Document:

EX-4.2

 Exhibit 4.2 

Execution Version 
  

 
  

ENERGY TRANSFER OPERATING, L.P., 

as Issuer, 
 SUNOCO LOGISTICS
PARTNERS OPERATIONS L.P., 
 as Guarantor, 

and 
 U.S. BANK NATIONAL
ASSOCIATION, 
 as Trustee 

SECOND SUPPLEMENTAL INDENTURE 

Dated as of January 15, 2019 

to 
 Indenture dated as of
June 8, 2018 
 4.500% Senior Notes due 2024 

5.250% Senior Notes due 2029 

6.250% Senior Notes due 2049 
  

 
  

 Table of Contents 
  

					
	 ARTICLE I DEFINITIONS
	  	 	1	 
	 SECTION 1.1 Generally
	  	 	1	 
	 SECTION 1.2 Definition of Certain Terms
	  	 	2	 
		
	 ARTICLE II GENERAL TERMS OF THE NOTES
	  	 	6	 
	 SECTION 2.1 Form
	  	 	6	 
	 SECTION 2.2 Title, Amount and Payment of Principal and Interest
	  	 	7	 
	 SECTION 2.3 Transfer and Exchange
	  	 	9	 
		
	 ARTICLE III GUARANTY; FUTURE SUBSIDIARY GUARANTEES
	  	 	9	 
	 SECTION 3.1 Guarantee
	  	 	9	 
	 SECTION 3.2 Future Subsidiary Guarantors
	  	 	9	 
	 SECTION 3.3 Release of Guarantees
	  	 	9	 
		
	 ARTICLE IV REDEMPTION
	  	 	10	 
	 SECTION 4.1 Optional Redemption of 2024 Notes
	  	 	10	 
	 SECTION 4.2 Optional Redemption of 2029 Notes
	  	 	10	 
	 SECTION 4.3 Optional Redemption of 2049 Notes
	  	 	10	 
	 SECTION 4.4 Optional Redemption Generally
	  	 	11	 
		
	 ARTICLE V ADDITIONAL COVENANTS
	  	 	11	 
	 SECTION 5.1 Limitations on Liens
	  	 	11	 
	 SECTION 5.2 Restriction on Sale-Leasebacks
	  	 	12	 
		
	 ARTICLE VI EVENTS OF DEFAULT
	  	 	12	 
	 SECTION 6.1 Additional Event of Default
	  	 	12	 
		
	 ARTICLE VII AMENDMENTS
	  	 	13	 
	 SECTION 7.1 Amendments without Consent of Holders
	  	 	13	 
	 SECTION 7.2 Notice of Redemption
	  	 	13	 
		
	 ARTICLE VIII MISCELLANEOUS PROVISIONS
	  	 	13	 
	 SECTION 8.1 Ratification of Base Indenture
	  	 	13	 
	 SECTION 8.2 Trustee Not Responsible for Recitals
	  	 	13	 
	 SECTION 8.3 Table of Contents, Headings, etc.
	  	 	14	 
	 SECTION 8.4 Counterpart Originals
	  	 	14	 
	 SECTION 8.5 Governing Law
	  	 	14	 

  

  
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 THIS SECOND SUPPLEMENTAL INDENTURE, dated as of January 15, 2019 (the
“Second Supplemental Indenture”), is among Energy Transfer Operating, L.P. (formerly known as Energy Transfer Partners, L.P.), a Delaware limited partnership (the “Partnership”), Sunoco Logistics Partners Operations L.P., a
Delaware limited partnership (“Guarantor”), and U.S. Bank National Association, a national banking association, as trustee (the “Trustee”). 

WHEREAS, the Partnership, the Subsidiary Guarantor and the Trustee have heretofore executed and delivered an Indenture, dated as of
June 8, 2018 (the “Base Indenture” and, as supplemented by this Second Supplemental Indenture, the “Indenture”), providing for the issuance by the Partnership from time to time of its debentures, notes, bonds or other
evidences of indebtedness to be issued in one or more series unlimited as to principal amount (the “Debt Securities”), and the guarantee of the Debt Securities (the “Guarantee”) by one or more of the Subsidiary Guarantors
(including the Guarantor); 
 WHEREAS, the Partnership has duly authorized and desires to cause to be established pursuant to the Base
Indenture and this Second Supplemental Indenture three new series of Debt Securities designated as follows: the “4.500% Senior Notes due 2024” (the “2024 Notes”); the “5.250% Senior Notes due 2029” (the “2029
Notes”); and the “6.250% Senior Notes due 2049” (the “2049 Notes” and, together with the 2024 Notes and the 2029 Notes, the “Notes”); 

WHEREAS, Sections 2.01 and 2.03 of the Base Indenture permit the execution of indentures supplemental thereto to establish the form and terms
of Debt Securities of any series; 
 WHEREAS, pursuant to Section 9.01 of the Base Indenture, the Partnership has requested that the
Trustee join in the execution of this Second Supplemental Indenture to establish the form and terms of the Notes; and 
 WHEREAS, all things
necessary have been done to make the Notes, when executed and delivered by the Partnership and authenticated and delivered by the Trustee hereunder and under the Base Indenture and duly issued by the Partnership, and the Guarantee of the Guarantor,
when the Notes are duly issued by the Partnership, the valid obligations of the Partnership and the Guarantor, respectively, and to make this Second Supplemental Indenture a valid agreement of the Partnership and the Guarantor enforceable in
accordance with its terms. 
 NOW, THEREFORE, the Partnership, the Guarantor and the Trustee hereby agree that the following provisions
shall supplement the Base Indenture: 
 ARTICLE I 

DEFINITIONS 
 SECTION 1.1
Generally. 
 (a)    Capitalized terms used herein and not otherwise defined herein shall have the respective
meanings ascribed thereto in the Base Indenture. 
 (b)    The rules of interpretation set forth in the Base Indenture
shall be applied hereto as if set forth in full herein. 

  
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 SECTION 1.2 Definition of Certain Terms. 

For all purposes of this Second Supplemental Indenture, except as otherwise expressly provided or unless the context otherwise requires, the
following terms shall have the following respective meanings: 
 “2024 Notes Early Call Date” means March 15, 2024. 

“2029 Notes Early Call Date” means January 15, 2029. 

“2049 Notes Early Call Date” means October 15, 2048. 

“Attributable Indebtedness,” when used with respect to any Sale-Leaseback Transaction (as defined in Section 5.2 hereof),
means, as at the time of determination, the present value (discounted at the rate set forth or implicit in the terms of the lease included in such transaction) of the total obligations of the lessee for rental payments (other than amounts required
to be paid on account of property taxes, maintenance, repairs, insurance, assessments, utilities, operating and labor costs and other items that do not constitute payments for property rights) during the remaining term of the lease included in such
Sale-Leaseback Transaction (including any period for which such lease has been extended). In the case of any lease that is terminable by the lessee upon the payment of a penalty or other termination payment, such amount shall be the lesser of the
amount determined assuming termination upon the first date such lease may be terminated (in which case the amount shall also include the amount of the penalty or termination payment, but no rent shall be considered as required to be paid under such
lease subsequent to the first date upon which it may be so terminated) or the amount determined assuming no such termination. 

“Comparable Treasury Issue” means the United States Treasury security selected by the Independent Investment Banker as having a
maturity comparable to the remaining term of the applicable series of Notes to be redeemed (assuming, for this purpose, that the applicable series of Notes matured on the applicable Early Call Date) that would be utilized, at the time of selection
and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the applicable series of Notes to be redeemed (assuming, for this purpose, that the applicable
series of Notes matured on the applicable Early Call Date). 
 “Comparable Treasury Price” means, with respect to any Redemption
Date, (a) the average of the Reference Treasury Dealer Quotations for the Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (b) if the Independent Investment Banker obtains fewer than four
Reference Treasury Dealer Quotations, the average of all such quotations. 
 “Consolidated Net Tangible Assets” means, at any date
of determination, the total amount of assets of the Partnership and its consolidated Subsidiaries after deducting therefrom: 

(1)    all current liabilities (excluding (A) any current liabilities that by their terms are extendable or renewable
at the option of the obligor thereon to a time more than twelve months after the time as of which the amount thereof is being computed, and (B) current maturities of long-term debt); and 

  
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 (2)    the value (net of any applicable reserves) of all goodwill, trade
names, trademarks, patents and other like intangible assets, all as set forth, or on a pro forma basis would be set forth, on the consolidated balance sheet of the Partnership and its consolidated Subsidiaries for the Partnership’s most
recently completed fiscal quarter for which financial statements have been filed with the SEC, prepared in accordance with generally accepted accounting principles. 

“Credit Agreement” means the Credit Agreement, dated as of December 1, 2017, among the Partnership, Wells Fargo Bank, National
Association, as Administrative Agent, and the other agents and lenders party thereto, and as further amended, restated, refinanced, replaced or refunded from time to time. 

“Early Call Date” means, with respect to the 2024 Notes, the 2029 Notes and the 2049 Notes, the 2024 Notes Early Call Date, the 2029
Notes Early Call Date and the 2049 Notes Early Call Date, respectively. 
 “Indebtedness” of any Person at any date means any
obligation created or assumed by such Person for the repayment of borrowed money or any guaranty thereof. 
 “Independent Investment
Banker” means any of Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Capital Markets, LLC and SunTrust Robinson Humphrey, Inc. (and their respective successors)
or, if any such firm is not willing and able to select the applicable Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Partnership. 

“Permitted Liens” means: 

(1)    liens upon rights-of-way for
pipeline purposes; 
 (2)    easements,
rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business and encumbrances consisting of zoning restrictions, easements,
licenses, restrictions on the use of real property or minor imperfections in title thereto and which do not in the aggregate materially adversely affect the value of the properties encumbered thereby or materially impair their use in the operation
of the business of the Partnership and its Subsidiaries; 
 (3)    rights reserved to or vested by any provision of law
in any municipality or public authority to control or regulate any of the properties of the Partnership or any Subsidiary or the use thereof or the rights and interests of the Partnership or any Subsidiary therein, in any manner under any and all
laws; 
 (4)    rights reserved to the grantors of any properties of the Partnership or any Subsidiary, and the
restrictions, conditions, restrictive covenants and limitations, in respect thereto, pursuant to the terms, conditions and provisions of any rights-of-way agreements,
contracts or other agreements therewith; 
 (5)    any statutory or governmental lien or lien arising by operation of
law, or any mechanics’, repairmen’s, materialmen’s, suppliers’, carriers’, landlords’, warehousemen’s or similar lien incurred in the ordinary course of business which is not more than sixty (60) days past due
or which is being contested in good faith by appropriate proceedings and any undetermined lien which is incidental to construction, development, improvement or repair; 

  
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 (6)    any right reserved to, or vested in, any municipality or public
authority by the terms of any right, power, franchise, grant, license, permit or by any provision of law, to purchase or recapture or to designate a purchaser of, any property; 

(7)    liens for taxes and assessments which are (a) for the then current year, (b) not at the time delinquent,
or (c) delinquent but the validity or amount of which is being contested at the time by the Partnership or any of its Subsidiaries in good faith by appropriate proceedings; 

(8)    liens of, or to secure performance of, leases, other than capital leases; 

(9)    any lien in favor of the Partnership or any Subsidiary; 

(10)    any lien upon any property or assets of the Partnership or any Subsidiary in existence on the date of the initial
issuance of the Notes; 
 (11)    any lien incurred in the ordinary course of business in connection with workmen’s
compensation, unemployment insurance, temporary disability, social security, retiree health or similar laws or regulations or to secure obligations imposed by statute or governmental regulations; 

(12)    liens in favor of any Person to secure obligations under provisions of any letters of credit, bank guarantees,
bonds or surety obligations required or requested by any governmental authority in connection with any contract or statute, provided that such obligations do not constitute Indebtedness; or any lien upon or deposits of any assets to secure
performance of bids, trade contracts, leases or statutory obligations, and other obligations of a like nature incurred in the ordinary course of business; 

(13)    any lien upon any property or assets created at the time of acquisition of such property or assets by the
Partnership or any of its Subsidiaries or within one year after such time to secure all or a portion of the purchase price for such property or assets or debt incurred to finance such purchase price, whether such debt was incurred prior to, at the
time of or within one year after the date of such acquisition; 
 (14)    any lien upon any property or assets to secure
all or part of the cost of construction, development, repair or improvements thereon or to secure Indebtedness incurred prior to, at the time of, or within one year after completion of such construction, development, repair or improvements or the
commencement of full operations thereof (whichever is later), to provide funds for any such purpose; 
 (15)    any lien
upon any property or assets existing thereon at the time of the acquisition thereof by the Partnership or any of its Subsidiaries and any lien upon any property or assets of a Person existing thereon at the time such Person becomes a Subsidiary of
the Partnership by acquisition, merger or otherwise; provided that, in each case, such lien only encumbers the property or assets so acquired or owned by such Person at the time such Person becomes a Subsidiary; 

  
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 (16)    liens imposed by law or order as a result of any proceeding
before any court or regulatory body that is being contested in good faith, and liens which secure a judgment or other court-ordered award or settlement as to which the Partnership or the applicable Subsidiary has not exhausted its appellate rights;

 (17)    any extension, renewal, refinancing, refunding or replacement (or successive extensions, renewals,
refinancing, refunding or replacements) of liens, in whole or in part, referred to in clauses (1) through (16) above; provided, however, that any such extension, renewal, refinancing, refunding or replacement lien shall be limited to the
property or assets covered by the lien extended, renewed, refinanced, refunded or replaced and that the obligations secured by any such extension, renewal, refinancing, refunding or replacement lien shall be in an amount not greater than the amount
of the obligations secured by the lien extended, renewed, refinanced, refunded or replaced and any expenses of the Partnership or its Subsidiaries (including any premium) incurred in connection with such extension, renewal, refinancing, refunding or
replacement; or 
 (18)    any lien resulting from the deposit of moneys or evidence of indebtedness in trust for the
purpose of defeasing Indebtedness of the Partnership or any of its Subsidiaries. 
 “Person” means any individual, corporation,
partnership, limited liability company, joint venture, incorporated or unincorporated association, joint stock company, trust, unincorporated organization, government or any agency, or political subdivision thereof or any other entity. 

“Principal Property” means, whether owned or leased on the date hereof or thereafter acquired: 

(1)    any pipeline assets of the Partnership or any of its Subsidiaries, including any related facilities employed in the
gathering, transportation, distribution, storage or marketing of natural gas, refined petroleum products, natural gas liquids and petrochemicals, that are located in the United States of America or any territory or political subdivision thereof; and

 (2)    any processing, compression, treating, blending or manufacturing plant or terminal owned or leased by the
Partnership or any of its Subsidiaries that is located in the United States or any territory or political subdivision thereof, except in the case of either of the preceding clause (1) or this clause (2): 

(a)    any such assets consisting of inventories, furniture, office fixtures and equipment (including data processing
equipment), vehicles and equipment used on, or useful with, vehicles; and 
 (b)    any such assets which, in the
opinion of the board of directors of the general partner of the General Partner are not material in relation to the activities of the Partnership and its Subsidiaries taken as a whole. 

“Reference Treasury Dealer” means a primary U.S. government securities dealer in the United States selected by each of Deutsche Bank
Securities Inc., Goldman Sachs & Co. LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Capital Markets, LLC and SunTrust Robinson Humphrey, Inc. or an affiliate or successor of the foregoing, and, at the option of the
Partnership, one or more additional primary U.S. government securities dealers in the United States; provided, however, that if any of the foregoing shall resign as a Reference Treasury Dealer or cease to be a U.S. government securities
dealer, the Partnership will substitute therefor another primary U.S. government securities dealer in the United States. 

  
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 “Reference Treasury Dealer Quotations” means, with respect to each Reference
Treasury Dealer and any Redemption Date for a series of Notes, an average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue for such series of Notes to be redeemed (expressed in each
case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date. 

“Restricted Subsidiary” means any Subsidiary owning or leasing, directly or indirectly through ownership in another Subsidiary, any
Principal Property. 
 “Subsidiary Guarantor” means each Subsidiary of the Partnership that guarantees the Notes pursuant to the
terms of the Indenture but only so long as such Subsidiary is a guarantor with respect to the Notes on the terms provided for in the Indenture. 

“Treasury Yield” means, with respect to any Redemption Date applicable to the Notes to be redeemed, the rate per annum equal to the
semi-annual equivalent yield to maturity (computed as of the third Business Day immediately preceding such Redemption Date) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the applicable Comparable Treasury Price for such Redemption Date. 
 ARTICLE II 

GENERAL TERMS OF THE NOTES 

SECTION 2.1 Form. 
 The
2024 Notes, the 2029 Notes and the 2049 Notes and the Trustee’s certificates of authentication shall be substantially in the form of Exhibit A-1, Exhibit A-2 and
Exhibit A-3, respectively, to this Second Supplemental Indenture, which are hereby incorporated into this Second Supplemental Indenture. The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Second Supplemental Indenture and, to the extent applicable, the Partnership, the Guarantor and the Trustee, by their execution and delivery of this Second Supplemental Indenture, expressly agree to such
terms and provisions and to be bound thereby. 
 Each series of Notes shall be issued upon original issuance in whole in the form of one or
more Global Securities (the “Book-Entry Notes”). Each Book-Entry Note shall represent such of the outstanding Notes as shall be specified therein and shall provide that it shall represent the aggregate amount of outstanding Notes from time
to time endorsed thereon and that the aggregate amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. 

  
 6 

 The Partnership initially appoints The Depository Trust Company to act as Depositary with
respect to the Book-Entry Notes. 
 SECTION 2.2 Title, Amount and Payment of Principal and Interest. 

(a)    The 2024 Notes shall be entitled the “4.500% Senior Notes due 2024”. The Trustee shall authenticate and
deliver (i) the 2024 Notes for original issue on the date hereof (the “Original 2024 Notes”) in the aggregate principal amount of $750,000,000, and (ii) additional 2024 Notes for original issue from time to time after the date
hereof in such principal amounts as may be specified in a Partnership Order described in this sentence, in each case upon a Partnership Order for the authentication and delivery thereof and satisfaction of the other provisions of Section 2.04
of the Base Indenture. Such order shall specify the amount of the 2024 Notes to be authenticated, the date on which the original issue of 2024 Notes is to be authenticated, and the name or names of the initial Holder or Holders. The aggregate
principal amount of 2024 Notes that may be outstanding at any time may not exceed $750,000,000 plus such additional principal amounts as may be issued and authenticated pursuant to clause (ii) of this paragraph (except as provided in
Section 2.09 of the Base Indenture). The Original 2024 Notes and any additional 2024 Notes issued and authenticated pursuant to clause (ii) of this paragraph shall constitute a single series of Debt Securities for all purposes under the
Indenture. 
 The principal amount of each 2024 Note shall be payable on April 15, 2024. Each 2024 Note shall bear interest from the
date of original issuance, or the most recent date to which interest has been paid, at the fixed rate of 4.500% per annum. The dates on which interest on the 2024 Notes shall be payable shall be April 15 and October 15 of each year (the
“2024 Interest Payment Dates”), commencing April 15, 2019. The regular record date for interest payable on the 2024 Notes on any 2024 Interest Payment Date shall be April 1 or October 1, as the case may be, next preceding
such 2024 Interest Payment Date. 
 Payments of principal of, premium, if any, on, and interest due on the 2024 Notes representing
Book-Entry Notes on any 2024 Interest Payment Date or at maturity will be made available to the Trustee by 10:00 a.m., New York City time, on such date, unless such date falls on a day that is not a Business Day, in which case (x) such payments
will be made available to the Trustee by 10:00 a.m., New York City time, on the next Business Day, and (y) for so long as clause (x) is satisfied, no interest shall accrue on the amount of interest due on such 2024 Interest Payment Date
for the period from and after such 2024 Interest Payment Date and the date of payment. As soon as possible thereafter, the Trustee will make such payments to the Depositary. 

(b)    The 2029 Notes shall be entitled the “5.250% Senior Notes due 2029”. The Trustee shall authenticate and
deliver (i) the 2029 Notes for original issue on the date hereof (the “Original 2029 Notes”) in the aggregate principal amount of $1,500,000,000, and (ii) additional 2029 Notes for original issue from time to time after the date
hereof in such principal amounts as may be specified in a Partnership Order described in this sentence, in each case upon a Partnership Order for the authentication and delivery thereof and satisfaction of the other provisions of Section 2.04
of the Base Indenture. Such order shall specify the amount of the 2029 Notes to be authenticated, the date on which the original issue of 2029 Notes is to be authenticated, and the name or names of the initial Holder or Holders. The aggregate
principal amount of 2029 Notes that may be outstanding at any time may not exceed $1,500,000,000 plus such additional principal amounts as may be issued and authenticated pursuant to clause (ii) of this paragraph (except as provided in
Section 2.09 of the Base Indenture). The Original 2029 Notes and any additional 2029 Notes issued and authenticated pursuant to clause (ii) of this paragraph shall constitute a single series of Debt Securities for all purposes under the
Indenture. 

  
 7 

 The principal amount of each 2029 Note shall be payable on April 15, 2029. Each 2029
Note shall bear interest from the date of original issuance, or the most recent date to which interest has been paid, at the fixed rate of 5.250% per annum. The dates on which interest on the 2029 Notes shall be payable shall be April 15 and
October 15 of each year (the “2029 Interest Payment Dates”), commencing April 15, 2019. The regular record date for interest payable on the 2029 Notes on any 2029 Interest Payment Date shall be April 1 or October 1, as
the case may be, next preceding such 2029 Interest Payment Date. 
 Payments of principal of, premium, if any, on, and interest due on the
2029 Notes representing Book-Entry Notes on any 2029 Interest Payment Date or at maturity will be made available to the Trustee by 10:00 a.m., New York City time, on such date, unless such date falls on a day that is not a Business Day, in which
case (x) such payments will be made available to the Trustee by 10:00 a.m., New York City time, on the next Business Day, and (y) for so long as clause (x) is satisfied, no interest shall accrue on the amount of interest due on such
2029 Interest Payment Date for the period from and after such 2029 Interest Payment Date and the date of payment. As soon as possible thereafter, the Trustee will make such payments to the Depositary. 

(c)    The 2049 Notes shall be entitled the “6.250% Senior Notes due 2049”. The Trustee shall authenticate and
deliver (i) the 2049 Notes for original issue on the date hereof (the “Original 2049 Notes”) in the aggregate principal amount of $1,750,000,000, and (ii) additional 2049 Notes for original issue from time to time after the date
hereof in such principal amounts as may be specified in a Partnership Order described in this sentence, in each case upon a Partnership Order for the authentication and delivery thereof and satisfaction of the other provisions of Section 2.04
of the Base Indenture. Such order shall specify the amount of the 2049 Notes to be authenticated, the date on which the original issue of 2049 Notes is to be authenticated, and the name or names of the initial Holder or Holders. The aggregate
principal amount of 2049 Notes that may be outstanding at any time may not exceed $1,750,000,000 plus such additional principal amounts as may be issued and authenticated pursuant to clause (ii) of this paragraph (except as provided in
Section 2.09 of the Base Indenture). The Original 2049 Notes and any additional 2049 Notes issued and authenticated pursuant to clause (ii) of this paragraph shall constitute a single series of Debt Securities for all purposes under the
Indenture. 
 The principal amount of each 2049 Note shall be payable on April 15, 2049. Each 2049 Note shall bear interest from the
date of original issuance, or the most recent date to which interest has been paid, at the fixed rate of 6.250% per annum. The dates on which interest on the 2049 Notes shall be payable shall be April 15 and October 15 of each year (the
“2049 Interest Payment Dates”), commencing April 15, 2019. The regular record date for interest payable on the 2049 Notes on any 2049 Interest Payment Date shall be April 1 or October 1, as the case may be, next preceding
such 2049 Interest Payment Date. 

  
 8 

 Payments of principal of, premium, if any, on, and interest due on the 2049 Notes
representing Book-Entry Notes on any 2049 Interest Payment Date or at maturity will be made available to the Trustee by 10:00 a.m., New York City time, on such date, unless such date falls on a day that is not a Business Day, in which case
(x) such payments will be made available to the Trustee by 10:00 a.m., New York City time, on the next Business Day, and (y) for so long as clause (x) is satisfied, no interest shall accrue on the amount of interest due on such 2049
Interest Payment Date for the period from and after such 2049 Interest Payment Date and the date of payment. As soon as possible thereafter, the Trustee will make such payments to the Depositary. 

SECTION 2.3 Transfer and Exchange. 

The transfer and exchange of Book-Entry Notes or beneficial interests therein shall be effected through the Depositary, in accordance with
Section 2.17 of the Base Indenture and Article II of this Second Supplemental Indenture (including the restrictions on transfer set forth therein and herein) and the rules and procedures of the Depositary therefor, which shall include
restrictions on transfer comparable to those set forth therein and herein to the extent required by the Securities Act of 1933, as amended. 

ARTICLE III 
 GUARANTY;
FUTURE SUBSIDIARY GUARANTEES 
 SECTION 3.1 Guarantee. 

In accordance with Article X of the Base Indenture, the Notes will be fully, unconditionally and absolutely guaranteed on an unsecured,
unsubordinated basis by the Guarantor. Initially, there will not be any other Subsidiary Guarantors. 
 SECTION 3.2 Future Subsidiary
Guarantors. 
 If any Subsidiary of the Partnership that is not then a Subsidiary Guarantor guarantees, becomes a co-obligor with respect to or otherwise provides direct credit support for any obligations of the Partnership or any of its other Subsidiaries under the Credit Agreement, then the Partnership shall cause such
Subsidiary to promptly execute and deliver to the Trustee a supplemental indenture in a form satisfactory to the Trustee pursuant to which such Subsidiary will Guarantee the Partnership’s obligations with respect to the Notes and under the
Indenture. 
 SECTION 3.3 Release of Guarantees. 

In addition to the provisions of Section 10.04(a) of the Base Indenture, if no Default shall have occurred and shall be continuing under
the Indenture, and to the extent not otherwise prohibited by the Indenture, any Guarantee incurred by a Subsidiary Guarantor shall be unconditionally released and discharged following delivery of a written notice by the Partnership to the Trustee,
upon the release of all guarantees or other obligations of such Subsidiary Guarantor with respect to the obligations of the Partnership or any of its Subsidiaries under the Credit Agreement. 

  
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 ARTICLE IV 

REDEMPTION 
  

SECTION 4.1 Optional Redemption of 2024 Notes. 

(a)    Prior to the 2024 Notes Early Call Date, the 2024 Notes are redeemable, at the option of the Partnership, at any
time in whole, or from time to time in part, at a Redemption Price equal to the greater of: (i) 100% of the principal amount of the 2024 Notes to be redeemed; or (ii) the sum of the present values of the remaining scheduled payments of
principal and interest (at the interest rate in effect on the date of calculation of the Redemption Price) on the 2024 Notes to be redeemed that would be due after the related Redemption Date if such 2024 Notes matured on the 2024 Notes Early
Call Date but for such redemption (exclusive of interest accrued to, but excluding, the Redemption Date), discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Yield plus 30 basis points; plus, in either case of clause (i) or clause (ii), accrued and unpaid interest thereon to, but excluding, the Redemption Date. 

(b)    At any time on or after the 2024 Notes Early Call Date, the 2024 Notes are redeemable in whole or in part, at the
option of the Partnership, at a Redemption Price equal to 100% of the principal amount of the 2024 Notes to be redeemed plus accrued and unpaid interest thereon to, but excluding, the Redemption Date. 

SECTION 4.2 Optional Redemption of 2029 Notes. 

(a)    Prior to the 2029 Notes Early Call Date, the 2029 Notes are redeemable, at the option of the Partnership, at any
time in whole, or from time to time in part, at a Redemption Price equal to the greater of: (i) 100% of the principal amount of the 2029 Notes to be redeemed; or (ii) the sum of the present values of the remaining scheduled payments of
principal and interest (at the interest rate in effect on the date of calculation of the Redemption Price) on the 2029 Notes to be redeemed that would be due after the related Redemption Date if such 2029 Notes matured on the 2029 Notes Early
Call Date but for such redemption (exclusive of interest accrued to, but excluding, the Redemption Date), discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Yield plus 40 basis points; plus, in either case of clause (i) or clause (ii), accrued and unpaid interest thereon to, but excluding, the Redemption Date. 

(b)    At any time on or after the 2029 Notes Early Call Date, the 2029 Notes are redeemable in whole or in part, at the
option of the Partnership, at a Redemption Price equal to 100% of the principal amount of the 2029 Notes to be redeemed plus accrued and unpaid interest thereon to, but excluding, the Redemption Date. 

SECTION 4.3 Optional Redemption of 2049 Notes. 

(a)    Prior to the 2049 Notes Early Call Date, the 2049 Notes are redeemable, at the option of the Partnership, at any
time in whole, or from time to time in part, at a Redemption Price equal to the greater of: (i) 100% of the principal amount of the 2049 Notes to be redeemed; or (ii) the sum of the present values of the remaining scheduled payments of
principal and interest (at the interest rate in effect on the date of calculation of the Redemption Price) on the 2049 Notes to be redeemed that would be due after the related Redemption Date if such 2049 Notes matured on the 2049 Notes Early
Call Date but for such redemption (exclusive of interest accrued to, but excluding, the Redemption Date), discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Yield plus 50 basis points; plus, in either case of clause (i) or clause (ii), accrued and unpaid interest thereon to, but excluding, the Redemption Date. 

  
 10 

 (b)    At any time on or after the 2049 Notes Early Call Date, the 2049
Notes are redeemable in whole or in part, at the option of the Partnership, at a Redemption Price equal to 100% of the principal amount of the 2049 Notes to be redeemed plus accrued and unpaid interest thereon to, but excluding, the Redemption Date.

 SECTION 4.4 Optional Redemption Generally. 

The actual Redemption Price, determined as provided in Sections 4.1, 4.2 and 4.3, shall be calculated and certified to the Trustee and the
Partnership by the Independent Investment Banker. 
 ARTICLE V 

ADDITIONAL COVENANTS 
 In
addition to the covenants set forth in the Base Indenture, the Notes shall be entitled to the benefit of the following covenants: 
 SECTION
5.1 Limitations on Liens. 
 The Partnership shall not, nor shall it permit any of its Subsidiaries to, create, assume, incur or
suffer to exist any mortgage, lien, security interest, pledge, charge or other encumbrance (“liens”) upon any Principal Property or upon any capital stock of any Restricted Subsidiary, whether owned on the date hereof or thereafter
acquired, to secure any Indebtedness of the Partnership or any other Person (other than the Notes), without in any such case making effective provisions whereby all of the outstanding Notes are secured equally and ratably with, or prior to, such
Indebtedness so long as such Indebtedness is so secured. 
 Notwithstanding the foregoing, the Partnership may, and may permit any of its
Subsidiaries to, create, assume, incur, or suffer to exist without securing the Notes (a) any Permitted Lien, (b) any lien upon any Principal Property or capital stock of a Restricted Subsidiary to secure Indebtedness of the Partnership or
any other Person, provided that the aggregate principal amount of all Indebtedness then outstanding secured by such lien and all similar liens under this clause (b), together with all Attributable Indebtedness from Sale-Leaseback Transactions
(excluding Sale-Leaseback Transactions permitted by clauses (1) through (4), inclusive, of Section 5.2(a) hereof), does not exceed 10% of Consolidated Net Tangible Assets or (c) any lien upon (i) any Principal Property that was
not owned by the Partnership or any of its Subsidiaries on the date hereof or (ii) the capital stock of any Restricted Subsidiary that owns no Principal Property that was owned by the Partnership or any of its Subsidiaries on the date hereof,
in each case owned by a Subsidiary of the Partnership (an “Excluded Subsidiary”) that (A) is not, and is not required to be, a Subsidiary Guarantor and (B) has not granted any liens on any of its property securing Indebtedness
with recourse to the Partnership or any Subsidiary of the Partnership other than such Excluded Subsidiary or any other Excluded Subsidiary. 

  
 11 

 SECTION 5.2 Restriction on Sale-Leasebacks. 

(a)    The Partnership shall not, and shall not permit any Subsidiary to, engage in the sale or transfer by the
Partnership or any of its Subsidiaries of any Principal Property to a Person (other than the Partnership or a Subsidiary) and the taking back by the Partnership or its Subsidiary, as the case may be, of a lease of such Principal Property (a
“Sale-Leaseback Transaction”), unless: 
 (1)    such Sale-Leaseback Transaction occurs within one year from
the date of completion of the acquisition of the Principal Property subject thereto or the date of the completion of construction, development or substantial repair or improvement, or commencement of full operations on such Principal Property,
whichever is later; 
 (2)    the Sale-Leaseback Transaction involves a lease for a period, including renewals, of not
more than three years; 
 (3)    the Partnership or such Subsidiary would be entitled to incur Indebtedness secured by a
lien on the Principal Property subject thereto in a principal amount equal to or exceeding the Attributable Indebtedness from such Sale-Leaseback Transaction without equally and ratably securing the Notes; or 

(4)    the Partnership or such Subsidiary, within a one-year period after such
Sale-Leaseback Transaction, applies or causes to be applied an amount not less than the Attributable Indebtedness from such Sale-Leaseback Transaction to (a) the prepayment, repayment, redemption, reduction or retirement of any Indebtedness of
the Partnership or any of its Subsidiaries that is not subordinated to the Notes or any Guarantee, or (b) the expenditure or expenditures for Principal Property used or to be used in the ordinary course of business of Partnership or its
Subsidiaries. 
 (b)    Notwithstanding Section 5.2(a) hereof, the Partnership may, and may permit any Subsidiary
to, effect any Sale-Leaseback Transaction that is not excepted by clauses (1) through (4), inclusive, of Section 5.2(a) hereof provided that the Attributable Indebtedness from such Sale-Leaseback Transaction, together with the aggregate
principal amount of outstanding Indebtedness (other than the Notes) secured by liens other than Permitted Liens upon Principal Properties, does not exceed 10% of Consolidated Net Tangible Assets. 

ARTICLE VI 
 EVENTS OF
DEFAULT 
 SECTION 6.1 Additional Event of Default. 

In addition to the Events of Default specified in Section 6.01 of the Base Indenture, the following shall be an Event of Default with
respect to each series of the Notes: any Indebtedness of the Partnership or any Subsidiary Guarantor is not paid within any applicable grace period after final maturity or is accelerated by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $25,000,000. 

  
 12 

 ARTICLE VII 

AMENDMENTS 
 SECTION 7.1
Amendments without Consent of Holders. 
 Clause (12) of Section 9.01 of the Base Indenture is hereby amended so as to be
renumbered as new clause (13), the “or” at the end of Clause (11) of Section 9.01 of the Base Indenture is hereby deleted, and new clause (12) is hereby added sequentially as follows: 

“(12)    conform the text of the Indenture to any provision set forth under the section entitled “Description of
the Notes” in the Prospectus Supplement dated January 8, 2019 to the extent that such text of the Indenture was intended to reflect such provision as set forth under the section entitled “Description of the Notes” in the
Prospectus Supplement dated January 8, 2019; or” 
 SECTION 7.2 Notice of Redemption. 

The first paragraph of Section 3.04 of the Base Indenture shall be amended and restated in its entirety to read as follows: 

“Notice of redemption shall be given by first-class mail, postage prepaid, mailed (or when the Debt Securities are in the form of Global
Securities, sent pursuant to the applicable procedures of the Depositary) not less than 15 nor more than 60 days prior to the Redemption Date, to each Holder of Debt Securities to be redeemed, at the address of such Holder appearing in the register
of Debt Securities maintained by the Registrar, except that redemption notices may be sent more than 60 days prior to a Redemption Date if the notice is issued in connection with a defeasance of a series of Debt Securities or a satisfaction or
discharge of the Indenture with respect to a series of Debt Securities.” 
 ARTICLE VIII 

MISCELLANEOUS PROVISIONS 

SECTION 8.1 Ratification of Base Indenture. 

The Base Indenture, as supplemented by this Second Supplemental Indenture, is in all respects ratified and confirmed, and this Second
Supplemental Indenture shall be deemed part of the Base Indenture in the manner and to the extent herein and therein provided. 
 SECTION
8.2 Trustee Not Responsible for Recitals. 
 The recitals contained herein and in the Notes, except with respect to the
Trustee’s certificates of authentication, shall be taken as the statements of the Partnership and the Guarantor, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Second Supplemental Indenture or of the Notes. 

  
 13 

 SECTION 8.3 Table of Contents, Headings, etc. 

The table of contents and headings of the Articles and Sections of this Second Supplemental Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. 

SECTION 8.4 Counterpart Originals. 

The parties may sign any number of copies of this Second Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. 
 SECTION 8.5 Governing Law. 

THIS SECOND SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 

(Signature Page Follows) 

  
 14 

 IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be
duly executed as of the day and year first above written. 
  

							
		 		 	ISSUER:
			
		 		 	ENERGY TRANSFER OPERATING, L.P.
				
		 		 	By:	 	 Energy Transfer Partners GP, L.P.,
 its general
partner

				
		 		 	By:	 	 Energy Transfer Partners, L.L.C.,
 its general
partner

				
		 		 	By:	 	/s/ Thomas E. Long
		 		 	 Name:
 Title:
	 	 Thomas E. Long
 Chief Financial
Officer

  

							
		 		 	GUARANTOR:
			
		 		 	SUNOCO LOGISTICS PARTNERS OPERATIONS L.P.
				
		 		 	By:	 	 Sunoco Logistics Partners GP LLC,
 its general
partner

				
		 		 	By:	 	/s/ Thomas E. Long
		 		 	 Name:
 Title:
	 	 Thomas E. Long
 Chief Financial
Officer

  

							
		 		 	TRUSTEE:
			
		 		 	U.S. BANK NATIONAL ASSOCIATION
				
		 		 	By:	 	/s/ Michael Herberger
		 		 	 Name:
 Title:
	 	 Michael Herberger
 Vice
President

 Signature Page of Second Supplemental Indenture 

 Exhibit A-1 

FORM OF NOTE 
 [FACE OF
SECURITY] 
 [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”) (55 WATER STREET, NEW
YORK, NEW YORK 10041) TO THE PARTNERSHIP OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]* 
 [TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO HEREIN.]* 
  

			
	No. __________________	  	$ __________________

 CUSIP: 29278N AH6 

ISIN: US29278NAH61 
 ENERGY
TRANSFER OPERATING, L.P. 
 4.500% SENIOR NOTES DUE 2024 

ENERGY TRANSFER OPERATING, L.P., a Delaware limited partnership (the “Partnership,” which term includes any successor under the
Indenture hereinafter referred to), for value received, hereby promises to pay to ______________ or its registered assigns, the principal sum of ________ U.S. dollars ($___________), [or such greater or lesser principal sum as is shown on the
attached Schedule of Increases and Decreases in Global Security]*, on April 15, 2024 in such coin and currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to
pay interest thereon at an annual rate of 4.500% payable on April 15 and October 15 of each year, to the person in whose name the Security is registered at the close of business on the record date for such interest, which shall be the
preceding April 1 or October 1 (each, a “Regular Record Date”), respectively, payable commencing on April 15, 2019. 
  

 

	*	 To be included in a Book-Entry Note. 

  
 A-1-1 

 Reference is made to the further provisions of this Security set forth on the reverse
hereof. Such further provisions shall for all purposes have the same effect as though fully set forth at this place. 
 The statements in
the legends set forth in this Security are an integral part of the terms of this Security and by acceptance hereof the Holder of this Security agrees to be subject to, and bound by, the terms and provisions set forth in each such legend. 

This Security is issued in respect of a series of Debt Securities of an initial aggregate principal amount of $750,000,000 designated as the
4.500% Senior Notes due 2024 of the Partnership and is governed by the Indenture dated as of June 8, 2018 (the “Base Indenture”), duly executed and delivered by the Partnership, as issuer, certain Subsidiary Guarantors party thereto,
including Sunoco Logistics Partners Operations L.P., a Delaware limited partnership (the “Guarantor”), and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the Second Supplemental Indenture dated as
of January 15, 2019 (the “Second Supplemental Indenture”, and together with the Base Indenture, the “Indenture”), duly executed by the Partnership, the Guarantor and the Trustee. The terms of the Indenture are incorporated
herein by reference. This Security shall in all respects be entitled to the same benefits as definitive Debt Securities under the Indenture. 

If and to the extent any provision of the Indenture limits, qualifies or conflicts with any other provision of the Indenture that is required
to be included in the Indenture or is deemed applicable to the Indenture by virtue of the provisions of the Trust Indenture Act of 1939, as amended (the “TIA”), such required provision shall control. 

This Security shall not be valid or become obligatory for any purpose until the Trustee’s Certificate of Authentication hereon shall have
been manually signed by the Trustee under the Indenture. 

  
 A-1-2 

 IN WITNESS WHEREOF, the Partnership has caused this instrument to be duly executed by the
general partner of the General Partner. 
 Dated: 
  

							
		 		 	ENERGY TRANSFER OPERATING, L.P.
				
		 		 	By:	 	 Energy Transfer Partners GP, L.P.,
 its General
Partner

				
		 		 	By:	 	 Energy Transfer Partners, L.L.C.,
 its General
Partner

				
		 		 	By:	 	 
		 		 	 Name:
 Title:
	 	 Thomas E. Long
 Chief Financial
Officer

 TRUSTEE’S CERTIFICATE OF AUTHENTICATION: 

This is one of the Debt Securities of the series designated therein referred to in the within-mentioned Indenture. 

 

			
	 U.S. BANK NATIONAL ASSOCIATION,

as Trustee

		
	By:	 	 
		 	Authorized Signatory

  
 A-1-3 

 [REVERSE OF SECURITY] 

ENERGY TRANSFER OPERATING, L.P. 

4.500% SENIOR NOTES DUE 2024 

This Security is one of a duly authorized issue of debentures, notes or other evidences of indebtedness of the Partnership (the “Debt
Securities”) of the series hereinafter specified, all issued or to be issued under and pursuant to the Indenture, to which Indenture reference is hereby made for a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Partnership, the Guarantor and the Holders of the Debt Securities. The Debt Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may be subject to different sinking, purchase or analogous funds (if any) and may otherwise vary as provided in the Indenture. This Security is one of a series designated as
the 4.500% Senior Notes due 2024 of the Partnership, in an initial aggregate principal amount of $750,000,000 (the “Securities”). 

1.     Interest. 

The Partnership promises to pay interest on the principal amount of this Security at the rate of 4.500% per annum. 

The Partnership will pay interest semi-annually on April 15 and October 15 of each year (each such date, an “Interest Payment
Date”), commencing April 15, 2019. Interest on the Securities will accrue from the most recent date to which interest has been paid or, if no interest has been paid on the Securities, from January 15, 2019. Interest will be computed
on the basis of a 360-day year consisting of twelve 30-day months. The Partnership shall pay interest (including post-petition interest in any proceeding under any
applicable bankruptcy laws) on overdue installments of interest (without regard to any applicable grace period) and on overdue principal and premium, if any, from time to time on demand at the same rate per annum, in each case to the extent lawful.

 2.     Method of Payment. 

The Partnership shall pay interest on the Securities (except Defaulted Interest) to the persons who are the registered Holders at the close of
business on the Regular Record Date immediately preceding the Interest Payment Date. Any such interest not so punctually paid or duly provided for (“Defaulted Interest”) may be paid to the persons who are registered Holders at the close of
business on a special record date for the payment of such Defaulted Interest, or in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may then be listed if such manner of payment shall
be deemed practicable by the Trustee, as more fully provided in the Indenture. The Partnership shall pay principal, premium, if any, and interest in such coin or currency of the United States of America as at the time of payment shall be legal
tender for payment of public and private debts. Payments in respect of a Global Security (including principal, premium, if any, and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Depositary.
Payments in respect of Securities in definitive form (including principal, premium, if any, and interest) will be made at 

  
 A-1-4 

 
the office or agency of the Partnership maintained for such purpose within The City of New York, which initially will be at the corporate trust office of the Trustee located at 100 Wall Street,
Suite 1600, New York, New York 10005, Mail Station: EX-NY-WALL, or, at the option of the Partnership, payment of interest may be made by check mailed to the Holders on
the relevant record date at their addresses set forth in the register of Holders maintained by the Registrar or at the option of the Holder, payment of interest on Securities in definitive form will be made by wire transfer of immediately available
funds to any account maintained in the United States, provided such Holder has requested such method of payment and provided timely wire transfer instructions to the Paying Agent. The Holder must surrender this Security to a Paying Agent to collect
payment of principal. 
 3.     Paying Agent and Registrar. 

Initially, U.S. Bank National Association will act as Paying Agent and Registrar. The Partnership may change any Paying Agent or Registrar at
any time upon notice to the Trustee and the Holders. The Partnership may act as Paying Agent. 
 4.     Indenture. 

This Security is one of a duly authorized issue of Debt Securities of the Partnership issued and to be issued in one or more series under the
Indenture. 
 Capitalized terms herein are used as defined in the Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Base Indenture, those made part of the Indenture by reference to the TIA, as in effect on the date of the Base Indenture, and those terms stated in the Second Supplemental Indenture. The Securities are subject to all such
terms, and Holders of Securities are referred to the Base Indenture, the Second Supplemental Indenture and the TIA for a statement of them. The Securities of this series are general unsecured obligations of the Partnership limited to an initial
aggregate principal amount of $750,000,000; provided, however, that the authorized aggregate principal amount of such series may be increased from time to time as provided in the Second Supplemental Indenture. 

5.     Redemption. 

Optional Redemption. Prior to the 2024 Notes Early Call Date, the Securities are redeemable, at the option of the Partnership, at any
time in whole, or from time to time in part, at a Redemption Price equal to the greater of: (i) 100% of the principal amount of the Securities to be redeemed; or (ii) the sum of the present values of the remaining scheduled payments of
principal and interest (at the interest rate in effect on the date of calculation of the Redemption Price) on the Securities to be redeemed that would be due after the related Redemption Date if such Securities matured on the 2024 Notes Early Call
Date but for such redemption (exclusive of interest accrued to, but excluding, the Redemption Date), discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Yield plus 30 basis points; plus, in either case of clause (i) or clause (ii), accrued and unpaid interest thereon to, but excluding, the Redemption Date. 

At any time on or after the 2024 Notes Early Call Date, the Securities are redeemable in whole or in part, at the option of the Partnership,
at a Redemption Price equal to 100% of the principal amount of the Securities to be redeemed plus accrued and unpaid interest thereon to, but excluding, the Redemption Date. 

  
 A-1-5 

 The actual Redemption Price, calculated as provided above, shall be calculated and certified
to the Trustee and the Partnership by the Independent Investment Banker. 
 Except as set forth above, the Securities will not be redeemable
prior to their Stated Maturity and will not be entitled to the benefit of any sinking fund. 
 6.     Denominations; Transfer;
Exchange. 
 The Securities are to be issued in registered form, without coupons, in denominations of $2,000 and integral multiples of
$1,000 in excess thereof. A Holder may register the transfer of, or exchange, Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. 
 7.     Person Deemed Owners. 

The registered Holder of a Security may be treated as the owner of it for all purposes. 

8.     Amendment; Supplement; Waiver. 

Subject to certain exceptions, the Indenture may be amended or supplemented, and any existing Event of Default or compliance with any
provision may be waived, with the consent of the Holders of a majority in principal amount of the then outstanding notes of the affected series. Without consent of any Holder of a Security, the parties thereto may amend or supplement the Indenture
to, among other things, cure any ambiguity or omission, to correct any defect or inconsistency, or to make any other change that does not adversely affect the rights of any Holder of a Security. Any such consent or waiver by the Holder of this
Security (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Security and any Securities which may be issued in exchange or substitution herefor, regardless of
whether any notation thereof is made upon this Security or such other Securities. 
 9.     Defaults and Remedies. 

Certain events of bankruptcy or insolvency are Events of Default that will result in the principal amount of the Securities, together with
premium, if any, and accrued and unpaid interest thereon, becoming due and payable immediately upon the occurrence of such Events of Default. If any other Event of Default with respect to the Securities occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities then outstanding may declare the principal amount of all the Securities, together with premium, if any, and accrued and unpaid interest thereon, to
be due and payable immediately in the manner and with the effect provided in the Indenture. Notwithstanding the preceding sentence, however, if at any time after such a declaration of acceleration has been made, the Holders of a majority in
principal amount of the outstanding Securities, by written notice to the Trustee, may rescind such declaration and annul its consequences if the rescission would not conflict with any judgment or decree of a court of competent jurisdiction and if
all existing Events of Default with 

  
 A-1-6 

 
respect to the Securities, other than the nonpayment of the principal, premium, if any, or interest which has become due solely by such declaration acceleration, shall have been cured or shall
have been waived. No such rescission shall affect any subsequent default or shall impair any right consequent thereon. Holders of Securities may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require
indemnity or security satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the Trustee in its
exercise of any trust or power. 
 10.    Trustee Dealings with Partnership. 

The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for
the Partnership or its Affiliates, and may otherwise deal with the Partnership or its Affiliates as if it were not the Trustee. 

11.    Authentication. 

This Security shall not be valid until the Trustee signs the certificate of authentication on the other side of this Security. 

12.    Abbreviations and Defined Terms. 

Customary abbreviations may be used in the name of a Holder of a Security or an assignee, such as: TEN COM (tenant in common), TEN ENT
(tenants by the entireties), JT TEN (joint tenants with right of survivorship and not as tenants in common), CUST (Custodian), and U/G/M/A (Uniform Gifts to Minors Act). 

13.    CUSIP Numbers. 

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Partnership has caused CUSIP
numbers to be printed on the Securities as a convenience to the Holders of the Securities. No representation is made as to the accuracy of such number as printed on the Securities and reliance may be placed only on the other identification numbers
printed hereon. 
 14.    Absolute Obligation. 

No reference herein to the Indenture and no provision of this Security or the Indenture shall alter or impair the obligation of the
Partnership, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Security in the manner, at the respective times, at the rate and in the coin or currency herein prescribed. 

15.    No Recourse. 

No director, officer, employee, limited partner or member, as such, of the Partnership, the General Partner or Energy Transfer Partners,
L.L.C. shall have any personal liability in respect of the obligations of the Partnership or the Guarantor under the Securities or the Indenture by reason of his, her or its status. Each Holder, by accepting the Securities, waives and releases all
such liability. The waiver and release are part of the consideration for issuance of the Securities. 

  
 A-1-7 

 16.    Governing Law. 

This Security shall be construed in accordance with and governed by the laws of the State of New York. 

17.    Guarantee. 
 The
Securities are fully and unconditionally guaranteed on an unsecured, unsubordinated basis by the Guarantor as set forth in Article X of the Base Indenture, as noted in the Notation of Guarantee affixed to this Security, and under certain
circumstances set forth in the Second Supplemental Indenture one or more Subsidiaries of the Partnership may be required to join in such Guarantee. 

18.    Reliance. 
 The
Holder, by accepting this Security, acknowledges and affirms that (i) it has purchased the Security in reliance upon the separateness of the Guarantor, the general partner of the Guarantor, the General Partner and the general partner of the
General Partner from each other and from any other Persons, and (ii) the Guarantor, the general partner of the Guarantor, the General Partner and the general partner of the General Partner have assets and liabilities that are separate from
those of each other and of any other Persons. 

  
 A-1-8 

 NOTATION OF GUARANTEE 

Each of the Subsidiary Guarantors (which term includes any successor Person under the Indenture) has fully, unconditionally and absolutely
guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, the due and punctual payment of the principal of, and premium, if any, and interest on the Debt Securities and all other amounts due and payable
under the Indenture and the Debt Securities by the Partnership. 
 The obligations of the Subsidiary Guarantors to the Holders of Debt
Securities and to the Trustee pursuant to the Guarantee and the Indenture are expressly set forth in Article X of the Base Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee. 

 

			
	 SUNOCO LOGISTICS PARTNERS

OPERATIONS L.P.

		
	By:	 	 Sunoco Logistics Partners GP LLC,
 its general
partner

		
	By:	 	 
	 Name:
 Title:
	 	 Thomas E. Long
 Chief Financial
Officer

  
 A-1-9 

 ABBREVIATIONS 

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according
to applicable laws or regulations: 
  

			
	 TEN COM — as tenants in common
	  	UNIF GIFT MIN ACT —
		  	(Cust.)                                
	 TEN ENT — as tenants by entireties
	  	Custodian for:
		  	(Minor)                                
	 JT TEN — as joint tenants with right of

survivorship and not as tenants in common
	  	Under Uniform Gifts to Minors Act of
		  	(State)                                

 Additional abbreviations may also be used though not in the above list. 

ASSIGNMENT 
 FOR VALUE RECEIVED, the
undersigned hereby sell(s), assign(s) and transfer(s) unto 
 PLEASE INSERT SOCIAL SECURITY OR OTHER 

IDENTIFYING NUMBER OF ASSIGNEE 
 Please print or type name and
address including postal zip code of assignee: 
 the within Security and all rights thereunder, hereby irrevocably constituting and appointing to transfer
said Security on the books of the Partnership, with full power of substitution in the premises. 

Dated                         
                                         
                                         
  Registered Holder 

  
 A-1-10 

 SCHEDULE OF INCREASES OR DECREASES 

IN GLOBAL SECURITY* 
 The
following increases or decreases in this Global Security have been made: 
  

									
	 Date of Exchange
	 	 Amount of Decrease in
Principal Amount of this
Global
Security
	 	 Amount of Increase in
Principal Amount of this
Global
Security
	  	 Principal Amount of this
Global Security
Following Such
Decrease
(or Increase)
	  	 Signature of Authorized
Officer of Trustee
or
Depositary

  

	*	 To be included in a Book-Entry Note. 

  
 A-1-11 

 Exhibit A-2 

FORM OF NOTE 
 [FACE OF
SECURITY] 
 [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”) (55 WATER STREET, NEW
YORK, NEW YORK 10041) TO THE PARTNERSHIP OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]* 
 [TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO HEREIN.]* 
  

			
	No. __________________	  	$ __________________

 CUSIP: 29278N AG8 

ISIN: US29278NAG88 
 ENERGY
TRANSFER OPERATING, L.P. 
 5.250% SENIOR NOTES DUE 2029 

ENERGY TRANSFER OPERATING, L.P., a Delaware limited partnership (the “Partnership,” which term includes any successor under the
Indenture hereinafter referred to), for value received, hereby promises to pay to ____________ or its registered assigns, the principal sum of ________ U.S. dollars ($___________), [or such greater or lesser principal sum as is shown on the attached
Schedule of Increases and Decreases in Global Security]*, on April 15, 2029 in such coin and currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay
interest thereon at an annual rate of 5.250% payable on April 15 and October 15 of each year, to the person in whose name the Security is registered at the close of business on the record date for such interest, which shall be the
preceding April 1 or October 1 (each, a “Regular Record Date”), respectively, payable commencing on April 15, 2019. 

Reference is made to the further provisions of this Security set forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place. 
  

 

	*	 To be included in a Book-Entry Note. 

 

  
 A-2-1 

 The statements in the legends set forth in this Security are an integral part of the terms
of this Security and by acceptance hereof the Holder of this Security agrees to be subject to, and bound by, the terms and provisions set forth in each such legend. 

This Security is issued in respect of a series of Debt Securities of an initial aggregate principal amount of $1,500,000,000 designated as the
5.250% Senior Notes due 2029 of the Partnership and is governed by the Indenture dated as of June 8, 2018 (the “Base Indenture”), duly executed and delivered by the Partnership, as issuer, certain Subsidiary Guarantors party thereto,
including Sunoco Logistics Partners Operations L.P., a Delaware limited partnership (the “Guarantor”), and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the Second Supplemental Indenture dated as
of January 15, 2019 (the “Second Supplemental Indenture”, and together with the Base Indenture, the “Indenture”), duly executed by the Partnership, the Guarantor and the Trustee. The terms of the Indenture are incorporated
herein by reference. This Security shall in all respects be entitled to the same benefits as definitive Debt Securities under the Indenture. 

If and to the extent any provision of the Indenture limits, qualifies or conflicts with any other provision of the Indenture that is required
to be included in the Indenture or is deemed applicable to the Indenture by virtue of the provisions of the Trust Indenture Act of 1939, as amended (the “TIA”), such required provision shall control. 

This Security shall not be valid or become obligatory for any purpose until the Trustee’s Certificate of Authentication hereon shall have
been manually signed by the Trustee under the Indenture. 

  
 A-2-2 

 IN WITNESS WHEREOF, the Partnership has caused this instrument to be duly executed by the
general partner of the General Partner. 
 Dated: 
  

							
		 		 	ENERGY TRANSFER OPERATING, L.P.
				
		 		 	By:	 	 Energy Transfer Partners GP, L.P.,
 its General
Partner

				
		 		 	By:	 	 Energy Transfer Partners, L.L.C.,
 its General
Partner

				
		 		 	By:	 	 
		 		 	 Name:
 Title:
	 	 Thomas E. Long
 Chief Financial
Officer

 TRUSTEE’S CERTIFICATE OF AUTHENTICATION: 

This is one of the Debt Securities of the series designated therein referred to in the within-mentioned Indenture. 

 

			
	 U.S. BANK NATIONAL ASSOCIATION,

as Trustee

		
	By:	 	 
		 	Authorized Signatory

  
 A-2-3 

 [REVERSE OF SECURITY] 

ENERGY TRANSFER OPERATING, L.P. 

5.250% SENIOR NOTES DUE 2029 

This Security is one of a duly authorized issue of debentures, notes or other evidences of indebtedness of the Partnership (the “Debt
Securities”) of the series hereinafter specified, all issued or to be issued under and pursuant to the Indenture, to which Indenture reference is hereby made for a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Partnership, the Guarantor and the Holders of the Debt Securities. The Debt Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may be subject to different sinking, purchase or analogous funds (if any) and may otherwise vary as provided in the Indenture. This Security is one of a series designated as
the 5.250% Senior Notes due 2029 of the Partnership, in an initial aggregate principal amount of $1,500,000,000 (the “Securities”). 

1.    Interest. 
 The
Partnership promises to pay interest on the principal amount of this Security at the rate of 5.250% per annum. 
 The Partnership will pay
interest semi-annually on April 15 and October 15 of each year (each such date, an “Interest Payment Date”), commencing April 15, 2019. Interest on the Securities will accrue from the most recent date to which interest has
been paid or, if no interest has been paid on the Securities, from January 15, 2019. Interest will be computed on the basis of a 360-day year consisting of twelve
30-day months. The Partnership shall pay interest (including post-petition interest in any proceeding under any applicable bankruptcy laws) on overdue installments of interest (without regard to any applicable
grace period) and on overdue principal and premium, if any, from time to time on demand at the same rate per annum, in each case to the extent lawful. 

2.    Method of Payment. 

The Partnership shall pay interest on the Securities (except Defaulted Interest) to the persons who are the registered Holders at the close of
business on the Regular Record Date immediately preceding the Interest Payment Date. Any such interest not so punctually paid or duly provided for (“Defaulted Interest”) may be paid to the persons who are registered Holders at the close of
business on a special record date for the payment of such Defaulted Interest, or in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may then be listed if such manner of payment shall
be deemed practicable by the Trustee, as more fully provided in the Indenture. The Partnership shall pay principal, premium, if any, and interest in such coin or currency of the United States of America as at the time of payment shall be legal
tender for payment of public and private debts. Payments in respect of a Global Security (including principal, premium, if any, and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Depositary.
Payments in respect of Securities in definitive form (including principal, premium, if any, and interest) will be made at the office or agency of the Partnership maintained for such purpose within The City of New York,

  
 A-2-4 

 
which initially will be at the corporate trust office of the Trustee located at 100 Wall Street, Suite 1600, New York, New York 10005, Mail Station: EX-NY-WALL, or, at the option of the Partnership, payment of interest may be made by check mailed to the Holders on the relevant record date at their addresses set forth in the register of Holders maintained
by the Registrar or at the option of the Holder, payment of interest on Securities in definitive form will be made by wire transfer of immediately available funds to any account maintained in the United States, provided such Holder has requested
such method of payment and provided timely wire transfer instructions to the Paying Agent. The Holder must surrender this Security to a Paying Agent to collect payment of principal. 

3.    Paying Agent and Registrar. 

Initially, U.S. Bank National Association will act as Paying Agent and Registrar. The Partnership may change any Paying Agent or Registrar at
any time upon notice to the Trustee and the Holders. The Partnership may act as Paying Agent. 
 4.    Indenture. 

This Security is one of a duly authorized issue of Debt Securities of the Partnership issued and to be issued in one or more series under the
Indenture. 
 Capitalized terms herein are used as defined in the Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Base Indenture, those made part of the Indenture by reference to the TIA, as in effect on the date of the Base Indenture, and those terms stated in the Second Supplemental Indenture. The Securities are subject to all such
terms, and Holders of Securities are referred to the Base Indenture, the Second Supplemental Indenture and the TIA for a statement of them. The Securities of this series are general unsecured obligations of the Partnership limited to an initial
aggregate principal amount of $1,500,000,000; provided, however, that the authorized aggregate principal amount of such series may be increased from time to time as provided in the Second Supplemental Indenture. 

5.    Redemption. 

Optional Redemption. Prior to the 2029 Notes Early Call Date, the Securities are redeemable, at the option of the Partnership, at any
time in whole, or from time to time in part, at a Redemption Price equal to the greater of: (i) 100% of the principal amount of the Securities to be redeemed; or (ii) the sum of the present values of the remaining scheduled payments of
principal and interest (at the interest rate in effect on the date of calculation of the Redemption Price) on the Securities to be redeemed that would be due after the related Redemption Date if such Securities matured on the 2029 Notes Early Call
Date but for such redemption (exclusive of interest accrued to, but excluding, the Redemption Date), discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Yield plus 40 basis points; plus, in either case of clause (i) or clause (ii), accrued and unpaid interest thereon to, but excluding, the Redemption Date. 

At any time on or after the 2029 Notes Early Call Date, the Securities are redeemable in whole or in part, at the option of the Partnership,
at a Redemption Price equal to 100% of the principal amount of the Securities to be redeemed plus accrued and unpaid interest thereon to, but excluding, the Redemption Date. 

  
 A-2-5 

 The actual Redemption Price, calculated as provided above, shall be calculated and certified
to the Trustee and the Partnership by the Independent Investment Banker. 
 Except as set forth above, the Securities will not be redeemable
prior to their Stated Maturity and will not be entitled to the benefit of any sinking fund. 
 6.    Denominations; Transfer;
Exchange. 
 The Securities are to be issued in registered form, without coupons, in denominations of $2,000 and integral multiples of
$1,000 in excess thereof. A Holder may register the transfer of, or exchange, Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. 
 7.    Person Deemed Owners. 

The registered Holder of a Security may be treated as the owner of it for all purposes. 

8.    Amendment; Supplement; Waiver. 

Subject to certain exceptions, the Indenture may be amended or supplemented, and any existing Event of Default or compliance with any
provision may be waived, with the consent of the Holders of a majority in principal amount of the then outstanding notes of the affected series. Without consent of any Holder of a Security, the parties thereto may amend or supplement the Indenture
to, among other things, cure any ambiguity or omission, to correct any defect or inconsistency, or to make any other change that does not adversely affect the rights of any Holder of a Security. Any such consent or waiver by the Holder of this
Security (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Security and any Securities which may be issued in exchange or substitution herefor, regardless of
whether any notation thereof is made upon this Security or such other Securities. 
 9.    Defaults and Remedies. 

Certain events of bankruptcy or insolvency are Events of Default that will result in the principal amount of the Securities, together with
premium, if any, and accrued and unpaid interest thereon, becoming due and payable immediately upon the occurrence of such Events of Default. If any other Event of Default with respect to the Securities occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities then outstanding may declare the principal amount of all the Securities, together with premium, if any, and accrued and unpaid interest thereon, to
be due and payable immediately in the manner and with the effect provided in the Indenture. Notwithstanding the preceding sentence, however, if at any time after such a declaration of acceleration has been made, the Holders of a majority in
principal amount of the outstanding Securities, by written notice to the Trustee, may rescind such declaration and annul its consequences if the rescission would not conflict with any judgment or decree of a court of competent jurisdiction and if
all existing Events of Default with respect to the Securities, other than the nonpayment of the principal, premium, if any, or interest which has become due solely by such declaration acceleration, shall have been cured or shall have been waived. No
such rescission shall affect any subsequent default or shall impair any right consequent thereon. Holders of Securities may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity or
security satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the Trustee in its exercise of any
trust or power. 

  
 A-2-6 

 10.    Trustee Dealings with Partnership. 

The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for
the Partnership or its Affiliates, and may otherwise deal with the Partnership or its Affiliates as if it were not the Trustee. 

11.    Authentication. 

This Security shall not be valid until the Trustee signs the certificate of authentication on the other side of this Security. 

12.    Abbreviations and Defined Terms. 

Customary abbreviations may be used in the name of a Holder of a Security or an assignee, such as: TEN COM (tenant in common), TEN ENT
(tenants by the entireties), JT TEN (joint tenants with right of survivorship and not as tenants in common), CUST (Custodian), and U/G/M/A (Uniform Gifts to Minors Act). 

13.    CUSIP Numbers. 

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Partnership has caused CUSIP
numbers to be printed on the Securities as a convenience to the Holders of the Securities. No representation is made as to the accuracy of such number as printed on the Securities and reliance may be placed only on the other identification numbers
printed hereon. 
 14.    Absolute Obligation. 

No reference herein to the Indenture and no provision of this Security or the Indenture shall alter or impair the obligation of the
Partnership, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Security in the manner, at the respective times, at the rate and in the coin or currency herein prescribed. 

15.    No Recourse. 

No director, officer, employee, limited partner or member, as such, of the Partnership, the General Partner or Energy Transfer Partners,
L.L.C. shall have any personal liability in respect of the obligations of the Partnership or the Guarantor under the Securities or the Indenture by reason of his, her or its status. Each Holder, by accepting the Securities, waives and releases all
such liability. The waiver and release are part of the consideration for issuance of the Securities. 

  
 A-2-7 

 16.    Governing Law. 

This Security shall be construed in accordance with and governed by the laws of the State of New York. 

17.    Guarantee. 
 The
Securities are fully and unconditionally guaranteed on an unsecured, unsubordinated basis by the Guarantor as set forth in Article X of the Base Indenture, as noted in the Notation of Guarantee affixed to this Security, and under certain
circumstances set forth in the Second Supplemental Indenture one or more Subsidiaries of the Partnership may be required to join in such Guarantee. 

18.    Reliance. 
 The
Holder, by accepting this Security, acknowledges and affirms that (i) it has purchased the Security in reliance upon the separateness of the Guarantor, the general partner of the Guarantor, the General Partner and the general partner of the
General Partner from each other and from any other Persons, and (ii) the Guarantor, the general partner of the Guarantor, the General Partner and the general partner of the General Partner have assets and liabilities that are separate from
those of each other and of any other Persons. 

  
 A-2-8 

 NOTATION OF GUARANTEE 

Each of the Subsidiary Guarantors (which term includes any successor Person under the Indenture) has fully, unconditionally and absolutely
guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, the due and punctual payment of the principal of, and premium, if any, and interest on the Debt Securities and all other amounts due and payable
under the Indenture and the Debt Securities by the Partnership. 
 The obligations of the Subsidiary Guarantors to the Holders of Debt
Securities and to the Trustee pursuant to the Guarantee and the Indenture are expressly set forth in Article X of the Base Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee. 

 

			
	 SUNOCO LOGISTICS PARTNERS

OPERATIONS L.P.

		
	By:	 	 Sunoco Logistics Partners GP LLC,
 its general
partner

		
	By:	 	 
	 Name:
 Title:
	 	 Thomas E. Long
 Chief Financial
Officer

  
 A-2-9 

 ABBREVIATIONS 

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according
to applicable laws or regulations: 
  

			
	 TEN COM — as tenants in common
	  	UNIF GIFT MIN ACT —
		  	(Cust.)                                
	 TEN ENT — as tenants by entireties
	  	Custodian for:
		  	(Minor)                                
	 JT TEN — as joint tenants with right of

survivorship and not as tenants in common
	  	Under Uniform Gifts to Minors Act of
		  	(State)                                

 Additional abbreviations may also be used though not in the above list. 

ASSIGNMENT 
 FOR VALUE RECEIVED, the
undersigned hereby sell(s), assign(s) and transfer(s) unto 
 PLEASE INSERT SOCIAL SECURITY OR OTHER 

IDENTIFYING NUMBER OF ASSIGNEE 
 Please print or type name and
address including postal zip code of assignee: 
 the within Security and all rights thereunder, hereby irrevocably constituting and appointing to transfer
said Security on the books of the Partnership, with full power of substitution in the premises. 

Dated                         
                                         
                                         
  Registered Holder 

  
 A-2-10 

 SCHEDULE OF INCREASES OR DECREASES 

IN GLOBAL SECURITY* 
 The
following increases or decreases in this Global Security have been made: 
  

									
	 Date of Exchange
	 	 Amount of Decrease in
Principal Amount of this
Global
Security
	 	 Amount of Increase in
Principal Amount of this
Global
Security
	  	 Principal Amount of this
Global Security
Following Such
Decrease
(or Increase)
	  	 Signature of Authorized
Officer of Trustee
or
Depositary

  

	*	 To be included in a Book-Entry Note. 

  
 A-2-11 

 Exhibit A-3 

FORM OF NOTE 
 [FACE OF
SECURITY] 
 [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”) (55 WATER STREET, NEW
YORK, NEW YORK 10041) TO THE PARTNERSHIP OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]* 
 [TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO HEREIN.]* 
  

			
	No. __________________	  	$ __________________

 CUSIP: 29279F AA7 

ISIN: US29279FAA75 
 ENERGY
TRANSFER OPERATING, L.P. 
 6.250% SENIOR NOTES DUE 2049 

ENERGY TRANSFER OPERATING, L.P., a Delaware limited partnership (the “Partnership,” which term includes any successor under the
Indenture hereinafter referred to), for value received, hereby promises to pay to ____________ or its registered assigns, the principal sum of ________ U.S. dollars ($___________), [or such greater or lesser principal sum as is shown on the attached
Schedule of Increases and Decreases in Global Security]*, on April 15, 2049 in such coin and currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay
interest thereon at an annual rate of 6.250% payable on April 15 and October 15 of each year, to the person in whose name the Security is registered at the close of business on the record date for such interest, which shall be the
preceding April 1 or October 1 (each, a “Regular Record Date”), respectively, payable commencing on April 15, 2019. 

Reference is made to the further provisions of this Security set forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place. 
  

 

	*	 To be included in a Book-Entry Note. 

 

  
 A-3-2 

 The statements in the legends set forth in this Security are an integral part of the terms
of this Security and by acceptance hereof the Holder of this Security agrees to be subject to, and bound by, the terms and provisions set forth in each such legend. 

This Security is issued in respect of a series of Debt Securities of an initial aggregate principal amount of $1,750,000,000 designated as the
6.250% Senior Notes due 2049 of the Partnership and is governed by the Indenture dated as of June 8, 2018 (the “Base Indenture”), duly executed and delivered by the Partnership, as issuer, certain Subsidiary Guarantors party thereto,
including Sunoco Logistics Partners Operations L.P., a Delaware limited partnership (the “Guarantor”), and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the Second Supplemental Indenture dated as
of January 15, 2019 (the “Second Supplemental Indenture”, and together with the Base Indenture, the “Indenture”), duly executed by the Partnership, the Guarantor and the Trustee. The terms of the Indenture are incorporated
herein by reference. This Security shall in all respects be entitled to the same benefits as definitive Debt Securities under the Indenture. 

If and to the extent any provision of the Indenture limits, qualifies or conflicts with any other provision of the Indenture that is required
to be included in the Indenture or is deemed applicable to the Indenture by virtue of the provisions of the Trust Indenture Act of 1939, as amended (the “TIA”), such required provision shall control. 

This Security shall not be valid or become obligatory for any purpose until the Trustee’s Certificate of Authentication hereon shall have
been manually signed by the Trustee under the Indenture. 

  
 A-3-3 

 IN WITNESS WHEREOF, the Partnership has caused this instrument to be duly executed by the
general partner of the General Partner. 
 Dated: 
  

							
		 		 	ENERGY TRANSFER OPERATING, L.P.
				
		 		 	By:	 	 Energy Transfer Partners GP, L.P.,
 its General
Partner

				
		 		 	By:	 	 Energy Transfer Partners, L.L.C.,
 its General
Partner

				
		 		 	By:	 	 
		 		 	 Name:
 Title:
	 	 Thomas E. Long
 Chief Financial
Officer

 TRUSTEE’S CERTIFICATE OF AUTHENTICATION: 

This is one of the Debt Securities of the series designated therein referred to in the within-mentioned Indenture. 

 

			
	 U.S. BANK NATIONAL ASSOCIATION,

as Trustee

		
	By:	 	 
		 	Authorized Signatory

  
 A-3-4 

 [REVERSE OF SECURITY] 

ENERGY TRANSFER OPERATING, L.P. 

6.250% SENIOR NOTES DUE 2049 

This Security is one of a duly authorized issue of debentures, notes or other evidences of indebtedness of the Partnership (the “Debt
Securities”) of the series hereinafter specified, all issued or to be issued under and pursuant to the Indenture, to which Indenture reference is hereby made for a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Partnership, the Guarantor and the Holders of the Debt Securities. The Debt Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may be subject to different sinking, purchase or analogous funds (if any) and may otherwise vary as provided in the Indenture. This Security is one of a series designated as
the 6.250% Senior Notes due 2049 of the Partnership, in an initial aggregate principal amount of $1,750,000,000 (the “Securities”). 

1.    Interest. 
 The
Partnership promises to pay interest on the principal amount of this Security at the rate of 6.250% per annum. 
 The Partnership will pay
interest semi-annually on April 15 and October 15 of each year (each such date, an “Interest Payment Date”), commencing April 15, 2019. Interest on the Securities will accrue from the most recent date to which interest has
been paid or, if no interest has been paid on the Securities, from January 15, 2019. Interest will be computed on the basis of a 360-day year consisting of twelve
30-day months. The Partnership shall pay interest (including post-petition interest in any proceeding under any applicable bankruptcy laws) on overdue installments of interest (without regard to any applicable
grace period) and on overdue principal and premium, if any, from time to time on demand at the same rate per annum, in each case to the extent lawful. 

2.    Method of Payment. 

The Partnership shall pay interest on the Securities (except Defaulted Interest) to the persons who are the registered Holders at the close of
business on the Regular Record Date immediately preceding the Interest Payment Date. Any such interest not so punctually paid or duly provided for (“Defaulted Interest”) may be paid to the persons who are registered Holders at the close of
business on a special record date for the payment of such Defaulted Interest, or in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may then be listed if such manner of payment shall
be deemed practicable by the Trustee, as more fully provided in the Indenture. The Partnership shall pay principal, premium, if any, and interest in such coin or currency of the United States of America as at the time of payment shall be legal
tender for payment of public and private debts. Payments in respect of a Global Security (including principal, premium, if any, and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Depositary.
Payments in respect of Securities in definitive form (including principal, premium, if any, and interest) will be made at the office or agency of the Partnership maintained for such purpose within The City of New York,

  
 A-3-5 

 
which initially will be at the corporate trust office of the Trustee located at 100 Wall Street, Suite 1600, New York, New York 10005, Mail Station: EX-NY-WALL, or, at the option of the Partnership, payment of interest may be made by check mailed to the Holders on the relevant record date at their addresses set forth in the register of Holders maintained
by the Registrar or at the option of the Holder, payment of interest on Securities in definitive form will be made by wire transfer of immediately available funds to any account maintained in the United States, provided such Holder has requested
such method of payment and provided timely wire transfer instructions to the Paying Agent. The Holder must surrender this Security to a Paying Agent to collect payment of principal. 

3.    Paying Agent and Registrar. 

Initially, U.S. Bank National Association will act as Paying Agent and Registrar. The Partnership may change any Paying Agent or Registrar at
any time upon notice to the Trustee and the Holders. The Partnership may act as Paying Agent. 
 4.    Indenture. 

This Security is one of a duly authorized issue of Debt Securities of the Partnership issued and to be issued in one or more series under the
Indenture. 
 Capitalized terms herein are used as defined in the Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Base Indenture, those made part of the Indenture by reference to the TIA, as in effect on the date of the Base Indenture, and those terms stated in the Second Supplemental Indenture. The Securities are subject to all such
terms, and Holders of Securities are referred to the Base Indenture, the Second Supplemental Indenture and the TIA for a statement of them. The Securities of this series are general unsecured obligations of the Partnership limited to an initial
aggregate principal amount of $1,750,000,000; provided, however, that the authorized aggregate principal amount of such series may be increased from time to time as provided in the Second Supplemental Indenture. 

5.    Redemption. 

Optional Redemption. Prior to the 2049 Notes Early Call Date, the Securities are redeemable, at the option of the Partnership, at any
time in whole, or from time to time in part, at a Redemption Price equal to the greater of: (i) 100% of the principal amount of the Securities to be redeemed; or (ii) the sum of the present values of the remaining scheduled payments of
principal and interest (at the interest rate in effect on the date of calculation of the Redemption Price) on the Securities to be redeemed that would be due after the related Redemption Date if such Securities matured on the 2049 Notes Early Call
Date but for such redemption (exclusive of interest accrued to, but excluding, the Redemption Date), discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Yield plus 50 basis points; plus, in either case of clause (i) or clause (ii), accrued and unpaid interest thereon to, but excluding, the Redemption Date. 

At any time on or after the 2049 Notes Early Call Date, the Securities are redeemable in whole or in part, at the option of the Partnership,
at a Redemption Price equal to 100% of the principal amount of the Securities to be redeemed plus accrued and unpaid interest thereon to, but excluding, the Redemption Date. 

  
 A-3-6 

 The actual Redemption Price, calculated as provided above, shall be calculated and certified
to the Trustee and the Partnership by the Independent Investment Banker. 
 Except as set forth above, the Securities will not be redeemable
prior to their Stated Maturity and will not be entitled to the benefit of any sinking fund. 
 6.    Denominations; Transfer;
Exchange. 
 The Securities are to be issued in registered form, without coupons, in denominations of $2,000 and integral multiples of
$1,000 in excess thereof. A Holder may register the transfer of, or exchange, Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. 
 7.    Person Deemed Owners. 

The registered Holder of a Security may be treated as the owner of it for all purposes. 

8.    Amendment; Supplement; Waiver. 

Subject to certain exceptions, the Indenture may be amended or supplemented, and any existing Event of Default or compliance with any
provision may be waived, with the consent of the Holders of a majority in principal amount of the then outstanding notes of the affected series. Without consent of any Holder of a Security, the parties thereto may amend or supplement the Indenture
to, among other things, cure any ambiguity or omission, to correct any defect or inconsistency, or to make any other change that does not adversely affect the rights of any Holder of a Security. Any such consent or waiver by the Holder of this
Security (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Security and any Securities which may be issued in exchange or substitution herefor, regardless of
whether any notation thereof is made upon this Security or such other Securities. 
 9.    Defaults and Remedies. 

Certain events of bankruptcy or insolvency are Events of Default that will result in the principal amount of the Securities, together with
premium, if any, and accrued and unpaid interest thereon, becoming due and payable immediately upon the occurrence of such Events of Default. If any other Event of Default with respect to the Securities occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities then outstanding may declare the principal amount of all the Securities, together with premium, if any, and accrued and unpaid interest thereon, to
be due and payable immediately in the manner and with the effect provided in the Indenture. Notwithstanding the preceding sentence, however, if at any time after such a declaration of acceleration has been made, the Holders of a majority in
principal amount of the outstanding Securities, by written notice to the Trustee, may rescind such declaration and annul its consequences if the rescission would not conflict with any judgment or decree of a court of competent jurisdiction and if
all existing Events of Default with respect to the Securities, other than the nonpayment of the principal, premium, if any, or interest which has become due solely by such declaration acceleration, shall have been cured or shall have been waived. No
such rescission shall affect any subsequent default or shall impair any right consequent thereon. Holders of Securities may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity or
security satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the Trustee in its exercise of any
trust or power. 

  
 A-3-7 

 10.    Trustee Dealings with Partnership. 

The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for
the Partnership or its Affiliates, and may otherwise deal with the Partnership or its Affiliates as if it were not the Trustee. 

11.    Authentication. 

This Security shall not be valid until the Trustee signs the certificate of authentication on the other side of this Security. 

12.    Abbreviations and Defined Terms. 

Customary abbreviations may be used in the name of a Holder of a Security or an assignee, such as: TEN COM (tenant in common), TEN ENT
(tenants by the entireties), JT TEN (joint tenants with right of survivorship and not as tenants in common), CUST (Custodian), and U/G/M/A (Uniform Gifts to Minors Act). 

13.    CUSIP Numbers. 

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Partnership has caused CUSIP
numbers to be printed on the Securities as a convenience to the Holders of the Securities. No representation is made as to the accuracy of such number as printed on the Securities and reliance may be placed only on the other identification numbers
printed hereon. 
 14.    Absolute Obligation. 

No reference herein to the Indenture and no provision of this Security or the Indenture shall alter or impair the obligation of the
Partnership, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Security in the manner, at the respective times, at the rate and in the coin or currency herein prescribed. 

15.    No Recourse. 

No director, officer, employee, limited partner or member, as such, of the Partnership, the General Partner or Energy Transfer Partners,
L.L.C. shall have any personal liability in respect of the obligations of the Partnership or the Guarantor under the Securities or the Indenture by reason of his, her or its status. Each Holder, by accepting the Securities, waives and releases all
such liability. The waiver and release are part of the consideration for issuance of the Securities. 

  
 A-3-8 

 16.    Governing Law. 

This Security shall be construed in accordance with and governed by the laws of the State of New York. 

17.    Guarantee. 
 The
Securities are fully and unconditionally guaranteed on an unsecured, unsubordinated basis by the Guarantor as set forth in Article X of the Base Indenture, as noted in the Notation of Guarantee affixed to this Security, and under certain
circumstances set forth in the Second Supplemental Indenture one or more Subsidiaries of the Partnership may be required to join in such Guarantee. 

18.    Reliance. 
 The
Holder, by accepting this Security, acknowledges and affirms that (i) it has purchased the Security in reliance upon the separateness of the Guarantor, the general partner of the Guarantor, the General Partner and the general partner of the
General Partner from each other and from any other Persons, and (ii) the Guarantor, the general partner of the Guarantor, the General Partner and the general partner of the General Partner have assets and liabilities that are separate from
those of each other and of any other Persons. 

  
 A-3-9 

 NOTATION OF GUARANTEE 

Each of the Subsidiary Guarantors (which term includes any successor Person under the Indenture) has fully, unconditionally and absolutely
guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, the due and punctual payment of the principal of, and premium, if any, and interest on the Debt Securities and all other amounts due and payable
under the Indenture and the Debt Securities by the Partnership. 
 The obligations of the Subsidiary Guarantors to the Holders of Debt
Securities and to the Trustee pursuant to the Guarantee and the Indenture are expressly set forth in Article X of the Base Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee. 

 

			
	 SUNOCO LOGISTICS PARTNERS

OPERATIONS L.P.

		
	By:	 	 Sunoco Logistics Partners GP LLC,
 its general
partner

		
	By:	 	 
	 Name:
 Title:
	 	 Thomas E. Long
 Chief Financial
Officer

  
 A-3-10 

 ABBREVIATIONS 

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according
to applicable laws or regulations: 
  

			
	 TEN COM — as tenants in common
	  	UNIF GIFT MIN ACT —
		  	(Cust.)                                
	 TEN ENT — as tenants by entireties
	  	Custodian for:
		  	(Minor)                                
	 JT TEN — as joint tenants with right of

survivorship and not as tenants in common
	  	Under Uniform Gifts to Minors Act of
		  	(State)                                

 Additional abbreviations may also be used though not in the above list. 

ASSIGNMENT 
 FOR VALUE RECEIVED, the
undersigned hereby sell(s), assign(s) and transfer(s) unto 
 PLEASE INSERT SOCIAL SECURITY OR OTHER 

IDENTIFYING NUMBER OF ASSIGNEE 
 Please print or type name and
address including postal zip code of assignee: 
 the within Security and all rights thereunder, hereby irrevocably constituting and appointing to transfer
said Security on the books of the Partnership, with full power of substitution in the premises. 

Dated                         
                                         
                                         
  Registered Holder 

  
 A-3-11 

 SCHEDULE OF INCREASES OR DECREASES 

IN GLOBAL SECURITY* 
 The
following increases or decreases in this Global Security have been made: 
  

									
	 Date of Exchange
	 	 Amount of Decrease in
Principal Amount of this
Global
Security
	 	 Amount of Increase in
Principal Amount of this
Global
Security
	  	 Principal Amount of this
Global Security
Following Such
Decrease
(or Increase)
	  	 Signature of Authorized
Officer of Trustee
or
Depositary

  

	*	 To be included in a Book-Entry Note. 

  
 A-3-12Form of Convertible Note  (M0890025.DOCX;7)

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

Original Issue Date: ______________, 2018

 

$______________

 

NEWBRIDGE GLOBAL VENTURES, INC.

10% CONVERTIBLE PROMISSORY NOTE

DUE _______________, 2019

 

THIS 10% CONVERTIBLE PROMISSORY NOTE is one of a series of duly authorized and validly issued 10% Convertible Promissory Notes issued by NewBridge Global Ventures, Inc., a Delaware corporation, (the “Company”), having its principal place of business at 2545 Santa Clara Avenue, Alameda, CA 94501 (this Note, the “Note” and, collectively with the other Notes of such series, the “Notes”). 

 

FOR VALUE RECEIVED, the Company promises to pay to _____________ or his registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder, the principal sum of $__________ on [_____________], 2019 (the “Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions hereof.  This Note is subject to the following additional provisions:

 

Section 1.Definitions.  For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings: 

 

“Bankruptcy Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, 

arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

 

“Beneficial Ownership Limitation” shall have the meaning set forth in Section 4(e).

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

“Buy-In” shall have the meaning set forth in Section 4(d)(v). 

 

“Change of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50% of the voting securities of the Company (other than by means of conversion or exercise of the Notes and the Securities issued together with the Notes), (b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than 66% of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a three year period of more than one-half of the members of the Board of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the execution by the Company of an agreement to which the Company  is a 

party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.

 

“Conversion” shall have the meaning ascribed to such term in Section 4. 

 

“Conversion Date” shall have the meaning set forth in Section 4(a).

 

“Conversion Price” shall have the meaning set forth in Section 4(c).

 

“Conversion Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.

 

“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms hereof.

 

“Effective Date” means the date when a Registration Statement has been declared effective by the SEC.

  

“Event of Default” shall have the meaning set forth in Section 6(a).

 

“Fundamental Transaction” means and one of the following:  (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions (excluding specifically the license or other disposition of the Company’s intellectual property in the ordinary course of business), (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination).

  

“Late Fees” shall have the meaning set forth in Section 2(d).

“Mandatory Default Amount” means the sum of (a) 120% of the outstanding principal amount of this Note, plus 100% of accrued and unpaid interest hereon. 

 

“New York Courts” shall have the meaning set forth in Section 7(d).

 

“Note Register” shall have the meaning set forth in Section 2(b).

 

“Notice of Conversion” shall have the meaning set forth in Section 4(a). 

 

“Original Issue Date” means the date of the first issuance of the Note, regardless of any transfers of the Note and regardless of the number of instruments which may be issued to evidence such Note.

 

“Purchase Agreement” means the Note Purchase Agreement, dated as of October _____, 2018 among the Company and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.

 

“Registration Statement” means a registration statement covering the resale of all the Conversion Shares issuable upon conversion of the outstanding Notes.

  

“Required Holders” means Holders of a majority in principal amount of the then outstanding Notes.

 

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

 

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

 

“Share Delivery Date” shall have the meaning set forth in Section 4(d)(ii). 

 

“Trading Day” means a day on which the principal Trading Market is open for trading.

 

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Markets Group, Inc. (or any successors to any of the foregoing).

 

Section 2.Interest; Fees. 

 

a)Payment of Interest in Cash. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note at the rate of 10% per annum, which interest shall start accruing on the date of closing with respect to the particular Note, subject to adjustment as set forth herein, payable on the  

Maturity Date (if the Maturity Date is not a Business Day, then the payment shall be due on the next succeeding Business Day), in cash.   

  

b)Interest Calculations. Interest on the outstanding principal amount shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on the Original Issue Date until payment or conversion in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made.  Interest hereunder will be paid to the Person in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note (the “Note Register”).  

 

c)Late Fee.  All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to 14% per annum (the “Late Fee”) which shall accrue daily from the date such interest is due hereunder through and including the date of actual payment in full. 

 

d)Prepayment.  The Company may prepay any portion of the principal amount of this Note without the prior written consent of the Holder. 

 

Section 3.Registration of Transfers and Exchanges.  

  

a)Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same.  No service charge will be payable for such registration of transfer or exchange. 

  

b)Investment Representations. This Note has been issued subject to certain investment representations of the original Holder and may be transferred or exchanged only in compliance with applicable federal and state securities laws and regulations.   

 

c)Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary. 

 

Section 4.Conversion.   

 

a)Voluntary Conversion. At any time after the Original Issue Date until this Note is no longer outstanding, this Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion limitations set forth in Section 4(e)).  The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein the  

principal amount of this Note to be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”).  The Conversion Date shall be no earlier than the date that such Notice of Conversion is deemed delivered hereunder.  If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder.  To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion.  The Company may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion.  Following delivery of the Notice of Conversion to the Company, the Company shall promptly update the Conversion Schedule (showing the principal amount(s) converted and the date of such conversion(s)) and deliver the same to the Holder.  In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

 

b)Automatic Conversion.  Subject to the provisions of Section 4(e)(i) hereof, the outstanding principal amount of this Note, plus accrued but unpaid interest, and any other amounts owing to the Holder under this note, shall automatically be converted into Conversion Shares at the Conversion Price if, for a period of sixty (60) consecutive Trading Days, the Common Stock is equal to or greater than a price per share of $2.50, and either (i) the Conversion Shares have been registered under the Securities Act, or (ii) six (6) months from Original Issue Date have passed  (the “Automatic Conversion Date”).   

 

c)Conversion Price.  The conversion price in effect on any Conversion Date shall be equal to $1.00, subject to adjustment herein (the “Conversion Price”). 

 

d)Mechanics of Conversion. 

  

i.Conversion Shares Issuable Upon Conversion.  The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted plus accrued but unpaid interest, and other amounts owing to the Holder under this Note as of the Conversion Date, by (y) the Conversion Price. 

 

ii.Delivery of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder a certificate or certificates representing the Conversion Shares which, on or after the earlier of (i)  

the one-year anniversary of the Original Issue Date (if the Holder is not an Affiliate of the Company and has not been an Affiliate during the preceding three (3) months) or (ii) the Effective Date, shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement) representing the number of Conversion Shares being acquired upon the conversion of this Note. On or after the earlier of (i) the one year anniversary of the Original Issue Date or (ii) the Effective Date, the Company shall use its best efforts to deliver any certificate or certificates required to be delivered by the Company under this Section 4(d) electronically through the Depository Trust Company or another established clearing corporation performing similar functions.  

  

iii.Failure to Deliver Certificates.  If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice.  

  

iv.Obligation Absolute.  The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder.  In the event the Holder of this Note shall elect to convert any or all of the outstanding principal amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment.  In the absence of such injunction, the Company shall issue Conversion Shares or,  

if applicable, cash, upon a properly noticed conversion.  The Holder shall have the right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof for the Company’s failure to deliver Conversion Shares within the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.  The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

 

v.No Additional Indebtedness. So long as this Note is outstanding, the Company shall not, and the Company shall not permit any of its subsidiaries to, directly or indirectly, incur or guarantee, assume or suffer to exist, any indebtedness that would rank senior or pari passu to the Note without the prior written consent of the Required Holders, which consent shall not be unreasonably withheld. 

  

vi.Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Note.  The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable and, if the Registration Statement is then effective under the Securities Act, shall be registered for public resale in accordance with the rules and regulations of the SEC. 

 

vii.Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note.  As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share. 

 

viii.Transfer Taxes.  The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the Person  

or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

 

e)Limitations on Conversion.   

  

i.Beneficial Ownership Limitation.  The Company shall not effect any conversion of this Note, and a Holder shall not have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together with the Holder or any of the Holder’s or such Persons’ Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Notes) beneficially owned by the Holder or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 4(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  To the extent that the limitation contained in this Section 4(e) applies, the determination of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates and any Persons deemed to act as a group together with the Holder and any of the Holder’s or such Person’s Affiliates) and of which principal amount of this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Note may be converted (in relation to other securities owned by the Holder together with any Affiliates) and which principal amount of this Note is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination.  In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  For purposes of this Section 4(e), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent periodic or annual report filed with the  

Commission, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder. The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 4(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Note held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(e) shall continue to apply.  Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Note.

 

Section 5.Certain Adjustments. 

  

a)Stock Dividends and Stock Splits.  If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, or payment of interest on, the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event.  Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive  

such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

  

b)Calculations.  All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.  For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding. 

 

c)Notice to the Holder.  

  

i.Adjustment to Conversion Price.  Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. 

 

ii.Notice to Allow Conversion by Holder or Prepayment by the Company.  If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any Fundamental Transaction or a Change of Control Transaction or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered to the Holder at its last address as it shall appear upon the Note Register, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such Fundamental Transaction or Change of Control Transaction is expected to become effective or close, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.  To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.  Subject to the terms of this Note, the Holder shall remain entitled to convert this Note during the 20-day period commencing on the date of such notice except as may otherwise be expressly set forth herein.  In the event that the Holder does not elect to convert this Note into Common Stock prior to the effective date, the Company may, at its  

sole election elect to prepay this Note in whole or in part in accordance with Section 2(d), provided, however, to the extent such action in this Section 5(c)(ii) constitutes an Event of Default, any such repayment of the Note will be governed in accordance with Section 6(b) hereunder.

 

Section 6.Events of Default.   

 

a)“Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body) and except as shall have been effected with the consent of the Holder: 

 

i.any default in the payment of (A) the principal amount of any Note or (B) interest and other amounts owing to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise) which default is not cured within 10 calendar days; 

  

ii.the Company shall fail to observe or perform any other covenant or agreement contained in the Notes (other than a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (xi) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) five (5) Trading Days after notice of such failure sent by the Holder or by any other Holder to the Company and (B) 10 Trading Days after the Company has become or should have become aware of such failure; 

 

iii.a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company or any Subsidiary is obligated (and not covered by clause (vi) below); 

 

iv.any representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made; 

 

v.the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X)  shall be subject to a Bankruptcy Event; 

  

vi.the Company shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring  

agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $250,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming (subject to any applicable cure period) or being declared due and payable prior to the date on which it would otherwise become due and payable; 

 

vii.the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume listing or quotation for trading thereon within five Trading Days; 

 

viii.on or after the 180th calendar day after the Closing Date, the Company does not meet the current public information requirements under Rule 144 and there is no effective Registration Statement in respect of the Conversion Shares;  

 

ix.the Company shall fail for any reason to deliver certificates to a Holder prior to the fifth Trading Day after a Conversion Date pursuant to Section 4(d) or any Forced Conversion Date pursuant to Section 6(d) or the Company shall provide at any time notice to the Holder, including by way of public announcement, of the Company’s intention to not honor requests for conversions of any Notes in accordance with the terms hereof; 

 

x.the Company shall materially breach any Transaction Document; or 

 

xi.any monetary judgment, writ or similar final process shall be entered or filed against the Company for more than $250,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days. 

 

b)Remedies Upon Event of Default. If an Event of Default occurs pursuant to Section 6(a)(i), the outstanding principal amount of this Note, plus accrued but unpaid interest, and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election and upon notice thereof to the Company, immediately due and payable in cash at the Mandatory Default Amount.  If an Event of Default occurs pursuant to Sections 6(a)(ii) - 6(a)(xii), the outstanding principal amount of this Note, plus accrued but unpaid interest, and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election and upon notice thereof to the Company, immediately due and payable in cash.  Commencing five (5) days after the occurrence of any Event of Default that results in the eventual acceleration of this Note, the interest rate on this Note shall accrue at an interest rate equal to 14% per annum.   Upon the payment in full of this Note pursuant to this Section 6(b), the Holder shall promptly surrender this Note to or as directed by the Company.  In connection with such acceleration described herein, the Holder need not provide, and the Company hereby  

waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law.  Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 6(b).  No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

Section 7.Miscellaneous.   

  

a)Notices.  Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile number or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 9(a).  Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of the Holder appearing on the books of the Company, or if no such facsimile number or address appears on the books of the Company, at the principal place of business of such Holder, as set forth in the Purchase Agreement.  Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any date, (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, (iii) the second Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given. 

  

b)Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed.  This Note is a direct debt obligation of the Company.     

  

c)Lost or Mutilated Note.  If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company. 

d)Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof.  Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by the Note (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”).  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of the Note), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding. 

  

e)Amendments, Waivers. No provision of the Notes may be waived, modified, supplemented or amended except in a written instrument signed by the Company and Required Holders, which upon execution of such written instrument shall be effective as to all Notes then outstanding.  Any waiver by the Company or the Required Holders of a breach of any provision of the Notes shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of the Notes.  The failure of the Company or the Required Holders to insist upon strict adherence to any term of the Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of the Notes on any other occasion.  Any waiver by the Company or the Required Holders must be in writing.   

  

f)Severability.  If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.  If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable  

rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

  

g)Next Business Day.  Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day. 

 

h)Headings.  The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof. 

 

 

 

*********************

 

(Signature Page Follows)

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

 

 

	NEWBRIDGE GLOBAL VENTURES, INC.

 

 

	By: 

     

Name:  Robert Bench

     

Title:  Chief Financial Officer

 

Email for delivery of Notices: bob@newbridgegv.com

	 

	 

ANNEX A 

 

NOTICE OF CONVERSION 

 

To be delivered to:

 

NewBridge Global Ventures, Inc.

c/o Robert Bench

2545 Santa Clara Avenue

Alameda, CA 94501

Attn:  Chief Financial Officer

 

The undersigned hereby elects to convert principal under the 10% Convertible Promissory Note due _____________, 201_ of NewBridge Global Ventures, Inc., a Delaware corporation (the “Company”), into shares of common stock (the “Common Stock”), of the Company according to the conditions hereof, as of the date written below.  If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith.  No fee will be charged to the holder for any conversion, except for such transfer taxes, if any. 

 

By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the Exchange Act. 

 

The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock.   

 

Conversion calculations:

Date to Effect Conversion:

 

Principal Amount of Note to be Converted:

 

 

Signature:

 

Name:

 

Address for Delivery of Common Stock Certificates:

 

Or

 

DWAC Instructions:

 

Broker No: ____________ 

 

Account No: ___________ 

 

Schedule 1 

 

CONVERSION SCHEDULE 

 

The 10% Convertible Promissory Notes due on ______________, 201_ in the aggregate principal amount of $____________ are issued by NewBridge Global Ventures, Inc., a Delaware corporation.  This Conversion Schedule reflects conversions made under Section 4 of the above referenced Note.

 

Dated:  

 

 

	 

Date of Conversion

(or for first entry, Original Issue Date)

	 

Amount of Conversion

	 

Aggregate Principal Amount Remaining Subsequent to Conversion

(or original Principal Amount)

	 

Company Attest

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