Letter Agreement dated March 8, 2011 by and between Dynegy Inc. and IEH Merger Sub LLC, Icahn Enterprises Holdings L.P., IEP Merger Sub Inc., Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Partners Master Fund II LP, Icahn Partners Master Fund III LP, High River Limited Partnership, Hopper Investments LLC, Barberry Corp., Icahn Onshore LP, Icahn Offshore LP, Icahn Capital LP, IPH GP LLC, Icahn Enterprises L.P., Icahn Enterprises G.P. Inc., Beckton Corp., and Carl C. Icahn

 

[Dynegy Letterhead]

 

IEH Merger Sub LLC

Icahn Enterprises Holdings L.P.

IEP Merger Sub Inc.

Icahn Partners LP

Icahn Partners Master Fund LP

Icahn Partners Master Fund II LP

Icahn Partners Master Fund III LP

High River Limited Partnership

Hopper Investments LLC

Barberry Corp.

Icahn Onshore LP

Icahn Offshore LP

Icahn Capital LP

IPH GP LLC

Icahn Enterprises L.P.

Icahn Enterprises G.P. Inc.

Beckton Corp.

Carl C. Icahn

c/o Icahn Enterprises Holdings L.P.

767 Fifth Avenue, 47th Floor

New York, NY 10153

Attention: Deputy General Counsel

 

March 8, 2011

 

Dear Ladies and Gentlemen:

 

This letter agreement (this “Agreement”) is made by and among IEH Merger Sub LLC, Icahn Enterprises Holdings L.P., IEP Merger Sub Inc., Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Partners Master Fund II LP, Icahn Partners Master Fund III LP, High River Limited Partnership, Hopper Investments LLC, Barberry Corp., Icahn Onshore LP, Icahn Offshore LP, Icahn Capital LP, IPH GP LLC, Icahn Enterprises L.P., Icahn Enterprises G.P. Inc., Beckton Corp., Carl C. Icahn (the foregoing individuals and entities being collectively referred to herein as “Icahn” and each individually as a “Member”), and Dynegy Inc., a Delaware corporation (“Dynegy”).

 

1.           Section 203 of the DGCL.

 

Dynegy hereby represents and warrants that the Board of Directors of Dynegy (the “Board”) has approved, for the purposes of Section 203 of the Delaware General Corporation Law (“DGCL”), from and after the date hereof, the Members collectively owning (as such term is defined under Section 203 of the DGCL) and acquiring voting stock of Dynegy in open market purchases, private transactions, the purchase or exercise of options, a tender offer or otherwise, up to, but not exceeding, 19.99999 percent of the outstanding voting stock of Dynegy (the “Ownership Threshold”), and subject to such limitation, becoming an “interested stockholder” for purposes of Section 203 of the DGCL, and entering into and becoming bound by this Agreement (such approval, together with this Agreement, the "203 Waiver"). Dynegy further acknowledges and irrevocably agrees that the 203 Waiver includes the approval of the Board that Dynegy and the Board shall not, and Dynegy and the Board agree that they shall not, at any time reduce or otherwise modify the 203 Waiver, including but not limited to the Ownership Threshold, without the Members’ prior written consent. The Members acknowledge that the 203 Waiver is limited as set forth in this Section 1 and is effective only to the extent of such limitation.

 

2.           Representations and Warranties.

 

a)

Each Member, on behalf of himself or itself, as applicable, represents and warrants that (i) each Member has the power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby, and (ii) this Agreement has been duly and validly authorized, executed and delivered by each Member, constitutes a valid and binding obligation and agreement of each Member and is enforceable against each Member in accordance with its terms.

 

b)

Dynegy hereby represents and warrants that (i) it has the power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby, and (ii) this Agreement has been duly and validly authorized, executed and delivered by Dynegy, constitutes a valid and binding obligation and agreement of Dynegy and is enforceable against Dynegy in accordance with its terms.

 

3.           Notice.  Any notice, request, instruction or other document to be given hereunder by any party to the others shall be in writing and delivered personally or sent by registered or certified mail, postage prepaid, by facsimile or by overnight courier:

 

if to Icahn or any Member:

 

c/o Icahn Enterprises Holdings L.P.

767 Fifth Avenue, 47th Floor

New York, New York 10153

Attention:  Deputy General Counsel

Fax.:   ###-###-####

 

if to Dynegy to:

 

Dynegy Inc.

1000 Louisiana, Suite 5800

Houston, TX 77002

Attention:    General Counsel

Fax:   ###-###-####

 

 

with a copy to:

 

Sullivan & Cromwell LLP

125 Broad Street

New York, NY  10004

Attention:  Joseph B. Frumkin

     Krishna Veeraraghavan

Fax:  ###-###-####

 

or to such other persons or addresses as may be designated in writing by the party to receive such notice as provided above.  Any notice, request, instruction or other document given as provided above shall be deemed given to the receiving party upon actual receipt, if delivered personally; three (3) business days after deposit in the mail, if sent by registered or certified mail; upon confirmation of successful transmission if sent by facsimile and received by 5:00 p.m. New York time on a business day (otherwise the next business day) (provided that if given by facsimile such notice, request, instruction or other document shall be followed up within one (1) business day by dispatch pursuant to one of the other methods described herein); or on the next business day after deposit with an overnight courier, if sent by an overnight courier.

 

4.           Assignment. This Agreement shall not be assignable by operation of law or otherwise by a party without the consent of the other party. Subject to the foregoing sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by and against the successors and assigns of each party to this Agreement.

 

5.           Amendment; Counterparts.  Any amendment or modification of the terms and conditions set forth herein or any waiver of such terms and conditions must be agreed to in a writing signed by each party hereto. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.

 

6.           Waiver.  Neither the failure nor any delay by a party in exercising any right, power or privilege under this Agreement will operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder.

 

7.           No Third Party Beneficiaries. This Agreement is solely for the benefit of the parties hereto and is not enforceable by any other persons

 

8.           Entire Agreement. This Agreement contains the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof and thereof.

 

9.           Remedies.  The parties to this Agreement agree that irreparable damage would occur if any provision of this Agreement were not strictly performed in accordance with its terms and that each party to this Agreement shall be entitled to an injunction to prevent breaches of this Agreement and to enforce specifically the performance of the provisions hereof in the Court of Chancery of the State of Delaware, in addition to any other remedy to which any party may be entitled at law or in equity.

 

10.         Jurisdiction.  The parties to this Agreement agree that any suit, action or proceeding to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement may be brought only in the Court of Chancery of the State of Delaware or a federal court located in Delaware, and each party irrevocably consents to the jurisdiction of such courts (and of the appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives any objection it may now or hereafter have to the laying of venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

 

11.         Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to any conflict of law rules that would otherwise cause the application of the laws of any other state.

 

Please acknowledge your agreement and acceptance of the foregoing by countersigning this letter in the space provided below.

 

Agreed and accepted:

 

DYNEGY INC.
By	/s/Kent R. Stephenson
	Name:	Kent R. Stephenson
	Title:	EVP & General Counsel

 

Accepted and agreed:

 

IEH MERGER SUB LLC By: Icahn Enterprises Holdings L.P., Its Sole Member By: Icahn Enterprises G.P. Inc., Its General Partner				ICAHN ENTERPRISES HOLDINGS L.P. By: Icahn Enterprises G.P. Inc., Its General Partner
By	/s/ Edward Mattner			By:	/s/ Daniel Ninnivaggi
	Name:	Edward Mattner			Name:	Daniel Ninnivaggi
	Title:	Authorized Signatory			Title:	President
IEP MERGER SUB INC.				ICAHN PARTNERS LP
By	/s/ Edward Mattner			By:	/s/ Edward Mattner
	Name:	Edward Mattner			Name:	Edward Mattner
	Title:	Authorized Signatory			Title:	Authorized Signatory
ICAHN PARTNERS MASTER FUND LP				ICAHN PARTNERS MASTER FUND II LP
By	/s/ Edward Mattner			By:	/s/ Edward Mattner
	Name:	Edward Mattner			Name:	Edward Mattner
	Title:	Authorized Signatory			Title:	Authorized Signatory
ICAHN PARTNERS MASTER FUND III LP				BARBERRY CORP.
By	/s/ Edward Mattner			By:	/s/ Edward Mattner
	Name:	Edward Mattner			Name:	Edward Mattner
	Title:	Authorized Signatory			Title:	Authorized Signatory
HIGH RIVER LIMITED PARTNERSHIP By: Hopper Investments LLC, Its General Partner By: Barberry Corp., Its Sole Member				HOPPER INVESTMENTS LLC By: Barberry Corp., Its Sole Member
By	/s/ Edward Mattner			By:	/s/ Edward Mattner
	Name:	Edward Mattner			Name:	Edward Mattner
	Title:	Authorized Signatory			Title:	Authorized Signatory
ICAHN ONSHORE LP				ICAHN OFFSHORE LP
By	/s/ Edward Mattner			By:	/s/ Edward Mattner
	Name:	Edward Mattner			Name:	Edward Mattner
	Title:	Authorized Signatory			Title:	Authorized Signatory
ICAHN CAPITAL LP				IPH GP LLC
By	/s/ Edward Mattner			By:	/s/ Edward Mattner
	Name:	Edward Mattner			Name:	Edward Mattner
	Title:	Authorized Signatory			Title:	Authorized Signatory
ICAHN ENTERPRISES L.P. By: Icahn Enterprises G.P. Inc., Its General Partner				ICAHN ENTERPRISES G.P. INC.
By	/s/ Daniel Ninnivaggi			By:	/s/ Daniel Ninnivaggi
	Name:	Daniel Ninnivaggi			Name:	Daniel Ninnivaggi
	Title:	President			Title:	President
BECKTON CORP.				CARL C. ICAHN
By	/s/ Edward Mattner			By:	/s/ Carl C. Icahn
	Name:	Edward Mattner			Name:	Carl C. Icahn
	Title:	Authorized Signatory			Title: