Document:

Exhibit 10.3

 

EXECUTION VERSION

 

LETTER OF CREDIT REIMBURSEMENT AGREEMENT, dated as of February 7, 2017, between DYNEGY INC., a Delaware corporation, as account party (the “Account Party”), and GOLDMAN SACHS BANK USA, a bank chartered under the laws of the State of New York, as issuing bank (in such capacity, together with its successors and permitted assigns in such capacity, the “Issuing Bank”).

 

STATEMENT OF PURPOSE:

 

WHEREAS, (i) the Account Party, Credit Suisse AG, Cayman Islands Branch, as administrative agent (the “Credit Agreement Administrative Agent”) and the lenders from time to time party thereto entered into that certain Credit Agreement, dated as of April 23, 2013 (as amended prior to the date hereof and, for all purposes of Article IV, as amended, restated, modified, waived and/or supplemented from time to time thereafter, the “Credit Agreement”), (ii) the Account Party, Credit Suisse AG, Cayman Islands Branch, as collateral trustee for the First-Lien Secured Parties (as defined in the Collateral Trust and Intercreditor Agreement) (the “Collateral Trustee”) and the Credit Agreement Administrative Agent entered into that certain Collateral Trust and Intercreditor Agreement, dated as of April 23, 2013 (as amended, restated, modified, waived and/or supplemented from time to time, the “Collateral Trust and Intercreditor Agreement”) and (iii) the Account Party, the subsidiaries of the Account Party from time to time party thereto and the Collateral Trustee entered into that certain Guarantee and Collateral Agreement, dated as of April 23, 2013 (as amended, restated, modified, waived and/or supplemented from time to time, the “Guarantee and Collateral Agreement”) and the other Security Documents (as defined in the Collateral Trust and Intercreditor Agreement);

 

WHEREAS, it is the intent of the parties hereto that in accordance with Section 5.5 of the Collateral Trust and Intercreditor Agreement, this Agreement shall constitute an Additional First-Lien Indebtedness Agreement (as defined in the Collateral Trust and Intercreditor Agreement) and the Obligations shall constitute Additional First-Lien Obligations (as defined in the Collateral Trust and Intercreditor Agreement); and

 

WHEREAS, the Account Party has requested that the Issuing Bank provide a letter of credit facility to the Account Party and the Issuing Bank is willing to provide such letter of credit facility in an amount not to exceed Fifty Million and 00/100 Dollars (US$50,000,000.00) upon the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises and to induce the Issuing Bank to enter into this Agreement, the Account Party hereby agrees with the Issuing Bank as follows:

 

ARTICLE I
 DEFINITIONS

 

SECTION 1.1.    Defined Terms.  The following terms shall have the following meanings:

 

“Accession Agreement”: the Accession Agreement, dated as of the Effective Date, among the Issuing Bank, the Account Party, certain Subsidiaries of the Account Party and the Collateral Trustee, substantially in the form of Exhibit A to the Collateral Trust and Intercreditor Agreement.

 

“Account Party”:  as defined in the preamble to this Agreement.

 

“Affiliate”:  with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with such 

 

 

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specified Person.  For the purposes of this definition, “Control” (including, with correlative meanings, the terms “Controlling”, “Controlled by” and “under common Control with”), means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

 

“Agreement”:  this Letter of Credit Reimbursement Agreement, as the same may be amended, restated, modified, waived and/or supplemented from time to time.

 

“Applicable Margin”:  as defined in the Credit Agreement on the date hereof in respect of Initial Revolving Loans that are Base Rate Loans (in each case, as defined in the Credit Agreement).

 

“Application”:  an application, in the form attached hereto as Exhibit B (or such other form as the Issuing Bank may specify from time to time in writing to the Account Party as the form used by the Issuing Bank) to request the Issuing Bank to issue, extend or amend a Letter of Credit.

 

“Bankruptcy Law”: Title 11 of the United States Code, 11 U.S.C. §§ 101, et seq., as amended from time to time, or any similar federal or state or other law for the relief of debtors.

 

“Business Day”:  a day other than a Saturday, Sunday or other day on which the commercial banks in New York City or Irving, Texas, are authorized or required by law to close.

 

“Change in Law”: as defined in Section 3.8(a).

 

“Change of Control”: as defined in the Credit Agreement.

 

“Collateral”: as defined in the Credit Agreement.

 

“Collateral Trust and Intercreditor Agreement”: as defined in the Statement of Purpose to this Agreement.

 

“Collateral Trustee”: as defined in the Statement of Purpose to this Agreement.

 

“Commitment Period”:  the period from and including the Effective Date through and including the Termination Date.

 

“Credit Agreement”:  as defined in the Statement of Purpose to this Agreement.

 

“Credit Agreement Administrative Agent”: as defined in the Statement of Purpose to this Agreement.

 

“Credit Documents”:  this Agreement and all Applications relating to the Letters of Credit, and each other agreement or instrument executed and delivered by the Account Party with or in favor of the Issuing Bank pursuant to and in accordance with the terms of this Agreement, as the same may be amended, restated, modified, waived and/or supplemented from time to time.

 

“Credit Party”: as defined in the Credit Agreement.

 

“Default”:  any of the events specified in Section 4.3 whether or not any requirement set forth therein for the giving of notice, the lapse of time, or both, has been satisfied.

 

 

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“Delta Acquisition”: the acquisition by the Account Party, directly or indirectly from International Power, S.A., of one hundred percent (100%) of the equity interests of GDF Suez Energy North America, Inc.

 

“Delta Acquisition Agreement”: that certain Stock Purchase Agreement, dated February 24, 2016 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with the provisions hereof and thereof, together with all schedules and exhibits thereto), pursuant to which the Account Party, indirectly, will consummate the Delta Acquisition.

 

“Delta Acquisition Agreement Representations”: such of the representations made by or on behalf of the Delta Target Entities in the Delta Acquisition Agreement as are material to the interests of the Issuing Bank, but only to the extent that the Account Party or the Account Party’s applicable Affiliate has the right to terminate its obligations under the Delta Acquisition Agreement or refuse to consummate the Delta Acquisition as a result of a breach of such representations in the Delta Acquisition Agreement.

 

“Delta Acquisition Funding Date Material Adverse Effect”: a Material Adverse Effect (as defined in the Delta Acquisition Agreement as in effect on February 24, 2016).

 

“Delta Specified Representations”: the representations and warranties set forth in this Agreement made with respect to the Credit Parties relating to: organizational existence; organizational power and authority (as it relates to due authorization, execution and delivery of the Credit Documents); due authorization, execution and delivery of the Credit Documents, and enforceability, in each case, as it relates to entering into and performance under the Credit Documents; solvency on the Effective Date (after giving effect to the Delta Transactions as defined in the Third Amendment) of the Account Party and its subsidiaries taken as a whole; no conflicts of the Credit Documents with charter documents; Federal Reserve margin regulations; the Investment Company Act; the PATRIOT Act; any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto; the Foreign Corrupt Practices Act (Pub. L. 95-213 (signed into law December 19, 1977)) and, subject to the Limited Conditionality Provision, the validity and perfection of security interests with respect to the Collateral (subject in all respects to security interests and liens permitted under the Credit Agreement and the Collateral Trust and Intercreditor Agreement).

 

“Delta Target Entities”: collectively, GDF Suez Energy North America, Inc. and its subsidiaries.

 

“Dollars”, “$” and “US$”:  dollars in lawful currency of the United States of America.

 

“Effective Date”:  the date of satisfaction of the conditions set forth in Section 5.2 herein, which date is February 7, 2017.

 

“Equity Interests”:  shares of capital stock, partnership interest, membership interest in a limited liability company, beneficial interests in a trust or other equity interest in any Person, and any option, warrant or other right entitling the holder thereof to purchase or otherwise acquire any such equity interests.

 

“Event of Default”:  as defined in Section 4.3.

 

“Excluded Taxes”:  with respect to the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Account Party hereunder or pursuant to any 

 

 

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Credit Document, (a) income or franchise taxes imposed on or measured by its net income or net profits, however denominated, by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of the Issuing Bank, in which its applicable lending office is located, or that are imposed by reason of any connection between the Issuing Bank or other recipient and any taxing jurisdiction other than a connection arising solely by executing or entering into any Credit Document, receiving payments thereunder or having been a party to, performed its obligations under, or enforced, any Credit Document, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction described in clause (a) above, (c) in the case of a Foreign Issuing Bank, any U.S. federal withholding tax or backup withholding that is imposed pursuant to laws in effect at the time such Foreign Issuing Bank or other recipient becomes a party to this Agreement (or designates a new lending office), except to the extent that such Foreign Issuing Bank (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts with respect to such withholding tax pursuant to Section 3.10(a), (d) in the case of a Foreign Issuing Bank, any U.S. federal withholding tax or backup withholding that is attributable to such Foreign Issuing Bank’s failure to comply with Section 3.10(e), (e) any U.S. federal withholding tax imposed pursuant to FATCA and (f) all penalties and interest on the foregoing amounts.

 

“FATCA”: Sections 1471 through 1474 of the Internal Revenue Code as of the date hereof (or any amended or successor provision that is substantively comparable and not materially more onerous to comply with) and any regulations or the official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code.

 

“Foreign Issuing Bank”: any Person that is not a “United States person” within the meaning of Section 7701(a)(30) of the Internal Revenue Code and who receives a payment from the Account Party pursuant to a Credit Document.

 

“GAAP”:  those generally accepted accounting principles in the United States as in effect from time to time.

 

“Governing Documents”:  collectively, as to any Person, the articles or certificate of incorporation and bylaws, any shareholders agreement, certificate of formation, limited liability company agreement, partnership agreement, trust indenture or other formation or constituent documents of such Person.

 

“Governmental Authority”:  the government of the United States of America or any other nation, or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory board, court, tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of, or pertaining to, government (including any supra-national bodies such as the European Union or the European Central Bank).

 

“Guarantee and Collateral Agreement”: as defined in the Statement of Purpose to this Agreement.

 

“Indemnified Taxes”:  (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Account Party hereunder or under any other Credit Document and (b) to the extent not otherwise described in (a), Other Taxes that are not Excluded Taxes.

 

“Initial Scheduled Maturity Date”:  5:00 pm New York City time on the date that is one year after the Effective Date.

 

 

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“Internal Revenue Code”:  the Internal Revenue Code of 1986, as amended from time to time.

 

“Issuance Date”:  in respect of any Letter of Credit, the date of issuance of such Letter of Credit.

 

“Issuing Bank”:  as defined in the preamble to this Agreement.

 

“L/C Disbursement”:  a payment or disbursement made by the Issuing Bank pursuant to a Letter of Credit.

 

“L/C Obligations”:  as defined in Section 3.3(a).

 

“Letter of Credit”:  any standby letter of credit issued pursuant to Section 3.1, as any such letter of credit may be amended, replaced and/or extended from time to time in accordance with the terms hereof.

 

“Letter of Credit Commitment”:  as of the Effective Date, $50,000,000, as the same may be modified from time to time in accordance with the terms hereof.

 

“Letter of Credit Fee”: as defined in Section 3.8(e)(ii).

 

“Limited Conditionality Provision”:  as defined in Section 5.2(b).

 

“Material Adverse Effect”: on the Effective Date, a Delta Acquisition Funding Date Material Adverse Effect and, at any time thereafter, (a) a materially adverse effect on the business, assets, liabilities, operations, condition (financial or otherwise) or operating results of the Account Party and its Restricted Subsidiaries, taken as a whole, (b) a material impairment of the ability of the Account Party or its Restricted Subsidiaries to perform any of their material obligations under any Credit Document or (c) a material impairment of the rights and remedies of or benefits available to the Issuing Bank, taken as a whole, under any Credit Document.

 

“Material Indebtedness”: as defined in Section 4.3(f).

 

“Non-Recourse Debt”: as defined in the Credit Agreement.

 

“Obligations”:  (a) all L/C Obligations and all other obligations of the Account Party under this Agreement or in connection with the Letters of Credit and (b) all other reasonable and documented out-of-pocket expenses (including reasonable attorney’s fees and disbursements), charges and other amounts, in each case owing by the Account Party to the Issuing Bank under this Agreement, the Letters of Credit or any of the other Credit Documents, of every kind, nature and description, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter incurred, liquidated or unliquidated (including all interest on any such amounts which accrues after the commencement of any case or proceeding in bankruptcy after the insolvency of, or for the reorganization of the Account Party, whether or not allowed or allowable in such case or proceeding).

 

“Other Taxes”:  any and all present or future stamp or documentary Taxes or any other excise or property Taxes, charges or similar levies arising from any payment made under any Credit Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Credit Document (except any such Taxes imposed with respect to an assignment, other than an assignment made at the Account Party’s request).

 

 

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“Outstanding Amount”: at any time, the sum of, without duplication, (a) the Dollar amount of the aggregate Stated Amount of all outstanding Letters of Credit at such time plus (b) the Dollar amount of the aggregate principal amount of all L/C Disbursements at such time for which the Issuing Bank has not been reimbursed.

 

“Person”: any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“Property”:  of any Person means, any right or interest in or to any type of real, personal, tangible, intangible or mixed property or asset of any kind whether or not included in the most recent consolidated balance sheet of such Person and its Restricted Subsidiaries under GAAP, including Equity Interests.

 

“Quarterly Payment Date”: shall mean the last Business Day of each March, June, September and December occurring after the Effective Date and prior to the Termination Date.

 

“Register”:  as defined in Section 7.14.

 

“Related Person”:  each of the Issuing Bank’s Affiliates, and each of the Issuing Bank’s and its Affiliates’ successors and permitted assigns, and all partners, directors, officers, employees, agents, members, Controlling Persons, trustees, administrators, managers and representatives of the foregoing Persons.

 

“Requirement of Law”:  as to any Person, the Governing Documents of such Person, and any law, statute, treaty, rule, regulation, official directive, order, decree, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

 

“Responsible Officer”: of any Person shall mean any executive officer or chief financial officer of such Person and any other officer or similar official thereof responsible for the administration of the obligations of such Person in respect of this Agreement.

 

“Restricted Subsidiary”: any Subsidiary of the Account Party other than an Unrestricted Subsidiary.

 

“Scheduled Maturity Date”:  (a) the Initial Scheduled Maturity Date or (b) if the Initial Scheduled Maturity Date is extended in accordance with Section 3.1(d), the applicable anniversary of the Initial Scheduled Maturity Date to which it is extended.

 

“Significant Subsidiary”: any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, as such Regulation is in effect on April 23, 2013.

 

“Stated Amount”:  in respect of a Letter of Credit, the maximum Dollar amount from time to time available to be drawn under such Letter of Credit, determined without regard to whether any conditions to drawing thereunder could then be met.

 

“Subsidiary”:  as defined in the Credit Agreement.

 

“Taxes”: any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

 

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“Termination Date”: the earlier of (a) the Scheduled Maturity Date and (b) the date upon which the Letter of Credit Commitment is terminated for any reason or otherwise reduced to zero in accordance with the terms of this Agreement (whether pursuant to Section 3.1(c), Section 4.3, or otherwise).

 

“Third Amendment”:  that certain Third Amendment to Credit Agreement, dated as of June 27, 2016, among inter alia, the Account Party and the lenders and additional lenders under the Credit Agreement party thereto.

 

“Unrestricted Subsidiary”  as defined in the Credit Agreement.

 

“Unused Commitment”: at any time, the Letter of Credit Commitment at such time less the Outstanding Amount at such time.

 

“Unused Commitment Fee”: as defined in Section 3.8(e)(iii).

 

SECTION 1.2.    Rules of Interpretation.

 

(i)                                     The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and section and paragraph references are to this Agreement unless otherwise specified.  The word “including” means “including without limitation”.  References herein to any laws or rules include any amendments thereto or successor or replacement laws or rules.

 

(ii)                                  The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

ARTICLE II
 CREDIT SUPPORT

 

SECTION 2.1.    Existing Credit Support.  The Account Party agrees that, as a condition to the issuance of Letters of Credit hereunder and as security for the payments of the Obligations, it shall, and shall cause its Subsidiaries who are party to the Collateral Trust and Intercreditor Agreement to, on the Effective Date, execute the Accession Agreement.  The Account Party represents and warrants that upon the execution and delivery of the Accession Agreement the guarantees, pledges, grants of security interests and other obligations provided as credit support for the obligations referenced in the Collateral Trust and Intercreditor Agreement (and other documents related thereto) shall provide equal and ratable credit support for the Obligations in accordance with the terms of the Collateral Trust and Intercreditor Agreement.

 

ARTICLE III
 LETTERS OF CREDIT

 

SECTION 3.1.    Letters of Credit.  (a)                                         Subject to the terms and conditions hereof, the Issuing Bank agrees to issue, amend or extend Letters of Credit denominated in Dollars at the request of the Account Party on any Business Day after the Effective Date and before the fifth Business Day prior to the end of the Commitment Period (i) in a minimum amount of $100,000 on the date of such issuance, amendment or extension and (ii) for the account of the Account Party or any of its Subsidiaries in such forms as may be approved from time to time by the Issuing Bank; provided that the Issuing Bank shall not issue, amend or extend any Letter of Credit if, after giving effect to such issuance, amendment or extension, the Stated Amount of such Letter of Credit, when added to the Outstanding Amount at such 

 

 

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time, would exceed the Letter of Credit Commitment at such time. Notwithstanding any provision hereof to the contrary, the Issuing Bank shall have no obligation to issue, amend or extend any Letter of Credit if (i) any order, judgment or decree of any Governmental Authority or arbitrator shall purport by its terms to enjoin or restrain the Issuing Bank from issuing, amending or extending such Letter of Credit or any requirement of law applicable to the Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing Bank refrain from, the issuance, amendment or extension of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Bank with respect to such Letter of Credit any restriction or reserve or capital requirement (for which the Issuing Bank is not otherwise compensated hereunder) not in effect with respect to the Issuing Bank on the date hereof, or any unreimbursed loss, cost or expense which was not applicable or in effect with respect to the Issuing Bank as of the date hereof and which the Issuing Bank reasonably and in good faith deems material to it or (ii) the issuance, amendment or extension thereof would violate one or more policies of the Issuing Bank applicable to letters of credit generally, as such policies may be in effect from time to time and in respect of which prior written notice has been provided by the Issuing Bank to the Account Party (provided that, notwithstanding any internal policy of the Issuing Bank to the contrary, Letters of Credit shall be permitted to be governed by the laws of the State of Texas). Each Letter of Credit shall (i) be denominated in Dollars, and (ii) expire on the earlier of (x) the date that is one year after the date of the issuance thereof and (y) the date that is five (5) Business Days prior to the Scheduled Maturity Date; provided that any Letter of Credit may provide for the extension thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above).  If the expiry date of any Letter of Credit is automatically extendible pursuant to the preceding sentence, then the terms of such Letter of Credit shall permit the Issuing Bank, in its discretion, to provide notice to the beneficiary or beneficiaries thereof, at least thirty (30) days prior to the then applicable expiry date, that the expiry date of such Letter of Credit will not be extended.

 

(b)                                 On the Termination Date, the Account Party shall pay in cash in Dollars all Obligations that are then due and payable and, if any Letters of Credit remain outstanding on such date, the Account Party will, on or prior to the Termination Date, cause all such Letters of Credit to either be (i) cancelled and returned to the Issuing Bank or (ii) cash collateralized (at 101% of the undrawn amount thereof) or otherwise backstopped in a manner satisfactory to the Issuing Bank in its reasonable discretion.

 

(c)                                  The Account Party shall have the right, upon not less than three (3) Business Days’ notice to the Issuing Bank, to terminate the Letter of Credit Commitment or, from time to time, to reduce the aggregate amount of the Letter of Credit Commitment; provided that no such termination or reduction of the Letter of Credit Commitment shall be permitted if, after giving effect thereto, the Outstanding Amount would exceed the Letter of Credit Commitment.  Any such reduction shall be in a minimum amount equal to $100,000, or any whole multiple of $100,000 in excess thereof, and shall reduce permanently the Letter of Credit Commitment then in effect.

 

(d)                                 The Account Party shall have the right to request up to four (4) one-year extensions of the Initial Scheduled Maturity Date by delivering to the Issuing Bank at its address for notices specified herein a written request therefor; provided that in each such case (i) no Default or Event of Default shall have occurred and be continuing on the date of such notice or on the then Scheduled Maturity Date, (ii) the Account Party shall have delivered to the Issuing Bank on or prior to the then applicable Scheduled Maturity Date such other certificates and other information as the Issuing Bank may reasonably request, and (iii) the Issuing Bank shall have consented in writing to such request in accordance with the terms hereof, such consent to be provided or withheld in the reasonable discretion of the Issuing Bank.  Any such written request for extension must be received by the Issuing Bank at least forty-five (45) days (but not more than ninety (90) days) prior to the then applicable Scheduled Maturity 

 

 

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Date and the Issuing Bank will inform the Account Party in writing no later than thirty (30) days prior to the then applicable Scheduled Maturity Date whether it consents to so extend the Scheduled Maturity Date for an additional one-year term.  Notwithstanding any other provision hereof, any such written consent provided by the Issuing Bank shall be effective to amend the definition of “Scheduled Maturity Date” set forth herein to such extended date without further action by any party hereto.

 

(e)                                  Letters of Credit shall be used solely to fund or support the working capital needs and general corporate purposes of the Account Party and its Subsidiaries (including, without limitation, to support any interest rate, currency, commodity or other hedging agreements or other derivative obligations of such Persons).

 

SECTION 3.2.    Procedure for Issuance of Letters of Credit.  (a) The Account Party may from time to time request that the Issuing Bank issue, amend or extend a Letter of Credit on behalf of the Account Party or its Subsidiaries by delivering to the Issuing Bank at its address for notices specified herein an Application therefor, completed to the reasonable satisfaction of the Issuing Bank, and such other certificates, documents and other papers and information as the Issuing Bank may reasonably request.  Upon receipt of any Application, the Issuing Bank will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue, amend or extend the Letter of Credit requested thereby (but in no event shall the Issuing Bank be required to issue, amend or extend any Letter of Credit earlier than two (2) Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto unless the Issuing Bank agrees in its sole discretion) by issuing, amending or extending the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by the Issuing Bank and the Account Party.  The Issuing Bank shall furnish a copy of such Letter of Credit to the Account Party promptly following the issuance thereof.

 

(b)                                 The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by one or more of its Affiliates reasonably acceptable to the Account Party (and any such Affiliate shall be deemed to be the “Issuing Bank” for all purposes of this Agreement and the Credit Documents in respect of each Letter of Credit issued by it).

 

(c)                                  This Section shall not be construed to impose an obligation upon the Issuing Bank to issue, amend or extend any Letter of Credit that is inconsistent with the terms and conditions of this Agreement.

 

SECTION 3.3.    L/C Obligations of the Account Party.  (a) The Account Party agrees to reimburse the Issuing Bank no later than 1:00 p.m. (New York City time) on the next Business Day after the Business Day on which the Issuing Bank notifies the Account Party of the date and amount of an L/C Disbursement for the amount of the L/C Disbursement (all of the obligations of the Account Party to reimburse the Issuing Bank for any L/C Disbursement are collectively referred to herein as “L/C Obligations”); provided that any failure to give or delay in giving such notice shall not relieve the Account Party of its obligation to reimburse the Issuing Bank with respect to such L/C Obligations.  The Issuing Bank acknowledges and agrees that any reimbursement of the Issuing Bank by the Account Party pursuant to this Section 3.3 shall satisfy in full any claims for reimbursement it has under a Letter of Credit in respect of such reimbursable amount.  Each such payment shall be made to the Issuing Bank at its address for notices specified herein (or via wire transfer instructions provided by the Issuing Bank as set forth on Schedule A, as such Schedule A may be updated from time to time by the Issuing Bank) in Dollars and in immediately available funds.  All L/C Obligations shall bear interest from the date of the applicable LC Disbursement to but excluding the date that such L/C Obligation is reimbursed in full at a rate per annum equal to (i) until the date that reimbursement is due hereunder, the Applicable Margin and 

 

 

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(ii) thereafter, the sum of the Applicable Margin plus two percent (2%) per annum, payable by the Account Party on the date of the applicable reimbursement and on the Termination Date (which interest shall be computed on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) occurring the period for which such interest is payable).

 

(b)                                 The responsibility of the Issuing Bank to the Account Party in connection with any draft or other demand for payment presented under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including such draft or other demand for payment) delivered under such Letter of Credit in connection with such presentment are substantially in conformity with such Letter of Credit.

 

(c)                                  The Issuing Bank shall promptly after receipt thereof, provide to the Account Party copies of any certificate of reduction, certificate of drawing or request for transfer the Issuing Bank receives from the beneficiary of a Letter of Credit.

 

SECTION 3.4.    Obligations Absolute.  The Account Party’s obligations under Section 3.3 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that the Account Party may have or may have had against the Issuing Bank, any beneficiary of a Letter of Credit or any other Person. The Account Party also agrees with the Issuing Bank that neither the Issuing Bank nor any Related Person shall be responsible for, in the absence of its willful misconduct, bad faith or gross negligence (as determined by a final, non-appealable decision of a court of competent jurisdiction), and the Account Party’s L/C Obligations under Section 3.3 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Account Party and any beneficiary of any Letter of Credit or any other Person to which such Letter of Credit may be transferred or any claims whatsoever of the Account Party against any beneficiary of such Letter of Credit or any such transferee. Neither the Issuing Bank nor any Related Person shall be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions found by a final, non-appealable decision of a court of competent jurisdiction to have resulted from willful misconduct, bad faith or gross negligence of the Issuing Bank or any such Related Person.

 

SECTION 3.5.    Applications.  To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall control.

 

SECTION 3.6.    Records.  The Issuing Bank shall maintain the following records with respect to each Letter of Credit:

 

(a)                                 the date of issuance, amendment or extension and expiration thereof;

 

(b)                                 the Stated Amount thereof; and

 

(c)                                  the date and amount of all payments and drawings made thereunder.

 

The Issuing Bank shall make copies of such records available to the Account Party upon its reasonable request.

 

SECTION 3.7.    No Liability.  The Account Party agrees that, except as expressly set forth in Section 3.3(b), neither the Issuing Bank nor any of its Related Persons will assume liability in

 

 

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connection with any Letter of Credit, or be responsible for any claim with respect thereto, including, without limitation:

 

(a)                                 the use which may be made of any Letter of Credit;

 

(b)                                 any acts or omissions of the beneficiary of any Letter of Credit, including the application of any payment made to such beneficiary;

 

(c)                                  the validity, correctness, genuineness or legal effect of any document or instrument relating to any Letter of Credit, even if such document or instrument should in fact prove to be in any respect invalid, insufficient, inaccurate, fraudulent or forged or any statement therein being untrue or inaccurate;

 

(d)                                 payment by the Issuing Bank of any draft or other demand from a beneficiary of a Letter of Credit for payment which does not comply with the terms of any Letter of Credit, unless such payment results from the gross negligence, bad faith or willful misconduct of the Issuing Bank (as determined by a final, non-appealable decision of a court of competent jurisdiction);

 

(e)                                  the failure of any document or instrument to bear any reference or adequate reference to any Letter of Credit;

 

(f)                                   any failure to note the amount of any draft on any Letter of Credit or on any related document or instrument, except to the extent such failure results from the gross negligence, bad faith or willful misconduct of the Issuing Bank (as determined by a final, non-appealable decision of a court of competent jurisdiction);

 

(g)                                  any failure of the beneficiary of any Letter of Credit to meet the obligations of such beneficiary to either the Account Party or any other Person;

 

(h)                                 any failure by the Issuing Bank to make payment under any Letter of Credit as a result of any Requirement of Law, control or restriction rightfully or wrongfully exercised or imposed by any Governmental Authority; or

 

(i)                                     the existence of any claim, set-off, defense or other right that the Account Party may have at any time against any beneficiary or any transferee of any Letter of Credit (or any other Person for whom any such transferee may be acting), the Issuing Bank or any Person, whether in connection with this Agreement, any Letter of Credit, the transaction contemplated herein and therein or any unrelated transaction (including any underlying transaction between the Account Party and the beneficiary named in such Letter of Credit).

 

SECTION 3.8.    Reserve Requirements; Change in Circumstances; Fees.  (a) Notwithstanding any other provision herein, if after the date of this Agreement any change in applicable law, rule, regulation or treaty or in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law) (a “Change in Law”) shall (i) result in the imposition, modification or applicability of any reserve, special deposit or similar requirement against assets of, deposits with or for the account of or credit extended by the Issuing Bank or any of its Affiliates, (ii) subject the Issuing Bank or any of its Affiliates to any Tax of any kind whatsoever with respect to this Agreement, or change the basis of taxation of payments in respect thereof (except for Indemnified Taxes or Other Taxes indemnified pursuant to Section 3.10 and the imposition of any Excluded Tax payable by the Issuing Bank or any of its 

 

 

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Affiliates), or (iii) result in the imposition on the Issuing Bank or any of its Affiliates of any other condition resulting from entering into any of the Credit Documents, and the result of any of the foregoing shall be to increase the cost to the Issuing Bank or any of its Affiliates of issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by the Issuing Bank hereunder (whether of reimbursement, interest or otherwise) by an amount reasonably determined by the Issuing Bank to be material, then such additional amount or amounts as will compensate the Issuing Bank or such Affiliate for such additional costs or reduction shall be paid by the Account Party to the Issuing Bank upon demand (in each case, so long as the Issuing Bank is requiring the payment of such additional amounts from similarly situated account parties and borrowers with similar provisions in their credit facilities). “Change in Law” shall include all requests, rules, guidelines or directives concerning capital adequacy and liquidity requirements issued in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives concerning capital adequacy and liquidity requirements promulgated by the Bank for International Settlements, the Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority) or the United States financial regulatory authorities, in each case pursuant to Basel III, regardless of the date adopted, issued, promulgated or implemented.

 

(b)                                 If the Issuing Bank determines that the adoption after the date hereof of any Change in Law regarding capital adequacy or liquidity requirements, or any change in any of the foregoing or in the interpretation or administration of any of the foregoing by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Issuing Bank (or any lending office of the Issuing Bank) or any Affiliate of the Issuing Bank with any request or directive regarding capital adequacy or liquidity requirements (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on the Issuing Bank’s capital or on the capital of an Affiliate of the Issuing Bank, if any, as a consequence of any Credit Document, to a level below that which the Issuing Bank or such Affiliate could have achieved but for such adoption, change, compliance or other Change in Law (taking into consideration the Issuing Bank’s policies and the policies of the Issuing Bank’s Affiliates with respect to capital adequacy and liquidity requirements) by an amount reasonably determined by the Issuing Bank to be material, then from time to time such additional amount or amounts as will compensate the Issuing Bank for such reduction will be paid by the Account Party to the Issuing Bank upon demand (in each case, so long as the Issuing Bank is requiring the payment of such additional amounts from similarly situated account parties and borrowers with similar provisions in their credit facilities).

 

(c)                                  A certificate of the Issuing Bank setting forth such amount or amounts as shall be necessary to compensate the Issuing Bank or its Affiliate, as applicable, as specified in paragraph (a) or (b) above, as the case may be, shall be delivered to the Account Party and shall be conclusive absent manifest error.  The Account Party shall pay the Issuing Bank the amount shown as due on any such certificate delivered by the Issuing Bank within 15 days after its receipt of the same.

 

(d)                                 Failure on the part of the Issuing Bank to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital with respect to any period shall not constitute a waiver of the Issuing Bank’s right to demand compensation with respect to such period or any other period; provided, however, that the Issuing Bank shall not be entitled to compensation under this Section 3.8 for any costs incurred or reductions suffered with respect to any date unless the Issuing Bank shall have notified the Account Party in writing that it will demand compensation for such costs or reductions under paragraph (c) above and such notice shall have been provided not more than 90 days after the later of (i) such date and (ii) the date on which it shall have become aware of such costs or reductions.

 

 

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(e)                                  Fees.

 

(i)                                     The Account Party agrees that it will pay to the Issuing Bank on the Effective Date a facility fee, in cash, in an amount equal to 2.00% of the Letter of Credit Commitment that becomes effective on such date.

 

(ii)                                  The Account Party agrees to pay to the Issuing Bank a fee in respect of each Letter of Credit issued by it (the “Letter of Credit Fee”) for the period from and including the date of issuance of such Letter of Credit to an including the date of termination or expiration of such Letter of Credit, computed at a rate per annum, equal to the Applicable Margin as in effect from time to time during such period on the daily Stated Amount of each such Letter of Credit.  Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on each Quarterly Payment Date and on the first day on or after the Scheduled Maturity Date on which no Letters of Credit remain outstanding (or such earlier date on which the Letter of Credit Commitment has been terminated).  Such Letter of Credit Fees shall be calculated in a manner consistent with the calculation of corresponding fees under the Credit Agreement as in effect on the date hereof.

 

(iii)                               The Account Party agrees to pay to the Issuing Bank a commitment commission (the “Unused Commitment Fee”) for the period from and including the Effective Date to an including the Scheduled Maturity Date (or such earlier date on which the Letter of Credit Commitment has been terminated) computed at a rate per annum, equal to the “Applicable Margin” (as defined in the Credit Agreement as in effect on the date hereof) applicable to “Unutilized Revolving Loan Commitment” (as defined in the Credit Agreement as in effect on the date hereof) as in effect from time to time during such period on the daily Unused Commitment.  Accrued Unused Commitment Fees shall be due and payable quarterly in arrears on each Quarterly Payment Date and on the first day on or after the Scheduled Maturity Date (or such earlier date on which the Letter of Credit Commitment has been terminated). Such Unused Commitment Fees shall be calculated in a manner consistent with the calculation of corresponding fees under the Credit Agreement as in effect on the date hereof.

 

(iv)                              The Account Party agrees to pay to the Issuing Bank such other fees, costs and charges as may be agreed in writing from time to time by the Account Party and the Issuing Bank.

 

SECTION 3.9.    Applicability of ISP98.  Unless otherwise expressly agreed by the Issuing Bank and the Account Party, when any Letter of Credit is issued, the rules of the “International Standby Practices 1998, International Chamber of Commerce Publication No. 590” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each standby Letter of Credit.

 

SECTION 3.10.    Taxes.

 

(a)                                 Any and all payments by or on account of any obligation of the Account Party hereunder or under any other Credit Document shall be made free and clear of and without deduction or withholding for any Taxes; provided, that, if any Indemnified Taxes shall be required to be deducted or withheld from such payments, then (i) the sum payable by the Account Party shall be increased as necessary so that after making all required deductions or withholdings (including deductions or withholdings applicable to additional sums payable under this Section) the Issuing Bank or other recipient of such payment, as the case may be, receives an amount equal to the sum it would have received had no 

 

 

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such deductions or withholdings been made, (ii) the Account Party shall make such deductions or withholdings and (iii) the Account Party shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

(b)                                 Without limiting the provisions of paragraph (a) above, the Account Party shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)                                  The Account Party shall indemnify the Issuing Bank, within 15 days after written demand therefor, for the full amount of any Indemnified Taxes by or on account of any obligation of the Account Party hereunder or under any other Credit Document (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Issuing Bank and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Account Party by the Issuing Bank shall be conclusive absent manifest error.

 

(d)                                 As soon as practicable after any payment of Indemnified Taxes by the Account Party to a Governmental Authority, the Account Party shall deliver to the Issuing Bank the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Issuing Bank.

 

(e)                                  Any Foreign Issuing Bank or other recipient that is entitled to an exemption from or reduction of withholding Tax with respect to payments under any Credit Document shall deliver to the Account Party, at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law and reasonably requested by the Account Party as will permit such payments to be made without or at a reduced rate of withholding.  In addition, any Foreign Issuing Bank or other recipient, if reasonably requested by the Account Party, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Account Party as will enable the Account Party to determine whether or not such Foreign Issuing Bank or other recipient is subject to backup withholding or information reporting requirements.  Without limiting the generality of the foregoing, any Foreign Issuing Bank or other recipient shall deliver to the Account Party (in such number of copies as shall be requested by the Account Party) on or prior to the date on which such Foreign Issuing Bank or other recipient receives a payment pursuant to a Credit Document (and from time to time thereafter promptly upon the expiration, obsolescence or invalidity of any previously delivered form or information or upon the request of the Account Party, but in each case only if such Foreign Issuing Bank or other recipient is legally entitled to do so), whichever of the following is applicable:

 

(i)                                     duly completed copies of IRS Form W-8BEN or IRS Form W-8-BEN-E claiming eligibility for benefits of an income tax treaty to which the United States of America is a party and such W-8BEN or W-BEN-E shall establish (x) with respect to payments of interest under any Credit Document an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Credit Document, IRS Form W-8BEN or IRS Form W-8-BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

 

(ii)                                  executed originals (or a scanned pdf copy of an executed originals) of IRS Form W-8ECI,

 

 

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(iii)                               in the case of a Foreign Issuing Bank claiming the benefits of the exemption for portfolio interest under 881(c) of the Internal Revenue Code, (x) a certificate substantially in the form of Exhibit A-1 to the effect that such Foreign Issuing Bank is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10-percent shareholder” of the Account Party within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance Certificate”), and (y) executed originals (or a scanned pdf copy of an executed originals) of IRS Form W-8BEN or IRS Form W-8-BEN-E, or

 

(iv)                              to the extent a Foreign Issuing Bank or other recipient is not the beneficial owner of the payments received by such Person under any Credit Document, executed originals (or a scanned pdf copy of executed originals) of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8-BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit A-2 or Exhibit A-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Issuing Bank is a partnership and one or more direct or indirect partners of such Foreign Issuing Bank are claiming the portfolio interest exemption, such Foreign Issuing Bank may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit A-4 on behalf of each such direct or indirect partner.

 

(f)                                   If the Issuing Bank is not a Foreign Issuing Bank, the Issuing Bank shall deliver to the Account Party (in such number of copies as shall be requested by the recipient) on or prior to the Effective Date (and from time to time thereafter promptly upon the expiration, obsolescence or invalidity of any previously delivered form or information or upon the request of the Account Party, but in each case only if the Issuing Bank is legally entitled to do so) duly completed copies of IRS Form W-9 or other forms or information establishing an exemption from U.S. backup withholding.

 

(g)                                  If a payment made to the Issuing Bank or other recipient under any Credit Document hereunder may be subject to U.S. federal withholding tax under FATCA if the Issuing Bank or such recipient were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), the Issuing Bank or other recipient shall deliver to the Account Party, at the time or times prescribed by law and at such time or times reasonably requested by Account Party, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Account Party to comply with its withholding obligations, to determine that the Issuing Bank or other recipient has complied with the Issuing Bank’s or other recipient’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 3.10(g), the term “FATCA” shall include any amendments to FATCA after the date hereof.

 

(h)                                 If the Issuing Bank determines, in its sole discretion, that it has received a refund of any Indemnified Taxes as to which it has been indemnified by the Account Party or with respect to which the Account Party has paid additional amounts pursuant to this Section 3.10, it shall pay to the Account Party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Account Party under this Section with respect to the Indemnified Taxes giving rise to such refund), net of all out-of-pocket expenses of the Issuing Bank and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Account Party, upon the request of the Issuing Bank, agrees to repay the amount paid over to the Account Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Issuing Bank in the event the Issuing Bank is required to repay such 

 

 

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refund to such Governmental Authority.  This paragraph shall not be construed to require the Issuing Bank to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the Account Party or any other Person.

 

ARTICLE IV
 COVENANTS AND EVENTS OF DEFAULT

 

SECTION 4.1.    Reporting Requirements. The Account Party hereby covenants and agrees with the Issuing Bank that, until the date upon which the Obligations (other than contingent indemnification obligations and undrawn amounts with respect to the then outstanding Letters of Credit which have either been cash collateralized (at 101% of the undrawn amount) or otherwise backstopped in a manner satisfactory to the Issuing Bank in its reasonable discretion) have been indefeasibly paid in full in cash and the Letter of Credit Commitment has been terminated or otherwise reduced to zero, the Account Party shall promptly provide to the Issuing Bank any notice, report or financial or operating information required to be delivered by it, directly or indirectly to the Lenders (as defined in the Credit Agreement), under Section 9.01(a), (b), (d) and (e) of the Credit Agreement as in effect on the Effective Date.  The obligations of the Account Party set forth in this Section 4.1 shall apply notwithstanding that the Credit Agreement may terminate.

 

SECTION 4.2.    Other Covenants.  The Account Party agrees that, until the date upon which the Obligations (other than contingent indemnification obligations and undrawn amounts with respect to the then outstanding Letters of Credit which have either been cash collateralized (at 101% of the undrawn amount) or otherwise backstopped in a manner satisfactory to the Issuing Bank in its reasonable discretion) have been indefeasibly paid in full in cash and the Letter of Credit Commitment has been terminated or otherwise reduced to zero, it shall:

 

(a)                                 (i) (A) preserve, renew and keep in full force and effect its organizational existence and (B) take all reasonable actions to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect on the business, operations or financial condition of the Account Party and its Restricted Subsidiaries taken as a whole; and (ii) comply with all requirements of all applicable laws, rules, regulations and orders of any Governmental Authority except to the extent that failure to comply therewith would not, in the aggregate, reasonably be expected to have a Material Adverse Effect on the business, operations or financial condition of the Account Party and its Restricted Subsidiaries taken as a whole;

 

(b)                                 furnish to the Issuing Bank prompt notice of the occurrence of any Default or Event of Default promptly after any Responsible Officer of the Account Party obtains knowledge thereof;

 

(c)                                  upon the exercise by the Issuing Bank of any remedy pursuant to this Agreement or the other Credit Documents which requires any consent, approval, recording qualification or authorization of any Governmental Authority, the Account Party will execute and deliver, or will cause the execution and delivery by its Restricted Subsidiaries of, all applications, certifications, instruments and other documents and papers that the Issuing Bank may be required to obtain from the Account Party or any of its Restricted Subsidiaries for such governmental consent, approval, recording, qualification or authorization; and

 

(d)                                 cause the Obligations to constitute senior indebtedness (or the equivalent thereof) under each issue of Subordinated Indebtedness (as defined in the Credit Agreement).

 

 

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SECTION 4.3.    Events of Default.  In case of the happening of any of the following events (each an “Event of Default”):

 

(a)                                The Account Party shall fail to pay any amounts as required by Section 3.1(b) or reimburse any L/C Obligation as required by Section 3.3(a), in each case when due in accordance with the terms hereof, within three (3) Business Days after the Account Party shall have received notice from the Issuing Bank to pay the respective amounts and L/C Obligations;

 

(b)                                Any representation or warranty made or deemed made by the Account Party herein or in any other Credit Document or that is contained in any certificate, document or other statement furnished by it at any time under or in connection with this Agreement or any such other Credit Document shall prove to have been inaccurate in any material respect on or as of the date made or deemed made;

 

(c)                                 The Account Party shall fail to make any payment of any other amount hereunder (other than an amount referred to in paragraph (a) above or payments required by Section 3.3(a)), after the Account Party shall have received notice that the respective obligations are then due and payable, and such default shall continue unremedied for a period of five (5) Business Days;

 

(d)                                The Account Party shall default in the observance or performance of any other covenant or agreement contained in this Agreement or any other Credit Document (other than as provided in paragraphs (a) through (c) above), and such default shall continue unremedied for a period of 30 days after notice thereof from the Issuing Bank;

 

(e)                                 An Event of Default shall have occurred and be continuing under the Credit Agreement;

 

(f)                                  (i) The Account Party or any Restricted Subsidiary shall fail to pay any principal, interest or any other amount, regardless of amount (beyond the period of grace, if any, provided therein), due in respect of any indebtedness with an aggregate principal amount in excess of $50,000,000 (such indebtedness, “Material Indebtedness”), when and as the same shall become due and payable, or (ii) any other event or condition occurs, in any such case, that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, but after giving effect to any required lapse of time) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (ii) shall not apply to secured Material Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such indebtedness if such sale or transfer is permitted under the documents providing for such indebtedness; provided further, that this paragraph (f) shall not apply to any Non-Recourse Debt of the Account Party and the Restricted Subsidiaries (except to the extent that the Account Party or any of the Restricted Subsidiaries that are not parties to such Non-Recourse Debt is then directly or indirectly liable, including pursuant to any contingent obligation, for any such Non-Recourse Debt that is Indebtedness (as defined in the Credit Agreement) for borrowed money thereunder and such liability, individually or in the aggregate, exceeds $50,000,000).

 

(g)                                 (x)(i) A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that is for relief against the Account Party or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary in an involuntary case; (ii) appoints a custodian of the 

 

 

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Account Party or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary for all or substantially all of the property of the Account Party or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary; or (iii) orders the liquidation of the Account Party or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary, and, in each of clauses (i), (ii) or (iii), the order or decree remains unstayed and in effect for at least 60 consecutive days; or (y) the Account Party or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary, pursuant to or within the meaning of Bankruptcy Law (i) commences a voluntary case; (ii) consents to the entry of an order for relief against it in an involuntary case; (iii) consents to the appointment of a custodian of it or for all or substantially all of its property; or (iv) makes a general assignment for the benefit of its creditors;

 

(h)                                (i) Any of the Credit Documents, the Collateral Trust and Intercreditor Agreement, the Guarantee and Collateral Agreement or the Accession Agreement shall cease, for any reason (other than in accordance with the express terms thereof), to be in full force and effect, or the Account Party shall so assert, or the Security Documents (as defined in the Credit Agreement) are for any reason (other than in accordance with the express terms thereof) unenforceable with respect to any material portion of the Collateral or (ii) other than as a result of any act or omission by the Issuing Bank, the Obligations hereunder shall no longer constitute Additional First-Lien Indebtedness (as defined in the Collateral Trust and Intercreditor Agreement);

 

(i)                                     One or more judgments for the payment of money in an aggregate amount in excess of $50,000,000 (excluding therefrom any amount covered by insurance) shall be rendered against the Account Party or any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary or any combination thereof and the same shall remain undischarged for a period of at least 60 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon assets or properties of the Account Party or any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary to enforce any such judgment; provided that this paragraph (i) shall not apply to any Non-Recourse Debt of the Account Party and the Restricted Subsidiaries (except to the extent that the Account Party or any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary) that are not parties to such Non-Recourse Debt is then directly or indirectly liable, including pursuant to any contingent obligation, for any such Non-Recourse Debt that is Indebtedness (as defined in the Credit Agreement) for borrowed money thereunder and such liability, individually or in the aggregate, exceeds $50,000,000; or

 

(j)                                    A Change of Control shall occur;

 

then, and in every such event and at any time thereafter during the continuance of such event, the Issuing Bank may take any or all of the following actions: (i) declare the commitments of the Issuing Bank to issue, amend, extend or otherwise modify any Letter of Credit and the Letter of Credit Commitment to be terminated (whereupon the same shall be terminated); (ii) declare all Obligations outstanding under the Credit Documents to be forthwith due and payable in whole or in part, whereupon such Obligations so declared to be due and payable, together with accrued interest thereon and any unpaid accrued fees and all 

 

 

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other liabilities of the Account Party accrued hereunder, shall be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived anything contained herein to the contrary notwithstanding; (iii) require that the Account Party cash collateralize (at 101% of the undrawn amount thereof) the Letters of Credit then outstanding; and (iv) subject to an in accordance with the terms of the Collateral Trust and Intercreditor Agreement, exercise any and all rights and remedies available to it under the Credit Documents or applicable laws, in each case, under or in respect of the Letter of Credit Commitment, any L/C Obligations or other obligations hereunder.  It is understood that if any event that is an Event of Default specified in paragraph (g) above shall occur with respect to the Account Party, the actions specified above shall occur automatically and without any requirement of notice or otherwise.

 

ARTICLE V
 CONDITIONS

 

SECTION 5.1.    Conditions to Issuances, Amendments or Extensions of Letters of Credit After the Effective Date.  The obligation of the Issuing Bank to issue, amend or extend a Letter of Credit on any Issuance Date (or, with respect to any extension or amendment, the date of such extension or amendment) after the Effective Date is subject to the following conditions precedent:

 

(a)                                 Each of the representations and warranties contained in Article VI shall be true and correct in all material respects on and as of such Issuance Date (or, with respect to any extension or amendment, the date of such extension or amendment), except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects on and as of such earlier date; provided that to the extent such representation and warranty is qualified as to materiality, such representation and warranty shall be true and correct in all respects.

 

(b)                                 At the time of and immediately after the issuance, amendment or extension of such Letter of Credit, no Default or Event of Default (each as defined in the Credit Agreement) and no Default or Event of Default hereunder shall have occurred and be continuing.

 

(c)                                  After giving effect to such issuance, amendment or extension, the Outstanding Amount will not exceed the Letter of Credit Commitment.

 

(d)                                 The Account Party shall have delivered to the Issuing Bank the information contemplated by Section 3.2.

 

Any issuance, amendment or extension of the Letter of Credit shall be deemed to constitute a representation and warranty by the Account Party on such Issuance Date (or, with respect to any amendment or extension, on the date of such amendment or extension) as to the matters specified in paragraphs (a), (b) and (c) of this Section 5.1.

 

SECTION 5.2.    Effective Date.

 

(a)                                 This Agreement shall become effective at the time (the “Effective Date”) when each of the following conditions precedent shall have been satisfied and the obligation of the Issuing Bank to issue Letters of Credit on the Effective Date shall be subject solely to the following conditions (subject, in the case of clauses (i), (ii), (iv), (v) and (xi), to the Limited Conditionality Provisions):

 

 

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(i)                         Issuing Bank shall have received this Agreement, executed and delivered by a duly authorized officer of the Account Party.

 

(ii)                      Issuing Bank shall have received the Accession Agreement, executed and delivered by duly authorized officers of the Account Party, the Subsidiaries of the Account Party who are party to the Collateral Trust and Intercreditor Agreement and the Collateral Trustee.

 

(iii)                   [Reserved].

 

(iv)                  Issuing Bank shall have received an opinion, addressed to the Issuing Bank dated the Effective Date, from (x) White & Case LLP, special New York counsel to the Account Party and (y) Saul Ewing, Delaware counsel to the Account Party, in each case, in form and substance consistent with the opinion delivered by White & Case LLP in connection with the effectiveness of the Letter of Credit Reimbursement Agreement, dated as of September 18, 2014, among the Account Party, Macquarie Bank Limited and Macquarie Energy LLC to the lender and issuing bank thereunder.

 

(v)                     Issuing Bank shall have received a good standing certificate (or local equivalent) from the jurisdiction of organization for the Account Party, dated as of a recent date.

 

(vi)                  All fees and expenses required to be paid on the Effective Date (including the reasonable and documented fees and disbursements of Moses & Singer LLP, special New York counsel to the Issuing Bank), in the case of expenses (including any such legal expenses) to the extent invoiced at least two (2) Business Days prior to the Effective Date, shall have been paid.

 

(vii)               Substantially concurrently with the Effective Date, the Delta Acquisition shall be consummated in accordance with the terms of the Delta Acquisition Agreement; but without giving effect to any amendments, waivers or consents by the Account Party that are materially adverse to the interests of the Delta Initial Lenders (as defined in the Third Amendment) in their respective capacities as such without the consent of the Delta Initial Lenders, such consent not to be unreasonably withheld, delayed or conditioned (it being understood that (a) any decrease in the purchase price shall not be materially adverse to the interests of the Delta Initial Lenders so long as such decrease is allocated to reduce the Incremental Tranche C Term Loans (as defined in the Third Amendment) and the Equity Financing (as defined in the Delta Acquisition Agreement) on a dollar-for-dollar basis (it being understood and agreed that any decrease in the purchase price due to purchase price adjustments contemplated in the Delta Acquisition Agreement as in effect on February 24, 2016 shall not (i) be materially adverse to the Delta Initial Lenders or (ii) require any reduction of the Incremental Tranche C Term Loans and the Equity Financing (as defined in the Delta Acquisition Agreement)), (b) any increase in the purchase price shall not be materially adverse to the Delta Initial Lenders so long as such increase is funded by amounts available to the Account Party to fund such increase (it being understood and agreed that any 

 

 

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increase in the purchase price due to purchase price adjustments contemplated in the Delta Acquisition Agreement as in effect on February 24, 2016 shall not be materially adverse to the Delta Initial Lenders), (c) the granting of any consent under the Delta Acquisition Agreement that is not materially adverse to the interests of the Delta Initial Lenders shall not otherwise constitute an amendment or waiver) and (d) any amendment, amendment and restatement of, or other waiver or consent to, the Delta Acquisition Agreement to (i) reflect the Account Party as the sole “Sponsor” thereunder and related changes to reflect the Account Party as providing all of the Equity Financing contemplated (and as defined) therein (with no reduction to the aggregate amount thereof) and/or (ii) reflect the Incremental Tranche B Revolver Increase (as defined in the Third Amendment) and the Incremental Tranche C Term Loans as the Debt Financing (as defined in the Delta Acquisition Agreement) thereunder, in each case shall not be materially adverse to the Delta Initial Lenders.

 

(viii)            The Delta Acquisition Agreement Representations and the Delta Specified Representations shall be true and correct in all material respects.

 

(ix)                  Except as set forth on Schedule 5.7 to the Delta Acquisition Agreement (as in effect on February 24, 2016), since December 31, 2015, there has not been any event, change, occurrence or circumstance that has had, or would reasonably be expected to result in, an Delta Acquisition Funding Date Material Adverse Effect.

 

(x)                     Issuing Bank shall have received at least three (3) Business Days prior to the Effective Date all documentation and other information reasonably required by the Issuing Bank as required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act, that has been reasonably requested by the Issuing Bank at least ten days in advance of the Effective Date.

 

(xi)                  Issuing Bank shall have received customary closing certificates with respect to each Credit Party in form and substance consistent with those delivered on the Closing Date (as defined in the Credit Agreement) pursuant to Section 6.03(a) of the Credit Agreement.

 

(b)                                 Notwithstanding anything in the Credit Documents or any letter agreement or other undertaking concerning the financing of the transactions contemplated by this Agreement to the contrary, (i) the terms of the Credit Documents (and/or any Letter of Credit) shall be in a form such that they do not impair the availability of the Letter of Credit Commitments or the issuance of Letters of Credit on the Effective Date if the conditions set forth in 5.2(a)  hereof are satisfied or waived by the Issuing Bank, it being understood that, to the extent any lien search or Collateral (including the creation or perfection of any security interest) is not or cannot be provided on the Effective Date (other than, a lien on Collateral that may be perfected solely by the filing of a financing statements under the UCC) after the Account Party’s use of commercially reasonable efforts to do so without undue burden or expense, then the provision and/or perfection of such lien search or Collateral shall not constitute a condition precedent to the availability and/or issuance of any Letters of Credit on the Effective Date but may instead be delivered and/or perfected within sixty (60) days (or, with respect to any Mortgage, ninety (90) days) (or, in each

 

 

22

 

case, such longer period as the Collateral Trustee (as defined in the Intercreditor Agreement) may agree in its reasonable discretion) after the Effective Date pursuant to arrangements consistent with the requirements of Section 9.10 of the Credit Agreement and (ii) the only conditions (express or implied) to the availability and/or issuance of the Letters of Credit on the Effective Date are those expressly set forth in Section 5.2(a) hereof, and such conditions shall be subject in all respects to the provisions of this Section 5.2(b). This paragraph and the provisions contained herein are referred to in this Agreement as the “Limited Conditionality Provision”.

 

(c)                                  The Issuing Bank shall provide written notice to the Account Party of the occurrence of the Effective Date at such time as all conditions set forth in Section 5.2(a) (subject, where applicable to the provisions of Section 5.2(b)) shall have been satisfied or waived and such notice, when provided, shall constitute conclusive evidence of the occurrence of the Effective Date; provided that provision of such notice shall in no event constitute a condition to the occurrence of the Effective Date.

 

ARTICLE VI
 REPRESENTATIONS AND WARRANTIES

 

The Account Party represents and warrants to the Issuing Bank on the Effective Date (and on each other date required pursuant to Section 5.1):

 

(a)                                 It is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware and has all necessary organizational powers and all government licenses, authorizations, consents and approvals required to carry on its business as now conducted, except to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect.

 

(b)                                 The execution, delivery and performance by it of this Agreement and the other Credit Documents to which it is a party are within its organizational powers, have been duly authorized by all necessary corporate action, require no approval, consent, exemption, authorization or other action by or in respect of, or filing with, any governmental body, agency or official and do not (i) contravene the terms of Governing Documents of the Account Party, (ii) contravene, violate, or otherwise constitute a default under, any provision of applicable law or regulation or of Governing Documents of the Account Party, or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Account Party, in each case under this clause (ii) in a manner that would reasonably be expected to have a Material Adverse Effect on the business, operations or financial condition of the Account Party and its Restricted Subsidiaries taken as a whole, or (iii) result in (except as contemplated by the Collateral Trust and Intercreditor Agreement and the related Security Documents (as defined in the Credit Agreement)) the creation or imposition of any Lien (as defined in the Credit Agreement) on any asset of the Account Party or any of its Restricted Subsidiaries.  The execution, delivery and performance of this Agreement and the Credit Documents, and the issuance of the Letters of Credit hereunder, do not, and will not, contravene, or constitute a default under, the Credit Agreement or any of the other Credit Documents (as defined in the Credit Agreement).

 

(c)                                  This Agreement and each Credit Document to which it is a party constitutes a legal, valid and binding obligation of the Account Party, enforceable against it in accordance with its terms, except to the extent that enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws generally affecting creditor’s rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).

 

 

23

 

(d)                                 No Default or Event of Default (each as defined in the Credit Agreement) and no Default or Event of Default hereunder has occurred and is continuing or would result from the consummation of the transactions contemplated hereby.

 

(e)                                  That, on the Effective Date only, (i) the fair value of the property of the Account Party and its Restricted Subsidiaries, taken as a whole, on a consolidated basis is greater than the total amount of its liabilities, including, without limitation, contingent liabilities that are probable and estimatable, of the Account Party and its Restricted Subsidiaries, taken as a whole, on a consolidated basis, (ii) the present fair salable value of the assets of the Account Party and its Restricted Subsidiaries, taken as a whole, on a consolidated basis is not less than the amount that will be required to pay the probable liability of the Account Party and its Restricted Subsidiaries, taken as a whole, on a consolidated basis on their debts as they become absolute and matured taking into account the possibility of refinancing such obligations and selling assets, (iii) the Account Party and its Restricted Subsidiaries, taken as a whole, on a consolidated basis do not intend to, and do not believe that they will, incur debts or liabilities beyond their ability to pay such debts and liabilities as they mature, taking into account the possibility of refinancing such obligations and selling assets and (iv) the Account Party and its Restricted Subsidiaries are not engaged in business or a transaction, and is not about to engage in business or a transaction, for which their property would constitute an unreasonably small capital.

 

(f)                                   (i) The audited consolidated balance sheet of the Account Party at December 31, 2015 and the related consolidated statements of income and cash flows and changes in shareholders’ equity of the Account Party for the period ended on such date and (ii) the unaudited consolidated balance sheet of the Account Party at September 30, 2016 and the related unaudited consolidated statements of income and cash flows and changes in shareholders’ equity of the Account Party for the period ended on such date, in each case furnished to Issuing Bank on or prior to the Effective Date, present fairly in all material respects the consolidated financial position of the Account Party as of such date.  All such financial statements have been prepared in accordance with GAAP consistently applied except to the extent provided in the notes to said financial statements and subject, in the case of the unaudited financial statements, to normal year-end audit adjustments and the absence of footnotes.

 

(g)                                  Since December 31, 2015, no event, change or condition has occurred that has had, or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

(h)                                 The representations and warranties made by the Account Party in Sections 8.08, 8.15, 8.16 and 8.19 of the Credit Agreement are incorporated by reference herein, mutatis mutandis (including, without limitation, that (i) references therein to the “Borrower” shall be deemed to be references to the Account Party, (ii) references therein to the “Administrative Agent” and the “Lenders” shall be deemed to be references to the Issuing Bank, and (iii) references therein to “this Agreement” and the “Credit Documents” shall be deemed to be references to this Agreement and the Credit Documents).

 

ARTICLE VII
 MISCELLANEOUS

 

SECTION 7.1.    Method of Communication.  Except as otherwise provided in this Agreement, all notices and communications hereunder shall be in writing or by telephone subsequently confirmed in writing.  Any notice shall be effective if delivered by hand delivery or sent via electronic mail (including a .pdf copy), recognized overnight courier service or certified mail, return receipt

 

 

24

 

requested, and shall be presumed to be received by a party hereto (a) on the date of delivery if delivered by hand or sent by electronic mail (including a .pdf copy), (b) on the second Business Day if sent by recognized overnight courier service and (c) on the third Business Day following the date sent by certified mail, return receipt requested.  A telephonic notice to the Issuing Bank as understood by the Issuing Bank will be deemed to be the controlling and proper notice in the event of a discrepancy with or failure to receive a confirming written notice.

 

SECTION 7.2.    Notices.  Notices to any party, including electronic mail, shall be sent to it at the following addresses, or any other address as to which the other party is notified in writing.

 

	
If to the Account   Party:
    	
 
    	
Dynegy Inc.
   601 Travis Street, Suite 1400
   Houston, Texas 77002
   Attn: General Counsel
   Telephone: (713) 504-6400
   Email: Catherine.James@dynegy.com
    

 

	
If to the Issuing Bank:
    	
 
    	
Goldman Sachs Bank USA
   c/o Goldman Sachs Loan Operations
   6011 Connection Drive
   Irving, Texas 75039
   Attention: Letter of Credit Department Manager
   Telephone: (972) 368-2148
   Email: gs-loc-operations@ny.email.gs.com
   Facsimile: (917) 977-4587
    

 

SECTION 7.3.    Amendments and Waivers.  Except as otherwise expressly set forth herein, none of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by the Account Party and the Issuing Bank.

 

SECTION 7.4.    Severability.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

SECTION 7.5.    Integration.  This Agreement, the other Credit Documents and the Letters of Credit, if any, represent the complete agreement of the Account Party and the Issuing Bank with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Issuing Bank or the Account Party relative to subject matter hereof not expressly set forth or referred to herein or in the other Credit Documents.

 

SECTION 7.6.    No Waiver; Cumulative Remedies.  Except as otherwise expressly set forth herein, no failure to exercise and no delay in exercising, on the part of the Issuing Bank, any right, remedy, power or privilege hereunder or under the other Credit Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or

 

 

25

 

privilege.  The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

SECTION 7.7.    Payment of Expenses; Indemnity.  The Account Party will (a) pay all reasonable and documented out-of-pocket expenses (including without limitation, reasonable and documented fees and disbursements of one primary counsel, and additional special or local counsel to the extent reasonably necessary) incurred by the Issuing Bank in connection with (i) the negotiation, preparation, execution and delivery of this Agreement and the other Credit Documents and any waiver, amendment or consent by the Issuing Bank relating to this Agreement or any other Credit Document and the preparation, execution and delivery the Letters of Credit, if any, issued hereunder and (ii) the administration and enforcement of any rights and remedies under this Agreement or any other Credit Document, and (b) defend, indemnify and hold harmless the Issuing Bank and each of its Related Persons, from and against any losses, penalties, fines, liabilities, judgments, settlements, damages, costs and expenses, suffered on or after the Effective Date by any such Person in connection with any claim, investigation, litigation or other proceeding (whether or not any such Person is a party thereto) and the prosecution and defense thereof, arising out of or in any way connected with this Agreement, the Letters of Credit or any other Credit Document, including without limitation, reasonable and documented fees and disbursements of one primary counsel, and additional special or local counsel to the extent reasonably necessary, to the Issuing Bank, except to the extent that any of the foregoing are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of the party seeking indemnification therefor.

 

SECTION 7.8.    Waiver of Consequential Damages, Etc.  To the extent permitted by applicable law, each party hereto shall not assert, and hereby waives, any claim against the other party hereto and any of its Related Persons, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Letters of Credit or the use of the proceeds thereof.  The foregoing does not in any way limit the indemnification obligations of the Account Party set forth in Section 7.7 hereof.

 

SECTION 7.9.    Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Account Party and the Issuing Bank and their respective successors and assigns, except that the Account Party may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Issuing Bank and the Issuing Bank may not assign or transfer any of its rights under this Agreement without the prior written consent of the Account Party.

 

SECTION 7.10.    Waivers of Jury Trial.  THE ACCOUNT PARTY AND THE ISSUING BANK HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY LETTER OF CREDIT OR OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM HEREIN OR THEREIN.

 

SECTION 7.11.    Set-off.  In addition to any rights and remedies of the Issuing Bank provided by law, upon the occurrence and during the continuance of an Event of Default, the Issuing Bank shall have the right, without prior notice to the Account Party (any such notice being expressly waived by the Account Party to the extent permitted by applicable law), upon any amount becoming due and payable (after all applicable grace periods have expired) by the Account Party hereunder (whether by acceleration or otherwise), to set off and appropriate and apply against such amount any and all deposits (including, but not limited to, general or special, time or demand, provisional or final, but excluding fiduciary accounts), in any currency, and any other credits, indebtedness or claims, in any currency, in

 

 

26

 

each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Issuing Bank or any branch or agency thereof to or for the credit or the account of the Account Party.  The Issuing Bank agrees to notify promptly the Account Party after any such setoff and application made by it; provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

SECTION 7.12.    Counterparts. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page of this Agreement by PDF (or similar file) by electronic mail shall be effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 7.13.    Section Headings.  The section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

 

SECTION 7.14.    Register.  The Account Party hereby designates the Issuing Bank to serve as its non-fiduciary agent, solely for purposes of this Section 7.14, to maintain a register (the “Register”) for the recordation of the amounts of and interest on the L/C Obligations owing to any Issuing Bank pursuant to the terms hereof from time to time.  The entries in the Register shall be conclusive absent manifest error, and the Account Party and the Issuing Bank shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as an Issuing Bank hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Account Party at any reasonable time and from time to time upon reasonable prior notice.

 

SECTION 7.15.    Submission to Jurisdiction.  Each of the parties hereto hereby irrevocably and unconditionally:

 

(a)                                 submits for itself and its property in any legal action or proceeding relating to this Agreement, any of the other Credit Documents or any Letter of Credit, or for recognition and enforcement of any judgment in respect thereof, to, subject to Section 7.15(d) below, the exclusive general jurisdiction of the courts of any state or federal court sitting in the Borough of Manhattan in the City of New York (or any appellate court therefrom);

 

(b)                                 consents that any such action or proceeding may be brought in such courts, and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

 

(c)                                  agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party at its address referred to in Section 7.2; and

 

(d)                                 agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right of Issuing Bank to bring any action or proceeding relating to this Agreement, the Credit Documents or the Letters of Credit in the courts of any other jurisdiction.

 

SECTION 7.16.    Governing Law.  This Agreement shall be governed by the law of the State of New York; provided, that (a) the interpretation of the definition of Delta Acquisition Funding Date Material Adverse Effect (and whether or not a Delta Acquisition Funding Date Material Adverse

 

 

27

 

Effect has occurred), (b) the determination of the accuracy of any Delta Acquisition Agreement Representation and whether as a result of any inaccuracy thereof the Account Party or any of its applicable Affiliates or Subsidiaries has the right to terminate its or their obligations under the Delta Acquisition Agreement or refuse to consummate the Delta Acquisition and (c) the determination of whether the Delta Acquisition has been consummated in accordance with the terms of the Delta Acquisition Agreement and, in any case, claims or disputes arising out of any such interpretation or determination or any aspect thereof, in each case, shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

 

SECTION 7.17.    USA PATRIOT Act.  The Issuing Bank hereby notifies the Account Party that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “PATRIOT Act”), it is, and certain of its Affiliates are, required to obtain, verify and record information that identifies the Account Party, which information includes the name and address of the Account Party and other information that will allow such Persons to identify the Account Party in accordance with the PATRIOT Act.

 

SECTION 7.18.    Survival.  The agreements and obligations contained in Section 3.8, Section 3.10, Section 7.7, Section 7.8, Section 7.10, Section 7.15, Section 7.16, this Section 7.18 and Section 7.19 shall survive the termination of this Agreement and any other Credit Document.

 

SECTION 7.19.  Confidentiality.  The Issuing Bank agrees that it will not disclose (without the prior written consent of the Account Party) (other than to its employees, agents, representatives, auditors, advisors or counsel, its Affiliates involved in the transactions hereunder or the administration of this Agreement on a “need to know” basis; provided such Persons shall be subject to the provisions of this Section 7.19 to the same extent as the Issuing Bank) any information with respect to the Account Party or any of its subsidiaries which is now or in the future furnished pursuant to this Agreement or any other Credit Document; provided that the Issuing Bank may disclose any such information (i) as has become generally available to the public other than by virtue of a breach of this Section 7.19, (ii) as may be required in any report, statement or testimony submitted to any municipal, state or Federal regulatory body having or claiming to have jurisdiction over it or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or similar organizations (whether in the United States or elsewhere) or their successors (provided that, except with respect to disclosures to supervisory or regulatory authorities having jurisdiction over it, the Issuing Bank, as applicable, shall give the Account Party prompt notice of such disclosure to the extent permitted by law, rule or regulation), (iii) as may be required in respect to any summons or subpoena or in connection with any litigation (provided that the Issuing Bank shall give the Account Party prompt notice of such disclosure to the extent permitted by law, rule or regulation), (iv) in order to comply with any law, order, regulation or ruling applicable to the Issuing Bank or as requested by a Governmental Authority (provided that, except with respect to disclosures to supervisory or regulatory authorities having jurisdiction over the Issuing Bank, the Issuing Bank shall give the Account Party prompt notice of such disclosure to the extent permitted by law, rule or regulation), (v) to the extent such information is received by the Issuing Bank from a third party that is not known by the Issuing Bank to be subject to confidentiality arrangements to the Account Party or any of its Subsidiaries, (vi) to the Collateral Trustee and (vii) for purposes of establishing a “due diligence” defense.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.

 

	
 
    	
DYNEGY INC., as Account   Party
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Clint C. Freeland
    
	
 
    	
 
    	
Name:
    	
Clint C. Freeland
    
	
 
    	
 
    	
Title:
    	
Executive Vice   President and Chief Financial Officer
    

 

[Signature Page to Dynegy LC Reimbursement Agreement]

 

	
 
    
	
 
    	
GOLDMAN SACHS BANK USA,   as Issuing Bank
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 /s/ Anna Ashurov
    
	
 
    	
 
    	
Name: 
    	
Anna Ashurov
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    

 

[Signature Page to Dynegy LC Reimbursement Agreement]

 

 

Schedule A

 

Wire Instructions

 

	
For Issuing Bank:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Account Holding   Institution:
    	
 
    	
Citibank N.A.
    
	
SWIFT:
    	
 
    	
CITIUS33
    
	
Beneficiary:
    	
 
    	
Goldman Sachs Bank USA
    
	
Beneficiary Account   Number:
    	
 
    	
#30627664
    

 

 

 

Exhibit A

 

EXHIBIT A-1

to Letter of Credit Reimbursement Agreement

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Issuing Banks That Are Not Partnerships for U.S. Federal Income Tax Purposes)

[Letterhead of Foreign Issuing Bank]

 

Date: [           ,     ]

 

Dynegy Inc.

          

          

 

Email:             

 

Re:  Dynegy Inc.— Foreign Issuing Bank Certificate

 

Ladies and Gentlemen:

 

This U.S. Tax Compliance Certificate is delivered to you pursuant to Section 3.10(e) of the Letter of Credit Reimbursement Agreement, dated as of February 7, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Agreement”), by and among Dynegy Inc., a Delaware corporation (the “Account Party”), and [            ] (together with its successors and assigns, the “Issuing Bank”).  Unless otherwise defined herein, capitalized terms used herein have the meanings provided in the Agreement.

 

[Insert name of applicable Foreign Issuing Bank] (the “Foreign Issuing Bank”) is providing this U.S. Tax Compliance Certificate pursuant to Section 3.10(e) of the Agreement.  Foreign Issuing Bank hereby represents and warrants that:

 

1.                                      The Foreign Issuing Bank is the sole record and beneficial owner of the Obligations in respect of which it is providing this U.S. Tax Compliance Certificate.  The Foreign Issuing Bank is not a “bank” for purposes of Section 881(c)(3)(A) of the Internal Revenue Code;

 

2.                                      The Foreign Issuing Bank is not a 10-percent shareholder of the Account Party within the meaning of Section 871(h)(3)(B) or 881(c)(3)(B) of the Internal Revenue Code; and

 

3.                                      The Foreign Issuing Bank is not a controlled foreign corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Internal Revenue Code.

 

The undersigned has furnished the Account Party with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8-BEN-E.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Account Party, and (2) the undersigned shall have at all times furnished the Account Party with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

IN WITNESS WHEREOF, the undersigned has duly executed this U.S. Tax Compliance Certificate as of

 

31

 

the date first written above.

 

 

	
 
    	
[INSERT NAME OF FOREIGN   ISSUING BANK]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

32

 

EXHIBIT A-2

to Letter of Credit Reimbursement Agreement

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Non-U.S. Participants That Are Not Partnerships for U.S. Federal Income Tax Purposes)

[Letterhead of Non-U.S. Participant]

 

Date: [           ,     ]

 

Dynegy Inc.

             

             

 

Email:                 

 

Re:                                    Dynegy Inc. — Foreign Issuing Bank Certificate

 

Ladies and Gentlemen:

 

This U.S. Tax Compliance Certificate is delivered to you pursuant to Section 3.10(e) of the Letter of Credit Reimbursement Agreement, dated as of February 7, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Agreement”), by and among Dynegy Inc., a Delaware corporation (the “Account Party”), and [            ] (together with its successors and assigns, the “Issuing Bank”). Unless otherwise defined herein, capitalized terms used herein have the meanings provided in the Agreement.

 

[Insert name of applicable Participant] (the “Non-U.S. Participant”) is providing this U.S. Tax Compliance Certificate pursuant to Section 3.10(e) of the Agreement.  The Non-U.S. Participant hereby represents and warrants that:

 

1.                                      The Non-U.S. Participant is the sole record and beneficial owner of the participation in respect of which it is providing this U.S. Tax Compliance Certificate.  The Non-U.S. Participant is not a “bank” for purposes of Section 881(c)(3)(A) of the Internal Revenue Code;

 

2.                                      The Non-U.S. Participant is not a 10-percent shareholder of the Account Party within the meaning of Section 871(h)(3)(B) or 881(c)(3)(B) of the Internal Revenue Code; and

 

3.                                      The Non-U.S. Participant is not a controlled foreign corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Internal Revenue Code.

 

The undersigned has furnished the Account Party with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8-BEN-E.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Account Party, and (2) the undersigned shall have at all times furnished the Account Party with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

IN WITNESS WHEREOF, the undersigned has duly executed this U.S. Tax Compliance Certificate as of the date first written above.

 

33

 

	
 
    	
[INSERT NAME OF   NON-U.S. PARTICIPANT]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

34

 

EXHIBIT A-3

to Letter of Credit Reimbursement Agreement

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Non-U.S. Participants That Are Partnerships for U.S. Federal Income Tax Purposes)

[Letterhead of Non-U.S. Participant]

 

Date: [           ,     ]

 

Dynegy Inc.

              

              

 

Email:

 

Re:                                    Dynegy Inc. — Foreign Issuing Bank Certificate

 

Ladies and Gentlemen:

 

This U.S. Tax Compliance Certificate is delivered to you pursuant to Section 3.10(e) of the Letter of Credit Reimbursement Agreement, dated as of February 7, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Agreement”), by and among Dynegy Inc., a Delaware corporation (the “Account Party”), and [            ] (together with its successors and assigns, the “Issuing Bank”).  Unless otherwise defined herein, capitalized terms used herein have the meanings provided in the Agreement.

 

[Insert name of applicable Participant] (“Non-U.S. Participant”) is providing this U.S. Tax Compliance Certificate pursuant to Section 3.10(e) of the Agreement.  Non-U.S. Participant hereby represents and warrants that:

 

1.                                      Non-U.S. Participant is the sole record owner of the participation in respect of which it is providing this U.S. Tax Compliance Certificate and its partners/members are the sole beneficial owners of such participation.  Neither Non-U.S. Participant nor any of its partners/members is a “bank” for purposes of Section 871(h) or 881(c)(3)(A) of the Internal Revenue Code;

 

2.                                      None of the partners/members of Non-U.S. Participant is a 10-percent shareholder of the Account Party within the meaning of Section 871(h)(3)(B) or 881(c)(3)(B) of the Internal Revenue Code; and

 

3.                                      None of the partners/members of Non-U.S. Participant is a controlled foreign corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Internal Revenue Code.

 

The undersigned has furnished the Account Party with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8-BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8-BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Account Party and (2) the undersigned shall have at all times furnished the Account Party with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding 

 

35

 

such payments.

 

IN WITNESS WHEREOF, the undersigned has duly executed this U.S. Tax Compliance Certificate as of the date first written above.

 

	
 
    	
[INSERT NAME OF   NON-U.S. PARTICIPANT]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

36

 

EXHIBIT A-4

to Letter of Credit Reimbursement Agreement

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Issuing Banks That Are Partnerships for U.S. Federal Income Tax Purposes)

[Letterhead of Foreign Issuing Bank]

 

Date: [           ,     ]

 

Dynegy Inc.

          

           

 

Email:              

 

Re:                                    Dynegy Inc. — Foreign Issuing Bank Certificate

 

Ladies and Gentlemen:

 

This U.S. Tax Compliance Certificate is delivered to you pursuant to Section 3.10(e) of the Letter of Credit Reimbursement Agreement, dated as of February 7, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Agreement”), by and among Dynegy Inc., a Delaware corporation (the “Account Party”), and [            ] (together with its successors and assigns, the “Issuing Bank”).  Unless otherwise defined herein, capitalized terms used herein have the meanings provided in the Agreement.

 

[Insert name of applicable Foreign Issuing Bank] (the “Foreign Issuing Bank”) is providing this U.S. Tax Compliance Certificate pursuant to Section 3.10(e) of the Agreement.  The Foreign Issuing Bank hereby represents and warrants that:

 

1.                                      The Foreign Issuing Bank is the sole record owner of the Obligations in respect of which it is providing this U.S. Tax Compliance Certificate and its partners/members are the sole beneficial owners of such Obligations.  Neither the Foreign Issuing Bank nor any of its partners/members is a “bank” for purposes of Section 881(c)(3)(A) of the Internal Revenue Code;

 

2.                                      None of the partners/members of the Foreign Issuing Bank is a 10-percent shareholder of the Account Party within the meaning of Section 871(h)(3)(B) or 881(c)(3)(B) of the Internal Revenue Code; and

 

3.                                      None of the partners/members of the Foreign Issuing Bank is a controlled foreign corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Internal Revenue Code.

 

The undersigned has furnished the Account Party with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8-BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8-BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Account Party, and (2) the undersigned shall have at all times furnished the Account Party with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding 

 

37

 

such payments.

 

IN WITNESS WHEREOF, the undersigned has duly executed this U.S. Tax Compliance Certificate as of the date first written above.

 

	
 
    	
[INSERT NAME OF FOREIGN   ISSUING BANK]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

38

 

Exhibit B

 

Form of Application

 

[See attached]

 

39

 

	
APPLICATION   AND AGREEMENT FOR
    	
 
    
	
 
    	
 
    
	
IRREVOCABLE   STANDBY LETTER OF CREDIT
    	
GOLDMAN   SACHS BANK USA
    

 

Standby no.                                                                                                                                  (For Bank Use)

(a)

 

The undersigned applicant hereby requests that Goldman Sachs Bank USA (the “Issuer”) issue an irrevocable standby letter of credit (together with any replacements, extensions, amendments  or modifications, the “Credit”) with the following terms and conditions and deliver it to the beneficiary named below by:

 

by  o courier  o U.S. Mail (domestic addresses only)

 

	
Amount   in Words(U.S.   dollars [only]/[unless otherwise indicated and approved by Goldman Sachs Bank   USA]):
    
   Amount in Figures:
    	
 
    	
Expiry   Date (credit will   expire at 5:00 p.m. New York time on the following date):
    
	
 
    	
 
    	
 
    
	
Applicant   (full legal name   and address - if more than one, jointly and severally, individually and   collectively, the “Applicant”):
    	
 
    	
Beneficiary (full legal name, address, and phone   number to appear in Credit)
    
	
 
    	
 
    	
 
    
	
Account   Party (full legal   name and address - Complete only if Account Party is not Applicant):
    	
 
    	
Advising   Bank, Confirming Bank, Receiving Bank or other Intermediary Bank-If any (full legal name and address - If   blank, Issuer may select at its option):
    

 

Complete only if Automatic Extension of the Expiry Date is required:

 

Credit to contain an automatic extension clause with extension periods of  ̈ one year/  ̈ other               (specify)

 

No less than  ̈ thirty/ ̈ other             (specify) calendar days non-extension notice to the beneficiary.

 

Final expiration date beyond which no automatic extension shall extend Credit (if such final expiration date is not scheduled to be the last day of the applicable additional period, then the final extension period shall be for the stub period ending on such final expiry date):

 

Special Conditions:

 

o Multiple drawings prohibited (if blank, [up to three] multiple drawings will be permitted)

 

o Credit is transferable only in its entirety (If blank, credit will be non-transferable.  If transferable, Issuer is authorized to include its standard transfer conditions).

 

Credit shall be subject to the International Standby Practices 1998 (International Chamber of Commerce Publication No. 590 (“ISP98”) or, o if box is checked, it shall be subject to the Uniform Customs and Practice for Documentary Credits, 2007 Revision, International Chamber of Commerce Publication No. 600 (“UCP600”).  As to all matters not governed by ISP98 or UCP600, as applicable, the Credit shall be governed by the law of the State of [New York][Texas](1), including, without limitation, the Uniform Commercial Code as in effect from time to time in the State of [New York][Texas].

 

(1)  Account Part to choose appropriate state.

 

40

 

This Application and Agreement will not be considered complete until all information required hereby has been provided by Applicant.

 

o Other:

 

Per regulatory requirements, please provide below a general description of the underlying transaction to enable proper classification of the Credit. This is for bank use only and will not be part of the text of the Credit.

 

The purpose of this Credit is:    (insert brief description of underlying transaction including the parties involved in the transaction and their roles, including other banks)

 

Draw Documents Required:

 

o           Format of Credit, documents required and other instructions to be substantially per attachment(s), which form an integral part of this application. (Note: All attachments should also be signed by the Applicant.)

 

or

 

 ̈                                    Payment to be available to the Beneficiary against presentation at the office of the Issuer’s servicer specified in the Credit of: 1) the original letter of credit together with originals of any amendments thereto which shall be attached to the Credit and 2) a dated statement issued on the letterhead of Beneficiary and purportedly signed by an authorized representative including the following statement:  (Please state within quotation marks the wording to appear on the statement to be presented):    (insert appropriate reason for drawing)

 

Terms and Conditions:

 

The opening of the Credit is subject to the terms and conditions of that certain Letter of Credit Reimbursement Agreement dated as of February 7, 2017 between Dynegy Inc., as account party, and Goldman Sachs Bank USA, as issuing bank (as amended, modified, supplemented or restated from time to time, the “LC Reimbursement Agreement”).  In the event of any inconsistency between the terms and conditions of the LC Reimbursement Agreement and the terms and conditions hereof, the terms and conditions of the LC Reimbursement Agreement shall control.

 

Applicant by signing below affirms that it has fully read and agrees to the terms of this Application and Agreement and the provisions of the LC Reimbursement Agreement relating to letters of credit which are incorporated by reference herein and form a part hereof and agrees to be bound thereby.

 

	
Applicant’s   Name:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Authorized   Signature
    	
Date
    	
 
    	
 
    
	
Name   (in print)
    	
 
    	
 
    	
 
    
	
Phone   No.:
    	
Fax   No.:
    	
 
    	
 
    
					

 

We join in the above Application and Agreement, naming us as Account Party, for the issuance of the Credit and, in consideration thereof, we irrevocably agree (i) that the Applicant has sole right to give instructions and make agreements with respect to this Application and Agreement, the Credit and the disposition of documents, and we have no right or claim against you or any of your Affiliates and (ii) to be jointly and severally bound by the Application and Agreement (including any terms and conditions incorporated herein) and all obligations of the Applicant hereunder.

 

	
Account   Party’s Name:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Authorized   Signature
    	
Date
    	
 
    	
 
    
					

 

41

 

Name (in print)

	
Phone No.:
    	
Fax No.:
    	
 
    

 

42Exhibit

Exhibit 10.1

AMENDED AND RESTATED
ADVISORY AGREEMENT
AMONG
NORTHSTAR/RXR NEW YORK METRO REAL ESTATE, INC.,
NORTHSTAR/RXR OPERATING PARTNERSHIP, LP,
NSAM J-NS/RXR LTD
AND
COLONY NORTHSTAR, INC.

NY 246322957v3

TABLE OF CONTENTS
	
			
	 
	 
	Page

	 
	 
	 

	ARTICLE 1 DEFINITIONS
	1

	ARTICLE 2 APPOINTMENT
	7

	ARTICLE 3 DUTIES OF THE ADVISOR
	7

	3.01
	Offering Services
	7

	3.02
	Acquisition Services
	8

	3.03
	Asset Management Services
	9

	3.04
	Accounting and Other Administrative Services
	9

	3.05
	Stockholder Services
	10

	3.06
	Financing Services
	11

	3.07
	Disposition Services
	11

	ARTICLE 4 AUTHORITY OF ADVISOR
	11

	4.01
	Powers of the Advisor
	11

	4.02
	Approval by the Board
	12

	4.03
	Modification or Revocation of Authority of Advisor
	12

	ARTICLE 5 BANK ACCOUNTS
	12

	ARTICLE 6 RECORDS AND ACCESS
	12

	ARTICLE 7 LIMITATION ON ACTIVITIES
	12

	ARTICLE 8 FEES
	13

	8.01
	Acquisition Fees
	13

	8.02
	Asset Management Fees
	13

	8.03
	Disposition Fees
	13

	8.04
	Operation Partnership Interests
	13

	8.05
	Changes to Fee Structure
	13

	8.06
	Payment in Shares
	13

	ARTICLE 9 EXPENSES
	14

	9.01
	General
	14

	9.02
	Timing of and Additional Limitations on Reimbursements
	15

	ARTICLE 10 OTHER SERVICES
	16

	ARTICLE 11 VOTING AGREEMENT
	16

	ARTICLE 12 RELATIONSHIP OF ADVISOR AND COMPANY; OTHER ACTIVITIES OF THE ADVISOR
	17

	12.01
	Relationship
	17

	12.02
	Time Commitment
	17

	12.03
	Investment Opportunities and Allocation
	17

	ARTICLE 13 THE NORTHSTAR NAME
	17

	ARTICLE 14 TERM AND TERMINATION OF THE AGREEMENT
	18

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NY 246322957v3

	
			
	14.01
	Term
	18

	14.02
	Termination by the Parties
	18

	14.03
	Payments on Termination and Survival of Certain Rights and Obligations
	18

	ARTICLE 15 ASSIGNMENT
	19

	ARTICLE 16 INDEMNIFICATION AND LIMITATION OF LIABILITY
	19

	16.01
	Indemnification
	19

	16.02
	Limitation on Indemnification
	20

	16.03
	Limitation on Payment of Expenses
	20

	16.04
	Indemnification by Advisor
	21

	ARTICLE 17 NON-SOLICITATION
	21

	ARTICLE 18 MISCELLANEOUS
	21

	18.01
	Notices
	21

	18.02
	Modification
	22

	18.03
	Severability
	22

	18.04
	Construction
	22

	18.05
	Entire Agreement
	22

	18.06
	Waiver
	22

	18.07
	Gender
	22

	18.08
	Titles Not to Affect Interpretation
	22

	18.09
	Counterparts
	22

ii
NY 246322957v3

AMENDED AND RESTATED ADVISORY AGREEMENT
THIS AMENDED AND RESTATED ADVISORY AGREEMENT (this “Agreement”), dated as of February 7, 2017 (the “Effective Date”), is entered into by and among NorthStar/RXR New York Metro Real Estate, Inc. (f/k/a NorthStar/RXR New York Metro Income, Inc.), a Maryland corporation (the “Company”), NorthStar/RXR Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), NSAM J-NS/RXR Ltd, a Jersey limited company (the “Advisor”) and, solely in connection with the obligations set forth in Article 13, Colony NorthStar, Inc. (as successor to NorthStar Asset Management Group Inc.), a Maryland corporation (“Colony NorthStar”).  Capitalized terms used herein shall have the meanings ascribed to them in Section 1 below.
W I T N E S S E T H
WHEREAS, the Company intends to qualify as a REIT, and to invest its funds in investments permitted by the terms of Sections 856 through 860 of the Code;
WHEREAS, the Company is the general partner of the Operating Partnership and intends to conduct all of its business and make all or substantially all Investments through the Operating Partnership;
WHEREAS, the Company and the Operating Partnership desire to avail themselves of the knowledge, experience, sources of information, advice, assistance and certain facilities available to the Advisor and to have the Advisor undertake the duties and responsibilities set forth herein, on behalf of, and subject to the supervision of, the Board of the Company, all as provided herein;
WHEREAS, the Company, the Operating Partnership, the Advisor and Colony NorthStar are parties to that certain Advisory Agreement dated February 9, 2015, which is amended and restated in its entirety hereby; and
WHEREAS, the Advisor is willing to undertake to render such services, subject to the supervision of the Board, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE 1 
 
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings specified below:
Acquisition Expenses means any and all expenses, excluding Acquisition Fees incurred by the Company, the Operating Partnership, the Advisor, the Sub-Advisor or any of their Affiliates in connection with the selection or acquisition of any Investments, whether or not acquired or originated, as applicable, including, without limitation, legal fees and expenses, travel and

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NY 246322957v3

communications expenses, costs of appraisals, nonrefundable option payments on properties or other investments not acquired, accounting fees and expenses, title insurance premiums and the costs of performing due diligence.
Acquisition Fees means the fee payable to the Advisor pursuant to Section 8.01 plus all other fees and commissions, excluding Acquisition Expenses, paid by any Person to any Person, including the Sub-Advisor, in connection with making or investing in any Investments or the purchase, development or construction of any Property by the Company. Included in the computation of such fees or commissions shall be any real estate commission, selection fee, Development Fee, Construction Fee, nonrecurring management fee, loan fees or points or any fee of a similar nature, however designated. Excluded shall be development fees and construction fees paid to Persons not Affiliated with the Advisor in connection with the actual development and construction of a Property.
Advisers Act has the meaning set forth in Article 15.
Advisor means:  (i) NSAM J-NS/RXR Ltd, a Jersey limited company; or (ii) any successor advisor to the Company.
Advisor Entities means the Advisor and the Sub-Advisor.
Affiliate or Affiliated means with respect to any Person:  (i) any Person directly or indirectly controlling, controlled by, or under common control with such other Person; (ii) any Person directly or indirectly owning, controlling, or holding with the power to vote 10.0% or more of the outstanding voting securities of such other Person; (iii) any legal entity for which such Person acts as an executive officer, director, trustee, or general partner; (iv) any Person 10.0% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held, with power to vote, by such other Person; and (v) any executive officer, director, trustee, or general partner of such other Person.  An entity shall not be deemed to control or be under common control with a program sponsored by the sponsor of the Company unless (A) the entity owns 10.0% or more of the voting equity interests of such program or (B) a majority of the Board (or equivalent governing body) of such program is composed of Affiliates of the entity.
Asset Management Fee means the fees payable to the Advisor pursuant to Section 8.02.
Average Invested Assets means, for a specified period, the average of the aggregate book value of the assets of the Company invested, directly or indirectly, in Investments before reserves for depreciation or bad debts or other similar non-cash reserves, computed by taking the average of such values at the end of each month during such period.
Board means the board of directors of the Company, as of any particular time.
Bylaws means the bylaws of the Company, as amended from time to time.
Cause means with respect to the termination of this Agreement, fraud, criminal conduct, misconduct, negligence or breach of fiduciary duty by the Advisor, or a material breach of this Agreement by the Advisor.

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NY 246322957v3

Charter means the articles of incorporation of the Company, as amended from time to time.
Code means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto.  Reference to any provision of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable regulations as in effect from time to time.
Colony NorthStar means Colony NorthStar, Inc., a corporation organized under the laws of the State of Maryland.
Company means NorthStar/RXR New York Metro Real Estate, Inc., a corporation organized under the laws of the State of Maryland.
Construction Fee means a fee or other remuneration for acting as general contractor and/or construction manager to construct improvements, supervise and coordinate projects or provide major repairs or rehabilitations on a Property.
Contract Sales Price means the total consideration received by the Company for the Sale, partial Sale or syndication of an Investment.
Cost of Investments means the sum of:  (i) with respect to the acquisition or origination of a Property, Loan or other permitted investment to be wholly owned, directly or indirectly, by the Company, the amount actually paid or allocated to fund the acquisition, origination, development, construction or improvement of the Property, Loan or other permitted investment, inclusive of expenses associated with such Property, Loan or other permitted investment and the amount of any debt associated with, or used to fund the investment in, such Property, Loan or other permitted investment; and (ii) with respect to the acquisition or origination of a Property, Loan or other permitted investment through any Joint Venture, the portion of the amount actually paid or allocated to fund the acquisition, origination, development, construction or improvement of the Property, Loan or other permitted investment, inclusive of expenses associated with such Property, Loan or other permitted investment and expenses of the Joint Venture, plus the amount of any debt associated with, or used to fund the investment in, such Property, Loan or other permitted investment that is attributable to the Company’s investment in such Joint Venture.
Dealer Manager means NorthStar Securities, LLC, a Delaware limited liability company, or such other Person or entity selected by the Board to act as dealer manager for the Offering.
Development Fee means a fee for the packaging of a Property, including the negotiation and approval of plans, and any assistance in obtaining zoning and necessary variances and financing for a specific Property, either initially or at a later date.
Disposition Fee means the fees payable to the Advisor pursuant to Section 8.03.
Distribution means any distributions of money or other property by the Company to Stockholders, including distributions that may constitute a return of capital for federal income tax purposes.

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NY 246322957v3

Excess Amount has the meaning set forth in Section 9.02.
Expense Year has the meaning set forth in Section 9.02.
FINRA means the Financial Industry Regulatory Authority, Inc.
GAAP means generally accepted accounting principles as in effect in the United States of America from time to time.
Good Reason means either:  (i) any failure by the Company or the Operating Partnership to obtain a satisfactory agreement from any successor to the Company or the Operating Partnership to assume and agree to perform the Company’s or the Operating Partnership’s obligations under this Agreement; or (ii) any material breach of this Agreement of any nature whatsoever by the Company or the Operating Partnership.
Gross Proceeds means the aggregate purchase price of all Shares sold for the account of the Company through an Offering, without deduction for Organization and Offering Expenses, and not including Shares sold pursuant to the Company’s distribution reimbursement plan.
Independent Directors has the meaning set forth in the Charter.
Initial Public Offering means the initial public offering of Shares registered on Registration Statement No. 333-200617 on Form S-11.
Investments means any investments by the Company or the Operating Partnership in Properties, Loans and all other permitted investments in which the Company or the Operating Partnership may acquire an interest, either directly or indirectly, including through ownership interests in a Joint Venture, pursuant to its Charter, Bylaws or operating partnership agreement, as applicable, and the investment objectives and policies adopted by the Board from time to time, other than short-term investments acquired for purposes of cash management.
Joint Venture means any joint venture, limited liability company, partnership or other entity pursuant to which the Company is a co-venturer or partner with respect to the ownership of any Investments.
Listing means the listing of the Shares on a national securities exchange.  Upon such Listing, the Shares shall be deemed “Listed.”
Loans means mortgage loans and other types of debt financing investments made by the Company or the Operating Partnership, either directly or indirectly, including through ownership interests in a Joint Venture, including, without limitation, mezzanine loans, B-notes, bridge loans, convertible debt, wraparound mortgage loans, construction mortgage loans, loans on leasehold interests, and participations in such loans.
NASAA REIT Guidelines means the Statement of Policy Regarding Real Estate Investment Trusts published by the North American Securities Administrators Association as in effect on the Effective Date.

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NY 246322957v3

Net Income means, for any period, the Company’s total revenues applicable to such period, less the total expenses applicable to such period excluding additions to reserves for depreciation, bad debts or other similar non-cash reserves; provided, however, Net Income for purposes of calculating total allowable Operating Expenses (as defined herein) shall exclude the gain from the sale of the Company’s assets.
Offering means any offering of Shares that is registered with the SEC, excluding Shares offered under any employee benefit plan.
Operating Expenses means all costs and expenses paid or incurred by the Company, as determined under GAAP, that in any way are related to the operation of the Company or its business, including fees paid to the Advisor, but excluding:  (i) the expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting, underwriting, brokerage, listing, registration, and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and Listing; (ii) interest payments; (iii) taxes; (iv) non-cash expenditures such as depreciation, amortization, bad debt reserves and equity-based compensation; (v) incentive fees; and (vi) Acquisition Fees, origination fees, Acquisition Expenses, real estate commissions on the resale of real property and other fees and expenses connected with the acquisition, financing, disposition, management and ownership of real estate interests, loans or other property, including the costs of foreclosure, insurance premiums, legal services, maintenance, repair, and improvement of property.  The definition of “Operating Expenses” set forth above is not intended to expand the type of expenses that are treated as “Total Operating Expenses” under the NASAA REIT Guidelines.
Operating Partnership means NorthStar/RXR Operating Partnership, LP, a Delaware limited partnership formed to own and operate Investments on behalf of the Company.
Operating Partnership Agreement means the limited partnership agreement among the Company and NorthStar/RXR NTR OP Holdings, LLC.
OP Units means the units of limited partnership interest in the Operating Partnership.
Organization and Offering Expenses means any and all costs and expenses incurred by or on behalf of the Company and to be paid from the assets of the Company in connection with the formation of the Company and the qualification and registration of an Offering, and the marketing and distribution of Shares, including, without limitation, total underwriting and brokerage discounts and commissions (including fees of the underwriters’ attorneys), expenses for printing, preparing and amending registration statements or supplementing prospectuses, mailing and distributing costs, salaries of employees while engaged in sales activity, telephone and other telecommunications costs, all advertising and marketing expenses, charges of transfer agents, registrars, trustees, escrow holders, depositories and experts and fees, expenses and taxes related to the filing, registration and qualification of the sale of the Shares under federal and state laws, including taxes and fees and accountants’ and attorneys’ fees.
Person means an individual, corporation, partnership, estate, trust (including a trust qualified under Section 401(a) or 501(c) (17) of the Code), a portion of a trust permanently set aside for or 

5
NY 246322957v3

to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity, or any government or any agency or political subdivision thereof, and also includes a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
Property means any real property or properties, including leasehold interests in any real property or properties, transferred or conveyed to the Company or the Operating Partnership, either directly or indirectly, including through ownership interests in a Joint Venture.
Prospectus means the Company’s final prospectus for any public offering within the meaning of Section 2(10) of the Securities Act of 1933, as amended.
Registration Statement means the registration statement filed by the Company with the SEC on Form S-11 (Reg. No. 333-200617), as amended from time to time, in connection with the Initial Public Offering.
REIT means a “real estate investment trust” under Sections 856 through 860 of the Code.
Sale means any transaction or series of transactions whereby:  (A) the Company or the Operating Partnership sells, grants, transfers, conveys, or relinquishes its ownership of any Investment or portion thereof, including the transfer of any Property that is the subject of a ground lease, including any event with respect to any Investment that gives rise to a significant amount of insurance proceeds or condemnation awards, and including the issuance by one of the Company’s subsidiaries of any asset-backed securities or collateralized debt obligations as part of a securitization transaction; (B) the Company or the Operating Partnership sells, grants, transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of the Company or the Operating Partnership in any Joint Venture in which it is a partner; or (C) any Joint Venture in which the Company or the Operating Partnership is a co-venturer or partner, sells, grants, transfers, conveys, or relinquishes its ownership of any Investment or portion thereof, including any event with respect to any Investment that gives rise to insurance claims or condemnation awards, and including the issuance by such Joint Venture or one of its subsidiaries of any asset-backed securities or collateralized debt obligations as part of a securitization transaction.
SEC means the United States Securities and Exchange Commission.
Securities means any Shares, any other stock, shares or other evidences of equity or beneficial or other interests, voting trust certificates, bonds, debentures, notes or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in, temporary or interim certificates for, receipts for, guarantees of, or warrants, options or rights to subscribe to, purchase or acquire, any of the foregoing.
Shares means shares of common stock of the Company, par value $0.01 per share.
Special OP Units means the separate series of limited partnership interests to be issued in accordance with Section 8.04.

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NY 246322957v3

Stockholders means the registered holders of the Shares.
Sub-Advisor means (i) RXR NTR Sub-Advisor LLC or (ii) any successor sub-advisor which enters into similar arrangements with the Advisor.
Sub-Advisory Agreement means the Sub-Advisory Agreement among the Advisor, NSAM Luxembourg S.ÀR.L., the Sub-Advisor, the Operating Partnership and the Company, as may be amended from time to time.
Termination Date means the date of termination of the Agreement determined in accordance with Article 14 hereof.
2%/25% Guidelines means the requirement pursuant to the NASAA REIT Guidelines that, in any period of four consecutive fiscal quarters, total Operating Expenses not exceed the greater of 2.0% of the Company’s Average Invested Assets during such 12-month period or 25.0% of the Company’s Net Income over the same 12-month period, unless the Board makes certain determinations.

ARTICLE 2 
 
APPOINTMENT
The Company and the Operating Partnership hereby appoint the Advisor to serve as their advisor and asset manager on the terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment.

ARTICLE 3 
 
DUTIES OF THE ADVISOR
The Advisor is responsible for managing, operating, directing and supervising the operations and administration of the Company and its assets.  The Advisor, either directly or through the Sub-Advisor, Affiliates or third parties it retains, undertakes to use its commercially reasonable efforts to present to the Company and the Operating Partnership potential investment opportunities, to make investment decisions on behalf of the Company subject to the limitations in the Company’s Charter, the direction and oversight of the Board and Section 4.03 hereof, and to provide the Company with a continuing and suitable investment program consistent with the investment objectives and policies of the Company as determined and adopted from time to time by the Board.  The Advisor will oversee and remain responsible for all duties delegated to the Sub-Advisor.  Subject to the limitations set forth in this Agreement, including Article 4 hereof, and the continuing and exclusive authority of the Board over the management of the Company, the Advisor shall, either directly or by engaging the Sub-Advisor, Affiliates or third parties, perform the following duties:

3.01    Offering Services.  The Advisor shall manage and supervise:
(i)    Development of the Initial Public Offering and any subsequent or simultaneous Offering approved by the Board, including the determination of the specific terms of the securities 

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to be offered by the Company, preparation of all offering and related documents, and obtaining all required regulatory approvals of such documents;
(ii)    Along with the Dealer Manager, approval of the participating broker-dealers and negotiation of the related selling agreements;
(iii)    Coordination of the due diligence process relating to participating broker-dealers and their review of the Registration Statement and other Offering and Company documents;
(iv)    Preparation and approval of all marketing materials contemplated to be used by the Dealer Manager or others relating to the Offering;
(v)    Along with the Dealer Manager, negotiation and coordination with the transfer agent of the receipt, collection, processing and acceptance of subscription agreements, commissions, and other administrative support functions;
(vi)    Creation and implementation of various technology and electronic communications related to the Offering; and
(vii)    All other services related to the Offering, other than services that (a) relate to the underwriting, marketing, distribution or sale of Securities in the Initial Public Offering and any subsequent or simultaneous Offering approved by the Board, (b) are to be performed by the Dealer Manager, (c) the Company elects to perform directly or (d) would require the Advisor to register as a broker-dealer with the SEC, FINRA or any state.

3.02    Acquisition Services.
The Advisor shall:
(i)    Serve as the Company’s investment and financial advisor and obtain certain market research and economic and statistical data in connection with the Company’s Investments and investment objectives and policies;
(ii)    Subject to Article 4 hereof and the investment objectives and policies of the Company:  (a) locate, analyze and select potential Investments; (b) structure and negotiate the terms and conditions of transactions pursuant to which the Investments will be made; and (c) acquire Investments on behalf of the Company;
(iii)    Oversee the due diligence process related to prospective investments;
(iv)    Prepare reports regarding prospective investments which include recommendations and supporting documentation necessary for the Board to evaluate the prospective investments;
(v)    Obtain reports, where appropriate, concerning the value and condition of prospective investments of the Company; and
(vi)    Negotiate and execute approved Investments and other transactions.

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3.03    Asset Management Services.  The Advisor shall:
(i)    Investigate, select, and, on behalf of the Company, engage and conduct business with such Persons as the Advisor deems necessary to the proper performance of its obligations hereunder, including but not limited to consultants, accountants, lenders, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, developers, construction companies, contractors, sub-contractors and any and all Persons acting in any other capacity deemed by the Advisor necessary or desirable for the performance of any of the foregoing services;
(ii)    Monitor applicable markets and obtain reports where appropriate, concerning the value and condition of Investments of the Company;
(iii)    Monitor and evaluate the performance of Investments of the Company, provide daily management services to the Company and perform and supervise the various management and operational functions related to the Company’s Investments;
(iv)    Formulate and oversee the implementation of strategies for the administration, promotion, management, operation, maintenance, improvement, redevelopment, repositioning, financing and refinancing, marketing, leasing and disposition of Investments on an overall portfolio basis;
(v)    Coordinate and manage relationships between the Company and any Joint Venture partners; and
(vi)    Provide financial and operational planning services and investment portfolio management functions.

3.04    Accounting and Other Administrative Services.
The Advisor shall:
(i)    Manage and perform the various administrative functions necessary for the management of the day-to-day operations of the Company;
(ii)    From time-to-time, or at any time reasonably requested by the Board, make reports to the Board on the Advisor’s performance of services to the Company under this Agreement;
(iii)    Make reports to the Board, at least annually, of the allocation of Investments that have been allocated by Colony NorthStar to the Company and any other programs advised, sponsored or organized by Colony NorthStar or its Affiliates;
(iv)    Coordinate with the Company’s independent auditors to prepare and deliver to the Company’s audit committee an annual report covering the Advisor’s compliance with certain material aspects of this Agreement;

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(v)    Provide or arrange for administrative services and items, legal and other services, office space, office furnishings, personnel and other overhead items necessary and incidental to the Company’s business and operations;
(vi)    Provide financial and operational planning services and portfolio management functions;
(vii)    Maintain accounting data and any other information concerning the activities of the Company as shall be needed to prepare and file all periodic financial reports and returns required to be filed with the SEC and any other regulatory agency, including annual financial statements;
(viii)    Maintain all appropriate books and records of the Company;
(ix)    Oversee tax and compliance services and risk management services and coordinate with appropriate third parties, including independent accountants and other consultants, on related tax matters;
(x)    Supervise the performance of such ministerial and administrative functions as may be necessary in connection with the daily operations of the Company;
(xi)    Provide the Company with all necessary cash management services;
(xii)    Manage and coordinate with the transfer agent the distribution process and payments to Stockholders;
(xiii)    Consult with the officers of the Company and the Board, and assist in evaluating and obtaining adequate insurance coverage based upon risk management determinations;
(xiv)    Provide the officers of the Company and the Board with timely updates related to the overall regulatory environment affecting the Company, as well as managing compliance with such matters;
(xv)    Consult with the officers of the Company and the Board relating to the corporate governance structure and appropriate policies and procedures related thereto; and
(xvi)    Oversee all reporting, record keeping, internal controls and similar matters in a manner to allow the Company to comply with applicable law including the Sarbanes-Oxley Act of 2002.
3.05    Stockholder Services.
The Advisor shall:
(i)    Manage communications with Stockholders, including answering phone calls, preparing and sending written and electronic reports and other communications; and

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(ii)    Establish technology infrastructure to assist in providing Stockholder support and service.

3.06    Financing Services.
The Advisor shall:
(i)    Identify and evaluate potential financing and refinancing sources, engaging a third-party broker if necessary;
(ii)    Negotiate terms, arrange and execute financing agreements;
(iii)    Manage relationships between the Company and its lenders; and
(iv)    Monitor and oversee the service of and compliance with the Company’s debt facilities and other borrowings.

3.07    Disposition Services.
The Advisor shall:
(i)    Consult with the Board and provide assistance with the evaluation and approval of potential asset dispositions, sales, syndications or other liquidity events; and
(ii)    Structure and negotiate the terms and conditions of transactions pursuant to which Investments may be sold.

ARTICLE 4 
 
AUTHORITY OF ADVISOR

4.01    Powers of the Advisor.  Subject to the express limitations set forth in this Agreement, any restrictions imposed by law, rule or regulation and the continuing and exclusive authority of the Board over the management of the Company, the power to direct the management, operation and policies of the Company, including making, financing and disposing of Investments, and the performance of those services described in Article 3 hereof, shall be vested in the Advisor, which shall have the power by itself and shall be authorized and empowered on behalf and in the name of the Company to carry out any and all of the objectives and purposes of the Company and to perform all acts and enter into and perform all contracts and other undertakings that it may in its sole discretion deem necessary, advisable or incidental thereto to perform its obligations under this Agreement.  The Advisor shall have the power to delegate all or any part of its rights and powers to manage and control the business and affairs of the Company to the Sub-Advisor and to such officers, employees, Affiliates, agents and representatives of the Advisor, the Sub-Advisor or the Company as it may deem appropriate.  Any authority delegated by the Advisor to any other Person shall be subject to the limitations on the rights and powers of the Advisor specifically set forth in this Agreement or the Charter.

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4.02    Approval by the Board.  Notwithstanding the foregoing, the Advisor may not take any action on behalf of the Company without the prior approval of the Board or duly authorized committees thereof if the Charter or Maryland General Corporation Law require the prior approval of the Board.  If the Board or a committee of the Board must approve a proposed investment, financing or disposition or chooses to do so, the Advisor will deliver to the Board or committee, as applicable, all documents required by it to evaluate such investment, financing or disposition.

4.03    Modification or Revocation of Authority of Advisor.  The Board may, at any time upon the giving of notice to the Advisor, modify or revoke the authority or approvals set forth in Article 3 and this Article 4 hereof; provided, however, that such modification or revocation shall be effective upon receipt by the Advisor and shall not be applicable to investment transactions to which the Advisor has committed the Company prior to the date of receipt by the Advisor of such notification.

ARTICLE 5 
 
BANK ACCOUNTS
The Advisor may establish and maintain one or more bank accounts in the name of the Company and the Operating Partnership and may collect and deposit into any such account or accounts, and disburse from any such account or accounts, any money on behalf of the Company or the Operating Partnership, under such terms and conditions as the Board may approve, provided that no funds shall be commingled with the funds of the Advisor.  The Advisor shall from time to time render appropriate accountings of such collections and payments to the Board and the independent auditors of the Company.

ARTICLE 6 
 
RECORDS AND ACCESS
The Advisor, in the conduct of its responsibilities to the Company, shall maintain adequate and separate books and records for the Company’s operations in accordance with GAAP, which shall be supported by sufficient documentation to ascertain that such books and records are properly and accurately recorded.  Such books and records shall be the property of the Company and shall be available for inspection by the Board and by counsel, auditors and other authorized agents of the Company, at any time or from time to time during normal business hours.  The Advisor shall at all reasonable times have access to the books and records of the Company and the Operating Partnership.

ARTICLE 7 
 
LIMITATION ON ACTIVITIES
Notwithstanding any provision in this Agreement to the contrary, the Advisor shall not take any action that, in its sole judgment made in good faith, would:  (i) adversely affect the ability of the Company to qualify or continue to qualify as a REIT under the Code unless the Board has 

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determined that the Company will not seek or maintain REIT qualification for the Company; (ii) subject the Company to regulation under the Investment Company Act of 1940, as amended; (iii) violate any law, rule, regulation or statement of policy of any governmental body or agency having jurisdiction over the Company, its Shares or its other securities; (iv) require the Advisor to register as a broker-dealer with the SEC or any state; or (v) violate the Charter or Bylaws.  In the event an action that would violate (i) through (v) of the preceding sentence but such action has been ordered by the Board, the Advisor shall notify the Board of the Advisor’s judgment of the potential impact of such action and shall refrain from taking such action until it receives further clarification or instructions from the Board.  In such event, the Advisor shall have no liability for acting in accordance with the specific instructions of the Board so given.

ARTICLE 8 
 
FEES

8.01    Acquisition Fees.  Reserved.

8.02    Asset Management Fees.  The Company shall pay the Advisor Entities or their Affiliates as compensation for the services described in Section 3.03 hereof a monthly fee (the “Asset Management Fee”) in an amount equal to one-twelfth of 1.0% of the sum of the Cost of Investments (or in the case of a Loan, the principal amount), less any principal repaid by borrowers on Loans or Securities investments, as of the end of each month.  For purposes of calculating the Asset Management Fee, the Cost of Investments for each Investment shall be prorated for the number of days during the applicable month that the Company owns such Investment.  The Asset Management Fee shall generally be payable on the last day of the month that immediately follows the month in which such Asset Management Fee was earned, or the first business day following the last day of such month.  However, payment of the Asset Management Fee may be deferred or waived, in whole or in part (or received in Shares) in the sole discretion of the Advisor.  Any such deferred or waived Asset Management Fees shall be paid to the Advisor or its Affiliates without interest at such subsequent date as the Advisor shall request or in accordance with the terms of the waiver or deferral, as the case may be.

8.03    Disposition Fees.  Reserved.

8.04    Operating Partnership Interests.  In addition, an Affiliate of Colony NorthStar and RXR Realty LLC has made a capital contribution of $1,000 to the Operating Partnership in exchange for Special OP Units.  The Special OP Units shall be entitled to the distributions provided for, and shall be subject to redemption by the Operating Partnership, in accordance with the terms of the Operating Partnership Agreement.

8.05    Changes to Fee Structure.  In the event of Listing, the Company and the Advisor shall negotiate in good faith to establish a fee structure appropriate for a perpetual-life entity.

8.06    Payment in Shares.  In the event the Advisor, in its sole discretion, elects to be paid any of the fees set forth in this Article 8 in Shares (in lieu of cash payment), the number of Class A Shares shall be equal to (A) the cash amount of such fee; divided by (B) $10.00 or, if an Offering is ongoing, $9.00; provided, however, that if an estimated value per share of our Class A common 

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stock has been determined, then the value of any payment in Shares to the Advisor shall be based on such estimated value per share.

ARTICLE 9 
 
EXPENSES

9.01    General.  In addition to the compensation paid to the Advisor Entities pursuant to Article 8 hereof, the Company shall pay directly or reimburse the Advisor Entities or their Affiliates for all of the expenses paid or incurred by the Advisor Entities or their Affiliates on behalf of the Company or in connection with the services provided to the Company pursuant to this Agreement, including, but not limited to:
(i)    All Organization and Offering Expenses; provided, however, that the Advisor, or an Affiliate of the Advisor, shall be responsible for the payment of the Company’s Organizational and Offering Expenses to the extent the total of such expenses exceeds the 15.0% of Gross Proceeds from the Company’s Offering; provided that within 60 days after the end of the month in which an Offering terminates, the Advisor shall reimburse the Company to the extent the Company incurred Organization and Offering Expenses exceeding 15.0% of the Gross Proceeds raised in the completed Offering.  The Company shall not reimburse the Advisor for any individual retirement account custodian fees that the Advisor pays on behalf of Stockholders;
(ii)    Acquisition Fees and Acquisition Expenses incurred in connection with the selection and acquisition of Investments, including such expenses incurred related to assets pursued or considered but not ultimately acquired by the Company, provided that, notwithstanding anything herein to the contrary, the payment of Acquisition Fees and Acquisition Expenses by the Company shall be subject to the limitations contained in the Company’s Charter;
(iii)    The actual out-of-pocket cost of goods and services used by the Company and obtained from entities not Affiliated with the Advisor;
(iv)    Interest and other costs for borrowed money or securitization transactions, including discounts, points and other similar fees;
(v)    Taxes and assessments on income or Properties, taxes as an expense of doing business and any other taxes otherwise imposed on the Company and its business, assets or income;
(vi)    Out-of-pocket costs associated with insurance required in connection with the business of the Company or by its officers and Board;
(vii)    Expenses of managing, improving, developing, operating and selling Investments owned, directly or indirectly, by the Company, as well as expenses of other transactions relating to such Investments, including but not limited to prepayments, maturities, workouts and other settlements of Loans and other Investments;

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(viii)    All out-of-pocket expenses in connection with payments to the Board and meetings of the Board and Stockholders;
(ix)    Personnel and related employment costs incurred by the Advisor, the Sub-Advisor or their Affiliates in performing the services described in Article 3 hereof, including but not limited to reasonable salaries and wages, benefits and overhead of all employees directly involved in the performance of such services, provided that no reimbursement shall be made for costs of such employees of the Advisor or its Affiliates to the extent that such employees (A) perform services for which the Advisor receives Acquisition Fees or Disposition Fees or (B) serve as executive officers of the Company;
(x)    Out-of-pocket expenses of providing services for and maintaining communications with Stockholders, including the cost of preparation, printing, and mailing annual reports and other Stockholder reports, proxy statements and other reports required by governmental entities;
(xi)    Audit, accounting and legal fees, and other fees for professional services relating to the operations of the Company and all such fees incurred at the request, or on behalf of, the Board or any other committee of the Board;
(xii)    Out-of-pocket costs for the Company to comply with all applicable laws, regulations and ordinances;
(xiii)    Expenses connected with payments of Distributions made or caused to be made by the Company to the Stockholders; 
(xiv)    Expenses of organizing, redomesticating, merging, liquidating or dissolving the Company or of amending the Charter or the Bylaws; and
(xv)    All other out-of-pocket costs incurred by the Advisor in performing its duties hereunder and the costs of the Sub-Advisor in performance of its delegated duties under a sub-advisory agreement.

9.02    Timing of and Additional Limitations on Reimbursements.
(i)    Expenses incurred by the Advisor or the Sub-Advisor on behalf of the Company and reimbursable pursuant to this Article 9 shall be reimbursed no less than monthly to the Advisor.  The Advisor shall prepare a statement documenting the expenses of the Company during each quarter and shall deliver such statement to the Company within 45 days after the end of each quarter.
(ii)    Notwithstanding anything else in this Article 9 to the contrary, the expenses enumerated in this Article 9 shall not become reimbursable to the Advisor or the Sub-Advisor unless and until the Company has raised $2 million in the Initial Public Offering.
(iii)    Commencing upon the fourth fiscal quarter after the commencement of the Initial Public Offering, the following limitation on Operating Expenses shall apply:  The Company shall not reimburse the Advisor at the end of any fiscal quarter for Operating Expenses that in the four consecutive fiscal quarters then ended (the “Expense Year”) exceed (the “Excess Amount”) the 

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greater of 2% of Average Invested Assets or 25% of Net Income (the “2%/25% Guidelines”) for such year unless the Board determines that such excess was justified, based on unusual and nonrecurring factors that the Board deems sufficient.  If the Board does not approve such excess as being so justified, any Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to the Company.  If the Board determines such excess was justified, then, within 60 days after the end of any fiscal quarter of the Company for which total reimbursed Operating Expenses for the Expense Year exceed the 2%/25% Guidelines, the Advisor, at the direction of the Board, shall cause such fact to be disclosed to the Stockholders in writing (or the Company shall disclose such fact to the Stockholders in the next quarterly report of the Company or by filing a Current Report on Form 8-K with the SEC within 60 days of such quarter end), together with an explanation of the factors the Board considered in determining that such excess expenses were justified.  The Company will ensure that such determination will be reflected in the minutes of the meetings of the Board.  All figures used in the foregoing computation shall be determined in accordance with GAAP applied on a consistent basis.

ARTICLE 10 
 
OTHER SERVICES
Should:  (i) the Operating Partnership request that the Advisor or any manager, officer or employee thereof render services for the Company other than as set forth in this Agreement; or (ii) there are changes to the regulatory environment in which the Advisor or Company operates that would increase significantly the level of services performed such that the costs and expenses borne by the Advisor for which the Advisor is not entitled to separate reimbursement for personnel and related employment direct costs and overhead under Article 9 of this Agreement would increase significantly, such services shall be separately compensated at such rates and in such amounts as are agreed by the Advisor and the Independent Directors, subject to the limitations contained in the Charter, and shall not be deemed to be services pursuant to the terms of this Agreement.

ARTICLE 11 
 
VOTING AGREEMENT
The Advisor agrees that, with respect to any Shares now or hereinafter owned by it or its Affiliates, none of them will vote or consent on matters submitted to the Stockholders of the Company regarding:  (i) the removal of the Advisor or any of its Affiliates; or (ii) any transaction between the Company and the Advisor or any of its Affiliates.  This voting restriction shall survive until such time that the Advisor or any of its Affiliates is no longer serving as the Advisor.

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ARTICLE 12 
 
RELATIONSHIP OF ADVISOR AND COMPANY; 
OTHER ACTIVITIES OF THE ADVISOR

12.01    Relationship.  The Company and the Advisor are not partners or joint venturers with each other, and nothing in this Agreement shall be construed to make them such partners or joint venturers.  Nothing herein contained shall prevent the Advisor from engaging in other activities, including, without limitation, the rendering of advice to other Persons (including other REITs) and the management of other programs advised, sponsored or organized by the Advisor or its Affiliates.  Nor shall this Agreement limit or restrict the right of any manager, director, officer, employee or equityholder of the Advisor or its Affiliates to engage in any other business or to render services of any kind to any other Person.  The Advisor may, with respect to any investment in which the Company is a participant, also render advice and service to each and every other participant therein.  The Advisor shall promptly disclose to the Board the existence of any condition or circumstance, existing or anticipated, of which it has knowledge, that creates or could create a conflict of interest between the Advisor’s obligations to the Company and its obligations to or its interest in any other Person.

12.02    Time Commitment.  The Advisor shall, and shall cause its Affiliates and their respective employees, officers and agents to, devote to the Company such time as shall be reasonably necessary to conduct the business and affairs of the Company in an appropriate manner consistent with the terms of this Agreement.  The Company acknowledges that the Advisor and its Affiliates and their respective employees, officers and agents may also engage in activities unrelated to the Company and may provide services to Persons other than the Company or any of its Affiliates.

12.03    Investment Opportunities and Allocation.  The Advisor shall be required to use commercially reasonable efforts to present a continuing and suitable investment program to the Company that is consistent with the investment policies and objectives of the Company, but neither the Advisor nor any Affiliate of the Advisor shall be obligated generally to present any particular Investment opportunity to the Company even if the opportunity is of a character that, if presented to the Company, could be taken by the Company.  In the event an Investment opportunity is identified, the allocation procedures set forth in the Company’s allocation policy adopted by the Board (as may be amended from time to time) shall govern the allocation of the opportunity among the Company, Colony NorthStar, or any of their Affiliates and any investment vehicles sponsored or managed by Colony NorthStar or any of its Affiliates.

ARTICLE 13 
 
THE NORTHSTAR NAME
Colony NorthStar and its Affiliates have a proprietary interest in the name “NorthStar.” Colony NorthStar hereby grants to the Company a non-transferable, non-assignable, non-exclusive royalty-free right and license to use the name “NorthStar” during the term of this Agreement.  Accordingly, and in recognition of this right, if at any time the Company ceases to retain the Advisor or one of its Affiliates to perform advisory services for the Company, the Company will, promptly 

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after receipt of written request from Colony NorthStar, cease to conduct business under or use the name “NorthStar” or any derivative thereof and the Company shall change its name and the names of any of its subsidiaries to a name that does not contain the name “NorthStar” or any other word or words that might, in the reasonable discretion of Colony NorthStar, be susceptible of indication of some form of relationship between the Company and Colony NorthStar or any its Affiliates.  At such time, the Company will also make any changes to any trademarks, servicemarks or other marks necessary to remove any references to the word “NorthStar.” Consistent with the foregoing, it is specifically recognized that Colony NorthStar or one or more of its Affiliates has in the past and may in the future organize, sponsor or otherwise permit to exist other investment vehicles (including vehicles for investment in real estate loans, real estate-related debt securities and other real estate assets) and financial and service organizations having “NorthStar” as a part of their name, all without the need for any consent (and without the right to object thereto) by the Company.  Colony NorthStar shall govern the Company’s use of the name “NorthStar” and the Company’s use of the “NorthStar” name will be in strict accordance with any quality standards and specifications that may be established by Advisor and communicated to Company from time to time.

ARTICLE 14 
 
TERM AND TERMINATION OF THE AGREEMENT

14.01    Term.  This Agreement shall continue in full force and effect through June 30, 2017 and may be renewed for an unlimited number of successive one-year terms upon mutual consent of the parties.  The Company (acting through the Independent Directors) will evaluate the performance of the Advisor annually before renewing this Agreement, and each such renewal shall be for a term of no more than one year.  Any such renewal must be approved by the Independent Directors.

14.02    Termination by the Parties.  This Agreement may be terminated:
(i)    immediately by the Company or the Operating Partnership for Cause or upon the bankruptcy of the Advisor;
(ii)    upon 60 days written notice without Cause and without penalty by a majority of the Independent Directors of the Company; or
(iii)    upon 60 days written notice with Good Reason by the Advisor.
The provisions of Article 13, Section 14.03 and Articles 16 through 18 of this Agreement shall survive termination of this Agreement.

14.03    Payments on Termination and Survival of Certain Rights and Obligations.  Payments to the Advisor pursuant to this Section 14.03 shall be subject to the 2%/25% Guidelines to the extent applicable.
(i)    After the Termination Date, the Advisor shall not be entitled to compensation for further services hereunder except it shall be entitled to receive from the Company or the Operating 

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Partnership within 30 days after the effective date of such termination all unpaid reimbursements of expenses and all earned but unpaid fees payable to the Advisor prior to termination of this Agreement, subject to the 2%/25% Guidelines to the extent applicable.
(ii)    The Advisor shall promptly upon termination:
(a)    pay over to the Company and the Operating Partnership all money collected and held for the account of the Company and the Operating Partnership pursuant to this Agreement, if any, after deducting any accrued compensation and reimbursement for its expenses to which it is then entitled;
(b)    deliver to the Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Board;
(c)    deliver to the Board all assets and documents of the Company then in the custody of the Advisor; and
(d)    cooperate with the Company to provide an orderly transition of advisory functions.

ARTICLE 15 
 
ASSIGNMENT
This Agreement may be assigned by the Advisor with the approval of a majority of the Board (and with respect to any assignment to an Affiliate, also with the approval of a majority of the Independent Directors).  The Advisor may assign any rights to receive fees or other payments under this Agreement without obtaining the approval of the Board.  This Agreement shall not be assigned by the Company or the Operating Partnership without the consent of the Advisor, except in the case of an assignment by the Company or the Operating Partnership to a corporation or other organization that is a successor to all of the assets, rights and obligations of the Company or the Operating Partnership, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Company and the Operating Partnership are bound by this Agreement.  Nothing herein shall be deemed to prohibit or otherwise restrict any transfers or additional issuances of equity interests in the Advisor nor shall any such transfer or issuance be deemed an assignment for purposes of this Article 15; provided, however, notwithstanding anything in this provision or generally in this Article 15 to the contrary, the Advisor shall not assign (as that term is defined by the U.S. Investment Advisers Act of 1940, as amended (the “Advisers Act”)) this Agreement without the Company’s consent.

ARTICLE 16 
 
INDEMNIFICATION AND LIMITATION OF LIABILITY

16.01    Indemnification.  Except as prohibited by the restrictions provided in this Section 16.01, Section 16.02 and Section 16.03, the Company and the Operating Partnership shall indemnify, defend and hold harmless the Advisor and its Affiliates, including their respective 

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officers, directors, equity holders, partners, members and employees, from all liability, claims, damages or losses arising in the performance of their duties hereunder, and related expenses, including reasonable attorneys’ fees, to the extent such liability, claims, damages or losses and related expenses are not fully reimbursed by insurance.  Any indemnification of the Advisor may be made only out of the net assets of the Company and not from Stockholders.
Notwithstanding the foregoing, the Company shall not indemnify the Advisors or its Affiliates for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following conditions are met:  (i) there has been a successful adjudication on the merits of each count involving alleged securities law violations as to the particular indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations of securities laws.

16.02    Limitation on Indemnification.  Notwithstanding the foregoing, the Company and the Operating Partnership shall not provide for indemnification of the Advisor or its Affiliates for any liability or loss suffered by any of them, nor shall any of them be held harmless for any loss or liability suffered by the Company, unless all of the following conditions are met:
(i)    The Advisor or its Affiliates have determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company and the Operating Partnership.
(ii)    The Advisor or its Affiliates were acting on behalf of or performing services for the Company or the Operating Partnership.
(iii)    Such liability or loss was not the result of negligence or misconduct by the Advisor or its Affiliates.
(iv)    Such indemnification or agreement to hold harmless is recoverable only out of the Company’s net assets and not from the Stockholders.

16.03    Limitation on Payment of Expenses.  The Company shall pay or reimburse reasonable legal expenses and other costs incurred by the Advisors or its Affiliates in advance of the final disposition of a proceeding only if (in addition to the procedures required by the Maryland General Corporation Law, as amended from time to time) all of the following are satisfied:  (a) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Company or the Operating Partnership, (b) the legal proceeding was initiated by a third party who is not a Stockholder or, if by a Stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement and (c) the Advisor or its Affiliates undertake to repay the amount paid or reimbursed by the Company Operating Partnership, together with the applicable legal rate of interest thereon, if it is ultimately determined that the particular indemnitee is not entitled to indemnification.

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16.04    Indemnification by Advisor.  The Advisor shall indemnify and hold harmless the Company and the Operating Partnership from contract or other liability, claims, damages, taxes or losses and related expenses including attorneys’ fees, to the extent that such liability, claims, damages, taxes or losses and related expenses are not fully reimbursed by insurance and are incurred by reason of the Advisor’s bad faith, fraud, misfeasance, intentional misconduct, negligence or reckless disregard of its duties; provided, however, that the Advisor shall not be held responsible for any action of the Board in following or declining to follow any advice or recommendation given by the Advisor.

ARTICLE 17 
 
NON-SOLICITATION
During the period commencing on the Effective Date and ending one year following the Termination Date, the Company shall not, without the Advisor’s prior written consent, directly or indirectly; (i) solicit or encourage any person to leave the employment or other service of the Advisor or its Affiliates; or (ii) hire, on behalf of the Company or any other person or entity, any person who has left the employment within the one year period following the termination of that person’s employment with the Advisor or its Affiliates.  During the period commencing on the date hereof through and ending one year following the Termination Date, the Company will not, whether for its own account or for the account of any other Person, intentionally interfere with the relationship of the Advisor or its Affiliates with, or endeavor to entice away from the Advisor or its Affiliates, any person who during the term of the Agreement is, or during the preceding one-year period, was a tenant, co-investor, co-developer, joint venturer or other customer of the Advisor or its Affiliates.

ARTICLE 18 
 
MISCELLANEOUS

18.01    Notices.  Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some other method of giving such notice, report or other communication is required by the Charter, the Bylaws or is accepted by the party to whom it is given, and shall be given by being delivered by hand or by overnight mail or other overnight delivery service to the addresses set forth herein:
	
		
	To the Board, the Company or the Operating Partnership:
	NorthStar/RXR New York Metro Real Estate, Inc.
399 Park Avenue 18th Floor
New York, New York 10022

	To the Advisor:
	NSAM J-NS/RXR Ltd
c/o NSAM Luxembourg S.à r.l.
6ème étage, 6A route de Trèves
L-2633 Senningerberg
Grand-Duchy of Luxembourg
Attention:  General Counsel

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Either party may at any time give notice in writing to the other party of a change in its address for the purposes of this Section 18.01.

18.02    Modification.  This Agreement shall not be changed, modified, terminated or discharged, in whole or in part, except by an instrument in writing signed by both parties hereto, or their respective successors or permitted assigns.

18.03    Severability.  Each provision of this Agreement shall be considered separate from the others and, if for any reason, any provision or its application is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, then such invalid, illegal or unenforceable provision shall not impair the operation of or affect any other provisions of this Agreement, and either (a) such invalid, illegal or unenforceable provision shall be construed and enforced to the maximum extent legally permissible or (b) the parties shall substitute for the invalid, illegal or unenforceable provision a valid, legal and enforceable provision with a substantially similar effect and intent.

18.04    Construction.  The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of New York applicable to contracts to be made and performed entirely in said state.

18.05    Entire Agreement.  This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.  The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof.

18.06    Waiver.  Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.  No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

18.07    Gender.  Words used herein regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires.

18.08    Titles Not to Affect Interpretation.  The titles of Articles and Sections contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

18.09    Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument.  This Agreement shall become 

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binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.
[The remainder of this page is intentionally left blank.]
[Signature page follows.]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

	
		
	NorthStar/RXR New York Metro Real Estate, Inc.

	 
	 

	By:
	/s/ Ann B. Harrington

	Name: 
	Ann B. Harrington

	Title: 
	General Counsel and Secretary

	
		
	NorthStar/RXR Operating Partnership, LP

	 
	 

	By:
	NorthStar/RXR New York Metro Real Estate, Inc.

	 
	its General Partner

	 
	 

	By:
	/s/ Ann B. Harrington

	Name: 
	Ann B. Harrington

	Title: 
	General Counsel and Secretary

	
		
	NSAM J-NS/RXR Ltd

	 
	 

	 
	 

	By:
	/s/ Daniel R. Gilbert

	Name: 
	Daniel R. Gilbert

	Title: 
	Director

	
		
	Colony NorthStar, Inc.

	 

	 

	By:
	/s/ Ronald M. Sanders

	Name: 
	Ronald M. Sanders

	Title: 
	Executive Vice President

NY 246322957v3

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