Document:

EX-10.5

 Exhibit 10.5 
  

 
 February 19, 2015 
 Arc
Terminals Holdings LLC 
 3000 Research Forest Drive, Suite 250 

The Woodlands, Texas 77381 
 Attention: Vincent T. Cubbage 

Arc Terminals Holdings LLC 

Acquisition Credit Facility 

Commitment Letter 
 Ladies and Gentlemen: 

Arc Terminals Holdings LLC (the “Company” or “you”) has advised SunTrust Bank and SunTrust
Robinson Humphrey, Inc. (the “Lead Arranger” and, together with SunTrust Bank, “SunTrust” or “we”) that the Company is seeking certain amendments (collectively, the
“Amendment”) to that certain Second Amended and Restated Revolving Credit Agreement, dated as of November 12, 2013 (as amended to date, the “Existing Credit Agreement”), by and among the Company,
the lenders from time to time party thereto (collectively, the “Existing Lenders”) and SunTrust Bank, as administrative agent for the Existing Lenders (in such capacity, the “Administrative Agent”),
which Amendment shall, among other things, (a) permit the acquisition (the “Acquisition”) by the Company, either directly or indirectly, of sixty percent (60%) of the membership interests of Joliet Bulk,
Barge & Rail LLC (the “Acquired Business”) pursuant to that certain Membership Interest Purchase Agreement, dated as of February 19, 2015 (as amended, supplemented or otherwise modified, the “Purchase
Agreement”), between Arc Terminals Joliet Holdings LLC, a subsidiary of the Company (the “Buyer”), and CenterPoint Properties Trust (the “Seller”) and (b) provide incremental
financing to fund a portion of the Acquisition. 
 This letter agreement and the Summary of Principal Terms and Conditions attached hereto
as Annex I (the “Incremental Term Sheet”) describes the general terms and conditions for an incremental senior secured credit facility, which will be comprised of an increase to the revolving credit facility set forth
in the Existing Credit Agreement (such increase, the “Incremental Facility”) in up to an amount such that the aggregate amount of all outstanding loans and commitments under the Existing Credit Agreement (as amended by the
Amendment) will not exceed $275,000,000. In addition, you have requested that SunTrust Bank provide an underwritten commitment for a backstop senior secured credit facility of up to $275,000,000 (the “Backstop Facility” and,
together with the Incremental Facility (or either individually, as the context shall require), the “Acquisition Credit Facility”) to be provided to the Company in order to refinance the Existing Credit Agreement in the event
that the Company is unable to obtain the consents of the requisite Existing Lenders for the Amendment, as more fully described in the Summary of Principal Terms and Conditions attached hereto as Annex II (the “Backstop Term
Sheet” and, together with the Incremental Term Sheet, the “Term Sheet”). The Company further intends to raise an amount to be determined in common equity (the “Arc Equity Contribution”),
which will be directly or indirectly contributed to the Buyer. In addition, an affiliate of General Electric Capital Corporation (“GE Capital”) intends to contribute an amount to be determined to the Buyer (the “GE
Equity Contribution”) 

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February 19, 2015 
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in connection with the consummation of the Acquisition. All transactions described above, together with the financing contemplated hereby, shall be referred to herein as the
“Transactions”. Capitalized terms used in this letter but not defined herein shall have the meanings given to them in the Incremental Term Sheet or the Backstop Term Sheet, as applicable. 

 

	A.	Commitment 

 SunTrust Bank is pleased to commit to provide 100% of the principal
amount of each of the Acquisition Credit Facilities described and defined in the Term Sheet, subject to the terms and conditions set forth in this letter and the Term Sheet (collectively, this “Commitment Letter”). 

 

	B.	Syndication 

 The Lead Arranger reserves the right, before or after the execution
of the definitive documentation for the Acquisition Credit Facility (collectively, the “Financing Documentation”), to syndicate all or a portion of SunTrust Bank’s commitments to one or more other financial institutions
reasonably acceptable to the Company that will become parties to the Financing Documentation (such financial institutions, together with the Existing Lenders, the “Lenders”); provided that, notwithstanding SunTrust
Bank’s right to syndicate the Acquisition Credit Facility and receive commitments with respect thereto, (x) SunTrust shall not be relieved, released or novated from its obligations hereunder (including its obligation to fund the
Acquisition Credit Facility on the Closing Date) in connection with any syndication, assignment or participation of the Acquisition Credit Facility, including its commitments in respect thereof, until after the Closing Date has occurred, (y) no
assignment or novation shall become effective with respect to all or any portion of SunTrust Bank’s commitments in respect of the Acquisition Credit Facility until the initial funding thereof and (z) unless SunTrust and the Company
otherwise agree in writing, SunTrust Bank shall retain exclusive control over all rights and obligations with respect to its commitments in respect of the Acquisition Credit Facility, including all rights with respect to consents, modifications,
supplements, waivers and amendments, until a Successful Syndication (as defined in the Fee Letter (as defined below)) has occurred. The Company understands that the Lead Arranger intends to commence such syndication efforts promptly and the Lead
Arranger may elect to appoint one or more agents to assist it in such syndication efforts. 
 You hereby appoint SunTrust Robinson Humphrey,
Inc. to act, and the Lead Arranger agrees to act, as lead arranger and book manager for the Acquisition Credit Facility, subject to the terms and conditions of this Commitment Letter. The Lead Arranger will manage all aspects of the syndication of
the Acquisition Credit Facility in consultation with the Company, including the timing of all offers to potential Lenders, the determination of all amounts offered to potential Lenders, the selection of Lenders (subject to the approval of the
Company, such approval not to be unreasonably withheld), the allocation of commitments among the Lenders, and the determination of compensation and titles (such as co-agent, managing agent, etc.), if any, to be given such Lenders. It is agreed that
no other agents, co-agents or arrangers will be appointed, or other titles conferred, except as mutually agreed to by the Company and by the Lead Arranger, and that no Lender will receive any compensation for its commitment to, or participation in,
the Acquisition Credit Facility or the Amendment except as expressly set forth in the Term Sheet or the Fee Letter or as otherwise mutually agreed to by the Company and by the Lead Arranger. 

Without limiting the Company’s obligations to assist with the marketing and syndication efforts as set forth herein, it is understood
that SunTrust Bank’s commitments hereunder are not conditioned upon the syndication of, or receipt of commitments from other Lenders in respect of, the Acquisition Credit Facility and in no event shall the commencement or successful completion
of syndication of the Acquisition Credit Facility constitute a condition to the availability of the Acquisition Credit Facility on the Closing Date. 

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 Until the later of (i) the Closing Date and (ii) the earlier of (A) the date
upon which a Successful Syndication is achieved and (B) 90 days after the Closing Date, the Company agrees to actively assist the Lead Arranger in attempting to complete a timely syndication of the Acquisition Credit Facility and shall take all
action as the Lead Arranger may reasonably request related thereto. The Company’s assistance shall include (i) making available senior management, representatives and advisors of the Company, Arc Logistics Partners LLP (the
“MLP”), Arc Logistics GP LLC (together with the MLP, the “MLP Affiliates”) and their respective subsidiaries (and shall request the Seller to make available its senior management, representatives and
advisors involved in the Transactions or otherwise substantively involved in the development of the Acquired Business) to participate in meetings with potential Lenders and to provide information to potential Lenders at such times and places as are
mutually agreed upon; (ii) ensuring that the syndication effort benefits from the existing lending relationships of the Company, the MLP Affiliates and their respective subsidiaries, and using commercially reasonable efforts to ensure that the
syndication effort benefits from the existing lending relationships, if any, of the Acquired Business; (iii) assisting in the preparation of customary marketing materials (which may include an information memorandum, if requested by the Lead
Arranger) to be used in connection with the syndication, in form and substance reasonably acceptable to the Lead Arranger and the Company, at least 20 days prior to the closing of the Acquisition Credit Facility; (iv) preparing and providing to
the Lead Arranger (and requesting the Seller, with respect to the Acquired Business, to prepare and provide to the Lead Arranger) all information with respect to the Company, the Acquired Business, their respective subsidiaries and the Transactions,
including, without limitation, all financial information and projections (the “Projections”), reasonably requested by the Lead Arranger that is usual and customary in financings of this type; and (v) furnishing to us an
electronic version of the Company’s trademarks, service marks and corporate logo for use in marketing materials for the purpose of facilitating the syndication of the Acquisition Credit Facility; provided that such license shall be used
solely for the purpose described above, is granted without any fee and may not be assigned or transferred. 
 For the avoidance of doubt,
the Company will not be required to provide any information to the extent that the provision thereof would violate any law, rule or regulation, or any obligation of confidentiality binding upon the Company, the Acquired Business or any of their
respective affiliates. Notwithstanding anything herein to the contrary, the only financial statements that shall be required to be provided to SunTrust with respect to the Acquired Business in connection with the syndication of the Acquisition
Credit Facility shall be such financial statements, if any, made available to the Company pursuant to the Purchase Agreement. 
 To ensure
an orderly and effective syndication of the Acquisition Credit Facility, the Company agrees that, until the earlier of (A) the date upon which a Successful Syndication is achieved and (B) 90 days after the Closing Date, the Company and the
Guarantors (as defined in the Existing Credit Agreement) shall not, and shall not permit their respective subsidiaries to, arrange, sell, syndicate or issue any credit facilities or debt security (including any renewals thereof) except with the
prior written consent of the Lead Arranger (excluding any indebtedness outstanding under the Existing Credit Agreement and excluding the ongoing ordinary course short-term working capital facilities and ongoing ordinary course capital lease,
purchase money and equipment financings of the Company and its subsidiaries and any other indebtedness permitted to be borrowed under the Existing Credit Agreement (other than the Qualified Senior Notes (as defined therein))). 

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	C.	Conditions Precedent 

 The undertakings and obligations of SunTrust under this
Commitment Letter and the commitment hereunder to fund the Acquisition Credit Facility on the Closing Date are subject only to (i) the accuracy in all material respects of all Specified Acquisition Representations and Specified Representations;
(ii) a closing of the Acquisition Credit Facility on or prior to May 18, 2015 unless mutually extended by the Company and SunTrust; and (iii) the satisfaction of the other conditions precedent set forth (x) in the case of the
Incremental Facility, in the Incremental Term Sheet under the section “Conditions to Closing” and (y) in the case of the Backstop Facility, in the Backstop Term Sheet under the section “Conditions to Closing”; and upon
satisfaction (or waiver by SunTrust) of such conditions, the initial funding of the Acquisition Credit Facility shall occur. It is understood and agreed that there are no other conditions (implied or otherwise) to the commitment hereunder to fund
the Acquisition Credit Facility, including compliance with any other terms of this Commitment Letter, the Fee Letter or the Financing Documentation. 

Notwithstanding anything in this Commitment Letter, the Fee Letter, the Financing Documentation or any other letter agreement or other
undertaking concerning the financing of the Acquisition to the contrary, (i) the only representations with respect to the Company, the Acquired Business and their respective subsidiaries and their respective businesses and assets, the accuracy
of which shall be a condition to the availability of the Acquisition Credit Facility on the Closing Date, shall be (A) such of the representations with respect to the Acquired Business in the Purchase Agreement as are material to the interests
of the Lenders, but only to the extent that the Buyer has the right to terminate its obligations under the Purchase Agreement as a result of a breach of one or more of such representations in the Purchase Agreement (the “Specified
Acquisition Representations”) and (B) the Specified Representations (as defined below) in the Financing Documentation and (ii) the terms of the Financing Documentation shall be in a form such that they do not impair the
availability of the Acquisition Credit Facility on the Closing Date if the applicable conditions set forth in the section entitled “Conditions to Closing” in the applicable Term Sheet are satisfied (the “Certain Funds
Provisions”). For purposes hereof, “Specified Representations” means the representations and warranties of the Company and its affiliates set forth in the Financing Documentation (which such representations and
warranties will be substantially the same as those set forth in the Existing Credit Agreement, subject to the Documentation Principles) relating to legal existence; power and authority, due authorization, execution and delivery, validity and
enforceability, in each case, related to the entering into and performance of the Financing Documentation; no conflicts of the Financing Documentation with respect to organizational documents; solvency on the Closing Date of the Company and its
subsidiaries; Federal Reserve margin regulations; the Investment Company Act; the PATRIOT Act; and creation, validity and perfection of security interests in the equity interests of the Buyer owned, directly or indirectly, by the Company. 

 

	D.	Information Requirements 

 You represent and warrant to SunTrust that (i) all
written information, other than in connection with the Projections and other than information of a general economic or industry specific nature, that has been or will be made available to SunTrust or any of the Lenders by the Company and its
subsidiaries or any of their respective representatives (or on your or their behalf) in connection with the Acquisition Credit Facility or the Financing Documentation (such written information, collectively, the
“Information”), when taken as a whole, is or will be when furnished correct in all material respects and does not or will not, when furnished and when taken as a whole (and when taken as a whole with all information in
respect of the MLP as filed with the Securities Exchange Commission under any current or 

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periodic report), contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light
of the circumstances under which such statements are made (giving effect to all supplements and updates thereto prior to the Closing Date and, in the case of Information supplemented or updated after the Closing Date, prior to when a Successful
Syndication is achieved); and (ii) the Projections have been or will be prepared in good faith based upon assumptions believed by you to be reasonable at the time furnished; it being understood that the Projections are as to future events and
are not to be viewed as facts, the Projections are subject to significant uncertainties and contingencies, many of which are beyond your control, that no assurance can be given that any particular Projections will be realized and that actual results
during the period covered by any such Projections may differ from the projected results and such differences may be material. You agree that if, at any time prior to the later of (i) the Closing Date and (ii) the earlier of (A) the
date a Successful Syndication is achieved and (B) 90 days after the Closing Date, you become aware that any of the representations and warranties in the preceding sentence would be incorrect if the Information and the Projections were being
furnished, and such representations were being made, at such time, then you will use commercially reasonable efforts to supplement the Information and the Projections so that (with respect to the Information relating to the Acquired Business and its
subsidiaries, to the best of your knowledge) the representation and warranty contained in this paragraph remains correct in all material respects. In issuing the commitments and undertakings hereunder and in arranging and syndicating the Acquisition
Credit Facility, SunTrust Bank and the Lead Arranger are relying on the accuracy of the Information and the Projections without independent verification thereof. 
  

	E.	Fees and Expenses; Indemnification  

 1. Fees and Expenses. In addition to
the fees described in the Term Sheet, you will pay at the times specified therein the fees set forth in that certain letter agreement dated as of the date hereof, executed by SunTrust Bank and the Lead Arranger and acknowledged and agreed to by the
Company relating to this Commitment Letter (the “Fee Letter”). You also agree to pay or reimburse SunTrust on demand for any other fees mutually agreed to by the Company and SunTrust and all reasonable and documented
out-of-pocket costs and expenses incurred by SunTrust (whether incurred before or after the date hereof) in connection with the Acquisition Credit Facility, the preparation of the Financing Documentation and the syndication thereof, including,
without limitation, reasonable fees and disbursements of its counsel, regardless of whether the Acquisition Credit Facility closes. You will also pay all documented out-of-pocket costs and expenses of SunTrust (including, without limitation,
reasonable fees and disbursements of its counsel) incurred in connection with the enforcement of any of its rights and remedies hereunder, in each case on terms substantially the same as those set forth in the Existing Credit Agreement. 

2. Indemnification. You will indemnify and hold harmless the Lead Arranger, SunTrust Bank, their respective affiliates and their
respective directors, officers, employees, agents, representatives, legal counsel and consultants (each, an “Indemnified Person”) against, and to reimburse each Indemnified Person upon its demand for, any losses, claims,
damages, liabilities or other reasonable and documented out-of-pocket expenses (“Losses”) incurred by such Indemnified Person or asserted against such Indemnified Person by the Company, the Acquired Business, any of their
subsidiaries or affiliates or any other person or party arising out of or in connection with this Commitment Letter, the Fee Letter, the Financing Documentation, the Acquisition Credit Facility, the use of the proceeds thereof, the Acquisition or
any related transaction, or any claim, litigation, investigation or proceeding relating to any of the foregoing, and to reimburse each Indemnified Person upon demand for any reasonable and documented out-of-pocket legal or other expenses (limited to
one primary counsel for the Indemnified Persons collectively and, if necessary in the Indemnified Persons’ reasonable determination, one local counsel in each appropriate jurisdiction and one regulatory counsel and, solely, in the event of a
conflict of interest, 

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one additional primary counsel (and, if necessary, one additional local counsel in each appropriate jurisdiction and one additional regulatory counsel)) incurred in connection with investigating
or defending any of the foregoing; provided, however, that the foregoing indemnity will not, as to any Indemnified Person, apply to Losses to the extent resulting from (x) the gross negligence or willful misconduct of such
Indemnified Person, (y) a claim brought solely between or among Indemnified Persons (other than a claim against the Administrative Agent or the Lead Arranger acting pursuant to this Commitment Letter or in their capacity as such or any of their
respective affiliates or their respective directors, officers, employees, agents, representatives, legal counsel or consultants) not arising from any act or omission by you or any of your affiliates or (z) a claim brought by the Company or any
of its subsidiaries against an Indemnified Person for a material or bad faith breach of such Indemnified Person’s material obligations hereunder (in each case of the foregoing clauses (x), (y) and (z), as determined by a court of competent
jurisdiction in a final and non-appealable judgment). 
 The Company shall not, without the prior written consent of any Indemnified Person,
effect any settlement of any pending or threatened proceeding in respect of which such Indemnified Person is a party and indemnity has been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such
Indemnified Person from all liability on claims that are the subject matter of such indemnity. The Company shall not be liable for any settlement of any pending or threatened proceeding effected without the Company’s written consent (such
consent not to be unreasonably withheld or delayed). No Indemnified Person shall be responsible or liable for any damages arising from the use by others of the Information or other materials obtained through electronic telecommunications or other
information transmission systems (other than as a result of willful misconduct, bad faith or gross negligence of such Indemnified Person). Neither any Indemnified Person nor the Company shall be liable for any special, indirect, punitive, exemplary
or consequential damages that may be alleged as a result of this Commitment Letter, the Fee Letter, the Financing Documentation, the Acquisition Credit Facility, the use of proceeds thereof, the Acquisition or any related transaction. Neither any
Indemnified Person nor the Company shall be liable for any indirect or consequential damages in connection with its activities related to the Acquisition Credit Facility or the Financing Documentation. 

 

	F.	Miscellaneous 

 1. Termination. This Commitment Letter and all commitments
and undertakings of SunTrust under this Commitment Letter shall expire at 5:00 p.m., Atlanta, Georgia time, on February 17, 2015 unless by such time the Company both executes and delivers to SunTrust this Commitment Letter and the Fee
Letter. Thereafter, unless mutually extended by SunTrust and the Company, all commitments and obligations of SunTrust under this Commitment Letter will terminate at 5:00 p.m. on May 18, 2015 unless the Financing Documentation related to the
Acquisition Credit Facility has been executed and delivered on or prior to such date. 
 2. No Third-Party Beneficiaries. This
Commitment Letter is solely for the benefit of the Company, SunTrust and the Indemnified Persons, and no provision hereof shall be deemed to confer rights on any other person or entity. 

3. No Assignment; Amendment. This Commitment Letter and the Fee Letter may not be assigned by any party hereto or thereto to any other
person or entity. All of the obligations of each party hereto or thereto under this Commitment Letter or the Fee Letter shall be binding upon the successors and permitted assigns of such party. This Commitment Letter and the Fee Letter may not be
amended or modified except in writing executed by each of the parties hereto. 

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 4. Use of Name and Information. You agree that, other than disclosures permitted
pursuant to paragraph 7 below, any references to SunTrust or any of its affiliates made in connection with the Acquisition Credit Facility or the Financing Documentation are subject to the prior approval of SunTrust, which approval shall not be
unreasonably withheld, conditioned or delayed. After the Closing Date, SunTrust shall be permitted to use information related to the syndication and arrangement of the Acquisition Credit Facility in connection with marketing, press releases or other
transactional announcements or updates provided to investor or trade publications, including, without limitation, the placement of “tombstone” advertisements in publications of its choice at its own expense. 

5. Governing Law. This Commitment Letter and the Fee Letter will be governed by and construed in accordance with the laws of the state
of New York; provided that (A) the determination of the accuracy of the Specified Acquisition Representations and whether, as a result of a breach thereof, the Buyer has the right to terminate its obligations under the Purchase Agreement
and (B) the determination as to whether the Acquisition has been consummated in accordance with the Purchase Agreement shall, in each case, be governed by and construed in accordance with the laws of the state of Delaware without regard to the
principles of conflicts of laws thereof. Each of the Company and SunTrust irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or related to this
Commitment Letter, the Fee Letter, the Financing Documentation, the Acquisition Credit Facility, the use of proceeds thereof or the actions of SunTrust in the negotiation, performance or enforcement hereof. Each party hereto irrevocably and
unconditionally submits to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York county or the United States District Court for the Southern District of New York for the purpose of any suit, action or
proceeding arising out of or relating to this Commitment Letter, the Fee Letter, the Financing Documentation, the Acquisition Credit Facility or the use of proceeds thereof and irrevocably agrees that all claims in respect of any such suit, action
or proceeding may be heard and determined in any such court. Each of the Company and SunTrust irrevocably and unconditionally waives any objection that it may now or hereafter have to the laying of venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. A final judgment in any such suit, action or proceeding brought in any such court may be enforced in any other courts to
whose jurisdiction the Company or SunTrust are or may be subject, by suit upon judgment. Service of any process, summons, notice or document on the Company may be made by registered mail addressed to the Company at the address appearing at the
beginning of this letter for any suit, action or proceeding brought in any such court pursuant to this Commitment Letter. Each of the parties hereto agree that this Commitment Letter is a binding and enforceable agreement with respect to the subject
matter contained herein, including an agreement to negotiate in good faith the Financing Documentation by the parties hereto in a manner consistent with this Commitment Letter, it being acknowledged and agreed that the funding of the Acquisition
Credit Facility is subject only to the conditions precedent as provided herein and in the Term Sheet. 
 6. Survival. The obligations
of the Company under the expense reimbursement, indemnification, confidentiality and governing law provisions of this Commitment Letter shall survive the expiration and termination of this Commitment Letter, but the Company’s indemnification
obligations and agreements in Section E will be superseded by the indemnification provisions in the Financing Documentation on the closing of the Acquisition Credit Facility. The Company’s obligations under the expense reimbursement and
governing law provisions shall survive for one year following termination of this Commitment Letter. 
 7. Confidentiality. The
Company shall not disclose or permit disclosure of this Commitment Letter, the Fee Letter nor the contents of the foregoing to any person or entity (including, without limitation, any Lender other than SunTrust Bank), either directly or indirectly,
either orally or in 

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writing, without the prior written consent of SunTrust in each instance, except (i) to the Company’s affiliates, to the Company’s and such affiliates’ respective members,
officers, directors, advisors (including accountants), agents and legal counsel and to any owner or proposed owner of the Buyer (including GE Capital) and their respective members and other equity holders, officers, directors, advisors (including
accountants), agents and legal counsel, in each case to the extent directly involved in the transactions contemplated hereby and, in each case, on a confidential basis, (ii) with respect to the Commitment Letter (but not the Fee Letter), to the
Acquired Business and its subsidiaries, its controlling shareholders and their respective officers, directors, agents, employees, attorneys, accountants, customers, advisors, controlling persons or equity holders on a confidential basis,
(iii) pursuant to the order of any court or administrative agency or in any pending legal or administrative proceeding, or otherwise as required by applicable law or compulsory legal process, including United States securities laws and the
rules and regulations promulgated thereunder and the rules and regulations of any national securities exchange on which the securities of the MLP are listed (in which case the Company, to the extent not prohibited by law, agrees to inform SunTrust
promptly thereof) or (iv) upon the request or demand of any regulatory authority having jurisdiction over the Company or any of its affiliates (in which case the Company, to the extent not prohibited by law, agrees to inform SunTrust promptly
thereof). Notwithstanding the foregoing, (i) the Company may disclose the aggregate fee amounts contained in the Fee Letter as part of the Projections, pro forma information or a generic disclosure of aggregate sources and uses related to fee
amounts related to the transactions contemplated hereby to the extent customary or required in marketing materials for the Acquisition Credit Facility and (ii) to the extent fee amounts, price caps and economic “flex” set forth
therein have been redacted in a manner to be reasonably agreed by SunTrust, the Company may disclose the Fee Letter and the contents thereof to the Acquired Business, its subsidiaries, its controlling shareholders and their respective officers,
directors, agents, employees, attorneys, accountants, advisors, controlling persons or equity holders, on a confidential and need-to-know basis. The confidentiality provisions set forth in this paragraph shall survive the termination of this
Commitment Letter and, other than with respect to the Fee Letter, shall expire and be of no further effect after the second anniversary of the date hereof. 

We agree to take normal and reasonable precautions to maintain the confidentiality of any information relating to the Company, the Acquisition
or the related transactions, to the extent provided to us by the Company, the Acquired Business or any of their respective affiliates, other than any such information that is available to us on a non-confidential basis prior to disclosure by any
such party, except that such information may be disclosed (i) to our affiliates and their and our respective managers, administrators, trustees, partners, directors, officers, employees, agents, advisors or other representatives including,
without limitation, accountants, legal counsel and other advisors, in each case so long as such person is advised that such information is confidential and may not be used for any purpose other than in connection with the transactions contemplated
by this Commitment Letter and may not be disclosed to any other person, (ii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iii) to the extent requested by any regulatory agency or
authority purporting to have jurisdiction over it (including any self-regulatory authority such as the National Association of Insurance Commissioners), (iv) to the extent that such information becomes publicly available other than as a result
of a breach of this paragraph, or which becomes available to us or any of our affiliates on a non-confidential basis from a source other than the Company, the Acquired Business or any of their respective affiliates, (v) in connection with the
exercise of any remedy hereunder or under the Fee Letter or any suit, action or proceeding relating to this Commitment Letter or the Fee Letter or the enforcement of rights hereunder or thereunder, (vi) subject to execution by such person of an
agreement containing provisions substantially the same as those of this paragraph, to any potential or prospective Lender, participant or assignee in the Acquisition Credit Facility, (vii) to any rating agency, (viii) to the CUSIP Service
Bureau or any similar organization or (ix) with the consent of the Company. Any person required to maintain the confidentiality of any information as provided for in this paragraph shall be considered to have complied

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with its obligation to do so if such person has exercised the same degree of care to maintain the confidentiality of such information as such person would accord its own confidential information.
In the event that the Acquisition Credit Facility is funded, the obligations set forth in this paragraph shall terminate automatically and be superseded by the confidentiality provisions in the Financing Documentation upon the initial funding
thereunder to the extent such provisions are binding on us, as applicable. Otherwise, the confidentiality provisions set forth in this paragraph shall survive the termination of this Commitment Letter and shall expire and be of no further effect
after the second anniversary of the date hereof. 
 8. No Fiduciary Duty. SunTrust is a full service securities firm and such person
may from time to time effect transactions, for its own or its affiliates’ account or the account of customers, and hold positions in loans, securities or options on loans or securities of you, your affiliates and of other companies that may be
the subject of the transactions contemplated by this Commitment Letter. The Company acknowledges and agrees that (i) the commitment to and syndication of the Acquisition Credit Facility by SunTrust pursuant to this Commitment Letter is an
arm’s-length commercial transaction between the Company, on the one hand, and SunTrust, on the other, and you are capable of evaluating and understanding, and do understand and accept, the terms, risks and conditions of the transactions
contemplated by this Commitment Letter; (ii) in connection with the transactions contemplated hereby and the process leading to such transactions, SunTrust is and has been acting solely as a principal, and not as advisor, agent or fiduciary of
the Company, its affiliates or any other party; (iii) SunTrust has not assumed an advisory responsibility or fiduciary duty in favor of the Company with respect to the transactions contemplated hereby or the process leading thereto
(irrespective of whether SunTrust has advised or is currently advising the Company on other matters) and SunTrust has no obligation to the Company except those expressly set forth in this Commitment Letter; (iv) SunTrust and its affiliates may
be engaged in a broad range of transactions that involve interests that differ from those of the Company and its affiliates, and SunTrust has no obligation to disclose any of such interests by virtue of any fiduciary or advisory relationship as a
consequence of this Commitment Letter; and (v) SunTrust has not provided any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby, and the Company has consulted its own legal, accounting,
regulatory and tax advisors to the extent it deemed appropriate. The Company waives and releases, to the fullest extent permitted by law, any claims that it may have against SunTrust with respect to any breach or alleged breach of fiduciary duty as
a consequence of this Commitment Letter. 
 9. Swaps. Nothing herein constitutes an offer or recommendation to enter into any
“swap” or trading strategy involving a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act. Any such offer or recommendation, if any, will only occur after we have received appropriate documentation
from you regarding whether you are qualified to enter into a swap under applicable law. 
 10. Counterparts. This Commitment Letter
and the Fee Letter may be executed in multiple counterparts, and by different parties hereto in any number of separate counterparts, all of which taken together shall constitute one original. Delivery of an executed counterpart of a signature page
to this Commitment Letter or the Fee Letter by telecopier or by electronic transmission (in pdf form) shall be as effective as delivery of a manually executed counterpart hereof. 

11. Entire Agreement. This Commitment Letter and the Fee Letter embody the entire agreement and understanding among SunTrust, the
Company and their affiliates with respect to the Acquisition Credit Facility, the Financing Documentation and the Transactions, and supersede all prior understandings and agreements among the parties relating to the subject matter hereof. However,
those matters not covered or made clear herein or in the Term Sheet are subject to mutual agreement of the parties. 

 Arc Terminals Holdings LLC 

February 19, 2015 
  Page
 10
 
  

 12. Patriot Act. SunTrust hereby notifies the Company that, pursuant to the
requirements of the USA Patriot Improvement and Reauthorization Act of 2005, Title III of Pub. L. 109-177 (signed into law March 9, 2006) (the “Patriot Act”), it and its affiliates are required to obtain, verify and
record information that identifies the Company, which information includes the name, address, tax identification number and other information regarding the Company that will allow SunTrust to identify the Company in accordance with the Patriot Act.
This notice is given in accordance with the requirements of the Patriot Act and is effective for SunTrust and its affiliates. 

 We look forward to working with you on this important transaction. 

 

			
	SUNTRUST BANK
		
	By:		 /s/ Scott Mackey

	Name:		Scott Mackey
	Title:		Director
	
	SUNTRUST ROBINSON HUMPHREY, INC.
		
	By:		 /s/ Peter Almond

	Name:		Peter Almond
	Title:		Managing Director

  
 Signature Page –
Commitment Letter 

							
	ACCEPTED AND AGREED
	this 19th day of February, 2015
	
	ARC TERMINALS HOLDINGS LLC
		
	By:		Arc Logistics LLC, its sole member
			By:		Arc Logistics Partners LP, its sole member
					By:		Arc Logistics GP LLC, its general member
		
	By:		 /s/ Vince T. Cubbage

	Name:		Vince T. Cubbage
	Title:		Chief Executive Officer

  
 Signature Page –
Commitment Letter 

 Annex I 

Summary of Principal Terms and Conditions of 

Incremental Facility 
  

					
	Borrower:		Arc Terminals Holdings LLC (the “Borrower”).
		
	Guarantors:		Arc Logistics Partners LP, Arc Logistics LLC and all existing and future direct and indirect domestic subsidiaries of the Borrower (other than the Buyer and any direct or indirect subsidiaries thereof).
		
	 Lead Arranger
 and
Bookrunner:
		  
 SunTrust Robinson Humphrey, Inc. (with any other lead
arrangers and bookrunners as mutually agreed to by the Borrower and SunTrust Robinson Humphrey, Inc., the “Lead Arranger”).

		
	Administrative Agent:		SunTrust Bank (the “Administrative Agent”).
		
	Lenders:		A syndicate of financial institutions (including SunTrust Bank) arranged by the Lead Arranger, which institutions shall be acceptable to the Borrower and the Administrative Agent (together, the
“Lenders”).
		
	Existing Credit Facility:		A senior secured revolving credit facility consisting of the commitments under the Existing Credit Agreement (as defined below) (the “Existing Credit Facility”).
		
	Incremental Facility:		An incremental revolving credit facility (the “Incremental Facility”) in an amount such that, after consummation of the Amendment, the aggregate outstanding commitments will equal $275,000,000.
For the avoidance of doubt, the Incremental Facility shall constitute an Incremental Commitment under the Existing Credit Agreement and, after consummation of the Amendment, up to $100,000,000 of further Incremental Commitments will be
available.
		
			The Existing Credit Facility and the Incremental Facility are collectively referred to herein as the “Senior Credit Facility”.
		
	Purpose:		Proceeds of the Incremental Facility (in up to an amount equal to or less than the difference between (a) the amount that would not cause the Total Leverage Ratio (as defined in the Existing Credit Agreement after giving
effect to the Documentation Principles), calculated on a pro forma basis after giving effect to the consummation of the Transactions and the initial funding of the Incremental Facility, to exceed 4.75:1.00 minus (b) any Pro Rata Purchase
Price Reduction (as defined below)), together with the proceeds of the Arc Equity Contribution, shall be used on the date that the initial funding under the Incremental Facility occurs (the “Closing Date”) (i) to finance,
directly or indirectly, the acquisition (the “Acquisition”) of 60% of the membership interests of Joliet Bulk, Barge & Rail LLC (the “Acquired Business”) and (ii) to pay fees, costs and expenses
incurred by the Borrower and its affiliates in connection with entering into the Incremental Facility and consummating the Acquisition

					
			and transactions related thereto. The Acquisition shall occur contemporaneously with the making of the extensions of credit pursuant to an amendment (the “Amendment”) to that certain Second
Amended and Restated Revolving Credit Agreement, dated as of November 12, 2013 (the “Existing Credit Agreement”; capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Existing
Credit Agreement), by and among the Company, the lenders from time to time party thereto (collectively, the “Existing Lenders”) and SunTrust Bank, as administrative agent for the Existing Lenders, which Amendment shall be
subject to the Documentation Principles (as defined below). Proceeds of the Incremental Facility shall be used after the Closing Date to provide for working capital and capital expenditures relating to terminal construction and for other general
corporate purposes.
		
	Documentation Principles:		The Amendment and any other definitive financing documentation for the Incremental Facility (including, without limitation, supplements to the schedules to the security documents in respect of the Existing Credit
Facility in order to effect the pledge of the equity interests of the Buyer shall be limited to the equity interests directly or indirectly owned by the Borrower or any of the Guarantors) (collectively, the “Financing
Documentation”) shall amend the Existing Credit Agreement to (x) permit the consummation of the Acquisition and the other Transactions, (y) give effect to the Incremental Facility and (z) reflect those terms and conditions set forth in
this Term Sheet and the commitment letter to which this Term Sheet is attached; provided that (a) other than with respect to the forgoing, the Incremental Facility shall be substantially identical to the Existing Credit Agreement that is in
effect immediately prior to the consummation of the Transactions; (b) the Financing Documentation shall be negotiated in good faith within a reasonable period to be mutually determined by the Borrower and the Administrative Agent based on the
expected Closing Date; (c) in all cases the Financing Documentation will be subject to the Certain Funds Provisions; and (d) the Financing Documentation shall give effect to other modifications to the Existing Credit Agreement as mutually agreed by
the Borrower and the Administrative Agent (the foregoing, collectively, the “Documentation Principles”).
		
	 Amortization and
 Maturity
Date:
		  
 The Senior Credit Facility shall terminate, and all amounts
outstanding thereunder shall be due and payable in full, on November 12, 2018.

		
	Pricing/Fees/Expenses:		With respect to the Existing Credit Facility, same as in the Existing Credit Agreement; with respect to the Incremental Facility, as set forth in Addendum I attached hereto.
		
	 Optional Prepayments
 and
Commitment
 Reductions:
		Same as in the Existing Credit Agreement.

					
	Mandatory Prepayments:		Same as in the Existing Credit Agreement.
		
	Collateral:		Substantially the same as in the Existing Credit Agreement and related security documents; provided that (x) the pledge of the equity interests of the Buyer shall be limited to the equity interests directly or
indirectly owned by the Borrower or any of the Guarantors and (y) for the avoidance of doubt, neither the Buyer nor any direct or indirect subsidiary thereof shall be required to pledge its assets under the Financing Documentation.
		
	Conditions to Closing:		The closing of the Incremental Facility shall be subject to the conditions set forth in the commitment letter to which this Term Sheet is attached and the following other conditions:
			
			 •
		(i) The execution and delivery of the Financing Documentation by the Borrower and the Guarantors, which shall, in each case, be in accordance with the terms hereof and subject to the Documentation Principles; provided that to
the extent any security interest in any Collateral (as defined in the Existing Credit Agreement) is not or cannot be provided and/or perfected on the Closing Date (other than the pledge and perfection of the security interest in any equity interests
and in any other assets pursuant to which a lien may be perfected by the filing of a financing statement under the Uniform Commercial Code) after the Borrower’s use of commercially reasonable efforts to do so or without undue burden or expense,
then the provision and/or perfection of a security interest in such Collateral shall not constitute a condition precedent to the availability of the Incremental Facility on the Closing Date but instead shall be required to be delivered after the
Closing Date pursuant to arrangements and timing to be mutually agreed by the Administrative Agent and the Borrower acting reasonably; and (ii) receipt of the consents of the requisite Existing Lenders for the Amendment.
			
			•		Subject to the Certain Funds Provision, delivery of customary corporate documents (including evidence of authorization), a solvency certificate, other customary officer certificates, customary legal opinions and other customary
closing documents (in substantially the same scope as previously delivered under the Existing Credit Agreement), each to be in substantially the same form as previously delivered under the Existing Credit Agreement.
			
			•		Receipt by the Administrative Agent of the consolidated financial statements of the MLP (as defined in the Existing Credit Agreement) and its subsidiaries for the fiscal year ended December 31, 2014 within one hundred five (105)
days after the end of such fiscal year.

					
			•		Receipt by the Administrative Agent of financial projections for the four-year period from the Closing Date and a pro forma balance sheet of the Borrower as of the Closing Date.
			
			•		Payment in full of all reasonable and documented fees and expenses required to be paid pursuant to the Fee Letter, the commitment letter to which this Term Sheet is attached and the Financing Documentation, to the extent, in the
case of expenses, invoiced at least two (2) Business Days prior to the Closing Date.
			
			•		Substantially simultaneously with the initial funding under the Incremental Facility on the Closing Date, each of the Arc Equity Contribution and the GE Equity Contribution shall have been made.
			
			•		The Acquisition shall have been consummated, or substantially simultaneously with the initial funding under the Incremental Facility on the Closing Date shall be consummated in all material respects in accordance with the terms of
the Purchase Agreement, after giving effect to any modifications, amendments, consents or waivers thereto, other than those modifications, amendments, consents or waivers that are materially adverse to the Lenders, the Administrative Agent or the
Lead Arranger in their capacities as such, unless consented to in writing by the Lead Arranger; provided that any reduction in the purchase price of, or consideration for, the Acquisition by no more than 10% shall be deemed not to be
materially adverse to the Lenders so long as 60% of such reduction (such percentage of such reduction, the “Pro Rata Purchase Price Reduction”) is applied on a dollar-for-dollar basis to reduce the aggregate amount of the
commitments in respect of the Senior Credit Facility to be funded on the Closing Date.
		
	 Conditions to
 All Credit
Extensions:
		  
 Same as in the Existing Credit Agreement; provided
that the only conditions to the availability of the Incremental Facility on the Closing Date shall be those set forth above under the heading “Conditions to Closing” and Section C of the commitment letter to which this Term Sheet is
attached.

		
	 Representations and

Warranties:
		Same as in the Existing Credit Agreement (subject to the Documentation Principles).
		
	Covenants:		Same as in the Existing Credit Agreement, except for the modifications set forth below:
		
			(a) Negative Covenants – Same as in the Existing Credit Agreement; provided that (i) the consummation of the Transactions shall be permitted; (ii) the Acquired Business and the Buyer shall not
incur

					
		  	any indebtedness or any liens, other than (x) a $5,000,000 basket for indebtedness that may be secured and (y) other exceptions to be mutually agreed by the Borrower and the Administrative Agent; (iii) the Senior Credit
Facility shall provide for a $30,000,000 basket for investments in the Buyer; and (iv) updates to the schedules to the Existing Credit Facility shall be made to permit any indebtedness assumed in connection with the Acquisition.
		
		  	(b) Financial Covenants – Same as in the Existing Credit Agreement; provided that the definition of “Pro Forma Adjusted EBITDA” shall (x) set forth certain amounts to be agreed as deemed
distributions from the Acquired Business prior to the Closing Date and (y) allow for the add-back of fees, costs and expenses associated with the Transactions.
		
	Events of Default:	  	Same as in the Existing Credit Agreement.
		
	Participations and Assignments:	  	Same as in the Existing Credit Agreement.
		
	 Waivers and
 Amendments:
	  	Same as in the Existing Credit Agreement.
		
	Defaulting Lenders:	  	Same as in the Existing Credit Agreement.
		
	Indemnification:	  	Same as in the Existing Credit Agreement.
		
	Governing Law:	  	State of New York.
		
	 Counsel to the
 Administrative
Agent:
	  	King & Spalding LLP.
		
	Miscellaneous:	  	Same as in the Existing Credit Agreement.

 ADDENDUM I 

PRICING, FEES AND EXPENSES 

Capitalized terms not otherwise defined herein have the meaning set forth in 

the Summary of Principal Terms and Conditions to which this Addendum is attached. 

 

			
	Interest Rates:	  	The interest rates per annum applicable to the Incremental Facility will be, at the option of the Borrower, (i) LIBOR plus the Applicable Margin (as defined below) or (ii) the Base Rate plus the Applicable
Margin.
		
		  	“LIBOR” definition to be the same as in the Existing Credit Agreement.
		
		  	“Base Rate” definition to be the same as in the Existing Credit Agreement.
		
		  	“Applicable Margin” means a percentage per annum to be determined in accordance with the pricing grid set forth below, based on the Total Leverage Ratio; provided that the Applicable Margin indicated
by Level I shall be in effect from the Closing Date through the date of delivery of the Borrower’s financial statements and compliance certificate for the first full fiscal quarter ending after the Closing
Date.

  

															
	Level	  	Total Leverage Ratio	  	LIBOR
Loans	 	 	Base Rate
Loans	 	 	Commitment
Fee	 
	I	  	3 4.00:1.00	  	 	3.00	% 	 	 	2.00	% 	 	 	0.50	% 
	II	  	3 3.50:1.00 but < 4.00:1.00	  	 	2.75	% 	 	 	1.75	% 	 	 	0.50	% 
	III	  	3 3.00:1.00 but < 3.50:1.00	  	 	2.50	% 	 	 	1.50	% 	 	 	0.50	% 
	IV	  	3 2.00:1.00 but < 3.00:1.00	  	 	2.25	% 	 	 	1.25	% 	 	 	0.375	% 
	VI	  	< 2.00:1.00	  	 	2.00	% 	 	 	1.00	% 	 	 	0.375	% 

  

			
		  	Interest for LIBOR loans shall be payable at the end of the selected interest period but no less frequently than quarterly. Interest for Base Rate loans shall be payable quarterly in arrears.
		
	Default Interest:	  	Same as in the Existing Credit Agreement.
		
	Commitment Fee:	  	A commitment fee shall be payable by the Borrower quarterly in arrears on the average daily unused portion of the Incremental Facility, in an amount equal to the percentage designated in the pricing grid set forth above for
Commitment Fees; provided that the Commitment Fee percentage indicated by Level I shall be in

			
			effect from the Closing Date through the date of delivery of the Borrower’s financial statements and compliance certificate for the first full fiscal quarter ending after the Closing Date.
		
	 Calculation of
 Interest and
Fees:
		Same as in the Existing Credit Agreement.
		
	 Cost and
 Yield
Protection:
		Same as in the Existing Credit Agreement.
		
	Expenses:		Same as in the Existing Credit Agreement.

 Annex II 

Summary of Principal Terms and Conditions of 

Backstop Facility 
  

					
	Borrower:		Arc Terminals Holdings LLC (the “Borrower”).
		
	Guarantors:		Arc Logistics Partners LP, Arc Logistics LLC and all existing and future direct and indirect domestic subsidiaries of the Borrower (other than the Buyer and any direct or indirect subsidiaries thereof).
		
	 Lead Arranger
 and
Bookrunner:
		  
 SunTrust Robinson Humphrey, Inc. (with any other lead
arrangers and bookrunners as mutually agreed to by the Borrower and SunTrust Robinson Humphrey, Inc., the “Lead Arranger”).

		
	Administrative Agent:		SunTrust Bank (the “Administrative Agent”).
		
	Lenders:		A syndicate of financial institutions (including SunTrust Bank) arranged by the Lead Arranger, which institutions shall be acceptable to the Borrower and the Administrative Agent (together, the
“Lenders”).
		
	Senior Credit Facility:		A $275,000,000 senior secured revolving credit facility (the “Senior Credit Facility”), including sublimits consistent with the Existing Credit Agreement (as defined below). Loans and extensions
of credit will be made in U.S. dollars. Letters of Credit will be issued by SunTrust Bank (the “Issuing Bank”) and Swingline Loans will be made available by SunTrust Bank (the “Swingline Lender”) in
its sole discretion, and each Lender will purchase an irrevocable and unconditional participation in each Letter of Credit and each Swingline Loan, in each case on terms and conditions consistent with the Existing Credit Agreement after giving
effect to the Documentation Principles.
		
	Incremental Facility:		The Borrower shall have the right to increase the commitments to the Senior Credit Facility in an aggregate amount up to $100,000,000 at any time on or before the final maturity date, on the same terms as in the Existing
Credit Agreement after giving effect to the Documentation Principles.
		
	Purpose:		Proceeds of the Senior Credit Facility (in up to an amount equal to or less than the difference between (a) the amount that would not cause the Total Leverage Ratio (as defined in the Existing Credit Agreement after
giving effect to the Documentation Principles), calculated on a pro forma basis after giving effect to the consummation of the Transactions and the initial funding of the Senior Credit Facility, to exceed 4.75:1.00 minus (b) any Pro Rata
Purchase Price Reduction (as defined below)), together with the proceeds of the Arc Equity Contribution, shall be used on the date that the initial funding under the Senior Credit Facility occurs (the “Closing Date”) (i) to
finance, directly or indirectly, the acquisition (the “Acquisition”) of 60% of the membership interests of Joliet Bulk, Barge & Rail LLC (the “Acquired Business”), (ii) to refinance
existing

					
			indebtedness under that certain Second Amended and Restated Revolving Credit Agreement, dated as of November 12, 2013 (the “Existing Credit Agreement”; capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Existing Credit Agreement), by and among the Company, the lenders from time to time party thereto (collectively, the “Existing Lenders”) and SunTrust Bank, as
administrative agent for the Existing Lenders, and (iii) to pay fees, costs and expenses incurred by the Borrower and its affiliates in connection with entering into the Senior Credit Facility and consummating the Acquisition and transactions
related thereto. Proceeds of the Senior Credit Facility shall be used after the Closing Date to provide for working capital and capital expenditures relating to terminal construction and for other general corporate purposes.
		
	Documentation Principles:		The definitive financing documentation for the Senior Credit Facility (collectively, the “Financing Documentation”) shall be substantially identical to the Existing Credit Agreement (and any
security agreements and guaranty agreements relating thereto) with such modifications to (x) permit the consummation of the Acquisition and the other Transactions, (y) give effect to the Senior Credit Facility and (z) reflect those terms and
conditions set forth in this Term Sheet and the commitment letter to which this Term Sheet is attached; provided that (a) other than with respect to the forgoing, the Senior Credit Facility shall be substantially identical to the Existing
Credit Agreement that is in effect immediately prior to the consummation of the Transactions; (b) the Financing Documentation shall be negotiated in good faith within a reasonable period to be mutually determined by the Borrower and the
Administrative Agent based on the expected Closing Date; (c) in all cases the Financing Documentation will be subject to the Certain Funds Provisions; and (d) the Financing Documentation shall give effect to other modifications to the Existing
Credit Agreement as mutually agreed by the Borrower and the Administrative Agent (the foregoing, collectively, the “Documentation Principles”).
		
	 Amortization and
 Maturity
Date:
		  
 The Senior Credit Facility shall terminate, and all amounts
outstanding thereunder shall be due and payable in full, on November 12, 2018.

		
	Pricing/Fees/Expenses:		As set forth in Addendum I attached hereto.
		
	 Optional Prepayments
 and
Commitment
 Reductions:
		Same as in the Existing Credit Agreement.
		
	Mandatory Prepayments:		Same as in the Existing Credit Agreement.
		
	Collateral:		Substantially the same as in the Existing Credit Agreement and related security documents; provided that (x) the pledge of the equity interests of the Buyer shall be limited to the equity interests directly or
indirectly

					
			owned by the Borrower or any of the Guarantors and (y) for the avoidance of doubt, neither the Buyer nor any direct or indirect subsidiary thereof shall be required to pledge its assets under the Financing
Documentation.
		
	Conditions to Closing:		The closing of the Senior Credit Facility shall be subject to the conditions set forth in the commitment letter to which this Term Sheet is attached and the following other conditions:
			
			•		The execution and delivery of the Financing Documentation by the Borrower and the Guarantors, which shall, in each case, be in accordance with the terms hereof and subject to the Documentation Principles; provided that to the
extent any security interest in any Collateral (as defined in the Existing Credit Agreement) is not or cannot be provided and/or perfected on the Closing Date (other than the pledge and perfection of the security interest in any equity interests and
in any other assets pursuant to which a lien may be perfected by the filing of a financing statement under the Uniform Commercial Code) after the Borrower’s use of commercially reasonable efforts to do so or without undue burden or expense,
then the provision and/or perfection of a security interest in such Collateral shall not constitute a condition precedent to the availability of the Senior Credit Facility on the Closing Date but instead shall be required to be delivered after the
Closing Date pursuant to arrangements and timing to be mutually agreed by the Administrative Agent and the Borrower acting reasonably.
			
			•		Subject to the Certain Funds Provision, delivery of customary corporate documents (including evidence of authorization), a solvency certificate, other customary officer certificates, customary legal opinions and other customary
closing documents (in substantially the same scope as previously delivered under the Existing Credit Agreement), each to be in substantially the same form as previously delivered under the Existing Credit Agreement.
			
			•		Receipt by the Administrative Agent of the consolidated financial statements of the MLP (as defined in the Existing Credit Agreement) and its subsidiaries for the fiscal year ended December 31, 2014 within one hundred five (105)
days after the end of such fiscal year.
			
			•		Receipt by the Administrative Agent of financial projections for the four-year period from the Closing Date and a pro forma balance sheet of the Borrower as of the Closing Date.
			
			•		Payment in full of all reasonable and documented fees and expenses required to be paid pursuant to the Fee Letter, the commitment letter to which this Term Sheet is attached and the Financing Documentation, to the extent, in the
case of expenses, invoiced at least two (2) Business Days prior to the Closing Date.

					
			•		Substantially simultaneously with the initial funding under the Senior Credit Facility on the Closing Date, each of the Arc Equity Contribution and the GE Equity Contribution shall have been made.
			
			•		The Acquisition shall have been consummated, or substantially simultaneously with the initial funding under the Senior Credit Facility on the Closing Date shall be consummated in all material respects in accordance with the terms of
the Purchase Agreement, after giving effect to any modifications, amendments, consents or waivers thereto, other than those modifications, amendments, consents or waivers that are materially adverse to the Lenders, the Administrative Agent or the
Lead Arranger in their capacities as such, unless consented to in writing by the Lead Arranger; provided that any reduction in the purchase price of, or consideration for, the Acquisition by no more than 10% shall be deemed not to be
materially adverse to the Lenders so long as 60% of such reduction (such percentage of such reduction, the “Pro Rata Purchase Price Reduction”) is applied on a dollar-for-dollar basis to reduce the aggregate amount of the
commitments in respect of the Senior Credit Facility to be funded on the Closing Date.
		
	 Conditions to
 All Credit
Extensions:
		  
 Same as in the Existing Credit Agreement; provided
that the only conditions to the availability of the Senior Credit Facility on the Closing Date shall be those set forth above under the heading “Conditions to Closing” and Section C of the commitment letter to which this Term Sheet is
attached.

		
	Representations and Warranties:		Same as in the Existing Credit Agreement (subject to the Documentation Principles).
		
	Covenants:		Same as in the Existing Credit Agreement, except for the modifications set forth below:
		
			(a) Negative Covenants – Same as in the Existing Credit Agreement; provided that (i) the consummation of the Transactions shall be permitted; (ii) the Acquired Business and the Buyer shall not incur
any indebtedness or any liens, other than (x) a $5,000,000 basket for indebtedness that may be secured and (y) other exceptions to be mutually agreed by the Borrower and the Administrative Agent; (iii) the Senior Credit Facility shall provide for a
$30,000,000 basket for investments in the Buyer; and (iv) updates to the schedules to the Existing Credit Facility shall be made to permit any indebtedness assumed in connection with the
Acquisition.

					
		 	(b) Financial Covenants – Same as in the Existing Credit Agreement; provided that the definition of “Pro Forma Adjusted EBITDA” shall (x) set forth certain amounts to be agreed as deemed
distributions from the Acquired Business prior to the Closing Date and (y) allow for the add-back of fees, costs and expenses associated with the Transactions.
		
	Events of Default:	 	Same as in the Existing Credit Agreement.
		
	Participations and Assignments:	 	Same as in the Existing Credit Agreement.
		
	 Waivers and
 Amendments:
	 	Same as in the Existing Credit Agreement.
		
	Defaulting Lenders:	 	Same as in the Existing Credit Agreement.
		
	Indemnification:	 	Same as in the Existing Credit Agreement.
		
	Governing Law:	 	State of New York.
		
	 Counsel to the
 Administrative
Agent:
	 	King & Spalding LLP.
		
	Miscellaneous:	 	Same as in the Existing Credit Agreement.

 ADDENDUM I 

PRICING, FEES AND EXPENSES 

Capitalized terms not otherwise defined herein have the meaning set forth in 

the Summary of Principal Terms and Conditions to which this Addendum is attached. 

 

			
	Interest Rates:	  	The interest rates per annum applicable to the Senior Credit Facility (other than with respect to Swingline Loans) will be, at the option of the Borrower, (i) LIBOR plus the Applicable Margin (as defined below) or (ii) the
Base Rate plus the Applicable Margin.
		
		  	“LIBOR” definition to be the same as in the Existing Credit Agreement.
		
		  	“Base Rate” definition to be the same as in the Existing Credit Agreement.
		
		  	“Applicable Margin” means a percentage per annum to be determined in accordance with the pricing grid set forth below, based on the Total Leverage Ratio; provided that the Applicable Margin indicated
by Level I shall be in effect from the Closing Date through the date of delivery of the Borrower’s financial statements and compliance certificate for the first full fiscal quarter ending after the Closing
Date.

  

															
	Level	  	Total Leverage Ratio	  	LIBOR
Loans	 	 	Base
Rate
Loans	 	 	Commitment
Fee	 
	I	  	3 4.00:1.00	  	 	3.00	% 	 	 	2.00	% 	 	 	0.50	% 
	II	  	3 3.50:1.00 but < 4.00:1.00	  	 	2.75	% 	 	 	1.75	% 	 	 	0.50	% 
	III	  	3 3.00:1.00 but < 3.50:1.00	  	 	2.50	% 	 	 	1.50	% 	 	 	0.50	% 
	IV	  	3 2.00:1.00 but < 3.00:1.00	  	 	2.25	% 	 	 	1.25	% 	 	 	0.375	% 
	VI	  	< 2.00:1.00	  	 	2.00	% 	 	 	1.00	% 	 	 	0.375	% 

  

					
		  	Each Swingline Loan shall bear interest at the Base Rate plus the Applicable Margin for Base Rate loans under the Senior Credit Facility.
		
		  	Interest for LIBOR loans shall be payable at the end of the selected interest period but no less frequently than quarterly. Interest for Base Rate loans and Swingline Loans shall be payable quarterly in
arrears.
		
	Default Interest:	  	Same as in the Existing Credit Agreement.
		
	Commitment Fee:	  	A commitment fee shall be payable by the Borrower quarterly in arrears on the average daily unused portion of the Senior Credit Facility, in an amount equal to the percentage designated in the pricing grid set
forth

					
		 	above for Commitment Fees; provided that the Commitment Fee percentage indicated by Level I shall be in effect from the Closing Date through the date of delivery of the Borrower’s financial statements and
compliance certificate for the first full fiscal quarter ending after the Closing Date. Outstanding letters of credit under the Senior Credit Facility will be deemed usage of the Senior Credit Facility, but Swingline Loans shall not be deemed usage
of the Senior Credit Facility.
		
	Letter of Credit Fee:	 	Letter of credit fees shall be payable quarterly in arrears at a rate equal to the Applicable Margin for LIBOR loans under the Senior Credit Facility on the average outstanding Letters of Credit, ratably to the Lenders
in accordance with their participation in the respective letters of credit. In addition, a facing fee of 0.175% and other customary administrative charges shall be paid to the Issuing Bank for its own account. In each case, fees shall be calculated
on the aggregate stated amount of the Letters of Credit for the duration thereof.
		
	 Calculation of
 Interest and
Fees:
	 	Same as in the Existing Credit Agreement.
		
	 Cost and Yield

Protection:
	 	Same as in the Existing Credit Agreement.
		
	Expenses:	 	Same as in the Existing Credit Agreement.NOC-Form 8-K-021815-Ex 10.1

Exhibit 10.1

NORTHROP GRUMMAN CORPORATION 
TERMS AND CONDITIONS APPLICABLE TO 
2015 RESTRICTED STOCK RIGHTS 
GRANTED UNDER THE 2011 LONG-TERM INCENTIVE STOCK PLAN

These Terms and Conditions (“Terms”) apply to certain “Restricted Stock Rights” (“RSRs”) granted by Northrop Grumman Corporation (the “Company”) in 2015 under its 2011 Long-Term Incentive Stock Plan.  If you were granted an RSR award by the Company in 2015, the date of grant of your RSR award (the “Grant Date”) and the number of RSRs applicable to your award are set forth in the letter from the Company announcing your RSR award (your “Grant Letter”) and are also reflected in the electronic stock plan award recordkeeping system (“Stock Plan System”) maintained by the Company or its designee.  These Terms apply only with respect to the 2015 RSR award, except as provided in Section 11.  If you were granted an RSR award, you are referred to as the “Grantee” with respect to your award.  Capitalized terms are generally defined in Section 12 below if not otherwise defined herein.
Each RSR represents a right to receive one share of the Company’s Common Stock, or cash of equivalent value as provided herein, subject to vesting as provided herein.  The number of RSRs subject to your award is subject to adjustment as provided herein.  The RSR award is subject to all of the terms and conditions set forth in these Terms, and is further subject to all of the terms and conditions of the Plan, as it may be amended from time to time, and any rules adopted by the Committee, as such rules are in effect from time to time.  If you do not formally accept your RSR award, including these Terms, in accordance with the instructions and time limit set forth in your Grant Letter, you will be deemed to have forfeited your RSR award.
		
	1.
	Vesting; Issuance of Shares.

Subject to Sections 2 and 6 below, one hundred percent (100%) of the number of RSRs (and any Dividend Equivalents (as defined below)) subject to your award (subject to adjustment as provided in Section 6.1) shall vest upon the third anniversary of the Grant Date, provided that if the third anniversary of the Grant Date falls on a weekend or holiday, then the award shall vest on the next business day.
1.1   Payment of RSRs.  Except as otherwise provided below, the Company shall pay an RSR subject to the award that vests (“Vested RSR”) (and related Dividend Equivalents) within 90 days following the vesting of the RSR on the third anniversary of the Grant Date.  The Company shall pay such Vested RSRs in either an equivalent number of shares of Common Stock, or, in the discretion of the Committee, in cash or in a combination of shares of Common Stock and cash.  In the event of a cash payment, the amount of the payment for each Vested RSR to be paid in cash will equal the Fair Market Value (as defined below) of a share of Common Stock as of the date that such RSR became vested.  
1.2   Dividend Equivalents.  The Grantee shall be entitled to payment for Dividend Equivalents (if any) with respect to any Vested RSRs.  For purposes of these Terms, “Dividend Equivalents” means the aggregate amount of dividends paid by the Company on a number of shares of Common Stock equivalent to the number of Vested RSRs during the period from the Grant date until the date the Vested RSRs are paid (without interest or 

 
other adjustments to reflect the time value of money).  Dividend Equivalents (if any) will be paid at the same time as the Vested RSRs to which they relate are paid.  Dividend Equivalents will be paid in cash.
		
	2.
	Early Termination of Award; Termination of Employment.

2.1    General.  The RSRs (and related Dividend Equivalents) subject to the award, to the extent not previously vested, shall terminate and become null and void if and when (a) the award terminates in connection with a Change in Control pursuant to Section 6 below, or (b) except as provided in Sections 2.6 and 2.7, and in Section 6, the Grantee ceases for any reason to be an employee of the Company or one of its subsidiaries.
2.2    Leave of Absence.  Unless the Committee otherwise provides (at the time of the leave or otherwise), if the Grantee is granted a leave of absence by the Company, the Grantee (a) shall not be deemed to have incurred a termination of employment at the time such leave commences for purposes of the award, and (b) shall be deemed to be employed by the Company for the duration of such approved leave of absence for purposes of the award.  A termination of employment shall be deemed to have occurred if the Grantee does not timely return to active employment upon the expiration of such approved leave or if the Grantee commences a leave that is not approved by the Company.
2.3    Salary Continuation.  Subject to Section 2.2 above, the term “employment” as used herein means active employment by the Company and salary 

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continuation without active employment (other than a leave of absence approved by the Company that is covered by Section 2.2) will not, in and of itself, constitute “employment” for purposes hereof (in the case of salary continuation without active employment, the Grantee’s cessation of active employee status shall, subject to Section 2.2, be deemed to be a termination of “employment” for purposes hereof).  Furthermore, salary continuation will not, in and of itself, constitute a leave of absence approved by the Company for purposes of the award.
2.4    Sale or Spinoff of Subsidiary or Business Unit.  For purposes of the RSRs (and related Dividend Equivalents) subject to the award, a termination of employment of the Grantee shall be deemed to have occurred if the Grantee is employed by a subsidiary or business unit and that subsidiary or business unit is sold, spun off, or otherwise divested, the Grantee does not otherwise continue to be employed by the Company or one of its subsidiaries after such event, and the divested entity or business (or its successor or a parent company) does not assume the award in connection with such transaction.  In the event of such a termination of employment, the termination shall be deemed to be an Early Retirement unless the Grantee was otherwise eligible at the time of termination for Normal Retirement (in which case, the termination shall be considered a Normal Retirement) treated as provided for in Section 2.7 (subject to Section 6).
2.5    Continuance of Employment Required.  Except as expressly provided in Section 2.6, Section 2.7 and in Section 6, the vesting of the RSRs (and related Dividend Equivalents) subject to the award requires continued employment through the third anniversary of the Grant Date as a condition to the vesting of any portion of the award.  Employment for only a portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment.  Nothing contained in these Terms, the Stock Plan System, or the Plan constitutes an employment commitment by the Company or any subsidiary, affects the Grantee’s status (if the Grantee is otherwise an at-will employee) as an employee at will who is subject to termination without cause, confers upon the Grantee any right to continue in the employ of the Company or any subsidiary, or interferes in any way with the right of the Company or of any subsidiary to terminate such employment at any time.
2.6    Death or Disability.  If the Grantee dies or incurs a Disability while employed by the Company or a subsidiary and such death or Disability occurs more than six months after the Grant Date, the outstanding and 

 
previously unvested RSRs (and related Dividend Equivalents) subject to the award shall vest as of the date of the Grantee’s death or Disability, as applicable.  RSRs (and related Dividend Equivalents) vesting under this Section shall be paid within 90 days following the earlier of (a) Grantee’s death or (b) Grantee’s Disability.  In the event of the Grantee’s death prior to the delivery of shares or other payment with respect to any vested RSRs (and related Dividend Equivalents), the Grantee’s Successor shall be entitled to any payments to which the Grantee would have been entitled under these Terms with respect to such vested and unpaid RSRs (and related Dividend Equivalents).  
2.7  Termination of Employment Due to Retirement.  If the Grantee ceases to be employed by the Company or one of its subsidiaries due to the Grantee’s Early Retirement and such Early Retirement occurs more than six months after the Grant Date, the RSRs (and related Dividend Equivalents) subject to the award shall vest on a prorated basis.  Such prorating of RSRs (and related Dividend Equivalents) shall be determined based on the number of days the Grantee was employed by the Company or a subsidiary in the period commencing with the Grant Date through and including the date on which the Grantee is last employed by the Company or a subsidiary, over the number of calendar days in the period commencing with the Grant Date through and including the third anniversary of the Grant Date.  Any remaining unvested RSRs (and related Dividend Equivalents), after giving effect to the foregoing acceleration of vesting, shall terminate immediately upon the Grantee’s Early Retirement.  If the Grantee ceases to be employed by the Company or one of its subsidiaries due to the Grantee’s Normal Retirement and such Normal Retirement occurs more than six months after the Grant Date, the RSRs (and related Dividend Equivalents) subject to the award shall vest in full.
Subject to the following provisions of this paragraph, RSRs (and related Dividend Equivalents) vesting under this Section shall be paid within 90 days following the Grantee’s Separation from Service.  However, in the case of a Governmental Service Retirement by the Grantee, payment of the vested RSRs (and related Dividend Equivalents) will be made within 10 days after the Grantee’s Early or Normal Retirement.  If the Grantee is a Key Employee as of the date of the Grantee’s Separation from Service, the Grantee shall not be entitled to payment of his or her vested RSRs (and related Dividend Equivalents) pursuant to this Section until the earlier of (and payment shall be made upon or promptly after, and in all events within thirty (30) days after, the first to occur of) (a) the date which is six (6) months and one day after the Grantee’s Separation from Service, or (b) the date of the Grantee’s death.  The 

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provisions of the preceding sentence shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A of the Code.  
In determining the Grantee’s eligibility for Early or Normal Retirement, service is measured by dividing (a) the number of days the Grantee was employed by the Company or a subsidiary in the period commencing with his or her last date of hire by the Company or a subsidiary through and including the date on which the Grantee is last employed by the Company or a subsidiary, by (b) 365.  If the Grantee ceased to be employed by the Company or a subsidiary and was later rehired by the Company or a subsidiary, the Grantee’s service prior to the break in service shall be disregarded in determining service for such purposes; provided that, if the Grantee’s employment with the Company or a subsidiary had terminated due to the Grantee’s Early Retirement, Normal Retirement, or by the Company or a subsidiary as part of a reduction in force (in each case, other than a termination by the Company or a subsidiary for cause) and, within the two-year period following such termination of employment (the “break in service”) the Grantee was subsequently rehired by the Company or a subsidiary, then the Grantee’s period of service with the Company or a subsidiary prior to and ending with the break in service will be included in determining service for such purposes.  In the event the Grantee is employed by a business that is acquired by the Company or a subsidiary, the Company shall have discretion to determine whether the Grantee’s service prior to the acquisition will be included in determining service for such purposes.  
		
	3.
	Non-Transferability and Other Restrictions.

3.1    Non-Transferability.  The award, as well as the RSRs (and related Dividend Equivalents) subject to the award, are non-transferable and shall not be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge.  The foregoing transfer restrictions shall not apply to transfers to the Company.  Notwithstanding the foregoing, the Company may honor any transfer required pursuant to the terms of a court order in a divorce or similar domestic relations matter to the extent that such transfer does not adversely affect the Company’s ability to register the offer and sale of the underlying shares on a Form S-8 Registration Statement and such transfer is otherwise in compliance with all applicable legal, regulatory and listing requirements.
3.2    Recoupment of Awards.  Any payments or issuances of shares with respect to the award are subject to recoupment pursuant to the Company’s Policy Regarding the Recoupment of Certain Performance-

 
Based Compensation Payments as in effect from time to time, as well as any recoupment or similar provisions of applicable law, and the Grantee shall promptly make any reimbursement requested by the Board or Committee pursuant to such policy or applicable law with respect to the award.  Further, the Grantee agrees, by accepting the award, that the Company and its affiliates may deduct from any amounts it may owe the Grantee from time to time (such as wages or other compensation) to the extent of any amounts the Grantee is required to reimburse the Company pursuant to such policy or applicable law with respect to the award.
4.Post-Employment Conduct.
4.1Corporate Policy Council Contribution.   You acknowledge and agree that as a member of the Corporate Policy Council (“CPC”), you are involved in managing the global operations of the Company, incorporated in Delaware and headquartered in Virginia.  You are involved in the most sensitive and proprietary matters affecting the Company, its subsidiaries, predecessors, and/or affiliates (collectively, “Northrop Grumman”), including from a  technical, strategic and financial perspective, and are widely exposed to confidential, sensitive and proprietary information concerning Northrop Grumman’s global operations, at the headquarters and each of the operating sectors, including in the areas of manned and unmanned aircraft, space, C4ISR, cyber, sensors, electronics, through-life support and technical services.  Your job responsibilities require that you have a primary office location in Virginia and/or you spend substantial time at the corporate headquarters in Virginia, among other things, attending CPC and other leadership meetings, and managing operations and employees in Virginia.  You occupy one of the most senior executive positions in the Company and have far-reaching access to highly confidential, valuable and sensitive information, customer, vendor and employee relationships, intellectual property, strategic and tactical plans, and financial information and plans.   The Company has a legitimate business interest in restricting your ability to compete in the specific manner set forth below.  The Company has provided you this grant, subject to these Terms and as consideration for the restrictive covenants set forth in this section 4.

4.2Non-Competition.   For a period of six (6) months from the date of the termination of Grantee’s employment for any reason other than a Reduction-in-Force as determined at the Company’s sole discretion (“Termination”), you will not, directly or indirectly, oversee, control, or participate in the design, operation, research, manufacture, marketing, sale, or distribution of “Competitive Products and Services”.  For the purpose 

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of this section, “Competitive Products and Services” shall mean products or services that compete with, or are an alternative or potential alternative to, the products sold or services provided by Northrop Grumman, including without limitation products and services in the areas of manned and unmanned aircraft, space, C4ISR, cyber, sensors, electronics, through-life support and technical services.

4.3Non-Solicitation of Customers.  For a period of eighteen (18) months from your Termination, you shall not, directly or indirectly, solicit any customer, supplier, or teammate of Northrop Grumman with whom you came into contact, or about whom you received confidential information, while employed by Northrop Grumman, for purposes of providing products or services in competition with Northrop Grumman.  In the case of a governmental, regulatory or administrative agency, commission, department or other governmental authority, the customer is determined by reference to the specific program offices or activities for which Northrop Grumman provides goods or services.

4.4Non-Solicitation of Employees.   For a period of eighteen (18) months from your Termination, you shall not, directly or indirectly, solicit or offer to hire, any person who was, within a period of six months prior to your Termination, employed by Northrop Grumman, with whom you worked or about whom you received confidential information while employed by Northrop Grumman.

4.5Non-Disparagement.  You will not issue or communicate any statement, whether verbal or written, or take any other action that disparages or may be interpreted to disparage the Company, its products, services, officers, directors, or employees; provided that the foregoing shall not apply to any truthful statements made in connection with a formal legal process or government investigation. 
 
4.6Exceptions.  You may request an exception to the covenants in this section by making a written request to the Company’s Chief Human Resources Officer, with such exceptions being considered at the sole discretion of the Company and communicated in writing to you.

4.7Reasonableness.  You agree that the restrictions set forth in this section are (i) reasonable and necessary in all respects, including duration, territory and scope of activity, in order to protect the Company’s legitimate business interests, (ii) that the parties have attempted to limit your right to compete only to the extent necessary to protect the Company’s legitimate business interests, and (iii) that you will be able to earn a livelihood without violating the restrictions in this 

 
section.  It is the intent of the parties that the provisions of this section shall be enforced to the fullest extent permissible under applicable law.  However, if any portion of this covenant is deemed unenforceable, the parties agree that a court or arbitrator may revise the portion deemed unenforceable to the maximum extent possible to achieve the objective of the parties, and the remainder of the covenant shall remain in full force and affect.

4.8Remedies.   If you violate any provision in Section 4.2, 4.3, 4.4 and/or 4.5 of this section, the Company shall have the right to terminate without payment to you any unvested and/or unpaid RSRs (and associated Dividend Equivalents) and require that you immediately deliver to the Company an amount in cash equal to the aggregate Fair Market Value, determined as of the vesting and/or payment date of all RSRs already received, including any Dividend Equivalents, within one year prior to the breach.  Further, you acknowledge and agree that a breach of any of the provisions of this section will result in immediate, irreparable, and continuing damage to the Company for which there is no adequate remedy at law, and the Company will be entitled to injunctive relief, a decree of specific performance, and other relief as may be proper, including monetary damages, to the maximum extent available.

		
	5.
	Compliance with Laws; No Stockholder Rights Prior to Issuance.

The Company’s obligation to make any payments or issue any shares with respect to the award is subject to full compliance with all then applicable requirements of law, the Securities and Exchange Commission, or other regulatory agencies having jurisdiction over the Company and its shares, and of any exchange upon which stock of the Company may be listed.  The Grantee shall not have the rights and privileges of a stockholder, including without limitation the right to vote or receive dividends (except as expressly provided in these Terms with respect to Dividend Equivalents), with respect to any shares which may be issued in respect of the RSRs until the date appearing on the certificate(s) for such shares (or, in the case of shares entered in book entry form, the date that the shares are actually recorded in such form for the benefit of the Grantee), if such shares become deliverable.
		
	6.
	Adjustments; Change in Control.

6.1.    Adjustments.  The RSRs, Dividend Equivalents, and the shares subject to the award are subject to adjustment upon the occurrence of events such as stock splits, stock dividends and other changes in 

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capitalization in accordance with Section 6(a) of the Plan.
6.2.    Possible Acceleration on Change in Control.  Notwithstanding the provisions of Section 2 hereof, and further subject to the Company’s ability to terminate the award as provided in Section 6.3 below, the outstanding and previously unvested RSRs (and related Dividend Equivalents) subject to the award shall become fully vested as of the date of the Grantee’s termination of employment if the termination occurs either within the Protected Period corresponding to a Change in Control of the Company or within twenty-four (24) calendar months following the date of a Change in Control of the Company, the Grantee’s employment by the Company and its subsidiaries is involuntarily terminated by the Company and its subsidiaries for reasons other than Cause or by the Grantee for Good Reason.
Notwithstanding anything else contained herein to the contrary, the termination of the Grantee’s employment (or other events giving rise to Good Reason) shall not entitle the Grantee to any accelerated vesting pursuant to this Section 6.2 if there is objective evidence that, as of the commencement of the Protected Period, the Grantee had specifically been identified by the Company as an employee whose employment would be terminated as part of a corporate restructuring or downsizing program that commenced prior to the Protected Period and such termination of employment was expected at that time to occur within six (6) months.  
Payment of any RSRs (and related Dividend Equivalents) that vest under this Section will be made at the time provided for in Section 2.7 as though the termination of the Grantee’s employment was due to a Normal Retirement.
6.3.    Automatic Acceleration; Early Termination.  If the Company undergoes a Change in Control triggered by clause (iii) or (iv) of the definition thereof and the Company is not the surviving entity and the successor to the Company (if any) (or a Parent thereof) does not agree in writing prior to the occurrence of the Change in Control to continue and assume the award following the Change in Control, or if for any other reason the award would not continue after the Change in Control, then upon the Change in Control the outstanding and previously unvested RSRs (and related Dividend Equivalents) subject to the award shall vest fully and completely.  Unless the Committee expressly provides otherwise in the circumstances, no acceleration of vesting of the award shall occur pursuant to this Section 6.3 in connection with a Change in Control if either (a) the Company is the surviving entity, or (b) the successor to the Company (if any) (or a Parent thereof) agrees in writing prior to the Change in Control to assume the 

 
award.  The Committee may make adjustments pursuant to Section 6(a) of the Plan and/or deem an acceleration of vesting of the award pursuant to this Section 6.3 to occur sufficiently prior to an event if necessary or deemed appropriate to permit the Grantee to realize the benefits intended to be conveyed with respect to the shares underlying the RSRs (and related Dividend Equivalents); provided, however, that, the Committee may reinstate the original terms of the award if the related event does not actually occur.
Payment of any RSRs (and related Dividend Equivalents) that vest under this Section 6.3 will be made within 90 days of the third anniversary of the Grant Date unless, prior to such date: (i) the Grantee dies or has a Disability, in which case such payment will be made in the calendar year containing the 75th day following the date of the Grantee’s death or Disability, as the case may be (and generally will be paid on or about such 75th day), or (ii) the Grantee has a Separation from Service, in which case such payment will be made at the time provided for in Section 2.7 as though the termination of the Grantee’s employment was due to a Normal Retirement.
		
	7.
	Tax Matters.

7.1.    Tax Withholding.  The Company or the subsidiary which employs the Grantee shall be entitled to require, as a condition of making any payments or issuing any shares upon vesting of the RSRs (and related Dividend Equivalents), that the Grantee or other person entitled to such shares or other payment pay the minimum sums required to be withheld by federal, state, local or other applicable tax law with respect to such vesting or payment.  Alternatively, the Company or such subsidiary, in its discretion, may make such provisions for the withholding of taxes as it deems appropriate (including, without limitation, withholding the taxes due from compensation otherwise payable to the Grantee or reducing the number of shares otherwise deliverable with respect to the award (valued at their then Fair Market Value) by the amount necessary to satisfy such statutory minimum withholding obligations).
7.2.    Transfer Taxes.  The Company will pay all federal and state transfer taxes, if any, and other fees and expenses in connection with the issuance of shares in connection with the vesting of the RSRs.
7.3.    Compliance with Code.  The Committee shall administer and construe the award, and may amend the Terms of the award, in a manner designed to comply with the Code and to avoid adverse tax consequences under Code Section 409A.

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7.4.    Unfunded Arrangement. The right of the Grantee to receive payment under the award shall be an unsecured contractual claim against the Company. As such, neither the Grantee nor any Successor shall have any rights in or against any specific assets of the Company based on the award. Awards shall at all times be considered entirely unfunded for tax purposes.
7.5.    Code Section 280G.  Notwithstanding any other provision of this Agreement to the contrary, in the event that any amounts payable to you as a result of Section 6.2 or 6.3 hereof, either alone or together with amounts payable pursuant to any other plan, program or arrangement (a) constitute “parachute payments” within the meaning of Section 280G of the Code, and (b) but for this Section 7.5 would be subject to the excise tax imposed by Section 4999 of the Code or any comparable successor provisions (the “Excise Tax”), then the vesting acceleration provided in Section 6.2 or 6.3, as applicable, shall be either (a) provided to you in full, or (b) provided to you to such lesser extent that would result in no portion of the payments so accelerated being subject to the Excise Tax, whichever of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, the Excise Tax, and any other applicable taxes, results in the receipt by you, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be subject to the Excise Tax.  All determinations required to be made under this Section 7.5 shall be made by a registered public accounting firm selected by the Company, which shall provide supporting calculations both to the Company and you no later than the date of the applicable Change in Control. In the event that the Payments are to be reduced pursuant to this Section 7.5, such Payments shall be reduced such that the reduction of compensation to be provided to the Executive as a result of this Section 7.5 is minimized.  In applying this principle, the reduction shall be made in a manner consistent with the requirements of Section 409A and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero.  
8.Choice of Law; Venue; Arbitration.  
This agreement shall be governed by the laws of the State of Delaware.  Any cause of action or claim arising out of or related to the terms and conditions applicable to this grant will be determined through final and binding arbitration, in accordance with Northrop Grumman Corporate Procedure H103A, provided that the prevailing party in the arbitration shall be entitled to receive from the losing party reasonably incurred attorneys’ fees and costs.  You and the Company agree that any arbitration hearing and related proceedings shall 

 
be convened and conducted in Falls Church, VA.  If you or the Company believes they require immediate relief to enforce or challenge these terms, before arbitration is commenced or concluded, either party may seek injunctive or other provisional equitable relief from a state or federal court in the Commonwealth of Virginia.  All court actions or proceedings arising under these terms shall be heard in a state or federal court in the Commonwealth of Virginia.  The Company and you hereby agree to the jurisdiction of the state and federal courts in the Commonwealth of Virginia and waive any right to object to such actions on grounds of venue, jurisdiction or convenience.
		
	9.
	Committee Authority.

The Committee has the discretionary authority to determine any questions as to the date when the Grantee’s employment terminated and the cause of such termination and to interpret any provision of these Terms, the Grant Letter, the Stock Plan System, the Plan, and any other applicable rules.  Any action taken by, or inaction of, the Committee relating to or pursuant to these Terms, the Grant Letter, the Stock Plan System, the Plan, or any other applicable rules shall be within the absolute discretion of the Committee and shall be conclusive and binding on all persons.
		
	10.
	Plan; Amendment.

The RSRs (and related Dividend Equivalents) subject to the award are governed by, and the Grantee’s rights are subject to, all of the terms and conditions of the Plan and any other rules adopted by the Committee, as the foregoing may be amended from time to time.  The Grantee shall have no rights with respect to any amendment of these Terms or the Plan unless such amendment is in writing and signed by a duly authorized officer of the Company.  In the event of a conflict between the provisions of the Grant Letter and/or the Stock Plan System and the provisions of these Terms and/or the Plan, the provisions of these Terms and/or the Plan, as applicable, shall control.
		
	11.
	Required Holding Period.

The holding requirements of this Section 11 shall apply to any Grantee who is an elected or appointed officer of the Company on the date Vested RSRs are paid (or, if earlier, on the date the Grantee’s employment by the Company and its subsidiaries terminates for any reason).  Any Grantee subject to this Section 11 shall not be permitted to sell, transfer, anticipate, alienate, assign, pledge, encumber or charge 50% of the total number (if any) of shares of Common Stock the Grantee receives as payment for Vested RSRs until the earlier of (A) the third anniversary of the date such shares of Common Stock 

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are paid to the Grantee, (B) the date the Grantee’s employment by the Company and its subsidiaries terminates due to the Grantee’s death or Disability, (C) the occurrence of a Change in Control that results in termination and payment under Section 6.2 or 6.3 above, or (D) with respected to Grantee’s entering a U.S. federal government position only, the latest of (i) the date the Grantee’s employment with the Company terminates, or (ii) the date the Grantee formally accepts the government position in writing, or (iii) the date the government confirms the Grantee (for positions requiring nomination and confirmation).  Notwithstanding anything to the contrary, the terms and conditions of all prior 2011-2014 grants are hereby modified to add the foregoing subpart (D) of this section 11 to the Required Holding Period Section of those grant terms and conditions.  For purposes of this Section 11, the total number of shares of Common Stock the Grantee receives as payment for Vested RSRs shall be determined on a net basis after taking into account any shares otherwise deliverable with respect to the award that the Company withholds to satisfy tax obligations pursuant to Section 7.1.   Any shares of Common Stock received in respect of shares that are covered by the holding period requirements of this Section 11 (such as shares received in respect of a stock split or stock dividend) shall be subject to the same holding period requirements as the shares to which they relate.
		
	12.
	Definitions.

Whenever used in these Terms, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized:
“Board” means the Board of Directors of the Company.
“Cause” means the occurrence of either or both of the following:
		
	(i)
	The Grantee’s conviction for committing an act of fraud, embezzlement, theft, or other act constituting a felony (other than traffic related offenses, as a result of vicarious liability, or as a result of good faith actions as an officer of the Company); or

		
	(ii)
	The willful engaging by the Grantee in misconduct that is significantly injurious to the Company.  However, no act, or failure to act, on the Grantee’s part shall be considered “willful” unless done, or omitted to be done, by the Grantee not in good faith and without reasonable belief that his or her action or omission was in the best interest of the Company.

 
“Change in Control” is used as defined in the Plan.
 “Code” means the United States Internal Revenue Code of 1986, as amended.
“Committee” means the Company’s Compensation Committee or any successor committee appointed by the Board to administer the Plan.
“Common Stock” means the Company’s common stock.
“Disability” means, with respect to a Grantee, that the Grantee:  (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Grantee’s employer; all construed and interpreted consistent with the definition of “Disability” set forth in Code Section 409A(a)(2)(C).
“Early Retirement” means that the Grantee’s employment terminates in any of the following circumstances, and other than a termination of employment that constitutes a Normal Retirement or occurs in connection with a termination by the Company or a subsidiary for cause:
(i)   a termination of employment after the Grantee has attained age 55 with at least 10 years of service.
		
	(ii)
	a termination of employment by the Company or a subsidiary as part of a reduction in force and, at the time of such termination, the Grantee has attained age 53 with at least 10 years of service.

		
	(iii)
	a termination of employment by the Company or a subsidiary as part of a reduction in force and, at the time of such termination, the sum of the Grantee’s age and years of service is at least 75.

“Fair Market Value” is used as defined in the Plan; provided, however, the Committee in determining such Fair Market Value for purposes of the award may utilize such other exchange, market, or listing as it deems appropriate.

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“Good Reason” means, without the Grantee’s express written consent, the occurrence of any one or more of the following:
		
	(i)
	A material and substantial reduction in the nature or status of the Grantee’s authorities or responsibilities (when such authorities and/or responsibilities are viewed in the aggregate) from their level in effect on the day immediately prior to the start of the Protected Period, other than (A) an inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by the Grantee, and/or (B) changes in the nature or status of the Grantee’s authorities or responsibilities that, in the aggregate, would generally be viewed by a nationally-recognized executive placement firm as resulting in the Grantee having not materially and substantially fewer authorities and responsibilities (taking into consideration the Company’s industry) when compared to the authorities and responsibilities applicable to the position held by the Grantee immediately prior to the start of the Protected Period.  The Company may retain a nationally-recognized executive placement firm for purposes of making the determination required by the preceding sentence and the written opinion of the firm thus selected shall be conclusive as to this issue. 

In addition, if the Grantee is a vice president, the Grantee’s loss of vice-president status will constitute “Good Reason”; provided that the loss of the title of “vice president” will not, in and of itself, constitute Good Reason if the Grantee’s lack of a vice president title is generally consistent with the manner in which the title of vice president is used within the Grantee’s business unit or if the loss of the title is the result of a promotion to a higher level office.  For the purposes of the preceding sentence, the Grantee’s lack of a vice-president title will only be considered generally consistent with the manner in which such title is used if most persons in the business unit with authorities, duties, and responsibilities comparable to those of the Grantee immediately prior to the commencement of the Protected Period do not have the title of vice-president. 
		
	(ii)
	A material reduction by the Company in the Grantee’s annualized rate of base salary as in effect at the start of the Protected Period, or as the same shall be increased from time to time. 

		
	(iii)
	A material reduction in the aggregate value of the Grantee’s level of participation in any of the 

 
Company’s short and/or long-term incentive compensation plans (excluding stock-based incentive compensation plans), employee benefit or retirement plans, or policies, practices, or arrangements in which the Grantee participates immediately prior to the start of the Protected Period; provided, however, that a reduction in the aggregate value shall not be deemed to be “Good Reason” if the reduced value remains substantially consistent with the average level of other employees who have positions commensurate with the position held by the Grantee immediately prior to the start of the Protected Period. 
		
	(iv)
	A material reduction in the Grantee’s aggregate level of participation in the Company’s stock-based incentive compensation plans from the level in effect immediately prior to the start of the Protected Period; provided, however, that a reduction in the aggregate level of participation shall not be deemed to be “Good Reason” if the reduced level of participation remains substantially consistent with the average level of participation of other employees who have positions commensurate with the position held by the Grantee immediately prior to the start of the Protected Period. 

		
	(v)
	The Grantee is informed by the Company that his or her principal place of employment for the Company will be relocated to a location that is greater than fifty (50) miles away from the Grantee’s principal place of employment for the Company at the start of the corresponding Protected Period; provided that, if the Company communicates an intended effective date for such relocation, in no event shall Good Reason exist pursuant to this clause (v) more than ninety (90) days before such intended effective date. 

The Grantee’s right to terminate employment for Good Reason shall not be affected by the Grantee’s incapacity due to physical or mental illness. The Grantee’s continued employment shall not constitute a consent to, or a waiver of rights with respect to, any circumstances constituting Good Reason herein.
“Governmental Service Retirement” means an Early or Normal Retirement by the Grantee where the Grantee accepts a position in the federal government or a state or local government and an accelerated distribution under the award is permitted under Code Section 409A based on such government employment and related ethics rules.

8

“Key Employee” means an employee treated as a “specified employee” under Code section 409A(a)(2)(B)(i) of the Company or an Affiliated Company (i.e., a key employee (as defined in Code section 416(i) without regard to paragraph (5) thereof)) if the Company’s or an Affiliated Company’s stock is publicly traded on an established securities market or otherwise.  The Company shall determine in accordance with a uniform Company policy which participants are Key Employees as of each December 31 in accordance with IRS regulations or other guidance under Section 409A.  Such determination shall be effective for the twelve (12) month period commencing on April 1 of the following year.

“Normal Retirement” means that the Grantee terminates employment after attaining age 65 with at least 10 years of service (other than in connection with a termination by the Company or a subsidiary for cause).  In the case of a Grantee who is an officer of the Company subject to the Company’s mandatory retirement at age 65 policy and who, at the applicable time, is not otherwise eligible for Normal Retirement as defined in the preceding sentence, “Normal Retirement” as to that Grantee means that the Grantee’s employment is terminated pursuant to such mandatory retirement policy (regardless of the Grantee’s years of service and other than in connection with a termination by the Company or a subsidiary for cause).
“Parent” is used as defined in the Plan.
“Plan” means the Northrop Grumman 2011 Long-Term Incentive Stock Plan, as it may be amended form time to time.
The “Protected Period” corresponding to a Change in Control of the Company shall be a period of time determined in accordance with the following:
		
	(i)
	If the Change in Control is triggered by a tender offer for shares of the Company’s stock or by the offeror’s acquisition of shares pursuant to such a tender offer, the Protected Period shall commence on the date of the initial tender offer and shall continue through and including the date of the Change in Control; provided that in no case will the Protected Period commence earlier than the date that is six (6) months prior to the Change in Control.

		
	(ii)
	If the Change in Control is triggered by a merger, consolidation, or reorganization of the Company with or involving any other corporation, the Protected Period shall commence on the date that 

 
serious and substantial discussions first take place to effect the merger, consolidation, or reorganization and shall continue through and including the date of the Change in Control; provided that in no case will the Protected Period commence earlier than the date that is six (6) months prior to the Change in Control.
		
	(iii)
	In the case of any Change in Control not described in clause (i) or (ii) above, the Protected Period shall commence on the date that is six (6) months prior to the Change in Control and shall continue through and including the date of the Change in Control.

“Separation from Service” means when the Grantee dies, retires, or otherwise has a termination of employment with the Company and its subsidiaries that constitutes a “separation from service” within the meaning of United States Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder.
“Successor” means the person acquiring a Grantee’s rights to a grant under the Plan by will or by the laws of descent or distribution.

9

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