Exhibit 10.4

 

EXECUTION VERSION

 

 

STOCK PURCHASE AGREEMENT

 

between

 

DYNEGY INC.

 

and

 

TERAWATT HOLDINGS, LP

 

dated as of February 24, 2016

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

Article I

 

 

 

 

 

DEFINITIONS

 

 

 

 

Section 1.01

Definitions

1

Section 1.02

Interpretation

8

 

 

 

 

Article II

 

 

 

 

 

AGREEMENT TO SELL AND PURCHASE

 

 

 

 

Section 2.01

Sale and Purchase

9

Section 2.02

Closing

9

Section 2.03

Mutual Conditions to Each Party’s Obligations

9

Section 2.04

Conditions to Purchaser’s Obligations

10

Section 2.05

Conditions to Dynegy’s Obligations

11

Section 2.06

Dynegy Closing Deliverables

12

Section 2.07

Purchaser Closing Deliverables

12

 

 

 

 

Article III

 

 

 

 

 

REPRESENTATIONS AND WARRANTIES OF DYNEGY

 

 

 

 

Section 3.01

Organization and Existence

13

Section 3.02

Authorization

13

Section 3.03

Consents

14

Section 3.04

Noncontravention

14

Section 3.05

Shares

14

Section 3.06

Capitalization

14

Section 3.07

Financial Statements

15

Section 3.08

No Undisclosed Liabilities

16

Section 3.09

Dynegy Filings

16

Section 3.10

No Material Adverse Change in Business

17

Section 3.11

Taxes

17

Section 3.12

Absence of Proceedings

17

Section 3.13

Compliance with Laws

18

Section 3.14

Energy Regulatory Laws

18

Section 3.15

Trade Compliance Laws

18

Section 3.16

Investment Company Act

18

Section 3.17

No Broker’s Fees

18

Section 3.18

Exclusive Representations and Warranties

18

 

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Article IV

 

 

 

 

 

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

 

 

 

Section 4.01

Organization and Existence

19

Section 4.02

Authorization

19

Section 4.03

Consents

19

Section 4.04

Noncontravention

20

Section 4.05

Certain Fees

20

Section 4.06

Unregistered Securities

20

Section 4.07

Ownership of Common Stock

21

Section 4.08

Financing

22

 

 

 

 

Article V

 

 

 

 

 

COVENANTS

 

 

 

 

Section 5.01

Efforts Prior to Closing

22

Section 5.02

Other Actions

22

Section 5.03

Further Assurances; Listing of Shares

22

Section 5.04

FIRPTA Compliance

22

Section 5.05

Interim Operations

23

Section 5.06

ROFR

23

 

 

 

 

Article VI

 

 

 

 

 

MISCELLANEOUS

 

 

 

 

Section 6.01

Termination

26

Section 6.02

Fees and Expenses

27

Section 6.03

Exclusive Representations and Warranties

27

Section 6.04

Survival of Provisions

28

Section 6.05

Indemnification

28

Section 6.06

No Waiver; Modifications in Writing

32

Section 6.07

Binding Effect; Assignment

33

Section 6.08

Confidentiality; Publicity

33

Section 6.09

Notices

34

Section 6.10

Removal of Legend

35

Section 6.11

Entire Agreement

35

Section 6.12

Specific Performance

36

Section 6.13

Governing Law; Submission to Jurisdiction

36

Section 6.14

Waiver of Jury Trial

37

Section 6.15

Execution in Counterparts

37

Section 6.16

No Recourse

37

 

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EXHIBITS

 

Exhibit A                                             Form of Investor Rights
Agreement

 

Exhibit B                                             Form of Legal Opinions

 

SCHEDULES

 

Schedule 1                                     Required Approvals

 

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STOCK PURCHASE AGREEMENT

 

This STOCK PURCHASE AGREEMENT, dated as of February 24, 2016 (this “Agreement”),
is entered into by and between Dynegy Inc., a Delaware corporation (“Dynegy”),
and Terawatt Holdings, LP, a Delaware limited partnership (“Purchaser” and
together with Dynegy, the “Parties”).

 

WHEREAS, in connection with entering into this Agreement, Atlas Power Finance,
LLC, a Delaware limited liability company and indirect subsidiary of Dynegy (the
“Delta Purchaser”), entered into the Stock Purchase Agreement, dated as of the
date hereof, by and among the Delta JV, GDF Suez Energy North America, Inc. and
International Power, S.A. (as the same may be amended or otherwise modified in
accordance with its terms from time to time, the “Delta Agreement”);

 

WHEREAS, in connection with entering into the Delta Agreement, certain
Affiliates of Purchaser, Dynegy and Atlas Power, LLC, a Delaware limited
liability company and direct parent company of Delta Purchaser (“Delta JV”),
have entered into an Interim Sponsors Agreement, dated as of the date hereof
(the “Interim Sponsors Agreement”), pursuant to which, among other things,
Dynegy and Affiliates of Purchaser will be obligated to invest in Delta JV,
subject to the terms and conditions therein;

 

WHEREAS, at the Closing (as defined below), and subject to the terms and
conditions of this Agreement, Dynegy desires to sell and issue to Purchaser, and
Purchaser desires to purchase from Dynegy, the Shares (as defined below); and

 

WHEREAS, at the Closing, the Parties will execute and deliver an Investor Rights
Agreement, in substantially the form attached hereto as Exhibit A (the “Investor
Rights Agreement”).

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties hereby agree as
follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01                             Definitions. As used in this Agreement,
the following terms have the meanings indicated below:

 

“Action” means any claim, action, suit, arbitration, inquiry, grievance,
proceeding, hearing, investigation, or administrative decision-making or
rulemaking process.

 

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“Affiliate” means, with respect to a specified Person, any other Person, whether
now in existence or hereafter created, directly or indirectly controlling,
controlled by or under direct or indirect common control with such specified
Person. For purposes of this definition, “control” (including, with correlative
meanings, “controlling,” “controlled by” and “under common control with”) means
the power to direct or cause the direction of the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise. For the avoidance of doubt, (a) GDF Suez
Energy North America, Inc. and its Subsidiaries shall not be deemed to be
Affiliates of either Party and (b) Dynegy and Purchaser shall not be deemed to
be Affiliates of each other.

 

“Agreement” has the meaning set forth in the introductory paragraph of this
Agreement.

 

“Beneficially Own” means, with respect to any securities, having “beneficial
ownership” of such securities for purposes of Rule 13d-3 or 13d-5 under the
Exchange Act as in effect on the date hereof and shall include securities that
are beneficially owned, directly or indirectly, by a Counterparty (or any of
such Counterparty’s Affiliates) under any Derivatives Contract (without regard
to any short or similar position under the same or any other Derivatives
Contract) to which such Person or any of such Person’s Affiliates is a Receiving
Party; provided, however, that the number of shares of Common Stock that a
Person is deemed to be the beneficial owner of, or to beneficially own, in
connection with a particular Derivatives Contract shall not exceed the number of
Notional Common Shares with respect to such Derivatives Contract; provided,
further, that the number of securities beneficially owned by each Counterparty
(including its Affiliates) under a Derivatives Contract shall be deemed to
include all securities that are beneficially owned, directly or indirectly, by
any other Counterparty (or any of such other Counterparty’s Affiliates) under
any Derivatives Contract to which such first Counterparty (or any of such first
Counterparty’s Affiliates) is a Receiving Party, with this provision being
applied to successive Counterparties as appropriate. Similar terms such as
“Beneficial Ownership” and “Beneficial Owner” shall have the corresponding
meanings.

 

“Beneficial Owner” or “Beneficial Ownership” shall have the meanings specified
in the definition of Beneficially Owns.

 

“Board” means the Board of Directors of Dynegy or any duly authorized committee
thereof.

 

“Business Day” means any day other than a Saturday, a Sunday or any federal
holiday or day on which banking institutions in the State of Texas or New York,
New York are authorized or required by Law or other governmental action to
close.

 

“Closing” shall have the meaning specified in Section 2.02.

 

“Closing Date” shall have the meaning specified in Section 2.02.

 

“Commercially Reasonable Efforts” shall have the meaning specified in the Delta
Agreement.

 

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“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the common stock of Dynegy, par value $0.01 per share.

 

“Contract” means any contract, agreement, indenture, note, bond, mortgage, deed
of trust, loan, instrument, lease, license, commitment or other arrangement,
understanding, undertaking, commitment or obligation, whether written or oral.

 

“Controlled Affiliate” means (a) Energy Capital Partners III, LLC and (b) any
Subsidiary of Energy Capital Partners III, LLC.

 

“Counterparty” shall have the meaning specified in the definition of Derivatives
Contract.

 

“Deductible” shall have the meaning specified in Section 6.05(c)(ii)(1).

 

“Defaulting Sponsor” shall have the meaning specified in the Interim Sponsors
Agreement.

 

“Delta JV” shall have the meaning specified in the recitals to this Agreement.

 

“Delta Agreement” shall have the meaning specified in the recitals to this
Agreement.

 

“Delta Closing” shall have the meaning given to the term “Closing” in the Delta
Agreement.

 

“Delta Documents” shall mean (a) the Interim Sponsors Agreement, (b) the
“Transaction Agreements” (as such term is defined in the Interim Sponsors
Agreement), (c) the Amended and Restated Limited Liability Company Agreement of
the Delta JV to be entered into as contemplated by the Interim Sponsors
Agreement, (d) the Transaction Documents and (e) any other agreements delivered
in connection with the consummation of the transactions contemplated by the
foregoing Contracts.

 

“Delta Purchaser” shall have the meaning specified in the recitals to this
Agreement.

 

“Derivatives Contract” means a contract between two parties (the “Receiving
Party” and the “Counterparty”) that is designed to produce economic benefits and
risks to the Receiving Party that correspond substantially to the ownership by
the Receiving Party of a number of shares of Common Stock specified or
referenced in such contract (the number corresponding to such economic benefits
and risks, the “Notional Common Shares”), regardless of whether obligations
under such contract are required or permitted to be settled through the delivery
of cash, Common Stock or other property, without regard to any short position
under the same or any other Derivative Contract. For the avoidance of doubt,
interests in broad-based index options, broad-based index futures and
broad-based publicly traded market baskets of stocks approved for trading by the
appropriate federal governmental authority shall not be deemed to be Derivatives
Contracts.

 

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“Disclosure” has the meaning set forth in the introductory paragraph of
Article III.

 

“Dynegy” shall have the meaning specified in the introductory paragraph of this
Agreement.

 

“Dynegy Balance Sheet” shall have the meaning specified in Section 3.07.

 

“Dynegy Financial Statements” shall have the meaning specified in Section 3.07.

 

“Dynegy Projections” shall have the meaning specified in Section 3.18.

 

“ECP” shall have the meaning specified in the Interim Sponsors Agreement.

 

“ECP Equity Commitment Letter” shall have the meaning specified in the Interim
Sponsors Agreement.

 

“Effect” shall have the meaning specified in the definition of Material Adverse
Effect.

 

“Energy Regulatory Laws” means applicable Laws administered by the Federal
Energy Regulatory Commission or state energy regulatory commissions.

 

“Equity Securities” means shares of Common Stock and any other shares of
Dynegy’s capital stock (including any options, warrants or other rights to
acquire Common Stock or such capital stock or any securities that are
convertible into, or exercisable or exchangeable for, or that represent the
right to receive Common Stock or such capital stock).

 

“Excess Proposed Securities” shall have the meaning specified in
Section 5.06(b).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and the rules and regulations of the Commission promulgated thereunder.

 

“Fundamental Representations” shall have the meaning specified in Section 6.04.

 

“GAAP” means generally accepted accounting principles and practices in the
United States of America as of the period presented.

 

“Governmental Authority” means any supranational, national, state, municipal,
local or foreign government; any instrumentality, subdivision, court,
administrative agency or commission or other authority thereof (including a
national securities exchange or other self-regulatory body); or any
quasi-governmental, arbitration or private body exercising any regulatory,
taxing, importing or other governmental or quasi-governmental authority.

 

“Governmental Order” means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority with competent jurisdiction.

 

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“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.

 

“Indemnified Purchaser Entities” shall have the meaning specified in
Section 6.05(a).

 

“Indemnifying Party” or “Indemnified Parties” shall have the meanings specified
in Section 6.05(d)(i).

 

“Interim Sponsors Agreement” shall have the meaning specified in the recitals to
this Agreement.

 

“Investor Rights Agreement” shall have the meaning specified in the recitals to
this Agreement.

 

“Law” means any applicable supranational, domestic or foreign federal, state or
local order, writ, injunction, judgment, settlement, award, decree, statute, law
(including common law), rule or regulation, including any Governmental Order.

 

“Losses” shall have the meaning specified in Section 6.05(a).

 

“Material Adverse Effect” means any circumstance, fact, condition, change,
development, occurrence, event or effect (each, an “Effect”) that, individually
or in the aggregate, is materially adverse to (a) the business, condition
(financial or otherwise), assets, liabilities, operations or results of
operations of Dynegy and its Subsidiaries, taken as a whole or (b) Dynegy’s
ability to perform its obligations, and consummate the transactions contemplated
by, the Transaction Documents, except for any Effect resulting from: (i) changes
in the economy or the financial, securities or currency markets in the United
States or elsewhere in the world (including changes in prevailing foreign
exchange rates or interest rates), (ii) changes generally affecting the
industries in which Dynegy and its Subsidiaries operate, (iii) generally
applicable changes in Law or in GAAP, accounting standards or interpretations
thereof, in each case, after the date hereof, (iv) weather-related or other
force majeure events or outbreaks or escalations of hostilities or acts of war
or terrorism, (v) the announcement or the existence of this Agreement or the
transactions contemplated hereby, (vi)  changes (in and of themselves) in the
share price or trading volume of the Common Stock (but not the underlying cause
thereof), (vii) the failure (in and of itself) of Dynegy to meet projections or
forecasts (but not the underlying causes thereof) or (viii) any requirements
imposed by any Governmental Authority as a condition to obtaining any consent,
approval or authorization from such Governmental Authority of the transactions
contemplated by the Transaction Documents or the Delta Documents, except, with
respect to clauses (i)—(iv), to the extent that any such Effect has a
disproportionate impact on the business of Dynegy and its Subsidiaries relative
to other businesses in the industries in which Dynegy and its Subsidiaries
operate (in which case, only the incremental disproportionate impact may be
taken into account in determining whether there has been a Material Adverse
Effect, to the extent such Effect is not otherwise excluded from being taken
into account by clauses (i)—(viii) of this definition).

 

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“Notional Common Shares” shall have the meaning specified in the definition of
Derivatives Contract.

 

“NYSE” means the New York Stock Exchange.

 

“Organizational Documents” means, with respect to a particular Person (other
than a natural person), the certificate or articles of incorporation,
certificate or articles of organization, certificate of formation, bylaws,
limited liability company agreement, limited partnership agreement, operating
agreement or similar organizational document or agreement, as applicable, of
such Person.

 

“Parties” shall have the meaning specified in the introductory paragraph of this
Agreement.

 

“Person” means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company, unincorporated
organization, Governmental Authority or any agency, instrumentality or political
subdivision thereof or any other form of entity.

 

“Preferred Stock” shall have the meaning specified in Section 3.06(a).

 

“Proposed Covered Issuance” shall have the meaning specified in Section 5.06(a).

 

“Proposed Securities” shall have the meaning specified in Section 5.06(a).

 

“Purchase Price” means $150,000,000, which shall equal $10.94 per share of
Common Stock.

 

“Purchaser” shall have the meaning specified in the introductory paragraph of
this Agreement.

 

“Receiving Party” shall have the meaning specified in the definition of
Derivatives Contract.

 

“Representatives” means, with respect to a specified Person, the officers,
directors, managers, employees, agents, counsel, accountants, investment
bankers, and other representatives of such Person.

 

“Required Approvals” means the required consents and approvals by Governmental
Authorities to the transactions contemplated by the Transaction Documents, as
set forth on Schedule 1.

 

“ROFR Consideration Period” shall have the meaning specified in Section 5.06(a).

 

“ROFR Election Notice” shall have the meaning specified in Section 5.06(a).

 

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“ROFR Negotiation Period” shall have the meaning specified in Section 5.06(c).

 

“ROFR Notice” shall have the meaning specified in Section 5.06(a).

 

“ROFR Shareholder Approval” shall have the meaning specified in Section 5.06(b).

 

“ROFR Shareholder Approval Notice” shall have the meaning specified in
Section 5.06(b).

 

“Rule 144 Representation Letter” shall have the meaning specified in
Section 6.10(a).

 

“SEC Disclosure” shall mean the disclosure included in the SEC Reports, but
excluding any risk factor disclosure, forward-looking statements or other
disclosures or statements that are similarly non-specific and are predictive and
forward-looking in nature contained in any such SEC Report under the heading
“Risk Factors” or “Cautionary Note Regarding Forward-Looking Statements” or any
other heading and excluding any information set forth in any exhibit thereto.

 

“SEC Reports” shall have the meaning specified in Section 3.09.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and the rules and regulations of the Commission promulgated thereunder.

 

“Shares” means 13,711,152 shares of Common Stock.

 

“Stockholder” means a holder of shares of Common Stock.

 

“Subsidiary” or “Subsidiaries” means, with respect to any Person, any
corporation, partnership, joint venture, limited liability company or other
entity (a) of which such Person or a subsidiary of such Person is a general
partner or manager or (b) of which a majority of the voting securities or other
voting interests, or a majority of the securities or other interests of which
having by their terms ordinary voting power to elect a majority of the board of
directors or Persons performing similar functions with respect to such entity,
are directly or indirectly owned by such Person and/or one or more subsidiaries
thereof.

 

“Tax Returns” means any return, declaration, report, election, claim for refund
or information return or other statement or form relating to Taxes, filed or
required to be filed with any taxing authority, including any schedule or
attachment thereto or any amendment thereof.

 

“Taxes” means any and all taxes, fees, levies, duties, tariffs, imposts, and
other charges of any kind (together with any and all interest, penalties,
additions to tax and additional amounts imposed with respect thereto) imposed by
any taxing authority, including taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property,
intangible property, excise, sales, use, capital stock, accumulation of
earnings, payroll, employment, social security, workers’ compensation,
unemployment compensation, or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer,

 

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value added, or gains taxes; license, registration and documentation fees; and
customs’ duties, tariffs, and similar charges.

 

“Trade Compliance Laws” means (a) applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970 or the Laws administered or promulgated by, or Actions of, the United
States Office of Foreign Asset Controls, or similar Laws of any jurisdiction,
(b) applicable anti-bribery and anti-corruption Laws, including the Foreign
Corrupt Practices Act of 1977 and (c) applicable sanctions rules and regulations
administered or enforced by the Office of Foreign Asset Control of the U.S.
Treasury Department, U.S. Department of State, or the Bureau of Industry and
Security of the U.S. Department of Commerce.

 

“Transaction Documents” means, collectively, this Agreement and the Investor
Rights Agreement.

 

Section 1.02                             Interpretation.

 

(a)                       Each of the Parties has participated in the drafting
and negotiation of this Agreement. If an ambiguity or question of intent or
interpretation arises, this Agreement must be construed as if it is drafted by
all the Parties, and no presumption or burden of proof shall arise favoring or
disfavoring any member by virtue of authorship of any of the provisions of this
Agreement.

 

(b)                       Any reference in this Agreement to $ means U.S.
dollars.

 

(c)                        Any reference in this Agreement to gender shall
include all genders, and words imparting the singular number only shall include
the plural and vice versa.

 

(d)                       The division of this Agreement into Articles, Sections
and other subdivisions and the insertion of headings are for convenience of
reference only and shall not affect or be utilized in construing or interpreting
this Agreement. All references in this Agreement to any “Article” or “Section”
are to the corresponding Article or Section of this Agreement unless otherwise
specified.  The Exhibits and Schedules to this Agreement are hereby incorporated
and made a part hereto.

 

(e)                        The words such as “herein,” “hereinafter,” “hereof”
and “hereunder” refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.

 

(f)                         The word “including” or any variation thereof means
“including, without limitation” and shall not be construed to limit any general
statement that it follows to the specific or similar items or matters
immediately following it.

 

(g)                        When calculating the period of time before which,
within which or following which any act is to be done or step taken pursuant to
this Agreement, the date that is the reference date in calculating such period
shall be excluded. If the last day of such period is a

 

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non-Business Day, the period in question shall end on the next succeeding
Business Day. All references to days in this Agreement are to calendar days
unless the term “Business Day” is specifically used.

 

(h)                       The word “extent” in the phrase “to the extent” shall
mean the degree to which a subject or other thing extends, and such phrase shall
not mean simply “if.”

 

(i)                           Any Contract or Law defined or referred to herein
means such Contract or Law as from time to time amended, modified or
supplemented, unless otherwise specifically indicated.

 

(j)                          References to a Person are also to its successors
and permitted assigns.

 

(k)                       Any reference to “transactions contemplated by the
Transaction Documents” or “transactions contemplated by this Agreement” excludes
any of the transactions to be effected pursuant to the Delta Agreement.

 

ARTICLE II

 

AGREEMENT TO SELL AND PURCHASE

 

Section 2.01                             Sale and Purchase. Subject to the terms
and conditions of this Agreement, at the Closing: (a) Dynegy hereby agrees to
issue and sell to Purchaser, and Purchaser hereby agrees to purchase from
Dynegy, the Shares; and (b) as consideration for the issuance and sale of the
Shares to Purchaser, Purchaser hereby agrees to pay Dynegy the Purchase Price.

 

Section 2.02                             Closing. Subject to the terms and
conditions of this Agreement, the consummation of the purchase and sale of the
Shares hereunder (the “Closing”) shall, unless otherwise agreed to in writing by
the Parties, take place at the offices of Skadden, Arps, Slate, Meagher & Flom
LLP, 1000 Louisiana Street, Suite 6800, Houston, TX 77002, on the later of
(i) the date of the Delta Closing or (ii) the Business Day following the date
that each of the conditions set forth in Sections 2.03, 2.04 and 2.05 shall have
been satisfied or, if permissible, waived (other than any conditions (including
the condition set forth in Section 2.03(d)) that by their nature are to be
satisfied at the Closing (but subject to the satisfaction or waiver of those
conditions)). The date on which the Closing occurs is referred to herein as the
“Closing Date.”  The Parties agree that the Closing may occur via delivery of
facsimiles or photocopies (via actual delivery or electronically via electronic
mail) of the Transaction Documents and the closing deliverables contemplated by
the Transaction Documents. Unless otherwise provided herein, all proceedings to
be taken and all documents to be executed and delivered by all Parties at the
Closing will be deemed to have been taken and executed simultaneously, and no
proceedings will be deemed to have been taken nor documents executed or
delivered until all have been taken.

 

Section 2.03                             Mutual Conditions to Each Party’s
Obligations. The respective obligations of each Party to consummate the purchase
and issuance and sale of the Shares shall

 

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be subject to the satisfaction or waiver by each Party (on behalf of itself in
writing, in whole or in part, to the extent permitted by applicable Law) on or
prior to the Closing Date of each of the following conditions:

 

(a)                       no Law shall have been enacted or promulgated, and no
action shall have been taken, by any Governmental Authority of competent
jurisdiction that temporarily, preliminarily or permanently restrains,
precludes, enjoins or otherwise prohibits the consummation of the transactions
contemplated by the Transaction Documents or makes the transactions contemplated
by the Transaction Documents illegal, and no Action is pending that seeks a
Governmental Order to such effect;

 

(b)                       any applicable waiting period under the HSR Act
relating to the transactions contemplated by this Agreement shall have expired
or been terminated;

 

(c)                        the Required Approvals shall have been obtained; and

 

(d)                       each of the conditions to the obligations of the
parties to the Delta Agreement to consummate the Delta Closing shall have been
satisfied or waived by the party or parties entitled to the benefit thereto
(other than those conditions that by their nature are to be satisfied
concurrently at the Delta Closing) such that the Delta Closing shall have
occurred or shall occur concurrently with the Closing.

 

Section 2.04                             Conditions to Purchaser’s Obligations.
The obligation of Purchaser to consummate the purchase of the Shares shall be
subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (any or all of which may be waived by Purchaser on behalf
of itself in writing, in whole or in part, to the extent permitted by applicable
Law):

 

(a)                       Dynegy shall have performed and complied in all
material respects with the covenants and agreements contained in this Agreement
that are required to be performed and complied with by Dynegy on or prior to the
Closing;

 

(b)                       each of the Fundamental Representations, disregarding
all qualifications and exceptions contained therein regarding “materiality”
shall be true and correct in all material respects on and as of the Closing Date
with the same effect as though such representations and warranties had been made
on and as of the Closing Date (except to the extent expressly made as of an
earlier date, in which case as of such earlier date);

 

(c)                        each of the representations and warranties of Dynegy
contained in Article III (other than the Fundamental Representations),
disregarding all qualifications and exceptions contained therein regarding
“materiality” or a “Material Adverse Effect,” shall be true and correct on and
as of the Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date (except to the extent
expressly made as of an earlier date, in which case as of such earlier date),
except where such failure to be true and correct would not constitute a Material
Adverse Effect;

 

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(d)                       the Shares shall have been approved for listing on the
NYSE, subject only to official notice of issuance;

 

(e)                        the Common Stock shall not have been suspended by the
Commission or the NYSE from trading on the NYSE or otherwise delisted from the
NYSE nor shall any such suspension or delisting have been threatened in writing
by the Commission or NYSE;

 

(f)                         the Board shall have taken all actions necessary and
appropriate to permit the Initial Appointment (as defined Investor Rights
Agreement) following the Closing as contemplated in the Investor Rights
Agreement;

 

(g)                        since the date hereof, no event or events shall have
occurred and be continuing which would constitute a Material Adverse Effect;

 

(h)                       Dynegy shall not be a Defaulting Sponsor pursuant to
the terms and conditions of the Interim Sponsors Agreement; and

 

(i)                           Dynegy shall have executed and delivered the
closing deliverables described in Section 2.06.

 

Section 2.05                             Conditions to Dynegy’s Obligations. The
obligation of Dynegy to consummate the sale of the Shares to Purchaser shall be
subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (any or all of which may be waived by Dynegy in writing, in
whole or in part, to the extent permitted by applicable Law):

 

(a)                       Purchaser shall have performed and complied in all
material respects with the covenants and agreements contained in this Agreement
that are required to be performed and complied with by Purchaser on or prior to
the Closing;

 

(b)                       (i) each of the representations and warranties of
Purchaser contained in Section 4.07 shall be true and correct in all respects on
and as of the Closing Date with the same effect as though such representations
and warranties had been made on and as of the Closing Date, and (ii) each of the
other representations and warranties in Article IV shall be true and correct on
and as of the Closing Date with the same effect as though such representations
and warranties had been made on and as of the Closing Date, except in the case
of clause (ii) where such failure to be true and correct would not, individually
or in the aggregate, have a material adverse effect on Purchaser’s ability to
perform its material obligations hereunder or to consummate the transactions
contemplated hereby;

 

(c)                        ECP shall not be a Defaulting Sponsor pursuant to the
terms and conditions of the Interim Sponsors Agreement; and

 

(d)                       Purchaser shall have executed and delivered the
closing deliverables described in Section 2.07.

 

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Section 2.06                             Dynegy Closing Deliverables. Subject to
the terms and conditions of this Agreement, at the Closing, Dynegy shall deliver
(or cause to be delivered) the following:

 

(a)                       the Shares, which shall be in book entry form,
registered in the name of Purchaser, free and clear of all liens other than
transfer restrictions set forth in the Investor Rights Agreement and applicable
federal and state securities Laws;

 

(b)                       a certificate of the Secretary or Assistant Secretary
of Dynegy, dated as of the Closing Date, certifying as to and attaching: (i) the
Bylaws of Dynegy, and (ii) the resolutions of the Board authorizing the
Transaction Documents and the transactions contemplated by the Transaction
Documents, including the issuance of the Shares;

 

(c)                        a copy of the Certificate of Incorporation of Dynegy,
certified by the Secretary of State of the State of Delaware and dated as of a
recent date;

 

(d)                       a certificate, dated as of a recent date, from the
Secretary of State of the State of Delaware evidencing that Dynegy is in good
standing in such jurisdiction;

 

(e)                        a certificate, dated the Closing Date and signed by
the Chief Executive Officer or the Chief Financial Officer of Dynegy, in his or
her capacity as such, stating that the conditions set forth in Sections 2.04(a),
Section 2.04(b) and Section 2.04(c) have been satisfied;

 

(f)                         the Investor Rights Agreement, which shall have been
duly executed by Dynegy;

 

(g)                        a written legal opinion from Skadden, Arps, Slate,
Meagher & Flom LLP or another nationally recognized law firm reasonably
acceptable to Purchaser addressed to Purchaser dated as of the date of the
Closing, in form and substance customary for private securities offerings and
reasonably acceptable to Purchaser and covering those opinions set forth on
Exhibit B; and

 

(h)                       all other documents, instruments and writings required
to be delivered by Dynegy at the Closing under the Transaction Documents.

 

Section 2.07                             Purchaser Closing Deliverables. Subject
to the terms and conditions of this Agreement, at the Closing, Purchaser shall
deliver (or cause to be delivered) the following:

 

(a)                       the Purchase Price, in immediately available U.S.
funds via wire transfer to an account designated by Dynegy;

 

(b)                       the Investor Rights Agreement, which shall have been
duly executed by Purchaser;

 

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(c)                        a certificate, dated the Closing Date and signed by a
duly authorized signatory of Purchaser stating that conditions set forth in
Sections 2.05(a) and 2.05(b) have been satisfied; and

 

(d)                       all other documents, instruments and writings required
to be delivered by Purchaser at the Closing under the Transaction Documents.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF DYNEGY

 

Except as otherwise disclosed in any SEC Disclosure contained in the SEC Reports
prior to the date hereof, and except as otherwise disclosed to Purchaser (the
“Disclosure”), Dynegy represents and warrants to Purchaser as follows:

 

Section 3.01                             Organization and Existence.

 

(a)                       Dynegy is a corporation duly organized, validly
existing and in good standing in its jurisdiction of organization and has all
requisite power and authority to own, lease and operate its properties, and to
conduct the businesses currently and customarily carried on by it. Dynegy is
duly qualified or licensed to do business and is in good standing in each other
jurisdiction where such qualification or licensing is necessary, except in those
jurisdictions where the failure to be so qualified or licensed or in good
standing would not have a Material Adverse Effect.

 

(b)                       Each of Dynegy’s Subsidiaries is a corporation or
other legal entity duly organized, validly existing and in good standing in its
jurisdiction of organization, has all requisite power and authority to own,
lease and operate its properties, and to conduct its business currently and
customarily carried on by it and is duly qualified to transact business and is
in good standing in each other jurisdiction in which such qualification is
necessary, except where the failure to be so qualified or to be in good standing
would not have a Material Adverse Effect.

 

Section 3.02                             Authorization. Dynegy has all requisite
power and authority required to enter into the Transaction Documents and
consummate the transactions contemplated by the Transaction Documents. The
execution, delivery and performance by Dynegy of the Transaction Documents and
the consummation by Dynegy of the transactions contemplated by the Transaction
Documents have been duly authorized by all necessary corporate action on the
part of Dynegy. This Agreement has been duly executed and delivered by Dynegy.
The Transaction Documents constitute, or will constitute when executed, as
applicable (assuming the due execution and delivery by each of the other parties
hereto and thereto), a valid and legally binding obligation of Dynegy,
enforceable against Dynegy in accordance with its terms, subject to the effects
of 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).

 

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Section 3.03                             Consents. Except for (a) compliance
with and filings under the HSR Act, (b) the Required Approvals and the approvals
required by the Commission in connection with any registration statement filed
under the Investor Rights Agreement, and (c) any approvals of Governmental
Authorities required in connection with the Delta Documents, no consent or
approval of, or filing with, notice to or waiver from any Governmental Authority
which has not been obtained or made by Dynegy is required to be obtained or made
by Dynegy in connection with the execution and delivery of the Transaction
Documents and the consummation by Dynegy of the transactions contemplated by the
Transaction Documents, other than any such consents, approvals or filings the
failure of which to obtain or make would not have a Material Adverse Effect.
Except as specifically contemplated by the Transaction Documents, no consent or
approval of the Stockholders is required with respect to the issuance of the
Shares to Purchaser or the performance by Dynegy of its obligations under the
Transaction Documents.

 

Section 3.04                             Noncontravention. The execution,
delivery and performance of the Transaction Documents by Dynegy does not or will
not, as applicable, and, subject to any applicable waiting period under the HSR
Act relating to the transactions contemplated by this Agreement having expired
or been terminated and the receipt of the Required Approvals, the consummation
by Dynegy of the transactions contemplated by the Transaction Documents will not
contravene or violate any provision of (a) the Organizational Documents of
Dynegy or any of its Subsidiaries, (b) any Contract to which Dynegy or any of
its Subsidiaries is a party or by which Dynegy or any of its Subsidiaries is
bound, or result in the termination or acceleration of any material obligation
thereunder or the loss of a material benefit thereunder, or entitle any party to
accelerate any obligation or indebtedness thereunder, or constitute (with due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) thereunder, or (c) any Law to which
Dynegy or any of its Subsidiaries is subject or by which any property or asset
of Dynegy or any of its Subsidiaries is bound or affected or result in the
creation of any liens upon any property or assets of Dynegy or any of its
Subsidiaries except, in the case of clauses (b) and (c), as would not have a
Material Adverse Effect.

 

Section 3.05                             Shares. The Shares are duly authorized
for issuance and sale to Purchaser and, when issued in accordance with the terms
of this Agreement, will be validly issued, fully paid and nonassessable, will be
issued in compliance with Law, will be issued and approved for listing on the
NYSE, and will not be issued in breach or violation of any preemptive rights or
Contract. Subject to the accuracy of the representations made by Purchaser in
Article IV hereof, the Shares will be issued to Purchaser in compliance with
applicable exemptions from (a) the registration and prospectus delivery
requirements of the Securities Act and (b) the registration and qualification
requirements of applicable securities Laws of the states of the United States.

 

Section 3.06                             Capitalization.

 

(a)                       The authorized capital stock of Dynegy consists of
420,000,000 shares of Common Stock and 20,000,000 shares of preferred stock, par
value $0.01. Of such authorized capital stock, as of December 31, 2015,
(i) 117,703,122 shares of Common Stock

 

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were issued and outstanding, (ii) 10,525,355 shares of Common Stock were held in
treasury, (iii) 1,832,227 shares of Common Stock were reserved for issuance in
respect of outstanding options to acquire Common Stock, (iv) 15,600,000 shares
of Common Stock were reserved for issuance in respect of outstanding warrants to
acquire Common Stock, (v) 1,989,607 shares of Common Stock were reserved for
issuance in respect of settlement of any outstanding awards of restricted stock
units or performance stock units with respect to shares of Common Stock, and
(vi) 4,000,000 shares of 5.375% Series A Mandatory Preferred Stock (the
“Preferred Stock”) were issued or outstanding. All outstanding shares of Common
Stock are duly authorized, validly issued, fully paid and nonassessable, and
free of pre-emptive rights.

 

(b)                       Except as set forth in Section 3.06(a), as of the date
hereof, there are no outstanding subscriptions, options, warrants, calls,
convertible securities or other similar rights, agreements or commitments
relating to the issuance of capital stock to which Dynegy or any of its
Subsidiaries is a party obligating Dynegy to (i) issue, transfer or sell any
shares of capital stock or other equity interests of Dynegy or securities
convertible into or exchangeable for such shares or equity interests,
(ii) grant, extend or enter into any such subscription, option, warrant, call,
convertible securities or other similar right, agreement or arrangement, or
(iii) redeem or otherwise acquire any such shares of capital stock or other
equity interests.

 

(c)                        Except as set forth in Section 3.06(a), as of the
date hereof, Dynegy has no outstanding bonds, debentures, notes or other
obligations, the holders of which have the right to vote (or which are
convertible into or exercisable for securities having the right to vote) with
the Stockholders on any matter.

 

(d)                       Except as set forth in Section 3.06(a), as of the date
hereof, (i) there are no voting trusts or other agreements or understandings to
which Dynegy is a party with respect to the voting of the capital stock or other
equity interest of Dynegy and (ii) except as set forth in the Transaction
Documents, Dynegy has not granted to any Person the right to require Dynegy to
register Common Stock.

 

Section 3.07                             Financial Statements.

 

(a)                       Dynegy has delivered to Purchaser (i) the unaudited
consolidated balance sheet, together with related consolidated statement of
operations, cash flow and changes in stockholders equity, for Dynegy as of and
for the nine (9) months ended September 30, 2015 (such balance sheet, the
“Dynegy Balance Sheet”), and (ii) the audited consolidated balance sheets,
together with related consolidated statements of income, cash flow and changes
in stockholders equity, for Dynegy as of and for the year ended December 31,
2014. The consolidated balance sheets, and the related consolidated statements
of income, operations, cash flows and changes in stockholders equity included or
incorporated in the SEC Reports (collectively, the “Dynegy Financial
Statements”) have been prepared in accordance with GAAP consistently applied
(other than, with respect to the unaudited Dynegy Financial Statements, normal
recurring year-end adjustments and the absence of footnotes) and from (and in
accordance with) the books and records of Dynegy and its consolidated
subsidiaries on a consistent basis and fairly present, in all material respects,
the consolidated financial position and

 

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consolidated results of operations, income, cash flow and changes in
stockholders equity of Dynegy and its consolidated subsidiaries as of the date
thereof or for the period set forth therein all in accordance with GAAP.

 

(b)                       Dynegy has implemented and maintains disclosure
controls and procedures (as defined in Rule 13a-15 or Rule 15d-15 of the
Exchange Act). Dynegy has disclosed, based on its most recent evaluation prior
to the date hereof, to Dynegy’s outside auditors and the audit committee of the
Board (i) any significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting (as defined in
Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely
affect Dynegy’s ability to record, process, summarize and report financial
information and (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in Dynegy’s internal
controls over financial reporting.

 

Section 3.08                             No Undisclosed Liabilities. As of the
date hereof, none of Dynegy or any of its Subsidiaries has any liabilities
(absolute, accrued, contingent or otherwise) that would be required to be
reflected on a consolidated balance sheet prepared in accordance with GAAP
consistently applied and which (a) are not reflected or reserved against in the
Dynegy Balance Sheet or incurred in the ordinary course of business since the
date of the Dynegy Balance Sheet, (b) are not incurred pursuant to the
transactions contemplated by this Agreement or the Delta Documents, or (c) are
not, individually or in the aggregate, material to the business or operations of
Dynegy.

 

Section 3.09                             Dynegy Filings. Dynegy has filed all
reports and other documents required to be filed by Dynegy under the Exchange
Act since January 1, 2014 (the foregoing materials, including the exhibits
thereto and documents incorporated by reference therein being collectively
referred to herein as the “SEC Reports”) on a timely basis. The SEC Reports
comply in all material respects with the requirements of the Exchange Act and
none of the SEC Reports, when filed (or if amended or superseded by a filing or
amendment prior to the date of this Agreement, then at the time of such filing
or amendment), contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. The Dynegy Financial Statements included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing (or if amended or superseded by a filing or
amendment prior to the date of this Agreement, then at the time of such filing
or amendment). Since January 1, 2014 to the date hereof, Dynegy has filed all
material reports, registrations and statements, together with any required
amendments thereto, that were required to be filed to the Commission, except
where the failure to file any such report, registration or statement would not
have a Material Adverse Effect.

 

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Section 3.10          No Material Adverse Change in Business. Since December 31,
2014 to the date hereof:

 

(a)        Dynegy and its Subsidiaries have conducted their respective
businesses in all material respects in the ordinary course of business (except
for any actions taken in connection with the Delta Documents); and

 

(b)        there has not occurred a Material Adverse Effect.

 

Section 3.11          Taxes.

 

(a)        Except as would not have a Material Adverse Effect:  (i) all Tax
Returns required to be filed by Dynegy and each of its Subsidiaries in any
jurisdiction have been timely filed, other than those filings being contested in
good faith; (ii) all Taxes due pursuant to such Tax Returns or pursuant to any
assessment received by Dynegy or any of its Subsidiaries have been paid, other
than those being contested in good faith and for which adequate reserves in
accordance with GAAP have been provided; and (iii) all such Tax Returns are
true, correct and complete in all respects.

 

(b)        Except as would not have a Material Adverse Effect:  (i) there are no
disputes pending, or claims asserted, for Taxes or assessments upon Dynegy or
any of its Subsidiaries for which Dynegy does not have reserves that are
adequate under GAAP; (ii) neither Dynegy nor any of its Subsidiaries is (A) a
party to or is bound by any Tax sharing, allocation or indemnification agreement
or arrangement (other than (1) such an agreement or arrangement exclusively
between or among Dynegy and its Subsidiaries or (2) customary Tax identification
or other arrangements contained in credit or other commercial agreements the
primary purposes of which does not relate to Taxes) or (B) has any liability for
the Taxes of any Person (other than Dynegy or any of its Subsidiaries) under
Treasury Regulation Section 1.1502 6 (or any similar provision of state, local
or foreign Law); and (iii) neither Dynegy nor any of its Subsidiaries has
participated in a “listed transaction” within the meaning of Treasury Regulation
Section 1.6011-4(b)(2).

 

(c)        To the knowledge of Dynegy, Dynegy currently is not a “United States
real property holding corporation” within the meaning of Section 897(c)(2) of
the Internal Revenue Code of 1986, as amended.

 

(d)        Within the past two years, none of Dynegy or any of its Subsidiaries
has been a “distributing corporation” or a “controlled corporation” in a
distribution intended to qualify under Section 355(a) of the Code.

 

Section 3.12          Absence of Proceedings. As of the date hereof, there is no
Action before or brought by any Governmental Authority, now pending or, to the
knowledge of Dynegy, threatened against or affecting Dynegy or any of its
Subsidiaries, which would have a Material Adverse Effect or that relates to or
challenges the validity or propriety of any of the Transaction Documents or the
transactions contemplated thereby.

 

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Section 3.13          Compliance with Laws. Dynegy and its Subsidiaries are, and
since January 1, 2014 have been, in compliance with, and conduct their
businesses in conformity with, all applicable Laws, except, in each case, as
would not have a Material Adverse Effect.

 

Section 3.14          Energy Regulatory Laws. The business of Dynegy and its
Subsidiaries is, and since January 1, 2014 has been, conducted in compliance
with all Energy Regulatory Laws and no Action by or before any court or
Governmental Authority involving Dynegy or its Subsidiaries with respect to the
Energy Regulatory Laws is pending or, to the knowledge of Dynegy, threatened,
except, in each case, as would not have a Material Adverse Effect.

 

Section 3.15          Trade Compliance Laws. The business of Dynegy and its
Subsidiaries is, and since January 1, 2014 has been, conducted in compliance
with all Trade Compliance Laws and no Action by or before any court or
Governmental Authority involving Dynegy or its Subsidiaries with respect to the
Trade Compliance Laws is pending or, to the knowledge of Dynegy, threatened,
except, in each case, as would not have a Material Adverse Effect.

 

Section 3.16          Investment Company Act. Dynegy is not required, and upon
the issuance and sale of the Shares as herein contemplated and the application
of the net proceeds therefrom to the capital or any other accounts of Dynegy
will not be required, to register as an “investment company” under the
Investment Company Act of 1940.

 

Section 3.17          No Broker’s Fees. Neither Dynegy nor any of its
Subsidiaries is a party to any Contract or understanding with any Person that
would give rise to a valid claim against Purchaser or its Affiliates for a
brokerage commission, finder’s fee or like payment in connection with the
transaction contemplated by the Transaction Documents.

 

Section 3.18          Exclusive Representations and Warranties. Except for the
representations and warranties expressly set forth in this Article III (as
modified by any Disclosure) or for any other representations and warranties
expressly set forth in any Delta Document, Dynegy hereby expressly disclaims and
negates (a) any other express or implied representation or warranty whatsoever
(whether at law (including at common law or by statute) or in equity), including
with respect to (i) Dynegy or any of Dynegy’s businesses, assets, employees,
permits, liabilities, operations, prospects or condition (financial or
otherwise) or (ii) any opinion, projection, forecast, statement, budget,
estimate, advice or other information (including information with respect to
filings with and consents of any Governmental Authority or information with
respect to the future revenues, results or operations (or any component
thereof), cash flows, financial condition (or any component thereof) or the
future business and operations of Dynegy, as well as any other business plan and
cost-related plan information of Dynegy), made, communicated or furnished
(orally or in writing), or to be made, communicated or furnished (orally or in
writing), to Purchaser, its Affiliates or its Representatives, in each case,
whether made by Dynegy or any of its Affiliates, Representatives or any other
Person (this clause (ii), collectively, “Dynegy Projections”) and (b) all
liability and responsibility for any such other representation or warranty or
any such Dynegy Projection.

 

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ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser hereby represents and warrants to Dynegy as follows:

 

Section 4.01          Organization and Existence. Purchaser is a limited
partnership duly organized, validly existing and in good standing in its
jurisdiction of organization. Purchaser is duly qualified or licensed to do
business and is in good standing in each other jurisdiction where the actions
required to be performed by it hereunder makes such qualification or licensing
necessary, except in those jurisdictions where the failure to be so qualified or
licensed or in good standing would not have a material adverse effect on
Purchaser’s ability to perform its material obligations hereunder or to
consummate the transactions contemplated hereby.

 

Section 4.02          Authorization. Purchaser has all requisite power and
authority required to enter into the Transaction Documents and consummate the
transactions contemplated by the Transaction Documents. The execution, delivery
and performance by Purchaser of the Transaction Documents and the consummation
by Purchaser of the transactions contemplated by the Transaction Documents have
been duly authorized by all necessary limited partnership action on the part of
Purchaser, and no other entity or governing body proceedings or approvals on the
part of Purchaser or any direct or indirect equity holders, managers or partners
are necessary to authorize the execution, delivery, and performance by Purchaser
of the Transaction Documents and the consummation by Purchaser of the
transactions contemplated by the Transaction Documents. This Agreement has been
duly executed and delivered by Purchaser. The Transaction Documents constitute,
or will constitute when executed, as applicable (assuming the due execution and
delivery by each of the other parties hereto and thereto), a valid and legally
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms, subject to the effects of 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).

 

Section 4.03          Consents. Except for (a) compliance with and filings under
the HSR Act, (b) the Required Approvals and the approvals required by the
Commission in connection with any registration statement filed under the
Investor Rights Agreement, (c) the filings required by the Commission in
connection with the acquisition of the Shares pursuant to Section 13 and
Section 16 of the Exchange Act and (d) any approvals of Governmental Authorities
required in connection with the Delta Documents, no consent or approval of, or
filing with, notice to or waiver from any Governmental Authority which has not
been obtained or made by Purchaser is required to be obtained or made by
Purchaser or its Affiliates in connection with the execution and delivery of the
Transaction Documents and the consummation by Purchaser of the transactions
contemplated by the Transaction Documents, other than any such consents,
approvals or filings the failure of which to obtain or make would not have
material adverse effect on Purchaser’s ability to perform its material
obligations hereunder or to consummate the transactions contemplated hereby.

 

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Section 4.04          Noncontravention. The execution, delivery and performance
of the Transaction Documents by Purchaser does not or will not, as applicable,
and, subject to any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement having expired or been terminated
and the Required Approvals, the consummation by Purchaser of the transactions
contemplated by the Transaction Documents will not contravene or violate any
provision of (a) the Organizational Documents of Purchaser, (b) any Contract to
which Purchaser is a party or by which Purchaser is bound, or result in the
termination or acceleration of any material obligation thereunder or the loss of
a material benefit thereunder, or entitle any party to accelerate any obligation
or indebtedness thereunder, or constitute (with due notice or lapse of time or
both) a default (or give rise to any right of termination, cancellation or
acceleration) thereunder, or (c) any Law to which Purchaser is subject or by
which any property or asset of Purchaser is bound or affected or result in the
creation of any liens upon any property or assets of Purchaser except, in the
case of clauses (b) and (c), as would not, individually or in the aggregate,
have a material adverse effect on Purchaser’s ability to perform its material
obligations hereunder or to consummate the transactions contemplated hereby.

 

Section 4.05          Certain Fees.  No fees or commissions are or will be
payable by Purchaser to brokers, finders or investment bankers with respect to
the purchase of the Shares or the consummation of the transactions contemplated
by this Agreement, except for such fees and commissions that will be paid by
Purchaser.

 

Section 4.06          Unregistered Securities.

 

(a)        Accredited Investor Status; Sophisticated Purchaser. Purchaser is an
“accredited investor” within the meaning of Rule 501 of Regulation D under the
Securities Act and is able to bear the risk of its investment in the Shares for
an indefinite period. Purchaser has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of
the purchase of the Shares. Purchaser is able to bear the economic risk of an
investment in the Shares and is able to afford a complete loss of such
investment.

 

(b)        Information. Purchaser or its Representatives have been furnished
with materials relating to the business, finances and operations of Dynegy and
relating to the offer and sale of the Shares that have been requested by
Purchaser. Purchaser or its Representatives have been afforded the opportunity
to ask questions of Dynegy or its Representatives and receive answers concerning
the terms and conditions of the offering and to obtain any additional
information which Dynegy possesses or can acquire without unreasonable effort or
expense. Purchaser understands and acknowledges that its purchase of the Shares
involves a high degree of risk and uncertainty. Purchaser has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its investment in the Shares.

 

(c)        Purchaser Representation. Purchaser is purchasing the Shares for its
own account and not with a view to distribution in violation of any securities
Laws. Purchaser has been advised and understands and acknowledges that the
Shares have not been registered under the Securities Act or under the “blue sky”
Laws of any jurisdiction and may be resold only

 

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if registered pursuant to the provisions of the Securities Act or if an
exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by Law and, subject
to the Investor Rights Agreement, Dynegy is not required to register the Shares.
Purchaser will not sell, transfer or otherwise dispose of the Shares or any
interest therein except in a transaction registered pursuant to the provisions
of the Securities Act or in a transaction exempt from or not subject to the
registration requirements of the Securities Act.  Purchaser has been advised of
and is aware of the provisions of Rule 144 promulgated under the Securities
Act.  The purchase of the Shares by Purchaser has not been solicited by or
through anyone other than Dynegy.

 

(d)        Legends. Purchaser understands and acknowledges that, until such time
as the Shares have been registered pursuant to the provisions of the Securities
Act, or the Shares are eligible for resale pursuant to Rule 144 promulgated
under the Securities Act without any restriction as to the number of securities
as of a particular date that can then be immediately sold, the Shares will bear
the following restrictive legend: “THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SECURITIES MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER
AND, IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS SOLD PURSUANT
TO RULE 144 UNDER SUCH ACT OR THE ISSUER HAS RECEIVED DOCUMENTATION REASONABLY
SATISFACTORY TO IT (WHICH MAY INCLUDE AN OPINION OF COUNSEL) THAT SUCH
TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS.”

 

(e)        Reliance Upon Purchaser’s Representations and Warranties. Purchaser
understands and acknowledges that the Shares are being offered and sold in
reliance on a transactional exemption from the registration requirements of
federal and state securities Laws, and that Dynegy is relying in part upon the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of Purchaser set forth in this Agreement in
(i) concluding that the issuance and sale of the Shares is a “private offering”
and, as such, is exempt from the registration requirements of the Securities
Act, and (ii) determining the applicability of such exemptions and the
suitability of Purchaser to purchase the Shares.

 

Section 4.07          Ownership of Common Stock. Except for a number of shares
of Common Stock Beneficially Owned by Purchaser as of (but before giving effect
to) the Closing that is less than five percent (5%) of the outstanding shares of
Common Stock as of (but before giving effect to) the Closing, and the Shares
which Purchaser will acquire at the Closing, as of the Closing none of Purchaser
or its Affiliates Beneficially Owns any shares of Common Stock, or any
securities that are convertible into, or exercisable or exchangeable for, or
that represent the right to receive, shares of Common Stock.

 

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Section 4.08          Financing. Purchaser has (and Purchaser will have as of
the Closing Date) available or accessible to it sufficient funds, committed
capital and credit capacity to consummate the transactions contemplated by this
Agreement and required for the satisfaction of all of Purchaser’s obligations
under this Agreement, including the payment of the Purchase Price at the
Closing, and all related fees and expenses. In no event shall the receipt or
availability of funds, capital or capacity be a condition to Purchaser’s
obligations under this Agreement.

 

ARTICLE V

 

COVENANTS

 

Section 5.01          Efforts Prior to Closing. Prior to the Closing, each of
the Parties shall use its Commercially Reasonable Efforts to take, or cause to
be taken, all actions necessary or appropriate to satisfy the conditions to the
Closing set forth in Sections 2.03, 2.04 and 2.05 and to consummate the
transactions contemplated by the Transaction Documents. Without limiting the
foregoing, each of the Parties shall use its reasonable best efforts to make all
filings and obtain all consents of Governmental Authorities that may be
necessary or advisable for the consummation of the transactions contemplated by
the Transaction Documents.

 

Section 5.02          Other Actions. From the date hereof through the Closing,
Dynegy shall use Commercially Reasonable Efforts to obtain authorization of the
listing of the Shares, subject to official notice of issuance. Without limiting
the foregoing, prior to Closing, Dynegy shall (a) file a supplemental listing
application with the NYSE to list the Shares and provide to NYSE any required
supporting documentation, and any other requested information, related to the
Shares and (b) ensure that the issuance of the Shares is in compliance with
applicable NYSE rules and regulations.

 

Section 5.03          Further Assurances; Listing of Shares. From time to time
after the Closing, without further consideration, the Parties shall use their
Commercially Reasonable Efforts to take, or cause to be taken, all actions
necessary or appropriate to consummate the transactions contemplated by the
Transaction Documents, including by executing and causing to be delivered such
other instruments or other documents as may be reasonably requested by a Party
for the purpose of carrying out or evidencing any of the transactions
contemplated by the Transaction Documents. If Dynegy applies to have its Common
Stock or other securities traded on any principal stock exchange or market other
than NYSE, it shall include in such application the Shares and will take such
other action as is necessary to cause the Shares to be so listed.

 

Section 5.04          FIRPTA Compliance. From time to time after the Closing,
without further consideration, if requested by Purchaser in writing, Dynegy
shall promptly provide Purchaser with a duly executed statement pursuant to
Treasury Regulation Section 1.897-2(h) informing Purchaser whether or not the
Common Stock constitutes a “United States real property interest” (and shall
comply with the related notice requirements in Treasury Regulation
Section 1.897-2(h)(2)).

 

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Section 5.05          Interim Operations. Until the earlier of the Closing and
the termination of this Agreement pursuant to Article VI:

 

(a)        Except as set forth in Section 5.06, none of Purchaser or its
Affiliates shall acquire Beneficial Ownership of any shares of Common Stock, or
any securities that are convertible into, or exercisable or exchangeable for, or
that represent the right to receive, shares of Common Stock.

 

(b)        Dynegy shall not, and shall cause its Subsidiaries not to, without
the prior written consent of Purchaser:

 

(i)            amend the Organizational Documents of Dynegy in a manner that
would affect Purchaser in an adverse manner either as a holder of Common Stock
or with respect to the rights of Purchaser under any of the Transaction
Documents;

 

(ii)           redeem, repurchase or acquire any capital stock of Dynegy, other
than repurchases of capital stock from employees, officers or directors of
Dynegy or any of its Subsidiaries in the ordinary course of business pursuant to
any of Dynegy’s agreements or plans in effect as of the date hereof; or

 

(iii)          authorize, or commit or agree to take, any of the foregoing
actions.

 

(c)        Each Party shall promptly notify the other Party of the occurrence of
any transaction or event or series of transactions or events that cause, or
would be reasonably likely to cause, any of the other Party’s conditions to
Closing, as set forth in Section 2.03, Section 2.04 and Section 2.05, as
applicable, to be unable to be satisfied (assuming the Closing were to occur on
such date).

 

Section 5.06          ROFR.

 

(a)        Until the earlier of the Closing and the termination of this
Agreement pursuant to Article VI, Dynegy shall not issue any Equity Securities
that would rank senior to the Common Stock with respect to dividends and
distributions upon liquidation other than pursuant to an Excluded Issuance (such
issuance, a “Proposed Covered Issuance”) unless Dynegy has first complied with
the terms of this Section 5.06.  Prior to any Proposed Covered Issuance, Dynegy
shall provide written notice to Purchaser (the “ROFR Notice”) describing in
reasonable detail the Proposed Covered Issuance, including the number and type
of Equity Securities to be issued in the Proposed Covered Issuance (the
“Proposed Securities”), the consideration to be paid for the Proposed
Securities, whether the Proposed Covered Issuance will be registered under the
Securities Act and, if not registered under the Securities Act, the parties, if
known, to the Proposed Covered Issuance and any other material conditions or
contingencies relating to the Proposed Covered Issuance. Purchaser shall have
fifteen (15) days after the delivery of the ROFR Notice (the “ROFR Consideration
Period”) to deliver written notice (such notice as such may be amended pursuant
to Section 5.06(b), a “ROFR Election Notice”) to Dynegy stating that Purchaser
intends to purchase up to its pro rata portion of the Proposed

 

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Securities based on the percentage of Dynegy’s then outstanding Common Stock
Beneficially Owned by Purchaser or any Controlled Affiliate on the terms,
conditions and contingencies set forth in the ROFR Notice, and Purchaser shall
not have the right to purchase any such Proposed Securities in excess of such
pro rata portion.

 

(b)        Notwithstanding anything to the contrary contained in
Section 5.06(b), in the event that Purchaser delivers a ROFR Election Notice
electing to purchase an amount of Proposed Securities that would require the
approval of the Stockholders pursuant to Section 312.03 of the NYSE Listed
Company Manual (“ROFR Shareholder Approval”), Dynegy shall, within three
(3) Business Days of receiving such ROFR Election Notice, provide written notice
to Purchaser (the “ROFR Shareholder Approval Notice”) setting forth the amount
of Proposed Securities that cannot be issued without such ROFR Shareholder
Approval (the “Excess Proposed Securities”).  In such case, Purchaser shall have
the right, within five (5) Business Days of receiving such ROFR Shareholder
Approval Notice, to deliver a written notice to Dynegy withdrawing its ROFR
Election Notice or amending its ROFR Election Notice to alter the amount of
Proposed Securities it is electing to purchase. To the extent that Purchaser
does not withdraw its ROFR Election Notice, or otherwise amend its ROFR Election
Notice to remove any Excess Proposed Securities, then Dynegy shall be required
to issue to Purchaser in place of each Excess Proposed Security included in the
ROFR Election Notice an Equity Security that is identical in all respects to
such Excess Proposed Security except that such Equity Security shall be a
non-voting Equity Security that will automatically convert into a voting Equity
Security upon receipt of the requisite ROFR Shareholder Approval (such that upon
receipt of ROFR Shareholder Approval, such Equity Security will automatically
convert and be identical in all respects to the Proposed Securities).

 

(c)        If Purchaser delivers the ROFR Election Notice prior to the
expiration of the ROFR Consideration Period, the Parties shall use reasonable
best efforts for a period of forty-five (45) days (the “ROFR Negotiation
Period”) after delivery of the ROFR Election Notice to negotiate in good faith a
definitive agreement or agreements providing for the sale and issuance of the
Proposed Securities Purchaser has determined to purchase in the ROFR Election
Notice at the price and on the other terms, conditions and contingencies set
forth in the ROFR Notice and as set forth in Section 5.06(b) as promptly as
practicable.  In the event that ROFR Shareholder Approval is required in
connection with any such Proposed Covered Issuance, Dynegy will use reasonable
best efforts to secure such ROFR Shareholder Approval as promptly as reasonably
practicable; provided, however, that Dynegy shall not be required to submit any
proposal to obtain the ROFR Shareholder Approval to the Stockholders until the
next annual meeting of Stockholders occurring after the delivery of the ROFR
Election Notice; provided, further, that if, Purchaser delivers such ROFR
Election Notice within seventy-five (75) days prior to the one year anniversary
of the date of Dynegy’s prior annual meeting of Stockholders, Dynegy shall not
be required to submit a proposal to obtain the ROFR Shareholder Approval until
the annual meeting of Stockholders occurring in the calendar year after the
calendar year in which Purchaser delivered such ROFR Election Notice.

 

(d)        If (i) Purchaser does not deliver the ROFR Election Notice prior to
the expiration of the ROFR Consideration Period, or withdraws its ROFR Election
Notice

 

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pursuant to Section 5.06(b), or (ii) Purchaser delivers the ROFR Election Notice
prior to the expiration of the ROFR Consideration Period but the Parties do not
execute a definitive agreement providing for the Proposed Covered Issuance prior
to the expiration of the ROFR Negotiation Period, then for a period of
one-hundred and twenty (120) days after the expiration of the ROFR Consideration
Period, the date on which the ROFR Election Notice is withdrawn or the
expiration of the ROFR Negotiation Period, as applicable, Dynegy may consummate
the Proposed Covered Issuance with Persons other than Purchaser on terms,
conditions and contingencies that no more favorable, in the aggregate, to such
other Persons than the terms, conditions and contingencies set forth in the ROFR
Notice.  If Dynegy does not consummate such Proposed Covered Issuance within
such one-hundred and twenty (120) day period, then Dynegy shall not thereafter
consummate such Proposed Covered Issuance without first offering the Proposed
Securities to Purchaser in the manner described in this Section 5.06.

 

(e)        Notwithstanding anything to the contrary set forth in this
Section 5.06, Purchaser shall be permitted to assign any of its rights under
this Section 5.06 (including its right to acquire any of the Proposed
Securities) to one or more Controlled Affiliates that agree in writing to be
bound by the terms and conditions of this Agreement and the terms of the
Investor Rights Agreement.

 

(f)        For purposes of this Section 5.06, “Excluded Issuance”  means any of
the following:

 

(i)            the issuance of Equity Securities pursuant to any employee
benefits or other compensation plan approved by the Board and the Stockholders;

 

(ii)           the issuance of Equity Securities other than for cash
consideration pursuant to a merger, consolidation, acquisition, disposition or
similar business combination approved by the Board;

 

(iii)          the issuance of Equity Securities upon any stock dividend, stock
split or other pro rata distribution, subdivision or combination of securities
or other recapitalization of Dynegy;

 

(iv)          the issuance of Equity Securities upon conversion of the Preferred
Stock outstanding as of the date hereof in accordance with its terms;

 

(v)           the issuance of Equity Securities upon the exercise of the
warrants issued by Dynegy and exercisable for Common Stock at an exercise price
of $40 per share that are outstanding as of the date hereof in accordance with
their terms; or

 

(vi)          the issuance of Equity Securities issued pursuant to the terms of
a “poison pill” or other stockholder rights plan approved by the Board.

 

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ARTICLE VI

 

MISCELLANEOUS

 

Section 6.01          Termination.

 

(a)           Prior to the Closing, this Agreement shall terminate automatically
without any further action by the Parties upon the termination of the Delta
Agreement.

 

(b)           Prior to the Closing, this Agreement may be terminated:

 

(i)            upon the mutual written consent of the Parties;

 

(ii)           by Purchaser if (A) any of the conditions set forth in Sections
2.03 and 2.04 shall have become incapable of fulfillment, (B) Dynegy shall have
breached a representation, warranty, covenant or agreement set forth in this
Agreement that results in the failure of any condition set forth in Sections
2.03 and 2.04 and such breach is not cured within thirty (30) days after Dynegy
receives notice thereof or (C) Dynegy is a Defaulting Sponsor pursuant to the
terms and conditions of the Interim Sponsors Agreement, and, in each case, such
breach shall not have been waived by Purchaser, provided that Purchaser shall
not have the right to terminate this Agreement pursuant to this
Section 6.01(b)(ii) if Purchaser’s breach of any of its covenants, obligations,
representations or warranties set forth in this Agreement gave rise to the
failure of such condition;

 

(iii)          by Dynegy if (A) any of the conditions set forth in Sections 2.03
and 2.05 shall have become incapable of fulfillment, (B) Purchaser shall have
breached a representation, warranty, covenant or agreement set forth in this
Agreement that results in the failure of any condition set forth in Sections
2.03 and 2.05 and such breach is not cured within thirty (30) days after
Purchaser receives notice thereof or (C) ECP is a Defaulting Sponsor pursuant to
the terms and conditions of the Interim Sponsors Agreement, and, in each case,
such breach shall not have been waived by Dynegy, provided that Dynegy shall not
have the right to terminate this Agreement pursuant to this
Section 6.01(b)(iii) if Dynegy’s breach of any of its covenants, obligations,
representations or warranties set forth in this Agreement gave rise to the
failure of such condition; or

 

(iv)          by Purchaser in the event that the condition set forth in
Section 2.04(g) is or becomes unsatisfied and is not satisfied, or is incapable
of being satisfied, prior to the time that the Closing would have otherwise
occurred had such condition set forth in Section 2.04(g) been satisfied (due to
the satisfaction or, if permissible, waiver of each of the other conditions set
forth in Sections 2.03, 2.04 and 2.05 (other than any conditions that by their
nature are to be satisfied at the Closing)).

 

(c)           If this Agreement is terminated pursuant to this Section 6.01,
this Agreement shall become void and of no further force and effect, except that
the provisions of

 

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this Article VI shall remain operative and in full force and effect, unless
Dynegy and Purchaser execute a writing that expressly (with specific references
to the applicable Section or subsection of this Agreement) terminates such
rights and obligations as between Dynegy and Purchaser. Notwithstanding the
foregoing, the termination of this Agreement pursuant to this Section 6.01 shall
not relieve any Party from liability for damages for any intentional
misrepresentation of the representations and warranties contained in Article III
or Article IV, as applicable, or any willful failure to perform or observe in
any material respect any of its agreements or covenants contained herein that
are to be performed or observed at or prior to the Closing.

 

Section 6.02          Fees and Expenses. All fees and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the Party incurring such fees or expenses.

 

Section 6.03          Exclusive Representations and Warranties. Except for the
representations and warranties expressly set forth in Article IV or as otherwise
expressly set forth in any Delta Document, Dynegy specifically acknowledges and
agrees that neither Purchaser nor any of its Affiliates, Representatives or any
other Person makes, or has made, any other express or implied representation or
warranty whatsoever (whether at law (including at common law or by statute) or
in equity).  Except for the representations and warranties expressly set forth
in Article III (as modified by any Disclosure) or as otherwise expressly set
forth in any Delta Document, Purchaser (a) specifically acknowledges and agrees
that neither Dynegy nor any of its Affiliates, Representatives or any other
Person makes, or has made, any other express or implied representation or
warranty whatsoever (whether at law (including at common law or by statute) or
in equity), including with respect to Dynegy or any of Dynegy’s businesses,
assets, employees, permits, liabilities, operations, prospects, condition
(financial or otherwise) or any Dynegy Projection, and hereby expressly waives
and relinquishes any and all rights, claims or causes of action (whether in
contract or in tort or otherwise, or whether at law (including at common law or
by statute) or in equity) based on, arising out of or relating to any such other
representation or warranty or any Dynegy Projection, (b) specifically
acknowledges and agrees to Dynegy’s express disclaimer and negation of any such
other representation or warranty and of all liability and responsibility for any
such other representation or warranty or Dynegy Projection and (c) expressly
waives and relinquishes any and all rights, claims and causes of action (whether
in contract or in tort or otherwise, or whether at law (including at common law
or by statute) or in equity) against (i) Dynegy in connection with accuracy,
completeness or materiality of any Dynegy Projection and (ii) any Affiliate of
Dynegy or any of Dynegy’s or any such Affiliate’s respective Representatives or
any other Person, and hereby specifically acknowledges and agrees that such
Persons shall have no liability or obligations, based on, arising out of or
relating to this Agreement or the negotiation, execution, performance or subject
matter hereof in connection with accuracy, completeness or materiality of any
Dynegy Projection. Purchaser acknowledges and agrees that (A) it has conducted
to its satisfaction its own independent investigation of the transactions
contemplated hereby (including with respect to Dynegy and its businesses,
operations, assets and liabilities) and, in making its determination to enter
into this Agreement and proceed with the transactions contemplated hereby, has
relied solely on the results of such independent investigation and the
representations and warranties of Dynegy expressly set forth in Article III (as
modified by any Disclosure) or as expressly set forth in any

 

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other Delta Document, and (B) except for the representations and warranties of
Dynegy expressly set forth in Article III (as modified by any Disclosure) or as
expressly set forth in any other Delta Document, it has not relied on, or been
induced by, any representation, warranty or other statement of or by Dynegy or
any of its Affiliates, Representatives or any other Person, including any Dynegy
Projection or with respect to Dynegy or any of Dynegy’s businesses, assets,
employees, permits, liabilities, operations, prospects or condition (financial
or otherwise) or any Dynegy Projection, in determining to enter into this
Agreement and proceed with the transactions contemplated hereby.

 

Section 6.04          Survival of Provisions. The representations and warranties
set forth in the first sentence of Section 3.01 and Sections 3.02, 3.05, 3.06
and 3.17 (the “Fundamental Representations”) and the first sentence of
Section 4.01 and Sections 4.02 and 4.05, and any claims or causes of actions
thereto, shall survive the execution and delivery of this Agreement and the
Closing and remain operative and in full force and effect until the ninety (90)
days after the expiration of the applicable statute of limitations and all other
representations and warranties set forth in Article III and Article IV, and any
claims or causes of actions thereto, shall survive until the date that is six
(6) months following the Closing Date. The covenants made in this Agreement or
any other Transaction Document, and any claims or causes of actions thereto,
shall survive the Closing and remain operative and in full force and effect in
accordance with their terms.

 

Section 6.05          Indemnification.

 

(a)        Indemnification by Dynegy. From and after the Closing, Dynegy agrees
to indemnify and hold harmless Purchaser, its Affiliates and each of its and
their respective Representatives (the “Indemnified Purchaser Entities”) in their
respective capacities as such to the fullest extent lawful, from and against any
and all losses, costs, liabilities, damages, Actions and fees and expenses of
any kind or nature, including reasonable attorneys’ fees and disbursements and
all other reasonable expenses, incurred in connection with investigating,
defending or preparing to defend any such matter (collectively, “Losses”)
arising out of or resulting from:

 

(i)            any inaccuracy in or breach of the representations or  warranties
made by Dynegy in Article III as of the date hereof or as of the Closing Date
(in each case, except to the extent expressly made as of an earlier date, in
which case as of such earlier date); and

 

(ii)           any breach of the covenants or agreements made by Dynegy in this
Agreement or any of the Transaction Documents.

 

(b)        Indemnification by Purchaser. From and after the Closing, Purchaser
agrees to indemnify and hold harmless Dynegy, its Affiliates and each of its and
their respective Representatives in their respective capacities as to the
fullest extent lawful, from and against any and all Losses arising out of or
resulting from:

 

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(i)            any inaccuracy in or breach of the representations or  warranties
made by Purchaser in Article IV as of the date hereof or as of the Closing Date
(in each case, except to the extent expressly made as of an earlier date, in
which case as of such earlier date); and

 

(ii)           any breach of the covenants or agreements made by Purchaser in
this Agreement or any of the Transaction Documents.

 

(c)        Limitations.

 

(i)            Notwithstanding anything to the contrary contained in this
Section 6.05, an Indemnified Party shall be entitled to indemnification only if
it makes a claim for indemnification to the Indemnifying Party on or before the
expiration of the survival period pursuant to Section 6.04 for the applicable
representation, warranty, covenant or agreement.

 

(ii)           Notwithstanding anything to the contrary in this Agreement:

 

(1)       an Indemnifying Party shall be liable under Section 6.05(a)(i) (in the
case of Dynegy’s liability) or Section 6.05(b)(i) (in the case of Purchaser’s
liability) only if the aggregate amount of indemnifiable Losses arising under
Section 6.05(a)(i) (in the case of Dynegy’s liability) or Section 6.05(b)(i) (in
the case of Purchaser’s liability) exceeds $2,250,000 (the “Deductible”),
whereupon (subject to the provisions of Section 6.05(c)(ii)(2) and
Section 6.05(c)(ii)(3)), such Indemnifying Party shall be obligated to pay in
full all such amounts but only to the extent such aggregate indemnifiable Losses
are in excess of the amount of the Deductible; provided that the Deductible
shall not apply to Losses incurred by an Indemnified Purchaser Entity as a
result of any inaccuracy in or breach of any of the Fundamental Representations;

 

(2)       in no event shall any Party’s aggregate liability to the Indemnified
Parties of the other Party under Section 6.05(a)(i) (in the case of Dynegy’s
liability) or Section 6.05(b)(i) (in the case of Purchaser’s liability) exceed
$15,000,000; provided that the foregoing provisions of this
Section 6.05(c)(ii)(2) shall not apply to limit any Losses incurred by an
Indemnified Purchaser Entity as a result of any inaccuracy in or breach of any
of the Fundamental Representations; and

 

(3)       in no event shall any Party’s aggregate liability to the Indemnified
Parties of the other Party under this Section 6.05 exceed $150,000,000.

 

(iii)          The amount of indemnifiable Losses which the Indemnifying Party
is or may be required to pay to any Indemnified Party pursuant to this
Section 6.05 shall be reduced (retroactively, if necessary) by any insurance
proceeds, Tax benefits or other amounts actually received by or on behalf of
such Indemnified Party or

 

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its Affiliates related to such indemnifiable Losses. An Indemnified Party shall
use Commercially Reasonable Effort to take, or cause its Affiliates to take, all
necessary and appropriate actions to pursue payment from any third party with
respect to any indemnifiable Loss under any Contract, arrangement or commitment
pursuant to which such Indemnified Party or its Affiliates are entitled to
indemnification with respect to such indemnifiable Loss. If an Indemnified Party
receives any payment required by this Agreement from the Indemnifying Party in
respect of indemnifiable Losses and shall subsequently receive (or any of its
Affiliates shall subsequently receive) any insurance proceeds, Tax benefit or
other amounts in respect of such indemnifiable Losses, then such Indemnified
Party shall promptly repay, or cause to be repaid, to the Indemnifying Party a
sum equal to the amount of such insurance proceeds, Tax benefit or other amounts
actually received.

 

(iv)          In connection with any Action for indemnification under this
Section 6.05, an Indemnified Party shall use Commercially Reasonable Efforts to
take all necessary and appropriate actions (or cease taking actions) to mitigate
indemnifiable Losses upon and after becoming aware of any fact or circumstance
that may give rise to such indemnifiable Losses.

 

(v)           The Indemnifying Party shall be subrogated to any right, defense
or claim that the Indemnified Party may have against any other Person with
respect to any matter for which it provides full indemnification hereunder. Such
Indemnified Party shall cooperate with the Indemnifying Party in a reasonable
manner, at the sole cost and expense of the Indemnifying Party, in presenting
any subrogated right, defense or claim.

 

(vi)          All indemnifiable Losses shall be determined without duplication
of recovery under other provisions of this Agreement. Without limiting the
generality of the prior sentence, if a set of facts, conditions or events
constitutes a breach of more than one representation, warranty, covenant or
agreement of this Agreement that is subject to an indemnification obligation
under this Section 6.05, only one recovery of indemnifiable Losses shall be
allowed with respect to such set of facts, conditions or events, and in no event
shall there be any indemnification or duplication of payments or recovery under
different provisions of this Agreement arising out of the same set of facts,
conditions or events.

 

(vii)         No Party shall be liable for special, punitive, exemplary,
incidental, consequential or indirect damages, lost profits or losses calculated
by reference to any multiple of earnings or earnings before interest, tax,
depreciation or amortization (or any other valuation methodology), whether based
on contract, tort, strict liability, other Law or otherwise and whether or not
arising from the other Party’s sole, joint or concurrent negligence, strict
liability or other fault for any matter relating to this Agreement and the
transactions contemplated hereby; provided, however, that the foregoing shall
not apply to (i) any such damages or Losses that are the natural, probable and
reasonably foreseeable result of the breach to which such damages or Losses
relate or

 

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(ii) Actions brought by any third party to which such damages or Losses are
payable by any Indemnifying Party hereunder.

 

(viii)        Neither Party shall have any right to off-set or set-off any
payment due pursuant to this Section 6.05.

 

(d)        Procedures.

 

(i)            A Person entitled to receive indemnification under this
Section 6.05 (an “Indemnified Party”) from a Party (the “Indemnifying Party”)
shall give written notice to the Indemnifying Party of any claim with respect to
which it seeks indemnification as promptly as reasonably practicable after the
discovery by such Indemnified Party of any matters giving rise to a claim for
indemnification; provided that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 6.05 unless (and solely to the extent) that the
Indemnifying Party shall have been materially prejudiced by the failure of such
Indemnified Party to so notify such Indemnifying Party.  Such notice shall
describe in reasonable detail the nature of such claim, identify the Sections of
this Agreement that form the basis of such claim, attach copies of all material
written evidence thereof received from any third party to the date of such
notice and set forth the estimated amount of indemnifiable Losses relating
thereto to the extent reasonably estimable.

 

(ii)           If an Action is brought against an Indemnified Party by a third
party, the Indemnifying Party shall be entitled to, by written notice to the
Indemnified Party, assume control of, and conduct the defense of, such Action
with counsel reasonably acceptable to the Indemnified Party and, in such case,
shall not be liable for legal or other expenses incurred by the Indemnified
Party in connection with the defense of such Action following the assumption of
such defense; provided that the Indemnifying Party shall not be permitted to
assume the defense of an Action, and shall be required to be liable for
reasonable legal or other expenses incurred by the Indemnified Party in
connection with the defense of such Action, in the event (A) the Indemnified
Party shall have reasonably concluded that there may be legal defenses available
to it that are different from or in addition to those available to the
Indemnifying Party or that there is otherwise a conflict of interest between the
Indemnified Party and the Indemnifying Party or (B) the Indemnifying Party has
failed within a reasonable timeframe to retain counsel reasonably satisfactory
to the Indemnified Party. In the event the Indemnifying Party does assume such
control and defense, the Indemnified Party shall be entitled to hire, at its own
expense, separate counsel and participate in (but not control) the defense
thereof. The Indemnifying Party shall reimburse the Indemnified Parties for all
reasonable out-of-pocket expenses (including reasonable attorneys’ fees and
disbursements) as they are incurred in connection with investigating, preparing
to defend or defending any such Action (including any inquiry or investigation)
whether or not an Indemnified Party is a party thereto unless, in each case, the
Indemnified Parties are not entitled to reimbursement of such expenses pursuant
to the terms of this Section 6.05(d).

 

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(iii)          The Indemnifying Party shall not be liable for any settlement of
any Action without its written consent; provided that the Indemnifying Party
shall not unreasonably withhold, delay or condition its consent. The
Indemnifying Party further agrees that it will not, without the Indemnified
Party’s prior written consent, settle or compromise any Action or consent to
entry of any judgment in respect thereof in any pending or threatened Action in
respect of which indemnification may be sought hereunder (whether or not any
Indemnified Party is an actual or potential party to such Action) unless such
settlement or compromise (A) includes an unconditional release of each
Indemnified Party from all liability arising out of such Action, (B) does not
include an admission of fault, culpability or a failure to act by any of the
Indemnified Parties and (C) does not impose any material obligation on the
Indemnified Party or its Affiliates.

 

(e)        The obligations of the Indemnifying Party under this Section 6.05
shall survive the Closing.

 

(f)        Except for exercising any rights under Section 6.12 with respect to
any covenants or agreement to be performed after the Closing, the
indemnification provided in this Section 6.05 shall, from and after the Closing,
be the exclusive remedy available to any Party or its Affiliates or it and their
respective Representatives with respect to any inaccuracy in or breach of any
representation, warranty, covenant or agreement in this Agreement. From and
after the Closing, notwithstanding anything herein to the contrary, no breach of
any representation, warranty, covenant or agreement in this Agreement,
individually or in the aggregate, shall give rise to any right on the part of
any Party to rescind this Agreement or any of the transactions contemplated
hereby.

 

Section 6.06          No Waiver; Modifications in Writing.

 

(a)        Delay. Except as otherwise provided herein, no failure or delay on
the part of any party in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to a party at Law or in equity or otherwise.

 

(b)        Specific Waiver. Except as otherwise provided herein, no amendment,
waiver, consent, modification or termination of any provision of this Agreement
or any other Transaction Document shall be effective unless signed by each of
the parties hereto or thereto affected by such amendment, waiver, consent,
modification or termination. Any amendment, supplement or modification of or to
any provision of this Agreement or any other Transaction Document, any waiver of
any provision of this Agreement or any other Transaction Document and any
consent to any departure from the terms of any provision of this Agreement or
any other Transaction Document shall be effective only in the specific instance
and for the specific purpose for which made or given. Except where notice is
specifically required by this Agreement, no notice to or demand on a Party in
any case shall entitle a Party to any other or further notice or demand in
similar or other circumstances. No information or knowledge

 

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obtained by any investigation by or on behalf of any Party shall be deemed to
constitute a waiver by such Party of, or otherwise affect, any representation,
warranty, covenant or agreement contained herein, the conditions or obligations
of the Parties to consummate the Closing in Sections 2.03, 2.04 or 2.05 or the
right of a party to seek indemnification pursuant to Section 6.05.

 

Section 6.07          Binding Effect; Assignment.

 

(a)        Binding Effect. This Agreement shall be binding upon Dynegy,
Purchaser and their respective successors and permitted assigns. Except as
expressly provided in this Agreement, this Agreement shall not be construed so
as to confer any right or benefit upon any Person other than the Parties and
their respective successors and permitted assigns.

 

(b)        Assignment. Neither Party may transfer or assign its rights and
obligations under this Agreement without the prior written consent of the other
Party.

 

Section 6.08          Confidentiality; Publicity.

 

(a)        Purchaser acknowledges that the information being provided to it in
connection with this Agreement and the consummation of the transactions
contemplated hereby is subject to the terms of a Non-Disclosure Agreement, dated
as of February 1, 2016, between an Affiliate of Purchaser and Dynegy, the terms
of which are incorporated herein by reference.

 

(b)        None of Purchaser, Dynegy, or any of its or their respective
Affiliates shall make any public announcement or issue any public communication
regarding this Agreement or the transactions contemplated hereby, or any matter
related to the foregoing, without first obtaining the prior consent of the other
Party (which consent shall not be unreasonably withheld, conditioned or
delayed), except if such announcement or other communication is required by
applicable Law or legal process (including pursuant to the Exchange Act or the
Securities Act or any rules promulgated thereunder or the rules of any national
securities exchange), in which case Purchaser or Dynegy, as applicable, shall,
to the extent reasonably practicable and permitted by Law, coordinate such
announcement or communication with the other Party prior to announcement or
issuance, including by providing such other Party a reasonable opportunity to
comment on any such announcement or communication; provided, however, that,
subject to Section 6.08(a), each Party and its Affiliates may make internal
announcements regarding this Agreement and the transactions contemplated hereby
to their and their Affiliates’ respective directors and officers and employees
without the consent of the other Party; provided, further, that, subject to
Section 6.08(a), the foregoing shall not prohibit any Party from communicating
with third parties to the extent necessary for the purpose of seeking any third
party consent so long as a Party coordinates such communication with the other
Party prior to making the communication, including by providing such other Party
a reasonable opportunity to comment on the substance of any such communication,
and such communication is otherwise in compliance with the terms of this
Agreement and the Interim Sponsors Agreement and provided, further, that nothing
in this Section 6.08 shall prohibit Purchaser, its Affiliates and its and their
respective Representatives from making disclosures of

 

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customary information regarding the transactions contemplated by this Agreement,
Purchaser’s investment in Dynegy, the financial performance and operations of
Dynegy and its Subsidiaries, and such other information relevant to Purchaser’s
investment in Dynegy to the limited partners, investors or other direct or
indirect equity owners of, or prospective investors of, ECP or their Affiliates
who are under customary duties or obligations of confidentiality. For the
avoidance of doubt, to the extent that ECP or Dynegy provide consent for any
announcement or communication pursuant to the terms of the Interim Sponsors
Agreement, this consent shall also be deemed to be valid under, and apply in
respect of, this Agreement.

 

Section 6.09          Notices. All notices and demands provided for hereunder
shall be in writing and shall be given by hand delivery, electronic mail,
registered or certified mail, return receipt requested, regular mail, facsimile
or air courier guaranteeing overnight delivery to the following addresses:

 

(a)        If to Purchaser:

 

c/o Energy Capital Partners, LLC

11943 El Camino Real, Suite 220

San Diego, California 92130

Attention:  Andrew Singer; Chris Leininger

Facsimile:  (858) 703-4401

Email:  asinger@ecpartners.com; cleininger@ecpartners.com

 

with a copy to:

 

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022

Attention:  David Kurzweil; Paul Kukish

Facsimile:  (212) 751-4864

E-mail:  david.kurzweil@lw.com;  paul.kukish@lw.com

 

(b)        If to Dynegy:

 

Dynegy Inc.
601 Travis Street
Houston, TX 77002
Attention: Catherine James, Esq., Executive Vice President and General Counsel
Facsimile: (713) 507-6808
E-mail:  catherine.james@dynegy.com

 

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with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Ave. NW
Washington, D.C. 20005
Attention:  Michael P. Rogan
Facsimile:  (202) 661-8200
E-mail:  michael.rogan@skadden.com

 

or to such other address as Dynegy or Purchaser may designate in writing. All
notices and communications shall be deemed to have been duly given: (i) at the
time delivered by hand, if personally delivered; (ii) when notice is sent to the
sender that the recipient has read the message, if sent by electronic mail;
(iii) upon actual receipt if sent by registered or certified mail, return
receipt requested, or regular mail, if mailed; (iv) when receipt is
acknowledged, if sent by facsimile; and (v) upon actual receipt when delivered
to an air courier guaranteeing overnight delivery.

 

Section 6.10          Removal of Legend.

 

(a)        In the event that Purchaser requests that Dynegy remove the legend on
the Shares, Dynegy shall remove such legend on the Shares (or instruct its
transfer agent to so remove such legend) if, unless otherwise required by state
securities Laws, (i) such Shares are sold pursuant to an effective registration
statement, (ii) such holder provides Dynegy with an opinion of outside counsel
reasonably acceptable to Dynegy, in a reasonably acceptable form to Dynegy and
its transfer agent, to the effect that such legend is no longer required under
the Securities Act (such that any sale, assignment or transfer of such Shares
may be made without registration under the applicable requirements of the
Securities Act), or (iii) in connection with a sale, assignment of or other
transfer of such Shares, such holder provides Dynegy with a representation
letter in a form reasonably acceptable to Dynegy and its transfer agent that
such Shares will be sold, assigned or transferred pursuant to Rule 144 under the
Securities Act (a “Rule 144 Representation Letter”). Dynegy shall bear all
direct costs and expenses associated with the removal of a legend pursuant to
this Section 6.10; provided, that Purchaser shall be responsible for all legal
fees and expenses of counsel incurred by Purchaser with respect to matters
addressed in this Section 6.10.

 

(b)        If Purchaser requests the removal of the legend on the Shares
pursuant to Section 6.10(a), Dynegy will use Commercially Reasonable Efforts to,
no later than three (3) Business Days following delivery of a legended
certificate or instrument representing the Shares (endorsed or with stock powers
attached) and any opinion or Rule 144 Representation Letter that may be
requested pursuant to the foregoing, deliver or cause to be delivered to such
Purchaser a letter confirming that the Shares are free of a restrictive legend.

 

Section 6.11          Entire Agreement. This Agreement, the Delta Documents and
the other agreements and documents referred to herein are intended by the
Parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the

 

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agreement and understanding of the Parties in respect of the subject matter
contained herein and therein. There are no restrictions, promises, warranties or
undertakings between the Parties, other than those set forth or referred to
herein or the other Delta Documents with respect to the rights granted by Dynegy
or any of its Affiliates or Purchaser or any of its Affiliates set forth herein
or therein. This Agreement, the other Delta Documents and the other agreements
and documents referred to herein or therein supersede all prior agreements and
understandings between the Parties with respect to such subject matter.

 

Section 6.12          Specific Performance. The Parties acknowledge and agree
that irreparable damage for which monetary damages, even if available, would not
be an adequate remedy, would occur in the event that any of the provisions of
this Agreement were not performed in accordance with its specific terms or were
otherwise breached and that any remedy at law for any breach of the provisions
of this Agreement would be inadequate. Accordingly, the Parties acknowledge and
agree that each Party shall be entitled to an injunction, specific performance
or other equitable relief to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement, including the right of
a Party to cause the other Party consummate the Closing in accordance with
Sections 2.01 and 2.02 and the other transactions contemplated by this
Agreement, in the courts provided for in Section 6.13, this being in addition to
any other remedy to which they are entitled at law or in equity. Each Party
agrees that it will not oppose the granting of specific performance and other
equitable relief on the basis that the other Party has an adequate remedy at Law
or that an award of specific performance is not an appropriate remedy for any
reason at Law or equity. The Parties acknowledge and agree that any Party
seeking an injunction to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in accordance with this
Section 6.12 shall not be required to provide any bond or other security in
connection with any such injunction.

 

Section 6.13          Governing Law; Submission to Jurisdiction. This Agreement,
and all claims or causes of action (whether in contract, tort or otherwise) that
may be based upon, arise out of or relate to this Agreement or the negotiation,
execution or performance of this Agreement (including any claim or cause of
action based upon, arising out of or related to any representation or warranty
made in or in connection with this Agreement), shall be governed by, and
construed in accordance with, the internal Laws of the State of Delaware,
without reference to the choice of law provisions thereof. All claims, causes of
action, suits, actions or proceedings shall be raised to and exclusively
determined by the Court of Chancery for the State of Delaware or, if such court
disclaims jurisdiction, the U.S. District Court for the District of Delaware or,
if such court disclaims jurisdiction, the courts of the State of Delaware, and
in each case, any appellate court from any decision thereof, to whose exclusive
jurisdiction and venue the Parties unconditionally consent and submit. Service
of process in connection with any such claim, cause of action suit, action or
proceeding may be served on each Party anywhere in the world by the same methods
as are specified for the giving of notices under this Agreement. Each of the
Parties irrevocably waives any objection to the laying of venue of any such
suit, action or proceeding brought in such courts and irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.

 

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Section 6.14          Waiver of Jury Trial. THE PARTIES TO THIS AGREEMENT EACH
HEREBY WAIVES, AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR (ii) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT
OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY
OR OTHERWISE. THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

Section 6.15          Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different Parties in separate counterparts,
each of which counterparts, when so executed and delivered, shall be deemed to
be an original and all of which counterparts, taken together, shall constitute
but one and the same agreement.

 

Section 6.16          No Recourse.

 

(a)        Notwithstanding anything to the contrary that may be expressed or
implied in this Agreement, and notwithstanding the fact that Purchaser or its
Affiliates or any of its or their successors or permitted assignees may be a
partnership or a limited liability company, Dynegy, by its acceptance of the
benefits hereof, covenants, agrees and acknowledges that no Person other than
Purchaser and its respective successors and permitted assignees shall have any
obligation hereunder, and that it has no rights of recovery against, and no
recourse hereunder against, any former, current or future director, officer,
agent, advisor, attorney, Representative, Affiliate, manager or employee of
Purchaser (or any of its successors or assignees), against any former, current
or future general or limited partner, manager, member or stockholder of
Purchaser, or any Affiliate thereof or against any former, current or future
director, officer, agent, advisor, attorney, Representative, employee,
Affiliate, assignee, general or limited partner, stockholder, manager or member
of any of the foregoing, whether by or through attempted piercing of the
corporate veil, by the enforcement of any judgment or assessment or by any legal
or equitable proceeding, or by virtue of any statute, regulation or other
applicable Law, except that, notwithstanding the foregoing, nothing in this
Section 6.16(a) shall limit Dynegy’s rights or remedies under the Investor
Rights Agreement, the Interim Sponsors Agreement or any Delta Document.

 

(b)        Notwithstanding anything to the contrary that may be expressed or
implied in this Agreement, Purchaser, by its acceptance of the benefits hereof,
covenants, agrees and acknowledges that no Person other than Dynegy and its
respective successors and permitted assignees shall have any obligation
hereunder, and that it has no rights of recovery against, and

 

37

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no recourse hereunder against, any former, current or future director, officer,
agent, advisor, attorney, Representative, Affiliate, manager or employee of
Dynegy (or any of its successors or assignees), against any former, current or
future general or limited partner, manager, member or stockholder of Dynegy, or
any Affiliate thereof or against any former, current or future director,
officer, agent, advisor, attorney, Representative, employee, Affiliate,
assignee, general or limited partner, stockholder, manager or member of any of
the foregoing, whether by or through attempted piercing of the corporate veil,
by the enforcement of any judgment or assessment or by any legal or equitable
proceeding, or by virtue of any statute, regulation or other applicable Law,
except that, notwithstanding the foregoing, nothing in this
Section 6.16(b) shall limit Purchaser’s rights or remedies under the Investor
Rights Agreement, the Interim Sponsors Agreement or any Delta Document.

 

[Remainder of Page Left Intentionally Blank]

 

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IN WITNESS WHEREOF, the Parties execute this Agreement, effective as of the date
first above written.

 

 

DYNEGY INC.

 

 

 

By:

/s/ Robert C. Flexon

 

Name:

Robert C. Flexon

 

Title:

President & Chief Executive Officer

 

 

 

TERAWATT HOLDINGS, LP

 

 

 

By:

/s/ Tyler Reeder

 

Name:

Tyler Reeder

 

Title:

President

 

 

 

 

By:

/s/ Andrew D. Singer

 

Name:

Andrew D. Singer

 

Title:

Secretary and General Counsel

 

[Signature Page to Stock Purchase Agreement]

 

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Schedule 1

 

1.              Federal Energy Regulatory Commission

 

2.              New York Public Service Commission

 

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Exhibit A

 

Form of Investor Rights Agreement

 

[Attached]

 

--------------------------------------------------------------------------------

 

FORM OF

 

INVESTOR RIGHTS AGREEMENT

 

This Investor Rights Agreement (this “Agreement”) is made and entered into as of
[•], [•], by and between Dynegy Inc., a Delaware corporation (“Dynegy”), and
Terawatt Holdings, LP, a Delaware limited partnership (“Purchaser” and, together
with Dynegy, the “Parties”).

 

WHEREAS, pursuant to the Stock Purchase Agreement, dated as of February 24, 2016
(the “Purchase Agreement”), by and between Dynegy and Purchaser, among other
things, Dynegy is issuing to Purchaser on the date hereof 13,711,152 shares of
Common Stock (as defined below), on the terms and conditions set forth in the
Purchase Agreement; and

 

WHEREAS, Dynegy has agreed to provide the registration and other rights set
forth in this Agreement for the benefit of Purchaser pursuant to the Purchase
Agreement.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by each Party, the Parties hereby agree as follows:

 

1.             Definitions.

 

(a)           As used in this Agreement, each of the following terms has the
meaning specified below:

 

“Affiliate” means, with respect to a specified Person, any other Person, whether
now in existence or hereafter created, directly or indirectly controlling,
controlled by or under direct or indirect common control with such specified
Person.  For purposes of this definition, “control” (including, with correlative
meanings, “controlling,” “controlled by” and “under common control with”) means
the power to direct or cause the direction of the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.  For the avoidance of doubt, for purposes
of this Agreement, none of Dynegy, its Affiliates or the Delta JV shall be
deemed an Affiliate of Purchaser or its Affiliates and no Person shall be deemed
an Affiliate of another Person solely by virtue of the fact that both Persons
Beneficially Own Common Stock.

 

“Beneficially Own” means, with respect to any securities, having “beneficial
ownership” of such securities for purposes of Rule 13d-3 or 13d-5 under the
Exchange Act as in effect on the date hereof and shall include securities that
are beneficially owned, directly or indirectly, by a Counterparty (or any of
such Counterparty’s Affiliates) under any Derivatives Contract (without regard
to any short or similar position under the same or any other Derivatives
Contract) to which such Person or any of such Person’s Affiliates is a Receiving
Party; provided, however, that the number of shares of Common Stock that a
Person is deemed to be the beneficial owner of, or to beneficially own, in
connection with a particular Derivatives Contract shall not exceed the number of
Notional Common Shares with respect to such Derivatives Contract; provided,
further, that the number of securities beneficially owned by each

 

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Counterparty (including its Affiliates) under a Derivatives Contract shall be
deemed to include all securities that are beneficially owned, directly or
indirectly, by any other Counterparty (or any of such other Counterparty’s
Affiliates) under any Derivatives Contract to which such first Counterparty (or
any of such first Counterparty’s Affiliates) is a Receiving Party, with this
provision being applied to successive Counterparties as appropriate. Similar
terms such as “Beneficial Ownership” and “Beneficial Owner” shall have the
corresponding meanings.

 

“Board” means the board of directors of Dynegy.

 

“Business Day” means any day other than a Saturday, a Sunday or any day on which
banking institutions in the State of Texas or New York, New York are authorized
or required by Law or governmental action to close.

 

“Change of Control Transaction” means (a) any transaction or series of related
transactions that results in the directors comprising the Board immediately
prior to such transaction ceasing to represent the majority of the directors
comprising the Board or the board of directors of the Person surviving or
resulting from such transaction (or the ultimate parent entity thereof);
provided, however, that any directors comprising such Board or board that were
nominated, elected, appointed or recommended by the Board immediately prior to
such transaction or series of related transactions shall be deemed for purposes
of this clause (a) to have been members of the Board immediately prior to such
transaction or series of related transactions; (b) the acquisition of Dynegy by
another Person by means of any transaction or series of related transactions,
whether or not Dynegy is a party thereto (including any stock acquisition,
reorganization, merger or consolidation), that results in the holders of the
Common Stock immediately prior to such transaction or series of related
transactions failing to represent, immediately after such transaction or series
of transactions, a majority of the total outstanding voting securities of the
surviving Person (or the ultimate parent entity thereof); (c) any transaction or
series of related transactions, whether or not Dynegy is a party thereto, after
giving effect to which, in excess of a majority of the voting securities is
Beneficially Owned directly, or indirectly through one or more Persons, by any
Person and its Affiliates; or (d) a Disposition of all or substantially all of
the assets of Dynegy and its Subsidiaries on a consolidated basis.

 

“Commission” means the U.S. Securities and Exchange Commission or any other U.S.
federal agency then administering the Securities Act or Exchange Act.

 

“Common Stock” means the common stock, par value $0.01 per share, of Dynegy.

 

“Confidential Information” means any information concerning or relating to
Dynegy, its Subsidiaries and investments, or the financial condition, business
operations, prospects, or present and future business plans of each of the
foregoing, directly or indirectly provided to or furnished by Dynegy or its
Representatives pursuant to Section 13(a); provided that the term “Confidential
Information” does not include information that (a) is or becomes generally
available to the public other than as a result of a disclosure by Purchaser or
its Representatives in violation of this Agreement or in violation of any legal
or fiduciary duty of any past or present Designated Director, (b) was available
to Purchaser or its Representatives on a nonconfidential basis prior to its
disclosure to Purchaser or its Representatives by Dynegy, (c) 

 

2

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becomes available to Purchaser or its Representatives on a nonconfidential basis
from a source other than Dynegy after the disclosure of such information to
Purchaser or its Representatives by Dynegy, which source is (at the time of
receipt of the relevant information) not, to the knowledge of Purchaser, bound
by a confidentiality agreement with (or other confidentiality or secrecy
obligation to) Dynegy or its Affiliates in respect to such information or (d) is
independently developed by Purchaser or its Representatives without violating
any confidentiality agreement with, or other obligation of secrecy to, Dynegy.

 

“Controlled Affiliate” means (a) ECP and (b) any Subsidiary of ECP.

 

“Delta Documents” has the meaning set forth in the Purchase Agreement.

 

“Delta JV” means Atlas Power, LLC, a Delaware limited liability company.

 

“Derivatives Contract” means a contract between two parties (the “Receiving
Party” and the “Counterparty”) that is designed to produce economic benefits and
risks to the Receiving Party that correspond substantially to the ownership by
the Receiving Party of a number of shares of Common Stock specified or
referenced in such contract (the number corresponding to such economic benefits
and risks, the “Notional Common Shares”), regardless of whether obligations
under such contract are required or permitted to be settled through the delivery
of cash, Common Stock or other property, without regard to any short position
under the same or any other Derivative Contract. For the avoidance of doubt,
interests in broad-based index options, broad-based index futures and
broad-based publicly traded market baskets of stocks approved for trading by the
appropriate federal governmental authority shall not be deemed to be Derivatives
Contracts.

 

“Dispose” (including the correlative terms “Disposed” and “Disposition”) means
any sale, assignment, transfer, conveyance, gift, pledge, distribution,
hypothecation or other encumbrance or any other disposition, whether voluntary,
involuntary or by operation of law, whether effected directly or indirectly;
provided that none of Purchaser or any other Controlled Affiliate shall be
deemed to have engaged in a “Disposition” of any Equity Securities as a result
of any (i) direct or indirect transfers of voting or economic interests in ECP
or any Controlled Affiliate so long as the transferee of such voting or economic
interests is a Controlled Affiliate and (ii) changes in the power directly or
indirectly to direct or cause the direction of management and policy of any
Controlled Affiliate that is a Fund, including the resignation, removal and
replacement of the Fund Manager or Fund Advisor of such Fund.

 

“Dynegy Bylaws” means the Sixth Amended and Restated Bylaws of Dynegy, as the
same may be amended, restated or amended and restated from time to time in
accordance with this Agreement, the Dynegy Organizational Documents and
applicable Law.

 

“Dynegy Charter” means the Third Amended and Restated Certificate of
Incorporation of Dynegy.

 

“Dynegy Organizational Documents” means, collectively, the Dynegy Charter and
the Dynegy Bylaws.

 

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“Dynegy Preferred Stock” means the 5.375% Series A Mandatory Convertible
Preferred Stock of Dynegy.

 

“Dynegy Securities” means any equity interest of any class or series in Dynegy.

 

“Dynegy Warrants” means the warrants issued by Dynegy and exercisable for Common
Stock at an exercise price of $40 per share.

 

“ECP” means Energy Capital Partners III, LLC, a Delaware limited liability
company.

 

“ECP Equity Commitment Letter” has the meaning set forth in the Purchase
Agreement.

 

“Effective Date” means the time and date that a Registration Statement is first
declared effective by the Commission or otherwise becomes effective.

 

“Equity Securities” means shares of Common Stock and any other shares of
Dynegy’s capital stock (including any options, warrants or other rights to
acquire Common Stock or such capital stock or any securities that are
convertible into, or exercisable or exchangeable for, or that represent the
right to receive Common Stock or such capital stock).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and the rules and regulations of the Commission promulgated thereunder.

 

“Fund” means any share trust, investment trust, investment company, limited
partnership, general partnership, limited liability company or other collective
investment scheme, pension fund, insurance company, or any body corporate or
other entity, in each case, the business, operations or assets of which are
managed professionally for investment purpose.

 

“Fund Advisor” means, with respect to any Fund that does not have a Fund
Manager, the primary or principal entity that provides investment advice to such
Fund.

 

“Fund Manager” means, with respect to any Fund, any general partner, trustee, or
other responsible entity.

 

“GAAP” means generally accepted accounting principles in the United States of
America as of the date of the applicable calculation being made.

 

“Hedging Arrangements” means a hedge, call, swap, collar, floor, cap, option,
forward sale or purchase or other contract or similar arrangement (including any
obligations to purchase or sell any commodity or security at a future date for a
specific price) with respect to any Equity Securities or debt or hybrid
securities of Dynegy.

 

“Holder” means (a) Purchaser unless and until Purchaser ceases to hold any
Registrable Securities and (b) any Controlled Affiliate that holds Registrable
Securities to whom registration rights conferred by this Agreement have been
transferred in compliance with Section

 

4

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14(e); provided that any Person referenced in clause (b) shall be a Holder only
if such Person agrees in writing to be bound by and subject to the terms set
forth in this Agreement.

 

“Interim Sponsors Agreement” has the meaning set forth in the Purchase
Agreement.

 

“Law” has the meaning set forth in the Purchase Agreement.

 

“NYSE” means the New York Stock Exchange.

 

“Person” means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company, unincorporated
organization, Governmental Authority or any agency, instrumentality or political
subdivision thereof or any other form of entity.

 

“Proceeding” means any action, claim, suit, proceeding or investigation
(including a preliminary investigation or partial proceeding, such as a
deposition).

 

“Prospectus” means the prospectus included in a Registration Statement
(including a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective Registration Statement in reliance upon
Rule 430A, Rule 430B or Rule 430C promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by a
Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

 

“Purchased Stock” means (a) the shares of Common Stock issued and sold by Dynegy
to Purchaser pursuant to the Purchase Agreement, (b) the shares of Common Stock
Beneficially Owned by Purchaser as of the date of this Agreement; provided such
shares (i) remain owned by Purchaser or any Controlled Affiliate as of the date
of this Agreement and (ii) the number of such shares of such Common Stock as of
(but before giving effect to) the Closing (as defined in the Purchase Agreement)
of the Purchase Agreement was less than five (5%) of the outstanding shares of
Common Stock as of such time, and (c) any Equity Securities that are acquired by
Purchaser pursuant to Section 5.06 of the Purchase Agreement.

 

“Registrable Securities” means the Shares; provided, however, that Registrable
Securities shall not include: (a) any Shares that have been registered under the
Securities Act and Disposed of pursuant to an effective registration statement
or otherwise transferred to a Person who is not entitled to the registration and
other rights hereunder or otherwise transferred to any Person in violation of
this Agreement; (b) any Shares that may be sold or transferred by the Holder
thereof under Rule 144 under the Securities Act without any limitation on volume
or the need to comply with the public information requirements of Rule 144 or
that have been sold under Rule 144 or another exemption under the Securities Act
in which the restrictive legend on such Shares has been removed; and (c) any
Shares that cease to be outstanding (whether as a result of repurchase and
cancellation, conversion or otherwise).

 

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“Registration Statement” means a registration statement in the form required to
register the resale of the Registrable Securities under the Securities Act and
other applicable Law, and including any Prospectus, amendments and supplements
to each such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.

 

“Resignation Event” means that the Designated Director, as reasonably determined
by the Board in good faith following compliance with the procedures set forth
below in this definition, (a) is prohibited or disqualified from serving as a
director based on the standards set forth in Section 9(a)(ii); (b) has engaged
in acts or omissions constituting a breach of the Designated Director’s duty of
loyalty to Dynegy or its stockholders; (c) has engaged or more likely than not,
as determined by a majority of the independent directors of the Board (other
than the Designated Director), engaged in acts or omissions which involve moral
turpitude, fraud, intentional misconduct or an intentional violation of Law
that, in each case, is material and would reasonably be expected to have an
adverse effect on Dynegy, (d) has engaged in any transaction involving Dynegy
from which the Designated Director derived an improper personal benefit or
(e) has materially violated the attendance or other material Dynegy policies
applicable to all Board members. Prior to making a determination that any
Resignation Event described in clauses (a)—(e) above has occurred, the Board
shall provide the Designated Director with proper notice of a meeting of the
Board in accordance with the Dynegy Bylaws at which the removal of such
Designated Director will be considered. At such duly called and held Board
meeting, the Board shall provide the Designated Director with a reasonable
opportunity to be heard and to present information relevant to the Board’s
proposed determination. The Board may make a determination that a Resignation
Event has occurred only following its consideration in good faith of such
information presented by the Designated Director and, in the case of clauses
(d) and (e), after having given the Designated Director an opportunity to cure
or correct the circumstances that resulted in such Resignation Event (to the
extent such circumstances are reasonably capable of being cured).  For the
avoidance of doubt, the occurrence of a Resignation Event in respect of any
Designated Director shall in no way effect the ability of Purchaser to appoint a
different individual as a Designated Director pursuant to Section 9.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act.

 

“Rule 405” means Rule 405 promulgated by the Commission pursuant to the
Securities Act.

 

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act.

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and the rules and regulations of the Commission promulgated thereunder.

 

6

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“Selling Expenses” means all underwriting discounts, selling commissions and
stock transfer taxes applicable to the sale of Registrable Securities and fees
and disbursements of counsel for any Holder.

 

“Shares” means the Purchased Stock and any other Equity Securities or equity
interests in any successor of Dynegy issued in respect of such Purchased Stock
by reason of or in connection with any stock dividend, stock split, combination,
reorganization, recapitalization, conversion to another type of entity or
similar event involving a change in the capital structure of Dynegy.

 

“Shelf Registration Statement” means a Registration Statement of Dynegy filed
with the Commission on either (i) Form S-3 (or any successor form or other
appropriate form under the Securities Act) or (ii) if Dynegy is not permitted to
file a Registration Statement on Form S-3, a Registration Statement on Form S-1
(or any successor form or other appropriate form under the Securities Act), in
each case, for an offering to be made on a continuous basis pursuant to Rule 415
under the Securities Act (or any similar rule that may be adopted by the
Commission) covering the Registrable Securities, as applicable; provided that
Dynegy may satisfy its obligations under this Agreement in respect of any Shelf
Registration Statement by filing one or more amendments to an existing Shelf
Registration Statement (including by filing a prospectus supplement to the
extent permitted under the Commission’s rules and regulations).

 

“Stockholder” means a holder of shares of Common Stock.

 

“Subsidiary” means, as to any Person, any corporation or other entity of which:
(a) such Person, or a Subsidiary of such Person, is a general partner or
manager; (b) at least a majority of the outstanding equity interest having by
the terms thereof ordinary voting power to elect a majority of the board of
directors or similar governing body of such corporation or other entity
(irrespective of whether or not at the time any equity interest of any other
class or classes of such corporation or other entity shall have or might have
ordinary voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more of
its Subsidiaries; or (c) any corporation or other entity as to which such Person
consolidates for accounting purposes.

 

“Termination Event” means (a) that Purchaser and any Controlled Affiliates to
which it has transferred the Shares in accordance with this Agreement have
ceased to Beneficially Own, collectively, at least 10% of the shares of Common
Stock outstanding as of the date of determination or (b) any material breach by
Purchaser or any of its Affiliates of its or their respective obligations under
Section 7 that, if curable, have not been cured within ten (10) Business Days
after Purchaser receives written notice from Dynegy of such breach.

 

“Trading Market” means the principal national securities exchange on which
Registrable Securities are listed.

 

“VWAP”  means, as of a specified date and in respect of Registrable Securities,
the volume weighted average price for such security on the Trading Market with
respect to the Registrable Securities for the five (5) trading days immediately
preceding, but excluding, such date.  A “trading day” only includes those days
that have a scheduled closing time of 4:00 p.m.

 

7

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(New York City time) or the then-standard closing time for regular trading on
the relevant Trading Market.

 

“WKSI” means a “well known seasoned issuer” as defined under Rule 405.

 

(b)                                 Additional Definitions. In addition to the
defined terms set forth in Section 1(a), each of the following capitalized terms
has the meaning given to such term in the Section set forth opposite such term
below:

 

Agreement

 

Preamble

Blackout Period

 

2(b)(iv)

Business Opportunity

 

10

Demand Notice

 

2(b)(i)

Demand Registration

 

2(b)(i)

Designated Director

 

9(a)(ii)

Dynegy

 

Preamble

Dynegy Indemnified Persons

 

5(b)

ECP Employee

 

9(d)

ECP Group

 

10

ECP Indemnitee

 

14(l)

Effectiveness Period

 

2(b)(ii)

Excess Proposed Securities

 

8(b)

Excluded Issuance

 

8(f)

FERC

 

7(g)

FPA

 

7(g)

Fund Indemnitors

 

14(l)

Holder Indemnified Persons

 

5(a)

Initial Appointment

 

9(a)(i)

Initiating Holder

 

2(b)(i)

Lock-Up Period

 

7(b)

Losses

 

5(a)

Non-Recourse Parties

 

14(m)

Other Investments

 

10

Parties

 

Preamble

Piggyback Notice

 

2(c)(i)

Piggyback Registration

 

2(c)(i)

Piggyback Request

 

2(c)(i)

Proposed Covered Issuance

 

8(a)

Proposed Securities

 

8(a)

Purchase Agreement

 

Recitals

Purchaser

 

Preamble

Registration Expenses

 

4

Renounced Business Opportunities

 

10

Renounced Business Opportunity

 

10

Representatives

 

13(b)

ROFR Consideration Period

 

8(a)

ROFR Election Notice

 

8(a)

 

8

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ROFR Negotiation Period

 

8(c)

ROFR Notice

 

8(a)

ROFR Shareholder Approval

 

8(b)

ROFR Shareholder Approval Notice

 

8(b)

Securities

 

7(a)(i)

Shelf Registration

 

2(a)(i)

Shelf Takedown

 

2(a)(iii)(1)

Shelf Takedown Request

 

2(a)(iii)(1)

Suspension Notice

 

14(b)

Suspension Period

 

14(b)

Underwritten Offering

 

3(k)

Underwritten Offering Notice

 

3(k)

Underwritten Shelf Takedown

 

2(a)(iii)(2)

 

(c)                                  Construction; Interpretation.

 

(i)                                     Each of the Parties has participated in
the drafting and negotiation of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement must be construed as if it is
drafted by all the Parties, and no presumption or burden of proof shall arise
favoring or disfavoring any member by virtue of authorship of any of the
provisions of this Agreement.

 

(ii)                                  Any reference in this Agreement to $ means
U.S. dollars.

 

(iii)                               Any reference in this Agreement to gender
shall include all genders, and words imparting the singular number only shall
include the plural and vice versa.

 

(iv)                              The division of this Agreement into Sections
and other subdivisions and the insertion of headings are for convenience of
reference only and shall not affect or be utilized in construing or interpreting
this Agreement. All references in this Agreement to any “Section” are to the
corresponding Section of this Agreement unless otherwise specified.

 

(v)                                 The words such as “herein,” “hereinafter,”
“hereof” and “hereunder” refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.

 

(vi)                              The word “including” or any variation thereof
means “including, without limitation” and shall not be construed to limit any
general statement that it follows to the specific or similar items or matters
immediately following it.

 

(vii)                           When calculating the period of time before
which, within which or following which any act is to be done or step taken
pursuant to this Agreement, the date that is the reference date in calculating
such period shall be excluded. If the last day of such period is a non-Business
Day, the period in question shall end on the next

 

9

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succeeding Business Day. All references to days in this Agreement are to
calendar days unless the term “Business Day” is specifically used.

 

(viii)                        The word “extent” in the phrase “to the extent”
shall mean the degree to which a subject or other thing extends, and such phrase
shall not mean simply “if.”

 

(ix)                              Any contract or Law defined or referred to
herein means such contract or Law as from time to time amended, modified or
supplemented, unless otherwise specifically indicated.

 

(x)                                 References to a Person are also to its
successors and permitted assigns.

 

2.                                      Registration.

 

(a)                                 Shelf Registration Statement

 

(i)                                     Filing.  Prior to the expiration of the
Lock-Up Period set forth in Section 7(b) and subject to the compliance by the
Holders of their obligations under this Agreement, Dynegy shall file with the
Commission a Shelf Registration Statement pursuant to Rule 415 of the Securities
Act relating to the offer and sale from time to time of all of the Holder’s
Registrable Securities (the “Shelf Registration”) in accordance with the methods
of distribution elected by the Holders and set forth in the Shelf Registration
Statement and shall use its reasonable best efforts to cause such Shelf
Registration Statement to be declared effective prior to the expiration of such
Lock-Up Period.

 

(ii)                                  Continued Effectiveness.  Dynegy shall use
its reasonable best efforts to keep such Shelf Registration Statement
continuously effective under the Securities Act in order to permit the
Prospectus forming a part thereof to be usable by Holders until the earlier of
(i) the date as of which all Registrable Securities have been sold pursuant to
the Shelf Registration Statement or another registration statement filed under
the Securities Act (but in no event prior to the applicable period referred to
in Section 4(3) of the Securities Act and Rule 174 thereunder) and (ii) the date
there are no longer any Registrable Securities outstanding.

 

(iii)                               Shelf Takedown.

 

(1)                                 An offering or sale of Registrable
Securities pursuant to a Shelf Registration Statement (each, a “Shelf Takedown”)
may be initiated at any time (subject to Section 7(b)), by notice to Dynegy
specifying the intended method or methods of disposition thereof, by written
request of the Holder (a “Shelf Takedown Request”) to Dynegy to effect a public
offering of all or a portion of the Holder’s Registrable Securities that are
covered by such Shelf Registration Statement. As soon as practicable after the
receipt of a Shelf Takedown Request, Dynegy shall amend or supplement the Shelf
Registration Statement, if necessary, for such purpose and shall within ten
(10) Business Days of the receipt of a Shelf Takedown Request, subject to the
compliance by the applicable Holders of their obligations under this Agreement

 

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file a prospectus supplement in respect of the Shelf Registration covering all
of the Registrable Securities that the Holders in writing request; provided
that, Dynegy shall have no obligation to effect any Underwritten Shelf Takedown
unless the amount of Registrable Securities included in the Shelf Takedown
Request have an aggregate value of at least $25 million based on the VWAP of
such Registrable Securities as of the date of the Shelf Takedown Request.

 

(2)                                 If the Holder elects by request to Dynegy, a
Shelf Takedown shall be in the form of an Underwritten Offering (an
“Underwritten Shelf Takedown”) in which case Section 3(k) shall apply and such
Underwritten Shelf Takedown will constitute an Underwritten Offering for
purposes of Section 2(b)(iii).

 

(iv)                              Distributions of Registrable Securities to
Partners or Members.  In the event any Holder requests to participate in a
registration pursuant to this Section 2 in connection with a distribution of
Registrable Securities to its direct or indirect partners or members, the
registration shall provide for resale by such partners or members, if requested
by the Holder and subject to such partners or members providing such cooperation
to Dynegy as would be required if such partners or members were Holders under
this Agreement.

 

(b)                                 Demand Registration.

 

(i)                                     If at any time there is no currently
effective Shelf Registration Statement on file with the Commission, any Holder
that holds any Registrable Securities shall have the option and right,
exercisable by delivering a written notice to Dynegy (a “Demand Notice,” and the
Holder that delivers such a Demand Notice, the “Initiating Holder”), to require
Dynegy to, pursuant to the terms of and subject to the limitations contained in
this Agreement, prepare and file with the Commission a Registration Statement
registering the offering and sale of the number and type of Registrable
Securities on the terms and conditions specified in the Demand Notice (or, to
the extent permitted under the Commission’s rules and regulations, a prospectus
supplement in respect of an existing Registration Statement) in accordance with
the intended timing and method or methods of distribution thereof specified in
the Demand Notice, which may include sales on a delayed or continuous basis
pursuant to Rule 415 (a “Demand Registration”). The Demand Notice must set forth
the number of Registrable Securities that the Initiating Holder intends to
include in such Demand Registration. Notwithstanding anything to the contrary
herein, in no event shall Dynegy be required to effectuate a Demand Registration
for Registrable Securities having an aggregate value of less than $25 million
based on the VWAP of such Registrable Securities as of the date of the Demand
Notice.

 

(ii)                                  Within ten (10) Business Days of the
receipt of the Demand Notice, Dynegy shall give written notice of such Demand
Notice to all Holders and, as soon as reasonably practicable thereafter, shall,
subject to the limitations of this Section 2(b) and subject to the compliance by
the applicable Holders of their obligations under this Agreement, file a
Registration Statement (or, to the extent permitted under the Commission’s
rules and regulations, a prospectus supplement in respect of an existing

 

11

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Registration Statement) covering all of the Registrable Securities that the
Holders shall in writing request (such request to be given to Dynegy within five
(5) days of receipt of such notice of the Demand Notice given by Dynegy pursuant
to this Section 2(b)(ii)) to be included in such Demand Registration as promptly
as reasonably practicable as directed by the Initiating Holder in accordance
with the terms and conditions of the Demand Notice and use reasonable best
efforts to cause such Registration Statement to become effective under the
Securities Act and remain effective under the Securities Act until the earlier
of (i) the date that all Registrable Securities covered by such Registration
Statement have been

sold or (ii) the date that is three (3) years after the original filing date of
such Registration Statement (the “Effectiveness Period”).

 

(iii)                               Subject to the other limitations contained
in this Agreement, Dynegy is not obligated hereunder to effect (A) more than one
(1) Demand Registration in any twelve (12) month period pursuant to this
Agreement, (B) more than a total of three (3) Demand Registrations pursuant to
this Agreement (including any Underwritten Offering pursuant to an Underwritten
Offering Notice under Section 3(k)) or (C) a subsequent Demand Registration
pursuant to a Demand Notice if a Registration Statement covering all of the
Registrable Securities held by the Holders providing such Demand Notice shall
have become effective under the Securities Act and remains effective under the
Securities Act and is sufficient to permit offers and sales of the number and
type of Registrable Securities on the terms and conditions specified in the
Demand Notice in accordance with the intended timing and method or methods of
distribution thereof specified in the Demand Notice.

 

(iv)                              Notwithstanding any other provision of this
Section 2, Dynegy shall not be required to effect a registration or file a
Registration Statement (or any amendment thereto)  or maintain the effectiveness
of a Registration Statement for a period of up to sixty (60) days, if (A) the
Board determines that a postponement is in the best interest of Dynegy and its
stockholders relating to a pending transaction involving Dynegy, (B) the Board
determines such registration would render Dynegy unable to comply with
applicable securities Laws or (C) the Board determines such registration would
require disclosure of material information that Dynegy has a bona fide business
purpose for preserving as confidential (any such period, a “Blackout Period”);
provided, however, that (1) in no event shall any Blackout Period together with
any Suspension Period collectively exceed an aggregate of ninety (90) days in
any twelve (12) month period, (2) during any Blackout Period contemplated by
Section 2(b)(iv)(B) or any Suspension Period, any Holder that has submitted a
Demand Notice may withdraw such Demand Notice by written notice to Dynegy, and
(3) during any Blackout Period contemplated by Section 2(b)(iv)(B) or (3) or any
Suspension Period, Dynegy shall not file a registration statement (or any
amendment or supplement thereto) with respect to any Dynegy Security for any
other holder of registration rights.

 

(v)                                 Dynegy may include in any such Demand
Registration other Dynegy Securities for sale for its own account or for the
account of any other Person; provided that if the managing underwriter, if any,
for an Underwritten Offering pursuant to a Demand Notice determines that the
type or number of Dynegy Securities proposed to be offered in such offering
would likely have an adverse effect in any material respect on

 

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the price, timing or distribution of the Registrable Securities proposed to be
included in such offering, the Registrable Securities to be sold by the Holders
shall be included in such registration before any Dynegy Securities proposed to
be sold for the account of Dynegy or any other Person, and thereafter the amount
of Registrable Securities included in such registration to be sold by the
Holders shall be reduced on a pro rata basis.

 

(vi)                              Subject to the limitations contained in this
Agreement, Dynegy shall effect any Demand Registration on Form S-3 (except if
Dynegy is not then eligible to register for resale the Registrable Securities on
Form S-3, in which case such Demand Registration shall be effected on another
appropriate form for such purpose pursuant to the Securities Act) and, so long
as Dynegy is a WKSI, the Demand Registration for any offering and selling of
Registrable Securities shall be effected pursuant to a  Shelf Registration
Statement, which shall be on Form S-3 or any equivalent or successor form under
the Securities Act (if available to Dynegy); provided, however, that if at any
time a Registration Statement on Form S-3 is effective and a Holder provides
written notice to Dynegy that it intends to effect an offering of all or part of
the Registrable Securities included on such Registration Statement, Dynegy will
amend or supplement such Registration Statement as may be necessary in order to
enable such offering to take place.

 

(vii)                           Without limiting Section 3, in connection with
any Demand Registration pursuant to and in accordance with this Section 2(b),
Dynegy shall, (A) promptly prepare and file or cause to be prepared and filed
(1) such additional forms, amendments, supplements, prospectuses, certificates,
letters, opinions and other documents, as may be necessary or advisable to
register or qualify the securities subject to such Demand Registration,
including under the securities Laws of such states as the Holders shall
reasonably request; provided, however, that no such qualification shall be
required in any jurisdiction where, as a result thereof, Dynegy would become
subject to general service of process or to taxation or qualification to do
business in such jurisdiction solely as a result of registration and (2) such
forms, amendments, supplements, prospectuses, certificates, letters, opinions
and other documents as may be necessary to apply for listing or to list the
Registrable Securities subject to such Demand Registration on the Trading Market
and (B) do any and all other acts and things that may be reasonably necessary or
appropriate or reasonably requested by the Holders to enable the Holders to
consummate a public sale of such Registrable Securities in accordance with the
intended timing and method or methods of distribution thereof.

 

(viii)                        In the event a Holder transfers Registrable
Securities to another Holder included on a Registration Statement and such
Registrable Securities remain Registrable Securities following such transfer, at
the reasonable request of such Holder, Dynegy shall amend or supplement such
Registration Statement as may be necessary in order to enable such transferee to
offer and sell such Registrable Securities pursuant to such Registration
Statement; provided that in no event shall Dynegy be required to file a
post-effective amendment to the Registration Statement unless (A) such
Registration Statement includes only Registrable Securities held by such Holder
or another Holder or (B) Dynegy has received written consent therefor from whom
Registrable Securities have been registered on (but not yet sold under) such
Registration Statement, other than such Holder or another Holder.

 

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(c)                                  Piggyback Registration.

 

(i)                                     If Dynegy shall at any time propose to
conduct, other than pursuant to any Demand Registration, a public offering of
Common Stock for cash (whether in connection with a public offering of Common
Stock by Dynegy, a public offering of Common Stock by stockholders, or both, but
excluding an offering relating solely to an employee benefit plan, an offering
relating to a transaction on Form S-4 or S-8 or an offering on any registration
statement form that does not permit secondary sales), Dynegy shall promptly
notify all Holders of such proposal reasonably in advance of (and in any event
at least two (2) Business Days prior for a block trade and five (5) Business
Days prior for any other public offering) the commencement of the offering (the
“Piggyback Notice”). The Piggyback Notice shall offer the Holders the
opportunity to include for registration in such Registration Statement the
number of Registrable Securities as they may request (a “Piggyback
Registration”). Dynegy shall use reasonable best efforts to include in each such
Piggyback Registration such Registrable Securities for which Dynegy has received
a written request from a Holder within three (3) Business Days (or one
(1) Business Day for a block trade) after delivery of the Piggyback Notice to
such Holder (“Piggyback Request”) for inclusion therein. If a Holder decides not
to include all of its Registrable Securities in any Registration Statement
thereafter filed by Dynegy, such Holder shall nevertheless continue to have the
right to include any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by Dynegy with respect to
offerings of Common Stock, all upon the terms and conditions set forth herein.

 

(ii)                                  If the Registration Statement under which
Dynegy gives notice under this Section 2(c) is for an underwritten offering,
Dynegy shall so advise the Holders of Registrable Securities. In such event, the
right of any such Holder to be included in a registration pursuant to this
Section 2(c) shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by Dynegy. If the managing underwriter or
managing underwriters of such offering advise Dynegy and the Holders in writing
that in their reasonable opinion the inclusion of all of the Holders’
Registrable Securities in the subject Registration Statement (or any other
Common Stock proposed to be included in such offering) would likely have an
adverse effect in any material respect on the price, timing or distribution of
Common Stock proposed to be included in such offering, Dynegy shall include in
such offering only that number of shares of Common Stock proposed to be included
in such offering that, in the reasonable opinion of the managing underwriter or
managing underwriters, will not have such effect, with such number to be
allocated as follows:  (A) first, to Dynegy and/or any holder exercising demand
registration rights pursuant to which the offering is being proposed, (B) if
there remains availability for additional shares of Common Stock to be included
in such registration, second pro rata among all Holders desiring to register
Registrable Securities and other holders of Common Stock exercising piggyback
rights under other registration rights agreements with Dynegy, based on the
number of Registrable Securities held by all such

 

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Holders and other holders of Common Stock, and (C) if there remains availability
for additional shares of Common Stock to be included in such registration, third
pro rata among all other holders of Common Stock who may be seeking to register
such Common Stock based on the number of shares of Common Stock such holder is
entitled to include in such registration.  If any Holder disapproves of the
terms of any such underwriting, such Holder may elect to withdraw therefrom by
written notice to Dynegy and the managing underwriter(s) delivered on or prior
to the time of the commencement of such offering. Any Registrable Securities
withdrawn from such underwriting shall be excluded and withdrawn from the
registration.

 

(iii)                               Dynegy shall have the right to terminate or
withdraw any registration initiated by it under this Section 2(c) at any time in
its sole discretion whether or not any Holder has elected to include Registrable
Securities in such Registration Statement. The registration expenses of such
withdrawn registration shall be borne by Dynegy in accordance with Section 4.

 

(iv)                              The rights of the Holders under this
Section 2(c) shall terminate if the number of Registrable Securities outstanding
is less than 5% of the number of outstanding shares of Common Stock.

 

3.                                      Registration Procedures.  The procedures
to be followed by Dynegy and each Holder electing to sell Registrable Securities
in a Registration Statement (for the avoidance of doubt, including in a Shelf
Registration Statement) pursuant to this Agreement, and the respective rights
and obligations of Dynegy and such Holders, with respect to the preparation,
filing and effectiveness of such Registration Statement, are as follows:

 

(a)                                 In connection with a Demand Registration or
a Shelf Registration, Dynegy will, to the extent reasonably practicable, at
least five (5) Business Days prior to the anticipated filing of the Registration
Statement and any related Prospectus or any amendment or supplement thereto
(other than any filing made under the Exchange Act that is incorporated by
reference into the Registration Statement), (i) furnish to such Holders a copy
of all such documents prior to filing and (ii) use reasonable efforts to address
in each such document when so filed with the Commission such comments as such
Holders reasonably shall propose prior to the filing thereof.

 

(b)                                 In connection with a Piggyback Registration,
Dynegy will at least two (2) Business Days prior to the anticipated filing of
the initial Registration Statement that identifies the Holders and any related
Prospectus or any amendment or supplement thereto (other than amendments and
supplements that do not materially alter the previous disclosure or do nothing
more than name Holders and provide information with respect thereto),
(i) furnish to such Holders copies of all Registration Statements that identify
the Holders and any related Prospectus or any amendment or supplement thereto
(other than amendments and supplements that do not materially alter the previous
disclosure or do nothing more than name Holders and provide information with
respect thereto) prior to filing and (ii) use reasonable best efforts to address
in each such document when so filed with the Commission such comments as such
Holders reasonably shall propose prior to the filing thereof.

 

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(c)                                  Dynegy will use reasonable best efforts to
as promptly as reasonably practicable (i) prepare and file with the Commission
such amendments, including post-effective amendments, and supplements to each
Registration Statement and the Prospectus used in connection therewith as may be
necessary under applicable Law to keep such Registration Statement continuously
effective with respect to the Disposition of all Registrable Securities covered
thereby for its Effectiveness Period (or, with respect to a Shelf Registration,
the Shelf Period) and, subject to the limitations contained in this Agreement,
prepare and file with the Commission such additional Registration Statements in
order to register for resale under the Securities Act all of the Registrable
Securities held by the Holders; (ii) cause the related Prospectus to be amended
or supplemented by any required prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424; and (iii) respond to any comments
received from the Commission with respect to each Registration Statement or any
amendment thereto and, as promptly as reasonably practicable provide such
Holders true and complete copies of all correspondence from and to the
Commission relating to such Registration Statement that pertains to such Holders
as selling Holders but not any comments that would result in the disclosure to
such Holders of material and non-public information concerning Dynegy.

 

(d)                                 Dynegy will comply in all material respects
with the provisions of the Securities Act and the Exchange Act with respect to
the Registration Statements and the Disposition of all Registrable Securities
covered by each Registration Statement.

 

(e)                                  Dynegy will notify such Holders who are
included in a Registration Statement as promptly as reasonably practicable:
(i)(A) when a Prospectus or any prospectus supplement or post-effective
amendment to a Registration Statement in which such Holder is included has been
filed; (B) when the Commission notifies Dynegy whether there will be a “review”
of such Registration Statement and whenever the Commission comments in writing
on such Registration Statement (in which case Dynegy shall provide true and
complete copies thereof and all written responses thereto to each of such
Holders that pertain to such Holders as selling Holders); and (C) with respect
to each such Registration Statement or any post-effective amendment thereto,
when the same has been declared effective; (ii) of any request by the Commission
or any other federal or state governmental authority for amendments or
supplements to such Registration Statement or Prospectus or for additional
information that pertains to such Holders as sellers of Registrable Securities;
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of such Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose;
(iv) of the receipt by Dynegy of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; and (v) of the occurrence of any event or passage
of time that makes any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
(provided, however, that no notice by Dynegy shall be required pursuant to this
clause (v) in the event that Dynegy either promptly files a prospectus
supplement to update the Prospectus or a Form 8-K or other appropriate

 

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Exchange Act report that is incorporated by reference into the Registration
Statement, which in either case, contains the requisite information that results
in such Registration Statement no longer containing any untrue statement of
material fact or omitting to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading).

 

(f)                                   Dynegy will use reasonable best efforts to
avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order
suspending the effectiveness of a Registration Statement, or (ii) any suspension
of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, as promptly as reasonably practicable,
or if any such order or suspension is made effective during any Blackout Period
or Suspension Period, as promptly as reasonably practicable after such Blackout
Period or Suspension Period is over.

 

(g)                                  During the Effectiveness Period Dynegy will
furnish to each such Holder, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto and all exhibits to the extent
requested by such Holder (including those incorporated by reference) promptly
after the filing of such documents with the Commission; provided, that Dynegy
will not have any obligation to provide any document pursuant to this clause
that is available on the Commission’s EDGAR system.

 

(h)                                 Dynegy will promptly deliver to each Holder,
without charge, as many copies of each Prospectus or Prospectuses (including
each form of prospectus) authorized by Dynegy for use and each amendment or
supplement thereto as such Holder may reasonably request during the
Effectiveness Period. Subject to the terms of this Agreement, Dynegy consents to
the use of such Prospectus and each amendment or supplement thereto by each of
the selling Holders in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement thereto.

 

(i)                                     Dynegy will cooperate with such Holders
to facilitate the timely preparation and delivery of book-entry interests
representing Registrable Securities to be delivered to a transferee pursuant to
a Registration Statement, which book-entry interests shall be free of all
restrictive legends indicating that the Registrable Securities are unregistered
or unqualified for resale under the Securities Act, Exchange Act or other
applicable securities Laws, and to enable such Registrable Securities to be in
such denominations and registered in such names as any such Holder may request
in writing. In connection therewith, if required by Dynegy’s transfer agent,
Dynegy will promptly, after the Effective Date of the Registration Statement,
cause an opinion of counsel as to the effectiveness of the Registration
Statement to be delivered to and maintained with its transfer agent, together
with any other authorizations, certificates and directions required by the
transfer agent which authorize and direct the transfer agent to issue such
Registrable Securities without any such legend upon sale by the Holder of such
Registrable Securities under the Registration Statement.

 

(j)                                    Upon the occurrence of any event
contemplated by Section 3(e)(v), subject to Section 2(a)(iv) and this
Section 3(j), as promptly as reasonably practicable, Dynegy will prepare a
supplement or amendment, including a post-effective amendment, if required by
applicable Law, to the affected Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any

 

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other required document so that, as thereafter delivered, no Registration
Statement nor any Prospectus will contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

 

(k)                                 Such Holders may distribute the Registrable
Securities by means of an underwritten offering; provided that (i) in the case
of a Demand Registration or Shelf Registration, the Initiating Holder provides
written notice to Dynegy of its intention to distribute Registrable Securities
by means of an underwritten offering, which for the avoidance of doubt in the
case of a Demand Registration, may be made at a date later than the original
Demand Notice (the “Underwritten Offering Notice” and such underwritten offering
being referred to herein as an “Underwritten Offering”), and, in the case of a
Piggyback Registration, the electing Holders must include their Registrable
Securities in an underwritten offering if the Piggyback Notice so requires,
(ii) the right of any Holder to include such Holder’s Registrable Securities in
such registration shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Securities in the
underwriting to the extent provided herein, (iii) the managing underwriter or
managing underwriters thereof shall be designated by the Initiating Holder in
the case of a Demand Registration and the Holders in the case of a Shelf
Registration (provided, however, that such designated managing underwriter or
managing underwriters shall be reasonably acceptable to Dynegy), by Dynegy in
the case of a registration initiated by Dynegy or by such other holder in the
case of a registration initiated by another holder, (iv) each Holder
participating in such underwritten offering agrees to enter into an underwriting
agreement in customary form and sell such Holder’s Registrable Securities on the
basis provided in any underwriting arrangements approved by the Persons entitled
to select the managing underwriter or managing underwriters hereunder and
(v) each Holder participating in such underwritten offering completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements. Dynegy hereby agrees with each Holder that, in
connection with any Underwritten Offering in accordance with the terms hereof,
it will negotiate in good faith and execute all indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements. If, in the case of an Underwritten Offering, the
managing underwriter advises Dynegy that the inclusion of all of the Holders’
Registrable Securities in the subject Underwritten Offering would likely have an
adverse effect in any material respect on the price, timing or distribution of
Registrable Securities proposed to be included in such Underwritten Offering,
then Dynegy shall so advise all Holders of Registrable Securities that would
otherwise be underwritten pursuant hereto, and the number of shares of Common
Stock that may be included in the Underwritten Offering shall be allocated to
the Holders on a pro rata basis based on the number of Registrable Securities
held by all such Holders (including the Initiating Holders).  Any Registrable
Securities excluded from such Underwritten Offering shall be withdrawn from the
Underwritten Offering. In the event that the managing underwriter limits the
number of Registrable Securities to be included in the Underwritten Offering
pursuant to this Section 3(k) such that at least one-half (1/2) of the aggregate
Registrable Securities set forth in such Holders’ written requests pursuant to
this Section 3(k) are included in the Underwritten Offering, such Underwritten
Offering shall be considered to be a Demand Registration for purposes of the
limitations set forth in Section 2(a)(iii) and an Underwritten Offering for
purposes of the limitations set forth in this Section

 

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3(k). In the case of an Underwritten Offering, the price, underwriting discount
and other financial terms for the Registrable Securities shall be determined by
the Holders.  In addition, in the case of any Underwritten Offering, each of the
Holders may withdraw all or part of their request to participate in the
registration after being advised of such price, discount and other terms and
shall not be required to enter into any agreements or documentation that would
require otherwise. Dynegy shall not be obligated to take any action to effect
any Underwritten Offering (i) if an Underwritten Offering (including an
Underwritten Shelf Takedown) was consummated within the preceding forty-five
(45) days (unless otherwise consented to by Dynegy and approved by Dynegy’s
Board) or (ii) during a Blackout Period.

 

(l)                                     In the case of an Underwritten Offering,
upon the request of the applicable underwriter or underwriters, Dynegy will
obtain for delivery to such underwriter or underwriters an opinion or opinions
from counsel for Dynegy dated the date of the closing under the underwriting
agreement, in customary form, scope and substance;

 

(m)                             In the case of an Underwritten Offering, upon
the request of the applicable underwriter or underwriters, (a) Dynegy shall
obtain for delivery to the managing underwriter or underwriters, with copies to
the Holders, a cold comfort letter from Dynegy’s independent certified public
accountants or independent auditors (and, if necessary, any other independent
certified public accountants or independent auditors of any subsidiary of Dynegy
or any business acquired by Dynegy for which financial statements and financial
data are, or are required to be, included in the Registration Statement)  in
customary form and covering such matters of the type customarily covered by cold
comfort letters as the managing underwriter or underwriters reasonably request,
dated the date of execution of the underwriting agreement and brought down to
the closing under the underwriting agreement and (b) Dynegy shall obtain the
required consents from Dynegy’s independent certified public accountants and, if
applicable, independent auditors to include the accountants’ or auditors’
report, as applicable, relating to the specified financial statements in the
Registration Statement and to be named as an expert in the Registration
Statement.

 

(n)                                 Dynegy shall reasonably cooperate with each
Holder and each underwriter, if any, participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with FINRA.

 

(o)                                 Dynegy shall use its reasonable best efforts
to comply with all applicable securities laws and make available to its security
holders, as soon as reasonably practicable, an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act and the rules and regulations
promulgated thereunder.

 

(p)                                 Dynegy shall provide and cause to be
maintained a transfer agent and registrar for all Registrable Securities covered
by the applicable Registration Statement from and after a date not later than
the effective date of such Registration Statement.

 

(q)                                 Dynegy shall use its best efforts to cause
all Registrable Securities covered by the applicable Registration Statement to
be listed on the securities exchange on which the Common Stock  is then listed.

 

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(r)                                    In the event such Holders seek to
complete an Underwritten Offering, for a reasonable period prior to the filing
of any Registration Statement and throughout the Effectiveness Period, Dynegy
will make available upon reasonable notice at Dynegy’s principal place of
business or such other reasonable place for inspection during normal business
hours by the managing underwriter or managing underwriters selected in
accordance with Section 3(k) such financial and other information and books and
records of Dynegy, and cause the officers, employees, counsel and independent
certified public accountants of Dynegy to respond to such inquiries, as shall be
reasonably necessary (and in the case of counsel, not violate an attorney-client
privilege in such counsel’s reasonable belief) to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act.

 

(s)                                   In connection with any Demand
Registration, Dynegy will use reasonable best efforts to cause appropriate
officers and employees to be available, on a customary basis and upon reasonable
notice, to meet with prospective investors in presentations, meetings and road
shows.

 

(t)                                    Dynegy may require such Holders to
furnish to Dynegy any other information regarding the Holder and the
distribution of such securities as Dynegy reasonably determines is required to
be included in any Registration Statement.

 

4.                                      Registration Expenses. All Registration
Expenses incident to the Parties’ performance of or compliance with their
respective obligations under this Agreement or otherwise in connection with any
Shelf Registration (including any Shelf Takedown) Demand Registration or
Piggyback Registration (in each case, excluding any Selling Expenses) shall be
borne by Dynegy, whether or not any Registrable Securities are sold pursuant to
a Registration Statement; provided that Dynegy shall not be required to bear any
such Registration Expenses of Holders that have withdrawn their request for
registration under this Agreement such that it no longer counts as an
Underwritten Offering for purposes of Section 2(b)(iii). “Registration Expenses”
shall include (i) all registration and filing fees (including fees and expenses
(A) with respect to filings required to be made with the Trading Market and
(B) in compliance with applicable state securities or “Blue Sky” Laws),
(ii) printing expenses (including expenses of printing certificates for Dynegy
Securities and of printing prospectuses if the printing of prospectuses is
reasonably requested by a Holder of Registrable Securities included in the
Registration Statement), (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel, auditors and accountants for Dynegy,
(v) Securities Act liability insurance, if Dynegy so desires such insurance,
(vi) fees and expenses of all other Persons retained by Dynegy in connection
with the consummation of the transactions contemplated by this Agreement and
(vii) all expenses relating to marketing the sale of the Registrable Securities,
including expenses related to conducting a “road show.” In addition, Dynegy
shall be responsible for all of its expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including
expenses payable to third parties and including all salaries and expenses of
their officers and employees performing legal or accounting duties), the expense
of any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on the Trading Market.

 

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5.                                      Indemnification.

 

(a)                                 Dynegy shall indemnify and hold harmless
each Holder, its Affiliates and each of their respective officers and directors
and any Person who controls any such Holder (within the meaning of the
Securities Act) and any agent thereof (collectively, “Holder Indemnified
Persons”), to the fullest extent permitted by applicable Law, from and against
any and all losses, claims, damages, liabilities, joint or several, costs
(including reasonable costs of preparation and reasonable attorneys’ fees) and
expenses, judgments, fines, penalties, interest, settlements or other amounts
arising from any and all claims, demands, actions, suits or proceedings, whether
civil, criminal, administrative or investigative, in which any Holder
Indemnified Person may be involved, or is threatened to be involved, as a party
or otherwise, under the Securities Act or otherwise (collectively, “Losses”), as
incurred, arising out of or relating to any untrue or alleged untrue statement
of a material fact contained in any Registration Statement under which any
Registrable Securities were registered, in any preliminary prospectus (if Dynegy
authorized the use of such preliminary prospectus prior to the Effective Date),
or in any summary or final prospectus or free writing prospectus (if such free
writing prospectus was authorized for use by Dynegy) or in any amendment or
supplement thereto (if used during the period Dynegy is required to keep the
Registration Statement current), or arising out of, based upon or resulting from
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein (in the case of
any preliminary prospectus, final prospectus or free writing prospectus, in the
light of the circumstances in which they were made) not misleading; provided,
however, that Dynegy shall not be liable to any Holder Indemnified Person to the
extent that any such claim arises out of, is based upon or results from (i) an
untrue or alleged untrue statement or omission or alleged omission made in such
Registration Statement, such preliminary, summary or final prospectus or free
writing prospectus or such amendment or supplement, in reliance upon and in
conformity with written information furnished to Dynegy by or on behalf of such
Holder Indemnified Person or any underwriter specifically for use in the
preparation thereof or (ii) any Disposition of Registrable Securities during a
Blackout Period or a Suspension Period. Dynegy shall notify the Holders promptly
of the institution, threat or assertion of any Proceeding of which Dynegy is
aware in connection with the transactions contemplated by this Agreement.

 

(b)                                 In connection with any Registration
Statement in which a Holder participates, such Holder shall indemnify and hold
harmless Dynegy, its Affiliates and each of their respective officers, directors
and any Person who controls Dynegy (within the meaning of the Securities Act)
and any agent thereof (collectively, the “Dynegy Indemnified Persons”), to the
fullest extent permitted by applicable Law, from and against any and all Losses
as incurred, arising out of or relating to any untrue or alleged untrue
statement of a material fact contained in any such Registration Statement, in
any preliminary prospectus (if used prior to the Effective Date of such
Registration Statement), or in any summary or final prospectus or free writing
prospectus or in any amendment or supplement thereto (if used during the period
Dynegy is required to keep the Registration Statement current), or arising out
of, based upon or resulting from the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements made therein, (in the case of any preliminary prospectus, final
prospectus or free writing prospectus, in the light of the circumstances in
which they were made) not misleading, but only to the extent that the same are
made in reliance and in conformity with information relating to the Holder
furnished in writing to Dynegy by such Holder for use therein.

 

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(c)                                  Any Person entitled to indemnification
hereunder shall (i) give prompt written notice to the indemnifying party of any
claim with respect to which it seeks indemnification and (ii) unless in such
indemnified party’s reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim or
there may be reasonable defenses available to the indemnified party that are
different from or additional to those available to the indemnifying party,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel (in addition to any local counsel) for all
parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party there may be one or
more legal or equitable defenses available to such indemnified party that are in
addition to or may conflict with those available to another indemnified party
with respect to such claim. Failure to give prompt written notice shall not
release the indemnifying party from its obligations hereunder.

 

(d)

 

(i)                                     If a claim for indemnification under
Section 5(a) or 5(b) is unavailable to an indemnified party (by reason of public
policy or otherwise), then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations. 
The relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission.  The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(d)(ii), any reasonable attorneys’ or
other reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section 5 was available to
such party in accordance with its terms.

 

(ii)                                  The Parties agree that it would not be
just and equitable if contribution pursuant to this Section 5(d) were determined
by pro rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to in Section 5(d)(i). 
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or

 

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alleged untrue statement or omission or alleged omission.  No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

 

(e)                                  Notwithstanding anything to the contrary
herein, this Section 5 shall survive any termination or expiration of this
Agreement indefinitely.

 

6.                                      Facilitation of Sales Under Rule 144. 
Dynegy covenants that it will file the reports required to be filed by it under
the Exchange Act and the Securities Act (or, if Dynegy is not required to file
such reports, it will, upon the reasonable request a Holder, make publicly
available such necessary information for so long as necessary to permit sales
pursuant to Rules 144 under the Securities Act), and it will take such further
action as any Holder may reasonably request, all to the extent required from
time to time to enable the Holders to sell Registrable Securities without
Registration under the Securities Act within the limitation of the exemptions
provided by (i) Rules 144 under the Securities Act or (ii) any similar rule or
regulation hereafter adopted by the Commission  Upon the reasonable request of a
Holder, Dynegy will deliver to such Holder a written statement as to whether it
has complied with such requirements and, if not, the specifics thereof.

 

7.                                      Standstill; Lock-Up.

 

(a)                                 For a period beginning on the date hereof
and ending on the six (6) month anniversary of the first date that Purchaser and
any Controlled Affiliates cease to Beneficially Own in the aggregate at least
10% of the then-outstanding Common Stock, without the prior written consent of
Dynegy, Purchaser agrees that it shall not, and shall cause its Affiliates and
its and their Representatives not to, in each case, individually, collectively
or in concert with any other Persons, directly or indirectly:

 

(i)                                     acquire or agree to acquire from any
Person, directly or indirectly, by purchase or merger, through the acquisition
of control of another Person, by joining a partnership, limited partnership or
other “group” (within the meaning of Section 13(d)(3) of the Exchange Act) or
otherwise, Beneficial Ownership of any Equity Securities or debt or hybrid
securities of Dynegy, or direct or indirect rights (including convertible
securities), options or warrants to acquire such Beneficial Ownership
(collectively, the “Securities”); provided, however, that no such acquisition or
agreement to acquire shall be deemed to occur solely due to (A) a stock split,
reverse stock split, reclassification, reorganization or other transaction by
Dynegy affecting any class of the outstanding Equity Securities generally, (B) a
dividend of Securities or other pro rata distribution by Dynegy to holders of
its outstanding Equity Securities or (C) a purchase by Purchaser or any
Controlled Affiliate of Securities of Dynegy pursuant to Section 7(d) or
Section 8;

 

(ii)                                  except as provided in Section 9 and
Section 11, make, or in any way participate in, directly or indirectly, any
“solicitation” of “proxies” to vote (as such terms are used in the Regulation
14A promulgated under the Exchange Act), become a “participant” in, or
encourage, support or aid any other Person to become a “participant,” in any
“election contest” (as such terms are defined in Rule 14a-11 promulgated under

 

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the Exchange Act) or seek to advise or influence any Stockholders with respect
to the voting of any voting Securities of Dynegy, in each case with respect to
Dynegy;

 

(iii)                               form, join or in any way participate in the
formation of, a “group” (within the meaning of Section 13(d)(3) of the Exchange
Act) with respect to any voting securities of Dynegy other than a “group” that
consists solely of the Controlled Affiliates;

 

(iv)                              deposit any Securities into a voting trust, or
subject any Securities to any voting or pooling agreement or arrangement with
respect to the voting of such Securities, or other agreement or arrangement
having similar effect;

 

(v)                                 participate in any tender offer, exchange
offer, merger, acquisition, share exchange or other similar business combination
or any Change of Control Transaction involving Dynegy or any of its
Subsidiaries, or any recapitalization, restructuring, liquidation, Disposition
or dissolution of, or other extraordinary transaction involving, Dynegy, any of
its Subsidiaries or any material portion of their businesses (but excluding, in
each case, any Disposition of any Securities of Dynegy held by Purchaser or any
of its Affiliates otherwise permitted by the terms of this Agreement);

 

(vi)                              make any public disclosure, or take any action
which would reasonably be expected to require Dynegy to make any public
disclosure, with respect to the intention of Purchaser or its Affiliates to take
any action that would be prohibited by this Section 7(a);

 

(vii)                           publicly disclose any intention, plan or
arrangement inconsistent any provision of this Section 7(a);

 

(viii)                        propose, or agree to, or enter into any
discussions, negotiations or arrangements with, or provide any Confidential
Information to, or act in concert with, any other Person (other than
Representatives of Purchaser in compliance with Section 13) for the purpose of
taking any action that would be prohibited by this Section 7(a); or

 

(ix)                              request that Dynegy (or any directors,
officers, employees or agents of Dynegy), directly or indirectly, amend, waive
or modify any provision of this Section 7(a), unless such request is made
confidentially to the Board.

 

Notwithstanding the foregoing, nothing in this Section 7(a) shall (i) prohibit
or restrict in any respect any Designated Director from participating as a
member of the Board and committees thereof in his or her capacity as such to the
extent permitted by Law and exercising his or her fiduciary duties in connection
therewith, (ii) restrict the rights of Purchaser or its Affiliates or its or
their respective Representatives under any of the other Delta Documents,
(iii) prohibit the taking of any action that is otherwise expressly permitted
pursuant to the terms of this Agreement (including Sections 7(d), 8, 9 and 11 of
this Agreement) or (iv) prohibit the taking of any action that is approved by
the Board.  Furthermore, and without limiting Section 11, the provisions of this
Section 7(a) shall automatically terminate and be inoperative and of no force or
effect if any Person or its Affiliates (w) enters into a definitive and binding
agreement with Dynegy providing for a Change of Control Transaction,
(x) commences a tender offer or

 

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exchange offer with respect to Equity Securities representing 40% or more of the
voting power of the Company and Dynegy does not recommend within ten
(10) Business Days of the commencement of such tender offer or exchange offer
that the Stockholders not tender their Equity Securities pursuant to such tender
offer or exchange offer, or (y) enters into an agreement or commences a proxy
solicitation in which such Person or its Affiliates would acquire the ability to
elect a majority of the Board and Dynegy does not recommend against such
agreement or proxy solicitation within ten (10) Business Days of the entry into
such agreement or the commencement of such proxy solicitation.

 

(b)                                 Notwithstanding anything to the contrary in
this Agreement, except for any Disposition of Shares to an Controlled Affiliate
pursuant to Section 7(d), for a period of six (6) months after the date hereof
(the “Lock-Up Period”) without the prior written consent of Dynegy, Purchaser
agrees not to offer, sell, contract to sell, pledge or otherwise Dispose of, or
enter into any transaction which is designed to, or might reasonably be expected
to, result in the Disposition of Shares (whether by actual Disposition or
effective economic Disposition due to cash settlement or otherwise) by Purchaser
or any of its Affiliates, directly or indirectly, including by establishing or
increasing a put equivalent position or liquidating or decreasing a call
equivalent position within the meaning of Section 16 of the Exchange Act with
respect to, any Shares or any securities that are convertible into, or
exercisable or exchangeable for, or that represent the right to receive, the
Shares, or publicly announce an intention to effect any such transaction;
provided that nothing in this Section 7(b) shall restrict or otherwise modify
the obligations of Dynegy set forth in Section 2(a)(i).

 

(c)                                  Until the first date that Purchaser and any
Controlled Affiliates cease to Beneficially Own in the aggregate at least 5% of
the then-outstanding Common Stock, Purchaser shall not, and shall cause its
Affiliates not to, enter into any Hedging Arrangements.

 

(d)                                 Purchaser may Dispose of Shares to one or
more Controlled Affiliates (and such Controlled Affiliates may then Dispose of
Shares to one or more Controlled Affiliates), provided that such transferee
Controlled Affiliate agrees in writing to be bound by the terms and conditions,
including the restrictions with respect to Purchaser set forth in this
Agreement.

 

(e)                                  Notwithstanding anything to the contrary in
this Agreement, until the first date that Purchaser and any Controlled
Affiliates cease to Beneficially Own in the aggregate at least 10% of the
then-outstanding Common Stock, Purchaser shall not Dispose of any Shares (other
than to an Controlled Affiliate pursuant to Section 7(d)) except: (i) pursuant
to a registered offering under the Securities Act; (ii) pursuant to Rule 144 (in
accordance with the volume and procedural limitations set forth in Rule 144 to
the extent  legally applicable to Purchaser at the time of the sale); or
(iii) to any Person or group that, after giving effect to such Disposition, will
not be reasonably expected (after reasonable investigation by Purchaser) to
Beneficially Own 9.9% or more of the then-outstanding Common Stock.

 

(f)                                   For so long as any Holder and its
Affiliates Beneficially Own in the aggregate at least 5% of the then-outstanding
Common Stock, in connection with any underwritten offering of Common Stock, such
Holder and its Affiliates will agree, upon the request of Dynegy, to enter into
a customary lock-up agreement with the managing underwriters

 

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of such offering, provided however, that the lock-up period under such agreement
shall not exceed ninety (90) days and shall be no more restrictive than any
lock-up arrangement entered into by the officers and directors of Dynegy or any
other Stockholder that holds at least 5% of the then-outstanding Common Stock.

 

(g)                                  Until the first date that Purchaser and any
Controlled Affiliates cease to Beneficially Own in the aggregate 10% or more of
the then-outstanding Common Stock, Purchaser shall not Dispose of any Shares to
any Person pursuant to Section 7(d) or Section 7(e)(iii) and shall cause its
Affiliates not to Dispose of Beneficial Ownership in any Shares (i) if such
Disposition is reasonably likely to require the approval of Federal Energy
Regulatory Commission (the “FERC”) under Section 203 of the Federal Power Act
(the “FPA”), or the approval of or notification to any state utility agency
under the applicable Laws of such state, and the FERC or the relevant state
utility agency shall have not issued an order approving such proposed
Disposition or accepting any such required notification (or otherwise indicating
in writing that no further action will be taken with respect to any required
notification), as applicable, (ii) if such Disposition is reasonably likely to
result in the loss of market-based rate authority, or a requirement by the FERC
to implement mitigation measures in order to retain such authority, by Dynegy,
any of its Subsidiaries, or any “affiliate” of Dynegy as defined in 18 C.F.R. §
35.36 or otherwise for market-based rate purposes under Section 205 of the FPA,
or (iii) if, immediately following such Disposition, Dynegy or any member of its
“holding company system” as defined in 18 C.F.R. § 366.1 that is, immediately
prior to such Disposition, exempt from regulation pursuant to 18 C.F.R. §
366.3(a), would reasonably be likely to cease to be exempt from regulation
pursuant to 18 C.F.R. § 366.3(a) immediately following such Disposition.

 

8.                                      Right of First Refusal.

 

(a)                                 Until the earlier of (i) first date that
Purchaser and any Controlled Affiliates cease to Beneficially Own in the
aggregate at least 7.5% of the then-outstanding Common Stock, and (ii) three
(3) years after the date of this Agreement, Dynegy shall not issue any Equity
Securities that would rank senior to the Common Stock with respect to dividends
and distributions upon liquidation other than pursuant to an Excluded Issuance
(such issuance, a “Proposed Covered Issuance”) unless Dynegy has first complied
with the terms of this Section 8.  Prior to any Proposed Covered Issuance,
Dynegy shall provide written notice to Purchaser (the “ROFR Notice”) describing
in reasonable detail the Proposed Covered Issuance, including the number and
type of Equity Securities to be issued in the Proposed Covered Issuance (the
“Proposed Securities”), the consideration to be paid for the Proposed
Securities, whether the Proposed Covered Issuance will be registered under the
Securities Act and, if not registered under the Securities Act, the parties, if
known, to the Proposed Covered Issuance and any other material conditions or
contingencies relating to the Proposed Covered Issuance. Purchaser shall have
fifteen (15) days after the delivery of the ROFR Notice (the “ROFR Consideration
Period”) to deliver written notice (such notice as such may be amended pursuant
to Section 8(b), a “ROFR Election Notice”) to Dynegy stating that Purchaser
intends to purchase up to its pro rata portion of the Proposed Securities based
on the percentage of Dynegy’s then outstanding Common Stock Beneficially Owned
by Purchaser or any Controlled Affiliate on the terms, conditions and
contingencies set forth in the ROFR Notice, and Purchaser shall not have the
right to purchase any such Proposed Securities in excess of such pro rata
portion.

 

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(b)                                 Notwithstanding anything to the contrary
contained in Section 8(a), in the event that Purchaser delivers a ROFR Election
Notice electing to purchase an amount of Proposed Securities that would require
the approval of the Stockholders pursuant to Section 312.03 of the NYSE Listed
Company Manual (“ROFR Shareholder Approval”), Dynegy shall, within three
(3) Business Days of receiving such ROFR Election Notice, provide written notice
to Purchaser (the “ROFR Shareholder Approval Notice”) setting forth the amount
of Proposed Securities that cannot be issued without such ROFR Shareholder
Approval (the “Excess Proposed Securities”).  In such case, Purchaser shall have
the right, within five (5) Business Days of receiving such ROFR Shareholder
Approval Notice, to deliver a written notice to Dynegy withdrawing its ROFR
Election Notice or amending its ROFR Election Notice to alter the amount of
Proposed Securities it is electing to purchase. To the extent that Purchaser
does not withdraw its ROFR Election Notice, or otherwise amend its ROFR Election
Notice to remove any Excess Proposed Securities, then Dynegy shall be required
to issue to Purchaser in place of each Excess Proposed Security included in the
ROFR Election Notice an Equity Security that is identical in all respects to
such Excess Proposed Security except that such Equity Security shall be a
non-voting Equity Security that will automatically convert into a voting Equity
Security upon receipt of the requisite ROFR Shareholder Approval (such that upon
receipt of ROFR Shareholder Approval, such Equity Security will automatically
convert and be identical in all respects to the Proposed Securities).

 

(c)                                  If Purchaser delivers the ROFR Election
Notice prior to the expiration of the ROFR Consideration Period, the Parties
shall use reasonable best efforts for a period of forty-five (45) days (the
“ROFR Negotiation Period”) after delivery of the ROFR Election Notice to
negotiate in good faith a definitive agreement or agreements providing for the
sale and issuance of the Proposed Securities Purchaser has determined to
purchase in the ROFR Election Notice  at the price and on the other terms,
conditions and contingencies set forth in the ROFR Notice and as set forth in
Section 8(b) as promptly as practicable.  In the event that ROFR Shareholder
Approval is required in connection with any such Proposed Covered Issuance,
Dynegy will use reasonable best efforts to secure such ROFR Shareholder Approval
as promptly as reasonably practicable; provided, however, that Dynegy shall not
be required to submit any proposal to obtain the ROFR Shareholder Approval to
the Stockholders until the next annual meeting of Stockholders occurring after
the delivery of the ROFR Election Notice; provided, further, that if Purchaser
delivers such ROFR Election Notice within seventy-five (75) days prior to the
one year anniversary of the date of Dynegy’s prior annual meeting of
Stockholders, Dynegy shall not be required to submit a proposal to obtain the
ROFR Shareholder Approval until the annual meeting of Stockholders occurring in
the calendar year after the calendar year in which Purchaser delivered such ROFR
Election Notice.

 

(d)                                 If (i) Purchaser does not deliver the ROFR
Election Notice prior to the expiration of the ROFR Consideration Period, or
withdraws its ROFR Election Notice pursuant to Section 8(b), or (ii) Purchaser
delivers the ROFR Election Notice prior to the expiration of the ROFR
Consideration Period but the Parties do not execute a definitive agreement
providing for the Proposed Covered Issuance prior to the expiration of the ROFR
Negotiation Period, then for a period of one-hundred and twenty (120) days after
the expiration of the ROFR Consideration Period, the date on which the ROFR
Election Notice is withdrawn or the expiration of the ROFR Negotiation Period,
as applicable, Dynegy may consummate the Proposed Covered Issuance with Persons
other than Purchaser on terms, conditions and contingencies that no more

 

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favorable, in the aggregate, to such other Persons than the terms, conditions
and contingencies set forth in the ROFR Notice.  If Dynegy does not consummate
such Proposed Covered Issuance within such one-hundred and twenty (120) day
period, then Dynegy shall not thereafter consummate such Proposed Covered
Issuance without first offering the Proposed Securities to Purchaser in the
manner described in this Section 8.

 

(e)                                  Notwithstanding anything to the contrary
set forth in this Section 8, Purchaser shall be permitted to assign any of its
rights under this Section 8 (including its right to acquire any of the Proposed
Securities) to one or more Controlled Affiliates that agree in writing to be
bound by the terms and conditions of this Agreement.

 

(f)                                   For purposes of this Section 8, “Excluded
Issuance”  means any of the following:

 

(i)                                     the issuance of Equity Securities
pursuant to any employee benefits or other compensation plan approved by the
Board and the Stockholders;

 

(ii)                                  the issuance of Equity Securities other
than for cash consideration pursuant to a merger, consolidation, acquisition,
Disposition or similar business combination approved by the Board;

 

(iii)                               the issuance of Equity Securities upon any
stock dividend, stock split or other pro rata distribution, subdivision or
combination of securities or other recapitalization of Dynegy;

 

(iv)                              the issuance of Equity Securities upon
conversion of the Dynegy Preferred Stock outstanding as of the date hereof in
accordance with its terms;

 

(v)                                 the issuance of Equity Securities upon the
exercise of the Dynegy Warrants outstanding as of the date hereof in accordance
with their terms; or

 

(vi)                              the issuance of Equity Securities issued
pursuant to the terms of a “poison pill” or other stockholder rights plan
approved by the Board.

 

9.                                      Director Designation Rights.

 

(a)                                 Board Representation.

 

(i)                                     On the date hereof, the Board shall
adopt resolutions that (A) increase the number of natural persons that
constitute the whole Board by one (1) person and (B) fill the vacancy created by
virtue of such increase in the size of the Board with Tyler Reeder (the “Initial
Appointment”).  For the avoidance of doubt, (1) Dynegy acknowledges and agrees
that Tyler Reeder meets all of the qualifications set forth in
Section 9(a)(ii) and has provided all of the requisite information necessary to
be admitted to the Board on the date hereof and (2) Tyler Reeder shall be
considered a Designated Director.

 

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(ii)                                  Until a Termination Event, Purchaser shall
have the right to nominate an individual for election to the Board, in each case
pursuant to the Dynegy Organizational Documents, who must in the reasonable,
good faith judgment of the Corporate Governance and Nominating Committee of the
Board, (1) have the requisite skill and experience to serve as a director of a
publicly traded company, (2) not be prohibited or disqualified from serving as a
director of Dynegy pursuant to the Dynegy Bylaws (as in effect as of the date
hereof) or any rule or regulation of the Commission, the NYSE (or any other
principal stock exchange or market upon which the Common Stock may be listed) or
by applicable Law and (3) otherwise be reasonably acceptable to the Corporate
Governance and Nominating Committee of the Board (the “Designated Director”).
Purchaser shall, and shall cause the Designated Director to, timely provide
Dynegy with accurate and complete information relating to Purchaser and the
Designated Director that may be required to be disclosed by Dynegy under the
Exchange Act. In addition, at Dynegy’s request, Purchaser shall cause the
Designated Director to complete and execute Dynegy’s standard director and
officer questionnaire and provide such other information as Dynegy may
reasonably request prior to being admitted to the Board or standing for
reelection at an annual meeting of Stockholders or at such other time as may be
requested by Dynegy; provided that, in each case, all such information is
generally required to be delivered to Dynegy by the other outside directors of
Dynegy.

 

(iii)                               The Designated Director will hold office
until his or her term expires and such Designated Director’s successor has been
duly elected and qualified or until such Designated Director’s earlier death,
resignation or removal.

 

(iv)                              Following the Initial Appointment, in order to
designate an individual as the Designated Director, Purchaser must deliver to
Dynegy a written notice in accordance with the notice provisions set forth in
Section 14(d), which notice shall include (A) the name, age, business address
and residence address of such designee, (B) a current resume and curriculum
vitae of such designee and (C) a statement describing such designee’s
qualifications.

 

(v)                                 Prior to a Termination Event:

 

(A)                               in connection with each annual meeting of
Stockholders, and subject to the conditions of Section 9(a)(ii) of this
Agreement, Dynegy shall nominate the Designated Director for election or
reelection, as applicable, to the Board and shall use its reasonable best
efforts, and take all reasonable and lawful actions necessary or advisable, to
cause the Board to recommend that the Stockholders vote “FOR” the election of
the Designated Director;

 

(B)                               upon written notice from Dynegy to Purchaser
that a Resignation Event has occurred, which notice shall set forth in
reasonable detail the facts and circumstances constituting the Resignation
Event, Purchaser will cause the Designated Director then serving as a member of
the Board

 

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to resign as a member of the Board within five (5) Business Days of such written
notice; and

 

(C)                               any vacancy caused by the death, disability,
removal or resignation of the Designated Director shall be filled by the Board
with an individual designated by Purchaser who, subject to the conditions of
Section 9(a)(ii) of this Agreement, shall become the Designated Director.

 

(vi)                              Any action by Purchaser to designate or
replace the Designated Director shall be evidenced in writing delivered to
Dynegy and shall be signed by or on behalf of Purchaser.

 

(vii)                           Prior to designating a Designated Director,
Purchaser shall, to the extent requested in writing by Dynegy, enter into a
written agreement in a form reasonably satisfactory to Dynegy with the
Designated Director whereby such Designated Director agrees to resign as a
member of the Board upon a Resignation Event, a Termination Event or at
Purchaser’s request, as applicable. Purchaser acknowledges and agrees that such
an agreement is in the best interest of Dynegy and Purchaser, and that Dynegy
shall be a third-party beneficiary of the terms and conditions of such an
agreement, and Dynegy shall have the right to enforce such an agreement to the
same extent as the parties thereto.

 

(viii)                        Dynegy shall notify the Designated Director of all
regular and special meetings of the Board and of all regular and special
meetings of any committee of the Board of which the Designated Director is a
member.  Dynegy shall provide the Designated Director with copies of all
notices, minutes, consents and other materials provided to all other members of
the Board concurrently as such materials are provided to the other members.

 

(b)                                 Termination of Director Designation Rights.
Upon the occurrence of a Termination Event, Purchaser’s right to designate, and
Dynegy’s obligation to nominate, the Designated Director shall automatically
terminate, and Purchaser shall cause the Designated Director then serving as a
member of the Board, promptly upon (and in any event within five (5) Business
Days following) receipt of a written request from Dynegy, to resign as a member
of the Board. In the event Dynegy does not request that the Designated Director
be caused to resign upon occurrence of a Termination Event, such Designated
Director will no longer be considered a designee of Purchaser and will be
subject to election and reelection in accordance with the Dynegy Bylaws.
Purchaser shall have the right at any time to cause the Designated Director to
resign as a member of the Board and to waive its rights to designate a nominee
for election to the Board.

 

(c)                                  Director Indemnification. At all times
while the Designated Director is serving as a member of the Board, and following
any such Designated Director’s death, resignation, removal or other cessation as
a director in such former Designated Director’s capacity as a former director,
each Designated Director shall be entitled to all rights to indemnification and
exculpation as are then made available to any other member (or former

 

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member) of the Board.  In addition, for so long as Dynegy maintains directors
and officers liability insurance, Dynegy shall include the Designated Director
as an “insured” for all purposes under such insurance policy for so long as such
Designated Director is a director of Dynegy and for the same period as other
former directors of Dynegy when such Designated Director ceases to be a director
of Dynegy. Each Designated Director is an express third party beneficiary of the
terms of this Section 9(c).

 

(d)                                 Director Compensation. In the event that the
Designated Director is an employee of ECP or any Affiliate of ECP that is a Fund
Manager, Fund Advisor or Fund (but excluding, for the avoidance of doubt, any
portfolio company of any Fund) (an “ECP Employee”), such Designated Director
shall not be entitled to compensation and benefits but shall be entitled to
receive at least the same reimbursement for fees and expenses as other outside
directors and, in any event, shall be entitled to reimbursement for documented,
reasonable out-of-pocket fees and expenses incurred in connection with such
Designated Director’s service on the Board or any committee thereof (including
in respect of travel, lodging, etc.).  In the event that the Designated Director
is not an ECP Employee, then such Designated Director shall, at such Designated
Director’s election, be entitled to receive at least the same compensation and
benefits as other outside directors of Dynegy.  Each Designated Director is an
express third party beneficiary of the terms of this Section 9(d).

 

10.                               Corporate Opportunities.  Dynegy, on behalf of
itself and its Subsidiaries, (a) acknowledges and affirms that Purchaser, ECP
and its and their respective Affiliates, employees, directors, partners and
members, including any Designated Directors (the “ECP Group”) (i) have
participated (directly or indirectly) and will continue to participate (directly
or indirectly) in private equity, venture capital and other direct investments
in corporations, joint ventures, limited liability companies and other entities
(“Other Investments”), including Other Investments engaged in various aspects of
the power generating business (and related services businesses) that may, are or
will be competitive with Dynegy’s business or that could be suitable for
Dynegy’s interest, (ii) have interests in, participate with, aid and maintain
seats on the board of directors or similar governing bodies of, Other
Investments, (iii) may develop or become aware of business opportunities for
Other Investments; and (iv) may or will, as a result of or arising from the
matters referenced in this Section 10, the nature of the Affiliated Parties’
businesses and other factors, have conflicts of interest or potential conflicts
of interest, (b) hereby renounces and disclaims any interest or expectancy in
any business opportunity (including any Other Investments or any other
opportunities that may arise in connection with the circumstances described in
the foregoing clauses (i) — (iv) (collectively, the “Renounced Business
Opportunities”) and (c) acknowledges and affirms that no member of the ECP
Group, including any Designated Director, shall have any obligation to
communicate or offer any Renounced Business Opportunity to Dynegy, and any
member of the ECP Group may pursue a Renounced Business Opportunity. 
Notwithstanding the foregoing, Dynegy does not renounce its interest in any
corporate opportunity if such corporate opportunity was offered to a Designated
Director solely in his or her capacity as a director of Dynegy, provided that
such opportunity (i) has not been separately presented to ECP or its Affiliates
or is not otherwise being independently pursued by ECP or its Affiliates (in
each case whether before or after such opportunity is presented to such
Designated Director) or (ii) is not disclosed to the public, in each case of
clauses (i) and (ii), other than as a result of a breach of such Designated
Director’s confidentiality obligations to Dynegy or a breach of Purchaser’s or
its Representatives’

 

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obligations under  Section 13.  Notwithstanding anything to the contrary in this
Section 10, Dynegy shall not be prohibited from pursuing any Renounced Business
Opportunity as a result of this Section 10.

 

11.                               Voting Arrangements.  Until the first date
that Purchaser and any Controlled Affiliates cease to Beneficially Own at least
10% of the then-outstanding Common Stock, at any annual or special meeting (or
adjournment thereof) of the Stockholders, Purchaser shall vote, or cause to be
voted, the Shares (and any other shares of Common Stock that Purchaser or its
Affiliates Beneficially Own after the date hereof) as recommended by the Board. 
This Section 11 shall terminate upon the consummation of a Change of Control
Transaction.

 

12.                               Section 16 Filings. Purchaser shall be solely
responsible for making, or causing to be made, any filings with the Commission
required to made by the Designated Director, Purchaser or any of their
respective Affiliates under Section 16 of the Exchange Act (including any filing
on Form 3, Form 4 or Form 5) as a result of the Beneficial Ownership of any
shares of Common Stock, or any securities that are convertible into, or
exercisable or exchangeable for, or that represent the right to receive, shares
of Common Stock, by Purchaser and any Controlled Affiliates; provided that
Dynegy shall cooperate with Purchaser in connection therewith, including by
providing such information as may be reasonably requested by Purchaser in
connection with such filings.

 

13.                               Information Rights; Confidentiality.

 

(a)                                 Until the first date that Purchaser and any
Controlled Affiliate cease to Beneficially Own at least 5% of the
then-outstanding Common Stock, Dynegy shall provide Purchaser with such
information as Purchaser may reasonably request to the extent necessary to
evaluate its investment in the Shares; provided that Dynegy may deny access to
any information and reports or portions thereof (i) if Dynegy reasonably
determines that access to any such information or report could (A) result in a
waiver of the attorney—client privilege (based on the advice of counsel),
(B) cause Dynegy to violate obligations with respect to confidential or
proprietary information of third parties (provided that Dynegy shall use
reasonable efforts to make appropriate substitute arrangements under
circumstances where the restrictions in clause (A) or (B) above apply) or
(C) cause Dynegy to violate any applicable Laws (including antitrust Laws) or
(ii)  in respect of a matter in which Purchaser has a material interest (other
than any such interest arising solely as a result of Purchaser’s status as a
Stockholder).

 

(b)                                 Purchaser agrees that Confidential
Information has been and may be furnished to it. Purchaser agrees that it shall
use, and shall instruct any Person to whom Confidential Information is disclosed
pursuant to clause (i) below, to use such Confidential Information only in
connection with Purchaser’s investment in the Shares or the other transactions
contemplated by the Delta Documents and not for any other purpose. Purchaser
further acknowledges and agrees that it shall not disclose any Confidential
Information to any Person, except that Purchaser may disclose Confidential
Information (i) to Purchaser’s Affiliates and its and their respective
directors, officers, employees, members, agents, counsel, investment advisers or
other representatives (collectively, “Representatives”), in each case, solely
with respect to Purchaser’s investment in Dynegy and the transactions
contemplated by the Delta Documents, including to the extent related to the tax
treatment and tax structure of the

 

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transactions contemplated by this Agreement, the Purchase Agreement or any other
Delta Document; provided that Purchaser advises any such Affiliates or
Representatives of the confidential nature of the Confidential Information and
causes its Affiliates, and uses its reasonable best efforts to cause its
Representatives, to not disclose the Confidential Information to any Person
except as permitted by this Section 13(b) or (ii) to the extent required by
applicable Law (including complying with any oral or written questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process to which Purchaser is subject); provided
that, prior to any such disclosure, Purchaser shall, to the extent legally
permissible, give Dynegy reasonably prompt notice of such request(s) so that
Dynegy may seek an appropriate protective order or similar relief (and Purchaser
shall reasonably cooperate with such efforts by Dynegy, at Dynegy’s sole cost
and expense, and shall in any event make only the minimum disclosure required by
such Law)); provided, further, that Purchaser, ECP and its and their respective
Affiliates and Representatives shall be permitted to disclose such information
regarding the direct or indirect investment in Dynegy by such Purchaser or
Affiliates, the financial performance and operations of Dynegy and its
Subsidiaries, and such other information relevant to such investment in Dynegy
to the limited partners, investors or other direct or indirect equity owners of,
or prospective investors of, Funds Affiliated with ECP or their Affiliates who
are under customary duties or obligations of confidentiality.  Purchaser shall
be liable for any disclosure of Confidential Information by its Affiliates or
Representatives in violation of this Section 13(b).

 

(c)                                  Purchaser is aware, and shall advise its
Representatives who are provided any Confidential Information, of the
restrictions imposed by the United States securities laws on the purchase or
sale of securities by any person who has received material, non-public
information from the issuer of such securities and on the communication of such
information to any other person when it is reasonably foreseeable that such
other person is likely to purchase or sell such securities. Purchaser hereby
confirms that it and its Affiliates shall, and shall instruct its
Representatives to, take any action necessary to prevent the use of any
information about Dynegy in a way which violates any securities or antitrust or
other applicable Law.

 

14.                               Miscellaneous.

 

(a)                                 Remedies. The Parties acknowledge and 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 monetary damages, even if available, would not
be an adequate remedy therefor.  It is accordingly agreed the Parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the performance of terms and provisions of this
Agreement, without proof of actual damages (and each Party hereby waives any
requirement for the securing or posting of any bond in connection with such
remedy), this being in addition to any other remedy to which they are entitled
at law or in equity.  The Parties further agree not to assert that a remedy of
specific enforcement is unenforceable, invalid, contrary to Law or inequitable
for any reason, nor to assert that a remedy of monetary damages would provide an
adequate remedy for any such breach.

 

(b)                                 Discontinued Disposition. Each Holder agrees
that, upon receipt of a notice from Dynegy of the occurrence of any event of the
kind described in clauses (ii) through

 

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(v) of Section 3(e) (a “Suspension Notice”), such Holder will forthwith
discontinue Disposition of such Registrable Securities under any Registration
Statement until such Holder’s receipt of the copies of the supplemental
Prospectus or amended Registration Statement as contemplated by Section 3(j) or
until it is advised in writing by Dynegy that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement (a
“Suspension Period”). Dynegy may provide appropriate stop orders to enforce the
provisions of this Section 14(b).

 

(c)                                  Amendments and Waivers. No provision of
this Agreement may be waived or amended except in a written instrument signed by
Dynegy and Purchaser. Dynegy shall provide prior notice to all Holders of any
proposed waiver or amendment. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of any Party to exercise any right hereunder in any manner
impair the exercise of any such right.

 

(d)                                 Notices. Any and all notices or other
communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest of
(i) the date of transmission, if such notice or communication is delivered via
facsimile or electronic mail as specified in this Section 14(d) prior to 5:00
p.m. (Houston, Texas time) on a Business Day, (ii) the Business Day after the
date of transmission, if such notice or communication is delivered via facsimile
or electronic mail as specified in this Agreement later than 5:00 p.m. (Houston,
Texas time) on any date and earlier than 11:59 p.m. (Houston, Texas time) on
such date, (iii) the Business Day following the date of mailing, if sent by
nationally recognized overnight courier service or (iv) upon actual receipt by
the Party to whom such notice is required to be given. The address for such
notices and communications shall be as follows:

 

If to Dynegy:

 

Dynegy Inc.
601 Travis Street
Houston, TX 77002
Facsimile: (713) 507-6808
E-mail: catherine.james@dynegy.com
Attention: Catherine James, Esq., Executive Vice President and General Counsel

 

With a copy (which shall not constitute notice) to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Avenue, N.W.
Washington, DC 20005
Facsimile: (202) 661-8200
E-mail: michael.rogan@skadden.com
Attention: Michael P. Rogan, Esq.

 

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If to Purchaser:

 

Energy Capital Partners, LLC
51 John F. Kennedy Parkway, Suite 200
Short Hills, NJ 07078
Facsimile: (973) 671-6101
Email:  asinger@ecpartners.com
Attention: Andrew Singer, Partner & General Counsel

 

With a copy (which shall not constitute notice) to:

 

Latham & Watkins LLP
885 Third Avenue

New York, New York 10022
Facsimile: (212) 751-4864
E-mail: david.kurzweil@lw.com; paul.kukish@lw.com
Attention: David Kurzweil; Paul Kukish

 

If to any other Person who is then the registered Holder:

 

To the address of such Holder as it appears in the applicable register for the
Registrable Securities or such other address as may be designated in writing
hereafter, in the same manner, by such Person.

 

(e)                                  Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the Parties hereto and their
heirs, executors, administrators, successors, legal representatives and
permitted assigns. This Agreement, and any rights or obligations hereunder, may
not be assigned without the prior written consent of Dynegy and Purchaser;
provided, however, that the rights and obligations of Purchaser hereunder may be
transferred or assigned by Purchaser to a Controlled Affiliate pursuant to
Section 7(d), provided, further that (i) Dynegy is, within a reasonable time
after such transfer, furnished with written notice of the name and address of
such Controlled Affiliate and (ii) such Controlled Affiliate agrees in writing
to be bound by and subject to the terms set forth in this Agreement.

 

(f)                                   Third-Party Beneficiaries. There are no
third-party beneficiaries having rights under or with respect to this Agreement
other than (i) the Holders (other than Purchaser), (ii) the Designated Director
in respect of Sections 9(c), 9(d) and 14(l), (iii) the Holder Indemnified
Persons in respect of Sections 5 and 14(l), (iv) the ECP Group in respect of
Section 10, (v) the Fund Indemnitors in respect of Section 14(l) and (vi) the
Non-Recourse Parties in respect of Section 14(m).

 

(g)                                  Execution and Counterparts. This Agreement
may be executed in any number of counterparts, 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. In the event that any signature is
delivered by facsimile or electronic mail transmission, such signature shall
create a valid binding obligation of the Party executing (or on whose behalf
such signature is executed)

 

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the same with the same force and effect as if such signature delivered by
facsimile or electronic mail transmission were the original thereof.

 

(h)                                 Governing Law; Consent to Jurisdiction;
Waiver of Jury Trial. This Agreement, and all claims or causes of action
(whether in contract, tort or otherwise) that may be based upon, arise out of or
relate to this Agreement or the negotiation, execution or performance of this
Agreement (including any claim or cause of action based upon, arising out of or
related to any representation or warranty made in or in connection with this
Agreement), shall be governed by, and construed in accordance with, the internal
Laws of the State of Delaware, without reference to the choice of law provisions
thereof. All claims, causes of action, suits, actions or proceedings shall be
raised to and exclusively determined by the Court of Chancery for the State of
Delaware or, if such court disclaims jurisdiction, the U.S. District Court for
the District of Delaware or, if such court disclaims jurisdiction, the courts of
the State of Delaware, and in each case, any appellate court from any decision
thereof, to whose exclusive jurisdiction and venue the Parties unconditionally
consent and submit. Service of process in connection with any such claim, cause
of action suit, action or proceeding may be served on each Party anywhere in the
world by the same methods as are specified for the giving of notices under this
Agreement. Each of the Parties irrevocably waives any objection to the laying of
venue of any such suit, action or proceeding brought in such courts and
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum. EACH OF THE PARTIES
HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH
RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.

 

(i)                                     Cumulative Remedies. The remedies
provided herein are cumulative and not exclusive of any remedies provided by
Law.

 

(j)                                    Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and the Parties shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the Parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

 

(k)                                 Entire Agreement. This Agreement constitutes
the entire agreement among the Parties with respect to the subject matter hereof
and supersedes all prior contracts or agreements with respect to the subject
matter hereof and the matters addressed or governed hereby, whether oral or
written.

 

(l)                                     Priority of Indemnification.  Dynegy
hereby acknowledges that each Holder Indemnified Person and Designated Director,
and their respective heirs or representatives (each, an “ECP Indemnitee”), may
have certain rights to indemnification, advancement of expenses and/or insurance
provided by or on behalf of the Controlled Affiliates (collectively, the “Fund
Indemnitors”) and that, notwithstanding anything to in this Agreement (including
as set

 

36

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forth in Section 5 and Section 9(c)):  (i) Dynegy is the indemnitor of first
resort and the Fund Indemnitors are the indemnitors of last resort in connection
with any claims for indemnification from the ECP Indemnitees, (ii) Dynegy will
be required to advance the full amount of expenses incurred by each ECP
Indemnitee and will be liable for the full amount of all losses, judgments,
penalties, fines and amounts paid in settlement to the extent legally permitted
and as required by Section 5 or Section 9(c), as applicable, without regard to
any rights each ECP Indemnitee may have against the Fund Indemnitors, and
(iii) the Parties irrevocably waive, relinquish and release the Fund Indemnitors
from any and all claims against the Fund Indemnitors for contribution,
subrogation or any other recovery of any kind in respect thereof. 
Notwithstanding anything to the contrary in this Agreement, no advancement or
payment by the Fund Indemnitors on behalf of an ECP Indemnitee with respect to
any claim for which such ECP Indemnitee has sought indemnification or
advancement of expenses from Dynegy will affect the foregoing and the Fund
Indemnitors will have a right of contribution and/or be subrogated to the extent
of such advancement or payment to all of the rights of recovery of such ECP
Indemnitee against Dynegy. The Fund Indemnitors and are express third party
beneficiaries of the terms of this Section 14(l).

 

(m)                             No Recourse. Notwithstanding anything to the
contrary that may be expressed or implied in this Agreement, any Delta Document
or any other document or instrument delivered in connection herewith, and
notwithstanding the fact that Purchaser or its Affiliates or any of its or their
successors or permitted assignees may be a partnership or a limited liability
company, Dynegy, by its acceptance of the benefits hereof, covenants, agrees and
acknowledges that no Person other than Purchaser and, solely to the extent any
Controlled Affiliate enters into a writing to be bound by the terms and
conditions of this Agreement as contemplated by Section 7(d), such Controlled
Affiliate, and its respective successors and permitted assignees shall have any
obligation hereunder, and that it has no rights of recovery against, and no
recourse hereunder, against, any former, current or future director, officer,
agent, advisor, attorney, Representative, Affiliate, manager or employee of
Purchaser (or any of its successors or assignees), against any former, current
or future general or limited partner, manager, member or stockholder of
Purchaser, or any Affiliate thereof or against any former, current or future
director, officer, agent, advisor, attorney, Representative, employee,
Affiliate, assignee, general or limited partner, stockholder, manager or member
of any of the foregoing (collectively, the “Non-Recourse Parties”), whether by
or through attempted piercing of the corporate veil, by the enforcement of any
judgment or assessment or by any legal or equitable Proceeding, or by virtue of
any statute, regulation or other applicable Law, except that, notwithstanding
the foregoing, nothing in this Section 14(m) shall limit Dynegy’s rights or
remedies (i) under the Purchase Agreement, the Interim Sponsors Agreement or any
Delta Document or (ii) under Section 14 to an injunction or injunctions against
Purchaser, any Controlled Affiliate and any other Affiliate of Purchaser that is
not an individual or limited partner to prevent breaches of this Agreement and
to enforce specifically the performance of terms and provisions of this
Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.

 

 

DYNEGY INC.

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

TERAWATT HOLDINGS, LP

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]

 

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Exhibit B

 

Form of Legal Opinions(1)

 

The following opinions shall be subject to customary qualifications and
assumptions:

 

1.              Dynegy has the corporate power and authority to execute and
deliver each of the Transaction Documents to which Dynegy is a party and to
consummate the issuance and sale of the Shares contemplated thereby under the
Delaware General Corporation Law.  Based solely on our review of certificates
from the Secretary of State of the State of Delaware with respect to Dynegy’s
existence and good standing, Dynegy is duly incorporated and is validly existing
and in good standing under the Delaware General Corporation Law.

 

2.              Each of the Transaction Documents to which Dynegy is a party has
been duly authorized, executed and delivered by all requisite corporate action
on the part of Dynegy under the Delaware General Corporation Law.

 

3.              Each of the Transaction Documents to which Dynegy is a party
constitutes the valid and binding obligation of Dynegy, enforceable against
Dynegy in accordance with its terms under the Delaware General Corporation Law.

 

4.              The Shares have been duly authorized by all requisite corporate
action on the part of Dynegy under the Delaware General Corporation Law and,
when the Shares are delivered to and paid for by Purchaser in accordance with
the terms of the Agreement, will be validly issued, fully paid and nonassessable
and free and clear of any preemptive rights or any similar rights arising under
the Delaware General Corporation Law or any of the Organizational Documents of
Dynegy.

 

5.              Assuming the accuracy of the representations and warranties of
Purchaser in Section 4.06 of the Agreement, the offer, sale and delivery of the
Shares to Purchaser in the manner contemplated by the Agreement does not require
registration under the Securities Act, it being understood that we do not
express any opinion with respect to any subsequent reoffer or resale of any
Share.

 

6.              Neither the execution and delivery by Dynegy of the Transaction
Documents to which it is a party nor the consummation by Dynegy of the issuance
and sale of the Shares contemplated thereby:  (i) conflicts with the
Organizational Documents of Dynegy or (ii) violates any law, rule or regulation
of the State of Delaware or the United States of America.

 

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(1)  Capitalized terms used but not defined herein shall have the meanings set
forth in the Agreement.

 

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7.              Neither the execution and delivery by Dynegy of the Transaction
Documents to which it is a party nor the consummation by Dynegy of the issuance
and sale of the Shares contemplated thereby requires the consent, approval,
licensing or authorization of, or any filing, recording or registration with,
any governmental authority under any law, rule or regulation of the State of
Delaware or the United States of America except for those consents, approvals,
licenses and authorizations already obtained and those filings, recordings or
registrations already made.

 

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