative Agent.
 
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Section 5.4    Grant of Intellectual Property License.
For the purpose of enabling the Administrative Agent, during the continuance of an Event of Default, to exercise rights and remedies hereunder at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Grantor hereby grants to the Administrative Agent, an irrevocable, non-exclusive, worldwide, royalty-free (and free of any other obligation of payment) license to use, assign, license or sublicense any of the Intellectual Property now owned, licensed or hereafter acquired by such Grantor, wherever the same may be located. Such license shall include access to all media in which any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout hereof.
Section 5.5    Registration Rights
Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any Pledged Collateral by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise or may determine that a public sale is impracticable or not commercially reasonable and, accordingly, may resort to one or more private sales thereof to a restricted group of purchasers that shall be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any Pledged Collateral for the period of time necessary to permit the issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such issuer would agree to do so.
Section 5.6    Deficiency
Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay the Secured Obligations and the fees and disbursements of any attorney employed by the Administrative Agent or any other Secured Party to collect such deficiency.
ARTICLE VI    T HE A DMINISTRATIVE A GENT
Section 6.1    Administrative Agent’s Appointment as Attorney-in-Fact
(a)     Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any appropriate action and to execute any document or instrument that may be necessary or desirable to accomplish the purposes of this Agreement,
 
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and, without limiting the generality of the foregoing, each Grantor hereby gives the Administrative Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any of the following:
(i)    in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any check, draft, note, acceptance or other instrument for the payment of moneys due under any Account or General Intangible or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any such moneys due under any Account or General Intangible or with respect to any other Collateral whenever payable;
(ii)    in the case of any Intellectual Property, execute and deliver, and have recorded, any agreement, instrument, document or paper as the Administrative Agent may deem appropriate to evidence the Administrative Agent’s security interest in such Intellectual Property and the goodwill and General Intangibles of such Grantor relating thereto or represented thereby;
(iii)    pay or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repair or pay any insurance called for by the terms of this Agreement (including all or any part of the premiums therefor and the costs thereof);
(iv)    execute, in connection with any sale provided for in Section  5.1 ( Code and Other Remedies ) or 5.5 ( Registration Rights ), any endorsement, assignment or other instrument of conveyance or transfer with respect to the Collateral; and
(v)    (A) direct any party liable for any payment under any Collateral to make payment of any moneys due or to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct, (B) ask or demand for, collect, and receive payment of and receipt for, any moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral, (C) sign and indorse any invoice, freight or express bill, bill of lading, storage or warehouse receipt, draft against debtors, assignment, verification, notice and other document in connection with any Collateral, (D) commence and prosecute any suit, action or proceeding at law or in equity in any court of competent jurisdiction to collect any Collateral and to enforce any other right in respect of any Collateral, (E) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral, (F) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Administrative Agent may deem appropriate, (G) assign, license or transfer any Intellectual Property (along with the goodwill of the business to which any Trademark included therein pertains) throughout the world for such term or terms, on such conditions, and in such manner as the Administrative Agent shall in its sole discretion determine, including the execution and filing of any document necessary to effectuate or record such assignment and (H) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Collateral as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes, and do, at such Grantor’s expense, at any time, or
 
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from time to time, all acts and things that the Administrative Agent deems necessary to protect, preserve or realize upon the Collateral and the Administrative Agent’s and the other Secured Parties’ security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.
Anything in this clause (a)  to the contrary notwithstanding, the Administrative Agent agrees that it shall not exercise any right under the power of attorney provided for in this clause (a)  unless an Event of Default shall be continuing.
(b)    If any Grantor fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement.
(c)    Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released.
Section 6.2    Duty of Administrative Agent
The Administrative Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. None of the Administrative Agent, any other Secured Party nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to any Collateral. The powers conferred on the Administrative Agent hereunder are solely to protect the Administrative Agent’s interest in the Collateral and shall not impose any duty upon the Administrative Agent or any other Secured Party to exercise any such powers. The Administrative Agent and the other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their respective officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct.
Section 6.3    Authorization of Financing Statements
Each Grantor authorizes the Administrative Agent and its Affiliates, counsel and other representatives, at any time and from time to time, to file or record financing statements, amendments to financing statements, and other filing or recording documents or instruments with respect to the Collateral in such form and in such offices appropriate to perfect the security interests of the Administrative Agent under this Agreement, and such financing statements and amendments may describe the Collateral covered thereby as “all assets of the debtor,” “all personal property of the debtor” or words of similar effect. Each Grantor hereby also authorizes the Administrative Agent and its Affiliates, counsel and other representatives, at any time and from time to time, to file continuation statements with respect to previously filed financing
 
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statements. A photographic or other reproduction of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction. Each Grantor hereby further authorizes the Administrative Agent to make filings with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country), including this Agreement, agreements in the forms of Annex 2 , 3 or 4 hereto or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the security interest granted by such Grantor hereunder.
Section 6.4    Authority of Administrative Agent
Each Grantor acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Administrative Agent and the other Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative Agent and the Grantors, the Administrative Agent shall be conclusively presumed to be acting as agent for the Administrative Agent and the other Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.
ARTICLE VII    M ISCELLANEOUS
Section 7.1    Amendments in Writing
None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Section  9.02 ( Waivers; Amendments ) of the Credit Agreement; provided , however , that annexes to this Agreement and the Perfection Certificate may each be supplemented (but no existing provisions may be modified and no Collateral may be released) through Joinder Agreements, in substantially the form of Annex 1 ( Form of Joinder Agreement ), in each case duly executed by the Administrative Agent and each Grantor directly affected thereby.
Section 7.2    Notices
All notices, requests and demands to or upon the Administrative Agent or any Grantor hereunder shall be effected in the manner provided for in Section  9.01 ( Notices ) of the Credit Agreement; provided , however , that any such notice, request or demand to or upon any Grantor shall be addressed to the Borrowers’ notice address set forth in such Section  9.01.
Section 7.3    No Waiver by Course of Conduct; Cumulative Remedies
Neither the Administrative Agent nor any other Secured Party shall by any act (except by a written instrument pursuant to Section  7.1 ( Amendments in Writing )), delay, indulge, omit or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in
 
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exercising, on the part of the Administrative Agent or any other Secured Party, 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 by the Administrative Agent or any other Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that the Administrative Agent or such other Secured Party would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.
Section 7.4    Successors and Assigns
This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of the Administrative Agent and each other Secured Party and their successors and assigns; provided , however , that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent.
Section 7.5    Counterparts
This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy or electronic mail), each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple counterparts and attached to a single counterpart so that all signature pages are attached to the same document. Delivery of an executed counterpart by telecopy or electronic mail shall be effective as delivery of a manually executed counterpart.
Section 7.6    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.
Section 7.7    Section Headings
The Article and Section titles contained in this Agreement are, and shall be, without substantive meaning or content of any kind whatsoever and are not part of the agreement of the parties hereto.
Section 7.8    Entire Agreement
This Agreement together with the other Loan Documents represents the entire agreement of the parties and supersedes all prior agreements and understandings relating to the subject matter hereof.
 
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Section 7.9    Governing Law; Waiver of Jury Trial
This Agreement shall be construed in accordance with and governed by the law of the State of New York (without regard to the conflict of law principles thereof to the extent that the application of the laws of another jurisdiction would be required thereby). EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 7.10    Additional Grantors
If, pursuant to Section  5.09 of the Credit Agreement, the Borrowers shall be required to cause any Subsidiary that is not a Grantor to become a Grantor hereunder, such Subsidiary shall execute and deliver to the Administrative Agent a Joinder Agreement substantially in the form of Annex 1 ( Form of Joinder Agreement ) and a Perfection Certificate and shall thereafter for all purposes be a party hereto and have the same rights, benefits and obligations as a Grantor party hereto on the Closing Date.
Section 7.11    Release of Collateral
The Liens of the Administrative Agent shall be released in full or in part as provided in Article VIII(j) or Section  5.11(a) of the Credit Agreement. At the written request and sole expense of any Grantor following any such termination or release, the Administrative Agent shall deliver to such Grantor any Collateral of such Grantor so released and held by the Administrative Agent hereunder and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination or release, such documents to be in form and substance reasonably satisfactory to the Administrative Agent.
Notwithstanding anything herein or in any other Loan Document to the contrary, upon the occurrence of a Collateral Suspension Date, and delivery to the Administrative Agent of an Officer’s Certificate set forth in clause (iv) of the definition of “Collateral Suspension Date” the pledge and security interest granted hereby shall terminate and all rights to the Collateral shall automatically revert to the applicable Grantor in accordance with Section  5.11(a) of the Credit Agreement; provided that, to the extent requested by the Required Lenders, the Collateral shall be subsequently automatically reinstated upon the occurrence of a Collateral Reinstatement Date in accordance with Section  5.11(b) of the Credit Agreement. During any Collateral Suspension Period, the Administrative Agent will, at the applicable Grantor’s expense, execute and deliver to such Grantor such documents as such Grantor shall reasonably request to
 
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evidence such termination. Notwithstanding anything herein or in any other Loan Document to the contrary, during any Collateral Suspension Period, the terms and conditions of this Agreement and each other Collateral Document, including all covenants and representations and warranties contained herein and therein, shall not apply to the Grantors.
Section 7.12    Reinstatement
Each Grantor further agrees that, if any payment made by any Loan Party or other Person and applied to the Obligations is at any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of Collateral are required to be returned by any Secured Party to such Loan Party, its estate, trustee, receiver or any other party, including any Grantor, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability shall be and remain in full force and effect, as fully as if such payment had never been made or, if prior thereto the Lien granted hereby or other Collateral securing such liability hereunder shall have been released or terminated by virtue of such cancellation or surrender), such Lien or other Collateral shall be reinstated in full force and effect, and such prior cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect any Lien or other Collateral securing the obligations of any Grantor in respect of the amount of such payment.
Section 7.13    Administrative Agent
Each Grantor hereby agrees that the Administrative Agent shall be afforded all of the rights, immunities, indemnities and privileges afforded to the Administrative Agent under the Credit Agreement, including, but not limited to, those set forth in Article VIII of the Credit Agreement, in connection with the execution of this Agreement by the Administrative Agent and the performance of its obligations hereunder, all of which are incorporated herein by reference thereto.
[S IGNATURE P AGES F OLLOW ]
 
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IN WITNESS WHEREOF, each of the undersigned has caused this Pledge and Security Agreement to be duly executed and delivered as of the date first above written.

[                    ], a Grantor	
		
By:	 	                                          	
	 	Name:	
	 	Title:	
	
[OTHER GRANTOR SIGNATURE BLOCKS]	
 
[S IGNATURE P AGE TO P LEDGE AND S ECURITY A GREEMENT ]

			
ACKNOWLEDGED AND AGREED
as of the date first above written:	
	
JPMORGAN CHASE BANK, N.A.,	
as Administrative Agent	
		
By:	 	                                          	
	 	Name:	
	 	Title:	
 
[S IGNATURE P AGE TO P LEDGE AND S ECURITY A GREEMENT ]

A NNEX 1
T O
P LEDGE AND S ECURITY A GREEMENT
F ORM OF J OINDER A GREEMENT
This JOINDER AGREEMENT , dated as of              , 20    , is delivered pursuant to Section 7.10 ( Additional Grantors ) of the Pledge and Security Agreement, dated as of [            ], 2017, by DELPHI JERSEY HOLDINGS PLC, a public limited company incorporated under the laws of Jersey (“ Parent ”), DELPHI POWERTRAIN CORPORATION, a Delaware corporation (the “ U.S. Parent Borrower ”), and the other Grantors party thereto in favor of JPMorgan Chase Bank, N.A., as administrative agent for the Secured Parties referred to therein (the “ Pledge and Security Agreement ”). Capitalized terms used herein but not defined herein are used with the meanings given them in the Pledge and Security Agreement.
By executing and delivering this Joinder Agreement, [                    ] (the “ Additional Grantor ”), as provided in Section  7.10 ( Additional Grantors ) of the Pledge and Security Agreement, hereby becomes a party to the Pledge and Security Agreement as a Grantor thereunder with the same force and effect as if originally named as a Grantor therein and, without limiting the generality of the foregoing, hereby grants to the Administrative Agent, as collateral security for the full, prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations, a Lien on and security interest in, all of its right, title and interest in, to and under the Collateral of the undersigned and expressly assumes all obligations and liabilities of a Grantor thereunder.
Attached hereto as Annex 1-A is a Perfection Certificate. The information set forth in Annex 1 -A is hereby added to the information set forth in Schedules [ ● ] through [ ● ] to the Perfection Certificate. By acknowledging and agreeing to this Joinder Agreement, the undersigned hereby agree that this Joinder Agreement may be attached to the Pledge and Security Agreement and that the Collateral listed on Annex 1-A to this Pledge Amendment shall be and become part of the Collateral referred to in the Pledge and Security Agreement and shall secure all Secured Obligations of the undersigned.
The Additional Grantor and the undersigned Grantors 2 hereby represent and warrant that each of the representations and warranties contained in Article III ( Representations and Warranties ) of the Pledge and Security Agreement applicable to it is true and correct in all material respects (except where such representation or warranty is stated to be qualified by materiality, in which case it shall be true and correct in all respects) on and as the date hereof as if made on and as of such date.

2  	NTD: Please confirm the intention is for only Grantors pledging additional collateral to sign, and not for all original Grantors to sign each joinder of an Additional Grantor.	
 
Annex 1-1

IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and delivered as of the date first above written.

[ADDITIONAL GRANTOR]	
		
By:	 	                                          	
	 	Name:	
	 	Title:	
 
Annex 1-2

			
A CKNOWLEDGED AND A GREED
as of the date first above written:	
	
[EACH GRANTOR PLEDGING	
ADDITIONAL COLLATERAL]	
		
By:	 	                                          	
	 	Name:	
	 	Title:	
	
JPMORGAN CHASE BANK, N.A.
as Administrative Agent	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
Annex 1-3

A NNEX 2
T O
P LEDGE AND S ECURITY A GREEMENT
F ORM OF S HORT F ORM C OPYRIGHT S ECURITY A GREEMENT
COPYRIGHT SECURITY AGREEMENT , dated as of              , 20    , by each of the entities listed on the signature pages hereof or that becomes a party hereto pursuant to Section 7.10 ( Additional Grantors ) of the Security Agreement referred to below (each a “ Grantor ” and, collectively, the “ Grantors ”), in favor of JPMorgan Chase Bank, N.A., as administrative agent for the Secured Parties (as defined in the Credit Agreement referred to below) (in such capacity, the “ Administrative Agent ”).
W I T N E S S E T H :
W HEREAS , pursuant to the Credit Agreement, dated as of [            ], 2017 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), by and among DELPHI JERSEY HOLDINGS PLC, a public limited company incorporated under the laws of Jersey (“ Parent ”), DELPHI POWERTRAIN CORPORATION, a Delaware corporation (the “ U.S. Parent Borrower ”), the Subsidiary Borrowers, the Lenders party thereto and JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders, the Lenders have severally agreed to make extensions of credit to the Borrowers upon the terms and subject to the conditions set forth therein;
W HEREAS , the Grantors are party to the Guaranty pursuant to which they have guaranteed the Obligations (as defined in the Credit Agreement) (other than each Borrower with respect to its own obligations); and
W HEREAS , all the Grantors are party to an Pledge and Security Agreement dated as of [ ], 2017 in favor of the Administrative Agent (the “ Security Agreement ”) pursuant to which the Grantors are required to execute and deliver this Copyright Security Agreement;
N OW , T HEREFORE , in consideration of the premises and to induce the Lenders and the Administrative Agent to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrowers thereunder, each Grantor hereby agrees with the Administrative Agent as follows:
Section 1.    Defined Terms
Unless otherwise defined herein, terms defined in the Credit Agreement or in the Security Agreement and used herein have the meaning given to them in the Credit Agreement or the Security Agreement.
Section 2.    Grant of Security Interest in Copyright Collateral
Each Grantor, as collateral security for the full, prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of such Grantor, hereby mortgages, pledges and hypothecates to the Administrative
 
Annex 2-1

Agent for the benefit of the Secured Parties, and grants to the Administrative Agent, for the benefit of the Secured Parties, a lien on and security interest in, all of its right, title and interest in, to and under the following Collateral of such Grantor (the “ Copyright Collateral ”), in each case other than Excluded Property :
(a) all of its Copyrights and Copyright Licenses to which it is a party, including, without limitation, those referred to on Schedule I hereto; and
(b) all Proceeds of the foregoing, including, without limitation, any claim by Grantor against third parties for past, present or future infringement of any Copyright or Copyright licensed under any Copyright License.
Section 3.    Security Agreement
The security interest granted pursuant to this Copyright Security Agreement is granted in conjunction with the security interest granted to the Administrative Agent pursuant to the Security Agreement and each Grantor hereby acknowledges and affirms that the rights and remedies of the Administrative Agent with respect to the security interest in the Copyright Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event of any conflict between the terms hereof and the Security Agreement, the Security Agreement shall prevail.
[S IGNATURE P AGES F OLLOW ]
 
Annex 2-2

I N W ITNESS W HEREOF , each Grantor has caused this Copyright Security Agreement to be executed and delivered by its duly authorized offer as of the date first set forth above.

[GRANTOR],
as Grantor	
		
By:	 	                                          	
	 	Name:	
	 	Title:	

A CKNOWLEDGED AND A GREED
as of the date first above written:	
	
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent	
		
By:	 	                                          	
	 	Name:	
	 	Title:	
 
[S IGNATURE P AGE TO C OPYRIGHT S ECURITY A GREEMENT ]

S CHEDULE I
TO
C OPYRIGHT S ECURITY A GREEMENT
Copyright Registrations
INCLUDE ONLY U.S. REGISTERED/PENDING COPYRIGHTS
 
A.	REGISTERED COPYRIGHTS [Include Copyright Registration Number and Date]	
 
B.	COPYRIGHT APPLICATIONS	
 
C.	COPYRIGHT LICENSES	
[Include complete legal description of agreement (name of agreement, parties and date)]

A NNEX 3
T O
P LEDGE AND S ECURITY A GREEMENT
F ORM OF S HORT F ORM P ATENT S ECURITY A GREEMENT
PATENT SECURITY AGREEMENT , dated as of              , 20    , by each of the entities listed on the signature pages hereof or that becomes a party hereto pursuant to Section 7.10 ( Additional Grantors ) of the Security Agreement referred to below (each a “ Grantor ” and, collectively, the “ Grantors ”), in favor of JPMorgan Chase Bank, N.A., as administrative agent for the Secured Parties (as defined in the Credit Agreement referred to below) (in such capacity, the “ Administrative Agent ”).
W I T N E S S E T H :
W HEREAS , pursuant to the Credit Agreement, dated as of [            ], 2017 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among DELPHI JERSEY HOLDINGS PLC, a public limited company incorporated under the laws of Jersey (“ Parent ”), DELPHI POWERTRAIN CORPORATION, a Delaware corporation (the “ U.S. Parent Borrower ”), the Subsidiary Borrowers, the Lenders party thereto and JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders, the Lenders have severally agreed to make extensions of credit to the Borrowers upon the terms and subject to the conditions set forth therein;
W HEREAS , the Grantors are party to the Guaranty pursuant to which they have guaranteed the Obligations (as defined in the Credit Agreement) (other than each Borrower with respect to its own obligations); and
W HEREAS , all the Grantors are party to an Pledge and Security Agreement dated as of [            ], 2017 in favor of the Administrative Agent (the “ Security Agreement ”) pursuant to which the Grantors are required to execute and deliver this Patent Security Agreement;
N OW , T HEREFORE , in consideration of the premises and to induce the Lenders and the Administrative Agent to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrowers thereunder, each Grantor hereby agrees with the Administrative Agent as follows:
Section 1.    Defined Terms
Unless otherwise defined herein, terms defined in the Credit Agreement or in the Security Agreement and used herein have the meaning given to them in the Credit Agreement or the Security Agreement.
Section 2.    Grant of Security Interest in Patent Collateral
Each Grantor, as collateral security for the full, prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of such Grantor, hereby mortgages, pledges and hypothecates to the Administrative
 
Annex 3-1

Agent, for the benefit of the Secured Parties, and grants to the Administrative Agent for the benefit of the Secured Parties a lien on and security interest in, all of its right, title and interest in, to and under the following Collateral of such Grantor (the “ Patent Collateral ”), in each case other than Excluded Property:
(a)     all of its Patents and Patent Licenses to which it is a party, including, without limitation, those referred to on Schedule I hereto; and
(b)     all Proceeds of the foregoing, including, without limitation, any claim by Grantor against third parties for past, present or future infringement of any Patent or any Patent licensed under any Patent License.
Section 3.    Security Agreement
The security interest granted pursuant to this Patent Security Agreement is granted in conjunction with the security interest granted to the Administrative Agent pursuant to the Security Agreement and each Grantor hereby acknowledges and affirms that the rights and remedies of the Administrative Agent with respect to the security interest in the Patent Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event of any conflict between the terms hereof and the Security Agreement, the Security Agreement shall prevail.
[S IGNATURE P AGES F OLLOW ]
 
Annex 3-2

I N W ITNESS W HEREOF , each Grantor has caused this Patent Security Agreement to be executed and delivered by its duly authorized offer as of the date first set forth above.

[GRANTOR],
as Grantor	
		
By:	 	 	
	 	Name:	
	 	Title:	

A CKNOWLEDGED AND A GREED
as of the date first above written:	
	
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent	
		
By:	 	                                          	
	 	Name:	
	 	Title:	
 
[S IGNATURE P AGE TO P ATENT S ECURITY A GREEMENT ]

S CHEDULE I
T O
P ATENT S ECURITY A GREEMENT
P ATENT R EGISTRATIONS
INCLUDE ONLY U.S. REGISTERED/PENDING PATENTS
 
A.	REGISTERED PATENTS	
 
B.	PATENT APPLICATIONS	
 
C.	PATENT LICENSES	
[Include complete legal description of agreement (name of agreement, parties and date)]

A NNEX 4
T O
P LEDGE AND S ECURITY A GREEMENT
F ORM OF S HORT F ORM T RADEMARK S ECURITY A GREEMENT
T RADEMARK S ECURITY A GREEMENT , dated as of              , 20    , by each of the entities listed on the signature pages hereof or that becomes a party hereto pursuant to Section 7.10 ( Additional Grantors ) of the Security Agreement referred to below (each a “ Grantor ” and, collectively, the “ Grantors ”), in favor of JPMorgan Chase Bank, N.A., as administrative agent for the Secured Parties (as defined in the Credit Agreement referred to below) (in such capacity, the “ Administrative Agent ”).
W I T N E S S E T H :
W HEREAS , pursuant to the Credit Agreement, dated as of [            ], 2017 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among DELPHI JERSEY HOLDINGS PLC, a public limited company incorporated under the laws of Jersey (“ Parent ”), DELPHI POWERTRAIN CORPORATION, a Delaware corporation (the “ U.S. Parent Borrower ”), the Subsidiary Borrowers, the Lenders party thereto and JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders, the Lenders have severally agreed to make extensions of credit to the Borrowers upon the terms and subject to the conditions set forth therein;
W HEREAS , the Grantors are party to the Guaranty pursuant to which they have guaranteed the Obligations (as defined in the Credit Agreement) (other than each Borrower with respect to its own obligations); and
W HEREAS , all the Grantors are party to an Pledge and Security Agreement dated as of [ ], 2017 in favor of the Administrative Agent (the “ Security Agreement ”) pursuant to which the Grantors are required to execute and deliver this Trademark Security Agreement;
N OW , T HEREFORE , in consideration of the premises and to induce the Lenders and the Administrative Agent to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrowers thereunder, each Grantor hereby agrees with the Administrative Agent as follows:
Section 1.    Defined Terms
Unless otherwise defined herein, terms defined in the Credit Agreement or in the Security Agreement and used herein have the meaning given to them in the Credit Agreement or the Security Agreement.
Section 2.    Grant of Security Interest in Trademark Collateral
Each Grantor, as collateral security for the full, prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of such Grantor, hereby mortgages, pledges and hypothecates to the Administrative
 
Annex 4-1

Agent, for the benefit of the Secured Parties, and grants to the Administrative Agent for the benefit of the Secured Parties a lien on and security interest in, all of its right, title and interest in, to and under the following Collateral of such Grantor (the “ Trademark Collateral ”), in each case other than Excluded Property :
(a)     all of its Trademarks and Trademark Licenses to which it is a party, including, without limitation, those referred to on Schedule I hereto;
(b)     all goodwill of the business connected with the use of, and symbolized by, each Trademark; and
(c)     all Proceeds of the foregoing, including, without limitation, any claim by Grantor against third parties for past, present, future (i) infringement or dilution of any Trademark or Trademark licensed under any Trademark License or (ii) injury to the goodwill associated with any Trademark or any Trademark licensed under any Trademark License.
Section 3.    Security Agreement
The security interest granted pursuant to this Trademark Security Agreement is granted in conjunction with the security interest granted to the Administrative Agent pursuant to the Security Agreement and each Grantor hereby acknowledges and affirms that the rights and remedies of the Administrative Agent with respect to the security interest in the Trademark Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event of any conflict between the terms hereof and the Security Agreement, the Security Agreement shall prevail.
[S IGNATURE P AGES F OLLOW ]
 
Annex 4-2

I N W ITNESS W HEREOF , each Grantor has caused this Trademark Security Agreement to be executed and delivered by its duly authorized offer as of the date first set forth above.

[GRANTOR],
as Grantor	
		
By:	 	                     	
	 	Name:	
	 	Title:	

A CKNOWLEDGED AND A GREED
as of the date first above written:	
	
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent	
		
By:	 	                     	
	 	Name:	
	 	Title:	
 
[S IGNATURE P AGE T O T RADEMARK S ECURITY A GREEMENT ]

S CHEDULE I
T O
T RADEMARK S ECURITY A GREEMENT
Trademark Registrations
INCLUDE ONLY U.S. REGISTERED/PENDING TRADEMARKS
 
A.	REGISTERED TRADEMARKS	
 
B.	TRADEMARK APPLICATIONS	
 
C.	TRADEMARK LICENSES	
[Include complete legal description of agreement (name of agreement, parties and date)]

EXHIBIT J
FORM OF JOINDER AGREEMENT
JOINDER AGREEMENT, dated as of                   , 20    , made by each signatory hereto (the “ Subsidiary Borrower ”), in favor of JPMorgan Chase Bank, N.A., as administrative agent for the Lenders (in such capacity, the “ Administrative Agent ”), referred to in the Credit Agreement, dated as of September 7, 2017 (as may be amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Delphi Jersey Holdings PLC (the “ Parent ”), Delphi Powertrain Corporation (the “ U.S. Parent Borrower ”), the Subsidiary Borrowers from time to time thereto, the Lenders from time to time party thereto, the Issuing Banks from time to time party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent. Unless otherwise defined herein, terms used but not defined herein shall have the meanings given to them in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the parties to this Joinder Agreement wish to add the Subsidiary Borrower to the Credit Agreement in the manner hereinafter set forth; and
WHEREAS, this Joinder Agreement is entered into pursuant to Section 9.02(c)(i) of the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and subject to the terms and conditions set forth in Section 9.02(c)(i) of the Credit Agreement, the parties hereto hereby agree as follows:
1.    The Subsidiary Borrower, hereby acknowledges that it has received and reviewed a copy of the Credit Agreement, and acknowledges and agrees to: (i) join the Credit Agreement as a Subsidiary Borrower, as indicated with its signature below; (ii) be bound by all covenants, agreements and acknowledgments attributable to a Subsidiary Borrower in the Credit Agreement; and (iii) perform all obligations and duties required of it by the Credit Agreement.
2.    The Subsidiary Borrower and each other Guarantor acknowledge and agree that the Guaranty covers the Obligations of the Subsidiary Borrower.
3.    The legal name, address, organizational identification number (if any), taxpayer identification number (if any) and jurisdiction and form of organization of the Subsidiary Borrower is set forth in Annex I to this Joinder Agreement.
4.    THIS JOINDER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[5.    To the extent the Subsidiary Borrower is incorporated in the Netherlands, the conditions and definitions set forth in Annex II to this Joinder Agreement shall apply.]
 
J-1

IN WITNESS WHEREOF, each of the undersigned has caused this Joinder Agreement to be duly executed and delivered by its proper and duly authorized officer as of the day and year first above written.

[NAME OF SUBSIDIARY BORROWER],
as a Subsidiary Borrower	
		
By:	 	                     	
	 	Name:	
	 	Title:	
	
DELPHI JERSEY HOLDINGS PLC,
as the Borrower Agent	
		
By:	 	                     	
	 	Name:	
	 	Title:	
 
[SIGNATURE PAGE TO JOINDER]

			
ACKNOWLEDGED AND AGREED TO:	
	
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent	
		
By:	 	                     	
	 	Name:	
	 	Title:	
	
ACKNOWLEDGED AND AGREED TO:	
	
[EACH OTHER GUARANTOR],
as Guarantor	
		
By:	 	                     	
	 	Name:	
	 	Title:	
 
[SIGNATURE PAGE TO JOINDER]

Annex I to Joinder Agreement

Legal
Name	  	Jurisdiction
of
Organization	  	Form of
Organization	  	Organizational
Identification
Number (if
any)	  	Federal
Taxpayer
Identification
Number (if
any)	  	Address
of Chief
Executive
Office	

 
ANNEX I

Annex II to Joinder Agreement
Additional Condition to the Joinder Agreement and Section  9.02(c)(i) of the Credit Agreement
The designation right set forth in Section 9.02(c)(i) of the Credit Agreement is also subject to, solely in relation to a Foreign Borrower incorporated in the Netherlands, the following additional condition: if required (i) the request for advice from any works council with jurisdiction over the transaction contemplated by the Credit Agreement and (ii) the unconditional positive advice from such works council.
Additional Defined Terms Applicable to the Joinder Agreement and Credit Agreement
In the Joinder Agreement and the Credit Agreement, where it relates to a Dutch entity, a reference to:
(a)      “the Netherlands ” refers to the part of the Kingdom of the Netherlands located in Europe (and all derivate terms, including “ Dutch ”, shall be construed accordingly);
(b)    unless a contrary indication appears, a “ director ”, in relation to a Dutch Loan Party, means a managing director ( bestuurder ) and “ board of directors ” means its managing board ( bestuur );
(c)     “Lien ” includes any mortgage ( hypotheek ), pledge ( pandrecht ), retention of title arrangement ( eigendomsvoorbehoud ), privilege ( voorrecht ), right of retention ( recht van retentie ), right to reclaim goods ( recht van reclame ), and, in general, any right in rem ( beperkt recht ), created for the purpose of granting security ( goederenrechtelijk zekerheidsrecht );
(d)    a “ liquidation ” includes a Dutch entity being declared bankrupt ( failliet verklaard ), dissolved ( ontbonden ) or granted suspension of payments ( surseance van betaling );
(e)    a “ receiver ” includes a curator or a bewindvoerder ; and
(f)    an “ attachment ” includes a beslag .
 
ANNEX II

Exhibit 10.6
EMPLOYMENT CONTRACT
In accordance with the Luxembourg “Code du Travail”, the following contract is made between Delphi International Operations Luxembourg S.a.r.l.
hereafter referred to as the ‘ Company ’
and Liam BUTTERWORTH
Residing [•]
hereafter referred to as the ‘ Employee ’:
ARTICLE 1 – Position of employment
The Company takes the Employee into its service as a salaried employee. The job will be Senior Vice President  & President, Powertrain Systems [Level: EXECUTIVE BAND G] starting on February 1 st , 2014. It is expected that the Employee will carry out the duties outlined in the agreed job description efficiently and in the best interest of the Company and the safety of its employees.
This position will be based in Luxembourg and given the Status of the position; a future assignment to a different location/country is possible.
ARTICLE 2 Seniority
You will not be subject to a probationary period and your seniority with other Delphi entities will be recognized from January 1 st 2000 to January 31 st , 2014.
ARTICLE 3 – Hours of work
The Company’s normal business hours are from 09.00 am to 17.00 pm from Monday to Friday and employees are required to work a minimum of 40 hours per week. Together with his/her supervisor the employee defines his/her individual work-schedule that fits within the department work-schedule. Overtime and flextime conditions are specified in the Site Procedures on the CTCL intranet.
Delphi International Operations Luxembourg S. à r.l.    Siége social :
Société à responsabilité limitée    Avenue de Luxembourg
Au capital de 123,200,050 Euros    L-4940 Bascharage
Immatriculée au Registre de Commerce et des Sociétés de Luxembourg
sous le numéro B 99 207
N° de TVA : LU20113988
Autorisation d’ établissement : 10036403 / 0

ARTICLE 4 – Salary
Gross monthly salary will be 35,000-€   [annual gross including 13 th month: Salary 455,000.- € ] (COLA 775.17). A year end gratuity equal to one month salary is paid to all employees in December. The salary is subject to deductions of legal contributions and taxes which will be made prior to payment without consent of the Employee. No fees other than those required by law can be collected by the Company. Salary payments are made at the end of each calendar month directly into the Employee’s nominated bank account.
ARTICLE 5 – Additional payments
 
 	•	 	Vacation allowance: :	
A vacation allowance linked to seniority is paid during the month of June. During the first 5 years of service the amount of the vacation allowance is: 350,00 €- gross per year as of January 2012. As of the 6 th year of service: 130,00 €,- gross will be added to the base of : 350,00 €,- for each year of seniority exceeding 5 years as of June 2014.
During the first year of service these payments are calculated on a prorate basis.
 
 	•	 	AIP Bonus Scheme :	
You will be eligible to an Annual Incentive Plan based on your individual performance and on the performance of Delphi. Your annual target will be communicated to you separately. Please note that the Annual Incentive Plan can be stopped by Delphi at any time or the rules of such plan can be changed at any time by Delphi.
 
 	•	 	Long Term Incentive Scheme :	
You will be eligible to a Long Term Incentive plan in accordance with Delphi policies.
 
 	•	 	Company car:	
You will have the use of a company car according to the current procedure implemented at Delphi Luxembourg which can be changed at any time by Delphi Luxembourg.
ARTICLE 6 – Pension Scheme & Group Life Insurance
The Company provides for a pension plan which an Employee is eligible to join when he/she fulfills the criteria for affiliation after which time contributions become mandatory. Details of the scheme are available on the CTCL intranet.
Delphi International Operations Luxembourg S. à r.l.    Siége social :
Société à responsabilité limitée    Avenue de Luxembourg
Au capital de 123,200,050 Euros    L-4940 Bascharage
Immatriculée au Registre de Commerce et des Sociétés de Luxembourg
sous le numéro B 99 207
N° de TVA : LU20113988
Autorisation d’ établissement : 10036403 / 0

ARTICLE 7 – Company Practices
In consideration of the opportunities which employment affords the Employee to become acquainted with the Company’s business, including the activities of the Company in connection with engineering, research and development work, the Employee agrees that any inventions or improvements which he/she may conceive, make, invent, suggest or contribute to during the term of the employment with the Company under this Agreement relating to any matter or thing, including processes and methods of manufacture, which may be connected in any way with the Employee’s work or related in any way to the Company’s business, existing or anticipated, at any time throughout the employment, the employee forgoes all/any rights to either during or following the term of the employment to apply for letters, patent or similar privileges in respect thereof in any country.
The Employee further agrees not to reveal to any person, unless authorized by the Company or its duly authorized officials, any information concerning the inventions, improvements or other confidential matters of the Company.
For the protection of all/any patents, secret processes and trade secrets of the Company and unless he/she is exempted by the provisions of article 13 of the “Texte coordonné”, the Employee undertakes that throughout the period of one year immediately following the end of the employment with the Company, he/she will not, without the prior written consent of the Company (such consent not to be unreasonably withheld), directly or indirectly on his/her own account or as an employee or agent of any person anywhere, be concerned or engaged in the engineering and/or manufacture of any product, component, sub-system, system in relation to, while in the employment of the Company he/she will have learned or had access to, any secret process or trade secrets of the Company.
The Employee agrees that he/she will, at the request of the Company, at any time during the employment or thereafter assign to the Company the said inventions and improvements and any patent applications filed or patents granted thereon and will execute any patent papers covering such inventions or improvements as well as any papers that the Company may consider necessary or helpful in the prosecution of patent applications thereon or in the conduct of any interference, litigation or any other controversy in connection therewith, all expense incident to the filing of such applications, the prosecution thereof, and the conduct of any such interference, litigation or other controversy to be borne by the Company.
ARTICLE 8 – Training
The company undertakes to provide the Employee with “on-job” training and/or personal development training. Should the Employee terminate his/her employment with the Company during, or within a period of twelve months of receipt of personal development training at the Company’s expense, the Employee agrees, upon request, to repay the Company for all/any training fees incurred including transportation and living expenses paid by the Company during that period of training.
Delphi International Operations Luxembourg S. à r.l.    Siége social :
Société à responsabilité limitée    Avenue de Luxembourg
Au capital de 123,200,050 Euros    L-4940 Bascharage
Immatriculée au Registre de Commerce et des Sociétés de Luxembourg
sous le numéro B 99 207
N° de TVA : LU20113988
Autorisation d’ établissement : 10036403 / 0

ARTICLE 9 – Business Trips
Where business trips are considered part of the job responsibility the Company will pay for and/or reimburse expenditure where necessary. The Employee will not, unless for personal reasons which would result in serious financial and/or family constraints, refuse the travel activity which may or may not include agreed periods of time away from home. All conditions for travelling are outlined in the Company’s Standard Procedure, Serial No. 3.
ARTICLE 10 – Driving License
Where a valid driver’s license is a job requirement the Employee must maintain the license during the time of employment. Termination of employment will result in the event that the driving license becomes revoked, suspended or restricted. Where a driving license is not a job requirement the employee is required to notify the Company immediately of any restrictions, suspensions or cancellations.
ARTICLE 11 – Vacation entitlement.
In addition to public holidays all Employees are entitled to 26 days of vacation per calendar year. As of the year employees reach 5 years of seniority with Delphi they are entitled to one additional day of vacation, for every 5 years of seniority with a maximum of 7 days for 35 years of seniority or more.
Entitlement to be taken in accordance with the Company policy.
ARTICLE 12 – Extraordinary leave.
All employees are entitled to additional days of leave in respect of immediate family births, death, weddings, civic duties and public holidays as detailed in the Company’s collective labor agreement.
ARTICLE 13– Miscellaneous Benefits.
Statutory benefits relating to insurance, sickness, accident, maternity, family allowances are provided for and so communicated to the Employee on commencement of employment.
ARTICLE 14 – Data protection
The employee is aware of the fact that all personal information provided by him/her are recorded in an electronic database and he/she agrees that this data as well as data recorded concerning career development may be shared with other Delphi entities in other geographical regions for career development purposes. The employee also agrees that the company shares his/her personal information necessary to administer employee benefits i.e. pension plan, life insurance with the service provider(s) contracted by the company.
Delphi International Operations Luxembourg S. à r.l.    Siége social :
Société à responsabilité limitée    Avenue de Luxembourg
Au capital de 123,200,050 Euros    L-4940 Bascharage
Immatriculée au Registre de Commerce et des Sociétés de Luxembourg
sous le numéro B 99 207
N° de TVA : LU20113988
Autorisation d’ établissement : 10036403 / 0

ARTICLE 16 – Termination of employment
This contract may be cancelled at any time by either party provided notice is given in accordance with the stipulations of the Luxembourg “Code du Travail”, livre I, Titre II – Chapters IV, V, VI, VII.
Upon termination of his/her employment, the Employee is required to return to the Company all drawings, blue-prints, manuals, letters, notes, notebooks, reports and all/any other material which are in the possession of or under the control of the Employee. This contract will automatically cease at the end of the month during which the Employee reaches 65 years of age.
This contract is made in the Grand-Duchy of Luxembourg whose laws and jurisdiction will determine the interpretation and execution of the present contract.
Made in duplicate and signed in
Bascharage, February 14 th , 2014
Delphi International Operations Employee
Luxembourg S.a.r.l
Delphi International Operations Luxembourg S. à r.l.    Siége social :
Société à responsabilité limitée    Avenue de Luxembourg
Au capital de 123,200,050 Euros    L-4940 Bascharage
Immatriculée au Registre de Commerce et des Sociétés de Luxembourg
sous le numéro B 99 207
N° de TVA : LU20113988
Autorisation d’ établissement : 10036403 / 0

ADDENDUM TO THE EMPLOYMENT CONTRACT
Mr. Liam Butterworth (“the Employee”) and Delphi International Operations Luxembourg S.à.r.l. (“the Employer”) entered into an employment contract on 14 February 2014 (“the Employment Contract”), based on which the Employee acts as Senior Vice President & President, Powertrain Systems since 1 February 2014.
Whereas
 
 	•	 	On 1 November 2012 the Employee and Delphi Connection Systems Holding France SAS entered into an employment contract dated 1 November 2012.	
 
 	•	 	On 3 December 2012 the Employee and Delphi Connection Systems Holding France SAS concluded an addendum to the employment contract dated 1 November 2012.	
 
 	•	 	The before mentioned addendum provides that the Employee is eligible to a Long Term Plan, based on which the Employee is entitled to a target cash amount of a EUR 1,000,000 for the period starting on the 4th quarter 2012 and ending on 31 December 2015, or EUR 5,000,000 where Delphi Connection Systems Holding France SAS business plan over-performs by 20% the objective that has been set.	
 
 	•	 	The Employee entered into an employment contract with Delphi International Operations Luxembourg S.à.r.l. since 1 February 2014. The Employee’s employment relationship with Delphi Connection Systems Holding France SAS ended on the same date. The parties understand that all rights accrued in connection with the Long Term Plan under the contract dated 1 November 2012 with Delphi Connection Systems Holding France SAS were lost as from 1 February 2014 when the employment relationship ceased between the Employee and Delphi Connection Systems Holding France SAS.	
The Employee and the Employer wish to agree on the following amendments to the Employment Contract.
Article 1 Purpose of the Addendum
The purpose of the Addendum is to complement the provisions of the Employment Contract. Where applicable, the provisions of the Addendum supersede the provisions of the Employment Contract.
Article 2 Amendments to the Employment Contract
Article 5 (Additional payments) of the Employment Contract is completed as follows:
 
 	•	 	Other benefits	
1. Upon completion of 12 months employment with the Employer, the Employer will pay an amount of EUR 377.000,- gross (AIP) to the Employee on 28 February 2015.

Delphi International Operations Luxembourg SARL                 TVA : 2004 2402 134	  		
Avenue de Luxembourg	  		  		
L-4940 BASCHARAGE	  		  		

2. In order to compensate him for the loss of the benefits derived from the Long Term Plan implemented by his former employer, the Employee and the Employer agree that the Employee is eligible to:
 
 	•	 	An amount of EUR 520.000,- gross on 28 February 2015	
 
 	•	 	An amount of EUR 780.000,- gross on 29 February 2016.	
The Employer and the Employee agree that the amounts under 1. and 2. above may be partly or fully invested by the Employer in the purchase of warrants (“the Warrants”) issued by an external provider (ING or another Luxembourg financial service provider). The Warrants will have a length of approximately 15 years and will be based on a stock market index (eg. the DAX Index). The Employer may grant the Warrants to the Employee under the rules of the Employer Warrant Scheme, which features will be similar to the Warrant Scheme to which the Employee has participated in 2014. However, in the event that the granting of the Warrants becomes, for fiscal, legal or any other reason, no longer possible, or at any time upon his sole discretion, the Employer may decide to provide the Employee with a cash payment instead of a grant of Warrants.
The Employee’s rights to the above-mentioned payments lapse automatically upon termination of the Employee’s employment contract with the Employer.
Article 3
The Addendum applies with immediate effect as from its date of signature.
This Addendum is made in the Grand-Duchy of Luxembourg whose laws and jurisdiction will determine the interpretation and execution of the present contract.
Made in duplicate and signed in
Bascharage, 19 February 2015
Delphi International Operations Luxembourg S.à.r.l                         Employee

Delphi International Operations Luxembourg SARL                 TVA : 2004 2402 134	  		
Avenue de Luxembourg	  		  		
L-4940 BASCHARAGE	  		  		

ADDENDUM TO EMPLOYMENT CONTRACT
Between :    Delphi International Operations Luxembourg S.A.
With registered office in Bascharage, route de Luxembourg
Hereinafter referred to as “Delphi International Operations Luxembourg”
And    Mr. Liam Butterworth
[•]
Hereinafter referred to as the “Employee”
Whereas the Parties have entered into an Employment Agreement on 1st February 2014 (the “Original Agreement”), and now wish to clarify the interpretation of article 4 of the Original Agreement.

The parties have agreed as follows:
Article 4 – Salary shall be read as follows:
Gross monthly salary will be 35,138.46 €  [annual gross including 13 th month: Salary 456,799.98 € ] (COLA 775.17). A year end gratuity equal to one month salary is paid to all employees in December. The salary is subject to deductions of legal contributions and taxes which will be made prior to payment without consent of the Employee. No fees other than those required by law can be collected by the Company. Salary payments are made at the end of each calendar month directly into the Employee’s nominated bank account.
In the context of the application of the Luxembourg Special Tax Regime for Inbound Employees provided for by the Circular Letter n°95/2 dated 27 January 2014, the gross monthly salary of 35,138.46 € will incorporate:
 
 	•	 	An allowance to cover the recurring charges linked to the employment in Luxembourg (i.e. housing and tax equalisation costs) of maximum 6,153.85 € (80,000 € per year);	
 
 	•	 	An allowance to compensate the Employee for the cost of living differential between Luxembourg and France of maximum 2,769.23 € (36,000 € per year).	
Signed in two originals in Bascharage, December 1 st , 2014

	 		
Delphi International Operations Luxembourg.                                 Liam Butterworth	
Delphi International Operations Luxembourg S. à r.l.    Siége social :
Société à responsabilité limitée    Avenue de Luxembourg
Au capital de 123,200,050 Euros    L-4940 Bascharage
Immatriculée au Registre de Commerce et des Sociétés de Luxembourg
sous le numéro B 99 207
N° de TVA : LU20113988
Autorisation d’ établissement : 10036403 / 0

Exhibit 10.7

September 19, 2017
Vivid Sehgal
[ADDRESS]
[ADDRESS]
Dear Vivid:
As you know, Delphi is currently contemplating a spin-off of its Powertrain Systems business (the “Spin-Off”) into a new, separately traded entity (“SpinCo”). In anticipation of the Spin-Off, and on behalf of Delphi, I am pleased to extend this offer of employment to you, as further described in this letter agreement and any related documentation (this “Offer”). Under the terms of this Offer, you will be hired as an employee of Delphi and at the time of the Spin-Off, you will transition employment to SpinCo where you will serve as its Chief Financial Officer. At SpinCo, you will be based in London and will report directly to Liam Butterworth, currently President, Powertrain/DPSS, who is expected to be appointed President & Chief Executive Officer of SpinCo in connection with the Spin-Off. I am providing you with this Offer to confirm your compensation details and to provide further background on the applicable Delphi plans and programs. Please note that we expect the SpinCo plans and programs to be substantially similar to Delphi plans and programs currently in place.
The following provides a summary of your compensation details regarding this Offer:
Base Salary: Your initial base salary is at an annual rate of £450,000 , which shall be paid in installments in accordance with Delphi’s normal payroll practices. Your base salary will be reviewed from time to time in accordance with normal employer practice.
Target Annual Incentive: Prior to the Spin-Off, you are eligible for an annual incentive plan award. Your target annual incentive compensation for 2017 will be 80% of your base salary (£360,000 at target payout), prorated for the number of months you work during the current year, and paid out at the higher of target payout or actual performance based on business results. The target has the potential to pay out in a range of 0 – 200% depending on applicable performance. The actual amount you may receive, if any, is adjusted based on business performance against the annual plan metrics and your individual performance. Such award, if earned, shall be paid by March 15, 2018. In connection with the Spin-Off, it is anticipated that outstanding Delphi annual incentive awards will be equitably adjusted to reflect the Spin-Off in a manner determined by the Compensation and Human Resources Committee of Delphi Automotive PLC. Following the Spin-Off, you will be eligible to participate in an annual incentive plan for SpinCo executives at no less than your current target percentage.
Long-Term Incentive: Detailed information about your participation in the SpinCo Long-Term Incentive (“LTI”) Plan is found in Attachment A.
Additional Sign-On Payments: As an incentive to join Delphi, you will receive a cash payment of £150,000 to be paid within 30 days of your hire date. Receipt of the cash payment is contingent on you signing an agreement indicating that you will repay the sign-on payments if you voluntarily resign your employment within 24 months of your date of hire. This provision applies to both your service at Delphi prior to the Spin-Off and with SpinCo following the Spin-Off. Should your employment with Delphi or SpinCo be involuntarily terminated without cause, you will have no obligation to repay the cash payments.
As you would expect, all compensation and payments referred to in this Offer will be subject to applicable tax withholding.

September 19, 2017
Vivid Sehgal
Page 2
 
Benefits: In addition to the compensation elements described above, prior to the Spin-Off, you are also eligible for Delphi’s benefits package. The benefits associated with the offer are detailed in the enclosed Contract of Employment and Appendix. Following the Spin-Off, you will be eligible to participate in SpinCo’s benefits package, which is expected to be substantially similar to the Delphi benefits package.
Special Circumstance Benefits : If a “Special Circumstance” occurs, you may be entitled to receive certain payments and benefits. More detailed information about these payments and benefits is found in Attachment A.
In accordance with Delphi policy and contingent on your acceptance of this Offer, a background verification process will be conducted. Your employment is contingent upon the results of the background verification.
Employment is also contingent upon your current and continued eligibility to work in the UK. To comply with government regulations, unexpired identification documents must be presented on your first day of work to verify that you are authorized to work in the UK.
If you have any questions, please contact me at [EMAIL] or on my mobile: [PHONE NUMBER].
To accept this Offer, please sign and complete the info in the appropriate box below and send to me at the email address listed above.
On behalf of our entire senior leadership team, we look forward to you joining our team.
Sincerely,
/s/ Susan M. Suver
Susan M. Suver
Senior Vice President & Chief Human Resources Officer
Enclosures

By signing below I am indicating my acceptance of this employment offer and acknowledgment of its contents. I understand that Delphi, its subsidiaries and affiliates (including SpinCo) may amend, modify or terminate any of its incentive, severance, retirement, insurance, or other benefit plans, policies or programs at any time and that SpinCo may adopt benefit, plans, policies or programs that differ from those of Delphi. I further acknowledge and understand that my employment will be considered “at will,” subject to applicable law, and subject to termination at any time, or for any reason.

ACCEPTANCE	
	
/s/ Vivid Sehgal	
Signature of Vivid Sehgal	
	
Start Date (if known):	
	
[EMAIL]	
Email Address	

			

	 	Private & Confidential	

		
	 	Contract of Employment
Vivid Sehgal	

		
	 	Delphi Powertrain Systems
Management Limited	

 
Contract of Employment
These are the terms and conditions of employment that apply to you.
This offer is made subject to satisfactory medical, references, qualifications, driving licence and identity documents.
 
1	Employer	
Your employer is Delphi Powertrain Systems Management Limited and the registered office is 1 Park Row, Leeds, North Yorkshire, LS1 5AB.
 
2	Employee	
 
2.1	Vivid Sehgal, [ADDRESS].	
 
3	Job Title	
 
3.1	Your job title is as set out at Section 1 of the Appendix. Your duties will include those set out in the relevant job description, although you may be required to carry out such additional or alternative tasks and duties within your skill set and remit as the Company may reasonably require of you from time to time.	
 
4	Date of Commencement	
 
4.1	Your employment shall commence on the date set out in Section 2 of the Appendix. Your period of continuous employment (for statutory employment rights purposes) commenced on the date set out in Section 3 of the Appendix. No previous employment outside of the employer will be treated as continuous with your employment by the Company.	
 
5	Probationary Period	
 
5.1	Your employment will be subject to successful completion of a six month probationary period, set out in Section 4 of the Appendix.	
 
6	Duration of Employment and Termination	
 
6.1	Your employment shall continue for an indefinite period and shall be terminable on notice or otherwise as set out below. The period of notice to be given in writing by either you or the Company to terminate your employment is set out in Section 5 of the Appendix.	
 
6.2	During any period of notice of termination served in accordance with this clause (whether given by you or the Company), the Company shall be under no obligation to assign any duties to you and shall be entitled to exclude you from its premises (“Garden Leave Period”). During the Garden Leave, you will continue to be bound by all other express and implied terms of this contract. You will also remain entitled to receive your remuneration and other contractual benefits.	
 
6.3	If either you or the Company is giving notice to terminate the employment, the Company reserves the right to pay you in lieu of notice or part of notice rather than asking you to work your notice period. Pay in lieu of notice will not be paid where gross misconduct is the reason for termination of employment. Holidays may only be taken during a notice period with the permission of the relevant Director.	
Payment in lieu of notice will be equal to the basic salary (as at the date of termination) which you would have been entitled to receive under this contract agreement during the notice period (or, if notice has already been given, during the remainder of the notice period) less income tax and National Insurance contributions. For the avoidance of doubt, the Payment in Lieu shall not include any element in relation to:
 
Page 2 of 12

 
 	(a)	Any bonus or commission payments that might otherwise have been due during the period for which the Payment in Lieu is made;	
 
 	(b)	Any payment in respect of benefits which the Employee would have been entitled to receive during the period for which the Payment in Lieu is made; and	
 
 	(c)	Any payment in respect of any holiday entitlement that would have accrued during the period for which the Payment in Lieu is made.	
 
6.4	Nothing in this clause shall preclude the Company from terminating your employment without notice or a payment in lieu of notice in appropriate circumstances, including (without limitation) serious/gross misconduct.	
 
6.5	Under agreed circumstances, employment may be terminated sooner by agreement with yourself and the Company to waive part of the notice period. In these circumstances no payment will be made for the un-worked portion of the notice period.	
 
7	Basic Salary/Pay	
 
7.1	Your current basic salary/pay and payment details are set out in Section 6 of the Appendix.	
 
7.2	Your salary/pay will be reviewed annually, although it will only be increased at the discretion of the Company. There is no guarantee that it will be increased.	
 
7.3	In addition to your basic salary/pay referred to in clause 7.1 above, you may be entitled to receive additional remuneration under a bonus scheme(s). If you are, it will be set out in Section 7 and/or Section 8 of the Appendix and will be subject to the relevant rules of any such schemes from time to time in force.	
 
7.4	You authorise the Company to deduct from your basic salary/pay, and to set off against any monies due to you under clause 8 (Expenses) or otherwise, any sum due to the Company from you including, without any limitation, any overpayments (including overpayments of holiday), loans or advances made to you by the Company, sums authorised to be deducted under a prior agreement (such as under a Salary Sacrifice Scheme or a study agreement) and the cost of repairing any damage or loss to the Company’s property caused by you.	
 
8	Expenses	
 
8.1	You will be reimbursed for all reasonable out of pocket expenses in accordance with any costs incurred through your role as agreed with your line manager.	
 
9	Place of Work	
 
9.1	Your normal place of work is set out in Section 9 of the Appendix. However, you may be required to work at other sites or travel throughout the United Kingdom and overseas and stay away as necessary for the proper performance of your duties or as reasonably requested by the Company.	
 
10	Overseas Work	
The company currently does not envisage you having to work outside the United Kingdom for a period of more than one consecutive month. If this should change you will be advised of this and subject to mutual agreement.
 
Page 3 of 12

 
You may be required to travel overseas on a frequent basis as part of your role in order to fulfil your contractual duties.
 
11	Working Hours	
 
11.1	Your normal hours of work are set out in Section 10 of the Appendix. The Company reserves the right to vary these times (and any shift patterns) as necessary to meet the changing needs of the business.	
 
11.2	The Company reserves the right to require you to work overtime, including evening, weekend and bank holidays where the needs of the business reasonably require. Time off in lieu for this additional time will be considered in agreement with your manager. If you are entitled to overtime payments, this will be set out in Section 11 of the Appendix.	
 
12	Holidays	
 
12.1	You are entitled to the number of days’ paid holiday in each period of 12 months from 1 January – 31 December each year (the “ Holiday Year ”) as set out in Section 12 of the Appendix. You may be required to work public holidays to support business needs.	
 
12.2	The Company may specify when some holiday must be taken (such as any closures). You will be given notice of any such obligatory holiday dates as soon as possible. Other holiday must be agreed in advance with your line manager. For holidays of 1 week or more, you should give at least 4 weeks’ notice. For holidays of less than 1 week you should give at least 1 weeks’ notice, wherever possible.	
 
12.3	If you do not take all your holiday entitlement in the relevant Holiday Year you are not entitled to receive payment for this. You may not usually carry forward any unused holiday entitlement in to the following Holiday Year; this would need to be agreed by the relevant Director.	
 
12.4	In the years of commencement and termination of employment, your basic holiday entitlement will be calculated pro rata to the number of months worked in that year. If on termination of employment you have any unused holiday entitlement the Company may either make a payment in lieu or require you to take it during any notice period. If you have exceeded your basic holiday entitlement you will be required to repay the excess holiday pay to the Company. This sum may be deducted from any monies due to you on termination of your employment.	
 
12.5	Your holiday will be paid at basic rate. If you receive any overtime, this will be reconsolidated in January each year and the difference will be paid to you at this time.	
 
13	Sickness and other absence	
 
13.1	On your first working day of absence, you must inform the Company of your absence by telephone prior to your normal start time, in accordance with the Attendance Policy . Any unauthorised absence must be properly explained. If absent because of illness you are required to give details of the nature of the illness and any indication that can then be given of your anticipated length of absence. If your absence is due to bereavement, or to attend medical appointments, guidance on this is contained in the Attendance Policy.	
 
13.2	When any period of absence continues beyond seven calendar days you are required to obtain a medical certificate and to forward this to the Human Resources Department. If illness continues after expiry of the first certificate further certificates must be obtained as necessary to cover the whole period of absence and forwarded to the Company on each occasion.	
 
Page 4 of 12

 
13.3	Your entitlement to sick pay (which is payable at the discretion of the Company and subject to your compliance with the above notification provisions) including statutory sick pay is shown in Section 13 of the Appendix.	
 
13.4	Your level of sickness absence will be monitored by the Company. Continued and excessive absence may result in Formal Attendance actions against you.	
 
14	Health and wellbeing	
 
14.1	You are entitled to meet with our Occupational Health Doctor at any time during your employment. The company may also request you meet with Occupational Health after prolonged absence or if they feel your wellbeing is at stake. All referrals are confidential and reports to Management are held in the strictest of confidence with your approval.	
 
15	Drug and Alcohol Testing	
 
15.1	At any time during your employment the Company may require you to undergo a drug/alcohol test in accordance with the terms of the Company’s drug and alcohol policy from time to time. If you are found to be under the influence of drugs and/or alcohol, it could be a disciplinary matter. In appropriate circumstances, it could be considered as gross misconduct, the penalty for which is summary dismissal.	
 
16	Car Allowance/Company Car	
 
16.1	If appropriate, and in order to assist you in the performance of your duties, under this contract or as a benefit of the role, (subject to you remaining legally qualified and fit to drive), the Company may provide you with a Company car cash allowance. If you are entitled to a car allowance, this will be set out in Section 14 of the Appendix.	
 
16.2	The car allowance is provided to cover all business travel eventualities with respect to travel by vehicle. Employees in receipt of a car allowance must ensure their car is insured for business travel. The Company Car Policy can provide further information.	
 
17	Pension and Insurance Benefits	
 
17.1	Delphi operates a Group Personal Pension Plan as detailed in Section 15 of the Appendix. Delphi will comply with legislative requirements and all employees will be automatically enrolled into the Group Personal Pension Plan. Employees will only be able to leave the Plan through opting out direct to the Pension Provider.	
 
18	Normal Retirement Age	
 
18.1	There is no normal retirement age in line with current legislation, however some insurance based benefits may cease to be offered after the age of 65, which may vary from time to time.	
 
19	Company Property	
 
19.1	You acknowledge that all mobile phones, laptops and other computer equipment, fuel cards, car keys, identity and access cards, books, notes, memoranda, records, lists of customers, suppliers and employees, correspondence, documents, computer and other discs and tapes, data listings, codes, designs and drawings, confidential information and other documents and materials (whether made or created by you or otherwise) relating to the business of the Company, any Group company or any customer of the Company or Group Company and any copies, summaries or adaptations of them as appropriate;	
 
Page 5 of 12

 
 	(a)	Shall be and remain the property of the Company or customer;	
 
 	(b)	Shall not be removed from the Company’s premises or copied, except in the proper performance of your duties; and	
 
 	(c)	Shall be handed over to the Company on demand and in any event on the termination of your employment.	
 
20	Confidentiality/Post Employment Obligations	
 
20.1	The Employee shall not, whether during the period of his employment by the Company or at any time after its termination (howsoever arising) except in the proper performance of his duties, or in pursuance of any obligation arising from any statutory enactment or order of a competent court or tribunal or on the request of the Board:	
 
 	(a)	Directly or indirectly make use of or divulge or communicate to any person firm company or organisation any Confidentiality Information which he has possessed during the continuance of his employment with the Company or any Group Company; or	
 
 	(b)	Copy or reproduce in any form or by or on any media or device (or allow others to copy or reproduce) documents, disks, tapes or other material containing or referring to Confidential Information.	
 
20.2	All documents (including copies), disks, tapes and other material (in whatsoever medium) held by the Employee containing or referring to Confidential Information or relating to the affairs and business of the Company or any Group Company (and whether or not prepared by him or supplied by the Company or any Group Company) shall be the property of the Company or the relevant Group Company and shall be delivered by him to the Company or the relevant Group Company upon the termination of his employment (howsoever arising).	
 
20.3	These restrictions shall not apply:	
 
 	(a)	To Confidential Information which has come into the public domain;	
 
 	(b)	To any disclosure or use of Confidential Information authorised by the Board or required by law or in connection with the performance by the Employee of his duties with the Company;	
 
 	(c)	So as to prevent the Employee from using his own personal skill in any business in which he may be lawfully engaged after the Employment is ended.	
 
20.4	You shall not for a period of one year after the termination of your employment whether alone or jointly with others, directly or indirectly:	
 
 	(a)	Interfere with, canvas, solicit, or cause to be canvassed, solicited or approached in respect of any services which are the same or similar to those which have been provided by the Company at any time during the preceding 12 months of your employment, any person, persons or Company who at the date of termination of your employment or during the period of one year prior to that date, was to your knowledge a customer or client of the Company and with whom you had dealings during the last twelve months of your employment.	
 
 	(b)	Supply to or deal with in respect of any services which are the same as or similar to those which have been provided by the Company at any time during the last 12 months of your employment, any person, persons or Company who at the date of termination of your employment or during the period on 1 year prior to that date, was to your knowledge a customer or client of the Company and with whom you had dealings during the last 12 months of your employment.	
 
Page 6 of 12

 
 	(c)	Offer to employ or endeavour to employ or entice away from the Company to join a direct competitor or start up a competing venture, any person employed by Delphi Powertrain Systems Management Limited during the period of 12 months prior to your termination of employment and with whom you had personal dealings in the normal course of your employment. This applies for a period of one year.	
 
 	(d)	Be employed by or hold any material interest in any person, firm or company which requires or might reasonably be thought by the company to require you to disclose or make use of any confidential business information in order properly to discharge your duties for the benefit of that person, firm or company and/or to further his interest in such person, firm or company.	
 
20.5	At any time after the your termination of employment you shall not represent yourself or permit yourself to be held out by any person, firm or company as being in any way connected with or interested in the Company.	
 
20.6	Whilst employed by the Company, you must not develop any business within the scope of services offered by Delphi Powertrain Systems Management Limited for your own (or others) benefit outside your employment, or after your employment has terminated for whatever reason. You accept that such business developed during your time employed by the Company will be assigned to Delphi Powertrain Systems Management Limited and that any gross profits made for a period of one year following termination of employment must be paid to the Company.	
 
20.7	The restrictions above apply to all the Company’s clients including Clients which members of staff bring in to the business as a result of their employment with the Company. They are clients of the Company and not of the individual employee.	
 
21	Intellectual Property	
 
21.1	If the Employee in the course of the performance of his duties under this Contract of Employment shall create, make or discover any Intellectual Property or make any improvement upon a derivation from any existing work, invention or design whether or not the Intellectual Property has, or is capable of giving rise to, patents or rights equivalent to patents, registered design, copyright, design right, or other like protection and whether alone or in conjunction with any other employee or employees of the Company, or of any Group Company, or other persons, he shall immediately disclose such Intellectual Property to the Board and undertakes that at the Company’s request and expense he shall at any time during or after the termination of his employment do all such acts and execute all such documents as may be necessary to vest all rights in or relating to any such Intellectual Property in the name of the Company and any Group Company to the intent that all such rights and any such invention, design or improvement shall subject, in relation to patents, to any applicable provisions of the Copyright Designs and Patent Act 1988, become the absolute property of the Company or its nominee. Nothing contained in this clause shall limit any statutory or other right of the Company or any Group Company in relation to any such intellectual Property.	
 
22	Other Employment	
 
22.1	It is expected that the Company will be your main employer, if you are employed by another company, you must notify the Company in writing to Human Resources. This is required whether you are a new or existing employee when the other employment commences.	
 
Page 7 of 12

 
23	Company Policy and Procedures	
 
23.1	You agree to comply with the rules, policies and procedures of the Company, although these do not form part of your contract of employment and are subject to change.	
 
24	Grievance Procedure	
 
24.1	Any grievance you may have relating to your employment should be in line with the Company’s Grievance Policy which can be obtained from your line manager or Human Resources. Should you need to raise a grievance, this should usually be raised with your line manager in the first instance and formally inn writing to your line manager or Human Resources if the issue cannot be resolved informally.	
 
25	Disciplinary Procedure	
 
25.1	The Company expects certain standards of conduct and performance from all employees and where an employee’s standards do not meet the Company’s expectations, or where they undertake misconduct, the Company will instigate the Disciplinary Policy . This can be obtained from your line manager or Human Resources. Any appeal should be in writing addressed to Human Resources.	
 
26	Equal Opportunities	
 
26.1	The Company is fully committed to the active promotion of equal opportunities in its capacity as an employer and its provision of all its services to the community as a whole.	
 
27	Health and Safety	
 
27.1	The Company takes Health and Safety very seriously and you must comply with this at all times. Your obligations are set out in our company Health and Safety Policy and supporting procedures and processes. It is the individual responsibility of each employee to ensure the practical application of these in the workplace to ensure that Delphi Powertrain Systems Management Limited is a safe place to work.	
 
28	IT Policy	
 
28.1	You agree to comply with all aspects of the Company’s IT Policy which is subject to change.	
 
28.2	You agree that the Company to which you provide services may intercept and monitor communications sent via any company communication systems or services of the Company.	
 
29	Collective Agreements	
 
29.1	There are no collective agreements which directly affect the terms and conditions of your employment.	
 
30	Variation to standard and other terms and conditions	
 
31	The Company reserves the right to make reasonable changes to these and any other agreed terms and conditions of employment. Minor changes of detail (e.g. in procedures) may be made from time to time and will be effected by a general notice to employees.	
 
32	Public interest disclosure	
 
32.1	Nothing in this Agreement shall prevent you from making a protected disclosure in good faith pursuant to the Public Interest Disclosure Act 1998.	
 
Page 8 of 12

 
33	Data Protection	
 
33.1	You agree that personal data (other than sensitive personal data) as defined in the Data Protection Act 1998, relating to you and your employment may be processed by the Company to the extent that it is reasonably necessary in connection with your employment or the business of the Company, in line with the Data Protection Policy available from your line manager or Human Resources.	
 
33.2	You agree that the Company may process sensitive personal data relating to you, including medical details and details of gender, race and ethnic origin. Personal data relating to gender, race and ethnic origin will be processed by the Company only for the purpose of monitoring the Company’s Equality Policy. You agree that the Company may disclose or transfer such sensitive personal data to other persons if it is required or permitted by law to do so for the purpose of monitoring the Company’s data.	
 
33.3	Your consent to the transfer and disclosure of personal data as set out above shall apply regardless of the country of residence of the person to whom the data is to be transferred. Where the disclosure or transfer is to a person resident outside the European Economic Area, the Company shall take reasonable steps to ensure that your rights and freedom in relation to the processing of the relevant personal data are adequately protected.	
 
34	Choice of law	
 
34.1	This Agreement and any dispute or claim arising out of or in connection with it shall be governed and construed in accordance with English law.	
 
34.2	All disputes or claims arising out of or relating to this Agreement shall be subject to the exclusive jurisdiction of the English courts to which the parties irrevocably submit.	
 
35	Whole Agreement	
 
35.1	This Agreement (including the Appendix) and the Company policies and procedures sets out the entire agreement relating to your employment with the Company and shall replace any previous agreements and arrangements relating to your employment with the Company.	
 
Page 9 of 12

 
Vivid Sehgal
Appendix to Employment Contract – September 19, 2017
The matters set out in this Appendix may only be amended by the issue of a new Appendix signed by you and the Company.

1.      Job title	  	Chief Financial Officer, reporting to Liam Butterworth, currently President, Powertrain/DPSS, who is expected to be appointed President & Chief Executive Officer of SpinCo in connection with the Spin-Off	
		
2.      Date of commencement of employment	  	Date	
		
3.      Date of commencement of continuous employment	  	Date	
		
4.      Probationary Period	  	6 months	
		
5.      Notice of termination	  	Your employment may be terminated at any time by either party giving to the other, in writing, the following prior notice:
 
Duration of probationary period – three months’ notice
Following successful completion of probationary period – Six Months’ notice	
		
6.      Basic Salary/Pay	  	£450,000 per annum payable on the 19 th of each month.	
		
7.      Bonus	  	You are eligible for our annual incentive plan (AIP). Your target annual incentive award will be 80% of your base salary, depending on the company’s performance. The actual amount you receive is adjusted depending on the company’s and your individual performance.	
		
8.      Long Term Incentive Plan	  	Please refer to the attachment A	
		
9.      Place of work	  	[ADDRESS]	
		
10.    Hours of work	  	You are required to work 37.5 hours over a 5 day period. You are required to take a minimum of 30 minutes lunch each day. Typically we would expect you to start work prior to 9.30am and finish work after 4pm.	
		
11.    Overtime	  	You may be required to work such additional hours as are necessary for the proper performance of your duties in the interest of the Company without further remuneration.	
		
12.    Holidays	  	The holiday year runs from 1st January to 31st December. Your holiday entitlement will be on a pro rata basis according to your contracted hours and start date within a year. If you leave the Company part way through a year, your holiday will be calculated up to your leave date.	
 
Page 10 of 12

 
					
	  	Your holiday terms are as below:
 
•    27 Days holiday per annum
 
•    8 statutory bank holidays
 
For employees with long service the following will apply:
 
After 10 years’ service – 1 additional day holiday entitlement from the start of the subsequent leave year	
			
13.    Sickness	  	Length of service	 	Duration of payment	
			
	  	0 – 5 years’ service	 	3 months following the month in which the illness occurs	
			
	  	5 – 9 years’ service	 	4 months following the month in which the illness occurs	
			
	  	9 – 12 years’ service	 	5 months following the month in which the illness occurs	
			
	  	12 – 15 years’ service	 	6 months following the month in which the illness occurs	
			
	  	15 – 17 years’ service	 	7 months following the month in which the illness occurs	
			
	  	17 – 19 years’ service	 	8 months following the month in which the illness occurs	
			
	  	19 – 22 years’ service	 	10 months following the month in which the illness occurs	
			
	  	22 – 23 years’ service	 	11 months following the month in which the illness occurs	
			
	  	23 years’ service	 	12 months following the month in which the illness occurs	
		
	  	And thereafter at the Director’s discretion. This is subject to adherence to adherence to the absence procedure. This will be calculated on a rolling 12 month basis.	
		
14.    Car/Car Allowance	  	You are entitled to a car allowance of £ 11,232 per year paid via payroll and subject to normal deductions. This is non-pensionable and is not incorporated into your salary for the purposes of annual salary reviews or bonus payments, if applicable.
 
Alternatively, you may wish to participate in the Company Car scheme. Further details on this are available from Human Resources.	
		
15.    Other benefits	  	Pension: You are entitled to participate in the Group Personal Pension Plan which the company will contribute to dependent on your contribution amount. You will receive further information of this separately.
 
Life Assurance : If you are a member of the Defined Contribution Pension Plan, you are entitled to four times basic salary death in service benefit. If you are not in the scheme, you are not eligible for this benefit.	
 
Page 11 of 12

 
					
	  	Voluntary Benefits:
The company offers a range of voluntary benefits which are not contractual and may be changed from time to time; include the removal of the voluntary benefit, according to the business needs.
 
Private Medical Insurance: You are entitled to fully funded Private Medical Insurance for yourself and eligible members of your family in a Company nominated private health care scheme, subject to meeting conditions and eligibility criteria imposed by the insurance provider and subject to the rules of such schemes.
 
This is regarded as a taxable benefit by the Inland Revenue and you are required to pay tax on the Company’s contributions.
 
Health Cash Plan: You are eligible for inclusion in our health cash plan further details will be communicated to you.
 
Childcare Vouchers: (Closes to new entrants April 2018) The Company offers Childcare Vouchers which can be deducted direct through your salary. For further information on this benefit, please contact a member of Human Resources.
 
Holiday Purchase: You are able to purchase up to 5 days holiday each year. This can be purchased from the company ahead of the start of the holiday year and will be communicated when this process is open for applications.
 
Severance: In the event of a dismissal without cause, you will be entitled to severance as provided in the Delphi Automotive Executive Severance Plan.	

You and the Company agree to appendix terms outlined above:	 		
		
Signed:       /s/ Vivid Sehgal                                                               	 	Date:       20/09/2017    	
Vivid Sehgal	 		
		
On behalf of Delphi Powertrain Systems Management Limited	 		
		
Signed:       /s/ Mike Clarke                                                               	 	Date:       20/9/2017      	
Mike Clarke	 		
Vice President Human Resources, Powertrain and Delphi EMEA	 		
		
Signed:       /s/ Liam Butterworth                                                     	 	Date:       20/09/2017    	
Liam Butterworth	 		
President, Powertrain/DPSS	 		
 
Page 12 of 12

Attachment A
 
September 19, 2017
Vivid Sehgal
[ADDRESS]
[ADDRESS]
Dear Vivid:
In connection with the proposed spin-off of the Powertrain Systems business from Delphi (“Spin-Off”) into a new, separately traded entity (“SpinCo”), we intend to recommend to the Compensation and Human Resources Committee (the “Committee”) of the Board of Directors of Delphi Automotive PLC (the “Company”) that you receive, subject to Committee approval, a grant of long-term incentive equity awards comprised of service-based Restricted Stock Units (“RSUs”) and performance-based RSUs (“PRSUs”, as discussed below), which shall vest and be settled (assuming your continued employment) as described below. These equity awards will be subject to the terms and conditions of the Delphi Automotive PLC Long-Term Incentive Plan, as amended and restated (the “Plan”) and the applicable award agreements. The Company reserves the right to suspend, modify, cancel or terminate its stock program at any time without compensation to you or any other of the participating employees, unless otherwise provided in the applicable award agreement or Plan.
Long-Term Incentive: Your annual long-term incentive target will be $1,300,000 . Your first annual equity award will be made in October 2017 on a prorated basis ($975,000 for the 2017-2019 grant). Typically, annual grants are awarded in late February, however, due to the timing of the Spin-Off, timing of granting 2018 annual awards may be adjusted. Should the Spin-Off not conclude by April 30, 2018, you will receive your 2018 annual award in Delphi shares during the Delphi annual grant process. The number of shares you receive will be based on the on the ten-day average closing stock price prior to (but not including) the date of grant. Twenty-five percent (25%) of these awards will be time-based RSUs, which generally vest ratably over three years beginning on the one-year anniversary of the date of grant. The remaining seventy-five percent (75%) of these awards will be PRSUs tied to the Company’s performance against applicable metrics (Delphi metrics are currently Average Return on Net Assets (“RONA”), Cumulative Net Income (“CNI”) and Relative Total Shareholder Return (“RTSR”), each as defined for purposes of the long-term incentive equity award). The PRSUs generally vest at the end of a three-year performance period, and are settled as soon as possible following confirmation of performance against the applicable metrics, but in no event later than March 15 of the year following the year in which the PRSUs vest.
As a condition of receiving your first long-term incentive grant, you will be required to sign a confidentiality and non-interference agreement, substantially in the form attached as Exhibit 1 . The agreement will be provided to you for signature at the time of the grant.
It is anticipated that unvested equity awards generally will be equitably adjusted to reflect the Spin-Off in a manner determined by the Committee, and that this equitable adjustment will include the conversion or adjustment of your unvested Delphi long-term incentive equity awards into corresponding SpinCo awards, subject to substantially similar terms and preserving to the extent practicable the intrinsic value of the awards immediately before and after the Spin-Off.
You acknowledge that if the Company grants RSUs and/or PRSUs to you, your participation in the stock program of the Company will be voluntary and that the benefits under the RSU and/or PRSU program will not be part of your offer letter, your salary or other remuneration for any purposes, including for purposes of computing payment during any notice period, payment in lieu of notice, severance pay or other termination compensation or indemnity (if any).

 
Should you receive RSUs and/or PRSUs, you will be responsible for complying with any applicable legal requirements in connection with your participation in the stock plan and for any taxes arising from the grant or vesting of your RSUs and/or PRSUs, the sale of any ordinary shares or the receipt of any dividends (if any), regardless of any tax withholding and/or reporting obligation of the Company or your employer, and you agree to seek advice from your personal tax and/or legal advisor at your own expense regarding the tax and legal implications of any award granted to you.
Special Circumstance Benefits: If a “Special Circumstance” occurs, you will receive a severance benefit equal to 18 months (the “Severance Period”) of your base salary and reduced by the amount of any compensation received during any notice period, paid in monthly installments (the “Special Benefit”). The Special Benefit will cease to be paid if you are employed by an entity other than Delphi and its subsidiaries and affiliates or SpinCo and its subsidiaries and affiliates prior to the end of the Severance Period.
For purposes of this letter, “Special Circumstance” means the occurrence of either of the following, plus termination of your employment with Delphi or SpinCo or their subsidiaries and affiliates by Delphi or SpinCo (or such applicable subsidiary or affiliate) without cause within one year of the occurrence of either of the following:
1. SpinCo (or Delphi’s Powertrain Systems business) is sold to a third-party prior to the effective time of the Spin-Off; or
2. The Spin-Off does not occur on or before December 31, 2018.
The receipt of the Special Benefit will be subject to your execution, no later than 45 days following such applicable termination of employment, of a general release of claims in favor of Delphi and its subsidiaries and affiliates, and, if applicable, SpinCo and its subsidiaries and affiliates (in such form as may reasonably be presented to you), and you not timely revoking such release. You hereby agree and acknowledge that Delphi, SpinCo and their subsidiaries and affiliates may assign any of their obligations regarding the Special Benefit to SpinCo and/or its subsidiaries and affiliates in connection with the Spin-Off.
If a Special Circumstance occurs, Delphi will provide you with the value of your annual long-term incentive target ($1,300,000) in cash (less the value of any shares that may vest on a prorata basis, valued at target on the termination date), paid in a lump sum within 30 days of your termination.
SpinCo Change in Control: It is currently anticipated that, immediately after the Spin-Off, SpinCo will adopt for its executive officers a double-trigger change in control severance program (“SpinCo CIC Severance Program”) substantially similar to the current Delphi program. If you are designated as a participant in the SpinCo CIC Severance Program, we currently anticipate that, after the Spin-Off, you may be entitled to receive certain severance benefits from SpinCo in the case of (1) a SpinCo change in control occurring after the completion of the Spin-Off and (2) a qualifying termination of your employment with SpinCo or its subsidiaries and affiliates, Those severance benefits are: cash severance equal to two times your annual base salary plus target annual incentive award opportunity, plus a benefits continuation payment equal to 24 months of medical benefits continuation premiums (the “SpinCo CIC Severance Benefits”). Cash severance and benefits continuation are expected to be paid in a lump sum amount no later than 90 days following separation, subject to compliance with applicable tax requirements. All SpinCo CIC Severance Benefits will be provided under the applicable SpinCo CIC Severance Program documents and requirements, and will be subject to compliance with such documents and requirements and all other applicable legal and tax requirements.
The terms of this letter shall be governed by the laws of the UK, without application of the conflicts of law principles thereof. Delphi, its subsidiaries and affiliates (including SpinCo) may amend, modify or terminate any of its incentive, severance, retirement, insurance, or other benefit plans, policies or programs at any time, and SpinCo may adopt benefit, plans, policies or programs that differ from those of Delphi.

 
* * *
The terms of this letter are strictly confidential. Should you have any questions in respect of the content of this letter, please do not hesitate to contact Susan M. Suver, Senior Vice President & Chief Human Resources Officer, at [EMAIL] or [PHONE NUMBER].
By:

/s/ Susan M. Suver	
Susan M. Suver	
Senior Vice President & Chief Human Resources Officer	
By signing this letter agreement, you declare that you have read and understand the terms and conditions of this letter agreement and agree to such terms and conditions.

/s/ Vivid Sehgal	
Signature of Vivid Sehgal	
		
Date:	 	September 20, 2017	

Exhibit 10.8

September 1, 2017 (Revised)
James Harrington
[ADDRESS]
[ADDRESS]
Dear Jim:
As you know, Delphi is currently contemplating a spin-off of its Powertrain Systems business (the “Spin-Off”) into a new, separately traded entity (“SpinCo”). In anticipation of the Spin-Off, and on behalf of Delphi, I am pleased to extend this offer of employment to you, as further described in this letter agreement and any related documentation (this “Offer”). Under the terms of this Offer, you will be hired as an employee of Delphi and at the time of the Spin-Off, you will transition employment to SpinCo where you will serve as its Senior Vice President and General Counsel. At SpinCo, you will be based in London and will report directly to Liam Butterworth, currently President, Powertrain/DPSS, who is expected to be appointed President & Chief Executive Officer of SpinCo in connection with the Spin-Off. I am providing you with this Offer to confirm your compensation details and to provide further background on the applicable Delphi plans and programs. Please note that we expect the SpinCo plans and programs to be substantially similar to Delphi plans and programs currently in place.
The following provides a summary of your compensation details regarding this Offer:
Base Salary: Your initial base salary is at an annual rate of $575,000 , which shall be paid in installments in accordance with Delphi’s normal payroll practices. Your base salary will be reviewed from time to time in accordance with normal employer practice.
Target Annual Incentive: Prior to the Spin-Off, you are eligible for an annual incentive plan award. Your target annual incentive compensation for 2017 will be 80% of your base salary ($460,000 at target payout), prorated for the number of months you work during the current year, and paid out at the higher of target payout or actual performance based on business results. The target has the potential to pay out in a range of 0 – 200% depending on applicable performance. The actual amount you may receive, if any, is adjusted based on business performance against the annual plan metrics and your individual performance. Such award, if earned, shall be paid by March 15, 2018. In connection with the Spin-Off, it is anticipated that outstanding Delphi annual incentive awards will be equitably adjusted to reflect the Spin-Off in a manner determined by the Compensation and Human Resources Committee of Delphi Automotive PLC. Following the Spin-Off, you will be eligible to participate in an annual incentive plan for SpinCo executives at no less than your current target percentage.
Long-Term Incentive: Detailed information about your participation in the SpinCo Long-Term Incentive (“LTI”) Plan is found in Attachment A.
Additional Sign-On Payments: In lieu of the annual incentive payout you will forfeit when departing from your current employer, you will receive a cash payment in the amount equal to the target amount forfeited, prorated to the date of your termination from that employer. The payment will be made at the same time that Delphi’s annual incentive payment is made (no later than March 15, 2018).
As an additional cash hiring incentive, you will be provided with a one-time cash payment of $275,000 payable one year from your hire date.
As an additional equity-based hiring incentive, Delphi will provide certain considerations, outlined in the LTI section of Attachment A.

September 1, 2017 (Revised)
James Harrington
Page 2
 
Receipt of the cash payments outlined in this section is contingent on you signing an agreement indicating that you will repay the sign-on payments if you voluntarily resign your employment within 24 months of your date of hire. This provision applies to both your service at Delphi prior to the Spin-Off and with SpinCo following the Spin-Off.
As you would expect, all compensation and payments referred to in this Offer will be subject to applicable tax withholding.
Benefits: In addition to the compensation elements described above, prior to the Spin-Off, you are also eligible for Delphi’s benefits package. Currently, this benefit package includes Salaried Retirement Savings Plan (401(k)) participation, health care, and life and disability insurance plan participation. For additional details, please review the document “A Brief Look: Executives Employees” included with this Offer. Also, specifically regarding vacation, you will be eligible for 20 vacation days per year. In addition, you will be eligible for 5 designated time off (“DTO”) days per year. Following the Spin-Off, you will be eligible to participate in SpinCo’s benefits package, which is expected to be substantially similar to the Delphi benefits package.
Special Circumstance Benefits : If a “Special Circumstance” occurs, you may be entitled to receive certain payments and benefits. More detailed information about these payments and benefits is found in Attachment A.
In accordance with Delphi policy and contingent on your acceptance of this Offer, a background verification process will be conducted. You are also responsible for completing a pre-employment drug screen. Your employment is contingent upon the results of the background verification and drug screen. We will work with you to find a convenient drug screening site near your home.
As a condition of employment, you will be required to sign a confidentiality and non-interference agreement, attached as Attachment B.
In your role with SpinCo, you will be covered under an expatriate assignment letter, a draft copy of which is included here as Attachment C.
Employment is also contingent upon your current and continued eligibility to work in the U.S. To comply with government regulations, unexpired identification documents must be presented on your first day of work to verify that you are authorized to work in the U.S.
If you have any questions, please contact me at [EMAIL] or on my mobile: [PHONE NUMBER].
To accept this Offer, please sign and complete the info in the appropriate box below and send to me at the email address listed above.
On behalf of our entire senior leadership team, we look forward to you joining our team.
Sincerely,
/s/ Susan M. Suver
Susan M. Suver
Senior Vice President & Chief Human Resources Officer
Enclosures

September 1, 2017 (Revised)
James Harrington
Page 3
 
By signing below I am indicating my acceptance of this employment offer and acknowledgment of its contents. I understand that Delphi, its subsidiaries and affiliates (including SpinCo) may amend, modify or terminate any of its incentive, severance, retirement, insurance, or other benefit plans, policies or programs at any time and that SpinCo may adopt benefit, plans, policies or programs that differ from those of Delphi. I further acknowledge and understand that my employment will be considered “at will,” subject to applicable law, and subject to termination at any time, or for any reason.

ACCEPTANCE
 
/s/ James Harrington 9/13/17
Signature of James Harrington
 
Start Date (if known): 10/2/17
 
[EMAIL]
Email Address	

Attachment A
September 1, 2017 (Revised)
James Harrington
[ADDRESS]
[ADDRESS]
Dear Jim:
In connection with the proposed spin-off of the Powertrain Systems business from Delphi (“Spin-Off”) into a new, separately traded entity (“SpinCo”), we intend to recommend to the Compensation and Human Resources Committee (the “Committee”) of the Board of Directors of SpinCo (the “Company”) that you receive, subject to Committee approval, a grant of long-term incentive equity awards comprised of service-based Restricted Stock Units (“RSUs”) and performance-based RSUs (“PRSUs”, as discussed below), which shall vest and be settled (assuming your continued employment) as described below. These equity awards will be subject to the terms and conditions of the SpinCo Long-Term Incentive Plan (the “Plan”) and the applicable award agreements, which we anticipate will be substantially similar to the Delphi Automotive PLC Long-Term Incentive Plan and award agreements thereunder. The Company reserves the right to suspend, modify, cancel or terminate its stock program at any time without compensation to you or any other of the participating employees, unless otherwise provided in the applicable award agreement or Plan.
Long-Term Incentive: Your annual long-term incentive target will be $1,200,000 . Your first annual equity award will be made in 2018, the granting of which is anticipated to be in February. However, due to the timing of the Spin-Off, timing of granting annual awards may be adjusted. Should the Spin-Off not conclude by April 30, 2018, you will receive your annual award in Delphi shares during the Delphi annual grant process, which is typically done in February. The number of shares you receive will be based on the on the ten-day average closing stock price prior to (but not including) the date of grant. Twenty-five percent (25%) of these awards will be time-based RSUs, which generally vest ratably over three years beginning on the one-year anniversary of the date of grant. The remaining seventy-five percent (75%) of these awards will be PRSUs tied to the Company’s performance against applicable metrics (Delphi metrics are currently Average Return on Net Assets (“RONA”), Cumulative Net Income (“CNI”) and Relative Total Shareholder Return (“RTSR”), each as defined for purposes of the long-term incentive equity award). The PRSUs generally vest at the end of a three-year performance period, and are settled as soon as possible following confirmation of performance against the applicable metrics, but in no event later than March 15 of the year following the year in which the PRSUs vest.
If you are granted a Delphi equity award prior to the Spin-Off, it is anticipated that unvested equity awards generally will be equitably adjusted to reflect the Spin-Off in a manner determined by the Committee, and that this equitable adjustment will include the conversion or adjustment of your unvested Delphi long-term incentive equity awards into corresponding SpinCo awards, subject to substantially similar terms and preserving to the extent practicable the intrinsic value of the awards immediately before and after the Spin-Off.
Additional LTI Grant: As an incentive for you to join Delphi, Delphi will provide you with a PRSU grant for the 2017-2019 performance period valued at $1,125,000 , to be granted in October 2017 and contingent on a hire date no later than October 2, 2017. Subject to the terms as determined by the Committee, this award shall vest 100% on December 31, 2019, and shall be settled no later than March 15, 2020. The final payout shall be based on the Company’s performance against all applicable metrics as described above.
You acknowledge that if the Company grants RSUs and/or PRSUs to you, your participation in the stock program of the Company will be voluntary and that the benefits under the RSU and/or PRSU program will not be part of your offer letter, your salary or other remuneration for any purposes, including for purposes of computing payment during any notice period, payment in lieu of notice, severance pay or other termination compensation or indemnity (if any).

Attachment A
 
Should you receive RSUs and/or PRSUs, you will be responsible for complying with any applicable legal requirements in connection with your participation in the stock plan and for any taxes arising from the grant or vesting of your RSUs and/or PRSUs, the sale of any ordinary shares or the receipt of any dividends (if any), regardless of any tax withholding and/or reporting obligation of the Company or your employer, and you agree to seek advice from your personal tax and/or legal advisor at your own expense regarding the tax and legal implications of any award granted to you.
Special Circumstance Benefits: If a “Special Circumstance” occurs, you will receive a severance benefit equal to 18 months (the “Severance Period”) of your base salary, paid in semi-monthly installments (the “Special Benefit”). The Special Benefit will cease to be paid if you are employed by an entity other than Delphi and its subsidiaries and affiliates or SpinCo and its subsidiaries and affiliates prior to the end of the Severance Period. In addition, if you timely elect COBRA coverage, you will receive a subsidized COBRA benefit for the duration of the Severance Period, whereby your COBRA premium will be equal to the health care premium you paid as an active employee. The subsidized COBRA benefit will also cease if you become eligible for other health care coverage prior to the end of the Severance Period. You may continue COBRA coverage at your personal expense for the remainder of the eligible period (18 months from separation).
For purposes of this letter, “Special Circumstance” means the occurrence of either of the following, plus termination of your employment with Delphi or SpinCo or their subsidiaries and affiliates by Delphi or SpinCo (or such applicable subsidiary or affiliate) without cause or for Good Reason (as defined in the Delphi Automotive PLC Executive Severance Plan) within one year of the occurrence of either of the following:
 
 	1.	SpinCo (or Delphi’s Powertrain Systems business) is sold to a third-party prior to the effective time of the Spin-Off; or	
 
 	2.	The Spin-Off does not occur on or before December 31, 2018.	
The receipt of the Special Benefit will be subject to your execution, no later than 45 days following such applicable termination of employment, of a general release of claims in favor of Delphi and its subsidiaries and affiliates, and, if applicable, SpinCo and its subsidiaries and affiliates (in such form as may reasonably be presented to you), and you not timely revoking such release. In general, the Special Benefit will be paid to you at the same time and in the same form of payment as required under the Delphi Automotive PLC Executive Severance Plan, effective February 1, 2017, or otherwise as required under applicable tax law including Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). Each payment that comprises the Special Benefit will be considered a separate payment and not one of a series of payments for purposes of Section 409A. You hereby agree and acknowledge that Delphi, SpinCo and their subsidiaries and affiliates may assign any of their obligations regarding the Special Benefit to SpinCo and/or its subsidiaries and affiliates in connection with the Spin-Off.
If a Special Circumstance occurs, Delphi will provide you with the value of your annual long-term incentive target ($1,200,000) plus the value of the additional LTI grant ($1,125,000) in cash (less the value of any shares that may vest on a prorata basis, valued at target on the termination date), plus the $275,000 one-time cash incentive in the event you have not yet reached one year of employment, paid in a lump sum within 30 days of your termination.
SpinCo Change in Control: It is currently anticipated that, immediately after the Spin-Off, SpinCo will adopt for its executive officers a double-trigger change in control severance program (“SpinCo CIC Severance Program”) substantially similar to the current Delphi program. If you are designated as a participant in the SpinCo CIC

Attachment A
 
Severance Program, we currently anticipate that, after the Spin-Off, you may be entitled to receive certain severance benefits from SpinCo in the case of (1) a SpinCo change in control occurring after the completion of the Spin-Off and (2) a qualifying termination of your employment with SpinCo or its subsidiaries and affiliates, Those severance benefits are: cash severance equal to two times your annual base salary plus target annual incentive award opportunity, plus a benefits continuation payment equal to 24 months of COBRA premiums (the “SpinCo CIC Severance Benefits”). Cash severance and benefits continuation are expected to be paid in a lump sum amount no later than 90 days following separation, subject to compliance with applicable tax requirements. All SpinCo CIC Severance Benefits will be provided under the applicable SpinCo CIC Severance Program documents and requirements, and will be subject to compliance with such documents and requirements and all other applicable legal and tax requirements.
The terms of this letter shall be governed by the laws of the State of Michigan, without application of the conflicts of law principles thereof. Delphi, its subsidiaries and affiliates (including SpinCo) may amend, modify or terminate any of its incentive, severance, retirement, insurance, or other benefit plans, policies or programs at any time, and SpinCo may adopt benefit, plans, policies or programs that differ from those of Delphi.
*                    *                     *
The terms of this letter are strictly confidential. Should you have any questions in respect of the content of this letter, please do not hesitate to contact Susan M. Suver, Senior Vice President & Chief Human Resources Officer, at [EMAIL] or [PHONE NUMBER].
By:

/s/ Susan M. Suver	
Susan M. Suver	
Senior Vice President & Chief Human Resources Officer	
By signing this letter agreement, you declare that you have read and understand the terms and conditions of this letter agreement and agree to such terms and conditions.

	 	/s/ James Harrington	
            	 	Signature of James Harrington	
			
	 	Date: 	 	September 13, 2017	

Attachment C

CONFIDENTIAL PROPRIETARY

DATE:	  	           	
ASSIGNMENT:	  	Senior Vice President and General Counsel, SpinCo	
NAME:	  	James Harrington	
Dear Jim:
This is a letter setting forth the guidelines concerning your position as Senior Vice President and General Counsel for SpinCo in London, hereinafter referred to as “the Company.” Your point of origin in the U.S. for policy purposes is           . The effective date of your expatriate assignment has been tentatively set for           . However, the actual effective date will not occur until you have received all of the necessary work permits needed for the host location. You acknowledge that this assignment is currently expected to continue for approximately            years. However, the Company specifically reserves the right to terminate this assignment at any time prior to the expiration of the period specified above. Your duties and responsibilities are to be performed as previously discussed with Liam Butterworth, to whom you will report.
COMPENSATION
While on assignment, you will continue to receive your annual compensation in your home country currency, which will be directly deposited into your bank account on record. In addition, you may choose to have a portion of your net pay deposited in your host country bank in local currency.
TAX EQUALIZATION
While on your expatriate assignment, you will be subject to the provisions of the tax equalization policy. You will also be notified and subject to revisions of the policy that may be issued during your assignment. The tax equalization policy is designed to assure that you do not incur additional tax liability as a result of the assignment in excess of the tax liability you would have incurred had you remained in your home country. During the course of your assignment a hypothetical tax will be computed and withheld from your monthly salary, which is an approximation of your annual tax liability on your base income had you remained in your home country.
If you receive any commissions, bonuses, or incentives in addition to salary, they are also subject to hypothetical tax. The final hypothetical tax will be calculated by an accounting program as your tax return is finalized each year, which determines your final actual income tax obligation for the year. Delphi will be responsible for home and/or host country taxes greater than the final hypothetical tax, which was incurred as a result of your expatriate assignment. The settlement of taxes is subject to final review of any taxes paid on behalf of an expatriate or advances provided to an expatriate as part of a tax settlement. However, because the Company is undertaking the obligation to pay your taxes in excess of your tax obligation under its tax equalization policy, the amount of any host country tax refunds received by you and final hypothetical tax settlement due from you must be paid to the Company.
 
1

Attachment C

The Company will also provide, at no cost to you, the service of a tax accounting firm to prepare your home and/or host country tax returns. Pre-departure and post-arrival orientations with the Delphi tax provider on Tax Equalization Policies and Procedures will be arranged for you at a convenient location.
HOST COUNTRY AUTOMOBILE
Delphi may provide assistance in the form of an allowance, direct auto purchase or direct auto lease, depending on host location practice. Contact your host global mobility manager for details.
BENEFITS
Delphi will apply all provisions of the Company and the home country government benefits to you. Your base salary will be used as the compensation base in determining your eligibility coverage and contributions to the Company benefit plans. The Company accepts the responsibility to honor all liability for injuries that you incur offshore where existing benefit coverage is voided due to a war risk exclusion. You will be provided coverage under this paragraph only for those benefits, which you have been eligible to receive, had you remained in your home country.
HEALTH CARE
Based on your home / host country combination, you and your eligible dependents will be enrolled in CIGNA International Health Care Plan (IHCP) during your expatriate assignment.
HOLIDAYS & VACATION
You will observe only the holidays normally observed by business and industry at the assignment location. Delphi’s domestic vacation policy will apply to you except when the local law requires more vacation than what you would qualify under the domestic policy. If such a case exists, you will then be eligible for additional vacation required under local law.
REPATRIATION & EARLY REPATRIATION
Your repatriation will be effective upon the conclusion of your assignment for whatever reasons in accordance with Company policy. This policy, along with the local applicable rules, regarding termination, reflects the Company’s acceptance of an obligation to return you, and your belongings, to your home country under virtually all circumstances. They also describe the Company’s commitment and program to offer you, if you return to your assignment in your home country, a position consistent with the business needs of the Company taking into consideration factors such as your prior position with          , your base salary at repatriation, your professional growth, your performance level and your personal desires.
 
2

Attachment C
 
EXTENSION OF ASSIGNMENT
Should your assignment require extension, you will be so notified in a letter similar to this. Likewise, any secondary relocation will be subject to future negotiations.
TERMINATION
If you are terminated involuntarily during your expatriate assignment at Delphi’s initiation, except for dismissal due to violation of company legal and ethical policies, Delphi will pay economy class travel costs for you and your family and the costs to move your personal possessions back to your point of origin only. You will continue to be covered under the tax equalization policy described above, but all other expatriate-related benefits will cease upon your termination.
If your employment was voluntarily terminated and was initiated by you the expatriate, Delphi will not cover the travel costs for you and your family or the shipment of personal possessions back to the home country unless required by home or host country law. You will continue to be covered under the tax equalization policy described above, but all other expatriate-related benefits will cease upon your termination.
CODE OF CONDUCT
With regards to your general responsibilities, you should understand that your assignment does not entitle you to act as or be our agent for any purpose except that which has been communicated to you directly by your Management. In terms of both your business activities and personal endeavors, your conduct must be in accordance with Delphi’s Code of Conduct, a copy of which you should have signed. Any questions regarding interpretation of the Code of Conduct should be directed to the General Counsel of Delphi Automotive PLC, who is currently David Sherbin.
Your signature below indicates your acknowledgement of the above-stated guidelines, which will affect your expatriation to the U.K. and your return to your home country as herein provided. Please sign below and return the originals to your International Human Resources Management as soon as possible.
DATA CONSENT
I understand that my personal data may be transferred to a Delphi affiliate or to a third party for the purpose of the performance of my assignment contract and I hereby consent to such transfer. I also understand that Delphi will request such Delphi affiliates or third parties to comply with the applicable privacy rules to protect my personal data.
 
3

Attachment C
 
RIGHT TO AMEND, MODIFY, SUSPEND OR TERMINATE
Delphi reserves the right to amend, modify, suspend, increase, decrease or terminate any of its employee benefit plans or programs by action of the Board of Directors (Board) or other committee or individual expressly authorized by the Board to take such action. The benefits to which an employee is entitled are determined solely by the provisions of the applicable benefit plan or program. Absent an express delegation of authority from the Board of Directors, no one has the authority to commit the Corporation to any benefit or benefit provisions not provided for under the applicable benefit program, or to change the eligibility criteria or any other provisions of such program.

 
Employee                                                                          (DATE)	 	        	  	 
International HRM                                                     (DATE)	
 
4

Exhibit 10.9
DELPHI TECHNOLOGIES PLC LONG-TERM INCENTIVE PLAN
Section 1.  Purpose . The purpose of the Delphi Technologies PLC Long-Term Incentive Plan (the “ Plan ”) is to motivate and reward those employees, directors, consultants, advisors and other individuals who are expected to contribute significantly to the success of Delphi Technologies PLC (the “ Company ”) and its Affiliates to perform at the highest level and to further the best interests of the Company and its shareholders. In addition, the Plan permits grants of awards in adjustment of, substitution for or conversion of awards relating to the ordinary shares of Delphi Automotive PLC and any successor thereto (“ Former Parent ”) immediately prior to the spin-off of the Company by Former Parent (the “ Spinoff ”), in accordance with the terms of an Employee Matters Agreement into which Former Parent and the Company enter in connection with the Spinoff (the “ Employee Matters Agreement ”).
Section 2.  Eligibility .
(a) Any employee, Non-Employee Director, consultant or other advisor of, or any other individual who provides services to, the Company or any Affiliate shall be eligible to be selected to receive an Award under the Plan.
(b) Holders of equity compensation awards granted by a company acquired by the Company (or whose business is acquired by the Company) or with which the Company combines are eligible for grants of Replacement Awards under the Plan.
Section 3.  Administration.
(a) The Plan shall be administered by the Committee. The Committee shall be appointed by the Board and shall consist of not less than three directors of the Board. To the extent necessary to comply with applicable regulatory regimes, any action by the Committee shall require the approval of Committee members who are (i) independent, within the meaning of and to the extent required by applicable rulings and interpretations of the principal stock market or exchange on which the Shares are quoted or traded; (ii) each a non-employee director within the meaning of Rule 16b-3 under the Exchange Act; and (iii) each an outside director within the meaning of Section 162(m) of the Code. The Board may designate one or more directors as a subcommittee who may act for the Committee if necessary to satisfy the requirements of this Section. To the extent permitted by applicable law, the Committee may delegate to one or more officers of the Company the authority to grant Awards, except that such delegation shall not be applicable to any Award for a person then covered by Section 16 of the Exchange Act or for a Non-Employee Director. The Committee may issue rules and regulations for administration of the Plan. For the purposes of this Section 3(a), “officer” means an executive of the Company who is elected to his or her position by the Board.
(b) Subject to the terms of the Plan and applicable law, the Committee (or its delegate) shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards (including Replacement Awards) to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by (or with respect to which payments, rights or other matters are to be calculated in connection with) Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent and under what circumstances Awards may be settled or exercised in cash, Shares, other Awards, other property, net settlement (including broker-assisted cashless exercise) or any combination thereof, or canceled, forfeited or suspended, and the method or methods by which Awards may be settled, exercised, canceled, forfeited or suspended; (vi) determine whether, to what extent and under what circumstances cash, Shares, other Awards, other property and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (viii) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (ix) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.
(c) All decisions of the Committee shall be final, conclusive and binding upon all parties, including the Company, its shareholders and Participants and any Beneficiaries thereof.

Section 4.  Shares Available for Awards .
(a) Subject to adjustment as provided in Section 4(c), (i) the maximum number of Shares available for issuance under the Plan shall not exceed [              ] Shares, (ii) no Participant may receive under the Plan in any calendar year (A) Options and SARs that relate to more than [              ] Shares or (B) if and to the extent that any such Awards are intended to constitute Section 162(m) Compensation and denominated in Shares, Restricted Stock, RSUs, Performance Awards or Other Stock-Based Awards that relate to more than [              ] Shares. Shares underlying Replacement Awards and Shares remaining available for grant under a plan of an acquired company or of a company with which the Company combines, appropriately adjusted to reflect the acquisition or combination transaction, shall not reduce the number of Shares remaining available for grant hereunder. The maximum number of Shares available for issuance under Incentive Stock Options shall be [              ] and shall not be increased by operation of Section 4(b).
(b) Any Shares subject to an Award (other than a Replacement Award and any Award granted out of the authorized shares of an acquired plan), that expires, is canceled, forfeited or otherwise terminates without the delivery of such Shares, including any Shares subject to such Award to the extent that such Award is settled without the issuance of Shares, shall again be, or shall become, available for issuance under the Plan. For the avoidance of doubt, any Shares surrendered or withheld in payment of any grant, acquisition, exercise or hurdle price of such Award or taxes related to such Award shall not become available for issuance under the Plan.
(c) In the event that, as a result of any dividend or other distribution (whether in the form of cash, Shares or other securities), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to acquire Shares or other securities of the Company, issuance of Shares pursuant to the anti-dilution provisions of securities of the Company, or other similar corporate transaction or event affecting the Shares, or of changes in applicable laws, regulations or accounting principles, an adjustment is necessary in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, subject to Section 18, adjust equitably any or all of:
(i) the number and type of Shares (or other securities) which thereafter may be made the subject of Awards, including the aggregate and individual limits specified in Section 4(a);
(ii) the number and type of Shares (or other securities) subject to outstanding Awards; and
(iii) the grant, acquisition, exercise or hurdle price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award;
provided , however , that the number of Shares subject to any Award denominated in Shares shall always be a whole number.
(d) Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or Shares acquired by the Company.
Section 5.  Options . The Committee is authorized to grant Options to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine.
(a) The exercise price per Share under an Option shall be determined by the Committee; provided, however, that, except in the case of Replacement Awards and Adjusted Awards, such exercise price shall not be less than the Fair Market Value of a Share on the date of grant of such Option.
(b) The term of each Option shall be fixed by the Committee but shall not exceed 10 years from the date of grant of such Option.
(c) The Committee shall determine the time or times at which an Option may be exercised in whole or in part.
 
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(d) The Committee shall determine the method or methods by which, and the form or forms, including cash, Shares, other Awards, other property, net settlement (including broker-assisted cashless exercise) or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price, in which payment of the exercise price with respect thereto may be made or deemed to have been made.
(e) Options shall not be granted under the Plan in consideration for and shall not be conditioned upon the delivery of Shares to the Company in payment of the exercise price and/or tax withholding obligation under any other stock option.
(f) The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code.
Section 6.  Stock Appreciation Rights . The Committee is authorized to grant SARs to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine.
(a) SARs may be granted under the Plan to Participants either alone (“freestanding”) or in addition to other Awards granted under the Plan (“tandem”) and may, but need not, relate to a specific Option granted under Section 5.
(b) The exercise or hurdle price per Share under a SAR shall be determined by the Committee; provided, however , that, except in the case of Replacement Awards and Adjusted Awards, such exercise or hurdle price shall not be less than the Fair Market Value of a Share on the date of grant of such SAR (or if granted in connection with an Option, on the grant date of such Option).
(c) The term of each SAR shall be fixed by the Committee but shall not exceed 10 years from the date of grant of such SAR.
(d) The Committee shall determine the time or times at which a SAR may be exercised or settled in whole or in part.
(e) Upon the exercise of a SAR, the Company shall pay to the Participant an amount equal to the number of Shares subject to the SAR multiplied by the excess, if any, of the Fair Market Value of one Share on the exercise date over the exercise or hurdle price of such SAR. The Company shall pay such excess in cash, in Shares valued at Fair Market Value, or any combination thereof, as determined by the Committee.
Section 7.  Restricted Stock and RSUs . The Committee is authorized to grant Awards of Restricted Stock and RSUs to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine.
(a) The applicable Award Document shall specify the vesting schedule and, with respect to RSUs, the delivery schedule (which may include deferred delivery later than the vesting date) and whether the Award of Restricted Stock or RSUs is entitled to dividends or dividend equivalents, voting rights or any other rights.
(b) Shares of Restricted Stock and RSUs shall be subject to such restrictions as the Committee may impose (including any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend, dividend equivalent or other right), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as the Committee may deem appropriate. Without limiting the generality of the foregoing, if the Award relates to Shares on which dividends are declared during the period that the Award is outstanding, the Award shall not provide for the payment of such dividend (or a dividend equivalent) to the Participant prior to the time at which such Award, or applicable portion thereof, becomes nonforfeitable, unless otherwise provided in the applicable Award Document.
(c) Any share of Restricted Stock granted under the Plan may be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of a stock certificate or certificates. In the event that any stock certificate is issued in respect of shares of Restricted Stock granted under the Plan, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock.
 
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(d) If and to the extent that the Committee intends that an Award granted under this Section 7 shall constitute or give rise to Section 162(m) Compensation, such Award may be structured in accordance with the requirements of Section 8, including the performance criteria and the Award limitation set forth therein, and any such Award shall be considered a Performance Award for purposes of the Plan.
(e) The Committee may provide in an Award Document that an Award of Restricted Stock is conditioned upon the Participant making or refraining from making an election with respect to the Award under Section 83(b) of the Code. If a Participant makes an election pursuant to Section 83(b) of the Code with respect to an Award of Restricted Stock, the Participant shall be required to file promptly a copy of such election with the Company and the Internal Revenue Service.
(f) The Committee may determine the form or forms (including cash, Shares, other Awards, other property or any combination thereof) in which payment of the amount owing upon settlement of any RSU Award may be made.
Section 8.  Performance Awards . The Committee is authorized to grant Performance Awards to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine.
(a) Performance Awards may be denominated as a cash amount, a number of Shares or a combination thereof and are Awards which may be earned upon achievement or satisfaction of performance conditions specified by the Committee. In addition, the Committee may specify that any other Award shall constitute a Performance Award by conditioning the right of a Participant to exercise the Award or have it settled, and the timing thereof, upon achievement or satisfaction of such performance conditions as may be specified by the Committee. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions. Subject to the terms of the Plan, the performance goals to be achieved during any Performance Period, the length of any Performance Period, the amount of any Performance Award granted and the amount of any payment or transfer to be made pursuant to any Performance Award shall be determined by the Committee. If the Performance Award relates to Shares on which dividends are declared during the Performance Period, the Performance Award shall not provide for the payment of such dividend (or dividend equivalent) to the Participant prior to the time at which such Performance Award, or the applicable portion thereof, is earned.
(b) Every Performance Award shall, if the Committee intends that such Award should constitute Section 162(m) Compensation, include a pre-established formula, such that payment, retention or vesting of the Award is subject to the achievement during a Performance Period or Performance Periods, as determined by the Committee, of a level or levels of, or increases in, in each case as determined by the Committee, one or more of the following performance measures with respect to the Company: market capitalization, stock price, value appreciation, total shareholder return, revenue, sales, bookings, unit volume, production, pre-tax income, earnings, earnings per share, net income, operating income, EBIT (earnings before interest and taxes), EBITDA (earnings before interest, taxes, depreciation and amortization), operating or profit margin, cost structure, restructuring, expense control, overhead costs, general and administration expense, economic value added, net capital employed, net asset value, reserve value, market share, customer satisfaction or service quality, capacity utilization, reserve replacement, increase in customer base, customer diversification, cash flow, cash from operations, debt leverage, debt to equity ratio, return on assets or RONA, return on equity, return on capital, assets levels, asset turnover, inventory turnover, environmental health and safety, diversity, productivity, risk mitigation, corporate compliance, employee retention or engagement, and goals relating to acquisitions or divestitures. Performance criteria may be measured on an absolute (e.g., plan or budget) or relative basis, and may be established on a corporate-wide basis or with respect to one or more business units, divisions, subsidiaries or business segments. Relative performance may be measured against a group of peer companies, a financial market index or other acceptable objective and quantifiable indices. Except in the case of an Award intended to qualify as Section 162(m) Compensation, if the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which the Company conducts its business, or other events or circumstances render the performance objectives unsuitable, the Committee may modify the minimum acceptable level of achievement, in whole or in part, as the
 
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Committee deems appropriate and equitable. Performance objectives shall be adjusted for material items not originally contemplated in establishing the performance target for items resulting from discontinued operations, extra-ordinary gains and losses, the effect of changes in accounting standards or principles, acquisitions or divestitures, changes in tax rules or regulations, capital transactions, restructuring, nonrecurring gains or losses or unusual items. Performance measures may vary from Performance Award to Performance Award, and from Participant to Participant, and may be established on a stand-alone basis, in tandem or in the alternative. The Committee shall have the power to impose such other restrictions on Awards subject to this Section 8(b) as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for Section 162(m) Compensation or requirements of any applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations. The maximum amount of any Performance Award denominated in cash that is intended to constitute Section 162(m) Compensation that may be earned in any calendar year shall not exceed $ [              ] .
(c)  Settlement of Performance Awards; Other Terms . Settlement of Performance Awards shall be in cash, Shares, other Awards, other property, net settlement or any combination thereof, as determined in the discretion of the Committee. Performance Awards will be settled only after the end of the relevant Performance Period. The Committee may, in its discretion, increase or reduce the amount of a settlement otherwise to be made in connection with a Performance Award but may not exercise discretion to increase any amount payable to a Covered Employee in respect of a Performance Award intended to qualify as Section 162(m) Compensation. Any settlement that changes the form of payment from that originally specified shall be implemented in a manner such that the Performance Award and other related Awards do not, solely for that reason, fail to qualify as Section 162(m) Compensation.
Section 9.  Other Share-Based Awards . The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Shares or factors that may influence the value of Shares, including convertible or exchangeable debt securities, other rights convertible or exchangeable into Shares, acquisition rights for Shares, Awards with value and payment contingent upon performance of the Company or business units thereof or any other factors designated by the Committee. The Committee shall determine the terms and conditions of such Awards. Shares delivered pursuant to an Award in the nature of an acquisition right granted under this Section 9 shall be acquired for such consideration, paid for at such times, by such methods and in such forms, including cash, Shares, other Awards, other property, net settlement (including broker-assisted cashless exercise) or any combination thereof, as the Committee shall determine; provided that the acquisition price therefor shall not be less than the Fair Market Value of such Shares on the date of grant of such right.
Section 10.  Minimum Vesting . Notwithstanding any provisions of this Plan to the contrary and except as provided in this Section 10 or pursuant to Section 11, Awards (other than Replacement Awards and Adjusted Awards) that are granted under the Plan shall not vest in full prior to the one-year anniversary of the applicable grant date; provided , however , that no more than five percent (5%) of the Shares available for issuance under the Plan as of the Distribution Date may be granted subject to such Awards with such other vesting requirements, if any, as the Committee may establish in its sole discretion (which number of Shares shall not include any Shares subject to Awards granted pursuant to Section 8).
Section 11.  Effect of Termination of Service or a Change in Control on Awards .
(a) The Committee may provide, by rule or regulation or in any Award Document, or may determine in any individual case, the circumstances in which, and the extent to which, an Award may be exercised, settled, vested, paid or forfeited in the event of a Participant’s Termination of Service prior to the end of a Performance Period or the vesting, exercise or settlement of such Award.
(b) The Committee may set forth the treatment of an Award upon a Change in Control in the applicable Award Document.
(c) In the case of an Option or SAR Award, except as otherwise provided in the applicable Award Document, upon a Change in Control, a merger or consolidation involving the Company or any other event with respect to which the Committee deems it appropriate, the Committee may cause such Award to be canceled in consideration of (i) the full acceleration of such Award and either (A) a period of at least 10 days prior to such Change in Control, merger, consolidation or other event to exercise the Award or (B) a payment in cash or other
 
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consideration to the Participant who holds such Award in an amount equal to the Intrinsic Value of such Award (which may be equal to but not less than zero), which, if in excess of zero, shall be payable upon the effective date of such Change in Control, merger, consolidation or other event or (ii) a substitute award (which immediately upon grant shall have an Intrinsic Value equal to the Intrinsic Value of such Award and shall include terms and conditions not less favorable to the Participant than the terms and conditions of such Award).
Section 12.  General Provisions Applicable to Awards .
(a) Awards shall be granted for no cash consideration or for such minimal cash consideration as may be required by applicable law.
(b) Awards may, in the discretion of the Committee, be granted either alone or in addition to or in tandem with any other Award or any award granted under any other plan of the Company. Awards granted in addition to or in tandem with other Awards, or in addition to or in tandem with awards granted under any other plan of the Company, may be granted either at the same time as or at a different time from the grant of such other Awards or awards.
(c) Subject to the terms of the Plan and Section 18, payments or transfers to be made by the Company upon the grant, exercise or settlement of an Award may be made in the form of cash, Shares, other Awards, other property, net settlement or any combination thereof, as determined by the Committee in its discretion, and may be made in a single payment or transfer, in installments or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of dividend equivalents in respect of installment or deferred payments.
(d) Except as may be permitted by the Committee or as specifically provided in an Award Document, (i) no Award and no right under any Award shall be assignable, alienable, saleable or transferable by a Participant otherwise than by will or pursuant to Section 12(e) and (ii) during a Participant’s lifetime, each Award, and each right under any Award, shall be exercisable only by the Participant or, if permissible under applicable law, by the Participant’s guardian or legal representative; provided, however, that the Committee shall not permit, and an Award Document shall not provide for, any Award to be transferred or transferable to a third party for value or consideration without the approval of the Company’s shareholders. The provisions of this Section 12(d) shall not apply to any Award that has been fully exercised or settled, as the case may be, and shall not preclude forfeiture of an Award in accordance with the terms thereof.
(e) A Participant may designate a Beneficiary or change a previous Beneficiary designation at such times prescribed by the Committee by using forms and following procedures approved or accepted by the Committee for that purpose.
(f) All certificates for Shares and/or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the Securities and Exchange Commission, any stock market or exchange upon which such Shares or other securities are then quoted, traded or listed, and any applicable securities laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
(g) Without limiting the generality of Section 12(h), the Committee may impose restrictions on any Award with respect to noncompetition, confidentiality and other restrictive covenants, or requirements to comply with minimum stock ownership requirements, as it deems necessary or appropriate in its sole discretion.
(h) The Committee may specify in an Award Document that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include a Termination of Service with or without Cause (and, in the case of any Cause that is resulting from an indictment or other non-final determination, the Committee may provide for such Award to be held in escrow or abeyance until a final resolution of the matters related to such event occurs, at which time the Award shall either be reduced, cancelled or forfeited (as provided in such Award Document) or remain in effect,
 
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depending on the outcome), violation of material policies, breach of noncompetition, confidentiality or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Company and/or its Affiliates.
(i) If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, and if the Participant knowingly or grossly negligently engaged in the misconduct, or knowingly or grossly negligently failed to prevent the misconduct, or if the Participant is one of the individuals subject to automatic forfeiture under Section 304 of the United States Sarbanes-Oxley Act of 2002 (and not otherwise exempted), the Participant shall reimburse the Company the amount of any payment in settlement of any Award earned or accrued during the 12-month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document not in compliance with such financial reporting requirement. Rights, payments and benefits under any Award shall be subject to repayment to or recoupment (clawback) by the Company in accordance with such policies and procedures as the Committee or Board may adopt from time to time, including policies and procedures to implement applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations.
Section 13.  Amendments and Termination .
(a) Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award Document or in the Plan, the Board may amend, alter, suspend, discontinue or terminate the Plan or any portion thereof at any time; provided , however , that no such amendment, alteration, suspension, discontinuation or termination shall be made without (i) shareholder approval, if such approval is required by applicable law or the rules of the stock market or exchange, if any, on which the Shares are principally quoted or traded or (ii) the consent of the affected Participant, if such action would materially adversely affect the rights of such Participant under any outstanding Award, except to the extent any such amendment, alteration, suspension, discontinuance or termination is made to cause the Plan to comply with applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations, or to impose any recoupment provisions on any Awards in accordance with Section 12(i). Notwithstanding anything to the contrary in the Plan, the Committee may amend the Plan in such manner as may be necessary to enable the Plan to achieve its stated purposes in any jurisdiction in a tax-efficient manner and in compliance with local laws, rules and regulations.
(b) The Committee may waive any conditions or rights under, amend any terms of, or amend, alter, suspend, discontinue or terminate any Award theretofore granted, prospectively or retroactively, without the consent of any relevant Participant or holder or Beneficiary of an Award; provided , however , that, subject to Sections 4(c) and 11(c), no such action shall materially adversely affect the rights of any affected Participant or holder or Beneficiary under any Award theretofore granted under the Plan, except to the extent any such action is made to cause the Plan to comply with applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations, or to impose any recoupment provisions on any Awards in accordance with Section 12(i); provided further that, except as provided in Section 4(c), the Committee shall not without the approval of the Company’s shareholders (a) lower the exercise price per Share of an Option or SAR after it is granted or take any other action that would be treated as a repricing of such Award under the rules of the principal stock market or exchange on which the Company’s Shares are quoted or traded, or (b) cancel an Option or SAR when the exercise price per Share exceeds the Fair Market Value in exchange for cash or another Award (other than in connection with a Change in Control); and provided further, that the Committee’s authority under this Section 13(b) is limited by the provisions of Section 12(d) and, in the case of Awards subject to Section 8(b), as provided in Section 8(b).
(c) Except as provided in Section 8(b), the Committee shall be authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of events (including the events described in Section 4(c)) affecting the Company, or the financial statements of the Company, or of changes in applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.
(d) The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect.
 
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Section 14.  Prohibition on Option and SAR Repricing . Except as provided in Section 4(c), the Committee may not, without prior approval of the Company’s shareholders, seek to effect any re-pricing of any previously granted “underwater” Option or SAR by: (i) amending or modifying the terms of the Option or SAR to lower the exercise price; (ii) cancelling the underwater Option or SAR and granting either (A) replacement Options or SARs having a lower exercise price or (B) Restricted Stock, RSU, Performance Award or Other Stock-Based Award in exchange; or (iii) cancelling or repurchasing the underwater Options or SARs for cash or other securities. An Option or SAR will be deemed to be “underwater” at any time when the Fair Market Value of the Shares covered by such Award is less than the exercise price of the Award.
Section 15.  Miscellaneous .
(a) No employee, Participant or other person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of employees, Participants or holders or Beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each recipient. Any Award granted under the Plan shall be a one-time Award that does not constitute a promise of future grants. The Company, in its sole discretion, maintains the right to make available future grants under the Plan.
(b) The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of, or to continue to provide services to, the Company or any Affiliate. Further, the Company or the applicable Affiliate may at any time dismiss a Participant, free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Document or in any other agreement binding the parties. The receipt of any Award under the Plan is not intended to confer any rights on the receiving Participant except as set forth in the applicable Award Document.
(c) Nothing contained in the Plan shall prevent the Company from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases.
(d) The Company shall be authorized to withhold from any Award granted or any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to a Participant the amount (in cash, Shares, other Awards, other property, net settlement or any combination thereof) of applicable withholding taxes due in respect of an Award, its exercise or settlement or any payment or transfer under such Award or under the Plan and to take such other action (including providing for elective payment of such amounts in cash or Shares by the Participant) as may be necessary in the opinion of the Committee to satisfy all obligations for the payment of such taxes.
(e) If any provision of the Plan or any Award Document is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award Document, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award Document shall remain in full force and effect.
(f) Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other person. To the extent that any person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company.
(g) No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash or other securities shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.
(h) Awards may be granted to Participants who are non-United States nationals or employed or providing services outside the United States, or both, on such terms and conditions different from those applicable to Awards to Participants who are employed or providing services in the United States as may, in the judgment of the Committee, be necessary or desirable to recognize differences in local law, tax policy or custom. The Committee also may impose conditions on the exercise or vesting of Awards in order to minimize the Company’s obligation with respect to tax equalization for Participants on assignments outside their home country.
 
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(i) The Company shall take responsibility for the information set out in the Plan.
Section 16.  Effective Date of the Plan . The Plan is effective as of the Distribution Date.
Section 17.  Term of the Plan . No Award shall be granted under the Plan after the earliest to occur of (i) the date on which a 10-year period measured from and including the effective date expires; provided that to the extent permitted by the listing rules of any stock exchanges on which the Company is listed, such 10-year term may be extended indefinitely so long as the maximum number of Shares available for issuance under the Plan have not been issued, (ii) the maximum number of Shares available for issuance under the Plan have been issued or (iii) the Board terminates the Plan in accordance with Section 13(a). However, unless otherwise expressly provided in the Plan or in an applicable Award Document, any Award theretofore granted may extend beyond such date, and the authority of the Committee to amend, alter, adjust, suspend, discontinue or terminate any such Award, or to waive any conditions or rights under any such Award, and the authority of the Board to amend the Plan, shall extend beyond such date.
Section 18.  Section 409A of the Code . With respect to Awards subject to Section 409A of the Code, the Plan is intended to comply with the requirements of Section 409A of the Code, and the provisions of the Plan and any Award Document shall be interpreted in a manner that satisfies the requirements of Section 409A of the Code, and the Plan shall be operated accordingly. If any provision of the Plan or any term or condition of any Award would otherwise frustrate or conflict with this intent, the provision, term or condition will be interpreted and deemed amended so as to avoid this conflict. If an amount payable under an Award as a result of the Participant’s Termination of Service (other than due to death) occurring while the Participant is a “specified employee” under Section 409A of the Code constitutes a deferral of compensation subject to Section 409A of the Code, then payment of such amount shall not occur until six months and one day after the date of the Participant’s Termination of Service, except as permitted under Section 409A of the Code. If the Award includes a “series of installment payments” (within the meaning of Section 1.409A-2(b)(2)(iii) of the Treasury Regulations), the Participant’s right to the series of installment payments shall be treated as a right to a series of separate payments and not as a right to a single payment, and if the Award includes “dividend equivalents” (within the meaning of Section 1.409A-3(e) of the Treasury Regulations), the Participant’s right to the dividend equivalents shall be treated separately from the right to other amounts under the Award. Notwithstanding the foregoing, the tax treatment of the benefits provided under the Plan or any Award Document is not warranted or guaranteed, and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A of the Code.
Section 19.  Data Protection . By participating in the Plan, the Participant consents to the holding and processing of personal information provided by the Participant to the Company or any Affiliate, trustee or third party service provider, for all purposes relating to the operation of the Plan. These include, but are not limited to:
(i) administering and maintaining Participant records;
(ii) providing information to the Company, Affiliates, trustees of any employee benefit trust, registrars, brokers or third party administrators of the Plan;
(iii) providing information to future purchasers or merger partners of the Company or any Affiliate, or the business in which the Participant works; and
(iv) transferring information about the Participant to any country or territory that may not provide the same protection for the information as the Participant’s home country.
 
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Section 20.  Governing Law . The Plan and each Award Document shall be governed by the laws of the state of New York, without application of the conflicts of law principles thereof.
Section 21.  Definitions . As used in the Plan, the following terms shall have the meanings set forth below:
(a) “ Adjusted Award ” means an Award that is issued under the Plan in accordance with the terms of the Employee Matters Agreement in adjustment of, substitution for or conversion of a time-based restricted stock unit or performance-based restricted stock unit award (or other Former Parent award outstanding at the time of the Spinoff) that was granted under a Former Parent Plan. Notwithstanding anything in the Plan to the contrary, subject to the Award Documents for the Adjusted Awards, the Adjusted Awards will reflect substantially the original terms of the awards being so adjusted or converted, and they need not comply with other specific terms of the Plan.
(b) “ Affiliate ” means (i) any entity that, directly or indirectly, is controlled by the Company, (ii) any entity in which the Company, directly or indirectly, has a significant equity interest, in each case as determined by the Committee and (iii) any other entity which the Committee determines should be treated as an “Affiliate.”
(c) “ Award ” means any Option, SAR, Restricted Stock, RSU, Performance Award or Other Stock-Based Award granted under the Plan.
(d) “ Award Document ” means any agreement, contract or other instrument or document, which may be in electronic format, evidencing any Award granted under the Plan, which may, but need not, be executed or acknowledged by a Participant. With respect to Adjusted Awards, the term also includes any writing or memorandum or summary of terms that may be specified by the Former Parent Committee, together with any evidence of award under any Former Parent Plan that may be referred to therein.
(e) “ Beneficiary ” means a person entitled to receive payments or other benefits or exercise rights that are available under the Plan in the event of the Participant’s death. If no such person is named by a Participant, or if no Beneficiary designated by the Participant is eligible to receive payments or other benefits or exercise rights that are available under the Plan at the Participant’s death, such Participant’s Beneficiary shall be such Participant’s estate.
(f) “ Board ” means the board of directors of the Company.
(g) “ Cause ” means, with respect to any Participant, “cause” as defined in such Participant’s Employment Agreement, if any, or if not so defined, except as otherwise provided in such Participant’s Award Document, such Participant’s:
(i) indictment for any crime (A) constituting a felony, or (B) that has, or could reasonably be expected to result in, an adverse impact on the performance of a Participant’s duties to the Company, or otherwise has, or could reasonably be expected to result in, an adverse impact to the business or reputation of the Company;
(ii) having been the subject of any order, judicial or administrative, obtained or issued by the Securities and Exchange Commission for any securities violation involving fraud, including, for example, any such order consented to by the Participant in which findings of facts or any legal conclusions establishing liability are neither admitted nor denied;
(iii) conduct, in connection with his or her employment or service, which is not taken in good faith and has, or could reasonably be expected to result in, material injury to the business or reputation of the Company;
(iv) willful violation of the Company’s Code of Conduct or other material policies set forth in the manuals or statements of policy of the Company;
(v) willful neglect in the performance of a Participant’s duties for the Company or willful or repeated failure or refusal to perform such duties; or
(vi) material breach of any applicable Employment Agreement.
 
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The occurrence of any such event that is susceptible to cure or remedy shall not constitute Cause if such Participant cures or remedies such event within 30 days after the Company provides notice to such Participant.
(h) “ Change in Control ” means the occurrence of any one or more of the following events:
(i) a direct or indirect change in ownership or control of the Company effected through one transaction or a series of related transactions within a 12-month period commencing after the Spinoff, whereby any “person” (as defined in Section 3(a)(9) of the Exchange Act) or any two or more persons deemed to be one “person” (as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) (in each case a “Person”) other than the Company or an employee benefit plan maintained by the Company, directly or indirectly acquire or maintain “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company constituting more than 30% of the total combined voting power of the Company’s equity securities outstanding immediately after such acquisition;
(ii) at any time during a period of 12 consecutive months commencing after the Spinoff, individuals who at the beginning of such period constituted the Board cease for any reason to constitute a majority of members of the Board; provided , however , that any new member of the Board whose election or nomination for election was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was so approved, shall be considered as though such individual were a member of the Board at the beginning of the period, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;
(iii) the consummation, commencing after the Spinoff, of a merger or consolidation of the Company or any of its subsidiaries with any other corporation or entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or being converted into voting securities of the surviving entity or, if applicable, the ultimate parent thereof) at least 50% of the combined voting power and total fair market value of the securities of the Company or such surviving entity or parent outstanding immediately after such merger or consolidation; or
(iv) the consummation of any sale, lease, exchange or other transfer to any Person (other than an Affiliate of the Company), in one transaction or a series of related transactions within a 12-month period commencing after the Spinoff, of all or substantially all of the assets of the Company and its subsidiaries.
Notwithstanding the foregoing or any provision of any Award Document to the contrary, for any Award that provides for accelerated distribution on a Change in Control of amounts that constitute “deferred compensation” (as defined in Section 409A of the Code), if the event that constitutes such Change in Control does not also constitute a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the Company’s assets (in either case, as defined in Section 409A of the Code), such amount shall not be distributed on such Change in Control but instead shall vest as of the date of such Change in Control and shall be paid on the scheduled payment date specified in the applicable Award Document, except to the extent that earlier distribution would not result in the Participant who holds such Award incurring any additional tax, penalty, interest or other expense under Section 409A of the Code.
(i) “ Code ” means the United States Internal Revenue Code of 1986, as amended from time to time, and the rules, regulations and guidance thereunder. Any reference to a provision in the Code shall include any successor provision thereto.
(j) “ Committee ” means the Compensation and Human Resources Committee of the Board or such other committee as may be designated by the Board; provided that, with respect to any Award granted to any Non-Employee Director, the “Committee” means the Nominating and Governance Committee of the Board or such other committee as may be designated by the Board. If the Board does not designate the Committee, references herein to the “Committee” shall refer to the Board.
 
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(k) “ Covered Employee ” means an individual who is (i) either a “covered employee” or expected by the Committee to be a “covered employee,” in each case within the meaning of Section 162(m)(3) of the Code or (ii) expected by the Committee to be the recipient of compensation (other than Section 162(m) Compensation) in excess of $1,000,000 for the tax year of the Company with regard to which a deduction in respect of such individual’s Award would be claimed.
(l) “ Disability ” means, with respect to any Participant, “disability” as defined in such Participant’s Employment Agreement, if any, or if not so defined, except as otherwise provided in such Participant’s Award Document:
(i) a permanent and total disability that entitles the Participant to disability income payments under any long-term disability plan or policy provided by the Company under which the Participant is covered, as such plan or policy is then in effect; or
(ii) if such Participant is not covered under a long-term disability plan or policy provided by the Company at such time for whatever reason, then a “permanent and total disability” as defined in Section 22(e)(3) of the Code and, in this case, the existence of any such Disability will be certified by a physician acceptable to the Company.
(m) “ Distribution Date ” means the effective date of the distribution in connection with the Spinoff.
(n) “ Employment Agreement ” means any employment, severance, consulting or similar agreement (including any offer letter) between the Company or any of its Affiliates and a Participant.
(o) “ Exchange Act ” means the United States Securities Exchange Act of 1934, as amended from time to time, and the rules, regulations and guidance thereunder. Any reference to a provision in the Exchange Act shall include any successor provision thereto.
(p) “ Fair Market Value ” means (i) with respect to a Share, the closing price of a Share on the date in question (or, if there is no reported sale on such date, on the last preceding date on which any reported sale occurred) on the principal stock market or exchange on which the Shares are quoted or traded, or if Shares are not so quoted or traded, the fair market value of a Share as determined by the Committee, and (ii) with respect to any property other than Shares, the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee.
(q) “ Former Parent Committee ” means the Compensation and Human Resources Committee of the Board of Directors of Former Parent.
(r) “ Former Parent Plans ” means the Delphi Automotive PLC Long-Term Incentive Plan (as amended and restated effective April 23, 2015), or any similar or predecessor plan sponsored by Former Parent or any of its subsidiaries, as applicable, under which any awards remain outstanding as of the date immediately prior to the Distribution Date.
(s) “ Good Reason ” means, with respect to any Participant, “good reason” as defined in such Participant’s Employment Agreement, if any, or if not so defined, except as otherwise provided in such Participant’s Award Document, the occurrence of any one or more of the following events:
(i) a material diminution in the Participant’s base salary;
(ii) a material diminution in the Participant’s authority, duties, or responsibilities;
(iii) a relocation of the Participant’s principal place of employment more than fifty (50) miles from its location; or
(iv) any other action or inaction that constitutes a material breach by the Company of the Participant’s Employment Agreement, if any;
 
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in each case, without the Participant’s consent. A Participant must provide notice to the Company of the existence of any one or more of the conditions described in (i) through (iv) above within sixty (60) days of the initial existence of the condition, upon the notice of which the Company will have a period of thirty (30) days during which it may remedy the condition before the condition gives rise to Good Reason.
(t) “ Incentive Stock Option ” means an option representing the right to acquire Shares from the Company, granted in accordance with the provisions of Section 5, that meets the requirements of Section 422 of the Code.
(u) “ Intrinsic Value ” with respect to an Option or SAR Award means (i) the excess, if any, of the price or implied price per Share in a Change in Control or other event over the exercise or hurdle price of such Award multiplied by (ii) the number of Shares covered by such Award.
(v) “ Non-Employee Director ” means a member of the Board who is not an employee of the Company or an Affiliate.
(w) “ Non-Qualified Stock Option ” means an option representing the right to acquire Shares from the Company, granted in accordance with the provisions of Section 5, that is not an Incentive Stock Option.
(x) “ Option ” means an Incentive Stock Option or a Non-Qualified Stock Option; provided , however , that any Option granted to a Non-Employee Director, consultant or other advisor shall be a Non-Qualified Stock Option.
(y) “ Other Stock-Based Award ” means an Award granted in accordance with the provisions of Section 9.
(z) “ Participant ” means the recipient of an Award granted under the Plan.
(aa) “ Performance Award ” means an Award granted in accordance with the provisions of Section 8.
(bb) “ Performance Period ” means the period established by the Committee at the time any Performance Award is granted or at any time thereafter during which any performance goals specified by the Committee with respect to such Award are measured.
(cc) “ Replacement Award ” means an Award granted in assumption of, or in substitution for, an outstanding award previously granted by a company or business acquired by the Company or with which the Company, directly or indirectly, combines.
(dd) “ Restricted Stock ” means any Share granted in accordance with the provisions of Section 7.
(ee) “ RSU ” means a contractual right granted in accordance with the provisions of Section 7 that is denominated in Shares. Each RSU represents a right to receive the value of one Share. Awards of RSUs may include the right to receive dividend equivalents.
(ff) “ SAR ” means any right granted in accordance with the provisions of Section 6 to receive upon exercise by a Participant or settlement the excess of (i) the Fair Market Value of one Share on the date of exercise or settlement over (ii) the exercise or hurdle price of the right on the date of grant, or if granted in connection with an Option, on the date of grant of the Option.
(gg) “ Section  162(m) Compensation ” means “qualified performance-based compensation” within the meaning of Section 162(m) of the Code.
(hh) “ Shares ” means ordinary shares of the Company.
(ii) “ Termination of Service ” means:
(i) in the case of a Participant who is an employee of the Company or an Affiliate, cessation of the employment relationship such that the Participant is no longer an employee of the Company or Affiliate;
 
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(ii) in the case of a Participant who is a Non-Employee Director, the date that the Participant ceases to be a member of the Board for any reason; or
(iii) in the case of a Participant who is a consultant or other advisor, the effective date of the cessation of the performance of services for the Company or an Affiliate;
provided , however , that in the case of an employee, the transfer of employment from the Company to an Affiliate, from an Affiliate to the Company, from one Affiliate to another Affiliate or, unless the Committee determines otherwise, the cessation of employee status but the continuation of the performance of services for the Company or an Affiliate as a member of the Board or a consultant or other advisor shall not be deemed a cessation of service that would constitute a Termination of Service; and provided further , that a Termination of Service will be deemed to occur for a Participant employed by an Affiliate when an Affiliate ceases to be an Affiliate, unless such Participant’s employment continues with the Company or another Affiliate. Notwithstanding the foregoing, with respect to any Award subject to Section 409A of the Code (and not exempt therefrom), a Termination of Service occurs when a Participant experiences a “separation from service” (as such term is defined under Section 409A of the Code).
 
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Exhibit 10.10
DELPHI TECHNOLOGIES PLC
ANNUAL INCENTIVE PLAN
 
1.	PURPOSE OF THE PLAN	
The purpose of the Delphi Technologies PLC Annual Incentive Plan (the “ Plan ”) is to reward performance and provide future incentives to employees who contribute to the success of the business of Delphi Technologies PLC (the “ Company ”). The Plan is available for incentive programs not to exceed a period of one year for eligible employees. Because the Plan does not provide welfare benefits and does not provide for the deferral of compensation to termination of employment, it is established with the intent and understanding that it is not an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended. To the extent any award under the Plan would become subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), such award shall be granted in compliance with the requirements set forth in Section 409A of the Code and any binding regulations or guidance promulgated thereunder.
 
2.	EFFECTIVE DATE AND DURATION OF THE PLAN	
The Plan is effective as of [              ] , 20 [      ] .
 
3.	PLAN ADMINISTRATION AND ELIGIBILITY	
 
(a)	The Plan shall be administered by the Compensation and Human Resources Committee (the “ Committee ”) of the Board of Directors of the Company (the “ Board ”). The Committee may authorize target award grants to employees. The Committee, in its sole discretion, shall determine the performance period, the performance levels at which different percentages of such awards will be earned, the collective amount for all awards to be granted at any one time, and the individual grants with respect to employees who are officers of the Company. The Committee may delegate to the Chief Executive Officer, the officers or such other committee or individual as determined by the Committee responsibility for determining, within the limits established by the Committee, individual award grants for employees who are not officers. All awards granted under the Plan will be denominated and paid in cash (U.S. dollars or local currency equivalent).	
 
(b)	The Committee shall have full power and authority to construe and interpret the Plan. The Committee shall determine the selection of employees for participation in the Plan and also decide any questions and settle any disputes or controversies that may arise with respect to the Plan. Any person who accepts any award hereunder agrees to accept as final, conclusive, and binding all determinations of the Committee and the Company’s officers. The Committee has the right, in the case of participants not employed in the United States, to vary from the provisions of the Plan in order to preserve its incentive features.	
 
(c)	Only persons who are employees of the Company are eligible to receive an award under the Plan. Subject to such additional limitations or restrictions as the Committee may impose, the term “ employees ” means persons (i) who are employed by the Company, or any subsidiary (as defined below), including employees who are also directors of the Company or any such subsidiary, or (ii) who accept (or previously have accepted) employment, at the request of the Company, with any entity that is not a subsidiary but in which the Company has, directly or indirectly, a substantial ownership interest. For purposes of this Plan, the term “ subsidiary ” means (x) a corporation of which the Company owns, directly or indirectly, capital stock having ordinary voting power to elect a majority of the board of directors of such corporation, (y) any unincorporated entity of which the Company can exercise, directly or indirectly, comparable control, or (z) any other entity which the Committee determines should be treated as a “subsidiary”. The Committee will determine when and to what extent individuals otherwise eligible for consideration become employees and when any individual will be deemed to have terminated employment for purposes of the Plan; provided that, with respect to any award subject to Section 409A of the Code, a termination of employment occurs when an employee experiences a “separation from service” (as such term is defined under Section 409A of the Code). To the extent determined by the Committee, the term “employees” will include former employees and any executor(s), administrator(s), or other legal representatives of an employee’s estate.	

4.	DETERMINATION OF ANNUAL INCENTIVE AWARD	
 
(a)	Prior to the grant of any target award, the Committee will establish performance levels for each such award related to the Company and its affiliates at which 100% of the award will be earned and a range (which need not be the same for all awards) within which greater and lesser percentages will be earned. The “ performance period ” will be twelve (12) months or less.	
 
(b)	With respect to the performance levels to be established, the Committee will establish the specific measures for each grant at the time of such grant. In creating these measures, the Committee may establish the specific goals based upon or relating to one or more specified criteria. If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which the Company conducts its business, or other events or circumstances render the performance objectives unsuitable, the Committee may modify the performance objectives or the related minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate and equitable. Performance measures may vary from award to award, and from participant to participant, and may be established on a stand-alone basis, in tandem or in the alternative.	
 
(c)	No target award will be granted to any director of the Company who is not an employee at the date of grant.	
 
(d)	If an employee is promoted during the performance period, a target award may be increased to reflect such employee’s new responsibilities.	
 
(e)	The Committee may adjust the performance levels and goals for any performance period and shall have the authority to make appropriate adjustments as it deems equitable in recognition of unusual or non-recurring events affecting the Company, changes in applicable tax laws or accounting principles, or such other factors as the Committee may determine to preserve the incentive features of the Plan (including, without limitation, any adjustments that would result in the Company paying non-deductible compensation to a participant).	
 
5.	DETERMINATION AND PAYMENT OF FINAL AWARD	
 
(a)	Except as otherwise provided in the Plan, the percentage of each target award to be distributed to an employee will be determined by the Committee on the basis of the performance levels established for such award and the performance of the applicable enterprise or specified portion thereof, as the case may be, during the performance period. Following determination of the final payout percentage, the Committee may, upon the recommendation of the Chief Executive Officer, make adjustments to awards for officers to reflect individual performance during such period. Adjustments to awards to reflect individual performance for employees who are not officers may be made by the Chief Executive Officer, other officer or such other committee or individual as determined by the Committee. The amount of any adjustments made to individual awards, in the aggregate, will not change the sum of the payments of individual awards. Any target award, as determined and adjusted, is herein referred to as a “final award.”	
 
(b)	Payment of any final award (or portion thereof) to an employee is subject to the satisfaction of the conditions precedent that such employee: (i) continue to render services as an employee through the end of the performance period, unless waived by the Committee, (ii) refrain from engaging in any activity through the end of the performance period which, in the opinion of the Committee, is competitive with any activity of the Company or any subsidiary (except that employment at the request of the Company with an entity in which the Company has, directly or indirectly, a substantial ownership interest, or other employment specifically approved by the Committee, may not be considered to be an activity which is competitive with any activity of the Company or any subsidiary) and from otherwise acting, either prior to or after termination of employment, in any manner inimical or in any way contrary to the best interests of the Company, and (iii) furnish to the Company such information with respect to the satisfaction of the foregoing conditions precedent as the Committee may reasonably request. Notwithstanding anything in this Plan to the contrary, nothing in this Plan prevents a participant from providing, without prior notice to the Company, information to governmental authorities regarding possible legal violations or otherwise	
 
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 	testifying or participating in any investigation or proceeding by any governmental authorities regarding possible legal violations, and for purposes of clarity a participant is not prohibited from providing information voluntarily to the United States Securities and Exchange Commission pursuant to Section 21F of the United States Securities Exchange Act of 1934, as amended.	
 
(c)	Final awards shall vest at the end of the performance period and shall be paid as soon as practicable following the end of the applicable performance period, but in no event later than March 15 following the last day of the applicable performance period.	
 
6.	TREATMENT OF AWARDS UPON EMPLOYEE’S DEATH OR TERMINATION OF EMPLOYMENT	
 
(a)	If an employee (x) is terminated for Cause at any time, (y) is terminated without Cause prior to having been employed for six months during the performance period, or (z) voluntarily quits employment (not due to Retirement) at any time, except as otherwise determined by the Committee, no award will be paid to the employee.	
The term “ Cause ” means, with respect to any participant, “cause” as defined in such participant’s employment, severance, consulting or similar agreement (including any offer letter) between the Company or any of its affiliates and the participant (each, an “ Employment Agreement ”), if any, or if not so defined, such participant’s:
(i) indictment for any crime (A) constituting a felony, or (B) that has, or could reasonably be expected to result in, an adverse impact on the performance of a participant’s duties to the Company, or otherwise has, or could reasonably be expected to result in, an adverse impact to the business or reputation of the Company;
(ii) having been the subject of any order, judicial or administrative, obtained or issued by the United States Securities and Exchange Commission for any securities violation involving fraud including, for example, any such order consented to by the participant in which findings of facts or any legal conclusions establishing liability are neither admitted nor denied;
(iii) conduct, in connection with his or her employment or service, which is not taken in good faith and has, or could reasonably be expected to result in, material injury to the business or reputation of the Company;
(iv) willful violation of the Company’s Code of Conduct or other material policies set forth in the manuals or statements of policy of the Company;
(v) willful neglect in the performance of a participant’s duties for the Company or willful or repeated failure or refusal to perform such duties; or
(vi) material breach of any Employment Agreement.
The occurrence of any such event that is susceptible to cure or remedy shall not constitute Cause if such participant cures or remedies such event within 30 days after the Company provides notice to such participant.
 
(b)	If, upon death or a Qualified Termination of an employee’s employment prior to the end of any performance period, other than an involuntary termination without Cause prior to having been employed for six months during the performance period, the Committee determines to waive the condition precedent of continuing to render services as provided in paragraph 5(b), then the target award granted to such employee with respect to such performance period will be reduced pro rata based on the number of months remaining in the performance period after the month of death or termination; provided further that such actions would not cause any payment to result in deferred compensation that is subject to the additional tax under Section 409A of the Code. The final award for such employee will be determined by the Committee	
 
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 	(i) on the basis of the performance levels established for such award (including the minimum performance level) and the performance level achieved through the end of the performance period and (ii) in the discretion of the Committee, on the basis of individual performance during the period prior to death or termination, and will be paid in accordance with paragraph 5(c).	
A “ Qualified Termination ” means an involuntary termination without Cause, termination due to Disability, Retirement, or any other termination approved by the Committee. Should an employee be involuntarily terminated without Cause at any time before the end of the applicable performance period after having attained Retirement eligibility, the termination will be treated as a Retirement hereunder.
The term “ Retirement ” means, with respect to any participant, voluntarily terminating employment after having attained age 55 with at least 10 years of service with the Company, a subsidiary or a predecessor of either (including Delphi Automotive PLC).
The term “ Disability ” means, with respect to any participant, “disability” as defined in such participant’s Employment Agreement, if any, or if not so defined:
(i) a permanent and total disability that entitles the participant to disability income payments under any long-term disability plan or policy provided by the Company under which the participant is covered, as such plan or policy is then in effect; or
(ii) if such participant is not covered under a long-term disability plan or policy provided by the Company at such time for whatever reason, then a “permanent and total disability” as defined in Section 22(e)(3) of the Code and, in this case, the existence of any such Disability will be certified by a physician acceptable to the Company.
A qualifying leave of absence, determined in accordance with procedures established by the Committee, will not be deemed to be a termination of employment, but, except as otherwise determined by the Committee, the employee’s target award may, but shall not be required to, be reduced pro rata based on the number of months during which such person was on such leave of absence during the performance period; provided that such actions would not cause any payment to result in deferred compensation that is subject to the additional tax under Section 409A of the Code. A target award will not vest during a leave of absence granted to an employee for government service.
 
7.	CHANGE IN CONTROL	
 
(a)	Upon the effective date of a Change in Control, all outstanding unvested awards granted under this Plan will vest on a pro rata basis based on the greater of target award or actual performance during the applicable performance period up to the date of the Change in Control. The pro-rated award shall be paid as a single lump sum payment as soon as reasonably practicable following the date of the Change in Control, but in no event later than March 15 of the calendar year following the year in which the Change in Control occurs.	
 
(b)	The term “ Change in Control ” means the occurrence of any one or more of the following events:	
(i) a direct or indirect change in ownership or control of the Company effected through one transaction or a series of related transactions within a 12-month period commencing after the spin-off of the Company from Delphi Automotive PLC, whereby any “person” (as defined in Section 3(a)(9) of the United States Securities Exchange Act of 1934, as amended from time to time, and the rules, regulations and guidance thereunder (the “ Exchange Act ”)), or any two or more persons deemed to be one “person” (as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) (in each case a “ Person ”) other than the Company or an employee benefit plan maintained by the Company, directly or indirectly acquire or maintain “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company constituting more than 30% of the total combined voting power of the Company’s equity securities outstanding immediately after such acquisition;
 
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(ii) at any time during a period of 12 consecutive months commencing after the spin-off of the Company from Delphi Automotive PLC, individuals who at the beginning of such period constituted the Board cease for any reason to constitute a majority of members of the Board; provided, however, that any new member of the Board whose election or nomination for election was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was so approved, shall be considered as though such individual were a member of the Board at the beginning of the period, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;
(iii) the consummation, commencing after the spin-off of the Company from Delphi Automotive PLC, of a merger or consolidation of the Company or any of its subsidiaries with any other corporation or entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or being converted into voting securities of the surviving entity or, if applicable, the ultimate parent thereof) at least 50% of the combined voting power and total fair market value of the securities of the Company or such surviving entity or parent outstanding immediately after such merger or consolidation; or
(iv) the consummation of any sale, lease, exchange or other transfer to any Person (other than an affiliate of the Company), in one transaction or a series of related transactions within a 12-month period commencing after the spin-off of the Company from Delphi Automotive PLC, of all or substantially all of assets of the Company and its subsidiaries.
 
8.	PLAN AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION	
The Committee may, in its sole discretion, at any time, amend, modify, suspend, or terminate this Plan provided that no such action shall (a) materially adversely affect the rights of an employee with respect to outstanding target awards or final awards under the Plan without the consent of the affected employee, except to the extent any such amendment, modification, suspension or termination is made to cause the Plan to comply with applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations or to impose any recoupment provisions on any award in accordance with paragraph 10(g), or (b) render any director of the Company who is not an employee at the date of grant eligible to be granted a target award.
 
9.	GOVERNING LAW	
This Plan and all determinations made and actions taken pursuant hereto will be governed by the laws of the State of New York, without giving effect to principles of conflict of laws, and construed accordingly.
 
10.	MISCELLANEOUS	
 
(a)	No employee, participant or other person shall have any claim to be granted any award under the Plan, and there is no obligation for uniformity of treatment of employees, participants or holders or beneficiaries of awards under the Plan. The grant of an award under the Plan shall not be construed as giving an employee the right to be retained in the employ of, or to continue to provide services to, the Company or any subsidiary. Further, the Company or the applicable subsidiary may at any time dismiss an employee, free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan.	
 
(b)	All final awards which have been awarded in accordance with the provisions of the Plan will be paid as soon as practicable following the end of the related performance period but prior to March 15 of the following year. If the Company has any unpaid claim against an employee arising out of or in connection with the employee’s employment with the Company, such claim may be offset against awards under the Plan. Such claim may include, but is not limited to, unpaid taxes or corporate business credit card charges.	
 
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(c)	All payments and distributions will be paid from the general assets of the Company. Nothing contained in the Plan, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between the Company and any employee, former employee, or any other person.	
 
(d)	The expenses of administering this Plan will be borne by the Company.	
 
(e)	Except as otherwise determined by the Committee, with the exception of transfer by will or the laws of descent and distribution, no target or final award is assignable or transferable and, during the lifetime of the employee, any payment of any final award will only be made to the employee.	
 
(f)	In the event of death, the executor(s) or administrator(s) of the employee’s estate, or such other person(s) as determined by a court of competent jurisdiction, may receive payment, in accordance with and subject to the provisions of this Plan, provided the executor(s), administrator(s), or other person supplies documentation satisfactory to the Company to so act. Upon making such determination, the Company is relieved of any further liability regarding any award to the deceased employee.	
 
(g)	If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, and if the participant knowingly or grossly negligently engaged in the misconduct, or knowingly or grossly negligently failed to prevent the misconduct, or if the participant is one of the individuals subject to automatic forfeiture under Section 304 of the United States Sarbanes-Oxley Act of 2002 (and not otherwise exempted), the participant shall reimburse the Company the amount of any payment in settlement of any award under the Plan earned or accrued during the twelve-month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document not in compliance with such financial reporting requirement. Rights, payments and benefits under any award under the Plan shall be subject to repayment to or recoupment (clawback) by the Company in accordance with such policies and procedures as the Committee or Board may adopt from time to time, including policies and procedures to implement applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations.	
 
(h)	With respect to awards subject to Section 409A of the Code, the Plan is intended to comply with the requirements of Section 409A of the Code, and the provisions of the Plan shall be interpreted in a manner that satisfies the requirements of Section 409A of the Code, and the Plan shall be operated accordingly. If any provision of the Plan or any term or condition of any award would otherwise frustrate or conflict with this intent, the provision, term or condition will be interpreted and deemed amended so as to avoid this conflict. If an amount payable under an award as a result of the participant’s termination of employment (other than due to death) occurring while the participant is a “specified employee” under Section 409A of the Code constitutes a deferral of compensation subject to Section 409A of the Code, then payment of such amount shall not occur until six months and one day after the date of the participant’s termination of employment, except as permitted under Section 409A of the Code. If an award includes a “series of installment payments” (within the meaning of Section 1.409A-2(b)(2)(iii) of the Treasury Regulations), the participant’s right to the series of installment payments shall be treated as a right to a series of separate payments and not as a right to a single payment. Notwithstanding the foregoing, the tax treatment of the benefits provided under the Plan is not warranted or guaranteed, and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the participant on account of non-compliance with Section 409A of the Code.	
 
(i)	By participating in the Plan, the participant consents to the holding and processing of personal information provided by the participant to the Company or any subsidiary, trustee or third party service provider, for all purposes relating to the operation of the Plan. These include, but are not limited to: (i) administering and maintaining participant records; (ii) providing information to the Company, subsidiaries, trustees of any employee benefit trust, registrars, brokers or third party administrators of the Plan; (iii) providing information to future purchasers or merger partners of the Company or any subsidiary, or the business in which the participant works; and (iv) transferring information about the participant to any country or territory that may not provide the same protection for the information as the participant’s home country.	
 
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Exhibit 10.11
DELPHI TECHNOLOGIES PLC LEADERSHIP INCENTIVE PLAN
The purpose of this Delphi Technologies PLC Leadership Incentive Plan (the “ Plan ”) is to enhance the Company’s ability to attract and retain highly qualified executives, to provide additional financial incentives to such executives and to promote the success of the Company and its subsidiaries through awards of incentive compensation that satisfy the requirements for performance-based compensation under Section 162(m) of the Code.
1.  Administration of the Plan .
(a) The Plan shall be administered by the Committee. The Committee shall be appointed by the Board and shall consist of not less than three directors of the Board. To the extent necessary to comply with applicable regulatory regimes, any action by the Committee shall require the approval of Committee members who are (i) independent, within the meaning of and to the extent required by applicable rulings and interpretations of the principal stock market or exchange on which the Shares are quoted or traded; (ii) each a non-employee director within the meaning of Rule 16b-3 under the Exchange Act; and (iii) each an outside director within the meaning of Section 162(m) of the Code. The Board may designate one or more directors as a subcommittee who may act for the Committee if necessary to satisfy the requirements of this Section. The Committee may issue rules and regulations for administration of the Plan.
(b) Subject to the terms of the Plan and applicable law, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the amount of any Incentive Amount; (iii) determine whether, to what extent and under what circumstances Incentive Amounts may be settled or exercised in cash, Shares, other awards, other property, net settlement or any combination thereof, or canceled, forfeited or suspended, and the method or methods by which Incentive Amounts may be settled, exercised, canceled, forfeited or suspended; (iv) determine whether, to what extent and under what circumstances cash, Shares, other awards, other property and other amounts payable with respect to an Incentive Amount under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee; (v) interpret and administer the Plan and any instrument or agreement relating to, or Incentive Amount made under, the Plan; (vi) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (vii) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Such authority shall include the right to exercise discretion to reduce, at any time prior to the payment thereof, the Incentive Amount payable to any Participant to any amount, including zero, that is below the Formula Amount; provided, however, that the exercise of such discretion with respect to any Participant shall not have the effect of increasing the Incentive Amount payable to any other Participant.
(c) All decisions of the Committee shall be final, conclusive and binding upon all parties, including the Company, its shareholders and Participants and any beneficiaries thereof.
2.  Participation and Performance Goals . Not later than the Applicable Deadline with respect to a Performance Period, the Committee shall (a) designate the Eligible Executives who are Participants in the Plan for such Performance Period, and (b) affirm, in writing, the formula governing each such Participant’s Formula Amount for such Performance Period. The “ Applicable Deadline ” shall mean the 90th day of the Performance Period (or such other time as may be required or permitted by Section 162(m) of the Code); provided , however , that in the event that the Committee determines that an individual is eligible for the Plan after the end of such deadline because of commencement of employment or promotion resulting in the individual’s becoming an Eligible Executive during the Performance Period, the Applicable Deadline shall mean 30 days following such determination (or, if earlier, prior to the expiration of 25% of the Performance Period to which such amount will relate).
3.  Adjustment for Extraordinary Items . The Committee shall adjust, to the extent permitted by Section 162(m) of the Code, the level of Net Income for material items not originally contemplated in establishing the performance target for items resulting from discontinued operations, extraordinary gains and losses, the effect of changes in accounting standards or principles, acquisitions or divestitures, changes in tax rules or regulations, capital transactions, restructuring, nonrecurring gains or losses or any other unusual items that are separately identified and quantified in the Company’s audited financial statements. In all events, any adjustments to Net Income shall be made in a manner intended to satisfy the requirements of Section 162(m) of the Code.

4.  Committee Certification . As soon as reasonably practicable after the end of each Performance Period, but in no event later than March 15 following the end of such Performance Period, the Committee shall certify, in writing, the level of Net Income achieved for such Performance Period and the dollar amount of the Formula Amount for each Participant in the Plan for such Performance Period.
5.  Determination of Incentive Amount . At any time before an Incentive Amount for a Performance Period is paid, the Committee may, in its sole discretion and taking into consideration such factors as it deems appropriate (which may include the degree to which objective and subjective performance goals and other criteria have been attained for such Performance Period), determine to pay a Participant an Incentive Amount that is less than the Formula Amount, or to pay no Incentive Amount. The amount by which any Formula Amount is reduced shall not be paid to any other Participant.
6.  Payment of Incentive Amount . An Incentive Amount shall be paid in cash, unrestricted or restricted Shares (which may be provided under a shareholder-approved equity plan of the Company, subject to the terms and conditions of such plan), or a combination of the foregoing. The payment of an Incentive Amount shall be made at such time as the Committee determines in its sole discretion, which shall in no event be later than March 15 following the Performance Period to which such Incentive Amount relates unless the Committee, in its sole discretion, provides for the deferral of an Incentive Amount under a nonqualified deferred compensation plan or program maintained by the Company, subject to the terms and conditions of such plan or program.
7.  AIP Awards . Notwithstanding any provision of the AIP, any Incentive Amount paid to any Participant pursuant to an award under the AIP shall be subject to the limits established for such Participant in this Plan. Upon the Participant’s death or termination of employment or in the event of a Change in Control (as defined in the AIP), any awards held by Participants under the AIP shall be treated in accordance with Sections 6 and 7 of the AIP.
8.  No Right to Incentive or Continued Employment .
(a) No employee, Participant or other person shall have any claim to be granted any Incentive Amount under the Plan, and there is no obligation for uniformity of treatment of employees, Participants or holders or beneficiaries of Incentive Amounts under the Plan. The terms and conditions of Incentive Amounts need not be the same with respect to each recipient. Any Incentive Amount granted under the Plan shall be a one-time award that does not constitute a promise of future grants. The Company, in its sole discretion, maintains the right to make available future grants under the Plan.
(b) The grant of an Incentive Amount shall not be construed as giving a Participant the right to be retained in the employ of, or to continue to provide services to, the Company or any affiliate. Further, the Company or the applicable affiliate may at any time dismiss a Participant, free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan or in any other agreement binding the parties. The receipt of any Incentive Amount under the Plan is not intended to confer any rights on the receiving Participant.
9.  Withholding . The Company shall be authorized to withhold from any Incentive Amount granted or any payment due or transfer made under any Incentive Amount or under the Plan or from any compensation or other amount owing to a Participant the amount (in cash, Shares, other awards, other property, net settlement or any combination thereof) of applicable withholding taxes due in respect of an Incentive Amount, its exercise or settlement or any payment or transfer under such Incentive Amount or under the Plan and to take such other action (including providing for elective payment of such amounts in cash or Shares by the Participant) as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes.
10.  Nontransferability . Except as may be permitted by the Committee, (a) no Incentive Amount and no right under any Incentive Amount shall be assignable, alienable, saleable or transferable by a Participant otherwise than by will and (b) during a Participant’s lifetime, each Incentive Amount, and each right under any Incentive Amount, shall be exercisable only by the Participant or, if permissible under applicable law, by the Participant’s guardian or legal representative; provided , however , that the Committee shall not permit any Incentive Amount to be transferred or transferable to a third party for value or consideration without the approval of the Company’s shareholders. The provisions of this Section 10 shall not apply to any Incentive Amount that has been fully exercised or settled, as the case may be, and shall not preclude forfeiture of an Incentive Amount in accordance with the terms thereof.
 
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11.  Unfunded Plan . Neither the Plan nor any Incentive Amount shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other person. To the extent that any person acquires a right to receive payments from the Company pursuant to an Incentive Amount, such right shall be no greater than the right of any unsecured general creditor of the Company.
12.  Repayment/Forfeiture of Incentive Amount . If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, and if the Participant knowingly or grossly negligently engaged in the misconduct, or knowingly or grossly negligently failed to prevent the misconduct, or if the Participant is one of the individuals subject to automatic forfeiture under Section 304 of the United States Sarbanes-Oxley Act of 2002 (and not otherwise exempted), the Participant shall reimburse the Company the amount of any payment of any Incentive Amount earned or accrued during the 12-month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document not in compliance with such financial reporting requirement. Rights, payments and benefits under any Incentive Amount shall be subject to repayment to or recoupment (clawback) by the Company in accordance with such policies and procedures as the Committee or Board may adopt from time to time, including policies and procedures to implement applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations. To the extent such Incentive Amount was deferred under a nonqualified deferred compensation plan maintained by the Company rather than paid to the Participant, the amount deferred (and any earnings thereon) shall be forfeited.
13.  Adoption, Amendment, Suspension and Termination of the Plan .
(a) The Plan shall be effective [              ] , 20 [      ] and shall continue in effect until terminated as provided below.
(b) Except to the extent prohibited by applicable law, the Board may amend, alter, suspend, discontinue or terminate the Plan or any portion thereof at any time; provided , however , that no such amendment, alteration, suspension, discontinuation or termination shall be made without shareholder approval, if such approval is required by applicable law or the rules of the stock market or exchange, if any, on which the Shares are principally quoted or traded or the consent of the affected Participant, if such action would materially adversely affect the rights of such Participant under any outstanding Incentive Amount, except to the extent any such amendment, alteration, suspension, discontinuance or termination is made to cause the Plan to comply with applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations or to impose any recoupment provisions on any Incentive Amounts in accordance with Section 12. Notwithstanding anything to the contrary in the Plan, the Committee may amend the Plan in such manner as may be necessary to enable the Plan to achieve its stated purposes in any jurisdiction in a tax-efficient manner and in compliance with local laws, rules and regulations.
(c) The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Incentive Amount in the manner and to the extent it shall deem desirable to carry the Plan into effect.
14.  Section 162(m) . If any provision of this Plan would cause an Incentive Amount not to constitute “qualified performance-based compensation” under Section 162(m) of the Code, that provision shall be severed from, and shall be deemed not to be a part of, the Plan, but the other provisions hereof shall remain in full force and effect.
15.  Section 409A . With respect to Incentive Amounts subject to Section 409A of the Code, the Plan is intended to comply with the requirements of Section 409A of the Code, and the provisions of the Plan shall be interpreted in a manner that satisfies the requirements of Section 409A of the Code, and the Plan shall be operated accordingly. If any provision of the Plan or any term or condition of any Incentive Amount would otherwise frustrate or conflict with this intent, the provision, term or condition will be interpreted and deemed amended so as to avoid this conflict. If an amount payable under an Incentive Amount as a result of the Participant’s termination of employment (other than due to death) occurring while the Participant is a “specified employee” under Section 409A of the Code constitutes a deferral of compensation subject to Section 409A of the Code, then payment of such amount shall not occur until six months and one day after the date of the Participant’s termination of employment, except as permitted under Section 409A of the Code. If an Incentive Amount includes a “series of installment payments” (within the meaning of Section 1.409A-2(b)(2)(iii) of the Treasury Regulations), the Participant’s right to the series of installment payments shall be treated as a right to a series of separate payments and not as a right to a single payment and if an Incentive Amount includes “dividend equivalents” (within the meaning of Section 1.409A-3(e) of
 
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the Treasury Regulations), the Participant’s right to the dividend equivalents shall be treated separately from the right to other amounts under the Incentive Amount. Notwithstanding the foregoing, the tax treatment of the benefits provided under the Plan is not warranted or guaranteed, and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A of the Code.
16.  Governing Law . The Plan shall be governed by the laws of the state of New York, without application of the conflicts of law principles thereof.
17.  Definitions . As used herein, the following terms shall have the respective meanings indicated:
(a) “ AIP ” shall mean the Delphi Technologies PLC Annual Incentive Plan, as amended from time to time.
(b) “ Board ” shall mean the Board of Directors of the Company.
(c) “ Code ” shall mean the United States Internal Revenue Code of 1986, as amended from time to time, and the rules, regulations and guidance thereunder. Any reference to a provision in the Code shall include any successor provision thereto.
(d) “ Committee ” shall mean the Compensation and Human Resources Committee of the Board or such other committee as may be appointed by the Board to administer the Plan that is comprised of not less than two directors of the Company, each of whom is an “outside director” within the meaning of Section 162(m) of the Code and Section 1.162-27(e)(3) of the Treasury Regulations.
(e) “ Company ” shall mean Delphi Technologies PLC.
(f) “ Eligible Executive ” shall mean the Company’s Chief Executive Officer and other executive officers of the Company who are or may be “covered employees” of the Company as defined in Section 162(m) of the Code.
(g) “ Exchange Act ” shall mean the United States Securities Exchange Act of 1934, as amended from time to time, and the rules, regulations and guidance thereunder. Any reference to a provision in the Exchange Act shall include any successor provision thereto.
(h) “ Fiscal Year ” or “ Fiscal Quarter ” shall mean a fiscal year or fiscal quarter, respectively, of the Company.
(i) “ Formula Amount ” shall mean, for each Participant, 1.0% of Net Income for the applicable Performance Period. Notwithstanding the foregoing, (i) with respect to any Participant the Committee may in its sole discretion substitute within the applicable time frame described in Section 2 above a percentage smaller than 1.0% for purposes of this definition, and (ii) in no event shall the amount awarded under the Plan for any Participant on account of any Fiscal Year exceed $ [              ] .
(j) “ Incentive Amount ” shall mean, for each Participant, an incentive to be paid under the Plan in the amount determined by the Committee pursuant to Sections 5 and 6 above.
(k) “ Net Income ” shall mean, for any Fiscal Quarter or Fiscal Year, the Net Income reported in the Company’s quarterly or annual earnings release, as applicable. In the event that the Company’s earnings release with respect to any Fiscal Year is delayed beyond March 15 of the following year, Net Income for such Fiscal Year shall be determined in good faith by the Committee, subject to the requirements of Code Section 162(m).
(l) “ Participant ” shall mean, with respect to any Performance Period, an Eligible Executive who is designated as a Participant in the Plan for such Performance Period in accordance with Section 2.
(m) “ Performance Period ” shall mean a Fiscal Year or any other period designated by the Committee with respect to which an award is granted under the Plan. In the event the Committee determines that an individual is first eligible for the Plan after the first day of a Fiscal Year because of commencement of employment or promotion, the first Performance Period for such individual shall commence on the first day of the Fiscal Quarter coinciding with or following the day on which such individual first becomes eligible for the Plan.
(n) “ Shares ” shall mean ordinary shares of the Company.
 
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Exhibit 21.1
Subsidiaries of Delphi Technologies PLC

Entity Name	  	Jurisdiction of
Formation	  	Economic Interest if
not 100%	 	
Alliance Friction Technology Pvt Ltd	  	India	  	 	10	% 	
AS Catalizadores Ambientales, S. de R.L. de C.V.	  	Mexico	  				
Beijing Delphi Technology Development Company, Ltd.	  	Peoples Republic of China	  				
Beijing Delphi Wan Yuan Engine Management Systems Company, Ltd.	  	Peoples Republic of China	  	 	51	% 	
BGMD Servicos Automotivos Ltda.	  	Brazil	  	 	30	% 	
Closed Joint Stock Company PES/SCC	  	Russian Federation	  	 	51	% 	
D2 Industrial Development and Production SRL	  	Romania	  				
Delphi Automotive France SAS	  	France	  				
Delphi Automotive Korea Ltd.	  	Korea	  				
Delphi Automotive Operations UK Limited	  	England and Wales	  				
Delphi Automotive Systems Australia Ltd.	  	Australia	  				
Delphi Automotive Systems Singapore Investments Pte Ltd	  	Singapore	  				
Delphi Canada Inc.	  	Ontario	  				
Delphi Diesel Systems (Yantai) Co., Ltd.	  	Republic of China	  				
Delphi Diesel Systems (Yantai) Co., Ltd Suzhou Branch	  	Republic of China	  				
Delphi Diesel Systems Limited	  	England and Wales	  				
Delphi Diesel Systems Pakistan (Private) Limited	  	Pakistan	  				
Delphi Diesel Systems Pension Trustees Limited	  	England and Wales	  				
Delphi Diesel Systems Romania Srl	  	Romania	  				
Delphi Diesel Systems S.L.	  	Spain	  				
Delphi Diesel Systems, S. de R.L. de C.V.	  	Mexico	  				
Delphi Electronics Overseas Company Ltd	  	England and Wales	  				
Delphi Financial Operations UK Limited	  	England and Wales	  				
Delphi Financial Services (UK) Limited	  	England and Wales	  				
Delphi France Holding SAS	  	France	  				
Delphi Holdfi Holdings S.a r.l.	  	Luxembourg	  				
Delphi Holdfi Luxembourg S.a r.l.	  	Luxembourg	  				

Exhibit 21.1
Subsidiaries of Delphi Technologies PLC

Delphi Japan Limited Co.	  	Japan	  				
Delphi Lockheed Automotive Limited	  	England and Wales	  				
Delphi Lockheed Automotive Pension Trustees Limited	  	England and Wales	  				
Delphi Luxembourg Investments S.a r.l.	  	Luxembourg	  				
Delphi Otomotiv Sistemleri Sanayi ve Ticaret Anonim Sirket	  	Turkey	  				
Delphi Powertrain Poland, sp.z.o.o.	  	Poland	  				
Delphi Powertrain Corporation	  	Delaware	  				
Delphi Powertrain International Services, LLC	  	Delaware	  				
Delphi Powertrain Systems Deutschland GmbH	  	Germany	  				
Delphi Powertrain Systems Holdings S.àr.l.	  	Luxembourg	  				
Delphi Powertrain Systems Hungary Kft	  	Hungary	  				
Delphi Powertrain Systems Indústria e Comércio Ltda.	  	Brazil	  				
Delphi Powertrain Systems Italia S.r.l.	  	Italy	  				
Delphi Powertrain Systems Korea Ltd.	  	Korea	  				
Delphi Powertrain Systems Management Limited	  	United Kingdom	  				
Delphi Powertrain Systems Manufacturing Management S.àr.l.	  	Luxembourg	  				
Delphi Powertrain Systems Netherlands B.V.	  	Netherlands	  				
Delphi Powertrain Systems Operations Luxembourg S.àr.l.	  	Luxembourg	  				
Delphi Powertrain Systems Portugal, Unipessoal Lda	  	Portugal	  				
Delphi Powertrain Systems, LLC	  	Delaware	  				
Delphi Powertrain Technologies General Partnership	  	Delaware	  				
Delphi Propulsion Systems Private Limited	  	India	  				
Delphi Shanghai Dynamics and Propulsion Systems Co., Ltd.	  	Peoples Republic of China	  				
Delphi Singapore Financing Pte. Ltd.	  	Singapore	  				
Delphi Singapore Holdings Pte. Ltd.	  	Singapore	  				
Delphi Singapore Investments Pte. Ltd.	  	Singapore	  				
Delphi Technologies IP Limited	  	Barbados	  				

Exhibit 21.1
Subsidiaries of Delphi Technologies PLC

Delphi Trading (Shanghai) Company Limited	 	Peoples Republic of China	 	 	                    	 	
Delphi-TVS Diesel Systems Ltd	 	India	 	 	52.5	% 	
Hartridge Limited	 	England and Wales	 				
TecAlliance GmbH	 	Federal Republic of Germany	 	 	2.73	% 	

Table of Contents
Exhibit 99.1
                     ,             
Dear Delphi Automotive PLC Shareholder:
On May 3, 2017, we announced our intention to separate our Powertrain Systems segment by means of a spin-off of a newly formed company that is expected to be traded on the New York Stock Exchange.
The convergence of technologies underpinning industry megatrends is driving greater demand for advanced electronics and increased computing power to meet consumer preferences for more safety, efficiency, and connectivity. At the same time, global regulations are becoming increasingly stringent, requiring advanced engine management and electrification systems to reduce emissions, improve fuel economy, and enhance vehicle performance. This transaction will create two strong independent companies, with global reach, industry-leading cost structures, market-relevant product portfolios, and advanced engineering capabilities, that are well positioned to solve their customers’ increasingly complex challenges.
Powertrain Systems will be a global leader with a portfolio of advanced technologies, including engine management, software and electrification solutions that optimize environmental efficiency and vehicle performance.
The remaining business will be a global technology leader with unparalleled strengths in signal and power distribution, centralized computing platforms, advanced safety systems, sensor fusion and systems integration, enabling advancements in autonomous driving, infotainment and user experience, vehicle connectivity and electrification.
Upon separation, Delphi shareholders will have ownership interests in both Delphi and the newly formed company, Delphi Technologies PLC (“Delphi Technologies”). To implement the separation, Delphi will transfer its Powertrain Systems segment to Delphi Technologies, and Delphi will distribute 100% of the outstanding ordinary shares of Delphi Technologies on a pro rata basis to existing shareholders of Delphi, subject to certain conditions. As discussed in this Form 10, we intend for this distribution to be tax-free to our shareholders for U.S. federal income tax purposes. As a result of the separation, each Delphi shareholder will receive          ordinary share(s) of Delphi Technologies for every          ordinary share(s) of Delphi held on                 ,                 , the record date for the distribution, with cash being paid in lieu of fractional shares.
No vote of Delphi shareholders is required for the distribution. You will not be required to pay any consideration or to exchange or surrender your existing ordinary shares of Delphi or take any other action to receive ordinary shares of Delphi Technologies on the distribution date to which you are entitled.
I encourage you to read the attached information statement, which is being provided to all Delphi shareholders who hold ordinary shares on                 ,                 . The information statement describes the separation in detail and contains important business and financial information about Delphi Technologies.
I believe the separation reflects our continued commitment to create value for our customers and shareholders. Thank you for your continuing support of Delphi, and we look forward to earning your support of both companies going forward.
Sincerely,
Kevin P. Clark
President and Chief Executive Officer
Delphi Automotive PLC

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                     ,             
Dear Future Delphi Technologies PLC Shareholder:
I am pleased to welcome you as a future shareholder of Delphi Technologies PLC (“Delphi Technologies”), whose ordinary shares we intend to list on the New York Stock Exchange under the symbol “DLPH.”
Delphi Technologies is a global leader in the development, design and manufacture of integrated powertrain technologies, including powertrain electrification, that satisfy the need for more efficient, clean and powerful vehicles by simultaneously optimizing engine performance, increasing efficiency and reducing emissions. Our comprehensive portfolio includes advanced fuel injection systems, actuators, valvetrain products, sensors, electronic control modules and power electronics. With 20 major manufacturing facilities, 12 major technical centers and approximately 5,000 scientists, engineers and technicians worldwide, we deliver our technologically advanced portfolio of powertrain products for gas, diesel and electric vehicles to every major automotive original equipment manufacturer in the world. We also offer a full spectrum of aftermarket products, including engine control modules, pumps, injectors, fuel modules, ignition coils, smart remote actuators, exhaust gas recirculation valves, brakes, steering, suspension and other products, which provide a stable and recurring revenue base.
As an independent company, we will be able to pursue a focused growth strategy with a portfolio of advanced powertrain technologies, strong engineering capabilities and an efficient global manufacturing footprint. Additionally, our strong Delphi heritage, which focuses on innovation and execution, cost structure optimization and increased business model flexibility, will allow us to continuously improve our growth, margins and cash flow.
I encourage you to learn more about us and our strategic initiatives by reading the attached information statement. Thank you in advance for your support as a future shareholder of Delphi Technologies.
Sincerely,
Liam Butterworth
President and Chief Executive Officer
Delphi Technologies PLC

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Information contained herein is subject to completion or amendment. A registration statement on Form 10 relating to these securities has been filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.
 
SUBJECT TO COMPLETION, DATED OCTOBER 13, 2017
INFORMATION STATEMENT
Ordinary Shares
DELPHI TECHNOLOGIES PLC

This information statement is being furnished in connection with the distribution by Delphi Automotive PLC to its shareholders of the outstanding ordinary shares of Delphi Technologies PLC (“Delphi Technologies” or the “Company”), a wholly-owned subsidiary of Delphi Automotive PLC. Upon completion of the distribution, Delphi Automotive PLC, which we will refer to as “Aptiv” herein, will change its name to Aptiv PLC. Delphi Technologies will hold directly and/or indirectly the assets and liabilities associated with Aptiv’s Powertrain Systems segment, which will be transferred to Delphi Technologies in connection with the distribution. To implement the distribution, Aptiv will distribute 100% of the outstanding ordinary shares of Delphi Technologies on a pro rata basis to existing shareholders of Aptiv.
For every     ordinary share(s) of Aptiv held of record by you as of the close of business on                 ,                 , or the distribution record date, you will receive         of our ordinary share(s). You will receive cash in lieu of any fractional ordinary shares which you would have received after application of the above ratio. We expect our ordinary shares will be distributed by Aptiv to you on or about                 , or the distribution date. As discussed under “Our Separation from Aptiv—Trading Between the Record Date and the Distribution Date,” if you sell your ordinary shares of Aptiv in the “regular-way” market after the record date and before the distribution date, you also will be selling your right to receive ordinary shares of Delphi Technologies in connection with the separation.
No vote of Aptiv’s shareholders is required in connection with the distribution. Therefore, you are not being asked for a proxy, and you are requested not to send us a proxy, in connection with the separation. You will not be required to pay any consideration or to exchange or surrender your existing ordinary shares of Aptiv or take any other action to receive ordinary shares of Delphi Technologies on the distribution date to which you are entitled.
We intend for the distribution to be tax-free to our shareholders (other than with respect to any cash received in lieu of fractional shares) for U.S. federal income tax purposes. To that end, Aptiv expects to receive an opinion of Latham & Watkins LLP, tax counsel to Aptiv, substantially to the effect that, subject to certain qualifications and limitations, for U.S. federal income tax purposes, the distribution will qualify as a distribution under Section 355(a) of the Internal Revenue Code of 1986, as amended (the “Code”). You should consult your own tax advisor as to the particular consequences of the distribution to you, including the applicability of any state, local and non-U.S. tax laws, which may result in the distribution being taxable to you.
There is no current trading market for our ordinary shares, although we expect that a limited market, commonly known as a “when-issued” trading market will develop on or shortly before the record date for the distribution, and we expect “regular-way” trading of our ordinary shares to begin on the first trading day following the completion of the separation. We intend to apply to list our ordinary shares on The New York Stock Exchange (“NYSE”) under the symbol “DLPH,” and Aptiv will change its ticker symbol to “APTV.”
In reviewing the information statement, you should carefully consider the matters described under the caption “ Risk Factors ” beginning on page 18.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.
This document is not a prospectus within the meaning of the Companies (Jersey) Law 1991, as amended. This document is not required to be, and has not been, approved or reviewed by the Jersey Financial Services Commission.
This Information Statement was first mailed to Aptiv shareholders on or about                 ,                 .             ,

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 TABLE OF CONTENTS

MARKET AND INDUSTRY DATA	  	 	i	 	
TRADEMARKS, SERVICE MARKS AND TRADENAMES	  	 	i	 	
SUMMARY	  	 	1	 	
RISK FACTORS	  	 	18	 	
FORWARD-LOOKING STATEMENTS	  	 	41	 	
OUR SEPARATION FROM APTIV	  	 	42	 	
DIVIDEND POLICY	  	 	57	 	
CAPITALIZATION	  	 	58	 	
SELECTED HISTORICAL COMBINED FINANCIAL DATA	  	 	59	 	
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS	  	 	61	 	
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	  	 	68	 	
BUSINESS	  	 	111	 	
MANAGEMENT	  	 	123	 	
COMPENSATION DISCUSSION AND ANALYSIS	  	 	127	 	
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	  	 	152	 	
PRINCIPAL SHAREHOLDERS	  	 	157	 	
DESCRIPTION OF MATERIAL INDEBTEDNESS	  	 	158	 	
DESCRIPTION OF SHARE CAPITAL	  	 	160	 	
WHERE YOU CAN FIND MORE INFORMATION	  	 	163	 	
INDEX TO FINANCIAL STATEMENTS	  	 	F-1	 	
 MARKET AND INDUSTRY DATA
The market data and certain other statistical information used throughout this information statement are based on independent industry publications, government publications or other published independent sources. These sources generally state that the information they provide has been obtained from sources believed to be reliable, but that the accuracy and completeness of the information are not guaranteed. We believe that the surveys and market research others have performed are reliable, but we have not independently verified this information. Some data is also based on our good faith estimates.
 TRADEMARKS, SERVICE MARKS AND TRADENAMES
We own or have rights to use the trademarks and trade names that we use in conjunction with the operation of our business. Solely for convenience, we only use the ™ or ® symbols the first time any trademark or trade name is mentioned. Such references are not intended to indicate in any way that we will not assert, to the fullest extent permitted under applicable law, our rights to our trademarks and trade names. Each trademark or trade name of any other company appearing in this information statement is, to our knowledge, owned by such other company.
 
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 SUMMARY
This summary highlights some of the information in this information statement relating to our Company, our separation from Aptiv and the distribution of our ordinary shares by Aptiv to its shareholders. For a more complete understanding of our business and the separation and distribution, you should read carefully the more detailed information set forth under the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Our Separation from Aptiv” and the other information included in this information statement.

Overview
Delphi Technologies PLC (“Delphi Technologies”, “we” or the “Company”) is a leader in the development, design and manufacture of integrated powertrain technologies that optimize engine performance, increase vehicle efficiency, reduce emissions, improve driving performance, and support increasing electrification of vehicles. We are a global supplier to original equipment manufacturers (“OEMs”) seeking to manufacture vehicles that meet and exceed increasingly stringent global regulatory requirements and satisfy consumer demands for an enhanced user experience. Additionally, we offer a full spectrum of aftermarket products serving a global customer base.
We provide advanced fuel injection systems (“FIS”), actuators, valvetrain products, sensors, electronic control modules and power electronics technologies. We believe our ability to meet regulatory requirements for reduced emissions and increased fuel economy, as well as to provide additional power to support consumer-driven demand for more in-vehicle electronics, will allow us to realize revenue growth in excess of vehicle production growth.
Our comprehensive portfolio of advanced technologies and solutions for propulsion systems are sold to global OEMs of both light vehicles (passenger cars, trucks and vans and sport-utility vehicles) and commercial vehicles (light-duty, medium-duty and heavy-duty trucks, commercial vans, buses and off-highway vehicles). We are a supplier to every major automotive OEM in the world. We operate 20 major manufacturing facilities and 12 major technical centers utilizing a regional service model that enables us to efficiently and effectively serve our global customers from best cost countries. We have a presence in 24 countries with approximately 5,000 scientists, engineers and technicians who focus on innovating and developing market-relevant product solutions.
We also manufacture and sell our technologies to leading aftermarket players, including independent retailers and wholesale distributors. We supply a full suite of aftermarket products including engine control modules, pumps, injectors, fuel modules, ignition coils, smart remote actuators, exhaust gas recirculation valves, brakes, steering, suspension and other products. We also add aftermarket know-how in category management, logistics, training, marketing and other dedicated services to provide a full range of aftermarket solutions throughout vehicles’ lives.
Our business is well diversified across regions, product types, markets and customers. In fiscal 2016, 44% of our revenue was derived from Europe, the Middle East and Africa (“EMEA”), 29% from North America, 24% from Asia Pacific and 3% from South America; further, 63% of our net sales were to light vehicle OEM customers, 16% were to commercial vehicle OEM customers and 21% were to aftermarket customers. No customer accounted for more than 10% of net sales and our top 5 customers accounted for a total of approximately 40% of net sales.
During fiscal 2016 and for the six months ended June 30, 2017, Delphi Technologies generated net sales of $4,486 million and $2,355 million, net income attributable to Delphi Technologies of $236 million and $151 million, and adjusted operating income of $512 million (11.4% margin) and $326 million (13.8% margin), respectively. See “Summary—Summary Historical Combined Financial Data” for our definition of “adjusted

 
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operating income” and a reconciliation of adjusted operating income to net income attributable to Delphi Technologies, which we believe is the most directly comparable financial measure calculated in accordance with GAAP.
Reasons for the Separation
The Aptiv board of directors believes that separating the Delphi Technologies business from the remainder of Aptiv is in the best interests of Aptiv for a number of reasons, including:
 
 	•	 	Strategic Focus —The separation will allow each of Delphi Technologies and Aptiv to focus on their distinct product portfolios and unique opportunities for long-term growth and profitability and to allocate capital and corporate resources in a manner that focuses on achieving each company’s own operating priorities and financial objectives. Specifically, Aptiv will pursue a strategy of developing advanced electronics and electrical architecture technology solutions, with a resource allocation strategy focused on investments in these spaces. Delphi Technologies will pursue a strategy of continuing to develop powertrain technologies for gas and diesel engines, as well as hybrid and electric vehicles, in order to help its customers meet increasingly stringent global regulatory requirements while also enhancing vehicle performance and providing additional power.	
 
 	•	 	Strategic Flexibility —The separation will provide each company with increased flexibility to pursue independent strategic and financial plans and strategic partnerships without having to consider the potential impact on the businesses of the other company. The separation will also provide each company the flexibility to pursue tailored investments in advanced technologies that solve their customers’ most complex challenges.	
 
 	•	 	Capital Allocation —The separation will enable each of Delphi Technologies and Aptiv to create independent capital structures that will afford each company direct access to the debt and equity capital markets to fund organic and inorganic growth opportunities and to establish an appropriate capital structure for their strategy and business needs.	
 
 	•	 	Investor Choice —The separation will allow investors to evaluate the separate investment characteristics of each company, including the merits, performance and future prospects of their respective businesses, and make investment decisions based on their distinct characteristics.	
The anticipated benefits of the separation are based on a number of assumptions, and there can be no assurance that such benefits will materialize to the extent anticipated, or at all. In the event the separation does not result in such benefits, the costs associated with the separation could have a material adverse effect on each company individually and in the aggregate. For more information about the risks associated with the separation, see “Risk Factors—Risks Related to Our Relationship with Aptiv and the Separation.”
Our Competitive Strengths
We believe we distinguish ourselves through the following competitive strengths, which we expect to continue to enhance as a standalone company:
 
 	•	 	Portfolio of Advanced Technologies Aligned to Customer Demands : We have an established product portfolio that includes powertrain technologies for gas and diesel engines, as well as hybrid and electric vehicles, which we sell to our diverse OEM and aftermarket customer base.	
 
 	•	 	Fuel Injection Systems: Our highly engineered gas and diesel FIS portfolio combines injectors, rails, pumps and electronic control modules into an advanced system which improves the efficiency of fuel injection to help light and commercial vehicle manufacturers improve engine performance and meet emissions standards.	
 
 	•	 	Gasoline: Our gasoline portfolio includes a full suite of fuel injection technologies that drive greater efficiency for traditional gasoline combustion engines and hybrid vehicles. Our	

 
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 	Gasoline Direct Injection (“GDi”) technology provides high precision fuel delivery for optimized combustion, which lowers emissions and increases fuel economy. As the industry continues to transition from port fuel injection to GDi, we expect the higher value technology content to drive growth in excess of vehicle production growth. Gasoline engines continue to be the globally dominant light vehicle engine type, and we expect them to remain predominant for the foreseeable future.	
 
 	•	 	Diesel: Our diesel portfolio provides enhanced engine performance at an attractive value, includes common rail FIS and is balanced between commercial and light vehicle applications. We are well positioned in the commercial vehicle market, where diesel is expected to remain the preferred technology. In the light vehicle market, we are focused on engines for larger passenger cars for which the greater fuel economy benefits of diesel technology deliver more value.	
 
 	•	 	Powertrain Products for Gasoline and Diesel Applications: Our portfolio also includes an array of highly engineered products for traditional combustion and hybrid electric vehicles, including variable valve timing, variable valve actuation, smart remote actuators, powertrain sensors, ignition products, canisters, and fuel handling products. These products often complement and enhance the efficiency improvements delivered by FIS and, as a result, drive above market growth.	
 
 	•	 	Electronics & Electrification: Our electronics portfolio consists of gasoline and diesel control modules and power electronics. The control modules are key components in ensuring the integration and operation of powertrain products throughout the vehicle. As the electrification of mechanical components increases, our proprietary power electronics solutions, including supervisory controllers and software, DC/DC converters and inverters provide better efficiency, reduced weight and lower cost for our OEM customers, while also making these and other components easier to integrate. These products are expected to experience increased demand as vehicle electrification accelerates.	
 
 	•	 	Aftermarket: Through our Products & Service Solutions segment, we sell aftermarket products to independent aftermarket customers and sell our products to original equipment service customers. Our aftermarket product portfolio includes engine control modules, pumps, injectors, fuel modules, ignition coils, smart remote actuators, exhaust gas recirculation valves, brakes, steering, suspension, and other products. Our aftermarket business provides a recurring and stable revenue base as many of these products are non-discretionary in nature. The growing number of vehicles on the road, along with the higher average age of vehicles and increasing miles driven collectively represent trends that are expected to lead to growing demand for our aftermarket products.	
 
 	•	 	Leading Innovation Platform : We have a team of approximately 5,000 scientists, engineers and technicians across 12 major technical centers globally. With approximately 2,400 active patents and patent applications, we have a strong track record of developing technologies focused on addressing consumer demands and industry trends, including GDi, powertrain domain controllers, two-step variable valve actuation, engine control algorithms, electronics and software. We also seek to further develop strategic collaborations, such as our investment in Tula Technology, Inc., a developer of dynamic, skip-fire cylinder deactivation software technology that helps to increase fuel efficiency, reduce emissions and improve engine performance. We also leverage our OEM product engineering capabilities across our aftermarket product lines to capture value over the lifetime of a vehicle. Our ability to provide the latest technologies to improve fuel economy, lower emissions and optimize power utilization for traditional and electrified vehicles has enabled us to realize above market revenue growth.	
 
 	•	 	Strong Customer Relationships Across Diverse Markets . Our customer base includes 23 of the largest light vehicle OEMs and the majority of the 10 largest commercial vehicle OEMs in the world. Our top	

 
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 	five customers, Hyundai Motor Company (“Hyundai”), Daimler AG (“Daimler”), General Motors Company (“GM”), PSA Peugeot Citroen (“PSA”) and Volkswagen AG (“VW”), collectively represented 40% of our net sales in fiscal 2016 with our largest customer accounting for only 9%. Our diverse customer base also includes manufacturers of commercial vehicles such as Volvo AB (“Volvo”), Caterpillar Inc. (“Caterpillar”), and PACCAR Inc. (“PACCAR”). Our aftermarket customers include AutoZone Inc. (“AutoZone”), NAPA Auto Parts (“NAPA”), as well as leading wholesale distributors such as Parts Alliance Group (“Parts Alliance”).	
 
 	•	 	Global Manufacturing and Development Capabilities with Regional Focus: We operate 20 major manufacturing facilities and 12 major technical centers and have a presence in 24 countries throughout the world. Our global manufacturing footprint enables us to efficiently manufacture in and supply from primarily best cost countries. Our regional engineering teams also allow us to stay connected to local market requirements and partner with our customers during all phases of the development process, from design through production. By working in collaboration with our customers, we expect to continue to increase market share and grow through technological advancements, such as increased vehicle electrification.	
 
 	•	 	Lean and Flexible Cost Structure: We have made significant investments to reduce our cost-structure by rotating our manufacturing capabilities toward best cost countries in order to further improve our cost position and drive margin expansion. Since 2014, our adjusted operating income margin increased 50 basis points as the benefits of these investments began to take hold. We expect additional operating margin expansion as the cost savings related to rotating our manufacturing facilities toward best cost countries are fully realized. Additionally, we leverage our lean enterprise operating system to reduce product lead times and execute flawless product launches. We believe our enterprise operating system and our strategic manufacturing footprint will allow us to continue expanding operating margins in the future.	
 
 	•	 	Strong and Sustainable Revenue and Earnings Growth and Cash Flow Generation: We expect to continue to leverage our portfolio of advanced technologies and strong customer relationships to generate strong revenue growth. Additionally, our innovative culture and manufacturing expertise in best cost countries provides us with a lean and flexible cost structure, which we believe will generate consistent earnings growth and strong cash flow.	
 
 	•	 	Experienced Leadership Team with Proven Track Record: We have a strong management team with extensive experience both within the industry and with Delphi Technologies. Through the combination of their longstanding customer relationships, proven track record in operations management and deep industry knowledge, the leadership team has positioned us for future revenue growth, margin expansion and strong cash flow.	
Business and Growth Strategies
Our strategy is to continue to accelerate the development of market-relevant technologies that solve our customers’ increasingly complex challenges and leverage our lean and flexible cost structure to deliver strong revenue and margin expansion, earnings and cash flow growth.
We seek to grow our business through the execution of the following strategies, among others:
 
 	•	 	Maintain Leadership in Technologies that Solve Our Customers’ Most Complex Challenges . We are focused on providing technologies and solutions that solve our customers’ biggest challenges. Leveraging the breadth and depth of our engineering capabilities, we have strong positions in fuel injectors, fuel pumps, variable valve timing and variable valve actuation. Additionally, we provide leading technology solutions in the areas of electronics and electrification, including engine control	

 
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 	modules and power electronics, where we see above market growth with increased levels of electrification. Our power electronics technologies include products such as high-voltage inverters, DC-DC converters and on-board chargers that convert electricity to enable hybrid and electric vehicle propulsion systems. Our comprehensive portfolio of powertrain products helps customers meet increasingly stringent global regulatory requirements while also enhancing vehicle performance.	
 
 	•	 	Focused Regional Strategies to Best Serve Our Customers’ Needs . The combination of our global operating capabilities and our portfolio of advanced technologies help us to serve our global customers and meet their local needs. We have a presence in all major global regions and have positioned ourselves to be a leading supplier of advanced powertrain technologies, including electrification, that are tailored to satisfy our customers’ needs in each region. We believe our focus on providing customer solutions to meet increasing global emissions and fuel efficiency regulations will collectively drive greater demand for our products and enable us to experience above-market growth.	
 
 	•	 	Continue to Enhance Aftermarket Position . We have strong customer relationships with the largest global aftermarket players, including independent retailers and wholesale distributors. We supply a full suite of aftermarket products including engine control modules, pumps, injectors, fuel modules, ignition coils, smart remote actuators, exhaust gas recirculation valves, brakes, steering, suspension and other products. We also add aftermarket know-how in category management, logistics, training, marketing and other dedicated services to provide a full range of aftermarket solutions throughout vehicles’ lives. Globally, we plan to gain scale by focusing on higher value, faster growing product lines such as electronics, and services, which include diagnostics and remanufacturing. We will also look to increase growth by leveraging our regional product program strengths to expand our portfolio across regions. In addition, we expect to benefit from aftermarket growth in key markets around the world, including China.	
 
 	•	 	Leverage Our Lean and Flexible Cost Structure to Deliver Strong Earnings and Cash Flow Growth. We recognize the importance of maintaining a lean and flexible business model in order to deliver earnings and cash flow growth. We intend to improve our cost competitiveness by leveraging our enterprise operating system, continuously increasing operational efficiency, maximizing manufacturing output and rotating our facilities to best cost countries. We have ongoing processes and resources dedicated to further improvement of our operations and we expect to use our cash flow to reinvest in our business to drive growth.	

 
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Our Industry
The automotive and commercial vehicle parts industry provides components, systems, subsystems and modules to OEMs for the manufacture of new vehicles, as well as to the aftermarket for use as replacement parts. Overall, we expect long-term growth of global vehicle production in the OEM market. In 2016, global vehicle production (including light and commercial vehicles) increased 5% versus the previous year, including increases of 2% in North America, 3% in Europe and 14% in China. In South America, as a result of persisting economic weakness, there was a 14% decline.

Demand for automotive components in the OEM market is generally a function of the number of new vehicles produced in response to consumer demand, which is primarily driven by macro-economic factors such as credit availability, interest rates, fuel prices, consumer confidence, employment and other trends. In the commercial vehicle market, OEM demand for components is also tied to vehicle production and is driven by industrial production, the amount of freight tonnage being transported, the availability of credit and interest rates, among other factors. Although OEM demand is tied to actual vehicle production, participants in the automotive and commercial vehicle parts industry also have the opportunity to grow faster by further penetrating business with existing customers and in existing markets, gaining new customers and increasing presence in global markets. Above market growth can be achieved through product alignment to favorable macro trends such as regulation and electrification. The number of vehicles utilizing electrification to meet increasingly stringent regulatory standards is expected to grow to approximately 25% of global vehicle production by 2025 as compared to just four percent today. We believe that as a global supplier with advanced technology, engineering, manufacturing and customer support capabilities, we are well-positioned to benefit from these opportunities.
Heightened Regulatory Environment
OEMs continue to focus on improving fuel efficiency and reducing emissions in order to meet increasingly stringent regulatory requirements in various markets. On a worldwide basis, the relevant authorities in the European Union, the United States (the “U.S.”), China, India, Japan, Brazil, South Korea and Argentina have already instituted regulations requiring further reductions in emissions and/or increased fuel economy. In many cases, other authorities have initiated legislation or regulation that would further tighten the standards through 2020 and beyond. Based on the current regulatory environment, we believe that OEMs, including those in the U.S. and China, will be subject to requirements for greater reductions in carbon dioxide (“CO2”) emissions over the next ten years. These standards will require meaningful innovation as OEMs and suppliers are forced to find ways to improve engine management, electrical power consumption, vehicle weight and integration of alternative powertrains (e.g., electric/hybrid propulsion). As a result, suppliers such as Delphi Technologies are continuing to develop innovations that result in improvements in fuel economy, emissions and performance from gasoline and diesel internal combustion engines, and permit engine downsizing without loss of performance.

 
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Standardization of Sourcing by OEMs
Many OEMs are continuing to adopt global vehicle platforms to increase standardization, reduce per unit cost and increase capital efficiency and profitability. As a result, OEMs are selecting suppliers that have the capability to manufacture products on a worldwide basis as well as the flexibility to adapt to regional variations. Suppliers with global scale and strong design, engineering and manufacturing capabilities are best positioned to benefit from this trend. OEMs are also increasingly looking to their suppliers to simplify vehicle design and assembly processes to reduce costs. As a result, suppliers that sell vehicle components directly to manufacturers have assumed many of the design, engineering, research and development and assembly functions traditionally performed by vehicle manufacturers. Suppliers that can provide fully-engineered solutions, systems and pre-assembled combinations of component parts, such as Delphi Technologies, are positioned to leverage the trend toward system sourcing.
Shorter Product Development Cycles To Benefit Strong Suppliers
As a result of government regulations and customer preferences, development cycles are becoming shorter and OEMs are requiring suppliers to respond faster with new designs and product innovations. While these trends are more prevalent in mature markets, emerging markets are advancing rapidly towards the regulatory standards and consumer preferences of more mature markets. Suppliers with strong technologies, global engineering and development capabilities, such as Delphi Technologies, will be best positioned to meet OEM demands for rapid innovation.
Increasing Vehicle Complexity
Vehicles are increasingly complex in their design, features, level of integration of mechanical and electrical components and increasing levels of software and coding necessary to their functionality. This has resulted in growing consumer demand for additional power, given the increasing level of electronic components and systems in vehicles. We believe electronics integration, which generally refers to products and systems that combine integrated circuits, software algorithms, sensor technologies and mechanical components within the vehicle will allow OEMs to achieve substantial reductions in weight and mechanical complexity, resulting in enhanced fuel economy, improved emissions control and better vehicle performance. We believe we are well-positioned to benefit from the accelerating industry demand for electronics integration and vehicle electrification, as we believe our proprietary power electronics solutions allow our OEM customers to improve efficiency, reduce weight and lower costs.
Our Structure and Restructuring Transactions
Delphi Technologies was organized under the laws of Jersey for the purpose of holding Aptiv’s Powertrain Systems segment (including the subsidiary entities, employees, operations, assets and liabilities associated with the Powertrain Systems segment) in connection with the separation and distribution described herein. Prior to the transfer of this business to Delphi Technologies, which will occur in connection with the distribution, Delphi Technologies will have no operations other than those incidental to its formation and in preparation for the separation. In connection with the separation and distribution described herein, Delphi Technologies and Aptiv will undertake a series of internal reorganization transactions to facilitate the transfers of entities and the related assets and liabilities described above from Aptiv to Delphi Technologies.
Our Principal Office
Our principal executive offices are located at Courteney Road, Hoath Way, Gillingham, Kent ME8 0RU, United Kingdom, and our telephone number is 011-44-163-423-4422. We maintain a website at www.                .com. The information contained on our website or that can be accessed through our website neither constitutes part of this prospectus nor is incorporated by reference herein.

 
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Questions and Answers about Us and the Separation

Why is the separation structured as a distribution?	  	Aptiv believes that a distribution of our ordinary shares is an efficient way to separate our assets and that the separation will create benefits and value for us and Aptiv.	
		
Why am I receiving this document?	  	Aptiv is delivering this document to you because you were a holder of ordinary shares of Aptiv on the record date of             ,         and are entitled to receive         ordinary share(s) of Delphi Technologies for every         ordinary share(s) of Aptiv that you held as of the close of business on the record date. The number of ordinary shares of Aptiv you own will not change as a result of the distribution. This document will help you understand how the separation and distribution will affect your investment in Aptiv and your investment in Delphi Technologies following the separation.	
		
How will the separation work?	  	At the time of the separation, Delphi Technologies will hold Aptiv’s Powertrain Systems segment (including the subsidiary entities, employees, operations, assets and liabilities associated with the Powertrain Systems segment). Aptiv will distribute all of the ordinary shares of Delphi Technologies to the holders of Aptiv’s ordinary shares. Following the separation, we will be an independent public company and intend to list our shares on the NYSE under the symbol “DLPH,” and Aptiv will change its ticker symbol to “APTV.”	
		
When will the distribution occur?	  	We expect that Aptiv will distribute our ordinary shares on             ,         to holders of record of ordinary shares of Aptiv at the close of business on the record date, subject to certain conditions described under “Our Separation from Aptiv—Conditions to the Distribution.”	
		
What do shareholders of Aptiv need to do to participate in the distribution?	  	Nothing, but we urge you to read this entire information statement carefully. Holders of ordinary shares of Aptiv as of the distribution record date will not be required to take any action to receive Delphi Technologies ordinary shares on the distribution date. No shareholder approval of the distribution is required or sought. We are not asking you for a proxy, and you are requested not to send us a proxy. You will not be required to make any payment or to surrender or exchange your ordinary shares of Aptiv or take any other action to receive your ordinary shares of Delphi Technologies on the distribution date.	
		
Can Aptiv decide to cancel the distribution of our ordinary shares even if all the conditions have been met?	  	Yes. The distribution is subject to the satisfaction or waiver of certain conditions. See “Our Separation from Aptiv—Conditions to the Distribution.” Even if all conditions to the distribution are satisfied, Aptiv may terminate and abandon the distribution at any time prior to the effectiveness of the distribution.	
		
What will be the relationships between Aptiv and Delphi Technologies following the separation?	  	Following the distribution, we and Aptiv will be separate companies. We will enter into a Separation and Distribution Agreement to effect the separation and distribution. The Separation and Distribution Agreement, a Transition Services Agreement, a Tax Matters Agreement and an Employee Matters Agreement will provide a framework for our relationships with Aptiv after the separation and	

 
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	  	distribution. The Separation and Distribution Agreement will govern certain aspects of the relationships between Aptiv and Delphi Technologies subsequent to the completion of the separation and provide for the allocation between Aptiv and Delphi Technologies of assets, liabilities and obligations attributable to periods prior to the separation. We cannot assure you that this agreement is on terms as favorable to us as agreements with independent third parties. See “Certain Relationships and Related Transactions—Agreements with Aptiv.”	
		
Will I receive physical certificates representing ordinary shares of Delphi Technologies following the separation?	  	No. Following the separation, neither Aptiv nor we will be issuing physical certificates representing our ordinary shares. If you own ordinary shares of Aptiv as of the close of business on the record date, Aptiv, with the assistance of Computershare Trust Company N.A. (“Computershare”), the distribution agent, will electronically distribute ordinary shares of Delphi Technologies to your bank or brokerage firm on your behalf or through the systems of the Depository Trust Company (“DTC”) (if you hold the shares through a bank or brokerage firm that uses DTC) or to you in book-entry form. Your bank or brokerage firm will credit your account for the Delphi Technologies ordinary shares or Computershare will mail you a book-entry account statement that reflects your ordinary shares of Delphi Technologies.	
		
Will I receive a fractional number of ordinary shares of Delphi Technologies?	  	No, fractional ordinary shares will not be issued in the distribution. Fractional shares that Aptiv shareholders would otherwise have been entitled to receive will be aggregated and sold in the public market by the distribution agent. The aggregate net cash proceeds of these sales will be distributed ratably to those shareholders who would otherwise have been entitled to receive fractional shares.	
		
What if I want to sell my Aptiv ordinary shares or my Delphi Technologies ordinary shares?	  	You should consult with your financial advisors, such as your broker, bank, other nominee or tax advisor.	
		
	  	If you decide to sell any ordinary shares of Aptiv before the distribution date, you should make sure your broker, bank or other nominee understands whether you want to sell your ordinary shares of Aptiv with or without your entitlement to Delphi Technologies ordinary shares pursuant to the distribution.	
		
What is “regular-way” and “ex-distribution” trading?	  	Beginning on or shortly before the record date and continuing up to and through the distribution date, it is expected that there will be two markets in ordinary shares of Aptiv: a “regular-way” market and an “ex-distribution” market. Ordinary shares of Aptiv that trade in the “regular-way” market will trade with an entitlement to ordinary shares of Delphi Technologies distributed pursuant to the distribution. Shares that trade in the “ex-distribution” market will trade without an entitlement to ordinary shares of Delphi Technologies distributed pursuant to the distribution. Aptiv cannot predict the trading prices of its ordinary shares before, on or after the distribution date.	

 
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Where will I be able to trade ordinary shares of Delphi Technologies?	  	We intend to apply to list our ordinary shares on the NYSE under the symbol “DLPH.” We anticipate that trading in our ordinary shares will begin on a “when-issued” basis on or shortly before the record date and will continue up to and through the distribution date and that “regular-way” trading in our ordinary shares will begin on the first trading day following the completion of the separation. If trading begins on a “when-issued” basis, you may purchase or sell our ordinary shares up to and through the distribution date, but your transaction will not settle until after the distribution date. We cannot predict the trading prices of our ordinary shares before, on or after the distribution date.	
		
What will happen to the listing of Aptiv’s ordinary shares?	  	Ordinary shares of Aptiv will continue to trade on the NYSE after the distribution under the ticker symbol “APTV.”	
		
Will the number of Aptiv ordinary shares I own change as a result of the distribution?	  	No. The number of ordinary shares of Aptiv you own will not change as a result of the distribution.	
		
Will the distribution affect the market price of my Aptiv ordinary shares?	  	Yes. As a result of the distribution, Aptiv expects the trading price of Aptiv ordinary shares immediately following the distribution to be lower than the “regular-way” trading price of such shares immediately prior to the distribution because the trading price will no longer reflect the value of the business held by Delphi Technologies. There can be no assurance that the aggregate market value of the Aptiv ordinary shares and the Delphi Technologies ordinary shares following the separation will be higher or lower than the market value of Aptiv ordinary shares if the separation and distribution did not occur. This means, for example, that the combined trading prices of         ordinary share(s) of Aptiv and             ordinary share(s) of Delphi Technologies may be equal to, greater than or less than the trading price of             ordinary share(s) of Aptiv before the distribution.	
		
What are the material U.S. federal income tax consequences of the distribution?	  	In connection with the distribution, Aptiv expects to receive an opinion of Latham & Watkins LLP, tax counsel to Aptiv, substantially to the effect that, subject to certain qualifications and limitations, for U.S. federal income tax purposes, the distribution will qualify as a distribution under Section 355(a) of the Code. Accordingly, for U.S. federal income tax purposes, you generally will not recognize any gain or loss as a result of the distribution, except for any gain or loss attributable to the receipt of cash in lieu of fractional shares of Delphi Technologies ordinary shares. The material U.S. federal income tax consequences of the distribution are described in more detail under “Our Separation from Aptiv—Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares—Material U.S. Federal Income Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares.” Information regarding tax matters in this information statement does not constitute tax advice. Each Aptiv shareholder is encouraged to consult its own tax advisor as to the specific tax consequences of the distribution to such shareholder, including the effect of any state, local or non-U.S. tax laws and of changes in applicable tax laws.	

 
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How will I determine my tax basis for U.S. federal income tax purposes in the Aptiv ordinary shares I continue to hold and the Delphi Technologies ordinary shares I receive in the distribution?	  	For U.S. federal income tax purposes, assuming that the distribution is tax-free to Aptiv’s shareholders, the tax basis in Aptiv’s ordinary shares that you hold immediately prior to the distribution will be allocated between such Aptiv ordinary shares and Delphi Technologies ordinary shares received in the distribution in proportion to the relative fair market values of each immediately following the distribution. See the section entitled “Our Separation from Aptiv—Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares—Material U.S. Federal Income Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares” for a more detailed description of the effects of the distribution on Aptiv’s shareholders’ tax basis in Aptiv ordinary shares and Delphi Technologies ordinary shares.
 
We encourage you to consult your tax advisor about how this allocation will work in your situation (including a situation where you have purchased Aptiv ordinary shares at different times or for different amounts) and regarding any particular consequences of the distribution to you, including the application of state, local and non-U.S. tax laws.	
		
What are the material U.K. tax consequences of the distribution?	  	Although Aptiv is not conditioning the distribution on any particular tax treatment under U.K. law and is not proffering any specific advice to its shareholders in this regard, Aptiv believes that the distribution should qualify as an exempt distribution under Section 1075 CTA 2010 and there should be no Chargeable Payments, as defined under Section 1088 CTA 2010. On this basis, any U.K. tax resident individual shareholders should generally not recognize any gain or loss as a result of the distribution, except for any gain or loss attributable to the receipt of cash in lieu of fractional shares of Delphi Technologies ordinary shares (although certain reliefs may apply, depending on the shareholder’s specific circumstances, to prevent the immediate taxation of such amounts if they are considered capital in nature for U.K. tax purposes). Further, it is anticipated that distribution should not give rise to any taxable gain for U.K. corporation tax purposes or any stamp taxes liabilities. The material U.K. tax consequences of the distribution are described in more detail under “Our Separation from Aptiv—Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares—Material U.K. Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares.” Each Aptiv shareholder is encouraged to consult its own tax advisor as to the specific tax consequences of the distribution to such shareholder, including the effect of any U.K. tax laws and of changes in applicable tax laws.	
		
What are the material Jersey tax consequences of the distribution?	  	Although Aptiv is not conditioning the distribution on any particular tax treatment under Jersey law and is not proffering any specific advice to its shareholders in this regard, Aptiv does not believe that a	

 
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	  	Jersey tax liability should arise on the distribution to shareholders that are not resident for tax purposes in Jersey. Jersey tax resident shareholders may be subject to income tax on the distribution, subject to their specific circumstances and to the extent that the distribution is not considered to be a capital distribution for Jersey tax purposes. The material Jersey tax consequences of the distribution are described in more detail under “Our Separation from Aptiv—Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares—Material Jersey Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares.” Each Aptiv shareholder is encouraged to consult its own tax advisor as to the specific tax consequences of the distribution to such shareholder, including the effect of any Jersey tax laws and of changes in applicable tax laws.	
		
Are there risks to owning ordinary shares of Delphi Technologies?	  	Yes. Our business is subject to various risks including risks relating to the separation. These risks are described in the “Risk Factors” section of this information statement beginning on page 17. We encourage you to read that section carefully.	
		
Does Delphi Technologies intend to pay dividends?	  	We have not yet determined the extent to which we will pay dividends on our ordinary shares. The payment of any dividends in the future, and the timing and amount thereof, to our shareholders will fall within the sole discretion of our board of directors and will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our debt, industry practice, legal requirements and other factors that our board of directors deems relevant. See “Dividend Policy.”	
		
Will Delphi Technologies have any debt?	  	We anticipate having approximately $1.55 billion in principal amount of indebtedness upon completion of the separation, primarily consisting of a $750 million term loan and $800 million of senior notes. See “Description of Material Indebtedness” and “Risk Factors—Risks Related to Our Relationship with Aptiv and the Separation.”	
		
Where can Aptiv shareholders get more information?	  	Before the separation, if you have any questions relating to the separation, you should contact:
 
Delphi Investor Relations Services
Delphi Automotive PLC
5725 Delphi Drive
Troy, MI 48098
Phone: 248-813-2494
Email: Investor.relations@delphi.com
 
After the separation, if you have any questions relating to our ordinary shares, you should contact:	

 
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The Separation and Distribution
 
Distributing company	Delphi Automotive PLC	
 
Distributed company	Delphi Technologies PLC	
 
 	We are a Jersey corporation and, prior to the separation, a wholly-owned subsidiary of Aptiv. After the separation, we will be an independent publicly traded company.	
 
Distribution ratio	Each holder of Aptiv ordinary shares will receive         of our ordinary shares for every          ordinary share(s) of Aptiv held as of the close of business on                 . If you would be entitled to a fractional number of our ordinary shares, you will instead receive a cash payment in lieu of the fractional ordinary shares. See “Our Separation from Aptiv—General Treatment of Fractional Ordinary Shares.”	
 
Distributed securities	Aptiv will distribute 100% of the ordinary shares of Delphi Technologies outstanding immediately before the distribution. Based on the approximately         ordinary shares of Aptiv outstanding as of             ,             , assuming distribution of 100% of our ordinary shares and applying the distribution ratio, we expect that approximately          ordinary shares of Delphi Technologies will be distributed to Aptiv shareholders.	
 
Record date	The record date is the close of business on             ,             .	
 
Distribution date	The distribution date is on or about             ,             .	
 
Distribution	On the distribution date, Aptiv, with the assistance of Computershare, the distribution agent, will electronically distribute ordinary shares to your bank or brokerage firm on your behalf or through the systems of the DTC (if you hold the shares through a bank or brokerage firm that uses DTC) or to you in book-entry form. You will not be required to make any payment or surrender or exchange your ordinary shares of Aptiv or take any other action to receive your ordinary shares of Delphi Technologies on the distribution date. Your bank or brokerage firm will credit your account for the Delphi Technologies ordinary shares or the distribution agent will mail you a book-entry account statement that reflects your ordinary shares of Delphi Technologies.	
 
Conditions to the distribution	The distribution of our ordinary shares by Aptiv is subject to the satisfaction of the following conditions:	
 
 	•	 	the SEC shall have declared effective our registration statement on Form 10, of which this information statement is a part, under the Exchange Act, and no stop order relating to the registration statement shall be in effect, and this information statement shall have been mailed to Aptiv’s shareholders;	
 
 	•	 	Delphi Technologies’ ordinary shares will have been accepted for listing on the NYSE, subject to official notice of issuance;	
 
 	•	 	any required actions and filings with regard to state securities and blue sky laws of the U.S. (and any comparable laws under any foreign jurisdictions) will have been taken and, where applicable, will have become effective or been accepted;	

 
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 	•	 	Delphi Technologies and its affiliates shall have completed a cash transfer in the amount of $         to Aptiv;	
 
 	•	 	the ancillary agreements relating to the spin-off have been duly executed and delivered by the parties;	
 
 	•	 	all material governmental approvals necessary to consummate the distribution and to permit the operation of the Delphi Technologies business after the spin-off substantially as it is conducted prior to the spin-off have been received and continue to be in full force and effect;	
 
 	•	 	no order, injunction, decree or regulation issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the completion of the spin-off is in effect, and no other event outside the control of Aptiv has occurred or failed to occur that prevents the completion of the spin-off; and	
 
 	•	 	no other event or development shall exist or have occurred that, in the judgment of the Aptiv board of directors, in its sole and absolute discretion, makes it inadvisable to effect the separation and distribution.	
 
 	Aptiv and Delphi Technologies cannot assure you that any or all of these conditions will be met and may also waive any of the conditions to the distribution. In addition, Aptiv and Delphi Technologies can decline at any time to go forward with the separation.	
 
Stock exchange listing	We intend to apply to list our ordinary shares on the NYSE under the symbol “DLPH.”	
 
Distribution agent	Computershare Trust Company, N.A.	
 
Tax considerations	In connection with the distribution, Aptiv expects to receive an opinion of Latham & Watkins LLP, tax counsel to Aptiv, substantially to the effect that, subject to certain qualifications and limitations, for U.S. federal income tax purposes, the distribution will qualify as a distribution under Section 355(a) of the Code. Accordingly, for U.S. federal income tax purposes, you generally will not recognize any gain or loss as a result of the distribution, except for any gain or loss attributable to the receipt of cash in lieu of fractional shares of Delphi Technologies ordinary shares.	
 
 	For a more detailed discussion, see the sections entitled “Our Separation From Aptiv—Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares—Material U.S. Federal Income Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares,” “—Material U.K. Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares,” and “—Material Jersey Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares.”	

 
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Relationship between Aptiv and Delphi Technologies following the separation and distribution	We will enter into a Separation and Distribution Agreement to effect the separation and distribution, a Transition Services Agreement, a Tax Matters Agreement, an Employee Matters Agreement and certain other agreements that will govern the relationship between Delphi Technologies and Aptiv subsequent to the completion of the separation and distribution and provide for the allocation between Delphi Technologies and Aptiv of Aptiv’s assets, liabilities and obligations attributable to periods prior to the separation from Aptiv. See “Certain Relationships and Related Transactions—Agreements with Aptiv.”	

 
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Summary Historical Combined Financial Data
The following summary historical financial data reflect the combined operations of Delphi Technologies as of and for each of the years in the five-year period ended December 31, 2016 and as of June 30, 2017 and for the six months ended June 30, 2017 and 2016. The summary historical financial data as of December 31, 2016 and 2015 and for each of the fiscal years in the three-year period ended December 31, 2016 are derived from our combined financial statements included elsewhere in this information statement. The summary historical financial data as of June 30, 2017 and for the six months ended June 30, 2017 and 2016 are derived from our combined unaudited interim financial statements that are included elsewhere in this information statement. The summary historical financial data as of December 31, 2014 and as of and for the years ended December 31, 2013 and 2012 are derived from our unaudited combined financial statements that are not included in this information statement. The unaudited combined financial statements have been prepared on the same basis as the audited combined financial statements and, in the opinion of our management, include all adjustments, consisting of only ordinary recurring adjustments, necessary for a fair presentation of the data set forth in this information statement.
The historical results do not necessarily indicate the results expected for any future period. To ensure a full understanding, you should read the summary combined financial data presented below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the combined financial statements and accompanying notes included in the “Index to Financial Statements” section of this information statement.

 	 	As of and for the
Six Months Ended	 	 	As of and for the Year Ended December 31,	 	
 	 	June 30,
2017	 	 	June 30,
2016	 	 	2016	 	 	2015	 	 	2014	 	 	2013	 	 	2012	 	
 	 	(unaudited)	 	 	(unaudited)	 	 	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
 	 	(in millions)	 	
Selected statement of operations data:	 				 				 				 				 				 				 				
Net sales	 	$	2,355	 	 	$	2,263	 	 	$	4,486	 	 	$	4,407	 	 	$	4,540	 	 	$	4,398	 	 	$	4,655	 	
Operating income	 	 	227	 	 	 	107	 	 	 	320	 	 	 	403	 	 	 	442	 	 	 	378	 	 	 	491	 	
Net income attributable to Delphi Technologies	 	 	151	 	 	 	81	 	 	 	236	 	 	 	272	 	 	 	306	 	 	 	247	 	 	 	356	 	
Selected balance sheet data:	 	 	 	 	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	 	 	 	 	 	
Total assets	 	$	3,092	 	 				 	$	2,899	 	 	$	3,001	 	 	$	3,141	 	 	$	3,205	 	 	$	3,074	 	
Long-term debt	 	 	6	 	 				 	 	6	 	 	 	9	 	 	 	14	 	 	 	6	 	 	 	6	 	
Selected other financial data:	 				 				 				 				 				 				 				
Adjusted operating income (1)	 	$	326	 	 	$	261	 	 	$	512	 	 	$	526	 	 	$	494	 	 	$	432	 	 	$	514	 	
Adjusted operating income margin (2)	 	 	13.8	% 	 	 	11.5	% 	 	 	11.4	% 	 	 	11.9	% 	 	 	10.9	% 	 	 	9.8	% 	 	 	11.0	% 	
 
(1)	Adjusted Operating Income represents net income before interest expense, other income (expense), net, income tax expense, equity income (loss), net of tax, income (loss) from discontinued operations, net of tax, restructuring, separation costs, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures), asset impairments and gains (losses) on business divestitures. Adjusted Operating Income is presented as a supplemental measure of the Company’s financial performance which management believes is useful to investors in assessing the Company’s ongoing financial performance that, when reconciled to the corresponding U.S. GAAP measure, provides improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company’s core operating performance and which may obscure underlying business results	

 
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 	and trends. Our management utilizes Adjusted Operating Income in its financial decision making process, to evaluate performance of the Company and for internal reporting, planning and forecasting purposes. Management also utilizes Adjusted Operating Income as the key performance measure of segment income or loss and for planning and forecasting purposes to allocate resources to our segments, as management also believes this measure is most reflective of the operational profitability or loss of our operating segments. Adjusted Operating Income should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered an alternative to net income attributable to Delphi Technologies, which is the most directly comparable financial measure to Adjusted Operating Income that is in accordance with U.S. GAAP. Adjusted Operating Income, as determined and measured by Delphi Technologies, should also not be compared to similarly titled measures reported by other companies.	
The reconciliation of Adjusted Operating Income to Operating Income includes, as applicable, restructuring, separation costs related to the planned spin-off, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures), asset impairments and gains (losses) on business divestitures. The reconciliation of Net income attributable to the Company to Adjusted Operating Income is as follows:

 	  	Six Months Ended	 	 	Year Ended December 31,	 	
 	  	June 30,
2017	 	  	June 30,
2016	 	 	2016	 	  	2015	 	  	2014	 	 	2013	 	 	2012	 	
 	  	(unaudited)	 	  	(unaudited)	 	 	 	 	  	 	 	  	 	 	 	(unaudited)	 	 	(unaudited)	 	
 	  	(in millions)	 	
Net income attributable to Delphi Technologies	  	$	151	 	  	$	81	 	 	$	236	 	  	$	272	 	  	$	306	 	 	$	247	 	 	$	356	 	
Net income attributable to noncontrolling interest	  	 	16	 	  	 	15	 	 	 	32	 	  	 	34	 	  	 	36	 	 	 	31	 	 	 	31	 	
Equity loss, net of tax	  	 	—  	 	  	 	—  	 	 	 	—  	 	  	 	—  	 	  	 	1	 	 	 	—  	 	 	 	3	 	
Income tax expense	  	 	53	 	  	 	13	 	 	 	50	 	  	 	92	 	  	 	97	 	 	 	96	 	 	 	94	 	
Other expense (income), net	  	 	6	 	  	 	(3	) 	 	 	1	 	  	 	2	 	  	 	(2	) 	 	 	(1	) 	 	 	—  	 	
Interest expense	  	 	1	 	  	 	1	 	 	 	1	 	  	 	3	 	  	 	4	 	 	 	5	 	 	 	7	 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Operating income	  	$	227	 	  	$	107	 	 	$	320	 	  	$	403	 	  	$	442	 	 	$	378	 	 	$	491	 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Restructuring	  	 	76	 	  	 	130	 	 	 	161	 	  	 	112	 	  	 	52	 	 	 	54	 	 	 	23	 	
Separation Costs	  	 	15	 	  	 	—  	 	 	 	—  	 	  	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	
Other acquisition and portfolio project costs	  	 	—  	 	  	 	2	 	 	 	2	 	  	 	2	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	
Asset impairments	  	 	8	 	  	 	22	 	 	 	29	 	  	 	9	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Adjusted operating income	  	$	326	 	  	$	261	 	 	$	512	 	  	$	526	 	  	$	494	 	 	$	432	 	 	$	514	 	

(2)	Adjusted operating income margin is defined as adjusted operating income as a percentage of Net sales.	

 
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 RISK FACTORS
You should carefully consider the risks and uncertainties described below, together with the information included elsewhere in this information statement. The risks and uncertainties described below are those that we have identified as material, but are not the only risks and uncertainties facing us. Our business is also subject to general risks and uncertainties that affect many other companies, such as market conditions, geopolitical events, changes in laws or accounting rules, fluctuations in interest rates, terrorism, wars or conflicts, major health concerns, natural disasters or other disruptions of expected economic or business conditions. Additional risks and uncertainties not currently known to us or that we currently believe are immaterial also may impair our business, including our results of operations, liquidity and financial condition.
Risks Related to Delphi Technologies’ Business
The cyclical nature of automotive sales and production can adversely affect our business.
Our business is directly related to automotive sales and automotive vehicle production by our customers. Automotive sales and production are highly cyclical and, in addition to general economic conditions, also depend on other factors, such as consumer confidence and consumer preferences. Lower global automotive sales would be expected to result in substantially all of our automotive original equipment manufacturer (“OEM”) customers lowering vehicle production schedules, which would have a direct impact on our earnings and cash flows. In addition, automotive sales and production can be affected by labor relations issues, regulatory requirements, trade agreements, the availability of consumer financing and other factors. Economic declines that result in a significant reduction in automotive sales and production by our customers have in the past had, and may in the future have, an adverse effect on our business, results of operations and financial condition.
Our sales are also affected by inventory levels and OEMs’ production levels. We cannot predict when OEMs will decide to increase or decrease inventory levels or whether new inventory levels will approximate historical inventory levels. Uncertainty and other unexpected fluctuations could have a material adverse effect on our business and financial condition.
In addition to these factors, the sales of our aftermarket operations are also directly related to the level of vehicle aftermarket parts replacement activity, which may be affected by additional factors such as the average useful life of OEM parts and components, severity of regional weather conditions, highway and roadway infrastructure deterioration and the average number of miles vehicles are driven by owners. Improvements in technology and product quality are extending the longevity of vehicle component parts, which may result in delayed or reduced aftermarket sales. Our results of operations and financial condition could be adversely affected if we fail to respond in a timely and appropriate manner to changes in the demand for our aftermarket products.
A prolonged economic downturn or economic uncertainty could adversely affect our business and cause us to require additional sources of financing, which may not be available.
Our sensitivity to economic cycles and any related fluctuation in the businesses of our customers or potential customers may have a material adverse effect on our financial condition, results of operations or cash flows. Due to overall strong global economic conditions in 2016, the automotive industry experienced increased global customer sales and production schedules. Compared to 2015, vehicle production in 2016 increased by 2% in North America, 3% in Europe and 14% in China. However, economic uncertainties have continued to persist in South America, resulting in a decline of 14% in South American vehicle production in 2016. As a result, we have experienced and may continue to experience reductions in orders from OEM customers in certain regions. Uncertainty relating to global or regional economic conditions may have an adverse impact on our business. A prolonged downturn in the global or regional automotive industry, or a significant change in product mix due to consumer demand, could require us to shut down plants or result in impairment charges, restructuring actions or
 
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changes in our valuation allowances against deferred tax assets, which could be material to our financial condition and results of operations. If global economic conditions deteriorate or economic uncertainty increases, our customers and potential customers may experience deterioration of their businesses, which may result in the delay or cancellation of plans to purchase our products. If vehicle production were to remain at low levels for an extended period of time or if cash losses for customer defaults rise, our cash flow could be adversely impacted, which could result in our needing to seek additional financing to continue our operations. There can be no assurance that we would be able to secure such financing on terms acceptable to us, or at all.
Any changes in consumer credit availability or cost of borrowing could adversely affect our business.
Declines in the availability of consumer credit and increases in consumer borrowing costs have negatively impacted global automotive sales and resulted in lower production volumes in the past. Substantial declines in automotive sales and production by our customers could have a material adverse effect on our business, results of operations and financial condition.
A drop in the market share and changes in product mix offered by our customers can impact our revenues.
We are dependent on the continued growth, viability and financial stability of our customers. Our customers generally are OEMs in the automotive industry. This industry is subject to rapid technological change, vigorous competition, short product life cycles and cyclical and reduced consumer demand patterns. When our customers are adversely affected by these factors, we may be similarly affected to the extent that our customers reduce the volume of orders for our products. As a result of changes impacting our customers, sales mix can shift which may have either favorable or unfavorable impact on revenue and would include shifts in regional growth, shifts in OEM sales demand, as well as shifts in consumer demand related to vehicle segment purchases and content penetration. For instance, a shift in sales demand favoring a particular OEMs’ vehicle model for which we do not have a supply contract may negatively impact our revenue. A shift in regional sales demand toward certain markets could favorably impact the sales of those of our customers that have a large market share in those regions, which in turn would be expected to have a favorable impact on our revenue.
The mix of vehicle offerings by our OEM customers also impacts our sales. A decrease in consumer demand for specific types of vehicles where we have traditionally provided significant components could have a significant effect on our business and financial condition. For example, a decrease in market demand for light-duty diesel-powered vehicles, or a decrease in OEM customer offerings in this vehicle segment, could adversely impact our ability to maintain or increase our revenues. In addition, our sales of products in the regions in which our customers operate also depend on the success of these customers in those regions.
The improved quality of vehicle components may adversely affect the demand for our aftermarket products.
The average useful lives of automotive parts, both OEM and aftermarket, have increased due to innovations in product technology and improved manufacturing processes. Longer product lives and improved durability may result in vehicle owners replacing components on their vehicles less frequently. If the demand for our aftermarket products is diminished as a result of this trends, our results of operations and financial condition may be adversely affected.
Declines in the market share or business of our five largest customers may have a disproportionate adverse impact on our revenues and profitability.
Our five largest customers accounted for approximately 40% of our total net sales in the year ended December 31, 2016 and the six months ended June 30, 2017. Accordingly, our revenues may be disproportionately affected by decreases in any of their businesses or market share. Because our customers
 
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typically have no obligation to purchase a specific quantity of parts, a decline in the production levels of any of our major customers, particularly with respect to models for which we are a significant supplier, could disproportionately reduce our sales and thereby adversely affect our financial condition, operating results and cash flows. See the section entitled “Business—Supply Relationships with Our Customers” for more information.
We may not realize sales represented by awarded business.
We estimate awarded business using certain assumptions, including projected future sales volumes. Our customers generally do not guarantee volumes. In addition, awarded business may include business under arrangements that our customers have the right to terminate without penalty. Therefore, our actual sales volumes, and thus the ultimate amount of revenue that we derive from such sales, are not committed. If actual production orders from our customers are not consistent with the projections we use in calculating the amount of our awarded business, we could realize substantially less revenue over the life of these projects than the currently projected estimate.
Our inability to continue to achieve product cost reductions which offset customer price reductions could have a significant negative impact on our business.
Cost-cutting initiatives adopted by our customers result in increased downward pressure on pricing. Our customer supply agreements generally require step-downs in component pricing over the period of production, typically one to two percent per year. In addition, our customers often reserve the right to terminate their supply contracts for convenience, which enhances their ability to obtain price reductions. OEMs have also possessed significant leverage over their suppliers, including us, because the automotive component supply industry is highly competitive, serves a limited number of customers, has a high fixed cost base and historically has had excess capacity. Based on these factors, and the fact that our customers’ product programs typically last a number of years and are anticipated to encompass large volumes, our customers are able to negotiate favorable pricing. Accordingly, as a Tier I supplier (one that supplies vehicle components directly to manufacturers), we are subject to substantial continuing pressure from OEMs to reduce the price of our products. For example, our customer supply agreements generally provide for annual reductions in pricing of our products over the period of production. It is possible that pricing pressures beyond our expectations could intensify as OEMs pursue restructuring and cost cutting initiatives. Our financial performance is therefore dependent on our ability to continue to achieve product cost reductions through obtaining price reductions from our suppliers, product design enhancement and improving production processes to increase manufacturing efficiency. If we are unable to generate sufficient production cost savings in the future to offset price reductions, our gross margin and profitability would be adversely affected. See the section entitled “Business—Supply Relationships with Our Customers” for a detailed discussion of our supply agreements with our customers.
Our supply agreements with our OEM customers are generally requirements contracts, and a decline in the production requirements of any of our customers, and in particular our largest customers, could adversely impact our revenues and profitability.
We receive OEM purchase orders for specific components supplied for particular vehicles. In most instances our OEM customers agree to purchase their requirements for specific products but are not required to purchase any minimum amount of products from us. The contracts we have entered into with most of our customers have terms ranging from one year to the life of the model (usually three to seven years, although customers often reserve the right to terminate for convenience). Therefore, a significant decrease in demand for certain key models or group of related models sold by any of our major customers or the ability of a manufacturer to re-source and discontinue purchasing from us, for a particular model or group of models, could have a material adverse effect on us. To the extent that we do not maintain our existing level of business with our largest customers because of a decline in their production requirements or because the contracts expire or are terminated for convenience, we will need to attract new customers or win new business with existing customers, or our results of operations and financial condition will be adversely affected. See the section entitled
 
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“Business—Supply Relationships with Our Customers” for a detailed discussion of our supply agreements with our customers.
We have invested substantial resources in markets where we expect growth and we may be unable to timely alter our strategies should such expectations not be realized.
Our future growth is dependent on our making the right investments at the right time to support product development and manufacturing capacity in geographic areas where we can support our customer base and in product areas of evolving vehicle technologies. We have identified the Asia Pacific region, and more specifically China, as a key geographic market, and have identified advanced electronics and software controls which deliver enhanced engine management systems that address demand for increased fuel efficiency and emission control through products such as turbo gasoline direct injection (“GDi”) fuel systems, variable valve actuation technologies such as dynamic skip fire software and evolving vehicle technologies such as electrification and hybridization as key product markets. We believe these markets are likely to experience substantial long-term growth, and accordingly have made and expect to continue to make substantial investments, both directly and through participation in various partnerships and joint ventures, in numerous manufacturing operations, technical centers, research and development activities and other infrastructure to support anticipated growth in these areas. If we are unable to deepen existing and develop additional customer relationships or are unable to develop and introduce market-relevant product technologies we may not only fail to realize expected rates of return on our existing investments, but we may incur losses on such investments and be unable to timely redeploy the invested capital to take advantage of other markets or product categories, potentially resulting in lost market share to our competitors. Our results will also suffer if these areas, including market demand for evolving vehicle technologies, do not grow as quickly as we anticipate.
Our business in China is sensitive to economic and market conditions that impact automotive sales volumes in China.
Maintaining a strong position in the Chinese market is a key component of our global growth strategy. Our business is sensitive to economic and market conditions that impact automotive sales volumes and growth in China and may be affected if the pace of growth slows as the Chinese market matures or if there are reductions in vehicle demand in China. There have been periods of increased market volatility and moderations in the level of economic growth in China, which resulted in periods of lower automotive production growth rates in China than those previously experienced. For example, automotive production in China increased 4% in 2015 as compared to 2014, which represented a reduction from the overall level of long-term automotive market growth in the country. In 2016, automotive production in China increased 14% as compared to 2015, benefiting in part from a consumer vehicle tax reduction program. Following a partial increase in the consumer vehicle tax in 2017, vehicle production volumes in China are expected to increase by 1% in 2017. If we are unable to maintain our position in the Chinese market, the pace of growth slows or vehicle sales in China decrease, our business and financial results could be materially adversely affected.
Disruptions in the supply of raw materials and other supplies that we and our customers use in our products may adversely affect our profitability.
We and our customers use a broad range of materials and supplies, including various metals, petroleum-based resins, chemicals, electronic components and semiconductors. A significant disruption in the supply of these materials for any reason could decrease our production and shipping levels, which could materially increase our operating costs and materially decrease our profit margins.
We, as with other component manufacturers in the automotive industry, ship products to our customers’ vehicle assembly plants throughout the world so they are delivered on a “just-in-time” basis in order to maintain low inventory levels. Our suppliers also use a similar method. However, this “just-in-time” method makes the logistics supply chain in our industry very complex and very vulnerable to disruptions.
 
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Such disruptions could be caused by any one of a myriad of potential problems, such as closures of one of our or our suppliers’ plants or critical manufacturing lines due to strikes, mechanical breakdowns, electrical outages, fires, explosions or political upheaval, as well as logistical complications due to weather, global climate change, volcanic eruptions, or other natural or nuclear disasters, mechanical failures, delayed customs processing and more. Additionally, as we grow in best cost countries, the risk for such disruptions is heightened. The lack of even a small single subcomponent necessary to manufacture one of our products, for whatever reason, could force us to cease production, even for a prolonged period. Similarly, a potential quality issue could force us to halt deliveries while we validate the products. Even where products are ready to be shipped, or have been shipped, delays may arise before they reach our customer. Our customers may halt or delay their production for the same reason if one of their other suppliers fails to deliver necessary components. This may cause our customers, in turn to suspend their orders, or instruct us to suspend delivery, of our products, which may adversely affect our financial performance.
When we fail to make timely deliveries in accordance with our contractual obligations, we generally have to absorb our own costs for identifying and solving the “root cause” problem as well as expeditiously producing replacement components or products. Generally, we must also carry the costs associated with “catching up,” such as overtime and premium freight.
Additionally, if we are the cause for a customer being forced to halt production, the customer may seek to recoup all of its losses and expenses from us. These losses and expenses could be significant, and may include consequential losses such as lost profits. Any supply-chain disruption, however small, could potentially cause the complete shutdown of an assembly line of one of our customers, and any such shutdown that is due to causes that are within our control could expose us to material claims of compensation. Where a customer halts production because of another supplier failing to deliver on time, it is unlikely we will be fully compensated, if at all.
Adverse developments affecting one or more of our suppliers could harm our profitability.
Any significant disruption in our supplier relationships, particularly relationships with sole-source suppliers, could harm our profitability. Furthermore, some of our suppliers may not be able to handle the commodity cost volatility and/or sharply changing volumes while still performing as we expect. To the extent our suppliers experience supply disruptions, there is a risk for delivery delays, production delays, production issues or delivery of non-conforming products by our suppliers. Even where these risks do not materialize, we may incur costs as we try to make contingency plans for such risks.
The loss of business with respect to, or the lack of commercial success of, a vehicle model for which we are a significant supplier could adversely affect our financial performance.
Although we receive purchase orders from our customers, these purchase orders generally provide for the supply of a customer’s requirements for a particular vehicle model and assembly plant, rather than for the purchase of a specific quantity of products. The loss of business with respect to, or the lack of commercial success of, a vehicle model for which we are a significant supplier could reduce our sales and thereby adversely affect our financial condition, operating results and cash flows.
We operate in the highly competitive automotive supply industry.
The global automotive component supply industry for both OEM and aftermarket components is highly competitive. Competition is based primarily on product quality, price, reliability and timeliness of delivery, product design capability, technical expertise and development capability, overall customer service and, in certain aftermarket product segments, brand recognition and perception. There can be no assurance that our products will be able to compete successfully with the products of our competitors. Furthermore, the rapidly evolving nature of the geographic markets in which we compete has attracted, and may continue to attract, new entrants, particularly in countries such as China or in areas of evolving vehicle technologies such as GDi
 
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systems. Additionally, consolidation in the automotive industry may lead to decreased product purchases from us. As a result, our sales levels and margins could be adversely affected by pricing pressures from OEMs and pricing actions of competitors. These factors led to selective resourcing of business to competitors in the past and may also do so in the future. In addition, any of our competitors may foresee the course of market development more accurately than us, develop products that are superior to our products, have the ability to produce similar products at a lower cost than us, adapt more quickly than us to new technologies or evolving customer requirements or develop or introduce new products or solutions before we do. As a result, our products may not be able to compete successfully with their products. There has also been a recent increase in consumer preferences for mobility on demand services, such as car- and ride-sharing, as opposed to automobile ownership, which may result in a long-term reduction in the number of vehicles per capita. These trends may adversely affect our sales as well as the profit margins on our products. If we do not continue to innovate to develop or acquire new and compelling products that capitalize upon new technologies, this could have a material adverse impact on our results of operations.
Increases in costs of the materials and other supplies that we use in our products may have a negative impact on our business.
Significant changes in the markets where we purchase materials, components and supplies for the production of our products may adversely affect our profitability, particularly in the event of significant increases in demand where there is not a corresponding increase in supply, inflation or other pricing increases. In recent periods there have been significant fluctuations in the global prices of petroleum-based resin products, and fuel charges, which have had and may continue to have an unfavorable impact on our business, results of operations or financial condition. Continuing volatility may have adverse effects on our business, results of operations or financial condition. We will continue efforts to pass some supply and material cost increases onto our customers, although competitive and market pressures have limited our ability to do that, particularly with domestic OEMs, and may prevent us from doing so in the future, because our customers are generally not obligated to accept price increases that we may desire to pass along to them. Even where we are able to pass price increases through to the customer, in some cases there is a lapse of time before we are able to do so. The inability to pass on price increases to our customers when raw material prices increase rapidly or to significantly higher than historic levels could adversely affect our operating margins and cash flow, possibly resulting in lower operating income and profitability. We expect to be continually challenged as demand for our principal raw materials and other supplies is significantly impacted by demand in emerging markets, particularly in China. We cannot provide assurance that fluctuations in commodity prices will not otherwise have a material adverse effect on our financial condition or results of operations, or cause significant fluctuations in quarterly and annual results of operations.
We may encounter manufacturing challenges.
The volume and timing of sales to our customers may vary due to: variation in demand for our customers’ products; our customers’ attempts to manage their inventory; design changes; changes in our customers’ manufacturing strategy; and acquisitions of or consolidations among customers. Due in part to these factors, many of our customers do not commit to long-term production schedules. Our inability to forecast the level of customer orders with certainty makes it difficult to schedule production and maximize utilization of manufacturing capacity.
We rely on third-party suppliers for the components used in our products, and we rely on third-party manufacturers to manufacture certain of our assemblies and finished products. Our results of operations, financial condition and cash flows could be adversely affected if our third party suppliers lack sufficient quality control or if there are significant changes in their financial or business condition. If our third-party manufacturers fail to deliver products, parts and components of sufficient quality on time and at reasonable prices, we could have difficulties fulfilling our orders, sales and profits could decline, and our commercial reputation could be damaged.
 
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From time to time, we have underutilized our manufacturing lines. This excess capacity means we incur increased fixed costs in our products relative to the net revenue we generate, which could have an adverse effect on our results of operations, particularly during economic downturns. If we are unable to improve utilization levels for these manufacturing lines and correctly manage capacity, the increased expense levels will have an adverse effect on our business, financial condition and results of operations. In addition, some of our manufacturing lines are located in China or other foreign countries that are subject to a number of additional risks and uncertainties, including increasing labor costs, which may result from market demand or other factors, and political, social and economic instability.
We may not be able to respond quickly enough to changes in regulations, technology and technological risks, and to develop our intellectual property into commercially viable products.
Changes in legislative, regulatory or industry requirements or in competitive technologies may render certain of our products obsolete or less attractive. Our ability to anticipate changes in technology and regulatory standards and to successfully develop and introduce new and enhanced products on a timely basis are significant factors in our ability to remain competitive and to maintain or increase our revenues. For example, our products and technologies are designed to assist our OEM customers’ needs to improve fuel economy and reduce vehicle emissions, in part to meet increasingly stringent regulatory requirements in various markets, such as standards in the U.S. requiring improved fuel efficiency through 2025. However, if such efficiency standards are relaxed or eliminated, there could be reduced demand for our products in the U.S. that are focused on meeting these requirements, which could adversely affect our financial performance.
We cannot provide assurance that certain of our products will not become obsolete or that we will be able to achieve the technological advances that may be necessary for us to remain competitive and maintain or increase our revenues in the future. We are also subject to the risks generally associated with new product introductions and applications, including lack of market acceptance, delays in product development or production and failure of products to operate properly. The pace of our development and introduction of new and improved products depends on our ability to implement successfully improved technological innovations in design, engineering and manufacturing, which requires extensive capital investment. Any capital expenditure cuts in these areas that we may determine to implement in the future to reduce costs and conserve cash could reduce our ability to develop and implement improved technological innovations, which may materially reduce demand for our products.
To compete effectively in the automotive supply industry, we must be able to launch new products to meet changing consumer preferences and our customers’ demand in a timely and cost-effective manner. Our ability to respond to competitive pressures and react quickly to other major changes in the marketplace, including the potential introduction of disruptive technologies such as autonomous driving solutions, increased gasoline prices, or consumer desire for and availability of vehicles which use alternative fuels is also a risk to our future financial performance.
We cannot provide assurance that we will be able to install and certify the equipment needed to produce products for new product programs in time for the start of production, or that the transitioning of our manufacturing facilities and resources to full production under new product programs will not impact production rates or other operational efficiency measures at our facilities. Development and manufacturing schedules are difficult to predict, and we cannot provide assurance that our customers will execute on schedule the launch of their new product programs, for which we might supply products. Our failure to successfully launch new products, or a failure by our customers to successfully launch new programs, could adversely affect our results.
Changes in factors that impact the determination of our pension liabilities may adversely affect us.
Certain of our subsidiaries sponsor defined benefit pension plans, which generally provide benefits based on negotiated amounts for each year of service. Our primary funded plans are located in Mexico and the United Kingdom and were underfunded by $470 million as of December 31, 2016. The funding requirements of
 
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these benefit plans, and the related expense reflected in our financial statements, are affected by several factors that are subject to an inherent degree of uncertainty and volatility, including governmental regulation. In addition to the defined benefit pension plans, we have retirement obligations driven by requirements in many of the countries in which we operate. These legally required plans require payments at the time benefits are due. Obligations, net of plan assets, related to the defined benefit pension plans and statutorily required retirement obligations totaled $525 million at December 31, 2016, of which $526 million is included in long-term liabilities and $1 million is included in long-term assets in our combined balance sheet. Key assumptions used to value these benefit obligations and the cost of providing such benefits, funding requirements and expense recognition include the discount rate and the expected long-term rate of return on pension assets. If the actual trends in these factors are less favorable than our assumptions, this could have an adverse effect on our results of operations and financial condition.
We may suffer future asset impairment and other restructuring charges, including write downs of long-lived assets.
We have taken, are taking, and may take future restructuring actions to realign and resize our production capacity and cost structure to meet current and projected operational and market requirements. Charges related to these actions or any further restructuring actions may have a material adverse effect on our results of operations and financial condition. We cannot assure that any current or future restructuring will be completed as planned or achieve the desired results.
Additionally, from time to time in the past, we have recorded asset impairment losses relating to specific plants and operations. Generally, we record asset impairment losses when we determine that our estimates of the future undiscounted cash flows from an operation will not be sufficient to recover the carrying value of that facility’s building, fixed assets and production tooling. We cannot ensure that we will not incur such charges in the future as changes in economic or operating conditions impacting the estimates and assumptions could result in additional impairment.
Employee strikes and labor-related disruptions involving us or one or more of our customers or suppliers may adversely affect our operations.
Our business is labor-intensive and utilizes a number of work councils and other represented employees. A strike or other form of significant work disruption by our employees would likely have an adverse effect on our ability to operate our business. A labor dispute involving us or one or more of our customers or suppliers or that could otherwise affect our operations could reduce our sales and harm our profitability. A labor dispute involving another supplier to our customers that results in a slowdown or a closure of our customers’ assembly plants where our products are included in the assembled parts or vehicles could also adversely affect our business and harm our profitability. In addition, our inability or the inability of any of our customers, our suppliers or our customers’ suppliers to negotiate an extension of a collective bargaining agreement upon its expiration could reduce our sales and harm our profitability. Significant increases in labor costs as a result of the renegotiation of collective bargaining agreements could also adversely affect our business and harm our profitability.
We may lose or fail to attract and retain key salaried employees and management personnel.
An important aspect of our competitiveness is our ability to attract and retain key salaried employees and management personnel. Our ability to do so is influenced by a variety of factors, including the compensation we award and the competitive market position of our overall compensation package. We may not be as successful as competitors at recruiting, assimilating and retaining highly skilled personnel. The loss of the services of any member of senior management or a key salaried employee could have an adverse effect on our business.
 
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Because some of our officers and directors live outside of the United States, you may have no effective recourse against them for misconduct and may not be able to receive compensation for damages to the value of your investment caused by wrongful actions by our directors and officers.
Some of our officers and directors live outside the U.S. As a result, it may be difficult for investors to enforce within the U.S. any judgments obtained against those officers and directors, or obtain judgments against them outside of the U.S. that are based on the civil liability provisions of the federal or state securities laws of the U.S. Investors may not be able to receive compensation for damages to the value of their investment caused by wrongful actions by our directors and officers.
We are exposed to foreign currency fluctuations as a result of our substantial global operations, which may affect our financial results.
We have currency exposures related to buying, selling and financing in currencies other than the local currencies of the countries in which we operate. Approximately 71% of our net revenue for the year ended December 31, 2016 and the six months ended June 30, 2017 came from sales outside the United States, which were primarily invoiced in currencies other than the U.S. dollar, and we expect net revenue from non-U.S. markets to continue to represent a significant portion of our net revenue. Accordingly, significant changes in currency exchange rates, particularly the Euro, Chinese Yuan (Renminbi), British Pound and Brazilian Real, could cause fluctuations in the reported results of our businesses’ operations that could negatively affect our results of operations. Price increases caused by currency exchange rate fluctuations may make our products less competitive or have an adverse effect on our margins. Currency exchange rate fluctuations may also disrupt the business of our suppliers by making their purchases of raw materials more expensive and more difficult to finance.
Historically, we have reduced our exposure by aligning our costs in the same currency as our revenues or, if that is impracticable, through financial instruments that provide offsets or limits to our exposures, which are opposite to the underlying transactions. However, any measures that we may implement to reduce the effect of volatile currencies and other risks of our global operations may not be effective.
In addition, we have significant business in Europe and transact much of this business in the Euro currency, including sales and purchase contracts. Although not as prevalent currently, concerns over the stability of the Euro currency and the economic outlook for many European countries, including those that do not use the Euro as their currency, persist. Given the broad range of possible outcomes, it is difficult to fully assess the implications on our business. Some of the potential outcomes could significantly impact our operations. In the event of a country redenominating its currency away from the Euro, the potential impact could be material to operations. We cannot provide assurance that fluctuations in currency exposures will not have a material adverse effect on our financial condition or results of operations, or cause significant fluctuations in quarterly and annual results of operations.
We face risks associated with doing business in non-U.S. jurisdictions.
The majority of our manufacturing and distribution facilities are in countries outside of the U.S., including Mexico, China and other countries in Asia Pacific, Eastern and Western Europe and South America. We also purchase raw materials and other supplies from many different countries around the world. For the year ended December 31, 2016 and the six months ended June 30, 2017, approximately 71% of our net revenue came from sales outside the United States. International operations are subject to certain risks inherent in doing business abroad, including:
 
 	•	 	exposure to local economic, political and labor conditions;	
 
 	•	 	unexpected changes in laws, regulations, trade or monetary or fiscal policy, including interest rates, foreign currency exchange rates and changes in the rate of inflation in the U.S. and other foreign countries;	
 
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 	•	 	tariffs, quotas, customs and other import or export restrictions and other trade barriers;	
 
 	•	 	expropriation and nationalization;	
 
 	•	 	difficulty of enforcing agreements, collecting receivables and protecting assets through non-U.S. legal systems;	
 
 	•	 	reduced intellectual property protection;	
 
 	•	 	limitations on repatriation of earnings;	
 
 	•	 	withholding and other taxes on remittances and other payments by subsidiaries;	
 
 	•	 	investment restrictions or requirements;	
 
 	•	 	export and import restrictions;	
 
 	•	 	violence and civil unrest in local countries; and	
 
 	•	 	compliance with the requirements of an increasing body of applicable anti-bribery laws, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar laws of various other countries.	
Additionally, our global operations may also be adversely affected by political events, domestic or international terrorist events and hostilities or complications due to natural or nuclear disasters. These uncertainties could have a material adverse effect on the continuity of our business and our results of operations and financial condition.
Existing free trade laws and regulations, such as the North American Free Trade Agreement, provide certain beneficial duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other requirements. Changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where we manufacture products, such as China and Mexico, could have a material adverse effect on our business and financial results.
Increasing our manufacturing footprint in Asian markets, including China, and our business relationships with Asian automotive manufacturers are important elements of our long-term strategy. In addition, our strategy includes increasing revenue and expanding our manufacturing footprint in lower-cost regions. As a result, our exposure to the risks described above may be greater in the future. The likelihood of such occurrences and their potential impact on us vary from country to country and are unpredictable.
The results of the referendum on the United Kingdom’s membership in the European Union may adversely affect global economic conditions, financial markets and our business and profitability.
The United Kingdom (“U.K.”) held a referendum on June 23, 2016 in which a majority of voters approved an exit from the European Union (“E.U.”), commonly referred to as “Brexit”, which resulted in increased market volatility and currency exchange rate fluctuations. As a result of the referendum, the British government formally initiated the process for withdrawal in March 2017. The terms of any withdrawal are subject to a negotiation period that could last at least two years from the initiation date. Nevertheless, the proposed withdrawal has created significant uncertainty about the future relationship between the U.K. and the E.U. These developments, or the perception that any of them could occur, may adversely affect European and worldwide economic and market conditions, significantly reduce global market liquidity and restrict the ability of key market participants to operate in certain financial markets and could contribute to instability in global financial and foreign exchange markets, including increased volatility in interest rates and foreign exchange rates. The taxation policies of the U.K. and the E.U. nations in which we conduct business may also change as a result of the Brexit, which could adversely impact our tax positions. We anticipate Delphi Technologies being a U.K. resident taxpayer.
Although we are actively monitoring the ongoing potential impacts of Brexit and will seek to minimize its impact on our business, any of these effects of Brexit, among others, could adversely affect our business, business opportunities, results of operations, financial condition and cash flows. Approximately 15% of our annual net sales are generated in the U.K., and approximately 10% are denominated in British pounds.
 
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If we fail to manage our growth effectively or to integrate successfully any new or future business ventures, acquisitions or strategic alliance into our business, our business could be materially adversely harmed.
We expect to pursue business ventures, acquisitions, and strategic alliances that leverage our capabilities, enhance our customer base, geographic penetration and scale to complement our current businesses and we regularly evaluate potential opportunities, some of which could be material. While we believe that such transactions are an integral part of our long-term strategy, there are risks and uncertainties related to these activities. Assessing a potential growth opportunity involves extensive due diligence. However, the amount of information we can obtain about a potential growth opportunity may be limited, and we can give no assurance that new business ventures, acquisitions, and strategic alliances will positively affect our financial performance or will perform as planned. We may not be able to successfully assimilate or integrate companies that we acquire, including their personnel, financial systems, distribution, operations and general operating procedures. We may also encounter challenges in achieving appropriate internal control over financial reporting in connection with the integration of an acquired company. If we fail to assimilate or integrate acquired companies successfully, our business, reputation and operating results could be materially impacted. Likewise, our failure to integrate and manage acquired companies successfully may lead to future impairment of any associated goodwill and intangible asset balances.
We depend on information technology to conduct our business. Any significant disruption could impact our business.
Our ability to keep our business operating effectively depends on the functional and efficient operation of information technology and telecommunications systems. We rely on these systems to make a variety of day-to-day business decisions as well as to track transactions, billings, payments and inventory. Our systems, as well as those of our customers, suppliers, partners, and service providers, are susceptible to interruptions (including those caused by systems failures, cyber-attack, malicious computer software (malware), and other natural or man-made incidents or disasters), which may be prolonged. We are also susceptible to security breaches that may go undetected. Although we have taken precautions to mitigate such events, including geographically diverse data centers, redundant infrastructure and the implementation of security measures, a significant or large-scale interruption of our information technology could adversely affect our ability to manage and keep our operations running efficiently and effectively. An incident that results in a wider or sustained disruption to our business could have a material adverse effect on our business, financial condition and results of operations.
We may incur material losses and costs as a result of warranty claims, product recalls, product liability and intellectual property infringement actions that may be brought against us.
We face an inherent business risk of exposure to warranty claims and product liability in the event that our products fail to perform as expected and, in the case of product liability, such failure of our products results in bodily injury and/or property damage. The fabrication of the products we manufacture is a complex and precise process. Our customers specify quality, performance and reliability standards. If flaws in either the design or manufacture of our products were to occur, we could experience a rate of failure in our products that could result in significant delays in shipment and product re-work or replacement costs. Although we engage in extensive product quality programs and processes, these may not be sufficient to avoid product failures, which could cause us to:
 
 	•	 	lose net revenue;	
 
 	•	 	incur increased costs such as warranty expense and costs associated with customer support;	
 
 	•	 	experience delays, cancellations or rescheduling of orders for our products;	
 
 	•	 	experience increased product returns or discounts; or	
 
 	•	 	damage our reputation,	
 
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all of which could negatively affect our financial condition and results of operations.
If any of our products are or are alleged to be defective, we may be required to participate in a recall involving such products. Each vehicle manufacturer has its own practices regarding product recalls and other product liability actions relating to its suppliers. However, as suppliers become more integrally involved in the vehicle design process and assume more of the vehicle assembly functions, OEMs continue to look to their suppliers for contribution when faced with recalls and product liability claims. A recall claim brought against us, or a product liability claim brought against us in excess of our available insurance, may have a material adverse effect on our business. OEMs also require their suppliers to guarantee or warrant their products and bear the costs of repair and replacement of such products under new vehicle warranties. Depending on the terms under which we supply products to a vehicle manufacturer, a vehicle manufacturer may attempt to hold us responsible for some or all of the repair or replacement costs of defective products under new vehicle warranties when the OEM asserts that the product supplied did not perform as warranted. Although we cannot assure that the future costs of warranty claims by our customers will not be material, we believe our established reserves are adequate to cover potential warranty settlements. Our warranty reserves are based on our best estimates of amounts necessary to settle future and existing claims. We regularly evaluate the level of these reserves and adjust them when appropriate. However, the final amounts determined to be due related to these matters could differ materially from our recorded estimates.
In addition, as we adopt new technology, we face an inherent risk of exposure to the claims of others that we have allegedly violated their intellectual property rights. We cannot assure that we will not experience any material warranty, product liability or intellectual property claim losses in the future or that we will not incur significant costs to defend such claims.
We may be adversely affected by laws or regulations, including environmental regulation, litigation or other liabilities.
We are subject to various U.S. federal, state and local, and non-U.S., laws and regulations, including those related to environmental, health and safety, financial and other matters.
We cannot predict the substance or impact of pending or future legislation or regulations, or the application thereof. The introduction of new laws or regulations or changes in existing laws or regulations, or the interpretations thereof, could increase the costs of doing business for us or our customers or suppliers or restrict our actions and adversely affect our financial condition, operating results and cash flows.
We are subject to regulation governing, among other things:
 
 	•	 	the generation, storage, handling, use, transportation, presence of, or exposure to hazardous materials;	
 
 	•	 	the emission and discharge of hazardous materials into the ground, air or water;	
 
 	•	 	the incorporation of certain chemical substances into our products, including electronic equipment; and	
 
 	•	 	the health and safety of our employees.	
We are also required to obtain permits from governmental authorities for certain operations. We cannot assure you that we have been or will be at all times in complete compliance with such laws, regulations and permits. If we violate or fail to comply with these laws, regulations or permits, we could be fined or otherwise sanctioned by regulators. We could also be held liable for any and all consequences arising out of human exposure to hazardous substances or other environmental damage.
Certain environmental laws impose liability, sometimes regardless of fault, for investigating or cleaning up contamination on or emanating from our currently or formerly owned, leased or operated property, as well as for damages to property or natural resources and for personal injury arising out of such contamination. Some of these
 
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environmental laws may also assess liability on persons who arrange for hazardous substances to be sent to third party disposal or treatment facilities when such facilities are found to be contaminated. At this time, we are involved in various stages of investigation and cleanup related to environmental remediation matters at certain facilities. The ultimate cost to us of site cleanups is difficult to predict given the uncertainties regarding the extent of the required cleanup, the potential for ongoing environmental monitoring and maintenance that could be required for many years, the interpretation of applicable laws and regulations, alternative cleanup methods, and potential agreements that could be reached with governmental and third parties. While we have environmental reserves of approximately $1 million at June 30, 2017 for the cleanup of presently-known environmental contamination conditions, it cannot be guaranteed that actual costs will not significantly exceed these reserves. We also could be named a potentially responsible party at additional sites in the future and the costs associated with such future sites may be material.
In addition, environmental laws are complex, change frequently and have tended to become more stringent over time. While we have budgeted for future capital and operating expenditures to maintain compliance with environmental laws, we cannot assure that environmental laws will not change or become more stringent in the future. Therefore, we cannot assure that our costs of complying with current and future environmental and health and safety laws, and our liabilities arising from past or future releases of, or exposure to, hazardous substances will not adversely affect our business, results of operations or financial condition. For example, adoption of greenhouse gas rules in jurisdictions in which we operate facilities could require installation of emission controls, acquisition of emission credits, emission reductions, or other measures that could be costly, and could also impact utility rates and increase the amount we spend annually for energy.
We are involved from time to time in legal proceedings and commercial or contractual disputes, which could have an adverse impact on our profitability and consolidated financial position.
We are involved in legal proceedings and commercial or contractual disputes that, from time to time, are significant. These are typically claims that arise in the normal course of business including, without limitation, commercial or contractual disputes, including warranty claims and other disputes with customers and suppliers; intellectual property matters; personal injury claims; environmental issues; tax matters; and employment matters.
In addition, we conduct business operations in Brazil that are subject to the Brazilian federal labor, social security, environmental, tax and customs laws as well as a variety of state and local laws. While we believe we comply with such laws, they are complex, subject to varying interpretations, and we are often engaged in litigation with government agencies regarding the application of these laws to particular circumstances. As of June 30, 2017, the majority of claims asserted against Delphi Technologies in Brazil relate to such litigation. The remaining claims relate to commercial and labor litigation with private parties in Brazil. As of June 30, 2017, claims totaling approximately $65 million (using June 30, 2017 foreign currency rates) have been asserted against Delphi Technologies in Brazil. As of June 30, 2017, we maintained reserves for these asserted claims of approximately $10 million (using June 30, 2017 foreign currency rates).
While we believe our reserves are adequate, the final amounts required to resolve these matters could differ materially from our recorded estimates and our results of operations could be materially affected.
Developments or assertions by us or against us relating to intellectual property rights could materially impact our business.
We own significant intellectual property, including a large number of patents and tradenames, and are involved in numerous licensing arrangements. Our intellectual property plays an important role in maintaining our competitive position in a number of the markets we serve. Developments or assertions by or against us relating to intellectual property rights could negatively impact our business. Significant technological developments by others also could materially and adversely affect our business and results of operations and financial condition.
 
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Risks Related to Our Relationship with Aptiv and the Separation
We have no history of operating as an independent company, and our historical and pro forma financial information may not be representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results.
The historical information about Delphi Technologies in this information statement refers to Delphi Technologies’ businesses as operated by and integrated with Aptiv. Our historical and pro forma financial information included in this information statement is derived from the consolidated financial statements and accounting records of Aptiv. Accordingly, the historical and pro forma financial information included in this information statement does not necessarily reflect the financial condition, results of operations or cash flows that Delphi Technologies would have achieved as a separate, publicly traded company during the periods presented or those that Delphi Technologies will achieve in the future primarily as a result of the factors described below:
 
 	•	 	prior to the separation, Delphi Technologies’ businesses have been operated by Aptiv as part of its broader corporate organization, rather than as an independent company. Aptiv or one of its affiliates performed various corporate functions for Delphi Technologies such as treasury, accounting, auditing, human resources, senior management, corporate affairs and finance. Our historical and pro forma financial results reflect allocations of corporate expenses from Aptiv for such functions, and are likely to be less than the expenses we would have incurred had we operated as a separate publicly traded company. Following the separation, our costs related to such functions previously performed by Aptiv are expected to increase. Following the separation, Aptiv will provide some of these functions to us pursuant to a transition services agreement, as described in “Certain Relationships and Related Transactions.” We will need to make investments to replicate or outsource from other providers certain facilities, systems, infrastructure, and personnel to which we will no longer have access after our separation from Aptiv. These initiatives to develop our independent ability to operate without access to Aptiv’s existing operational and administrative infrastructure will have a cost to implement. We may not be able to operate our business efficiently or at comparable costs, and our profitability may decline;	
 
 	•	 	currently, Delphi Technologies’ businesses are integrated with the other businesses of Aptiv. Historically, we have shared economies of scale in costs, employees, vendor relationships and customer relationships. Although we will enter into a transition services agreement with Aptiv, these arrangements may not fully capture the benefits that we have enjoyed as a result of being integrated with Aptiv and may result in our paying higher amounts than in the past for these products and services. This could have an adverse effect on our results of operations and financial condition following the completion of the separation;	
 
 	•	 	generally, our working capital requirements and capital for our general corporate purposes, including investments and capital expenditures, have historically been satisfied as part of Aptiv’s corporate cash management strategies and capital structure. Following the completion of the separation, we will need to obtain additional financing from sources which may include banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements;	
 
 	•	 	our historical financial information does not reflect the debt or the associated interest expense that we will incur as part of the separation and distribution. After the completion of the separation, the cost of capital for our business will likely be higher than Aptiv’s cost of capital prior to the separation.	
Other significant changes may occur in our cost structure, management, financing and business operations as a result of operating as a company separate from Aptiv. For additional information about the historical financial performance of our businesses and the basis of presentation of the historical combined financial statements and the unaudited pro forma condensed combined financial statements of our businesses, see the sections entitled “Unaudited Pro Forma Condensed Combined Financial Statements,” “Selected Historical Combined Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and accompanying notes included elsewhere in this information statement.
 
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We may be unable to achieve some or all of the benefits that we expect to achieve from our separation from Aptiv, and we may no longer enjoy certain benefits from Aptiv as an independent, publicly traded company.
There is a risk that, by separating from Aptiv, Delphi Technologies may become more susceptible to market fluctuations and other adverse events than we would have been if we were still a part of the current Aptiv organizational structure. We are able to use Aptiv’s size and purchasing power in procuring various goods and services and have shared economies of scope and scale in costs, employees, vendor relationships and customer relationships. Following the separation from Aptiv, we will be a smaller and less diversified company than Aptiv, and will not have access to financial and other resources comparable to those of Aptiv prior to the separation. As an independent, publicly traded company, we may not have similar diversity or integration opportunities and may not have similar purchasing power or access to capital markets. Although we will enter into a transition services agreement with Aptiv, these arrangements may not fully capture the benefits we have enjoyed as a result of being integrated with Aptiv and may result in our paying higher amounts than in the past for these services, which could decrease our overall profitability. This could have an adverse effect on our results of operations and financial condition following the completion of the separation.
Additionally, we may not be able to achieve the full strategic and financial benefits expected to result from the separation, or such benefits may be delayed or not occur at all. We may not achieve these and other anticipated benefits for a variety of reasons, including, among others:
 
 	•	 	the actions required to separate Delphi Technologies’ and Aptiv’s respective businesses could disrupt our and Aptiv’s operations;	
 
 	•	 	certain costs and liabilities that were otherwise less significant to Aptiv as a whole will be more significant for Delphi Technologies and Aptiv as stand-alone companies;	
 
 	•	 	we will incur costs in connection with the transition to being a stand-alone public company that will include accounting, tax, legal and other professional services costs, recruiting and relocation costs associated with hiring or reassigning Delphi Technologies personnel, costs related to establishing a new brand identity in the marketplace and costs to separate information systems; and	
 
 	•	 	we may not achieve the anticipated benefits of the separation for a variety of reasons, including, among others: (i) the separation will require significant amounts of management’s time and effort, which may divert management’s attention from operating and growing our businesses; (ii) following the separation, we may be more susceptible to market fluctuations and other adverse events than if it were still a part of Aptiv; and (iii) following the separation, our businesses will be less diversified than Aptiv’s businesses prior to the separation.	
The assets and resources we acquire from Aptiv may not be sufficient for us to operate as a stand-alone company, and we may experience difficulty in separating our assets and resources from Aptiv.
Because we have not operated as an independent company in the past, we may need to acquire assets and resources in addition to those contributed by Aptiv and its subsidiaries to our company and our subsidiaries in connection with our separation from Aptiv. We may also face difficulty in separating our assets from Aptiv’s assets and integrating newly acquired assets into our business. Our business, financial condition and results of operations could be harmed if we fail to acquire assets that prove to be important to our operations or if we incur unexpected costs or encounter other difficulties in separating our assets from Aptiv’s assets or integrating newly acquired assets.
Historically, we have relied on financial, administrative and other resources of Aptiv to operate our business. In conjunction with our separation from Aptiv, we will need to create our own financial, administrative and other support systems or contract with third parties to replace Aptiv’s systems. We expect the cost of creating this infrastructure to be approximately $120 million, which includes approximately $55 million in
 
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capital expenditures, in the fiscal year following the completion of the separation. We will enter into a transition services agreement with Aptiv under which Aptiv will provide certain transitional services to us, including services related to accounting, tax, IT and other infrastructure management. See “Certain Relationships and Related Transactions—Agreements with Aptiv” for a description of these services. These services may not be sufficient to meet our needs, and, after our agreement with Aptiv expires, we may not be able to replace these services at all or obtain these services at prices and on terms as favorable as we currently have. Any failure or significant downtime in our own financial or administrative systems or in Aptiv’s financial or administrative systems during the transitional period could impact our results and/or prevent us from paying our employees, or performing other administrative services on a timely basis and could materially and adversely affect us.
Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we will be subject following the separation and distribution.
Our financial results previously were included within the consolidated results of Aptiv. Although we believe that our financial reporting and internal controls were appropriate for those of a subsidiary of a public company, we were not directly subject to reporting and other requirements of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result of the spin-off, we will be directly subject to reporting and other obligations under the Exchange Act. Beginning with our first required Annual Report on Form 10-K, we intend to comply with Section 404 of the Sarbanes Oxley Act of 2002, as amended (the “Sarbanes Oxley Act”), which will require annual management assessments of the effectiveness of our internal control over financial reporting and a report by our independent registered public accounting firm addressing these assessments. These reporting and other obligations may place significant demands on management, administrative and operational resources, including accounting systems and resources.
The Exchange Act requires that we file annual, quarterly and current reports with respect to its business and financial condition. Under the Sarbanes Oxley Act, we are required to maintain effective disclosure controls and procedures and internal controls over financial reporting. To comply with these requirements, we may need to upgrade its systems, implement additional financial and management controls, reporting systems and procedures and hire additional accounting and finance staff. We expect to incur additional annual expenses for the purpose of addressing these requirements. If we are unable to upgrade our financial and management controls, reporting systems, information technology systems and procedures in a timely and effective fashion, our ability to comply with financial reporting requirements and other rules that apply to reporting companies under the Exchange Act could be impaired. Any failure to achieve and maintain effective internal controls could have a material adverse effect on our business, financial condition, results of operations and cash flow.
As we build our information technology infrastructure and transition our data to our own systems, we could incur substantial additional costs and experience temporary business interruptions.
After the separation, we will install and implement information technology infrastructure to support certain of our business functions, including accounting and reporting, manufacturing process control, customer service, inventory control and distribution. We may incur temporary interruptions in business operations if we cannot transition effectively from Aptiv’s existing transactional and operational systems, data centers and the transition services that support these functions. We may not be successful in implementing our new systems and transitioning our data, and we may incur substantially higher costs for implementation than currently anticipated. Our failure to avoid operational interruptions as we implement the new systems and replace Aptiv’s information technology services, or our failure to implement the new systems and replace Aptiv’s services successfully, could disrupt our business and have a material adverse effect on our profitability. In addition, if we are unable to replicate or transition certain systems, our ability to comply with regulatory requirements could be impaired.
 
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Our customers, prospective customers, suppliers or other companies with whom we conduct business may need assurances that our financial stability on a stand-alone basis is sufficient to satisfy their requirements for doing or continuing to do business with them.
Some of our customers, prospective customers, suppliers or other companies with whom we conduct business may need assurances that Delphi Technologies’ financial stability on a stand-alone basis is sufficient to satisfy their requirements for doing or continuing to do business with them. Any failure of parties to be satisfied with our financial stability could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Potential indemnification liabilities to Aptiv pursuant to the separation agreement could materially adversely affect Delphi Technologies.
The separation agreement with Aptiv will provide for, among other things, the principal corporate transactions required to effect the separation, certain conditions to the separation and provisions governing the relationship between Delphi Technologies and Aptiv with respect to and resulting from the separation. For a description of the separation agreement, see “Certain Relationships and Related Transactions—Agreements with Aptiv.” Among other things, the separation agreement will provide for indemnification obligations designed to make us financially responsible for substantially all liabilities that may exist relating to its business activities, whether incurred prior to or after the separation, as well as those obligations of Aptiv assumed by us pursuant to the separation agreement. If we are required to indemnify Aptiv under the circumstances set forth in the separation agreement, we may be subject to substantial liabilities.
We may have potential business conflicts of interest with Aptiv with respect to our past and ongoing relationships.
Conflicts of interest may arise between Aptiv and us in a number of areas relating to our past and ongoing relationships, including:
 
 	•	 	labor, tax, employee benefit, indemnification and other matters arising from our separation from Aptiv;	
 
 	•	 	intellectual property matters;	
 
 	•	 	employee recruiting and retention; and	
 
 	•	 	business combinations involving our company.	
We may not be able to resolve any potential conflicts, and, even if we do so, the resolution may be less favorable to us than if we were dealing with an unaffiliated party
After the separation, certain of our executive officers and directors may have actual or potential conflicts of interest because of their equity interest in Aptiv.
Because of their current or former positions with Aptiv, certain of our expected executive officers and directors own equity interests in Aptiv. Continuing ownership of shares of Aptiv ordinary shares and equity awards, or service as a director at both companies could create, or appear to create, potential conflicts of interest if Delphi Technologies and Aptiv face decisions that could have implications for both Delphi Technologies and Aptiv.
Until the separation occurs, Aptiv has sole discretion to change the terms of the separation in ways that may be unfavorable to us.
Until the separation occurs, Delphi Technologies will be a wholly-owned subsidiary of Aptiv. Accordingly, Aptiv will effectively have the sole and absolute discretion to determine and change the terms of the separation,
 
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including the establishment of the record date for the distribution and the distribution date. These changes could be unfavorable to us. In addition, the separation and distribution and related transactions are subject to the satisfaction or waiver by Aptiv in its sole discretion of a number of conditions. We cannot assure you that any or all of these conditions will be met. Aptiv may also decide at any time not to proceed with the separation and distribution.
Delphi Technologies may have received better terms from unaffiliated third parties than the terms it will receive in its agreements with Aptiv.
The agreements Delphi Technologies will enter into with Aptiv in connection with the separation, such as a Separation and Distribution Agreement, a Transition Services Agreement, a Tax Matters Agreement and an Employee Matters Agreement will be prepared in the context of our separation from Aptiv while we are still a wholly-owned subsidiary of Aptiv. Accordingly, during the period in which the terms of those agreements will be prepared, we will not have an independent board of directors or a management team that is independent of Aptiv. As a result, while those agreements are intended to have arm’s-length terms, the agreements may not reflect terms that would have resulted from arm’s-length negotiations between unaffiliated third parties. Arm’s-length negotiations between Aptiv and an unaffiliated third party in another form of transaction, such as a buyer in a sale of a business transaction, may have resulted in more favorable terms to the unaffiliated third party. For more information, see the section entitled “Certain Relationships and Related Transactions.”
We or Aptiv may fail to perform under various transaction agreements that will be executed as part of the separation or we may fail to have necessary systems and services in place when certain of the transaction agreements expire.
The separation agreement and other agreements to be entered into in connection with the separation will determine the allocation of assets and liabilities between the companies following the separation for those respective areas and will include any necessary indemnifications related to liabilities and obligations. The transition services agreement will provide for the performance of certain services for a period of time after the separation. We will rely on Aptiv to satisfy our performance and payment obligations under these agreements. If Aptiv is unable to satisfy its obligations under these agreements, including its indemnification obligations, we could incur operational difficulties or losses. If we do not have in place our own systems and services, or if we do not have agreements with other providers of these services once certain transaction agreements expire, we may not be able to operate our businesses effectively and our profitability may decline. We are in the process of creating our own, or engaging third parties to provide, systems and services to replace many of the systems and services that Aptiv currently provides to us. However, we may not be successful in implementing these systems and services or in transitioning data from Aptiv’s systems to ours.
Challenges in the commercial and credit environment may materially adversely affect our and Aptiv’s ability to complete the separation.
Our ability to issue debt or enter into other financing arrangements on acceptable terms could be materially adversely affected if there is a material decline in the demand for our products or in the solvency of its customers or suppliers or if other significantly unfavorable changes in economic conditions occur. Volatility in the global financial markets could increase borrowing costs or affect our ability to gain access to the capital markets, all of which could have a material adverse effect on our or Aptiv’s ability to complete the separation.
After our separation from Aptiv, we will have debt obligations that could adversely affect our businesses and our ability to meet our obligations and pay dividends.
Immediately following the separation, we expect to have approximately $1,550 million principal amount of indebtedness. See “Description of Material Indebtedness.” We may also incur additional indebtedness in the
 
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future. This significant amount of debt could have important, adverse consequences to us and our investors, including:
 
 	•	 	requiring a substantial portion of our cash flow from operations to make interest payments;	
 
 	•	 	making it more difficult to satisfy other obligations;	
 
 	•	 	increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing;	
 
 	•	 	increasing our vulnerability to general adverse economic and industry conditions;	
 
 	•	 	reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our businesses;	
 
 	•	 	limiting our flexibility in planning for, or reacting to, changes in our businesses and industries; and	
 
 	•	 	limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase or redeem ordinary shares.	
To the extent that we incur additional indebtedness, the risks described above could increase. In addition, our actual cash requirements in the future may be greater than expected. Our cash flow from operations may not be sufficient to service its outstanding debt or to repay the outstanding debt as it becomes due, and we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to service or refinance its debt.
Risks Related to Tax Matters
Taxing authorities could challenge our historical and future tax positions.
Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory rates and changes in tax laws or their interpretation including changes related to tax holidays or tax incentives. Our taxes could increase if certain tax holidays or incentives are not renewed upon expiration, or if tax rates or regimes applicable to us in such jurisdictions are otherwise increased.
The amount of tax we pay is subject to our interpretation of applicable tax laws in the jurisdictions in which we file. We have taken and will continue to take tax positions based on our interpretation of such tax laws. In particular, we will seek to organize and operate ourselves in such a way that we are and remain tax resident in the United Kingdom. Additionally, in determining the adequacy of our provision for income taxes, we regularly assess the likelihood of adverse outcomes resulting from tax examinations. While it is often difficult to predict the final outcome or the timing of the resolution of a tax examination, our reserves for uncertain tax benefits reflect the outcome of tax positions that are more likely than not to occur. While we believe that we have complied with all applicable tax laws, there can be no assurance that a taxing authority will not have a different interpretation of the law and assess us with additional taxes. Should additional taxes be assessed, this may result in a material adverse effect on our results of operations and financial condition.
There could be significant liability if the distribution and certain restructuring transactions in connection with the distribution fail to qualify as a tax-free transaction for U.S. federal income tax purposes, or if certain restructuring transactions entered into in connection with the distribution are not taxed as intended.
In connection with the distribution, Aptiv expects to receive an opinion of Latham & Watkins LLP, tax counsel to Aptiv, substantially to the effect that, for U.S. federal income tax purposes, the distribution will qualify as a distribution under Section 355(a) of the Code, subject to certain qualifications and limitations. Based on this tax treatment, for U.S. federal income tax purposes, except with respect to cash received in lieu of a fractional Delphi Technologies ordinary share, no gain or loss will be recognized by Aptiv’s shareholders and no amount will be included in their income, upon the receipt of Delphi Technologies ordinary shares in the
 
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distribution. The opinion will be based on and rely on, among other things, certain facts, assumptions, representations and undertakings from Aptiv and Delphi Technologies, including those regarding the past and future conduct of the companies’ respective businesses and other matters. If any of these facts, assumptions, representations or undertakings are incorrect or not satisfied, Aptiv may not be able to rely on the opinion, and Aptiv’s shareholders could be subject to significant U.S. federal income tax liabilities. Notwithstanding the opinion of tax counsel, the IRS could determine on audit that the distribution is taxable to Aptiv’s shareholders if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated or if it disagrees with the conclusions in the opinion. For more information regarding the tax opinion, see “Our Separation from Aptiv—Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares—Material U.S. Federal Income Tax Consequences of the Distribution and the Ownership and the Disposition of Delphi Technologies Ordinary Shares.”
If the distribution is ultimately determined to be taxable to Aptiv’s shareholders for U.S. federal income tax purposes, the distribution could be treated as a taxable dividend or capital gain to Aptiv’s shareholders for U.S. federal income tax purposes, and Aptiv’s shareholders that are subject to U.S. federal income tax could incur significant U.S. federal income tax liabilities. For a more detailed discussion, see the section entitled “Our Separation from Aptiv—Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares—Material U.S. Federal Income Tax Consequences of the Distribution and the Ownership and the Disposition of Delphi Technologies Ordinary Shares.”
In addition, Aptiv expects that restructuring transactions undertaken in connection with the distribution will be taxed in a certain manner. If, contrary to Aptiv’s expectations, such transactions are taxed in a different manner, Aptiv and/or Delphi Technologies may incur additional tax liabilities which may be substantial. If Delphi Technologies is required to pay any such liabilities, the payments could materially adversely affect Delphi Technologies’ financial position.
Under the tax matters agreement that Aptiv and Delphi Technologies intend to enter into, Delphi Technologies will generally be required to indemnify Aptiv against taxes incurred by Aptiv that arise as a result of Delphi Technologies taking or failing to take, as the case may be, certain actions that result in the distribution failing to meet the requirements of a distribution under Section 355(a) of the Code, or that result in certain restructuring transactions in connection with the distribution failing to meet the requirements for tax-free treatment for U.S. federal income tax purposes.
Delphi Technologies may not be able to engage in desirable strategic or capital raising transactions after the separation.
Aptiv and Delphi Technologies will engage in various restructuring transactions in connection with the distribution. To preserve the tax-free treatment of certain such restructuring transactions for U.S. federal income tax purposes, for the two-year period following the separation, under the tax matters agreement that Delphi Technologies has entered into with Aptiv, Delphi Technologies may be prohibited, except in specific circumstances, from (i) entering into any transaction pursuant to which all or a portion of the Delphi Technologies ordinary shares would be acquired, whether by merger or otherwise, (ii) ceasing to actively conduct certain of its businesses or (iii) taking or failing to take any other action that would prevent certain of such restructuring transactions from qualifying as a transaction that is generally tax-free for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code. These restrictions may limit for a period of time Delphi Technologies’ ability to pursue certain strategic transactions or other transactions that Delphi Technologies may believe to be in the best interests of its shareholders or that might increase the value of its business. For more information, see “Certain Relationships and Related Transactions—Agreements with Aptiv—Tax Matters Agreement.”
 
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Risks Related to Our Jurisdiction of Incorporation
The rights of shareholders of Jersey corporations differ in some respects from those of shareholders of U.S. corporations.
We will be incorporated under the laws of Jersey. The rights of holders of ordinary shares are governed by Jersey law, including the Companies (Jersey) Law 1991, as amended, and by our memorandum and articles of association (“Articles of Association”). These rights differ in some respects from the rights of shareholders in corporations incorporated in the United States. See “Description of Share Capital—Comparison of United States and Jersey Corporate Law.”
Risks Related to Delphi Technologies’ Ordinary Shares
We cannot be certain that an active trading market for our ordinary shares will develop or be sustained after the separation, and following the separation, our stock price may fluctuate significantly.
A public market for our ordinary shares does not currently exist. We anticipate that on or prior to the record date for the distribution, trading of shares of our ordinary shares will begin on a “when-issued” basis and will continue through the distribution date. However, we cannot guarantee that an active trading market will develop or be sustained for our ordinary shares after the separation. If an active trading market does not develop, you may have difficulty selling your shares of Delphi Technologies ordinary shares at an attractive price, or at all. In addition, we cannot predict the prices at which shares of Delphi Technologies ordinary shares may trade after the separation.
Similarly, we cannot predict the effect of the separation on the trading prices of our ordinary shares. After the separation, Aptiv’s ordinary shares will continue to be listed and traded on the NYSE. Subject to the consummation of the separation, we expect the Delphi Technologies ordinary shares to be listed and traded on the NYSE under the symbol “DLPH.” The combined trading prices of Aptiv’s ordinary shares and Delphi Technologies’ ordinary shares after the separation, as adjusted for any changes in the combined capitalization of these companies, may not be equal to or greater than the trading price of Aptiv’s ordinary shares prior to the separation. Until the market has fully evaluated the business of Aptiv without the Delphi Technologies businesses, or fully evaluated Delphi Technologies, the price at which Aptiv’s or our ordinary shares trades may fluctuate significantly.
The market price of our ordinary shares may fluctuate significantly due to a number of factors, some of which may be beyond our control, including:
 
 	•	 	our business profile and market capitalization may not fit the investment objectives of Aptiv’s current shareholders, causing a shift in our investor base, and our ordinary shares may not be included in some indices in which Aptiv’s ordinary shares are included, causing certain holders to sell their shares;	
 
 	•	 	our quarterly or annual earnings, or those of other companies in its industry;	
 
 	•	 	the failure of securities analysts to cover our ordinary shares after the separation;	
 
 	•	 	actual or anticipated fluctuations in our operating results;	
 
 	•	 	changes in earnings estimated by securities analysts or our ability to meet those estimates;	
 
 	•	 	the operating and stock price performance of other comparable companies;	
 
 	•	 	changes to the regulatory and legal environment in which we operate;	
 
 	•	 	overall market fluctuations and domestic and worldwide economic conditions; and	
 
 	•	 	other factors described in these “Risk Factors” and elsewhere in this information statement.	
Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations may adversely affect the trading price of our ordinary shares.
 
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A number of shares of our ordinary shares are or will be eligible for future sale, which may cause our stock price to decline.
Any sales of substantial amounts of our ordinary shares in the public market or the perception that such sales might occur, in connection with the distribution or otherwise, may cause the market price of our ordinary shares to decline. Upon completion of the distribution, we expect that we will have an aggregate of approximately          million shares of our ordinary shares issued and outstanding. These shares will be freely tradeable without restriction or further registration under the U.S. Securities Act of 1933, as amended (“Securities Act”), unless the shares are owned by one or more of our “affiliates,” as that term is defined in Rule 405 under the Securities Act. We are unable to predict whether large amounts of our ordinary shares will be sold in the open market following the distribution. We are also unable to predict whether a sufficient number of buyers would be in the market at that time.
We cannot guarantee the payment of dividends on its ordinary shares, or the timing or amount of any such dividends.
We have not yet determined the extent to which we will pay dividends on our ordinary shares. The payment of any dividends in the future, and the timing and amount thereof, to our shareholders will fall within the discretion of our board of directors. The decisions by our board of directors regarding the payment of dividends will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our debt, industry practice, legal requirements and other factors that our board of directors deems relevant. For more information, see “Dividend Policy.” Our ability to pay dividends will depend on our ongoing ability to generate cash from operations and on our access to the capital markets. We cannot guarantee that we will pay a dividend in the future or continue to pay any dividends if we commence paying dividends.
Your percentage ownership in Delphi Technologies may be diluted in the future.
In the future, your percentage ownership in Delphi Technologies may be diluted because of equity issuances for acquisitions, capital market transactions or otherwise, including equity awards that we will be granting to our directors, officers and employees. Our employees will have rights to receive shares of our ordinary shares after the distribution as a result of the conversion of their Aptiv restricted stock units to Delphi Technologies restricted stock units. The conversion of these Aptiv awards into Delphi Technologies awards is described in further detail in the section entitled “Our Separation from Aptiv.” As of the date of this information statement, the exact number of shares of our ordinary shares that will be subject to the converted Delphi Technologies options, restricted stock units and performance stock units is not determinable, and, therefore, it is not possible to determine the extent to which your percentage ownership in Delphi Technologies could be diluted as a result of the conversion. It is anticipated that our compensation committee will grant additional equity awards to our employees and directors after the distribution, from time to time, under our employee benefits plans. These additional awards will have a dilutive effect on our earnings per share, which could adversely affect the market price of our ordinary shares.
In addition, our Articles of Association will authorize us to issue, without the approval of our shareholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our ordinary shares respecting dividends and distributions, as our board of directors generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our ordinary shares. For example, we could grant the holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences that we could assign to holders of preferred stock could affect the residual value of the ordinary shares. See “Description of Share Capital.”
 
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If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline.
The trading market for our ordinary shares will rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts. Furthermore, if one or more of the analysts who do cover us downgrade our shares or our industry, or the shares of any of our competitors, or publish inaccurate or unfavorable research about our business, the price of our ordinary shares could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, we could lose viability in the market, which in turn could cause our share price or trading volume to decline.
Provisions of our Articles of Association could delay or prevent a takeover of us by a third party.
Our Articles of Association could delay, defer or prevent a third party from acquiring us, despite any possible benefit to our shareholders, or otherwise adversely affect the price of our ordinary shares. For example, our Articles of Association will:
 
 	•	 	permit our board of directors to issue one or more series of preferred shares with rights and preferences designated by our board;	
 
 	•	 	impose advance notice requirements for shareholder proposals and nominations of directors to be considered at shareholder meetings;	
 
 	•	 	limit the ability of shareholders to remove directors without cause; and	
 
 	•	 	require that all vacancies on our board of directors be filled by our directors	
These provisions may discourage potential takeover attempts, discourage bids for our ordinary shares at a premium over the market price or adversely affect the market price of, and the voting and other rights of the holders of, our ordinary shares. These provisions could also discourage proxy contests and make it more difficult for you and other shareholders to elect directors other than the candidates nominated by our board of directors. See “Description of Share Capital” for additional information on the anti-takeover measures that may be applicable to us.
 
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 FORWARD-LOOKING STATEMENTS
This information statement contains forward-looking statements that reflect, when made, the Company’s current views with respect to current events and financial performance. Such forward-looking statements are subject to many risks, uncertainties and factors relating to the Company’s operations and business environment, which may cause the actual results of the Company to be materially different from any future results, express or implied, by such forward-looking statements. All statements that address future operating, financial or business performance or the Company’s strategies or expectations are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “outlook” or “continue,” and other comparable terminology. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following:
 
 	•	 	global and regional economic conditions, including conditions affecting the credit market and resulting from the United Kingdom referendum held on June 23, 2016 in which voters approved an exit from the European Union, commonly referred to as “Brexit”;	
 
 	•	 	fluctuations in interest rates and foreign currency exchange rates;	
 
 	•	 	the cyclical nature of automotive sales and production;	
 
 	•	 	the potential disruptions in the supply of and changes in the competitive environment for raw material integral to our products;	
 
 	•	 	our ability to maintain contracts that are critical to our operations;	
 
 	•	 	potential changes to beneficial free trade laws and regulations such as the North American Free Trade Agreement;	
 
 	•	 	our ability to integrate and realize the benefits of acquisitions;	
 
 	•	 	our ability to attract, motivate and/or retain key executives;	
 
 	•	 	our ability to avoid or continue to operate during a strike, or partial work stoppage or slow down by any of our unionized employees or those of our principal customers;	
 
 	•	 	our ability to attract and retain customers;	
 
 	•	 	the amount of debt that we currently have or may incur in the future;	
 
 	•	 	our separation from Aptiv and our ability to operate as a stand-alone public company;	
 
 	•	 	our ability to achieve the intended benefits from our separation from Aptiv; and	
 
 	•	 	potential business conflicts of interest with Aptiv.	
Additional factors are discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect the Company. It should be remembered that the price of the ordinary shares can go down as well as up. Forward-looking statements speak only as of the date they are made and we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise, except as may be required by law.
 
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 OUR SEPARATION FROM APTIV
General
The Aptiv board of directors determined upon careful review and consideration that the separation of Delphi Technologies from the rest of Aptiv and the establishment of Delphi Technologies as a separate, publicly-traded company was in the best interests of Aptiv.
The Aptiv board of directors periodically reviews Aptiv’s business portfolio and capital allocation options, with the goal of enhancing shareholder value. In reaching the decision to create two independent public companies, Aptiv’s board considered strategic alternatives for Delphi Technologies and concluded that the creation of two independent public companies was then advisable and in the best interests of Aptiv. As part of this evaluation, Aptiv considered a number of factors, including the strategic focus and flexibility for Aptiv and Delphi Technologies after the spin-off, the ability of Delphi Technologies to compete and operate efficiently and effectively after the spin-off, the financial profiles of Aptiv and Delphi Technologies and the expected potential reaction of investors.
As a result of this evaluation, the Aptiv board of directors believes that separating the Delphi Technologies business from the remainder of Aptiv is in the best interests of Aptiv for a number of reasons, including:
 
 	•	 	Strategic Focus —The separation will allow each of Delphi Technologies and Aptiv to focus on their distinct product portfolios and unique opportunities for long-term growth and profitability, and to allocate capital and corporate resources in a manner that focuses on achieving each company’s own operating priorities and financial objectives. Specifically, Aptiv will pursue a strategy of developing advanced electronics and electrical architecture technology solutions, with a resource allocation strategy focused on investments in these spaces. Delphi Technologies will pursue a strategy of continuing to develop powertrain technologies for gas and diesel engines, as well as hybrid and electric vehicles, in order to help its customers meet increasingly stringent global regulatory requirements while also enhancing vehicle performance and providing additional power.	
 
 	•	 	Strategic Flexibility —The separation will provide each company with increased flexibility to pursue independent strategic and financial plans and strategic partnerships without having to consider the potential impact on the businesses of the other company. The separation will also provide each company the flexibility to pursue tailored investments in advanced technologies that solve their customers’ most complex challenges.	
 
 	•	 	Capital Allocation —The separation will enable each of Delphi Technologies and Aptiv to create independent capital structures that will afford each company direct access to the debt and equity capital markets to fund organic and inorganic growth opportunities and to establish an appropriate capital structure for their strategy and business needs.	
 
 	•	 	Investor Choice —The separation will allow investors to evaluate the separate investment characteristics of each company, including the merits, performance and future prospects of their respective businesses, and make investment decisions based on their distinct characteristics.	
The anticipated benefits of the separation are based on a number of assumptions, and there can be no assurance that such benefits will materialize to the extent anticipated, or at all. In the event the separation does not result in such benefits, the costs associated with the separation could have a material adverse effect on each company individually and in the aggregate.
Our board of directors has carefully reviewed the separation transaction and determined that establishing us as a separate, publicly traded company is in our best interests.
In furtherance of this plan, Aptiv will distribute 100% of our ordinary shares held by Aptiv to holders of Aptiv ordinary shares, subject to certain conditions. The distribution of our ordinary shares is expected to take
 
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place on         ,     . On the distribution date, each holder of Aptiv ordinary shares will receive              of our ordinary shares for every         ordinary share(s) of Aptiv held at the close of business on the distribution record date, as described below. You will not be required to make any payment, surrender or exchange your ordinary shares of Aptiv or take any other action to receive your ordinary shares of Delphi Technologies to which you are entitled on the distribution date.
The distribution of our ordinary shares as described in this information statement is subject to the satisfaction or waiver of certain conditions. We cannot provide any assurances that the distribution will be completed. For a more detailed description of these conditions, see the section entitled “Conditions to the Distribution” below.
The Number of Shares You Will Receive
For every         ordinary share(s) of Aptiv that you owned at the close of business on         ,         , the distribution record date, you will receive              of our ordinary share(s) on the distribution date.
Transferability of Shares You Receive
The ordinary shares of Delphi Technologies distributed to Aptiv shareholders will be freely transferable, except for shares received by persons who may be deemed to be our “affiliates” under the Securities Act. Persons who may be deemed to be our affiliates after the separation generally include individuals or entities that control, are controlled by or are under common control with us and may include directors and certain officers or principal shareholders of us. Our affiliates will be permitted to sell their Delphi Technologies ordinary shares only pursuant to an effective registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act, such as the exemptions afforded by Rule 144.
When and How You Will Receive the Distributed Shares
Aptiv will distribute the ordinary shares of Delphi Technologies on         ,         , the distribution date. Computershare will serve as distribution agent and registrar for our ordinary shares and as distribution agent in connection with the distribution.
If you own ordinary shares of Aptiv as of the close of business on the record date, Aptiv, with the assistance of Computershare, will electronically distribute ordinary shares to your bank or brokerage firm on your behalf or through the systems of the DTC (if you hold the shares through a bank or brokerage firm that uses DTC) or to you in book-entry form and Computershare will mail you a book-entry account statement that reflects your ordinary shares of Delphi Technologies.
Most Aptiv shareholders hold their ordinary shares through a bank or brokerage firm. In such cases, the bank or brokerage firm would be said to hold the shares in “street name” and ownership would be recorded on the bank or brokerage firm’s books. If you hold your Aptiv ordinary shares through a bank or brokerage firm, your bank or brokerage firm will credit your account for the ordinary shares of Delphi Technologies that you are entitled to receive in the distribution. If you have any questions concerning the mechanics of having shares held in “street name,” we encourage you to contact your bank or brokerage firm.
If you sell ordinary shares of Aptiv in the “regular-way” market up to and including the distribution date, you will be selling your right to receive ordinary shares of Delphi Technologies in the distribution.
General Treatment of Fractional Ordinary Shares
Aptiv will not distribute any fractional ordinary shares to its shareholders. Instead, the transfer agent will aggregate fractional ordinary shares into whole ordinary shares, sell the whole ordinary shares in the open market
 
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at prevailing market prices and distribute the aggregate cash proceeds (net of discounts and commissions) of the sales pro rata (based on the fractional ordinary shares such holder would otherwise be entitled to receive) to each holder who otherwise would have been entitled to receive a fractional ordinary share in the distribution. The transfer agent, in its sole discretion, without any influence by Aptiv or us, will determine when, how, through which broker-dealer and at what price to sell the whole ordinary shares. Any broker-dealer used by the transfer agent will not be an affiliate of either Aptiv or us. Neither we nor Aptiv will be able to guarantee any minimum sale price in connection with the sale of these ordinary shares. Recipients of cash in lieu of fractional ordinary shares will not be entitled to any interest on the amounts of payment made in lieu of fractional ordinary shares.
The aggregate net cash proceeds of these sales will be taxable for U.S. federal income tax purposes. For an explanation of the material U.S. federal income tax consequences of the distribution, see the section entitled “Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares—Material U.S. Federal Income Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares” below. We estimate that it will take approximately         weeks from the distribution date for the distribution agent to complete the distributions of the aggregate net cash proceeds. If you are the registered holder of ordinary shares of Aptiv, you will receive a check from the distribution agent in an amount equal to your pro-rate share of the aggregate net cash proceeds of the sale. If you hold your Aptiv ordinary shares through a bank or brokerage firm, your bank or brokerage firm will receive, on your behalf, your pro-rata share of the aggregate net cash proceeds of the sales and will electronically credit your account for your share of such proceeds.
Treatment of Equity-Based Compensation
With respect to Aptiv restricted stock units held by Delphi Technologies employees, including Delphi Technologies’ NEOs (as defined under “Compensation Discussion and Analysis”), that are outstanding on the distribution date and for which the underlying security is Aptiv ordinary shares, we currently anticipate that each such outstanding Aptiv restricted stock unit (other than performance-based restricted stock units (“PRSUs”)) will be equitably adjusted or converted into an award with respect to Delphi Technologies ordinary shares. Each other Aptiv restricted stock unit that is outstanding on the distribution date and for which the underlying security is Aptiv ordinary shares (other than PRSUs) will also be equitably adjusted or converted, but will continue to relate to Aptiv ordinary shares. In each case, the outstanding Aptiv award will be equitably adjusted or converted in a manner intended to preserve the approximate intrinsic value of such Aptiv equity award from directly before to directly after the spin-off. More specifically, with respect to each adjusted or converted award covering Delphi Technologies ordinary shares, the number of underlying shares will be determined based on a ratio, as further described in the Employee Matters Agreement, applied to the number of Aptiv ordinary shares subject to the original Aptiv award outstanding on the distribution date. Further, we currently anticipate that PRSUs and their applicable performance objectives and criteria will also be equitably adjusted in accordance with the terms of Aptiv’s equity compensation plans so that, generally, each award will retain directly after the spin-off approximately the same intrinsic value that the awards had directly prior to the spin-off. Specific treatment may, however, depend on the year in which the PRSUs were originally granted and whether the holders of such awards will continue employment with Aptiv or Delphi Technologies. To the extent that an affected employee is employed in a non-U.S. jurisdiction, and the adjustments or conversions contemplated above could result in adverse tax consequences or other adverse regulatory consequences, Aptiv may determine that a different equitable adjustment or grant will apply in order to avoid any such adverse consequences.
Results of the Separation
After our separation from Aptiv, Delphi Technologies will be a separate, publicly traded company. Immediately following the distribution we expect to have approximately         of our ordinary shares outstanding. The actual number of shares to be distributed will be determined after                 ,                 , the record date of the distribution. The distribution will not affect the number of outstanding ordinary shares of Aptiv. No fractional ordinary shares of Delphi Technologies will be distributed.
 
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Delphi Technologies will enter into a separation and distribution agreement and other related agreements with Aptiv to effect the separation and distribution and provide a framework for Delphi Technologies’ relationship with Aptiv after the separation. These agreements will provide for the allocation between Aptiv and Delphi Technologies of assets, liabilities and obligations attributable to periods prior to Delphi Technologies’ separation from Aptiv and will govern the relationship between Aptiv and Delphi Technologies after the separation. For a more detailed description of these agreements, see “Certain Relationships and Related Transactions.”
Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares
Aptiv is a public limited company incorporated under the laws of Jersey and resident for tax purposes in the U.K. Delphi Technologies is also a public limited company incorporated under the laws of Jersey and we intend to be centrally managed and controlled in the U.K. such that we should be treated as resident in the U.K. for U.K tax purposes.
Accordingly, the following represents a summary of the U.S., U.K., and Jersey tax consequences of the distribution and the ownership and disposition of Delphi Technologies ordinary shares.
The statements made under the heading “Material U.S. Federal Income Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares” below are based on the Code, the U.S. Treasury Regulations promulgated thereunder and judicial and administrative interpretations thereof, all in effect as of the date hereof, and all of which are subject to change at any time, possibly with retroactive effect. Any such change could affect the tax consequences described below.
The statements made under the heading “Material U.K. Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares” below are based upon U.K. tax laws and the practice of the Her Majesty’s Revenue & Customs (HMRC) in effect as of the date hereof, which are subject to change at any time, possibly with retroactive effect. Any such change could affect the tax consequences described below.
The statements made under the heading “Certain Jersey Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares” below are based upon Jersey tax laws and the practice of the Jersey Taxes Office in effect as of the date hereof, which are subject to change at any time, possibly with retroactive effect. Any such change could affect the tax consequences described below.
Material U.S. Federal Income Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares
The following is a summary of the material U.S. federal income tax consequences of the distribution to U.S. Holders and Non-U.S. Holders (each as defined below) and a summary of the material U.S. federal income tax consequences of the ownership and disposal of Delphi Technologies ordinary shares for U.S. Holders and Non-US Holders.
For purposes of this discussion, a U.S. Holder is a beneficial owner of Aptiv ordinary shares that is, for U.S. federal income tax purposes:
 
 	•	 	an individual who is a citizen or resident of the United States;	
 
 	•	 	a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;	
 
 	•	 	an estate the income of which is subject to U.S. federal income taxation regardless of its source; or	
 
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 	•	 	a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more United States persons (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a United States person.	
For purposes of this discussion, a “Non-U.S. Holder” is any beneficial owner of Aptiv ordinary shares that is neither a U.S. Holder nor an entity treated as a partnership for U.S. federal income tax purposes.
This summary also does not discuss all tax considerations that may be relevant to holders in light of their particular circumstances, nor does it address the consequences to holders subject to special treatment under the U.S. federal income tax laws, such as:
 
 	•	 	U.S. expatriates and former citizens or long-term residents of the United States;	
 
 	•	 	dealers or brokers in securities, commodities or currencies;	
 
 	•	 	tax-exempt organizations;	
 
 	•	 	banks, insurance companies or other financial institutions;	
 
 	•	 	mutual funds;	
 
 	•	 	regulated investment companies and real estate investment trusts;	
 
 	•	 	a corporation that accumulates earnings to avoid U.S. federal income tax;	
 
 	•	 	holders who hold individual retirement or other tax-deferred accounts;	
 
 	•	 	holders who acquired Aptiv ordinary shares pursuant to the exercise of stock options or otherwise as compensation;	
 
 	•	 	holders who own, or are deemed to own, at least 10% or more, by voting power or value, of Aptiv ordinary shares;	
 
 	•	 	holders who hold Aptiv ordinary shares as part of a hedge, appreciated financial position, straddle, constructive sale, conversion transaction or other risk reduction transaction;	
 
 	•	 	traders in securities who elect to apply a mark-to-market method of accounting;	
 
 	•	 	U.S. Holders who have a functional currency other than the U.S. dollar;	
 
 	•	 	holders who are subject to the alternative minimum tax;	
 
 	•	 	partnerships or other pass-through entities or investors in such entities; or	
 
 	•	 	“qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds.	
This summary does not address the U.S. federal income tax consequences to Aptiv shareholders who do not hold shares of Aptiv ordinary shares as a capital asset. Moreover, this summary does not address any state, local or foreign tax consequences or any estate, gift or other non-income tax consequences, or the consequences of the Medicare tax on net investment income.
If a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds shares of Aptiv ordinary shares, the tax treatment of a partner in that partnership will generally depend on the status of the partner and the activities of the partnership. Partners in a partnership holding Aptiv ordinary shares should consult their own tax advisors regarding the tax consequences of the distribution.
This summary further assumes that neither Aptiv nor Delphi Technologies is a passive foreign investment company (“PFIC”). In that regard, we believe that neither Aptiv nor Delphi Technologies is currently a PFIC, and we do not expect either entity to become one in the foreseeable future. To the extent either Aptiv or Delphi
 
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Technologies is a PFIC, the tax consequences described below may be materially different. Accordingly, holders should consult their own tax advisors regarding the tax consequences if either Aptiv or Delphi Technologies is a PFIC.
U.S. Federal Income Tax Consequences of the Distribution to U.S. Holders
In connection with the distribution, Aptiv expects to receive an opinion of Latham & Watkins LLP, tax counsel to Aptiv, substantially to the effect that, for U.S. federal income tax purposes, subject to certain qualifications and limitations, the distribution will qualify as a distribution under Section 355(a) of the Code. If the distribution is so treated, then for U.S. federal income tax purposes:
 
 	•	 	no gain or loss will be recognized by, or be includible in the income of, a U.S. Holder of Aptiv ordinary shares, solely as a result of the receipt of Delphi Technologies ordinary shares in the distribution;	
 
 	•	 	the aggregate tax basis of the shares of Aptiv ordinary shares and shares of Delphi Technologies ordinary shares in the hands of a U.S. Holder of Aptiv ordinary shares immediately after the distribution will be the same as the aggregate tax basis of the shares of Aptiv ordinary shares held by the holder immediately before the distribution, allocated between the Aptiv ordinary shares and Delphi Technologies ordinary shares, including any fractional share interest for which cash is received, in proportion to their relative fair market values on the date of the distribution;	
 
 	•	 	the holding period with respect to shares of Delphi Technologies ordinary shares received by a U.S. Holder of Aptiv ordinary shares will include the holding period of its shares of Aptiv ordinary shares; and	
 
 	•	 	a U.S. Holder of Aptiv ordinary shares who receives cash in lieu of a fractional share of Delphi Technologies ordinary shares in the distribution will be treated as having sold such fractional share for cash and generally will recognize capital gain or loss in an amount equal to the difference between the amount of cash received and such holder’s adjusted tax basis in the fractional share. That gain or loss will be long-term capital gain or loss if the holder’s holding period for its shares of Aptiv ordinary shares exceeds one year.	
U.S. Treasury Regulations generally provide that if a U.S. Holder of Aptiv ordinary shares holds different blocks of Aptiv ordinary shares (generally shares of Aptiv ordinary shares purchased or acquired on different dates or at different prices), the aggregate basis for each block of Aptiv ordinary shares purchased or acquired on the same date and at the same price will be allocated, to the greatest extent possible, between the shares of Delphi Technologies ordinary shares received in the distribution in respect of such block of Aptiv ordinary shares and such block of Aptiv ordinary shares, in proportion to their respective fair market values, and the holding period of the shares of Delphi Technologies ordinary shares received in the distribution in respect of such block of Aptiv ordinary shares will include the holding period of such block of Aptiv ordinary shares, provided that such block of Aptiv ordinary shares was held as a capital asset on the distribution date. If a U.S. Holder of Aptiv ordinary shares is not able to identify which particular shares of Delphi Technologies ordinary shares are received in the distribution with respect to a particular block of Aptiv ordinary shares, for purposes of applying the rules described above, the U.S. Holder may designate which shares of Delphi Technologies ordinary shares are received in the distribution in respect of a particular block of Aptiv ordinary shares, provided that such designation is consistent with the terms of the distribution. Holders of Aptiv ordinary shares are encouraged to consult their own tax advisors regarding the application of these rules to their particular circumstances.
U.S. Holders should note that the opinion that Aptiv expects to receive from Latham & Watkins LLP will be based on certain facts and assumptions, and certain representations and undertakings, from Delphi Technologies and Aptiv, and is not binding on the U.S. Internal Revenue Service (the “IRS”), or the courts. If any of the facts, representations, assumptions or undertakings relied upon in the opinion is not correct, is incomplete or has been violated, Aptiv’s ability to rely on the opinion of counsel could be jeopardized. However, Aptiv is not aware of
 
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any facts or circumstances that would cause these facts, representations or assumptions to be untrue or incomplete, or that would cause any of these undertakings to fail to be complied with, in any material respect.
If, notwithstanding the conclusions that Aptiv expects to be included in the opinion, the distribution is ultimately determined to not qualify as a distribution under Section 355(a) of the Code, each U.S. Holder who receives shares of Delphi Technologies ordinary shares in the distribution would be treated as receiving a taxable distribution in an amount equal to the fair market value of the Delphi Technologies ordinary shares that were distributed to the holder. Specifically, the full value of the Delphi Technologies ordinary shares distributed to a U.S. Holder generally would be treated first as a taxable dividend to the extent of the holder’s pro rata share of Aptiv’s current and accumulated earnings and profits, then as a non-taxable return of capital to the extent of the holder’s basis in the Aptiv ordinary shares, and finally as capital gain from the sale or exchange of Aptiv ordinary shares with respect to any remaining value.
U.S. Federal Income Tax Consequences of the Ownership and Disposition of Delphi Technologies Ordinary Shares to U.S. Holders
Distributions on Delphi Technologies Ordinary Shares
We have not yet determined the extent to which we will pay dividends on our ordinary shares. If our board of directors determines to make distributions of cash or other property on its ordinary shares, such distributions will be treated first as a dividend to the extent of Delphi Technologies’ current and accumulated earnings and profits (as determined for U.S. federal income tax purposes), and then as a tax-free return of capital to the extent of the U.S. Holder’s tax basis, with any excess treated as capital gain from the sale or exchange of the shares. Any dividend will not be eligible for the dividends received deduction allowed to corporations in respect of dividends received from U.S. corporations.
If Delphi Technologies is not a PFIC, subject to certain limitations, including minimum holding period requirements, dividends paid to non-corporate U.S. Holders may be “qualified dividend income” taxable at a maximum rate of 20%. U.S. Holders should consult their tax advisors regarding the availability of this preferential tax rate under their particular circumstances.
Subject to certain exceptions, dividends on Delphi Technologies ordinary shares will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by a fraction, the numerator of which is the reduced rate applicable to qualified dividend income and the denominator of which is the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by Delphi Technologies with respect to its ordinary shares generally will constitute “passive category income” but could, in the case of certain U.S. Holders, constitute “general category income.”
Sale or Other Taxable Disposition of Delphi Technologies Ordinary Shares
Upon a subsequent sale or other taxable disposition of Delphi Technologies ordinary shares, a U.S. Holder will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a Delphi Technologies ordinary share equal to the difference between the amount realized on the disposition of the ordinary share and the U.S. Holder’s tax basis in the ordinary share. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual, who has held the ordinary share for more than one year, you generally will be eligible for reduced tax rates for such long-term capital gains. The deductibility of capital losses is subject to limitations. Any such gain or loss you recognize generally will be treated as U.S. source income or loss.
 
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U.S. Federal Income Tax Consequences of the Distribution and of the Ownership and Disposition of Delphi Technologies Ordinary Shares to Non-U.S. Holders
Any (i) gain or loss recognized by a Non-U.S. Holder in connection with the distribution, (ii) distributions of cash or property paid to a Non-U.S. Holder in respect of Delphi Technologies ordinary shares or (iii) gain realized upon the sale or other taxable disposition of Delphi Technologies ordinary shares generally will not be subject to U.S. federal income taxation unless:
 
 	•	 	the gain or distribution is effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such gain is attributable); or	
 
 	•	 	in the case of gain only, the Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met.	
Gain or distributions described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular graduated rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items.
Gain described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.
Non-U.S. Holders should consult their tax advisors regarding potentially applicable income tax treaties that may provide for different rules.
Information Reporting and Backup Withholding
U.S. Treasury Regulations require certain shareholders who receive shares in a distribution to attach to their U.S. federal income tax return for the year in which the distribution occurs a detailed statement setting forth certain information relating to the tax-free nature of the distribution.
Certain persons holding specified foreign financial assets with an aggregate value in excess of the applicable dollar threshold are required to report information to the IRS relating to Delphi Technologies ordinary shares, subject to certain exceptions (including an exception for Delphi Technologies ordinary shares held in accounts maintained by U.S. financial institutions), by attaching a complete IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax returns, for each year in which they hold Delphi Technologies ordinary shares. Delphi Technologies shareholders should consult their tax advisors regarding information reporting requirements relating to their ownership of Delphi Technologies ordinary shares.
U.S. Holders
A U.S. Holder may be subject to information reporting and backup withholding when such holder receives cash in lieu of fractional shares of Delphi Technologies ordinary shares in the distribution or receives payments on Delphi Technologies ordinary shares or proceeds from the sale or other taxable disposition of such shares, in each case effected within the United States or through certain U.S.-related financial intermediaries. Certain U.S. Holders are exempt from backup withholding, including corporations and certain tax-exempt organizations. A U.S. Holder will be subject to backup withholding if such holder is not otherwise exempt and:
 
 	•	 	the holder fails to furnish the holder’s taxpayer identification number, which for an individual is ordinarily his or her social security number;	
 
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 	•	 	the holder furnishes an incorrect taxpayer identification number;	
 
 	•	 	the applicable withholding agent is notified by the IRS that the holder previously failed to properly report payments of interest or dividends; or	
 
 	•	 	the holder fails to certify under penalties of perjury that the holder has furnished a correct taxpayer identification number and that the IRS has not notified the holder that the holder is subject to backup withholding.	
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS. U.S. Holders should consult their tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption.
Non-U.S. Holders
Payments to Non-U.S. Holders of distributions on, or proceeds from the disposition of, Delphi Technologies ordinary shares are generally exempt from information reporting and backup withholding. However, a Non-U.S. Holder may be required, under certain circumstances, to establish that exemption by providing certification of non-U.S. status on an appropriate IRS Form W-8.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a Non-U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS.
THE FOREGOING IS A SUMMARY OF THE MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION UNDER CURRENT LAW. THE FOREGOING DOES NOT PURPORT TO ADDRESS ALL U.S. FEDERAL INCOME TAX CONSEQUENCES OR TAX CONSEQUENCES THAT MAY ARISE UNDER THE TAX LAWS OR THAT MAY APPLY TO PARTICULAR CATEGORIES OF SHAREHOLDERS. EACH APTIV SHAREHOLDER IS ENCOURAGED TO CONSULT ITS OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES OF THE DISTRIBUTION TO SUCH SHAREHOLDER, INCLUDING THE APPLICATION OF U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS, AND THE EFFECT OF POSSIBLE CHANGES IN TAX LAWS THAT MAY AFFECT THE TAX CONSEQUENCES DESCRIBED ABOVE.
Material U.K. Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares
The following is a summary of the material U.K. corporation tax, stamp tax and income tax consequences of the distribution for certain beneficial owners of Aptiv shares and a summary of the material U.K. corporation tax, stamp tax and income tax consequences of the ownership and disposition of Delphi Technologies ordinary shares for certain beneficial owners of Delphi Technologies shares.
This summary does not purport to be a comprehensive description of all of the tax considerations that may be relevant to each of the shareholders and does not constitute tax advice. The summary is not exhaustive and shareholders should consult their own tax advisors about the U.K. tax consequences (and tax consequences under the laws of other relevant jurisdictions) of the distribution and of the ownership, and disposition of Delphi Technologies ordinary shares.
Further, the following statements are intended to apply to holders of ordinary shares who are only resident or (in the case of capital gains tax) ordinarily resident for tax purposes in the U.K., who hold the ordinary shares as investments and who are the beneficial owners of the ordinary shares. The statements may not apply to certain classes of holders of ordinary shares, such as dealers in securities and persons acquiring ordinary shares in connection with their employment.
 
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U.K. Corporation Tax and Income Tax Consequences of the Distribution
Assuming that the distribution qualifies under Section 1075 CTA 2010, there are no Chargeable Payments under Section 1088 CTA 2010 within five years, and either Aptiv obtains sufficient tax basis in its investment in Delphi Technologies as a result of the certain restructuring transactions related to the distribution or the distribution gives rise to an exempt gain by virtue of Schedule 7AC TCGA 1992:
 
 	•	 	No adverse U.K. corporation tax implications will arise for Aptiv as a result of the distribution.	
 
 	•	 	No adverse U.K. corporation tax implications will arise for Delphi Technologies (or any of its subsidiaries) as a result of Delphi Technologies leaving the group for U.K. corporation tax purposes.	
 
 	•	 	Any U.K. tax resident individual shareholders will be treated as having not received an income distribution from Aptiv such that they do not have a liability to U.K. income tax on receipt of Delphi Technologies shares, except to the extent that the shareholder receives cash in lieu of fractional share of Delphi Technologies ordinary shares in the distribution and the receipt of such cash is treated as an income transaction for U.K. tax purposes.	
 
 	•	 	Any U.K. tax resident individual shareholders will not be treated as having made a disposal or part disposal of their shares in Aptiv for U.K. capital gains tax purposes such that no liability to U.K. capital gains tax should arise for those shareholders, except to the extent that the shareholder receives cash in lieu of fractional share of Delphi Technologies ordinary shares in the distribution and the receipt of such cash is treated as a capital gains transaction for U.K. tax purposes. The shares they receive in Delphi Technologies will be treated as the same asset, acquired at the same time as their shares in Aptiv and the base cost should be apportioned between shares.	
 
 	•	 	To the extent that a U.K. tax resident shareholder receives cash in lieu of a fractional share of Delphi Technologies ordinary shares in the distribution and the receipt of such cash is treated as a capital gains transaction, the U.K. tax resident shareholder generally recognizes gain or loss in an amount equal to the difference between the amount of cash received and such holder’s adjusted basis in the fractional shares. However, it is noted that certain exceptions from needing to immediately recognize such gain or loss may be available, depending on the holder’s specific circumstances.	
U.K. Stamp Tax Consequences of the Distribution
No stamp duty reserve tax will be payable on the issue of ordinary shares by Delphi Technologies or on any transfer of Delphi Technologies’ ordinary shares, provided that the ordinary shares are not registered in a register kept in the U.K. It is not intended that such a register will be kept in the U.K.
No stamp duty will be payable on the issue of ordinary shares by Delphi Technologies. No stamp duty will be payable on a transfer of Delphi Technologies’ ordinary shares provided that (i) any instrument of transfer is not executed inside the U.K., and (ii) such instrument of transfer does not relate to any property situated, or any matter or thing done or to be done, in the U.K.
U.K Corporation Tax and Income Tax Consequences of the Ownership and Disposition of Delphi Technologies Ordinary Shares for U.K. Resident Shareholders
Dividends
Individuals
An individual holder who receives a dividend from Delphi Technologies may, subject to their specific circumstances, be subject to U.K. income tax on the dividend income. The rates at which income tax is charged on taxable dividend income, i.e. dividend income in excess of any remaining personal allowance, vary from 0% (for the first £5,000 of taxable dividend income from Delphi Technologies or other investments) to 38.1%, depending on the individual’s amount of total taxable income (including Delphi Technologies dividends, other dividends and the individual’s other taxable income).
 
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Corporate Shareholders within the Charge to U.K. Corporation Tax
Holders of ordinary shares within the charge to U.K. corporation tax which are “small companies” for the purposes of Chapter 2 of Part 9A of the Corporation Tax Act 2009 (“CTA 2009”) (for the purposes of U.K. taxation of dividends) will not be subject to U.K. corporation tax on any dividend received from Delphi Technologies provided certain conditions are met (including an anti-avoidance condition).
Other holders within the charge to U.K. corporation tax will not normally be subject to tax on dividends (including dividends from Delphi Technologies). If the conditions for exemption are not met or cease to be satisfied, or such a holder elects for an otherwise exempt dividend to be taxable, the holder will be subject to U.K. corporation tax on dividends received from Delphi Technologies, at the rate of corporation tax applicable to that holder.
Withholding Taxes
Delphi Technologies will not be required to deduct or withhold U.K. tax at source from dividend payments it makes.
Capital Gains
Individuals
For individual holders, the principal factors that will determine the U.K. capital gains tax position on a disposal or deemed disposal of ordinary shares are the extent to which the holder realizes any other capital gains in the U.K. tax year in which the disposal is made, the extent to which the holder has incurred capital losses in that or earlier U.K. tax years, and the level of the annual allowance of tax-free gains in that U.K. tax year (the “annual exemption”). The annual exemption for the 2017/2018 U.K. tax year is £11,300.
If, after all allowable deductions, an individual holder’s taxable income for the year exceeds the basic rate U.K. income tax limit, a taxable chargeable gain accruing on a disposal or deemed disposal of the ordinary shares would be taxed at 20%.
A holder who is an individual and who has ceased to be resident or ordinarily resident in the U.K. for tax purposes for a period of less than five complete tax years and who disposes of ordinary shares during that period may also be liable on his return to the U.K. to tax on any capital gain realized, subject to any available exemptions or reliefs.
Corporate Shareholders within the Charge to U.K. Corporation Tax
A disposal or deemed disposal of ordinary shares by a holder within the charge to U.K. corporation tax may give rise to a chargeable gain or allowable loss for the purposes of U.K. corporation tax, depending on the circumstances and subject to any available exemptions or reliefs. Corporation tax is charged on chargeable gains at the rate applicable to that company.
Holders within the charge to U.K. corporation tax will, for the purposes of computing chargeable gains, be allowed to claim an indexation allowance which applies to reduce capital gains (but not to create or increase an allowable loss) to the extent that such gains arise due to inflation.
U.K Corporation Tax and Income Tax Consequences of the Ownership and Disposition of Delphi Technologies Ordinary Shares for Non U.K. Resident Shareholders
Dividends
Holders of ordinary shares who are not resident in the U.K. will not generally be subject to U.K. taxation on the receipt of dividends.
 
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Capital Gains
Holders of ordinary shares who are not resident or ordinarily resident in the U.K. will not generally be subject to U.K. taxation of capital gains on the disposal or deemed disposal of ordinary shares unless they are carrying on a trade, profession or vocation in the U.K. through a branch or agency (or, in the case of a corporate holder, carrying on a trade in the U.K. through a permanent establishment) in connection with which the ordinary shares are used, held or acquired.
Stamp tax consequences of the ownership and disposition of Delphi Technologies ordinary shares
No stamp duty reserve tax will be payable on the issue of ordinary shares by Delphi Technologies or on any transfer of Delphi Technologies’ ordinary shares, provided that the ordinary shares are not registered in a register kept in the U.K. It is not intended that such a register will be kept in the U.K.
No stamp duty will be payable on a transfer of Delphi Technologies’ ordinary shares provided that (i) any instrument of transfer is not executed inside the U.K., and (ii) such instrument of transfer does not relate to any property situated, or any matter or thing done or to be done, in the U.K.
Material Jersey Tax Consequences of the Distribution and the Ownership and Disposition of Delphi Technologies Ordinary Shares
The following is a summary of the material Jersey tax consequences of the distribution for certain beneficial owners of Aptiv shares and a summary of the Jersey income and stamp tax consequences of the ownership and disposition of Delphi Technologies ordinary shares for certain beneficial owners of Delphi Technologies shares.
This summary does not purport to be a comprehensive description of all of the tax considerations that may be relevant to each of the shareholders and does not constitute tax advice. The summary is not exhaustive and shareholders should consult their own tax advisors about the Jersey tax consequences (and tax consequences under the laws of other relevant jurisdictions) of the distribution and of the ownership, and disposition of Delphi Technologies ordinary shares.
Further, this summary applies only to shareholders who will own Delphi Technologies ordinary shares as capital assets and does not apply to other categories of shareholders, such as dealers in securities, trustees, insurance companies, collective investment schemes, and shareholders who have, or who are deemed to have, acquired Delphi Technologies ordinary shares by virtue of a Jersey office or employment (performed or carried on in Jersey).
Material Jersey Income Tax Consequences of the Distribution
The beneficial holders of Aptiv ordinary shares (other than holders that are resident for Jersey tax purposes) will not be subject to any tax in Jersey in respect of the distribution. Jersey tax resident shareholders may be subject to income tax on the distribution, subject to their specific circumstances and to the extent that the distribution is not considered to be a capital distribution for Jersey tax purposes.
Jersey Stamp Duty Consequences of the Distribution
No Jersey stamp duty should be levied on the distribution.
Delphi Technologies’ Liability to Jersey Tax
Although Delphi Technologies is incorporated in Jersey, it will not be regarded as resident for tax purposes in Jersey due to the company being managed and controlled in the U.K. and hence being considered tax resident
 
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in the U.K. Therefore, Delphi Technologies will not be liable to Jersey income tax other than on Jersey source income (except where such income is exempted from income tax pursuant to the Income Tax (Jersey) Law 1961, as amended).
Material Jersey Income Tax Consequences of the Ownership and Disposition of Delphi Technologies Ordinary Shares
The holders of Delphi Technologies ordinary shares (other than residents of Jersey) will not be subject to any tax in Jersey in respect of the holding, sale or other disposition of such ordinary shares. Jersey resident individuals may be subject to tax on dividends, depending on their circumstances, at an effective rate of up to 20% but will not be subject to tax on any gains arising on the disposition of Delphi Technologies shares as Jersey does not levy capital gains tax. Jersey resident corporations will also be subject to tax on dividends at the rate applicable to them, either 0%, 10% or 20%, but again will not be subject to tax on any gains arising on the disposition of Delphi Technologies shares.
Jersey Stamp Duty Consequences of the Ownership and Disposition of Delphi Technologies Ordinary Shares
In Jersey, no stamp duty should be levied on the issue or transfer of our ordinary shares except that stamp duty is payable on Jersey grants of probate and letters of administration, which will generally be required to transfer ordinary shares on the death of a holder of such ordinary share. In the case of a grant of probate or letters of administration, stamp duty is levied according to the size of the estate (wherever situated in respect of a holder of ordinary shares domiciled in Jersey, or situated in Jersey in respect of a holder of ordinary shares domiciled outside Jersey) and is payable on a sliding scale at a rate of up to 0.75% of such estate (subject to a cap of £100,000).
Withholding Taxes
Delphi Technologies will not be required to deduct or withhold Jersey tax at source from dividend payments it makes.
Other Taxes
Jersey does not otherwise levy taxes upon capital, inheritances, capital gains or gifts nor are there otherwise estate duties.
Market for Ordinary Shares
There is currently no public market for our ordinary shares. A condition to the distribution is the listing on the NYSE of our ordinary shares. We intend to apply to list our ordinary shares on the NYSE under the symbol “DLPH.” We have not and will not set the initial price of our ordinary shares. The initial price will be established by the public markets.
We cannot predict the price at which our ordinary shares will trade after the distribution. In fact, the combined trading prices, after the separation, of our ordinary shares that each Aptiv shareholder will receive in the distribution and the ordinary shares of Aptiv held at the record date may not equal the “regular-way” trading price of an Aptiv share immediately prior to completion of the separation. The price at which our ordinary shares trade may fluctuate significantly, particularly until an orderly public market develops. Trading prices for our ordinary shares will be determined in the public markets and may be influenced by many factors.
Trading Between the Record Date and the Distribution Date
Beginning on or shortly before the record date and continuing up to and including the distribution date, Aptiv expects that there will be two markets in Aptiv ordinary shares: a “regular-way” market and an
 
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“ex-distribution” market. Aptiv ordinary shares that trade on the “regular-way” market will trade with an entitlement to our ordinary shares distributed pursuant to the distribution. Aptiv ordinary shares that trade on the “ex-distribution” market will trade without an entitlement to our ordinary shares distributed pursuant to the distribution. Therefore, if you sell ordinary shares of Aptiv in the “regular-way” market up to and including through the distribution date, you will be selling your right to receive our ordinary shares in the distribution. If you own Aptiv ordinary shares at the close of business on the record date and sell those shares on the “ex-distribution” market up to and including through the distribution date, you will receive ordinary shares of Delphi Technologies that you are entitled to receive pursuant to your ownership as of the record date of Aptiv ordinary shares.
Furthermore, beginning on or shortly before the record date and continuing up to and including the distribution date, we expect that there will be a “when-issued” market in our ordinary shares. “When-issued” trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. The “when-issued” trading market will be a market for our ordinary shares that will be distributed to holders of Aptiv ordinary shares on the distribution date. If you own Aptiv ordinary shares at the close of business on the record date, you will be entitled to our ordinary shares distributed pursuant to the distribution. You may trade this entitlement to our ordinary shares, without the Aptiv ordinary shares you own, on the “when-issued” market. On the first trading day following the distribution date, “when-issued” trading with respect to our ordinary shares will end, and “regular-way” trading will begin.
Conditions to the Distribution
The distribution of our ordinary shares by Aptiv is subject to the satisfaction of the following conditions:
 
 	•	 	the SEC shall have declared effective our registration statement on Form 10, of which this information statement is a part, under the Exchange Act, and no stop order relating to the registration statement shall be in effect, and this information statement shall have been mailed to Aptiv’s shareholders;	
 
 	•	 	Delphi Technologies’ ordinary shares will have been accepted for listing on the NYSE, subject to official notice of issuance;	
 
 	•	 	any required actions and filings with regard to state securities and blue sky laws of the U.S. (and any comparable laws under any foreign jurisdictions) will have been taken and, where applicable, will have become effective or been accepted;	
 
 	•	 	Delphi Technologies and its affiliates shall have completed a cash transfer in the amount of $         to Aptiv;	
 
 	•	 	the ancillary agreements relating to the spin-off have been duly executed and delivered by the parties;	
 
 	•	 	all material governmental approvals necessary to consummate the distribution and to permit the operation of the Delphi Technologies business after the spin-off substantially as it is conducted prior to the spin-off have been received and continue to be in full force and effect;	
 
 	•	 	no order, injunction, decree or regulation issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the completion of the spin-off is in effect, and no other event outside the control of Aptiv has occurred or failed to occur that prevents the completion of the spin-off; and	
 
 	•	 	no other event or development shall exist or have occurred that, in the judgment of the Aptiv board of directors, in its sole and absolute discretion, makes it inadvisable to effect the separation and distribution.	
Aptiv and Delphi Technologies cannot assure you that any or all of these conditions will be met and may also waive any of the conditions to the distribution. In addition, Aptiv and Delphi Technologies can decline at any time to go forward with the separation.
 
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Reasons for the Separation
The Aptiv board of directors believes that separating the Delphi Technologies business from the remainder of Aptiv is in the best interests of Aptiv for a number of reasons, including:
 
 	•	 	Strategic Focus —The separation will allow each of Delphi Technologies and Aptiv to focus on their distinct product portfolios and unique opportunities for long-term growth and profitability and to allocate capital and corporate resources in a manner that focuses on achieving each company’s own operating priorities and financial objectives. Specifically, Aptiv will pursue a strategy of developing advanced electronics and electrical architecture technology solutions, with a resource allocation strategy focused on investments in these spaces. Delphi Technologies will pursue a strategy of continuing to develop powertrain technologies for gas and diesel engines, as well as hybrid and electric vehicles, in order to help its customers meet increasingly stringent global regulatory requirements while also enhancing vehicle performance and providing additional power.	
 
 	•	 	Strategic Flexibility —The separation will provide each company with increased flexibility to pursue independent strategic and financial plans and strategic partnerships without having to consider the potential impact on the businesses of the other company. The separation will also provide each company the flexibility to pursue tailored investments in advanced technologies that solve their customers’ most complex challenges.	
 
 	•	 	Capital Allocation —The separation will enable each of Delphi Technologies and Aptiv to create independent capital structures that will afford each company direct access to the debt and equity capital markets to fund organic and inorganic growth opportunities and to establish an appropriate capital structure for their strategy and business needs.	
 
 	•	 	Investor Choice —The separation will allow investors to evaluate the separate investment characteristics of each company, including the merits, performance and future prospects of their respective businesses, and make investment decisions based on their distinct characteristics.	
Our board of directors has carefully reviewed the separation transaction and determined that establishing us as a separate, publicly traded company is in our best interest.
The anticipated benefits of the separation are based on a number of assumptions, and there can be no assurance that such benefits will materialize to the extent anticipated, or at all. In the event the separation does not result in such benefits, the costs associated with the separation could have a material adverse effect on each company individually and in the aggregate. For more information about the risks associated with the separation, see “Risk Factors—Risks Related to Our Relationship with Aptiv and the Separation.”
Reasons for Furnishing this Information Statement
This information statement is being furnished solely to provide information to Aptiv shareholders who are entitled to receive our ordinary shares in the distribution. The information statement is not, and is not to be construed as, an inducement or encouragement to buy, hold or sell any of our securities or securities of Aptiv. We believe that the information in this information statement is accurate as of the date set forth on the cover. Changes may occur after that date and neither Aptiv nor we undertake any obligation to update such information.
 
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 DIVIDEND POLICY
We have not yet determined the extent to which we will pay dividends on our ordinary shares. The payment of any dividends in the future, and the timing and amount thereof, to our shareholders will fall within the sole discretion of our board of directors and will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our debt, industry practice, legal requirements and other factors that our board of directors deems relevant. Our ability to pay dividends will depend on our ongoing ability to generate cash from operations and on our access to the capital markets. We cannot guarantee that we will pay a dividend in the future or continue to pay any dividends if we commence paying dividends.
 
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 CAPITALIZATION
The following table sets forth Delphi Technologies’ capitalization as of June 30, 2017, on a historical basis and on a pro forma basis to give effect to the pro forma adjustments included in Delphi Technologies’ unaudited pro forma financial information. The information below is not necessarily indicative of what Delphi Technologies’ capitalization would have been had the separation, distribution and related financing transactions been completed as of June 30, 2017. In addition, it is not indicative of Delphi Technologies’ future capitalization. This table should be read in conjunction with “Selected Historical Combined Financial Data,” “Unaudited Pro Forma Condensed Combined Financial Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Delphi Technologies’ combined financial statements and notes thereto included elsewhere in this information statement.

 	  	As of June 30, 2017	 	
 	  	Actual	 	  	Pro Forma	 	
 	  	(in millions)	 	
Cash and cash equivalents (1)	  	$	78	 	  	$	237	 	
	  	 	 	 	  	 	 	 	
Short-term debt, including current portion of long-term debt	  	$	1	 	  	$	10	 	
Long-term debt	  	 	6	 	  	 	1,520	 	
	  	 	 	 	  	 	 	 	
Total debt	  	 	7	 	  	 	1,530	 	
			
Equity:	  				  				
Ordinary shares, par value $0.01 per share	  	 	—  	 	  				
Additional paid-in capital	  	 	—  	 	  				
Net parent investment	  	 	1,779	 	  	 	421	 	
Accumulated other comprehensive loss	  	 	(622	) 	  	 	(622	) 	
Noncontrolling interest	  	 	164	 	  	 	164	 	
	  	 	 	 	  	 	 	 	
Total equity	  	 	1,321	 	  	 	(37	) 	
	  	 	 	 	  	 	 	 	
Total capitalization	  	$	1,328	 	  	$	1,493	 	

(1)	Includes $42 million of cash held by majority-owned joint ventures that are consolidated by Delphi Technologies.	
 
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 SELECTED HISTORICAL COMBINED FINANCIAL DATA
The following selected historical financial data reflect the combined operations of Delphi Technologies as of and for each of the years in the five-year period ended December 31, 2016 and as of June 30, 2017 and for the six months ended June 30, 2017 and 2016. The selected historical financial data as of December 31, 2016 and 2015 and for each of the fiscal years in the three-year period ended December 31, 2016 are derived from our combined financial statements included elsewhere in this information statement. The selected historical financial data as of June 30, 2017 and for the six months ended June 30, 2017 and 2016 are derived from our combined unaudited interim financial statements that are included elsewhere in this information statement. The selected historical financial data as of December 31, 2014 and as of and for the years ended December 31, 2013 and 2012 are derived from our unaudited combined financial statements that are not included in this information statement. The unaudited combined financial statements have been prepared on the same basis as the audited combined financial statements and, in the opinion of our management, include all adjustments, consisting of only ordinary recurring adjustments, necessary for a fair presentation of the data set forth in this information statement.
The historical results do not necessarily indicate the results expected for any future period. To ensure a full understanding, you should read the selected combined financial data presented below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the combined financial statements and accompanying notes included in the “Index to Financial Statements” section of this information statement.

 	 	As of and for the
Six Months Ended	 	 	As of and for the Year Ended December 31,	 	
 	 	June 30,
2017	 	 	June 30,
2016	 	 	2016	 	 	2015	 	 	2014	 	 	2013	 	 	2012	 	
 	 	(unaudited)	 	 	(unaudited)	 	 	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
 	 	(in millions)	 	
Selected statement of operations data:	 				 				 				 				 				 				 				
Net sales	 	$	2,355	 	 	$	2,263	 	 	$	4,486	 	 	$	4,407	 	 	$	4,540	 	 	$	4,398	 	 	$	4,655	 	
Operating income	 	 	227	 	 	 	107	 	 	 	320	 	 	 	403	 	 	 	442	 	 	 	378	 	 	 	491	 	
Net income attributable to Delphi Technologies	 	 	151	 	 	 	81	 	 	 	236	 	 	 	272	 	 	 	306	 	 	 	247	 	 	 	356	 	
Selected balance sheet data:	 				 				 				 				 	 	(unaudited	) 	 				 				
Total assets	 	$	3,092	 	 				 	$	2,899	 	 	$	3,001	 	 	$	3,141	 	 	$	3,205	 	 	$	3,074	 	
Long-term debt	 	 	6	 	 				 	 	6	 	 	 	9	 	 	 	14	 	 	 	6	 	 	 	6	 	
Selected other financial data:	 				 				 				 				 				 				 				
Adjusted operating income (1)	 	$	326	 	 	$	261	 	 	$	512	 	 	$	526	 	 	$	494	 	 	$	432	 	 	$	514	 	
Adjusted operating income margin (2)	 	 	13.8	% 	 	 	11.5	% 	 	 	11.4	% 	 	 	11.9	% 	 	 	10.9	% 	 	 	9.8	% 	 	 	11.0	% 	
 
(1)	Adjusted Operating Income represents net income before interest expense, other income (expense), net, income tax expense, equity income (loss), net of tax, income (loss) from discontinued operations, net of tax, restructuring, separation costs, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures), asset impairments and gains (losses) on business divestitures. Adjusted Operating Income is presented as a supplemental measure of the Company’s financial performance which management believes is useful to investors in assessing the Company’s ongoing financial performance that, when reconciled to the corresponding U.S. GAAP measure, provides improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company’s core operating performance and which may obscure underlying business results and trends. Our management utilizes Adjusted Operating Income in its financial decision making process, to evaluate performance of the Company and for internal reporting, planning and forecasting purposes. Management also utilizes Adjusted Operating Income as the key performance measure of segment income or loss and for planning and forecasting purposes to allocate resources to our segments, as management also believes this measure is most reflective of the operational profitability or loss of our operating segments. Adjusted Operating Income should not be considered a substitute for results prepared in accordance with	
 
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 	U.S. GAAP and should not be considered an alternative to net income attributable to Delphi Technologies, which is the most directly comparable financial measure to Adjusted Operating Income that is in accordance with U.S. GAAP. Adjusted Operating Income, as determined and measured by Delphi Technologies, should also not be compared to similarly titled measures reported by other companies.	
The reconciliation of Adjusted Operating Income to Operating Income includes, as applicable, restructuring, separation costs related to the planned spin-off, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures), asset impairments and gains (losses) on business divestitures. The reconciliation of Net income attributable to the Company to Adjusted Operating Income is as follows:

 	 	Six Months Ended	 	 	Year Ended December 31,	 	
 	 	June 30,
2017	 	 	June 30,
2016	 	 	2016	 	 	2015	 	 	2014	 	 	2013	 	 	2012	 	
 	 	(unaudited)	 	 	(unaudited)	 	 	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
 	 	(in millions)	 	
Net income attributable to Delphi Technologies	 	$	151	 	 	$	81	 	 	$	236	 	 	$	272	 	 	$	306	 	 	$	247	 	 	$	356	 	
Net income attributable to noncontrolling interest	 	 	16	 	 	 	15	 	 	 	32	 	 	 	34	 	 	 	36	 	 	 	31	 	 	 	31	 	
Equity loss, net of tax	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	1	 	 	 	—  	 	 	 	3	 	
Income tax expense	 	 	53	 	 	 	13	 	 	 	50	 	 	 	92	 	 	 	97	 	 	 	96	 	 	 	94	 	
Other expense (income), net	 	 	6	 	 	 	(3	) 	 	 	1	 	 	 	2	 	 	 	(2	) 	 	 	(1	) 	 	 	—  	 	
Interest expense	 	 	1	 	 	 	1	 	 	 	1	 	 	 	3	 	 	 	4	 	 	 	5	 	 	 	7	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	 	$	227	 	 	$	107	 	 	$	320	 	 	$	403	 	 	$	442	 	 	$	378	 	 	$	491	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Restructuring	 	 	76	 	 	 	130	 	 	 	161	 	 	 	112	 	 	 	52	 	 	 	54	 	 	 	23	 	
Separation costs	 	 	15	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Other acquisition and portfolio project costs	 	 	—  	 	 	 	2	 	 	 	2	 	 	 	2	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
Asset impairments	 	 	8	 	 	 	22	 	 	 	29	 	 	 	9	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted operating income	 	$	326	 	 	$	261	 	 	$	512	 	 	$	526	 	 	$	494	 	 	$	432	 	 	$	514	 	

(2)	Adjusted operating income margin is defined as adjusted operating income as a percentage of Net sales.	
 
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 UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial statements consist of the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2016 and the six months ended June 30, 2017 and an unaudited pro forma condensed combined balance sheet as of June 30, 2017. These unaudited pro forma condensed combined statements were derived from the Company’s historical combined financial statements included in this information statement. The pro forma adjustments give effect to the separation and the related transactions described below. The unaudited pro forma condensed combined balance sheet gives effect to the separation and related transactions described below as if they had occurred on June 30, 2017, the last balance sheet date. The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2017 and for the year ended December 31, 2016 give effect to the separation and related transactions described below as if they occurred as of January 1, 2016, the first day of the last fiscal year.
The unaudited pro forma condensed combined balance sheet and statements of operations have been derived from the historical combined financial statements and the combined unaudited interim financial statements of Delphi Technologies included in the “Index to Financial Statements” section of this information statement. These adjustments give effect to events that are (i) directly attributable to the separation and related transaction agreements, (ii) factually supportable, and (iii) with respect to the unaudited pro forma condensed combined statements of operations, expected to have a continuing impact on Delphi Technologies, and are based on assumptions that management believes are reasonable given the information currently available.
The unaudited pro forma condensed combined financial statements give effect to the following:
 
 	•	 	the transfer from Aptiv to Delphi Technologies of the assets and liabilities that comprise Delphi Technologies’ business;	
 
 	•	 	the retention by Aptiv, pursuant to the separation and distribution agreement, of certain assets and operations that were managed as part of Delphi Technologies and included in Delphi Technologies’ historical combined financial statements;	
 
 	•	 	the incurrence of $1,550 million in principal amount of indebtedness, consisting of $800 million of eight-year senior notes and a $750 million five-year term loan pursuant to the Credit Agreement, at an estimated weighted average interest rate of approximately 4.10%;	
 
 	•	 	the removal of non-recurring separation costs;	
 
 	•	 	the expected cash distribution of approximately $1,148 million by Delphi Technologies to Aptiv;	
 
 	•	 	the expected issuance of approximately             Delphi Technologies ordinary shares; and	
 
 	•	 	the impact of certain agreements to be entered into by Aptiv and Delphi Technologies in conjunction with the separation, as described in the information statement section titled “Certain Relationships and Related Transactions.”	
The unaudited pro forma condensed combined financial statements are for informational purposes only and do not purport to represent what Delphi Technologies’ financial position and results of operations actually would have been had the separation and related transactions occurred on the dates indicated, or to project Delphi Technologies’ financial performance for any future period. The unaudited pro forma condensed combined financial statements are based on information and assumptions, which are described in the accompanying notes.
The Delphi Technologies historical combined financial statements, which were the basis for the unaudited pro forma condensed combined financial statements, were prepared on a carve-out basis, as Delphi Technologies was not operated as a separate, independent company for the periods presented. Accordingly, the combined financial statements reflect an allocation of certain corporate costs for corporate administrative services and functions. These services and functions included, but were not limited to, senior management, legal, human
 
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resources, finance and accounting, treasury, information technology services and support, cash management, payroll processing, pension and benefit administration and other shared services. These historical allocations may not be indicative of Delphi Technologies’ future cost structure; however, the pro forma results have not been adjusted to reflect any potential changes associated with Delphi Technologies being an independent public company as such amounts are estimates that are not factually supportable.
Aptiv did not account for Delphi Technologies as, and Delphi Technologies was not operated as, a separate, independent company for the periods presented. Due to regulations governing the preparation of pro forma financial statements, the unaudited condensed combined pro forma financial statements do not reflect certain estimated incremental expenses associated with being an independent public company because they are projected amounts based on judgmental estimates. Although the Company’s combined statements of operations include allocations of certain Aptiv corporate costs, as described above, as a stand-alone public company the Company anticipates incurring additional recurring costs that could be materially different from the allocations of Aptiv costs that are included within the historical combined financial statements. These estimated incremental expenses include costs for information technology and costs associated with corporate administrative services such as tax, treasury, audit, risk management, legal, investor relations and human resources, as well as corporate governance costs, including board of director compensation and expenses, audit and other professional services fees, annual report and proxy statement costs, SEC filing fees, transfer agent fees, consulting and legal fees and stock exchange fees. Certain factors could impact these stand-alone public company costs, including the finalization of the Company’s staffing and infrastructure needs.
Aptiv will pay certain non-recurring third-party costs and expenses related to the separation. Such non-recurring amounts will include fees for financial advisors, outside legal and accounting fees, costs to separate information technology systems and other similar costs. After the separation, each party will generally bear its own costs and expenses.
The unaudited pro forma condensed combined financial statements reported below should be read in conjunction with the section herein entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as the historical combined annual financial statements and the combined unaudited interim financial statements and the corresponding notes included elsewhere in this information statement.
 
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DELPHI TECHNOLOGIES PLC
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2017
($ and shares in millions, except per share amounts)

 	  	Historical	 	  	Pro Forma
Adjustments	 	 	Pro Forma	 	
Net sales	  	$	2,355	 	  	$	(41)	(A) 	 	$	2,314	 	
Operating expenses:	  				  				 				
Cost of sales	  	 	1,873	 	  	 	(31)	(A)(B)	 	 	1,842	 	
Selling, general and administrative	  	 	156	 	  	 	4	(B) 	 	 	160	 	
Amortization	  	 	8	 	  	 	—  	 	 	 	8	 	
Restructuring	  	 	76	 	  	 	—  	 	 	 	76	 	
Separation costs	  	 	15	 	  	 	(15)	(C) 	 	 	—  	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total operating expenses	  	 	2,128	 	  	 	(42)	 	 	 	2,086	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Operating income	  	 	227	 	  	 	1	 	 	 	228	 	
Interest expense	  	 	(1)	 	  	 	(34)	(D) 	 	 	(35)	 	
Other income (expense), net	  	 	(6)	 	  	 	—  	 	 	 	(6)	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Income before income taxes and equity income	  	 	220	 	  	 	(33)	 	 	 	187	 	
Income tax (expense) benefit	  	 	(53)	 	  	 	8	(E) 	 	 	(45)	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Income before equity income	  	 	167	 	  	 	(25)	 	 	 	142	 	
Equity income, net of tax	  	 	—  	 	  	 	—  	 	 	 	—  	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Net income	  	 	167	 	  	 	(25)	 	 	 	142	 	
Net income attributable to noncontrolling interest	  	 	16	 	  	 	—  	 	 	 	16	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Net income attributable to Delphi Technologies	  	$	151	 	  	$	(25)	 	 	$	126	 	

Net income per share:	  				  				 				
Basic	  				  	 		(F) 	 				
Diluted	  				  	 		(G) 	 				
				
Weighted average shares outstanding:	  				  				 				
Basic	  				  	 		(F) 	 				
Diluted	  				  	 		(G) 	 				
See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Statements.
 
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DELPHI TECHNOLOGIES PLC
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2016
($ and shares in millions, except per share amounts)

 	  	Historical	 	  	Pro Forma
Adjustments	 	 	Pro
Forma	 	
Net sales	  	$	4,486	 	  	$	(98)	(A) 	 	$	4,388	 	
Operating expenses:	  				  				 				
Cost of sales	  	 	3,689	 	  	 	(79)	(A)(B)(I) 	 	 	3,610	 	
Selling, general and administrative	  	 	299	 	  	 	8	(B) 	 	 	307	 	
Amortization	  	 	17	 	  	 	—  	 	 	 	17	 	
Restructuring	  	 	161	 	  	 	—  	 	 	 	161	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total operating expenses	  	 	4,166	 	  	 	(71)	 	 	 	4,095	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Operating income	  	 	320	 	  	 	(27)	 	 	 	293	 	
Interest expense	  	 	(1)	 	  	 	(67)	(D) 	 	 	(68)	 	
Other income (expense), net	  	 	(1)	 	  	 	—  	 	 	 	(1)	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Income before income taxes and equity income	  	 	318	 	  	 	(94)	 	 	 	224	 	
Income tax (expense) benefit	  	 	(50)	 	  	 	17	(E) 	 	 	(33)	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Income before equity income	  	 	268	 	  	 	(77)	 	 	 	191	 	
Equity income, net of tax	  	 	—  	 	  	 	—  	 	 	 	—  	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Net income	  	 	268	 	  	 	(77)	 	 	 	191	 	
Net income attributable to noncontrolling interest	  	 	32	 	  	 	—  	 	 	 	32	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Net income attributable to Delphi Technologies	  	$	236	 	  	$	(77)	 	 	$	159	 	

Net income per share:	  				  				 				
Basic	  				  	 		(F) 	 				
Diluted	  				  	 		(G) 	 				
				
Weighted average shares outstanding:	  				  				 				
Basic	  				  	 		(F) 	 				
Diluted	  				  	 		(G) 	 				
See accompanying notes to Unaudited Pro Forma Condensed Combined Financial Statements.
 
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DELPHI TECHNOLOGIES PLC
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF JUNE 30, 2017
(millions of dollars)

 	  	Historical	 	  	Pro Forma
Adjustments	 	 	Pro
Forma	 	
ASSETS	  				  				 				
Current assets:	  				  				 				
Cash and cash equivalents	  	$	78	 	  	$	159	(H) 	 	$	237	 	
Accounts receivable, net	  	 	945	 	  	 	(9)	(A) 	 	 	936	 	
Inventories	  	 	452	 	  	 	—  	 	 	 	452	 	
Other current assets	  	 	100	 	  	 	—  	 	 	 	100	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total current assets	  	 	1,575	 	  	 	150	 	 	 	1,725	 	
Long-term assets:	  				  				 				
Property, plant and equipment, net	  	 	1,151	 	  	 	—  	 	 	 	1,151	 	
Investments in affiliates	  	 	34	 	  	 	—  	 	 	 	34	 	
Intangible assets, net	  	 	83	 	  	 	—  	 	 	 	83	 	
Goodwill	  	 	7	 	  	 	—  	 	 	 	7	 	
Other long-term assets	  	 	242	 	  	 	—  	 	 	 	242	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total long-term assets	  	 	1,517	 	  	 	—  	 	 	 	1,517	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total assets	  	$	3,092	 	  	$	150	 	 	$	3,242	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
LIABILITIES AND SHAREHOLDERS’ EQUITY	  				  				 				
Current liabilities:	  				  				 				
Short-term debt, including current portion of long-term debt	  	$	1	 	  	$	9	(H) 	 	$	10	 	
Accounts payable	  	 	754	 	  	 	(5)	(A) 	 	 	749	 	
Accrued liabilities	  	 	357	 	  	 	—  	 	 	 	357	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total current liabilities	  	 	1,112	 	  	 	4	 	 	 	1,116	 	
Long-term liabilities:	  				  				 				
Long-term debt	  	 	6	 	  	 	1,514	(H) 	 	 	1,520	 	
Pension benefit obligations	  	 	529	 	  	 	(10)	(I) 	 	 	519	 	
Other long-term liabilities	  	 	124	 	  	 	—  	 	 	 	124	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total long-term liabilities	  	 	659	 	  	 	1,504	 	 	 	2,163	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total liabilities	  	 	1,771	 	  	 	1,508	 	 	 	3,279	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Shareholders’ Equity:	  				  				 				
Net parent investment	  	 	1,779	 	  	 	(1,358)	(A)(H)(I)(J) 	 	 	421	 	
Ordinary shares, par value $0.01 per share	  	 	—  	 	  	 		(J) 	 	 	—  	 	
Additional paid-in capital	  	 	—  	 	  	 		(J) 	 	 	—  	 	
Accumulated other comprehensive loss	  	 	(622)	 	  	 	—  	 	 	 	(622)	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total Delphi Technologies equity	  	 	1,157	 	  	 	(1,358)	 	 	 	(201)	 	
Noncontrolling interest	  	 	164	 	  	 	—  	 	 	 	164	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total shareholders’ equity	  	 	1,321	 	  	 	(1,358)	 	 	 	(37)	 	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total liabilities and shareholders’ equity	  	$	3,092	 	  	$	150	 	 	$	3,242	 	

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
For further information regarding the historical combined financial statements of Delphi Technologies, refer to the combined financial statements and the notes thereto in this information statement. The unaudited pro forma condensed combined balance sheet as of June 30, 2017 and unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2017 and the year ended December 31, 2016, include adjustments related to the following:
 
 	(A)	Reflects adjustments for certain assets and operations related to the original equipment service business conducted by Aptiv’s Powertrain Systems segment prior to the spin-off that are to be transferred from Delphi Technologies to Aptiv in connection with the separation, which were historically managed as part of Delphi Technologies’ business and are therefore included in the historical combined financial statements.	
 
 	(B)	Reflects the difference in costs to be incurred by Delphi Technologies for services and products to be provided by Aptiv under the terms of long-term agreements that Delphi Technologies and Aptiv will enter into in connection with the separation, as compared to the amounts for such products and services recorded in the historical combined financial statements. These costs are principally related to components that Aptiv will provide to Delphi Technologies under contract manufacturing services agreements, and certain information technology, supply chain management and other services that Aptiv will provide under the transition services agreement subsequent to the separation. These agreements are further described in “Certain Relationships and Related Transactions—Agreements with Aptiv.”	
 
 	    	The adjustment to the historical cost of sales and SG&A expense for the six months ended June 30, 2017 and for the year ended December 31, 2016 to give effect to these agreements is as follows:	

 	 	Six Months
Ended June 30,
2017	 	 	Year Ended
December 31,
2016	 	
 	 	(in millions)	 	
Adjustment for contract manufacturing services agreements over a period of up to 48 months	 	$	            4	 	 	$	            8	 	
	 	 	 	 	 	 	 	 	
Total Cost of sales adjustment	 	$	4	 	 	$	8	 	

Adjustment for contract manufacturing services agreements over a period of up to 48 months	 	$	1	 	 	$	1	 	
Adjustment for transition services to be provided over a period of up to 21 months	 	 	3	 	 	 	7	 	
	 	 	 	 	 	 	 	 	
Total SG&A adjustment	 	$	4	 	 	$	8	 	

 	(C)	Reflects the removal of non-recurring separation costs directly related to the separation that were incurred during the historical period, but which are not expected to have a continuing impact on Delphi Technologies’ results of operations following the completion of the separation. These costs were primarily for legal, tax, accounting and other third party professional fees associated with the separation.	
 
 	(D)	Reflects interest expense related to $1,550 million in principal amount of debt that Delphi Technologies expects to incur in connection with the separation, consisting of $800 million in eight-year unsecured senior notes and the $750 million five-year term loan pursuant to the Credit Agreement, as further described in the “Description of Material Indebtedness” section of this information statement, as well as the amortization of the associated deferred debt issuance costs. Based on Delphi Technologies’ currently expected debt rating, the weighted average interest rate on this debt is estimated to be approximately 4.10%. Interest expense was calculated assuming constant debt levels	
 
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 	throughout the periods. Interest expense may be higher or lower if Delphi Technologies’ actual interest rate or credit ratings change. A 0.25% change to the annual interest rate would change interest expense by approximately $4 million on an annual basis.	
 
 	(E)	Reflects the tax effects of the pro forma adjustments at the applicable statutory income tax rates in the respective jurisdictions. The effective tax rate of Delphi Technologies could be different (either higher or lower) depending on activities subsequent to the distribution.	
 
 	(F)	The number of Delphi Technologies ordinary shares used to compute basic earnings per share is based on the number of Delphi Technologies ordinary shares assumed to be outstanding on the record date, based on the number of shares of Aptiv outstanding on             , assuming a distribution ratio of             Delphi Technologies ordinary share(s) for every             Aptiv share(s) outstanding as of the close of business on the record date.	
 
 	(G)	The number of shares used to compute diluted earnings per share is based on the number of Delphi Technologies ordinary shares, as described in note F above, plus the additional number of shares that would be issued upon the vesting of outstanding restricted stock awards.	
 
 	(H)	Reflects the expected incurrence of $1,550 million in principal amount of debt by Delphi Technologies, the expected distribution of $1,148 million in cash to Aptiv and approximately $180 million that is expected to be used to pay taxes in connection with various restructuring transactions (which taxes will be the obligation of Delphi Technologies pursuant to the Tax Matters Agreement), with the remaining proceeds, net of debt issuance costs, to be held by Delphi Technologies. Also reflects the retention by Aptiv of certain cash balances held by Delphi Technologies legal entities pursuant to the Separation and Distribution Agreement. For purposes of these unaudited pro forma condensed combined financial statements, the expected distribution to Aptiv represents the proceeds from the new borrowings, net of debt issuance costs and the portion of such net proceeds expected to be retained by Delphi Technologies for general corporate purposes after payment of estimated taxes. The actual amount of the distribution to Aptiv, the amount of taxes and the amount of cash held by Delphi Technologies at the date of separation will depend on a number of factors, including completion of the restructuring transactions described above. As of June 30, 2017, cash and cash equivalents includes $42 million of cash held by majority-owned joint ventures that are consolidated by Delphi Technologies.	
 
 	(I)	Reflects the retention by Aptiv of certain net pension benefit obligations that were included in our historical Combined Financial Statements. This adjustment to the net liability would have reduced operating expenses by an immaterial amount for the six months ended June 30, 2017, and by $1 million the year ended December 31, 2016. The actual assumed net benefit plan obligations and related expense could change significantly from our estimates, including as a result of the requirement that all of our benefit plans be revalued as of December 31, 2017 in accordance with U.S. GAAP. The assumptions utilized in all actuarial valuations will be based on market conditions at the time of the measurement, and the most current available plan participant data.	
 
 	(J)	On the distribution date, Aptiv’s net investment in Delphi Technologies will be re-designated as Delphi Technologies Shareholders’ Equity and will be allocated between Delphi Technologies ordinary shares and additional paid in capital based on the number of Delphi Technologies ordinary shares outstanding at the distribution date.	
 
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 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis presented below should be read in conjunction with the audited combined financial statements and the corresponding notes, combined unaudited interim financial statements and the corresponding notes, and the selected historical combined financial data, each included elsewhere in this information statement. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risk, uncertainties and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. See “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.
Introduction
The following management’s discussion and analysis of financial condition and results of operations (“MD&A”) is intended to help you understand the business operations and financial condition of Delphi Technologies PLC (“Delphi Technologies”). This discussion should be read in conjunction with the accompanying historical combined financial statements and the notes thereto. This MD&A is presented in the following sections:
 
 	•	 	Executive Overview	
 
 	•	 	Results of Operations	
 
 	•	 	Liquidity and Capital Resources	
 
 	•	 	Off-Balance Sheet Arrangements and Other Matters	
 
 	•	 	Significant Accounting Policies and Critical Accounting Estimates	
 
 	•	 	Recently Issued Accounting Pronouncements	
 
 	•	 	Market Risk Management	
Within this MD&A, “Delphi Technologies,” the “Company,” “we,” “us” and “our” refer to Delphi Technologies PLC. “Aptiv” or “Parent” refers to Delphi Automotive PLC.
Spin-off from Aptiv
On May 3, 2017, Aptiv announced its intention to separate its Powertrain Systems segment, which includes its engine management systems and aftermarket operations, from the rest of Aptiv by means of a spin-off. The spin-off will create Delphi Technologies, a separate, independent, publicly traded company. As part of the separation, Aptiv intends to transfer the assets, liabilities and operations of its Powertrain Systems business on a global basis to Delphi Technologies. The spin-off is expected to be completed by March of 2018, subject to customary market, regulatory and other conditions.
Delphi Technologies’ historical combined financial statements have been prepared on a stand-alone basis and are derived from Aptiv’s consolidated financial statements and accounting records. Therefore, these financial statements reflect, in conformity with accounting principles generally accepted in the United States, Delphi Technologies’ financial position, results of operations, comprehensive income/loss and cash flows as the business was historically operated as part of Aptiv prior to the distribution. They may not be indicative of Delphi Technologies’ future performance and do not necessarily reflect what Delphi Technologies’ combined results of operations, financial condition and cash flows would have been had Delphi Technologies operated as a separate, publicly traded company during the periods presented, particularly because Delphi Technologies expects that changes will occur in Delphi Technologies’ operating structure and its capitalization as a result of the separation from Aptiv.
 
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Delphi Technologies’ combined statement of operations includes its direct expenses for cost of goods sold, research and development, sales and marketing, distribution, and administration as well as allocations of certain general, administrative, sales and marketing expenses and cost of sales provided by Aptiv to Delphi Technologies and allocations of related assets, liabilities, and Parent’s investment, as applicable. The allocations have been determined on a reasonable basis; however, the amounts are not necessarily representative of the amounts that would have been reflected in the financial statements had the Company been an entity that operated independently of Parent. Related party allocations are further described in Note 3. Related Party Transactions to the audited combined financial statements. Delphi Technologies expects that Aptiv will continue to provide some of the services related to these general and administrative functions on a transitional basis for a fee following the separation under the transition services agreement described below.
We will enter into a number of agreements with Aptiv to govern the spin-off and our relationship with Aptiv following the spin-off. These agreements will provide for the allocation between Delphi Technologies and Aptiv of Aptiv’s assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after Delphi Technologies’ separation from Aptiv and will govern certain relationships between Delphi Technologies and Aptiv after the spin-off. Following is a description of the material terms of the Separation and Distribution Agreement, Transition Services Agreement, Contract Manufacturing Services Agreements, Tax Matters Agreement and Employee Matters Agreement that we will enter into in connection with the separation. The summaries of each of these agreements are summaries of their material terms and do not purport to be complete. These summaries are subject to, and qualified in their entirety, by reference to the full text of the applicable agreements.
Separation and Distribution Agreement
The Separation and Distribution Agreement will set forth the agreements between Delphi Technologies and Aptiv regarding the principal transactions required to effect our separation from Aptiv. This agreement will also address certain relationships between us and Aptiv with respect to matters relating to the separation. The Separation and Distribution Agreement will identify the assets to be transferred, the liabilities to be assumed and the contracts to be assigned to us and which assets, liabilities and contracts will be retained by Aptiv as part of the separation, and will provide for when and how these transfers, assumptions and assignments will occur. In particular, the Separation and Distribution Agreement will provide, among other things, that, subject to the terms and conditions contained therein, (i) substantially all of the assets related to the businesses and operations of Aptiv’s Powertrain Systems segment, as described in “Business,” will be transferred to us or one of our subsidiaries, (ii) substantially all liabilities arising out of or resulting from such assets, and other liabilities related to the current or former business and operations of Aptiv’s powertrain systems business, will be retained by or transferred to us or one of our subsidiaries, (iii) the assets related to the original equipment service business conducted by Aptiv’s Powertrain Systems segment prior to the spin-off, to the extent related to the sale of products of other Aptiv segments to vehicle original equipment manufacturers or their affiliates, will be retained by or transferred to Aptiv or one of its subsidiaries, and (iv) all of Aptiv’s other assets and liabilities will be retained by or transferred to Aptiv or one of its subsidiaries. The original equipment service business that will be retained by Aptiv following the separation had net sales of $98 million and corresponding costs of such sales of $86 million during the year ended December 31, 2016.
Delphi Technologies will be responsible for paying all costs and expenses incurred in connection with the separation and distribution, whether incurred or payable prior to, on or after the distribution, including costs and expenses relating to legal and tax counsel, financial advisors and accounting advisory work related to the separation and distribution.
Transition Services Agreement
Delphi Technologies and Aptiv will enter into a Transition Services Agreement prior to the distribution pursuant to which Delphi Technologies and Aptiv and each entity’s respective subsidiaries will provide to each
 
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other, on an interim, transitional basis, certain services, including, but not limited to, services related to information technology, engineering, accounting, administrative, payroll, human resources and facilities to provide temporary assistance while developing stand-alone systems and processes. The charges for the transition services generally are intended to allow the transition services provider to fully recover the costs associated with providing the services plus a percentage of such costs and expenses. The Transition Services Agreement will terminate no later than 24 months after the distribution date, although most services will terminate earlier. The transition services recipient can generally terminate particular services prior to the scheduled expiration date for such service on 45 days’ prior written notice. Due to interdependencies between services, certain services may be extended or terminated early only if other services are likewise extended or terminated. Based on currently expected terms and pricing, the increase in costs to be incurred by Delphi Technologies for the services to be provided by Aptiv under the Transition Services Agreement, as compared to the amounts recorded in the historical combined financial statements, is expected to be approximately $10 million annually.
Contract Manufacturing Service Agreements
Delphi Technologies will enter into Contract Manufacturing Service Agreements pursuant to which Aptiv subsidiaries will manufacture for Delphi Technologies certain electronic components that are currently manufactured at facilities that Delphi Technologies shares with Aptiv. Delphi Technologies will purchase and consign to Aptiv raw materials and components that Aptiv will use to manufacture those products and Delphi Technologies will also own certain of the equipment Aptiv uses to produce those products. Aptiv will charge us a fee for its manufacturing services based on its costs and expenses plus a percentage of such costs. Aptiv’s services under the contract manufacturing service agreements will generally expire when we relocate manufacturing of our products. The Contract Manufacturing Service Agreements are expected to expire within four years. Based on currently expected volumes and pricing, the increase in costs to be incurred by Delphi Technologies for the components to be provided by Aptiv under such contract manufacturing services agreements, as compared to the amounts recorded in the historical combined financial statements, is expected to be approximately $10 million annually.
Tax Matters Agreement
The tax matters agreement that will generally govern our and Aptiv’s respective rights, responsibilities and obligations after the distribution with respect to taxes for any tax period ending on or before the distribution date, as well as tax periods beginning before and ending after the distribution date. Generally, Aptiv will be liable for all pre-distribution U.S. federal income taxes, foreign income taxes and certain non-income taxes attributable to our business required to be reported on combined, consolidated, unitary or similar returns that include one or more members of the Aptiv group and one or more members of our group. Delphi Technologies will generally be liable for all other taxes attributable to our business. In addition, the tax matters agreement will address the allocation of liability for taxes that are incurred as a result of restructuring activities undertaken to effectuate the distribution. As a general matter, any tax due on the movement of assets or people into Delphi Technologies will be allocated to and paid by Delphi Technologies. The Tax Matters Agreement will also restrict our ability to take certain actions that could result in certain of the restructuring transactions undertaken in connection with the separation failing to qualify as transactions that are generally tax-free, for U.S. federal income tax purposes, under Sections 355 and 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended.
Employee Matters Agreement
Delphi Technologies and Aptiv will enter into an Employee Matters Agreement to allocate liabilities and responsibilities relating to employment matters, employee compensation and benefits plans and programs, and other related matters.
The Employee Matters Agreement governs Aptiv’s and Delphi Technologies’ compensation and employee benefit obligations with respect to the current and former employees and, with respect to equity award matters,
 
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non-employee directors of each company. The Employee Matters Agreement will provide that, in general, and subject to certain exceptions specified in the Employee Matters Agreement, Aptiv will be responsible for liabilities associated with its employees and former employees whose last employment was not with our business, and we will be responsible for liabilities associated with our employees and former employees whose last employment was with our business.
In general, our employees currently participate in various retirement, health and welfare, and other employee benefit and compensation plans maintained by Aptiv. Generally and subject to certain exceptions, we will create compensation and benefit plans that mirror the terms of corresponding Aptiv compensation and benefit plans, and we will credit each of our employees with his or her service with Aptiv prior to the separation under our benefit plans to the same extent such service was recognized by Aptiv and so long as such crediting does not result in a duplication of benefits.
With respect to Aptiv restricted stock units (“RSUs”) held by Delphi Technologies employees and non-employee directors that are outstanding as of the separation and for which the underlying security is Aptiv ordinary shares, the Employee Matters Agreement provides that each such outstanding Aptiv RSU will be equitably adjusted or converted into an award with respect to Delphi Technologies ordinary shares. Each other Aptiv RSU that is outstanding as of the separation and for which the underlying security is Aptiv ordinary shares will also be equitably adjusted or converted, but will continue to relate to Aptiv ordinary shares. In each case, the outstanding Aptiv award will be equitably adjusted or converted in a manner intended to preserve the approximate intrinsic value of such Aptiv equity award from directly before to directly after the spin-off. Pursuant to the terms of the Employee Matters Agreement and the applicable Aptiv equity compensation plans, we currently anticipate that performance achievement with respect to performance-based RSUs will also be equitably adjusted in connection with the separation. We do not currently anticipate incurring material additional compensation expense as a result of modifying such awards.
See the section entitled “Certain Relationships and Related Party Transactions—Agreements with Aptiv” in this information statement for further description of these agreements.
Executive Overview
Our Business
Delphi Technologies is a leader in the development, design and manufacture of integrated powertrain technologies that optimize engine performance, increase vehicle efficiency, reduce emissions, improve driving performance, and support increasing electrification of vehicles. We are a global supplier to original equipment manufacturers (“OEMs”) seeking to manufacture vehicles that meet and exceed increasingly stringent global regulatory requirements and satisfy consumer demands for an enhanced user experience. Additionally, we offer a full spectrum of aftermarket products serving a global customer base.
We provide advanced fuel injection systems (“FIS”), actuators, valvetrain products, sensors, electronic control modules and power electronics technologies. We believe our ability to meet regulatory requirements for reduced emissions and increased fuel economy, as well as to provide additional power to support consumer-driven demand for more in-vehicle electronics, will allow us to realize revenue growth in excess of vehicle production growth.
Our comprehensive portfolio of advanced technologies and solutions for all propulsion systems are sold to global OEMs of both light vehicles (passenger, cars, trucks and vans and sport-utility vehicles) and commercial vehicles (light-duty, medium-duty and heavy-duty trucks, commercial vans, buses and off-highway vehicles). The Company’s Products & Services Solutions (“PSS”) segment also manufactures and sells our technologies to leading aftermarket players, including independent retailers and wholesale distributors. We supply a full suite of aftermarket products including engine control modules, pumps, injectors, fuel modules, ignition coils, smart
 
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remote actuators, exhaust gas recirculation valves, brakes, steering, suspension and other products. We also add aftermarket know-how in category management, logistics, training, marketing and other dedicated services to provide a full range of aftermarket solutions through vehicles’ lives.
The Company is comprised of operations conducted at legal entities which are directly or indirectly wholly owned by Aptiv the ultimate parent of Delphi Technologies, a 51% owned controlled joint venture in China, a 70% owned controlled joint venture in South Korea and a non-consolidated approximately 50% owned joint venture in India.
Business Strategy
Our strategy is to continue to accelerate the development of market-relevant technologies that solve our customers’ increasingly complex challenges and leverage our lean and flexible cost structure to deliver strong revenue and margin expansion, earnings and cash flow growth.
We seek to grow our business through the execution of the following strategies, among others:
 
 	•	 	Maintain Leadership in Technologies that Solve Our Customers’ Most Complex Challenges. We are focused on providing technologies and solutions that solve our customers’ biggest challenges. Leveraging the breadth and depth of our engineering capabilities, we have strong positions in fuel injectors, fuel pumps, variable valve timing and variable valve actuation. Additionally, we provide leading technology solutions in the areas of electronics and electrification, including engine control modules and power electronics, where we see above market growth with increased levels of electrification. Our power electronics technologies include products such as high-voltage inverters, DC-DC converters and on-board chargers that convert electricity to enable hybrid and electric vehicle propulsion systems. Our comprehensive portfolio of powertrain products helps customers meet increasingly stringent global regulatory requirements while also enhancing vehicle performance.	
 
 	•	 	Focused Regional Strategies To Best Serve Our Customers’ Needs. The combination of our global operating capabilities and our portfolio of advanced technologies help us to serve our global customers and meet their local needs. We have a presence in all major global regions and have positioned ourselves to be a leading supplier of advanced powertrain technologies, including electrification, that are tailored to satisfy our customers’ needs in each region. We believe our focus on providing customer solutions to meet increasing global emissions and fuel efficiency regulations will collectively drive greater demand for our products and enable us to experience above-market growth.	
 
 	•	 	Continue to Enhance Aftermarket Position. We have strong customer relationships with the largest global aftermarket players, including independent retailers and wholesale distributors. We supply a full suite of aftermarket products including engine control modules, pumps, injectors, fuel modules, ignition coils, smart remote actuators, exhaust gas recirculation valves, brakes, steering, suspension and other products. We also add aftermarket know-how in category management, logistics, training, marketing and other dedicated services to provide a full range of aftermarket solutions throughout vehicles’ lives. Globally, we plan to gain scale by focusing on higher value, faster growing product lines such as electronics, and services, which include diagnostics and remanufacturing. We will also look to increase growth by leveraging our regional product program strengths to expand our portfolio across regions. In addition, we expect to benefit from aftermarket growth in key markets around the world, including China.	
 
 	•	 	Leverage Our Lean and Flexible Cost Structure to Deliver Strong Earnings and Cash Flow Growth . We recognize the importance of maintaining a lean and flexible business model in order to deliver earnings and cash flow growth. We intend to improve our cost competitiveness by leveraging our enterprise operating system, continuously increasing operational efficiency, maximizing manufacturing output and rotating our facilities to best cost countries. We have ongoing processes and resources dedicated to further improvement of our operations and we expect to use our cash flow to reinvest in our business to drive growth.	
 
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Trends, Uncertainties and Opportunities
Economic conditions . Our business is directly related to automotive sales and automotive light and commercial vehicle production by our customers. Automotive sales depend on a number of factors, including global and regional economic conditions. Although global automotive vehicle production (including light and commercial vehicles) increased 5% from 2015 to 2016, economic conditions and the resultant levels of automotive vehicle production were uneven from a regional perspective. Vehicle production increased by 2% in North America and 3% in Europe in 2016, as consumer demand for vehicles increased. Both the North American and European economies are expected to continue to experience moderate growth in 2017, which is expected to result in a 1% increase in European production. However, after several years of increases, consumer demand for vehicles in North America is expected to recede, resulting in a 2% decrease in North American production in 2017 as compared to the increased volumes experienced in 2016. Automotive production in China increased by 14% in 2016 as compared to 2015, benefiting in part from a consumer vehicle tax reduction program. Following a partial increase in the consumer vehicle tax in 2017, vehicle production in China is expected to increase by 1% in 2017 as compared to 2016. Additionally, vehicle production in South America, our smallest region, decreased by 14% in 2016 as compared to 2015, with volumes expected to increase by 15% in 2017 from the reduced volumes experienced in 2016.
Economic volatility or weakness in North America, Europe or China, or continued weakness in South America, could result in a significant reduction in automotive sales and production by our customers, which would have an adverse effect on our business, results of operations and financial condition. There is also potential that geopolitical factors could adversely impact the U.S. and other economies, and specifically the automotive sector. In particular, changes to international trade agreements such as the North American Free Trade Agreement or other political pressures could affect the operations of our OEM customers, resulting in reduced automotive production in certain regions or shifts in the mix of production to higher cost regions. Increases in interest rates could also negatively impact automotive production as a result of increased consumer borrowing costs or reduced credit availability. Additionally, economic weakness may result in shifts in the mix of future automotive sales (from vehicles with more content such as luxury vehicles, trucks and sport utility vehicles toward smaller passenger cars) or reductions in industrial production and the corresponding level of freight tonnage being transported. While our diversified customer and geographic revenue base, along with our flexible cost structure, have well positioned us to withstand the impact of industry downturns and benefit from industry upturns, shifts in the mix of global automotive production to higher cost regions or to vehicles with less content could adversely impact our profitability.
There have also been periods of increased market volatility and currency exchange rate fluctuations, both globally and most specifically within the United Kingdom (“U.K.”) and Europe, as a result of the U.K. referendum held on June 23, 2016 in which voters approved an exit from the European Union (“E.U.”), commonly referred to as “Brexit.” As a result of the referendum, the British government formally initiated the process for withdrawal in March 2017. The terms of any withdrawal are subject to a negotiation period that could last at least two years from the initiation date. Nevertheless, the proposed withdrawal has created significant uncertainty about the future relationship between the U.K. and the E.U. These developments, or the perception that any of them could occur, may adversely affect European and worldwide economic and market conditions, significantly reduce global market liquidity and restrict the ability of key market participants to operate in certain financial markets and could contribute to instability in global financial and foreign exchange markets, including increased volatility in interest rates and foreign exchange rates. Although we are actively monitoring the ongoing potential impacts of Brexit and will seek to minimize its impact on our business, any of these effects of Brexit, among others, could adversely affect our business, business opportunities, results of operations, financial condition and cash flows. Approximately 15% of our annual net sales are generated in the U.K., and approximately 10% are denominated in British pounds.
Key growth markets . There have been periods of increased market volatility and moderations in the level of economic growth in China, which resulted in periods of lower automotive production growth rates in China than
 
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those previously experienced. Despite these recent moderations in the level of economic growth in China, rising income levels in China and other emerging markets have resulted and are expected to result in stronger growth rates in these markets over the long-term. We believe our strong global presence, and presence in these markets, has positioned us to experience above-market growth rates over the long-term. We continue to expand our established presence in emerging markets, positioning us to benefit from the expected long-term growth opportunities in these regions. We believe that increasing regulation in these markets related to emissions control and fuel efficiency will enable us to experience above-market growth as a result of increased demand for our products focused on meeting these regulations. We are capitalizing on our long-standing relationships with the global OEMs and further enhancing our positions with the emerging market OEMs to continue increasing our presence in these markets.
We have a strong local presence in China, including a major manufacturing base and well-established customer relationships, which we believe has positioned us to continue being a leading supplier of advanced engine technologies in this market. Our business in China is sensitive to economic and market conditions that impact automotive sales volumes and growth in China and may be affected if the pace of growth slows as the Chinese market matures or if there are reductions in vehicle demand in China. However, we continue to believe there is long-term growth potential in this market based on increasing long-term automotive and vehicle content demand, as well as increasing government regulations related to emissions control.
Technologically advanced product portfolio . Our product offerings satisfy the OEMs’ needs to meet increasingly stringent government regulations related to fuel efficiency and emissions control on a global basis, and to provide additional power to support consumer-driven demand for more in-vehicle electronics. Leveraging the breadth and depth of our engineering capabilities, we have strong positions in FIS technologies. Our injector portfolio maximizes engine uptime and reliability which is especially important for large, long-life commercial vehicle applications. Additionally, we expect continued growth in key technologies such as GDi, variable valve timing, variable valve actuation and power electronics to meet increasing consumer demand for greater performance and power needs. We are focused on providing technologies and solutions which we believe will result in growth rates in excess of vehicle production growth.
Global capabilities with focused regional strategies . Many OEMs are continuing to adopt global vehicle platforms to increase standardization, reduce per unit cost and increase capital efficiency and profitability. As a result, OEMs are selecting suppliers that have the capability to manufacture products on a worldwide basis, as well as the flexibility to adapt to regional variations. Suppliers with global scale and strong design, engineering and manufacturing capabilities, are best positioned to benefit from this trend. Our global manufacturing footprint enables us to serve our customers on a worldwide basis, with regional engineering teams that allow us to stay connected to local market requirements. This regional model principally services the North American market out of Mexico, the South American market out of Brazil, the European market out of Eastern Europe, and the Asia Pacific market out of China, and we have continued to rotate our manufacturing footprint to best cost locations within these regions.
Our global operations are subject to certain risks inherent in doing business abroad, including unexpected changes in laws, regulations, trade or monetary or tax fiscal policy, including tariffs, quotas, customs and other import or export restrictions and other trade barriers. Existing free trade laws and regulations, such as the North American Free Trade Agreement, provide certain beneficial duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other requirements. Changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where we manufacture products, such as China and Mexico, could have a material adverse effect on our business and financial results.
Product development . The automotive component supply industry is highly competitive, both domestically and internationally, and is characterized by rapidly changing technology, evolving industry standards and demand for improved vehicle performance and additional power needs. Our ability to anticipate changes in
 
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technology regulatory standards and to successfully develop and introduce new and enhanced products on a timely and cost competitive basis will be a significant factor in our ability to remain competitive. To compete effectively in the automotive supply industry, we must be able to develop new products that meet our customers’ demands in a timely manner. Our advanced technologies and robust global engineering and development capabilities have well positioned us to meet increasingly stringent vehicle manufacturer demands.
OEMs are increasingly looking to their suppliers to simplify vehicle design and assembly processes to reduce costs. As a result, suppliers that sell vehicle components directly to manufacturers (Tier I suppliers) have assumed many of the design, engineering, research and development and assembly functions traditionally performed by vehicle manufacturers. Suppliers that can provide fully-engineered solutions, systems and pre-assembled combinations of component parts are positioned to leverage the trend toward system sourcing.
Engineering, design & development . Our history and culture of innovation have enabled us to develop significant intellectual property and design and development expertise to provide high-quality, technologically advanced products that meet and exceed our customers’ demands for safety, durability and performance. We have a team of approximately 5,000 scientists, engineers and technicians across 12 major technical centers globally focused on innovating and developing market-relevant product solutions. We have invested approximately $600 million (which includes approximately $160 million of co-investment by customers and government agencies) annually in research and development, including engineering, to maintain our portfolio of innovative products and solutions. We have a strong track record of developing technologies focused on addressing consumer demands and industry trends, including GDi, powertrain domain controllers, two-step variable valve actuation and engine control algorithms. We benefit from the ability to provide the latest commercially available technologies to increase fuel economy, reduce emissions and improve engine performance. We also leverage our OEM product engineering capabilities across our aftermarket product lines to capture value over the lifetime of a vehicle.
In the past, suppliers often incurred the initial cost of engineering, designing and developing automotive component parts, and recovered their investments over time by including a cost recovery component in the price of each part based on expected volumes. Recently, we and many other suppliers have negotiated for cost recovery payments independent of volumes. This trend reduces our economic risk.
Pricing . Cost-cutting initiatives adopted by our customers result in increased downward pressure on pricing. Our customer supply agreements generally require step-downs in component pricing over the periods of production and OEMs have historically possessed significant leverage over their outside suppliers because the automotive component supply industry is fragmented and serves a limited number of automotive OEMs. Our profitability depends in part on our ability to generate sufficient cost savings in the future to offset price reductions.
We maintain a low fixed cost structure which provides us with the flexibility to invest in new growth opportunities and remain profitable at all points of the traditional vehicle industry production cycle. As a result, approximately 80% of our hourly workforce is located in best cost countries. Furthermore, we have substantial operational flexibility by leveraging a large workforce of contract workers, which represented approximately 19% of the hourly workforce as of June 30, 2017. However, we will continue to adjust our cost structure and optimize our manufacturing footprint in response to changes in the global and regional automotive markets and in order to increase investment in advanced technologies and engineering, as evidenced by our on-going restructuring programs focused on the continued rotation of our manufacturing footprint to best cost locations. As we continue to operate in a cyclical industry that is impacted by movements in the global and regional economies, we continually evaluate opportunities to further refine our cost structure.
OEM product recalls . The number of vehicles recalled globally by OEMs has increased above historical levels. These recalls can either be initiated by the OEMs or influenced by regulatory agencies. Although there are differing rules and regulations across countries governing recalls for safety issues, the overall transition towards
 
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global vehicle platforms may also contribute to increased recalls outside of the U.S., as automotive components are increasingly standardized across regions. Given the sensitivity to safety issues in the automotive industry, including increased focus from regulators and consumers, we anticipate the number of automotive recalls may remain above historical levels in the near future. Although we engage in extensive product quality programs and processes, and have not experienced any significant impacts to date as a result of the recalls that have been initiated, it is possible that we may be adversely affected in the future if the pace of these recalls continues.
Industry consolidation . Consolidation among worldwide suppliers is expected to continue as suppliers seek to achieve operating synergies and value stream efficiencies, acquire complementary technologies and build stronger customer relationships as OEMs continue to expand globally. Additionally, new entrants from outside the traditional automotive industry may seek to gain access to certain vehicle component markets. We believe companies with strong balance sheets and financial discipline are in the best position to take advantage of the industry consolidation trend.
Results of Operations
The following discussion of the Company’s results of operations should be read in connection with “Forward-Looking Statements” and “Risk Factors.” These items provide additional relevant information regarding the business of the Company, its strategy and various industry conditions which have a direct and significant impact on the Company’s results of operations, as well as the risks associated with the Company’s business.
Delphi Technologies typically experiences fluctuations in revenue due to changes in OEM production schedules, vehicle sales mix and the net of new and lost business (which we refer to collectively as volume), fluctuations in foreign currency exchange rates (which we refer to as FX), contractual reductions of the sales price to the OEM (which we refer to as contractual price reductions) and engineering changes. Changes in sales mix can have either favorable or unfavorable impacts on revenue. Such changes can be the result of shifts in regional growth, shifts in OEM sales demand, as well as shifts in consumer demand related to vehicle segment purchases and content penetration. For instance, a shift in sales demand favoring a particular OEM’s vehicle model for which we do not have a supply contract may negatively impact our revenue. A shift in regional sales demand toward certain markets could favorably impact the sales of those of our customers that have a large market share in those regions, which in turn would be expected to have a favorable impact on our revenue.
We typically experience (as described below) fluctuations in operating income due to:
 
 	•	 	Volume, net of contractual price reductions—changes in volume offset by contractual price reductions (which typically range from 1% to 3% of net sales) and changes in mix;	
 
 	•	 	Operational performance—changes to costs for materials and commodities or manufacturing variances; and	
 
 	•	 	Other—including restructuring costs and any remaining variances not included in Volume, net of contractual price reductions or Operational performance.	
The automotive component supply industry is traditionally subject to inflationary pressures with respect to raw materials and labor which may place operational and profitability burdens on the entire supply chain. We will continue to work with our customers and suppliers to mitigate the impact of these inflationary pressures in the future. In addition, we expect commodity cost volatility to have a continual impact on future earnings and/or operating cash flows. As such, we continually seek to mitigate both inflationary pressures and our material-related cost exposures using a number of approaches, including combining purchase requirements with customers and/or other suppliers, using alternate suppliers or product designs and negotiating cost reductions and/or commodity cost contract escalation clauses into our vehicle manufacturer supply contracts.
 
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Results of Operations for the Three and Six Months Ended June 30, 2017 versus the Three and Six Months Ended June 30, 2016
Combined Results of Operations
The results of operations for the three and six months ended June 30, 2017 and 2016 were as follows:

 	  	Three Months Ended June 30,	 	 	Six Months Ended June 30,	 	
 	  	2017	 	 	2016	 	 	Favorable/
(unfavorable)	 	 	2017	 	 	2016	 	 	Favorable/
(unfavorable)	 	
 	  	(dollars in millions)	 	 	(dollars in millions)	 	
Net sales	  	$	1,187	 	 	$	1,146	 	 	$	41	 	 	$	2,355	 	 	$	2,263	 	 	$	92	 	
Cost of sales	  	 	947	 	 	 	953	 	 	 	6	 	 	 	1,873	 	 	 	1,869	 	 	 	(4	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross margin	  	 	240	 	 	 	193	 	 	 	47	 	 	 	482	 	 	 	394	 	 	 	88	 	
Selling, general and administrative	  	 	76	 	 	 	73	 	 	 	(3	) 	 	 	156	 	 	 	148	 	 	 	(8	) 	
Amortization	  	 	4	 	 	 	5	 	 	 	1	 	 	 	8	 	 	 	9	 	 	 	1	 	
Restructuring	  	 	66	 	 	 	124	 	 	 	58	 	 	 	76	 	 	 	130	 	 	 	54	 	
Separation costs	  	 	15	 	 	 	—  	 	 	 	(15	) 	 	 	15	 	 	 	—  	 	 	 	(15	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	  	 	79	 	 	 	(9	) 	 	 	88	 	 	 	227	 	 	 	107	 	 	 	120	 	
Interest expense	  	 	—  	 	 	 	(1	) 	 	 	1	 	 	 	(1	) 	 	 	(1	) 	 	 	—  	 	
Other income (expense), net	  	 	—  	 	 	 	3	 	 	 	(3	) 	 	 	(6	) 	 	 	3	 	 	 	(9	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before income taxes and equity income	  	 	79	 	 	 	(7	) 	 	 	86	 	 	 	220	 	 	 	109	 	 	 	111	 	
Income tax (expense) benefit	  	 	(22	) 	 	 	2	 	 	 	(24	) 	 	 	(53	) 	 	 	(13	) 	 	 	(40	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) before equity income	  	 	57	 	 	 	(5	) 	 	 	62	 	 	 	167	 	 	 	96	 	 	 	71	 	
Equity income, net of tax	  	 	(1	) 	 	 	—  	 	 	 	(1	) 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	  	 	56	 	 	 	(5	) 	 	 	61	 	 	 	167	 	 	 	96	 	 	 	71	 	
Net income attributable to noncontrolling interest	  	 	8	 	 	 	7	 	 	 	1	 	 	 	16	 	 	 	15	 	 	 	1	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to Delphi Technologies	  	$	48	 	 	$	(12	) 	 	$	60	 	 	$	151	 	 	$	81	 	 	$	70	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Net Sales
Below is a summary of our total net sales for the three months ended June 30, 2017 versus June 30, 2016.

 	  	Three Months Ended June 30,	 	 	Variance Due To:	 	
 	  	2017	 	  	2016	 	  	Favorable/
(unfavorable)	 	 	Volume, net of
contractual
price
reductions	 	  	FX	 	 	Other	 	  	Total	 	
 	  	(in millions)	 	 	(in millions)	 	
Total net sales	  	$	1,187	 	  	$	1,146	 	  	$	41	 	 	$	69	 	  	$	(28	) 	 	$	—  	 	  	$	41	 	
Total net sales for the three months ended June 30, 2017 increased 4% compared to the three months ended June 30, 2016. We experienced volume growth of 7% for the period, primarily as a result of increased sales in North America and Asia Pacific. These increased volumes were partially offset by $16 million of contractual price reductions, as well as decreases due to unfavorable currency impacts, primarily related to the Euro and British Pound.
 
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Total Net Sales
Below is a summary of our total net sales for the six months ended June 30, 2017 versus June 30, 2016.

 	  	Six Months Ended June 30,	 	 	Variance Due To:	 	
 	  	2017	 	  	2016	 	  	Favorable/
(unfavorable)	 	 	Volume, net of
contractual
price
reductions	 	  	FX	 	 	Other	 	  	Total	 	
 	  	(in millions)	 	 	(in millions)	 	
Total net sales	  	$	2,355	 	  	$	2,263	 	  	$	92	 	 	$	152	 	  	$	(60	) 	 	$	—  	 	  	$	92	 	
Total net sales for the six months ended June 30, 2017 increased 4% compared to the six months ended June 30, 2016. We experienced volume growth of 8% for the period, primarily as a result of increased sales in North America and Asia Pacific. These increased volumes were partially offset by $31 million of contractual price reductions, as well as decreases due to unfavorable currency impacts, primarily related to the Euro and British Pound.
Cost of Sales
Cost of sales is primarily comprised of material, labor, manufacturing overhead, freight, fluctuations in foreign currency exchange rates, product engineering, design and development expenses, depreciation and amortization, warranty costs and other operating expenses. Gross margin is revenue less cost of sales and gross margin percentage is gross margin as a percentage of net sales.
Cost of sales decreased $6 million for the three months ended June 30, 2017 compared to the three months ended June 30, 2016, as summarized below. The Company’s material cost of sales was approximately 50% of net sales in the three months ended June 30, 2017 and 2016.

 	  	Three Months Ended June 30,	 	 	Variance Due To:	 	
 	  	2017	 	 	2016	 	 	Favorable/
(unfavorable)	 	 	Volume (a)	 	 	FX	 	  	Operational
performance	 	  	Other	 	  	Total	 	
 	  	(dollars in millions)	 	 	(in millions)	 	
Cost of sales	  	$	947	 	 	$	953	 	 	$	6	 	 	$	(66	) 	 	$	28	 	  	$	31	 	  	$	13	 	  	$	6	 	
Gross margin	  	$	240	 	 	$	193	 	 	$	47	 	 	$	3	 	 	$	—  	 	  	$	31	 	  	$	13	 	  	$	47	 	
Percentage of net sales	  	 	20.2	% 	 	 	16.8	% 	 				 				 				  				  				  				
 
(a)	Presented net of $16 million of contractual price reductions for gross margin variance.	
The decrease in cost of sales reflects improved operational performance and the impacts from currency exchange, partially offset by increased volumes, net of unfavorable changes in sales mix of $17 million, as well as the following item included within Other in the table above:
 
 	•	 	A reduction in asset impairments of $18 million during the three months ended June 30, 2017 as compared to the three months ended June 30, 2016, primarily due to $19 million of impairments recorded in the second quarter of 2016 related to the initiation of a plant closure of a European manufacturing site within the Powertrain Systems segment, as further described in Note 8. Restructuring to the combined unaudited interim financial statements included herein.	
 
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Cost of sales increased $4 million for the six months ended June 30, 2017 compared to the six months ended June 30, 2016, as summarized below. The Company’s material cost of sales was approximately 50% of net sales in the six months ended June 30, 2017 and 2016.

 	  	Six Months Ended June 30,	 	 	Variance Due To:	 	
 	  	2017	 	 	2016	 	 	Favorable/
(unfavorable)	 	 	Volume (a)	 	 	FX	 	 	Operational
performance	 	  	Other	 	  	Total	 	
 	  	(dollars in millions)	 	 	(in millions)	 	
Cost of sales	  	$	1,873	 	 	$	1,869	 	 	$	(4	) 	 	$	(129	) 	 	$	51	 	 	$	51	 	  	$	23	 	  	$	(4	) 	
Gross margin	  	$	482	 	 	$	394	 	 	$	88	 	 	$	23	 	 	$	(9	) 	 	$	51	 	  	$	23	 	  	$	88	 	
Percentage of net sales	  	 	20.5	% 	 	 	17.4	% 	 				 				 				 				  				  				
 
(a)	Presented net of $31 million of contractual price reductions for gross margin variance.	
The increase in cost of sales reflects increased volumes, net of unfavorable changes in sales mix of $26 million, partially offset by improved operational performance, the impacts from currency exchange and the following items reflected in Other above:
 
 	•	 	In conjunction with a program cancellation by one of the Company’s OEM customers during the six months ended June 30, 2017, the Company entered into a commercial agreement for reimbursement of previously incurred development costs. As a result of this commercial agreement, the Company recorded a reduction of $13 million to cost of sales during the six months ended June 30, 2017.	
 
 	•	 	A reduction in asset impairments of $14 million during the six months ended June 30, 2017 as compared to the six months ended June 30, 2016, primarily due to $19 million of impairments recorded in the second quarter of 2016 related to the initiation of a plant closure of a European manufacturing site within the Powertrain Systems segment, as further described in Note 8. Restructuring to the combined unaudited interim financial statements included herein.	
Selling, General and Administrative Expense

 	  	Three Months Ended June 30,	 	
 	  	  2017  	 	 	  2016  	 	 	Favorable/
  (unfavorable)  	 	
 	  	(dollars in millions)	 	
Selling, general and administrative expense	  	$	76	 	 	$	73	 	 	$	(3	) 	
Percentage of net sales	  	 	6.4	% 	 	 	6.4	% 	 				
		
 	  	Six Months Ended June 30,	 	
 	  	  2017  	 	 	  2016  	 	 	Favorable/
  (unfavorable)  	 	
 	  	(dollars in millions)	 	
Selling, general and administrative expense	  	$	156	 	 	$	148	 	 	$	(8	) 	
Percentage of net sales	  	 	6.6	% 	 	 	6.5	% 	 				
Selling, general and administrative expense (“SG&A”) includes administrative expenses, information technology costs and incentive compensation related costs. SG&A as a percentage of net sales was consistent for the three and six months ended June 30, 2017 as compared to the three and six months ended June 30, 2016, as the favorable impact of cost reduction initiatives, including our continuing rotation to best cost manufacturing locations in Europe, was offset by increased information technology costs and increased incentive compensation accruals.
 
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Amortization

 	  	Three Months Ended June 30,	 	
 	  	  2017  	 	  	  2016  	 	  	Favorable/
  (unfavorable)  	 	
 	  	(in millions)	 	
Amortization	  	$	4	 	  	$	5	 	  	$	1	 	
		
 	  	Six Months Ended June 30,	 	
 	  	  2017  	 	  	  2016  	 	  	Favorable/
  (unfavorable)  	 	
 	  	(in millions)	 	
Amortization	  	$	8	 	  	$	9	 	  	$	1	 	
Amortization expense reflects the non-cash charge related to definite-lived intangible assets. The consistency in amortization during the three and six months ended June 30, 2017 compared to the three and six months ended June 30, 2016 reflects the continued amortization of our intangible assets.
Restructuring

 	  	Three Months Ended June 30,	 	
 	  	  2017  	 	 	  2016  	 	 	Favorable/
  (unfavorable)  	 	
 	  	(dollars in millions)	 	
Restructuring	  	$	66	 	 	$	124	 	 	$	58	 	
Percentage of net sales	  	 	5.6	% 	 	 	10.8	% 	 				
		
 	  	Six Months Ended June 30,	 	
 	  	  2017  	 	 	  2016  	 	 	Favorable/
  (unfavorable)  	 	
 	  	(dollars in millions)	 	
Restructuring	  	$	76	 	 	$	130	 	 	$	54	 	
Percentage of net sales	  	 	3.2	% 	 	 	5.7	% 	 				
Restructuring charges recorded during the three and six months ended June 30, 2017 were primarily attributable to our restructuring programs focused on the continued rotation of our manufacturing footprint to best cost locations in Europe and on reducing global overhead costs. The Company recorded employee-related and other restructuring charges related to these programs totaling $66 million and $76 million during the three and six months ended June 30, 2017, respectively. These charges included $53 million of separation costs for approximately 500 employees recognized due to the initiation of the closure of a Western European manufacturing site within the Powertrain Systems segment pursuant to the Company’s on-going European footprint rotation strategy. Charges for the program have been substantially completed, and cash payments for this plant closure are expected to be principally completed by 2020.
During the three and six months ended June 30, 2016, the Company recorded employee-related and other restructuring charges totaling $124 million and $130 million, respectively, primarily related to on-going restructuring programs, which included workforce reductions as well as plant closures, that were focused on the rotation of our manufacturing footprint to best cost locations in Europe. These charges included $88 million of employee-related and other costs recorded during the three months ended June 30, 2016 for the initiation of a plant closure at a European manufacturing site within the Powertrain Systems segment.
We expect to continue to incur additional restructuring expense in 2017, primarily related to programs focused on the continued rotation of our manufacturing footprint to best cost locations in Europe and to reduce global overhead costs.
 
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Refer to Note 8. Restructuring to the combined unaudited interim financial statements included herein for additional information.
Separation Costs

 	  	Three Months Ended June 30,	 	
 	  	  2017  	 	  	  2016  	 	  	Favorable/
  (unfavorable)  	 	
 	  	(dollars in millions)	 	
Separation costs	  	$	15	 	  	$	—  	 	  	$	(15	) 	
		
 	  	Six Months Ended June 30,	 	
 	  	  2017  	 	  	  2016  	 	  	Favorable/
  (unfavorable)  	 	
 	  	(dollars in millions)	 	
Separation costs	  	$	15	 	  	$	—  	 	  	$	(15	) 	
During the three and six months ended June 30, 2017, the Company incurred costs of $15 million related to the separation, primarily for third party professional fees associated with planning the separation. The Company expects to continue to incur additional expenses related to the separation during 2017.
Income Taxes

 	  	Three Months Ended June 30,	 	
 	  	  2017  	 	  	  2016  	 	 	Favorable/
  (unfavorable)  	 	
 	  	(in millions)	 	
Income tax expense (benefit)	  	$	22	 	  	$	(2	) 	 	$	(24	) 	
		
 	  	Six Months Ended June 30,	 	
 	  	  2017  	 	  	  2016  	 	 	Favorable/
  (unfavorable)  	 	
 	  	(in millions)	 	
Income tax expense	  	$	53	 	  	$	13	 	 	$	(40	) 	
The Company’s tax rate is affected by the fact that its parent entity is a U.K. resident taxpayer, the tax rates in the U.K. and other jurisdictions in which the Company operates, the relative amount of income earned by jurisdiction and the relative amount of losses or income for which no tax benefit or expense was recognized due to a valuation allowance. The Company’s effective tax rate was impacted by unfavorable changes in geographic income mix in 2017 as compared to 2016, primarily due to changes in the underlying business operations, as well as the tax benefit recognized in the prior period due to the restructuring charges recorded within the Powertrain Systems segment in the second quarter of 2016, as more fully described in Note 8. Restructuring.
Results of Operations by Segment
We operate our core business along the following operating segments, which are grouped on the basis of similar product, market and operating factors:
 
 	•	 	Powertrain Systems, which manufactures fuel injection systems as well as various other powertrain products including valvetrain, fuel delivery modules, ignition coils, canisters, sensors, valves and actuators. This segment also offers electronic control modules and corresponding software, as well as power electronics solutions including supervisory controllers and software, converters and inverters.	
 
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 	•	 	Products & Service Solutions (“PSS”), which sells a portfolio of aftermarket products and services to independent aftermarket customers and for original equipment service, including a wide variety of powertrain and select additional vehicle components.	
 
 	•	 	Eliminations and Other, which includes the elimination of inter-segment transactions.	
Our management utilizes segment Adjusted Operating Income as the key performance measure of segment income or loss and for planning and forecasting purposes, as management believes this measure is most reflective of the operational profitability or loss of our operating segments. Segment Adjusted Operating Income should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered an alternative to net income attributable to Delphi Technologies, which is the most directly comparable financial measure to Adjusted Operating Income that is prepared in accordance with U.S. GAAP. Segment Adjusted Operating Income, as determined and measured by Delphi Technologies, should also not be compared to similarly titled measures reported by other companies.
The reconciliation of Adjusted Operating Income to Operating Income includes, as applicable, restructuring, separation costs related to the planned spin-off, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures) and asset impairments. The reconciliations of Adjusted Operating Income to net income attributable to Delphi Technologies for the three and six months ended June 30, 2017 and 2016 are as follows:

 	  	Powertrain
Systems	 	 	PSS	 	 	Eliminations
and Other	 	  	Total	 	
 	  	(in millions)	 	
For the Three Months Ended June 30, 2017:	  				 				 				  				
Adjusted operating income	  	$	141	 	 	$	23	 	 	$	—  	 	  	$	164	 	
Restructuring	  	 	(64	) 	 	 	(2	) 	 	 	—  	 	  	 	(66	) 	
Separation costs	  	 	(12	) 	 	 	(3	) 	 	 	—  	 	  	 	(15	) 	
Asset impairments	  	 	(4	) 	 	 	—  	 	 	 	—  	 	  	 	(4	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating income	  	$	61	 	 	$	18	 	 	$	—  	 	  	 	79	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Interest expense	  				 				 				  	 	—  	 	
Other income, net	  				 				 				  	 	—  	 	
	  				 				 				  	 	 	 	
Income before income taxes and equity income	  				 				 				  	 	79	 	
Income tax expense	  				 				 				  	 	(22	) 	
Equity loss, net of tax	  				 				 				  	 	(1	) 	
	  				 				 				  	 	 	 	
Net income	  				 				 				  	 	56	 	
Net income attributable to noncontrolling interest	  				 				 				  	 	8	 	
	  				 				 				  	 	 	 	
Net income attributable to Delphi Technologies	  				 				 				  	$	48	 	

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 	  	Powertrain
Systems	 	 	PSS	 	 	Eliminations
and Other	 	  	Total	 	
 	  	(in millions)	 	
For the Three Months Ended June 30, 2016:	  				 				 				  				
Adjusted operating income	  	$	114	 	 	$	23	 	 	$	—  	 	  	$	137	 	
Restructuring	  	 	(116	) 	 	 	(8	) 	 	 	—  	 	  	 	(124	) 	
Asset impairments	  	 	(22	) 	 	 	—  	 	 	 	—  	 	  	 	(22	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating (loss) income	  	$	(24	) 	 	$	15	 	 	$	—  	 	  	 	(9	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Interest expense	  				 				 				  	 	(1	) 	
Other income, net	  				 				 				  	 	3	 	
	  				 				 				  	 	 	 	
Loss before income taxes and equity income	  				 				 				  	 	(7	) 	
Income tax benefit	  				 				 				  	 	2	 	
Equity income, net of tax	  				 				 				  	 	—  	 	
	  				 				 				  	 	 	 	
Net loss	  				 				 				  	 	(5	) 	
Net income attributable to noncontrolling interest	  				 				 				  	 	7	 	
	  				 				 				  	 	 	 	
Net loss attributable to Delphi Technologies	  				 				 				  	$	(12	) 	

																	
 	  	Powertrain
Systems	 	 	PSS	 	 	Eliminations
and Other	 	  	Total	 	
 	  	(in millions)	 	
For the Six Months Ended June 30, 2017:	  				 				 				  				
Adjusted operating income	  	$	291	 	 	$	35	 	 	$	—  	 	  	$	326	 	
Restructuring	  	 	(68	) 	 	 	(8	) 	 	 	—  	 	  	 	(76	) 	
Separation costs	  	 	(12	) 	 	 	(3	) 	 	 	—  	 	  	 	(15	) 	
Asset impairments	  	 	(8	) 	 	 	—  	 	 	 	—  	 	  	 	(8	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating income	  	$	203	 	 	$	24	 	 	$	—  	 	  	 	227	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Interest expense	  				 				 				  	 	(1	) 	
Other expense, net	  				 				 				  	 	(6	) 	
	  				 				 				  	 	 	 	
Income before income taxes and equity income	  				 				 				  	 	220	 	
Income tax expense	  				 				 				  	 	(53	) 	
Equity income, net of tax	  				 				 				  	 	—  	 	
	  				 				 				  	 	 	 	
Net income	  				 				 				  	 	167	 	
Net income attributable to noncontrolling interest	  				 				 				  	 	16	 	
	  				 				 				  	 	 	 	
Net income attributable to Delphi Technologies	  				 				 				  	$	151	 	

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 	  	Powertrain
Systems	 	 	PSS	 	 	Eliminations
and Other	 	  	Total	 	
 	  	(in millions)	 	
For the Six Months Ended June 30, 2016:	  				 				 				  				
Adjusted operating income	  	$	218	 	 	$	43	 	 	$	—  	 	  	$	261	 	
Restructuring	  	 	(121	) 	 	 	(9	) 	 	 	—  	 	  	 	(130	) 	
Other acquisition and portfolio project costs	  	 	—  	 	 	 	(2	) 	 	 	—  	 	  	 	(2	) 	
Asset impairments	  	 	(22	) 	 	 	—  	 	 	 	—  	 	  	 	(22	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating income	  	$	75	 	 	$	32	 	 	$	—  	 	  	 	107	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Interest expense	  				 				 				  	 	(1	) 	
Other income, net	  				 				 				  	 	3	 	
	  				 				 				  	 	 	 	
Income before income taxes and equity income	  				 				 				  	 	109	 	
Income tax expense	  				 				 				  	 	(13	) 	
Equity income, net of tax	  				 				 				  	 	—  	 	
	  				 				 				  	 	 	 	
Net income	  				 				 				  	 	96	 	
Net income attributable to noncontrolling interest	  				 				 				  	 	15	 	
	  				 				 				  	 	 	 	
Net income attributable to Delphi Technologies	  				 				 				  	$	81	 	
	  				 				 				  	 	 	 	
Net sales, gross margin as a percentage of net sales and Adjusted Operating Income by segment for the three and six months ended June 30, 2017 and 2016 are as follows:
Net Sales by Segment

 	  	Three Months Ended June 30,	 	 	Variance Due To:	 	
 	  	2017	 	 	2016	 	 	Favorable/
(unfavorable)	 	 	Volume, net of
contractual
price
reductions	 	 	FX	 	 	Other	 	  	Total	 	
 	  	(in millions)	 	 	(in millions)	 	
Powertrain Systems	  	$	1,035	 	 	$	983	 	 	$	52	 	 	$	75	 	 	$	(23	) 	 	$	—  	 	  	$	52	 	
PSS	  	 	232	 	 	 	235	 	 	 	(3	) 	 	 	5	 	 	 	(8	) 	 	 	—  	 	  	 	(3	) 	
Eliminations and Other	  	 	(80	) 	 	 	(72	) 	 	 	(8	) 	 	 	(11	) 	 	 	3	 	 	 	—  	 	  	 	(8	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Total	  	$	1,187	 	 	$	1,146	 	 	$	41	 	 	$	69	 	 	$	(28	) 	 	$	—  	 	  	$	41	 	

																													
 	  	Six Months Ended June 30,	 	 	Variance Due To:	 	
 	  	2017	 	 	2016	 	 	Favorable/
(unfavorable)	 	 	Volume, net of
contractual
price
reductions	 	 	FX	 	 	Other	 	  	Total	 	
 	  	(in millions)	 	 	(in millions)	 	
Powertrain Systems	  	$	2,058	 	 	$	1,946	 	 	$	112	 	 	$	162	 	 	$	(50	) 	 	$	—  	 	  	$	112	 	
PSS	  	 	454	 	 	 	449	 	 	 	5	 	 	 	21	 	 	 	(16	) 	 	 	—  	 	  	 	5	 	
Eliminations and Other	  	 	(157	) 	 	 	(132	) 	 	 	(25	) 	 	 	(31	) 	 	 	6	 	 	 	—  	 	  	 	(25	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Total	  	$	2,355	 	 	$	2,263	 	 	$	92	 	 	$	152	 	 	$	(60	) 	 	$	—  	 	  	$	92	 	

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Gross Margin Percentage by Segment

 	  	Three Months Ended June 30,	 	 	Six Months Ended June 30,	 	
 	  	        2017        	 	 	        2016        	 	 	        2017        	 	 	        2016        	 	
Powertrain Systems (1)	  	 	18.7	% 	 	 	14.6	% 	 	 	19.2	% 	 	 	15.5	% 	
PSS	  	 	19.8	% 	 	 	20.9	% 	 	 	19.2	% 	 	 	20.5	% 	
Eliminations and Other	  	 	—  	% 	 	 	—  	% 	 	 	—  	% 	 	 	—  	% 	
Total	  	 	20.2	% 	 	 	16.8	% 	 	 	20.5	% 	 	 	17.4	% 	
 
(1)	The three and six months ended June 30, 2016 include asset impairment charges of $22 million within Powertrain Systems.	
Adjusted Operating Income by Segment

 	  	Three Months Ended June 30,	 	 	Variance Due To:	 	
 	  	  2017  	 	  	  2016  	 	  	Favorable/
  (unfavorable)  	 	 	Volume, net of
contractual
price
reductions	 	 	Operational
performance	 	  	Other	 	 	Total	 	
 	  	(in millions)	 	 	(in millions)	 	
Powertrain Systems	  	$	141	 	  	$	114	 	  	$	27	 	 	$	9	 	 	$	26	 	  	$	(8	) 	 	$	27	 	
PSS	  	 	23	 	  	 	23	 	  	 	—  	 	 	 	(2	) 	 	 	5	 	  	 	(3	) 	 	 	—  	 	
Eliminations and Other	  	 	—  	 	  	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Total	  	$	164	 	  	$	137	 	  	$	27	 	 	$	7	 	 	$	31	 	  	$	(11	) 	 	$	27	 	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
As noted in the table above, Adjusted Operating Income for the three months ended June 30, 2017 as compared to the three months ended June 30, 2016 was impacted by volume and contractual price reductions, including product mix, and operational performance improvements, as well as the following items included in Other in the table above:
 
 	•	 	$3 million of increased SG&A expense during the three months ended June 30, 2017, primarily for increased information technology costs and increased incentive compensation accruals; and	
 
 	•	 	The absence of a $3 million gain on the sale of unutilized land during the three months ended June 30, 2016.	

 	  	Six Months Ended June 30,	 	 	Variance Due To:	 	
 	  	  2017  	 	  	  2016  	 	  	Favorable/
  (unfavorable)  	 	 	Volume, net of
contractual
price
reductions	 	 	Operational
performance	 	  	Other	 	 	Total	 	
 	  	(in millions)	 	 	(in millions)	 	
Powertrain Systems	  	$	291	 	  	$	218	 	  	$	73	 	 	$	32	 	 	$	41	 	  	$	—  	 	 	$	73	 	
PSS	  	 	35	 	  	 	43	 	  	 	(8	) 	 	 	(2	) 	 	 	10	 	  	 	(16	) 	 	 	(8	) 	
Eliminations and Other	  	 	—  	 	  	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Total	  	$	326	 	  	$	261	 	  	$	65	 	 	$	30	 	 	$	51	 	  	$	(16	) 	 	$	65	 	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
As noted in the table above, Adjusted Operating Income for the six months ended June 30, 2017 as compared to the six months ended June 30, 2016 was impacted by volume and contractual price reductions, including product mix, and operational performance improvements, as well as the following items included in Other in the table above:
 
 	•	 	$8 million of increased SG&A expense during the six months ended June 30, 2017, primarily for increased information technology costs and increased incentive compensation accruals;	
 
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 	•	 	Increased estimated cost accruals of $3 million at our PSS segment related to certain Brazilian legal matters; and	
 
 	•	 	The absence of a $3 million gain on the sale of unutilized land during the three months ended June 30, 2016; partially offset by	
 
 	•	 	In conjunction with a program cancellation by one of the Company’s OEM customers during the six months ended June 30, 2017, the Company entered into a commercial agreement for reimbursement of previously incurred development costs. As a result of this commercial agreement, the Company recorded a reduction of $13 million to cost of sales during the six months ended June 30, 2017.	
The results of operations for the years ended December 31, 2016 and 2015 were as follows:

 	  	Year Ended December 31,	 	
 	  	2016	 	 	2015	 	 	Favorable/
(unfavorable)	 	
 	  	(dollars in millions)	 	
Net sales	  	$	4,486	 	 	$	4,407	 	 	$	79	 	
Cost of sales	  	 	3,689	 	 	 	3,557	 	 	 	(132	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Gross margin	  	 	797	 	 	 	850	 	 	 	(53	) 	
Selling, general and administrative	  	 	299	 	 	 	312	 	 	 	13	 	
Amortization	  	 	17	 	 	 	23	 	 	 	6	 	
Restructuring	  	 	161	 	 	 	112	 	 	 	(49	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Operating income	  	 	320	 	 	 	403	 	 	 	(83	) 	
Interest expense	  	 	(1	) 	 	 	(3	) 	 	 	2	 	
Other expense, net	  	 	(1	) 	 	 	(2	) 	 	 	1	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Income before income taxes and equity income	  	 	318	 	 	 	398	 	 	 	(80	) 	
Income tax expense	  	 	(50	) 	 	 	(92	) 	 	 	42	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Income before equity income	  	 	268	 	 	 	306	 	 	 	(38	) 	
Equity income, net of tax	  	 	—  	 	 	 	—  	 	 	 	—  	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	268	 	 	 	306	 	 	 	(38	) 	
Net income attributable to noncontrolling interest	  	 	32	 	 	 	34	 	 	 	(2	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Delphi Technologies	  	$	236	 	 	$	272	 	 	$	(36	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total Net Sales
Below is a summary of our total net sales for the years ended December 31, 2016 versus December 31, 2015.

 	  	Year Ended December 31,	 	 	Variance Due To:	 	
 	  	2016	 	  	2015	 	  	Favorable/
(unfavorable)	 	 	Volume, net of
contractual
price
reductions	 	  	FX	 	 	Other	 	  	Total	 	
 	  	(in millions)	 	 	(in millions)	 	
Total net sales	  	$	4,486	 	  	$	4,407	 	  	$	79	 	 	$	211	 	  	$	(132	) 	 	$	—  	 	  	$	79	 	
Total net sales for the year ended December 31, 2016 increased 2% compared to the year ended December 31, 2015. We experienced volume growth of 6% for the period, primarily as a result of increased sales in North America and Asia Pacific. These increased volumes were partially offset by $63 million of contractual price reductions, as well as decreases due to unfavorable currency impacts, primarily related to the British Pound and Chinese Yuan Renminbi, and contractual price reductions.
 
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Cost of Sales
Cost of sales is primarily comprised of material, labor, manufacturing overhead, freight, fluctuations in foreign currency exchange rates, product engineering, design and development expenses, depreciation and amortization, warranty costs and other operating expenses. Gross margin is revenue less cost of sales and gross margin percentage is gross margin as a percentage of net sales.
Cost of sales increased $132 million for the year ended December 31, 2016 compared to the year ended December 31, 2015, as summarized below. The Company’s material cost of sales was approximately 50% of net sales in both the years ended December 31, 2016 and December 31, 2015.

 	  	Year Ended December 31,	 	 	Variance Due To:	 	
 	  	2016	 	 	2015	 	 	Favorable/
(unfavorable)	 	 	Volume (a)	 	 	FX	 	 	Operational
performance	 	  	Other	 	 	Total	 	
 	  	(dollars in millions)	 	 	(in millions)	 	
Cost of sales	  	$	3,689	 	 	$	3,557	 	 	$	(132	) 	 	$	(252	) 	 	$	77	 	 	$	128	 	  	$	(85	) 	 	$	(132	) 	
Gross margin	  	$	797	 	 	$	850	 	 	$	(53	) 	 	$	(41	) 	 	$	(55	) 	 	$	128	 	  	$	(85	) 	 	$	(53	) 	
Percentage of net sales	  	 	17.8	% 	 	 	19.3	% 	 				 				 				 				  				 				
 
(a)	Presented net of $63 million of contractual price reductions for gross margin variance.	
The increase in cost of sales reflects increased volumes, net of unfavorable changes in sales mix of $96 million, partially offset by improved operational performance and the impacts from currency exchange. The increase in cost of sales is also attributable to the following items in Other above:
 
 	•	 	Increased warranty costs of $28 million; which includes $25 million pursuant to a settlement agreement reached in 2016 with one of our OEM customers regarding warranty claims related to certain components supplied by the Powertrain Systems segment; and	
 
 	•	 	$29 million of asset impairments recognized in 2016 due to declines in the fair values of certain fixed assets, as compared to $9 million recognized in 2015. The increase was primarily due to $25 million recognized in 2016 related to the closure of a European manufacturing site within the Powertrain Systems segment, as further described in Note 10. Restructuring.	
Selling, General and Administrative Expense

 	  	Year Ended December 31,	 	
 	  	2016	 	 	2015	 	 	Favorable/
(unfavorable)	 	
 	  	(dollars in millions)	 	
Selling, general and administrative expense	  	$	299	 	 	$	312	 	 	$	13	 	
Percentage of net sales	  	 	6.7	% 	 	 	7.1	% 	 				
Selling, general and administrative expense (“SG&A”) includes administrative expenses, information technology costs and incentive compensation related costs. The reduction in SG&A for the year ended December 31, 2016 as compared to 2015 was primarily due to reduced expenses as a result of cost reduction initiatives, including our continuing rotation to best cost manufacturing locations in Europe.
Amortization

 	  	Year Ended December 31,	 	
 	  	2016	 	  	2015	 	  	Favorable/
(unfavorable)	 	
 	  	(in millions)	 	
Amortization	  	$	17	 	  	$	23	 	  	$	6	 	
 
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Amortization expense reflects the non-cash charge related to definite-lived intangible assets. The decrease in 2016 as compared to 2015 was due to certain PSS customer relationship assets reaching the end of their amortizable lives during 2015.
In 2017, we expect to incur non-cash amortization charges of approximately $15 million.
Restructuring

 	  	Year Ended December 31,	 	
 	  	2016	 	 	2015	 	 	Favorable/
(unfavorable)	 	
 	  	(dollars in millions)	 	
Restructuring	  	$	161	 	 	$	112	 	 	$	(49	) 	
Percentage of net sales	  	 	3.6	% 	 	 	2.5	% 	 				
Restructuring charges recorded during 2016 were primarily attributable to our restructuring programs which focused on the continued rotation of our manufacturing footprint to best cost locations in Europe and on reducing global overhead costs.
The Company recorded employee-related and other restructuring charges related to these programs totaling approximately $161 million during the year ended December 31, 2016. These charges included $131 million for programs focused on the continued rotation of our manufacturing footprint to best cost locations in Europe, $93 million of which related to the closure of a European manufacturing site within the Powertrain Systems segment, associated with separation costs for approximately 500 employees. Charges for the program have been substantially completed, and cash payments for this plant closure are expected to be principally completed in 2017. Additionally, the Company recognized non-cash asset impairment charges of $25 million during the year ended December 31, 2016 related to this plant closure, which were recorded within cost of sales. Delphi Technologies also recorded restructuring costs of $12 million in 2016 for programs implemented to reduce global overhead costs. We expect to make cash payments of approximately $60 million in 2017 pursuant to our implemented restructuring programs.
During the year ended December 31, 2015, Delphi Technologies recorded employee-related and other restructuring charges totaling approximately $112 million, primarily related to on-going restructuring programs focused on aligning manufacturing capacity with the levels of automotive production in Europe and South America, and the continued rotation of our manufacturing footprint to best cost locations within these regions. These charges included the recognition of approximately $68 million of employee-related and other costs related to the initiation of a workforce reduction at a European manufacturing site within the Powertrain Systems segment.
While the restructuring programs initiated in 2016 have been principally completed, we expect to continue to incur additional restructuring expense in 2017, primarily related to the initiation of new programs focused on the continued rotation of our manufacturing footprint to best cost locations in Europe and to reduce global overhead costs. We expect these restructuring costs to total approximately $100 million in 2017. Additionally, as we continue to operate in a cyclical industry that is impacted by movements in the global and regional economies, we continually evaluate opportunities to further adjust our cost structure and optimize our manufacturing footprint. The Company plans to implement additional restructuring activities in the future, if necessary, in order to align manufacturing capacity and other costs with prevailing regional automotive production levels and locations, to improve the efficiency and utilization of other locations and in order to increase investment in advanced technologies and engineering. Such future restructuring actions are dependent on market conditions, customer actions and other factors.
Refer to Note 10. Restructuring to the combined financial statements included herein for additional information.
 
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Income Taxes

 	  	Year Ended December 31,	 	
 	  	2016	 	  	2015	 	  	Favorable/
(unfavorable)	 	
 	  	(in millions)	 	
Income tax expense	  	$	50	 	  	$	92	 	  	$	42	 	
The Company’s tax rate is affected by the fact that its parent entity is a U.K. resident taxpayer, the tax rates in the U.K. and other jurisdictions in which the Company operates, the relative amount of income earned by jurisdiction and the relative amount of losses or income for which no tax benefit or expense was recognized due to a valuation allowance.
The effective tax rate in the year ended December 31, 2016 was impacted by favorable geographic income mix in 2016 as compared to 2015, primarily due to changes in the underlying operations of the business. These benefits were partially offset by $5 million of reserve adjustments recorded for uncertain tax positions, which included reserves for ongoing audits in foreign jurisdictions, as well as for changes in estimates based on relevant new or additional evidence obtained related to certain of the Company’s tax positions. Additionally, the Company’s tax rate was impacted by the enactment of the U.K. Finance (No. 2) Act 2016 on September 15, 2016, which provides for a reduction of the corporate income tax rate from 18% to 17% effective April 1, 2020. The income tax accounting effect, including any retroactive effect, of a tax law change is accounted for in the period of enactment, which in this case was the third quarter of 2016. As a result, the effective tax rate was impacted by an increased tax expense of approximately $4 million for the year ended December 31, 2016 due to the resultant impact on the net deferred tax asset balances.
The effective tax rate in the year ended December 31, 2015 was impacted by the enactment of the U.K. Finance (No. 2) Act 2015 (the “UK 2015 Finance Act”) on November 18, 2015, which provides for a reduction of the corporate income tax rate from 20% to 19% effective April 1, 2017, with a further reduction to 18% effective April 1, 2020. The income tax accounting effect, including any retroactive effect, of a tax law change is accounted for in the period of enactment, which in this case was the fourth quarter of 2015. As a result, the effective tax rate was impacted by an increased tax expense of approximately $9 million for the year ended December 31, 2015 due to the resultant impact on the net deferred tax asset balances.
 
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Results of Operations by Segment
The reconciliations of Adjusted Operating Income to net income attributable to Delphi Technologies for the years ended December 31, 2016 and 2015 are as follows:

 	  	Powertrain
Systems	 	 	PSS	 	 	Eliminations
and Other	 	  	Total	 	
 	  	(in millions)	 	
For the Year Ended December 31, 2016:	  				 				 				  				
Adjusted operating income	  	$	418	 	 	$	94	 	 	$	—  	 	  	$	512	 	
Restructuring	  	 	(151	) 	 	 	(10	) 	 	 	—  	 	  	 	(161	) 	
Other acquisition and portfolio project costs	  	 	—  	 	 	 	(2	) 	 	 	—  	 	  	 	(2	) 	
Asset impairments	  	 	(28	) 	 	 	(1	) 	 	 	—  	 	  	 	(29	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating income	  	$	239	 	 	$	81	 	 	$	—  	 	  	 	320	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Interest expense	  				 				 				  	 	(1	) 	
Other expense, net	  				 				 				  	 	(1	) 	
	  				 				 				  	 	 	 	
Income before income taxes and equity income	  				 				 				  	 	318	 	
Income tax expense	  				 				 				  	 	(50	) 	
Equity income, net of tax	  				 				 				  	 	—  	 	
	  				 				 				  	 	 	 	
Net income	  				 				 				  	 	268	 	
Net income attributable to noncontrolling interest	  				 				 				  	 	32	 	
	  				 				 				  	 	 	 	
Net income attributable to Delphi Technologies	  				 				 				  	$	236	 	

																	
 	  	Powertrain
Systems	 	 	PSS	 	 	Eliminations
and Other	 	  	Total	 	
 	  	(in millions)	 	
For the Year Ended December 31, 2015:	  				 				 				  				
Adjusted operating income	  	$	428	 	 	$	98	 	 	$	—  	 	  	$	526	 	
Restructuring	  	 	(108	) 	 	 	(4	) 	 	 	—  	 	  	 	(112	) 	
Other acquisition and portfolio project costs	  	 	(2	) 	 	 	—  	 	 	 	—  	 	  	 	(2	) 	
Asset impairments	  	 	(9	) 	 	 	—  	 	 	 	—  	 	  	 	(9	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating income	  	$	309	 	 	$	94	 	 	$	—  	 	  	 	403	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Interest expense	  				 				 				  	 	(3	) 	
Other expense, net	  				 				 				  	 	(2	) 	
	  				 				 				  	 	 	 	
Income before income taxes and equity income	  				 				 				  	 	398	 	
Income tax expense	  				 				 				  	 	(92	) 	
Equity income, net of tax	  				 				 				  	 	—  	 	
	  				 				 				  	 	 	 	
Net income	  				 				 				  	 	306	 	
Net income attributable to noncontrolling interest	  				 				 				  	 	34	 	
	  				 				 				  	 	 	 	
Net income attributable to Delphi Technologies	  				 				 				  	$	272	 	

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Net sales, gross margin as a percentage of net sales and Adjusted Operating Income by segment for the years ended December 31, 2016 and 2015 are as follows:
Net Sales by Segment

 	  	Year Ended December 31,	 	 	Variance Due To:	 	
 	  	2016	 	 	2015	 	 	Favorable/
(unfavorable)	 	 	Volume, net of
contractual
price
reductions	 	 	FX	 	 	Other	 	  	Total	 	
 	  	(in millions)	 	 	(in millions)	 	
Powertrain Systems	  	$	3,837	 	 	$	3,729	 	 	$	108	 	 	$	208	 	 	$	(100	) 	 	$	—  	 	  	$	108	 	
PSS	  	 	924	 	 	 	963	 	 	 	(39	) 	 	 	6	 	 	 	(45	) 	 	 	—  	 	  	 	(39	) 	
Eliminations and Other	  	 	(275	) 	 	 	(285	) 	 	 	10	 	 	 	(3	) 	 	 	13	 	 	 	—  	 	  	 	10	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Total	  	$	4,486	 	 	$	4,407	 	 	$	79	 	 	$	211	 	 	$	(132	) 	 	$	—  	 	  	$	79	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Gross Margin Percentage by Segment

 	  	Year Ended December 31,	 	
 	  	2016	 	 	2015	 	
Powertrain Systems	  	 	15.8	% 	 	 	17.2	% 	
PSS	  	 	20.6	% 	 	 	21.5	% 	
Eliminations and Other	  	 	—  	% 	 	 	—  	% 	
Total	  	 	17.8	% 	 	 	19.3	% 	
Adjusted Operating Income by Segment

 	  	Year Ended December 31,	 	 	Variance Due To:	 	
 	  	2016	 	  	2015	 	  	Favorable/
(unfavorable)	 	 	Volume, net of
contractual
price
reductions	 	 	Operational
performance	 	  	Other	 	 	Total	 	
 	  	(in millions)	 	 	(in millions)	 	
Powertrain Systems	  	$	418	 	  	$	428	 	  	$	(10	) 	 	$	(35	) 	 	$	114	 	  	$	(89	) 	 	$	(10	) 	
PSS	  	 	94	 	  	 	98	 	  	 	(4	) 	 	 	1	 	 	 	14	 	  	 	(19	) 	 	 	(4	) 	
Eliminations and Other	  	 	—  	 	  	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Total	  	$	512	 	  	$	526	 	  	$	(14	) 	 	$	(34	) 	 	$	128	 	  	$	(108	) 	 	$	(14	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
As noted in the table above, Adjusted Operating Income for the year ended December 31, 2016 as compared to the year ended December 31, 2015 was impacted by volume and contractual price reductions, including product mix, and operational performance improvements, as well as the following items included in Other in the table above:
 
 	•	 	Increased warranty costs of $28 million, which includes $25 million pursuant to a settlement agreement reached in 2016 with one of our OEM customers regarding warranty claims related to certain components supplied by the Powertrain Systems segment, and	
 
 	•	 	Unfavorable foreign currency impacts of $25 million, primarily related to the Chinese Yuan Renminbi and British Pound.	
 
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Results of Operations for the Year Ended December 31, 2015 versus December 31, 2014
Combined Results of Operations
The decrease in our total net sales of 3% during the year ended December 31, 2015 as compared to 2014 was primarily attributable to unfavorable foreign currency impacts, which offset increased sales volumes in North America, Europe and Asia Pacific. Partially offsetting these increases were reduced sales volumes in our smallest region, South America, due to continuing economic weakness, resulting in continued reductions in OEM production schedules in the region.
The results of operations for the years ended December 31, 2015 and 2014 were as follows:

 	  	Year Ended December 31,	 	
 	  	2015	 	 	2014	 	 	Favorable/
(unfavorable)	 	
 	  	(dollars in millions)	 	
Net sales	  	$	4,407	 	 	$	4,540	 	 	$	(133	) 	
Cost of sales	  	 	3,557	 	 	 	3,671	 	 	 	114	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Gross margin	  	 	850	 	 	 	869	 	 	 	(19	) 	
Selling, general and administrative	  	 	312	 	 	 	343	 	 	 	31	 	
Amortization	  	 	23	 	 	 	32	 	 	 	9	 	
Restructuring	  	 	112	 	 	 	52	 	 	 	(60	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Operating income	  	 	403	 	 	 	442	 	 	 	(39	) 	
Interest expense	  	 	(3	) 	 	 	(4	) 	 	 	1	 	
Other (expense) income, net	  	 	(2	) 	 	 	2	 	 	 	(4	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Income from operations before income taxes and equity income	  	 	398	 	 	 	440	 	 	 	(42	) 	
Income tax expense	  	 	(92	) 	 	 	(97	) 	 	 	5	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Income from operations before equity income	  	 	306	 	 	 	343	 	 	 	(37	) 	
Equity income (loss), net of tax	  	 	—  	 	 	 	(1	) 	 	 	1	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	306	 	 	 	342	 	 	 	(36	) 	
Net income attributable to noncontrolling interest	  	 	34	 	 	 	36	 	 	 	(2	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Delphi Technologies	  	$	272	 	 	$	306	 	 	$	(34	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total Net Sales
Below is a summary of Delphi Technologies’ total net sales for the year ended December 31, 2015 versus December 31, 2014.

 	  	Year Ended December 31,	 	 	Variance Due To:	 	
 	  	2015	 	  	2014	 	  	Favorable/
(unfavorable)	 	 	Volume, net of
contractual
price
reductions	 	  	FX	 	 	Other	 	  	Total	 	
 	  	(in millions)	 	 	(in millions)	 	
Total net sales	  	$	4,407	 	  	$	4,540	 	  	$	(133	) 	 	$	272	 	  	$	(405	) 	 	$	—  	 	  	$	(133	) 	
Total net sales for the year ended December 31, 2015 decreased 3% compared to the year ended December 31, 2014. We experienced volume growth of 7% for the period, primarily as a result of increased sales in North America, Europe and Asia Pacific. These increased volumes were partially offset by $61 million of contractual price reductions, as well as decreases due to unfavorable currency impacts, primarily related to the Euro.
 
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Cost of Sales
Cost of sales is primarily comprised of material, labor, manufacturing overhead, freight, fluctuations in foreign currency exchange rates, product engineering, design and development expenses, depreciation and amortization, warranty costs and other operating expenses. Gross margin is revenue less cost of sales and gross margin percentage is gross margin as a percentage of net sales.
Cost of sales decreased $114 million for the year ended December 31, 2015 compared to the year ended December 31, 2014, as summarized below. The Company’s material cost of sales was approximately 50% of net sales in both the year ended December 31, 2015 and December 31, 2014.

 	  	Year Ended December 31,	 	 	Variance Due To:	 	
 	  	2015	 	 	2014	 	 	Favorable/
(unfavorable)	 	 	Volume (a)	 	 	FX	 	 	Operational
performance	 	  	Other	 	 	Total	 	
 	  	(dollars in millions)	 	 	(in millions)	 	
Cost of sales	  	$	3,557	 	 	$	3,671	 	 	$	114	 	 	$	(296	) 	 	$	338	 	 	$	92	 	  	$	(20	) 	 	$	114	 	
Gross margin	  	$	850	 	 	$	869	 	 	$	(19	) 	 	$	(24	) 	 	$	(67	) 	 	$	92	 	  	$	(20	) 	 	$	(19	) 	
Percentage of net sales	  	 	19.3	% 	 	 	19.1	% 	 			 	 				 				 				  				 				
 
(a)	Presented net of $61 million of contractual price reductions for gross margin variance.	
The decrease in cost of sales reflects improved operational performance and the impacts from currency exchange, partially offset by increased volumes before contractual price reductions, net of unfavorable changes in sales mix of $99 million for the period.
Selling, General and Administrative Expense

 	  	Year Ended December 31,	 	
 	  	2015	 	 	2014	 	 	Favorable/
(unfavorable)	 	
 	  	(dollars in millions)	 	
Selling, general and administrative expense	  	$	312	 	 	$	343	 	 	$	31	 	
Percentage of net sales	  	 	7.1	% 	 	 	7.6	% 	 				
Selling, general and administrative expense (“SG&A”) includes administrative expenses, information technology costs and incentive compensation related costs. The reduction in SG&A for the year ended December 31, 2015 as compared to 2014 was primarily due to reduced expenses as a result of cost reduction initiatives, including our continuing rotation to best cost manufacturing locations in Europe.
Amortization

 	  	Year Ended December 31,	 	
 	  	2015	 	  	2014	 	  	Favorable/
(unfavorable)	 	
 	  	(in millions)	 	
Amortization	  	$	23	 	  	$	32	 	  	$	9	 	
Amortization expense reflects the non-cash charge related to definite-lived intangible assets. The decrease in 2015 as compared to 2014 was due to certain PSS customer relationship assets reaching the end of their amortizable lives during 2015.
 
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Restructuring

 	  	Year Ended December 31,	 	
 	  	2015	 	 	2014	 	 	Favorable/
(unfavorable)	 	
 	  	(dollars in millions)	 	
Restructuring	  	$	112	 	 	$	52	 	 	$	(60	) 	
Percentage of net sales	  	 	2.5	% 	 	 	1.1	% 	 				
During the year ended December 31, 2015, Delphi Technologies recorded employee-related and other restructuring charges totaling approximately $112 million, primarily related to on-going restructuring programs focused on aligning manufacturing capacity with the levels of automotive production in Europe and South America, and the continued rotation of our manufacturing footprint to low cost locations within these regions. These charges included the recognition of approximately $68 million of employee-related and other costs related to the initiation of a workforce reduction at a European manufacturing site within the Powertrain Systems segment.
During the year ended December 31, 2014, Delphi Technologies recorded employee related and other restructuring charges totaling approximately $52 million, which included the recognition of approximately $35 million of employee-related and other costs related to the initiation of a workforce reduction at a European manufacturing site.
Refer to Note 10. Restructuring to the combined financial statements included herein for additional information.
Income Taxes

 	  	Year Ended December 31,	 	
 	  	2015	 	  	2014	 	  	Favorable/
(unfavorable)	 	
 	  	(in millions)	 	
Income tax expense	  	$	92	 	  	$	97	 	  	$	5	 	
The Company’s tax rate is affected by the fact that its parent entity is a U.K. resident taxpayer, the tax rates in the U.K. and other jurisdictions in which the Company operates, the relative amount of income earned by jurisdiction and the relative amount of losses or income for which no tax benefit or expense was recognized due to a valuation allowance.
The effective tax rate in the year ended December 31, 2015 was impacted by the enactment of the U.K. Finance (No. 2) Act 2015 (the “UK 2015 Finance Act”) on November 18, 2015, which provides for a reduction of the corporate income tax rate from 20% to 19% effective April 1, 2017, with a further reduction to 18% effective April 1, 2020. The income tax accounting effect, including any retroactive effect, of a tax law change is accounted for in the period of enactment, which in this case was the fourth quarter of 2015. As a result, the effective tax rate was impacted by an increased tax expense of approximately $9 million for the year ended December 31, 2015 due to the resultant impact on the net deferred tax asset balances. Additionally, the effective tax rate in the year ended December 31, 2015 was impacted by unfavorable geographic income mix in 2015 as compared to 2014, primarily due to changes in the underlying operations of the business.
 
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Results of Operations by Segment
The reconciliations of Adjusted Operating Income to net income attributable to Delphi Technologies for the years ended December 31, 2015 and 2014 are as follows:

 	  	Powertrain
Systems	 	 	PSS	 	 	Eliminations
and Other	 	  	Total	 	
 	  	(in millions)	 	
For the Year Ended December 31, 2015:	  				 				 				  				
Adjusted operating income	  	$	428	 	 	$	98	 	 	$	—  	 	  	$	526	 	
Restructuring	  	 	(108	) 	 	 	(4	) 	 	 	—  	 	  	 	(112	) 	
Other acquisition and portfolio project costs	  	 	(2	) 	 	 	—  	 	 	 	—  	 	  	 	(2	) 	
Asset impairments	  	 	(9	) 	 	 	—  	 	 	 	—  	 	  	 	(9	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating income	  	$	309	 	 	$	94	 	 	$	—  	 	  	 	403	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Interest expense	  				 				 				  	 	(3	) 	
Other expense, net	  				 				 				  	 	(2	) 	
	  				 				 				  	 	 	 	
Income before income taxes and equity income	  				 				 				  	 	398	 	
Income tax expense	  				 				 				  	 	(92	) 	
Equity income, net of tax	  				 				 				  	 	—  	 	
	  				 				 				  	 	 	 	
Net income	  				 				 				  	 	306	 	
Net income attributable to noncontrolling interest	  				 				 				  	 	34	 	
	  				 				 				  	 	 	 	
Net income attributable to Delphi Technologies	  				 				 				  	$	272	 	

																	
 	  	Powertrain
Systems	 	 	PSS	 	 	Eliminations
and Other	 	  	Total	 	
 	  	(in millions)	 	
For the Year Ended December 31, 2014:	  				 				 				  				
Adjusted operating income	  	$	402	 	 	$	92	 	 	$	—  	 	  	$	494	 	
Restructuring	  	 	(48	) 	 	 	(4	) 	 	 	—  	 	  	 	(52	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating income	  	$	354	 	 	$	88	 	 	$	—  	 	  	 	442	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Interest expense	  				 				 				  	 	(4	) 	
Other income, net	  				 				 				  	 	2	 	
	  				 				 				  	 	 	 	
Income before income taxes and equity income	  				 				 				  	 	440	 	
Income tax expense	  				 				 				  	 	(97	) 	
Equity loss, net of tax	  				 				 				  	 	(1	) 	
	  				 				 				  	 	 	 	
Net income	  				 				 				  	 	342	 	
Net income attributable to noncontrolling interest	  				 				 				  	 	36	 	
	  				 				 				  	 	 	 	
Net income attributable to Delphi Technologies	  				 				 				  	$	306	 	

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Net sales, gross margin as a percentage of net sales and Adjusted Operating Income by segment for the years ended December 31, 2015 and 2014 are as follows:
Net Sales by Segment

 	  	Year Ended December 31,	 	 	Variance Due To:	 	
 	  	2015	 	 	2014	 	 	Favorable/
(unfavorable)	 	 	Volume, net of
contractual
price
reductions	 	  	FX	 	 	Other	 	  	Total	 	
 	  	(in millions)	 	 	(in millions)	 	
Powertrain Systems	  	$	3,729	 	 	$	3,862	 	 	$	(133	) 	 	$	219	 	  	$	(352	) 	 	$	—  	 	  	$	(133	) 	
PSS	  	 	963	 	 	 	1,000	 	 	 	(37	) 	 	 	44	 	  	 	(81	) 	 	 	—  	 	  	 	(37	) 	
Eliminations and Other	  	 	(285	) 	 	 	(322	) 	 	 	37	 	 	 	9	 	  	 	28	 	 	 	—  	 	  	 	37	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total	  	$	4,407	 	 	$	4,540	 	 	$	(133	) 	 	$	272	 	  	$	(405	) 	 	$	—  	 	  	$	(133	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Gross Margin Percentage by Segment

 	  	Year Ended December 31,	 	
 	  	2015	 	 	2014	 	
Powertrain Systems	  	 	17.2	% 	 	 	16.9	% 	
PSS	  	 	21.5	% 	 	 	21.6	% 	
Eliminations and Other	  	 	—  	% 	 	 	—  	% 	
Total	  	 	19.3	% 	 	 	19.1	% 	
Adjusted Operating Income by Segment

 	  	Year Ended December 31,	 	 	Variance Due To:	 	
 	  	2015	 	  	2014	 	  	Favorable/
(unfavorable)	 	 	Volume, net of
contractual
price
reductions	 	 	Operational
performance	 	  	Other	 	 	Total	 	
 	  	(in millions)	 	 	(in millions)	 	
Powertrain Systems	  	$	428	 	  	$	402	 	  	$	26	 	 	$	(24	) 	 	$	74	 	  	$	(24	) 	 	$	26	 	
PSS	  	 	98	 	  	 	92	 	  	 	6	 	 	 	1	 	 	 	18	 	  	 	(13	) 	 	 	6	 	
Eliminations and Other	  	 	—  	 	  	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Total	  	$	526	 	  	$	494	 	  	$	32	 	 	$	(23	) 	 	$	92	 	  	$	(37	) 	 	$	32	 	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
As noted in the table above, Adjusted Operating Income for the year ended December 31, 2015 as compared to the year ended December 31, 2014 was impacted by volume and contractual price reductions, including product mix and operational performance improvements, as well as the following items included in Other in the table above:
 
 	•	 	$45 million of unfavorable foreign currency impacts, primarily related to the Euro; partially offset by	
 
 	•	 	A $5 million reduction in depreciation and amortization.	
Liquidity and Capital Resources
As part of Aptiv, the Company is dependent upon Aptiv for all of its working capital and financing requirements, as Aptiv uses a centralized approach to cash management and financing of its operations. Aptiv utilizes a combination of strategies, including dividends, cash pooling arrangements, intercompany loan
 
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structures and other distributions and advances to centrally manage its global liquidity needs, including the use of a global cash pooling arrangement to consolidate and manage its global cash balances. Accordingly, cash and cash equivalents held by Aptiv at the corporate level were not attributable to Delphi Technologies for any of the periods presented. Only cash amounts specifically attributable to Delphi Technologies are reflected in the accompanying combined financial statements. Financing transactions relating to the Company are accounted for as a component of Net Parent investment in the combined balance sheets and as a financing activity on the accompanying combined statements of cash flows. Third-party debt obligations of Aptiv and the corresponding interest costs related to those debt obligations, specifically those that relate to senior notes, term loans and revolving credit facilities, have not been attributed to Delphi Technologies, as Delphi Technologies was not the legal obligor of such debt obligations. The only third-party debt obligations included in the historical combined financial statements are those for which the legal obligor is a legal entity within Delphi Technologies. None of the Company’s assets were pledged as collateral under the Parent’s debt obligations as of December 31, 2016 or 2015.
During the years ended December 31, 2016, 2015 and 2014, and the six month periods ended June 30, 2017 and June 30, 2016, the Company generated sufficient cash from operating activities to fund its operating and investing activities. Management assesses the Company’s liquidity in terms of its ability to generate cash to fund its operating and investing activities, including capital expenditures, operational restructuring activities and separation activities. The Company continues to generate substantial cash from operating activities and believes that its operating cash flow and other sources of liquidity, including available borrowings under the Credit Agreement, as described below, will be sufficient to allow it to continue investing in existing businesses and manage its capital structure on a short and long-term basis.
Overview of Capital Structure
We have entered into the Credit Agreement and completed the offering of the Senior Notes, as described below, such that we will have a total principal amount of debt of approximately $1,550 million immediately following the separation, primarily consisting of a $750 million five-year term loan pursuant to the Credit Agreement and $800 million of eight-year senior notes. We currently anticipate that approximately $1,148 million of the net proceeds from these borrowings will be distributed to Aptiv upon the separation, with the remaining net proceeds to be held by Delphi Technologies in order to fund operating cash requirements and to pay related taxes, fees and expenses.
The Company’s liquidity requirements are primarily to fund our business operations, including capital expenditures and working capital requirements, operational restructuring activities, separation activities and to meet planned debt service requirements. Our primary sources of liquidity are cash flows from operations, our existing cash balance, and as necessary, borrowings under the Credit Agreement and the issuance of senior unsecured notes, as described below. To the extent we generate discretionary cash flow we may consider using this additional cash flow for optional prepayments of indebtedness, undertake new capital investment projects, strategic acquisitions, return capital to shareholders and/or general corporate purposes.
Credit Agreement
On September 7, 2017, Delphi Technologies and its wholly-owned subsidiary Delphi Powertrain Corporation entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), with respect to $1.25 billion in senior secured credit facilities. The Credit Agreement consists of a senior secured five-year $750 million term loan facility (the “Term Loan A Facility”) and a $500 million five-year senior secured revolving credit facility (the “Revolving Credit Facility”) (collectively, the “Credit Facilities”) with the lenders party thereto and JPMorgan Chase Bank, N.A. The Credit Facilities are expected to become available to Delphi Technologies no later than the date of the separation, subject to the satisfaction of certain conditions customary for financings of this type, including the spin-off.
 
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The Credit Facilities will be subject to an interest rate, at our option, of either (a) the Administrative Agent’s Alternate Base Rate (“ABR” as defined in the Credit Agreement) or (b) the London Interbank Offered Rate (the “Adjusted LIBOR Rate” as defined in the Credit Agreement) (“LIBOR”), in each case, plus an applicable margin that is based on our corporate credit ratings, as more particularly described below. In addition, the Credit Agreement will require payment of additional interest on certain overdue obligations on terms and conditions customary for financings of this type. The interest rate period with respect to LIBOR interest rate options will be set at one-, two-, three-, or six-months as selected by us in accordance with the terms of the Credit Agreement (or other period as may be agreed by the applicable lenders), but payable no less than quarterly. We may elect to change the selected interest rate over the term of the Credit Facilities in accordance with the provisions of the Credit Agreement.
The applicable interest rate margins for the Term Loan A Facility will increase or decrease from time to time between 1.50% and 2.00% per annum (for LIBOR loans) and between 0.50% and 1.00% per annum (for ABR loans), in each case based upon changes to our corporate credit ratings. The applicable interest rate margins for the Revolving Credit Facility will increase or decrease from time to time between 1.30% and 1.55% per annum (for LIBOR loans) and between 0.30% and 0.55% per annum (for ABR loans), in each case based upon changes to our corporate credit ratings. Accordingly, the interest rates for the Credit Facilities will fluctuate during the term of the Credit Agreement based on changes in the ABR, LIBOR or future changes in our corporate credit ratings. The Credit Agreement also requires that we pay certain facility fees on the aggregate commitments under the Revolving Credit Facility and certain letter of credit issuance and fronting fees.
Letters of credit will be available for issuance under the Credit Agreement on terms and conditions customary for financings of this type, which issuances will reduce availability under the Revolving Credit Facility.
We will be obligated to make quarterly principal payments throughout the term of the Term Loan A Facility according to the amortization provisions in the Credit Agreement, as such payments may be reduced from time to time in accordance with the terms of the Credit Agreement as a result of the application of loan prepayments made by us, if any, prior to the scheduled date of payment thereof.
Borrowings under the Credit Agreement will be prepayable at our option without premium or penalty, subject to customary increased cost provisions. We may request that all or a portion of the Credit Facilities be converted to extend the scheduled maturity date(s) with respect to all or a portion of any principal amount of such Credit Facilities under certain conditions customary for financings of this type. The Credit Agreement also contains certain mandatory prepayment provisions in the event that we receive net cash proceeds from certain non-ordinary course asset sales, casualty events and debt offerings, in each case subject to terms and conditions customary for financings of this type.
The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type that, among other things, limit our and our subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to designate subsidiaries as unrestricted, to make certain investments, to prepay certain indebtedness and to pay dividends, or to make other distributions or redemptions/repurchases, in respect of the our and our subsidiaries’ equity interests. In addition, the Credit Agreement requires that we maintain a consolidated net leverage ratio (the ratio of Consolidated Total Indebtedness to Consolidated Adjusted EBITDA, each as defined in the Credit Agreement) of not greater than 3.50 to 1.00. The Credit Agreement also contains events of default customary for financings of this type, including certain customary change of control events.
The borrowers under the Credit Agreement will comprise Delphi Technologies and its wholly-owned Delaware-organized subsidiary, Delphi Powertrain Corporation. Additional subsidiaries of Delphi Technologies may be added as co-borrowers or guarantors under the Credit Agreement from time to time on the terms and conditions set forth in the Credit Agreement. The obligations of each borrower under the Credit Agreement will
 
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be jointly and severally guaranteed by each other borrower and by certain of our existing and future direct and indirect subsidiaries, subject to certain exceptions customary for financings of this type. All obligations of the borrowers and the guarantors will be secured by certain assets of such borrowers and guarantors, including a perfected first-priority pledge of all of the capital stock in Delphi Powertrain Corporation.
In addition, the Credit Agreement contains provisions pursuant to which, based upon our achievement of certain corporate credit ratings, certain covenants and/or our obligation to provide collateral to secure the Credit Facilities, will be suspended.
Unsecured Senior Notes
On September 28, 2017, we issued $800 million in aggregate principal amount of 5.00% senior unsecured notes due 2025 in a transaction exempt from registration under the Securities Act (the “Senior Notes”). The Senior Notes were priced at 99.50% of par, resulting in a yield to maturity of 5.077%. Interest is payable semi-annually on April 1 and October 1 of each year to holders of record at the close of business on March 15 or September 15 immediately preceding the interest payment date. The proceeds received from the Senior Notes offering were deposited into escrow for release to Delphi Technologies PLC upon satisfaction of certain conditions, including completion of the separation. If the conditions for the release of the proceeds of this offering from escrow are not satisfied by June 30, 2018, the Senior Notes will be subject to mandatory redemption. From the date of the satisfaction of the escrow conditions, the notes will be guaranteed, jointly and severally, on an unsecured basis, by each of our current and future domestic subsidiaries that guarantee our Credit Facilities, as described above. Upon completion of the separation, Delphi Technologies PLC will use the proceeds from the Spin-Off Senior Notes together with the proceeds from the Term Loan A Facility to fund a dividend to Aptiv, fund operating cash and pay taxes and related fees and expenses.
Receivable factoring —Beginning in 2015, the Company has entered into arrangements with various financial institutions to sell eligible trade receivables from certain aftermarket customers in North America. These arrangements can be terminated at any time subject to prior written notice. The receivables under these arrangements are sold without recourse to the Company and are therefore accounted for as true sales. During the years ended December 31, 2016 and 2015, $123 million and $100 million of receivables were sold under these arrangements, and expenses of $3 million and $2 million, respectively, were recognized within interest expense. During the three and six months ended June 30, 2017, $22 million and $38 million of receivables were sold under these arrangements, and expenses of $1 million and $1 million, respectively, were recognized within interest expense. During the three and six months ended June 30, 2016, $43 million and $75 million of receivables were sold under these arrangements, and expenses of less than $1 million and $2 million, respectively, were recognized within interest expense.
In addition, in 2016 and 2015 one of the Company’s European subsidiaries factored, without recourse, receivables related to certain foreign research tax credits to a financial institution. These transactions were accounted for as true sales of the receivables, and the Company therefore derecognized approximately $22 million and $20 million from other long-term assets in the combined balance sheet as of December 31, 2016 and December 31, 2015, respectively, as a result of these transactions.
Aptiv centrally maintains a European accounts receivable factoring facility, and Delphi Technologies participates in this facility. As the factoring facility allows Delphi Technologies to maintain effective control over the receivables, the accounts receivable related to this facility are included in the combined balance sheets. Collateral is not required related to these trade accounts receivable. No amounts were outstanding on the European accounts receivable factoring facility as of June 30, 2017, December 31, 2016 or December 31, 2015. The European accounts receivable factoring facility matures on August 31, 2017, and will automatically renew on a non-committed, indefinite basis unless terminated by either party.
Capital leases —There were no capital lease obligations outstanding as of June 30, 2017 or December 31, 2016. As of December 31, 2015, there were approximately $22 million of capital lease obligations outstanding.
 
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Interest —Cash paid for interest totaled $1 million, $3 million and $4 million for the years ended December 31, 2016, 2015 and 2014, respectively.
Contractual Commitments
The following table summarizes our expected cash outflows resulting from financial contracts and commitments as of December 31, 2016, with amounts denominated in foreign currencies translated using foreign currency rates as of December 31, 2016. We have not included information on our recurring purchases of materials for use in our manufacturing operations. These amounts are generally consistent from year to year, closely reflect our levels of production, and are not long-term in nature. The amounts below exclude the gross liability for uncertain tax positions of $9 million as of December 31, 2016. We do not expect a significant payment related to these obligations to be made within the next twelve months. We are not able to provide a reasonably reliable estimate of the timing of future payments relating to the non-current portion of obligations associated with uncertain tax positions. For more information, refer to Note 13. Income Taxes to the combined financial statements included herein.

 	  	Payments due by Period	 	
 	  	Total	 	  	2017	 	  	2018 & 2019	 	  	2020 & 2021	 	  	Thereafter	 	
 	  	(in millions)	 	
Debt obligations	  	$	8	 	  	$	2	 	  	$	5	 	  	$	—  	 	  	$	1	 	
Operating lease obligations	  	 	44	 	  	 	11	 	  	 	12	 	  	 	10	 	  	 	11	 	
Contractual commitments for capital expenditures	  	 	49	 	  	 	49	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
Other contractual purchase commitments, including information technology	  	 	18	 	  	 	9	 	  	 	6	 	  	 	3	 	  	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	119	 	  	$	71	 	  	$	23	 	  	$	13	 	  	$	12	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
In addition to the obligations discussed above, certain of the Company’s non-U.S. subsidiaries sponsor defined benefit pension plans, some of which are funded. There are minimum funding requirements with respect to certain of the pension obligations and we may periodically elect to make discretionary contributions to the plans in support of risk management initiatives. We will also have payments due with respect to our other postretirement benefit obligations. We do not fund our other postretirement benefit obligations and payments are made as costs are incurred by covered retirees. Refer to Note 11. Pension Benefits to the combined financial statements included herein for additional detail regarding our expected contributions to our pension plans and expected distributions to participants in future periods.
As described above, in September 2017 we entered into the Credit Agreement, which included a $750 million five-year floating rate Term Loan A Facility that will become available upon the date of the separation. We will subsequently be obligated to make quarterly principal payments throughout the term of the Term Loan A Facility according to the amortization provisions in the Credit Agreement. We also completed the offering of $800 million of 5.00% Senior Notes due 2025 through a private offering exempt from registration under Rule 144A and Regulation S of the Securities Act of 1933. As a result, subsequent to the separation from the Parent, our contractual commitments will change significantly from our historical amounts.
 
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Capital Expenditures
Supplier selection in the auto industry is generally finalized several years prior to the start of production of the vehicle. Therefore, current capital expenditures are based on customer commitments entered into previously, generally several years ago when the customer contract was awarded. As of December 31, 2016, we had approximately $49 million in outstanding cancellable and non-cancellable capital commitments. Capital expenditures by operating segment and geographic region for the periods presented were:

 	  	Year Ended December 31,	 	
 	  	2016	 	  	2015	 	  	2014	 	
 	  	(in millions)	 	
Powertrain Systems	  	$	169	 	  	$	197	 	  	$	319	 	
PSS	  	 	2	 	  	 	4	 	  	 	3	 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total capital expenditures	  	$	171	 	  	$	201	 	  	$	322	 	
	  	 	 	 	  	 	 	 	  	 	 	 	
North America	  	$	50	 	  	$	61	 	  	$	15	 	
Europe, Middle East & Africa	  	 	82	 	  	 	96	 	  	 	141	 	
Asia Pacific	  	 	34	 	  	 	42	 	  	 	156	 	
South America	  	 	5	 	  	 	2	 	  	 	10	 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total capital expenditures	  	$	171	 	  	$	201	 	  	$	322	 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Cash Flows
Comparison of the Six Months Ended June 30, 2017 and Six Months Ended June 30, 2016
Operating activities —Net cash provided by operating activities totaled $177 million and $247 million for the six months ended June 30, 2017 and 2016, respectively. Cash flow from operating activities for the six months ended June 30, 2017 consisted primarily of net earnings of $167 million increased by $121 million for non-cash charges for depreciation, amortization and pension costs, partially offset by $118 million related to changes in operating assets and liabilities, net of restructuring and pension contributions. Cash flow from operating activities for the six months ended June 30, 2016 consisted primarily of net earnings of $96 million increased by $127 million for non-cash charges for depreciation, amortization and pension costs and $20 million related to changes in operating assets and liabilities, net of restructuring and pension contributions. The decrease in operating cash flows for the six months ended June 30, 2017 as compared to the six months ended June 30, 2016 was primarily due to increased working capital usage resulting from increased sales volumes and corresponding inventory build-ups.
Investing activities —Net cash used in investing activities totaled $77 million for the six months ended June 30, 2017, as compared to $79 million for the six months ended June 30, 2016. The decrease was due to $1 million of reduced capital expenditures and $1 million of increased proceeds received from the sale of property.
Financing activities —Net cash used in financing activities totaled $128 million and $172 million for the six months ended June 30, 2017 and 2016, respectively. The decrease in usage in the six months ended June 30, 2017 as compared to the six months ended June 30, 2016 is primarily due to less cash being transferred to Aptiv as compared to the prior period as a result of increased working capital usage.
Comparison of the Years Ended December 31, 2016, December 31, 2015 and December 31, 2014
Operating activities —Net cash provided by operating activities totaled $372 million and $429 million for the years ended December 31, 2016 and 2015, respectively. Cash flow from operating activities for the year ended December 31, 2016 consisted primarily of net earnings of $268 million, increased by $240 million for non-cash charges for depreciation and amortization, pension and other postretirement benefit expenses, partially offset by $139 million related to changes in operating assets and liabilities, net of restructuring and pension
 
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contributions. Cash flow from operating activities for the year ended December 31, 2015 consisted primarily of net earnings of $306 million, increased by $228 million for non-cash charges for depreciation and amortization, pension and other postretirement benefit expenses, partially offset by $131 million related to changes in operating assets and liabilities, net of restructuring and pension contributions.
Net cash provided by operating activities totaled $533 million for the year ended December 31, 2014, which consisted of net earnings of $342 million, increased by $235 million for non-cash charges for depreciation and amortization, pension and other postretirement benefit expenses, partially offset by $59 million related to changes in operating assets and liabilities, net of restructuring and pension contributions.
Investing activities —Net cash used in investing activities totaled $162 million and $201 million for the years ended December 31, 2016 and 2015, respectively. The decrease was primarily due to $30 million of reduced capital expenditures during the year ended December 31, 2016 as compared to 2015, as well as $20 million that was paid in 2015 for the Company’s investment in Tula Technology, Inc., an engine control software company.
Net cash used in investing activities totaled $321 million for the year ended December 31, 2014, which was primarily attributable to capital expenditures of $322 million.
Financing activities —Net cash used in financing activities totaled $210 million and $273 million for the years ended December 31, 2016 and 2015, respectively. The decrease in usage in 2016 as compared to 2015 is primarily due to less cash being transferred to Aptiv due to reduced cash flow generated by Delphi Technologies operations.
Net cash used in financing activities totaled $201 million for the year ended December 31, 2014. The increase in usage in 2015 as compared to 2014 is primarily due to more cash being transferred to Aptiv resulting from the expansion of Aptiv’s global cash pooling arrangement, as described above, which resulted in increased consolidation and Parent management of cash generated by Aptiv’s subsidiaries.
Off-Balance Sheet Arrangements and Other Matters
We do not engage in any off-balance sheet financial arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Pension Benefits
Certain of the Company’s non-U.S. subsidiaries sponsor defined-benefit pension plans, which generally provide benefits based on negotiated amounts for each year of service. The primary non-U.S. plans are located in the United Kingdom (“U.K”), France and Mexico. The U.K. and certain Mexican plans are funded. In addition, the Company has defined benefit plans in South Korea, Turkey and Italy for which amounts are payable to employees immediately upon separation. The obligations for these plans are recorded over the requisite service period. Delphi Technologies does not have any U.S. pension assets or liabilities.
We anticipate making pension contributions and benefit payments of approximately $37 million for non-U.S. plans in 2017.
Refer to Note 11. Pension Benefits to the combined financial statements included herein for further information on (1) historical benefit costs of the pension plans, (2) the principal assumptions used to determine the pension benefit expense and the actuarial value of the projected benefit obligation for the pension plans, (3) a sensitivity analysis of potential changes to pension obligations and expense that would result from changes in key assumptions and (4) funding obligations.
 
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Environmental Matters
We are subject to the requirements of environmental and safety and health laws and regulations in each country in which we operate. These include laws regulating air emissions, water discharge, hazardous materials and waste management. We have an environmental management structure designed to facilitate and support our compliance with these requirements globally. Although it is our intent to comply with all such requirements and regulations, we cannot provide assurance that we are at all times in compliance. Environmental requirements are complex, change frequently and have tended to become more stringent over time. Accordingly, we cannot assure that environmental requirements will not change or become more stringent over time or that our eventual environmental remediation costs and liabilities will not be material.
Certain environmental laws assess liability on current or previous owners or operators of real property for the cost of removal or remediation of hazardous substances. At this time, we are involved in various stages of investigation and cleanup related to environmental remediation matters at certain of our facilities. In addition, there may be soil or groundwater contamination at several of our properties resulting from historical, ongoing or nearby activities.
As of December 31, 2016 and 2015, the undiscounted reserve for environmental investigation and remediation was approximately $1 million (which was recorded in other long-term liabilities) and $1 million (which was recorded in other long-term liabilities). The Company cannot ensure that our eventual environmental remediation costs and liabilities will not exceed the amount of our current reserves. In the event that such liabilities were to significantly exceed the amounts recorded, our results of operations could be materially affected.
Legal Proceedings
For a description of our legal proceedings, see Note 12. Commitments and Contingencies to the combined financial statements included herein.
Significant Accounting Policies and Critical Accounting Estimates
Our significant accounting policies are described in Note 2. Significant Accounting Policies to the combined financial statements included herein. Certain of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, terms of existing contracts, our evaluation of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate.
We consider an accounting estimate to be critical if:
 
 	•	 	it requires us to make assumptions about matters that were uncertain at the time we were making the estimate, and	
 
 	•	 	changes in the estimate or different estimates that we could have selected would have had a material impact on our financial condition or results of operations.	
Acquisitions
In accordance with accounting guidance for the provisions in FASB ASC 805, Business Combinations , we allocate the purchase price of an acquired business to its identifiable assets and liabilities based on estimated fair values. The excess of the purchase price over the amount allocated to the assets and liabilities, if any, is recorded as goodwill.
 
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We use all available information to estimate fair values. We typically engage outside appraisal firms to assist in the fair value determination of identifiable intangible assets and any other significant assets or liabilities. We adjust the preliminary purchase price allocation, as necessary, up to one year after the acquisition closing date as we obtain more information regarding asset valuations and liabilities assumed.
Our purchase price allocation methodology contains uncertainties because it requires management to make assumptions and to apply judgment to estimate the fair value of acquired assets and liabilities. Management estimates the fair value of assets and liabilities based upon quoted market prices, the carrying value of the acquired assets and widely accepted valuation techniques, including discounted cash flows and market multiple analyses. Unanticipated events or circumstances may occur which could affect the accuracy of our fair value estimates, including assumptions regarding industry economic factors and business strategies.
Other estimates used in determining fair value may include, but are not limited to, future cash flows or income related to intangibles, market rate assumptions, actuarial assumptions for benefit plans and appropriate discount rates. Our estimates of fair value are based upon assumptions believed to be reasonable, but that are inherently uncertain, and therefore, may not be realized. Accordingly, there can be no assurance that the estimates, assumptions, and values reflected in the valuations will be realized, and actual results could vary materially.
Warranty Obligations and Product Recall Costs
Estimating warranty obligations requires us to forecast the resolution of existing claims and expected future claims on products sold. We base our estimate on historical trends of units sold and payment amounts, combined with our current understanding of the status of existing claims and discussions with our customers. The key factors which impact our estimates are (1) the stated or implied warranty period; (2) OEM source; (3) OEM policy decisions regarding warranty claims; and (4) OEMs seeking to hold suppliers responsible for product warranties. These estimates are re-evaluated on an ongoing basis. Actual warranty obligations could differ from the amounts estimated requiring adjustments to existing reserves in future periods. Due to the uncertainty and potential volatility of the factors contributing to developing these estimates, changes in our assumptions could materially affect our results of operations.
In addition to our ordinary warranty provisions with customers, we are also at risk for product recall costs, which are costs incurred when a customer or the Company recalls a product through a formal campaign soliciting return of that product. In addition, the National Highway Traffic Safety Administration (“NHTSA”) has the authority, under certain circumstances, to require recalls to remedy safety concerns. Product recall costs typically include the cost of the product being replaced as well as the customer’s cost of the recall, including labor to remove and replace the recalled part. The Company accrues for costs related to product recalls as part of our warranty accrual at the time an obligation becomes probable and can be reasonably estimated. Actual costs incurred could differ from the amounts estimated, requiring adjustments to these reserves in future periods. It is possible that changes in our assumptions or future product recall issues could materially affect our financial position, results of operations or cash flows.
Refer to Note 9. Warranty Obligations to the combined financial statements included herein for additional information.
Legal and Other Contingencies
We are involved from time to time in various legal proceedings and claims, including commercial or contractual disputes, product liability claims, government investigations, product warranties and environmental and other matters, that arise in the normal course of business. We routinely assess the likelihood of any adverse judgments or outcomes related to these matters, as well as ranges of probable losses, by consulting with internal personnel involved with such matters and, as appropriate, with outside legal counsel handling such matters. We
 
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have accrued for estimated losses for those matters where we believe that the likelihood of a loss has occurred, is probable and the amount of the loss is reasonably estimable. The determination of the amount of such reserves is based on knowledge and experience with regard to past and current matters and consultation with internal personnel involved with such matters and, where applicable, with outside legal counsel handling such matters. The amount of such reserves may change in the future due to new developments or changes in circumstances. The inherent uncertainty related to the outcome of these matters can result in amounts materially different from any provisions made with respect to their resolution.
Restructuring
Accruals have been recorded in conjunction with our restructuring actions. These accruals include estimates primarily related to employee termination costs, contract termination costs and other related exit costs in conjunction with workforce reduction and programs related to the rationalization of manufacturing and engineering processes. Actual costs may vary from these estimates. These accruals are reviewed on a quarterly basis and changes to restructuring actions are appropriately recognized when identified.
Pensions
We use actuarial estimates and related actuarial methods to calculate our obligation and expense. We are required to select certain actuarial assumptions, which are determined based on current market conditions, historical information and consultation with and input from our actuaries and asset managers. Refer to Note 11. Pension Benefits to the combined financial statements included herein for additional details. The key factors which impact our estimates are (1) discount rates; (2) asset return assumptions; and (3) actuarial assumptions such as retirement age and mortality which are determined as of the current year measurement date. We review our actuarial assumptions on an annual basis and make modifications to the assumptions based on current rates and trends when appropriate. Experience gains and losses, as well as the effects of changes in actuarial assumptions and plan provisions are recognized in other comprehensive income. Cumulative actuarial gains and losses in excess of 10% of the projected benefit obligation (“PBO”) for a particular plan are amortized over the average future service period of the employees in that plan.
Delphi Technologies does not have any U.S. pension assets or liabilities. The principal assumptions used to determine the pension expense and the actuarial value of the projected benefit obligation for the non-U.S. pension plans were:
Assumptions used to determine benefit obligations at December 31:

 	  	Pension Benefits	 	
 	  	Non-U.S. Plans	 	
 	  	  2016  	 	 	  2015  	 	
Weighted-average discount rate	  	 	2.58	% 	 	 	3.72	% 	
Weighted-average rate of increase in compensation levels	  	 	3.97	% 	 	 	3.73	% 	
Assumptions used to determine net expense for years ended December 31:

 	  	Pension Benefits	 	
 	  	Non-U.S. Plans	 	
 	  	    2016    	 	 	    2015    	 	 	    2014    	 	
Weighted-average discount rate	  	 	3.72	% 	 	 	3.63	% 	 	 	4.42	% 	
Weighted-average rate of increase in compensation levels	  	 	3.73	% 	 	 	3.72	% 	 	 	3.96	% 	
Weighted-average expected long-term rate of return on plan assets	  	 	5.75	% 	 	 	6.24	% 	 	 	6.24	% 	
 
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We select discount rates by analyzing the results of matching each plan’s projected benefit obligations with a portfolio of high-quality fixed income investments rated AA- or higher by Standard and Poor’s.
The primary funded plans are in the United Kingdom and Mexico. For the determination of 2016 expense, we assumed a long-term expected asset rate of return of approximately 5.75% and 7.50% for the United Kingdom and Mexico, respectively. We evaluated input from local actuaries and asset managers, including consideration of recent fund performance and historical returns, in developing the long-term rate of return assumptions. The assumptions for the United Kingdom and Mexico are primarily conservative long-term, prospective rates. To determine the expected return on plan assets, the market-related value of approximately 26% of our plan assets is actual fair value. The expected return on the remainder of our plan assets is determined by applying the expected long-term rate of return on assets to a calculated market-related value of these plan assets, which recognizes changes in the fair value of the plan assets in a systematic manner over five years.
Our pension expense for 2017 is determined at the December 31, 2016 measurement date. For purposes of analysis, the following table highlights the sensitivity of our pension obligations and expense to changes in key assumptions:

Change in Assumption	  	Impact on Pension
Expense	 	  	Impact on PBO	 	
25 basis point (“bp”) decrease in discount rate	  	+ $	6 million	 	  	+ $	73 million	 	
25 bp increase in discount rate	  	- $	6 million	 	  	- $	68 million	 	
25 bp decrease in long-term expected return on assets	  	+ $	2 million	 	  	 	—  	 	
25 bp increase in long-term expected return on assets	  	- $	2 million	 	  	 	—  	 	
The above sensitivities reflect the effect of changing one assumption at a time. It should be noted that economic factors and conditions often affect multiple assumptions simultaneously and the effects of changes in key assumptions are not necessarily linear. The above sensitivities also assume no changes to the design of the pension plans and no major restructuring programs.
Based on information provided by our actuaries and asset managers, we believe that the assumptions used are reasonable; however, changes in these assumptions could impact our financial position, results of operations or cash flows. Refer to Note 11. Pension Benefits to the combined financial statements included herein for additional information.
Accounts Receivable Allowance
Establishing valuation allowances for doubtful accounts requires the use of estimates and judgment in regard to the risk exposure and ultimate realization. The allowance for doubtful accounts is established based upon analysis of trade receivables for known collectability issues, including bankruptcies, and aging of receivables at the end of each period. Changes to our assumptions could materially affect our recorded allowance.
Valuation of Long-Lived Assets, Intangible Assets and Investments in Affiliates and Expected Useful Lives
We monitor our long-lived and definite-lived assets for impairment indicators on an ongoing basis based on projections of anticipated future cash flows, including future profitability assessments of various manufacturing sites when events and circumstances warrant such a review. If impairment indicators exist, we perform the required impairment analysis by comparing the undiscounted cash flows expected to be generated from the long-lived assets to the related net book values. If the net book value exceeds the undiscounted cash flows, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the estimated fair value of the long-lived assets. Even if an impairment charge is not required, a
 
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reassessment of the useful lives over which depreciation or amortization is being recognized may be appropriate based on our assessment of the recoverability of these assets. We estimate cash flows and fair value using internal budgets based on recent sales data, independent automotive production volume estimates and customer commitments and review of appraisals. The key factors which impact our estimates are (1) future production estimates; (2) customer preferences and decisions; (3) product pricing; (4) manufacturing and material cost estimates; and (5) product life / business retention. Any differences in actual results from the estimates could result in fair values different from the estimated fair values, which could materially impact our future results of operations and financial condition. We believe that the projections of anticipated future cash flows and fair value assumptions are reasonable; however, changes in assumptions underlying these estimates could affect our valuations.
Goodwill and Intangible Assets
We periodically review goodwill for impairment indicators. We review goodwill for impairment annually in the fourth quarter or more frequently if events or changes in circumstances indicate that goodwill might be impaired. The Company performs the goodwill impairment review at the reporting unit level. We perform a qualitative assessment (step 0) of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. If not, no further goodwill impairment testing is performed. If so, we perform the step 1 and step 2 tests discussed hereafter. Our qualitative assessment involves significant estimates, assumptions, and judgments, including, but not limited to, macroeconomic conditions, industry and market conditions, financial performance of the Company, reporting unit specific events and changes in the Parent’s share price.
If the fair value of the reporting unit is greater than its carrying amount (step 1), goodwill is not considered to be impaired and the second step is not required. We estimate the fair value of our reporting units using a combination of a future discounted cash flow valuation model and, if possible, a comparable market transaction model. Estimating fair value requires the Company to make judgments about appropriate discount rates, growth rates, relevant comparable company earnings multiples and the amount and timing of expected future cash flows. If the fair value of the reporting unit is less than its carrying amount, an entity must perform the second step to measure the amount of the impairment loss, if any. The second step requires a reporting unit to compare its implied fair value of goodwill to its carrying amount. If the carrying amount of goodwill exceeds its implied fair value, the reporting unit would recognize an impairment loss for that excess. We estimate implied fair value of goodwill in the same way as goodwill is recognized in a business combination. We estimate fair value of the reporting unit’s identifiable net assets excluding goodwill is compared to the fair value of the reporting unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.
We review indefinite-lived intangible assets for impairment annually or more frequently if events or changes in circumstances indicate the assets might be impaired. Similar to the goodwill assessment described above, the Company first performs a qualitative assessment of whether it is more likely than not that an indefinite-lived intangible asset is impaired. If necessary, the Company then performs a quantitative impairment test by comparing the estimated fair of the asset, based upon its forecasted cash flows, to its carrying value. Other intangible assets with definite lives are amortized over their useful lives and are subject to impairment testing only if events or circumstances indicate that the asset might be impaired, as described above.
Inventories
Inventories are stated at the lower of cost, determined on a first-in, first-out basis, or net realizable value, including direct material costs and direct and indirect manufacturing costs. Refer to Note 4. Inventories to the combined financial statements included herein. Obsolete inventory is identified based on analysis of inventory for known obsolescence issues, and, as of December 31, 2016, the market value of inventory on hand in excess of one year’s supply is generally fully-reserved.
 
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From time to time, payments may be received from suppliers. These payments from suppliers are recognized as a reduction of the cost of the material acquired during the period to which the payments relate. In some instances, supplier rebates are received in conjunction with or concurrent with the negotiation of future purchase agreements and these amounts are amortized over the prospective agreement period.
Income Taxes
Deferred tax assets and liabilities reflect temporary differences between the amount of assets and liabilities for financial and tax reporting purposes. Such amounts are adjusted, as appropriate, to reflect changes in tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is recorded to reduce our deferred tax assets to the amount that is more likely than not to be realized. Changes in tax laws or accounting standards and methods may affect recorded deferred taxes in future periods.
When establishing a valuation allowance, we consider future sources of taxable income such as “future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards” and “tax planning strategies.” A tax planning strategy is defined as “an action that: is prudent and feasible; an enterprise ordinarily might not take, but would take to prevent an operating loss or tax credit carryforward from expiring unused; and would result in realization of deferred tax assets.” In the event we determine it is more likely than not that the deferred tax assets will not be realized in the future, the valuation adjustment to the deferred tax assets will be charged to earnings in the period in which we make such a determination. The valuation of deferred tax assets requires judgment and accounting for the deferred tax effect of events that have been recorded in the combined financial statements or in tax returns and our future projected profitability. Changes in our estimates, due to unforeseen events or otherwise, could have a material impact on our financial condition and results of operations.
We calculate our current and deferred tax provision based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed in subsequent years. Adjustments based on filed returns are recorded when identified. The amount of income taxes we pay is subject to ongoing audits by federal, state and foreign tax authorities. Our estimate of the potential outcome of any uncertain tax issue is subject to management’s assessment of relevant risks, facts, and circumstances existing at that time. We use a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. We record a liability for the difference between the benefit recognized and measured and tax position taken or expected to be taken on our tax return. To the extent that our assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. We report tax-related interest and penalties as a component of income tax expense. We do not believe there is a reasonable likelihood that there will be a material change in the tax related balances or valuation allowance balances. However, due to the complexity of some of these uncertainties, the ultimate resolution may be materially different from the current estimate. Refer to Note 13. Income Taxes to the combined financial statements included herein for additional information.
Share-Based Compensation
Certain U.S. and non-U.S. employees of Delphi Technologies are covered by the Aptiv-sponsored share-based compensation arrangement, the Delphi Automotive PLC Long Term Incentive Plan, as amended and restated effective April 23, 2015 (“PLC LTIP”), which allows for the grant of share-based awards for long-term compensation to the employees, directors, consultants and advisors of the Company (further discussed in Note 16. Share-Based Compensation to the combined financial statements included herein). Grants of restricted stock units (“RSUs”) to executives have been made under the PLC LTIP in each year from 2012 to 2017. The RSU awards include a time-based vesting portion and a performance-based vesting portion. The performance-based vesting portion includes performance and market conditions in addition to service conditions. We determine the grant date fair value of the RSUs based on the closing price of the Company’s ordinary shares on the date of the grant of the award and a contemporaneous valuation performed by an independent valuation
 
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specialist with respect to certain market conditions that impact the performance-based vesting portion of the RSUs. We recognize compensation expense based upon the grant date fair value of the awards applied to the Company’s best estimate of ultimate performance against the respective targets on a straight-line basis over the requisite vesting period of the awards, adjusted for an estimate for forfeitures. The performance conditions require management to make assumptions regarding the likelihood of achieving certain performance goals. Changes in these performance assumptions, as well as differences in actual results from management’s estimates, could result in estimated or actual fair values different from previously estimated fair values, which could materially impact the Company’s future results of operations and financial condition.
Pursuant to the terms of the Employee Matters Agreement, with respect to Aptiv RSUs held by Delphi Technologies employees, including Delphi Technologies’ NEOs (as defined under “Compensation Discussion and Analysis”), that are outstanding as of the separation and for which the underlying securities are Aptiv ordinary shares, each such outstanding Aptiv restricted stock unit will be equitably adjusted or converted into an award with respect to Delphi Technologies ordinary shares. Each other Aptiv restricted stock unit that is outstanding as of the separation and for which the underlying securities are Aptiv ordinary shares will also be equitably adjusted or converted, but will continue to relate to Aptiv ordinary shares. In each case, the outstanding Aptiv award will be equitably adjusted or converted in a manner intended to preserve the approximate intrinsic value of such Aptiv equity award from directly before to directly after the spin-off. More specifically, with respect to each adjusted or converted award covering Delphi Technologies ordinary shares, the number of underlying shares will be determined based on a ratio, as further described in the Employee Matters Agreement, applied to the number of Aptiv ordinary shares subject to the original Aptiv award outstanding as of the separation. Pursuant to the terms of the Employee Matters Agreement and the applicable Aptiv compensation plans, we currently anticipate that performance achievement with respect to performance-based RSUs will also be equitably adjusted in connection with the separation. Specific treatment may, however, depend on the year in which the performance-based RSUs were originally granted and whether the holders of such awards will continue employment with Aptiv or Delphi Technologies. To the extent that an affected employee is employed in a non-U.S. jurisdiction, and the adjustments or conversions contemplated above could result in adverse tax consequences or other adverse regulatory consequences, Aptiv may determine that a different equitable adjustment or grant will apply in order to avoid any such adverse consequences. We do not currently anticipate incurring material additional compensation expense as a result of modifying such awards.
Refer to Note 16. Share-Based Compensation to the combined financial statements included herein for additional information.
Recently Issued Accounting Pronouncements
Refer to Note 2. Significant Accounting Policies to the combined financial statements included herein for a complete description of recent accounting standards which we have not yet been required to implement which may be applicable to our operations. Additionally, the significant accounting standards that have been adopted during the year ended December 31, 2016 and the six months ended June 30, 2017 are described.
Market Risk Management
We are exposed to market risks from changes in currency exchange rates and certain commodity prices. These exposures may impact future earnings and/or operating cash flows. In order to manage these risks, Aptiv centrally manages its exposure to fluctuations in currency exchange rates, interest rates, and certain commodity prices by entering into a variety of forward contracts and swaps with various counterparties. Aptiv does not enter into derivative transactions for speculative or trading purposes. Such financial exposures are managed in accordance with the policies and procedures of Aptiv and accounted for in accordance with ASC Topic 815, Derivatives and Hedging . Delphi Technologies does not enter into any derivative transactions, contracts, options, or swaps.
 
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Currency Exchange Rate Risk
Delphi Technologies has currency exposures related to buying, selling and financing in currencies other than the local currencies in which we operate. Historically, we have reduced our exposure through participation in Aptiv’s hedging program, which utilize financial instruments (hedges) that provide offsets or limits to our exposures, which are opposite to the underlying transactions. We have currency exposures related to buying, selling and financing in currencies other than the local functional currencies in which we operate (“transactional exposure”). We also have currency exposures related to the translation of the financial statements of our foreign subsidiaries that use the local currency as their functional currency into U.S. dollars, the Company’s reporting currency (“translational exposure”). The impact of translational exposure is recorded within currency translation adjustment in the combined statements of comprehensive income.
As of December 31, 2016 and 2015 the net fair value asset of all financial instruments with exposure to currency risk was approximately $88 million and $92 million, respectively. The potential loss or gain in fair value for such financial instruments from a hypothetical 10% adverse or favorable change in quoted currency exchange rates would be approximately $9 million and $9 million at December 31, 2016 and 2015, respectively. The model assumes a parallel shift in currency exchange rates; however, currency exchange rates rarely move in the same direction. The assumption that currency exchange rates change in a parallel fashion may overstate the impact of changing currency exchange rates on assets and liabilities denominated in currencies other than the U.S. dollar.
Commodity Price Risk
We also face an inherent business risk of exposure to commodity price risk, particularly to changes in the price of various non-ferrous metals used in our manufacturing operations. We have historically managed certain of these exposures through participation in Aptiv’s hedging program, which may utilize commodity swaps and option contracts. Although Delphi Technologies does not enter into any derivative transactions, contracts, options, or swaps to hedge our commodity exposures, based on Delphi Technologies’ exposures as a percentage of the total exposures hedged by Aptiv, the net fair value of contracts attributable to Delphi Technologies was an asset (liability) of approximately $1 million and $(2) million at December 31, 2016 and 2015, respectively. If the price of the commodities that were being hedged by these commodity swaps/average rate forward contracts changed adversely or favorably by 10%, the fair value of our commodity swaps/average rate forward contracts would decrease or increase by approximately $400 thousand and $600 thousand at December 31, 2016 and 2015, respectively. A 10% change in the net fair value liability differs from a 10% change in rates on fair value due to the relative differences between the underlying commodity prices and the prices in place in our commodity swaps/average rate forward contracts. These amounts exclude the offsetting impact of the price risk inherent in the physical purchase of the underlying commodities.
 
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 BUSINESS
Overview
Delphi Technologies PLC (“Delphi Technologies”, “we” or the “Company”) is a leader in the development, design and manufacture of integrated powertrain technologies that optimize engine performance, increase vehicle efficiency, reduce emissions, improve driving performance, and support increasing electrification of vehicles. We are a global supplier to original equipment manufacturers (“OEMs”) seeking to manufacture vehicles that meet and exceed increasingly stringent global regulatory requirements and satisfy consumer demands for an enhanced user experience. Additionally, we offer a full spectrum of aftermarket products serving a global customer base.
We provide advanced fuel injection systems (“FIS”), actuators, valvetrain products, sensors, electronic control modules and power electronics technologies. We believe our ability to meet regulatory requirements for reduced emissions and increased fuel economy, as well as to provide additional power to support consumer-driven demand for more in-vehicle electronics, will allow us to realize revenue growth in excess of vehicle production growth.
Our comprehensive portfolio of advanced technologies and solutions for all propulsion systems are sold to global OEMs of both light vehicles (passenger cars, trucks and vans and sport-utility vehicles) and commercial vehicles (light-duty, medium-duty and heavy-duty trucks, commercial vans, buses and off-highway vehicles). We are a supplier to every major automotive OEM in the world. We operate 20 major manufacturing facilities and 12 major technical centers utilizing a regional service model that enables us to efficiently and effectively serve our global customers from best cost countries. We have a presence in 24 countries with approximately 5,000 scientists, engineers and technicians who focus on innovating and developing market-relevant product solutions.
We also manufacture and sell our technologies to leading aftermarket players, including independent retailers and wholesale distributors. We supply a full suite of aftermarket products including engine control modules, pumps, injectors, fuel modules, ignition coils, smart remote actuators, exhaust gas recirculation valves, brakes, steering, suspension and other products. We also add aftermarket know-how in category management, logistics, training, marketing and other dedicated services to provide a full range of aftermarket solutions throughout vehicles’ lives.
Our business is well diversified across regions, product types, markets and customers. In fiscal 2016, 44% of our revenue was derived from Europe, the Middle East and Africa (“EMEA”), 29% from North America, 24% from Asia Pacific and 3% from South America; further, 63% of our net sales were to light vehicle OEM customers, 16% were to commercial vehicle OEM customers and 21% were to aftermarket customers. No customer accounted for more than 10% of net sales and our top 5 customers accounted for a total of approximately 40% of net sales.
 
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During fiscal 2016 and for the six months ended June 30, 2017, Delphi Technologies generated net sales of $4,486 million and $2,355 million, net income attributable to Delphi Technologies of $236 million and $151 million, and adjusted operating income of $512 million (11.4% margin) and $326 million (13.8% margin), respectively. See “Summary—Summary Historical Combined Financial Data” for our definition of “adjusted operating income” and a reconciliation of adjusted operating income to net income attributable to Delphi Technologies, which we believe is the most directly comparable financial measure calculated in accordance with GAAP.
Our Competitive Strengths
We believe we distinguish ourselves through the following competitive strengths, which we expect to continue to enhance as a standalone company:
 
 	•	 	Portfolio of Advanced Technologies Aligned to Customer Demands: We have an established product portfolio that includes powertrain technologies for gas and diesel engines, as well as hybrid and electric vehicles, which we sell to our diverse OEM and aftermarket customer base.	
 
 	•	 	Fuel Injection Systems: Our highly engineered gas and diesel FIS portfolio combines injectors, rails, pumps and electronic control modules into an advanced system which improves the efficiency of fuel injection to help light and commercial vehicle manufacturers improve engine performance and meet emissions standards.	
 
 	•	 	Gasoline: Our gasoline portfolio includes a full suite of fuel injection technologies that drive greater efficiency for traditional gasoline combustion engines and hybrid vehicles. Our Gasoline Direct Injection (“GDi”) technology provides high precision fuel delivery for optimized combustion, which lowers emissions and increases fuel economy. As the industry	
 
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 	continues to transition from port fuel injection to GDi, we expect the higher value technology content to drive growth in excess of vehicle production growth. Gasoline engines continue to be the globally dominant light vehicle engine type, and we expect them to remain predominant for the foreseeable future.	
 
 	•	 	Diesel: Our diesel portfolio provides enhanced engine performance at an attractive value, includes common rail FIS and is balanced between commercial and light vehicle applications. We are well positioned in the commercial vehicle market, where diesel is expected to remain the preferred technology. In the light vehicle market, we are focused on engines for larger passenger cars for which the greater fuel economy benefits of diesel technology deliver more value.	
 
 	•	 	Powertrain Products for Gasoline and Diesel Applications: Our portfolio also includes an array of highly engineered products for traditional combustion and hybrid electric vehicles, including variable valve timing, variable valve actuation, smart remote actuators, powertrain sensors, ignition products, canisters, and fuel handling products. These products often complement and enhance the efficiency improvements delivered by FIS and, as a result, drive above market growth.	
 
 	•	 	Electronics & Electrification: Our electronics portfolio consists of gasoline and diesel control modules and power electronics. The control modules are key components in ensuring the integration and operation of powertrain products throughout the vehicle. As the electrification of mechanical components increases, our proprietary power electronics solutions, including supervisory controllers and software, DC/DC converters and inverters provide better efficiency, reduced weight and lower cost for our OEM customers, while also making these and other components easier to integrate. These products are expected to experience increased demand as vehicle electrification accelerates.	
 
 	•	 	Aftermarket: Through our Products & Service Solutions segment, we sell aftermarket products to independent aftermarket customers and sell our products to original equipment service customers. Our aftermarket product portfolio includes engine control modules, pumps, injectors, fuel modules, ignition coils, smart remote actuators, exhaust gas recirculation valves, brakes, steering, suspension, and other products. Our aftermarket business provides a recurring and stable revenue base as many of these products are non-discretionary in nature. The growing number of vehicles on the road, along with the higher average age of vehicles and increasing miles driven collectively represent trends that are expected to lead to growing demand for our aftermarket products.	
 
 	•	 	Leading Innovation Platform : We have a team of approximately 5,000 scientists, engineers and technicians across 12 major technical centers globally. With approximately 2,400 active patents and patent applications, we have a strong track record of developing technologies focused on addressing consumer demands and industry trends, including GDi, powertrain domain controllers, two-step variable valve actuation, engine control algorithms, electronics and software. We also seek to further develop strategic collaborations, such as our investment in Tula Technology, Inc., a developer of dynamic, skip-fire cylinder deactivation software technology that helps to increase fuel efficiency, reduce emissions and improve engine performance. We also leverage our OEM product engineering capabilities across our aftermarket product lines to capture value over the lifetime of a vehicle. Our ability to provide the latest technologies to improve fuel economy, lower emissions and optimize power utilization for traditional and electrified vehicles has enabled us to realize above market revenue growth.	
 
 	•	 	Strong Customer Relationships Across Diverse Markets. Our customer base includes 23 of the largest light vehicle OEMs and the majority of the 10 largest commercial vehicle OEMs in the world. Our top five customers, Hyundai Motor Company (“Hyundai”), Daimler AG (“Daimler”), General Motors Company (“GM”), PSA Peugeot Citroen (“PSA”) and Volkswagen AG (“VW”), collectively represented 40% of our net sales in fiscal 2016 with our largest customer accounting for only 9%. Our	
 
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 	diverse customer base also includes manufacturers of commercial vehicles such as Volvo AB (“Volvo”), Caterpillar Inc. (“Caterpillar”), and PACCAR Inc. (“PACCAR”). Our aftermarket customers include AutoZone Inc. (“AutoZone”), NAPA Auto Parts (“NAPA”), as well as leading wholesale distributors such as Parts Alliance Group (“Parts Alliance”).	
 
 	•	 	Global Manufacturing and Development Capabilities with Regional Focus: We operate 20 major manufacturing facilities and 12 major technical centers and have a presence in 24 countries throughout the world. Our global manufacturing footprint enables us to efficiently manufacture in and supply from primarily best cost countries. Our regional engineering teams also allow us to stay connected to local market requirements and partner with our customers during all phases of the development process, from design through production. By working in collaboration with our customers, we expect to continue to increase market share and grow through technological advancements, such as increased vehicle electrification.	
 
 	•	 	Lean and Flexible Cost Structure: We have made significant investments to reduce our cost-structure by rotating our manufacturing capabilities toward best cost countries in order to further improve our cost position and drive margin expansion. Since 2014, our adjusted operating income margin increased 50 basis points as the benefits of these investments began to take hold. We expect additional operating margin expansion as the cost savings related to rotating our manufacturing facilities toward best cost countries are fully realized. Additionally, we leverage our lean enterprise operating system to reduce product lead times and execute flawless product launches. We believe our enterprise operating system and our strategic manufacturing footprint will allow us to continue expanding operating margins in the future.	
 
 	•	 	Strong and Sustainable Revenue and Earnings Growth and Cash Flow Generation: We expect to continue to leverage our portfolio of advanced technologies and strong customer relationships to generate strong revenue growth. Additionally, our innovative culture and manufacturing expertise in best cost countries provides us with a lean and flexible cost structure, which we believe will generate consistent earnings growth and strong cash flow.	
 
 	•	 	Experienced Leadership Team with Proven Track Record: We have a strong management team with extensive experience both within the industry and with Delphi Technologies. Through the combination of their longstanding customer relationships, proven track record in operations management and deep industry knowledge, the leadership team has positioned us for future revenue growth, margin expansion and strong cash flow.	
Business and Growth Strategies
Our strategy is to continue to accelerate the development of market-relevant technologies that solve our customers’ increasingly complex challenges and leverage our lean and flexible cost structure to deliver strong revenue and margin expansion, earnings and cash flow growth.
We seek to grow our business through the execution of the following strategies, among others:
 
 	•	 	Maintain Leadership in Technologies that Solve Our Customers’ Most Complex Challenges. We are focused on providing technologies and solutions that solve our customers’ biggest challenges. Leveraging the breadth and depth of our engineering capabilities, we have strong positions in fuel injectors, fuel pumps, variable valve timing and variable valve actuation. Additionally, we provide leading technology solutions in the areas of electronics and electrification, including engine control modules and power electronics, where we see above market growth with increased levels of electrification. Our power electronics technologies include products such as high-voltage inverters, DC-DC converters and on-board chargers that convert electricity to enable hybrid and electric vehicle propulsion systems. Our comprehensive portfolio of powertrain products helps customers meet increasingly stringent global regulatory requirements while also enhancing vehicle performance.	
 
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 	•	 	Focused Regional Strategies to Best Serve Our Customers’ Needs. The combination of our global operating capabilities and our portfolio of advanced technologies help us to serve our global customers and meet their local needs. We have a presence in all major global regions and have positioned ourselves to be a leading supplier of advanced powertrain technologies, including electrification, that are tailored to satisfy our customers’ needs in each region. We believe our focus on providing customer solutions to meet increasing global emissions and fuel efficiency regulations will collectively drive greater demand for our products and enable us to experience above-market growth.	
 
 	•	 	Continue to Enhance Aftermarket Position. We have strong customer relationships with the largest global aftermarket players, including independent retailers and wholesale distributors. We supply a full suite of aftermarket products including engine control modules, pumps, injectors, fuel modules, ignition coils, smart remote actuators, exhaust gas recirculation valves, brakes, steering, suspension and other products. We also add aftermarket know-how in category management, logistics, training, marketing and other dedicated services to provide a full range of aftermarket solutions throughout vehicles’ lives. Globally, we plan to gain scale by focusing on higher value, faster growing product lines such as electronics, and services, which include diagnostics and remanufacturing. We will also look to increase growth by leveraging our regional product program strengths to expand our portfolio across regions. In addition, we expect to benefit from aftermarket growth in key markets around the world, including China.	
 
 	•	 	Leverage Our Lean and Flexible Cost Structure to Deliver Strong Earnings and Cash Flow Growth. We recognize the importance of maintaining a lean and flexible business model in order to deliver earnings and cash flow growth. We intend to improve our cost competitiveness by leveraging our enterprise operating system, continuously increasing operational efficiency, maximizing manufacturing output and rotating our facilities to best cost countries. We have ongoing processes and resources dedicated to further improvement of our operations and we expect to use our cash flow to reinvest in our business to drive growth.	
Our Segments
We provide technologies to customers through the following two segments:
 
 	•	 	Powertrain Systems (79% of 2016 total net sales) —This segment provides FIS as well as various other powertrain products including valvetrain, fuel delivery modules, ignition coils, canisters, sensors, valves and actuators. This segment also offers electronic control modules with the corresponding software, algorithms and calibration that provide centralized and reliable management of various powertrain components. Additionally, we provide power electronics solutions that include supervisory controllers and software, along with DC/DC converters and inverters. In fiscal 2016, 74% of our net sales in this segment consisted of FIS and other powertrain components (“PTP”) while 26% were derived from electronics and electrification products (“E&E”).	

 
 	•	 	Products & Service Solutions (21% of 2016 total net sales) —This segment sells aftermarket products to independent aftermarket and original equipment service customers. This segment supplies a full suite of aftermarket products including engine control modules, pumps, injectors, fuel modules,	
 
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 	ignition coils, smart remote actuators, exhaust gas recirculation valves, brakes, steering, suspension and other products. After the separation, our sales to original equipment service customers will not include sales of products that are manufactured by Aptiv’s other non-Powertrain segments as reflected in the Unaudited Pro Forma Condensed Financial Statements. As we continue to develop and expand our aftermarket distribution channel, we expect to benefit from the strength of our leading engineering capabilities and advanced technological product offering. In fiscal 2016, approximately two-thirds of segment net sales were derived from powertrain products with the remaining third derived from other aftermarket products.	
See Note 17 of the notes to the combined financial statements included in this information statement for certain financial information about segments.
Our Industry
The automotive and commercial vehicle parts industry provides components, systems, subsystems and modules to OEMs for the manufacture of new vehicles, as well as to the aftermarket for use as replacement parts. Overall, we expect long-term growth of global vehicle production in the OEM market. In 2016, global vehicle production (including light and commercial vehicles) increased 5% versus the previous year, including increases of 2% in North America, 3% in Europe and 14% in China. In South America, as a result of persisting economic weakness, there was a 14% decline.

Demand for automotive components in the OEM market is generally a function of the number of new vehicles produced in response to consumer demand, which is primarily driven by macro-economic factors such as credit availability, interest rates, fuel prices, consumer confidence, employment and other trends. In the commercial vehicle market, OEM demand for components is also tied to vehicle production and is driven by industrial production, the amount of freight tonnage being transported, the availability of credit and interest rates, among other factors. Although OEM demand is tied to actual vehicle production, participants in the automotive and commercial vehicle parts industry also have the opportunity to grow faster by further penetrating business with existing customers and in existing markets, gaining new customers and increasing presence in global markets. Above market growth can be achieved through product alignment to favorable macro trends such as regulation and electrification. The number of vehicles utilizing electrification to meet increasingly stringent regulatory standards is expected to grow to approximately 25% of global vehicle production by 2025 as compared to just four percent today. We believe that as a global supplier with advanced technology, engineering, manufacturing and customer support capabilities, we are well-positioned to benefit from these opportunities.
Heightened Regulatory Environment
OEMs continue to focus on improving fuel efficiency and reducing emissions in order to meet increasingly stringent regulatory requirements in various markets. On a worldwide basis, the relevant authorities in the
 
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European Union, the United States, China, India, Japan, Brazil, South Korea and Argentina have already instituted regulations requiring further reductions in emissions and/or increased fuel economy. In many cases, other authorities have initiated legislation or regulation that would further tighten the standards through 2020 and beyond. Based on the current regulatory environment, we believe that OEMs, including those in the U.S. and China, will be subject to requirements for greater reductions in carbon dioxide (“CO2”) emissions over the next ten years. These standards will require meaningful innovation as OEMs and suppliers are forced to find ways to improve engine management, electrical power consumption, vehicle weight and integration of alternative powertrains (e.g., electric/hybrid propulsion). As a result, suppliers such as Delphi Technologies are continuing to develop innovations that result in improvements in fuel economy, emissions and performance from gasoline and diesel internal combustion engines, and permit engine downsizing without loss of performance.
Standardization of Sourcing by OEMs
Many OEMs are continuing to adopt global vehicle platforms to increase standardization, reduce per unit cost and increase capital efficiency and profitability. As a result, OEMs are selecting suppliers that have the capability to manufacture products on a worldwide basis as well as the flexibility to adapt to regional variations. Suppliers with global scale and strong design, engineering and manufacturing capabilities are best positioned to benefit from this trend. OEMs are also increasingly looking to their suppliers to simplify vehicle design and assembly processes to reduce costs. As a result, suppliers that sell vehicle components directly to manufacturers have assumed many of the design, engineering, research and development and assembly functions traditionally performed by vehicle manufacturers. Suppliers that can provide fully-engineered solutions, systems and pre-assembled combinations of component parts, such as Delphi Technologies, are positioned to leverage the trend toward system sourcing.
Shorter Product Development Cycles To Benefit Strong Suppliers
As a result of government regulations and customer preferences, development cycles are becoming shorter and OEMs are requiring suppliers to respond faster with new designs and product innovations. While these trends are more prevalent in mature markets, emerging markets are advancing rapidly towards the regulatory standards and consumer preferences of more mature markets. Suppliers with strong technologies, global engineering and development capabilities, such as Delphi Technologies, will be best positioned to meet OEM demands for rapid innovation.
Increasing Vehicle Complexity
Vehicles are increasingly complex in their design, features, level of integration of mechanical and electrical components and increasing levels of software and coding necessary to their functionality. This has resulted in growing consumer demand for additional power, given the increasing level of electronic components and systems in vehicles. We believe electronics integration, which generally refers to products and systems that combine integrated circuits, software algorithms, sensor technologies and mechanical components within the vehicle will allow OEMs to achieve substantial reductions in weight and mechanical complexity, resulting in enhanced fuel economy, improved emissions control and better vehicle performance. We believe we are well-positioned to benefit from the accelerating industry demand for electronics integration and vehicle electrification, as we believe our proprietary power electronics solutions allow our OEM customers to improve efficiency, reduce weight and lower costs.
Customers
Our business is diversified across end-markets, regions, customers, vehicle platforms and products. We sell our products and services to the major global automotive and commercial vehicle OEMs in every region of the world. We also sell our products to the worldwide aftermarket for replacement parts, including the aftermarket operations of our OEM customers and to other distributors and retailers. Our global customer base includes 23 of
 
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the largest light vehicle OEMs, the majority of the 10 largest commercial vehicle OEMs, and 4 of the top 5 largest automotive aftermarket retailers and wholesale distributors. Our ten largest platforms in 2016 were with five different OEMs. In addition, in 2016 our products were found in the majority of the top twenty platforms in each of the regions in which we operate. Furthermore, 18% of our business is focused on the commercial vehicle market, which is typically on a different business cycle than the light vehicle market. Our revenue base is also geographically diverse, and in 2016, 24% of our net sales came from the Asia Pacific region, which we believe will be a key growth market driven by increasing levels of vehicle production and regulatory change.
Supply Relationships with Our Customers
We typically supply products to our OEM customers through purchase orders, which are generally governed by general terms and conditions established by each OEM. Although the terms and conditions vary from customer to customer, they typically contemplate a relationship under which our customers place orders for their requirements of specific components supplied for particular vehicles but are not required to purchase any minimum amount of products from us. These relationships typically extend over the life of the related vehicle. Prices are negotiated with respect to each business award, which may be subject to adjustments under certain circumstances, such as commodity or foreign exchange escalation/de-escalation clauses or for cost reductions achieved by us. The terms and conditions typically provide that we are subject to a warranty on the products supplied; in most cases, the duration of such warranty is coterminous with the warranty offered by the OEM to the end-user of the vehicle. We may also be obligated to share in all or a part of recall costs if the OEM recalls its vehicles for defects attributable to our products.
Individual purchase orders are terminable for cause or non-performance and, in most cases, upon our insolvency and certain change of control events. In addition, many of our OEM customers have the option to terminate for convenience on certain programs, which permits our customers to impose pressure on pricing during the life of the vehicle program, and issue purchase contracts for less than the duration of the vehicle program, which potentially reduces our profit margins and increases the risk of our losing future sales under those purchase contracts. We manufacture and ship based on customer release schedules, normally provided on a weekly basis, which can vary due to cyclical automobile production or dealer inventory levels.
Although customer programs typically extend to future periods, and although there is an expectation that we will supply certain levels of OEM production during such future periods, customer agreements including applicable terms and conditions do not necessarily constitute firm orders. Firm orders are generally limited to specific and authorized customer purchase order releases placed with our manufacturing and distribution centers for actual production and order fulfillment. Firm orders are typically fulfilled as promptly as possible from the conversion of available raw materials, sub-components and work-in-process inventory for OEM orders and from current on-hand finished goods inventory for aftermarket orders. The dollar amount of such purchase order releases on hand and not processed at any point in time is not believed to be significant based upon the time frame involved.
 
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Our Global Operations
Information concerning principal geographic areas is set forth below. Net sales data reflects the manufacturing location for the years ended December 31, 2016, 2015 and 2014. Net property data is as of December 31, 2016, 2015 and 2014.

 	  	Year Ended
December 31, 2016	 	  	Year Ended
December 31, 2015	 	  	Year Ended
December 31, 2014	 	
 	  	Net
Sales	 	  	Net
Property (1)	 	  	Net
Sales	 	  	Net
Property (1)	 	  	Net
Sales	 	  	Net
Property (1)	 	
 	  	(in millions)	 	
United States (2)	  	$	1,297	 	  	$	214	 	  	$	1,132	 	  	$	189	 	  	$	989	 	  	$	171	 	
Other North America	  	 	6	 	  	 	22	 	  	 	7	 	  	 	20	 	  	 	25	 	  	 	22	 	
Europe, Middle East & Africa (3)	  	 	1,995	 	  	 	613	 	  	 	2,087	 	  	 	704	 	  	 	2,323	 	  	 	789	 	
Asia Pacific (4)	  	 	1,071	 	  	 	270	 	  	 	1,045	 	  	 	272	 	  	 	1,005	 	  	 	287	 	
South America	  	 	117	 	  	 	23	 	  	 	136	 	  	 	17	 	  	 	198	 	  	 	24	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	4,486	 	  	$	1,142	 	  	$	4,407	 	  	$	1,202	 	  	$	4,540	 	  	$	1,293	 	

(1)	Net property data represents property, plant and equipment, net of accumulated depreciation.	
(2)	Includes net sales and machinery, equipment and tooling that relate to the Company’s maquiladora operations located in Mexico. These assets are utilized to produce products sold to customers located in the United States.	
(3)	Includes the Company’s country of domicile, Jersey, and the country of the Company’s principal executive offices, the United Kingdom. The Company had no sales in Jersey in any period. The Company had net sales of $674 million, $728 million, and $820 million in the United Kingdom for the years ended December 31, 2016, 2015 and 2014, respectively. The Company had net property in the United Kingdom of $146 million, $188 million, and $213 million as of December 31, 2016, 2015 and 2014, respectively. The largest portion of net sales in the Europe, Middle East & Africa region was $674 million in the United Kingdom, $728 million in the United Kingdom and $820 million in the United Kingdom for the years ended December 31, 2016, 2015 and 2014, respectively.	
(4)	Net sales and net property in Asia Pacific are primarily attributable to China.	
Competition
The automotive parts industry remains extremely competitive in light of constantly evolving market dynamics. The industry in which we compete has attracted, and may continue to attract, new entrants in areas of evolving vehicle technologies such as power electronics. Although OEMs prefer to maintain relationships with suppliers that have a proven record of performance, due to risks associated with transferring responsibility for complex manufacturing processes, they rigorously evaluate suppliers on the basis of product quality, price, reliability and timeliness of delivery, product design capability, technical expertise and development capability, new product innovation, financial viability, application of lean principles, operational flexibility, customer service and overall management. In addition, our customers generally require that we demonstrate improved efficiencies, through cost reductions and/or price improvements, on a year-over-year basis. Our primary competitors include Bosch Group, Continental AG, Denso Corporation, Hitachi Ltd., and Magneti Marelli S.p.A.
Materials
We procure our raw materials from a variety of suppliers around the world. Generally, we seek to obtain materials in the region in which our products are manufactured in order to minimize transportation and other costs. The most significant raw materials we use to manufacture our products are various non-ferrous metals. As of June 30, 2017, we have not experienced any significant shortages of raw materials and normally do not carry inventories of such raw materials in excess of those reasonably required to meet our production and shipping schedules.
 
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Commodity cost volatility, most notably related to various non-ferrous metals, is a challenge for us and our industry. We are continually seeking to manage these and other material-related cost pressures using a combination of strategies, including working with our suppliers to mitigate costs, seeking alternative product designs and material specifications, combining our purchase requirements with our customers and/or suppliers, changing suppliers, hedging of certain commodities and other means. Our overall success in passing commodity cost increases on to our customers has been limited. We will continue our efforts to pass market-driven commodity cost increases to our customers in an effort to mitigate all or some of the adverse earnings impacts, including by seeking to renegotiate terms as contracts with our customers expire.
Research, Development and Intellectual Property
We maintain technical engineering centers in major regions of the world to develop and provide advanced products, processes and manufacturing support for all of our manufacturing sites, and to provide our customers with local engineering capabilities and design development on a global basis. As of June 30, 2017, we employed approximately 5,000 scientists, engineers and technicians around the world. Our total research and development expenses, including engineering, net of customer reimbursements, were approximately $424 million, $443 million and $461 million for the years ended December 31, 2016, 2015 and 2014, respectively.
We believe that our engineering and technical expertise, together with our emphasis on continuing research and development, allow us to use the latest technologies, materials and processes to solve problems for our customers and to bring new, innovative products to market. We believe that continued engineering activities are critical to maintaining our pipeline of technologically advanced products. Given our strong financial discipline, we seek to effectively manage fixed costs and efficiently rationalize capital spending by critically evaluating the profit potential of new and existing customer programs, including investment in innovation and technology. We maintain our engineering activities around our focused product portfolio and allocate our capital and resources to those products with distinctive technologies.
We currently hold approximately 2,400 active patents and patent applications. While no individual patent or group of patents, taken alone, is considered material to our business, taken in the aggregate, these patents provide meaningful protection for our products and technical innovations. We are actively pursuing marketing opportunities to commercialize and license our technology to both automotive and non-automotive industries and we have selectively taken licenses from others to support our business interests. These activities foster optimization of intellectual property rights.
Environmental Compliance
We are subject to the requirements of environmental and safety and health laws and regulations in each country in which we operate. These include laws regulating air emissions, water discharge, hazardous materials and waste management. We have an environmental management structure designed to facilitate and support our compliance with these requirements globally. Although it is our intent to comply with all such requirements and regulations, we cannot provide assurance that we are at all times in compliance. Environmental requirements are complex, change frequently and have tended to become more stringent over time. Accordingly, we cannot assure that environmental requirements will not change or become more stringent over time or that our eventual environmental costs and liabilities will not be material.
Certain environmental laws assess liability on current or previous owners or operators of real property for the cost of removal or remediation of hazardous substances. At this time, we are involved in various stages of investigation and cleanup related to environmental remediation matters at certain of our present and former facilities. In addition, there may be soil or groundwater contamination at several of our properties resulting from historical, ongoing or nearby activities.
At December 31, 2016, the undiscounted reserve for environmental investigation and remediation was approximately $1 million. We cannot ensure that our eventual environmental remediation costs and liabilities
 
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will not exceed the amount of our current reserves. In the event that such liabilities were to significantly exceed the amounts recorded, our results of operations could be materially adversely affected.
Employees
As of June 30, 2017, we had approximately 19,000 workers: 6,000 salaried employees, 10,000 hourly employees and 3,000 contract workers. Our employees are represented worldwide by numerous unions and works councils, including the European Works Council and local trade unions such as Unite, U.K., CFE-CGC France and C.T.M. in Mexico.
Seasonality
Our business is moderately seasonal, as our primary North American customers historically reduce production during the month of July and halt operations for approximately one week in December. Our European customers generally reduce production during the months of July and August and for one week in December. Shut-down periods in the rest of the world generally vary by country. In addition, automotive production is traditionally reduced in the months of July, August and September due to the launch of parts production for new vehicle models. Accordingly, our results reflect this seasonality.
Properties
As of June 30, 2017, we owned or leased 27 manufacturing sites and 19 technical centers. A manufacturing site may include multiple plants and may be wholly or partially owned or leased. We also have many smaller sales offices, warehouses, joint ventures and other investments strategically located throughout the world. We have a presence in 24 countries. The following table shows the regional distribution of our manufacturing and technical sites:

 	  	North
America	 	  	Europe,
Middle East &
Africa	 	  	Asia
Pacific	 	  	South
America	 	  	Total	 	
Total Manufacturing Sites	  	 	7	 	  	 	8	 	  	 	11	 	  	 	1	 	  	 	27	 	
Total Technical Sites	  	 	4	 	  	 	9	 	  	 	5	 	  	 	1	 	  	 	19	 	
We frequently review our real estate portfolio and develop footprint strategies to support our customers’ global plans, while at the same time supporting our technical needs and controlling operating expenses. We believe our evolving portfolio will meet current and anticipated future needs.
We have established a worldwide design and manufacturing footprint with a regional service model that enables us to efficiently and effectively serve our global customers from best cost countries. This regional model is structured primarily to service the North American market from Mexico, the South American market from Brazil, the European market from Eastern Europe, and the Asia Pacific market from China. Our global scale and regional service model enables us to engineer globally and execute regionally to serve the largest OEMs, which are seeking suppliers that can serve them on a worldwide basis. Our footprint also enables us to adapt to the regional design variations the global OEMs require and serve the emerging market OEMs.
Legal Proceedings
The Company is, from time to time, subject to various legal actions and claims incidental to its business, including those arising out of alleged defects, alleged breaches of contracts, product warranties, intellectual property matters, and employment-related matters. It is the opinion of Delphi Technologies that the outcome of such matters will not have a material adverse impact on the consolidated financial position, results of operations, or cash flows of Delphi Technologies. With respect to product warranty matters, although Delphi Technologies cannot ensure that the future costs of warranty claims by customers will not be material, Delphi Technologies believes its established reserves are adequate to cover potential warranty settlements.
 
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Principal Executive Offices
Our principal executive offices are located at Courteney Road, Hoath Way, Gillingham, Kent ME8 0RU, United Kingdom, and our telephone number is 011-44-163-423-4422. Our website address is www.                     .com. Our website and the information contained on that site, or connected to that site, are not incorporated by reference into this information statement.
 
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 MANAGEMENT
Our Directors, Director Nominees and Executive Officers
Under Jersey law, the business and affairs of Delphi Technologies will be managed under the direction of its board of directors. We currently expect that, upon completion of the separation, our board of directors will consist of members. At an annual meeting of our shareholders, our shareholders will elect each of our directors to serve until the next annual meeting of our shareholders and until his or her successor is duly elected and qualified. See “Description of Share Capital.” We expect the first annual meeting of our shareholders after the separation and distribution will be held in 2018. Each officer will serve until his or her successor is elected and qualified or until his or her death, or his or her resignation or removal. Any officer may be removed, with or without cause, by the board of directors, but such removal will be without prejudice to the contract rights, if any, of the officer so removed.
The following table sets forth certain information concerning the individuals who are expected to serve as our directors and executive officers upon completion of the separation. Additional executive officers of Delphi Technologies will be appointed prior to the separation and additional directors of Delphi Technologies will be elected prior to the separation. While some of Delphi Technologies’ executive officers are currently officers and employees of Aptiv, after the separation, none of these individuals will be employees or executive officers of Aptiv.

Name	  	Age	 	  	Position	
Executive Officers	  				  		
Liam Butterworth	  	 	46	 	  	President and Chief Executive Officer	
Vivid Sehgal	  	 	49	 	  	Chief Financial Officer	
James Harrington	  	 	56	 	  	Senior Vice President and General Counsel	
Non-Employee Directors	  				  		
Timothy M. Manganello	  	 	67	 	  	Chairman	
Biographical Summaries of Executive Officers
The following is the biographical summary of the experience of Liam Butterworth, our President and Chief Executive Officer. We expect that prior to the separation and distribution additional executive officers will be appointed.
Liam Butterworth will be our President and Chief Executive Officer. Mr. Butterworth was named senior vice president of Aptiv and president, Powertrain Systems in February 2014 and assumed responsibilities for Delphi Product & Service Solutions in September 2015. He previously was president of Delphi Connection Systems, a product business unit of Delphi E/EA, from October 2012. He joined Aptiv in 2012 after the company acquired FCI Holding SAS’s (“FCI’s”) Motorized Vehicles Division, where he had been president and general manager from 2009 through the acquisition by Aptiv. He joined FCI in 2000 and held positions in sales, marketing, purchasing and general management. Prior to FCI, Mr. Butterworth worked for Lucas Industries and TRW Automotive. He holds a master’s degree in business administration from Lancaster University in England.
Vivid Sehgal will be our Chief Financial Officer. Prior to joining us, he served as Chief Financial Officer of LivaNova PLC, a global medical technology company, from 2015 to 2017. Previously, Mr. Sehgal served as Senior Vice President, Treasury, Risk and Investor Relations at Allergan, Inc. a multi-specialty health care company, from 2014 to 2015. Prior to assuming his position as Senior Vice President, Mr. Sehgal served as Vice President and Regional Controller of Allergan’s Europe, Middle East and Africa business from 2007 to 2014. Before Allergan, Mr. Sehgal worked for nine years in various roles with GlaxoSmithKline PLC and SmithKline Beecham PLC, where he eventually served as Group Controller for GSK’s International Pharmaceutical
 
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Division. He brings additional financial leadership experience from other companies, including with Gillette Company, Inc. during its acquisition by Procter and Gamble, Inc. and Grand Metropolitan plc. Mr. Sehgal earned a master’s degree in finance and investment from the University of Exeter, a bachelor’s degree in economics from the University of Leicester and is a member of the Chartered Institute of Management Accountants.
James Harrington will be our Senior Vice President and General Counsel. Prior to joining us, he was Senior Vice President, General Counsel and Corporate Secretary of Tenneco Inc., a global automotive supplier, from 2009 to 2017. Previously, he served as Vice President, Law. Before joining Tenneco in 2005 as corporate counsel, he worked at Mayer Brown LLP in the firm’s corporate and securities practice from 1997 to 2005. Mr. Harrington earned a master’s degree in business administration from the University of Chicago Graduate School of Business, a juris doctor degree from the Northwestern University School of Law, and a bachelor’s degree in business administration from the University of Notre Dame. He is also a certified public accountant.
Biographical Summaries of Directors
The following is the biographical summary of Timothy M. Manganello, who will serve as our non-executive Chairman, as well as a description of the specific skills and qualifications he is expected to provide to Delphi Technologies’ board of directors. We expect that prior to the separation and distribution additional non-employee directors will be elected to the board of directors.
Timothy M. Manganello will serve as our non-executive Chairman of our board of directors. Mr. Manganello retired as Chief Executive Officer of BorgWarner Inc., a global automotive supplier, in 2012, and retired as Executive Chairman of the Board of BorgWarner in 2013. He served in these roles since 2003 and had also served as President and Chief Operating Officer, among other executive roles. He joined the company in 1989. Mr. Manganello also served as the Chairman of the Chicago Federal Reserve Bank, Detroit branch, from 2007 to 2011. He earned both undergraduate and graduate engineering degrees from the University of Michigan. Mr. Manganello currently serves as a director of Aptiv and chairman of Bemis Company, Inc. He served as a director of BorgWarner Inc. from 2002 to 2013 and of Zep Inc. from 2011 to 2015.
As the retired Chairman and CEO of an automotive supply company and global public company, Mr. Manganello offers the Board valuable experience in automotive operations, international sales, operations and engineering, as well as corporate governance, strategic and financial management skills.
Family Relationships
There are no family relationships among any of our directors or executive officers.
Corporate Governance Guidelines
Our board of directors is expected to adopt corporate governance guidelines that will provide a framework for the effective governance of Delphi Technologies. These guidelines will address matters such as the board’s duties, director independence, director responsibilities, board structure and operation, director criteria and qualifications, board succession planning, board compensation, management evaluation and development, board orientation and training.
Role of our Board of Directors in Risk Oversight
Our board of directors is expected to take an active role in risk oversight related to Delphi Technologies both as a full board and through its committees, each of which will have primary risk oversight responsibility with respect to all matters within the scope of its duties as contemplated by its charter. While the Company’s
 
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management will be responsible for the day-to-day management of the various risks facing Delphi Technologies, the board of directors will be responsible for monitoring management’s actions and decisions. The board of directors, as advised by the audit committee, will determine that appropriate risk management and mitigation procedures are in place and that senior management takes the appropriate steps to manage all major risks.
Board Committees
Effective upon the completion of the separation and distribution, our board of directors is expected to have three standing committees: an audit committee, a compensation committee and a nominating and governance committee. The principal functions of each committee are briefly described below. We intend to comply with the listing requirements and other rules and regulations of the NYSE, as amended or modified from time to time, with respect to each of these committees and each of these committees will be comprised exclusively of independent directors. Additionally, our board of directors may, from time to time, establish other committees to facilitate the board’s oversight of management of the business and affairs of our company.
Audit Committee
The Audit Committee is expected to consist of at least three directors, each of whom is expected to be independent in accordance with the rules of the NYSE and the SEC. Each of these directors will be financially literate, and it is expected that at least one of them will be determined to be an “audit committee financial expert” as defined under the Securities Exchange Act of 1934, as amended. We will identify the members of the Audit Committee and the Audit Committee Chairman prior to the separation and distribution. The Audit Committee will be responsible for oversight of the adequacy of our internal accounting and financial controls and the accounting principles and auditing practices and procedures to be employed in preparation and review of our financial statements. The Audit Committee will also be responsible for the engagement of the independent public auditors and the review of the scope of the audit to be undertaken by such auditors.
Compensation Committee
The Compensation Committee is expected to consist of at least three directors, each of whom is expected to be independent in accordance with the rules of the NYSE and the SEC. We will identify the members of the Compensation Committee and the Compensation Committee Chairman prior to the separation and distribution. The Compensation Committee will be responsible for the review and, as it deems appropriate, recommendation to the board of directors of policies and procedures relating to the compensation of the CEO and other officers.
Nominating and Governance Committee
The Nominating and Governance Committee is expected to consist of at least three directors, each of whom is expected to be independent in accordance with the rules of the NYSE and the SEC. We will identify the members of the Nominating and Governance Committee and the Nominating and Governance Committee Chairman prior to the separation and distribution. The Nominating and Governance Committee will be responsible for the review and, as it deems appropriate, recommendation to the board of directors of policies and procedures relating to director and board committee nominations and corporate governance policies.
Director Independence
Our board of directors will annually determine the independence of each director and nominee for election as a director under the NYSE’s independence standards and our corporate governance guidelines. A majority of our board will be comprised of independent directors upon completion of the separation and distribution.
 
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Code of Business Conduct and Ethics
Upon the completion of our separation from Aptiv, our board of directors will adopt a code of ethics and business conduct that applies to our directors, officers and employees. Among other matters, our code of ethics and business conduct will be designed to deter wrongdoing and to promote:
 
 	•	 	honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest;	
 
 	•	 	full, fair, accurate, timely and understandable disclosure in our SEC reports and other public communications;	
 
 	•	 	compliance with applicable governmental laws, rules and regulations;	
 
 	•	 	prompt internal reporting of violations of law or the code to appropriate persons identified in the code; and	
 
 	•	 	accountability for adherence to the code of ethics and business conduct, including fair process by which to determine violations.	
Any waiver of the code of ethics and business conduct for our directors or executive officers must be approved by a majority of our independent directors, and any such waiver shall be promptly disclosed as required by law.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended December 31, 2016, Delphi Technologies was not an independent company, and did not have a Compensation Committee or any other committee serving a similar function.
 
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 COMPENSATION DISCUSSION AND ANALYSIS
Overview
As discussed above, we are currently a part of Aptiv and not an independent company, and the Compensation Committee of our Board of Directors (“Delphi Technologies Compensation Committee”) has not yet been formed. This Compensation Discussion and Analysis describes the historical compensation practices of Aptiv and the design and objectives of Aptiv’s executive compensation programs in place prior to the separation. It also attempts to outline certain aspects of Delphi Technologies’ anticipated compensation structure for its senior executive officers following the separation, including the material terms of any such compensation programs already determined and currently in place. While Delphi Technologies has discussed its anticipated programs and policies with the Compensation and Human Resources Committee (the “Aptiv Compensation Committee”) of Aptiv’s Board of Directors (the “Aptiv Board”), they remain subject to the review and approval of the Delphi Technologies Compensation Committee.
For purposes of this Compensation Discussion and Analysis, the persons identified below are referred to collectively as our “named executive officers,” or “NEOs”:
 
 	•	 	Liam Butterworth, our President and Chief Executive Officer;	
 
 	•	 	Vivid Sehgal, our Chief Financial Officer; and	
 
 	•	 	James Harrington, our Senior Vice President and General Counsel.	
Mr. Butterworth has been serving as Aptiv’s Senior Vice President and President of Aptiv’s Powertrain Systems and Aptiv’s Product & Service Solutions businesses. The information provided for Mr. Butterworth for 2016 reflects compensation earned at Aptiv based on his role with Aptiv during 2016. Mr. Butterworth is identified as an NEO because he is expected to serve as our President and Chief Executive Officer. Mr. Sehgal is identified as an NEO because he is expected to serve as our Chief Financial Officer. Mr. Harrington is identified as an NEO because he is expected to serve as our Senior Vice President and General Counsel. Neither Mr. Sehgal nor Mr. Harrington was an Aptiv employee or an Aptiv director during 2016, so the following discussion of Aptiv’s historical executive compensation programs does not apply to them. The discussion of current and future executive compensation programs and the philosophy and principles for NEO compensation does, however, apply to the compensation Mr. Sehgal and Mr. Harrington are expected to receive from us following the separation.
Historically, Mr. Butterworth has participated in Aptiv’s executive compensation programs. All executive compensation decisions for Mr. Butterworth prior to the spin-off were or will be made or overseen by the Aptiv Compensation Committee or the full Aptiv Board. The Aptiv Compensation Committee, in consultation with Aptiv management and the Aptiv Compensation Committee’s independent compensation consultant, oversees Aptiv’s executive compensation philosophy and reviews and approves compensation for executive officers (including cash compensation, equity incentives and benefits).
Therefore, except as otherwise indicated, this Compensation Discussion and Analysis focuses on Aptiv compensation earned by Mr. Butterworth based on his role with Aptiv during Aptiv’s fiscal year ended December 31, 2016. In this section, we describe and analyze: (1) the material components of the executive compensation programs applicable to Mr. Butterworth; (2) the material compensation decisions the Aptiv Compensation Committee made for 2016 under those programs; and (3) the key factors considered in making those decisions, including 2016 Aptiv performance. For purposes of this Compensation Discussion and Analysis, references to Aptiv’s Powertrain Systems segment and its Product & Service Solutions business specifically cover their organization and function for purposes of the Aptiv executive compensation plans and programs discussed in this section.
Executive compensation decisions following the spin-off are expected to be made by the Delphi Technologies Compensation Committee. We currently anticipate that, except as otherwise described in this
 
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Compensation Discussion and Analysis, annual and long-term compensation programs for our NEOs immediately following the spin-off will be substantially similar to the programs currently utilized by Aptiv for its executive officers. The Delphi Technologies Compensation Committee will review these programs, and, it is expected, will make adjustments to support Delphi Technologies’ strategies and to remain market competitive.
Aptiv Executive Compensation Philosophy and Strategy
General Philosophy in Establishing and Making Pay Decisions.
Aptiv’s executive compensation programs reflected Aptiv’s pay-for-performance philosophy and encouraged Mr. Butterworth to make sound decisions that drove short- and long-term Aptiv shareholder value creation. The Aptiv Compensation Committee utilized a combination of fixed and variable pay elements in order to achieve the following objectives:
 
 	•	 	Support Aptiv’s overall business strategy and results as they drive long-term shareholder value creation;	
 
 	•	 	Emphasize a pay-for-performance culture by linking incentive compensation to defined short- and long-term performance goals;	
 
 	•	 	Attract, retain and motivate key executives by providing competitive total compensation opportunities; and	
 
 	•	 	Align executive and investor interests by establishing market- and investor-relevant metrics that drive shareholder value creation.	
Aptiv’s goal for target total direct compensation (base salary, annual and long-term incentives) for its officers, including Mr. Butterworth, was to approximate the median (50th percentile) of Aptiv’s market. Compensation for individual roles could be positioned higher or lower than the market median where Aptiv believed it was appropriate, considering multiple factors such as each executive’s roles and responsibilities, labor market dynamics, the individual’s performance over time, and the experience and critical skills the individual could bring to his or her role with Aptiv.
2016 Peer Group Analysis.
To attract, retain and motivate key executives, Aptiv’s goal was to provide total compensation opportunities at competitive market pay rates. Aptiv created a compensation structure based on its compensation philosophy, which approximated the median of Aptiv’s peer companies, but allowed total compensation to vary above or below this level based on considerations such as job responsibilities, experience, and quantitative and qualitative company or individual performance factors.
Aptiv used a group of peer companies to compare executive compensation to market. The Aptiv Compensation Committee reviewed and determined the composition of Aptiv’s peer group for 2016, considering input from its independent compensation consultant and management.
Aptiv’s 2016 peer group consisted of the following 15 companies, whose aggregate profile was comparable to Aptiv in terms of size, industry, operating characteristics and competition for executive talent:

Autoliv, Inc.	  	Ingersoll-Rand plc	
BorgWarner Inc.	  	Johnson Controls, Inc.	
Cummins Inc.	  	Lear Corporation	
Danaher Corporation	  	Parker-Hannifin Corporation	
Eaton Corporation	  	TE Connectivity Ltd.	
Emerson Electric Co.	  	Textron Inc.	
Honeywell International Inc.	  	The Goodyear Tire & Rubber Company	
Illinois Tool Works, Inc.	  		
 
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In 2016, target total direct compensation among Aptiv’s named executive officers (including Mr. Butterworth), on average, was positioned within a competitive range of the peer group median. Pay adjustments were typically made when Aptiv believed that there was a market or individual performance issue that should have been addressed to preserve the best interests of Aptiv’s shareholders.
In 2016, with advice from its independent compensation consultant, the Aptiv Compensation Committee approved a change to its peer group, reducing the number of peer companies from 15 to 14. The Goodyear Tire & Rubber Company was removed from the peer group because of the differences in the nature of its then-current business as compared to Aptiv.
2016 Shareholder Engagement.
During 2016, Aptiv continued to engage its shareholders with respect to its governance and executive compensation practices. These outreach meetings, conducted by members of Aptiv management, gave Aptiv an opportunity to solicit feedback from its major institutional shareholders on a variety of topics related to corporate governance and executive compensation. This feedback provided Aptiv with valuable insights, which Aptiv management shared with the Aptiv Board, with respect to Aptiv shareholders’ voting policies and priorities.
2016 Say-on-Pay.
At Aptiv’s 2016 Annual Meeting of Shareholders, Aptiv received favorable support from over 98% of votes cast on its executive compensation program. Aptiv management and the Aptiv Compensation Committee reviewed its shareholders’ affirmative 2016 Say-on-Pay vote. Aptiv’s management and the Aptiv Compensation Committee believed such vote to be a strong indication of support for Aptiv’s executive compensation program and pay-for-performance philosophy. Therefore, the Aptiv Compensation Committee continued the philosophy, compensation objectives and governing principles it has used in recent years when making decisions or adopting policies regarding executive compensation for 2016.
Delphi Technologies Going Forward.
As noted above, because the Delphi Technologies Compensation Committee has not yet been formed, the executive compensation philosophy and strategy of Delphi Technologies will be developed and established by the Delphi Technologies Compensation Committee after the separation. It is currently expected, however, that after the separation the framework of Delphi Technologies’ executive compensation program will initially be similar to Aptiv’s compensation framework, and will be principally comprised of base salaries and annual and long-term incentives.
Overview of 2016 Aptiv Executive Compensation
Aptiv regularly undertakes a comprehensive review of its business plan to identify strategic initiatives that should be linked to executive compensation. Aptiv also assessed and reviewed the level of risk in its company-wide compensation programs to ensure that they did not encourage imprudent risk-taking.
Elements of Aptiv Executive Compensation.
In line with Aptiv’s executive compensation philosophy, Aptiv annually provided the following primary elements of compensation to its officers, including Mr. Butterworth:
 
 	•	 	Base salary;	
 
 	•	 	Annual incentive award;	
 
 	•	 	Long-term incentive award; and	
 
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 	•	 	Other compensation, such as participation in a defined contribution retirement plan and benefits that were the same as those provided to similarly situated non-officer employees of Aptiv.	
Additional, non-primary elements of executive compensation, such as payments related to automobile and related expenses, were provided to Mr. Butterworth. These elements are reflected in the “All Other Compensation” column of the “2016 Summary Compensation Table”.
The following table outlines the primary elements of Aptiv’s executive compensation for Mr. Butterworth and indicates how these elements relate to Aptiv’s key strategic objectives:

Element	  	Key Features	  	Relationship to Strategic Objectives	
Total Direct Compensation	
Base Salary	  	•    Commensurate with job responsibilities, experience, and qualitative and quantitative company or individual performance factors
 
•    Reviewed on a periodic basis for competitiveness and individual performance
 
•    Targeted at peer group median
 	  	•    Attract, retain and motivate key Aptiv executives by providing market-competitive fixed compensation	
Annual Incentive Plan Awards	  	•    Aptiv Compensation Committee approved a target incentive pool for each performance period based on selected financial and/or operational metrics
 
•    Mr. Butterworth was granted a target award opportunity based on market competitiveness and level of responsibility
 
•    Payouts could range between 0% and 200% of target and were determined by achievement of financial goals based on pre-established objectives (at both the Aptiv corporate and division level), then adjusted to reflect individual performance achievement
 
•    Strategic Results Modifier (“SRM”) provided for an adjustment to individual payout levels based on an assessment of performance against strategic qualitative factors reviewed and approved by the Aptiv Compensation Committee at the beginning of the performance period
 	  	•    Pay-for-performance
 
•    Align executive and Aptiv shareholder interests
 
•    Attract, retain and motivate key Aptiv executives with market-competitive compensation opportunities	
 
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Element	  	Key Features	  	Relationship to Strategic Objectives	
Long-Term Incentive Plan Awards	  	•    Target award granted commensurate with job responsibilities, market competitiveness, experience, and qualitative and quantitative company and individual performance factors
 
•    Issue full share unit awards, 75% weighted on Aptiv performance metrics, including use of Aptiv relative total shareholder return (“TSR”), and 25% time-based, which means that the value was to be determined by Aptiv’s share price
 	  	•    Pay-for-performance
 
•    Aligns executive and Aptiv shareholder interests
 
•    Attract, retain and motivate key Aptiv executives with market-competitive compensation opportunities
 
•    Utilizes multi-year vesting period and metrics aligned to long-term shareholder value creation including stock price performance
 	
Other Compensation	  		  		
Retirement Programs	  	•    Participation in a defined contribution plan for Luxembourg employees	  	•    Attract, retain and motivate key Aptiv executives with market-competitive compensation opportunities	
Aptiv 2016 Target Annual Total Direct Compensation Mix.
Base salary and annual and long-term incentive award opportunities were the elements of Mr. Butterworth’s total direct compensation from Aptiv. A majority of Mr. Butterworth’s total direct compensation opportunity was comprised of performance-based pay. Aptiv annual incentive awards and the performance-based RSUs component of Aptiv’s long-term incentive awards were considered by Aptiv to be performance-based pay because the payout of these awards is dependent on the achievement of specified performance goals at Aptiv corporate, division and/or individual levels. The time-based portion of Aptiv’s RSU awards is retentive while also aligning with Aptiv performance as the final value realized is based on Aptiv’s share price.
The significant proportion of performance-based pay was intended to align the interests of Mr. Butterworth with Aptiv’s shareholders’ interests.
Aptiv 2016 Target Compensation Structure.
In 2016, 22% of Mr. Butterworth’s compensation was attributable to his base salary, 19% was attributable to his annual incentive opportunity, and 59% was attributable to his long-term incentive opportunity. The following table specifies the 2016 target annual total direct compensation opportunity for Mr. Butterworth:

Name	  	Base Salary ($)	 	  	Annual
Incentive
Target
Award($)	 	  	Long-Term
Incentive Plan
Target Annual
Award ($)	 	  	Total ($)	 	
Liam Butterworth (1)	  	 	584,970	 	  	 	497,225	 	  	 	1,560,000	 	  	 	2,642,195	 	
President and Chief Executive Officer	  				  				  				  				

(1)	Mr. Butterworth is a Luxembourg employee and his salary and bonus were paid in Euros. U.S. Dollar amounts in this information statement with respect to Mr. Butterworth have been converted from Euros at a rate of 1.11 Dollars to one Euro. The exchange rate used was calculated by averaging exchange rates for each calendar month in 2016.	
 
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Aptiv 2016 Annual Compensation Determination.
The base salary and annual incentive target for Mr. Butterworth were established based on the scope of his responsibilities, individual performance, experience and market pay data. At the beginning of 2016, Aptiv also defined key strategic objectives Mr. Butterworth was expected to achieve during the year.
Aptiv 2016 Base Salary.
Base salary was targeted at approximately the median of Aptiv’s peer group and was intended to reward and be commensurate with Mr. Butterworth’s responsibilities, individual performance and experience. Aptiv’s practice has been to periodically make base salary adjustments, although Aptiv reviews compensation competitiveness annually.
During 2016, Mr. Butterworth received a base salary adjustment. Generally, this adjustment was intended to increase the competitiveness of salary in comparison to market median. Mr. Butterworth’s increase also reflected his expanded responsibilities for Aptiv’s Product & Service Solutions business. The following table summarizes the adjustment:

Name	  	Base Salary
Adjustment
Effective Date	 	  	Adjusted
Base Salary
($)	 	  	Increase
(%)	 	
Liam Butterworth	  	 	April 1, 2016	 	  	 	584,970	 	  	 	5	 	
2016 Annual Incentive Plan Awards.
Aptiv’s Annual Incentive Plan was designed to motivate Aptiv executives to drive earnings, cash flow and profitable growth by measuring the executives’ performance against Aptiv’s goals at the Aptiv corporate and relevant division levels. Aptiv’s Annual Incentive Plan was structured under the Aptiv Leadership Incentive Plan (“DLIP”) so that these awards could potentially qualify for certain tax deductibility treatment under Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”). Mr. Butterworth’s 2016 target annual incentive award was initially funded under a performance formula at 1% of Aptiv’s adjusted net income, up to a maximum of $12 million. For this purpose, adjusted net income represented net income attributable to Aptiv before discontinued operations, restructuring and other special items, including the tax impact thereon. Please see Appendix A for a reconciliation of this number to U.S. GAAP financial measures.
Aptiv’s adjusted net income for 2016 was $1.719 billion; thus the maximum funding for payout to Mr. Butterworth under the 2016 DLIP, subject to the Aptiv Compensation Committee’s exercise of negative discretion, was approved at the $12 million maximum. The Aptiv Compensation Committee then used negative discretion to determine his final payout under the DLIP to reflect the performance against the goals identified under Aptiv’s Annual Incentive Plan.
The Aptiv Compensation Committee established the individual annual incentive target for Mr. Butterworth at approximately the median of Aptiv’s peer group, but such target could be adjusted based on Mr. Butterworth’s position, individual performance, and the size and scope of his responsibilities. Final payouts could range from 0% to 200% of Mr. Butterworth’s annual incentive target.
The Aptiv Compensation Committee, working with Aptiv management and the Aptiv Compensation Committee’s independent compensation consultant, set the underlying performance metrics and objectives for the preliminary annual incentive plan payout levels based on Aptiv’s annual business objectives. For 2016, Mr. Butterworth’s award payout was determined as follows:
 
 	•	 	Aptiv corporate and Powertrain Systems division performance metrics were weighted 40% and 60%, respectively.	
 
 	•	 	Individual performance was considered for adjustments to the final annual incentive payouts based on individual performance and achievements.	
 
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For 2016, both Aptiv corporate and Powertrain Systems division underlying performance objectives were based on the following metrics which were aligned with Aptiv’s business strategy:
 
 	•	 	Aptiv corporate performance: Net Income (“NI”), Cash Flow Before Financing (“CFBF”) and Revenue Growth (Bookings).	
 
 	•	 	Aptiv Powertrain Systems division performance: Operating Income (“OI”), Simplified Operating Cash Flow (“SOCF”) and Revenue Growth (Bookings).	
The Aptiv Compensation Committee selected the following weightings in 2016 with respect to Mr. Butterworth for both Aptiv corporate and Powertrain Systems division performance metrics:

Weighting (%)
Performance Metrics	  	60%
Powertrain
Systems
Division	 	 	40%
Aptiv
Corporate	 	
NI (Aptiv Corporate) or OI (Powertrain Systems Division) (1)	  	 	50	% 	 	 	50	% 	
CFBF (Aptiv Corporate) and SOCF (Powertrain Systems Division) (2)	  	 	40	 	 	 	40	 	
Revenue Growth (Bookings) (3)	  	 	10	 	 	 	10	 	
 	 	
In addition, discretionary adjustments could be applied based on
qualitative factors and considerations (4)	  				 				

(1)	Aptiv believed that NI and OI were appropriate measurements of Aptiv’s underlying earnings for 2016 and a good indication of Aptiv’s overall financial performance.	
(2)	CFBF and SOCF are different metrics for measuring cash. CFBF is Aptiv cash flow before financing, which is defined as cash provided by (used in) operating activities from continuing operations plus cash provided by (used in) investing activities from continuing operations, adjusted for the purchase price of business acquisitions (including the settlement of foreign currency derivatives related to Aptiv’s 2015 acquisition of HellermannTyton) and net proceeds from the divestiture of discontinued operations and other significant businesses. Please see Appendix A for a reconciliation of this number to U.S. GAAP financial measures. SOCF is defined, on a divisional basis, as earnings before interest, tax, depreciation and amortization (“EBITDA”), plus or minus changes in accounts receivable, inventory and accounts payable, less capital expenditures net of proceeds from asset dispositions, plus restructuring expense, less cash expenditures for restructuring.	
(3)	Revenue Growth (Bookings) is based on Aptiv’s future business booked in the current fiscal year. In general, in order to achieve the target performance level, a specified percentage of Aptiv’s planned future sales for the next two calendar years must be booked by the end of the measurement period, in this case the end of fiscal year 2016.	
(4)	Could be applied, in all cases subject to the maximum funding level for awards under the DLIP, based on any of the Strategic Results Modifier factors (further described below), discretion of Aptiv’s Chief Executive Officer with Aptiv Compensation Committee approval, and/or consideration of individual performance goals/criteria established at the beginning of the year.	
For purposes of using negative discretion under the DLIP to determine the preliminary payout for Mr. Butterworth, the NI / OI and CFBF / SOCF goals and the award payout levels related to the achievement of those goals were measured on a performance scale set by the Aptiv Compensation Committee. Performance below the minimum threshold resulted in no payout, and performance above the maximum level was capped at a maximum total payout of 200% of the target award. For the NI / OI and CFBF / SOCF metrics the threshold, target and maximum payout levels were 50%, 100% and 200%, respectively. Revenue Growth (Bookings) was treated differently than the NI / OI and CFBF / SOCF metrics. If the Revenue Growth (Bookings) targets were achieved, the target payout for that metric was paid. If the Revenue Growth (Bookings) targets were not achieved, no portion of the Revenue Growth (Bookings) award was paid.
 
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The 2016 performance targets by metric were:

Category	  	NI / OI
($ in millions)	 	  	CFBF /
SOCF
($ in millions)	 	  	Revenue
Growth
2017 / 2018
(Bookings)	
Aptiv Corporate Metrics	  	$	1,679	 	  	$	1,207	 	  	99%/91%	
Powertrain Systems Division Metrics	  	 	479	 	  	 	340	 	  	100/91	
Aptiv’s Annual Incentive Plan target goals, approved by the Aptiv Compensation Committee, were established to reflect Aptiv’s focus on growth over prior year actual outcomes, and above market growth in the performance period. With respect to the performance levels required for target payment, 2016 overall performance at the Aptiv corporate level produced an above-target payout of 103%. Overall performance for Aptiv’s Powertrain Systems division came in below target for a payout at 91%.
Following the determination of payout levels for the Aptiv corporate and Powertrain Systems division metrics, the Aptiv Compensation Committee, in conjunction with Aptiv’s Chief Executive Officer, assessed Mr. Butterworth’s performance with respect to the Strategic Results Modifiers (“SRM”) and individual qualitative performance.
As part of Aptiv’s focus on strategic priorities, the SRM was approved by the Aptiv Compensation Committee at the beginning of the year as part of the Aptiv Annual Incentive Plan design. The SRM could range in the aggregate from plus or minus 10% of the total Aptiv Annual Incentive Plan target opportunity. The SRM allowed the Aptiv Compensation Committee to consider strategic factors in addition to the financial metrics under the Aptiv Annual Incentive Plan. The SRM was determined based on a qualitative performance assessment and recommendation by Aptiv’s Chief Executive Officer as to each other participant’s achievement of SRM objectives, with final approval by the Aptiv Compensation Committee. For 2016, the focus areas of the SRM for Mr. Butterworth were:
 
 	•	 	Talent outcomes	
 
 	•	 	Customer diversification	
In determining the final individual payouts, the Aptiv Compensation Committee, in consultation with Aptiv’s Chief Executive Officer, evaluated Mr. Butterworth’s qualitative performance in relation to the specific Aptiv division and overall Aptiv corporate performance. Mr. Butterworth was also evaluated based on his individual achievements. The material qualitative performance achievements considered by the Aptiv Compensation Committee included his leadership and performance in his division specific to product innovation, customer diversification, and operational excellence. The final award payout percentage was 106% for Mr. Butterworth.
As a result of the analysis described above, the Aptiv Compensation Committee approved the following 2016 annual incentive award payment for Mr. Butterworth:

 	  	Annual Incentive
Plan Actual Payment
for 2016 ($) (1)	 	  	Percent of Annualized
Target Incentive (%)	 	
Liam Butterworth	  	 	527,058	 	  	 	106	 	

(1)	This award amount is reported in the “Non-Equity Incentive Plan Compensation” column of the “2016 Summary Compensation Table”.	
2016 Long-Term Incentive Awards.
Aptiv’s Long-Term Incentive Plan was designed to reward performance on long-term strategic metrics and to attract, retain and motivate participants.
 
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Aptiv’s annual equity awards included both performance-based and time-based RSUs. The time-based RSUs, which made up 25% of Mr. Butterworth’s long-term awards, were designed to vest ratably over three years, beginning on the first anniversary of the grant date. The performance-based RSUs, which made up 75% of Mr. Butterworth’s long-term awards, were designed to be settled after the results of a three-year performance period were determined. The 2016 grant was designed to vest at the end of 2018 and be settled in early 2019 after the outcomes of the performance period are determined and approved. Mr. Butterworth may receive from 0% to 200% of his target performance-based RSU award as determined by Aptiv’s performance against the following company-wide performance metrics:

Metric	  	Weighting (%)	 	
Average Return on Net Assets (“RONA”) (1)	  	 	50	% 	
Cumulative Net Income (“NI”)	  	 	25	 	
Relative Aptiv Total Shareholder Return (“TSR”) (2)	  	 	25	 	

(1)	Average return on net assets is Aptiv’s tax-affected operating income (net income before interest expense, other income (expense), net, income tax expense, equity income (loss), net of tax, income (loss) from discontinued operations, net of tax), divided by average Aptiv net working capital plus average net property, plant and equipment for each calendar year, as adjusted for incentive plan calculation purposes.	
(3)	Relative Aptiv TSR is measured by comparing the average closing price per share of Aptiv’s ordinary shares for all available trading days in the fourth quarter of 2018 to the average closing price per share of Aptiv’s ordinary shares for all available trading days in the fourth quarter of 2015, including the reinvestment of dividends, relative to the companies in Russell 3000 Auto Parts Index.	
Aptiv’s Long-Term Incentive Plan allows for dividend equivalents to accrue on unvested RSUs; however, the dividend equivalents vest and pay out only if and to the extent that the underlying RSUs vest and pay out.
2016 Grants
The Aptiv Compensation Committee established the following 2016 target long-term incentive awards for Mr. Butterworth (consisting of time-based RSUs and performance-based RSUs, as described above), taking into account scope of responsibilities, individual performance, retention considerations and market compensation data:

 	  	Long-Term Incentive Plan Target
Annual Award ($)	 	
Liam Butterworth	  	 	1,560,000	 	
The target annual award approved by the Aptiv Compensation Committee differs from the amount disclosed in the “Stock Awards” column of the “2016 Summary Compensation Table” because of the different methodologies used to calculate the value of the award.
In February 2017, Aptiv paid out the performance-based RSUs for the 2014-2016 performance period. The following tables set forth: (1) the threshold, target and maximum levels, as well as the actual level achieved, for each performance metric; and (2) for Mr. Butterworth, the target total number of performance-based RSUs and actual number of performance-based RSUs earned.

Metric	  	Weighting
(%)	 	 	Threshold	  	Target	  	Maximum	  	Actual	
Average Return on Net Assets (RONA) (1)(3)	  	 	50	% 	 	29.0%	  	33.7%	  	37.3%	  	38.1%	
Cumulative Earnings Per Share (EPS) (2)(3)	  	 	30	 	 	$10.96	  	$14.56	  	$16.36	  	$16.68	
Relative Aptiv Total Shareholder Return (TSR)	  	 	20	 	 	30th%ile	  	50th%ile	  	90th%ile	  	39th%ile	

(1)	Average return on net assets is Aptiv’s tax-affected adjusted operating income divided by Aptiv’s average net working capital plus Aptiv’s average net property, plant and equipment for each calendar year, as adjusted for incentive plan calculation purposes.	
 
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(2)	Cumulative EPS is Aptiv’s adjusted net income divided by the weighted number of diluted shares of Aptiv outstanding.	
(3)	Actual achievement reflects adjustments permitted for incentive plan calculation purposes.	
Based on the achievement of the performance goals associated with these performance-based RSUs, the payout multiplier was 175% of the awarded target opportunity.

Name	  	Performance-Based RSUs	 	
	  	Target Total Number
of Units Granted (#)	 	  	Actual Total Number
of Units Earned (#) (1)	 	
Liam Butterworth	  	 	10,371	 	  	 	19,023	 	

(1)	Includes accrued dividend equivalents.	
2016 Payments from Prior Years’ Arrangements
Mr. Butterworth received a bonus payment of $865,800 in 2016 related to an arrangement established at the time he became an officer of Aptiv in 2014. This amount is reported in the “Bonus” column of the “2016 Summary Compensation Table”.
Delphi Technologies Going Forward
After the separation, the Delphi Technologies Compensation Committee will adopt and develop practices and procedures with respect to compensation decisions relating to base salary, annual incentive plan awards, long-term incentive plan awards, and other compensation. It is currently anticipated that these compensation plans will initially be substantially similar to Aptiv’s compensation plans.
Other Compensation
Additional compensation and benefit programs made available to Mr. Butterworth by Aptiv are described below. Only those benefits and policies offered to the other Aptiv salaried employee populations were available to Mr. Butterworth.
Other Benefits.
Aptiv provided additional benefits, such as relocation and expatriate benefits to its executives, when applicable, and in general, these benefits were the same as those provided to similarly situated non-officer employees. For Mr. Butterworth, this included participation in Aptiv’s defined contribution plan for Luxembourg employees. The primary expatriate benefits included housing allowance, transportation allowance and tax equalization in home and host country. During 2016, Mr. Butterworth was also covered by Aptiv’s severance plan, as further described below in the “Potential Payments Upon Termination Or Change In Control” section.
Governance Practices
Stock Ownership Guidelines
To support better alignment of Aptiv’s executives’ interests with those of Aptiv’s shareholders, Aptiv believes that Aptiv’s officers should maintain an appropriate level of equity interest in Aptiv. To that end, Aptiv’s Board has adopted the following stock ownership guidelines applicable to Mr. Butterworth:
 
 	•	 	Aptiv’s most senior elected officers (other than its Chief Executive Officer) (generally, Aptiv’s other Section 16 officers, including Mr. Butterworth) are required to hold a minimum of three times their base salaries in Aptiv shares.	
 
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Mr. Butterworth was expected to fulfill the ownership requirement within five years from the time he was appointed to his position. Until such time as the required holding is met, Mr. Butterworth may not sell stock, subject to limited exceptions. Once the ownership requirement has been met, Mr. Butterworth may sell stock, provided, however, that the minimum ownership requirement must continue to be met. The Aptiv Compensation Committee reviews the ownership level for covered executives each year. As of the 2016 measurement of ownership, Mr. Butterworth had met his applicable ownership requirement.
After the separation, Delphi Technologies will adopt its own stock ownership guidelines.
Clawback
As a matter of policy, if Aptiv’s financial statements are materially misstated or in material noncompliance with any financial reporting requirement under securities laws, then the Aptiv Compensation Committee will review the circumstances and determine if any participants should forfeit certain future awards or repay prior payouts. If the misstatement is due to fraud, then the participants responsible for the fraud will forfeit their rights to future awards and must repay to Aptiv any amounts they received from prior awards due to the fraudulent behavior. The Aptiv Compensation Committee expects to update Aptiv’s clawback policy, as appropriate, to comply with the requirements for clawbacks under the final provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as implemented by the Securities and Exchange Commission (“SEC”) and the NYSE.
After the separation, the Delphi Technologies Compensation Committee will adopt and develop practices and procedures with respect to compensation decisions relating to clawbacks within the framework of the compensation plans adopted by us and applicable law. It is currently expected that these compensation programs will initially be similar to Aptiv’s compensation programs.
Restrictive Covenants
Mr. Butterworth was required to sign confidentiality and non-interference agreements in order to participate in Aptiv’s Long-Term Incentive Plan. The non-interference agreements include non-compete and non-solicitation covenants, which were intended so that Mr. Butterworth will not:
 
 	•	 	Work for a competitor or otherwise directly or indirectly engage in competition with Aptiv for 12 months after leaving Aptiv;	
 
 	•	 	Solicit or hire Aptiv employees for 24 months after leaving Aptiv; and	
 
 	•	 	Solicit Aptiv customers for 24 months after leaving Aptiv.	
If the terms of the confidentiality and non-interference agreements are violated, Aptiv has the right to cancel or rescind any final Aptiv Long-Term Incentive Plan award, consistent with applicable law.
No Excise Tax Gross-Ups
Aptiv does not provide any excise tax gross-ups specific to Aptiv’s officer population. Certain expatriate policy and relocation provisions, applicable to all salaried employees, allow for tax gross-ups as reimbursement for additional taxes or expenses incurred due to expatriate status or relocation expenses.
No Hedging/No Pledging
Aptiv prohibits Mr. Butterworth from engaging in transactions having the effect of hedging the unvested portion of any equity or equity-linked award. In addition, Aptiv prohibits Mr. Butterworth from purchasing Aptiv securities on margin or holding Aptiv securities in a margin account. Aptiv also prohibits Mr. Butterworth from pledging Aptiv’s securities as collateral for a loan.
 
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Independent Compensation Consultant
The Aptiv Compensation Committee retains Compensation Advisory Partners LLC (“CAP”) as its independent compensation consultant. The scope of the work done by CAP during 2016 for the Aptiv Compensation Committee included the following:
 
 	•	 	Providing analyses and recommendations that inform the Aptiv Compensation Committee’s decisions;	
 
 	•	 	Preparing and evaluating market pay data and competitive position benchmarking;	
 
 	•	 	Assisting in the design and development of Aptiv’s executive compensation programs;	
 
 	•	 	Providing updates on market compensation trends and the regulatory environment as they relate to executive compensation;	
 
 	•	 	Reviewing various management proposals presented to the Aptiv Compensation Committee related to executive compensation; and	
 
 	•	 	Working with the Aptiv Compensation Committee to validate and strengthen Aptiv’s pay-for-performance relationship and alignment with shareholders.	
The Aptiv Compensation Committee assessed the independence of CAP pursuant to SEC and NYSE rules and concluded that no conflict of interest existed that would prevent CAP from independently representing the Aptiv Compensation Committee. CAP does not perform other services for Aptiv, and will not do so without the prior consent of the Chair of the Aptiv Compensation Committee. CAP meets with the Aptiv Compensation Committee Chair and the Aptiv Compensation Committee outside the presence of management. In addition, CAP participates in all of the Aptiv Compensation Committee’s meetings and, when requested by the Aptiv Compensation Committee Chair, in the preparatory meetings and the executive sessions.
Compensation Risk Assessment
Pay Governance, an independent executive compensation consulting firm, conducted a risk assessment of Aptiv’s compensation programs in January 2017 and concluded that Aptiv’s compensation policies, practices and programs do not create risks that are reasonably likely to have a material adverse effect on Aptiv. The assessment included a review of Aptiv’s incentive plan structures, pay practices, and governance process, including the Aptiv Compensation Committee’s oversight of such programs, and interviews with executives representing Aptiv Accounting, Finance, HR and Internal Audit.
The Aptiv Compensation Committee and CAP reviewed the 2017 assessment and discussed the report with Aptiv management. The Aptiv Compensation Committee agreed that Aptiv’s compensation policies, practices and programs did not create risks that were reasonably likely to have a material adverse effect on Aptiv. In doing so, the Aptiv Compensation Committee also reaffirmed the following key risk mitigating factors with respect to Aptiv’s named executive officers:
 
 	•	 	Mix of fixed versus variable, cash versus equity-based and short- versus long-term compensation with an emphasis on equity-based pay;	
 
 	•	 	Incentive award opportunities, with performance-based awards capped at two times the target amount, that span both annual and overlapping, multiyear time periods and condition payout on a range of financial metrics (including total shareholder return);	
 
 	•	 	Application of a clawback policy; and	
 
 	•	 	Stock ownership guidelines and the prohibition of hedging and pledging.	
After the separation, the Delphi Technologies Compensation Committee will adopt and develop practices and procedures with respect to risk assessment of compensation practices within the framework of the compensation plans adopted by us. It is currently expected that these compensation plans will be substantially similar to Aptiv’s compensation plans.
 
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Tax and Accounting Considerations
Section 162(m) generally limits the tax deductibility of compensation paid to Aptiv’s chief executive officer and each of its next three most highly compensated executive officers (excluding the chief financial officer) that exceeds $1 million in any taxable year unless the compensation over $1 million qualifies as “performance-based” within the meaning of Section 162(m). It is Aptiv’s policy to structure compensation arrangements with Aptiv’s executive officers to potentially qualify as performance-based so as to potentially maximize the tax deductibility of that compensation for U.S. federal income tax purposes; however, there are cases where the benefit of such tax deductibility is outweighed by the need for flexibility or the attainment of other objectives. The Aptiv Compensation Committee may from time to time award compensation that is not tax deductible if the Aptiv Compensation Committee determines that it is in Aptiv’s and its shareholders’ best interests. Moreover, even if the Aptiv Compensation Committee intends to grant compensation that qualifies as “performance-based” compensation for purposes of Section 162(m), Aptiv cannot guarantee that such compensation will so qualify or ultimately will be deductible.
After the separation, the Delphi Technologies Compensation Committee will adopt and develop practices and procedures with respect to compensation decisions relating to the deductibility of compensation within the framework of the compensation plans adopted by us. It is currently expected that these compensation plans will initially be substantially similar to Aptiv’s compensation plans.
Treatment of Outstanding Aptiv Equity Compensation in the Spin-Off
We currently anticipate that each outstanding Aptiv RSU award held by the NEOs as of the separation will be converted into an award with respect to our ordinary shares. In each case, the award will be adjusted in a manner intended to preserve the aggregate intrinsic value of the original Aptiv RSU award from directly before to directly after the spin-off and, other than regarding performance-based RSU awards, the terms of the RSU awards, such as vesting dates, will generally remain substantially the same.
We currently anticipate that the target number of RSUs and the performance objectives and criteria applicable to each outstanding Aptiv performance-based RSU award held by the NEOs as of the separation will be equitably adjusted in accordance with the terms of Aptiv’s equity compensation plans so that, generally, each such award will retain directly after the spin-off approximately the same intrinsic value that the award had directly prior to the spin-off. Specific treatment may, however, depend on the year in which the performance-based RSUs were originally granted.
Our Anticipated Compensation Programs
We believe the Aptiv executive compensation programs described above were both effective at retaining and motivating Mr. Butterworth and competitive as compared to compensation programs at peer companies. The executive compensation programs that will initially be adopted by the Company are currently expected to be substantially similar to those in place at Aptiv immediately prior to the spin-off. However, after the spin-off, the Delphi Technologies Compensation Committee will continue to evaluate our compensation and benefit programs and may make adjustments, which may be significant, as necessary to meet prevailing business needs and strategic priorities. Adjustments to elements of our compensation programs may be made going forward if appropriate, based on industry practices and the competitive environment for a newly-formed, publicly-traded company of our size, or for other reasons.
Arrangements with Mr. Sehgal
In connection with his commencement of employment in October 2017, Mr. Sehgal entered into an offer letter and a Contract of Employment that collectively describe certain terms of Mr. Sehgal’s initial compensation arrangements. In accordance with those arrangements, Mr. Sehgal was initially hired as an employee of Aptiv. At
 
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the time of the spin-off, Mr. Sehgal is expected to transition employment to the Company, where he will serve as our Chief Financial Officer. The arrangements provide that Mr. Sehgal will receive an initial annual base salary of $607,500 and will participate in his employer’s annual incentive plan and long-term incentive program.
Mr. Sehgal’s annual incentive award opportunity for 2017 will be provided under Aptiv’s Annual Incentive Plan, will have a target payout equal to 80% of Mr. Sehgal’s base salary, and may be earned at up to 200% of target based on the level of achievement against corporate and individual performance objectives. The 2017 annual incentive award payout will be pro-rated to reflect the number of months Mr. Sehgal is employed during 2017, but it will be payable at the greater of target and actual performance.
Subject to the approval of the Aptiv Compensation Committee (for grants made prior to the separation) or the Delphi Technologies Compensation Committee (for grants made following the separation), Mr. Sehgal’s annual long-term incentive opportunity will initially have a value equal to $1,300,000, calculated as described in the offer letter. Mr. Sehgal’s first annual long-term incentive award is expected to be made (subject to the approval of the Aptiv Compensation Committee) in October 2017 on a pro-rated basis (in other words, having a target value of $975,000), 25% of which award will be in the form of time-based RSUs that vest annually over three years, and 75% of which award will be in the form of performance-based RSUs initially tied to Aptiv’s performance against applicable metrics over a three-year performance period. As a condition to receiving this first long-term incentive award, Mr. Sehgal will be required to sign a confidentiality and non-interference agreement that includes terms substantially similar to those described above for Mr. Butterworth.
Under Mr. Sehgal’s offer letter, Mr. Sehgal also received an initial cash payment of $202,500, subject to repayment by Mr. Sehgal if he voluntarily resigns employment within 24 months of his hire date. The Contract of Employment provides that Mr. Sehgal’s employer will provide Mr. Sehgal with a company car cash allowance equal to $15,163 (unless Mr. Sehgal chooses to participate in the applicable company car scheme). The Contract of Employment also provides for 27 days of vacation per full calendar year (pro-rated for the first year of employment) and “sick pay,” which for Mr. Sehgal’s first five years of service could be provided for up to three months following certain illnesses. Mr. Sehgal will also be eligible to participate in certain of his employer’s retirement and other employee benefit programs (including private medical insurance).
Mr. Sehgal’s Contract of Employment does not have a fixed term or expiration date. During the first six months of employment, Mr. Sehgal’s employment may be terminated by either party on three months’ notice. Following such six-month period, Mr. Sehgal’s employment may be terminated by either party on six months’ notice. In the event either party gives such notice, the employer may pay Mr. Sehgal base salary in lieu of all or a portion of such notice rather than asking Mr. Sehgal to work his notice period. Further, Mr. Sehgal will be entitled to certain severance benefits in the event of certain transactions or situations involving the Company and a termination of his employment without cause (as described in his offer letter), subject to a general release of claims by Mr. Sehgal. Such severance benefits would consist of (1) monthly installment payments equal to 18 months of his base salary (reduced by the amount of any compensation during any notice period, as described above), which payments will cease if Mr. Sehgal is employed by an entity other than Aptiv and its subsidiaries or affiliates or the Company and its subsidiaries or affiliates prior to the end of the 18-month period, plus (2) a lump sum in cash equal to the value of Mr. Sehgal’s annual long-term incentive target ($1,300,000), less the value of any shares that may vest on a pro-rata basis, valued at target on the termination date.
Mr. Sehgal is employed in the United Kingdom, and his salary, initial cash payment and car allowance are paid in pounds sterling. Certain U.S. Dollar amounts in this information statement with respect to Mr. Sehgal have been converted from pounds sterling at a rate of approximately 1.35 U.S. Dollars to one pound sterling. The exchange rate used was calculated as of September 19, 2017.
Arrangements with Mr. Harrington
In connection with his commencement of employment with Aptiv in October 2017, Mr. Harrington received an offer letter that describes certain terms of Mr. Harrington’s initial compensation arrangements with the
 
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Company. In accordance with the offer letter, Mr. Harrington was initially hired as an employee of Aptiv. At the time of the spin-off, Mr. Harrington is expected to transition employment to the Company, where he will serve as our Senior Vice President and General Counsel. Under the offer letter, Mr. Harrington will receive an initial annual base salary of $575,000 and will participate in his employer’s annual incentive plan and long-term incentive program.
Mr. Harrington’s annual incentive award opportunity for 2017 will be provided under Aptiv’s Annual Incentive Plan, will have a target payout equal to 80% of Mr. Harrington’s base salary, and may be earned at up to 200% of target based on the level of achievement against corporate and individual performance objectives. The 2017 target award will be pro-rated to reflect the number of months Mr. Harrington is employed during such year, but will be payable at the greater of target and actual performance.
Subject to the approval of the Aptiv Compensation Committee (for grants made prior to the separation) or the Delphi Technologies Compensation Committee (for grants made following the separation), Mr. Harrington’s initial annual long-term incentive opportunity will have a value equal to $1,200,000, calculated as described in the offer letter. Mr. Harrington’s first annual equity award will be made (subject to the approval of the Aptiv Compensation Committee) in 2018, 25% of which award will be in the form of time-based RSUs that vest annually over three years, and 75% of which award will be in the form of performance-based RSUs initially tied to performance against applicable metrics over a three-year performance period. Mr. Harrington will also be entitled to an initial performance-based RSU grant for the 2017-2019 performance period valued at $1,125,000, to be granted (subject to the approval of the Aptiv Compensation Committee) in October 2017.
Under Mr. Harrington’s offer letter, Mr. Harrington is also eligible to receive (1) in March 2018, a cash payment equal to $307,406, representing the target annual incentive that Mr. Harrington forfeited when he left his prior employer, and (2) one year from his hire date, an additional cash equal to $275,000. Both of such payments are subject to repayment by Mr. Harrington if he voluntarily resigns employment within 24 months of his hire date. The offer letter also provides for 20 days of vacation per year. Mr. Harrington will also be eligible to participate in certain of the employer’s retirement and other employee benefit programs. In connection with his employment, Mr. Harrington is required to sign a confidentiality and non-interference agreement that includes terms substantially similar to those described above for Mr. Butterworth.
Mr. Harrington will be entitled to certain severance benefits in the event of certain transactions or situations involving the Company and a termination of his employment without cause or for good reason (as described in his offer letter), subject to a general release of claims by Mr. Harrington. Such severance benefits would consist of (1) installment payments equal to 18 months of Mr. Harrington’s base salary, which payments will cease if Mr. Harrington is employed by an entity other than Aptiv and its subsidiaries or affiliates or the Company and its subsidiaries or affiliates prior to the end of the 18-month period, (2) if COBRA coverage is elected, a subsidized COBRA benefit for up to 18 months, (3) a lump sum cash payment equal to the value of Mr. Harrington’s annual long-term incentive target ($1,200,000) plus the value of his initial performance-based RSU grant ($1,125,000), less the value of any shares that vest on a pro-rata basis valued at target at the termination date, and (4) in the event Mr. Harrington has not yet reached one year of employment, payment of the $275,000 one-time cash incentive.
Mr. Harrington is providing services in the United Kingdom on expatriate assignment. As a result, pursuant to an arrangement with Mr. Harrington, Mr. Harrington is eligible for expatriate benefits, including tax equalization and tax preparation services. Aptiv may also provide assistance in the form of a car allowance, direct auto purchase or direct auto lease, depending on the host location practice.
Other Arrangements
It is currently anticipated that, in connection with the separation, we will adopt a “double trigger” severance program that is substantially similar to the current Aptiv program. Under such program, it is expected that
 
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Mr. Sehgal and Mr. Harrington would be entitled to receive certain severance benefits from us in the case of (1) a change in control of the Company occurring after completion of the separation and (2) a qualifying termination of the applicable NEO’s employment with us or our subsidiaries and affiliates. Such benefits are expected to consist of a lump sum payment equal to (1) an amount equal to two times the NEO’s annual base salary plus target annual incentive, plus (2) 24 months of medical benefit continuation premiums.
In connection with the spin-off, it is anticipated that outstanding Aptiv annual incentive award opportunities of the NEOs will be equitably adjusted to reflect the spin-off. Further, it is anticipated that the NEOs’ outstanding RSUs will be equitably adjusted in connection with the spin-off, as further described above in the “Treatment of Outstanding Aptiv Equity Compensation in the Spin-Off” section.
 
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2016 SUMMARY COMPENSATION TABLE
The table below sets forth specified information regarding the compensation of our NEOs under Aptiv’s compensation programs during 2016. Mr. Butterworth, as a named executive officer of Aptiv, had participated during 2016 in Aptiv’s executive compensation programs. Neither Mr. Sehgal nor Mr. Harrington was an Aptiv employee or an Aptiv director during 2016, so the following information about Aptiv’s historical executive compensation does not apply to them.

Name and Principal Position	  	Year	 	  	Salary
($)	 	  	Bonus
($) (2)	 	  	Stock
Awards
($) (3)	 	  	Non-Equity
Incentive Plan
Compensation
($) (4)	 	  	Change in Pension
Value and Non-
Qualified Deferred
Compensation
Earnings ($)	 	  	All Other
Compensation
($) (5)	 	  	Total($)	 	
Liam Butterworth (1)	  	 	2016	 	  	 	578,689	 	  	 	865,800	 	  	 	1,255,157	 	  	 	527,058	 	  	 	—  	 	  	 	85,884	 	  	 	3,312,588	 	
President and Chief Executive Officer	  				  				  				  				  				  				  				  				
Vivid Sehgal (6)	  	 	2016	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
Chief Financial Officer	  				  				  				  				  				  				  				  				
James Harrington (6)	  	 	2016	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
Senior Vice President and General Counsel	  				  				  				  				  				  				  				  				

(1)	Mr. Butterworth received a base salary increase in 2016. Mr. Butterworth’s base salary increased to $584,970. Mr. Butterworth is a Luxembourg employee and his salary, bonus and other compensation items are paid in Euros. U.S. Dollar amounts in this information statement with respect to Mr. Butterworth have been converted from Euros at a rate of 1.11 Dollars to one Euro. The exchange rate used was calculated by averaging exchange rates for each calendar month in 2016.	
(2)	Mr. Butterworth received a bonus payment of $865,800 in 2016 related to becoming an Aptiv officer in 2014.	
(3)	The award value reflected in the “Stock Awards” column is the grant date fair value of Mr. Butterworth’s Aptiv long-term incentive awards determined in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718. The 2016 grant date for accounting purposes for the annual award was set at February 28, 2016, as approved by the Aptiv Board and the Aptiv Compensation Committee. For assumptions used in determining the fair value of these awards, see Note 21. Share-Based Compensation to the Consolidated Financial Statements in Aptiv’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. The award value includes the value of Aptiv performance-based RSUs based on target performance. Assuming maximum performance achievement and based on grant date share price, for Mr. Butterworth’s Aptiv performance-based RSUs granted in 2016, the value in the “Stock Awards” column would be $2,178,008.	
(4)	The “Non-Equity Incentive Plan Compensation” column reflects payments made under Aptiv’s Annual Incentive Plan.	
(5)	Amounts reported in the “All Other Compensation” column for 2016 reflect the following:	

Name	  	Aptiv
Contributions (a)	 	  	Life
Insurance (b)	 	  	Expatriate
Assignment	 	  	Severance	 	  	Other (c)	 	  	Total	 	
Liam Butterworth	  	$	48,814	 	  	$	4,416	 	  	 	—  	 	  	 	—  	 	  	$	32,654	 	  	$	85,884	 	
 
(a)	This column reflects contributions to a defined contribution plan for eligible employees in Luxembourg. The 2016 contribution made on Mr. Butterworth’s behalf is based on 2016 eligible salary and is calculated as 10% of salary in excess of a threshold of 62,721 Euros.	
(b)	This column reflects the aggregate incremental cost to Aptiv with respect to Mr. Butterworth for premium payments made regarding his life insurance policy.	
(c)	This amount represents Aptiv-provided automobile and related expenses of $30,557, and a vacation allowance. Amounts reflected for Mr. Butterworth are generally available to all similar Luxembourg-based Aptiv executives or employees, and were paid in Euros and converted in this information statement to U.S. Dollars at a rate of 1.11 Dollars to one Euro. The exchange rate used was calculated by averaging exchange rates for each calendar month in 2016.	
 
(6)	Neither Mr. Sehgal nor Mr. Harrington was employed by us or Aptiv in 2016 and therefore no historical information is provided for them.	
 
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2016 GRANTS OF PLAN-BASED AWARDS
The table below sets forth the threshold, target and maximum award payout opportunities (or full award opportunity, as applicable) for Aptiv plan-based awards that were granted to our NEOs in 2016.

Name	  	Grant
Date	 	  	Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards (1)	 	  	Estimated Future Payouts Under
Equity Incentive Plan Awards (2)	 	  	All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#) (3)	 	  	Grant Date
Fair Value
of Stock
and
Option
Awards
($) (4)	 	
	  			  	Threshold
($)	 	  	Target
($)	 	  	Maximum
($)	 	  	Threshold
(#)	 	  	Target
(#)	 	  	Maximum
(#)	 	  			  			
Liam Butterworth	  	 	—  	 	  	 	248,613	 	  	 	497,225	 	  	 	994,450	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
	  	 	2/28/2016	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	4,664	 	  	 	311,182	 	
	  	 	2/28/2016	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	6,995	 	  	 	13,990	 	  	 	27,980	 	  	 	—  	 	  	 	943,975	 	
Vivid Sehgal (5)	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
James Harrington (5)	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	

(1)	These columns show the threshold, target and maximum awards payable to Mr. Butterworth under the 2016 Aptiv Annual Incentive Plan. The final award is determined by both Aptiv corporate and Powertrain Systems division performance, as well as individual performance, as determined by the Aptiv Compensation Committee.	
(2)	These columns show the threshold, target and maximum number of Aptiv RSUs possible under the Aptiv performance-based RSUs granted in 2016 pursuant to Aptiv’s Long-Term Incentive Plan. The actual payout generally will be based on three Aptiv performance metrics (Average Return on Net Assets, Cumulative Net Income and relative Aptiv TSR) during the performance period from January 1, 2016 through December 31, 2018.	
(3)	This column shows the number of Aptiv time-based RSUs granted to Mr. Butterworth in 2016 pursuant to Aptiv’s Long-Term Incentive Plan excluding dividend equivalents. These Aptiv time-based RSUs were designed to generally vest ratably over three years on the first, second and third anniversary dates of the date of grant.	
(4)	This column reflects the grant date fair value of each award determined in accordance with FASB ASC Topic 718, including, for the performance-based award, the target outcome of the performance conditions, excluding the effect of estimated forfeitures and dividend equivalents. Except for the Aptiv performance-based RSUs based on Aptiv’s relative TSR (25% of the annual performance-based RSUs), the grant date value for the equity awards was determined based on the grant date closing price of Aptiv’s stock on the New York Stock Exchange. If the grant was issued on a non-trading day, the grant date closing price was deemed to be the closing price of Aptiv’s stock on the last preceding date on which any reported sale occurred. The closing price of Aptiv stock on February 26, 2016 was $66.72. The grant date fair value for the Aptiv relative TSR performance-based RSUs was determined using a Monte Carlo simulation and was based on a price of $69.74 per share.	
(5)	Neither Mr. Sehgal nor Mr. Harrington was employed by us or Aptiv in 2016 and therefore no historical information is provided for them.	
Mr. Butterworth is a party to an employment agreement with Aptiv that generally describes the compensation and benefits initially provided to him upon employment. For more information about this arrangement, refer to “Potential Payments Upon Termination or Change in Control”. For more information about Mr. Butterworth’s relative mix of salary and other compensation elements in proportion to total compensation, refer to “Compensation Discussion and Analysis—Aptiv 2016 Target Annual Total Direct Compensation Mix”. Messrs. Sehgal and Harrington are each a party to employment arrangements with Aptiv or its affiliates that generally describe the compensation and benefits provided to them upon employment. For more information, see “Compensation Discussion and Analysis–Our Anticipated Compensation Programs”.
 
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2016 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The values displayed in the table below reflect the NEOs’ outstanding Aptiv long-term incentive awards as of December 31, 2016. The market values are calculated using a share price of $67.35, the December 30, 2016 closing price of Aptiv’s stock. The Aptiv performance-based RSUs granted in 2015 and 2016, labeled with performance periods 1/1/2015-12/31/2017, 1/1/2016-12/31/2018 and 1/1/2015-12/31/2018, are presented at the maximum level of performance.

Name	  	Stock Awards	 	
	  	Restricted
Stock Unit
Grant Date or
Performance
Period (1)	 	Number of
Shares or Units
of Stock That
Have Not
Vested (#) (2)	 	  	Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($) (3)	 	  	Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested (#) (4),(5)	 	  	Equity Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested ($) (3)	 	
Liam Butterworth	  	2/18/2014	 	 	1,204	 	  	 	81,089	 	  	 	—  	 	  	 	—  	 	
	  	2/18/2015	 	 	2,983	 	  	 	200,905	 	  	 	—  	 	  	 	—  	 	
	  	2/18/2015 (6)	 	 	22,365	 	  	 	1,506,283	 	  	 	—  	 	  	 	—  	 	
	  	2/28/2016	 	 	4,725	 	  	 	318,229	 	  	 	—  	 	  	 	—  	 	
	  	1/1/2015-12/31/2017	 	 	—  	 	  	 	—  	 	  	 	26,838	 	  	 	1,807,539	 	
	  	1/1/2015-12/31/2018 (7)	 	 	—  	 	  	 	—  	 	  	 	44,730	 	  	 	3,012,566	 	
	  	1/1/2016-12/31/2018	 	 	—  	 	  	 	—  	 	  	 	28,341	 	  	 	1,908,766	 	
Vivid Sehgal (8)	  	—  	 	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
James Harrington (8)	  	—  	 	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	

(1)	To better explain the information in this table we included the Aptiv time-based RSU award grant dates and the performance periods of Aptiv performance-based RSU awards. All awards include dividend equivalents.	
(2)	This column shows the unvested Aptiv time-based RSU awards as of December 31, 2016:	
 
 	•	 	Units granted on 2/18/2014 were generally designed to vest on February 17, 2017.	
 
 	•	 	Units granted on 2/18/2015 were generally designed to vest ratably on February 17, 2017 and February 16, 2018, except as described in footnote 6 below.	
 
 	•	 	Units granted on 2/28/2016 were generally designed to vest ratably on each of the first, second and third anniversaries of the grant date.	
 
(3)	The amount shown represents the market value of Aptiv awards using a per share price of $67.35, the closing price of Aptiv’s stock on December 30, 2016.	
(4)	Aptiv RSUs represent maximum performance level.	
(5)	Of the awards reflected in this column, the Aptiv 2015-2017 performance-based RSUs were generally designed to be settled in early 2018 after the results for the three-year performance period are determined and the Aptiv 2016-2018 performance-based RSUs were generally designed to be settled in early 2019 after the results for the three-year performance period are determined.	
(6)	Time-based Aptiv continuity awards were generally designed to cliff vest on December 31, 2018.	
(7)	Performance-based Aptiv continuity awards were generally designed to cliff vest on December 31, 2018 based on satisfaction of the performance condition.	
(8)	Neither Mr. Sehgal nor Mr. Harrington was employed by us or Aptiv in 2016 and therefore no historical information is provided for them.	
 
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2016 OPTION EXERCISES AND STOCK VESTED TABLE
The following table sets forth information regarding vested Aptiv stock awards during 2016 for our NEOs. The value realized on vesting is equal to the market price of the underlying Aptiv shares on the date of vest.

Name	  	Stock Awards	 	
	  	Number of Shares
Acquired on
Vesting(#) (1)	 	  	Value Realized
on Vesting
($) (1)	 	
Liam Butterworth	  	 	23,295	 	  	 	1,542,360	 	
Vivid Sehgal (2)	  	 	—  	 	  	 	—  	 	
James Harrington (2)	  	 	—  	 	  	 	—  	 	

(1)	The shares and values listed in these columns include Aptiv performance-based RSUs that were earned as of December 31, 2016, and settled on February 17, 2017.	
(2)	Neither Mr. Sehgal nor Mr. Harrington was employed by us or Aptiv in 2016 and therefore no historical information is provided for them.	
Potential Payments Upon Termination Or Change In Control
Employment Arrangements
Mr. Butterworth has an employment agreement with Aptiv that specifies the terms and conditions of his employment and compensation and benefits that are in accordance with his employment in Luxembourg. Aptiv does not have an individual change in control agreement with Mr. Butterworth. During 2016, the only applicable change in control provisions were those provided in Aptiv’s incentive plans, as described below.
Mr. Butterworth, by virtue of his participation in Aptiv’s annual Long-Term Incentive Plan equity grant program, must sign a grant agreement, as well as a non-interference and confidentiality agreement, described above in the “Compensation Discussion and Analysis” section. The non-interference agreement includes both non-compete and non-solicitation covenants.
Messrs. Sehgal and Harrington are each a party to employment arrangements with Aptiv or its affiliates that generally describe the compensation and benefits provided to them upon employment. For more information, see “Compensation Discussion and Analysis–Our Anticipated Compensation Programs”.
Aptiv Annual Incentive Plan
In the event of a change in control of Aptiv, Mr. Butterworth’s Aptiv annual incentive target award will be prorated for the time period between the plan start date and the effective change in control date. A payment will also be calculated for that time period based on actual performance and compared to the prorated target, with Mr. Butterworth receiving the larger of the two values. Payment of the award will be made by March 15 of the calendar year following the year in which a change in control occurs.
A change in control of Aptiv under the annual incentive plan occurs if any of the following events occur:
 
 	•	 	A change in ownership or control of Aptiv resulting in any person or group other than Aptiv or an Aptiv employee benefit plan acquiring securities of Aptiv possessing more than 50% of the total combined voting power of Aptiv’s equity securities outstanding after such acquisition;	
 
 	•	 	The majority of the Aptiv Board as of the date of the initial public offering is replaced by persons whose election was not approved by a majority of the incumbent board; or	
 
 	•	 	The sale of all or substantially all of the assets of Aptiv, in one or a series of related transactions, to any person or group other than Aptiv.	
 
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If involuntarily terminated without “Cause” as defined below, Mr. Butterworth will also be eligible for a prorated portion of his Aptiv annual incentive award. The period used to determine the prorated award will be the beginning of the performance period to Mr. Butterworth’s termination date.
Aptiv Long-Term Incentive Plan
An Aptiv equity award must be outstanding for one year in order to receive any benefit at termination. Upon a voluntary resignation from Aptiv, including retirement, any Aptiv time-based RSUs that have not vested will be canceled. Upon a termination without cause, for good reason or due to death or disability, the Aptiv time-based RSUs will be prorated over the period between the grant date and termination date. Any unvested pro-rata awards will be delivered at the next scheduled vesting date.
Upon a termination without cause, for good reason or due to retirement, death or disability, any outstanding Aptiv performance-based RSUs will be prorated over the period between the grant date and termination date. The final performance payout will be determined at the end of the performance period and Aptiv shares will be distributed at the time of the general distribution.
If Mr. Butterworth voluntarily departs (with the exception of the retirement provisions discussed above) or is terminated for cause, or in the event of any termination prior to the first anniversary of the grant date, all outstanding unvested Aptiv equity awards will be canceled.
“Cause” is defined in the Aptiv Long-Term Incentive Plan as:
 
 	•	 	Indictment for a felony or for any other crime that has or could be reasonably expected to have an adverse impact on performance of duties to Aptiv or on the business or reputation of Aptiv;	
 
 	•	 	Mr. Butterworth being the subject of any order regarding a fraudulent violation of securities laws;	
 
 	•	 	Conduct in connection with employment or service that is not taken in good faith and has resulted or could reasonably be expected to result in material injury to the business or reputation of Aptiv;	
 
 	•	 	Willful violation of Aptiv’s Code of Ethical Business Conduct or other material policies;	
 
 	•	 	Willful neglect in the performance of duties for Aptiv, or willful or repeated failure or refusal to perform these duties; or	
 
 	•	 	Material breach of any applicable employment agreement.	
“Good Reason” is defined in the Aptiv Long-Term Incentive Plan as:
 
 	•	 	A material diminution in base salary;	
 
 	•	 	A material diminution in authority, duties or responsibilities from those in effect immediately prior to the Aptiv change in control;	
 
 	•	 	Relocation of Mr. Butterworth’s principal place of employment more than 50 miles from the location immediately prior to the Aptiv change in control; or	
 
 	•	 	Any other action or inaction that is a material breach by Aptiv of the agreement under which Mr. Butterworth provides services to Aptiv.	
Upon a qualifying termination within two years after a change in control of Aptiv, or upon a change in control of Aptiv if a replacement award is not provided, outstanding unvested Aptiv equity awards will vest as follows:
 
 	•	 	Aptiv time-based RSUs will vest in full; and	
 
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 	•	 	After a determination by the Aptiv Compensation Committee of Aptiv’s performance at the time of the Aptiv change in control, the number of Aptiv performance-based RSUs that will vest will be equal to the greater of (a) the Aptiv performance-based RSUs earned through the Aptiv change in control date, or (b) 100% of the Aptiv performance-based RSUs granted.	
A replacement award is an award with respect to the stock of Aptiv or its successor that is at least equal in value to the outstanding award, is a publicly traded security and has no less favorable terms than the outstanding award. A qualifying termination after an Aptiv change in control includes any termination by Aptiv without cause, or by Mr. Butterworth for good reason, or due to death or disability.
Severance Payments
Mr. Butterworth is eligible to receive severance payments under Aptiv’s severance plan should he be involuntarily terminated.
The following table describes the payments the NEOs would have earned on December 31, 2016, subject to review and approval by the Aptiv Compensation Committee, had their employment terminated on such date under various scenarios, including a qualifying termination of employment after a change in control of Aptiv.
Potential Payments upon Termination or Change in Control

Name	 	Component	 	Voluntary
Resignation (5)	 	 	Involuntary
(Not For
Cause)	 	 	Involuntary
(For Cause)	 	 	Change in
Control and
Termination	 	 	Death/
Disability	 	
Liam Butterworth	 	Cash Severance (1)	 	 	—  	 	 	 	1,623,292	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
	 	Annual Incentive Plan (2)	 	 	527,058	 	 	 	527,058	 	 	 	—  	 	 	 	527,058	 	 	 	527,058	 	
	 	Long-Term Incentives—Time-Based Restricted Stock Units (3)(4)	 	 	—  	 	 	 	871,640	 	 	 	—  	 	 	 	2,106,393	 	 	 	871,640	 	
	 	Long-Term Incentives—Performance-Based Restricted Stock Units (3)(4)	 	 	729,329	 	 	 	2,034,515	 	 	 	—  	 	 	 	4,093,728	 	 	 	2,034,515	 	
	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	Total	 	 	1,256,387	 	 	 	5,056,505	 	 	 	—  	 	 	 	6,727,179	 	 	 	3,433,213	 	
	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Vivid Sehgal (6)	 	—  	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
James Harrington (6)	 	—  	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	

(1)	In the case of a qualifying termination, Mr. Butterworth is eligible to receive severance payments equal to 18 months of base salary, plus 1.5 times the value of the Aptiv annual incentive plan target award.	
(2)	In all scenarios except a voluntary termination or an involuntary termination for cause, Mr. Butterworth would receive a prorated Aptiv annual incentive award. If Mr. Butterworth voluntarily terminates employment, he must have worked on the last business day of the year in order to receive his Aptiv annual incentive award; if not, the award is forfeited in its entirety. For Mr. Butterworth, Aptiv annual incentive award payments are subject to performance assessment and will be paid after the conclusion of the performance period.	
(3)	The value shown is based on the market value of the award using a per-share price of $67.35, the closing price of Aptiv’s stock on December 30, 2016.	
(4)	In the event of a qualifying termination within two years after an Aptiv change in control Mr. Butterworth’s awards will vest as described under “Aptiv Long-Term Incentive Plan”. Also as described under “Aptiv Long-Term Incentive Plan”, if at the time of an Aptiv change in control Mr. Butterworth does not receive replacement awards, his awards will vest upon the Aptiv change in control regardless of whether his employment is terminated. The Aptiv performance-based RSUs included represent a 100% payout of each award.	
(5)	In the event of a voluntary termination on December 31, 2016, Mr. Butterworth would receive the value of his 2014 performance-based RSUs.	
 
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(6)	Neither Mr. Sehgal nor Mr. Harrington was employed by us or Aptiv during 2016 and therefore no historical information is provided for them.	
All amounts are estimates only, and actual amounts will vary depending upon the facts and circumstances applicable at the time of the triggering event.
 
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APPENDIX A
Reconciliation of Non-GAAP Financial Measures
The tables below present a reconciliation of certain Aptiv non-GAAP financial measures to GAAP:
Aptiv Adjusted Net Income:

 	  	Year Ended December 31,	 	
(in millions)	  	    2016    	 	  	    2015    	 	  	    2014	 	
Net income attributable to Aptiv	  	$	1,257	 	  	$	1,450	 	  	$	1,351	 	
Income from discontinued operations attributable to Aptiv, net of tax	  	 	(105	) 	  	 	(262	) 	  	 	(42	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Income from continuing operations attributable to Aptiv	  	 	1,152	 	  	 	1,188	 	  	 	1,309	 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Adjusting items:	  				  				  				
Restructuring	  	 	328	 	  	 	177	 	  	 	140	 	
Transaction and related costs associated with acquisitions	  	 	—  	 	  	 	43	 	  	 	6	 	
Other acquisition and portfolio project costs	  	 	59	 	  	 	47	 	  	 	20	 	
Asset impairments	  	 	30	 	  	 	16	 	  	 	7	 	
Debt extinguishment costs	  	 	73	 	  	 	58	 	  	 	34	 	
Reserve for Unsecured Creditors litigation	  	 	300	 	  	 	—  	 	  	 	—  	 	
(Gain) loss on business divestitures, net	  	 	(141	) 	  	 	8	 	  	 	—  	 	
Contingent consideration liability fair value adjustments	  	 	3	 	  	 	(7	) 	  	 	—  	 	
Tax impact of adjusting items (a)	  	 	(85	) 	  	 	(35	) 	  	 	(24	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Adjusted net income attributable to Aptiv	  	$	1,719	 	  	$	1,495	 	  	$	1,492	 	

(a)	Represents the income tax impacts of the adjustments made for restructuring and other special items by calculating the income tax impact of these items using the appropriate tax rate for the jurisdiction where the charges were incurred, as well as the elimination of the net impact of deferred tax asset valuation allowance changes in estimates of $15 million of valuation allowance reversals during the three months ended December 31, 2016, and $12 million of valuation allowances recorded during the three months ended December 31, 2015.	
 
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Appendix A (continued)
Aptiv Cash Flow Before Financing:

 	  	Year Ended December 31,	 	
(in millions)	  	2016	 	 	2015	 	 	2014	 	
Cash flows from operating activities:	  				 				 				
Income from continuing operations	  	$	1,218	 	 	$	1,261	 	 	$	1,380	 	
Adjustments to reconcile net income to net cash provided by operating activities:	  				 				 				
Depreciation and amortization	  	 	704	 	 	 	540	 	 	 	540	 	
Restructuring expense, net of cash paid	  	 	73	 	 	 	44	 	 	 	(22	) 	
Working capital	  	 	(221	) 	 	 	(51	) 	 	 	82	 	
Pension contributions	  	 	(95	) 	 	 	(91	) 	 	 	(110	) 	
Other, net	  	 	262	 	 	 	(36	) 	 	 	175	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by operating activities from continuing operations	  	 	1,941	 	 	 	1,667	 	 	 	2,045	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from investing activities:	  				 				 				
Capital expenditures	  	 	(828	) 	 	 	(704	) 	 	 	(779	) 	
Net proceeds from divestiture of discontinued operations	  	 	48	 	 	 	730	 	 	 	—  	 	
Net proceeds from business divestitures	  	 	197	 	 	 	11	 	 	 	—  	 	
Cost of business acquisitions, net of cash acquired	  	 	(15	) 	 	 	(1,654	) 	 	 	(345	) 	
Cost of technology investments	  	 	(3	) 	 	 	(23	) 	 	 	(5	) 	
Settlement of derivatives	  	 	(1	) 	 	 	—  	 	 	 	—  	 	
Other, net	  	 	28	 	 	 	10	 	 	 	17	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in investing activities from continuing operations	  	 	(574	) 	 	 	(1,630	) 	 	 	(1,112	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Adjustment for net proceeds from divestiture of discontinued operations	  	 	(48	) 	 	 	(730	) 	 	 	—  	 	
Adjustment for net proceeds from divestiture of Mechatronics business	  	 	(197	) 	 	 	—  	 	 	 	—  	 	
Adjustment for the cost of business acquisitions, net of cash acquired	  	 	15	 	 	 	1,654	 	 	 	345	 	
Adjustment for settlement of derivatives related to business acquisition	  	 	15	 	 	 	—  	 	 	 	—  	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash flow before financing	  	$	1,152	 	 	$	961	 	 	$	1,278	 	

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 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Agreements with Aptiv
Following the separation, we and Aptiv will operate separately, each as an independent public reporting company. We and Aptiv will enter into a Separation and Distribution Agreement that will effectuate the separation and distribution. We and Aptiv will also enter into other agreements, including a Transition Services Agreement, a Tax Matters Agreement, an Employee Matters Agreement and Contract Manufacturing Service Agreements. These agreements will provide a framework for our relationship with Aptiv after the separation, and the Separation and Distribution Agreement, Tax Matters Agreement and Employee Matters Agreement provide for the allocation between Delphi Technologies and Aptiv of assets, liabilities and obligations attributable to periods prior to, at and after our separation from Aptiv.
The material agreements between us and Aptiv are described below and the expected form of such agreements will be filed as exhibits to the registration statement on Form 10 of which this information statement is a part. The summaries of each of these agreements are summaries of their material terms and do not purport to be complete. These summaries are subject to, and qualified in their entirety, by reference to the full text of the applicable agreements.
Separation and Distribution Agreement
The Separation and Distribution Agreement will set forth the agreements between us and Aptiv regarding the principal transactions required to effect our separation from Aptiv. This agreement will also address certain relationships between us and Aptiv with respect to matters relating to the separation.
The Separation and Distribution Agreement will identify the assets to be transferred, the liabilities to be assumed and the contracts to be assigned to us and which assets, liabilities and contracts will be retained by Aptiv as part of the separation, and will provide for when and how these transfers, assumptions and assignments will occur. In particular, the Separation and Distribution Agreement will provide, among other things, that, subject to the terms and conditions contained therein, (i) substantially all of the assets related to the businesses and operations of Aptiv’s powertrain systems business segment, as described in “Business,” will be transferred to us or one of our subsidiaries, (ii) substantially all liabilities arising out of or resulting from such assets, and other liabilities related to the current or former business and operations of Aptiv’s powertrain systems business, will be retained by or transferred to us or one of our subsidiaries, (iii) the assets related to the original equipment service business conducted by Aptiv’s powertrain systems business segment prior to the spin-off, to the extent related to the sale of products of other Aptiv segments to vehicle original equipment manufacturers or their affiliates, will be retained by or transferred to Aptiv or one of its subsidiaries, and (iv) all of Aptiv’s other assets and liabilities will be retained by or transferred to Aptiv or one of its subsidiaries.
Except as expressly forth in the Separation and Distribution Agreement or any ancillary agreement, neither we nor Aptiv will make any representation or warranty as to the assets, business or liabilities transferred or assumed as part of the separation, as to any consents or approvals required in connection with the transfers, as to the value of or the freedom from any security interests of any of the assets transferred, as to the non-infringement of any intellectual property, at to any warranty that any intellectual property is error-free, as to the absence or presence of any defenses or right of setoff or freedom from counterclaim with respect to any claim or other asset of either us or Aptiv, or as to the legal sufficiency of any assignment, document or instrument delivered to convey title to any asset or thing of value to be transferred in connection with the separation. Except as expressly forth in the separation agreement or any ancillary agreement, all assets will be transferred on an “as is,” “where is” basis and the respective transferees will bear the economic and legal risks that any conveyance will prove to be insufficient to vest in the transferee good and marketable title, free and clear of all security interests. The respective transferees will also generally bear the risk that any necessary approvals or notifications are not obtained or made or that any requirements of laws or judgments are not complied with.
 
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The Separation and Distribution Agreement will also provide that, in the event that the transfer or assignment of certain assets and liabilities to us or Aptiv does not occur prior to the separation, then until such assets or liabilities are able to be transferred or assigned, we or Aptiv, as applicable, will hold such assets on behalf of and for the benefit of the other party and will pay, perform, and discharge such liabilities, for which the other party will reimburse us or Aptiv, as applicable, for costs and expenses in connection with the performance and discharge of such liabilities.
Subject to the satisfaction or waiver of the conditions set forth in the section of this information statement titled “Our Separation from Aptiv—Conditions to the Distribution,” on the distribution date, Aptiv will distribute all of the ordinary shares of Delphi Technologies to the holders of Aptiv’s ordinary shares.
Pursuant to the Separation and Distribution Agreement, we will indemnify, defend and hold harmless Aptiv, each of its subsidiaries and each of their respective past and present directors, officers, employees and agents, from and against all liabilities relating to, arising out of or resulting from: (i) the liabilities assumed by us, including our failure or the failure of any of our subsidiaries or any other person to pay, perform or otherwise promptly discharge any of the liabilities assumed by us, in accordance with their respective terms, whether prior to, at or after the distribution; (ii) any breach by us or any of our subsidiaries of the Separation and Distribution Agreement or any of the ancillary agreements entered into between us and Aptiv; (iii) any third-party claims that the use by us or our subsidiaries of the intellectual property licensed to us by Aptiv infringes on the intellectual property rights of such third party; (iv) any guarantee, indemnification or contribution obligation, letter of credit reimbursement obligations, surety, bond or other credit support agreement, arrangement, commitment or understanding for the benefit of Delphi Technologies or any of its subsidiaries by Aptiv that survives the distribution; and (v) any untrue statement or alleged untrue statement of a material fact in the registration statement, this information statement or any similar disclosure document other than any such statement specifically relating to Aptiv’s business, assets or liabilities, or to Aptiv and its subsidiaries after the distribution.
Aptiv will indemnify, defend and hold harmless Delphi Technologies, each of its subsidiaries and each of their respective past and present directors, officers, employees and agents, from and against all liabilities relating to, arising out of or resulting from: (i) the liabilities assumed or retained by Aptiv, including the failure of Aptiv or any of its subsidiaries or any other person to pay, perform or otherwise promptly discharge any of the liabilities assumed or retained by Aptiv, in accordance with their respective terms, whether prior to, at or after the distribution; (ii) any breach by Aptiv or any of its subsidiaries of the Separation and Distribution Agreement or any of the ancillary agreements entered into between us and Aptiv; (iii) any third-party claims that the use by Aptiv or its subsidiaries of the intellectual property licensed to Aptiv by us infringes on the intellectual property rights of such third party; (iv) except to the extent that it relates to a liability assumed by us, any guarantee, indemnification or contribution obligation or other credit support agreement or arrangement for the benefit of Aptiv or any of its subsidiaries by Delphi Technologies that survives the distribution; and (v) any untrue statement or alleged untrue statement of a material fact in the registration statement, this information statement or any similar disclosure document specifically relating to Aptiv’s business, assets or liabilities, or to Aptiv and its subsidiaries after the distribution.
All such rights to indemnification will be in excess of available insurance. The separation agreement will also establish procedures with respect to claims subject to indemnification and related matters.
Under the Separation and Distribution Agreement, Aptiv will transfer certain intellectual property to us related to our business. With respect to registered intellectual property and related common-law rights, Aptiv will transfer those items of intellectual property that primarily relate to our business as documented by Aptiv’s books and records; all other intellectual property owned or licensed by Aptiv will be transferred to us if used or held for use exclusively in connection with our business. In connection with the transfer of such intellectual property, we will grant to Aptiv a non-exclusive, perpetual, irrevocable, royalty-free, non-transferrable license to use such intellectual property to the extent such intellectual property was used or held for use in connection with its business as of the date of the separation. Aptiv will also grant us a non-exclusive, perpetual, irrevocable, royalty
 
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free, non-transferrable license to use the intellectual property owned & retained by Aptiv, to the extent such intellectual property was used or held for use in our business as of the date of the separation, subject to certain conditions. Each party may sublicense its rights to service providers and customers and may assign its rights to affiliates or in connection with an acquisition of its business, subject to certain conditions.
Under the Separation and Distribution Agreement, we and Aptiv will agree to not solicit or hire the other party’s executives, officers or engineers for a period of one year following the distribution. Otherwise, the parties have agreed that there will be no restrictions on post-closing competitive activities pursuant to the Separation and Distribution Agreement or other agreements being entered into in connection with the separation.
In the event of any dispute arising out of the separation or distribution, we and Aptiv will agree to attempt in good faith to resolve the dispute for a period of time, and if we and Aptiv are unable to resolve disputes in the manner outlined in the Separation and Distribution Agreement, the disputes will be resolved through binding arbitration.
The Separation and Distribution Agreement will provide that it may be terminated, and the terms and conditions of the separation and distribution may be amended, modified or abandoned, at any time prior to the distribution date by and in the sole and absolute discretion of Aptiv’s board of directors. In the event of a termination of the Separation and Distribution Agreement, neither party, nor any of their directors, officers, or employees, will have any liability of any kind to the other party or any other person. After the distribution date, the Separation and Distribution Agreement may not be terminated except by an agreement in writing signed by both Aptiv and Delphi Technologies.
Delphi Technologies will be responsible for paying all costs and expenses incurred in connection with the separation and distribution, whether incurred or payable prior to, on or after the distribution, including costs and expenses relating to legal and tax counsel, financial advisors and accounting advisory work related to the separation and distribution.
Other matters governed by the Separation and Distribution Agreement will include access to financial and other information, confidential provisions, access to and provision of records and treatment of outstanding guarantees and similar credit support.
Transition Services Agreement
We and Aptiv will enter into a Transition Services Agreement prior to the distribution pursuant to which we and Aptiv and our respective subsidiaries will provide to each other, on an interim, transitional basis, certain services, including, but not limited to, services related to information technology, engineering, accounting, administrative, payroll, human resources and facilities to provide temporary assistance while developing stand-alone systems and processes. The charges for the transition services generally are intended to allow the transition services provider to fully recover the costs associated with providing the services plus a percentage of such costs and expenses.
The Transition Services Agreement will terminate no later than twenty-four (24) months after the distribution date, although most services will terminate earlier. The transition services recipient can generally terminate particular services prior to the scheduled expiration date for such service on forty-five (45) days’ prior written notice. Due to interdependencies between services, certain services may be extended or terminated early only if other services are likewise extended or terminated.
The aggregate liability of each party under the Transition Services Agreement will be limited to the fees received by Aptiv for the transition services and neither party will be liable for any special, indirect, incidental or consequential damages.
 
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Tax Matters Agreement
The Tax Matters Agreement will generally govern our and Aptiv’s respective rights, responsibilities and obligations after the distribution with respect to taxes for any tax period ending on or before the distribution date, as well as tax periods beginning before and ending after the distribution date. Generally, Aptiv will be liable for all pre-distribution U.S. federal income taxes, foreign income taxes and certain non-income taxes attributable to our business required to be reported on combined, consolidated, unitary or similar returns that include one or more members of the Aptiv group and one or more members of our group. We will generally be liable for all other taxes attributable to our business. In addition, the Tax Matters Agreement will address the allocation of liability for taxes that are incurred as a result of restructuring activities undertaken to effectuate the distribution. As a general matter, any tax due on the movement of assets or people into our group will be allocated to and paid by us. The Tax Matters Agreement will also restrict our ability to take certain actions that could result in certain of the restructuring transactions undertaken in connection with the separation failing to qualify as transactions that are generally tax-free, for U.S. federal income tax purposes, under Sections 355 and 368(a)(1)(D) of the Code.
Employee Matters Agreement
Delphi Technologies and Aptiv will enter into an Employee Matters Agreement to allocate liabilities and responsibilities relating to employment matters, employee compensation and benefits plans and programs, and other related matters. The Employee Matters Agreement governs Aptiv’s and our compensation and employee benefit obligations with respect to the current and former employees and (with respect to equity award matters) non-employee directors of each company.
The Employee Matters Agreement will provide that, in general, and subject to certain exceptions specified in the Employee Matters Agreement, Aptiv will be responsible for liabilities associated with its employees and former employees whose last employment was not with our business, and we will be responsible for liabilities associated with our employees and former employees whose last employment was with our business.
Employee Benefits
In general, our employees currently participate in various retirement, health and welfare, and other employee benefit and compensation plans maintained by Aptiv. As of December 1, 2017 (or the time otherwise specified for certain non-U.S. plans), our employees will be eligible to participate in Delphi Technologies benefit plans in accordance with the terms and conditions of our plans as in effect from time to time. Generally and subject to certain exceptions, we will create compensation and benefit plans that mirror the terms of corresponding Aptiv compensation and benefit plans, and we will credit each of our employees with his or her service with Aptiv prior to the separation under our benefit plans to the same extent such service was recognized by Aptiv and so long as such crediting does not result in a duplication of benefits.
Treatment of Equity Compensation
The Employee Matters Agreement will generally provide for the adjustment of the outstanding awards granted under the Aptiv equity compensation programs, including as follows.
With respect to Aptiv restricted stock units held by Delphi Technologies employees and non-employee directors that are outstanding as of the separation and for which the underlying security is Aptiv ordinary shares, the Employee Matters Agreement provides that each such outstanding Aptiv restricted stock unit will be equitably adjusted or converted into an award with respect to Delphi Technologies ordinary shares. Each other Aptiv restricted stock unit that is outstanding as of the separation and for which the underlying security is Aptiv ordinary shares will also be equitably adjusted or converted, but will continue to relate to Aptiv ordinary shares. In each case, the outstanding Aptiv award will be equitably adjusted or converted in a manner intended to preserve the approximate intrinsic value of such Aptiv equity award from directly before to directly after the
 
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spin-off. More specifically, with respect to each adjusted or converted award covering Delphi Technologies ordinary shares, the number of underlying shares will be determined based on a ratio, as further described in the Employee Matters Agreement, applied to the number of Aptiv ordinary shares subject to the original Aptiv award outstanding as of the separation.
Pursuant to the terms of the Employee Matters Agreement and the applicable Aptiv equity compensation plans, we currently anticipate that performance achievement with respect to performance-based restricted stock units will also be equitably adjusted in connection with the separation. Specific treatment may, however, depend on the year in which the awards were originally granted and whether the holders of such awards will continue employment with Aptiv or Delphi Technologies. To the extent that an affected employee is employed in a non-U.S. jurisdiction, and the adjustments or conversions contemplated above could result in adverse tax consequences or other adverse regulatory consequences, Aptiv may determine that a different equitable adjustment or grant will apply in order to avoid any such adverse consequences.
For purposes of vesting for all awards, continued employment with or service to Aptiv or Delphi Technologies, as applicable, will generally be treated as continued employment with respect to the adjusted restricted stock unit awards.
Miscellaneous
The Employee Matters Agreement will also address other employee-related issues and certain special circumstances and special rules for benefit arrangements in various non-U.S. jurisdictions.
Contract Manufacturing Service Agreement s
We will enter into Contract Manufacturing Service Agreements pursuant to which Aptiv subsidiaries will manufacture for us certain electronic components that are currently manufactured at facilities that we share with Aptiv. We will purchase and consign to Aptiv raw materials and components that Aptiv will use to manufacture those products and we will also own certain of the equipment Aptiv uses to produce those products. Aptiv will charge us a fee for its manufacturing services based on its costs and expenses plus a percentage of such costs. The aggregate liability under these agreements will be limited to the fees paid to Aptiv pursuant to the applicable Contract Manufacturing Service Agreement, and neither party will be liable for any special, indirect, incidental or consequential damages. Aptiv’s services under the Contract Manufacturing Service Agreements will generally expire when we relocate manufacturing of our products. The Contract Manufacturing Service Agreements are expected to expire within four years.
Statement of Policy Regarding Transactions with Related Persons
In connection with the separation and distribution, we will adopt a policy regarding the approval of any transaction or series of transactions in which we or any of our subsidiaries is a participant, the amount involved exceeds $120,000, and a “related person” (as defined under SEC rules) has a direct or indirect material interest. Under the policy, a related person must promptly disclose to our general counsel any “related person transaction” (defined as any transaction involving us and in which any related person has a direct or indirect material interest) and all material facts about the transaction. The general counsel will then assess and promptly communicate that information to the Nominating and Governance Committee of our board of directors. Based on its consideration of all of the relevant facts and circumstances, this board committee will decide whether or not to approve such transaction and will generally not approve or ratify a transaction unless it shall have determined that, upon consideration of all relevant information, the transaction is in, or not inconsistent with, the best interests of the Company and its shareholders. If we become aware of an existing related person transaction that has not been pre-approved under this policy, the transaction will be referred to the Nominating and Governance Committee, which will evaluate all options available, including ratification, revision or termination of such transaction. On at least an annual basis, the Nominating and Governance Committee shall review previously approved related person transactions, under the standard described above, to determine whether such transactions should continue.
 
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 PRINCIPAL SHAREHOLDERS
As of the date hereof, all of our outstanding ordinary shares are owned by Aptiv. Immediately after the distribution, Aptiv will own none of our ordinary shares.
The following table provides information with respect to the expected beneficial ownership of our ordinary shares immediately after the distribution by (i) each person who we believe will be a beneficial owner of more than 5% of our outstanding ordinary shares, (ii) each of our expected directors, director nominees and named executive officers, and (iii) all expected directors and executive officers as a group. We based the share amounts on each person’s beneficial ownership of Aptiv ordinary shares as of                ,        , unless we indicate some other basis for the share amounts, and assuming a distribution ratio of                 of our ordinary shares for every                  ordinary share(s) of Aptiv. Beneficial ownership is determined in accordance with the rules of the SEC.
To the extent our directors and officers own Aptiv ordinary shares at the time of the separation, they will participate in the distribution on the same terms as other holders of Aptiv ordinary shares.
Except as otherwise noted in the footnotes below, each person or entity identified has sole voting and investment power with respect to such securities. Following the distribution, we expect to have outstanding an aggregate of         ordinary shares based upon (i)                 ordinary shares of Aptiv outstanding on                 ,        , (ii) distribution by Aptiv of         of our ordinary shares on the distribution date, and (iii) applying the distribution ratio of         of our ordinary shares for every                 ordinary share(s) of Aptiv held as of the record date.
Unless otherwise indicated, the address of each named person is c/o Delphi Technologies PLC, Courteney Road, Hoath Way, Gillingham, Kent ME8 0RU, United Kingdom. No shares beneficially owned by any executive officer, director or director nominee have been pledged as security.

Beneficial Owner	  	Number of Ordinary
Shares	 	  	% of Ordinary Shares
Outstanding (1)	 	
5% or greater shareholders:	  				  				

Directors and Named Executive Officers	  				  				
Liam Butterworth	  				  				
Timothy M. Manganello	  				  				
Vivid Sehgal	  				  				
James Harrington	  				  				
All Executive Officers and Directors as a Group (     persons)	  				  				

(1)	Based on         of our ordinary shares, which is calculated by applying the distribution ratio of         of our ordinary shares for every                 ordinary share(s) of Aptiv to the number of ordinary shares of Aptiv outstanding as of         ,         .	
 
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 DESCRIPTION OF MATERIAL INDEBTEDNESS
In connection with the separation and distribution, we have entered into the Credit Agreement and completed the offering of $800 million of Senior Notes due 2025, as described below, such that we will have a total principal amount of debt of approximately $1,550 million immediately following the separation, primarily consisting of a $750 million five-year term loan pursuant to the Credit Agreement and the $800 million of eight-year senior notes. We currently anticipate that approximately $1,148 million of the net proceeds from these borrowings will be distributed to Aptiv upon the separation, with the remaining net proceeds to be held by Delphi Technologies in order to fund operating cash requirements and to pay related taxes, fees and expenses.
Credit Agreement
On September 7, 2017, Delphi Technologies and its wholly-owned subsidiary Delphi Powertrain Corporation entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), with respect to $1.25 billion in senior secured credit facilities. The Credit Agreement consists of a senior secured five-year $750 million term loan facility (the “Term Loan A Facility”) and a $500 million five-year senior secured revolving credit facility (the “Revolving Credit Facility”) (collectively, the “Credit Facilities”) with the lenders party thereto and JPMorgan Chase Bank, N.A. The Credit Facilities will become available to Delphi Technologies no later than the date of the separation.
The Credit Facilities will be subject to an interest rate, at our option, of either (a) the Administrative Agent’s Alternate Base Rate (“ABR” as defined in the Credit Agreement) or (b) the London Interbank Offered Rate (the “Adjusted LIBOR Rate” as defined in the Credit Agreement) (“LIBOR”), in each case, plus an applicable margin that is based on our corporate credit ratings, as more particularly described below. In addition, the Credit Agreement will require payment of additional interest on certain overdue obligations on terms and conditions customary for financings of this type. The interest rate period with respect to LIBOR interest rate options will be set at one-, two-, three-, or six-months as selected by us in accordance with the terms of the Credit Agreement (or other period as may be agreed by the applicable lenders), but payable no less than quarterly. We may elect to change the selected interest rate over the term of the Credit Facilities in accordance with the provisions of the Credit Agreement.
The applicable interest rate margins for the Term Loan A Facility will increase or decrease from time to time between 1.50% and 2.00% per annum (for LIBOR loans) and between 0.50% and 1.00% per annum (for ABR loans), in each case based upon changes to our corporate credit ratings. The applicable interest rate margins for the Revolving Credit Facility will increase or decrease from time to time between 1.30% and 1.55% per annum (for LIBOR loans) and between 0.30% and 0.55% per annum (for ABR loans), in each case based upon changes to our corporate credit ratings. Accordingly, the interest rates for the Credit Facilities will fluctuate during the term of the Credit Agreement based on changes in the ABR, LIBOR or future changes in our corporate credit ratings. The Credit Agreement also requires that we pay certain facility fees on the aggregate commitments under the Revolving Credit Facility and certain letter of credit issuance and fronting fees.
Letters of credit will be available for issuance under the Credit Agreement on terms and conditions customary for financings of this type, which issuances will reduce availability under the Revolving Credit Facility.
We will be obligated to make quarterly principal payments throughout the term of the Term Loan A Facility according to the amortization provisions in the Credit Agreement, as such payments may be reduced from time to time in accordance with the terms of the Credit Agreement as a result of the application of loan prepayments made by us, if any, prior to the scheduled date of payment thereof.
Borrowings under the Credit Agreement will be prepayable at our option without premium or penalty, subject to customary increased cost provisions. We may request that all or a portion of the Credit Facilities be
 
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converted to extend the scheduled maturity date(s) with respect to all or a portion of any principal amount of such Credit Facilities under certain conditions customary for financings of this type. The Credit Agreement also contains certain mandatory prepayment provisions in the event that we receive net cash proceeds from certain non-ordinary course asset sales, casualty events and debt offerings, in each case subject to terms and conditions customary for financings of this type.
The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type that, among other things, limit our and our subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to designate subsidiaries as unrestricted, to make certain investments, to prepay certain indebtedness and to pay dividends, or to make other distributions or redemptions/repurchases, in respect of the our and our subsidiaries’ equity interests. In addition, the Credit Agreement requires that we maintain a consolidated net leverage ratio (the ratio of Consolidated Total Indebtedness to Consolidated Adjusted EBITDA, each as defined in the Credit Agreement) of not greater than 3.50 to 1.00. The Credit Agreement also contains events of default customary for financings of this type, including certain customary change of control events.
The borrowers under the Credit Agreement will comprise Delphi Technologies and its wholly-owned Delaware-organized subsidiary, Delphi Powertrain Corporation. Additional subsidiaries of Delphi Technologies may be added as co-borrowers or guarantors under the Credit Agreement from time to time on the terms and conditions set forth in the Credit Agreement. The obligations of each borrower under the Credit Agreement will be jointly and severally guaranteed by each other borrower and by certain of our existing and future direct and indirect subsidiaries, subject to certain exceptions customary for financings of this type. All obligations of the borrowers and the guarantors will be secured by certain assets of such borrowers and guarantors, including a perfected first-priority pledge of all of the capital stock in Delphi Powertrain Corporation.
In addition, the Credit Agreement contains provisions pursuant to which, based upon our achievement of certain corporate credit ratings, certain covenants and/or our obligation to provide collateral to secure the Credit Facilities, will be suspended.
Unsecured Senior Notes
On September 28, 2017, Delphi Technologies PLC issued $800 million in aggregate principal amount of 5.00% senior unsecured notes due 2025 in a transaction exempt from registration under the Securities Act (the “Senior Notes”). The Senior Notes were priced at 99.50% of par, resulting in a yield to maturity of 5.077%. Approximately $14 million of issuance costs were incurred in connection with the Spin-Off Senior Notes offering. Interest is payable semi-annually on April 1 and October 1 of each year to holders of record at the close of business on March 15 or September 15 immediately preceding the interest payment date. The proceeds received from the Senior Notes offering were deposited into escrow for release to Delphi Technologies PLC upon satisfaction of certain conditions, including completion of the separation. If the conditions for the release of the proceeds of this offering from escrow are not satisfied by June 30, 2018, the Senior Notes will be subject to mandatory redemption. From the date of the satisfaction of the escrow conditions, the notes will be guaranteed, jointly and severally, on an unsecured basis, by each of our current and future domestic subsidiaries that guarantee our Credit Facilities, as described above. Upon completion of the separation, Delphi Technologies PLC will use the proceeds from the Spin-Off Senior Notes together with the proceeds from the Term Loan A Facility to fund a dividend to Aptiv, fund operating cash and pay taxes and related fees and expenses.
 
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 DESCRIPTION OF SHARE CAPITAL
Delphi Technologies PLC’s Articles of Association and Memorandum of Association will be amended and restated in connection with the separation. The following descriptions are summaries of the material terms that will be contained in the amended and restated Articles of Association and Memorandum of Association. Reference is made to the more detailed provisions of, and the descriptions are qualified in their entirety by reference to, the Articles of Association and Memorandum of Association to be in effect at the time of the distribution, which will be filed as an exhibit to the registration statement of which this information statement is a part, and applicable law.
Our authorized share capital will be         ordinary shares, par value $0.01 per share, and        preferred shares, par value $0.01 per share.
Ordinary Shares
Immediately following the distribution, we expect that approximately                 ordinary shares will be issued and outstanding. All outstanding ordinary shares will be validly issued, fully paid and non-assessable. The ordinary shares do not have preemptive, subscription or redemption rights. Neither our Memorandum of Association or Articles of Association nor the laws of Jersey restrict in any way the ownership or voting of ordinary shares held by non-residents of Jersey.
Our board of directors may issue authorized but unissued ordinary shares without further shareholder action, unless shareholder action is required by applicable law or by the rules of a stock exchange or quotation system on which any series of our shares may be listed or quoted.
Dividend and Liquidation Rights . Holders of ordinary shares are entitled to receive equally, share for share, any dividends that may be declared in respect of our ordinary shares by the board of directors out of funds legally available therefor. If, in the future, we declare cash dividends, such dividends will be payable in U.S. dollars. In the event of our liquidation, after satisfaction of liabilities to creditors, holders of ordinary shares are entitled to share pro rata in our net assets. Such rights may be affected by the grant of preferential dividend or distribution rights to the holders of a class or series of preferred shares that may be authorized in the future. Our board of directors has the power to declare such interim dividends as it determines. Declaration of a final dividend (not exceeding the amounts proposed by our board of directors) requires shareholder approval by adoption of an ordinary resolution. Failure to obtain such shareholder approval does not affect previously paid interim dividends.
Voting, Shareholder Meetings and Resolutions . Holders of ordinary shares have one vote for each ordinary share held on all matters submitted to a vote of holders of ordinary shares. These voting rights may be affected by the grant of any special voting rights to the holders of a class or series of preferred shares that may be authorized in the future. Pursuant to Jersey law, an annual general meeting shall be held once every calendar year at the time (within a period of not more than 18 months after the last preceding annual general meeting) and at the place as may be determined by the board of directors. The quorum required for an ordinary meeting of shareholders consists of shareholders present in person or by proxy who hold or represent between them a majority of the outstanding shares entitled to vote at such meeting.
An ordinary resolution (such as a resolution for the declaration of a final dividend) requires approval by the holders of a majority of the voting rights represented at a meeting, in person or by proxy, and voting thereon.
Amendments to Governing Documents . A special resolution (such as, for example, a resolution amending our Memorandum of Association or Articles of Association or approving any change in authorized capitalization, or a liquidation or winding-up) requires approval of the holders of two-thirds of the voting rights represented at the meeting, in person or by proxy, and voting thereon. A special resolution can only be considered if shareholders receive at least fourteen days’ prior notice of the meeting at which such resolution will be considered.
 
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Requirements for Advance Notification of Shareholder Nominations and Proposals . Our Articles of Association establish advance notice and related procedures with respect to shareholder proposals and nomination of candidates for election as directors.
Limits on Written Consents . Any action required or permitted to be taken by the shareholders must be effected at a duly called annual or special meeting of shareholders and may not be effected by any consent in writing in lieu of a meeting of such shareholders.
Transfer of Shares and Notices . Fully paid ordinary shares are issued in registered form and may be freely transferred pursuant to the Articles of Association unless the transfer is restricted by applicable securities laws or prohibited by another instrument. Each shareholder of record is entitled to receive at least fourteen days’ prior notice (excluding the day of notice and the day of the meeting) of an ordinary shareholders’ meeting and of any shareholders’ meeting at which a special resolution is to be adopted. For the purposes of determining the shareholders entitled to notice and to vote at the meeting, the board of directors may fix a date as the record date for any such determination.
Modification of Class Rights . The rights attached to any class (unless otherwise provided by the terms of issue of that class), such as voting, dividends and the like, may be varied with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class.
Election and Removal of Directors . The ordinary shares do not have cumulative voting rights in the election of directors. As a result, the holders of ordinary shares that represent more than 50% of the voting power have the power to elect any of our directors who are up for election. All of our directors will be elected at each annual meeting.
Immediately following the separation and distribution, we expect our board of directors to consist of directors. Our Articles of Association state that shareholders may only remove a director for cause. Our board of directors has sole power to fill any vacancy occurring as a result of the death, disability, removal or resignation of a director or as a result of an increase in the size of the board of directors.
Applicability of U.K. Takeover Code . We do not believe that the U.K. City Code on Takeovers and Mergers will apply to takeover transactions for the Company.
Preferred Shares
Immediately following the distribution, we will have no preferred shares issued and outstanding. The board of directors has the authority to issue the preferred shares in one or more series and to fix the rights, preferences, privileges and restrictions of such shares, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any series, without further vote or action by the shareholders.
Our board may issue authorized preferred shares without further shareholder action, unless shareholder action is required by applicable law or by the rules of a stock exchange or quotation system on which any series of our shares may be listed or quoted.
Any preferred shares that are issued may have priority over the ordinary shares with respect to dividend or liquidation rights or both.
The purpose of authorizing the board of directors to issue preferred shares and to determine their rights and preferences is to eliminate delays associated with a shareholder vote on specific issuances. The issuance of preferred shares, while providing desirable flexibility in connection with possible equity financings, acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, a majority of our outstanding voting shares.
 
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Comparison of United States and Jersey Corporate Law
The following discussion is a summary of the material differences between United States and Jersey corporate law relevant to an investment in the ordinary shares. The following discussion is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change.
As in most United States jurisdictions, unless approved by a special resolution of our shareholders, our directors do not have the power to take certain actions, including an amendment of our Memorandum of Association or Articles of Association or an increase or reduction in our authorized capital. Directors of a Jersey corporation, without shareholder approval, in certain instances may, among other things, implement certain sales, transfers, exchanges or dispositions of assets, property, parts of the business or securities of the corporation; or any combination thereof, if they determine any such action is in the best interests of the corporation, its creditors or its shareholders.
As in most United States jurisdictions, the board of directors of a Jersey corporation is charged with the management of the affairs of the corporation. In most United States jurisdictions, directors owe a fiduciary duty to the corporation and its shareholders, including a duty of care, pursuant to which directors must properly apprise themselves of all reasonably available information, and a duty of loyalty, pursuant to which they must protect the interests of the corporation and refrain from conduct that injures the corporation or its shareholders or that deprives the corporation or its shareholders of any profit or advantage. Many United States jurisdictions have enacted various statutory provisions that permit the monetary liability of directors to be eliminated or limited. Jersey law protecting the interests of shareholders may not be as protective in all circumstances as the law protecting shareholders in United States jurisdictions. Under our Articles of Association, we are required to indemnify every present and former officer of ours out of our assets against any loss or liability incurred by such officer by reason of being or having been such an officer. The extent of such indemnities shall be limited in accordance with the provisions of the Companies (Jersey) Law 1991, as amended.
In most United States jurisdictions, the board of directors is permitted to authorize share repurchases without shareholder consent. Jersey law does not permit share repurchases without shareholder consent. However, our Articles of Association permit our board of directors to convert any of our shares that we wish to purchase into redeemable shares, and thus effectively allow our board of directors to authorize share repurchases (which shall be effected by way of redemption) without shareholder consent, consistent with the practice in most United States jurisdictions.
Transfer Agent and Registrar
The U.S. transfer agent and registrar for the ordinary shares is Computershare Trust Company, N.A. The U.S. transfer agent and registrar’s address is 250 Royall Street, Canton, MA 02021, Attention: Client Administration. Computershare Investor Services (Jersey) Limited will be the transfer agent and registrar for the ordinary shares in Jersey and its address is Queensway House, Hilgrove Street, St Helier, Jersey JE1 1ES.
Stock Exchange Listing
We intend to apply to list our ordinary shares on the NYSE under the symbol “DLPH.”
 
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 WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form 10, including exhibits and schedules filed with the registration statement of which this information statement is a part, under the Exchange Act, with respect to our ordinary shares being distributed as contemplated by this registration statement. This information statement is part of, and does not contain all of the information set forth in, the registration statement and exhibits and schedules to the registration statement. For further information with respect to us and our ordinary shares, please refer to the registration statement, including its exhibits and schedules. Statements made in this information statement relating to any contract or other document are not necessarily complete, and you should refer to the exhibits attached to the registration statement for copies of the actual contract or document. You may review a copy of the registration statement, including its exhibits and schedules, at the SEC’s public reference room, located at 100 F Street, N.E., Washington, D.C. 20549, by calling the SEC at 1-800-SEC-0330 as well as on the Internet website maintained by the SEC at www.sec.gov. Information contained on any website referenced in this information statement is not incorporated by reference in this information statement.
As a result of the distribution, we will become subject to the information and reporting requirements of the Exchange Act and, in accordance with the Exchange Act, we will file periodic reports, proxy statements and other information with the SEC, which will be available on the Internet website maintained by the SEC at www.sec.gov.
We intend to furnish holders of our ordinary shares with annual reports containing combined financial statements prepared in accordance with U.S. generally accepted accounting principles and audited and reported on, with an opinion expressed, by an independent registered public accounting firm.
You should rely only on the information contained in this information statement or to which we have referred you. We have not authorized any person to provide you with different information or to make any representation not contained in this information statement.
 
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 INDEX TO FINANCIAL STATEMENTS

 	  	Page	 	
DELPHI TECHNOLOGIES COMBINED AUDITED FINANCIAL STATEMENTS	 	
Report of Independent Registered Public Accounting Firm	  	 	F-2	 	
Combined Statements of Operations for the Years Ended December  31, 2016, 2015 and 2014	  	 	F-3	 	
Combined Statements of Comprehensive Income for the Years Ended December 31, 2016, 2015 and 2014	  	 	F-4	 	
Combined Balance Sheets as of December 31, 2016 and 2015	  	 	F-5	 	
Combined Statements of Cash Flows for the Years Ended December  31, 2016, 2015 and 2014	  	 	F-6	 	
Combined Statement of Net Parent Investment for the Years Ended December 31, 2016, 2015 and 2014	  	 	F-7	 	
Notes to Combined Financial Statements	  	 	F-8	 	
Financial Statement Schedule—Schedule II, Valuation and Qualifying Accounts	  	 	F-45	 	
 
DELPHI TECHNOLOGIES COMBINED UNAUDITED INTERIM FINANCIAL STATEMENTS	  				
Combined Statements of Operations for the Three and Six Months Ended June 30, 2017 and 2016	  	 	F-46	 	
Combined Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2017 and 2016	  	 	F-47	 	
Combined Balance Sheets as of June 30, 2017 and December 31, 2016	  	 	F-48	 	
Combined Statements of Cash Flows for the Six Months Ended June 30, 2017 and 2016	  	 	F-49	 	
Combined Statement of Net Parent Investment for the Six Months Ended June 30, 2017	  	 	F-50	 	
Notes to Combined Financial Statements	  	 	F-51	 	
 
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 Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders of Delphi Automotive PLC:
We have audited the accompanying combined balance sheets of Delphi Technologies PLC as of December 31, 2016 and 2015, and the related combined statements of operations, comprehensive income, net parent investment, and cash flows for each of the three years in the period ended December 31, 2016. Our audits also included the financial statement schedule listed in the Index to Financial Statements. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the combined financial position of Delphi Technologies PLC at December 31, 2016 and 2015, and the combined results of its operations and its cash flows for each of the three years in the period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respect the information set forth therein.
/s/ Ernst & Young LLP
Detroit, Michigan
June 9, 2017
 
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 DELPHI TECHNOLOGIES PLC
COMBINED STATEMENTS OF OPERATIONS

 	  	Year Ended December 31,	 	
 	  	2016	 	 	2015	 	 	2014	 	
 	  	(in millions)	 	
Net sales	  	$	4,486	 	 	$	4,407	 	 	$	4,540	 	
Operating expenses:	  				 				 				
Cost of sales	  	 	3,689	 	 	 	3,557	 	 	 	3,671	 	
Selling, general and administrative	  	 	299	 	 	 	312	 	 	 	343	 	
Amortization	  	 	17	 	 	 	23	 	 	 	32	 	
Restructuring (Note 10)	  	 	161	 	 	 	112	 	 	 	52	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	4,166	 	 	 	4,004	 	 	 	4,098	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Operating income	  	 	320	 	 	 	403	 	 	 	442	 	
Interest expense	  	 	(1	) 	 	 	(3	) 	 	 	(4	) 	
Other (expense) income, net (Note 15)	  	 	(1	) 	 	 	(2	) 	 	 	2	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Income before income taxes and equity loss	  	 	318	 	 	 	398	 	 	 	440	 	
Income tax expense	  	 	(50	) 	 	 	(92	) 	 	 	(97	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Income before equity loss	  	 	268	 	 	 	306	 	 	 	343	 	
Equity loss, net of tax	  	 	—  	 	 	 	—  	 	 	 	(1	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	268	 	 	 	306	 	 	 	342	 	
Net income attributable to noncontrolling interest	  	 	32	 	 	 	34	 	 	 	36	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Delphi Technologies	  	$	236	 	 	$	272	 	 	$	306	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to combined financial statements.
 
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 DELPHI TECHNOLOGIES PLC
COMBINED STATEMENTS OF COMPREHENSIVE INCOME

 	  	Year Ended December 31,	 	
 	  	2016	 	 	2015	 	 	2014	 	
 	  	(in millions)	 	
Net income	  	$	268	 	 	$	306	 	 	$	342	 	
Other comprehensive (loss) income:	  				 				 				
Currency translation adjustments	  	 	(84	) 	 	 	(151	) 	 	 	(148	) 	
Employee benefit plans adjustment, net of tax (Note 11)	  	 	(135	) 	 	 	15	 	 	 	(48	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive loss, net of tax	  	 	(219	) 	 	 	(136	) 	 	 	(196	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Comprehensive income	  	 	49	 	 	 	170	 	 	 	146	 	
Comprehensive income attributable to noncontrolling interests	  	 	28	 	 	 	29	 	 	 	34	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Comprehensive income attributable to Delphi Technologies	  	$	21	 	 	$	141	 	 	$	112	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to combined financial statements.
 
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 DELPHI TECHNOLOGIES PLC
COMBINED BALANCE SHEETS

 	  	December 31,	 	
 	  	2016	 	 	2015	 	
 	  	(in millions)	 	
ASSETS	  				 				
Current assets:	  				 				
Cash and cash equivalents	  	$	101	 	 	$	108	 	
Accounts receivable, net:	  				 				
Outside customers	  	 	803	 	 	 	801	 	
Related parties	  	 	16	 	 	 	26	 	
Inventories (Note 4)	  	 	374	 	 	 	366	 	
Other current assets (Note 5)	  	 	108	 	 	 	114	 	
	  	 	 	 	 	 	 	 	
Total current assets	  	 	1,402	 	 	 	1,415	 	
Long-term assets:	  				 				
Property, net (Note 6)	  	 	1,142	 	 	 	1,202	 	
Investments in affiliates	  	 	34	 	 	 	34	 	
Intangible assets, net (Note 7)	  	 	92	 	 	 	112	 	
Goodwill (Note 7)	  	 	6	 	 	 	8	 	
Other long-term assets (Note 5)	  	 	223	 	 	 	230	 	
	  	 	 	 	 	 	 	 	
Total long-term assets	  	 	1,497	 	 	 	1,586	 	
	  	 	 	 	 	 	 	 	
Total assets	  	$	2,899	 	 	$	3,001	 	
	  	 	 	 	 	 	 	 	
LIABILITIES AND INVESTED EQUITY	  				 				
Current liabilities:	  				 				
Short-term debt	  	$	2	 	 	$	23	 	
Accounts payable:	  				 				
Outside vendors	  	 	671	 	 	 	661	 	
Related parties	  	 	78	 	 	 	79	 	
Accrued liabilities (Note 8)	  	 	331	 	 	 	353	 	
	  	 	 	 	 	 	 	 	
Total current liabilities	  	 	1,082	 	 	 	1,116	 	
Long-term liabilities:	  				 				
Long-term debt	  	 	6	 	 	 	9	 	
Pension benefit obligations	  	 	526	 	 	 	414	 	
Other long-term liabilities (Note 8)	  	 	103	 	 	 	120	 	
	  	 	 	 	 	 	 	 	
Total long-term liabilities	  	 	635	 	 	 	543	 	
	  	 	 	 	 	 	 	 	
Total liabilities	  	 	1,717	 	 	 	1,659	 	
	  	 	 	 	 	 	 	 	
Commitments and contingencies (Note 12)	  				 				
Net Parent Equity:	  				 				
Net parent investment	  	 	1,737	 	 	 	1,677	 	
Accumulated other comprehensive loss (Note 14)	  	 	(711	) 	 	 	(496	) 	
	  	 	 	 	 	 	 	 	
Total parent equity	  	 	1,026	 	 	 	1,181	 	
Noncontrolling interest	  	 	156	 	 	 	161	 	
	  	 	 	 	 	 	 	 	
Total invested equity	  	 	1,182	 	 	 	1,342	 	
	  	 	 	 	 	 	 	 	
Total liabilities and invested equity	  	$	2,899	 	 	$	3,001	 	
	  	 	 	 	 	 	 	 	
See accompanying notes to combined financial statements.
 
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 DELPHI TECHNOLOGIES PLC
COMBINED STATEMENTS OF CASH FLOWS

 	  	Year Ended December 31,	 	
 	  	2016	 	 	2015	 	 	2014	 	
 	  	(in millions)	 	
Cash flows from operating activities:	  				 				 				
Net income	  	$	268	 	 	$	306	 	 	$	342	 	
Adjustments to reconcile net income to net cash provided by operating activities:	  				 				 				
Depreciation	  	 	193	 	 	 	166	 	 	 	162	 	
Amortization	  	 	17	 	 	 	23	 	 	 	32	 	
Restructuring expense, net of cash paid	  	 	(4	) 	 	 	60	 	 	 	18	 	
Deferred income taxes	  	 	(12	) 	 	 	3	 	 	 	(9	) 	
Pension and other postretirement benefit expenses	  	 	30	 	 	 	39	 	 	 	41	 	
Income from equity method investments, net of dividends received	  	 	—   	 	 	 	—   	 	 	 	1	 	
(Gain) loss on sale of assets	  	 	(4	) 	 	 	1	 	 	 	1	 	
Share-based compensation	  	 	19	 	 	 	22	 	 	 	22	 	
Changes in operating assets and liabilities:	  				 				 				
Accounts receivable, net	  	 	8	 	 	 	(23	) 	 	 	(24	) 	
Inventories	  	 	(8	) 	 	 	(25	) 	 	 	18	 	
Other assets	  	 	(23	) 	 	 	(5	) 	 	 	53	 	
Accounts payable	  	 	(4	) 	 	 	52	 	 	 	36	 	
Accrued and other long-term liabilities	  	 	(25	) 	 	 	(59	) 	 	 	(28	) 	
Other, net	  	 	(31	) 	 	 	(77	) 	 	 	(73	) 	
Pension contributions	  	 	(52	) 	 	 	(54	) 	 	 	(59	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by operating activities	  	 	372	 	 	 	429	 	 	 	533	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from investing activities:	  				 				 				
Capital expenditures	  	 	(171	) 	 	 	(201	) 	 	 	(322	) 	
Proceeds from sale of property	  	 	9	 	 	 	20	 	 	 	1	 	
Cost of technology investments	  	 	—   	 	 	 	(20	) 	 	 	—   	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in investing activities	  	 	(162	) 	 	 	(201	) 	 	 	(321	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from financing activities:	  				 				 				
Net (repayments) proceeds under other short-term debt agreements	  	 	(2	) 	 	 	(5	) 	 	 	8	 	
Dividend payments of combined affiliates to minority shareholders	  	 	(13	) 	 	 	(13	) 	 	 	(9	) 	
Net transfers to Parent	  	 	(195	) 	 	 	(255	) 	 	 	(200	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in financing activities	  	 	(210	) 	 	 	(273	) 	 	 	(201	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Effect of exchange rate fluctuations on cash and cash equivalents	  	 	(7	) 	 	 	(8	) 	 	 	(7	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
(Decrease) increase in cash and cash equivalents	  	 	(7	) 	 	 	(53	) 	 	 	4	 	
Cash and cash equivalents at beginning of the year	  	 	108	 	 	 	161	 	 	 	157	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents at end of the year	  	$	101	 	 	$	108	 	 	$	161	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to combined financial statements.
 
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 DELPHI TECHNOLOGIES PLC
COMBINED STATEMENT OF NET PARENT INVESTMENT

 	  	Net Parent
Investment	 	 	Accumulated
Other
Comprehensive
Loss	 	 	Total Parent
Equity	 	 	Noncontrolling
Interest	 	 	Total Invested
Equity	 	
 	  	(in millions)	 	
Balance at December 31, 2013	  	$	1,510	 	 	$	(171	) 	 	$	1,339	 	 	$	162	 	 	$	1,501	 	
Net income	  	 	306	 	 	 	—  	 	 	 	306	 	 	 	36	 	 	 	342	 	
Other comprehensive loss	  	 	—  	 	 	 	(194	) 	 	 	(194	) 	 	 	(2	) 	 	 	(196	) 	
Dividend payments of combined affiliates to minority shareholders	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(29	) 	 	 	(29	) 	
Share-based compensation	  	 	22	 	 	 	—  	 	 	 	22	 	 	 	—  	 	 	 	22	 	
Net transfers to parent	  	 	(200	) 	 	 	—  	 	 	 	(200	) 	 	 	—  	 	 	 	(200	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2014	  	$	1,638	 	 	$	(365	) 	 	$	1,273	 	 	$	167	 	 	$	1,440	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	272	 	 	 	—  	 	 	 	272	 	 	 	34	 	 	 	306	 	
Other comprehensive loss	  	 	—  	 	 	 	(131	) 	 	 	(131	) 	 	 	(5	) 	 	 	(136	) 	
Dividend payments of combined affiliates to minority shareholders	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(35	) 	 	 	(35	) 	
Share-based compensation	  	 	22	 	 	 	—  	 	 	 	22	 	 	 	—  	 	 	 	22	 	
Net transfers to parent	  	 	(255	) 	 	 	—  	 	 	 	(255	) 	 	 	—  	 	 	 	(255	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2015	  	$	1,677	 	 	$	(496	) 	 	$	1,181	 	 	$	161	 	 	$	1,342	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	236	 	 	 	—  	 	 	 	236	 	 	 	32	 	 	 	268	 	
Other comprehensive loss	  	 	—  	 	 	 	(215	) 	 	 	(215	) 	 	 	(4	) 	 	 	(219	) 	
Dividend payments of combined affiliates to minority shareholders	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(33	) 	 	 	(33	) 	
Share-based compensation	  	 	19	 	 	 	—  	 	 	 	19	 	 	 	—  	 	 	 	19	 	
Net transfers to parent	  	 	(195	) 	 	 	—  	 	 	 	(195	) 	 	 	—  	 	 	 	(195	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2016	  	$	1,737	 	 	$	(711	) 	 	$	1,026	 	 	$	156	 	 	$	1,182	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to combined financial statements.
 
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 DELPHI TECHNOLOGIES PLC
NOTES TO COMBINED FINANCIAL STATEMENTS
1. BUSINESS AND BASIS OF PRESENTATION
The Separation
On May 3, 2017, Delphi Automotive PLC announced its intention to separate its Powertrain Systems segment, which includes its engine management systems and aftermarket operations, by means of a spin-off. Upon completion of the spin-off, Delphi Automotive PLC will change its name to Aptiv PLC, and is herein referred to as “Aptiv” or the “Parent.” The spin-off will create Delphi Technologies PLC (the “Company” or “Delphi Technologies”), a separate, independent, publicly traded company. Prior to October 10, 2017, the Company was named Delphi Jersey Holdings plc. As part of the separation, Aptiv intends to transfer the assets, liabilities and operations of its Powertrain Systems business on a global basis to Delphi Technologies. The spin-off is expected to be completed by March of 2018, subject to customary market, regulatory and other conditions.
Nature of Operations
Delphi Technologies is a leader in the development, design and manufacture of integrated powertrain technologies that optimize engine performance, increase vehicle efficiency, reduce emissions, improve driving performance, and support increasing electrification of vehicles. The Company is a global supplier to original equipment manufacturers (“OEMs”) seeking to manufacture vehicles that meet and exceed increasingly stringent global regulatory requirements and satisfy consumer demands for an enhanced user experience. We provide advanced fuel injection systems (“FIS”), actuators, valvetrain products, sensors, electronic control modules and power electronics technologies. Additionally, the Company offers a full spectrum of aftermarket products serving a global customer base.
Our comprehensive portfolio of advanced technologies and solutions for all propulsion systems are sold to global OEMs of both light vehicles (passenger cars, trucks and vans and sport-utility vehicles) and commercial vehicles (light-duty, medium-duty and heavy-duty trucks, commercial vans, buses and off-highway vehicles). The Company’s Products & Services Solutions (“PSS”) segment also manufactures and sells our technologies to leading aftermarket players, including independent retailers and wholesale distributors. We supply a full suite of aftermarket products including engine control modules, pumps, injectors, fuel modules, ignition coils, smart remote actuators, exhaust gas recirculation valves, brakes, steering, suspension and other products. We also add aftermarket know-how in category management, logistics, training, marketing and other dedicated services to provide a full range of aftermarket solutions through vehicles’ lives.
The Company is comprised of operations conducted at legal entities which are directly or indirectly wholly-owned by Aptiv, the parent of Delphi Technologies, a 51% owned controlled joint venture in China, a 70% owned controlled joint venture in South Korea and a non-consolidated approximately 50% owned joint venture in India.
Basis of Presentation
These combined financial statements reflect the combined historical results of the operations, financial position and cash flows of Delphi Technologies. The Company has historically operated as part of the Parent and not as a stand-alone company. The combined financial statements have been derived from the Parent’s historical accounting records and are presented on a carve-out basis. All revenues and costs as well as assets and liabilities directly associated with the business activity of the Company are included as a component of the combined financial statements. The combined financial statements also include allocations of certain general, administrative, sales and marketing expenses and cost of sales provided by the Parent to Delphi Technologies and allocations of related assets, liabilities, and the Parent’s investment, as applicable. The allocations have been determined on a reasonable basis; however, the amounts are not necessarily representative of the amounts that
 
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would have been reflected in the financial statements had the Company been an entity that operated independently of the Parent. Related party allocations are further described in Note 3. Related Party Transactions.
As part of the Parent, the Company is dependent upon the Parent for all of its working capital and financing requirements, as the Parent uses a centralized approach to cash management and financing of its operations, including the use of a global cash pooling arrangement. Accordingly, cash and cash equivalents held by the Parent at the corporate level were not attributable to Delphi Technologies for any of the periods presented. Only cash amounts specifically attributable to Delphi Technologies are reflected in the accompanying combined financial statements. Financing transactions related to the Company are accounted for as a component of Net parent investment in the combined balance sheets and as a financing activity on the accompanying combined statements of cash flows.
Third-party debt obligations of the Parent and the corresponding interest costs related to those debt obligations, specifically those that relate to senior notes, term loans and revolving credit facilities, have not been attributed to Delphi Technologies, as Delphi Technologies was not the legal obligor of such debt obligations. The only third-party debt obligations included in the combined financial statements are those for which the legal obligor is a legal entity within Delphi Technologies. None of the Company’s assets were pledged as collateral under the Parent’s debt obligations as of December 31, 2016 or 2015.
As the separate legal entities that comprise Delphi Technologies were not historically held by a single legal entity, Net Parent Equity is shown in lieu of shareholder’s equity in the combined financial statements. Net parent investment represents the cumulative investment by the Parent in Delphi Technologies through the dates presented, inclusive of operating results. Balances between Delphi Technologies and the Parent that were not historically settled in cash are included in Net parent investment. All significant transactions between the Company and the Parent have been included in the accompanying combined financial statements. Transactions with the Parent are reflected in the accompanying combined statements of net parent investment as Net Transfers to Parent, and in the accompanying combined balance sheets within net parent investment.
All significant intercompany accounts and transactions between the businesses comprising the Company have been eliminated in the accompanying combined financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
Principles of Combination —The combined financial statements include the accounts of Delphi Technologies’ U.S. and non-U.S. subsidiaries and operations in which the Company holds a controlling interest. The combined financial statements include certain assets and liabilities that have historically been held at the Parent level but are specifically identifiable or otherwise attributable to Delphi Technologies. All significant intercompany transactions and accounts within the Company’s combined businesses have been eliminated. All intercompany transactions between the Company and the Parent have been included in these combined financial statements as net parent investment. Expenses related to corporate allocations from the Parent to the Company are considered to be effectively settled for cash in the combined financial statements at the time the transaction is recorded. In addition, transactions between the Company and the Parent’s other subsidiaries have been classified as related party, rather than intercompany, transactions within the combined financial statements.
Delphi Technologies’ share of the earnings or losses of Delphi-TVS Diesel Systems Ltd (of which Delphi Technologies owns approximately 50%), a non-controlled affiliate located in India over which the Company exercises significant influence, is included in the combined operating results of Delphi Technologies using the equity method of accounting.
During the year ended December 31, 2015, Delphi Technologies made a $20 million investment in Tula Technology, Inc. (“Tula”), an engine control software company, over which the Company does not exert
 
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significant influence. The Company’s investment in Tula is accounted for under the cost method, and is classified within other long-term assets in the combined balance sheets.
The Company monitors its investments in affiliates for indicators of other-than-temporary declines in value on an ongoing basis. If the Company determines that such a decline has occurred, an impairment loss is recorded, which is measured as the difference between carrying value and estimated fair value. Estimated fair value is generally determined using an income approach based on discounted cash flows or negotiated transaction values.
Use of estimates —The preparation of combined financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires the use of estimates and assumptions that affect amounts reported therein. Generally, matters subject to estimation and judgment include amounts related to accounts receivable realization, inventory obsolescence, asset impairments, useful lives of intangible and fixed assets, deferred tax asset valuation allowances, income taxes, pension benefit plan assumptions, accruals related to litigation, warranty costs, environmental remediation costs, worker’s compensation accruals, healthcare accruals and estimates used to allocate the Parent company costs and account balances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from those estimates.
Revenue recognition —Sales are recognized when there is evidence of a sales agreement, the delivery of goods has occurred, the sales price is fixed or determinable and the collectability of revenue is reasonably assured. Sales are generally recorded upon shipment of product to customers and transfer of title under standard commercial terms. In addition, if Delphi Technologies enters into retroactive price adjustments with its customers, these reductions to revenue are recorded when they are determined to be probable and estimable. From time to time, Delphi Technologies enters into pricing agreements with its customers that provide for price reductions, some of which are conditional upon achieving certain joint cost saving targets. In these instances, revenue is recognized based on the agreed-upon price at the time of shipment.
Sales incentives and allowances are recognized as a reduction to revenue at the time of the related sale. In addition, from time to time, Delphi Technologies makes payments to customers in conjunction with ongoing and future business. These payments to customers are generally recognized as a reduction to revenue at the time of the commitment to make these payments.
Shipping and handling fees billed to customers are included in net sales, while costs of shipping and handling are included in cost of sales.
Delphi Technologies collects and remits taxes assessed by different governmental authorities that are both imposed on and concurrent with a revenue-producing transaction between the Company and the Company’s customers. These taxes may include, but are not limited to, sales, use, value-added, and some excise taxes. Delphi Technologies reports the collection of these taxes on a net basis (excluded from revenues).
Rebates —The Company accrues for rebates pursuant to specific arrangements with certain of its aftermarket customers. Rebates generally provide for price reductions based upon the achievement of specified purchase volumes and are recorded as a reduction of sales as earned by such customers.
Research and development —Costs are incurred in connection with research and development programs that are expected to contribute to future earnings. Such costs are charged against income as incurred. Total research and development expenses, including engineering, net of customer reimbursements, were approximately $424 million, $443 million and $461 million for the years ended December 31, 2016, 2015 and 2014, respectively.
Cash and cash equivalents —Cash and cash equivalents are defined as short-term, highly liquid investments with original maturities of three months or less.
 
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Accounts receivable —Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company generally does not require collateral for its trade receivables.
Sales of receivables are accounted for in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 860, Transfers and Servicing (“ASC 860”). Agreements which result in true sales of the transferred receivables, as defined in ASC 860, which occur when receivables are transferred without recourse to the Company, are excluded from amounts reported in the combined balance sheets. Cash proceeds received from such sales are included in operating cash flows. Agreements that allow the Company to maintain effective control over the transferred receivables and which do not qualify as a sale, as defined in ASC 860, are accounted for as secured borrowings and recorded in the combined balance sheets within accounts receivable, net and short-term debt. The expenses associated with receivables factoring are recorded in the combined statements of operations within interest expense.
In 2015, the Company entered into arrangements with various financial institutions to sell eligible trade receivables from certain aftermarket customers in North America. These arrangements can be terminated at any time subject to prior written notice. The receivables under these arrangements are sold without recourse to the Company and are therefore accounted for as true sales. During the years ended December 31, 2016 and 2015, $123 million and $100 million of receivables were sold under these arrangements, and expenses of $3 million and $2 million, respectively, were recognized within interest expense.
In addition, in 2016 and 2015 one of the Company’s European subsidiaries factored, without recourse, receivables related to certain foreign research tax credits to a financial institution. These transactions were accounted for as true sales of the receivables, and the Company therefore derecognized approximately $22 million and $20 million from other long-term assets in the combined balance sheet as of December 31, 2016 and December 31, 2015, respectively, as a result of these transactions.
Aptiv centrally maintains a European accounts receivable factoring facility, and Delphi Technologies participates in this facility. As the factoring facility allows Delphi Technologies to maintain effective control over the receivables, the accounts receivable related to this facility are included in the combined balance sheets. Collateral is not required related to these trade accounts receivable. No amounts were outstanding on the European accounts receivable factoring facility as of December 31, 2016 or December 31, 2015.
The Company exchanges certain amounts of accounts receivable, primarily in the Asia Pacific region, for bank notes with original maturities greater than three months. The collection of such bank notes are included in operating cash flows based on the substance of the underlying transactions, which are operating in nature. Bank notes held by the Company with original maturities of three months or less are classified as cash and cash equivalents within the combined balance sheet, and those with original maturities of greater than three months are classified as notes receivable within other current assets. The Company may hold such bank notes until maturity, exchange them with suppliers to settle liabilities, or sell them to third party financial institutions in exchange for cash.
The allowance for doubtful accounts is established based upon analysis of trade receivables for known collectability issues, the aging of the trade receivables at the end of each period and, generally, all accounts receivable balances greater than 90 days past due are fully reserved. As of December 31, 2016 and 2015, the allowance for doubtful accounts was $9 million and $8 million, respectively, and the provision for doubtful accounts was $2 million, $5 million, and $4 million for the years ended December 31, 2016, 2015 and 2014, respectively.
Inventories —As of December 31, 2016 and 2015, inventories are stated at the lower of cost, determined on a first-in, first-out basis, or market, including direct material costs and direct and indirect manufacturing costs. Refer to Note 4. Inventories for additional information. Obsolete inventory is identified based on analysis of inventory for known obsolescence issues, and, generally, the market value of inventory on hand in excess of one year’s supply is fully-reserved.
 
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From time to time, payments may be received from suppliers. These payments from suppliers are recognized as a reduction of the cost of the material acquired during the period to which the payments relate. In some instances, supplier rebates are received in conjunction with or concurrent with the negotiation of future purchase agreements and these amounts are amortized over the prospective agreement period.
Property —Major improvements that materially extend the useful life of property are capitalized. Expenditures for repairs and maintenance are charged to expense as incurred. Depreciation is determined based on a straight-line method over the estimated useful lives of groups of property. Leasehold improvements under capital leases are depreciated over the period of the lease or the life of the property, whichever is shorter. Refer to Note 6. Property, Net for additional information.
Pre-production costs related to long-term supply agreements —The Company incurs pre-production engineering, development and tooling costs related to products produced for its customers under long-term supply agreements. Engineering, testing and other costs incurred in the design and development of production parts are expensed as incurred, unless the costs are reimbursable, as specified in a customer contract. As of December 31, 2016 and 2015, $16 million and $18 million of such contractually reimbursable costs were capitalized, respectively. These amounts are recorded within other current and other long-term assets in the combined balance sheets, as further detailed in Note 5. Assets.
Special tools represent Delphi Technologies-owned tools, dies, jigs and other items used in the manufacture of customer components that will be sold under long-term supply arrangements, the costs of which are capitalized within property, plant and equipment if the Company has title to the assets. Special tools also include capitalized unreimbursed pre-production tooling costs related to customer-owned tools for which the customer has provided Delphi Technologies a non-cancellable right to use the tool. Delphi Technologies-owned special tools balances are depreciated over the expected life of the special tool or the life of the related vehicle program, whichever is shorter. The unreimbursed costs incurred related to customer-owned special tools that are not subject to reimbursement are capitalized and depreciated over the expected life of the special tool or the life of the related vehicle program, whichever is shorter. At December 31, 2016 and 2015, the special tools balance, net of accumulated depreciation, was $110 million and $96 million, respectively, included within property, net in the combined balance sheets. As of December 31, 2016 and 2015, the Delphi Technologies-owned special tools balances were $94 million and $95 million, respectively, and the customer-owned special tools balances were $16 million and $1 million, respectively.
Valuation of long-lived assets —The carrying value of long-lived assets held for use, including definite-lived intangible assets, is periodically evaluated when events or circumstances warrant such a review. The carrying value of a long-lived asset held for use is considered impaired when the anticipated separately identifiable undiscounted cash flows from the asset are less than the carrying value of the asset. In that event, a loss is recognized based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset. Impairment losses on long-lived assets held for sale are recognized if the carrying value of the asset is in excess of the asset’s estimated fair value, reduced for the cost to dispose of the asset. Fair value of long-lived assets is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved (an income approach), and in certain situations the Company’s review of appraisals (a market approach). Refer to Note 6. Property, Net for additional information.
Fair value measurements —Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company’s financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable, as well as debt, which consists of capital leases and other debt issued by non-U.S. subsidiaries. For all financial instruments recorded at December 31, 2016 and 2015, fair value approximates book value. Nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis include long-lived assets, equity and cost method investments, intangible assets and liabilities for exit or disposal activities measured at fair value upon
 
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initial recognition. Fair value of long-lived assets is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved and a review of appraisals. As such, the Company has determined that the fair value measurements of long-lived assets fall in Level 3 of the fair value hierarchy.
Intangible assets —The Company has definite-lived intangible assets related to patents and developed technology, customer relationships and trade names. The Company amortizes definite-lived intangible assets over their estimated useful lives. Costs to renew or extend the term of acquired intangible assets are recognized as expense as incurred. No intangible asset impairments were recorded in 2016, 2015 or 2014. Refer to Note 7. Intangible Assets and Goodwill for additional information.
Goodwill —Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. The Company tests goodwill for impairment annually in the fourth quarter, or more frequently when indications of potential impairment exist. The Company monitors the existence of potential impairment indicators throughout the fiscal year. The Company tests for goodwill impairment at the reporting unit level. Our reporting units are the components of operating segments which constitute businesses for which discrete financial information is available and is regularly reviewed by segment management.
The impairment test involves first qualitatively assessing goodwill for impairment. If the qualitative assessment is not met we then perform a quantitative assessment by first comparing the estimated fair value of each reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit. If the estimated fair value exceeds carrying value, then we conclude that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its estimated fair value, a second step is required to measure possible goodwill impairment loss. The second step includes hypothetically valuing the tangible and intangible assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit’s goodwill is compared to the carrying value of that goodwill. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of the goodwill, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value.
Goodwill impairment —In the fourth quarter of 2016 and 2015, the Company completed a qualitative goodwill impairment assessment, and after evaluating the results, events and circumstances of the Company, the Company concluded that sufficient evidence existed to assert qualitatively that it was more likely than not that the estimated fair value of each reporting unit remained in excess of its carrying values. Therefore, a two-step impairment assessment was not necessary. No goodwill impairments were recorded in 2016, 2015 or 2014. Refer to Note 7. Intangible Assets and Goodwill for additional information.
Warranty and product recalls —Expected warranty costs for products sold are recognized at the time of sale of the product based on an estimate of the amount that eventually will be required to settle such obligations. These accruals are based on factors such as past experience, production changes, industry developments and various other considerations. Costs of product recalls, which may include the cost of the product being replaced as well as the customer’s cost of the recall, including labor to remove and replace the recalled part, are accrued as part of our warranty accrual at the time an obligation becomes probable and can be reasonably estimated. These estimates are adjusted from time to time based on facts and circumstances that impact the status of existing claims. Refer to Note 9. Warranty Obligations for additional information.
Income taxes —The Company’s domestic and foreign operating results are included in the income tax returns of the Parent. The Company accounts for income taxes under the separate return method. Under this approach, the Company determines its deferred tax assets and liabilities and related tax expense as if it were filing separate tax returns. Deferred tax assets and liabilities reflect temporary differences between the amount of assets and liabilities for financial and tax reporting purposes. Such amounts are adjusted, as appropriate, to reflect changes in tax rates expected to be in effect when the temporary differences reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment
 
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date. A valuation allowance is recorded to reduce deferred tax assets to the amount that is more likely than not to be realized. In the event the Company determines it is more likely than not that the deferred tax assets will not be realized in the future, the valuation allowance adjustment to the deferred tax assets will be charged to earnings in the period in which we make such a determination. In determining the provision for income taxes for financial statement purposes, the Company makes certain estimates and judgments which affect its evaluation of the carrying value of its deferred tax assets, as well as its calculation of certain tax liabilities. Refer to Note. 13. Income Taxes for additional information.
Foreign currency translation —Assets and liabilities of non-U.S. subsidiaries that use a currency other than U.S. dollars as their functional currency are translated to U.S. dollars at end-of-period currency exchange rates. The combined statements of operations of non-U.S. subsidiaries are translated to U.S. dollars at average-period currency exchange rates. The effect of translation for non-U.S. subsidiaries is generally reported in other comprehensive income (“OCI”). The effect of remeasurement of assets and liabilities of non-U.S. subsidiaries that use the U.S. dollar as their functional currency is primarily included in cost of sales. Also included in cost of sales are gains and losses arising from transactions denominated in a currency other than the functional currency of a particular entity. Net foreign currency transaction losses of $11 million, $5 million and $3 million were included in the combined statements of operations for the years ended December 31, 2016, 2015 and 2014, respectively.
Restructuring —The Company continually evaluates alternatives to align the business with the changing needs of its customers and to lower operating costs. This includes the realignment of its existing manufacturing capacity, facility closures, or similar actions, either in the normal course of business or pursuant to significant restructuring programs. These actions may result in employees receiving voluntary or involuntary employee termination benefits, which are mainly pursuant to union or other contractual agreements. Voluntary termination benefits are accrued when an employee accepts the related offer. Involuntary termination benefits are accrued upon the commitment to a termination plan and when the benefit arrangement is communicated to affected employees, or when liabilities are determined to be probable and estimable, depending on the existence of a substantive plan for severance or termination. Contract termination costs are recorded when contracts are terminated or when Delphi Technologies ceases to use the leased facility and no longer derives economic benefit from the contract. All other exit costs are expensed as incurred. Refer to Note 10. Restructuring for additional information.
Derivative financial instruments —Aptiv centrally manages its exposure to fluctuations in currency exchange rates and certain commodity prices by entering into a variety of forward contracts and swaps with various counterparties. Such financial exposures are managed in accordance with the policies and procedures of Aptiv and accounted for in accordance with ASC Topic 815, Derivatives and Hedging .
Delphi Technologies does not enter into any derivative transactions, contracts, options, or swaps. Accordingly, derivative assets and liabilities held by the Parent at the corporate level were not attributable to Delphi Technologies for any of the periods presented. Due to the Company’s participation in Aptiv’s hedging program, the Company is allocated a portion of the impact from these activities. Based on the exposure levels related to Delphi Technologies, the Company recorded gains (losses) of $6 million, $(16) million and $(1) million in cost of sales for the years ended December 31, 2016, 2015 and 2014, respectively.
Extended disability benefits —The estimated costs associated with extended disability benefits provided to inactive employees were allocated to Delphi Technologies based on its relative portion of participants. Workforce demographic data and historical experience are utilized to develop projections of time frames and related expense for postemployment benefits.
Workers’ compensation benefits —Workers’ compensation benefit accruals are actuarially determined and are subject to the existing workers’ compensation laws that vary by location. Accruals for workers’ compensation benefits represent the discounted future cash expenditures expected during the period between the incidents
 
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necessitating the employees to be idled and the time when such employees return to work, are eligible for retirement or otherwise terminate their employment.
Share-based compensation —Certain U.S. and non-U.S. employees of Delphi Technologies are covered by the Parent-sponsored share-based compensation arrangement, the Delphi Automotive PLC Long Term Incentive Plan, as amended and restated effective April 23, 2015 (the “PLC LTIP”), under which grants of restricted stock units (“RSUs”) have been made in each period from 2012 to 2017. Share-based compensation expense within the combined financial statements has been allocated to Delphi Technologies based on the awards and terms previously granted to Delphi Technologies employees while part of Aptiv, and includes the cost of Delphi Technologies employees who participate in the Aptiv plan as well as an allocated portion of the cost of Aptiv senior management awards.
The RSU awards include a time-based vesting portion and a performance-based vesting portion. The performance-based vesting portion includes performance and market conditions in addition to service conditions. The grant date fair value of the RSUs is determined based on the closing price of the Aptiv’s ordinary shares on the date of the grant of the award, including an estimate for forfeitures, and a contemporaneous valuation performed by an independent valuation specialist with respect to awards with market conditions. The Company accounts for compensation expense incurred by the Parent based upon the grant date fair value of the awards applied to the best estimate of ultimate performance against the respective targets on a straight-line basis over the requisite vesting period of the awards. The performance conditions require management to make assumptions regarding the likelihood of achieving certain performance goals. Changes in these performance assumptions, as well as differences in actual results from management’s estimates, could result in estimated or actual values different from previously estimated fair values. Refer to Note 16. Share-Based Compensation for additional information on the share-based compensation plans of the Parent that certain employees of the Company participate in.
Pension and Other Post-Retirement Benefits (OPEB) —Certain of the Company’s non-U.S. subsidiaries sponsor defined-benefit pension plans, which generally provide benefits based on negotiated amounts for each year of service. Certain Delphi Technologies employees, primarily in the United Kingdom (“U.K.”), France, Mexico and Turkey, participate in these plans (collectively, the “Direct Plans”). The Direct Plans, which relate solely to the Company, are included within the combined financial statements. In addition to the Direct Plans, certain of the Company’s employees in Germany and the U.S. participate in defined benefit pension plans (collectively, the “Shared Plans”) sponsored by Aptiv that include Delphi Technologies employees as well as employees of other Aptiv subsidiaries. Under the guidance in ASC 715, Compensation—Retirement Benefits , the Company accounts for the Shared Plans as multiemployer plans, and accordingly the Company does not record an asset or liability to recognize the funded status of the Shared Plans. The related pension and other postemployment expenses of the Shared Plans are charged to Delphi Technologies based primarily on the service cost of active participants. These expenses were funded through intercompany transactions with Aptiv that are reflected within the Net parent investment in the combined financial statements. Refer to Note 11. Pension Benefits for additional information.
Delphi Technologies Net Parent Investment —The Delphi Technologies net parent investment account includes the accumulation of the Company’s historical earnings, cumulative currency translation adjustments, dividend payments, and other transactions between the Company and the Parent.
 
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Customer Concentrations —Net sales to Delphi Technologies’ largest customers, which were principally attributable to the Powertrain Systems segment, and the corresponding percentage of total net sales were as follows:

 	  	Year Ended
December 31, 2016	 	 	Year Ended
December 31, 2015	 	 	Year Ended
December 31, 2014	 	
 	  	Net Sales	 	  	Percentage
of total	 	 	Net Sales	 	  	Percentage
of total	 	 	Net Sales	 	  	Percentage
of total	 	
 	  	(Net sales in millions)	 	
Daimler AG	  	$	413	 	  	 	9	% 	 	$	419	 	  	 	10	% 	 	$	495	 	  	 	11	% 	
General Motors Company	  	 	409	 	  	 	9	% 	 	 	285	 	  	 	6	% 	 	 	336	 	  	 	7	% 	
Hyundai Motor Company	  	 	404	 	  	 	9	% 	 	 	506	 	  	 	11	% 	 	 	541	 	  	 	12	% 	
Other	  	 	3,260	 	  	 	73	% 	 	 	3,197	 	  	 	73	% 	 	 	3,168	 	  	 	70	% 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Net sales	  	$	4,486	 	  	 	100	% 	 	$	4,407	 	  	 	100	% 	 	$	4,540	 	  	 	100	% 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Recently issued accounting pronouncements —In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers . This ASU supersedes most of the existing guidance on revenue recognition in Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition and establishes a broad principle that would require an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this principle, an entity identifies the contract with a customer, identifies the separate performance obligations in the contract, determines the transaction price, allocates the transaction price to the separate performance obligations and recognizes revenue when each separate performance obligation is satisfied. The FASB has subsequently issued additional ASUs to clarify certain elements of the new revenue recognition guidance. The guidance is effective for fiscal years beginning after December 15, 2017, and is to be applied retrospectively using one of two transition methods at the entity’s election. The full retrospective method requires companies to recast each prior reporting period presented as if the new guidance had always existed. Under the modified retrospective method, companies would recognize the cumulative effect of initially applying the standard as an adjustment to opening retained earnings at the date of initial application.
The Company has continued to monitor FASB activity related to the new standard, and has worked with various non-authoritative industry groups to assess certain interpretative issues and the associated implementation of the new standard. The Company has drafted its accounting policy for the new standard based on a detailed review of its business and contracts. While the Company continues to assess all potential impacts of the new standard, we do not currently expect that the adoption of the new revenue standard will have a material impact on our revenues, results of operations or financial position. The Company plans to adopt the new revenue standard effective January 1, 2018. The Company has not yet selected a transition method and continues to evaluate the effect of the standard on our ongoing financial reporting and implementation approach.
In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory . This guidance requires an entity to measure inventory at the lower of cost and net realizable value, rather than at the lower of cost or market. The guidance is effective for interim and annual periods beginning after December 15, 2016, and is to be applied prospectively. The Company adopted this guidance in the first quarter of 2017 on a prospective basis. The adoption of this guidance did not have a significant impact on the Company’s financial statements.
In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance makes targeted improvements to existing U.S. GAAP for financial instruments, including requiring equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; requiring entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requiring separate
 
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presentation of financial assets and financial liabilities by measurement category and form of financial asset and requiring entities to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017. Early adoption of the own credit provision is permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its combined financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Under this guidance, lessees will be required to recognize on the balance sheet a lease liability and a right-of-use asset for all leases, with the exception of short-term leases. The lease liability represents the lessee’s obligation to make lease payments arising from a lease, and will be measured as the present value of the lease payments. The right-of-use asset represents the lessee’s right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. The standard also requires a lessee to recognize a single lease cost allocated over the lease term, generally on a straight-line basis. The new guidance is effective for fiscal years beginning after December 15, 2018. ASU 2016-02 is required to be applied using the modified retrospective approach for all leases existing as of the effective date and provides for certain practical expedients. Early adoption is permitted. The Company is currently evaluating the effects that the adoption of ASU 2016-02 will have on the Company’s combined financial statements, and anticipates the new guidance will impact its combined financial statements as the Company has a number of operating leases. As further described in Note 12. Commitments and Contingencies, as of December 31, 2016, the Company had minimum lease commitments under non-cancellable operating leases totaling $44 million.
In March 2016, the FASB issued ASU 2016-09,  Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This guidance contains multiple updates related to the accounting and financial statement presentation of share-based payment transactions. Under the new guidance, excess tax benefits will be recognized as income tax expense in the period in which the awards vest, as opposed to being recognized in additional paid-in capital when the deduction reduces taxes payable. Excess tax benefits will be classified as an operating activity within the statement of cash flows, as opposed to a financing activity. The new guidance also clarifies that cash paid by an employer when withholding shares for tax withholding purposes should be classified as a financing activity, and also permits an accounting policy election for accruing compensation cost to either estimate the number of awards that are expected to vest, similar to current U.S. GAAP, or account for forfeitures when they occur. The new guidance is effective for fiscal years beginning after December 15, 2016. The method of transition is dependent on the particular provision within the new guidance. The Company adopted this guidance in the first quarter of 201 7 . The provisions of ASU 2016-09 related to the timing of when excess tax benefits are recognized were adopted using a modified retrospective transition method by means of an immaterial cumulative-effect adjustment to net parent investment as of January 1, 2017. On a prospective basis, excess tax benefits will be recognized as income tax expense in the period in which the awards vest, as opposed to being recognized in net parent investment when the deduction reduces taxes payable. Such excess tax benefits will be classified as an operating activity within the combined statement of cash flows prospectively, as opposed to a financing activity. The adoption of ASU 2016-09 did not materially impact the Company’s financial position, results of operations, equity or cash flows.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This guidance also requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. The new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the adoption of this guidance will have on its combined financial statements.
 
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In September 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . This guidance clarifies the presentation requirements of eight specific issues within the statement of cash flows. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The adoption of this guidance is not expected to have a significant impact on the Company’s financial statements, as the Company’s treatment of the relevant affected items within its combined statement of cash flows is consistent with the requirements of this guidance.
In October 2016, the FASB issued ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory . This guidance requires that the tax effects of all intra-entity sales of assets other than inventory be recognized in the period in which the transaction occurs. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption as of the beginning of an annual reporting period is permitted. The guidance is to be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact that the adoption of this guidance will have on its combined financial statements.
In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . This guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. As a result, restricted cash will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, and the new guidance is to be applied retrospectively. The adoption of this guidance is not expected to have a significant impact on the Company’s financial statements.
In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . This guidance simplifies how an entity is required to test goodwill for impairment by eliminating step two from the goodwill impairment test, which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard will be applied prospectively and is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its financial statements, but does not anticipate a material impact. As this standard is prospective in nature, the impact to the Company’s financial statements of not performing step two to measure the amount of any potential goodwill impairment will depend on various factors associated with the Company’s assessment of goodwill for impairment in those future periods.
In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”), which changes the presentation of net periodic pension and postretirement benefit cost in the income statement. Under the new guidance, employers present the service cost component of the net periodic benefit cost in the same income statement line items as other employee compensation costs for services rendered during the period. In addition, only the service cost component is eligible for capitalization as an asset. Employers present the other components of net periodic benefit cost separately from the line items that include the service cost component and outside of operating income. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual period. The new guidance related to the presentation of the components of net periodic benefit cost within the income statement will be applied retrospectively. The new guidance limiting the capitalization of net periodic benefit cost in assets to the service cost component will be applied prospectively. As permitted, the Company elected to early adopt this guidance effective January 1, 2017, and has classified the components of net periodic pension and postretirement benefit cost other than service costs in other expense
 
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within the combined statement of operations for all periods presented. Refer to Note 11. Pension Benefits for further detail of the components of net periodic benefit costs.
3. RELATED PARTY TRANSACTIONS
The Company has historically operated as part of the Parent and not as a stand-alone company. Accordingly, the Parent has allocated certain account balances and costs to the Company that are reflected within these combined financial statements. Management considers the allocation methodologies used by the Parent to be reasonable and to appropriately reflect the related expenses attributable to the Company for purposes of the carve-out financial statements; however, the expenses reflected in these financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if the Company had operated as a separate stand-alone entity. In addition, the expenses reflected in the financial statements may not be indicative of expenses the Company will incur in the future. Actual costs that would have been incurred if the Company had been a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including the Company’s capital structure, information technology and infrastructure.
As described in Note 1. Business and Basis of Presentation, the Company participates in a global cash pooling arrangement operated by the Parent and certain of its subsidiaries, whereby cash generated by Delphi Technologies is managed by Aptiv. This arrangement manages the working capital needs of the Company. The majority of the Company’s cash is transferred to Aptiv, and Aptiv funds the Company’s operating and investing activities as necessary. The cumulative net transfers related to these transactions are recorded in Net parent investment in the combined financial statements.
Related Party Sales and Purchases
In the ordinary course of business, the Company enters into transactions with related parties, which are subsidiaries and other businesses of the Parent, for the sale or purchase of goods, as well as other arrangements, such as providing engineering services for other Aptiv subsidiaries.
Net sales of products from Delphi Technologies to uncombined Aptiv affiliates totaled $1 million, $1 million and $2 million for the years ended December 31, 2016, 2015 and 2014, respectively.
Total purchases from uncombined Aptiv affiliates totaled $102 million, $126 million and $178 million for the years ended December 31, 2016, 2015 and 2014, respectively.
As of December 31, 2016 and 2015, the net amount due to Aptiv affiliates from related party transactions was $62 million and $53 million, respectively. The Company’s average receivable and payable balances with related parties during each period were consistent with the period end balances.
Allocations of Costs for Parent Services
The Company has certain services and functions provided to it by the Parent. These services and functions included, but were not limited to, senior management, legal, human resources, finance and accounting, treasury, information technology (“IT”) services and support, cash management, payroll processing, pension and benefit administration and other shared services. These costs were allocated using methodologies that management believes were reasonable for the item being allocated. Allocation methodologies included direct usage when identifiable, as well as the Company’s relative share of revenues, headcount or functional spend as a percentage of the total.
 
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The total costs for services and functions allocated to the Company from the Parent were as follows for the years ended December 31, 2016, 2015 and 2014:

 	  	Year Ended December 31,	 	
 	  	2016	 	  	2015	 	  	2014	 	
 	  	(in millions)	 	
Cost of sales	  	$	44	 	  	$	28	 	  	$	37	 	
Selling, general and administrative	  	 	137	 	  	 	158	 	  	 	168	 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total cost of parent services	  	$	181	 	  	$	186	 	  	$	205	 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Net Parent Investment
Net Parent investment on the combined balance sheets and combined statements of net parent investment represents Aptiv’s historical investment in Delphi Technologies, the net effect of transactions with, and allocations from, Aptiv, as well as Delphi Technologies’ accumulated earnings and other comprehensive income. Net transfers to Parent are included within Net Parent investment. The components of Net transfers to Parent were as follows:

 	  	Year Ended December 31,	 	
 	  	2016	 	 	2015	 	 	2014	 	
 	  	(in millions)	 	
Cash pooling and general financing activities, net	  	$	(376	) 	 	$	(441	) 	 	$	(405	) 	
Corporate cost allocations	  	 	181	 	 	 	186	 	 	 	205	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net transfers to parent per combined statement of net parent investment	  	$	(195	) 	 	$	(255	) 	 	$	(200	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
4. INVENTORIES
Inventories are stated at the lower of cost, determined on a first-in, first-out basis, or market, including direct material costs and direct and indirect manufacturing costs. A summary of inventories is shown below:

 	  	December 31,
2016	 	  	December 31,
2015	 	
 	  	(in millions)	 	
Productive material	  	$	158	 	  	$	143	 	
Work-in-process	  	 	41	 	  	 	48	 	
Finished goods	  	 	175	 	  	 	175	 	
	  	 	 	 	  	 	 	 	
Total	  	$	374	 	  	$	366	 	
	  	 	 	 	  	 	 	 	
5. ASSETS
Other current assets consisted of the following:

 	  	December 31,
2016	 	  	December 31,
2015	 	
 	  	(in millions)	 	
Value added tax receivable	  	$	48	 	  	$	51	 	
Prepaid insurance and other expenses	  	 	4	 	  	 	9	 	
Reimbursable engineering costs	  	 	16	 	  	 	10	 	
Notes receivable	  	 	36	 	  	 	15	 	
Income and other taxes receivable	  	 	1	 	  	 	4	 	
Deposits to vendors	  	 	3	 	  	 	3	 	
Other	  	 	—  	 	  	 	22	 	
	  	 	 	 	  	 	 	 	
Total	  	$	108	 	  	$	114	 	

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Other long-term assets consisted of the following:

 	  	December 31,
2016	 	  	December 31,
2015	 	
 	  	(in millions)	 	
Deferred income taxes (Note 13)	  	$	146	 	  	$	138	 	
Income and other taxes receivable	  	 	26	 	  	 	29	 	
Reimbursable engineering costs	  	 	—  	 	  	 	8	 	
Investment in Tula Technology, Inc. (Note 2)	  	 	20	 	  	 	20	 	
Other	  	 	31	 	  	 	35	 	
	  	 	 	 	  	 	 	 	
Total	  	$	223	 	  	$	230	 	
	  	 	 	 	  	 	 	 	
6. PROPERTY, NET
Property, net is stated at cost less accumulated depreciation and amortization, and consisted of:

 	  	Estimated Useful
Lives	 	  	December 31,	 	
 	  			  	2016	 	 	2015	 	
 	  	(Years)	 	  	(in millions)	 	
Land	  	 	—  	 	  	$	62	 	 	$	91	 	
Land and leasehold improvements	  	 	3-20	 	  	 	30	 	 	 	32	 	
Buildings	  	 	40	 	  	 	214	 	 	 	226	 	
Machinery, equipment and tooling	  	 	3-20	 	  	 	1,541	 	 	 	1,502	 	
Furniture and office equipment	  	 	3-10	 	  	 	48	 	 	 	44	 	
Construction in progress	  	 	—  	 	  	 	100	 	 	 	82	 	
	  				  	 	 	 	 	 	 	 	
Total	  				  	 	1,995	 	 	 	1,977	 	
Less: accumulated depreciation	  				  	 	(853	) 	 	 	(775	) 	
	  				  	 	 	 	 	 	 	 	
Total property, net	  				  	$	1,142	 	 	$	1,202	 	
	  				  	 	 	 	 	 	 	 	
For the year ended December 31, 2016, Delphi Technologies recorded asset impairment charges of $29 million in cost of sales related to declines in the fair values of certain fixed assets, $25 million of which related to the closure of a European manufacturing site within the Powertrain Systems segment, as further described in Note 10. Restructuring. For the year ended December 31, 2015, Delphi Technologies recorded asset impairment charges of $9 million in cost of sales related to declines in the fair values of certain fixed assets. For the year ended December 31, 2014, no asset impairment charges were recorded.
 
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7. INTANGIBLE ASSETS AND GOODWILL
The changes in the carrying amount of intangible assets and goodwill were as follows as of December 31, 2016 and 2015.

 	 	 	 	 	As of December 31, 2016	 	 	As of December 31, 2015	 	
 	 	Estimated
Useful
Lives	 	 	Gross
Carrying
Amount	 	 	Accumulated
Amortization	 	 	Net
Carrying
Amount	 	 	Gross
Carrying
Amount	 	 	Accumulated
Amortization	 	 	Net
Carrying
Amount	 	
 	 	(Years)	 	 	(in millions)	 	 	(in millions)	 	
Amortized intangible assets:	 				 				 				 				 				 				 				
Patents and developed technology	 	 	6-12	 	 	$	139	 	 	$	90	 	 	$	49	 	 	$	141	 	 	$	78	 	 	$	63	 	
Customer relationships	 	 	4-10	 	 	 	115	 	 	 	104	 	 	 	11	 	 	 	120	 	 	 	105	 	 	 	15	 	
Trade names	 	 	5-20	 	 	 	48	 	 	 	16	 	 	 	32	 	 	 	48	 	 	 	14	 	 	 	34	 	
	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 				 	 	302	 	 	 	210	 	 	 	92	 	 	 	309	 	 	 	197	 	 	 	112	 	
Unamortized intangible assets:	 				 				 				 				 				 				 				
Goodwill	 	 	—  	 	 	 	6	 	 	 	—  	 	 	 	6	 	 	 	8	 	 	 	—  	 	 	 	8	 	
	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 				 	$	308	 	 	$	210	 	 	$	98	 	 	$	317	 	 	$	197	 	 	$	120	 	
	 				 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Estimated amortization expense for the years ending December 31, 2017, 2018, 2019, 2020 and 2021 is presented below:

 	  	Year Ending December 31,	 	
 	  	2017	 	  	2018	 	  	2019	 	  	2020	 	  	2021	 	
 	  	(in millions)	 	
Estimated amortization expense	  	$	15	 	  	$	14	 	  	$	13	 	  	$	12	 	  	$	9	 	
A roll-forward of the gross carrying amounts of intangible assets for the years ended December 31, 2016 and 2015 is presented below.

 	  	2016	 	 	2015	 	
 	  	(in millions)	 	
Balance at January 1	  	$	317	 	 	$	327	 	
Foreign currency translation	  	 	(9	) 	 	 	(10	) 	
	  	 	 	 	 	 	 	 	
Balance at December 31	  	$	308	 	 	$	317	 	
	  	 	 	 	 	 	 	 	
A roll-forward of the accumulated amortization for the years ended December 31, 2016 and 2015 is presented below:

 	  	2016	 	 	2015	 	
 	  	(in millions)	 	
Balance at January 1	  	$	197	 	 	$	175	 	
Amortization	  	 	17	 	 	 	23	 	
Foreign currency translation	  	 	(4	) 	 	 	(1	) 	
	  	 	 	 	 	 	 	 	
Balance at December 31	  	$	210	 	 	$	197	 	

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A roll-forward of the carrying amount of goodwill, all of which is attributable to the PSS segment, for the years ended December 31, 2016 and 2015 is presented below:

 	  	Goodwill	 	
 	  	(in millions)	 	
Balance at January 1, 2015	  	$	8	 	
Acquisitions	  	 	—  	 	
Foreign currency translation and other	  	 	—  	 	
	  	 	 	 	
Balance at December 31, 2015	  	$	8	 	
	  	 	 	 	
Acquisitions	  	$	—  	 	
Foreign currency translation and other	  	 	(2	) 	
	  	 	 	 	
Balance at December 31, 2016	  	$	6	 	
	  	 	 	 	
8. LIABILITIES
Accrued liabilities consisted of the following:

 	  	December 31,
2016	 	  	December 31,
2015	 	
 	  	(in millions)	 	
Payroll-related obligations	  	$	39	 	  	$	45	 	
Employee benefits, including current pension obligations	  	 	28	 	  	 	31	 	
Income and other taxes payable	  	 	39	 	  	 	57	 	
Warranty obligations (Note 9)	  	 	51	 	  	 	56	 	
Restructuring (Note 10)	  	 	62	 	  	 	51	 	
Customer deposits	  	 	8	 	  	 	11	 	
Freight	  	 	10	 	  	 	7	 	
Outside services	  	 	10	 	  	 	13	 	
Deferred revenue	  	 	11	 	  	 	7	 	
Accrued rebates	  	 	24	 	  	 	27	 	
Other	  	 	49	 	  	 	48	 	
	  	 	 	 	  	 	 	 	
Total	  	$	331	 	  	$	353	 	
	  	 	 	 	  	 	 	 	
Other long-term liabilities consisted of the following:

 	  	December 31,
2016	 	  	December 31,
2015	 	
 	  	(in millions)	 	
Environmental (Note 12)	  	$	1	 	  	$	1	 	
Warranty obligations (Note 9)	  	 	45	 	  	 	44	 	
Restructuring (Note 10)	  	 	21	 	  	 	43	 	
Deferred income taxes (Note 13)	  	 	17	 	  	 	20	 	
Other	  	 	19	 	  	 	12	 	
	  	 	 	 	  	 	 	 	
Total	  	$	103	 	  	$	120	 	
	  	 	 	 	  	 	 	 	
9. WARRANTY OBLIGATIONS
Expected warranty costs for products sold are recognized principally at the time of sale of the product based on an estimate of the amount that will eventually be required to settle such obligations. These accruals are based on factors such as past experience, production changes, industry developments and various other considerations. The estimated costs related to product recalls based on a formal campaign soliciting return of that product are
 
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accrued at the time an obligation becomes probable and can be reasonably estimated. These estimates are adjusted from time to time based on facts and circumstances that impact the status of existing claims. Delphi Technologies has recognized its best estimate for its total aggregate warranty reserves, including product recall costs, across all of its operating segments as of December 31, 2016. The Company estimates the reasonably possible amount to ultimately resolve all matters in excess of the recorded reserves as of December 31, 2016 to be zero to $10 million.
The table below summarizes the activity in the product warranty liability for the years ended December 31, 2016 and 2015:

 	  	Year Ended December 31,	 	
 	  	    2016    	 	 	    2015    	 	
 	  	(in millions)	 	
Accrual balance at beginning of year	  	$	100	 	 	$	111	 	
Provision for estimated warranties incurred during the year	  	 	42	 	 	 	37	 	
Changes in estimate for pre-existing warranties	  	 	16	 	 	 	(7	) 	
Settlements made during the year (in cash or in kind)	  	 	(59	) 	 	 	(43	) 	
Foreign currency translation and other	  	 	(3	) 	 	 	2	 	
	  	 	 	 	 	 	 	 	
Accrual balance at end of year	  	$	96	 	 	$	100	 	
	  	 	 	 	 	 	 	 	
During the year ended December 31, 2016, the Company recorded $25 million pursuant to a settlement agreement reached with one of the Company’s OEM customers regarding warranty claims related to certain components supplied by the Company’s Powertrain Systems segment.
10. RESTRUCTURING
The Company’s restructuring activities are undertaken as necessary to implement management’s strategy, streamline operations, take advantage of available capacity and resources, and ultimately achieve net cost reductions. These activities generally relate to the realignment of existing manufacturing capacity and closure of facilities and other exit or disposal activities, as it relates to executing Delphi Technologies’ strategy, either in the normal course of business or pursuant to significant restructuring programs.
As part of the Company’s continued efforts to optimize its cost structure, it has undertaken several restructuring programs which include workforce reductions as well as plant closures. These programs are primarily focused on the continued rotation of our manufacturing footprint to best cost locations in Europe and on reducing global overhead costs. The Company recorded employee-related and other restructuring charges related to these programs totaling approximately $161 million during the year ended December 31, 2016. These charges included $131 million for programs focused on the continued rotation of our manufacturing footprint to best cost locations in Europe, $93 million of which related to the closure of a European manufacturing site within the Powertrain Systems segment, associated with separation costs for approximately 500 employees. Charges for the program have been substantially completed, and cash payments for this plant closure are expected to be principally completed in 2017. Additionally, the Company recognized non-cash asset impairment charges of $25 million during the year ended December 31, 2016 related to this plant closure, which were recorded within cost of sales. Delphi Technologies also recorded restructuring costs of $12 million in 2016 for programs implemented to reduce global overhead costs.
During the year ended December 31, 2015, Delphi Technologies recorded employee-related and other restructuring charges totaling approximately $112 million, primarily related to on-going restructuring programs focused on aligning manufacturing capacity with the levels of automotive production in Europe and South America, and the continued rotation of our manufacturing footprint to best cost locations within these regions. These charges included the recognition of approximately $68 million of employee-related and other costs related
 
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to the initiation of a workforce reduction at a European manufacturing site within the Powertrain Systems segment. During the year ended December 31, 2014, Delphi Technologies recorded employee related and other restructuring charges totaling approximately $52 million, which included the recognition of approximately $35 million of employee-related and other costs related to the initiation of a workforce reduction at a European manufacturing site.
Restructuring charges for employee separation and termination benefits are paid either over the severance period or in a lump sum in accordance with either statutory requirements or individual agreements. Delphi Technologies incurred cash expenditures related to its restructuring programs of approximately $165 million and $52 million in the years ended December 31, 2016 and December 31, 2015, respectively.
The following table summarizes the restructuring charges recorded for the years ended December 31, 2016, 2015 and 2014 by operating segment:

 	  	Year Ended December 31,	 	
 	  	  2016  	 	  	  2015  	 	  	  2014  	 	
 	  	(in millions)	 	
Powertrain Systems	  	$	151	 	  	$	108	 	  	$	48	 	
PSS	  	 	10	 	  	 	4	 	  	 	4	 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	161	 	  	$	112	 	  	$	52	 	
	  	 	 	 	  	 	 	 	  	 	 	 	
The table below summarizes the activity in the restructuring liability for the years ended December 31, 2016 and 2015:

 	  	Employee
Termination
Benefits Liability	 	 	Other Exit
Costs Liability	 	 	Total	 	
 	  	(in millions)	 	
Accrual balance at January 1, 2015	  	$	38	 	 	$	2	 	 	$	40	 	
Provision for estimated expenses incurred during the year	  	 	111	 	 	 	1	 	 	 	112	 	
Payments made during the year	  	 	(51	) 	 	 	(1	) 	 	 	(52	) 	
Foreign currency and other	  	 	(6	) 	 	 	—  	 	 	 	(6	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Accrual balance at December 31, 2015	  	$	92	 	 	$	2	 	 	$	94	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Provision for estimated expenses incurred during the year	  	$	156	 	 	$	5	 	 	$	161	 	
Payments made during the year	  	 	(162	) 	 	 	(3	) 	 	 	(165	) 	
Foreign currency and other	  	 	(7	) 	 	 	—  	 	 	 	(7	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Accrual balance at December 31, 2016	  	$	79	 	 	$	4	 	 	$	83	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
11. PENSION BENEFITS
The Company sponsors defined benefit pension plans for certain employees and retirees outside of the U.S. Using appropriate actuarial methods and assumptions, the Company’s defined benefit pension plans are accounted for in accordance with FASB ASC Topic 715,  Compensation—Retirement Benefits . The Company’s primary non-U.S. plans are located in the U.K., France and Mexico. The U.K. and certain Mexican plans are funded. In addition, the Company has defined benefit plans in South Korea, Turkey and Italy for which amounts are payable to employees immediately upon separation. The obligations for these plans are recorded over the requisite service period. Delphi Technologies does not have any U.S. pension assets or liabilities.
 
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Funded Status
The amounts shown below reflect the change in the non-U.S. defined benefit pension obligations during 2016 and 2015.

 	  	Year Ended December 31,	 	
 	  	    2016    	 	 	    2015    	 	
 	  	(in millions)	 	
Benefit obligation at beginning of year	  	$	1,277	 	 	$	1,365	 	
Service cost	  	 	29	 	 	 	38	 	
Interest cost	  	 	38	 	 	 	47	 	
Actuarial loss (gain)	  	 	315	 	 	 	(48	) 	
Benefits paid	  	 	(50	) 	 	 	(49	) 	
Impact of curtailments	  	 	3	 	 	 	—  	 	
Exchange rate movements and other	  	 	(207	) 	 	 	(76	) 	
	  	 	 	 	 	 	 	 	
Benefit obligation at end of year	  	 	1,405	 	 	 	1,277	 	
Change in plan assets:	  				 				
Fair value of plan assets at beginning of year	  	 	864	 	 	 	899	 	
Actual return on plan assets	  	 	157	 	 	 	4	 	
Contributions	  	 	52	 	 	 	54	 	
Benefits paid	  	 	(50	) 	 	 	(49	) 	
Exchange rate movements and other	  	 	(143	) 	 	 	(44	) 	
	  	 	 	 	 	 	 	 	
Fair value of plan assets at end of year	  	 	880	 	 	 	864	 	
Underfunded status	  	 	(525	) 	 	 	(413	) 	
Amounts recognized in the combined balance sheets consist of:	  				 				
Non-current assets	  	 	1	 	 	 	1	 	
Non-current liabilities	  	 	(526	) 	 	 	(414	) 	
	  	 	 	 	 	 	 	 	
Total	  	 	(525	) 	 	 	(413	) 	
Amounts recognized in accumulated other comprehensive income consist of (pre-tax):	  				 				
Actuarial loss	  	 	360	 	 	 	197	 	
Prior service cost	  	 	1	 	 	 	—  	 	
	  	 	 	 	 	 	 	 	
Total	  	$	361	 	 	$	197	 	

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The projected benefit obligation (“PBO”), accumulated benefit obligation (“ABO”), and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets and with plan assets in excess of accumulated benefit obligations are as follows:

 	  	Non-U.S. Plans	 	
 	  	2016	 	  	2015	 	
 	  	(in millions)
Plans with ABO in Excess of Plan Assets	 	
PBO	  	$	1,387	 	  	$	1,258	 	
ABO	  	 	1,209	 	  	 	1,113	 	
Fair value of plan assets at end of year	  	 	862	 	  	 	845	 	
		
 	  	Plans with Plan Assets in Excess of ABO	 	
PBO	  	$	18	 	  	$	19	 	
ABO	  	 	13	 	  	 	14	 	
Fair value of plan assets at end of year	  	 	18	 	  	 	19	 	
		
 	  	Total	 	
PBO	  	$	1,405	 	  	$	1,277	 	
ABO	  	 	1,222	 	  	 	1,127	 	
Fair value of plan assets at end of year	  	 	880	 	  	 	864	 	
Benefit costs presented below were determined based on actuarial methods and included the following:

 	  	Non-U.S. Plans	 	
 	  	Year Ended December 31,	 	
 	  	  2016  	 	 	  2015  	 	 	  2014  	 	
 	  	(in millions)	 	
Service cost	  	$	29	 	 	$	38	 	 	$	36	 	
Interest cost	  	 	38	 	 	 	47	 	 	 	55	 	
Expected return on plan assets	  	 	(46	) 	 	 	(54	) 	 	 	(52	) 	
Curtailment loss	  	 	3	 	 	 	—  	 	 	 	—  	 	
Amortization of actuarial losses	  	 	6	 	 	 	8	 	 	 	2	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net periodic benefit cost	  	$	30	 	 	$	39	 	 	$	41	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
As described in Note 2. Significant Accounting Policies, during the first quarter of 2017, the Company elected to early adopt ASU 2017-07. As a result, service costs are classified as employee compensation costs within cost of sales and selling, general and administrative expense within the combined statement of operations. All other components of net periodic benefit cost are classified within other expense for all periods presented.
The Company had no other postretirement benefit obligations as of December 31, 2016 or 2015.
Experience gains and losses, as well as the effects of changes in actuarial assumptions and plan provisions are recognized in other comprehensive income. Cumulative gains and losses in excess of 10% of the PBO for a particular plan are amortized over the average future service period of the employees in that plan. The estimated actuarial loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2017 is $25 million.
 
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The principal assumptions used to determine the pension expense and the actuarial value of the projected benefit obligation for the non-U.S. pension plans were:
Assumptions used to determine benefit obligations at December 31:

 	  	Pension Benefits	 	
 	  	Non-U.S. Plans	 	
 	  	2016	 	 	2015	 	
Weighted-average discount rate	  	 	2.58	% 	 	 	3.72	% 	
Weighted-average rate of increase in compensation levels	  	 	3.97	% 	 	 	3.73	% 	
Assumptions used to determine net expense for years ended December 31:

 	  	Pension Benefits	 	
 	  	Non-U.S. Plans	 	
 	  	2016	 	 	2015	 	 	2014	 	
Weighted-average discount rate	  	 	3.72	% 	 	 	3.63	% 	 	 	4.42	% 	
Weighted-average rate of increase in compensation levels	  	 	3.73	% 	 	 	3.72	% 	 	 	3.96	% 	
Weighted-average expected long-term rate of return on plan assets	  	 	5.75	% 	 	 	6.24	% 	 	 	6.24	% 	
Delphi Technologies selects discount rates by analyzing the results of matching each plan’s projected benefit obligations with a portfolio of high-quality fixed income investments rated AA-or higher by Standard and Poor’s.
The primary funded plans are in the U.K. and Mexico. For the determination of 2016 expense, Delphi Technologies assumed a long-term expected asset rate of return of approximately 5.75% and 7.50% for the U.K. and Mexico, respectively. Delphi Technologies evaluated input from local actuaries and asset managers, including consideration of recent fund performance and historical returns, in developing the long-term rate of return assumptions. The assumptions for the U.K. and Mexico are primarily long-term, prospective rates. To determine the expected return on plan assets, the market-related value of approximately 26% of our plan assets is actual fair value. The expected return on the remainder of our plan assets is determined by applying the expected long-term rate of return on assets to a calculated market-related value of these plan assets, which recognizes changes in the fair value of the plan assets in a systematic manner over five years.
Delphi Technologies’ pension expense for 2017 is determined at the 2016 year end measurement date. For purposes of analysis, the following table highlights the sensitivity of the Company’s pension obligations and expense to changes in key assumptions:

Change in Assumption	  	Impact on
Pension Expense	 	  	Impact on PBO	 	
25 basis point (“bp”) decrease in discount rate	  	+ $	6 million	 	  	+ $	73 million	 	
25 bp increase in discount rate	  	- $	6 million	 	  	- $	68 million	 	
25 bp decrease in long-term expected return on assets	  	+ $	2 million	 	  	 	—  	 	
25 bp increase in long-term expected return on assets	  	- $	2 million	 	  	 	—  	 	
The above sensitivities reflect the effect of changing one assumption at a time. It should be noted that economic factors and conditions often affect multiple assumptions simultaneously and the effects of changes in key assumptions are not necessarily linear. The above sensitivities also assume no changes to the design of the pension plans and no major restructuring programs.
 
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Pension Funding
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

 	  	Projected Pension
Benefit Payments	 	
 	  	Non-U.S. Plans	 	
 	  	(in millions)	 	
2017	  	$	37	 	
2018	  	 	36	 	
2019	  	 	37	 	
2020	  	 	38	 	
2021	  	 	43	 	
2022 – 2026	  	 	234	 	
Delphi Technologies anticipates making pension contributions and benefit payments of approximately $37 million in 2017.
Plan Assets
Certain pension plans sponsored by Delphi Technologies invest in a diversified portfolio consisting of an array of asset classes that attempts to maximize returns while minimizing volatility. These asset classes include developed market equities, emerging market equities, private equity, global high quality and high yield fixed income, real estate and absolute return strategies.
The fair values of Delphi Technologies’ pension plan assets weighted-average asset allocations at December 31, 2016 and 2015, by asset category, are as follows:

  	  	Fair Value Measurements at December 31, 2016	 	
Asset Category	  	Total	 	  	Quoted Prices in
Active Markets for
Identical Assets
(Level 1)	 	  	Significant
Observable Inputs
(Level 2)	 	  	Significant
Unobservable Inputs
(Level 3)	 	
 	  	(in millions)	 	
Cash	  	$	50	 	  	$	50	 	  	$	—  	 	  	$	—  	 	
Time deposits	  	 	7	 	  	 	—  	 	  	 	7	 	  	 	—  	 	
Equity mutual funds	  	 	334	 	  	 	—  	 	  	 	334	 	  	 	—  	 	
Bond mutual funds	  	 	371	 	  	 	—  	 	  	 	371	 	  	 	—  	 	
Real estate trust funds	  	 	22	 	  	 	—  	 	  	 	—  	 	  	 	22	 	
Hedge Funds	  	 	85	 	  	 	—  	 	  	 	—  	 	  	 	85	 	
Debt securities	  	 	5	 	  	 	5	 	  	 	—  	 	  	 	—  	 	
Equity securities	  	 	6	 	  	 	6	 	  	 	—  	 	  	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	880	 	  	$	61	 	  	$	712	 	  	$	107	 	

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 	  	Fair Value Measurements at December 31, 2015	 	
Asset Category	  	Total	 	  	Quoted Prices in
Active Markets for
Identical Assets
(Level 1)	 	  	Significant
Observable Inputs
(Level 2)	 	  	Significant
Unobservable Inputs
(Level 3)	 	
 	  	(in millions)	 	
Cash	  	$	25	 	  	$	25	 	  	$	—  	 	  	$	—  	 	
Time deposits	  	 	7	 	  	 	—  	 	  	 	7	 	  	 	—  	 	
Equity mutual funds	  	 	358	 	  	 	—  	 	  	 	358	 	  	 	—  	 	
Bond mutual funds	  	 	180	 	  	 	—  	 	  	 	180	 	  	 	—  	 	
Real estate trust funds	  	 	30	 	  	 	—  	 	  	 	—  	 	  	 	30	 	
Hedge Funds	  	 	79	 	  	 	—  	 	  	 	—  	 	  	 	79	 	
Debt securities	  	 	179	 	  	 	176	 	  	 	3	 	  	 	—  	 	
Equity securities	  	 	6	 	  	 	6	 	  	 	—  	 	  	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	864	 	  	$	207	 	  	$	548	 	  	$	109	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Following is a description of the valuation methodologies used for pension assets measured at fair value.
Time deposits —The fair value of fixed-maturity certificates of deposit was estimated using the rates offered for deposits of similar remaining maturities.
Equity mutual funds —The fair value of the equity mutual funds is determined by the indirect quoted market prices on regulated financial exchanges of the underlying investments included in the fund.
Bond mutual funds —The fair value of the bond mutual funds is determined by the indirect quoted market prices on regulated financial exchanges of the underlying investments included in the fund.
Real estate —The fair value of real estate properties is estimated using an annual appraisal provided by the administrator of the property investment. Management believes this is an appropriate methodology to obtain the fair value of these assets.
Hedge funds —The fair value of the hedge funds is accounted for by a custodian. The custodian obtains valuations from the underlying hedge fund managers based on market quotes for the most liquid assets and alternative methods for assets that do not have sufficient trading activity to derive prices. Management and the custodian review the methods used by the underlying managers to value the assets. Management believes this is an appropriate methodology to obtain the fair value of these assets.
Debt securities —The fair value of debt securities is determined by direct quoted market prices on regulated financial exchanges.
Equity securities —The fair value of equity securities is determined by direct quoted market prices on regulated financial exchanges.
 
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The following table summarizes the changes in Level 3 defined benefit pension plan assets measured at fair value on a recurring basis:

 	  	Fair Value Measurements Using Significant
Unobservable Inputs (Level 3)	 	
 	  	Real Estate
Trust Fund	 	 	Hedge Funds	 	
 	  	(in millions)	 	
Beginning balance at January 1, 2015	  	$	31	 	 	$	79	 	
Actual return on plan assets:	  				 				
Relating to assets still held at the reporting date	  	 	(2	) 	 	 	4	 	
Purchases, sales and settlements	  	 	3	 	 	 	—  	 	
Foreign currency translation and other	  	 	(2	) 	 	 	(4	) 	
	  	 	 	 	 	 	 	 	
Ending balance at December 31, 2015	  	$	30	 	 	$	79	 	
	  	 	 	 	 	 	 	 	
Actual return on plan assets:	  				 				
Relating to assets still held at the reporting date	  	$	4	 	 	$	19	 	
Purchases, sales and settlements	  	 	(7	) 	 	 	—  	 	
Foreign currency translation and other	  	 	(5	) 	 	 	(13	) 	
	  	 	 	 	 	 	 	 	
Ending balance at December 31, 2016	  	$	22	 	 	$	85	 	
	  	 	 	 	 	 	 	 	
Defined Contribution Plans
Aptiv sponsors defined contribution plans for certain hourly and salaried employees. Expense related to the contributions for these plans recorded by Delphi Technologies was approximately $9 million, $10 million, and $11 million for the years ended December 31, 2016, 2015 and 2014, respectively.
Multiemployer Pension Plans
As described in Note 2. Significant Accounting Policies, certain of the Company’s employees in Germany and the U.S. participate in defined benefit pension plans (collectively, “Shared Plans”) sponsored by Aptiv. The Company has recorded expense of approximately $1 million, $1 million, and $1 million for the years ended December 31, 2016, 2015 and 2014, respectively, to record its allocation of pension benefit costs related to the Shared Plans.
12. COMMITMENTS AND CONTINGENCIES
Ordinary Business Litigation
Delphi Technologies is from time to time subject to various legal actions and claims incidental to its business, including those arising out of alleged defects, alleged breaches of contracts, product warranties, intellectual property matters, and employment-related matters. It is the opinion of Delphi Technologies that the outcome of such matters will not have a material adverse impact on the combined financial position, results of operations, or cash flows of Delphi Technologies. With respect to warranty matters, although Delphi Technologies cannot ensure that the future costs of warranty claims by customers will not be material, Delphi Technologies believes its established reserves are adequate to cover potential warranty settlements.
Brazil Matters
Delphi Technologies conducts business operations in Brazil that are subject to the Brazilian federal labor, social security, environmental, tax and customs laws, as well as a variety of state and local laws. While Delphi Technologies believes it complies with such laws, they are complex, subject to varying interpretations, and the Company is often engaged in litigation with government agencies regarding the application of these laws to
 
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particular circumstances. As of December 31, 2016, the majority of claims asserted against Delphi Technologies in Brazil relate to such litigation. The remaining claims in Brazil relate to commercial and labor litigation with private parties. As of December 31, 2016, claims totaling approximately $60 million (using December 31, 2016 foreign currency rates) have been asserted against Delphi Technologies in Brazil. As of December 31, 2016, the Company maintains accruals for these asserted claims of approximately $10 million (using December 31, 2016 foreign currency rates). The amounts accrued represent claims that are deemed probable of loss and are reasonably estimable based on the Company’s analyses and assessment of the asserted claims and prior experience with similar matters. While the Company believes its accruals are adequate, the final amounts required to resolve these matters could differ materially from the Company’s recorded estimates and Delphi Technologies’ results of operations could be materially affected. The Company estimates the reasonably possible loss in excess of the amounts accrued related to these claims to be zero to $50 million.
Environmental Matters
Delphi Technologies is subject to the requirements of U.S. federal, state, local and non-U.S. environmental and safety and health laws and regulations. As of December 31, 2016 and December 31, 2015, the undiscounted reserve for environmental investigation and remediation, which was recorded within other long-term liabilities, was approximately $1 million and $1 million, respectively. Delphi Technologies cannot ensure that environmental requirements will not change or become more stringent over time or that its eventual environmental remediation costs and liabilities will not exceed the amount of its current reserves. In the event that such liabilities were to significantly exceed the amounts recorded, Delphi Technologies’ results of operations could be materially affected. At December 31, 2016 the difference between the recorded liabilities and the reasonably possible range of potential loss was not material.
Leases and Other Financing Charges
Operating leases —Rental expense totaled $11 million, $13 million and $13 million for the years ended December 31, 2016, 2015 and 2014, respectively. As of December 31, 2016, Delphi Technologies had minimum lease commitments under non-cancellable operating leases totaling $44 million, which become due as follows:

 	  	Minimum Future
Operating Lease Commitments	 	
 	  	(in millions)	 	
2017	  	$	11	 	
2018	  	 	7	 	
2019	  	 	5	 	
2020	  	 	5	 	
2021	  	 	5	 	
Thereafter	  	 	11	 	
	  	 	 	 	
Total	  	$	44	 	
	  	 	 	 	
Capital leases —There were no capital lease obligations outstanding as of December 31, 2016. As of December 31, 2015, there were approximately $22 million of capital lease obligations outstanding.
Interest —Cash paid for interest related to debt issued by non-U.S. subsidiaries totaled $1 million, $3 million and $4 million for the years ended December 31, 2016, 2015 and 2014, respectively.
13. INCOME TAXES
Operations of certain businesses included in Delphi Technologies’ combined financial statements are divisions of legal entities included in Aptiv’s consolidated U.S. federal and state income tax returns, or tax returns of non-U.S. entities of Aptiv. The provision for income taxes and related balance sheet accounts of such
 
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entities have been prepared and presented in the combined financial statements based on a separate return basis. Therefore, cash tax payments and items of current and deferred taxes may not be reflective of the actual tax balances of Delphi Technologies prior to or subsequent to the separation.
The Parent’s global tax model has been developed based upon its entire portfolio of business. Accordingly, the Company’s tax results as presented are not necessarily indicative of future performance and do not necessarily reflect the results that would have generated as an independent company for the periods presented.
Because portions of the Company’s operations are included in the Parent’s tax returns, payments to certain tax authorities are made by the Parent, and not by the Company. With the exception of certain dedicated foreign entities, the Company does not maintain taxes payable to/from Aptiv and the balances are deemed to settle the annual current tax balances immediately with the legal tax-paying entities in the respective jurisdictions. These settlements are reflected as changes in the Parent’s net investment.
Income (loss) before income taxes and equity income for U.S. and non-U.S. operations are as follows:

 	  	Year Ended
December 31,	 	
 	  	2016	 	 	2015	 	 	2014	 	
 	  	(in millions)	 	
U.S. loss	  	$	(35	) 	 	$	(16	) 	 	$	(83	) 	
Non-U.S. income	  	 	353	 	 	 	414	 	 	 	523	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Income before income taxes and equity income	  	$	318	 	 	$	398	 	 	$	440	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
The provision (benefit) for income taxes is comprised of:

 	  	Year Ended
December 31,	 	
 	  	2016	 	 	2015	 	 	2014	 	
 	  	(in millions)	 	
Current income tax expense:	  				 				 				
U.S. federal	  	$	—  	 	 	$	—  	 	 	$	—  	 	
Non-U.S.	  	 	62	 	 	 	96	 	 	 	106	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total current	  	 	62	 	 	 	96	 	 	 	106	 	
Deferred income tax (benefit) expense, net:	  				 				 				
U.S. federal	  	 	(2	) 	 	 	(2	) 	 	 	(7	) 	
Non-U.S.	  	 	(10	) 	 	 	(2	) 	 	 	(2	) 	
U.S. state and local	  	 	—  	 	 	 	—  	 	 	 	—  	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total deferred	  	 	(12	) 	 	 	(4	) 	 	 	(9	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total income tax provision	  	$	50	 	 	$	92	 	 	$	97	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash paid or withheld for income taxes by Delphi Technologies was $59 million, $61 million and $51 million for the years ended December 31, 2016, 2015 and 2014, respectively.
 
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For purposes of comparability and consistency, the Company uses the notional U.S. federal income tax rate when presenting the Company’s reconciliation of the income tax provision. Delphi Technologies’ parent entity is a U.K. resident taxpayer and as such is not generally subject to U.K. tax on remitted foreign earnings. A reconciliation of the provision for income taxes compared with the amounts at the notional U.S. federal statutory rate was:

 	  	Year Ended
December 31,	 	
 	  	2016	 	 	2015	 	 	2014	 	
 	  	(in millions)	 	
Notional U.S. federal income taxes at statutory rate	  	$	112	 	 	$	140	 	 	$	154	 	
Income taxed at other rates	  	 	(78	) 	 	 	(67	) 	 	 	(65	) 	
Other change in tax reserves	  	 	5	 	 	 	1	 	 	 	(1	) 	
Withholding taxes	  	 	5	 	 	 	7	 	 	 	9	 	
Change in tax law	  	 	4	 	 	 	9	 	 	 	—  	 	
Other adjustments	  	 	2	 	 	 	2	 	 	 	—  	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total income tax expense	  	$	50	 	 	$	92	 	 	$	97	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Effective tax rate	  	 	16	% 	 	 	23	% 	 	 	22	% 	
The Company’s tax rate is affected by the fact that its parent entity is a U.K. resident taxpayer, the tax rates in the U.K. and other jurisdictions in which the Company operates, the relative amount of income earned by jurisdiction and the relative amount of losses or income for which no tax benefit or expense was recognized due to a valuation allowance. Included in the non-U.S. income taxed at other rates are tax incentives obtained in various non-U.S. countries, primarily the High and New Technology Enterprise (“HNTE”) status in China and the Special Economic Zone exemption in Turkey of $13 million in 2016, $16 million in 2015, and $16 million in 2014, as well as tax benefit for income earned, and no tax benefit for losses incurred, in jurisdictions where a valuation allowance has been recorded. The Company currently benefits from tax holidays in various non-U.S. jurisdictions with expiration dates from 2016 through 2026. The income tax benefits attributable to these tax holidays are approximately $1 million in 2016, $2 million in 2015 and $4 million in 2014.
The effective tax rate in the year ended December 31, 2016 was impacted by favorable geographic income mix in 2016 as compared to 2015, primarily due to changes in the underlying operations of the business. These benefits were partially offset by $5 million of reserve adjustments recorded for uncertain tax positions, which included reserves for ongoing audits in foreign jurisdictions, as well as for changes in estimates based on relevant new or additional evidence obtained related to certain of the Company’s tax positions. Additionally, the Company’s tax rate was impacted by the enactment of the U.K. Finance (No. 2) Act 2016 on September 15, 2016, which provides for a reduction of the corporate income tax rate from 18% to 17% effective April 1, 2020. The income tax accounting effect, including any retroactive effect, of a tax law change is accounted for in the period of enactment, which in this case was the third quarter of 2016. As a result, the effective tax rate was impacted by an increased tax expense of approximately $4 million for the year ended December 31, 2016 due to the resultant impact on the net deferred tax asset balances.
The effective tax rate in the year ended December 31, 2015 was impacted by the enactment of the U.K. Finance (No. 2) Act 2015 (the “UK 2015 Finance Act”) on November 18, 2015, which provides for a reduction of the corporate income tax rate from 20% to 19% effective April 1, 2017, with a further reduction to 18% effective April 1, 2020. The income tax accounting effect, including any retroactive effect, of a tax law change is accounted for in the period of enactment, which in this case was the fourth quarter of 2015. As a result, the effective tax rate was impacted by an increased tax expense of approximately $9 million for the year ended December 31, 2015 due to the resultant impact on the net deferred tax asset balances.
The effective tax rate in the year ended December 31, 2014 was impacted by favorable geographic income mix in 2014 as compared to 2013, primarily due to changes in the underlying operations of the business as well as tax planning initiatives.
 
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Deferred Income Taxes
The Company accounts for income taxes and the related accounts under the liability method. Deferred income tax assets and liabilities reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and the bases of such assets and liabilities as measured by tax laws. Significant components of the deferred tax assets and liabilities are as follows:

 	  	December 31,	 	
 	  	2016	 	 	2015	 	
 	  	(in millions)	 	
Deferred tax assets:	  				 				
Pension	  	$	95	 	 	$	82	 	
Employee benefits	  	 	1	 	 	 	2	 	
Net operating loss carryforwards	  	 	54	 	 	 	57	 	
Warranty and other liabilities	  	 	46	 	 	 	45	 	
Other	  	 	20	 	 	 	29	 	
	  	 	 	 	 	 	 	 	
Total gross deferred tax assets	  	 	216	 	 	 	215	 	
Less: valuation allowances	  	 	(70	) 	 	 	(77	) 	
	  	 	 	 	 	 	 	 	
Total deferred tax assets (1)	  	$	146	 	 	$	138	 	
	  	 	 	 	 	 	 	 	
Deferred tax liabilities:	  				 				
Fixed assets	  	$	1	 	 	$	3	 	
Tax on unremitted profits of certain foreign subsidiaries	  	 	2	 	 	 	3	 	
Intangibles	  	 	14	 	 	 	14	 	
	  	 	 	 	 	 	 	 	
Total gross deferred tax liabilities	  	 	17	 	 	 	20	 	
	  	 	 	 	 	 	 	 	
Net deferred tax assets	  	$	129	 	 	$	118	 	

(1)	Reflects gross amount before jurisdictional netting of deferred tax assets and liabilities.	
Deferred tax liabilities and assets are classified as long-term in the combined balance sheet. Net deferred tax assets and liabilities are included in the combined balance sheets as follows:

 	  	December 31,	 	
 	  	2016	 	 	2015	 	
 	  	(in millions)	 	
Long-term assets	  	$	146	 	 	$	138	 	
Long-term liabilities	  	 	(17	) 	 	 	(20	) 	
	  	 	 	 	 	 	 	 	
Total deferred tax asset	  	$	129	 	 	$	118	 	
	  	 	 	 	 	 	 	 	
The net deferred tax assets of $129 million as of December 31, 2016 are primarily comprised of deferred tax asset amounts in the U.K., Luxembourg and China, offset by deferred tax liability amounts in Luxembourg.
Net Operating Loss and Tax Credit Carryforwards
As of December 31, 2016, the Company has gross deferred tax assets of approximately $54 million for non-U.S. net operating loss (“NOL”) carryforwards with recorded valuation allowances of $37 million. These NOL’s are available to offset future taxable income and realization is dependent on generating sufficient taxable income prior to expiration of the loss carryforwards. The NOL’s primarily relate to France, China and Spain. The NOL carryforwards have expiration dates ranging from one year to an indefinite period.
Deferred tax assets include $2 million and $2 million of tax credit carryforwards with recorded valuation allowances of $2 million and $2 million at December 31, 2016 and 2015, respectively. These tax credit carryforwards expire in 2017 through 2021.
 
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Cumulative Undistributed Foreign Earnings
As of December 31, 2016, deferred income tax liabilities of $2 million have been established with respect to the undistributed earnings of combined foreign subsidiaries whose parent entities are also included within the combined financial statements. No deferred tax liability has been recorded within the combined financial statements on the undistributed earnings of combined foreign subsidiaries whose parent entities are Aptiv affiliates that are not included within the combined financial statements, as the potential foreign withholding taxes would be payable by these non-combined Aptiv affiliates.
Uncertain Tax Positions
The Company recognizes tax benefits only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards.
A reconciliation of the gross change in the unrecognized tax benefits balance, excluding interest and penalties is as follows:

 	  	Year Ended
December 31,	 	
 	  	2016	 	 	2015	 	 	2014	 	
 	  	(in millions)	 	
Balance at beginning of year	  	$	16	 	 	$	18	 	 	$	24	 	
Additions related to prior years	  	 	3	 	 	 	1	 	 	 	—  	 	
Reductions related to prior years	  	 	(10	) 	 	 	(3	) 	 	 	(2	) 	
Reductions due to expirations of statute of limitations	  	 	—  	 	 	 	—  	 	 	 	(4	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance at end of year	  	$	9	 	 	$	16	 	 	$	18	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
A portion of the Company’s unrecognized tax benefits would, if recognized, reduce its effective tax rate. The remaining unrecognized tax benefits relate to tax positions for which only the timing of the benefit is uncertain. Recognition of these tax benefits would reduce the Company’s effective tax rate only through a reduction of accrued interest and penalties. As of December 31, 2016 and 2015, the amounts of unrecognized tax benefit that would reduce the Company’s effective tax rate were $13 million and $7 million, respectively. In addition, $2 million and $12 million for 2016 and 2015, respectively, would be offset by the write-off of a related deferred tax asset, if recognized.
The Company recognizes interest and penalties relating to unrecognized tax benefits as part of income tax expense. Total accrued liabilities for interest and penalties were $6 million and $4 million at December 31, 2016 and 2015, respectively. Total interest and penalties recognized as part of income tax expense (benefit) was $2 million, $1 million and $(1) million for the years ended December 31, 2016, 2015 and 2014, respectively.
Aptiv files tax returns in multiple jurisdictions and is subject to examination by taxing authorities throughout the world. Taxing jurisdictions significant to Delphi Technologies include China, Romania, Turkey, South Korea, Mexico and the U.K. Delphi Technologies also includes divisions of legal entities that file tax returns in the following jurisdictions: the U.S., Hungary, Luxembourg, Brazil, France, Singapore and Poland. Open tax years related to these taxing jurisdictions remain subject to examination and could result in additional tax liabilities. In general, the Aptiv affiliates are no longer subject to income tax examinations by foreign tax authorities for years before 2001. It is reasonably possible that audit settlements, the conclusion of current examinations or the expiration of the statute of limitations in several jurisdictions could impact the Delphi Technologies’ unrecognized tax benefits.
 
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14. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The changes in accumulated other comprehensive income (loss) attributable to Delphi Technologies (net of tax) are shown below.

 	  	Year Ended December 31,	 	
 	  	2016	 	 	2015	 	 	2014	 	
 	  	(in millions)	 	
Foreign currency translation adjustments:	  				 				 				
Balance at beginning of year	  	$	(339	) 	 	$	(193	) 	 	$	(47	) 	
Aggregate adjustment for the year	  	 	(80	) 	 	 	(146	) 	 	 	(146	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance at end of year	  	 	(419	) 	 	 	(339	) 	 	 	(193	) 	
				
Pension and postretirement plans:	  				 				 				
Balance at beginning of year	  	$	(157	) 	 	$	(172	) 	 	$	(124	) 	
Other comprehensive income before reclassifications (net tax effect of $29, $4 and $11)	  	 	(140	) 	 	 	9	 	 	 	(50	) 	
Reclassification to income (net tax effect of $1, $2 and $0)	  	 	5	 	 	 	6	 	 	 	2	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance at end of year	  	 	(292	) 	 	 	(157	) 	 	 	(172	) 	

Accumulated other comprehensive loss, end of year	  	$	(711	) 	 	$	(496	) 	 	$	(365	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Reclassifications from accumulated other comprehensive income (loss) to income were as follows:

Reclassification Out of Accumulated Other Comprehensive Income (Loss)	
Details About Accumulated Other
Comprehensive Income Components	  	Year Ended
December 31,	 	 	Affected Line Item in the Statement of Operations	
	  	2016	 	 	2015	 	 	2014	 	 		
 	  	(in millions)	 	 	 	
Pension and postretirement plans:	  				 				 				 		
Actuarial loss	  	$	(6	) 	 	$	(8	) 	 	$	(2	) 	 	Other expense (1)	
	  	 	 	 	 	 	 	 	 	 	 	 	 		
	  	 	(6	) 	 	 	(8	) 	 	 	(2	) 	 	Income before income taxes	
	  	 	1	 	 	 	2	 	 	 	—  	 	 	Income tax expense	
	  	 	 	 	 	 	 	 	 	 	 	 	 		
	  	 	(5	) 	 	 	(6	) 	 	 	(2	) 	 	Net income	
	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	Net income attributable to noncontrolling interest	
	  	 	 	 	 	 	 	 	 	 	 	 	 		
	  	$	(5	) 	 	$	(6	) 	 	$	(2	) 	 	Net income attributable to Delphi Technologies	
	  	 	 	 	 	 	 	 	 	 	 	 	 		
Total reclassifications for the year	  	$	(5	) 	 	$	(6	) 	 	$	(2	) 	 		

(1)	These accumulated other comprehensive loss components are components of net periodic pension cost (see Note 11. Pension Benefits for additional details).	
15. OTHER INCOME, NET
Other income (expense), net included:

 	  	Year Ended December 31,	 	
 	  	    2016    	 	 	    2015    	 	 	    2014    	 	
 	  	(in millions)	 	
Interest income	  	$	—  	 	 	$	—  	 	 	$	3	 	
Components of net periodic benefit cost other than service cost (Note 11)	  	 	(1	) 	 	 	(1	) 	 	 	(5	) 	
Other	  	 	—  	 	 	 	(1	) 	 	 	4	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Other (expense) income, net	  	$	(1	) 	 	$	(2	) 	 	$	2	 	

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16. SHARE-BASED COMPENSATION
Certain U.S. and non-U.S. employees of Delphi Technologies are covered by the Parent-sponsored share-based compensation arrangement, the Delphi Automotive PLC Long Term Incentive Plan, as amended and restated effective April 23, 2015 (the “PLC LTIP”). The PLC LTIP allows for the grant of awards of up to 22,977,116 Aptiv ordinary shares for long-term compensation. The PLC LTIP is designed to align the interests of management and shareholders. The awards can be in the form of shares, options, stock appreciation rights, restricted stock, RSUs, performance awards, and other share-based awards to the employees, directors, consultants and advisors of Aptiv.
Aptiv has made annual grants of RSUs to its executives in February of each year beginning in 2012 in order to align management compensation with Aptiv’s overall business strategy. Aptiv has competitive and market-appropriate ownership requirements. All of the RSUs granted under the PLC LTIP are eligible to receive dividend equivalents for any dividend paid from the grant date through the vesting date. Dividend equivalents are generally paid out in ordinary shares upon vesting of the underlying RSUs.
These awards include a time-based vesting portion and a performance-based vesting portion, as well as continuity awards in certain years. The time-based RSUs, which make up 25% of the awards for Aptiv’s officers and 50% for Aptiv’s other executives, vest ratably over three years beginning on the first anniversary of the grant date. The performance-based RSUs, which make up 75% of the awards for Aptiv’s officers and 50% for Aptiv’s other executives, vest at the completion of a three-year performance period if certain targets are met. Each executive will receive between 0% and 200% of his or her target performance-based award based on Aptiv’s performance against established company-wide performance metrics, which are:

Metric	  	2016 Grant	 	  	2013 - 2015 Grants	 	  	2012 Grant	 	
Average return on net assets (1)	  	 	50%	 	  	 	50%	 	  	 	50%	 	
Cumulative net income	  	 	25%	 	  	 	N/A	 	  	 	30%	 	
Cumulative earnings per share (2)	  	 	N/A	 	  	 	30%	 	  	 	N/A	 	
Relative total shareholder return (3)	  	 	25%	 	  	 	20%	 	  	 	20%	 	
 
(1)	Average return on net assets is measured by Aptiv’s tax-affected operating income divided by Aptiv’s average net working capital plus average net property, plant and equipment for each calendar year during the respective performance period.	
(2)	Cumulative earnings per share is measured by net income attributable to Aptiv divided by the weighted average number of diluted shares outstanding for the respective three-year performance period.	
(3)	Relative total shareholder return is measured by comparing the average closing price per share of Aptiv’s ordinary shares for all available trading days in the fourth quarter of the end of the performance period to the average closing price per share of Aptiv’s ordinary shares for all available trading days in the fourth quarter of the year preceding the grant, including dividends, and assessed against a comparable measure of competitor and peer group companies.	
Any new executives hired after the annual executive RSU grant date may be eligible to participate in the PLC LTIP. Any off cycle grants made for new hires are valued at their grant date fair value based on the closing price of Aptiv’s ordinary shares on the date of such grant.
The grant date fair value of the RSUs is determined based on the target number of awards issued, the closing price of Aptiv’s ordinary shares on the date of the grant of the award, including an estimate for forfeitures, and a contemporaneous valuation performed by an independent valuation specialist with respect to the relative total shareholder return awards.
 
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A summary of activity, including award grants, vesting and forfeitures for Delphi Technologies employees who participate in the Aptiv plan is provided below:

 	  	RSUs	 	 	Weighted Average Grant
Date Fair Value	 	
 	  	(in thousands)	 	 	 	 	
Nonvested, January 1, 2014	  	 	371	 	 	$	36.55	 	
Granted	  	 	163	 	 	 	57.27	 	
Vested	  	 	(221	) 	 	 	33.14	 	
Forfeited	  	 	(24	) 	 	 	41.69	 	
	  	 	 	 	 				
Nonvested, December 31, 2014	  	 	289	 	 	 	50.38	 	
	  	 	 	 	 				
Granted	  	 	214	 	 	 	72.30	 	
Vested	  	 	(226	) 	 	 	42.45	 	
Forfeited	  	 	(26	) 	 	 	64.75	 	
	  	 	 	 	 				
Nonvested, December 31, 2015	  	 	251	 	 	 	74.66	 	
	  	 	 	 	 				
Granted	  	 	155	 	 	 	68.35	 	
Vested	  	 	(158	) 	 	 	65.91	 	
Forfeited	  	 	(28	) 	 	 	74.10	 	
	  	 	 	 	 				
Nonvested, December 31, 2016	  	 	220	 	 	 	76.54	 	
	  	 	 	 	 				
As of December 31, 2016, there were approximately 97,000 performance-based RSUs, with a weighted average grant date fair value of $70.07, that were vested but not yet distributed.
Share-based compensation expense within the combined financial statements has been allocated to Delphi Technologies based on the awards and terms previously granted to Delphi Technologies employees while part of Aptiv, and includes the cost of Delphi Technologies employees who participate in the Aptiv plan as well as an allocated portion of the cost of Aptiv senior management awards. Share-based compensation expense recorded within the combined statement of operations, which includes the cost of Delphi Technologies employees who participate in the Aptiv plan as well as an allocated portion of the cost of Aptiv senior management awards, was $19 million ($16 million, net of tax), $22 million ($19 million, net of tax) and $22 million ($19 million net of tax) based on the Company’s best estimate of Aptiv’s ultimate performance against the respective targets during the years ended December 31, 2016, 2015 and 2014, respectively. The Company will continue to recognize compensation expense, based on the grant date fair value of the awards applied to the Company’s best estimate of ultimate performance against the respective targets, over the requisite vesting periods of the awards. Based on the grant date fair value of the awards and the Company’s best estimate of Aptiv’s ultimate performance against the respective targets as of December 31, 2016, unrecognized compensation expense on a pretax basis of approximately $23 million is anticipated to be recognized over a weighted average period of approximately 2 years.
17. SEGMENT REPORTING
Delphi Technologies operates its core business along the following operating segments, which are grouped on the basis of similar product, market and operating factors:
 
 	•	 	Powertrain Systems, which manufactures fuel injection systems as well as various other powertrain products including valvetrain, fuel delivery modules, ignition coils, canisters, sensors, valves and actuators. This segment also offers electronic control modules and corresponding software, as well as power electronics solutions including supervisory controllers and software, converters and inverters.	
 
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 	•	 	PSS, which sells a portfolio of aftermarket products and services to independent aftermarket customers and for original equipment service, including a wide variety of powertrain and select additional vehicle components.	
 
 	•	 	Eliminations and Other, which includes the elimination of inter-segment transactions.	
The accounting policies of the segments are the same as those described in Note 2. Significant Accounting Policies, except that the disaggregated financial results for the segments have been prepared using a management approach, which is consistent with the basis and manner in which management internally disaggregates financial information for which Delphi Technologies’ chief operating decision maker regularly reviews financial results to assess performance of, and make internal operating decisions about allocating resources to, the segments.
Generally, Delphi Technologies evaluates segment performance based on stand-alone segment net income before interest expense, other income (expense), net, income tax expense, equity income (loss), net of tax, income (loss) from discontinued operations, net of tax, restructuring, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures), asset impairments and gains (losses) on business divestitures (“Adjusted Operating Income”) and accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, at current market prices. Delphi Technologies’ management utilizes Adjusted Operating Income as the key performance measure of segment income or loss to evaluate segment performance, and for planning and forecasting purposes to allocate resources to the segments, as management believes this measure is most reflective of the operational profitability or loss of Delphi Technologies’ operating segments. Segment Adjusted Operating Income should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered an alternative to net income attributable to Delphi Technologies, which is the most directly comparable financial measure to Adjusted Operating Income that is prepared in accordance with U.S. GAAP. Segment Adjusted Operating Income, as determined and measured by Delphi Technologies, should also not be compared to similarly titled measures reported by other companies.
Included below are sales and operating data for the Company’s segments for the years ended December 31, 2016, 2015 and 2014, as well as balance sheet data as of December 31, 2016 and 2015.

 	  	Powertrain
Systems	 	  	PSS	 	  	Eliminations
and Other (1)	 	 	Total	 	
 	  	(in millions)	 	
For the Year Ended December 31, 2016:	  				  				  				 				
Net sales	  	$	3,837	 	  	$	924	 	  	$	(275	) 	 	$	4,486	 	
Depreciation and amortization (2)	  	$	202	 	  	$	8	 	  	$	—  	 	 	$	210	 	
Adjusted operating income	  	$	418	 	  	$	94	 	  	$	—  	 	 	$	512	 	
Operating income (3)	  	$	239	 	  	$	81	 	  	$	—  	 	 	$	320	 	
Net income attributable to noncontrolling interest	  	$	32	 	  	$	—  	 	  	$	—  	 	 	$	32	 	
Capital expenditures	  	$	169	 	  	$	2	 	  	$	—  	 	 	$	171	 	

 	  	Powertrain
Systems	 	  	PSS	 	  	Eliminations
and Other (1)	 	 	Total	 	
 	  	(in millions)	 	
For the Year Ended December 31, 2015:	  				  				  				 				
Net sales	  	$	3,729	 	  	$	963	 	  	$	(285	) 	 	$	4,407	 	
Depreciation and amortization (4)	  	$	178	 	  	$	11	 	  	$	—  	 	 	$	189	 	
Adjusted operating income	  	$	428	 	  	$	98	 	  	$	—  	 	 	$	526	 	
Operating income (5)	  	$	309	 	  	$	94	 	  	$	—  	 	 	$	403	 	
Net income attributable to noncontrolling interest	  	$	34	 	  	$	—  	 	  	$	—  	 	 	$	34	 	
Capital expenditures	  	$	197	 	  	$	4	 	  	$	—  	 	 	$	201	 	
 
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 	  	Powertrain
Systems	 	 	PSS	 	  	Eliminations
and Other (1)	 	 	Total	 	
 	  	(in millions)	 	
For the Year Ended December 31, 2014:	  				 				  				 				
Net sales	  	$	3,862	 	 	$	1,000	 	  	$	(322	) 	 	$	4,540	 	
Depreciation and amortization	  	$	178	 	 	$	16	 	  	$	—  	 	 	$	194	 	
Adjusted operating income	  	$	402	 	 	$	92	 	  	$	—  	 	 	$	494	 	
Operating income (6)	  	$	354	 	 	$	88	 	  	$	—  	 	 	$	442	 	
Equity loss	  	$	(1	) 	 	$	—  	 	  	$	—  	 	 	$	(1	) 	
Net income attributable to noncontrolling interest	  	$	35	 	 	$	1	 	  	$	—  	 	 	$	36	 	
Capital expenditures	  	$	319	 	 	$	3	 	  	$	—  	 	 	$	322	 	
 
(1)	Eliminations and Other includes the elimination of inter-segment transactions.	
(2)	Includes asset impairment charges of $29 million within Powertrain Systems.	
(3)	Includes charges recorded in 2016 related to costs associated with employee termination benefits and other exit costs of $151 million for Powertrain Systems and $10 million for PSS.	
(4)	Includes asset impairment charges of $9 million within Powertrain Systems.	
(5)	Includes charges recorded in 2015 related to costs associated with employee termination benefits and other exit costs of $108 million for Powertrain Systems and $4 million for PSS.	
(6)	Includes charges recorded in 2014 related to costs associated with employee termination benefits and other exit costs of $48 million for Powertrain Systems and $4 million for PSS.	

 	  	Powertrain
Systems	 	  	PSS	 	  	Eliminations
and Other (1)	 	 	Total	 	
 	  	(in millions)	 	
Balance as of December 31, 2016:	  				  				  				 				
Investment in affiliates	  	$	34	 	  	$	—  	 	  	$	—  	 	 	$	34	 	
Goodwill	  	$	—  	 	  	$	6	 	  	$	—  	 	 	$	6	 	
Total segment assets	  	$	2,555	 	  	$	655	 	  	$	(311	) 	 	$	2,899	 	
Balance as of December 31, 2015:	  				  				  				 				
Investment in affiliates	  	$	34	 	  	$	—  	 	  	$	  —	 	 	$	34	 	
Goodwill	  	$	—  	 	  	$	8	 	  	$	—  	 	 	$	8	 	
Total segment assets	  	$	2,604	 	  	$	667	 	  	$	(270	) 	 	$	3,001	 	
 
(1)	Eliminations and Other includes the elimination of inter-segment transactions.	
 
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The reconciliation of Adjusted Operating Income to Operating Income includes, as applicable, restructuring, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures) and asset impairments. The reconciliation of Adjusted Operating Income to net income attributable to Delphi Technologies for the years ended December 31, 2016, 2015 and 2014 are as follows:

 	  	Powertrain
Systems	 	 	PSS	 	 	Eliminations
and Other	 	  	Total	 	
 	  	(in millions)	 	
For the Year Ended December 31, 2016:	  				 				 				
Adjusted operating income	  	$	418	 	 	$	94	 	 	$	—  	 	  	$	512	 	
Restructuring	  	 	(151	) 	 	 	(10	) 	 	 	—  	 	  	 	(161	) 	
Other acquisition and portfolio project costs	  	 	—  	 	 	 	(2	) 	 	 	—  	 	  	 	(2	) 	
Asset impairments	  	 	(28	) 	 	 	(1	) 	 	 	—  	 	  	 	(29	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating income	  	$	239	 	 	$	81	 	 	$	—  	 	  	 	320	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Interest expense	  				 				 				  	 	(1	) 	
Other expense, net	  				 				 				  	 	(1	) 	
	  				 				 				  	 	 	 	
Income before income taxes and equity income	  				 				 				  	 	318	 	
Income tax expense	  				 				 				  	 	(50	) 	
Equity income, net of tax	  				 				 				  	 	—  	 	
	  				 				 				  	 	 	 	
Net income	  				 				 				  	 	268	 	
Net income attributable to noncontrolling interest	  				 				 				  	 	32	 	
	  				 				 				  	 	 	 	
Net income attributable to Delphi Technologies	  				 				 				  	$	236	 	

																	
 	  	Powertrain
Systems	 	 	PSS	 	 	Eliminations
and Other	 	  	Total	 	
 	  	(in millions)	 	
For the Year Ended December 31, 2015:	  				 				 				
Adjusted operating income	  	$	428	 	 	$	98	 	 	$	—  	 	  	$	526	 	
Restructuring	  	 	(108	) 	 	 	(4	) 	 	 	—  	 	  	 	(112	) 	
Other acquisition and portfolio project costs	  	 	(2	) 	 	 	—  	 	 	 	—  	 	  	 	(2	) 	
Asset impairments	  	 	(9	) 	 	 	—  	 	 	 	—  	 	  	 	(9	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating income	  	$	309	 	 	$	94	 	 	$	—  	 	  	 	403	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Interest expense	  				 				 				  	 	(3	) 	
Other expense, net	  				 				 				  	 	(2	) 	
	  				 				 				  	 	 	 	
Income before income taxes and equity income	  				 				 				  	 	398	 	
Income tax expense	  				 				 				  	 	(92	) 	
Equity income, net of tax	  				 				 				  	 	—  	 	
	  				 				 				  	 	 	 	
Net income	  				 				 				  	 	306	 	
Net income attributable to noncontrolling interest	  				 				 				  	 	34	 	
	  				 				 				  	 	 	 	
Net income attributable to Delphi Technologies	  				 				 				  	$	272	 	

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 	  	Powertrain
Systems	 	 	PSS	 	 	Eliminations
and Other	 	  	Total	 	
 	  	(in millions)	 	
For the Year Ended December 31, 2014:	  				 				 				
Adjusted operating income	  	$	402	 	 	$	92	 	 	$	—  	 	  	$	494	 	
Restructuring	  	 	(48	) 	 	 	(4	) 	 	 	—  	 	  	 	(52	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating income	  	$	354	 	 	$	88	 	 	$	—  	 	  	 	442	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Interest expense	  				 				 				  	 	(4	) 	
Other income, net	  				 				 				  	 	2	 	
	  				 				 				  	 	 	 	
Income before income taxes and equity income	  				 				 				  	 	440	 	
Income tax expense	  				 				 				  	 	(97	) 	
Equity loss, net of tax	  				 				 				  	 	(1	) 	
	  				 				 				  	 	 	 	
Net income	  				 				 				  	 	342	 	
Net income attributable to noncontrolling interest	  				 				 				  	 	36	 	
	  				 				 				  	 	 	 	
Net income attributable to Delphi Technologies	  				 				 				  	$	306	 	
	  				 				 				  	 	 	 	
Information concerning principal geographic areas is set forth below. Net sales data reflects the manufacturing location for the years ended December 31, 2016, 2015 and 2014. Net property data is as of December 31, 2016, 2015 and 2014.

 	  	Year Ended
December 31, 2016	 	  	Year Ended
December 31, 2015	 	  	Year Ended
December 31, 2014	 	
 	  	Net Sales	 	  	Net
Property (1)	 	  	Net Sales	 	  	Net
Property (1)	 	  	Net Sales	 	  	Net
Property (1)	 	
 	  	(in millions)	 	
United States (2)	  	$	1,297	 	  	$	214	 	  	$	1,132	 	  	$	189	 	  	$	989	 	  	$	171	 	
Other North America	  	 	6	 	  	 	22	 	  	 	7	 	  	 	20	 	  	 	25	 	  	 	22	 	
Europe, Middle East & Africa (3)	  	 	1,995	 	  	 	613	 	  	 	2,087	 	  	 	704	 	  	 	2,323	 	  	 	789	 	
Asia Pacific (4)	  	 	1,071	 	  	 	270	 	  	 	1,045	 	  	 	272	 	  	 	1,005	 	  	 	287	 	
South America	  	 	117	 	  	 	23	 	  	 	136	 	  	 	17	 	  	 	198	 	  	 	24	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	4,486	 	  	$	1,142	 	  	$	4,407	 	  	$	1,202	 	  	$	4,540	 	  	$	1,293	 	

(1)	Net property data represents property, plant and equipment, net of accumulated depreciation.	
(2)	Includes net sales and machinery, equipment and tooling that relate to the Company’s maquiladora operations located in Mexico. These assets are utilized to produce products sold to customers located in the United States.	
(3)	Includes the Company’s country of domicile, Jersey, and the country of the Company’s principal executive offices, the United Kingdom. The Company had no sales in Jersey in any period. The Company had net sales of $674 million, $728 million, and $820 million in the United Kingdom for the years ended December 31, 2016, 2015 and 2014, respectively. The Company had net property in the United Kingdom of $146 million, $188 million, and $213 million as of December 31, 2016, 2015 and 2014, respectively. The largest portion of net sales in the Europe, Middle East & Africa region was $674 million in the United Kingdom, $728 million in the United Kingdom and $820 million in the United Kingdom for the years ended December 31, 2016, 2015 and 2014, respectively.	
(4)	Net sales and net property in Asia Pacific are primarily attributable to China.	
 
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Net Sales to outside customers by major product group were as follows:

 	  	Year Ended December 31,	 	
 	  	2016	 	  	2015	 	  	2014	 	  	 	 	
 	  	(in millions)	 	
Fuel Injection Systems	  	$	1,465	 	  	$	1,519	 	  	$	1,580	 	  				
Powertrain Products	  	 	1,169	 	  	 	1,158	 	  	 	1,195	 	  				
Electrification & Electronics	  	 	928	 	  	 	767	 	  	 	765	 	  				
Independent Aftermarket	  	 	594	 	  	 	617	 	  	 	600	 	  				
Original Equipment Service	  	 	330	 	  	 	346	 	  	 	400	 	  				
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Net sales	  	$	4,486	 	  	$	4,407	 	  	$	4,540	 	  				

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DELPHI TECHNOLOGIES PLC
 SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

 	  	Balance at
Beginning
of Period	 	  	Additions	 	  	 	 	 	 	 	 	 	 	
 	  			  	Charged to Costs
and Expenses	 	  	Deductions	 	 	Other Activity	 	 	Balance at
End of Period	 	
 	  	(in millions)	 	
December 31, 2016:	  				  				  				 				 				
Allowance for doubtful accounts	  	$	8	 	  	$	2	 	  	$	(1	) 	 	$	—  	 	 	$	9	 	
Tax valuation allowance (a)	  	$	77	 	  	$	—  	 	  	$	(4	) 	 	$	(3	) 	 	$	70	 	
December 31, 2015:	  				  				  				 				 				
Allowance for doubtful accounts	  	$	7	 	  	$	5	 	  	$	(4	) 	 	$	—  	 	 	$	8	 	
Tax valuation allowance (a)	  	$	66	 	  	$	18	 	  	$	—  	 	 	$	(7	) 	 	$	77	 	
December 31, 2014:	  				  				  				 				 				
Allowance for doubtful accounts	  	$	7	 	  	$	4	 	  	$	(4	) 	 	$	—  		 	$	7	 	
Tax valuation allowance (a)	  	$	77	 	  	$	—  	 	  	$	(2	) 	 	$	(9	) 	 	$	66	 	
 
(a)	Additions Charged to Costs and Expenses are primarily related to taxable losses for which the tax benefit has been reserved.	
 
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DELPHI TECHNOLOGIES PLC
 COMBINED STATEMENTS OF OPERATIONS (Unaudited)

 	  	Three Months Ended
June 30,	 	 	Six Months Ended
June 30,	 	
 	  	    2017    	 	 	    2016    	 	 	    2017    	 	 	    2016    	 	
 	  	(in millions)	 	 	(in millions)	 	
Net sales	  	$	1,187	 	 	$	1,146	 	 	$	2,355	 	 	$	2,263	 	
Operating expenses:	  				 				 				 				
Cost of sales	  	 	947	 	 	 	953	 	 	 	1,873	 	 	 	1,869	 	
Selling, general and administrative	  	 	76	 	 	 	73	 	 	 	156	 	 	 	148	 	
Amortization	  	 	4	 	 	 	5	 	 	 	8	 	 	 	9	 	
Restructuring (Note 8)	  	 	66	 	 	 	124	 	 	 	76	 	 	 	130	 	
Separation costs	  	 	15	 	 	 	—  	 	 	 	15	 	 	 	—  	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	1,108	 	 	 	1,155	 	 	 	2,128	 	 	 	2,156	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	  	 	79	 	 	 	(9	) 	 	 	227	 	 	 	107	 	
Interest expense	  	 	—  	 	 	 	(1	) 	 	 	(1	) 	 	 	(1	) 	
Other income (expense), net	  	 	—  	 	 	 	3	 	 	 	(6	) 	 	 	3	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) before income taxes and equity income	  	 	79	 	 	 	(7	) 	 	 	220	 	 	 	109	 	
Income tax (expense) benefit	  	 	(22	) 	 	 	2	 	 	 	(53	) 	 	 	(13	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) before equity income	  	 	57	 	 	 	(5	) 	 	 	167	 	 	 	96	 	
Equity (loss) income, net of tax	  	 	(1	) 	 	 	—  	 	 	 	—  	 	 	 	—  	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	  	 	56	 	 	 	(5	) 	 	 	167	 	 	 	96	 	
Net income attributable to noncontrolling interest	  	 	8	 	 	 	7	 	 	 	16	 	 	 	15	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to Delphi Technologies	  	$	48	 	 	$	(12	) 	 	$	151	 	 	$	81	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to combined financial statements.
 
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DELPHI TECHNOLOGIES PLC
 COMBINED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

 	  	Three Months Ended
June 30,	 	 	Six Months Ended
June 30,	 	
 	  	    2017    	 	  	    2016    	 	 	    2017    	 	  	    2016    	 	
 	  	(in millions)	 	
Net income (loss)	  	$	56	 	  	$	(5	) 	 	$	167	 	  	$	96	 	
Other comprehensive income:	  				  				 				  				
Currency translation adjustments	  	 	55	 	  	 	(38	) 	 	 	84	 	  	 	(13	) 	
Employee benefit plans adjustment, net of tax	  	 	3	 	  	 	12	 	 	 	7	 	  	 	17	 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Other comprehensive income (loss), net of tax	  	 	58	 	  	 	(26	) 	 	 	91	 	  	 	4	 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Comprehensive income (loss)	  	 	114	 	  	 	(31	) 	 	 	258	 	  	 	100	 	
Comprehensive income attributable to noncontrolling interests	  	 	9	 	  	 	5	 	 	 	18	 	  	 	14	 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Comprehensive income (loss) attributable to Delphi Technologies	  	$	105	 	  	$	(36	) 	 	$	240	 	  	$	86	 	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
See accompanying notes to combined financial statements.
 
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DELPHI TECHNOLOGIES PLC
 COMBINED BALANCE SHEETS

 	  	June 30,
2017
(Unaudited)	 	 	December 31,
2016	 	
 	  	(in millions)	 	
ASSETS	  				 				
Current assets:	  				 				
Cash and cash equivalents	  	$	78	 	 	$	101	 	
Accounts receivable, net:	  				 				
Outside customers	  	 	920	 	 	 	803	 	
Related parties	  	 	25	 	 	 	16	 	
Inventories (Note 4)	  	 	452	 	 	 	374	 	
Other current assets (Note 5)	  	 	100	 	 	 	108	 	
	  	 	 	 	 	 	 	 	
Total current assets	  	 	1,575	 	 	 	1,402	 	
Long-term assets:	  				 				
Property, net	  	 	1,151	 	 	 	1,142	 	
Investments in affiliates	  	 	34	 	 	 	34	 	
Intangible assets, net	  	 	83	 	 	 	92	 	
Goodwill	  	 	7	 	 	 	6	 	
Other long-term assets (Note 5)	  	 	242	 	 	 	223	 	
	  	 	 	 	 	 	 	 	
Total long-term assets	  	 	1,517	 	 	 	1,497	 	
	  	 	 	 	 	 	 	 	
Total assets	  	$	3,092	 	 	$	2,899	 	
	  	 	 	 	 	 	 	 	
LIABILITIES AND INVESTED EQUITY	  				 				
Current liabilities:	  				 				
Short-term debt	  	$	1	 	 	$	2	 	
Accounts payable:	  				 				
Outside vendors	  	 	680	 	 	 	671	 	
Related parties	  	 	74	 	 	 	78	 	
Accrued liabilities (Note 6)	  	 	357	 	 	 	331	 	
	  	 	 	 	 	 	 	 	
Total current liabilities	  	 	1,112	 	 	 	1,082	 	
Long-term liabilities:	  				 				
Long-term debt	  	 	6	 	 	 	6	 	
Pension benefit obligations	  	 	529	 	 	 	526	 	
Other long-term liabilities (Note 6)	  	 	124	 	 	 	103	 	
	  	 	 	 	 	 	 	 	
Total long-term liabilities	  	 	659	 	 	 	635	 	
	  	 	 	 	 	 	 	 	
Total liabilities	  	 	1,771	 	 	 	1,717	 	
	  	 	 	 	 	 	 	 	
Commitments and contingencies (Note 10)	  				 				
Net Parent Equity:	  				 				
Net parent investment	  	 	1,779	 	 	 	1,737	 	
Accumulated other comprehensive loss (Note 12)	  	 	(622	) 	 	 	(711	) 	
	  	 	 	 	 	 	 	 	
Total parent equity	  	 	1,157	 	 	 	1,026	 	
Noncontrolling interest	  	 	164	 	 	 	156	 	
	  	 	 	 	 	 	 	 	
Total invested equity	  	 	1,321	 	 	 	1,182	 	
	  	 	 	 	 	 	 	 	
Total liabilities and invested equity	  	$	3,092	 	 	$	2,899	 	
	  	 	 	 	 	 	 	 	
See accompanying notes to combined financial statements.
 
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DELPHI TECHNOLOGIES PLC
 COMBINED STATEMENTS OF CASH FLOWS (Unaudited)

 	  	Six Months Ended
June 30,	 	
 	  	    2017    	 	 	    2016    	 	
 	  	(in millions)	 	
Cash flows from operating activities:	  				 				
Net income	  	$	167	 	 	$	96	 	
Adjustments to reconcile net income to net cash provided by operating activities:	  				 				
Depreciation	  	 	89	 	 	 	104	 	
Amortization	  	 	8	 	 	 	9	 	
Restructuring expense, net of cash paid	  	 	30	 	 	 	69	 	
Pension and other postretirement benefit expenses	  	 	24	 	 	 	14	 	
Gain on sale of assets	  	 	(1	) 	 	 	(3	) 	
Share-based compensation	  	 	8	 	 	 	7	 	
Changes in operating assets and liabilities:	  				 				
Accounts receivable, net	  	 	(126	) 	 	 	20	 	
Inventories	  	 	(78	) 	 	 	(25	) 	
Other assets	  	 	(11	) 	 	 	(14	) 	
Accounts payable	  	 	37	 	 	 	48	 	
Accrued and other long-term liabilities	  	 	14	 	 	 	(35	) 	
Other, net	  	 	38	 	 	 	(21	) 	
Pension contributions	  	 	(22	) 	 	 	(22	) 	
	  	 	 	 	 	 	 	 	
Net cash provided by operating activities	  	 	177	 	 	 	247	 	
	  	 	 	 	 	 	 	 	
Cash flows from investing activities:	  				 				
Capital expenditures	  	 	(82	) 	 	 	(83	) 	
Proceeds from sale of property	  	 	5	 	 	 	4	 	
	  	 	 	 	 	 	 	 	
Net cash used in investing activities	  	 	(77	) 	 	 	(79	) 	
	  	 	 	 	 	 	 	 	
Cash flows from financing activities:	  				 				
Net repayments under other short-term debt agreements	  	 	(1	) 	 	 	—  	 	
Dividend payments of combined affiliates to minority shareholders	  	 	(10	) 	 	 	(12	) 	
Net transfers to Parent	  	 	(117	) 	 	 	(160	) 	
	  	 	 	 	 	 	 	 	
Net cash used in financing activities	  	 	(128	) 	 	 	(172	) 	
	  	 	 	 	 	 	 	 	
Effect of exchange rate fluctuations on cash and cash equivalents	  	 	5	 	 	 	(3	) 	
	  	 	 	 	 	 	 	 	
Decrease in cash and cash equivalents	  	 	(23	) 	 	 	(7	) 	
Cash and cash equivalents at beginning of the year	  	 	101	 	 	 	108	 	
	  	 	 	 	 	 	 	 	
Cash and cash equivalents at end of the year	  	$	78	 	 	$	101	 	
	  	 	 	 	 	 	 	 	
See accompanying notes to combined financial statements.
 
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DELPHI TECHNOLOGIES PLC
 COMBINED STATEMENT OF NET PARENT INVESTMENT (Unaudited)

 	  	Net Parent
Investment	 	 	Accumulated
Other
Comprehensive
Loss	 	 	Total Parent
Equity	 	 	Noncontrolling
Interest	 	 	Total Invested
Equity	 	
 	  	(in millions)	 	
Balance at December 31, 2016	  	$	1,737	 	 	$	(711	) 	 	$	1,026	 	 	$	156	 	 	$	1,182	 	
Net income	  	 	151	 	 	 	—  	 	 	 	151	 	 	 	16	 	 	 	167	 	
Other comprehensive income	  	 	—  	 	 	 	89	 	 	 	89	 	 	 	2	 	 	 	91	 	
Dividend payments of combined affiliates to minority shareholders	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(10	) 	 	 	(10	) 	
Share-based compensation	  	 	8	 	 	 	—  	 	 	 	8	 	 	 	—  	 	 	 	8	 	
Net transfers to parent	  	 	(117	) 	 	 	—  	 	 	 	(117	) 	 	 	—  	 	 	 	(117	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at June 30, 2017	  	$	1,779	 	 	$	(622	) 	 	$	1,157	 	 	$	164	 	 	$	1,321	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to combined financial statements.
 
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DELPHI TECHNOLOGIES PLC
 NOTES TO COMBINED FINANCIAL STATEMENTS (Unaudited)
1. BUSINESS AND BASIS OF PRESENTATION
The Separation
On May 3, 2017, Delphi Automotive PLC announced its intention to separate its Powertrain Systems segment, which includes its engine management systems and aftermarket operations, by means of a spin-off. Upon completion of the spin-off, Delphi Automotive PLC will change its name to Aptiv PLC, and is herein referred to as “Aptiv” or the “Parent.” The spin-off will create Delphi Technologies PLC (the “Company” or “Delphi Technologies”), a separate, independent, publicly traded company. Prior to October 10, 2017, the Company was named Delphi Jersey Holdings plc. As part of the separation, Aptiv intends to transfer the assets, liabilities and operations of its Powertrain Systems business on a global basis to Delphi Technologies. The spin-off is expected to be completed by March of 2018, subject to customary market, regulatory and other conditions.
Nature of Operations
Delphi Technologies is a leader in the development, design and manufacture of integrated powertrain technologies that optimize engine performance, increase vehicle efficiency, reduce emissions, improve driving performance, and support increasing electrification of vehicles. The Company is a global supplier to original equipment manufacturers (“OEMs”) seeking to manufacture vehicles that meet and exceed increasingly stringent global regulatory requirements and satisfy consumer demands for an enhanced user experience. We provide advanced fuel injection systems (“FIS”), actuators, valvetrain products, sensors, electronic control modules and power electronics technologies. Additionally, the Company offers a full spectrum of aftermarket products serving a global customer base.
Our comprehensive portfolio of advanced technologies and solutions for all propulsion systems are sold to global OEMs of both light vehicles (passenger cars, trucks and vans and sport-utility vehicles) and commercial vehicles (light-duty, medium-duty and heavy-duty trucks, commercial vans, buses and off-highway vehicles). The Company’s Products & Services Solutions (“PSS”) segment also manufactures and sells our technologies to leading aftermarket players, including independent retailers and wholesale distributors. We supply a full suite of aftermarket products including engine control modules, pumps, injectors, fuel modules, ignition coils, as well as smart remote actuators, exhaust gas recirculation valves, brakes, steering and suspension and other products. We also add aftermarket know-how in category management, logistics, training, marketing and other dedicated services to provide a full range of aftermarket solutions through vehicles’ lives.
The Company is comprised of operations conducted at legal entities which are directly or indirectly wholly-owned by Aptiv, the parent of Delphi Technologies, a 51% owned controlled joint venture in China, a 70% owned controlled joint venture in South Korea and a non-consolidated approximately 50% owned joint venture in India.
Basis of Presentation
These combined unaudited interim financial statements reflect the combined historical results of the operations, financial position and cash flows of Delphi Technologies. The Company has historically operated as part of the Parent and not as a stand-alone company. The financial statements have been derived from the Parent’s historical accounting records and are presented on a carve-out basis. All revenues and costs as well as assets and liabilities directly associated with the business activity of the Company are included as a component of the financial statements. The financial statements also include allocations of certain general, administrative, sales and marketing expenses and cost of sales provided by the Parent to Delphi Technologies and allocations of
 
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related assets, liabilities, and the Parent’s investment, as applicable. The allocations have been determined on a reasonable basis; however, the amounts are not necessarily representative of the amounts that would have been reflected in the financial statements had the Company been an entity that operated independently of the Parent. Related party allocations are further described in Note 3. Related Party Transactions.
As part of the Parent, the Company is dependent upon the Parent for all of its working capital and financing requirements, as the Parent uses a centralized approach to cash management and financing of its operations, including the use of a global cash pooling arrangement. Accordingly, cash and cash equivalents held by the Parent at the corporate level were not attributable to Delphi Technologies for any of the periods presented. Only cash amounts specifically attributable to Delphi Technologies are reflected in the accompanying combined financial statements. Financing transactions related to the Company are accounted for as a component of Net parent investment in the combined balance sheets and as a financing activity on the accompanying combined statements of cash flows.
Third-party debt obligations of the Parent and the corresponding interest costs related to those debt obligations, specifically those that relate to senior notes, term loans and revolving credit facilities, have not been attributed to Delphi Technologies, as Delphi Technologies was not the legal obligor of such debt obligations. The only third-party debt obligations included in the combined financial statements are those for which the legal obligor is a legal entity within Delphi Technologies. None of the Company’s assets were pledged as collateral under the Parent’s debt obligations as of June 30, 2017 or December 31, 2016.
As the separate legal entities that comprise Delphi Technologies were not historically held by a single legal entity, Net Parent Equity is shown in lieu of shareholder’s equity in the combined financial statements. Net parent investment represents the cumulative investment by the Parent in Delphi Technologies through the dates presented, inclusive of operating results. Balances between Delphi Technologies and the Parent that were not historically settled in cash are included in Net parent investment. All significant transactions between the Company and the Parent have been included in the accompanying combined financial statements. Transactions with the Parent are reflected in the accompanying combined statements of net parent investment as Net Transfers to Parent, and in the accompanying combined balance sheets within net parent investment.
The combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All adjustments, consisting of only normal recurring items, which are necessary for a fair presentation, have been included. All significant intercompany accounts and transactions between the businesses comprising the Company have been eliminated in the accompanying combined financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
Principles of Combination —The combined unaudited interim financial statements include the accounts of Delphi Technologies’ U.S. and non-U.S. subsidiaries and operations in which the Company holds a controlling interest. The combined financial statements include certain assets and liabilities that have historically been held at the Parent level but are specifically identifiable or otherwise attributable to Delphi Technologies. All significant intercompany transactions and accounts within the Company’s combined businesses have been eliminated. All intercompany transactions between the Company and the Parent have been included in these combined financial statements as net parent investment. Expenses related to corporate allocations from the Parent to the Company are considered to be effectively settled for cash in the combined financial statements at the time the transaction is recorded. In addition, transactions between the Company and the Parent’s other subsidiaries have been classified as related party, rather than intercompany, transactions within the combined financial statements.
Delphi Technologies’ share of the earnings or losses of Delphi-TVS Diesel Systems Ltd (of which Delphi Technologies owns approximately 50%), a non-controlled affiliate located in India over which the Company
 
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exercises significant influence, is included in the combined operating results of Delphi Technologies using the equity method of accounting.
During the year ended December 31, 2015, Delphi Technologies made a $20 million investment in Tula Technology, Inc. (“Tula”), an engine control software company, over which the Company does not exert significant influence. The Company’s investment in Tula is accounted for under the cost method, and is classified within other long-term assets in the combined balance sheets.
The Company monitors its investments in affiliates for indicators of other-than-temporary declines in value on an ongoing basis. If the Company determines that such a decline has occurred, an impairment loss is recorded, which is measured as the difference between carrying value and estimated fair value. Estimated fair value is generally determined using an income approach based on discounted cash flows or negotiated transaction values.
Use of estimates —The preparation of combined financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect amounts reported therein. Generally, matters subject to estimation and judgment include amounts related to accounts receivable realization, inventory obsolescence, asset impairments, useful lives of intangible and fixed assets, deferred tax asset valuation allowances, income taxes, pension benefit plan assumptions, accruals related to litigation, warranty costs, environmental remediation costs, worker’s compensation accruals, healthcare accruals and estimates used to allocate Parent company costs and account balances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from those estimates.
Revenue recognition —Sales are recognized when there is evidence of a sales agreement, the delivery of goods has occurred, the sales price is fixed or determinable and the collectability of revenue is reasonably assured. Sales are generally recorded upon shipment of product to customers and transfer of title under standard commercial terms. In addition, if Delphi Technologies enters into retroactive price adjustments with its customers, these reductions to revenue are recorded when they are determined to be probable and estimable. From time to time, Delphi Technologies enters into pricing agreements with its customers that provide for price reductions, some of which are conditional upon achieving certain joint cost saving targets. In these instances, revenue is recognized based on the agreed-upon price at the time of shipment.
Sales incentives and allowances are recognized as a reduction to revenue at the time of the related sale. In addition, from time to time, Delphi Technologies makes payments to customers in conjunction with ongoing and future business. These payments to customers are generally recognized as a reduction to revenue at the time of the commitment to make these payments.
Shipping and handling fees billed to customers are included in net sales, while costs of shipping and handling are included in cost of sales.
Delphi Technologies collects and remits taxes assessed by different governmental authorities that are both imposed on and concurrent with a revenue-producing transaction between the Company and the Company’s customers. These taxes may include, but are not limited to, sales, use, value-added, and some excise taxes. Delphi Technologies reports the collection of these taxes on a net basis (excluded from revenues).
Rebates —The Company accrues for rebates pursuant to specific arrangements with certain of its aftermarket customers. Rebates generally provide for price reductions based upon the achievement of specified purchase volumes and are recorded as a reduction of sales as earned by such customers.
Cash and cash equivalents —Cash and cash equivalents are defined as short-term, highly liquid investments with original maturities of three months or less.
Accounts receivable —Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company generally does not require collateral for its trade receivables.
 
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Sales of receivables are accounted for in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 860, Transfers and Servicing (“ASC 860”). Agreements which result in true sales of the transferred receivables, as defined in ASC 860, which occur when receivables are transferred without recourse to the Company, are excluded from amounts reported in the combined balance sheets. Cash proceeds received from such sales are included in operating cash flows. Agreements that allow the Company to maintain effective control over the transferred receivables and which do not qualify as a sale, as defined in ASC 860, are accounted for as secured borrowings and recorded in the combined balance sheets within accounts receivable, net and short-term debt. The expenses associated with receivables factoring are recorded in the combined statements of operations within interest expense.
In 2015, the Company entered into arrangements with various financial institutions to sell eligible trade receivables from certain aftermarket customers in North America. These arrangements can be terminated at any time subject to prior written notice. The receivables under these arrangements are sold without recourse to the Company and are therefore accounted for as true sales. During the three and six months ended June 30, 2017, $22 million and $38 million of receivables were sold under these arrangements, and expenses of $1 million and $1 million, respectively, were recognized within interest expense. During the three and six months ended June 30, 2016, $43 million and $75 million of receivables were sold under these arrangements, and expenses of less than $1 million and $2 million, respectively, were recognized within interest expense.
Aptiv centrally maintains a European accounts receivable factoring facility, and Delphi Technologies participates in this facility. As the factoring facility allows Delphi Technologies to maintain effective control over the receivables, the accounts receivable related to this facility are included in the combined balance sheets. Collateral is not required related to these trade accounts receivable. No amounts were outstanding on the European accounts receivable factoring facility as of June 30, 2017 or December 31, 2016.
The Company exchanges certain amounts of accounts receivable, primarily in the Asia Pacific region, for bank notes with original maturities greater than three months. The collection of such bank notes are included in operating cash flows based on the substance of the underlying transactions, which are operating in nature. Bank notes held by the Company with original maturities of three months or less are classified as cash and cash equivalents within the combined balance sheet, and those with original maturities of greater than three months are classified as notes receivable within other current assets. The Company may hold such bank notes until maturity, exchange them with suppliers to settle liabilities, or sell them to third party financial institutions in exchange for cash.
Valuation of long-lived assets —The carrying value of long-lived assets held for use, including definite-lived intangible assets, is periodically evaluated when events or circumstances warrant such a review. The carrying value of a long-lived asset held for use is considered impaired when the anticipated separately identifiable undiscounted cash flows from the asset are less than the carrying value of the asset. In that event, a loss is recognized based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset. Impairment losses on long-lived assets held for sale are recognized if the carrying value of the asset is in excess of the asset’s estimated fair value, reduced for the cost to dispose of the asset. Fair value of long-lived assets is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved (an income approach), and in certain situations the Company’s review of appraisals (a market approach). During the three and six months ended June 30, 2017, Delphi Technologies recorded non-cash asset impairment charges totaling $4 million and $8 million, respectively, within cost of sales related to declines in the fair values of certain fixed assets. During the three and six months ended June 30, 2016, Delphi Technologies recorded non-cash asset impairment charges totaling $22 million within cost of sales related to declines in the fair values of certain fixed assets, $19 million of which related to the initiation of a plant closure of a European manufacturing site within the Powertrain Systems segment in the second quarter of 2016, as further described in Note 8. Restructuring.
Fair value measurements —Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or
 
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liability in an orderly transaction between market participants on the measurement date. The Company’s financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable, as well as debt, which consists of debt issued by non-U.S. subsidiaries. For all financial instruments recorded at June 30, 2017 and December 31, 2016, fair value approximates book value. Nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis include long-lived assets, equity and cost method investments, intangible assets and liabilities for exit or disposal activities measured at fair value upon initial recognition. Fair value of long-lived assets is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved and a review of appraisals. As such, the Company has determined that the fair value measurements of long-lived assets fall in Level 3 of the fair value hierarchy.
Intangible assets —Intangible assets were $83 million and $92 million as of June 30, 2017 and December 31, 2016, respectively. The Company amortizes definite-lived intangible assets over their estimated useful lives. Costs to renew or extend the term of acquired intangible assets are recognized as expense as incurred. Amortization expense was $4 million and $8 million for the three and six months ended June 30, 2017 and $5 million and $9 million for the three and six months ended June 30, 2016, respectively.
Goodwill —Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. The Company tests goodwill for impairment annually in the fourth quarter, or more frequently when indications of potential impairment exist. The Company monitors the existence of potential impairment indicators throughout the fiscal year. The Company tests for goodwill impairment at the reporting unit level. Our reporting units are the components of operating segments which constitute businesses for which discrete financial information is available and is regularly reviewed by segment management.
The impairment test involves first qualitatively assessing goodwill for impairment. If the qualitative assessment is not met we then perform a quantitative assessment by first comparing the estimated fair value of each reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit. If the estimated fair value exceeds carrying value, then we conclude that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its estimated fair value, a second step is required to measure possible goodwill impairment loss. The second step includes hypothetically valuing the tangible and intangible assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit’s goodwill is compared to the carrying value of that goodwill. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of the goodwill, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value. There were no indicators of potential goodwill impairment during the three and six months ended June 30, 2017. Goodwill was $7 million and $6 million as of June 30, 2017 and December 31, 2016, respectively.
Warranty and product recalls —Expected warranty costs for products sold are recognized at the time of sale of the product based on an estimate of the amount that eventually will be required to settle such obligations. These accruals are based on factors such as past experience, production changes, industry developments and various other considerations. Costs of product recalls, which may include the cost of the product being replaced as well as the customer’s cost of the recall, including labor to remove and replace the recalled part, are accrued as part of our warranty accrual at the time an obligation becomes probable and can be reasonably estimated. These estimates are adjusted from time to time based on facts and circumstances that impact the status of existing claims. Refer to Note 7. Warranty Obligations for additional information.
Income taxes —The Company’s domestic and foreign operating results are included in the income tax returns of the Parent. The Company accounts for income taxes under the separate return method. Under this approach, the Company determines its deferred tax assets and liabilities and related tax expense as if it were filing separate tax returns. Deferred tax assets and liabilities reflect temporary differences between the amount of assets and liabilities for financial and tax reporting purposes. Such amounts are adjusted, as appropriate, to reflect changes in tax rates expected to be in effect when the temporary differences reverse. The effect on deferred tax
 
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assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. A valuation allowance is recorded to reduce deferred tax assets to the amount that is more likely than not to be realized. In the event the Company determines it is more likely than not that the deferred tax assets will not be realized in the future, the valuation allowance adjustment to the deferred tax assets will be charged to earnings in the period in which we make such a determination. In determining the provision for income taxes for financial statement purposes, the Company makes certain estimates and judgments which affect its evaluation of the carrying value of its deferred tax assets, as well as its calculation of certain tax liabilities. Refer to Note. 11. Income Taxes for additional information.
Foreign currency translation —Assets and liabilities of non-U.S. subsidiaries that use a currency other than U.S. dollars as their functional currency are translated to U.S. dollars at end-of-period currency exchange rates. The combined statements of operations of non-U.S. subsidiaries are translated to U.S. dollars at average-period currency exchange rates. The effect of translation for non-U.S. subsidiaries is generally reported in other comprehensive income (“OCI”). The effect of remeasurement of assets and liabilities of non-U.S. subsidiaries that use the U.S. dollar as their functional currency is primarily included in cost of sales. Also included in cost of sales are gains and losses arising from transactions denominated in a currency other than the functional currency of a particular entity.
Restructuring —The Company continually evaluates alternatives to align the business with the changing needs of its customers and to lower operating costs. This includes the realignment of its existing manufacturing capacity, facility closures, or similar actions, either in the normal course of business or pursuant to significant restructuring programs. These actions may result in employees receiving voluntary or involuntary employee termination benefits, which are mainly pursuant to union or other contractual agreements. Voluntary termination benefits are accrued when an employee accepts the related offer. Involuntary termination benefits are accrued upon the commitment to a termination plan and when the benefit arrangement is communicated to affected employees, or when liabilities are determined to be probable and estimable, depending on the existence of a substantive plan for severance or termination. Contract termination costs are recorded when contracts are terminated or when Delphi Technologies ceases to use the leased facility and no longer derives economic benefit from the contract. All other exit costs are expensed as incurred. Refer to Note 8. Restructuring for additional information.
Derivative financial instruments —Aptiv centrally manages its exposure to fluctuations in currency exchange rates and certain commodity prices by entering into a variety of forward contracts and swaps with various counterparties. Such financial exposures are managed in accordance with the policies and procedures of Aptiv and accounted for in accordance with ASC Topic 815, Derivatives and Hedging .
Delphi Technologies does not enter into any derivative transactions, contracts, options, or swaps. Accordingly, derivative assets and liabilities held by the Parent at the corporate level were not attributable to Delphi Technologies for any of the periods presented. Due to the Company’s participation in Aptiv’s hedging program, the Company is allocated a portion of the impact from these activities. Based on the exposure levels related to Delphi Technologies, the Company recorded gains of $3 million and $12 million in cost of sales for the three and six months ended June 30, 2017 and $1 million and $5 million in cost of sales for the three and six months ended June 30, 2016, respectively.
Extended disability benefits —The estimated costs associated with extended disability benefits provided to inactive employees were allocated to Delphi Technologies based on its relative portion of participants. Workforce demographic data and historical experience are utilized to develop projections of time frames and related expense for postemployment benefits.
Workers’ compensation benefits —Workers’ compensation benefit accruals are actuarially determined and are subject to the existing workers’ compensation laws that vary by location. Accruals for workers’ compensation benefits represent the discounted future cash expenditures expected during the period between the incidents
 
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necessitating the employees to be idled and the time when such employees return to work, are eligible for retirement or otherwise terminate their employment.
Share-based compensation —Certain U.S. and non-U.S. employees of Delphi Technologies are covered by the Parent-sponsored share-based compensation arrangement, the Delphi Automotive PLC Long Term Incentive Plan, as amended and restated effective April 23, 2015 (the “PLC LTIP”), under which grants of restricted stock units (“RSUs”) have been made in each period from 2012 to 2017. Share-based compensation expense within the combined financial statements has been allocated to Delphi Technologies based on the awards and terms previously granted to Delphi Technologies employees while part of Aptiv, and includes the cost of Delphi Technologies employees who participate in the Aptiv plan as well as an allocated portion of the cost of Aptiv senior management awards.
The RSU awards include a time-based vesting portion and a performance-based vesting portion. The performance-based vesting portion includes performance and market conditions in addition to service conditions. The grant date fair value of the RSUs is determined based on the closing price of the Aptiv’s ordinary shares on the date of the grant of the award, including an estimate for forfeitures, and a contemporaneous valuation performed by an independent valuation specialist with respect to awards with market conditions. The Company accounts for compensation expense incurred by the Parent based upon the grant date fair value of the awards applied to the best estimate of ultimate performance against the respective targets on a straight-line basis over the requisite vesting period of the awards. The performance conditions require management to make assumptions regarding the likelihood of achieving certain performance goals. Changes in these performance assumptions, as well as differences in actual results from management’s estimates, could result in estimated or actual values different from previously estimated fair values. Refer to Note 13. Share-Based Compensation for additional information on the share-based compensation plans of the Parent that certain employees of the Company participate in.
Pension and Other Post-Retirement Benefits (OPEB) —Certain of the Company’s non-U.S. subsidiaries sponsor defined-benefit pension plans, which generally provide benefits based on negotiated amounts for each year of service. Certain Delphi Technologies employees, primarily in the United Kingdom (“U.K.”), France, Mexico and Turkey, participate in these plans (collectively, the “Direct Plans”). The Direct Plans, which relate solely to the Company, are included within the combined financial statements. In addition to the Direct Plans, certain of the Company’s employees in Germany and the U.S. participate in defined benefit pension plans (collectively, the “Shared Plans”) sponsored by Aptiv that include Delphi Technologies employees as well as employees of other Aptiv subsidiaries. Under the guidance in ASC 715, Compensation—Retirement Benefits , the Company accounts for the Shared Plans as multiemployer plans, and accordingly the Company does not record an asset or liability to recognize the funded status of the Shared Plans. The related pension and other postemployment expenses of the Shared Plans are charged to Delphi Technologies based primarily on the service cost of active participants. These expenses were funded through intercompany transactions with Aptiv that are reflected within the Net parent investment in the combined financial statements. Refer to Note 9. Pension Benefits for additional information.
Delphi Technologies Net Parent Investment —The Delphi Technologies net parent investment account includes the accumulation of the Company’s historical earnings, cumulative currency translation adjustments, dividend payments, and other transactions between the Company and the Parent.
 
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Customer Concentrations —Net sales to Delphi Technologies’ largest customers, which were principally attributable to the Powertrain Systems segment, and the corresponding percentage of total net sales for the three and six months ended June 30, 2017 and 2016 were as follows:

 	 	Three Months Ended
June 30, 2017	 	 	Three Months
Ended June 30, 2016	 	 	Six Months Ended
June 30, 2017	 	 	Six Months Ended
June 30, 2016	 	
 	 	Net Sales	 	 	Percentage
of total	 	 	Net
Sales	 	 	Percentage
of total	 	 	Net
Sales	 	 	Percentage
of total	 	 	Net
Sales	 	 	Percentage
of total	 	
 	 	(Net sales in millions)	 	
General Motors Company	 	$	113	 	 	 	10	% 	 	$	101	 	 	 	9	% 	 	$	221	 	 	 	9	% 	 	$	188	 	 	 	8	% 	
Daimler AG	 	 	101	 	 	 	8	% 	 	 	105	 	 	 	9	% 	 	 	204	 	 	 	9	% 	 	 	211	 	 	 	9	% 	
Hyundai Motor Company	 	 	91	 	 	 	8	% 	 	 	109	 	 	 	9	% 	 	 	178	 	 	 	8	% 	 	 	218	 	 	 	10	% 	
Other	 	 	882	 	 	 	74	% 	 	 	831	 	 	 	73	% 	 	 	1,752	 	 	 	74	% 	 	 	1,646	 	 	 	73	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	1,187	 	 	 	100	% 	 	$	1,146	 	 	 	100	% 	 	$	2,355	 	 	 	100	% 	 	$	2,263	 	 	 	100	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Recently issued accounting pronouncements —In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers . This ASU supersedes most of the existing guidance on revenue recognition in Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition and establishes a broad principle that would require an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this principle, an entity identifies the contract with a customer, identifies the separate performance obligations in the contract, determines the transaction price, allocates the transaction price to the separate performance obligations and recognizes revenue when each separate performance obligation is satisfied. The FASB has subsequently issued additional ASUs to clarify certain elements of the new revenue recognition guidance. The guidance is effective for fiscal years beginning after December 15, 2017, and is to be applied retrospectively using one of two transition methods at the entity’s election. The full retrospective method requires companies to recast each prior reporting period presented as if the new guidance had always existed. Under the modified retrospective method, companies would recognize the cumulative effect of initially applying the standard as an adjustment to opening retained earnings at the date of initial application.
The Company has continued to monitor FASB activity related to the new standard, and has worked with various non-authoritative industry groups to assess certain interpretative issues and the associated implementation of the new standard. The Company has drafted its accounting policy for the new standard based on a detailed review of its business and contracts. While the Company continues to assess all potential impacts of the new standard, we do not currently expect that the adoption of the new revenue standard will have a material impact on our revenues, results of operations or financial position. As a result of the adoption of this standard, the Company expects to make additional disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers as required by the new standard. The Company plans to adopt the new revenue standard effective January 1, 2018. The Company has not yet selected a transition method and continues to evaluate the effect of the standard on our ongoing financial reporting and implementation approach.
In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory . This guidance requires an entity to measure inventory at the lower of cost and net realizable value, rather than at the lower of cost or market. The guidance is effective for interim and annual periods beginning after December 15, 2016, and is to be applied prospectively. The Company adopted this guidance in the first quarter of 2017 on a prospective basis. The adoption of this guidance did not have a significant impact on the Company’s financial statements.
In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance makes targeted improvements to existing U.S. GAAP for financial instruments, including requiring equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee)
 
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to be measured at fair value with changes in fair value recognized in net income; requiring entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and requiring entities to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017. Early adoption of the own credit provision is permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its combined financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Under this guidance, lessees will be required to recognize on the balance sheet a lease liability and a right-of-use asset for all leases, with the exception of short-term leases. The lease liability represents the lessee’s obligation to make lease payments arising from a lease, and will be measured as the present value of the lease payments. The right-of-use asset represents the lessee’s right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. The standard also requires a lessee to recognize a single lease cost allocated over the lease term, generally on a straight-line basis. The new guidance is effective for fiscal years beginning after December 15, 2018. ASU 2016-02 is required to be applied using the modified retrospective approach for all leases existing as of the effective date and provides for certain practical expedients. Early adoption is permitted. The Company is currently evaluating the effects that the adoption of ASU 2016-02 will have on the Company’s combined financial statements, and anticipates the new guidance will impact its combined financial statements as the Company has a number of operating leases.
In March 2016, the FASB issued ASU 2016-09,  Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This guidance contains multiple updates related to the accounting and financial statement presentation of share-based payment transactions. Under the new guidance, excess tax benefits will be recognized as income tax expense in the period in which the awards vest, as opposed to being recognized in additional paid-in capital when the deduction reduces taxes payable. Excess tax benefits will be classified as an operating activity within the statement of cash flows, as opposed to a financing activity. The new guidance also clarifies that cash paid by an employer when withholding shares for tax withholding purposes should be classified as a financing activity, and also permits an accounting policy election for accruing compensation cost to either estimate the number of awards that are expected to vest, similar to current U.S. GAAP, or account for forfeitures when they occur. The new guidance is effective for fiscal years beginning after December 15, 2016. The method of transition is dependent on the particular provision within the new guidance. The Company adopted this guidance in the first quarter of 2017. The provisions of ASU 2016-09 related to the timing of when excess tax benefits are recognized were adopted using a modified retrospective transition method by means of an immaterial cumulative-effect adjustment to net parent investment as of January 1, 2017. On a prospective basis, excess tax benefits will be recognized as income tax expense in the period in which the awards vest, as opposed to being recognized in net parent investment when the deduction reduces taxes payable. Such excess tax benefits will be classified as an operating activity within the combined statement of cash flows prospectively, as opposed to a financing activity. The adoption of ASU 2016-09 did not materially impact the Company’s financial position, results of operations, equity or cash flows.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This guidance also requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. The new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the adoption of this guidance will have on its combined financial statements.
 
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In September 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . This guidance clarifies the presentation requirements of eight specific issues within the statement of cash flows. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The adoption of this guidance is not expected to have a significant impact on the Company’s financial statements, as the Company’s treatment of the relevant affected items within its combined statement of cash flows is consistent with the requirements of this guidance.
In October 2016, the FASB issued ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory . This guidance requires that the tax effects of all intra-entity sales of assets other than inventory be recognized in the period in which the transaction occurs. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption as of the beginning of an annual reporting period is permitted. The guidance is to be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact that the adoption of this guidance will have on its combined financial statements.
In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . This guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. As a result, restricted cash will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, and the new guidance is to be applied retrospectively. The adoption of this guidance is not expected to have a significant impact on the Company’s financial statements.
In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . This guidance simplifies how an entity is required to test goodwill for impairment by eliminating step two from the goodwill impairment test, which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard will be applied prospectively and is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its financial statements, but does not anticipate a material impact. As this standard is prospective in nature, the impact to the Company’s financial statements of not performing step two to measure the amount of any potential goodwill impairment will depend on various factors associated with the Company’s assessment of goodwill for impairment in those future periods.
In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”), which changes the presentation of net periodic pension and postretirement benefit cost in the income statement. Under the new guidance, employers present the service cost component of the net periodic benefit cost in the same income statement line items as other employee compensation costs for services rendered during the period. In addition, only the service cost component is eligible for capitalization as an asset. Employers present the other components of net periodic benefit cost separately from the line items that include the service cost component and outside of operating income. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual period. The new guidance related to the presentation of the components of net periodic benefit cost within the income statement will be applied retrospectively. The new guidance limiting the capitalization of net periodic benefit cost in assets to the service cost component will be applied prospectively. As permitted, the Company elected to early adopt this guidance effective January 1, 2017, and has classified the components of net periodic pension and postretirement benefit cost other than service costs in other expense within the combined
 
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statement of operations for all periods presented. Refer to Note 9. Pension Benefits for further detail of the components of net periodic benefit costs.
3. RELATED PARTY TRANSACTIONS
The Company has historically operated as part of the Parent and not as a stand-alone company. Accordingly, the Parent has allocated certain account balances and costs to the Company that are reflected within these combined financial statements. Management considers the allocation methodologies used by the Parent to be reasonable and to appropriately reflect the related expenses attributable to the Company for purposes of the carve-out financial statements; however, the expenses reflected in these financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if the Company had operated as a separate stand-alone entity. In addition, the expenses reflected in the financial statements may not be indicative of expenses the Company will incur in the future. Actual costs that would have been incurred if the Company had been a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including the Company’s capital structure, information technology and infrastructure.
As described in Note 1. Business and Basis of Presentation, the Company participates in a global cash pooling arrangement operated by the Parent and certain of its subsidiaries, whereby cash generated by Delphi Technologies is managed by Aptiv. This arrangement manages the working capital needs of the Company. The majority of the Company’s cash is transferred to Aptiv, and Aptiv funds the Company’s operating and investing activities as necessary. The cumulative net transfers related to these transactions are recorded in Net parent investment in the combined financial statements.
Related Party Sales and Purchases
In the ordinary course of business, the Company enters into transactions with related parties, which are subsidiaries and other businesses of the Parent, for the sale or purchase of goods, as well as other arrangements, such as providing engineering services for other Aptiv subsidiaries.
Net sales of products from Delphi Technologies to uncombined Aptiv affiliates were $1 million for the three and six months ended June 30, 2017. There were no net sales from Delphi Technologies to uncombined Aptiv affiliates during the three and six months ended June 30, 2016. Total purchases from uncombined Aptiv affiliates totaled $21 million and $43 million for the three and six months ended June 30, 2017, respectively. Total purchases from uncombined Aptiv affiliates totaled $27 million and $53 million for the three and six months ended June 30, 2016, respectively.
As of June 30, 2017 and December 31, 2016, the net amount due to Aptiv affiliates from related-party transactions was $49 million and $62 million, respectively. The Company’s average receivable and payable balances with related parties during each period were consistent with the period end balances.
Allocations of Costs for Parent Services
The Company has certain services and functions provided to it by the Parent. These services and functions included, but were not limited to, senior management, legal, human resources, finance and accounting, treasury, information technology (“IT”) services and support, cash management, payroll processing, pension and benefit administration and other shared services. These costs were allocated using methodologies that management believes were reasonable for the item being allocated. Allocation methodologies included direct usage when identifiable, as well as the Company’s relative share of revenues, headcount or functional spend as a percentage of the total.
 
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The total costs for services and functions allocated to the Company from the Parent were as follows for the three and six months ended June 30, 2017 and 2016:

 	  	Three Months Ended June 30,	 	  	Six Months Ended June 30,	 	
 	  	2017	 	  	2016	 	  	2017	 	  	2016	 	
 	  	(in millions)	 	
Cost of sales	  	$	6	 	  	$	9	 	  	$	17	 	  	$	22	 	
Selling, general and administrative	  	 	46	 	  	 	33	 	  	 	79	 	  	 	65	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total cost of parent services	  	$	52	 	  	$	42	 	  	$	96	 	  	$	87	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Net Parent Investment
Net Parent investment on the combined balance sheets and combined statements of net parent investment represents Aptiv’s historical investment in Delphi Technologies, the net effect of transactions with, and allocations from, Aptiv, as well as Delphi Technologies’ accumulated earnings and other comprehensive income. Net transfers to Parent are included within Net Parent investment. The components of Net transfers to Parent were as follows:

 	  	Three Months Ended June 30,	 	 	Six Months Ended June 30,	 	
 	  	  2017  	 	 	  2016  	 	 	  2017  	 	 	  2016  	 	
 	  	(in millions)	 	
Cash pooling and general financing activities, net	  	$	(171	) 	 	$	(97	) 	 	$	(213	) 	 	$	(247	) 	
Corporate cost allocations	  	 	52	 	 	 	42	 	 	 	96	 	 	 	87	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net transfers to parent	  	$	(119	) 	 	$	(55	) 	 	$	(117	) 	 	$	(160	) 	
4. INVENTORIES
Inventories are stated at the lower of cost, determined on a first-in, first-out basis, or net realizable value, including direct material costs and direct and indirect manufacturing costs. A summary of inventories is shown below:

 	  	June 30,
2017	 	  	December 31,
2016	 	
 	  	(in millions)	 	
Productive material	  	$	198	 	  	$	158	 	
Work-in-process	  	 	47	 	  	 	41	 	
Finished goods	  	 	207	 	  	 	175	 	
	  	 	 	 	  	 	 	 	
Total	  	$	452	 	  	$	374	 	
	  	 	 	 	  	 	 	 	
5. ASSETS
Other current assets consisted of the following:

 	  	June 30,
2017	 	  	December 31,
2016	 	
 	  	(in millions)	 	
Value added tax receivable	  	$	50	 	  	$	48	 	
Prepaid insurance and other expenses	  	 	8	 	  	 	4	 	
Reimbursable engineering costs	  	 	11	 	  	 	16	 	
Notes receivable	  	 	26	 	  	 	36	 	
Income and other taxes receivable	  	 	3	 	  	 	1	 	
Deposits to vendors	  	 	2	 	  	 	3	 	
	  	 	 	 	  	 	 	 	
Total	  	$	100	 	  	$	108	 	

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Other long-term assets consisted of the following:

 	  	June 30,
2017	 	  	December 31,
2016	 	
 	  	(in millions)	 	
Deferred income taxes (Note 11)	  	$	146	 	  	$	146	 	
Income and other taxes receivable	  	 	40	 	  	 	26	 	
Reimbursable engineering costs	  	 	2	 	  	 	—  	 	
Value added taxes receivable	  	 	1	 	  	 	—  	 	
Investment in Tula Technology, Inc.	  	 	20	 	  	 	20	 	
Other	  	 	33	 	  	 	31	 	
	  	 	 	 	  	 	 	 	
Total	  	$	242	 	  	$	223	 	
	  	 	 	 	  	 	 	 	
6. LIABILITIES
Accrued liabilities consisted of the following:

 	  	June 30,
2017	 	  	December 31,
2016	 	
 	  	(in millions)	 	
Payroll-related obligations	  	$	49	 	  	$	39	 	
Employee benefits, including current pension obligations	  	 	16	 	  	 	28	 	
Income and other taxes payable	  	 	46	 	  	 	39	 	
Warranty obligations (Note 7)	  	 	58	 	  	 	51	 	
Restructuring (Note 8)	  	 	70	 	  	 	62	 	
Customer deposits	  	 	7	 	  	 	8	 	
Freight	  	 	13	 	  	 	10	 	
Outside services	  	 	13	 	  	 	10	 	
Deferred revenue	  	 	8	 	  	 	11	 	
Accrued rebates	  	 	20	 	  	 	24	 	
Other	  	 	57	 	  	 	49	 	
	  	 	 	 	  	 	 	 	
Total	  	$	357	 	  	$	331	 	
	  	 	 	 	  	 	 	 	
Other long-term liabilities consisted of the following:

 	  	June 30,
2017	 	  	December 31,
2016	 	
 	  	(in millions)	 	
Environmental (Note 10)	  	$	1	 	  	$	1	 	
Warranty obligations (Note 7)	  	 	40	 	  	 	45	 	
Restructuring (Note 8)	  	 	49	 	  	 	21	 	
Deferred income taxes	  	 	14	 	  	 	17	 	
Other	  	 	20	 	  	 	19	 	
	  	 	 	 	  	 	 	 	
Total	  	$	124	 	  	$	103	 	
	  	 	 	 	  	 	 	 	
7. WARRANTY OBLIGATIONS
Expected warranty costs for products sold are recognized principally at the time of sale of the product based on an estimate of the amount that will eventually be required to settle such obligations. These accruals are based on factors such as past experience, production changes, industry developments and various other considerations. The estimated costs related to product recalls based on a formal campaign soliciting return of that product are accrued at the time an obligation becomes probable and can be reasonably estimated. These estimates are
 
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adjusted from time to time based on facts and circumstances that impact the status of existing claims. Delphi Technologies has recognized its best estimate for its total aggregate warranty reserves, including product recall costs, across all of its operating segments as of June 30, 2017. The Company estimates the reasonably possible amount to ultimately resolve all matters in excess of the recorded reserves as of June 30, 2017 to be zero to $15 million.
The table below summarizes the activity in the product warranty liability for the six months ended June 30, 2017:

 	  	Warranty
Obligations	 	
 	  	(in millions)	 	
Accrual balance at beginning of period	  	$	96	 	
Provision for estimated warranties incurred during the period	  	 	18	 	
Changes in estimate for pre-existing warranties	  	 	3	 	
Settlements made during the period (in cash or in kind)	  	 	(23	) 	
Foreign currency translation and other	  	 	4	 	
	  	 	 	 	
Accrual balance at end of period	  	$	98	 	
	  	 	 	 	
8. RESTRUCTURING
The Company’s restructuring activities are undertaken as necessary to implement management’s strategy, streamline operations, take advantage of available capacity and resources, and ultimately achieve net cost reductions. These activities generally relate to the realignment of existing manufacturing capacity and closure of facilities and other exit or disposal activities, as it relates to executing Delphi Technologies’ strategy, either in the normal course of business or pursuant to significant restructuring programs.
As part of the Company’s continued efforts to optimize its cost structure, it has undertaken several restructuring programs which include workforce reductions as well as plant closures. These programs are primarily focused on the continued rotation of our manufacturing footprint to best cost locations in Europe and on reducing global overhead costs. The Company recorded employee-related and other restructuring charges related to these programs totaling approximately $66 million and $76 million during the three and six months ended June 30, 2017, respectively.
The charges recorded during the three and six months ended June 30, 2017 included the recognition of approximately $53 million for the initiation of the closure of a Western European manufacturing site within the Powertrain Systems segment, associated with separation costs for approximately 500 employees. Cash payments for this restructuring action are expected to be principally completed by 2020.
The Company recorded employee-related and other restructuring charges totaling approximately $124 million and $130 million during the three and six months ended June 30, 2016, respectively. These charges were principally for programs focused on the continued rotation of our manufacturing footprint to best cost locations in Europe, $88 million of which related to the closure of a European manufacturing site within the Powertrain Systems segment, associated with separation costs for approximately 500 employees. Additionally, the Company recognized non-cash asset impairment charges of $19 million in the second quarter of 2016 related to the initiation of this plant closure, which are recorded within cost of sales.
Restructuring charges for employee separation and termination benefits are paid either over the severance period or in a lump sum in accordance with either statutory requirements or individual agreements. Delphi Technologies incurred cash expenditures related to its restructuring programs of approximately $46 million and $61 million in the six months ended June 30, 2017 and 2016, respectively.
 
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The following table summarizes the restructuring charges recorded for the three and six months ended June 30, 2017 and 2016 by operating segment:

 	  	Three Months
Ended June 30,	 	  	Six Months
Ended June 30,	 	
 	  	  2017  	 	  	  2016  	 	  	  2017  	 	  	  2016  	 	
 	  	(in millions)	 	  	(in millions)	 	
Powertrain Systems	  	$	64	 	  	$	116	 	  	$	68	 	  	$	121	 	
PSS	  	 	2	 	  	 	8	 	  	 	8	 	  	 	9	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	66	 	  	$	124	 	  	$	76	 	  	$	130	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
The table below summarizes the activity in the restructuring liability for the six months ended June 30, 2017:

 	  	Employee
Termination
Benefits Liability	 	 	Other Exit
Costs Liability	 	 	Total	 	
 	  	(in millions)	 	
Accrual balance at January 1, 2017	  	$	79	 	 	$	4	 	 	$	83	 	
Provision for estimated expenses incurred during the period	  	 	76	 	 	 	—  	 	 	 	76	 	
Payments made during the period	  	 	(44	) 	 	 	(2	) 	 	 	(46	) 	
Foreign currency and other	  	 	7	 	 	 	(1	) 	 	 	6	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Accrual balance at June 30, 2017	  	$	118	 	 	$	1	 	 	$	119	 	
	  	 	 	 	 	 	 	 	 	 	 	 	
9. PENSION BENEFITS
The Company sponsors defined benefit pension plans for certain employees and retirees outside of the U.S. The Company’s primary non-U.S. plans are located in the U.K., France and Mexico. The U.K. and certain Mexican plans are funded. In addition, the Company has defined benefit plans in South Korea, Turkey and Italy for which amounts are payable to employees immediately upon separation. The obligations for these plans are recorded over the requisite service period. Delphi Technologies does not have any U.S. pension assets or liabilities.
The amounts shown below reflect the defined benefit pension expense for the three and six months ended June 30, 2017 and 2016:

 	  	Non-U.S. Plans	 	 	U.S. Plans	 	
 	  	Three Months Ended
June 30,	 	
 	  	  2017  	 	 	  2016  	 	 	  2017  	 	  	  2016  	 	
 	  	(in millions)	 	
Service cost	  	$	9	 	 	$	8	 	 	$	—  	 	  	$	—  	 	
Interest cost	  	 	9	 	 	 	10	 	 	 	—  	 	  	 	—  	 	
Expected return on plan assets	  	 	(12	) 	 	 	(12	) 	 	 	—  	 	  	 	—  	 	
Amortization of actuarial losses	  	 	7	 	 	 	2	 	 	 	—  	 	  	 	—  	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Net periodic benefit cost	  	$	13	 	 	$	8	 	 	$	—  	 	  	$	—  	 	

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 	  	Non-U.S. Plans	 	 	U.S. Plans	 	
 	  	Six Months Ended
June 30,	 	
 	  	  2017  	 	 	  2016  	 	 	  2017  	 	  	  2016  	 	
 	  	(in millions)	 	
Service cost	  	$	17	 	 	$	15	 	 	$	—  	 	  	$	—  	 	
Interest cost	  	 	17	 	 	 	19	 	 	 	—  	 	  	 	—  	 	
Expected return on plan assets	  	 	(23	) 	 	 	(23	) 	 	 	—  	 	  	 	—  	 	
Amortization of actuarial losses	  	 	13	 	 	 	3	 	 	 	—  	 	  	 	—  	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Net periodic benefit cost	  	$	24	 	 	$	14	 	 	$	—  	 	  	$	—  	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
As described in Note 2. Significant Accounting Policies, during the first quarter of 2017, the Company elected to early adopt ASU 2017-07. As a result, service costs are classified as employee compensation costs within cost of sales and selling, general and administrative expense within the consolidated statement of operations. All other components of net periodic benefit cost are classified within other expense for all periods presented.
10. COMMITMENTS AND CONTINGENCIES
Ordinary Business Litigation
Delphi Technologies is from time to time subject to various legal actions and claims incidental to its business, including those arising out of alleged defects, alleged breaches of contracts, product warranties, intellectual property matters, and employment-related matters. It is the opinion of Delphi Technologies that the outcome of such matters will not have a material adverse impact on the combined financial position, results of operations, or cash flows of Delphi Technologies. With respect to warranty matters, although Delphi Technologies cannot ensure that the future costs of warranty claims by customers will not be material, Delphi Technologies believes its established reserves are adequate to cover potential warranty settlements.
Brazil Matters
Delphi Technologies conducts business operations in Brazil that are subject to the Brazilian federal labor, social security, environmental, tax and customs laws, as well as a variety of state and local laws. While Delphi Technologies believes it complies with such laws, they are complex, subject to varying interpretations, and the Company is often engaged in litigation with government agencies regarding the application of these laws to particular circumstances. As of June 30, 2017, the majority of claims asserted against Delphi Technologies in Brazil relate to such litigation. The remaining claims in Brazil relate to commercial and labor litigation with private parties. As of June 30, 2017, claims totaling approximately $65 million (using June 30, 2017 foreign currency rates) have been asserted against Delphi Technologies in Brazil. As of June 30, 2017, the Company maintains accruals for these asserted claims of approximately $10 million (using June 30, 2017 foreign currency rates). The amounts accrued represent claims that are deemed probable of loss and are reasonably estimable based on the Company’s analyses and assessment of the asserted claims and prior experience with similar matters. While the Company believes its accruals are adequate, the final amounts required to resolve these matters could differ materially from the Company’s recorded estimates and Delphi Technologies’ results of operations could be materially affected. The Company estimates the reasonably possible loss in excess of the amounts accrued related to these claims to be zero to $55 million.
Environmental Matters
Delphi Technologies is subject to the requirements of U.S. federal, state, local and non-U.S. environmental and safety and health laws and regulations. As of June 30, 2017 and December 31, 2016, the undiscounted reserve for environmental investigation and remediation, which was recorded within other long-term liabilities,
 
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was approximately $1 million and $1 million, respectively. Delphi Technologies cannot ensure that environmental requirements will not change or become more stringent over time or that its eventual environmental remediation costs and liabilities will not exceed the amount of its current reserves. In the event that such liabilities were to significantly exceed the amounts recorded, Delphi Technologies’ results of operations could be materially affected. At June 30, 2017 the difference between the recorded liabilities and the reasonably possible range of potential loss was not material.
11. INCOME TAXES
Operations of certain businesses included in Delphi Technologies’ combined financial statements are divisions of legal entities included in Aptiv’s consolidated U.S. federal and state income tax returns, or tax returns of non-U.S. entities of Aptiv. The provision for income taxes and related balance sheet accounts of such entities have been prepared and presented in the combined financial statements based on a separate return basis. Therefore, cash tax payments and items of current and deferred taxes may not be reflective of the actual tax balances of Delphi Technologies prior to or subsequent to the separation.
The Parent’s global tax model has been developed based upon its entire portfolio of business. Accordingly, the Company’s tax results as presented are not necessarily indicative of future performance and do not necessarily reflect the results that would have generated as an independent company for the periods presented. Because portions of the Company’s operations are included in the Parent’s tax returns, payments to certain tax authorities are made by the Parent, and not by the Company. With the exception of certain dedicated foreign entities, the Company does not maintain taxes payable to/from Aptiv and the balances are deemed to settle the annual current tax balances immediately with the legal tax-paying entities in the respective jurisdictions. These settlements are reflected as changes in the Parent’s net investment.
At the end of each interim period, the Company makes its best estimate of the annual expected effective income tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to unusual or infrequent items, if applicable, that will be separately reported or reported net of their related tax effects are individually computed and recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or income tax contingencies is recognized in the interim period in which the change occurs.
The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (and/or loss) earned and taxed in respective jurisdictions, permanent and temporary differences, and the likelihood of the realizability of deferred tax assets generated in the current year. Jurisdictions with a projected loss for the year or a year-to-date loss for which no tax benefit or expense can be recognized due to a valuation allowance are excluded from the estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the composition and timing of actual earnings compared to annual projections. The estimates used to compute the provision or benefit for income taxes may change as new events occur, additional information is obtained or as our tax environment changes. To the extent that the expected annual effective income tax rate changes, the effect of the change on prior interim periods is included in the income tax provision in the period in which the change in estimate occurs.
 
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The Company’s income tax expense and effective tax rate for the three and six months ended June 30, 2017 and 2016 were as follows:

 	  	Three Months
Ended June 30,	 	 	Six Months
Ended June 30,	 	
 	  	2017	 	 	2016	 	 	2017	 	 	2016	 	
 	  	(dollars in millions)	 	
Income tax expense (benefit)	  	$	22	 	 	$	(2	) 	 	$	53	 	 	$	13	 	
Effective tax rate	  	 	28	% 	 	 	29	% 	 	 	24	% 	 	 	12	% 	
The Company’s tax rate is affected by the fact that its parent entity is a U.K. resident taxpayer, the tax rates in the U.K. and other jurisdictions in which the Company operates, the relative amount of income earned by jurisdiction and the relative amount of losses or income for which no tax benefit or expense was recognized due to a valuation allowance. The Company’s effective tax rate was impacted by unfavorable changes in geographic income mix in 2017 as compared to 2016, primarily due to changes in the underlying business operations, as well as the tax benefit recognized in the prior period due to the restructuring charges recorded within the Powertrain Systems segment in the second quarter of 2016, as more fully described in Note 8. Restructuring.
12. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The changes in accumulated other comprehensive income (loss) attributable to Delphi Technologies (net of tax) are shown below.

 	 	Three Months
Ended June 30,	 	 	Six Months
Ended June 30,	 	
 	 	  2017  	 	 	  2016  	 	 	  2017  	 	 	  2016  	 	
 	 	(in millions)	 	
Foreign currency translation adjustments:	 				 				 				 				
Balance at beginning of period	 	$	(391	) 	 	$	(315	) 	 	$	(419	) 	 	$	(339	) 	
Aggregate adjustment for the period	 	 	54	 	 	 	(36	) 	 	 	82	 	 	 	(12	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at end of period	 	 	(337	) 	 	 	(351	) 	 	 	(337	) 	 	 	(351	) 	
					
Pension and postretirement plans:	 				 				 				 				
Balance at beginning of period	 	$	(288	) 	 	$	(152	) 	 	$	(292	) 	 	$	(157	) 	
Other comprehensive income before reclassifications (net tax effect of $1, $2, $1 and $3)	 	 	(3	) 	 	 	11	 	 	 	(4	) 	 	 	15	 	
Reclassification to income (net tax effect of $1, $1, $2 and $1)	 	 	6	 	 	 	1	 	 	 	11	 	 	 	2	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at end of period	 	 	(285	) 	 	 	(140	) 	 	 	(285	) 	 	 	(140	) 	

Accumulated other comprehensive loss, end of period	 	$	(622	) 	 	$	(491	) 	 	$	(622	) 	 	$	(491	) 	

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Reclassifications from accumulated other comprehensive income (loss) to income were as follows:

Reclassification Out of Accumulated Other Comprehensive Income (Loss)	
Details About Accumulated Other
Comprehensive Income Components	  	Three Months
Ended June 30,	 	 	Six Months
Ended June 30,	 	 	Affected Line Item in the Statement of
Operations	
	  	2017	 	 	2016	 	 	2017	 	 	2016	 	 		
 	  	(in millions)	 	 	 	
Pension and postretirement plans:	  				 				 				 				 		
Actuarial loss	  	$	(7	) 	 	$	(2	) 	 	$	(13	) 	 	$	(3	) 	 	Other expense (1)	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		
	  	 	(7	) 	 	 	(2	) 	 	 	(13	) 	 	 	(3	) 	 	Income before income taxes	
	  	 	1	 	 	 	1	 	 	 	2	 	 	 	1	 	 	Income tax expense	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		
	  	 	(6	) 	 	 	(1	) 	 	 	(11	) 	 	 	(2	) 	 	Net income	
	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	Net income attributable to noncontrolling interest	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		
	  	$	(6	) 	 	$	(1	) 	 	$	(11	) 	 	$	(2	) 	 	Net income attributable to Delphi Technologies	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Total reclassifications for the period	  	$	(6	) 	 	$	(1	) 	 	$	(11	) 	 	$	(2	) 	 		

(1)	These accumulated other comprehensive loss components are components of net periodic pension cost (see Note 9. Pension Benefits for additional details).	
13. SHARE-BASED COMPENSATION
Certain U.S. and non-U.S. employees of Delphi Technologies are covered by the Parent-sponsored share-based compensation arrangement, the Delphi Automotive PLC Long Term Incentive Plan, as amended and restated effective April 23, 2015 (the “PLC LTIP”). The PLC LTIP allows for the grant of awards of up to 22,977,116 Aptiv ordinary shares for long-term compensation. The PLC LTIP is designed to align the interests of management and shareholders. The awards can be in the form of shares, options, stock appreciation rights, restricted stock, RSUs, performance awards, and other share-based awards to the employees, directors, consultants and advisors of Aptiv.
Aptiv has made annual grants of RSUs to its executives in February of each year beginning in 2012 in order to align management compensation with Aptiv’s overall business strategy. Aptiv has competitive and market-appropriate ownership requirements. All of the RSUs granted under the PLC LTIP are eligible to receive dividend equivalents for any dividend paid from the grant date through the vesting date. Dividend equivalents are generally paid out in ordinary shares upon vesting of the underlying RSUs.
These awards include a time-based vesting portion and a performance-based vesting portion, as well as continuity awards in certain years. The time-based RSUs, which make up 25% of the awards for Aptiv’s officers and 50% for Aptiv’s other executives, vest ratably over three years beginning on the first anniversary of the grant date. The performance-based RSUs, which make up 75% of the awards for Aptiv’s officers and 50% for Aptiv’s other executives, vest at the completion of a three-year performance period if certain targets are met. Each executive will receive between 0% and 200% of his or her target performance-based award based on Aptiv’s performance against established company-wide performance metrics, which are:

Metric	  	2016 - 2017
Grants	 	  	2013 - 2015
Grants	 	  	2012
Grant	 	
Average return on net assets (1)	  	 	50%	 	  	 	50%	 	  	 	50%	 	
Cumulative net income	  	 	25%	 	  	 	N/A	 	  	 	30%	 	
Cumulative earnings per share (2)	  	 	N/A	 	  	 	30%	 	  	 	N/A	 	
Relative total shareholder return (3)	  	 	25%	 	  	 	20%	 	  	 	20%	 	
 
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(1)	Average return on net assets is measured by Aptiv’s tax-affected operating income divided by Aptiv’s average net working capital plus average net property, plant and equipment for each calendar year during the respective performance period.	
(2)	Cumulative earnings per share is measured by net income attributable to Aptiv divided by the weighted average number of diluted shares outstanding for the respective three-year performance period.	
(3)	Relative total shareholder return is measured by comparing the average closing price per share of Aptiv’s ordinary shares for all available trading days in the fourth quarter of the end of the performance period to the average closing price per share of Aptiv’s ordinary shares for all available trading days in the fourth quarter of the year preceding the grant, including dividends, and assessed against a comparable measure of competitor and peer group companies.	
Any new executives hired after the annual executive RSU grant date may be eligible to participate in the PLC LTIP. Any off cycle grants made for new hires are valued at their grant date fair value based on the closing price of Aptiv’s ordinary shares on the date of such grant.
The grant date fair value of the RSUs is determined based on the target number of awards issued, the closing price of Aptiv’s ordinary shares on the date of the grant of the award, including an estimate for forfeitures, and a contemporaneous valuation performed by an independent valuation specialist with respect to the relative total shareholder return awards.
A summary of activity, including award grants, vesting and forfeitures for Delphi Technologies employees who participate in the Aptiv plan is provided below:

 	  	RSUs	 	 	Weighted Average
Grant Date
Fair Value	 	
 	  	(in thousands)	 	 	 	 	
Nonvested, January 1, 2017	  	 	220	 	 	$	76.54	 	
Granted	  	 	112	 	 	 	79.68	 	
Vested	  	 	(43	) 	 	 	73.85	 	
Forfeited	  	 	(15	) 	 	 	76.78	 	
	  	 	 	 	 				
Nonvested, June 30, 2017	  	 	274	 	 	 	78.23	 	
	  	 	 	 	 				
Share-based compensation expense within the combined financial statements has been allocated to Delphi Technologies based on the awards and terms previously granted to Delphi Technologies employees while part of Aptiv, and includes the cost of Delphi Technologies employees who participate in the Aptiv plan as well as an allocated portion of the cost of Aptiv senior management awards. Share-based compensation expense recorded within the combined statement of operations, which includes the cost of Delphi Technologies employees who participate in the Aptiv plan as well as an allocated portion of the cost of Aptiv senior management awards, was $3 million ($3 million, net of tax) and $8 million ($7 million, net of tax) based on the Company’s best estimate of ultimate performance against the respective targets during the three and six months ended June 30, 2017, respectively. Share-based compensation expense was $2 million ($1 million, net of tax) and $7 million ($6 million net of tax) based on the Company’s best estimate of ultimate performance against the respective targets during the three and six months ended June 30, 2016, respectively. The Company will continue to recognize compensation expense, based on the grant date fair value of the awards applied to the Company’s best estimate of ultimate performance against the respective targets, over the requisite vesting periods of the awards. Based on the grant date fair value of the awards and the Company’s best estimate of ultimate performance against the respective targets as of June 30, 2017, unrecognized compensation expense on a pretax basis of approximately $31 million is anticipated to be recognized over a weighted average period of approximately 2 years.
 
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14. SEGMENT REPORTING
Delphi Technologies operates its core business along the following operating segments, which are grouped on the basis of similar product, market and operating factors:
 
 	•	 	Powertrain Systems, which manufactures fuel injection systems as well as various other powertrain products including valvetrain, fuel delivery modules, ignition coils, canisters, sensors, valves and actuators. This segment also offers electronic control modules and corresponding software, as well as power electronics solutions including supervisory controllers and software, converters and inverters.	
 
 	•	 	PSS, which sells a portfolio of aftermarket products and services to independent aftermarket customers and for original equipment service, including a wide variety of powertrain and select additional vehicle components.	
 
 	•	 	Eliminations and Other, which includes the elimination of inter-segment transactions.	
The accounting policies of the segments are the same as those described in Note 2. Significant Accounting Policies, except that the disaggregated financial results for the segments have been prepared using a management approach, which is consistent with the basis and manner in which management internally disaggregates financial information for which Delphi Technologies’ chief operating decision maker regularly reviews financial results to assess performance of, and make internal operating decisions about allocating resources to, the segments.
Generally, Delphi Technologies evaluates segment performance based on stand-alone segment net income before interest expense, other income (expense), net, income tax expense, equity income (loss), net of tax, income (loss) from discontinued operations, net of tax, restructuring, separation costs related to the planned spin-off, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures), asset impairments and gains (losses) on business divestitures (“Adjusted Operating Income”) and accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, at current market prices. Delphi Technologies’ management utilizes Adjusted Operating Income as the key performance measure of segment income or loss to evaluate segment performance, and for planning and forecasting purposes to allocate resources to the segments, as management believes this measure is most reflective of the operational profitability or loss of Delphi Technologies’ operating segments. Segment Adjusted Operating Income should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered an alternative to net income attributable to Delphi Technologies, which is the most directly comparable financial measure to Adjusted Operating Income that is prepared in accordance with U.S. GAAP. Segment Adjusted Operating Income, as determined and measured by Delphi Technologies, should also not be compared to similarly titled measures reported by other companies.
Included below are sales and operating data for the Company’s segments for the three and six months ended June 30, 2017 and 2016.

 	  	Powertrain
Systems	 	 	PSS	 	  	Eliminations
and Other (1)	 	 	Total	 	
 	  	(in millions)	 	
For the Three Months Ended June 30, 2017:	  				 				  				 				
Net sales	  	$	1,035	 	 	$	232	 	  	$	(80	) 	 	$	1,187	 	
Depreciation and amortization	  	$	48	 	 	$	1	 	  	$	—  	 	 	$	49	 	
Adjusted operating income	  	$	141	 	 	$	23	 	  	$	—  	 	 	$	164	 	
Operating income (2)	  	$	61	 	 	$	18	 	  	$	—  	 	 	$	79	 	
Equity loss	  	$	(1	) 	 	$	—  	 	  	$	—  	 	 	$	(1	) 	
Net income attributable to noncontrolling interest	  	$	8	 	 	$	—  	 	  	$	—  	 	 	$	8	 	
 
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 	  	Powertrain
Systems	 	 	PSS	 	  	Eliminations
and Other (1)	 	 	Total	 	
 	  	(in millions)	 	
For the Three Months Ended June 30, 2016:	  				 				  				 				
Net sales	  	$	983	 	 	$	235	 	  	$	(72	) 	 	$	1,146	 	
Depreciation and amortization (3)	  	$	68	 	 	$	1	 	  	$	—  	 	 	$	69	 	
Adjusted operating income	  	$	114	 	 	$	23	 	  	$	—  	 	 	$	137	 	
Operating (loss) income (4)	  	$	(24	) 	 	$	15	 	  	$	—  	 	 	$	(9	) 	
Equity income	  	$	—  	 	 	$	—  	 	  	$	—  	 	 	$	—  	 	
Net income attributable to noncontrolling interest	  	$	7	 	 	$	—  	 	  	$	—  	 	 	$	7	 	

 	  	Powertrain
Systems	 	  	PSS	 	  	Eliminations
and Other (1)	 	 	Total	 	
 	  	(in millions)	 	
For the Six Months Ended June 30, 2017:	  				  				  				 				
Net sales	  	$	2,058	 	  	$	454	 	  	$	(157	) 	 	$	2,355	 	
Depreciation and amortization	  	$	94	 	  	$	3	 	  	$	—  	 	 	$	97	 	
Adjusted operating income	  	$	291	 	  	$	35	 	  	$	—  	 	 	$	326	 	
Operating income (2)	  	$	203	 	  	$	24	 	  	$	—  	 	 	$	227	 	
Equity income	  	$	—  	 	  	$	—  	 	  	$	—  	 	 	$	—  	 	
Net income attributable to noncontrolling interest	  	$	16	 	  	$	—  	 	  	$	—  	 	 	$	16	 	

 	  	Powertrain
Systems	 	  	PSS	 	  	Eliminations
and Other (1)	 	 	Total	 	
 	  	(in millions)	 	
For the Six Months Ended June 30, 2016:	  				  				  				 				
Net sales	  	$	1,946	 	  	$	449	 	  	$	(132	) 	 	$	2,263	 	
Depreciation and amortization (3)	  	$	110	 	  	$	3	 	  	$	—  	 	 	$	113	 	
Adjusted operating income	  	$	218	 	  	$	43	 	  	$	—  	 	 	$	261	 	
Operating income (4)	  	$	75	 	  	$	32	 	  	$	—  	 	 	$	107	 	
Equity income	  	$	—  	 	  	$	—  	 	  	$	—  	 	 	$	—  	 	
Net income attributable to noncontrolling interest	  	$	15	 	  	$	—  	 	  	$	—  	 	 	$	15	 	
 
(1)	Eliminations and Other includes the elimination of inter-segment transactions.	
(2)	Includes $66 million and $76 million of charges recorded related to costs associated with employee termination benefits and other exit costs for the three and six months ended June 30, 2017, respectively.	
(3)	Includes asset impairment charges of $22 million within Powertrain Systems.	
(4)	Includes $124 million and $130 million of charges recorded related to costs associated with employee termination benefits and other exit costs for the three and six months ended June 30, 2016, respectively.	
 
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The reconciliation of Adjusted Operating Income to Operating Income includes, as applicable, restructuring, separation costs, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures) and asset impairments. The reconciliation of Adjusted Operating Income to net income attributable to Delphi Technologies for the three and six months ended June 30, 2017 and 2016 are as follows:

 	  	Powertrain
Systems	 	 	PSS	 	 	Eliminations
and Other	 	  	Total	 	
 	  	(in millions)	 	
For the Three Months Ended June 30, 2017:	  				 				 				  				
Adjusted operating income	  	$	141	 	 	$	23	 	 	$	—  	 	  	$	164	 	
Restructuring	  	 	(64	) 	 	 	(2	) 	 	 	—  	 	  	 	(66	) 	
Separation costs	  	 	(12	) 	 	 	(3	) 	 	 	—  	 	  	 	(15	) 	
Asset impairments	  	 	(4	) 	 	 	—  	 	 	 	—  	 	  	 	(4	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating income	  	$	61	 	 	$	18	 	 	$	—  	 	  	 	79	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Interest expense	  				 				 				  	 	—  	 	
Other income, net	  				 				 				  	 	—  	 	
	  				 				 				  	 	 	 	
Income before income taxes and equity income	  				 				 				  	 	79	 	
Income tax expense	  				 				 				  	 	(22	) 	
Equity loss, net of tax	  				 				 				  	 	(1	) 	
	  				 				 				  	 	 	 	
Net income	  				 				 				  	 	56	 	
Net income attributable to noncontrolling interest	  				 				 				  	 	8	 	
	  				 				 				  	 	 	 	
Net income attributable to Delphi Technologies	  				 				 				  	$	48	 	

																	
 	  	Powertrain
Systems	 	 	PSS	 	 	Eliminations
and Other	 	  	Total	 	
 	  	(in millions)	 	
For the Three Months Ended June 30, 2016:	  				 				 				  				
Adjusted operating income	  	$	114	 	 	$	23	 	 	$	—  	 	  	$	137	 	
Restructuring	  	 	(116	) 	 	 	(8	) 	 	 	—  	 	  	 	(124	) 	
Asset impairments	  	 	(22	) 	 	 	—  	 	 	 	—  	 	  	 	(22	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating (loss) income	  	$	(24	) 	 	$	15	 	 	$	—  	 	  	 	(9	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Interest expense	  				 				 				  	 	(1	) 	
Other income, net	  				 				 				  	 	3	 	
	  				 				 				  	 	 	 	
Loss before income taxes and equity income	  				 				 				  	 	(7	) 	
Income tax benefit	  				 				 				  	 	2	 	
Equity income, net of tax	  				 				 				  	 	—  	 	
	  				 				 				  	 	 	 	
Net loss	  				 				 				  	 	(5	) 	
Net income attributable to noncontrolling interest	  				 				 				  	 	7	 	
	  				 				 				  	 	 	 	
Net loss attributable to Delphi Technologies	  				 				 				  	$	(12	) 	

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Table of Contents

 	  	Powertrain
Systems	 	 	PSS	 	 	Eliminations
and Other	 	  	Total	 	
 	  	(in millions)	 	
For the Six Months Ended June 30, 2017:	  				 				 				  				
Adjusted operating income	  	$	291	 	 	$	35	 	 	$	—  	 	  	$	326	 	
Restructuring	  	 	(68	) 	 	 	(8	) 	 	 	—  	 	  	 	(76	) 	
Separation costs	  	 	(12	) 	 	 	(3	) 	 	 	—  	 	  	 	(15	) 	
Asset impairments	  	 	(8	) 	 	 	—  	 	 	 	—  	 	  	 	(8	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating income	  	$	203	 	 	$	24	 	 	$	—  	 	  	 	227	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Interest expense	  				 				 				  	 	(1	) 	
Other expense, net	  				 				 				  	 	(6	) 	
	  				 				 				  	 	 	 	
Income before income taxes and equity income	  				 				 				  	 	220	 	
Income tax expense	  				 				 				  	 	(53	) 	
Equity income, net of tax	  				 				 				  	 	—  	 	
	  				 				 				  	 	 	 	
Net income	  				 				 				  	 	167	 	
Net income attributable to noncontrolling interest	  				 				 				  	 	16	 	
	  				 				 				  	 	 	 	
Net income attributable to Delphi Technologies	  				 				 				  	$	151	 	

																	
 	  	Powertrain
Systems	 	 	PSS	 	 	Eliminations
and Other	 	  	Total	 	
 	  	(in millions)	 	
For the Six Months Ended June 30, 2016:	  				 				 				  				
Adjusted operating income	  	$	218	 	 	$	43	 	 	$	—  	 	  	$	261	 	
Restructuring	  	 	(121	) 	 	 	(9	) 	 	 	—  	 	  	 	(130	) 	
Other acquisition and portfolio project costs	  	 	—  	 	 	 	(2	) 	 	 	—  	 	  	 	(2	) 	
Asset impairments	  	 	(22	) 	 	 	—  	 	 	 	—  	 	  	 	(22	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Operating income	  	$	75	 	 	$	32	 	 	$	—  	 	  	 	107	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  				
Interest expense	  				 				 				  	 	(1	) 	
Other income, net	  				 				 				  	 	3	 	
	  				 				 				  	 	 	 	
Income before income taxes and equity income	  				 				 				  	 	109	 	
Income tax expense	  				 				 				  	 	(13	) 	
Equity income, net of tax	  				 				 				  	 	—  	 	
	  				 				 				  	 	 	 	
Net income	  				 				 				  	 	96	 	
Net income attributable to noncontrolling interest	  				 				 				  	 	15	 	
	  				 				 				  	 	 	 	
Net income attributable to Delphi Technologies	  				 				 				  	$	81	 	
	  				 				 				  	 	 	 	
15. OTHER INCOME, NET
Other income (expense), net included:

 	  	Three Months
Ended June 30,	 	  	Six Months
Ended June 30,	 	
 	  	  2017  	 	 	  2016  	 	  	  2017  	 	 	  2016  	 	
 	  	(in millions)	 	
Interest income	  	$	1	 	 	$	—  	 	  	$	1	 	 	$	—  	 	
Components of net periodic benefit cost other than service cost (Note 9)	  	 	(4	) 	 	 	—  	 	  	 	(7	) 	 	 	1	 	
Other	  	 	3	 	 	 	3	 	  	 	—  	 	 	 	2	 	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Other income (expense), net	  	$	—  	 	 	$	3	 	  	$	(6	) 	 	$	3	 	

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