Document:

Exhibit

Exhibit 10.1

CONFIDENTIAL TREATMENT REQUESTED

CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN  FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

LICENSE AGREEMENT

between
SANOFI

and

OPIANT PHARMACEUTICALS, INC.

Dated as of December 21, 2018

* Certain confidential information contained in this document, marked [***], is filed separately with the Securities and Exchange Commission.

Exhibit 10.1

TABLE OF CONTENTS
Page
		
	Article 1 Definitions
	1

		
	Article 2 Grant of Rights
	13

		
	2.1
	Grants to Opiant                                13

		
	2.2
	Retention of Rights                                13

		
	2.3
	Sublicenses                                    13

		
	2.4
	Use of the Sanofi Corporate Names                        14

		
	2.5
	No Implied Rights                                14

		
	2.6
	Exclusivity                                    14

		
	2.7
	Transfer of Licensed Know-How and Regulatory Documentation; 

		
	Transition Plan
	15

		
	2.8
	Supply of Licensed Compound                        16

		
	2.9
	Subcontracting                                16

		
	2.10
	Expansion of the Field                            16

		
	Article 3 Development and Regulatory
	16

		
	3.1
	Development                                    16

		
	3.2
	Regulatory Matters                                17

		
	3.3
	Reports                                    17

		
	3.4
	Records                                    18

		
	3.5
	Compliance                                    18

		
	Article 4 Commercialization
	18

		
	4.1
	In General                                    18

		
	4.2
	Commercialization Report                            18

		
	4.3
	Diligence                                    18

		
	4.4
	Compliance with Applicable Law                        18

		
	4.5
	Sales and Distribution                                18

		
	4.6
	Product Trademarks                                19

		
	4.7
	Markings                                    19

		
	Article 5 Manufacture and Supply
	19

		
	5.1
	In General                                    19

		
	5.2
	Sanofi Manufacturing Option                            19

		
	5.3
	Manufacturing by Third Parties                        20

		
	Article 6 Payments
	20

		
	6.1
	Upfront Payment                                20

		
	6.2
	Milestones.                                    20

		
	6.3
	Royalties                                    22

		
	6.4
	Payment Dates and Reports                            23

i

		
	6.5
	Mode of Payment; Currency Conversion.                    23

		
	6.6
	Taxes                                        24

		
	6.7
	Interest on Late Payments                            24

		
	6.8
	Financial Records                                24

		
	6.9
	Audits                                        24

		
	6.10
	Audit Dispute                                    25

		
	6.11
	Confidentiality                                25

		
	Article 7 Intellectual Property
	25

		
	7.1
	Ownership of Arising Information and Inventions                25

		
	7.2
	Prosecution and Maintenance of Patents                    26

		
	7.3
	Enforcement of Patents                            27

		
	7.4
	Infringement Claims by Third Parties                        28

		
	7.5
	Invalidity or Unenforceability Defenses or Actions                29

		
	7.6
	Third Party Licenses                                30

		
	7.7
	Product Trademarks                                30

		
	Article 8 Pharmacovigilance and Safety
	31

		
	8.1
	Global Safety Database                            31

		
	Article 9 Confidentiality and Non-Disclosure
	31

		
	9.1
	Confidentiality Obligations                            31

		
	9.2
	Permitted Disclosures                                32

		
	9.3
	Use of Name                                    33

		
	9.4
	Press Releases                                    33

		
	9.5
	Publications                                    33

		
	9.6
	Destruction of Confidential Information                    34

		
	Article 10 Representations and Warranties
	34

		
	10.1
	Mutual Representations and Warranties                    34

		
	10.2
	Representations, Warranties and Covenants of Opiant            35

		
	10.3
	Representations, Warranties and Covenants of Sanofi            35

		
	10.4
	DISCLAIMER OF WARRANTY                        35

		
	10.5
	ADDITIONAL WAIVER                            36

		
	Article 11 Indemnity
	36

		
	11.1
	Indemnification of Sanofi                            36

		
	11.2
	Indemnification of Opiant                            36

		
	11.3
	Notice of Claim                                36

		
	11.4
	Control of Defense                                37

		
	11.5
	Insurance                                    39

		
	Article 12 Term and Termination
	39

		
	12.1
	Term                                        39

		
	12.2
	Termination of this Agreement for Material Breach                39

ii

		
	12.3
	Termination by Sanofi                                39

		
	12.4
	Termination by Opiant                            40

		
	12.5
	Termination Upon Insolvency                             40

		
	12.6
	Rights in Bankruptcy                                40

		
	12.7
	Consequences of Termination                            40

		
	12.8
	Accrued Rights; Surviving Obligations                    41

		
	Article 13 Miscellaneous
	42

		
	13.1
	Force Majeure                                    42

		
	13.2
	Alliance Managers                                42

		
	13.3
	Export Control                                42

		
	13.4
	Assignment                                    43

		
	13.5
	Change of Control                                43

		
	13.6
	Severability                                    43

		
	13.7
	Dispute Resolution                                44

		
	13.8
	Governing Law and Service                            44

		
	13.9
	Notices                                    45

		
	13.10
	Entire Agreement; Amendments                        45

		
	13.11
	English Language                                46

		
	13.12
	Equitable Relief                                46

		
	13.13
	Waiver and Non-Exclusion of Remedies                    46

		
	13.14
	No Benefit to Third Parties                            46

		
	13.15
	Further Assurance                                46

		
	13.16
	Relationship of the Parties                            47

		
	13.17
	Counterparts                                    47

		
	13.18
	References                                    47

		
	13.19
	Construction                                    47

		
	13.20
	Affiliates                                    47

Schedules

Schedule 1.50        Licensed Compound
Schedule 1.51        Licensed Know-How
Schedule 1.52        Licensed Patents
Schedule 1.90        Sanofi Corporate Names
Schedule 3.1.2        Development Plan
Schedule 9.4        Press Release

iii

Exhibit 10.1

LICENSE AGREEMENT
This License Agreement (this “Agreement”) is made and entered into as of December 21, 2018 (the “Effective Date”) by and between Sanofi, a French corporation (“Sanofi” or “Licensor”) and Opiant Pharmaceuticals, Inc., a Delaware corporation, having offices located at  201 Santa Monica Blvd., Suite 500, Santa Monica, California, USA 90401  (“Opiant”).  Sanofi and Opiant are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, Sanofi controls certain intellectual property rights with respect to the Licensed Compound (as defined herein) and Licensed Products (as defined herein) in the Territory (as defined herein); and
WHEREAS, Sanofi wishes to grant to Opiant, and Opiant wishes to take, a license under such intellectual property rights to Exploit (as defined herein) Licensed Products in the Territory, in each case in accordance with the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual promises and conditions hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows:

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Article 1 
DEFINITIONS
Unless otherwise specifically provided herein, the following terms shall have the following meanings:
1.1    “Accountant” has the meaning set forth in Section 6.10.
1.2    “Acute Cannabinoid Overdose” means a condition arising from the excessive intake of either a synthetic or naturally occurring cannabinoid resulting in symptoms that require immediate medical intervention administered in an emergency context.  The terms cannabinoid "intoxication", "toxicity", and "poisoning" are each understood to be synonymous with cannabinoid "overdose" and are intended to be covered by this definition.
1.3     “Adverse Event” means (a) the development of an undesirable medical condition or the deterioration of a pre-existing medical condition in a patient or clinical investigation subject during or following exposure to or use of a Licensed Product, whether or not considered causally related to such Licensed Product, (b) the exacerbation of any pre-existing condition occurring during or following exposure to or use of a Licensed Product, or (c) any other adverse experience or adverse drug experience (as described in the FDA’s Investigational New Drug safety reporting and NDA post-marketing reporting regulations, 21 C.F.R. §§312.32 and 314.80, respectively, and any applicable corresponding regulations outside the United States, in each case as may be amended from time to time), occurring during or following exposure to or use of a Licensed Product.  For purposes of this Agreement, “undesirable medical condition” includes symptoms (e.g., nausea, chest pain), signs (e.g., tachycardia, enlarged liver) or the abnormal results of an investigation (e.g., laboratory findings, electrocardiogram), including unfavorable side effects, toxicity, injury, overdose or sensitivity reactions.
1.4    “Affiliate” means, with respect to a Party, any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such Party, in each case for so long as such control exists.  For purposes of this definition, “control” and, with correlative meanings, the terms “controlled by” and “under common control with” means (a) the possession, directly or indirectly, of the power to direct the management or policies of a business entity, whether through the ownership of voting securities, by contract relating to voting rights or corporate governance, or otherwise, or (b) the ownership, directly or indirectly, of 50% or more of the voting securities or other ownership interest of a business entity (or, with respect to a limited partnership or other similar entity, its general partner or controlling entity).
1.5    “Agreement” has the meaning set forth in the preamble hereto.
1.6    “Alliance Manager” has the meaning set forth in Section 13.2.
1.7    “Applicable Law” means applicable laws, rules and regulations, including any rules, regulations, guidelines (including without limitation Good Clinical Practices and Good Laboratory Practices, as respectively defined under the ICH Guidelines and Good Manufacturing Practices as 

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defined in 21 C.F.R. Parts 210 and 211, European Directive 2003/94/EC, Eudralex 4, Annex 16, and ICH Guidelines) or other requirements of the Regulatory Authorities, that may be in effect from time to time.
1.8    “Breaching Party” has the meaning set forth in Section 12.2.
1.9    “Business Day” means a day other than a Saturday or Sunday on which banking institutions in Paris, France and in Los Angeles, California are not closed.
1.10    “Calendar Quarter” means each successive period of three calendar months commencing on January 1, April 1, July 1 and October 1, except that the first Calendar Quarter shall commence on the Effective Date and end on the day immediately prior to the first to occur of January 1, April 1, July 1 or October 1 after the Effective Date, and the last Calendar Quarter shall end on the last day of the Term.
1.11    “Calendar Year” means each successive period of 12 calendar months commencing on January 1 and ending on December 31, except that the first Calendar Year shall commence on the Effective Date and end on December 31 of the year in which the Effective Date occurs and the last Calendar Year of the Term shall commence on January 1 of the year in which the Term ends and end on the last day of the Term.
1.12    “Change of Control” means, with respect to either Party, (a) any sale, exchange, transfer, or issuance to or acquisition by one or more Third Parties of shares representing more than fifty percent (50%) of the aggregate ordinary voting power entitled to vote for the election of directors represented by the issued and outstanding stock of such Party or any Affiliate that directly or indirectly controls (as defined in Section 1.4) (such Affiliate, a “Parent” of such Party), whether such sale, exchange, transfer, issuance or acquisition is made directly or indirectly, beneficially or of record or in one transaction or a series of related transactions, but excluding the issuance of shares in financing transactions, including any venture capital financing or any public offering; (b) a merger or consolidation under applicable Law of such Party with a Third Party in which the shareholders of a Party or such Parent immediately prior to such merger or consolidation do not continue to hold immediately following the closing of such merger or consolidation at least fifty percent (50%) of the aggregate ordinary voting power entitled to vote for the election of directors represented by the issued and outstanding stock of the entity surviving or resulting from such consolidation; or (c) a sale or other disposition of all or substantially all of the assets of such Party to which this Agreement relates to one (1) or more Third Party in one transaction or a series of related transactions.
1.13    “Clinical Data” means all data, reports and results with respect to the Licensed Compound and the Licensed Products made, collected or otherwise generated under or in connection with the Clinical Studies.  
1.14    “Clinical Studies” means human clinical trials for a Licensed Product and any other tests and studies for a Licensed Product in human subjects.

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1.15    “Combination Product” means a Licensed Product that consists of or contains a Licensed Compound as an active ingredient together with one or more other active ingredients and is sold either as a fixed dose or as separate doses, in a single package.
1.16    “Commercialization” means, with respect to a Licensed Product, any and all activities (whether before or after Market Approval) directed to the preparation for sale of, offering for sale of, or  sale of such Licensed Product in the Field in the Territory, including pre‐launch and post-launch marketing, promoting, marketing research, distributing, offering to commercially sell and commercially selling such Licensed Product, importing, exporting or transporting such Licensed Product for commercial sale, medical education activities with respect to such Licensed Product, conducting Clinical Studies that are not required to obtain or maintain Market Approval for such Licensed Product for an indication, which may include epidemiological studies, modeling and pharmacoeconomic studies, post-marketing surveillance studies, investigator sponsored studies and health economics studies; Manufacturing Licensed Products for commercial sale, samples and/or any of the foregoing studies; and regulatory affairs (including the preparation and submission of Regulatory Documentation and interacting with Regulatory Authorities) with respect to the foregoing.  When used as a verb, “Commercializing” means to engage in Commercialization and “Commercialize” and “Commercialized” shall have a corresponding meaning.
1.17    “Commercially Reasonable Efforts” means with respect to Opiant’s Development and Commercialization of a Licensed Product, a level of efforts and resources comparable to the efforts and resources commonly used in the research-based biopharmaceutical industry by companies with resources and expertise similar to those of Opiant for internally-developed compounds or products of similar market potential at a similar stage in development or product life, taking into account: (a) issues of efficacy, safety and expected and actual approved labeling, (b) the expected and actual competitiveness of alternative products being developed and sold in the marketplace, (c) the expected and actual product profile of the Licensed Product, (d) the expected and actual patent and other proprietary position of the Licensed Product, the expected and actual profitability, market potential and return on investment of the Licensed Product, but without regard to payments owed by Opiant to Sanofi under this Agreement.  “Commercially Reasonable Efforts” shall be determined on a country-by-country (or region-by-region, where applicable) and indication-by-indication basis, without regard to the particular circumstances of Opiant, including any other product opportunities of Opiant and any payments owed by Opiant to Sanofi under this Agreement.
1.18    “Competing Product” means any pharmaceutical product that (a) is not a Licensed Product or Licensed Compound and (b) is a CB receptor (type 1) blocker (CB1 antagonist) developed for the treatment of Acute Cannabinoid Overdose.
1.19    “Complaining Party” has the meaning set forth in Section 12.2.
1.20    “Confidential Information” has the meaning set forth in Section 9.1.
1.21    “Control” means, with respect to any Information and Inventions, Regulatory Documentation, Patent, or other intellectual property right, possession of the right, whether directly or indirectly, and whether by ownership, license or otherwise (other than by operation of the license 

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and other grants in Section 2.1), to assign or grant a license, sublicense or other right (including a right to reference Regulatory Documentation) to or under such Information and Inventions, Regulatory Documentation, Patent, or other intellectual property right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party.
1.22    “Controlling Party” has the meaning set forth in Section 7.4.1
1.23    “Development” means, with respect to a Licensed Product, all activities related to research, preclinical and other non-clinical testing, test method development and stability testing, toxicology, formulation, Manufacture Process Development, Clinical Studies intended for use as a basis for obtaining Market Approval of such Licensed Product, including Manufacturing in support of the foregoing activities (but excluding any commercial Manufacturing), statistical analysis and report writing, the preparation and submission of Drug Approval Applications, regulatory affairs with respect to the foregoing and all other activities necessary or reasonably useful or otherwise requested or required by a Regulatory Authority or other governmental authority as a condition or in support of obtaining or maintaining Market Approval for such Licensed Product.  When used as a verb, “Develop” means to engage in Development.
1.24    “Development Plan” means the plan for the Development of the Licensed Products as described in Section 3.1.2, as updated from time to time pursuant to Section 3.1.2.
1.25    “Disclosing Party” has the meaning set forth in Section 9.1.
1.26    “Dispute” has the meaning set forth in Section 13.7.
1.27    “Dollars” or “$” means United States Dollars.
1.28    “Drug Approval Application” means a New Drug Application (an “NDA”) as defined in the FFDCA and the regulations promulgated thereunder (including all additions, supplements, extensions and modifications thereto), or any corresponding foreign application in the Territory, including, with respect to the European Union, a Marketing Authorization Application (an “MAA”) filed with the EMA pursuant to the centralized approval procedure or with the applicable Regulatory Authority of a country in Europe with respect to the mutual recognition principles or any other national approval procedure.
1.29    “Effective Date” has the meaning set forth in the preamble hereto.
1.30    “EMA” means the European Medicines Agency and any successor agency thereto.
1.31    “Europe” means the countries comprising the European Economic Area as it may be constituted from time to time, which as of the Effective Date consists of the member countries of the European Union, Iceland, Norway, Liechtenstein and Switzerland.
1.32    “European Union” means the economic, scientific and political organization of member states as it may be constituted from time to time, which as of the Effective Date consists of Austria, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, 

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Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom of Great Britain and Northern Ireland and that certain portion of Cyprus included in such organization.
1.33    “Executive Officers” means a senior executive of a Party having corporate authority to make decisions regarding this Agreement.
1.34    “Exploit” means, with respect to a Licensed Product, to make, have made, import, export, use, have used, sell, have sold, or offer for sale, including to Develop, have Developed, Manufacture, have Manufactured, Commercialize, have Commercialized, modify, enhance, improve, hold, or keep (whether for disposal or otherwise), or otherwise practice, exploit or dispose of such Licensed Product and “Exploitation” means the act of Exploiting a Licensed Product.
1.35    “FDA” means the United States Food and Drug Administration and any successor agency thereto.
1.36    “FFDCA” means the United States Food, Drug, and Cosmetic Act, as amended from time to time.
1.37    “Field” means the therapeutic emergency treatment of Acute Cannabinoid Overdoses in humans by administration of a pharmaceutical product via any parenteral route of administration.  The term “Field” excludes the chronic administration of a therapeutic agent, irrespective of the purpose or route of administration.
1.38    “First Commercial Sale” means, with respect to a Licensed Product in a country in the Territory, the first sale to a Third Party for monetary value for use or consumption by the general public of such Licensed Product in such country after the applicable Regulatory Authority has approved the Drug Approval Application for such Licensed Product in such country.  Sales prior to the approval of the applicable Drug Approval Application, such as so-called “treatment IND sales”, “named patient sales” and “compassionate use sales”, shall not constitute a First Commercial Sale.
1.39    “Force Majeure Event” has the meaning set forth in Section 13.1.
1.40    “GAAP” means United States generally accepted accounting principles consistently applied.
1.41    “Hatch-Waxman Act” means the Drug Price Competition and Patent Term Restoration Act of 1984, as amended.
1.42    “IND” means an investigational new drug application filed with the FDA for authorization to commence Clinical Studies in the United States (including all additions, supplements, extensions and modifications thereto), or any corresponding foreign application in the Territory.
1.43    “Indemnification Claim Notice” has the meaning set forth in Section 11.3.

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1.44    “Indemnified Party” has the meaning set forth in Section 11.3.
1.45    “Indemnifying Party” means the Party from whom indemnification is sought pursuant to Section 11.1 or Section 11.2.
1.46    “Information and Inventions” means all technical, scientific and other data, know-how and information of any type, trade secrets, knowledge, technology, means, methods, processes, practices, formulas, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, data, results and other material, including pre-clinical trial results and Clinical Study results, Manufacturing procedures, test procedures, and purification and isolation techniques, (whether or not confidential, proprietary, patented or patentable) in written, electronic or any other form now known or hereafter developed, and all other discoveries, developments, inventions, and tangible embodiments of any of the foregoing.
1.47    “Infringement” has the meaning set forth in Section 7.3.1.
1.48    “Infringement Notice” has the meaning set forth in Section 7.3.1.
1.49    “Invoiced Sales” has the meaning set forth in the definition of “Net Sales”.
1.50    “Licensed Compound” means the pharmaceutical compound known as AVE1625 (drinabant), as more specifically described in Schedule 1.50 attached hereto, together with any metabolite, salt, ester, hydrate, solvate, isomer, enantiomer, free acid form, free base form, crystalline form, co-crystalline form, amorphous form, pro-drug form, racemate, polymorph, chelate, stereoisomer, tautomer or optically active form of any of the foregoing.
1.51    “Licensed Know-How” means (i) the Information and Inventions and Regulatory Documentation existing as of the Effective Date that are listed in Schedule 1.51 (Licensed Know-How), together with (ii) any additional Information and Inventions and Regulatory Documentation which Sanofi may provide to Opiant after the Effective Date in accordance with Section 2.7 (and the Parties agree to update the list of Licensed Know-How in Schedule 1.51, from time to time, to reflect any such additional Information and Inventions and Regulatory Documentation). 
1.52    “Licensed Patents” means the Patents set forth on Schedule 1.53.
1.53    “Licensed Product” means any pharmaceutical product containing a Licensed Compound, alone or in combination with one or more other active ingredients.
1.54    “Losses” has the meaning set forth in Section 11.1.
1.55    “MAA” has the meaning set forth in Section 1.28.
1.56    “Major Markets” means each of the United States of America, Canada, the European Union and Japan.

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1.57    “Manufacture” and “Manufacturing” means, with respect to a Licensed Product, all activities related to the production, manufacture, processing, filling, finishing, packaging, labeling, shipping, holding, Manufacture Process Development, stability testing, quality assurance or quality control of such Licensed Product or any intermediate thereof.
1.58    “Manufacture Negotiation Period” has the meaning set forth in Section 5.2.
1.59    “Manufacture Option” has the meaning set forth in Section 5.2.
1.60    “Manufacture Option Data Package” means, with respect to a Licensed Compound or a Licensed Product, as applicable:  (a) a description of the Manufacturing process for such Licensed Product (to the extent such process exists as of the time the Manufacture Option is triggered); (b) Opiant’s good faith forecasted requirements of such Licensed Product for (x) the first five (5) years after the First Commercial Sale of such Licensed Product (such forecasted requirements to be non-binding) and (y) where applicable the duration of the Development Plan; and (c) any other information Controlled and possessed by Opiant or its Affiliates directly related to the Manufacture of such Licensed Product (and not already in Sanofi’s possession) that Sanofi requests within fifteen (15) days of receipt of the information in clauses (a) and (b) that would be reasonably necessary for Sanofi to make an informed decision regarding whether to exercise its Manufacture Option with respect to such Licensed Product.
1.61    “Manufacture Option Notice” has the meaning set forth in Section 5.2.
1.62    “Manufacture Option Period” means, with respect to a Licensed Product, the period commencing on the date on which Opiant notifies Sanofi in writing that it intends to enter into one or more Third Party Manufacture and Supply Agreements with respect to such Licensed Product and ending  sixty (60) days thereafter.
1.63    “Manufacture Process Development” means the process development, process qualification and validation and scale-up of the process to manufacture a Licensed Product and analytic development and product characterization with respect thereto.
1.64    “Market Approval” means all clearances, approvals, licenses, registrations or authorizations from a Regulatory Authority necessary for the distribution, pricing, reimbursement, marketing or sale of a Licensed Product in the jurisdiction of such Regulatory Authority.  For countries where governmental approval is required for pricing or reimbursement for a pharmaceutical product to be reimbursed by national health insurance (or its local equivalent), “Market Approval” shall not be deemed to occur until such pricing or reimbursement approval is obtained.
1.65    “Markings” has the meaning set forth in Section 4.7.
1.66    “Milestone Event” means each of the events identified as a milestone event in Section 6.2.1 or Section 6.2.2.

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1.67    “Monetization” means the monetization of all or a portion of Sanofi’s rights to receive royalties and other related payments under this Agreement, including by means of a direct sale (through an auction process or otherwise) or a financing (through a borrowing of loans, an offering of securities or otherwise).
1.68    “NDA” has the meaning set forth in the definition of “Drug Approval Application.”
1.69    “Net Sales” means, for any period, the gross amount invoiced by Opiant or any of its Affiliates or Sublicensees for the sale of a Licensed Product (the “Invoiced Sales”), less deductions for:  (a) normal and customary trade, quantity and cash discounts, prompt settlement discounts (including chargebacks and allowances) and amounts allowed, expended, repaid or credited by reason of or in connection with rejection, return, recall suspension or withdrawal of goods, rebates or bona fide price reductions; (b) freight, postage, shipping and insurance expenses to the extent that such items are not borne or reimbursed by the purchaser; (c) customs and excise duties, VAT and other taxes, duties and governmental charges related to the sales to the extent that such items are not borne or reimbursed by the purchaser; (d) rebates and similar payments made with respect to sales paid for by any governmental or regulatory authority or to managed-care entities or entities that manage patient drug benefits, (e) the portion of administrative fees paid during the relevant time period to group purchasing organizations or pharmaceutical benefit managers relating to Licensed Product, (f) that portion of the annual fee on prescription drug manufacturers imposed by the Patient protection and Affordable Care Act, Pub. L. No. 111-48 (as amended) that Opiant, its Affiliates or Sublicensee, as applicable, allocates to sales of the Licensed Product in accordance with Opiant’s, its Affiliate’s or Sublicensee’s standard policies and procedures consistently applied across its products, as applicable, and (g) amounts reserved and credited for uncollectible amounts with respect invoiced sales determined in a manner consistent with Opiant’s, its Affiliate’s or Sublicensee’s, as applicable, internal accounting practices, consistently applied across its products, in each case ((a) to (g)) in accordance with GAAP.  Any of the deductions listed above that involves a payment by Opiant or any of its Affiliates shall be taken as a deduction in the Calendar Quarter in which the payment is accrued by such entity.  For purposes of determining Net Sales, a Licensed Product shall be deemed to be sold when invoiced and a “sale” shall not include transfers or dispositions of such Licensed Product for pre-clinical or clinical purposes or as samples, in each case, without charge.
In the event that a Licensed Product is sold in any country in the form of a Combination Product, Net Sales of such Combination Product shall be adjusted by multiplying actual Net Sales of such Combination Product in such country calculated pursuant to the foregoing definition of “Net Sales” by the fraction A/(A+B), where A is the average invoice price in such country of any Licensed Product that contains the same Licensed Compound as such Combination Product as its sole active ingredient, if sold separately in such country, and B is the average invoice price in such country of each product that contains an active ingredient other than the Licensed Compound contained in such Combination Product as its sole active ingredient, if sold separately in such country.  If either such Licensed Product that contains the Licensed Compound as its sole active ingredients or a product that contains an active ingredient (other than the Licensed Product) in the Combination Product as its sole active ingredient is not sold separately in a particular country, the Parties shall negotiate in good faith a reasonable adjustment to Net Sales in such country that takes into account the medical 

9

contribution to the Combination Product of, and all other factors reasonably relevant to the relative value of, the Licensed Compound, on the one hand, and all of the other active ingredients, collectively, on the other hand; provided that if, notwithstanding such good faith negotiation, the Parties are unable to agree on an adjustment to Net Sales in such country within 60 days after a request by a Party that they negotiate such an adjustment, then either Party shall have the right to submit such matter for resolution pursuant to Section 13.7.
In the case of pharmacy incentive programs, hospital performance incentive programs, chargebacks, disease management programs, similar programs or discounts on portfolio product offerings, all rebates, discounts and other forms of reimbursements shall be allocated among products on the basis on which such rebates, discounts and other forms of reimbursements were actually granted or, if such basis cannot be determined, in accordance with Opiant’s, or its Affiliates’ or Sublicensees’ existing allocation method; provided that any such allocation shall be done in accordance with Applicable Law, including any price reporting laws, rules and regulations.
Opiant’s or any of its Affiliates’ transfer of any Licensed Product to an Affiliate or Sublicensee shall not result in any Net Sales, unless such Licensed Product is consumed by such Affiliate or Sublicensee in the course of its commercial activities.
1.70    “Non-Controlling Party” has the meaning set forth in Section 7.4.1.
1.71    “Opiant” has the meaning set forth in the preamble hereto.
1.72    “Opiant Indemnitees” has the meaning set forth in Section 11.2.
1.73    “Party” and “Parties” each has the meaning set forth in the preamble hereto.
1.74    “Patents” means (a) all national, regional and international patents and patent applications, including provisional patent applications, (b) all patent applications filed from any of the foregoing provisional patent applications in clause (a), (c) all patent applications that claim priority to any patent or patent applications in clause (a) or clause (b), including divisionals, continuations, continuations-in-part, provisionals, converted provisionals and continued prosecution applications, (d) any and all patents that have issued or in the future issue from any of foregoing patent applications in clause (a), clause (b) or clause (c), including utility models, petty patents and design patents and certificates of invention, and (e) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of any of the foregoing patents or patent applications in clause (a), clause (b), clause (c) or clause (d).
1.75    “Payments” has the meaning set forth in Section 6.5.
1.76    “Pediatric Exclusivity” means a Market Approval issued by FDA in application of 21 C.F.R. § 355a or its successor regulation.
1.77    “Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock 

10

company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department or agency of a government.
1.78    “Phase I Clinical Study”  means a Clinical Study of a Licensed Product that meets the definition of a Phase I study in the Clinical Trial Regulation EU No 536/2014 and for the United States as described in 21 C.F.R. §312.21(a), or its successor regulation, or the equivalent regulation in any other country
1.79    “Phase II Clinical Study”  means a Clinical Study of a Licensed Product that meets the definition of a Phase II study in the Clinical Trial Regulation EU No 536/2014 and for the United States as described in 21 C.F.R. §312.21(b), or its successor regulation, or the equivalent regulation in any other country.
1.80    “Phase III Clinical Study” means a Clinical Study of Licensed Product that meets the definition of a Phase III study in the Clinical Trial Regulation EU No 536/2014 and for the United States as described in 21 C.F.R. §312.21(c), or its successor regulation, or the equivalent regulation in any other country.
1.81    “Positive Results” means in relation to any Clinical Study that the results of such Clinical Study either (i) met their pre-determined primary end point, and (ii) were sufficient to enable such Licensed Product to advance to the next Clinical Study state (e.g. Phase II Clinical Study or Phase III Clinical Study) or to the next phase of regulatory approval (e.g. Market Approval).
1.82    “Product Labeling” means, with respect to a Licensed Product in a country in the Territory, (a) the Regulatory Authority‐approved full prescribing information for such Licensed Product for such country, including any required patient information and (b) all labels and other written, printed or graphic matter upon a container, wrapper or any package insert utilized with or for such Licensed Product in such country.
1.83    “Product Trademarks” means the Trademark(s) to be used by Opiant or its Affiliates for the Commercialization of the Licensed Products in the Field in the Territory and any registrations thereof or any pending applications relating thereto in the Territory (excluding, in any event, any Trademarks that include any corporate name or logo of the Parties or their Affiliates, including the Sanofi Corporate Names).
1.84    “Receiving Party” has the meaning set forth in Section 9.1.
1.85    “Regulatory Authority” means any applicable supra-national, federal, national, regional, state, provincial or local regulatory agencies, departments, bureaus, commissions, councils or other government entities regulating or otherwise exercising authority with respect to the Exploitation of a Licensed Compound or a Licensed Product in the Territory.
1.86    “Regulatory Documentation” means all (a) applications (including all INDs and Drug Approval Applications), registrations, licenses, authorizations and approvals (including all 

11

Market Approvals), (b) correspondence and reports submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority) and all supporting documents with respect thereto, including all regulatory drug lists, advertising and promotion documents, Adverse Event files and complaint files and (c) Clinical Data and any other data contained in any of the foregoing, in each case ((a), (b) and (c)), relating to the Licensed Product.
1.87    “Regulatory Exclusivity” means any period of data, market or other regulatory exclusivity granted or otherwise authorized in respect of a Licensed Product, including any such period under the FFDCA, European Parliament and Council Regulations (EC) Nos. 726/2004, 141/2000 and 1901/2006, or national implementations of Article 10 of Directive 2001/83/EC, and all equivalents (in the United States, European Union or elsewhere) of any of the foregoing.
1.88    “Royalty Term”  means, with respect to each Licensed Product and each country in the Territory, the period beginning on the date of the First Commercial Sale of such Licensed Product in such country, and ending on the latest to occur of (a) the expiration of the last-to-expire Licensed Patent that includes a Valid Claim; (b) the expiration of Regulatory Exclusivity in such country for such Licensed Product; or (c) the tenth anniversary of the First Commercial Sale of such Licensed Product in such country.
1.89    “Sanofi” has the meaning set forth in the preamble hereto.
1.90    “Sanofi Corporate Names” means the Trademarks and logos identified on Schedule 1.90 and such other names and logos as Sanofi may designate in writing from time to time.
1.91    “Sanofi Indemnitees” has the meaning set forth in Section 11.1.
1.92    “Sanofi Manufacturing and Supply Agreement” has the meaning set forth in Section 5.2.
1.93    “Segregate” means with respect to a Competing Product, to segregate the development and commercialization activities relating to such product or program from development and commercialization with respect to the corresponding Licensed Product under this Agreement, including ensuring that: (i) no personnel involved in performing the development or commercialization of such product or program have access to non-public plans or information relating to the development or commercialization of the corresponding Licensed Product (provided that management personnel may review and evaluate plans and information regarding the development and commercialization of such Licensed Product in connection with portfolio decision-making or other company-wide responsibilities); and (ii) no personnel involved in performing the development or commercialization of such Licensed Product have access to non-public plans or information relating to the development or commercialization of such Competing Product (provided that upper management personnel (limited, for Opiant, to employees reporting directly to CEO reports and, for Sanofi, to employees reporting directly to an Executive Committee member) may review and evaluate plans and information regarding the development and commercialization of 

12

such product or program in connection with portfolio decision-making or other company-wide responsibilities).
1.94    “Sublicensee” means a Person, other than an Affiliate, that is granted a sublicense by Opiant or its Affiliate under the grants in Section 2.1 to market, promote and sell a Licensed Compound or Licensed Product, as provided in Section 2.3; and a “Sublicense Agreement” means an agreement pursuant to which a Sublicensee is granted such rights by Opiant.
1.95    “Term” has the meaning set forth in Section 12.1.
1.96    “Termination Notice Period” has the meaning set forth in Section 12.2.
1.97    “Territory” means the entire world.
1.98    “Third Party” means any Person other than Sanofi, Opiant and their respective Affiliates.
1.99    “Third Party Claims” has the meaning set forth in Section 11.1.
1.100    “Third Party Manufacture and Supply Agreement” has the meaning set forth in Section 5.2.
1.101    “Trademark” means any word, name, symbol, color, designation or device or any combination thereof that functions as a source identifier, including any trademark, trade dress, brand mark, service mark, trade name, brand name, logo or business symbol, whether or not registered.
1.102    “Transition Plan” has the meaning set forth in Section 2.7.
1.103    “Valid Claim” means, with respect to a particular country, (a) any claim of an issued and unexpired Patent in such country that (i) has not been held permanently revoked, unenforceable or invalid by a decision of a court or governmental agency of competent jurisdiction that is unappealable or unappealed within the time allowed for appeal and (ii) has not been abandoned, disclaimed, denied or admitted to be invalid or unenforceable through reissue or disclaimer or otherwise in such country or (b) any claim of a pending Patent application that has not been abandoned or finally disallowed without the possibility of appeal or re-filing of the application.

ARTICLE 2     
GRANT OF RIGHTS

2.1    Grants to Opiant.  Subject to Section 2.2, Section 2.3, and compliance with all other terms and conditions of this Agreement, Sanofi hereby grants to Opiant:
2.1.1    an exclusive (including with regard to Sanofi and its Affiliates) license, with the right to grant sublicenses in accordance with Section 2.3, under the Licensed Patents and the Licensed Know-How to Exploit the Licensed Compounds and the Licensed Products in the Field in the Territory; and
2.1.2    subject to Section 2.4, a non-exclusive license to use the Sanofi Corporate Names solely as necessary for Opiant to perform its obligations under Section 4.7 and for no other purpose.

2.2    Retention of Rights.  Sanofi retains, on behalf of itself and its Affiliates, non-exclusive rights in and to the Licensed Patents and the Licensed Know-How to conduct non-clinical research with respect to the Licensed Compounds and Licensed Products in the Field in the Territory.

2.3    Sublicenses.  Opiant shall have the right to grant sublicenses through multiple tiers of sublicensees under the rights and licenses granted to Opiant under Section 2.1 without the written consent of Sanofi, but will provide Sanofi with at least ten (10) Business Days’ prior notice of any Sublicense Agreement, and if within five (5) Business Days’ of receipt of such notice, Sanofi raises any concern, Opiant shall, in good faith, consider such concerns of Sanofi; provided that, Opiant’s notice shall be limited to a simple statement that Opiant intends to grant a sublicense to a Third Party and shall not disclose either the identity of the potential Sublicensee or any terms of the potential Sublicense Agreement. Opiant shall within thirty (30) calendar days of executing a Sublicense Agreement deliver a fully executed copy of such Sublicense Agreement to the attention of Sanofi’s Alliance Manager; provided that the terms of such Sublicense Agreement, to the extent not pertinent to an understanding of Party’s obligations or benefits under this Agreement, may be redacted.  Opiant shall, notwithstanding any sublicensing, remain liable to Sanofi for compliance with this Agreement.  Opiant shall ensure that any sublicenses it grants or authorizes shall be subject and subordinate to the terms hereof.  For the avoidance of doubt, Opiant shall not be obligated to provide Sanofi a copy, or notice, of any agreement pursuant to which Opiant grants a sublicense under any of the rights granted to Opiant under Section 2.1 to a contract research organization, contract manufacturing organization, service provider, distributor or other similar Third Party for purposes of providing services for, on behalf or in collaboration with, Opiant.

2.4    Use of the Sanofi Corporate Names.  With respect to any Sanofi Corporate Names licensed to Opiant under Section 2.1.2, Opiant agrees to conform to the guidelines of Sanofi in effect from time to time (as notified to Opiant) with respect to manner of use and to maintain the quality standards of Sanofi for goods sold and services provided in connection with the Sanofi Corporate Names.  Opiant shall, and shall cause its Affiliates to, use diligent efforts not to do any act that endangers, destroys or similarly affects the value of the goodwill pertaining to the Sanofi Corporate Names.  Opiant shall, and shall cause its Affiliates to, execute any documents required in the reasonable opinion of Sanofi to be entered as a “registered user” or recorded licensee of the Sanofi Corporate Names or to be removed as registered user or licensee thereof.

2.5    No Implied Rights.  Opiant and its Affiliates shall have no right, express or implied, with respect to the Licensed Patents, the Licensed Know-How or the Sanofi Corporate Names, except as expressly provided in Section 2.1.

2.6    Exclusivity
2.6.1    Opiant.  During the Term, Opiant shall not, and shall cause its Affiliates not to (a) directly or indirectly, develop, commercialize or manufacture any Competing Product in any country in the Territory, or (b) license, authorize, appoint, or otherwise enable any Third Party to directly or indirectly, develop, commercialize or manufacture any Competing Product in any country in the Territory.
2.6.2    Sanofi.
(i)    During the initial five (5) years of the Term, Sanofi shall not, and shall cause its Affiliates not to (a) directly or indirectly, develop or commercialize any Competing Product in any country in the Territory, or (b) license, authorize, appoint, or otherwise enable any Third Party to directly or indirectly, develop or commercialize any Competing Product in any country in the Territory; provided that if Sanofi or an Affiliate acquires a Third Party that as of the effective date of such transaction is engaged in the development or commercialization of any Competing Product, (a “Competing Product Acquisition Transaction”), then Sanofi shall not be in breach of this Section 2.6.2(i) if Sanofi notifies Opiant in writing within ninety (90) days after the effective date (i.e., after any pre-clearance or similar regulatory approval periods have expired) of such Competing Product Acquisition Transaction that it or its Affiliate, as applicable, intends to either (A) divest its rights to such Competing Product or (B) terminate development and commercialization of such Competing Product (subject to any regulatory requirements to complete ongoing Clinical Studies), within twelve (12) months of the close of the Competing Product Acquisition Transaction and Opiant shall have no right to terminate this Agreement pursuant to Section 12.2 during such twelve (12) month period if Sanofi is using good faith efforts to effect the option it has selected under this Section 2.6.2(i). Moreover, if Sanofi demonstrates to Opiant that it is engaged in bona fide negotiations relating to any such divestiture, Sanofi may, with the consent of Opiant, such consent not to be unreasonably withheld, conditioned or delayed, extend the period of time to complete such divestiture for a period not to exceed  eighteen (18) months from the closing date of such Competing Product Acquisition Transaction (it being understood that a divestiture may take the form of an out-license of the rights to such Competing Product so long as Sanofi or its Affiliates do not retain any rights to develop or commercialize the Competing Product).  
(ii)    During the Term, Sanofi shall not, and shall cause its Affiliates not to (a) directly or indirectly, develop or commercialize the Licensed Compound or any Licensed Product, in each case for treatment of Acute Cannabinoid Overdose in any country in the Territory  outside of the Field or (b) license, authorize, appoint, or otherwise enable any Third Party to directly or indirectly, develop or commercialize the Licensed Compound or any Licensed Product, in each case for treatment of Acute Cannabinoid Overdose in any country in the Territory outside of the Field. 
2.6.3    Each Party acknowledges and agrees that (a) this Section 2.6 has been negotiated by the Parties, (b) the geographical and time limitations on activities set forth in Sections 2.6.1 – 2.6.2 are reasonable, valid and necessary in light of the Parties’ circumstances and necessary for the adequate protection of the business of the Licensed Compounds and the Licensed Products and (c) the Parties would not have entered into this Agreement without the protection it is afforded  by this Section 2.6.  If, notwithstanding the foregoing, a court of competent jurisdiction determines that the restrictions set forth in this Section 2.6 are too broad or otherwise unreasonable under Applicable Law, including with respect to duration, geographic scope or space, the court is hereby requested and authorized by the Parties to revise this Section 2.6 to include the maximum restrictions allowable under Applicable Law.

2.7    Transfer of Licensed Know-How; Transition Plan.  Sanofi shall disclose and make available to Opiant the Licensed Know-How listed in Schedule 1.51 (a) by granting download and such other access rights to the data room in which such information was hosted for the purpose of Opiant’s due diligence until at least January 31, 2019, and (b) by (i) delivering a complete and accurate copy of such information no later than January 15, 2019 provided that Opiant notifies Sanofi of its preferred method of transfer and form of media within five (5) Business Days after the Effective Date, and (ii) subject to the agreement of the Third Party service provider on which such data is maintained, assisting Opiant in promptly transferring a complete and accurate copy of such data maintained by Sanofi to a data room maintained by and at the expense of Opiant (such activities in items (a) and (b) of this paragraph are the “Transition Plan”). Except as set forth in the preceding sentence, each Party shall bear its own expenses with respect to its activities under the Transition Plan.  If, after the Effective Date, Opiant identifies particular items of Information and Inventions or Regulatory Documentation relating to the  Licensed Compound or its Exploitation that were not included in Schedule 1.51, Opiant may request that Sanofi provide to Opiant such identified items of Information and Inventions or Regulatory Documentation.  To the extent such requested items of Information and Inventions or Regulatory Documentation are readily accessible by Sanofi or its Affiliates, Sanofi shall use reasonable efforts to provide the requested additional items of Information and Inventions and Regulatory Documentation to Opiant as soon as practicable, at Opiant’s cost, using a method of transfer and form of media as the Parties may determine at such time to be technically feasible and cost-effective, and such transferred Information and Inventions and Regulatory Documentation shall thereafter be included in the Licensed Know-How as per Section 1.51. 

2.8    Supply of Licensed Compound. Sanofi and Opiant shall negotiate in good faith after the Effective Date a separate agreement under which Sanofi would manufacture and supply to Opiant an agreed quantity of newly manufactured Licensed Compound, under terms and conditions to be mutually agreed. 

2.9    Subcontracting.  Opiant may subcontract the exercise of its rights and the performance of its obligations under this Agreement (including, without limitation, by appointing one or more suppliers, manufacturers, or distributors); provided that (a) no such permitted subcontracting shall relieve Opiant of any obligations (except to the extent satisfactorily performed by such subcontractor), and Opiant shall remain responsible for the performance of such activities in accordance with this Agreement and the Development Plan and (b) any agreement pursuant to which Opiant engages a subcontractor must (i) be consistent in all material respects with this Agreement and (ii) contain confidentiality and intellectual property terms sufficient to allow Opiant and its Affiliates to satisfy their respective obligations under this Agreement. 

2.10    Expansion of the Field. If during the Term, Opiant wishes to pursue administration of a Licensed Product using a route of administration not included within the definition of the Field herein, then Opiant may request, on written notice to Sanofi, that this Agreement be amended to include such additional route of administration within the scope of the definition of the Field, and Sanofi agrees that it will not unreasonably withhold its consent with respect to any such request; provided that any such expansion of the Field will be automatically revoked if Opiant has not received, within one (1) year of the date on which Sanofi grants its consent, an affirmative decision from a Regulatory Authority expressly allowing the development of such alternative route of administration. 

13

Article 1     
DEVELOPMENT AND REGULATORY

1.1    Development.
1.1.1    In General.  As between the Parties, Opiant shall have the sole right and responsibility to Develop the Licensed Products in the Field in the Territory at its own cost and expense in accordance with the Development Plan.
1.1.2    Development Plan.  Schedule 3.1.2 sets forth an initial development plan for the Licensed Compounds and Licensed Products in the Field in the Territory (such plan, as amended from time to time in accordance with this Agreement, the “Development Plan”).  From time to time, Opiant may amend the Development Plan on written notice to Sanofi and shall consider in good faith incorporating any reasonable comments of Sanofi to such amended plan.  The Development Plan shall, during the Term, reflect the Development activities that Opiant believes, in good faith, to be required in order for Opiant to satisfy its obligations under Section 3.1.3.  The Development Plan shall set forth the Development objectives, the planned Clinical Studies and other planned Development activities (including regulatory filings and communications) and the contemplated timelines for the foregoing.  The Development Plan shall be the Confidential Information of Opiant.
1.1.3    Diligence.  Opiant shall use Commercially Reasonable Efforts to Develop and obtain and maintain Market Approval for at least one Licensed Product for use in the Field in the United States.

1.2    Regulatory Matters. 
1.2.1    Regulatory Responsibilities - Opiant.  Opiant shall have the sole right and responsibility for preparing, filing and maintaining all necessary Regulatory Documentation (including Drug Approval Applications), and for conducting communications with the Regulatory Authorities, for the Licensed Products in the Territory.  All Market Approvals relating to the Licensed Products with respect to the Territory shall be owned by, and shall be the sole property and held in the name of, Opiant or its designees.  
1.2.2    Regulatory Responsibilities – Sanofi. Sanofi hereby grants to Opiant (a) a right of reference to all Regulatory Documentation (including any existing INDs), and (b) the right to access such Regulatory Documentation and any data therein and use such data in connection with the performance of its obligations and exercise of its rights under this Agreement, including inclusion of such data in its own regulatory filings for Licensed Product, which rights Opiant may extend to its Affiliates and Sublicensees of such Licensed Products. Sanofi shall notify relevant Regulatory Authorities of Opiant’s right of reference to such Regulatory Documentation in the form of a letter to the FDA or other Regulatory Authorities and if requested by Opiant, shall provide to Opiant a signed statement acknowledging the grant of such right of reference.  Sanofi will provide, and cause its Affiliates to provide, cooperation to Opiant to effect the foregoing.

1.3    Reports.  Opiant shall provide Sanofi within thirty (30) calendar days of the end of each Calendar Year, with an annual development update, such update to include a reasonably detailed summary of Development activities conducted in such reporting period Calendar Year, including a description of material regulatory filings and communications planned for subsequent reporting period.  Each such report shall contain sufficient detail to enable Sanofi to assess Opiant’s compliance with its obligations set forth in Section 3.1.3 and shall be deemed Confidential Information of Opiant.  Opiant’s obligation to provide such annual development update reports shall expire on the earlier of (a) the date on which a first Market Approval is obtained for a Licensed Product in the USA, or (b) the tenth anniversary following First Commercial Sale. 

1.4    Records.  Opiant shall maintain, or cause to be maintained, all Regulatory Documentation and final supporting records and documentation therefor (but not draft records or documentation therefor except as otherwise required by Applicable Law), in accordance with its standard practices, which in all cases shall be consistent with standard practices in the pharmaceutical industry and in compliance with Applicable Law.  Such records and documentation shall be retained for at least three years or such longer period as may be required by Applicable Law.

1.5    Compliance.  Opiant shall perform or cause to be performed any and all of its Development activities under this Agreement in a good scientific manner and in compliance with all Applicable Laws.

Article 2     
COMMERCIALIZATION

2.1    In General.  As between the Parties, Opiant shall have the sole right and responsibility to Commercialize the Licensed Products in the Field in the Territory at its own cost and expense.

2.2    Commercialization Report.  Following the commencement of Commercialization activities under this Agreement by Opiant or its Affiliates, at least sixty (60) calendar days after the end of each Calendar Year during the Term, Opiant shall provide to Sanofi an annual summary update with respect to Opiant’s Commercialization activities with respect to the Licensed Compounds and Licensed Products for such preceding Calendar Year, such update to be the Confidential Information of Opiant.

2.3    Diligence.  Opiant shall use Commercially Reasonable Efforts to Commercialize one (1) Licensed Product for use in the Field in the United States and in each additional Major Market in which it obtains Market Approval.

2.4    Compliance with Applicable Law.  Opiant shall, and shall cause its Affiliates to, comply with all Applicable Law with respect to the Commercialization of the Licensed Products.

2.5    Sales and Distribution.  As between the Parties, Opiant shall be solely responsible for invoicing and booking sales, establishing all terms of sale (including pricing and discounts), warehousing and distributing the Licensed Products in the Field in the Territory and performing all related services, in each case, in a manner consistent with the terms and conditions of this Agreement.  As between the Parties, Opiant shall be solely responsible for handling all returns, recalls and withdrawals, order processing, invoicing and collection, distribution and inventory and receivables with respect to the Licensed Product in the Territory.

2.6    Product Trademarks.  Subject to Section 2.4, Opiant shall have the right to determine and own the Product Trademarks to be used with respect to the Exploitation of the Licensed Products in the Field in the Territory.

2.7    Markings. To the extent required by Applicable Law in a country in the Territory, the promotional materials, packaging and Product Labeling for the Licensed Product used by Opiant or its Affiliates in connection with the Licensed Product in such country shall contain (a) the Sanofi Corporate Name and (b) the logo and corporate name of the manufacturer (collectively, the “Markings”).  The manner in which the Sanofi Corporate Name is to be presented on promotional materials, packaging and Product Labeling for the Licensed Product shall be subject to prior review and approval by Sanofi.

Article 3     
MANUFACTURE AND SUPPLY

3.1    In General.  As between the Parties, Opiant shall be responsible for the Manufacture of each Licensed Product in sufficient quantities for the Exploitation of such Licensed Product in the Field in the Territory.  Opiant shall either itself Manufacture and supply, or enter into one or more definitive Manufacturing and supply agreements either with Sanofi or appropriate Third Parties, to Manufacture and supply clinical and commercial supplies of Licensed Product.  Opiant shall, and shall cause its Affiliates and any Third Party that Manufactures and supplies clinical or commercial supplies of any Licensed Product to, comply with all Applicable Law with respect to the Manufacture of the Licensed Products.

3.2    Sanofi Manufacturing Option.  At such time as Opiant intends to enter into discussions with one or more Third Parties regarding such Third Party’s ability to Manufacture and supply Opiant’s requirements of Licensed Product for use in Phase III Clinical Studies and subsequent launch and commercialization of a Licensed Product (a “Third Party Manufacture and Supply Agreement”), Opiant shall so notify Sanofi and provide Sanofi a Manufacture Option Data Package.  Sanofi shall have the option to engage in negotiations with Opiant to obtain rights for it or one of its Affiliates to Manufacture and supply all or certain of Opiant’s, and its Affiliates’ clinical and/or commercial requirements of such Licensed Compound or Licensed Product (the “Manufacture Option” for such Licensed Compound or Licensed Product).  Sanofi may exercise its Manufacture Option with respect to a Licensed Compound or Licensed Product by providing written notice to Opiant (a “Manufacture Option Notice”) at any time during the Manufacture Option Period with respect to such Licensed Compound or Licensed Product.  If Sanofi exercises its Manufacture Option with respect to a Licensed Compound or Licensed Product during the applicable Manufacture Option Period, then during the period beginning on the date Sanofi provides the applicable Manufacture Option Notice to Opiant and ending ninety (90) calendar days thereafter (or such later date as may be mutually agreed by the Parties) (the “Manufacture Negotiation Period”), the Parties shall diligently negotiate in good faith the terms and conditions of an agreement pursuant to which Sanofi or one of its Affiliates would Manufacture and supply all or certain of Opiant’s and its Affiliates’ clinical and/or commercial requirements of such Licensed Compound or Licensed Product (a “Sanofi Manufacturing and Supply Agreement”).  If (a) Sanofi does not deliver a Manufacture Option Notice to Opiant with respect to a Licensed Product during the Manufacture Option Period with respect to such Licensed Compound or Licensed Product or (b) Opiant and Sanofi cannot agree on the terms and conditions of a Sanofi Manufacturing and Supply Agreement with respect to a Licensed Compound or Licensed Product during the Manufacture Negotiation Period with respect to such Licensed Compound or Licensed Product, then, in either case ((a) or (b)), Opiant or its Affiliate, as applicable, shall be free to enter into one or more Third Party Manufacture and Supply Agreements.

3.3    Manufacturing by Third Parties.  Opiant shall oversee the performance by its subcontractors of the subcontracted Manufacturing activities in a manner that would be reasonably expected to result in their timely and successful completion and shall remain responsible for the performance of such activities in accordance with this Agreement.  Any Third Party manufacture and supply agreement must (i) be consistent in all material respects with this Agreement and (ii) contain confidentiality and intellectual property terms sufficient to allow Opiant and its Affiliates to satisfy their respective obligations under this Agreement

Article 4     
PAYMENTS

4.1    Upfront Payment.  No later than ten (10) calendar days after the Effective Date, Opiant shall pay Sanofi an upfront amount equal to $500,000.00.  Such payment shall be nonrefundable and non-creditable against any other payments due hereunder.

4.2    Milestones. 
4.2.1    Development Milestones.  Opiant shall pay Sanofi each of the following one-time non-refundable, non-creditable milestone payments within forty-five (45) calendar days after the achievement of the corresponding Milestone Event with respect to each Licensed Product:

	
					
	 
	Milestone Event
	Milestone Payment

	1.
	Upon Positive Results of Phase I Clinical Study conducted anywhere in the Territory
	

	$500,000.00
	

	2.
	Upon Positive Results of Phase II Clinical Study conducted anywhere in the Territory
	

	$1,000,000.00
	

	3.
	Upon Positive Results of Phase III Clinical Study conducted anywhere in the Territory
	

	$1,500,000.00
	

	4.
	Upon receipt of Market Approval of first Licensed Product in the United States of America
	

	$3,000,000.00
	

	5.
	Upon Market Approval for first Licensed Product from the EMA (or if the centralized approval procedure is not pursued, receipt of Market Approval for first Licensed Product from a national Regulatory Authority in any one of France, Germany, Italy, Spain or the United Kingdom)
	

	$1,000,000.00
	

	6.
	Upon receipt of the Market Approval for first Licensed Product in Canada
	

	$500,000.00
	

	7.
	Upon receipt of the Market Approval first Licensed Product in Japan
	

	$500,000.00
	

	8.
	Issuance of first Pediatric Exclusivity for a Licensed Product in the United States of America
	

	$100,000.00
	

4.2.2    Sales Milestones.  Opiant shall pay Sanofi each of the following one time, non-refundable, non-creditable milestone payments within forty-five (45) calendar days after the achievement of the corresponding Milestone Event:

	
				
	Milestone Event
	Milestone Payment

	Upon first time achieving Territory-wide Net Sales of all Licensed Products in a Calendar Year of at least $75,000,000.00
	

	$2,500,000.00
	

	Upon first time achieving Territory-wide Net Sales of all Licensed Products in a Calendar Year of at least $150,000,000.00
	

	$3,500,000.00
	

	Upon first time achieving Territory-wide Net Sales of all Licensed Products in a Calendar Year of at least $250,000,000.00
	

	$10,000,000.00
	

	Upon first time achieving Territory-wide Net Sales of all Licensed Products in a Calendar Year of at least $400,000,000.00
	

	$20,000,000.00
	

4.2.3    Determination that Milestone Events Have Occurred.  Opiant shall promptly notify Sanofi in writing of the achievement of each Milestone Event.  In the event that, notwithstanding the fact that Opiant has not provided Sanofi such a notice, Sanofi believes that any such Milestone Event has been achieved, it shall so notify Opiant in writing and the Parties shall promptly meet and discuss in good faith whether such Milestone Event has been achieved.  For clarity, (a) any achievement of a Milestone Event for a Licensed Product shall be deemed an achievement of any prior Milestone Event for the same Licensed Product, if the Milestone Payment corresponding to such prior Milestone Event has not been made for any reason; provided however that the foregoing does not apply with regard to Market Approval milestones in distinct countries or regions (i.e., no Milestone Event from among Milestone Events 4 – 7 in Section 6.2.1 shall be deemed to be “prior” to any other Milestone Event from among Milestone Events 4 – 7) nor shall any of Milestone Events 1 – 7 in Section 6.2.1 be deemed to be “prior” to Milestone Event 8 (Issuance of first Pediatric Exclusivity) in Section 6.2.1),  and (b) the achievement of any Milestone Event by an Affiliate of Opiant shall trigger the corresponding Milestone Payment as if such Milestone Event had been achieved by Opiant.  Any dispute under this Section 6.2.3 regarding whether or not a Milestone Event has been achieved shall be subject to resolution in accordance with Section 13.7.

4.3    Royalties. 
4.3.1    Royalty Rates.  Opiant shall pay Sanofi a royalty on Net Sales of all Licensed Products in the Territory for each Calendar Year (or partial Calendar Year), as follows:

	
		
	That portion of Net Sales of all Licensed  
Products in the Territory in a Calendar Year that is:
	Royalty Rate

	Less than or equal to $150,000,000.00
	7%

	Greater than $150,000,000 but less than or equal to $250,000,000.00
	8%

	Greater than $250,000,000.00
	12%

4.3.2    Blended Royalty.  Opiant acknowledges that (a) the Licensed Know-How is proprietary and valuable and that without the Licensed Know-How, Opiant would not be able to obtain and maintain Market Approvals with respect to the Licensed Products, (b) such Market Approvals will allow Opiant to obtain and maintain Regulatory Exclusivity with respect to the Licensed Products in the Field in the Territory, (c) access to the Licensed Know-How and the rights with respect to the Regulatory Documentation have provided Opiant with a competitive advantage in the marketplace beyond the exclusivity afforded by the Licensed Patents and the Regulatory Exclusivity, and (d) the milestone payments and royalties set forth in Section 6.2 and Section 6.3, respectively, are, in part, intended to compensate Sanofi for such exclusivity and such competitive advantage.  The Parties agree that the royalty rates set forth in Section 6.3.1 reflect an efficient and reasonable blended allocation of the value provided by Sanofi to Opiant.
4.3.3    Third Party Licenses.  If, during the Term, Opiant determines in good faith that it is reasonably necessary or useful to obtain a license from any Third Party to any Patent or technology (e.g., an excipient) in order to Exploit a Licensed Product in the Field, fifty percent (50% ) of any royalties or other amounts paid to such Third Party under the license for such Patent or technology in respect of such Licensed Product may be deducted from royalties or other amounts otherwise due to Sanofi with respect to such Licensed under this Agreement; provided that in no event shall any deduction under this Section 6.3.3 result in a reduced effective royalty rate payable to Sanofi in respect of such Licensed Product in such country of less than fifty percent (50%) of the effective royalty rate prior to application of this clause.  Upon Sanofi’s written request, Opiant shall provide Sanofi with a copy of the license agreement(s) pursuant to which such Patent(s) or technology were obtained; provided that the terms of such license agreement(s), to the extent not pertinent to Sanofi’s verification of (i) the Patent or technology being in-licensed and its applicability to the Licensed Product, and (ii) the verification of the offsets being applied to the royalty payments owing to Sanofi, may be redacted.     
4.3.4    Generic Competition.  During the Royalty Term for a Licensed Product in a particular country of the Territory, the royalty rate applicable to such Licensed Product in such country under Section 6.3.1 above shall be subject to reduction, based on the level of competition from Generic Versions of such Licensed Product in such country as follows:
(i)    If Generic Versions of such Licensed Product capture a Generic Market Share with respect to such Licensed Product in such country of at least fifty percent (50%), then for so long as Generic Version(s) maintain a Generic Market Share of at least fifty percent (50%) in such country, the  amount of Net Sales of such Licensed Product in such country during the relevant period of time shall be reduced by fifty percent (50%) for the purpose of calculating the royalty due to Sanofi according to Section 6.3.1.
(ii)    For purposes of this Section 6.3.4:
(a)    “Generic Version” shall mean, with respect to a Licensed Product and a particular country, a pharmaceutical product that: (1) is marketed in such country by an entity other than Opiant, its Affiliates or its Sublicensees, (2) contains the same active pharmaceutical ingredient utilized as a Licensed Compound in such Licensed Product, (3) receives Market Approval for use in the Field (with or without pricing reimbursement approval) in such country in full or partial reliance on the Market Approval (but not necessarily pricing or reimbursement approval) of such Licensed Product; 
(b)    “Generic Market Share” means, with respect to a Licensed Product in a country, the total unit volume of Generic Version(s) of such Licensed Product sold in such country, as a percentage of the combined unit volume of such Licensed Product and such Generic Version(s), in the aggregate in such country, for the current calendar quarter (i.e., the calendar quarter for which royalties are being calculated under this Section 6.3) and the preceding calendar quarter.  Such unit volumes shall be determined by the number of unit sales given for such Licensed Product and such Generic Version(s) in aggregate, during such period (based on data provided by a reputable Third Party data source generally accepted in the pharmaceutical industry in the relevant country and mutually agreed by the Parties)

4.4    Payment Dates and Reports.  Royalty payments shall be made by Opiant within sixty (60) calendar days after the end of each Calendar Quarter commencing with the Calendar Quarter in which the first day of the first Royalty Term for the first Licensed Product occurs.  Opiant shall also provide to Sanofi, at the same time each such payment is made, a report showing:  (a) the Net Sales of the Licensed Products by country in the Territory; (b) an itemized calculation of Net Sales showing deductions from Invoiced Sales to determine Net Sales; (c) the applicable royalty rates for the Licensed Products; (d) the exchange rates used in calculating any of the foregoing; and (e) a calculation of the amount of royalty due to Sanofi.  If for any Calendar Quarter there are no Net Sales in such Calendar Quarter, Opiant shall notify Sanofi in writing thereof.

4.5    Mode of Payment; Currency Conversion. 
(i)    All payments to Sanofi under this Agreement shall be made by deposit of USD in the requisite amount to such bank account as Sanofi may from time to time designate by notice to Opiant.
(ii)    If any currency conversion shall be required in connection with any payment hereunder, such conversion shall be made using the exchange rate utilized by Opiant in calculating its own revenues for financial reporting purposes.
4.6    Taxes.  The upfront payment, milestone payments and other amounts payable by Opiant to Sanofi pursuant to this Agreement (“Payments”) shall not be reduced on account of any taxes unless required by Applicable Law.  Sanofi alone shall be responsible for paying any and all taxes (other than withholding taxes required by Applicable Law to be paid by Opiant) levied on account of, or measured in whole or in part by reference to, any Payments it receives.  Opiant shall deduct or withhold from the Payments any taxes that it is required by Applicable Law to deduct or withhold.  Notwithstanding the foregoing, if Sanofi is entitled under any applicable tax treaty to a reduction of rate of, or the elimination of, applicable withholding tax, it may deliver to Opiant or the appropriate governmental authority (with the assistance of Opiant to the extent that this is reasonably required and is expressly requested in writing) the prescribed forms necessary to reduce the applicable rate of withholding or to relieve Opiant of its obligation to withhold tax, and Opiant shall apply the reduced rate of withholding, or dispense with withholding, as the case may be; provided that Opiant has received evidence, in a form reasonably satisfactory to Opiant, of Sanofi’s delivery of all applicable forms (and, if necessary, its receipt of appropriate governmental authorization) at least fifteen (15) calendar days prior to the time that the Payments are due.  If, in accordance with the foregoing, Opiant withholds any amount, it shall pay to Sanofi the balance when due, make timely payment to the proper taxing authority of the withheld amount and send to Sanofi proof of such payment within ten (10) calendar days following such payment.  Opiant shall be responsible for any sales or other similar tax that Sanofi may be required to collect with respect to the Payments.

4.7    Interest on Late Payments.  If any Payment due to Sanofi under this Agreement is not paid in when due, then Opiant shall pay interest thereon and on any unpaid accrued interest (before and after any judgment) at an annual rate (but with interest accruing on a daily basis) of three and a half percent (3.5%), such interest to run from the date upon which payment of such amount became due until payment thereof in full together with such accrued interest.

4.8    Financial Records.  Opiant shall, and shall cause its Affiliates and sub-licensees to, keep complete and accurate books and records pertaining to the sale of the Licensed Products, including books and records of Invoiced Sales (including any deductions therefrom) and Net Sales of the Licensed Products in the Territory.  Opiant shall, and shall cause its Affiliates and sublicensees to, retain such books and records, until the later of (3) three years after the end of the period to which such books and records pertain and the expiration of the applicable tax statute of limitations (or any extensions thereof), or for such longer period as may be required by Applicable Law.

4.9    Audits.  At the reasonable request of Sanofi, Opiant shall, and shall cause its Affiliates and shall use reasonable efforts to require its Sublicensees to, permit an independent certified public accountant designated by Sanofi and reasonably acceptable to Opiant, at reasonable times and upon reasonable notice, to audit the books and records maintained pursuant to Section 6.8 to verify the accuracy of all reports and payments made under Section 6.4 for any Calendar Year ending not more than thirty six (36) months prior to the date of such requested audit.  Such audits may not be conducted more than once in any 12-month period (unless a previous audit during such 12-month period revealed an underpayment with respect to such period or Opiant restates or revises such books and records for such 12-month period) or (c) be repeated for any Calendar Year.  If Opiant is unable to obtain from any Sublicensee a right for Sanofi (through an independent certified public accountant designated by Sanofi) to audit the equivalent books and records of such Sublicensee, Opiant shall obtain the right to inspect and audit such Sublicensee’s books and records for itself and shall exercise such audit rights on behalf and at the expense of Sanofi upon Sanofi’s written request and disclose the results of any such audit to Sanofi in accordance with the terms of this Agreement.  Except as provided below, the cost of any audit shall be borne by Sanofi, unless the audit reveals a variance of more than ten percent (10%) from the reported amounts for such Calendar Year, in which case Opiant shall bear the costs of the audit charged to Sanofi by the applicable independent certified public accountant.  Unless disputed pursuant to Section 6.10, if such audit concludes that additional payments were owed or that excess payments were made during such period, Opiant shall pay the additional amounts, with interest from the date originally due as provided in Section 6.7, within thirty (30) calendar days after the date on which such audit is completed and the conclusions thereof are notified to the Parties or Opiant shall deduct such excess payments from future payments owed Sanofi, as the case may be.

4.10    Audit Dispute.  In the event of a dispute over the results of any audit conducted pursuant to Section 6.9, Sanofi and Opiant shall work in good faith to resolve such dispute.  If the Parties are unable to reach a mutually acceptable resolution of any such dispute within thirty (30) calendar days, the dispute shall be submitted for arbitration to a certified public accounting firm selected by each Party’s certified public accountants or to such other Person as the Parties shall mutually agree (the “Accountant”) or failing such agreement, as the Chairman of the International Chamber of Commerce (or such other body as the Parties may mutually agree), may nominate.  The decision of the Accountant shall be final and the costs of such arbitration as well as the initial audit shall be borne between the Parties in such manner as the Accountant shall determine.  Not later than thirty (30) calendar days after such decision and in accordance with such decision, Opiant shall pay the additional royalties, with interest from the date originally due as provided in this Section 6.10 or Sanofi shall reimburse such excess payments, as applicable.

4.11    Confidentiality.  Sanofi shall treat all information subject to review under this Article 6 in accordance with the confidentiality provisions of Article 9 and Sanofi shall cause the independent public accountant retained by Sanofi pursuant to Section 6.10 or the Accountant, as applicable, to enter into a reasonably acceptable confidentiality agreement that includes an obligation to retain all such financial information in confidence.

Article 5     
INTELLECTUAL PROPERTY

5.1    Ownership of Arising Information and Inventions.  Opiant shall own and retain all right, title and interest in and to any and all Information and Inventions that are conceived, discovered, developed or otherwise made by or on behalf of Opiant or its Affiliates under or in performance of the exercise of the licenses granted to Opiant pursuant to Section 2.1, whether or not patented or patentable, and any and all Patents and other intellectual property rights with respect thereto.

5.2    Prosecution and Maintenance of Patents. 
5.2.1    Licensed Patents.  As between the Parties, Opiant shall have the first right, but not the obligation, to prepare, file, prosecute and maintain (including with respect to related interference, re-issuance, re-examination and opposition proceedings) the Licensed Patents in the Territory at its sole cost and expense using reasonable care and skill and using counsel reasonably acceptable to Sanofi; provided that if Opiant plans to abandon any Licensed Patent in the Territory, Opiant shall notify Sanofi in writing at least thirty (30) calendar days in advance of the due date of any payment or other action that is required to prosecute and maintain such Licensed Patent. Sanofi shall thereupon have the right, in its sole discretion, to assume control and direction of the prosecution and maintenance of such Licensed Patent at its sole cost and expense in such country.  Upon receipt of written notice that Sanofi has elected to exercise its back-up prosecution rights under this Section 7.2.1 with respect to such abandoned Licensed Patent, the licenses under such Licensed Patent granted in Section 2.1 above shall terminate.

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5.2.2    Cooperation.  Sanofi shall assist Opiant at the reasonable request of Opiant from time to time in connection with its activities set forth in Section 7.2.1 above at Opiant’s cost.  At Sanofi’s written request, Opiant shall keep Sanofi  informed of all material steps to be taken in the preparation and prosecution of all applications filed by it pursuant to Section 7.2.1 above and shall furnish Sanofi with copies of such applications for Patents, amendments thereto and other related correspondence to and from patent offices, and, to the extent reasonably practicable, permit Sanofi an opportunity to offer its comments thereon before making a submission to a patent office and Opiant shall consider in good faith Sanofi’s comments.  Sanofi shall offer its comments, if any, promptly.  Opiant also shall provide Sanofi, upon its request, with copies of any patentability search reports generated by its patent counsel with respect to the Licensed Patents, including relevant Third Party Patents and Patent applications located; provided that neither Party shall be required to provide privileged information with respect to such intellectual property status, unless and until procedures reasonably acceptable to such Party are in place to protect such privilege.  All communications between the Parties relating to the preparation, filing, prosecution or maintenance of the Licensed Patents, including applications for Patents, amendments thereto and related correspondence to and from patent offices or patent authorities with respect to such Patents, shall be considered Confidential Information of both Parties and subject to the confidentiality provisions of Article 9.
5.2.3    Patent Term Extension and Supplementary Protection Certificate.  As between the Parties, Opiant shall have the sole right to make decisions regarding patent term extensions, including supplementary protection certificates and any other extensions that are now or become available in the future, wherever applicable, for the Licensed Patents in any country in the Territory.  Opiant shall have the primary responsibility of applying for any such extension.  Sanofi shall provide prompt and reasonable assistance, as reasonably requested by Opiant, including by taking such action as Patent owner as is required under any Applicable Law to obtain any such extension.
5.2.4    Patent Listings.  As between the Parties, Opiant shall have the sole right to make decisions regarding and make all filings with Regulatory Authorities in the Territory with respect to the Licensed Patents for the Licensed Compounds and the Licensed Products, including as required or allowed (a) in the United States, in the FDA’s Orange Book, and (b) in the European Union, under the national implementations of Article 10.1(a)(iii) or Directive 2001/EC/83 or other international equivalents, provided that Opiant shall consult with Sanofi in determining the course of action with respect to such filings.  Sanofi shall reasonably cooperate with Opiant with respect to such patent listings of such Licensed Patent.

5.3    Enforcement of Patents. 
5.3.1    Notice.  In the event either Party becomes aware of (a) any suspected infringement of any Licensed Patents or (b) any certification filed under the Hatch-Waxman Act claiming that any Licensed Patents are invalid or unenforceable or claiming that any Licensed Patents would not be infringed by the making, use, offer for sale, sale or import of a product for which an application under the Hatch-Waxman Act is filed, or any equivalent or similar certification or notice in any other jurisdiction in the Territory (each of clauses (a) and (b), an “Infringement”), such Party shall promptly notify the other Party and provide it with all details of such Infringement 

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of which it is aware (each, an “Infringement Notice”); provided that each Party shall give the other Party an Infringement Notice not later than (3) three Business Days after it becomes aware of any Infringement described in clause (b) above.
5.3.2    Licensed Patents in the Territory.  As between the parties, Opiant shall have the first right, but not the obligation, through counsel of its choosing, to initiate an infringement action with respect to any Infringement of any Licensed Patents at its sole cost and expense.  Opiant may, subject to Section 2.3, grant the infringing Third Party adequate rights and licenses necessary for continuing such activities.  If Opiant does not initiate an infringement action (a) with respect to any commercially significant Infringement (other than an Infringement of the type described in clause (b) below) within ninety (90) calendar days of a request by Sanofi to do so, or (b) within twenty-five (25) calendar days of learning of any Infringement described in clause (b) of the definition thereof, or earlier notifies Sanofi in writing of its intent not to so initiate an action, and Opiant has not granted such infringing Third Party rights and licenses to continue its otherwise infringing activities, then Sanofi shall have the right, but not the obligation, to bring such an action; provided that, except with respect to any Infringement described in clause (b) of the definition thereof, if Opiant has commenced negotiations with an alleged infringer for discontinuance of such infringement within such 90-day period, Sanofi shall not bring suit against such Infringer for so long as Opiant is actively pursuing such negotiations.  The scope of the enforcement rights granted to Opiant by Sanofi under this Section 7.3.2 is intended to be broader than the scope of the rights to practice the Licensed Patents granted to Opiant under 2.1.1.  Accordingly, and without limiting its obligations under Section 7.3.4 below, Sanofi agrees that it will take such steps as are necessary to give effect to the foregoing enforcement rights, including without limitation, joining as party plaintiff any action Opiant seeks to bring against a Third Party for Infringement pursuant to this Section 7.3.2 at Opiant’s cost.
5.3.3    Settlement.  The Party that is entitled to pursue an action against an Infringement in accordance with Section 7.3.2 also shall have the right to control settlement of such claim; provided that no settlement shall be entered into without the prior consent of the other Party (which consent shall not be unreasonably withheld) if such settlement would adversely affect or diminish the rights and benefits of the other Party under this Agreement, or impose any new obligations or adversely affect any obligations of the other Party under this Agreement.
5.3.4    Cooperation.  In the event a Party is entitled to and brings an infringement action in accordance with this Section 7.3, the other Party shall cooperate fully, including being joined as a party plaintiff in such action, providing access to relevant documents and other evidence and making its employees available at reasonable business hours.  If a Party pursues an action against such alleged Infringement, it shall consider in good faith any comments from the other Party and shall keep the other Party reasonably informed of any steps taken to preclude such infringement.
5.3.5    Costs and Recovery.  Each Party shall bear its own costs and expenses relating to any Infringement action commenced pursuant to this Section 7.3.  Any damages or other amounts collected shall be first allocated to reimburse the Parties for their costs and expenses in making such recovery (which amounts shall be allocated pro rata if insufficient to cover the totality 

16

of such expenses).  Any remainder after such reimbursement is made shall (a) before the First Commercial Sale of the considered Licensed Product, be shared 30% Sanofi and 70% Opiant, or (b) after the First Commercial Sale of the considered Licensed Product, be included in the Net Sales calculation for such Licensed Product.

5.4    Infringement Claims by Third Parties. 
5.4.1    Defense of Third Party Claims.  If a Third Party asserts that a Patent or other intellectual property right owned or otherwise controlled by it is infringed by the Exploitation of the Licensed Products in the Field in the Territory, the Party first made aware of such a claim shall promptly provide the other Party written notice of such claim along with the related facts in reasonable detail.  As between the Parties, Opiant shall have the first right, but not the obligation, to control the defense of such claim.  If Opiant fails to assume control of the defense of such claim within ninety (90) calendar days after receiving notice thereof from, or giving notice thereof to, Sanofi pursuant to the first sentence of this Section 7.4.1, then Sanofi shall have the right, but not the obligation, to defend against such claim.  Notwithstanding the foregoing, the Party controlling such defense (the “Controlling Party”) shall not be entitled to assert a claim or counterclaim against such Third Party based on the Patents or other intellectual property rights owned or otherwise controlled by the other Party (the “Non-Controlling Party”) without the prior written consent of the Non-Controlling Party, such consent not to be unreasonably conditioned, withheld or delayed.  The Non-Controlling Party shall cooperate with the Controlling Party, at the Controlling Party’s reasonable request and expense, in any such defense and shall have the right, at its own expense, to be represented separately by counsel of its own choice in any such proceeding.
5.4.2    Settlement of Third Party Claims.  The Controlling Party with respect to a particular claim pursuant to Section 7.4.1 also shall have the right to control settlement of such claim; provided that (a) no settlement shall be entered into without the prior written consent of the Non-Controlling Party (which consent shall not be unreasonably withheld) if such settlement would adversely affect or diminish the rights and benefits of the Non-Controlling Party under this Agreement, or impose any new obligations or adversely affect any obligations of the Non-Controlling Party under this Agreement and (b) the Controlling Party shall not be entitled to settle any such claim by granting a license or covenant not to sue under or with respect to the Patents or other intellectual property rights owned or otherwise controlled by the Non-Controlling Party without the prior written consent of the Non-Controlling Party, such consent not to be unreasonably conditioned, withheld or delayed.
5.4.3    Allocation of Costs.  Except as otherwise provided in Article 11 (Indemnity) each Party shall be responsible for the costs and expenses it incurs relating to any defense, settlement and judgments in actions commenced pursuant to this Section 7.4.

5.5    Invalidity or Unenforceability Defenses or Actions. 
5.5.1    Third Party Defense or Counterclaim.

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(i)    If a Third Party asserts, as a defense or as a counterclaim in any infringement action under Section 7.3 or claim or counterclaim asserted under Section 7.4, or in a declaratory judgment action or similar action or claim filed by such Third Party, that any Licensed Patent is invalid or unenforceable, then the Party pursuing such infringement action, or the Party first obtaining knowledge of such declaratory judgment action, as the case may be, shall promptly give written notice to the other Party.
(ii)    Opiant shall have the first right, but not the obligation, through counsel of its choosing, at its sole cost and expense, to defend against such action or claim.  If Opiant fails to accept control of the defense of such a claim within ninety (90) calendar days after receiving notice thereof from, or giving notice thereof to, Sanofi pursuant to Section 7.5.1(i), Sanofi shall have the right, through counsel of its choosing, at its sole cost and expense, to defend against such action or claim.
5.5.2    Assistance.  Each Party shall assist and cooperate with the other Party as such other Party may reasonably request from time to time in connection with its activities set forth in Section 7.5.1, including by providing access to relevant documents and other evidence and making its employees available at reasonable business hours; provided that neither Party shall be required to disclose legally privileged information unless and until procedures reasonably acceptable to such Party are in place to protect such privilege.  In connection with any such defense or claim or counterclaim, the controlling Party shall consider in good faith any comments from the other Party and shall keep the other Party reasonably informed of any steps taken, and shall provide copies of all documents filed, in connection with such defense, claim or counterclaim.  In connection with the activities set forth in Section 7.5.1, each Party shall consult with the other as to the strategy for the defense of the Licensed Patents.

5.6    Third Party Licenses.  If, in the reasonable opinion of counsel to Opiant, the Exploitation of the Licensed Product in the Field in the Territory by Opiant or its Affiliates or Sublicensees infringes or is reasonably expected to infringe any Patent of a Third Party or to infringe or misappropriate any other intellectual property right of a Third Party, in any country in the Territory (such right, a “Third Party Right”), then as between the Parties, Opiant shall have the first right, but not the obligation, to negotiate and obtain a license or other rights from such Third Party to such Third Party Right as necessary or desirable for Opiant or its Affiliates or Sublicensees to Exploit such Licensed Product in the Field in such country.  As between the Parties, Opiant shall be responsible for all license fees, milestones, royalties or other such payments due to such Third Party, provided that Opiant shall have the right to offset the amounts that it is obligated to pay to such Third Party for such Third Party Rights against payments otherwise due to Sanofi under this Agreement, as further described in Section 6.3.3.

5.7    Product Trademarks. 
5.7.1    Maintenance and Prosecution of Product Trademarks.  Opiant shall own all right, title, and interest to the Product Trademarks in the Territory, and shall be responsible for the registration, prosecution, and maintenance thereof.  All costs and expenses of registering, prosecuting, and maintaining the Product Trademarks shall be borne solely by Opiant.

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5.7.2    Enforcement of Product Trademarks.  As between the Parties, Opiant shall have the sole right to take such action as it deems necessary against a Third Party based on any alleged, threatened, or actual infringement, dilution, misappropriation, or other violation of, or unfair trade practices or any other like offense relating to, the Product Trademarks by a Third Party in the Territory.  Opiant shall bear the costs and expenses relating to any enforcement action commenced pursuant to this Section 7.7.2 and any settlements and judgments with respect thereto, and shall retain any damages or other amounts collected in connection therewith.
5.7.3    Third Party Claims.  Opiant shall have the right to defend against and settle any alleged, threatened, or actual claim by a Third Party that the use or registration of the Product Trademarks in the Territory infringes, dilutes, misappropriates, or otherwise violates any Trademark or other right of such Third Party or constitutes unfair trade practices or any other like offense, or any other claims as may be brought by a Third Party against a Party in connection with the use of the Product Trademarks with respect to a Licensed Product in the Territory.  Opiant shall bear the costs and expenses relating to any defense commenced pursuant to this Section 7.7.3 and any settlements and judgments with respect thereto, and shall retain any damages or other amounts collected in connection therewith.
5.7.4    Notice and Cooperation.  Each Party shall provide to the other Party prompt written notice of any actual or threatened infringement of the Product Trademarks in the Territory and of any actual or threatened claim that the use of the Product Trademarks in the Territory violates the rights of any Third Party.  Each Party shall cooperate fully with the other Party with respect to any enforcement action or defense commenced pursuant to this Section 7.7; provided that Opiant shall bear the costs and expenses incurred by Sanofi in connection with such cooperation.

Article 6     
PHARMACOVIGILANCE AND SAFETY

6.1    Global Safety Database.  Opiant shall set up, hold, and maintain (at Opiant’s sole cost and expense) the global safety database for the Licensed Products in the Territory.

Article 7     
CONFIDENTIALITY AND NON-DISCLOSURE

7.1    Confidentiality Obligations.  At all times during the Term and for a period of ten (10) years following termination or expiration of this Agreement, each Party shall, and shall cause its Affiliates and their respective officers, directors, employees and agents to, keep completely confidential and not publish or otherwise disclose to a Third Party and not to use, directly or indirectly, for any purpose, any Confidential Information furnished or otherwise made known to it, directly or indirectly, by the other Party, except to the extent such disclosure or use is expressly permitted by the terms of this Agreement or such use is reasonably necessary for the performance of its obligations or the exercise of its rights under this Agreement.  “Confidential Information” means any information provided by one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) under or in connection with this Agreement, including the terms of this 

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Agreement (subject to Sections 9.2.5 and 9.4) or any information relating to the Licensed Products (including the Regulatory Documentation and Market Approvals and any information or data contained therein), any information relating to any Exploitation of the Licensed Products in the Territory or the scientific, regulatory or business affairs or other activities of either Party.  Notwithstanding the foregoing (i) Licensed Know-How and the terms of this Agreement shall be deemed Confidential Information of both Parties, and (ii) Confidential Information shall not include any information that:
7.1.1    is or hereafter becomes part of the public domain by public use, publication, general knowledge or the like through no breach of this Agreement, wrongful act, fault or negligence on the part of the Receiving Party;
7.1.2    can be demonstrated by documentation or other competent proof to have been in the Receiving Party’s possession prior to disclosure by the Disclosing Party without any obligation of confidentiality with respect to such information;
7.1.3    is subsequently received by the Receiving Party from a Third Party who is not bound by any obligation of confidentiality with respect to such information; or
7.1.4    can be demonstrated by contemporaneous documentation or other competent evidence to have been independently developed by or for the Receiving Party without use of or reference to the Disclosing Party’s Confidential Information.
Specific aspects or details of Confidential Information shall not be deemed to be within the public domain or in the possession of the Receiving Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of the Receiving Party.  Further, any combination of Confidential Information shall not be considered in the public domain or in the possession of the Receiving Party merely because individual elements of such Confidential Information are in the public domain or in the possession of the Receiving Party unless the combination and its principles are in the public domain or in the possession of the Receiving Party.

7.2    Permitted Disclosures.  Each Receiving Party may disclose Confidential Information disclosed to it by the Disclosing Party to the extent that such disclosure by the Receiving Party is:
7.2.1    made in response to a valid order of a court of competent jurisdiction or other supra-national, federal, national, regional, state, provincial and local governmental or regulatory body of competent jurisdiction or, if in the reasonable opinion of the Receiving Party’s legal counsel, such disclosure is otherwise required by Applicable Law or the requirements of a national securities exchange or other similar regulatory body; provided that the Receiving Party shall first have given notice, to the extent legally permitted, to the Disclosing Party and given the Disclosing Party a reasonable opportunity to quash such order and to obtain a protective order requiring that the Confidential Information and documents that are the subject of such order be held in confidence by such court or agency or, if disclosed, be used only for the purposes for which the order was issued; and provided further that if a disclosure order is not quashed or a protective order 

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is not obtained, the Confidential Information disclosed in response to such court or governmental order shall be limited to the information that is legally required to be disclosed in response to such court or governmental order;
7.2.2    made by or on behalf of the Receiving Party to a Regulatory Authority as required in connection with any filing, application or request for Market Approval; provided that reasonable measures shall be taken to obtain confidential treatment of such information to the extent practicable and consistent with Applicable Law;
7.2.3    made by or on behalf of the Receiving Party as reasonably necessary or useful to file or prosecute Patent applications, prosecute or defend litigation or otherwise establish rights or enforce obligations under this Agreement; provided that reasonable measures shall be taken to obtain confidential treatment of such information the extent such protection is available;
7.2.4    made by or on behalf of the Opiant as the Receiving Party, in connection with the exercise of its rights or performance of its obligation under this Agreement, including the Development, Manufacture and/or Commercialization of Licensed Compounds and/or Licensed Products and the Exploitation of Licensed Know-How and Licensed Patents in accordance with the licenses and rights granted to Opiant under Article 2 above, provided that such persons provided Confidential Information shall be subject to obligations of confidentiality and non-use with respect to such Confidential Information substantially similar to the obligations of confidentiality and non-use of the Receiving Party pursuant to this Article 9 (with a duration of confidentiality and non-use as appropriate that is not less than three (3) years from the date of disclosure).
7.2.5    made by or on behalf of the Receiving Party to actual or prospective investors, collaboration partners, acquirers, merger candidates, or, with respect to Sanofi as the Receiving Party, investors in connection with a Monetization (and to its and their respective Affiliates, representatives and financing sources); provided that such persons shall be subject to obligations of confidentiality and non-use with respect to such Confidential Information substantially similar to the obligations of confidentiality and non-use of the Receiving Party pursuant to this Article 9 (with a duration of confidentiality and non-use as appropriate that is not less than three (3) years from the date of disclosure); and provided further that actual or prospective investors, collaboration partners, acquirers, or merger candidates may be able to disclose Confidential Information to their own affiliates, investors, representatives, and agents, in each case subject to similar obligations of confidentiality and non-use with respect to such Confidential Information.

7.3    Use of Name.  Except as expressly provided in this Agreement, neither Party shall use the name, insignia, symbol, Trademark of the other Party (or any abbreviation or adaptation thereof) in any publication, press release, marketing and promotional material or other form of publicity without the prior written approval of such other Party in each instance, such approval not be unreasonably conditioned, withheld or delayed.  The restrictions imposed by this Section 9.3 shall not prohibit either Party from making any disclosure (a) identifying the other Party as a counterparty to this Agreement to its investors, (b) that is required by Applicable Law or the requirements of a national securities exchange or another similar regulatory body (provided that any such disclosure shall be governed by this Article 9) or (c) with respect to which written consent has previously been 

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obtained.  Further, the restrictions imposed on each Party under this Section 9.3 are not intended, and shall not be construed, to prohibit a Party from identifying the other Party in its internal business communications, provided that any Confidential Information in such communications remains subject to this Article 9.

7.4    Press Releases.  Opiant shall have the right to issue an initial press release regarding the execution of this Agreement as attached as Schedule 9.4 to this Agreement.  Thereafter,  neither Party shall issue any press release or other similar public communication relating to this Agreement, its subject matter or the transactions covered by it, or the activities of the Parties under or in connection with this Agreement, without the prior written approval of the other Party, such consent not to be unreasonably withheld, conditioned or delayed, except , (a) that Opiant may issue press releases and other public statements as it deems appropriate in connection with the Development, Manufacture or Commercialization of Licensed Compounds and Licensed Products under this Agreement, provided that Sanofi is given an opportunity to review and comment on any such press release or public communication at least ten (10) Business Days in advance and provided further that Opiant shall act in good faith to incorporate any comments provided by Sanofi with respect to such press release or public communication, (b) either Party may issue any disclosure required by Applicable Law or the rules of a stock exchange on which the securities of the issuing Party are listed, as reasonably advised by the issuing Party’s counsel (provided that the other Party is given a reasonable opportunity to review and comment on any such press release or public communication at least five (5) Business Days in advance thereof (or if five (5) Business Days is not practicable, then such shorter period as is practicable), in each case to the extent legally permitted and the issuing Party shall consider in good faith incorporating any reasonable comments provided by the other Party in such press release or public communication), (c) for information that has been previously disclosed publicly or (d) as otherwise set forth in this Agreement.

7.5    Publications.  Each Party recognizes that Opiant’s publication of papers regarding results of the Development activities under this Agreement in scientific journals and at scientific conferences, including oral presentations and abstracts, may be beneficial to both Parties.  Accordingly, Opiant shall be free to publically disclose the results and information regarding its Development activities under this Agreement in scientific journals and in connection with participation in scientific conferences; provided, however, that Opiant shall provide Sanofi with a draft of any proposed publications in scientific journals or at scientific conferences, the primary focus of which concerns the results of the Development activities under this Agreement, at least thirty (30) days before the intended date of submission (in the case of any proposed publications in scientific journals) or presentation (in the case of oral presentations), and will consider in good faith any reasonable comment made by Sanofi in relation to such draft publication.

7.6    Destruction of Confidential Information.  Within ninety (90) days after the termination of this Agreement, or at the written request of the Disclosing Party, the Receiving Party shall promptly destroy all documentary, electronic or other tangible embodiments of the Disclosing Party’s Confidential Information to which the Receiving Party does not retain rights hereunder and any and all copies thereof, and destroy those portions of any documents that incorporate or are derived from the Disclosing Party’s Confidential Information to which the Receiving Party does not retain rights hereunder, and provide a written certification of such destruction, except that the Receiving Party may retain one copy thereof, to the extent that the Receiving Party requires such Confidential Information for the purpose of performing any obligations or exercising any rights under this Agreement that may survive such expiration or termination, or for archival or compliance purposes.  Notwithstanding the foregoing, the Receiving Party also shall be permitted to retain such additional copies of or any computer records or files containing the Disclosing Party’s Confidential Information that have been created solely by the Receiving Party’s automatic archiving and back-up procedures, to the extent created and retained in a manner consistent with the Receiving Party’s standard archiving and back-up procedures, but not for any other use or purpose.  

Article 8     
REPRESENTATIONS AND WARRANTIES

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8.1    Mutual Representations and Warranties.  Each Party hereby represents and warrants to the other Party as of the Effective Date as follows:
8.1.1     Corporate Authority.  Such Party (a) has the power and authority and the legal right to enter into this Agreement and perform its obligations hereunder and (b) has taken all necessary action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder.  This Agreement has been duly executed and delivered by such Party and constitutes a legal, valid and binding obligation of such Party and is enforceable against it in accordance with its terms subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement of creditor rights and judicial principles affecting the availability of specific performance and general principles of equity, whether enforceability is considered in a proceeding at law or equity.
8.1.2    Conflicts.  The execution and delivery of this Agreement and the performance of such Party’s obligations hereunder (a) do not conflict with or violate any requirement of Applicable Law or any provision of the articles of incorporation or bylaws of such Party in any material way and (b) do not conflict with, violate or breach or constitute a default or require any consent under, any contractual obligation or court or administrative order by which such Party is bound.

8.2    Representations, Warranties and Covenants of Opiant.  Neither Opiant nor any of its Affiliates has been debarred or is subject to debarment and neither Opiant nor any of its Affiliates will use in any capacity, in connection with the activities to be performed under this Agreement, any Person who has been debarred pursuant to Section 306 of the FFDCA or who is the subject of a conviction described in such section.  Opiant shall inform Sanofi in writing immediately if it or any Person who is performing activities hereunder is debarred or is the subject of a conviction described in Section 306 or if any action, suit, claim, investigation or legal or administrative proceeding is pending or, to the best of Opiant’s knowledge, is threatened, relating to the debarment or conviction of Opiant or any Person performing activities hereunder.

8.3    Representations, Warranties and Covenants of Sanofi.  Sanofi hereby represents and warrants to Opiant as of the Effective Date as follows:
8.3.1    It Controls the Licensed Patents and the Licensed Know-How, and has the right to grant the licenses specified herein, free of any encumbrance, lien, or claim of ownership by a Third Party;
8.3.2    to its knowledge there are, as of the Effective Date, no material claims against Sanofi or its Affiliates relating to the Licensed Patents and/or the Licensed Compound in the Territory.
8.3.3    Neither Sanofi nor any of its Affiliates has used in any capacity, in connection with the Manufacture or Development of Licensed Compound or Licensed Product prior to the Effective Date, any Person who has been debarred pursuant to Section 306 of the FFDCA or who is the subject of a conviction described in such section.

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8.4    DISCLAIMER OF WARRANTY.  EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH HEREIN, NEITHER PARTY MAKES ANY REPRESENTATIONS OR GRANTS ANY WARRANTY, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

8.5    ADDITIONAL WAIVER.  OPIANT AGREES THAT:  (A) SUBJECT TO THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTIONS 10.3.1 AND 10.3.2, THE LICENSED PATENTS ARE LICENSED “AS IS,” “WITH ALL FAULTS,” AND “WITH ALL DEFECTS,” AND EXCEPT FOR THE RIGHT TO BRING CLAIMS IN CONNECTION WITH A BREACH OF SECTIONS 10.3.1 OR 10.3.2, OPIANT EXPRESSLY WAIVES ALL RIGHTS TO MAKE ANY CLAIM WHATSOEVER AGAINST SANOFI FOR MISREPRESENTATION OR FOR BREACH OF PROMISE, GUARANTEE OR WARRANTY OF ANY KIND RELATING TO THE LICENSED PATENTS; (B) OPIANT AGREES THAT SANOFI WILL HAVE NO LIABILITY TO OPIANT FOR ANY ACT OR OMISSION IN THE PREPARATION, FILING, PROSECUTION, MAINTENANCE, ENFORCEMENT, DEFENCE OR OTHER HANDLING OF THE LICENSED PATENTS; AND (C) OPIANT IS SOLELY RESPONSIBLE FOR DETERMINING WHETHER THE LICENSED PATENTS HAVE APPLICABILITY OR UTILITY IN OPIANT’S CONTEMPLATED EXPLOITATION OF THE LICENSED PRODUCT, AND OPIANT ASSUMES ALL RISK AND LIABILITY IN CONNECTION WITH SUCH DETERMINATION.

Article 9     
INDEMNITY

9.1    Indemnification of Sanofi.  Opiant shall indemnify Sanofi, its Affiliates and its and their respective directors, officers, employees and agents (collectively, “Sanofi Indemnitees”), and defend and save each of them harmless, from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) (collectively, “Losses”) in connection with any and all suits, investigations, claims or demands of Third Parties (collectively, “Third Party Claims”) arising from or occurring as a result of: (a) the material breach by Opiant of any term of this Agreement, (b) the gross negligence or willful misconduct on the part of any Opiant Indemnitee or (c) the Exploitation of any Licensed Compounds or Licensed Products by or on behalf of Opiant or any of its Affiliates; provided that, with respect to any Third Party Claim for which Opiant has an obligation to any Sanofi Indemnitee pursuant to this Section 11.1 and Sanofi has an obligation to any Opiant Indemnitee pursuant to Section 11.2, each Party shall indemnify each of the Sanofi Indemnitees or the Opiant Indemnitees, as applicable, for its Losses to the extent of its responsibility, relative to the other Party.

9.2    Indemnification of Opiant.  Sanofi shall indemnify Opiant, its Affiliates and its and their respective directors, officers, employees and agents (collectively, “Opiant Indemnitees”), and defend and save each of them harmless, from and against any and all Losses in connection with any 

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and all Third Party Claims arising from or occurring as a result of:  (a) the material breach by Sanofi of this Agreement, (b) the gross negligence or willful misconduct on the part of any Sanofi Indemnitee or (c) the exercise by Sanofi or its Affiliates of the rights retained by Sanofi under Section 2.2; provided that, with respect to any Third Party Claim for which Sanofi has an obligation to any Opiant Indemnitee pursuant to this Section 11.2 and Opiant has an obligation to any Sanofi Indemnitee pursuant to Section 11.1, each Party shall indemnify each of the Sanofi Indemnitees or the Opiant Indemnitees, as applicable, for its Losses to the extent of its responsibility, relative to the other Party.

9.3    Notice of Claim.  All indemnification claims in respect of a Sanofi Indemnitee or a Opiant Indemnitee shall be made solely by Sanofi or Opiant, as applicable (each of Sanofi or Opiant in such capacity, the “Indemnified Party”).  The Indemnified Party shall give the Indemnifying Party prompt written notice (an “Indemnification Claim Notice”) of any Losses or discovery of fact upon which such Indemnified Party intends to base a request for indemnification under Section 11.1 or Section 11.2, but in no event shall the Indemnifying Party be liable for any Losses that result from any delay in providing such notice.  Each Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss is known at such time).  The Indemnified Party shall furnish promptly to the Indemnifying Party copies of all papers and official documents received in respect of any Losses and Third Party Claims.

9.4    Control of Defense. 
9.4.1    Control of Defense.  At its option, the Indemnifying Party may assume the defense of any Third Party Claim, including the right to compromise or settle any Third Party Claim, by giving written notice to the Indemnified Party within 30 days after the Indemnifying Party’s receipt of an Indemnification Claim Notice.  The assumption of the defense of a Third Party Claim by the Indemnifying Party shall not be construed as an acknowledgment that the Indemnifying Party is liable to indemnify any Sanofi Indemnitee or Opiant Indemnitee, as applicable, in respect of the Third Party Claim, nor shall it constitute a waiver by the Indemnifying Party of any defenses it may assert against a Sanofi Indemnitee’s or a Opiant Indemnitee’s, as applicable, claim for indemnification.  Upon assuming the defense of a Third Party Claim, the Indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel selected by the Indemnifying Party.  In the event the Indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party shall immediately deliver to the Indemnifying Party all original notices and documents (including court papers) received by any Sanofi Indemnitee or Opiant Indemnitee, as applicable, in connection with the Third Party Claim.  If the Indemnifying Party assumes the defense of a Third Party Claim, except as provided in Section 11.4.2, the Indemnifying Party shall not be liable to the Indemnified Party for any legal expenses subsequently incurred by such Indemnified Party or any Sanofi Indemnitee or Opiant Indemnitee, as applicable, in connection with the analysis, defense or settlement of such Third Party Claim.  In the event that it is ultimately determined that the Indemnifying Party is not obligated to indemnify, defend or hold harmless a Sanofi Indemnitee or Opiant Indemnitee, as applicable, from and against a Third Party Claim, the Indemnified Party shall 

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reimburse the Indemnifying Party for any and all costs and expenses (including attorneys’ fees and costs of suit) incurred by the Indemnifying Party in its defense of such Third Party Claim.
9.4.2    Right to Participate in Defense.  Without limiting Section 11.4.1, any Indemnified Party shall be entitled to participate in, but not control, the defense of a Third Party Claim and to employ counsel of its choice for such purpose; provided that such employment shall be at the Indemnified Party’s own expense unless (a) the employment thereof has been specifically authorized by the Indemnifying Party in writing, (b) the Indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 11.4.1 (in which case the Indemnified Party shall control the defense) or (c) the interests of the Indemnified Party and any Sanofi Indemnitee or Opiant Indemnitee, as applicable, on the one hand, and the Indemnifying Party, on the other hand, with respect to such Third Party Claim are sufficiently adverse to prohibit the representation by the same counsel of all such Persons under Applicable Law, ethical rules or equitable principles.
9.4.3    Settlement.  With respect to Third Party Claims, where the Indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 11.4.1, the Indemnifying Party shall have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Third Party Claim, on such terms as the Indemnifying Party, in its sole discretion, shall deem appropriate, provided however that the Indemnifying Party shall not make any compromise or settlement admitting fault, subjecting the Indemnified Party to injunctive or other relief, adversely affecting the business of the Indemnified Party or of any Sanofi Indemnitee or Opiant Indemnitee, as applicable, adversely affecting the Indemnified Party’s rights under this Agreement or incurring any liability on the part of the Indemnified Party or of any Sanofi Indemnitee or Opiant Indemnitee, as applicable, in each case without  the prior written consent of the Indemnified Party (such consent not to be unreasonably conditioned, withheld or delayed).  The Indemnifying Party shall not be liable for any settlement or other disposition of a Third Party Claim by a Sanofi Indemnitee or a Opiant Indemnitee that is reached without the prior written consent of the Indemnifying Party.  Regardless of whether the Indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party shall not, and the Indemnified Party shall ensure that each Sanofi Indemnitee or Opiant Indemnitee, as applicable, does not, admit any liability with respect to or settle, compromise or discharge, any Third Party Claim without the prior written consent of the Indemnifying Party, such consent not to be unreasonably conditioned, withheld or delayed.
9.4.4    Cooperation.  Regardless of whether the Indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party shall, and shall cause each Sanofi Indemnitee or Opiant Indemnitee, as applicable, to, cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith.  Such cooperation shall include access during normal business hours afforded to the Indemnifying Party to, and reasonable retention by the Indemnified Party and any Sanofi Indemnitee or Opiant Indemnitee, as applicable, of, records and information that are reasonably relevant to such Third Party Claim, and making all Sanofi Indemnitees or Opiant Indemnitees, as applicable, and other employees and agents available on a mutually convenient basis to provide 

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additional information and explanation of any material provided hereunder; provided that neither Party shall be required to disclose legally privileged information unless and until procedures reasonably acceptable to such Party are in place to protect such privilege, and the Indemnifying Party shall reimburse the Indemnified Party for all its reasonable costs and expenses in connection therewith.
9.4.5    Expenses.  Except as provided above, the costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any Third Party Claim shall be reimbursed on a Calendar Quarter basis by the Indemnifying Party, without prejudice to the Indemnifying Party’s right to contest any Sanofi Indemnitee’s or Opiant Indemnitee’s, as applicable, right to indemnification and subject to refund in the event the Indemnifying Party is ultimately held not to be obligated to indemnify a Sanofi Indemnitee or Opiant Indemnitee, as applicable.
9.4.6    Limitation on Damages and Liability.  EXCEPT (a) IN CIRCUMSTANCES OF GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT BY A PARTY OR ITS AFFILIATES, (b) TO THE EXTENT SUCH DAMAGES ARE REQUIRED TO BE PAID TO A THIRD PARTY AS PART OF A CLAIM FOR WHICH A PARTY PROVIDES INDEMNIFICATION UNDER SECTION 11.1 OR SECTION 11.2, OR (c) WITH RESPECT TO A BREACH OF ARTICLE 9, NEITHER PARTY NOR ANY OF THEIR RESPECTIVE AFFILIATES SHALL BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, OR FOR LOST PROFITS, SUFFERED BY THE OTHER PARTY, WHETHER IN CONTRACT, WARRANTY, NEGLIGENCE, TORT, STRICT LIABILITY OR OTHERWISE ARISING OUT OF THIS AGREEMENT.

9.5    Insurance.  Opiant shall, and shall cause its Affiliates to, have and maintain such type and amounts of liability insurance covering the Exploitation of the Licensed Products as is normal and customary in the pharmaceutical industry generally for parties similarly situated, and shall upon request provide Sanofi with a copy of its policies of insurance in that regard, along with any amendments and revisions thereto.  Maintenance of such insurance coverage shall not relieve Opiant of any responsibility under this Agreement for damages in excess of insurance limits or otherwise.

Article 10     
TERM AND TERMINATION

10.1    Term.  This Agreement shall commence on the Effective Date and shall, unless earlier terminated in accordance with this Article 12, continue (a) with respect to each Licensed Product in each country in the Territory, until the expiration of the Royalty Term for such Licensed Product in such country and (b) with respect to this Agreement in its entirety, until the expiration of the Royalty Term for the last Licensed Product for which there has been a First Commercial Sale in the Territory (such period, the “Term”). Upon expiry of the Royalty Term for a Licensed Product in a country, Opiant’s license with respect to the considered Licensed Product in the applicable country would become non-exclusive, fully paid-up, perpetual and irrevocable

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10.2    Termination of this Agreement for Material Breach.  
10.2.1    In the event that either Party materially breaches this Agreement (such Party, the “Breaching Party”), in addition to any other right and remedy the other Party (the “Complaining Party”) may have, the Complaining Party may terminate this Agreement by providing written notice (the “Termination Notice”) to the Breaching Party, specifying the material breach and its claim of right to terminate.  Any such Termination Notice shall become effective sixty (60) calendar days after receipt by the Breaching Party (the “Termination Notice Period”) unless the Breaching Party cures the material breach complained of during the Termination Notice Period, except in the case of a failure by the Breaching Party to pay an undisputed payment, as to which the Breaching Party shall have only a ten (10) calendar-day cure period.  
10.2.2    Notwithstanding Section 12.2.1, in the event of an alleged breach by Sanofi of its exclusivity obligations under Section 2.6.2, Opiant may in its discretion elect, in lieu of exercising its rights of termination under Section 12.2.1 and without prejudice to any other remedy available to it (in law or equity), to continue this Agreement (“Post-Breach Continuation”) by providing written notice of such election to Sanofi.  Following delivery of such notice: (i) Opiant’s exclusivity obligations under Section 2.6.1 shall terminate, (ii) Opiant’s due diligence obligations under Sections 3.1.4 and 4.3 shall terminate, (iii) Opiant’s reporting obligations under Sections 3.4 (Reports), 4.3 (Commercialization Reports) and 6.4 (Payment Dates and Reports) shall terminate; and (iv) the Sanofi’s Manufacture Option under Section 5.2 shall terminate.  Except as expressly set forth above, in the case of a Post-Breach Continuation, the terms and conditions of this Agreement shall otherwise remain in effect. Nothing herein shall prevent Sanofi from pursuing any remedy available to it (in law or equity) to challenge Opiant’s election under this Section 12.2.2 (for example, if Sanofi believes that it has not breached the Agreement) and if Sanofi prevails in such challenge then Opiant’s obligations pursuant to item (iii) herein shall be reinstated retroactively. 

10.3    Termination by Sanofi.  In the event that Opiant or any of its Affiliates anywhere in the Territory, institutes, prosecutes or otherwise participates in (or in any way aids any Third Party in instituting, prosecuting or participating in), at law or in equity or before any administrative or regulatory body, including the U.S. Patent and Trademark Office or its foreign counterparts, any claim, demand, action or cause of action for declaratory relief, damages or any other remedy or for an enjoinment, injunction or any other equitable remedy, including any interference, re-examination, opposition or any similar proceeding, alleging that any claim in a Licensed Patent is invalid, unenforceable or otherwise not patentable or would not be infringed by Opiant’s activities contemplated by this Agreement absent the rights and licenses granted hereunder, Sanofi may terminate this Agreement upon thirty (30) calendar days’ written notice to Opiant, provided, however, that Sanofi will not have the right to terminate this Agreement under this Section 12.3 if the applicable challenge is permanently dismissed or withdrawn within thirty (30) calendar days of Sanofi’s notice to Opiant under this Section 12.3 and is not thereafter continued.  Notwithstanding the foregoing, this Section 12.3 shall not apply with respect to any administrative proceeding filed or requested to be filed by Opiant or its Affiliates with respect to a Licensed Patent, after prior consultation and with the consent of Sanofi (to be determined in Sanofi’s sole discretion), that is filed in a good-faith effort to (i) reinforce the patentability, validity or enforceability of such 

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Licensed Patent or (ii) expand the claim scope of such Licensed Patent with respect to Licensed Compounds or Licensed Products.

10.4    Termination by Opiant.  Opiant shall have the right to terminate this Agreement in its entirety without cause at any time by giving at least six (6) months advance written notice to Sanofi of such termination.

10.5    Termination Upon Insolvency.  Sanofi may terminate this Agreement if, at any time, Opiant (a) files in any court or agency pursuant to any statute or regulation of any state, country or jurisdiction, a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a receiver or trustee of such other Party or of its assets, (b) proposes a written agreement of composition or extension of its debts, (c) is served with an involuntary petition against it, filed in any insolvency proceeding that is not dismissed within sixty (60) calendar days after the filing thereof, (d) proposes or is a party to any dissolution or liquidation, or (e) makes an assignment for the benefit of its creditors.

10.6    Rights in Bankruptcy.  All rights and licenses granted under or pursuant to this Agreement by Opiant or Sanofi are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of right to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code.  The Parties agree that the Parties shall retain and may fully exercise all of their rights and elections under the U.S. Bankruptcy Code.  The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against either Party under the U.S. Bankruptcy Code, the Party that is not a party to such proceeding shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, which, if not already in the non-subject Party’s possession, shall be promptly delivered to it (a) upon any such commencement of a bankruptcy proceeding upon the non-subject Party’s written request therefor, unless the Party subject to such proceeding elects to continue to perform all of its obligations under this Agreement or (b) if not delivered under (a) above, following the rejection of this Agreement by or on behalf of the Party subject to such proceeding upon written request therefor by the non-subject Party.  To the extent available in countries other than the U.S., Applicable Law similar to Section 365(n) of the U.S. Bankruptcy Code shall be applied so as to treat this Agreement as an executory contract.

10.7    Consequences of Termination.  In the event of a termination of this Agreement in its entirety:
10.7.1    all rights and licenses granted by Sanofi hereunder shall immediately terminate;
10.7.2    any sublicenses granted by Opiant to a Sublicensee in accordance with Section 2.3 prior to the date of termination of this Agreement shall terminate within thirty (30) days from the effective date of termination of this Agreement, unless the relevant Sublicensee agrees within that period of time to be bound by the terms of this Agreement (in which case the Sublicensee shall be deemed a direct licensee of Sanofi); and

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10.7.3    to the extent requested in writing by Sanofi within thirty (30) calendar days following the effective date of any termination of this Agreement, Opiant agrees to negotiate in good faith with Sanofi, for up to ninety (90) calendar days following such notice, with respect to an agreement pursuant to which Opiant would:
(i)    where permitted by Applicable Law, assign to Sanofi all of its right, title and interest in and to, and transfer possession to Sanofi of, all Regulatory Documentation (including Market Approvals) then in its name applicable to any Licensed Product in the Territory; 
(ii)    notify the applicable Regulatory Authorities and take any other action reasonably necessary to effect the transfer set forth in clause (a) above; and
(iii)    grant to Sanofi a worldwide exclusive license, with full right to sublicense, under any Opiant Controlled Information and Inventions and/or any Opiant Controlled Patents that exclusively relate to the Licensed Products and arose from in the performance of this Agreement by Opiant. 
Nothing in this Section 12.7.3 shall obligate either Party following the termination of this Agreement to enter into an agreement with respect to the Regulatory Documentation (including Market Approvals) described in Section 12.7.3(i) and Section 12.7.3(iii) above; except that, in case of a termination of this Agreement by Opiant pursuant to Section 12.4, the rights described under Section 12.7.3(i), 12.7.3(ii) and Section 12.7.3(iii) above shall be automatically granted to Sanofi if Sanofi (a) agrees to pay Opiant the same amounts as due by Opiant to Sanofi under Article 6 hereof, and (b) assumes full responsibility for any amounts owing to Opiant’s Third Party licensors with respect to Sanofi’s practice of Information and Inventions and/or Patents in-licensed by Opiant and included in the licenses granted to Sanofi pursuant to Section 12.7.3(iii) above.

10.8    Accrued Rights; Surviving Obligations. 
10.8.1    Accrued Rights.  Termination or expiration of this Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit of a Party prior to such termination or expiration.  Such termination or expiration shall not relieve a Party from obligations that are expressly indicated to survive the termination or expiration of this Agreement.
10.8.2    Survival.  The following Sections  and Articles shall survive the termination or expiration of this Agreement for any reason, Section 6.9 (Audit), 6.10 (Audit Dispute) and 6.11 (Confidentiality) solely with regard to the auditable period up to the effective date of termination; Sections 7.3.2 – 7.3.5 (solely with respect to any enforcement actions ongoing as of the effective date of termination); Section 12.7 (Consequences of Termination); this Section 12.8 (Accrued Rights; Surviving Obligations);  Article 1 (Definitions) to the extent necessary to give effect to surviving provisions; Article 6 (Payments) with regard to any payment obligations which accrued prior to termination or expiration payments and also with regard to any post-termination or post-expiration payments; Article 9 (Confidentiality and Non-Disclosure) for the period prescribed in Section 9.1 (Term of Confidentiality); Article 11 (Indemnification), provided that Section 11.5 (Insurance) will survive only with respect to insurable events which occurred during the period prior 

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to termination or expiration; and Article 13 (Miscellaneous) to the extent necessary to give effect to surviving provisions.  

Article 11     
MISCELLANEOUS

11.1    Force Majeure.  Neither Party shall be held liable or responsible to the other Party or be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement (other than an obligation to make payments) when such failure or delay is caused by or results from events beyond the reasonable control of the non-performing Party, including fires, floods, earthquakes, embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be declared or not), terrorist acts, insurrections, riots, civil commotion, strikes, lockouts or other labor disturbances (whether involving the workforce of the non-performing Party or of any other Person), acts of God or acts, omissions or delays in acting by any governmental authority (each, a “Force Majeure Event”).  The non-performing Party shall notify the other Party of a Force Majeure Event within 15 days after the occurrence of such Force Majeure Event by giving written notice to the other Party stating the nature of such Force Majeure Event, its anticipated duration, and any action being taken to avoid or minimize its effect.  The suspension of performance shall be of no greater scope and no longer duration than is necessary and the non-performing Party shall use commercially reasonable efforts to remedy its inability to perform.  In the event that such suspension of performance lasts for more than 90 days and in the absence of such Force Majeure Event such suspension of performance would be a material breach of this Agreement, such other Party shall have the right to terminate this Agreement pursuant to Section 12.2.

11.2    Alliance Managers. Within thirty (30) days after the Effective Date, each Party shall appoint and notify the other Party of the identity of a representative having the appropriate qualifications, including a general understanding of pharmaceutical development and commercialization issues, to act as its alliance manager under this Agreement (the “Alliance Manager”).  The Alliance Managers shall serve as the primary contact points between the Parties for the purpose of providing Sanofi with information on the progress of Opiant’s Development and Commercialization activities under this Agreement.  The Alliance Managers shall also be primarily responsible for facilitating the flow of information and otherwise promoting communication, coordination and collaboration between the Parties.  Each Party may replace its Alliance Manager at any time upon written notice to the other Party.

11.3    Export Control.  This Agreement is made subject to any restrictions concerning the export of products or technical information from the United States or other countries that may be imposed on or related to the Parties from time to time.  Each Party agrees that it will not export, directly or indirectly, any technical information acquired from the other Party under this Agreement or any products using such technical information to a location or in a manner that at the time of export requires an export license or other governmental approval, without first obtaining the written consent to do so from the appropriate agency or other governmental entity in accordance with Applicable Law.

31

11.4    Assignment.  Without the prior written consent of the other Party, neither Party shall sell, transfer, assign, delegate, pledge or otherwise dispose of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or any of its rights or duties hereunder; provided that (a) Sanofi may, without such consent, assign this Agreement and its rights and obligations hereunder to an Affiliate, to the purchaser of the Licensed Patents or Licensed Know-How or to its successor entity or acquirer in the event of a Change of Control of Sanofi and (b) Opiant may, without such consent, but after having provided Sanofi with a fifteen (15) calendar day written prior notice, assign this Agreement and its rights and obligations hereunder in connection with  a Change of Control; provided, further, that in either case ((a) or (b)), the assignee or transferee shall assume all obligations of its assignor or transferor under this Agreement and such assignor or transferor shall remain responsible to the other Party for the performance by such assignee or transferee of the rights and obligations of the assigning Party hereunder.  Any attempted assignment or delegation in violation of the preceding sentence shall be void and of no effect.  All validly assigned and delegated rights and obligations of the Parties hereunder shall be binding upon and inure to the benefit of and be enforceable by and against the successors and permitted assigns of Sanofi or Opiant, as the case may be.  In the event either Party seeks and obtains the other Party’s consent to assign or delegate its rights or obligations to another Party, the assignee or transferee shall assume all obligations of its assignor or transferor under this Agreement.

11.5    Change of Control.  In the event of a Change of Control of Opiant or Sanofi pursuant to which such Party is acquired by a Third Party (such Third Party, together with its Affiliates existing immediately prior to the effective date of such Change of Control, the “Acquirer”), which Acquirer is developing, manufacturing or commercializing one or more Competing Products, then provided the Acquirer Segregates all information directly pertaining to the Licensed Product from its Competing Product, the provisions of Section 2.6.1 or 2.6.2(i), as applicable, shall not apply with respect to the Competing Products developed, manufactured or commercialized by the Acquirer before such Change of Control (including as further developed, manufactured or commercialized after such Change of Control). Any Acquirer of Opiant deciding to continue the parallel Development and Commercialization of a Licensed Product under the provisions of this Section 13.5 shall remain fully bound by Opiant’s diligence obligations as described under Section 3.1.2 and Section 4.3.

11.6    Severability.  To the fullest extent permitted by Applicable Law, the Parties waive any provision of law that would render any provision in this Agreement invalid, illegal, or unenforceable in any respect.  If any provision of this Agreement is held to be invalid, illegal, or unenforceable, in any respect, then such provision will be given no effect by the Parties and shall not form part of this Agreement.  To the fullest extent permitted by Applicable Law and if the rights or obligations of either Party will not be materially and adversely affected, all other provisions of this Agreement shall remain in full force and effect, and the Parties shall use their best efforts to negotiate a provision in replacement of the provision held invalid, illegal, or unenforceable that is consistent with Applicable Law and achieves, as nearly as possible, the original intention of the Parties.

32

11.7    Dispute Resolution.  If a dispute arises between the Parties in connection with the interpretation, validity or performance of this Agreement or any document or instrument delivered in connection herewith (a “Dispute”), it shall be resolved pursuant to this Section 13.7. 
11.7.1    General.  Any Dispute shall first be referred to the Executive Officers for attempted resolution by good faith negotiations during a period of ten (10) Business Days.  Any final decision mutually agreed to by the Executive Officers shall be conclusive and binding on the Parties.  If such Executive Officers are unable to resolve such Dispute within such ten (10) Business Day period, (or such other period of time as mutually agreed by the Senior Officers) after such issue was first referred to them, then, except as otherwise set forth in Section 13.7.2 either Party may, by written notice to the other Party, institute litigation in accordance with Section 13.6 and seek such remedies as may be available. Notwithstanding anything in this Agreement to the contrary, either Party shall be entitled to institute litigation in accordance with Section 13.11 immediately if such litigation is necessary to prevent irreparable harm to that Party
11.7.2    Jurisdiction.  For any dispute referred for resolution pursuant to Section 13.7.1, the Parties hereby irrevocably and unconditionally consent to the exclusive jurisdiction of the courts of New York for any action, suit or proceeding (other than appeals therefrom) arising out of or relating to this Agreement, and agree not to commence any action, suit or proceeding (other than appeals therefrom) related thereto except in such courts. The Parties further hereby irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding (other than appeals therefrom) arising out of or relating to this Agreement in the courts of New York, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. The Parties irrevocably and unconditionally waive their right to a jury trial. 
11.7.3    Interim Relief.  Notwithstanding anything herein to the contrary, nothing in this Section 13.7 shall preclude either Party from seeking interim or provisional relief, including a temporary restraining order, preliminary or permanent injunction (including for specific performance) or other interim equitable relief concerning a Dispute, if necessary to protect the interests of such Party.  This Section 13.7.3 shall be specifically enforceable.

11.8    Governing Law and Service. 
11.8.1    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.  The Parties agree to exclude the application to this Agreement of the United Nations Convention on Contracts for the International Sale of Goods.
11.8.2    Service.  Each Party further agrees that service of any process, summons, notice or document by registered mail to its address set forth in Section 13.9.2 shall be effective service of process for any action, suit or proceeding brought against it under this Agreement in any such court.

33

11.9    Notices. 
11.9.1    Notice Requirements.  Any notice, request, demand, waiver, consent, approval or other communication permitted or required under this Agreement shall be in writing, shall refer specifically to this Agreement and shall be deemed given only if delivered by internationally recognized overnight delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified in Section 13.9.2 or to such other address as the Party to whom notice is to be given may have provided to the other Party in accordance with this Section 13.9.  Such notice shall be deemed to have been given as of the date delivered by such internationally recognized overnight delivery service.  This Section 13.9 is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement.
11.9.2    Address for Notice.
If to Opiant, to:
201 Santa Monica Boulevard, Suite 500
Santa Monica, CA 90401, USA

Attention: Vice President, Corporate Development
Telephone: + (310) 598 5878 

with a copy to (which shall not constitute notice):
Attention: Chris Byrd, Wilson Sonsini Goodrich & Rosati
Telephone: + (858) 350 2314
If to Sanofi, to:
54 rue La Boétie
75008 Paris, France
Attention:    Head of SIP (Out-Licensing)
BD&L, Strategy and Business Development
Telephone:    +33.1.53.77.90.24

11.10    Entire Agreement; Amendments.  This Agreement, together with the Schedules attached hereto, sets forth and constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof and all prior agreements, understandings, promises and representations, whether written or oral, with respect thereto are superseded hereby, including that certain confidential disclosure agreement between Sanofi and Opiant dated February 15, 2018, and as of the Effective Date, any and all disclosures of Confidential Information between the Parties concerning the Licensed Compounds and Licensed Products shall be governed by this Agreement.  Each Party confirms that it is not relying on any representations or warranties of the other Party except as specifically set forth herein.  No amendment of this Agreement shall be binding upon the Parties unless in writing and duly executed by authorized representatives of both Parties.

11.11    English Language.  This Agreement shall be written and executed in, and all other communications under or in connection with this Agreement shall be in, the English language.  Any translation into any other language shall not be an official version thereof, and in the event of any conflict in interpretation between the English version and such translation, the English version shall control.

11.12    Equitable Relief.  The Parties acknowledge and agree that the restrictions set forth in Article 9 and Sections 2.6.1 and 2.6.2(i) are reasonable and necessary to protect the legitimate interests of the other Party and that such other Party would not have entered into this Agreement in the absence of such restrictions, and that any breach or threatened breach of any provision of Article 9 or Sections 2.6.1 and 2.6.2(i) may result in irreparable injury to such other Party for which there will be no adequate remedy at law.  In the event of a breach or threatened breach of any provision of Article 9 or Sections 2.6.1 and 2.6.2(i), the non-breaching Party shall be authorized and entitled to obtain from any court of competent jurisdiction injunctive relief, whether preliminary or permanent, specific performance and an equitable accounting of all earnings, profits and other benefits arising from such breach, which rights shall be cumulative and in addition to any other rights or remedies to which such non-breaching Party may be entitled in law or equity.  Both Parties agree to waive any requirement that the other Party (a) post a bond or other security as a condition for obtaining any such relief and (b) show irreparable harm, balancing of harms, consideration of the public interest or inadequacy of monetary damages as a remedy.  Nothing in this Section 13.12 is intended, or should be construed, to limit either Party’s right to equitable relief or any other remedy for a breach of any other provision of this Agreement.

34

11.13    Waiver and Non-Exclusion of Remedies.  Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition.  The waiver by either Party of any right hereunder or of the failure to perform or of a breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by the other Party whether of a similar nature or otherwise.

11.14    No Benefit to Third Parties.  The representations, warranties, covenants and agreements set forth in this Agreement are for the sole benefit of the Parties, their respective Affiliates and its and their successors and permitted assigns, and they shall not be construed as conferring any rights on any Third Parties.

11.15    Further Assurance.  Each Party shall duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents and instruments, as may be necessary or as the other Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes hereof, or to better assure and confirm unto such other Party its rights and remedies under this Agreement

11.16    Relationship of the Parties.  It is expressly agreed that Sanofi, on the one hand, and Opiant, on the other hand, shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency.  Neither Sanofi, on the one hand, nor Opiant, on the other hand, shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other, without the prior written consent of the other Party to do so, such consent not to be unreasonably conditioned, withheld or delayed.  All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party.

11.17    Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Agreement may be executed by facsimile or other electronic signatures and such signatures shall be deemed to bind each Party as if they were original signatures.

11.18    References.  Unless otherwise specified, (a) references in this Agreement to any Article, Section or Schedule mean references to such Article, Section or Schedule of this Agreement, (b) references in any section to any clause are references to such clause of such section and (c) references to any agreement, instrument or other document in this Agreement refer to such agreement, instrument or other document as originally executed or, if subsequently varied, replaced or supplemented from time to time, as so varied, replaced or supplemented and in effect at the relevant time of reference thereto.

11.19    Construction.  Except where the context otherwise requires, wherever used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word “or” is used in the inclusive sense (and/or).  The captions of this Agreement are for convenience of reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement.  The term “including” as used herein means including, without limiting the generality of any description preceding such term.  The language of this Agreement shall be deemed to be the language mutually chosen by the Parties and no rule of strict construction shall be applied against either Party

11.20    Affiliates.  Each Party will have the right to exercise its rights and perform its obligations hereunder, in whole or in part, through any of its Affiliates (as long as such entity remains an Affiliate of the relevant Party); provided that such Party will be responsible for its Affiliates’ performance hereunder.
[SIGNATURE PAGE FOLLOWS.]

35

THIS AGREEMENT IS EXECUTED by the authorized representatives of the Parties as of the date first written above.
Sanofi        Opiant Pharmaceuticals, Inc.

By:     /s/ Alan De La Sabliere        By:     /s/ Dr. Roger Crystal    
Name: Alban De La Sabliére        Name: Dr. Roger Crystal
Title: Global Head Business Development        Title: Chief Executive Officer
 & Licensing        

* Certain confidential information contained in this document, marked [***], is filed separately with the Securities and Exchange Commission.

Schedules 

Schedule 1.50         Licensed Compound
Schedule 1.51        Licensed Know-How
Schedule 1.52        Licensed Patents
Schedule 1.90        Sanofi Corporate Names
Schedule 3.1.2        Development Plan
Schedule 9.4        Press Release

* Certain confidential information contained in this document, marked [***], is filed separately with the Securities and Exchange Commission.

Schedule 1.50         Licensed Compound

AVE1625 (drinabant) 

 
C23H20Cl2F2N2O2S

* Certain confidential information contained in this document, marked [***], is filed separately with the Securities and Exchange Commission.

Schedule 1.51        Licensed Know-How

[***] Schedule has been redacted.

* Certain confidential information contained in this document, marked [***], is filed separately with the Securities and Exchange Commission.

Schedule 1.52        Licensed Patents

Title : PHARMACEUTICAL COMPOSITIONS CONTAINING AZETIDINE DERIVATIVES, NOVEL AZETIDINE DERIVATIVES AND PREPARATION THEREOF
Inventors : ACHARD, Daniel Bas du formulaire BOUCHARD, Hervé   BOUQUEREL, Jean   FILOCHE-ROMMÉ, Bruno   GRISONI, Serge   HITTINGER, Augustin   MYERS, Michael  

	
					
	Ctry
	Filing Date
	Filing Number
	Grant Number
	Grant Date

	JP
	01 mars 2001
	563477/01
	4,883,867
	16 déc 2011

	US
	02 mars 2001
	09/798.452
	6,355,631
	12 mars 2002

Title : METHOD AND INTERMEDIATES FOR THE PREPARATION OF DERIVATIVES OF N-(1-BENZHYDRYLAZETIDIN-3-YL)-N-PHENYLMETHYLSULFONAMIDE
Inventors : BOFFELLI, Philippe  DELTHIL, Michel  GRONDARD, Luc  LAMPILAS, Maxime  MALPART, Joel  MUTTI, Stephane  NAIT-BOUDA, Lahlou  REIKE-ZAPP, Joerg

	
					
	Ctry
	Filing Date
	Filing Number
	Grant Number
	Grant Date

	US
	20 aug 2008
	12/194,644
	7,652,154
	26 jan 2010

* Certain confidential information contained in this document, marked [***], is filed separately with the Securities and Exchange Commission.

Title : METHOD AND INTERMEDIATES FOR THE PREPARATION OF DERIVATIVES OF N-(1-BENZHYDRYLAZETIDIN-3-YL)-N-PHENYLMETHYLSULFONAMIDE
Inventors : BOFFELLI, Philippe  DELTHIL, Michel  GRONDARD, Luc  LAMPILAS, Maxime  MALPART, Joel  MUTTI, Stephane  NAIT-BOUDA, Lahlou  REIKE-ZAPP, Joerg

	
					
	Ctry
	Filing Date
	Filing Number
	Grant Number
	Grant Date

	US
	11 dec 2009
	12/635,965
	8,071,788
	06 dec 2011

Title : METHOD FOR PREPARING AZETIDINE DERIVATIVES
Inventors : BIGOT, Anthony  BOFFELLI, Philippe  LAMPILAS, Maxime  MAROLLEAU, Pascale MEDARD, Alain ODDON, Gilles VARRAILLON, Daniel

	
					
	Ctry
	Filing Date
	Filing Number
	Grant Number
	Grant Date

	US
	14 jun 2010
	12/814,994
	8,207,355
	26 jun 2012

* Certain confidential information contained in this document, marked [***], is filed separately with the Securities and Exchange Commission.

Schedule 1.90        Sanofi Corporate Names
Ablynx
Aventis
Aventis Pharma
Biovertativ
Chattem
Genzyme
Hoechst
Sanofi
Sanofi-Aventis
Sanofi Pasteur
Sanofi Winthrop

* Certain confidential information contained in this document, marked [***], is filed separately with the Securities and Exchange Commission.

Schedule 3.1.2        Development Plan

[***] Two pages of a chart have been redacted.

* Certain confidential information contained in this document, marked [***], is filed separately with the Securities and Exchange Commission.

Schedule 9.4        Press Release

* Certain confidential information contained in this document, marked [***], is filed separately with the Securities and Exchange Commission.ugi-ex41_6.htm

 

EXHIBIT 4.1

 

 

 

 

 

 

 

UGI Utilities, Inc. 

 

 

 

 

 

$150,000,000 4.55% Senior Notes due February 1, 2049

 

 

 

______________

 

Note Purchase Agreement

 

______________

 

 

Dated as of December 21, 2018

 

 

 

 

 

 

Table of Contents

	
Section
	
HeadingPage

	
Section 1.
	
Authorization of Notes1
	
 

	
Section 2.
	
Sale and Purchase of Notes1
	
 

	
Section 3.
	
Closing2
	
 

	
Section 4.
	
Conditions to Closings2
	
 

	
 
	
Section 4.1.
	
Representations and Warranties2
	
 

	
 
	
Section 4.2.
	
Performance; No Default2
	
 

	
 
	
Section 4.3.
	
Compliance Certificates3
	
 

	
 
	
Section 4.4.
	
Opinions of Counsel3
	
 

	
 
	
Section 4.5.
	
Purchase Permitted By Applicable Law, Etc3
	
 

	
 
	
Section 4.6.
	
Sale of Other Notes3
	
 

	
 
	
Section 4.7.
	
Payment of Special Counsel Fees3
	
 

	
 
	
Section 4.8.
	
Private Placement Number4
	
 

	
 
	
Section 4.9.
	
Changes in Corporate Structure4
	
 

	
 
	
Section 4.10.
	
Funding Instructions4
	
 

	
 
	
Section 4.11.
	
Proceedings and Documents4
	
 

	
 
	
Section 4.12.
	
Subsidiary Guaranties4
	
 

	
Section 5.
	
Representations and Warranties of the Company5
	
 

	
 
	
Section 5.1.
	
Organization; Power and Authority5
	
 

	
 
	
Section 5.2.
	
Authorization, Etc5
	
 

	
 
	
Section 5.3.
	
Disclosure5
	
 

	
 
	
Section 5.4.
	
Organization and Ownership of Shares of Subsidiaries5
	
 

	
 
	
Section 5.5.
	
Financial Statements; Material Liabilities6
	
 

	
 
	
Section 5.6.
	
Compliance with Laws, Other Instruments, Etc6
	
 

	
 
	
Section 5.7.
	
Governmental Authorizations, Etc6
	
 

	
 
	
Section 5.8.
	
Litigation; Observance of Agreements, Statutes and Orders6
	
 

	
 
	
Section 5.9.
	
Taxes7
	
 

	
 
	
Section 5.10.
	
Title to Property; Leases7
	
 

	
 
	
Section 5.11.
	
Licenses, Permits, Etc7
	
 

	
 
	
Section 5.12.
	
Compliance with ERISA7
	
 

	
 
	
Section 5.13.
	
Private Offering by the Company9
	
 

	
 
	
Section 5.14.
	
Use of Proceeds; Margin Regulations9
	
 

	
 
	
Section 5.15.
	
Existing Indebtedness9
	
 

	
 
	
Section 5.16.
	
Foreign Assets Control Regulations, Etc10
	
 

	
 
	
Section 5.17.
	
Status under Certain Statutes10
	
 

	
Section 6.
	
Representations of the Purchasers10
	
 

	
 
	
Section 6.1.
	
Purchase for Investment10
	
 

‐i‐

 

	
 
	
Section 6.2.
	
Source of Funds11
	
 

	
Section 7.
	
Information as to Company12
	
 

	
 
	
Section 7.1.
	
Financial and Business Information12
	
 

	
 
	
Section 7.2.
	
Officer’s Certificate15
	
 

	
 
	
Section 7.3.
	
Visitation16
	
 

	
 
	
Section 7.4. 
	
Electronic Delivery16
	
 

	
Section 8.
	
Payment and Prepayment of the Notes17
	
 

	
 
	
Section 8.1.
	
Maturity17
	
 

	
 
	
Section 8.2.
	
Optional Prepayments with Make‐Whole Amount17
	
 

	
 
	
Section 8.3.
	
Allocation of Partial Prepayments17
	
 

	
 
	
Section 8.4.
	
Maturity; Surrender, Etc.17
	
 

	
 
	
Section 8.5.
	
Purchase of Notes18
	
 

	
 
	
Section 8.6.
	
Make‐Whole Amount18
	
 

	
 
	
Section 8.7.
	
Payments Due on Non‐Business Days19
	
 

	
 
	
Section 8.8.
	
 Prepayment of Notes upon Change in Control20
	
 

	
Section 8.9.
	
Prepayment in Connection with Asset Dispositions21
	
 

	
Section 9.
	
Affirmative Covenants.21
	
 

	
 
	
Section 9.1.
	
Compliance with Law21
	
 

	
 
	
Section 9.2.
	
Insurance22
	
 

	
 
	
Section 9.3.
	
Maintenance of Properties22
	
 

	
 
	
Section 9.4.
	
Payment of Taxes22
	
 

	
 
	
Section 9.5.
	
Corporate Existence, Etc22
	
 

	
 
	
Section 9.6.
	
Books and Records23
	
 

	
 
	
Section 9.7.
	
 Subsidiary Guarantors23
	
 

	
Section 10.
	
Negative Covenants.24
	
 

	
 
	
Section 10.1.
	
Transactions with Affiliates24
	
 

	
 
	
Section 10.2.
	
Merger, Consolidation, Etc24
	
 

	
 
	
Section 10.3.
	
Line of Business25
	
 

	
 
	
Section 10.4.
	
Terrorism Sanctions Regulations25
	
 

	
 
	
Section 10.5.
	
Liens25
	
 

	
 
	
Section 10.6.
	
Financial Covenants26
	
 

	
 
	
Section 10.7.
	
Sale of Assets27
	
 

	
Section 11.
	
Events of Default27
	
 

	
Section 12.
	
Remedies on Default, Etc30
	
 

	
 
	
Section 12.1.
	
Acceleration30
	
 

	
 
	
Section 12.2.
	
Other Remedies30
	
 

	
 
	
Section 12.3.
	
Rescission31
	
 

‐ii‐

 

	
 
	
Section 12.4.
	
No Waivers or Election of Remedies, Expenses, Etc31
	
 

	
Section 13.
	
Registration; Exchange; Substitution of Notes31
	
 

	
 
	
Section 13.1.
	
Registration of Notes31
	
 

	
 
	
Section 13.2.
	
Transfer and Exchange of Notes32
	
 

	
 
	
Section 13.3.
	
Replacement of Notes32
	
 

	
Section 14.
	
Payments on Notes33
	
 

	
 
	
Section 14.1.
	
Place of Payment33
	
 

	
 
	
Section 14.2.
	
Home Office Payment33
	
 

	
Section 15.
	
Expenses, Etc33
	
 

	
 
	
Section 15.1.
	
Transaction Expenses33
	
 

	
 
	
Section 15.2.
	
Survival34
	
 

	
Section 16.
	
Survival of Representations and Warranties; Entire Agreement34
	
 

	
Section 17.
	
Amendment and Waiver34
	
 

	
 
	
Section 17.1.
	
Requirements34
	
 

	
 
	
Section 17.2.
	
Solicitation of Holders of Notes35
	
 

	
 
	
Section 17.3.
	
Binding Effect, etc35
	
 

	
 
	
Section 17.4.
	
Notes Held by Company, etc36
	
 

	
Section 18.
	
Notices36
	
 

	
Section 19.
	
Reproduction of Documents36
	
 

	
Section 20.
	
Confidential Information37
	
 

	
Section 21.
	
Substitution of Purchaser38
	
 

	
Section 22.
	
Miscellaneous38
	
 

	
 
	
Section 22.1.
	
Successors and Assigns38
	
 

	
 
	
Section 22.2.
	
Accounting Terms38
	
 

	
 
	
Section 22.3.
	
Severability39
	
 

	
 
	
Section 22.4.
	
Construction, Etc39
	
 

	
 
	
Section 22.5.
	
Counterparts39
	
 

	
 
	
Section 22.6.
	
Governing Law39
	
 

	
 
	
Section 22.7.
	
Jurisdiction and Process; Waiver of Jury Trial40
	
 

	
 
	
Section 22.8.
	
Taxes40
	
 

‐iii‐

 

Schedule A—Defined Terms

 

Schedule 1—Form of 4.55% Senior Note due February 1, 2049

 

Schedule 2 —Form of Subsidiary Guaranty

 

Schedule 4.4(a) — Form of Opinion of Special Counsel for the Company

 

Schedule 4.4(b) —Form of Opinion of Special Counsel for the Purchasers

 

Schedule 5.3 —Disclosure Documents 

 

Schedule 5.4—Subsidiaries of the Company and Ownership of Subsidiary Stock

 

Schedule 5.5—Financial Statements

 

Schedule 5.15—Existing Indebtedness; Liens

 

Schedule B—Information Relating to Purchasers 

 

Exhibit 22.8—Form of U.S. Tax Compliance Certificate

 

 

‐iv‐

 

UGI Utilities, Inc.

 

$150,000,000 4.55% Senior Notes due February 1, 2049

 

 

 

 

 

December 21, 2018

 

 

To Each of the Purchasers Listed in

Schedule B Hereto:

Ladies and Gentlemen:

UGI Utilities, Inc., a Pennsylvania corporation (together with any successor thereto that becomes a party hereto pursuant to Section 10.2, the “Company”), agrees with each of the Purchasers as follows:

	
Section 1.
	
Authorization of Notes.

The Company will authorize the issue and sale of $150,000,000 aggregate principal amount of its 4.55% Senior Notes, due February 1, 2049 (as amended, restated or otherwise modified from time to time pursuant to Section 17 and including any such notes issued in substitution therefor pursuant to Section 13, the “Notes”).  The Notes shall be substantially in the form set out in Schedule 1.  Certain capitalized and other terms used in this Agreement are defined in Schedule A.  References to a “Schedule” are references to a Schedule attached to this Agreement unless otherwise specified.  References to a “Section” are references to a Section of this Agreement unless otherwise specified.  References to a “series” shall refer to each series of Notes or all series of Notes, as the context may require.

	
Section 2.
	
Sale and Purchase of Notes.

Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at the respective Closing provided for in Section 3, Notes in the principal amount specified opposite such Purchaser’s name in Schedule B at the purchase price of 100% of the principal amount thereof.  The Purchasers’ obligations hereunder are several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or non‐performance of any obligation by any other Purchaser hereunder.

The payment of the Notes and the performance by the Company of its obligations under this Agreement shall, from time to time, be guaranteed by one or more Subsidiaries of the 

 

 

Company as required by Section 9.7, pursuant to a Subsidiary Guaranty of each Subsidiary Guarantor. 

	
Section 3.
	
Closing.

The execution and delivery of this Agreement shall occur as of the date of this Agreement (the “Execution Date”).  The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, IL 60606, at 10:00 a.m., Chicago time, at a closing (the “Closing”) on February 1, 2019 or on such other Business Day thereafter on  or prior to February 5, 2019.  At the Closing the Company will deliver to each Purchaser the Notes to be purchased by such Purchaser at the Closing in the form of a single Note (or such greater number of Notes in denominations of at least $1,000,000 and any integral multiple of $1,000,000 in excess thereof as such Purchaser may request) dated the date of the Closing and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to XXXXXX, Account Number XXXXXX, ABA:XXXXXX, Swift: XXXXXX, Beneficiary: XXXXXX.  If at any Closing the Company shall fail to tender such Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of any of the conditions specified in Section 4 not having been fulfilled to such Purchaser’s satisfaction or such failure by the Company to tender such Notes.

	
Section 4.
	
Conditions to Closings.

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at the Closing, of the following conditions:

	

	
Section 4.1.Representations and Warranties.  The representations and warranties of the Company in this Agreement shall be correct as of the Execution Date and at the Closing.

	

	
Section 4.2.Performance; No Default.  The Company shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing and from the Execution Date to the Closing assuming that Sections 9 and 10 are applicable from the date of this Agreement.  From the Execution Date until the Closing, before and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Section 5.14), no Default or Event of Default or Change in Control shall have occurred and be continuing. Neither the Company nor any Subsidiary shall have entered into any transaction since the date of the Memorandum that would have been prohibited by Section 10 had such Section applied since such date.

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Section 4.3.Compliance Certificates.

	

	
(a)Officer’s Certificate.  The Company shall have delivered to such Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

	

	
(b)Secretary’s Certificate.  The Company shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of the Closing, certifying as to (i) the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and this Agreement and (ii) the Company’s organizational documents as then in effect.

	

	
Section 4.4.Opinions of Counsel.  Such Purchaser shall have received opinions in form and substance satisfactory to such Purchaser, dated the date of the Closing (a) from Morgan, Lewis & Bockius LLP, counsel for the Company, covering the matters set forth in Schedule 4.4(a) and covering such other matters incident to the transactions contemplated hereby as such Purchaser or its counsel may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to the Purchasers) and (b) from Chapman and Cutler LLP, the Purchasers’ special counsel in connection with such transactions, substantially in the form set forth in Schedule 4.4(b) and covering such other matters incident to such transactions as such Purchaser may reasonably request.

	

	
Section 4.5.Purchase Permitted By Applicable Law, Etc.  On the date of the Closing such Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof.  If requested by such Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.

	

	
Section 4.6.Sale of Other Notes.  Contemporaneously with the Closing, the Company shall sell to each other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it at the Closing as specified in Schedule B.  

	

	
Section 4.7.Payment of Special Counsel Fees.  Without limiting Section 15.1, the Company shall have paid on or before the Execution Date and the Closing the fees, charges and disbursements of the Purchasers’ special counsel referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Execution Date and the Closing, respectively.

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Section 4.8.Private Placement Number.  A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for the Notes.

	

	
Section 4.9.Changes in Corporate Structure.  The Company shall not have changed its jurisdiction of incorporation or organization, as applicable, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements identified in Schedule 5.5.  

	

	
Section 4.10.Funding Instructions.  At least three Business Days prior to the date of the Closing, each Purchaser scheduled to participate in the Closing shall have received written instructions signed by a Responsible Officer on letterhead of the Company confirming the information specified in Section 3 including (i) the name and address of the transferee bank, (ii) such transferee bank’s ABA number and (iii) the account name and number into which the purchase price for the Notes is to be deposited.

	

	
Section 4.11.Proceedings and Documents.  All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to such Purchaser and its special counsel, and such Purchaser and its special counsel shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or such special counsel may reasonably request.

	

	
Section 4.12.Subsidiary Guaranties.  As to each Subsidiary which on or before the Execution Date had delivered a Guaranty pursuant to, or is a borrower under, any Material Credit Facility, the Company will cause each such Subsidiary to, on the date hereof, (a) enter into a Subsidiary Guaranty and (b) deliver the following to each Purchaser:

	
 
	

	
(i)an executed counterpart of such Subsidiary Guaranty;

	
 
	

	
(ii)a certificate signed by an authorized responsible officer of such Subsidiary containing representations and warranties on behalf of such Subsidiary to the same effect, mutatis mutandis, as those contained in Sections 5.1, 5.2, 5.6, 5.7 and 5.16 of this Agreement (but with respect to such Subsidiary and such Subsidiary Guaranty rather than the Company);

	
 
	

	
(iii)all such documents as may be reasonably requested by the Purchasers to evidence the due organization, continuing existence and good standing of such Subsidiary and the due authorization by all requisite action on the part of such Subsidiary of the execution and delivery of such Subsidiary Guaranty and the performance by such Subsidiary of its obligations thereunder and under the Subsidiary Guaranty; and 

	

	
(iv)an opinion of counsel reasonably satisfactory to the Purchasers covering such matters relating to such Subsidiary and such Subsidiary Guaranty as the Purchasers may reasonably request.

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Section 5.
	
Representations and Warranties of the Company.

The Company represents and warrants to each Purchaser that:

	

	
Section 5.1.Organization; Power and Authority.  The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof.

	

	
Section 5.2.Authorization, Etc.  This Agreement and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

	

	
Section 5.3.Disclosure.  The Company, through its agents, Credit Suisse Securities (USA) LLC and PNC Capital Markets LLC, has delivered to each Purchaser a copy of a Private Placement Memorandum, dated November 2018 (the “Memorandum”), relating to the transactions contemplated hereby.  This Agreement, the Memorandum, and the financial statements listed in Schedule 5.3 (this Agreement, the Memorandum and such financial statements delivered to each Purchaser being referred to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made.  Except as disclosed in the Disclosure Documents, since September 30, 2018, there has been no change in the financial condition, operations, business or properties of the Company or any Subsidiary except changes that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

	

	
Section 5.4.Organization and Ownership of Shares of Subsidiaries; Affiliates.  (a) Schedule 5.4 contains (except as noted therein) complete and correct lists of (i) the Company’s Subsidiaries, showing, as to each Subsidiary, the name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary, (ii) the Company’s Affiliates, other than Subsidiaries, and (iii) the Company’s directors and officers.

	

	
(b)All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been 

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validly issued, are fully paid and non‐assessable and are owned by the Company or another Subsidiary free and clear of any Lien that is prohibited by this Agreement.

	

	
(c)Each Subsidiary is a corporation or other legal entity duly organized, validly existing and, where applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and, where applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact.

	

	
Section 5.5.Financial Statements; Material Liabilities.  The Company has delivered to each Purchaser copies of the consolidated financial statements of the Company identified on Schedule 5.5.  All of such financial statements (including in each case the notes thereto) fairly present in all material respects the consolidated financial position of the Company as of the respective dates specified in such Schedule and the consolidated results of the Company’s operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year‐end adjustments).   The Company and its Subsidiaries do not have any Material liabilities that are not disclosed in the Disclosure Documents.

	

	
Section 5.6.Compliance with Laws, Other Instruments, Etc.  The execution, delivery and performance by the Company of this Agreement and the Notes will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by‐laws, shareholders agreement or any other agreement or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary. 

	

	
Section 5.7.Governmental Authorizations, Etc.  No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Company of this Agreement or the Notes, other than any such consent, approval or authorization as is already in force and effect as of the Execution Date.

	

	
Section 5.8.Litigation; Observance of Statutes and Orders.  (a) There are no actions, suits, investigations, or proceedings pending or, to the best knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental 

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Authority that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

	

	
(b)Neither the Company nor any Subsidiary is (i) in violation of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or (ii) in violation of any applicable law, ordinance, rule or regulation of any Governmental Authority (including, without limitation, Environmental Laws, the USA PATRIOT Act or any of the other laws and regulations that are referred to in Section 5.16), which default or violation would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

	

	
Section 5.9.Taxes.  The Company and its Subsidiaries have filed all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments payable by them, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (i) the amount of which, individually or in the aggregate, is not Material or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP.  The U.S. federal income tax liabilities of the Company and its Subsidiaries have been finally determined (whether by reason of completed audits or the statute of limitations having run) for all fiscal years up to and including the fiscal year ended September 30, 2017.

	

	
Section 5.10.Title to Property; Leases.  The Company and its Subsidiaries have good and sufficient title to their respective Material properties, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Company or any Subsidiary after such date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement, except for those defects in title and Liens that, individually or in the aggregate, would not have a Material Adverse Effect.  All Material leases are valid and subsisting and are in full force and effect in all material respects. 

	

	
Section 5.11.Licenses, Permits, Etc.  The Company and its Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of others, except for those conflicts that, individually or in the aggregate, would not have a Material Adverse Effect.

	

	
Section 5.12.Compliance with ERISA.  (a)  The Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred or exists that would, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties 

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or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate Material.

 

(b)The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit liabilities by more than $50,000,000 in the case of any single Plan and by more than $50,000,000 in the aggregate for all Plans. The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Plan that is funded, determined as of the end of the Company’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Non-U.S. Plan allocable to such benefit liabilities by more than $50,000,000. The term “benefit liabilities” has the meaning specified in section 4001 of ERISA and the terms “current value” and “present value” have the meaning specified in section 3 of ERISA.

 

(c)The Company and its ERISA Affiliates have not incurred (i) withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material or (ii) any obligation in connection with the termination of or withdrawal from any Non-U.S. Plan that individually or in the aggregate are Material

	

	
(d)The expected postretirement benefit obligation (determined as of the last day of the Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715‐60, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Company and its Subsidiaries is not Material.

	

	
(e)The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)‐(D) of the Code.  The representation by the Company to each Purchaser in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds to be used to pay the purchase price of the Notes to be purchased by such Purchaser.

	

	
(f)All Non-U.S. Plans have been established, operated, administered and maintained in compliance with all laws, regulations and orders applicable thereto, except where failure so to comply could not be reasonably expected to have a Material Adverse Effect.  All premiums, contributions and any other amounts required by applicable Non-U.S. Plan documents or applicable laws to be paid or accrued by the Company and its Subsidiaries have been paid or 

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accrued as required, except where failure so to pay or accrue could not be reasonably expected to have a Material Adverse Effect.

Section 5.13.Private Offering by the Company.  Neither the Company nor anyone acting on its behalf has offered the Notes or any similar Securities for sale to, or solicited any offer to buy the Notes or any similar Securities from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than 30 other Institutional Investors, each of which has been offered the Notes at a private sale for investment.  Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of section 5 of the Securities Act or to the registration requirements of any Securities or blue sky laws of any applicable jurisdiction.

	

	
Section 5.14.Use of Proceeds; Margin Regulations.  The Company will apply the proceeds of the sale of the Notes hereunder to pay down short term borrowings under the Credit Agreements and for general corporate purposes.  No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any Securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).  Margin stock does not constitute more than 1.00% of the value of the Consolidated Total Assets of the Company and its Subsidiaries as of the date hereof and the Company does not have any present intention that margin stock will constitute more than 25% of the value of such Consolidated Total Assets.  As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.

	

	
Section 5.15.Existing Indebtedness.  (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Company and its Subsidiaries as of November 30, 2018 (including descriptions of the obligors and obligees, principal amounts outstanding, any collateral therefor and any Guaranties thereof), since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries.  Neither the Company nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary and no event or condition exists with respect to any Indebtedness of the Company or any Subsidiary the outstanding principal amount of which exceeds the greater of $25,000,000 or 2.00% of Consolidated Total Assets that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

	

	
(b)Neither the Company nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Company or such Subsidiary, any agreement relating thereto or any other agreement (including, but not limited to, its charter or any other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Company, except as disclosed in Schedule 5.15.

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Section 5.16.Foreign Assets Control Regulations, Etc.  (a)  Neither the Company nor any Controlled Entity (i) is a Blocked Person, (ii) has been notified that its name appears or may in the future appear on a State Sanctions List or (iii) is a target of sanctions that have been imposed by the United Nations or the European Union.

	

	
(b)Neither the Company nor any Controlled Entity (i) has violated, been found in violation of, or been charged or convicted under, any applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws or (ii) to the Company’s knowledge, is under investigation by any Governmental Authority for possible violation of any U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws.

	

	
(c)No part of the proceeds from the sale of the Notes hereunder:

	
 
	

	
(i)constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by the Company or any Controlled Entity, directly or indirectly, (A) in connection with any investment in, or any transactions or dealings with, any Blocked Person, (B) for any purpose that would cause any Purchaser to be in violation of any U.S. Economic Sanctions Laws or (C) otherwise in violation of any U.S. Economic Sanctions Laws;

	
 
	

	
(ii)will be used, directly or indirectly, in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Money Laundering Laws; or

	
 
	

	
(iii)will be used, directly or indirectly, for the purpose of making any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage, in each case which would be in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Corruption Laws.

	

	
(d)The Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws and Anti-Corruption Laws.

	

	
Section 5.17.Status under Certain Statutes.  Neither the Company nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 2005, as amended, or the ICC Termination Act of 1995, as amended.

	
Section 6.
	
Representations of the Purchasers.

	

	
Section 6.1.Purchase for Investment.  Each Purchaser severally represents that it is (a) purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s or their property shall at all times be within such Purchaser’s or their control and (b) an “accredited investor” (as defined in Rule 501(a)(1), (2), (3), (7) or (8) under the Securities Act.  Each Purchaser understands that the 

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Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.

	

	
Section 6.2.Source of Funds.  Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:

	
 
	

	
(a)the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95‐60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95‐60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or

	
 
	

	
(b)the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or

	
 
	

	
(c)the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90‐1 or (ii) a bank collective investment fund, within the meaning of the PTE 91‐38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or

	
 
	

	
(d)the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84‐14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM maintains an 

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ownership interest in the Company that would cause the QPAM and the Company to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company in writing pursuant to this clause (d);or

	
 
	

	
(e)the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96‐23 (the “INHAM Exemption”)) managed by an “in‐house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or

	
 
	

	
(f)the Source is a governmental plan; or

	
 
	

	
(g)the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or

	
 
	

	
(h)the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.

As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.

	
Section 7.
	
Information as to Company

	

	
Section 7.1.Financial and Business Information.  The Company shall deliver to each Purchaser and each holder of a Note that is an Institutional Investor:

	
 
	

	
(a)Quarterly Statements — within 60 days (or such shorter period as is the earlier of (x) 15 days greater than the period applicable to the filing of the Company’s Quarterly Report on Form 10‐Q (the “Form 10‐Q”) with the SEC regardless of whether the Company is subject to the filing requirements thereof and (y) the date by which such financial statements are required to be delivered under any Material Credit Facility or the date on which such corresponding financial statements are delivered under any Material Credit Facility if such delivery occurs earlier than such required delivery date) after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of,

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(i)a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and

(ii)consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,

setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with SEC requirements applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year‐end adjustments, provided that delivery within the time period specified above of copies of the Company’s Form 10‐Q prepared in compliance with the requirements therefor and filed with the SEC shall be deemed to satisfy the requirements of this Section 7.1(a);

	
 
	

	
(b)Annual Statements — within 105 days (or such shorter period as is the earlier of (x) 15 days greater than the period applicable to the filing of the Company’s Annual Report on Form 10‐K (the “Form 10‐K”) with the SEC regardless of whether the Company is subject to the filing requirements thereof and (y) the date by which such financial statements are required to be delivered under any Material Credit Facility or the date on which such corresponding financial statements are delivered under any Material Credit Facility if such delivery occurs earlier than such required delivery date) after the end of each fiscal year of the Company, duplicate copies of

(i)a consolidated balance sheet of the Company and its Subsidiaries as at the end of such year, and

(ii)consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries for such year,

setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon (without a “going concern” or similar qualification or exception and without any qualification or exception as to the scope of the audit on which such opinion is based) of independent public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with the standards of the Public Company Accounting Oversight Board (United States), if the Company is subject to the filing requirements of the Form 10-K, or, otherwise, generally accepted auditing standards in the United States, and that such audit provides a reasonable basis for such opinion in the circumstances, provided that the delivery within the time 

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period specified above of the Company’s Form 10‐K for such fiscal year (together with the Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a‐3 under the Securities Exchange Act of 1934, as amended) prepared in accordance with the requirements therefor and filed with the SEC, shall be deemed to satisfy the requirements of this Section 7.1(b);

	
 
	

	
(c)SEC and Other Reports — promptly upon their becoming available, one copy of (i) each financial statement, report, notice or proxy statement sent by the Company or any Significant Subsidiary to its holders of outstanding debt or equity securities generally, and (ii) each regular or periodic report, each registration statement that shall have become effective (without exhibits except as expressly requested by such Purchaser or holder), and each final prospectus and all amendments thereto filed by the Company or any Significant Subsidiary with the SEC; 

	
 
	

	
(d)Notice of Default or Event of Default — promptly, and in any event within five days after a Responsible Officer becoming aware of the existence of any Default or Event of Default, a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto;

	
 
	

	
(e)ERISA Matters — promptly, and in any event within ten days after a Responsible Officer becoming aware of any of the following that would reasonably be expected to have a Material Adverse Effect, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto:

(i)with respect to any Plan, any reportable event, as defined in section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof; or

(ii)the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or

(iii)any event, transaction or condition that could result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions; or

(iv)receipt of notice of the imposition of a Material financial penalty (which for this purpose shall mean any tax, penalty or other liability, whether by way of indemnity or otherwise) with respect to one or more Non-U.S. Plans; and 

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(f)Resignation or Replacement of Auditors — unless the Company has filed with the SEC a Form 8-K to report a change in auditors as required by Item 4.01 of Form 8-K, within ten days following the date on which the Company’s auditors resign or the Company elects to change auditors, as the case may be, notification thereof, together with such supporting information as the Required Holders may request; and

	
 
	

	
(g)Requested Information — with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of its Significant Subsidiaries (including, but without limitation, actual copies of the Company’s Form 10‐Q and Form 10‐K) or relating to the ability of the Company to perform its obligations hereunder and under the Notes as from time to time may be reasonably requested by any such Purchaser or holder of a Note.

	

	
Section 7.2.Officer’s Certificate.  Each set of financial statements delivered to a Purchaser or a holder of a Note pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer:

	
 
	

	
(a)Covenant Compliance — setting forth the information from such financial statements that is required in order to establish whether the Company was in compliance with the requirements of Section 10 during the quarterly or annual period covered by the statements then being furnished, (including with respect to each such provision that involves mathematical calculations, the information from such financial statements that is required to perform such calculations) and detailed calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Section, and the calculation of the amount, ratio or percentage then in existence.  In the event that the Company or any Subsidiary has made an election to measure any financial liability using fair value (which election is being disregarded for purposes of determining compliance with this Agreement pursuant to the second sentence in the definition of GAAP in Schedule A) as to the period covered by any such financial statement, such Senior Financial Officer’s certificate as to such period shall include a reconciliation from GAAP with respect to such election; and

	
 
	

	
(b)Event of Default — certifying that such Senior Financial Officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.

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Section 7.3.Visitation.  The Company shall permit the representatives of each Purchaser and each holder of a Note that is an Institutional Investor:

	
 
	

	
(a)No Default — if no Default or Event of Default then exists, at the expense of such Purchaser or such holder and upon reasonable prior notice to the Company and during normal business hours and not more often than once during the calendar year, to visit the principal executive office of the Company and, to discuss the affairs, finances and accounts of the Company and its Significant Subsidiaries with the Company’s officers, and (with the consent of the Company, which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Significant Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; and

	
 
	

	
(b)Default — if a Default or Event of Default then exists, at the expense of the Company to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at such times and as often as may be requested.

	

	
Section 7.4.Electronic Delivery.  Financial statements, opinions of independent certified public accountants, other information and Officer’s Certificates that are required to be delivered by the Company pursuant to Sections 7.1(a), (b) or (c) and Section 7.2 shall be deemed to have been delivered if the Company satisfies any of the following requirements with respect thereto:

	
 
	

	
(i)such financial statements satisfying the requirements of Section 7.1(a) or (b) and related Officer’s Certificate satisfying the requirements of Section 7.2 are delivered to each Purchaser or holder of a Note by e‐mail; 

	
 
	

	
(ii)the Company shall have filed such Form 10‐Q or Form 10‐K, satisfying the requirements of Section 7.1(a) or Section 7.1(b), as the case may be, with the SEC on EDGAR and shall have made such form and the related Officer’s Certificate satisfying the requirements of Section 7.2 available on its website, which is located at http://ugicorp.com as of the date of this Agreement; 

	
 
	

	
(iii)such financial statements satisfying the requirements of Section 7.1(a) or Section 7.1(b) and related Officer’s Certificate(s) satisfying the requirements of Section 7.2 are timely posted by or on behalf of the Company on IntraLinks or on any other similar website to which each holder of Notes has free access; or 

	
 
	

	
(iv)the Company shall have filed any of the items referred to in Section 7.1(c) with the SEC on EDGAR and shall have made such items available on its website or on IntraLinks or on any other similar website to which each holder of Notes has free access;

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provided however, that upon request of any holder to receive paper copies of such forms, financial statements and Officer’s Certificates or to receive them by e-mail, the Company will promptly e-mail them or deliver such paper copies, as the case may be, to such holder.

	
Section 8.
	
Payment and Prepayment of the Notes.

	

	
Section 8.1.Maturity.  As provided therein, the entire unpaid principal balance of each Note shall be due and payable on the Maturity Date thereof.

	

	
Section 8.2.Optional Prepayments with Make‐Whole Amount  The Company may, at its option, upon notice as provided below, prepay at any time after the Closing all, or from time to time any part of, the Notes, in an amount not less than 5.00% of the aggregate principal amount of the Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, and the Make‐Whole Amount determined for the prepayment date with respect to such principal amount.  The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than ten days and not more than 60 days prior to the date fixed for such prepayment unless the Company and the Required Holders agree to another time period pursuant to Section 17.  Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make‐Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.  Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make‐Whole Amount as of the specified prepayment date.

	

	
Section 8.3.Allocation of Partial Prepayments.  In the case of each partial prepayment of the Notes pursuant to Section 8.2, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.

	

	
Section 8.4.Maturity; Surrender, Etc.  In the case of each optional prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make‐Whole Amount, if any.  From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make‐Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue.  Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

	

	
Section 8.5.Purchase of Notes.  The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with this Agreement 

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and the Notes or (b) pursuant to an offer to purchase made by the Company or an Affiliate pro rata to the holders of all Notes at the time outstanding upon the same terms and conditions.  Any such offer shall provide each holder with sufficient information to enable it to make an informed decision with respect to such offer, and shall remain open for at least 15 Business Days.  If the holders of more than 35% of the principal amount of the Notes then outstanding accept such offer, the Company shall promptly notify the remaining holders of such fact and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least 5 Business Days from its receipt of such notice to accept such offer.  The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

	

	
Section 8.6.Make‐Whole Amount.

“Make‐Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make‐Whole Amount may in no event be less than zero.  For the purposes of determining the Make‐Whole Amount, the following terms have the following meanings:

“Called Principal” means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

“Discounted Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes of such series is payable) equal to the Reinvestment Yield with respect to such Called Principal.

“Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the yield(s) reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on‐the‐run U.S. Treasury securities (“Reported”) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between the yields Reported for the applicable most recently issued actively traded on‐the‐run U.S. Treasury securities with the maturities (1) closest to and greater than such Remaining Average Life and (2) closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.  

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If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.

“Remaining Average Life” means, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a 360‐day year composed of twelve 30‐day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

“Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.4 or Section 12.1.

“Settlement Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

	

	
Section 8.7.Payments Due on Non‐Business Days.  Anything in this Agreement or the Notes to the contrary notwithstanding, (x) subject to clause (y), any payment of interest on any Note that is due on a date that is not a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; and (y) any payment of principal of or Make‐Whole Amount on any Note (including principal due on the Maturity Date of such Note) that is due on a date that is not a Business Day shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.

	

	
Section 8.8.Prepayment of Notes upon Change in Control.  

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(a)Notice of Change in Control.  The Company will, within five Business Days after any Responsible Officer has knowledge of the occurrence of any Change in Control, give written notice of such Change in Control to each holder of Notes.  Such notice shall contain and constitute an offer to prepay Notes as described in subparagraph (b) of this Section 8.8 and shall be accompanied by the certificate described in subparagraph (e) of this Section 8.8.

	

	
(b)Offer to Prepay Notes.  The offer to prepay Notes contemplated by subparagraph (a) of this Section 8.8 shall be an offer to prepay, in accordance with and subject to this Section 8.8, all, but not less than all, the Notes held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the “Proposed Prepayment Date”) which shall be a Business Day.  Such date shall be not less than 30 days and not more than 120 days after the Change in Control.

	

	
(c)Acceptance/Rejection.  A holder of Notes may accept the offer to prepay made pursuant to this Section 8.8 by causing a notice of such acceptance to be delivered to the Company not later than 15 days after receipt by such holder of the most recent offer of prepayment.  A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.8 shall be deemed to constitute a rejection of such offer by such holder.

	

	
(d)Prepayment.  Prepayment of the Notes to be prepaid pursuant to this Section 8.8 shall be at 100% of the principal amount of such Notes, together with interest on such Notes accrued to the date of prepayment, but without the Make-Whole Amount or other premium.  The prepayment shall be made on the Proposed Prepayment Date.

	

	
(e)Officer’s Certificate.  Each offer to prepay the Notes pursuant to this Section 8.8 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this Section 8.8; (iii) the principal amount of each Note offered to be prepaid which shall be 100% of the principal amount thereof; (iv) the interest that would be due on each Note offered to be prepaid, accrued to the Proposed Prepayment Date; (v) that the conditions of this Section 8.8 have been fulfilled; and (vi) in reasonable detail, the nature and date or proposed date of the Change in Control.

	

	
(f)Certain Definitions.  “Change in Control” means (i) the acquisition by any Person, or two or more Persons acting in concert (other than UGI Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of 50% or more of the outstanding shares of voting stock of the Company on a fully diluted basis or (ii) the Company shall cease for any reason to be directly or indirectly wholly-owned by UGI Corporation. 

	

	
(g)All calculations contemplated in this Section 8.8 involving the capital stock of any Person shall be made with the assumption that all convertible Securities of such Person then outstanding and all convertible Securities issuable upon the exercise of any warrants, options and other rights outstanding at such time were converted at such time and that all options, warrants and similar rights to acquire shares of capital stock of such Person were exercised at such time.

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Section 8.9.Prepayment in Connection with Asset Dispositions.  In the event the Company elects to make a Debt Prepayment Application pursuant to Section 10.7, the Company shall offer to prepay each outstanding Note in a principal amount which equals the Ratable Portion for such Note (which offer shall be in writing and shall offer to make such prepayment on a Business Day which is not less than 30 and not more than 60 days after the date of the notice of offer (the “Disposition Prepayment Date”)), together with accrued interest thereon to the date of such prepayment (but without Make-Whole Amount or other premium).  Each holder of a Note shall notify the Company of such holder’s acceptance or rejection of such offer within 10 Business Days of receipt thereof by giving notice of such acceptance or rejection to the Company, provided, however, that any holder of a Note who fails to so notify the Company within 10 Business Days of receipt of the notice of offer of prepayment shall be deemed to have rejected such offer.  If any holder of a Note rejects or is deemed to have rejected such offer of prepayment in accordance with the preceding sentence, then, for the purposes of determining compliance with Section 10.7(e), the Company nevertheless will be deemed to have made a Debt Prepayment Application in an amount equal to the Ratable Portion for such Note.  The Company shall prepay on the Disposition Prepayment Date the Ratable Portion of each Note held by the holders who have accepted such offer in accordance with this Section 8.9, together with accrued interest thereon to the date of such prepayment (but without Make-Whole Amount or other premium).  No Make-Whole Amount shall be payable in connection with any Debt Prepayment Application made with respect to the Notes from the Net Proceeds Amount (or portion thereof) arising from asset dispositions.

For purposes of this Section 8.9, “Ratable Portion” for any Note means, with respect to a Debt Prepayment Application, an amount equal to the product of (x) the Net Proceeds Amount being so applied to the payment of Senior Indebtedness multiplied by (y) a fraction the numerator of which is the outstanding principal amount of such Note and the denominator of which is the aggregate principal amount of Senior Indebtedness of the Company and its Subsidiaries then being prepaid.

	
Section 9.
	
Affirmative Covenants.

From the Execution Date until the Closing and thereafter, so long as any of the Notes are outstanding, the Company covenants that:

	

	
Section 9.1.Compliance with Laws.  Without limiting Section 10.4, the Company will, and will cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, ERISA, Environmental Laws, the USA PATRIOT Act and the other laws and regulations that are referred to in Section 5.16, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non‐compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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Section 9.2.Insurance.  The Company will, and will cause each of its Subsidiaries to, maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co‐insurance and self‐insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated; provided however that the Company and its Subsidiaries may self insure to the extent consistent with prudent business practices. 

	

	
Section 9.3.Maintenance of Properties.  The Company will, and will cause each of its Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section shall not prevent the Company or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

	

	
Section 9.4.Payment of Taxes.  The Company will, and will cause each of its Subsidiaries to, file all income tax or similar tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies payable by any of them, to the extent the same have become due and payable and before they have become delinquent, provided that neither the Company nor any Subsidiary need pay any such tax, assessment, charge or levy if (i) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (ii) the nonpayment of all such taxes, assessments, charges and levies would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 

	

	
Section 9.5.Corporate Existence, Etc.  Subject to Section 10.2, the Company will at all times preserve and keep its corporate existence in full force and effect.  Subject to Sections 10.2 and 10.7, the Company will at all times preserve and keep in full force and effect the corporate existence of each of its Subsidiaries (unless merged into the Company or a Wholly‐Owned Subsidiary) and all rights and franchises of the Company and its Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise would not, individually or in the aggregate, have a Material Adverse Effect. 

	

	
Section 9.6.Books and Records.  The Company will, and will cause each of its Material Subsidiaries to, maintain proper books of record and account in conformity with GAAP and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over the Company or such Material Subsidiary, as the case may be.  The Company will, and will cause each of its Material Subsidiaries to, keep books, records and accounts which, in reasonable detail, accurately reflect all transactions and dispositions of assets.  The Company has devised a system of internal accounting controls sufficient to provide reasonable assurances that its 

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respective books, records, and accounts accurately reflect all transactions and dispositions of Consolidated Total Assets of the Company and the Company will continue to maintain such system.

	

	
Section 9.7Subsidiary Guarantors.  The Company will cause each of its Subsidiaries that guarantees or otherwise becomes liable at any time, whether as a borrower or an additional or co‐borrower or otherwise, for or in respect of any Indebtedness under any Material Credit Facility to concurrently therewith:

	
 
	

	
(a)enter into an agreement (substantially in the form of Schedule 2 attached hereto) providing for the guaranty by such Subsidiary, on a joint and several basis with all other such Subsidiaries, of (i) the prompt payment in full when due of all amounts payable by the Company pursuant to the Notes (whether for principal, interest, Make‐Whole Amount or otherwise) and this Agreement, including, without limitation, all indemnities, fees and expenses payable by the Company thereunder and (ii) the prompt, full and faithful performance, observance and discharge by the Company of each and every covenant, agreement, undertaking and provision required pursuant to the Notes or this Agreement to be performed, observed or discharged by it (a “Subsidiary Guaranty”); and

	
 
	

	
(b)deliver the following to each holder of a Note:

(i)an executed counterpart of such Subsidiary Guaranty;

(ii)a certificate signed by an authorized responsible officer of such Subsidiary containing representations and warranties on behalf of such Subsidiary to the same effect, mutatis mutandis, as those contained in Sections 5.1, 5.2, 5.6 and 5.7 of this Agreement (but with respect to such Subsidiary and such Subsidiary Guaranty rather than the Company);

(iii)all documents as may be reasonably requested by the Required Holders to evidence the due organization, continuing existence and good standing of such Subsidiary and the due authorization by all requisite action on the part of such Subsidiary of the execution and delivery of such Subsidiary Guaranty and the performance by such Subsidiary of its obligations thereunder; and

(iv)an opinion of counsel reasonably satisfactory to the Required Holders covering such matters relating to such Subsidiary and such Subsidiary Guaranty as the Required Holders may reasonably request.

With respect to the Notes to be purchased at the Closing, if the Company fails to comply with any provision of Section 9 prior to the Closing at which the Company will issue the Notes, then the Purchaser may elect not to purchase such Notes. 

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Section 10.
	
Negative Covenants.

From the Execution Date until the Closing and thereafter, so long as any of the Notes are outstanding, the Company covenants that:

	

	
Section 10.1.Transactions with Affiliates.  The Company will not and will not permit any Subsidiary to enter into directly or indirectly any Material transaction or Material group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company or another Subsidiary), except pursuant to the reasonable requirements of the Company’s or such Subsidiary’s business and, except for any transaction that does not require approval by the Pennsylvania Public Utility Commission (the “PUC”) or any transaction that has been approved by the PUC, upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtainable in a comparable arm’s‐length transaction with a Person not an Affiliate.

	

	
Section 10.2.Merger, Consolidation, Etc.  The Company will not consolidate with or merge with any other Person or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions to any Person unless:

	
 
	

	
(a)the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease all or substantially all of the assets of the Company as an entirety, as the case may be, shall be a solvent corporation or limited liability company organized and existing under the laws of the United States or any state thereof (including the District of Columbia), and, if the Company is not such corporation or limited liability company, such corporation or limited liability company shall have executed and delivered to each holder of any Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and the Notes; 

	
 
	

	
(b)each Subsidiary Guarantor under any Subsidiary Guaranty that is outstanding at the time such transaction or each transaction in such a series of transactions occurs reaffirms its obligations under such Subsidiary Guaranty in writing at such time pursuant to documentation that is reasonably acceptable to the Required Holders; and

	
 
	

	
(c)immediately before and immediately after giving effect to such transaction or each transaction in any such series of transactions, no Default or Event of Default shall have occurred and be continuing.

No such conveyance, transfer or lease of substantially all of the assets of the Company shall have the effect of releasing the Company or any successor corporation or limited liability company that shall theretofore have become such in the manner prescribed in this Section 10.2 from its liability under this Agreement or the Notes.

	

	
Section 10.3.Line of Business.  The Company will not and will not permit any Material Subsidiary to engage in any business other than the businesses conducted by the Borrower and its 

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Subsidiaries as of the date of the Closing and business activities reasonably related or ancillary thereto, including any Midstream Business.

	

	
Section 10.4.Terrorism Sanctions Regulations.  The Company will not, and will not permit any Controlled Entity to (a) become (including by virtue of being owned or controlled by a Blocked Person), own or control a Blocked Person or (b) directly or indirectly have any investment in or engage in any dealing or transaction (including any investment, dealing or transaction involving the proceeds of the Notes) with any Person if such investment, dealing or transaction (i) would cause any holder or any affiliate of such holder to be in violation of, or subject to sanctions under, any law or regulation applicable to such holder, or (ii) is prohibited by or subject to sanctions under any U.S. Economic Sanctions Laws.

	

	
Section 10.5.Liens.  The Company will not create or suffer to exist, or permit any of its Subsidiaries to create or suffer to exist, any Lien on or with respect to any of its properties, whether now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any right to receive income, other than:

	
 
	

	
(a)Permitted Liens;

	
 
	

	
(b)Liens upon any property acquired, constructed or improved after the date hereof by the Company or a Subsidiary which are created or incurred contemporaneously with or within 180 days after such acquisition, construction or improvement to secure or provide for the payment of any part of the purchase price of such property or the cost of such construction or improvement or Indebtedness incurred to pay that purchase price or cost of construction or improvement (but no other amounts), provided, however, that no such Lien shall extend to or cover any properties of any character other than the real property or equipment being acquired, and no such extension, renewal or replacement shall extend to or cover any properties not theretofore subject to the Lien being extended, renewed or replaced; 

	
 
	

	
(c)the Liens existing on November 30, 2018 and described on Schedule 5.15 hereto;

	
 
	

	
(d)Liens on property of a Person existing at the time such Person is merged into or consolidated with the Company or any Subsidiary or becomes a Subsidiary of the Company and Liens existing on assets at the time of their acquisition; provided that such Liens were not created in contemplation of such merger, consolidation or acquisition and do not extend to any assets other than those of the Person so merged into or consolidated with the Company or such Subsidiary or acquired by the Company or such Subsidiary or those assets so acquired, as the case may be;

	
 
	

	
(e)Liens arising from legal proceedings being contested by the Company in good faith by appropriate legal or administrative proceedings;

	
 
	

	
(f)Liens on cash and cash equivalents securing obligations pursuant to non‐speculative Hedge Agreements;

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(g)Liens arising from Section 302 of ERISA or pursuant to the PBGC’s authority under Title IV of ERISA in an aggregate principal amount not to exceed the greater of (i) 2.00% of Consolidated Total Assets or (ii) $50,000,000, at any time outstanding;

	
 
	

	
(h)Liens arising pursuant to any Non‐recourse Debt;

	
 
	

	
(i)Liens arising in connection with the issuance of industrial revenue bonds or pollution control bonds;

	
 
	

	
(j)Liens created in connection with inventory management agreements in the ordinary course of business that do not in the aggregate materially detract from the value of the Company’s Consolidated Total Assets or materially impair the use thereof in the operation of its business;

	
 
	

	
(k)the replacement, extension or renewal of any Lien permitted by clause (c) or (d) above upon or in the same property theretofore subject thereto or the replacement, extension or renewal (without increase in the amount or change in any direct or contingent obligor) of the Indebtedness secured thereby; and

	
 
	

	
(l)other Liens securing Indebtedness of the Company or any Subsidiary; provided that the aggregate principal amount of Indebtedness at any time outstanding secured by Liens described in this clause (l) is permitted by Section 10.6(b); and provided further that notwithstanding the foregoing, the Company shall not, and shall not permit any of its Subsidiaries to, secure pursuant to this clause (l) any Indebtedness outstanding under or pursuant to any Material Credit Facility unless and until the Notes (and any guaranty delivered in connection therewith) shall concurrently be secured equally and ratably with such Indebtedness pursuant to documentation reasonably acceptable to the Required Holders in substance and in form and opinions of counsel to the Company and/or any such Subsidiary, as the case may be, from counsel that is reasonably acceptable to the Required Holders.

	

	
Section 10.6.Financial Covenants.  

	

	
(a)Leverage Ratio.  The Company will maintain a ratio of Consolidated Indebtedness to Consolidated Total Capital of not greater than 0.65 to 1.00.

	

	
(b)Priority Debt Ratio.  The Company will not at any time permit Consolidated Priority Debt to exceed 10% of Consolidated Total Assets.

	

	
Section 10.7.Sale of Assets.  The Company will not, nor will it permit any Subsidiary to, lease, sell or otherwise dispose of its Property to any other Person, except:

	
 
	

	
(a)sales of inventory, or used, worn-out, surplus or obsolete equipment, all in the ordinary course of business;

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(b)the sale of equipment to the extent that such equipment is exchanged for credit against the purchase price of similar replacement equipment, or the proceeds of such sale are applied with reasonable promptness to the purchase price of such replacement equipment;

	
 
	

	
(c)intercompany dispositions of property;

	
 
	

	
(d)the licensing of rights to use intellectual property in the ordinary course of business or in settlement of any litigation or claims in respect of intellectual property and the leasing of real property or equipment in the ordinary course of business or as part of or incidental to the provision of transitional services to a purchaser of Property in connection with a disposition of such Property permitted by this Agreement; and

	
 
	

	
(e)any lease, sale or other disposition of its Property that, together with all other Property of the Company and its Subsidiaries previously leased, sold or disposed of pursuant to this clause (e) during the twelve month period ending on the date such lease, sale or other disposition occurs, do not constitute a Substantial Portion of the Property of the Company and its Subsidiaries.

To the extent that the Net Proceeds Amount for any asset disposition to a Person (other than an Affiliate of the Company or Subsidiary thereof) is applied to a Debt Prepayment Application or a Property Reinvestment Application within one year after such asset disposition, then such asset disposition (or, if less than all such Net Proceeds Amount is applied as contemplated hereinabove, the pro rata percentage thereof which corresponds to the Net Proceeds Amount so applied), shall be deemed not to be an asset disposition.

With respect to the Notes to be purchased at the Closing, if the Company fails to comply with any provision of Section 10 prior to the Closing at which the Company will issue the Notes, then the Purchaser may elect not to purchase such Notes. 

	
Section 11.
	
Events of Default.

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

	
 
	

	
(a)the Company defaults in the payment of any principal or Make‐Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or

	
 
	

	
(b)the Company defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or

	
 
	

	
(c)the Company defaults in the performance of or compliance with any term contained in Section 7.1(d) or Sections 10.2 or 10.6; or

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(d)the Company or any Subsidiary Guarantor defaults in the performance of or compliance with any term contained herein (other than those referred to in Sections 11(a), (b) and (c)) or in any Subsidiary Guaranty and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or

	
 
	

	
(e)(i) any representation or warranty made in writing by or on behalf of the Company or by any officer of the Company in this Agreement or any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made, or (ii) any representation or warranty made in writing by or on behalf of any Subsidiary Guarantor or by any officer of such Subsidiary Guarantor in any Subsidiary Guaranty or any writing furnished in connection with such Subsidiary Guaranty proves to have been false or incorrect in any material respect on the date as of which made; or

	
 
	

	
(f)(i) the Company or any Significant Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make‐whole amount or interest on any Indebtedness that is outstanding in an aggregate principal amount equal to at least 2.00% of Consolidated Total Assets beyond any period of grace provided with respect thereto; or (ii) the Company or any Significant Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding principal amount equal to at least 2.00% of Consolidated Total Assets or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition, such Indebtedness has become or has been declared due and payable before its stated maturity or before its regularly scheduled dates of payment; or

	
 
	

	
(g)the Company or any Significant Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or

	
 
	

	
(h)a court or other Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Company or any of its Significant Subsidiaries, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering 

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the dissolution, winding‐up or liquidation of the Company or any of its Significant Subsidiaries, or any such petition shall be filed against the Company or any of its Significant Subsidiaries and such petition shall not be dismissed within 60 days; or

	
 
	

	
(i)one or more final judgments or orders for the payment of money aggregating in excess of 2.00% of Consolidated Total Assets, including, without limitation, any such final order enforcing a binding arbitration decision, are rendered against one or more of the Company and its Significant Subsidiaries and which judgments are not, within 30 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 30 days after the expiration of such stay; or

	
 
	

	
(j)if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) there is any “amount of unfunded benefit liabilities” (within the meaning of section 4001(a)(18) of ERISA) under one or more Plans, determined in accordance with Title IV of ERISA, (iv) the aggregate present value of accrued benefit liabilities under all funded Non-U.S. Plans exceeds the aggregate current value of the assets of such Non-U.S. Plans allocable to such liabilities, (v) the Company or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (vi) the Company or any ERISA Affiliate withdraws from any Multiemployer Plan, (vii) the Company or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of the Company or any Subsidiary thereunder, (viii) the Company or any Subsidiary fails to administer or maintain a Non-U.S. Plan in compliance with the requirements of any and all applicable laws, statutes, rules, regulations or court orders or any Non-U.S. Plan is involuntarily terminated or wound up, or (ix) the Company or any Subsidiary becomes subject to the imposition of a financial penalty (which for this purpose shall mean any tax, penalty or other liability, whether by way of indemnity or otherwise) with respect to one or more Non-U.S. Plans; and any such event or events described in clauses (i) through (ix) above, either individually or together with any other such event or events, would reasonably be expected to have a Material Adverse Effect.  As used in this Section 11(j), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in section 3 of ERISA; or

	
 
	

	
(k)any Subsidiary Guaranty shall cease to be in full force and effect, any Subsidiary Guarantor or any Person acting on behalf of any Subsidiary Guarantor shall contest in any manner the validity, binding nature or enforceability of any Subsidiary Guaranty, or the obligations of any Subsidiary Guarantor under any Subsidiary Guaranty are not or cease to be legal, valid, binding and enforceable in accordance with the terms of such Subsidiary Guaranty.

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Section 12.
	
Remedies on Default, Etc.

	

	
Section 12.1.Acceleration.  (a)  If an Event of Default with respect to the Company described in Section 11(g) or (h) (other than an Event of Default described in clause (i) of Section 11(g) or described in clause (vi) of Section 11(g) by virtue of the fact that such clause encompasses clause (i) of Section 11(g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.

	

	
(b)If any other Event of Default has occurred and is continuing, the Required Holders may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable.

	

	
(c)If any Event of Default described in Section 11(a), (b) or (f) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.

Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (y) the Make‐Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.  The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make‐Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

	

	
Section 12.2.Other Remedies.  If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note or Subsidiary Guaranty, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

	

	
Section 12.3.Rescission.  At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the Required Holders in principal amount of the Notes then outstanding, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make‐Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make‐Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, 

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at the Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non‐payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes.  No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

	

	
Section 12.4.No Waivers or Election of Remedies, Expenses, Etc.  No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies.  No right, power or remedy conferred by this Agreement, any Subsidiary Guaranty or any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.  Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.

	
Section 13.
	
Registration; Exchange; Substitution of Notes.

	

	
Section 13.1.Registration of Notes.  The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes.  The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register.  If any holder of one or more Notes is a nominee, then (a) the name and address of the beneficial owner of such Note or Notes shall also be registered in such register as an owner and holder thereof and (b) at any such beneficial owner’s option, either such beneficial owner or its nominee may execute any amendment, waiver or consent pursuant to this Agreement.  Prior to due presentment for registration of transfer, the Person(s) in whose name any Note(s) shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary.  The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.

	

	
Section 13.2.Transfer and Exchange of Notes.  Upon surrender of any Note to the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof), within ten Business Days thereafter, the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor and in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note.  Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Schedule 1.  Each 

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such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon.  The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.  Notes shall not be transferred in denominations of less than $5,000,000, provided that, if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $5,000,000.  Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2.  If a transferee is relying on clauses (c), (d), (e) or (g) of Section 6.2, it shall provide the written disclosure required in such clauses to the Company at least six Business Days prior to the transfer of a Note and if the Company reasonably determines, based upon an opinion of counsel it furnishes to the transferor and the transferee not less than one Business Day prior to the proposed transfer, that the transfer could reasonably be prohibited under section 406 of ERISA, such transfer shall not be effectuated until such time, if any, as the transferee represents that it is relying on other clauses of Section 6.2 or the Company determines that the proposed transfer would not be prohibited by section 406 of ERISA.

	

	
Section 13.3.Replacement of Notes.  Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and

	
 
	

	
(a)in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $100,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or

	
 
	

	
(b)in the case of mutilation, upon surrender and cancellation thereof,

within ten Business Days thereafter, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

	
Section 14.
	
Payments on Notes.

	

	
Section 14.1.Place of Payment.  Subject to Section 14.2, payments of principal, Make‐Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at the principal office of J.P. Morgan in such jurisdiction.  The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.

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Section 14.2.Home Office Payment.  So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make‐Whole Amount, if any, interest and all other amounts becoming due hereunder by the method and at the address specified for such purpose below such Purchaser’s name in Schedule B, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1.  Prior to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2.  The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 14.2.

	
Section 15.
	
Expenses, Etc.

	

	
Section 15.1.Transaction Expenses.  Whether or not the transactions contemplated hereby are consummated, the Company will pay all costs and expenses (including reasonable attorneys’ fees of a special counsel and, with respect to any costs or expenses arising after the Closing, if reasonably required by the Required Holders, local or other counsel) incurred by the Purchasers and each other holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement, any Subsidiary Guaranty or the Notes (whether or not such amendment, waiver or consent becomes effective), including, without limitation:  (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, any Subsidiary Guaranty or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, any Subsidiary Guaranty or the Notes, or by reason of being a holder of any Note, (b) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work‐out or restructuring of the transactions contemplated hereby and by the Notes and any Subsidiary Guaranty and (c) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO provided, that such costs and expenses under this clause (c) shall not exceed $3,500.00.  The Company will pay, and will save each Purchaser and each other holder of a Note harmless from, (i) all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Notes) and (ii) any and all wire transfer fees that any bank deducts from any payment under such Note to such holder or otherwise charges to a holder of a Note with respect to a payment under such Note.

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Section 15.2.Survival.  The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement, any Subsidiary Guaranty or the Notes, and the termination of this Agreement.

	
Section 16.
	
Survival of Representations and Warranties; Entire Agreement.

All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of such Purchaser or any other holder of a Note.  All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement.  Subject to the preceding sentence, this Agreement, the Notes and any Subsidiary Guaranties embody the entire agreement and understanding between each Purchaser and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.

	
Section 17.
	
Amendment and Waiver.  

	

	
Section 17.1.Requirements.  This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), only with the written consent of the Company and the Required Holders, except that:

	
 
	

	
(a)no amendment or waiver of any of Sections 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser unless consented to by such Purchaser in writing; and

	
 
	

	
(b) no amendment or waiver may, without the written consent of each Purchaser and the holder of each Note at the time outstanding, (i) subject to Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of (x) interest on the Notes or (y) the Make‐Whole Amount, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any amendment or waiver or the principal amount of the Notes that the Purchasers are to purchase pursuant to Section 2 upon satisfaction of the conditions to the Closing that appear in Section 4, or (iii) amend any of Sections 8 (except as set forth in the second sentence of Section 8.2), 11(a), 11(b), 12, 17 or 20.

	

	
Section 17.2.Solicitation of Holders of Notes.

	

	
(a)Solicitation.  The Company will provide each Purchaser and each holder of a Note with sufficient information, sufficiently far in advance of the date a decision is required, to enable such Purchaser and such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes or any Subsidiary Guaranty.  The Company will deliver executed or true and correct copies of each 

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amendment, waiver or consent effected pursuant to this Section 17 or any Subsidiary Guaranty to each Purchaser and each holder of a Note promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite Purchasers or holders of Notes.

	

	
(b)Payment.  The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any Purchaser or holder of a Note as consideration for or as an inducement to the entering into by such Purchaser or holder of any waiver or amendment of any of the terms and provisions hereof or of any Subsidiary Guaranty or any Note unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each Purchaser and each holder of a Note even if such Purchaser or holder did not consent to such waiver or amendment.

	

	
(c)Consent in Contemplation of Transfer.  Any consent given pursuant to this Section 17 or any Subsidiary Guaranty which contains or is in contemplation of a current or future offer of prepayment or repurchase, or any consent given pursuant to this Section by a holder of a Note that has transferred or has agreed to transfer its Note to the Company, any Subsidiary or any Affiliate or any other Person acting in concert with the Company or any of its Subsidiaries or Affiliates in connection with such consent shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.

	

	
Section 17.3.Binding Effect, etc.  Any amendment or waiver consented to as provided in this Section 17 or any Subsidiary Guaranty applies equally to all Purchasers and holders of Notes and is binding upon them and upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver.  No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon.  No course of dealing between the Company and any Purchaser or holder of a Note and no delay in exercising any rights hereunder or under any Note or Subsidiary Guaranty shall operate as a waiver of any rights of any Purchaser or holder of such Note.

	

	
Section 17.4.Notes Held by Company, etc.  Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement, any Subsidiary Guaranty or the Notes, or have directed the taking of any action provided herein or in any Subsidiary Guaranty or the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.

‐35‐

 

	
Section 18.
	
Notices.

Except to the extent otherwise provided in Section 7.4, all notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by an internationally recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by an internationally recognized overnight delivery service (with charges prepaid).  Any such notice must be sent:

	
 
	

	
(i)if to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in Schedule B, or at such other address as such Purchaser or nominee shall have specified to the Company in writing;

	
 
	

	
(ii)if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing; or

	
 
	

	
(iii)if to the Company, to the Company at its address set forth at the beginning hereof to the attention of the Treasurer, or at such other address as the Company shall have specified to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

	
Section 19.
	
Reproduction of Documents.

This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser at any Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser may destroy any original document so reproduced.  The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

	
Section 20.
	
Confidential Information.

For the purposes of this Section 20, “Confidential Information” means information delivered to any Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes 

‐36‐

 

publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available.  Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (i) its directors, officers, employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes), (ii) its auditors, financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 20), (v) any Person from which it offers to purchase any Security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 20), (vi) any federal or state regulatory authority having jurisdiction over such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser is a party or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes, this Agreement or any Subsidiary Guaranty, provided, however, that the Purchasers shall to the extent legally permissable use their commercially reasonable efforts to give prior notice to the Company of information disclosed pursuant to clauses (vi) through (viii) of this Section 20, but that the failure to do so would not constitute a violation of this Agreement.  Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement.  On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying this Section 20.

In the event that as a condition to receiving access to information relating to the Company or its Subsidiaries in connection with the transactions contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder of a Note is required to agree to a confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual workspace or otherwise) which is different from this Section 20, this Section 20 shall not be amended thereby and, as between such Purchaser or such holder and the Company, this Section 20 shall supersede any such other confidentiality undertaking.

‐37‐

 

	
Section 21.
	
Substitution of Purchaser.

Each Purchaser shall have the right to substitute any one of its Affiliates or another Purchaser or any one of such other Purchaser’s Affiliates (a “Substitute Purchaser”) as the purchaser of the Notes that it has agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both such Purchaser and such Substitute Purchaser, shall contain such Substitute Purchaser’s agreement to be bound by this Agreement and shall contain a confirmation by such Substitute Purchaser of the accuracy with respect to it of the representations set forth in Section 6.  Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 21), shall be deemed to refer to such Substitute Purchaser in lieu of such original Purchaser.  In the event that such Substitute Purchaser is so substituted as a Purchaser hereunder and such Substitute Purchaser thereafter transfers to such original Purchaser all of the Notes then held by such Substitute Purchaser, upon receipt by the Company of notice of such transfer, any reference to such Substitute Purchaser as a “Purchaser” in this Agreement (other than in this Section 21), shall no longer be deemed to refer to such Substitute Purchaser, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.

	
Section 22.
	
Miscellaneous.

	

	
Section 22.1.Successors and Assigns.  All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto and their respective successors and assigns permitted hereby) any legal or equitable right, remedy or claim under or by reason of this Agreement.

	

	
Section 22.2.Accounting Terms.  All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP.  Except as otherwise specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be prepared in accordance with GAAP.  For purposes of determining compliance with this Agreement (including Section 9, Section 10 and the definition of “Indebtedness”), any election by the Company to measure any financial liability using fair value (as permitted by Financial Accounting Standards Board Accounting Standards Codification Topic No. 825-10-25 – Fair Value Option, International Accounting Standard 39 – Financial Instruments: Recognition and Measurement or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.

	

	
Section 22.3.Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

‐38‐

 

	

	
Section 22.4.Construction, Etc.  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.  Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

Defined terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein) and, for purposes of the Notes, shall also include any such notes issued in substitution therefor pursuant to Section 13, (b) subject to Section 22.1, any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections and Schedules shall be construed to refer to Sections of, and Schedules to, this Agreement, and (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time.

	

	
Section 22.5.Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

	

	
Section 22.6.Governing Law.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice‐of‐law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

	

	
Section 22.7.Jurisdiction and Process; Waiver of Jury Trial.  (a) The Company irrevocably submits to the non‐exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes.  To the fullest extent permitted by applicable law, the Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

‐39‐

 

	

	
(b)The Company consents to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 22.7(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in Section 18 or at such other address of which such holder shall then have been notified pursuant to said Section.  The Company agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it.  Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.

	

	
(c)Nothing in this Section 22.7 shall affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

	

	
(d)The parties hereto hereby waive trial by jury in any action brought on or with respect to this Agreement, the Notes or any other document executed in connection herewith or therewith.

Section 22.8.Taxes.  Except as otherwise required by applicable law, the Company agrees that it will not withhold from any applicable payment to be made to a holder of a Note that is not a United States Person any tax so long as such holder shall have delivered to the Company (in such number of copies as shall be requested) on or about the date on which such holder becomes a holder under this Agreement (and from time to time thereafter upon the reasonable request of the Company), executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, as well as the applicable “U.S. Tax Compliance Certificate” substantially in the form attached as Exhibit 22.8 hereto, in both cases correctly completed and executed.

*    *    *    *    *

 

 

 

‐40‐

 

If you are in agreement with the foregoing, please sign the form of agreement on a counterpart of this Agreement and return it to the Company, whereupon this Agreement shall become a binding agreement between you and the Company.

 

 

Very truly yours,

 

UGI Utilities, Inc. 

 

 

By   /s/ Daniel J. Platt

	
 
	

	
Name:   Daniel J. Platt

	
 
	

	
Title:     Vice President - Finance and Chief 

	
 
	

	
              Financial Officer 

 

 

 

 

This Agreement is hereby

accepted and agreed to as 

of the date hereof.

 

MetLife Insurance K.K.

by MetLife Investor Advisors, LLC, Its Investment Manager

 

 

 

	
 
	
By
	
 /s/ John Willis

	
 
	

	
Name:  John Willis

	
 
	

	
Title:    Managing Director

 

 

 

 

This Agreement is hereby

accepted and agreed to as 

of the date hereof.

 

The Prudential Insurance Company of America

 

 

 

	
 
	
By
	
 /s/ Brian E. Lemons

Name:  Brian E. Lemons

Title:    Senior Vice President

 

 

 

 

 

This Agreement is hereby

accepted and agreed to as 

of the date hereof.

 

The Lincoln National Life Insurance Company

By:  Macquarie Investment Management
    Advisers, a series of Macquarie Investment
    Management Business Trust, Attorney in
    Fact

 

 

 

	
 
	
By
	
 /s/ Karl Spaeth

Name:  Karl Spaeth

Title:    Vice President

 

 

 

 

This Agreement is hereby

accepted and agreed to as 

of the date hereof.

 

Genworth Life Insurance Company

 

 

 

	
 
	
By
	
 /s/ Stuart Shepetin

	
 
	

	
Name:  Stuart Shepetin

	
 
	

	
Title:    Investment Officer

 

 

 

 

This Agreement is hereby

accepted and agreed to as 

of the date hereof.

 

Manufacturers Life Reinsurance Limited

 

 

 

By /s/ Tatsuya Oshiro

	
 
	

	
Name:  Tatsuya Oshiro

	
 
	

	
Title:     Co-Head of Investments, Manulife   General Account Investments (Singapore) Pte. Ltd. as investment manager of Manufacturers Life Reinsurance Limited

 

 

 

 

 

 

 

This Agreement is hereby

accepted and agreed to as 

of the date hereof.

 

New York Life Insurance Company

 

 

 

By /s/ Colleen C. Cooney

	
 
	

	
Name:  Colleen C. Cooney

	
 
	

	
Title:    Vice President

 

 

 

New York Life Insurance and Annuity Corporation

By:  NYL Investors LLC, its Investment Manager

 

 

 

By /s/ Colleen C. Cooney

	
 
	

	
Name:  Colleen C. Cooney

	
 
	

	
Title:    Vice President

 

 

 

 

This Agreement is hereby

accepted and agreed to as 

of the date hereof.

 

American United Life Insurance Company

 

 

 

By: /s/ David M. Weisenburger

Name:  David M. Weisenburger 

Title:    VP, Fixed Income Securities

 

 

 

The State Life Insurance Company

By:  American United Life Insurance Company

Its:   Agent

 

 

 

By: /s/ David M. Weisenburger

Name:  David M. Weisenburger 

Title:    VP, Fixed Income Securities

 

 

 

This Agreement is hereby

accepted and agreed to as 

of the date hereof.

 

Life Insurance Company of the Southwest

 

 

 

By /s/ Ken Weliczka

	
 
	

	
Name:  Ken Weliczka

	
 
	

	
Title:    Head of Private Placements

	
 
	

	
   Sentinel Asset Management, Inc.

 

 

 

 

This Agreement is hereby

accepted and agreed to as 

of the date hereof.

 

CMFG Life Insurance Company

By:  MEMBERS Capital Advisors, Inc.

	
 
	

	
   Acting as Investment Advisor

 

 

 

By /s/ Jason Micks

	
 
	

	
Name:  Jason Micks

	
 
	

	
Title:    Director II, Investments

 

 

 

 

 

 

 

Schedule A

Defined Terms

As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

“Acquired Subsidiary Indebtedness” means all Indebtedness of any Person which becomes a Subsidiary after the date of the Closing or is consolidated with or merged into a Subsidiary after the date of the Closing and which (i) is outstanding on the date such Person becomes a Subsidiary (or such Person is at such time contractually bound, in writing, to incur such Indebtedness), and (ii) has not been (or is not being) incurred, extended or renewed in contemplation of such Person becoming a Subsidiary.

“Affiliate” means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person.  As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.

“Agreement” means this Agreement, including all Schedules attached to this Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.

“Anti-Corruption Laws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding bribery or any other corrupt activity, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010.

“Anti-Money Laundering Laws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes, including the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act) and the USA PATRIOT Act.

“Blocked Person” means (a) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by OFAC, (b) a Person, entity, organization, country or regime that is blocked or a target of sanctions that have been imposed under U.S. Economic Sanctions Laws or (c) a Person that is an agent, department or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, any Person, entity, organization, country or regime described in clause (a) or (b).

 “Business Day” means (a) for the purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York or Pennsylvania are required or authorized to be closed.

 

 

“Capital Lease” means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.

“Closing” is defined in Section 3.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.

“Company” means UGI Utilities, Inc., a Pennsylvania corporation or any successor that becomes such in the manner prescribed in Section 10.2.

“Confidential Information” is defined in Section 20.

“Consolidated Indebtedness” means at any time the Indebtedness (other than Non‐Recourse Debt) of the Company and its Subsidiaries calculated on a consolidated basis as of such time. 

“Consolidated Priority Debt” means at any time the sum of:

	
 
	

	
(a)Indebtedness of the Company or any Subsidiaries secured by Liens permitted by Section 10.5(l), plus (but without duplication)

	
 
	

	
(b)Indebtedness of Subsidiaries other than:

(i)Indebtedness of Subsidiaries existing as of the date hereof and described on Schedule 5.15 (and any renewals, extension, or replacement thereof without increase in the principal amount thereof);

(ii)Indebtedness of Subsidiaries owing to the Company or any Subsidiary;

(iii)Acquired Subsidiary Indebtedness (and any renewal, extension or replacement thereof without increase in the principal amount thereof), provided that immediately after such acquired Subsidiary becomes a Subsidiary, no Default or Event of Default shall exist;

(iv)Indebtedness arising under any derivative transaction protecting against or benefiting from fluctuations in any rate or price entered into in the ordinary course of business and not for investment or speculative purposes;

(v)Indebtedness comprising a netting or set-off arrangement entered into by the Company or a Subsidiary in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;

(vi)Indebtedness of Subsidiary Guarantors; and

‐2‐

 

(vii)Indebtedness of Subsidiaries secured by Liens permitted by Section 10.5(a) through (k), inclusive.

“Consolidated Total Assets” means the sum of the assets of the Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP, as shown in the most recent consolidated financial statements published by the Company and its Subsidiaries.

“Consolidated Total Capital” means at any time with respect to the Company, the sum of (x) Consolidated Indebtedness plus (y) consolidated stockholders’ equity of the Company and its consolidated Subsidiaries, in each case determined at such date; provided that any accumulated other comprehensive income and loss and, without duplication, any non‐cash effects resulting from the application of Accounting Standards Codification 715 and any non‐recurring non‐cash charges and any non‐recurring non‐cash gains will be excluded.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “Controlled” and “Controlling” shall have meanings correlative to the foregoing. 

“Controlled Entity” means (a) any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled Affiliates and (b) if the Company has a parent company, such parent company and its Controlled Affiliates

 “Credit Agreements” means that certain (i) $300,000,000 Credit Agreement dated as of March 25, 2015, among the Company, the lending institutions listed on the signature pages thereof, and their respective successors and assigns, and PNC Bank, National Association, as administrative agent, and Citizens Bank of Pennsylvania, as syndication agent as so amended, modified, supplemented or restated and (ii) $125,000,000 Credit Agreement dated as of October 31, 2017, among the Company, the lending institutions listed on the signature pages thereof, and their respective successors and assigns, and PNC Bank, National Association, as administrative agent, and The Bank of New York Mellon, as syndication agent as so amended, modified, supplemented or restated.

“Debt Prepayment Application” means, with respect to any asset disposition, the application by the Company or any Subsidiary thereof of cash in an amount equal to the Net Proceeds Amount (or portion thereof) with respect to such asset disposition to pay Senior Indebtedness of the Company or such Subsidiary (other than Senior Indebtedness in respect of any revolving credit or similar credit facility providing the Company or any of its Subsidiaries with the right to obtain loans or other extensions of credit from time to time, except to the extent that in connection with such payment of Senior Indebtedness, the availability of credit under such credit facility is permanently reduced by an amount not less than the amount of such proceeds applied to the payment of such Senior Indebtedness).

“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

‐3‐

 

“Default Rate” means that rate of interest that is the greater of (i) 2.00% per annum above the rate of interest stated in clause (a) of the first paragraph of the Notes or (ii) 2.00% over the rate of interest publicly announced by Chase Bank, N.A. in New York, New York as its “base” or “prime” rate.

“Disclosure Documents” is defined in Section 5.3.

“Disposition Prepayment Date” is defined in Section 8.9. 

“EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval System or any successor SEC electronic filing system for such purposes.

“Environmental Laws” means any and all federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to Hazardous Materials.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect. 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414(b) or (c) of the Code (and, for purposes of section 302 and 303 of ERISA, sections 412 and 430 of the Code and each “applicable section” under Section 414(t)(2) of the Code, under Section 414(b), (c), (m) and (o) of the Code), or under Section 4001 of ERISA.

“Event of Default” is defined in Section 11.

“Form 10‐K” is defined in Section 7.1(b).

“Form 10‐Q” is defined in Section 7.1(a).

“GAAP” means generally accepted accounting principles as in effect from time to time in the United States of America.  Notwithstanding the foregoing for purposes of determining compliance with any covenant (including the computation of any financial covenant or Defaults) contained herein, Indebtedness of the Company and any Subsidiary shall be deemed to be carried at 100% of the outstanding principal amount thereof, notwithstanding the effects of any applicable accounting standard in effect in GAAP as of the date hereof or hereafter. 

“Governmental Authority” means

	
 
	

	
(a)the government of

(i)the United States of America or any state or other political subdivision thereof, or

‐4‐

 

(ii)any other jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or

	
 
	

	
(b)any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

“Governmental Official” means any governmental official or employee, employee of any government‐owned or government‐controlled entity, political party, any official of a political party, candidate for political office, official of any public international organization or anyone else acting in an official capacity.

“Guaranty” means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person:

	
 
	

	
(a)to purchase such indebtedness or obligation or any property constituting security therefor;

	
 
	

	
(b)to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation;

	
 
	

	
(c)to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or

	
 
	

	
(d)otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.

“Hazardous Materials” means any and all pollutants, toxic or hazardous wastes or other substances that might pose a hazard to health and safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized by any applicable law including, but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances.

‐5‐

 

“Hedge Agreements” means interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts, commodity swap agreements or option agreements, commodity future agreements, equity or equity index swap agreements, foreign exchange transaction agreements, floor transaction agreements, cap transaction agreements, collar transaction agreements and other similar agreements or any combination of the foregoing agreements. 

“holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1, provided, however, that if such Person is a nominee, then for the purposes of Sections 7, 12, 17.2 and 18 and any related definitions in this Schedule B, “holder” shall mean the beneficial owner of such Note whose name and address appears in such register.

“INHAM Exemption” is defined in Section 6.2(e).

“Indebtedness with respect to any Person means, at any time, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all obligations of such Person as lessee under leases that have been or should be, in accordance with GAAP, recorded as capital leases, (f) all non‐contingent obligations of such Person in respect of acceptances, letters of credit or similar extensions of credit, (g) all Indebtedness of others referred to in clauses (a) through (f) above or clause (h) below (collectively, “Guaranteed Debt”) guaranteed directly or indirectly in any manner by such Person, or in effect guaranteed directly or indirectly by such Person through an agreement (1) to pay or purchase such Guaranteed Debt or to advance or supply funds for the payment or purchase of such Guaranteed Debt, (2) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Guaranteed Debt or to assure the holder of such Guaranteed Debt against loss, (3) to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether such property is received or such services are rendered) or (4) otherwise to assure a creditor against loss, and (h) all Indebtedness referred to in clauses (a) through (g) above (including Guaranteed Debt) secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness.

“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than 5.00% of the aggregate principal amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note.

‐6‐

 

“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or capital lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements).

“Make‐Whole Amount” is defined in Section 8.6.

“Material” means material in relation to the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole.

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole, (b) the ability of the Company to perform its obligations under this Agreement and the Notes, (c) the ability of any Subsidiary Guarantor to perform its obligations under its Subsidiary Guaranty, or (d) the validity or enforceability of this Agreement, the Notes or any Subsidiary Guaranty.

“Material Credit Facility” means, as to the Company and its Subsidiaries,

	
 
	

	
(a)the Credit Agreements, including each respective renewal, extension, amendment, supplement, restatement, replacement or refinancing thereof (each referred to in the aggregate as a “Primary Credit Facility”); or

	
 
	

	
(b)if there is no Primary Credit Facility, any other agreement(s) creating or evidencing indebtedness for borrowed money entered into on or after the Execution Date by the Company or any Subsidiary, or in respect of which the Company or any Subsidiary is an obligor or otherwise provides a guarantee or other credit support (“Credit Facility”), in a principal amount outstanding or available for borrowing equal to or greater than $100,000,000 (or the equivalent of such amount in the relevant currency of payment, determined as of the date of the closing of such facility based on the exchange rate of such other currency). 

“Material Subsidiary” means at any time any Subsidiary that would at such time constitute a “significant subsidiary” (as such term is defined in Regulation S-X of the SEC as in effect on the date of the Closing, substituting 5 percent for 10 percent each place it appears therein) of the Company. 

“Maturity Date” is defined in the first paragraph of each Note.

“Memorandum” is defined in Section 5.3.

“Midstream Business” means the business of storage, processing, marketing and/or transmission of gas, oil or products thereof, including owning and operating pipelines, storage facilities, processing plants and facilities and gathering systems and other assets related thereto. 

‐7‐

 

“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).

“NAIC” means the National Association of Insurance Commissioners or any successor thereto.

“NAIC Annual Statement” is defined in Section 6.2(a).

“Net Proceeds Amount” means, with respect to any Transfer of any asset by the Company or any Subsidiary thereof, an amount equal to the difference of:

	
 
	

	
(a)the aggregate amount of consideration (valued at the fair market value thereof by the Company or such Subsidiary in good faith) received by the Company or Subsidiary in respect of such Transfer, minus

	
 
	

	
(b)all ordinary and reasonable out-of-pocket costs and expenses actually incurred by the Company or Subsidiary (including any applicable transfer taxes, stamp duty or other similar taxes) in connection with such Transfer.

“Non‐recourse Debt” of any Person means Indebtedness secured by a Lien on one or more assets or rights to receive revenue of such Person where the rights and remedies of the holder of such Indebtedness in respect of such Indebtedness are non‐recourse to such Person and do not extend to any other assets or rights to receive revenue of such Person and, if such Person is organized under the laws of or doing business in the United States or any political subdivision thereof or therein, as to which such holder has effectively waived (or subordinated in favor of the holders of the Notes) such holder’s right to make the election provided under 11 U.S.C. §1111(b)(1)(A).

“Non-U.S. Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States of America by the Company or any Subsidiary primarily for the benefit of employees of the Company or one or more Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and (b) is not subject to ERISA or the Code.

 

“Notes” is defined in Section 1.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing.  A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.

‐8‐

 

 “Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.

“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, business entity or Governmental Authority.

“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject to Title I of ERISA that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.

 “Permitted Liens” means such of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced: (a) Liens for taxes, assessments and governmental charges or levies to the extent not required to be paid under Section 9.4 hereof; (b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary course of business securing obligations that are not overdue for a period of more than 60 days; (c) pledges or deposits to secure obligations under workers’ compensation laws or similar legislation or to secure public or statutory obligations or contracts (other than for the repayment of borrowed money); and (d) easements, rights of way and other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially adversely affect the use of such property for its present purposes.

“Property” of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person. 

“Property Reinvestment Application” means, with respect to any asset disposition, the application of the Net Proceeds Amount (or a portion thereof) with respect to such asset disposition to the acquisition by the Company or any Subsidiary of fixed or capital assets of the Company or any Subsidiary to be used in the business of such Person.

“PTE” is defined in Section 6.2(a).

“Purchaser” or “Purchasers” means each of the purchasers that has executed and delivered this Agreement to the Company and such Purchaser’s successors and assigns (so long as any such assignment complies with Section 13.2), provided, however, that any Purchaser of a Note that ceases to be the registered holder or a beneficial owner (through a nominee) of such Note as the result of a transfer thereof pursuant to Section 13.2 shall cease to be included within the meaning of “Purchaser” of such Note for the purposes of this Agreement upon such transfer.

“Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer” within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.

‐9‐

 

“QPAM Exemption” is defined in Section 6.2(d).

“Ratable Portion” is defined in Section 8.9. 

“Related Fund” means, with respect to any holder of any Note, any fund or entity that (i) invests in Securities or bank loans, and (ii) is advised or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor.

“Required Holders” means at any time (i) on or after the Execution Date but prior to the Closing, the Purchasers and (ii) on or after the Closing, the holders of at least a majority in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).

“Responsible Officer” means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this Agreement.

“SEC” means the Securities and Exchange Commission of the United States, or any successor thereto.

“Securities” or “Security” shall have the meaning specified in section 2(1) of the Securities Act. 

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

“Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer or comptroller of the Company.

“Senior Indebtedness” means and includes any Consolidated Indebtedness of the Company or any Subsidiary thereof owing to any Person other than the Company, a Subsidiary thereof or an Affiliate and which is not expressed to be junior or subordinate to any other Consolidated Indebtedness of the Company or any Subsidiary.

“Significant Subsidiary” means at any time any Subsidiary that would at such time constitute a “significant subsidiary” (as such term is defined in Regulation S‐X of the SEC as in effect on the date of the Closing) of the Company.

“Source” is defined in Section 6.2.

“State Sanctions List” means a list that is adopted by any state Governmental Authority within the United States of America pertaining to Persons that engage in investment or other commercial activities in Iran or any other country that is a target of economic sanctions imposed under U.S. Economic Sanctions Laws.

“Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient 

‐10‐

 

equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries).  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.

“Subsidiary Guarantor” means each Subsidiary that has executed and delivered a Subsidiary Guaranty.

“Subsidiary Guaranty” is defined in Section 9.7(a).

“Substantial Portion” means, with respect to the Property of the Company and its Subsidiaries, Property which represents more than 15% of the Consolidated Total Assets of the Company and its Subsidiaries taken as a whole as of the last day of the fiscal period ending immediately prior to the date on which such determination is made.

“Substitute Purchaser” is defined in Section 21.

“SVO” means the Securities Valuation Office of the NAIC or any successor to such Office.

“Transfer” means, with respect to any Person, any transaction (including by merger, consolidation or disposition of all or substantially all of the assets of such) in which such Person sells, conveys, transfers or leases (as lessor) and of its property, including, without limitation Subsidiary stock.  “Transfer” shall also include the creation of minority interests in connection with any merger or consolidation involving a Subsidiary if the resulting entity is owned, directly or indirectly, by the Company in the proportion less than the proportion of ownership of such Subsidiary by the Company immediately preceding such merger or consolidation. 

“UGI Corporation” means UGI Corporation, a Pennsylvania corporation.

“USA PATRIOT Act” means United States Public Law 107‐56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

“U.S. Economic Sanctions Laws” means those laws, executive orders, enabling legislation or regulations administered and enforced by the United States pursuant to which economic sanctions have been imposed on any Person, entity, organization, country or regime, including the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Iran Sanctions Act, the Sudan Accountability and Divestment Act and any other OFAC Sanctions Program.

‐11‐

 

 “Wholly‐Owned Subsidiary” means, at any time, any Subsidiary all of the equity interests (except directors’ qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company’s other Wholly‐Owned Subsidiaries at such time.

 

 

‐12‐

 

Schedule 1-B

 

[Form of Note]

UGI Utilities, Inc. 

4.55% Senior Note Due February 1, 2049

No. R-[_____][Date]

$[_______]PPN: 902691 B@2 

For Value Received, the undersigned, UGI Utilities, Inc. (herein called the “Company”), a corporation organized and existing under the laws of the Commonwealth of Pennsylvania, hereby promises to pay to [____________], or registered assigns, the principal sum of [_____________________] Dollars (or so much thereof as shall not have been prepaid) on February 1, 2049 (the “Maturity Date”), with interest (computed on the basis of a 360‐day year of twelve 30‐day months) (a) on the unpaid balance hereof at the rate of 4.55% per annum from the date hereof, payable semiannually, on the 1st day of February and August in each year, commencing with the February 1st or August 1st next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make‐Whole Amount, at a rate per annum from time to time equal to the greater of (i) 6.55% or (ii) 2.00% over the rate of interest publicly announced by Chase Bank N.A. from time to time in New York, New York as its “base” or “prime” rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).

Payments of principal of, interest on and any Make‐Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Chase Bank N.A. or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

This Note is one of the Senior Notes (herein called the “Notes”), issued pursuant to the Note Purchase Agreement, dated as of December 21, 2018 (as from time to time amended, the “Note Purchase Agreement”), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set forth in Section 6.2 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the 

 

 

transferee.  Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

 This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make‐Whole Amount) and with the effect provided in the Note Purchase Agreement.

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice‐of‐law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

 

UGI Utilities, Inc.

 

 

By 

	
 
	

	
[Title]

 

 

1-B‐2‐

 

Schedule 2

 

 [Form of Subsidiary Guaranty]

 

 

 

 

 

 

 

 

 

Guaranty Agreement

 

 

 

 

Dated as of [_______________], 20[__]

 

 

 

of

 

 

 

[Name of Guarantor]

 

 

 

 

 

2-2

 

Table of Contents

 

	
Section
	
HeadingPage

	
Section 1.
	
Guaranty4
	
 

	
Section 2.
	
Obligations Absolute6
	
 

	
Section 3.
	
Waiver6
	
 

	
Section 4.
	
Obligations Unimpaired7
	
 

	
Section 5.
	
Subrogation and Subordination7
	
 

	
Section 6.
	
Reinstatement of Guaranty8
	
 

	
Section 7.
	
Rank of Guaranty8
	
 

	
Section 8.
	
Representations and Warranties of the Guarantor8
	
 

	
 
	
Section 8.1.
	
Organization; Power and Authority9
	
 

	
 
	
Section 8.2.
	
Authorization, Etc9
	
 

	
 
	
Section 8.3.
	
Governmental Authorizations, Etc9
	
 

	
 
	
Section 8.4.
	
Compliance with Laws, Other Instruments, Etc9
	
 

	
Section 9.
	
Term of Guaranty Agreement10
	
 

	
Section 10.
	
Survival of Representations and Warranties; Entire Agreement10
	
 

	
Section 11.
	
Miscellaneous10
	
 

	
 
	
Section 11.1.
	
Successors and Assigns10
	
 

	
 
	
Section 11.2.
	
Severability10
	
 

	
 
	
Section 11.3.
	
Construction10
	
 

	
 
	
Section 11.4.
	
Further Assurances11
	
 

	
 
	
Section 11.5.
	
Governing Law11
	
 

	
 
	
Section 11.6.
	
Jurisdiction and Process; Waiver of Jury Trial11
	
 

 

 

2-3

 

Guaranty Agreement

 

This Guaranty Agreement, dated as of [_______________, 20__] (this “Guaranty Agreement”), is made by [_______________], a [_______________] (the “Guarantor”) in favor of the Purchasers (as defined below) and the other holders from time to time of the Notes (as defined below).  The Purchasers and such other holders are herein collectively called the “holders” and individually a “holder.”

 

Preliminary Statements:

 

I.UGI Utilities, Inc., a Pennsylvania corporation (the “Company”), is entering into a Note Purchase Agreement dated as of December 21, 2018 (as amended, modified, supplemented or restated from time to time, the “Note Agreement”) with the Persons listed on the signature pages thereto (the “Purchasers”) simultaneously with the delivery of this Guaranty Agreement.  Capitalized terms used herein have the meanings specified in the Note Agreement unless otherwise defined herein.

	
II.
	
Pursuant to the Note Agreement, the Company has issued and sold $150,000,000 aggregate principal amount of its 4.55% Senior Notes due February 1, 2049 (the “Initial Notes”).  The Initial Notes and any other Notes that may from time to time be issued pursuant to the Note Agreement (including any notes issued in substitution for any of the Notes) are herein collectively called the “Notes” and individually a “Note”.

	
III.
	
It was a condition to the agreement of the Purchasers to purchase the Notes that the Company agree to deliver this Guaranty Agreement pursuant to Section 9.7 of the Note Agreement.

	
IV.
	
The Guarantor has received or will receive direct and indirect benefits from the financing arrangements covered by the Note Agreement.

Now Therefore, in compliance with Note Agreement, and in consideration of, the execution and delivery of the Note Agreement and the purchase of the Notes by each of the Purchasers, the Guarantor hereby covenants and agrees with, and represents and warrants to each of the holders as follows:

 

Section 1.Guaranty.

 

The Guarantor hereby irrevocably and unconditionally guarantees to each holder, the due and punctual payment in full of (a) the principal of, Make‐Whole Amount, if any, Modified Make-Whole Amount, if any, and interest on (including, without limitation, interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), and any other amounts due under, the Notes when and as the same shall become due and payable (whether at stated maturity or by required or optional prepayment or by acceleration or otherwise) and (b) any other sums which may become due under the terms and provisions of the Notes, the Note Agreement or any other instrument referred to therein, (all such obligations 

2-4

 

described in clauses (a) and (b) above are herein called the “Guaranteed Obligations”).  The guaranty in the preceding sentence is an absolute, present and continuing guaranty of payment and not of collectability and is in no way conditional or contingent upon any attempt to collect from the Company or any other guarantor of the Notes or upon any other action, occurrence or circumstance whatsoever.  In the event that the Company shall fail so to pay any of such Guaranteed Obligations, the Guarantor agrees to pay the same when due to the holders entitled thereto, without demand, presentment, protest or notice of any kind, in lawful money of the United States of America, pursuant to the requirements for payment specified in the Notes and the Note Agreement.  Each default in payment of any of the Guaranteed Obligations shall give rise to a separate cause of action hereunder and separate suits may be brought hereunder as each cause of action arises.  The Guarantor agrees that the Notes issued in connection with the Note Agreement may (but need not) make reference to this Guaranty Agreement.

 

The Guarantor agrees to pay and to indemnify and save each holder harmless from and against any damage, loss, cost or expense (including attorneys’ fees) which such holder may incur or be subject to as a consequence, direct or indirect, of (x) any breach by the Guarantor or by the Company of any warranty, covenant, term or condition in, or the occurrence of any default under, this Guaranty Agreement, the Notes, the Note Agreement or any other instrument referred to therein, together with all expenses resulting from the compromise or defense of any claims or liabilities arising as a result of any such breach or default, (y) any legal action commenced to challenge the validity or enforceability of this Guaranty Agreement, the Notes, the Note Agreement or any other instrument referred to therein and (z) enforcing or defending (or determining whether or how to enforce or defend) the provisions of this Guaranty Agreement.

 

The Guarantor hereby acknowledges and agrees that the Guarantor’s liability hereunder is joint and several with any other Person(s) who may guarantee the obligations and Indebtedness under and in respect of the Notes and the Note Agreement.

 

Notwithstanding the foregoing provisions or any other provision of this Guaranty Agreement, the Purchasers (on behalf of themselves and their successors and assigns) and the Guarantor hereby agree that if at any time the Guaranteed Obligations exceed the Maximum Guaranteed Amount determined as of such time with regard to the Guarantor, then this Guaranty Agreement shall be automatically amended to reduce the Guaranteed Obligations to the Maximum Guaranteed Amount.  Such amendment shall not require the written consent of the Guarantor or any holder and shall be deemed to have been automatically consented to by the Guarantor and each holder.  The Guarantor agrees that the Guaranteed Obligations may at any time exceed the Maximum Guaranteed Amount without affecting or impairing the obligation of the Guarantor.  “Maximum Guaranteed Amount” means as of the date of determination with respect to the Guarantor, the lesser of (a) the amount of the Guaranteed Obligations outstanding on such date and (b) the maximum amount that would not render the Guarantor’s liability under this Guaranty Agreement subject to avoidance under Section 548 of the United States Bankruptcy Code (or any successor provision) or any comparable provision of applicable state law.

 

2-5

 

Section 2.Obligations Absolute.

 

The obligations of the Guarantor hereunder shall be primary, absolute, irrevocable and unconditional, irrespective of the validity or enforceability of the Notes, the Note Agreement or any other instrument referred to therein, shall not be subject to any counterclaim, setoff, deduction or defense based upon any claim the Guarantor may have against the Company or any holder or otherwise, and shall remain in full force and effect without regard to, and shall not be released, discharged or in any way affected by, any circumstance or condition whatsoever (whether or not the Guarantor shall have any knowledge or notice thereof), including, without limitation:  (a) any amendment to, modification of, supplement to or restatement of the Notes, the Note Agreement or any other instrument referred to therein (it being agreed that the obligations of the Guarantor hereunder shall apply to the Notes, the Note Agreement or any such other instrument as so amended, modified, supplemented or restated) or any assignment or transfer of any thereof or of any interest therein, or any furnishing, acceptance or release of any security for the Notes; (b) any waiver, consent, extension, indulgence or other action or inaction under or in respect of the Notes, the Note Agreement or any other instrument referred to therein; (c) any bankruptcy, insolvency, arrangement, reorganization, readjustment, composition, liquidation or similar proceeding with respect to the Company or its property; (d) any merger, amalgamation or consolidation of the Guarantor or of the Company into or with any other Person or any sale, lease or transfer of any or all of the assets of the Guarantor or of the Company to any Person; (e) any failure on the part of the Company for any reason to comply with or perform any of the terms of any other agreement with the Guarantor; (f) any failure on the part of any holder to obtain, maintain, register or otherwise perfect any security; or (g) any other event or circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (whether or not similar to the foregoing), and in any event however material or prejudicial it may be to the Guarantor or to any subrogation, contribution or reimbursement rights the Guarantor may otherwise have.  The Guarantor covenants that its obligations hereunder will not be discharged except by indefeasible payment in full in cash of all of the Guaranteed Obligations and all other obligations hereunder.

 

Section 3.Waiver.

 

The Guarantor unconditionally waives to the fullest extent permitted by law, (a) notice of acceptance hereof, of any action taken or omitted in reliance hereon and of any default by the Company in the payment of any amounts due under the Notes, the Note Agreement or any other instrument referred to therein, and of any of the matters referred to in Section 2 hereof, (b) all notices which may be required by statute, rule of law or otherwise to preserve any of the rights of any holder against the Guarantor, including, without limitation, presentment to or demand for payment from the Company or the Guarantor with respect to any Note, notice to the Company or to the Guarantor of default or protest for nonpayment or dishonor and the filing of claims with a court in the event of the bankruptcy of the Company, (c) any right to require any holder to enforce, assert or exercise any right, power or remedy including, without limitation, any right, power or remedy conferred in the Note Agreement or the Notes, (d) any requirement for diligence on the part of any holder and (e) any other act or omission or thing or delay in doing any other act or thing which might in any manner or to any extent vary the risk of the Guarantor or otherwise operate as a discharge of the Guarantor or in any manner lessen the obligations of the Guarantor hereunder.

2-6

 

 

Section 4.Obligations Unimpaired.

 

The Guarantor authorizes the holders, without notice or demand to the Guarantor and without affecting its obligations hereunder, from time to time:  (a) to renew, compromise, extend, accelerate or otherwise change the time for payment of, all or any part of the Notes, the Note Agreement or any other instrument referred to therein; (b) to change any of the representations, covenants, events of default or any other terms or conditions of or pertaining to the Notes, the Note Agreement or any other instrument referred to therein, including, without limitation, decreases or increases in amounts of principal, rates of interest, the Make‐Whole Amount, Modified Make‐Whole Amount or any other obligation; (c) to take and hold security for the payment of the Notes, the Note Agreement or any other instrument referred to therein, for the performance of this Guaranty Agreement or otherwise for the Indebtedness guaranteed hereby and to exchange, enforce, waive, subordinate and release any such security; (d) to apply any such security and to direct the order or manner of sale thereof as the holders in their sole discretion may determine; (e) to obtain additional or substitute endorsers or guarantors; (f) to exercise or refrain from exercising any rights against the Company and others; and (g) to apply any sums, by whomsoever paid or however realized, to the payment of the Guaranteed Obligations and all other obligations owed hereunder.  The holders shall have no obligation to proceed against any additional or substitute endorsers or guarantors or to pursue or exhaust any security provided by the Company, the Guarantor or any other Person or to pursue any other remedy available to the holders.

 

If an event permitting the acceleration of the maturity of the principal amount of any Notes shall exist and such acceleration shall at such time be prevented or the right of any holder to receive any payment on account of the Guaranteed Obligations shall at such time be delayed or otherwise affected by reason of the pendency against the Company, the Guarantor or any other guarantors of a case or proceeding under a bankruptcy or insolvency law, the Guarantor agrees that, for purposes of this Guaranty Agreement and its obligations hereunder, the maturity of such principal amount shall be deemed to have been accelerated with the same effect as if the holder thereof had accelerated the same in accordance with the terms of the Note Agreement, and the Guarantor shall forthwith pay such accelerated Guaranteed Obligations.

 

Section 5.Subrogation and Subordination.

 

(a)The Guarantor will not exercise any rights which it may have acquired by way of subrogation under this Guaranty Agreement, by any payment made hereunder or otherwise, or accept any payment on account of such subrogation rights, or any rights of reimbursement, contribution or indemnity or any rights or recourse to any security for the Notes or this Guaranty Agreement unless and until all of the Guaranteed Obligations shall have been indefeasibly paid in full in cash.

 

(b)The Guarantor hereby subordinates the payment of all Indebtedness and other obligations of the Company or any other guarantor of the Guaranteed Obligations owing to the Guarantor, whether now existing or hereafter arising, including, without limitation, all rights and claims described in clause (a) of this Section 5, to the indefeasible payment in full in cash of all of the Guaranteed Obligations.  If the Required Holders so request, any such Indebtedness or other 

2-7

 

obligations shall be enforced and performance received by the Guarantor as trustee for the holders and the proceeds thereof shall be paid over to the holders promptly, in the form received (together with any necessary endorsements) to be applied to the Guaranteed Obligations, whether matured or unmatured, as may be directed by the Required Holders, but without reducing or affecting in any manner the liability of the Guarantor under this Guaranty Agreement.

 

	
(c)
	
If any amount or other payment is made to or accepted by the Guarantor in violation of any of the preceding clauses (a) and (b) of this Section 5, such amount shall be deemed to have been paid to the Guarantor for the benefit of, and held in trust for the benefit of, the holders and shall be paid over to the holders promptly, in the form received (together with any necessary endorsements) to be applied to the Guaranteed Obligations, whether matured or unmatured, as may be directed by the Required Holders, but without reducing or affecting in any manner the liability of the Guarantor under this Guaranty Agreement.  

 

	
(d)
	
The Guarantor acknowledges that it has received or will receive direct and indirect benefits from the financing arrangements contemplated by the Note Agreement and that the execution of this Guaranty Agreement is in the best interests of the Guarantor.

 

Section 6.Reinstatement of Guaranty.

 

This Guaranty Agreement shall continue to be effective, or be reinstated, as the case may be, if and to the extent at any time payment, in whole or in part, of any of the sums due to any holder on account of the Guaranteed Obligations is rescinded or must otherwise be restored or returned by a holder upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Company or any other guarantors, or upon or as a result of the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to the Company or any other guarantors or any part of its or their property, or otherwise, all as though such payments had not been made.  

 

Section 7.Rank of Guaranty.

 

The Guarantor will ensure that its payment obligations under this Guaranty Agreement will at all times rank at least pari passu, without preference or priority, with all other unsecured and unsubordinated Indebtedness of the Guarantor now or hereafter existing.

 

Section 8.Representations and Warranties of the Guarantor.

 

The Guarantor represents and warrants to each holder as follows:

 

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Section 8.1.Organization; Power and Authority.  The Guarantor is a [_______________], duly organized, validly existing and in good standing under the laws of its jurisdiction of [__________], and is duly qualified as a foreign [_______________] and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Guarantor has the [__________] power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Guaranty Agreement and to perform the provisions hereof.

 

Section 8.2.Authorization, Etc.  This Guaranty Agreement has been duly authorized by all necessary [__________] action on the part of the Guarantor, and this Guaranty Agreement constitutes a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

Section 8.3.Governmental Authorizations, Etc.  No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Guarantor of this Guaranty Agreement. 

 

Section 8.4.Compliance with Laws, Other Instruments, Etc.  The execution, delivery and performance by the Guarantor of this Guaranty Agreement will not (a) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Guarantor or any of its Subsidiaries under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, organizational documents, or any other agreement or instrument to which the Guarantor or any of its Subsidiaries is bound or by which the Guarantor or any of its Subsidiaries or any of their respective properties may be bound or affected; (b) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Guarantor or any of its Subsidiaries; or (c) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Guarantor or any of its Subsidiaries.  “Governmental Authority” means (x) the government of (i) the United States of America or any State or other political subdivision thereof, or (ii) any other jurisdiction in which the Guarantor or any of its Subsidiaries conducts all or any part of its business, or which asserts jurisdiction over any properties of the Guarantor or any of its Subsidiaries, or (y) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

 

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Section 9.Term of Guaranty Agreement.

 

This Guaranty Agreement and all guarantees, covenants and agreements of the Guarantor contained herein shall continue in full force and effect and shall not be discharged until such time as all of the Guaranteed Obligations and all other obligations hereunder shall be indefeasibly paid in full in cash and shall be subject to reinstatement pursuant to Section 6.

 

Section 10.Survival of Representations and Warranties; Entire Agreement.  

 

All representations and warranties contained herein shall survive the execution and delivery of this Guaranty Agreement and may be relied upon by any subsequent holder, regardless of any investigation made at any time by or on behalf of any Purchaser or any other holder.  All statements contained in any certificate or other instrument delivered by or on behalf of the Guarantor pursuant to this Guaranty Agreement shall be deemed representations and warranties of the Guarantor under this Guaranty Agreement.  Subject to the preceding sentence, this Guaranty Agreement embodies the entire agreement and understanding between each holder and the Guarantor and supersedes all prior agreements and understandings relating to the subject matter hereof.

 

Section 11.Miscellaneous.

 

Section 11.1.Successors and Assigns.  All covenants and other agreements contained in this Guaranty Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns whether so expressed or not.

 

Section 11.2.Severability.  Any provision of this Guaranty Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law), not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 11.3.Construction.  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such express contrary provision) be deemed to excuse compliance with any other covenant.  Whether any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

 

The section and subsection headings in this Guaranty Agreement are for convenience of reference only and shall neither be deemed to be a part of this Guaranty Agreement nor modify, define, expand or limit any of the terms or provisions hereof.  All references herein to numbered sections, unless otherwise indicated, are to sections of this Guaranty Agreement.  Words and definitions in the singular shall be read and construed as though in the plural and vice versa, and words in the masculine, neuter or feminine gender shall be read and construed as though in either of the other genders where the context so requires.

 

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Section 11.4.Further Assurances.  The Guarantor agrees to execute and deliver all such instruments and take all such action as the Required Holders may from time to time reasonably request in order to effectuate fully the purposes of this Guaranty Agreement.

 

Section 11.5.Governing Law.  This Guaranty Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York, excluding choice‐of‐law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

 

Section 11.6.Jurisdiction and Process; Waiver of Jury Trial.

 

	
(a)
	
The Guarantor irrevocably submits to the non‐exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Guaranty Agreement.  To the fullest extent permitted by applicable law, the Guarantor irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  

 

(b)The Guarantor consents to process being served by or on behalf of any holder in any suit, action or proceeding of the nature referred to in Section 11.6(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in the Note Agreement or at such other address of which such holder shall then have been notified pursuant to Note Agreement.  The Guarantor agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it.  Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.

 

(c)Nothing in this Section 11.6 shall affect the right of any holder to serve process in any manner permitted by law, or limit any right that the holders may have to bring proceedings against the Guarantor in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

 

(d)THE GUARANTOR AND THE HOLDERS HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS GUARANTY AGREEMENT OR OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH.

In Witness Whereof, the Guarantor has caused this Guaranty Agreement to be duly executed and delivered as of the date and year first above written.

 

[Name of Guarantor]

 

By:  _________________________

2-11

 

Name:

Title:

 

 

 

 

 

2-12

 

Schedule 4.4(a)

 

Form of Opinion of Special Counsel
to the Company

Matters To Be Covered in
Opinion of Special Counsel to the Company

	

	
1.Each of the Company and its Significant Subsidiaries being validly existing and in good standing and the Company having requisite corporate power and authority to issue and sell the Notes and to execute and deliver the documents.

	

	
2.Each of the Company and its Significant Subsidiaries being duly qualified and in good standing as a foreign corporation in appropriate jurisdictions.

	

	
3.Due authorization and execution of the documents and such documents being legal, valid, binding and enforceable.

	

	
4.No conflicts with charter documents, laws or other agreements.

	

	
5.All consents required to issue and sell the Notes and to execute and deliver the documents having been obtained.

	

	
6.No litigation questioning validity of documents.

	

	
7.The Notes not requiring registration under the Securities Act of 1933, as amended; no need to qualify an indenture under the Trust Indenture Act of 1939, as amended.

	

	
8.No violation of Regulations T, U or X of the Federal Reserve Board.

	

	
9.Company not an “investment company”, or a company “controlled” by an “investment company”, under the Investment Company Act of 1940, as amended.

 

 

 

 

Schedule 4.4(B)

 

Form of Opinion of Special Counsel
to The Purchasers

[To Be Provided on a Case by Case Basis]

 

 

 

 

 

 

Schedule 5.3

 

Disclosure Documents 

 

 

Private Placement Memorandum dated November 2018

 

Financial Statements of UGI Utilities for the fiscal year ended September 30, 2018

 

 

 

 

Schedule 5.4

Subsidiaries of the Company and Ownership of Subsidiary Stock

 

	
 
	
1.
	
Subsidiaries:

 

 

			
	
Subsidiary
	
Jurisdiction of Organization
	
Ownership Structure

	
Operation Share Energy Fund
	
Pennsylvania
	
Common Shares 100% owned by Company

	
UGI Energy Ventures, Inc.
	
Delaware
	
Common Shares 100% owned by Company

	
UGI Penn HVAC Services, Inc.
	
Pennsylvania
	
Common Shares 100% owned by Company

	
UGI Central Penn Propane, LLC
	
Pennsylvania
	
Membership Interests 100% owned by Company

	
UGI Petroleum Products of Delaware, Inc.
	
Delaware
	
Common Shares 100% owned by Company

	
UGI Stoneridge I, LLC
	
Delaware
	
Membership Interests 100% owned by Company

	
--UGI Stoneridge II, LLC
	
Delaware
	
Membership Interests 100% owned by UGI Stoneridge I, LLC, a wholly owned subsidiary of the Company

 

	
 
	
2.
	
Affiliates:  See attached Corporate Organizational Chart.

 

 

 

 

3.DIRECTORS AND OFFICERS:

 

a.Officers:

 

		
	
Name
	
Title

	
Beard, Robert F.
	
President and Chief Executive Officer 

	
Bell, Hans G.
	
Chief Operating Officer

	
Szykman, Paul J.
	
Chief Regulatory Officer

	
Mattern, Megan
	
Controller

	
Gaudiosi, Monica M.
	
Vice President and General Counsel, Secretary

	
Lord, Thomas N.
	
Vice President and Chief Information Officer

	
Platt, Daniel J.
	
Vice President - Finance and Chief Financial Officer, Assistant Secretary and Treasurer

	
Beaver, Kelly A.
	
Vice President - Engineering and Operations Support

	
Dorman, Keith G.
	
Vice President - Communications and Community Relations

	
Jastrzebski, Ted J.
	
Vice President - Financial Strategy

	
Koppenhofer, Deanna
	
Vice President - Human Resources

	
Krieger, Robert P.
	
Vice President - Operations

	
Murphy, Kent D.
	
Vice President - Law

	
Stoyko, Robert R.
	
Vice President - Customer Relations

	
Garcia, G. Gary
	
Assistant Treasurer

	
Pearson, Michael R.
	
Assistant Treasurer

	
Meredith, Pamela A.
	
Assistant Secretary

	
Sorber, Eric W.
	
Assistant Secretary

 

 

b.Directors:

 

Marvin O. Schlanger 

Robert F. Beard 

M. Shawn Bort

Theodore A. Dosch

Richard W. Gochnauer

Alan N. Harris

Frank S. Hermance

Anne Pol

James B. Stallings, Jr.

John L. Walsh

 

 

 

 

 

 

 

4.CORPORATE ORGNAIZATIONAL CHART:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 5.5

Financial Statements

 

Financial Statements of UGI Utilities for the fiscal year ended September 30, 2018

 

 

 

 

 

 

 

 

 

Schedule 5.15

Existing Indebtedness; Liens

 

 

Schedule B

 

UGI Utilities, Inc.

 

Information Relating to Purchasers

 

 

 

Exhibit 22.8 

 

[Form of U.S. Tax Compliance Certificate]

 

Reference is hereby made to the Note Purchase Agreement dated as of December 21, 2018 (as amended, supplemented or otherwise modified from time to time, the “Note Purchase Agreement”), among UGI Utilities, Inc., a Pennsylvania corporation (the “Company”) and the Purchasers listed in Schedule A attached thereto.

Unless otherwise defined herein, capitalized terms defined in the Note Purchase Agreement and used herein have the meanings given to them in the Note Purchase Agreement.

Pursuant to the provisions of Section 22.8 of the Note Purchase Agreement, the undersigned hereby certifies that:

	
 
	
(i)
	
it is the sole record and beneficial owner of the Notes in respect of which it is providing this certificate;

	
 
	
(ii)
	
it is not a bank within the meaning of Section 881(c)(3)(A) of the Code;

	
 
	
(iii)
	
it is not a ten percent shareholder of the Company within the meaning of Section 871(h)(3)(B) of the Code; and 

	
 
	
(iv)
	
it is not a controlled foreign corporation related to the Company as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Company with a certificate of its non-U.S. Person status on IRS W-8BEN-E.  

 

 

 

		
	
[•]

	
By:

	
 
	
Name:  

	
 
	
Title:  

Date: ________ __, [•]

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