PUBLIC-PRIVATE PARTNERSHIP AGREEMENT

PURPLE LINE PROJECT

BETWEEN

Maryland Department of Transportation and the

Maryland Transit Administration

and

Purple Line Transit Partners LLC

DATED [__________]

DOCUMENT CONTROL NUMBER: 2016.02.29.0800

PUBLIC-PRIVATE PARTNERSHIP AGREEMENT

PURPLE LINE PROJECT

This Public-Private Partnership Agreement (the “Agreement”) is entered as of the [___] day of [__________], 2016 by THE STATE OF MARYLAND (the “State”) acting by and through the Maryland Department of Transportation (“MDOT”) and the Maryland Transit Administration (“MTA”) (collectively “Owner”), and PURPLE LINE TRANSIT PARTNERS LLC, a Delaware limited liability company (“Concessionaire”), with reference to the following facts:

Owner wishes to finance, develop, design, construct, equip, supply light rail vehicles (“LRVs”) for, operate and maintain the Purple Line Light Rail Project (the “Project”) as a public-private partnership under §§ 10A-101 through 10A-402, and § 11-203(h) of the State Finance and Procurement Article of the Annotated Code (the “Act”).

On November 8, 2013, Owner issued a Request for Qualifications (as amended, the “RFQ”), received six statements of qualifications on or before the due date of December 9, 2013, and subsequently shortlisted four proposers.

On July 28, 2014, Owner issued a Request for Proposals to finance, develop, design, construct, equip, supply LRVs for, operate and maintain the Project through this Agreement (as amended, the “RFP”).

On November 17, 2015, Concessionaire submitted a technical proposal and on December 8, 2015 it submitted a financial proposal to Owner offering to finance, develop, design, construct, equip, supply LRVs for, operate and maintain the Project. Owner received three additional responses to the RFP.

On January 4, 2016, Owner selected Concessionaire as the best value proposer, and Owner and Concessionaire proceeded with negotiations.

On March 1, 2016, following conclusion of negotiations, the Secretary of the Maryland Department of Transportation determined that Concessionaire’s Proposal offered the best value to the State, and Owner proceeded with the final agreement review process required by the Act and implementing regulations.

On [__________], 2016, the Maryland Board of Public Works approved this Agreement in accordance with the provisions of the Act and implementing regulations.

This Agreement and the other Contract Documents collectively constitute a public-private partnership agreement as contemplated under the Act, and are entered into in accordance with the provisions of the RFP.

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:

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ARTICLE 19. TERMINATION

19.1 Termination for Convenience; Condemnation

19.1.1

Owner may terminate this Agreement in whole, but not in part, if Owner determines, in its discretion, that termination is in Owner’s best interest (a “Termination for Convenience”). Termination of this Agreement shall not relieve Concessionaire or any Guarantor or Surety of its obligation for any claims arising before termination.

19.1.2

Owner may exercise Termination for Convenience by delivering to Concessionaire a Notice of Termination for Convenience specifying the election to terminate. Termination for Convenience shall be effective as and when provided in Section 2 of Exhibit 13B.

19.1.3

In the event of a Termination for Convenience, Concessionaire will be entitled to compensation determined in accordance with Section 2 of Exhibit 13B. Payment will be due and payable as and when provided in Section 2 of Exhibit 13B.

19.1.4

If either MTA or MDOT confiscates, sequesters, condemns or appropriates the Concessionaire’s Interest or any material part thereof, compensation payable to Concessionaire with respect to such action shall be determined on the same basis as a Termination for Convenience under this Agreement.

19.2 Termination for Extended Delay or Insurance Unavailability

19.2.1 Notice of Conditional Election to Terminate – Extended Delay

Either Party, following consultation with the other Party, may deliver to the other Party notice of its conditional election to terminate this Agreement if an Extended Delay has occurred and is continuing. The notice shall state the notifying Party’s intent to terminate this Agreement and describe the Extended Delay and consequences thereof in reasonable detail. If the notice is provided by Concessionaire, it shall include an estimate, with supporting documentation, regarding the total amount due to Concessionaire under Section 19.2.4.1.

19.2.2 Notice of Conditional Election to Terminate – Insurance Unavailability

If it becomes apparent that insurance required under the Contract Documents is not available as described in the definition of “Insurance Unavailability”, Owner may deliver to Concessionaire notice of its conditional election to terminate this Agreement for Insurance Unavailability. Such notice shall include reasonable details regarding the affected coverages and associated risks, as well as the estimated cost of premiums if Commercially Reasonable Insurance Rates are not available.

19.2.3 Concessionaire Options upon Owner Notice

19.2.3.1

If Owner gives notice of conditional election to terminate this Agreement under Section 19.2.1 or 19.2.2, then Concessionaire shall either accept such notice or give notice to Owner to continue performing its obligations under this Agreement subject to Section 19.2.3.2 or 19.2.3.3, as applicable, and without limiting any of Owner’s other rights under this Agreement. Concessionaire shall deliver to Owner notice of Concessionaire’s choice within 30 days after its receipt of notice from Owner. Concessionaire may also dispute Owner’s right to terminate, in which case the notice shall state that Concessionaire elects to continue to

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19.3 Termination for Concessionaire Default

19.3.1 Concessionaire Defaults Triggering Owner Termination Rights

Concessionaire acknowledges and agrees that any Concessionaire Default under Sections 17.1.1(b) through 17.1.1(v) would result in material and substantial harm to Owner’s rights and interests under this Agreement and therefore constitutes a material Concessionaire Default justifying termination of the Agreement, unless fully and completely cured within the applicable cure period, if any, in Section 17.1.2, any extended cure period available under Section 16.6 or any cure period available to a Lender under a Direct Agreement. A Concessionaire Default shall be considered a “Default Termination Event” if not fully and completely cured prior to expiration of the relevant cure period (if any), or immediately if the Concessionaire Default is not subject to cure. Any Default Termination Event shall, subject to the provisions of any Direct Agreement and Section 21.3, entitle Owner, at its sole election, to terminate this Agreement and the other Contract Documents by delivering notice of termination to (a) Concessionaire and (b) if applicable, the Collateral Agent under the Direct Agreement. Termination shall be effective as and when provided in Section 4 of Exhibit 13B.

19.3.2 Compensation to Concessionaire

If Owner issues notice of termination of this Agreement due to a Default Termination Event, or if Concessionaire terminates this Agreement on grounds or in circumstances beyond Concessionaire’s termination rights under this Agreement, Concessionaire will be entitled to compensation to the extent (if any), and only to the extent, provided in Section 4 of Exhibit 13B. Payment (if any) shall be due and payable as and when provided in Section 4 of Exhibit 13B.

19.3.3 Finality

If Owner issues notice of termination of this Agreement due to a Default Termination Event, termination shall be effective and final regardless of whether Owner is correct in determining that it has the right to terminate for Concessionaire Default. If it is determined that Owner lacked such right, then such termination shall be treated as a Termination for Convenience as provided in Section 19.1 for the purpose of determining the Termination Compensation due.

19.4 Concessionaire Rights to Terminate

19.4.1

Concessionaire shall have the right to terminate this Agreement in the event of an Owner Default under Section 17.3.1(a) involving an undisputed payment of $1 million or more if Owner has failed to cure such default following delivery of the warning notices described in this Section 19.4.1. Concessionaire shall provide a warning notice to Owner at least 15 days before terminating, which notice may not be delivered until 30 days after delivery of the notice under Section 17.3.2.1. Concessionaire shall provide a second warning notice to Owner at least five days before terminating, which notice may not be delivered until 10 days after delivery of the first warning notice. If Owner fails to effect cure within five days after the date of delivery of the second warning notice, Concessionaire shall have the right to terminate this Agreement by delivery of notice to that effect to Owner delivered at any time before the default is cured.

19.4.2

If any order to suspend all or a material portion of the Work is issued (or deemed issued) by Owner for its convenience under Section 17.2.7.3 and continues for a period of 270 days or more, Concessionaire may terminate this Agreement, effective immediately upon delivery of notice of termination to Owner delivered at any time before the suspension is lifted.

19.4.3

If Concessionaire’s Financial Proposal includes a TIFIA Loan, and (a) USDOT requires execution of the “New Starts Full Funding Grant Agreement” as a requirement for draw on such TIFIA Loan, (b) Owner fails to execute the “New Starts Full Funding Grant Agreement” prior to May 17, 2018, and (c) Owner and Concessionaire have not agreed, in writing, and subject to any approval rights of Lenders then holding Project Debt (other than the TIFIA Loan), upon alternative arrangements with respect to the “New Starts Grant Agreement” prior to April 2, 2018, then Concessionaire may terminate this Agreement, effective immediately upon Owner’s receipt of Concessionaire’s notice of termination delivered at any time on or after such date.

19.4.4

In the event of termination under this Section 19.4, Concessionaire will be entitled to compensation determined in accordance with Section 2 of Exhibit 13B. Payment shall be due and payable as and when provided in said Section 2. Any Dispute arising out of the determination of such compensation shall be resolved under the Dispute Resolution Procedures.

19.4.5

Concessionaire may not terminate under this Section 19.4 if, at the time Concessionaire’s right to terminate would arise, circumstances exist entitling either Party to terminate under Section 19.2, 19.3, 19.5 or 19.6.

19.5 Termination Due to Court Ruling

19.5.1.1

If grounds for Termination Due to Court Ruling exist, either Party has the right to terminate. Any Party that wishes to terminate shall consult with the other before delivering a termination notice. Any notice of Termination Due to Court Ruling shall be effective 10 business days after delivery unless (a) a later date is specified in the notice, (b) the notice is withdrawn or (c) with said 10-day period the other Party delivers an objection to the first Party contesting the first Party’s right to terminate. Any disagreement regarding the right to terminate shall be resolved under the Dispute Resolution Procedures.

19.5.1.2

Once Termination Due to Court Ruling becomes effective, Owner and Concessionaire shall work together to implement Sections 19.7, 19.8, and 19.11.

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EXHIBIT 13B

TERMINATION COMPENSATION

Unless otherwise specified, all references in this Exhibit 13B to “Sections” are to the sections of this Exhibit 13B, and all references to “Exhibits” are to the exhibits to the Agreement to which this Exhibit 13B is attached.

All calculations under this Exhibit 13B shall be made without double counting and shall be made as of the Early Termination Date unless otherwise specified. Notwithstanding anything to the contrary in this Exhibit 13B, Termination Compensation payable to Concessionaire shall be reduced by the amount of any advance payments to Affiliates that Section 9.6.3 of the Agreement specifies will be excluded from Termination Compensation. If a termination occurs, the compensation provided for in this Exhibit shall constitute full and final payment and satisfaction of Owner’s obligations to Concessionaire under the Agreement. Except as otherwise specified in this Exhibit 13B, the Dispute Resolution Procedures shall apply with respect to any disagreement regarding amounts owing under this Exhibit 13B, and any additional payment that is determined to be owing shall be made within 30 days following final resolution of the Dispute.

1. Defined Terms

Capitalized terms shall have the meanings specified in Exhibit 1.

2. Termination for Convenience; Termination for Owner Default; Payment of Termination Compensation

2.1 Termination for Convenience or Owner Default

If Owner exercises its right of Termination for Convenience pursuant to Section 19.1 of the Agreement or a termination occurs under Section 19.4 of the Agreement, then the Early Termination Date shall be as specified in the notice of Termination for Convenience, but in no event earlier than 30 days after the date such notice is delivered.

2.2 Calculation and Payment of Termination Compensation.

2.2.1

If Owner exercises its right of Termination for Convenience pursuant to Section 19.1 of the Agreement or a termination occurs under Section 19.4 of the Agreement, then Owner shall pay compensation to Concessionaire (or to Collateral Agent or Concessionaire’s Lenders, as applicable, when the right to receive such compensation has been duly pledged), in an amount equal to (a) the Project Debt Termination Amount plus the Termination for Convenience Amount plus Contract Termination Costs, less (b) available Credit Balances and Insurance Proceeds, to the extent not already taken account in calculating any of the amounts included in item (a).

2.2.2

The Termination for Convenience Amount shall be calculated as the net present value of the anticipated future nominal Distributions (Post-Tax on the part of the Concessionaire but pre-tax on the part of the Equity Members) from drawn share capital and payments on any Subordinate Debt as of the Early Termination Date based on an appraisal by an independent third party expert appraiser that is nationally recognized for the conduct of valuation exercises. The appraisal shall be provided within 90 days of the appointment by both Parties of such independent appraiser (provided that if the Parties fail to agree on the identity of such independent appraiser and fail to complete such appointment by the 15th business day following the Termination Date, either Party may request the financial DRB to select and appoint such independent appraiser within 15 business days of such request). For purposes of the calculation of such net present value, the Parties shall instruct the independent appraiser to:

(a)

utilize a discount rate that is based on both (i) the performance of the Project and projects in the United States of America employing a similar approach to risk allocation (including credit risk) and a similar payment mechanism (including the absence of any transfer of usage risk to the Concessionaire) and (ii) the assumption that no event has occurred for which Termination Compensation is payable and the equity interests of the Equity Members of the Concessionaire are freely transferable and are being sold in the open market; and

(b)

estimate the anticipated future nominal Distributions based on the performance of the project up to the Early Termination Date employing an approach that considers the most recent Financial Model Update and making any adjustments for positive or negative operating performance that is not yet reflected in the Financial Model Update.

The determination of the independent appraiser shall, except in the case of manifest error or fraud, be final unless either Party challenges such determination within 30 days of the date of the determination by submission to the financial DRB. If such a challenge is filed, the amount shall be determined in accordance with the Dispute Resolution Procedures.

2.2.3

The Project Debt Termination Amount included in the Termination Compensation owing under Section 2.2.1 (including interest on the Project Debt, other than Subordinate Debt, that has accrued and remains unpaid as of the payment date) shall be due and payable by Owner within 90 days after Concessionaire (or Collateral Agent or Concessionaire’s Lender(s), as applicable) provides Owner with a written statement as to the Project Debt Termination Amount and accounts held by the Concessionaire (or Collateral Agent or Concessionaire’s Lenders, as applicable), with documentation reasonably required by and acceptable to Owner supporting such statement.

2.3

Payment of Remaining Amount. The remaining amount owing shall be due and payable by Owner within 60 days after Owner determines the amount payable. Concessionaire shall provide Owner with a written settlement proposal identifying all amounts relevant to calculation of Termination Compensation not covered under Section 2.2 above, accompanied by (a) a certification signed by Concessionaire’s Authorized Representative stating that such amounts are owing under the terms of the Agreement and (b) a certification signed by the independent appraiser stating the net present value of the anticipated future nominal distributions and (c) back-up documentation, including the report of the independent appraiser that describes the basis for their recommendation, supporting the request as reasonably required by and acceptable to Owner. Owner shall promptly review all such information and determine the amount owing.

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