UGI (UGI) 10-Q 2011 Q2 Quarterly report

Exhibit 10.3

DATED 16 MARCH 2011

FINANCIAL SECURITIES ACCOUNT PLEDGE AGREEMENT
(Acte de Nantissement de Compte de Titres Financiers)

Between

ANTARGAZ
as Pledgor

NATIXIS
as Security Agent

THE FACILITY AGENT, THE SECURITY AGENT AND THE LENDERS
as Beneficiaries

and

NATIXIS
as Bank Accounts Holder

INDEX

	Page
1. INTERPRETATION		4
1.1 DEFINITIONS		4
1.2 CONSTRUCTION		6
2. SECURITY AGENT		7
3. PLEDGE		7
3.1 PLEDGED ACCOUNTS		7
3.2 REGISTRATION OF THE PLEDGE		7
3.3 SHAREHOLDER INTEREST		8
3.4 INCOME AND PROCEEDS		8
3.5 INSTRUCTIONS		9
4. PRESERVATION OF SECURITY		9
4.1 CONTINUING SECURITY		9
4.2 ADDITIONAL SECURITY		9
4.3 SECURITY TRANSFER		9
5. REPRESENTATIONS AND WARRANTIES		9
5.1 REPRESENTATIONS AND WARRANTIES		9
5.2 TIME FOR MAKING REPRESENTATIONS AND WARRANTIES		10
6. UNDERTAKINGS		10
6.1 DURATION		10
6.2 NEGATIVE PLEDGE		10
6.3 NO DISPOSAL		11
6.4 MANAGEMENT OF PLEDGED ACCOUNTS		11
6.5 INFORMATION		11
7. LIABILITY TO PERFORM		12
8. ENFORCEMENT		12
9. APPLICATION OF PROCEEDS		13
10. COVENANT TO RELEASE		14
11. EXPENSES, INDEMNITIES AND TAXES		14
12. CHANGES TO THE PARTIES		14
13. SEVERABILITY		14
14. NOTICES		15
15. FRENCH LANGUAGE		15
16. GOVERNING LAW AND JURISDICTION		15
16.1 GOVERNING LAW		15
16.2 JURISDICTION		15
17. DURATION		15
18. WAIVERS, REMEDIES CUMULATIVE		15
SCHEDULE 1. FORM OF STATEMENT OF PLEDGE		17
SCHEDULE 2. FORM OF FINANCIAL SECURITIES ACCOUNT — CONFIRMATION OF PLEDGE		26
SCHEDULE 3. FORM OF BANK ACCOUNT CONFIRMATION OF PLEDGE		28
SCHEDULE 4. LIST OF LENDERS AND COMMITMENTS		29
SCHEDULE 5. FORM OF NOTICE		30

2.

THIS AGREEMENT IS MADE BY AND BETWEEN:

1. ANTARGAZ, asociété anonyme, incorporated under the laws of France under registration number 572 126 043 RCS Nanterre, with registered capital of euro 3,935,349.00, and having its registered office at Immeuble Les Renardières, 3 Place de Saverne, 92400 Courbevoie, and represented by a duly authorized signatory for the purpose of this Agreement, asPledgor;

2. NATIXIS, asociété anonyme, incorporated under the laws of France under registration number 542 044 524 RCS Paris, with registered capital of euro 4,653,020,308.80, and having its registered office at 30, avenue Pierre Mendès France 75013 Paris, and represented by duly authorised signatories for the purpose of this Agreement, asSecurity Agent;

3. NATIXIS, (designated as above) and represented by duly authorised signatories for the purpose of this Agreement, asFacility Agent;

4. The Lenderslisted inSchedule 4(List of Lenders and Commitments) of this Agreement, duly represented by the Security Agent for the purpose of this Agreement;

5. NATIXIS, asociété anonyme, incorporated under the laws of France under registration number 572 126 043 RCS Paris, with registered capital of euro 4,653,020,308.80, and having its registered office at 30, avenue Pierre Mendès France 75013 Paris and represented by duly authorised signatories for the purpose of this Agreement, asBank Accounts Holder.

3.

WHEREAS:

(A) Pursuant to a facilities agreement dated 16 March 2011 entered into between,inter alios, AGZ Holding and Antargaz as Borrowers, BNP Paribas, Caisse Régionale de Crédit Agricole Mutuel de Paris et D’Ile De France, Crédit Lyonnais SA and Natixis as Mandated Lead Arrangers and Bookrunners, the Mandated Lead Arrangers (as defined therein), the Arrangers (as defined therein), the Lenders (as defined therein), and Natixis as Facility Agent and Security Agent (the“Facilities Agreement”), the Lenders have agreed to make certain Facilities available to the Borrowers.

(B) Pursuant to clause 15 (Security interest) and Schedule 2 (Security Documents) of the Facilities Agreement, as a condition precedent to the Lenders making the Facilities available to the Borrowers, the Obligors have accepted to grant to the Beneficiaries, as security for the Secured Liabilities (as defined herein), a pledge over the Pledged Account upon the terms and conditions of this Agreement and the Intercreditor Agreement.

NOW, THEREFORE, IT HAS BEEN AGREED AS FOLLOWS:

1. INTERPRETATION

1.1 Definitions

In this Agreement, terms defined in the Facilities Agreement shall have the same meaning when used in this Agreement, unless otherwise specified. Terms defined above have the same meaning when used in this Agreement, and the following terms have the following meanings:

“Account Holders” means the Companies in their capacity as account holders (teneurs de comptes) of the Financial Securities Accounts open in the name of the Pledgor in the Companies’ books.

“Agreement” means this agreement for the pledge of the Pledged Accounts together with the Schedules hereto, as supplemented or amended from time to time.

“Aquitaine Rhône Gaz”means asociété anonyme à conseil d’administration, incorporated under the laws of France under registration number 382 151 272 RCS Lyon, with registered capital of euro 197,731.45, and having its registered office at 13 rue Alfred Nobel Bâtiment A 69320 Feyzin.

“Bank Accounts” means in relation to the Financial Securities Accounts, the bank accounts (comptes bancaires spéciaux) open in the name of the Pledgor in the books of the Bank Accounts Holder in accordance with article L.211-20 of the French Monetary and Financial Code (Code monétaire et financier).

“Bank Accounts Holder” means Natixis, as designated above, in its capacity as holder (teneur de comptes bancaires) of the Bank Accounts open in the name of the Pledgor in Natixis’s books.

4.

“Beneficiaries” means (i) the Lenders, the Facility Agent and/or any of them, from time to time party to each and any Finance Documents, as represented by the Security Agent and (ii) the Security Agent itself.

“Companies” means Aquitaine Rhône Gaz and Gaz Energie Distribution.

“Discharge Date” means the earlier of (i) the date on which all the Secured Liabilities have been irrevocably and unconditionally discharged in full, independently of any partial or intermediate payment and (ii) the date on which the Pledge has been fully released in accordance with the terms of this Agreement or the other Finance Documents.

“Event of Default” means an event specified as such in clause 18.1 (Events of Default) of the Facilities Agreement.

“Facilities” has the meaning ascribed thereto in the Facilities Agreement.

“Facility Agent” has the meaning ascribed thereto in the Facilities Agreement.

“Finance Documents” has the meaning ascribed thereto in the Facilities Agreement.

“Financial Instruments” means all the financial instruments (excluding ten shares) held at any time by the Pledgor in the issued share capital of each Company and any other financial instrument which is a debt instrument issued by the Companies and held by the Pledgor.

“Financial Securities Accounts” means the financial securities accounts (comptes de titres financiers) within the meaning of article L.211-20 of the French Monetary and Financial Code (Code monétaire et financier) open in the name of the Pledgor in the books of the Companies as set out in the Statements of Pledge.

“Gaz Energie Distribution”means asociété anonymeincorporated under the laws of France under registration number 421 283 615 RCS Nancy, with registered capital of euro 348,965.52, and having its registered office at 109 Boulevard d’Haussonville 54000 Nancy.

“Insolvency” means any proceeding referred to in clauses 18.1(f) to 18.1(h) of the Facilities Agreement.

“Intercreditor Agreement” has the meaning ascribed thereto in the Facilities Agreement.

“Lenders” has the meaning ascribed thereto in the Facilities Agreement.

“Obligors” has the meaning ascribed thereto in the Facilities Agreement.

“Pledge” means the pledge (nantissement) created over the Pledged Accounts by virtue of this Agreement, as security for the Secured Liabilities.

“Pledged Accounts” means the Financial Securities Accounts (“Comptes de Titres Financiers”) together with the Bank Accounts.

“Pledgor” means ANTARGAZ, as designated above.

5.

“Secured Liabilities” means all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally) arising from obligations and liabilities of Antargaz to the Lenders, the Facility Agent, the Security Agent (or any of them) in its capacity as Borrower under or in connection with the Facilities and the Finance Documents (or any of them) (including, in each case, without limitation, under any amendments, supplements or restatements of any of the Finance Documents or in relation to any new or increased advances or utilisations); together with all costs, charges and expenses incurred by any Beneficiary in connection with the protection, preservation or enforcement of its respective rights (and/or in the case of the Security Agent, the rights of the other Beneficiaries (as the case may be)) under the Finance Documents or any other document evidencing or securing any such payment liabilities in favour of the Beneficiaries, to the extent due under any such document and subject to the provisions of the Facilities Agreement.

“Security Agent” means Natixis, as designated above, or any bank or financial institution which becomes Security Agent under the Facilities Agreement.

“Security Period” means the period beginning on the date hereof and ending on the Discharge Date.

“Shareholder Interest” means, in respect of the Pledgor and at any time until the expiry of the Security Period, (a) any and all of the Financial Instruments of the Companies held by the Pledgor on the date hereof; (b) all shares, other shareholder interest (titres financiers) and other securities (valeurs mobilières) which may be substituted for or added to the Financial Instruments, following or in connection with share exchanges, regroupings, splits, free issues, subscriptions by way of cash or otherwise, in accordance with the terms hereof and article L. 211-20 of the French Monetary and Financial Code (Code monétaire et financier); and (c) all proceeds or income whether present or future, actual or contingent, from time to time (including, without limitation, dividends, interest and other distributions) (fruits et produits) attached or deriving from the Financial Instruments or other securities referred to in paragraphs (b) and (c) above, provided that the dividends paid in cash (dividendes en numéraire), interest and other distributions thereon (fruits et produits) relating to the Financial Instruments or other above mentioned shareholder interest (titres financiers) shall be credited to the Bank Accounts in accordance withClause 3.4(Income and Proceeds) of this Agreement.

1.2 Construction

(a) In this Agreement, unless the contrary intention appears, a reference to:

(i) “assets” or“regulation” shall be construed in accordance with the Facilities Agreement;

(ii) a Clause or a Schedule is, unless otherwise specified, a reference to a clause or a schedule to this Agreement;

(iii) a provision of a law is a reference to that provision as amended or re-enacted;

(iv) a time of day is a reference to Paris time;

(v) words importing the plural shall include the singular andvice versa;

(vi) any reference to a party to this Agreement or other person includes, unless otherwise provided in this Agreement, such party’s or person’s permitted successors, assignees, transferees or substitutes;

(vii) an agreement or document includes a reference to that agreement or document as amended, novated or supplemented from time to time.

6.

(b) The index to and the headings in this Agreement are for convenience only and are to be ignored in construing this Agreement.

(c) This Agreement is entered into with the benefit and subject to the burden of the Intercreditor Agreement.

(d) The“Facility Agent” shall on or prior to the Discharge Date, be deemed to be a reference to the “Facility Agent” (in the context of the rights and obligations of the Lenders).

2. SECURITY AGENT

The Pledgor hereby agrees that the Security Agent shall be the agent (mandataire) of the Beneficiaries for the purposes of this Agreement, acting in such capacity in its name but on behalf of the Beneficiaries.

3. PLEDGE

3.1 Pledged Accounts

As security for the full repayment, discharge and performance of the Secured Liabilities and in guarantee of the obligations of the Obligors, the Pledgor irrevocably grants to the Beneficiaries a first ranking Pledge over the Pledged Accounts to the credit of which its Shareholder Interest has been credited, pursuant to article L. 211-20 of the French Monetary and Financial Code (Code monétaire et financier).

3.2 Registration of the Pledge

Immediately upon signature of this Agreement and in relation to the Pledged Accounts, the Pledgor shall, for each of the Pledged Accounts, execute in French a statement of first ranking pledge related to the concerned Pledged Account (each, a“Statement of Pledge” and together, the“Statements of Pledge”) (“déclarations de nantissement de compte de titres financiers”) in the form ofSchedule 1, transmit an executed copy of such Statement of Pledge to the concerned Company as Account Holder of the concerned Financial Securities Account and to the Bank Accounts Holder as account holder of the concerned Bank Account and request:

A. such Account Holder to (i) record in the concerned Company’s shareholder register (“registre de mouvements de titres”) and the shareholders accounts registry (“comptes d’actionnaires”) that the concerned Financial Securities Account is pledged in favour of the Beneficiaries by virtue of such Statement of Pledge and (ii) issue on the same date a certificate of confirmation of pledge related to such Financial Securities Account (the“Financial Securities Account Confirmation of Pledge”) (“attestation de nantissement de compte de titres financiers”) in the form ofSchedule 2; and

B. the Bank Accounts Holder (which the Bank Accounts Holder undertakes) to (i) record that the concerned Bank Account is pledged in favour of the Beneficiaries by virtue of such Statement of Pledge and (ii) issue on the same date a certificate of confirmation of pledge related to such Bank Account (the“Bank Account Confirmation of Pledge” (“attestation de nantissement de compte de fruits et produits”) and together with the Financial Securities Account Confirmation of Pledge, the“Confirmations of Pledge”) in the form ofSchedule 3.

7.

3.3 Shareholder Interest

Without prejudice toClause 3.1 (Pledged Account) and subject to the provisions ofClause3.4(Income and Proceeds) herein:

(i) any shareholder interest (titre financier) for any reason whatsoever substituted for, or added to, the Shareholder Interest of the Pledgor, together with any and all distributions, interest and proceeds (fruits et produits) resulting therefrom in accordance with article L. 211-20 of the French Monetary and Financial Code (Code monétaire et financier), and

(ii) more generally, any shares or other shareholder interests (titres financiers) attributed to, and any additional shares or other shareholder interests (titres financiers) acquired by the Pledgor and constituting ownership interests in the Companies or any legal entity resulting from the transformation or merger of the Companies or any similar operation,

shall automatically be deemed the Shareholder Interest of the Pledgor for the purposes of this Agreement and shall be promptly credited to the Pledged Accounts, without any such operation constituting in any manner a novation of the rights and security granted to the Beneficiaries hereunder.

3.4 Income and Proceeds

(a) In accordance with article L.211-20 of the French Monetary and Financial Code (Code monétaire et financier), any cash proceeds, income or distribution included in the Shareholder Interest shall be recorded on the Bank Accounts. The Bank Accounts shall be deemed to be an integral part of the Financial Securities Accounts as from the date of execution of the Statements of Pledge. The Pledgor shall request, at any time upon the Security Agent’s reasonable demand, from the Bank Accounts Holder a certificate of pledge comprising the inventory of all sums standing to the credit of the Bank Accounts as from the date of delivery of such certificate.

(b) Notwithstanding Clause 4.4(a) above, as long as no Event of Default has occurred and has been notified to the Bank Accounts Holder (with copy to the Pledgor) by the Security Agent in accordance with paragraph (c) below and is continuing, the Beneficiaries authorise the Pledgor to freely use all the monies held on the Bank Accounts.

(c) Upon the occurrence of an Event of Default which is notified to the Bank Accounts Holder (with copy to the Pledgor) by a notice substantially in the form ofSchedule 5 and which is continuing, the Pledgor will cease to be entitled to use the monies held on the Bank Accounts and any monies held on the Bank Accounts shall, upon receipt of such notice by the Bank Accounts Holder, no longer be available to the Pledgor, until such Event of Default has been remedied or waived. Notwithstanding the foregoing provisions, the Pledgor is entitled to use the monies held on the Bank Accounts exclusively in order to perform payments due under the Secured Liabilities by using the due amounts directly on the bank accounts held by the Security Agent.

(d) For the avoidance of doubt, as soon as an Event of Default is remedied or waived, the Pledgor will be entitled to use all monies held on the Bank Accounts so long as no other Event of Default occurs and is continuing, and the Security Agent shall, upon the request of the Pledgor, promptly notify the Bank Accounts Holder of the same.

8.

3.5 Instructions

The Pledgor agrees that it shall instruct the Companies to pay all dividends paid in cash (dividendes en numéraire), interest and other distributions thereon (fruits et produits) relating to the Shareholder Interest on the Bank Accounts.

4. PRESERVATION OF SECURITY

4.1 Continuing security

The security (nantissement) constituted by the Pledge herein created shall extend to the Discharge Date.

4.2 Additional security

This Pledge is in addition to and is not in any way prejudiced by any other security now or hereafter held by the Beneficiaries in respect of the Secured Liabilities.

4.3 Security transfer

In the event of any assignment, transfer, novation or disposal of a part or all of its rights and obligations by any Beneficiary under each and any of the Finance Documents to which such Beneficiary is a party, such Beneficiary hereby expressly maintains, which the Pledgor accepts, all its rights and privileges hereunder for the benefit of its successor, in accordance with the terms of article 1278 of the French Civil Code (Code civil) so that the Pledge herein created will secure the Secured Liabilities to the rateable benefit of such successor, without further formalities.

5. REPRESENTATIONS AND WARRANTIES

5.1 Representations and Warranties

The Pledgor represents and warrants to the Beneficiaries that:

(a) Due incorporation:it is a limited liability company, duly incorporated and validly existing under the laws of the jurisdiction of its incorporation, with the power to own its assets and carry on its business as it is being conducted;

(b) Corporate power and authority:it has the power to enter into and perform, and has taken all necessary action to authorise the entry into, performance and delivery by it of, this Agreement and the obligations contemplated herein;

(c) Insolvency:it is not in Insolvency, nor in a situation likely to result in the same;

(d) Authorisations, approvals and consents:no authorization, approval, consent, licence, notice or other requirement of public or corporate bodies of the Pledgor or of the Companies is required in connection with the entry into, performance, validity or enforceability of this Agreement and of the Statements of Pledge, except any authorization that has been duly obtained and of which written evidence has been provided to the Security Agent;

9.

(e) Companies’ approval:the Beneficiaries and any other transferee, assignee or appointee of all or part of the Financial Instruments have been approved by the relevant competent corporate body of each Company in accordance with article 11 of the by-laws of Aquitaine Rhône Gaz and article 10 of the by-laws of Gaz Energie Distribution respectively, so as is required for any of them to become a shareholder of the Companies;

(f) Validity:this Agreement constitutes its legal, valid, binding and enforceable obligation in accordance with its terms;

(g) Non-conflict:the execution of this Agreement and performance of the Pledgor’s obligations hereunder and the performance by the Companies of the transactions contemplated by this Agreement do not and will not breach, violate or conflict with any agreement to which the Pledgor or the Companies is respectively a party or which is binding upon their respective assets, by-laws, rules, regulations, or any applicable law, regulation or official or judicial order or any authorization;

(h) Ownership:

(i) it has valid title and is the sole absolute legal owner of the Shareholder Interest and the Pledged Accounts; and

(ii) all of the Financial Instruments and the Shareholder Interest have been validly issued and fully paid, and are not subject to any option to purchase or similar rights;

(i) Security Interests: the Pledged Accounts and the Shareholder Interest are not subject to any Security Interest, and there are no similar restrictions which may affect the rights of the Beneficiaries under this Agreement and the Pledge created over the Pledged Accounts, or the Shareholder Interest;

(j) Access to share capital:on the date hereof, there are no securities giving access directly or indirectly to the share capital of the Companies, and more generally there exists no agreement by which the Companies has undertaken to issue new Financial Securities or securities giving access directly or indirectly to its share capital except as otherwise permitted under the Finance Documents.

5.2 Time for making representations and warranties

The representations and warranties set out inClause 5.1 (Representation and warranties) above are made on the date hereof and are deemed to be repeated on the same dates as the representations and warranties are repeated under the Facilities Agreement.

6. UNDERTAKINGS

6.1 Duration

The undertakings in this Clause 7 remain in force from the date of this Agreement until the Discharge Date.

6.2 Negative pledge

Subject to the Facilities Agreement, the Pledgor hereby undertakes to the Beneficiaries that it will not create or permit to subsist any Security Interest on the whole or any part of the Financial Instruments, the Shareholder Interest and/or the Pledged Accounts other than the Pledge created pursuant to this Agreement and the Statements of Pledge.

10.

6.3 No Disposal

(a) The Pledgor will not, either in a single transaction or in a series of transactions, make a sale, transfer or other disposal (including by way of loan) of all or any part of the Financial Instruments, the Shareholder Interest (subject to its rights to dispose of the monies credited on the Bank Accounts as set forth inClause 3.4) or the Pledged Accounts, except as otherwise provided for in the Finance Documents and in this Agreement.

(b) The Pledgor will refrain from debiting from the Financial Securities Accounts any Shareholder Interest credited on the Financial Securities Accounts from time to time, except as otherwise provided for in the Finance Documents and in this Agreement.

(c) The Pledgor will not enter into or permit to subsist any option or other arrangement whereby any person has the right (whether or not exercisable only on a contingency) to require the Pledgor to sell or otherwise dispose of all or any part of the Financial Instruments, the Shareholder Interest or the Pledged Accounts.

6.4 Management of Pledged Accounts

(a) The Pledgor will request the Account Holder and the Bank Accounts Holder (and the Bank Accounts Holder undertakes accordingly) to credit to the Pledged Accounts any Shareholder Interest attributed to or acquired by it in accordance withClauses 3.3 (Shareholder Interest) and3.4 (Income and Proceeds) above and the Pledgor will, and shall procure that the Account Holders and the Bank Accounts Holder will, sign all documents and take all action (and the Bank Accounts Holder undertakes accordingly) necessary to this effect.

(b) Except as otherwise provided under the terms of this Agreement, the Pledgor will not (i) locate or permit to locate the Shareholder Interest received by it from any person for whatever reason in an account other than the Pledged Accounts, (ii) close or transfer the Pledged Accounts, nor (iii) appoint a new account holder other than the Account Holders and the Bank Accounts Holder, unless such new account holder has been approved by the Security Agent acting in accordance with the instructions of the Beneficiaries and has agreed in writing to be bound by all the terms and conditions of this Agreement, as Account Holder or Bank Accounts Holder, as the case may be.

6.5 Information

(a) From the date of this Agreement and throughout the Security Period, the Pledgor undertakes to promptly provide to the Security Agent all information relating to the Pledged Accounts and the Shareholder Interest which the Security Agent may from time to time reasonably require and to permit the Security Agent at any time, to request from the Account Holders and the Bank Accounts Holder, from time to time, a Confirmation of Pledge, which shall be furnished upon demand of the Security Agent and the Pledgor will sign all documents and take all action necessary to the effect of carrying out such request.

(b) Upon becoming aware thereof, the Pledgor will promptly inform the Security Agent of any disputes relating to the Pledged Accounts and the Shareholder Interest.

11.

7. LIABILITY TO PERFORM

It is expressly agreed that the Pledgor shall remain liable to observe and perform all of the conditions and obligations assumed by it respectively in respect of its Shareholder Interest and the Pledged Accounts, and the Beneficiaries and the Security Agent shall not be under any obligation or liability by reason of, or arising out of, this Agreement unless otherwise specified herein. The Beneficiaries and the Security Agent shall not be required in any manner to perform or fulfil any obligation of the Pledgor in respect of its Shareholder Interest and the Pledged Accounts, or to make any payment or to present or file any claim or take any other action to collect or enforce the payment of any amount to which it may have been or to which it may be entitled hereunder at any time or times.

8. ENFORCEMENT

Subject to the provisions of the Intercreditor Agreement, upon the occurrence of a payment Event of Default or payment default with respect to a notification relating to any Event of Default made in accordance with clause 18.2 (Acceleration) of the Facilities Agreement, the Security Agent acting on behalf of the relevant Beneficiaries, shall be entitled to exercise all rights, actions and privileges as granted by law to a secured creditor, including but not limited to:

(a) at its discretion and in accordance with the provisions of article L.211-20, paragraph V of the French Monetary and Financial Code (Code Monétaire et Financier):

(i) after a period of 8 (eight) days following the service of a notification (mise en demeure) on the Pledgor (which may be served simultaneously with the acceleration notice mentioned above), to request a court order for the sale of the Shareholder Interest at public auction in accordance with the provisions of article L.521-3(i) of the French Commercial Code (Code de Commerce),

(ii) immediately following the service of a notification (mise en demeure) on the Pledgor (which may be served simultaneously with the acceleration notice mentioned above), to request a court order for the judicial assignment of the Shareholder Interest to the Beneficiaries in accordance with the provisions of article 2347 of the French Civil Code (Code civil), or

(iii) to become the owner of the Shareholder Interest immediately following the service of a notification (mise en demeure) on the Pledgor (which may be served simultaneously with the acceleration notice mentioned above) (the“Transfer Date”) in satisfaction of the Secured Liabilities in accordance with the provisions of article 2348 of the French Civil Code (Code civil), in which case following such transfer of title:

(1) the value of the Shareholder Interest will be estimated by an expert (the“Expert”) appointed in good faith by the Security Agent and the Pledgor within five (5) calendar days following the Transfer Date;

(2) if the parties fail to agree on the name of the expert, the Expert shall be appointed by thePrésidentof the Paris Commercial Court (by way of summary judgment (référé) further to a motion by the most diligent party) among leading auditors exercising activities in France;

12.

(3) within thirty (30) days of the Expert’s acceptance of the appraisal mission (such appraisal period to be extended once for a maximum of ten (10) days at the request of the Expert), the Expert shall establish a report in which shall be determined (a) the value of the Shareholder Interest (at the relevant date of transfer of ownership of the collateral) (the“Enforcement Value”) and (b) the detailed calculations relating to such valuation (the“Report”); it being agreed to such valuation shall, in the absence of a manifest error (“erreur grossière”), be finally binding on the parties; the Report shall be delivered to the Security Agent and the Pledgor;

(4) in the event of a manifest error (“erreur grossière”) in the determination of the value of the Shareholder Interest, such error being acknowledged by the President of the commercial court of Paris (Président du Tribunal de Commerce de Paris), a new Expert shall be appointed in accordance with the same terms and conditions as referred to in paragraphs (1) and (2) above and perform the appraisal mission in accordance with the same terms and conditions as referred to in paragraph (3) above;

(5) the Pledgor hereby undertakes to execute any document and do all such things that are required to carry out the transfer of full ownership in the Shareholder Interest to the Beneficiaries on the Transfer Date;

(6) notwithstanding the foregoing, the Security Agent shall be entitled to resort at any time during the course of the procedure set out in this paragraph (iii) to the proceedings mentioned in paragraphs (i) and (ii) above, if it deems it necessary to protect the Beneficiaries’ interests;

(b) immediately after serving a notification (mise en demeure) on the Pledgor and the Bank Accounts Holder in accordance with the provisions of article L.211-20, paragraph V of the French Monetary and Financial Code (Code monétaire et financier), to retain full ownership in the sums credited to the Bank Accounts up to the amount of the Secured Liabilities.

9. APPLICATION OF PROCEEDS

The proceeds from the sale or the retention of the Shareholder Interest and/or the sums on the Bank Accounts pursuant to the enforcement of this Pledge shall be applied to the repayment of the Secured Liabilities, as set out and in the order and priority set forth under the Intercreditor Agreement.

If the aggregate amount of the Enforcement Value and of all sums credited on the Bank Accounts and collected by the Beneficiaries (represented by the Security Agent) in accordance with paragraph 9(b) above is greater than the amount of the Secured Liabilities which are due and payable, the Security Agent shall pay to the Pledgor the difference between those two amounts in accordance with the provisions of article 2348, paragraph 3 of the French Civil Code (Code civil).

In any case, the Beneficiaries shall not be responsible for the value retained for the enforcement of the Pledge.

13.

10. COVENANT TO RELEASE

On or, as soon as practicable, after the Discharge Date, the Security Agent on behalf of the Beneficiaries shall, at the cost of the Pledgor, execute and do all such deeds, acts and things as may be necessary to release and discharge in full the Pledgor from its liability hereunder.

11. EXPENSES, INDEMNITIES AND TAXES

In accordance with, and subject to the provisions of, clause 14 (Fees, Expenses and Stamp Duties) of the Facilities Agreement, all out of pocket costs and expenses (including reasonable legal fees and expenses) together with any applicable value added tax or other like Taxes incurred by the Beneficiaries or the Security Agent in connection with the negotiation or execution of this Agreement will be for the account of the Pledgor.

12. CHANGES TO THE PARTIES

All the rights, privileges, powers, discretions and authorities of the Beneficiaries hereunder will benefit their respective successors and assignees and all terms, conditions, representations and warranties and undertakings of the Pledgor hereunder shall oblige its respective successors and assignees in the same manner, it being agreed and understood that:

(a) the Pledgor shall not assign, transfer, novate or dispose of any of, or any interest in its rights and/or obligations under this Agreement, and

(b) the Beneficiaries shall be entitled to assign, transfer, novate or dispose of any of, or any interest in their rights and/or obligations hereunder to any successor in accordance with the relevant provisions of the Finance Documents.

The provisions of this Agreement and the rights arising therefrom shall remain in full force and effect and benefit to any successors, transferees or assignees of a Beneficiary, without any specific notice, registration or reiteration, in case,inter alia, of any sale, merger, demerger, spin-off or assets contribution which a Beneficiary may decide to proceed. It is expressly agreed that an asset contribution or a partial merger within the meanings of articles L. 236-1et sequiturof the French Commercial Code (Code de Commerce) shall be deemed to be a transfer for the purpose of the present provision.

13. SEVERABILITY

If a provision of this Agreement is or becomes illegal, invalid or unenforceable in any jurisdiction in respect of the Pledgor and/or the Account Holders and/or the Bank Accounts Holder that shall not affect:

(a) the validity or enforceability in that jurisdiction of any other provision of this Agreement; or

(b) the validity or enforceability in other jurisdictions of that provision or any other provision of this Agreement.

In any case, if such illegality, invalidity or enforceability occurs, the parties shall negotiate in good faith with a view to agree on the replacement of such provision by a provision which is legal, valid and enforceable and which is to the extent applicable in accordance with the intents and purposes of this Agreement and which in its economic effect come as close as practicable to the provision being replaced.

14.

14. NOTICES

Except as specifically provided otherwise in this Agreement, all notices or other communications under or in connection with this Agreement shall be given to each party as specified in clause 18 (Notices) of the Intercreditor Agreement.

15. FRENCH LANGUAGE

The Statements of Pledge executed by the Pledgor pursuant toClause 3.2(Registration of the Pledge) above shall be made in the French language and accompanied by an English translation. The French language version of the Statements of Pledge shall prevail over any English translation and shall be binding on the Pledgor.

16. GOVERNING LAW AND JURISDICTION

16.1 Governing law

This Agreement and the Statements of Pledge shall be governed by and construed in accordance with French law.

16.2 Jurisdiction

For the benefit of the Beneficiaries, the Pledgor and the Bank Accounts Holder agree that the courts of France have jurisdiction to settle any disputes in connection with this Agreement and the Statements of Pledge, and accordingly submit to the jurisdiction of the Commercial Court of Paris (Tribunal de Commerce de Paris).

17. DURATION

The Pledge created pursuant to this Agreement shall remain in force until the Discharge Date.

18. WAIVERS, REMEDIES CUMULATIVE

(a) The rights of the Beneficiaries under this Agreement:

(i) may be exercised as often as necessary;

(ii) are cumulative and not exclusive of its rights under general law; and

(iii) may be waived only in writing and specifically.

(b) Delay in exercising or non-exercise of any such right is not a waiver of that right.

15.

Made in Paris
On 16 March 2011

In as many original copies as parties to this Agreement

The Pledgor

ANTARGAZ

By: François Varagne

The Beneficiaries

NATIXIS
As Facility Agent and Security Agent

By: Jean-Philippe Nani By: Sylvie Delorme

THE LENDERS
Represented by the Security Agent

By: Jean-Philippe Nani By: Sylvie Delorme

The Bank Accounts Holder

NATIXIS

By:

16.

TRANSLATION FOR INFORMATION PURPOSES ONLY

STATEMENT OF PLEDGE OVER FINANCIAL SECURITIES ACCOUNT
(subject to provisions of article L. 211-20 of the Monetary and Financial Code)

THE UNDERSIGNED:

ANTARGAZ, asociété anonyme, incorporated under the laws of France under registration number 572 126 043 RCS Nanterre, with registered capital of euro 3,935,349.00, and having its registered office at Immeuble Les Renardières, 3 Place de Saverne, 92400 Courbevoie and represented by a duly authorized signatory for the purpose hereof,

Hereinafter referred to as the“Pledgor”,

HEREBY PLEDGES:

(A) THE FOLLOWING FINANCIAL SECURITIES ACCOUNT:

Its special shareholder’s account number [ARG: 11 Quarter / GED: 1 Quarter],

Hereinafter referred to as the“Financial Securities Account”,

OPEN IN THE BOOKS OF:

[AQUITAINE RHONE GAZ, asociété anonyme à conseil d’administration, incorporated under the laws of France under registration number 382 151 272 RCS Lyon, with registered capital of euro 197,731.45, and having its registered office at 13 rue Alfred Nobel Bâtiment A 69320 Feyzin /GAZ ENERGIE DISTRIBUTION, asociété anonymeincorporated under the laws of France under registration number 421 283 615 RCS Nancy, with registered capital of euro 348,965.52, and having its registered office at 109 Boulevard d’Haussonville 54000 Nancy]

Hereinafter referred to as the“Account Holder” or the“Company”,

IN WHICH IS CREDITED INITIALLY THE FOLLOWING SHAREHOLDER INTEREST:

	Nomination, nature,
Qty	form, nominal	Currency	Par value (each share)
[ARG: 3,805 / GED: 22,888]	Ordinary shares	Euro	€ [ARG: 51.83 / GED: 15.24]

AND

17.

(B)    THE BANK ACCOUNT:

The bank account open in the name of the Pledgor, N° [ARG 30007 99999 3N019091001 88 / GED 30007 99999 3N019091002 85], deemed to be an integral part of the Financial Securities Account at the date hereof pursuant to the provisions of article L. 211-20 of the French Monetary and Financial Code,

Hereinafter referred to as the“Bank Account” and together with the Financial Securities Account, the “Pledged Accounts”,

OPEN IN THE BOOKS OF:

NATIXIS, asociété anonyme,incorporated under the laws of the Republic of France under registration number 542 044 524 RCS Paris, with registered capital of euro 4,653,020,308.80, and having its registered office at 30, avenue Pierre Mendès France 75013 Paris,

Hereinafter referred to as the“Bank Accounts Holder”,

In which will be credited all dividends paid in cash (dividendes en numéraire), interest and other distributions thereon (fruits et produits) which will be due to the Pledgor in relation to the Shareholder Interest,

TO THE BENEFIT OF:

• BANQUE PALATINE, asociété anonyme à directoireincorporated under the laws of France under registration number 542 104 245 RCS Paris,with registered capital of euro 538,802,680.00, having its registered office at 42 rue d’Anjou 75008 Paris, acting as Lender;

• BARCLAYS BANK PLC, a company incorporated under the laws of England and Wales under registration number 1026167, with registered capital of sterling 3,040,001,000, having its registered office at 1 Churchill Place, London E14 5HP, United Kingdom, acting as Lender;

• BANCO BILBAO VIZCAYA ARGENTARIA, asociété anonyme, incorporated under the laws of the Kingdom of Spainacting through its Paris Branch under registered number 349 358 887 RCS Paris, with registered capital of euro 1,523,867,581.08, and having its registered office at 29, Avenue de l’Opéra 75001 Paris, France, acting as Lender;

• BNP PARIBAS, asociété anonymeincorporated under the laws of the Republic of France under registration number 662 042 449 RCS Paris, with registered capital of euro 2,397,320,312.00, having its registered office at 16, boulevard des Italiens, 75009 Paris, acting as Lender;

• BRED BANQUE POPULAIRE, asociété anonyme coopérative de Banque Populaireincorporated under the laws of France under registration number 552 091 795 RCS Paris,with registered capital of euro 432,487,500.00, having its registered office at 18 quai de la Rapée 75012 Paris,acting as Lender;

• CAISSE REGIONALE DE CREDIT AGRICOLE MUTUEL DE PARIS ET D’ILE DE FRANCE, asociété coopérative, incorporated under the laws of France under registration number 775 665 615 RCS Paris, a credit institution and brokerage insurance firm registered with the Register of the Intermediaries in Insurances under number 07 008 015, and having its registered office at 26 quai de la Rapée, 75012 Paris, acting as Lender;

18.

• CREDIT DU NORD, asociété anonymeincorporated under the laws of France under registration number 456 504 851 RCS Lille,with registered capital of euro 890,263,248.00, having its registered office at 28 place Rihour 59000 Lille,acting as Lender;

• CREDIT LYONNAIS, asociété anonymeincorporated under the laws of the Republic of France under registration number 954 509 741 RCS Lyon, with registered capital of euro 1,847,860,375.00, having its registered office at 18, rue de la République, 69002 Lyon, acting as Lender;

• BANQUE COMMERCIALE POUR LE MARCHE DE L’ENTREPRISE, asociété anonyme à directoire et conseil de surveillance, incorporated under the laws of France under registration number 378 398 911 RCS Brest, with registered capital of euro 330,000,000, having its registered office at 1 allée Louis Lichou 29480 Le Relecq-Kerhuon France, acting as Lender;

• CREDIT SUISSE INTERNATIONAL, a company incorporated under the laws of England and Wales under registration number 02500199, having its registered office at One Cabot Square, London, UK E14 4QJ,acting as Lender;

• HSBC FRANCE, asociété anonyme, incorporated under the laws of France under registration number 775 670 284 RCS Paris, with registered capital of euro 337,189,100, having its registered office at 103, avenue des Champs-Elysées, 75419 Paris, France, acting as Lender;

• ING BELGIUM SA, SUCCURSALE EN FRANCE, incorporated under registration number 490 100 260, having its main office at Coeur Défense, Tour A, Place de la Défense, 90-102 avenue du Général de Gaulle, 92400 Courbevoie, France, a branch of ING Belgium SA/NV, with capital of euro 2,350,000,000, having its registered office at Marnix 24, B-1000 Brussels, registered with the Brussels register under number 0403 200 393, acting as Lender;

• NATIXIS, asociété anonymeincorporated under the laws of the Republic of France under registration number 542 044 524 RCS Paris, with registered capital of euro 4,653,020,308.80, having its registered office at 30, avenue Pierre Mendès France 75013 Paris, acting as Lender;

and their respective successors and assignees under a facilities agreement dated 16 March 2011 entered into between,inter alios, AGZ Holding and Antargaz as Borrowers, BNP Paribas, Caisse Régionale de Crédit Agricole Mutuel de Paris et d’Ile De France, Crédit Lyonnais SA and Natixis as Mandated Lead Arrangers and Bookrunners, the Mandated Lead Arrangers (as defined in the Facilities Agreement), the Arrangers (as defined in the Facilities Agreement), the Lenders, and Natixis as Facility Agent and Security Agent (the“Facilities Agreement”),

• NATIXIS, asociété anonyme,incorporated under the laws of the Republic of France under registration number 542 044 524 RCS Paris, with registered capital of euro 4,653,020,308.80, and having its registered office at 30, avenue Pierre Mendès France 75013, as Security Agent, and its successors and assignees in such capacity under the Facilities Agreement; and

• NATIXIS, asociété anonyme,incorporated under the laws of the Republic of France under registration number 542 044 524 RCS Paris, with registered capital of euro 4,653,020,308.80, and having its registered office at 30, avenue Pierre Mendès France 75013, as Facility Agent, and its successors and assignees in such capacity under the Facilities Agreement.

Hereinafter referred to as the“Beneficiaries”,

19.

AS SECURITY FOR PAYMENT OF THE FOLLOWING LIABILITIES:

All present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally) of Antargaz to (a) the Lenders, the Facility Agent, the Security Agent (or any of them), in its capacity as Borrower under the Finance Documents (or any of them) (including, in each case, without limitation, under any amendments, supplements or restatements of any of the Finance Documents or in relation to any new or increased advances or utilisations); together with all costs, charges and expenses incurred by any Beneficiary in connection with the protection, preservation or enforcement of its respective rights (and/or in the case of the Security Agent, the rights of the other Beneficiaries (as the case may be)) under the Finance Documents or any other document evidencing or securing any such payment liabilities in favour of the Beneficiaries, to the extent due under any such document.

Secured amounts:

• an aggregate principal amount of EUR 40,000,000 (forty million euros) plus interest, late payment interest, fees, commissions and anything else of a similar nature, under the Revolving Facility.

Hereinafter referred to as the“Secured Liabilities”.

UNDER THE FOLLOWING TERMS AND CONDITIONS:

The Pledge is granted by the Pledgor in accordance with terms of (i) a financial securities account pledge agreement dated 16 March 2011 (the“Agreement”) entered into between the Pledgor, the Beneficiaries and the Bank Accounts Holder, constituting an integral part of this statement of pledge and defining the terms and conditions under which the Pledged Accounts shall operate and the Pledge shall be enforced and (ii) the Intercreditor Agreement.

A copy of this statement of pledge shall be notified to the Account Holder and the Bank Accounts Holder on the date hereof, together with the Pledgor’s instruction to register this pledge in the books held by the Account Holder and the Bank Accounts Holder. In particular, the Account Holder shall register in the Company’s shareholder register (“registre de mouvements de titres”) and the shareholders accounts registry (“comptes d’actionnaires”) the following:

“Affectation en nantissement aux termes d’une déclaration de nantissement de compte de titres financiers en date du 16 mars 2011 signée par Antargaz en qualité de Constituant au profit de l’Agent, de l’Agent des Sûretés et des Prêteurs au titre du Contrat de Crédits, étant précisé que les droits de tout Bénéficiaire au titre du présent nantissement (en ce compris pour la réalisation du nantissement) demeurent soumis aux stipulations de la Convention de Subordination (les termes commençant par une majuscule ayant le sens qui leur est attribué dans la déclaration susvisée)”.

Capitalized terms used herein shall have the meaning ascribed to them under the Agreement.

This statement of pledge is governed by the laws of France. Any dispute relating to the validity, interpretation and realisation of this statement shall be in the jurisdiction of the Paris Commercial Court (Tribunal de Commerce de Paris).

Signed in Paris, on 16 March 2011
In one (1) original copy

For the Pledgor
ANTARGAZ

By:

20.

Schedule 2.
FORM OF FINANCIAL SECURITIES ACCOUNT — CONFIRMATION OF PLEDGE

To:	Natixis
	in its capacity as Security Agent

Dear Sirs,

Having knowledge of the Statement of Pledge over the Financial Securities Account (Déclaration de nantissement de compte de titres financiers),

dated:16 March 2011

signed by:ANTARGAZ

We the undersigned,[AQUITAINE RHONE GAZ, asociété anonyme à conseil d’administration, incorporated under the laws of France under registration number 382 151 272 RCS Lyon, with registered capital of euro 197,731.45, and having its registered office at 13 rue Alfred Nobel Bâtiment A 69320 Feyzin /GAZ ENERGIE DISTRIBUTION, asociété anonymeincorporated under the laws of France under registration number 421 283 615 RCS Nancy, with registered capital of euro 348,965.52, and having its registered office at 109 Boulevard d’Haussonville 54000 Nancy] (the“Company”), in our capacity as Account Holder,

1/ hereby confirm the opening and constitution of a pledge over the financial securities account, the references of which are the following: Financial Securities Account N°[ARG: 11 Quarter / GED: 1 Quarter] open in the name of the Pledgor as provided in the Statement of Pledge;

2/ present the inventory of shareholder interest as attached hereto, held by the Pledgor in the books of the Company;

3/ hereby confirm having knowledge of the mode of management of the Financial Securities Account under the conditions described in the financial securities account pledge agreement dated 16 March 2011 and entered into,inter alios, between ANTARGAZ as Pledgor, NATIXIS as Security Agent, the Beneficiaries, and NATIXIS as Bank Accounts Holder (the“Agreement”), and referred to in the Statement of Pledge;

4/ accept to pay all dividends paid in cash (dividendes en numéraire), interest and other distributions thereon (fruits et produits) relating to the Shareholder Interest on the Bank Account;

5/ agree to promptly credit to the Financial Securities Account (i) any shareholder interest (titre financier) for any reason whatsoever substituted for, or added to, the Shareholder Interest of the Pledgor and (ii) any shares or other shareholder interests (titres financiers) attributed to, and any additional shares or other shareholder interests (titres financiers) acquired by the Pledgor and constituting ownership interests in the Company;

6/ acknowledge that the Pledgor is not allowed to sell, assign or otherwise dispose of any or all of the Shareholder Interest credited to the Financial Securities Account other than in accordance with the Agreement, and undertake not to debit from the Financial Securities Account any Shareholder Interest credited on the Financial Securities Account from time to time, except as otherwise provided for in the Finance Documents and in the Agreement; and

21.

7/ agree, upon instruction of the Security Agent, to sign all documents and take all action to render effective, and to record in the Company’s shareholder register (“registre de mouvements de titres”) and the shareholders accounts registry (“comptes d’actionnaires”), the transfer of Financial Instruments to it following an enforcement of the Pledge for the benefit of the Beneficiaries.

Terms defined herein have the meaning ascribed to them in the Agreement.

Made in Paris, on 16 March 2011
In two (2) original copies

[AQUITAINE RHONE GAZ/GAZ ENERGIE DISTRIBUTION]
as Account Holder

By:

22.

Schedule 3.

FORM OF BANK ACCOUNT CONFIRMATION OF PLEDGE

To:	NATIXIS
	in its capacity as Security Agent

Dear Sirs,

Having knowledge of the Statement of Pledge over the Bank Accounts (Déclaration de nantissement de compte de titres financiers),

dated: 16 March 2011

signed by:ANTARGAZ

We, Natixis, in our capacity as Bank Accounts Holder,

1/ hereby confirm the opening and constitution of a pledge over special bank accounts, the references of which are the following: (i) with respect to Aquitaine Rhône Gaz, Bank Account N°30007 99999 3N019091001 88 open in the name of the Pledgor as provided in the concerned Statement of Pledge and (ii) with respect to Gaz Energie Distribution, Bank Account N°30007 99999 3N019091002 85 open in the name of the Pledgor as provided in the concerned Statement of Pledge; and

2/ acknowledge that the Pledgor is not allowed to assign or otherwise dispose of any or all of the monies credited to the Bank Accounts other than in accordance with the terms of the financial securities account pledge agreement dated 16 March 2011 and entered into,inter alios, between ANTARGAZ as Pledgor, NATIXIS as Security Agent, the Beneficiaries, and us as Bank Accounts Holder (the“Agreement”), and referred to in the Statement of Pledge.

Terms defined herein have the meaning ascribed to them in the Agreement.

Made in Paris, on 16 March 2011
In two (2) original copies

NATIXIS
as Bank Accounts Holder

By:

23.

Schedule 4.
LIST OF LENDERS AND COMMITMENTS

	Revolving
	Commitment (EUR)
Banque Palatine		1 400 000
Barclays Bank Plc		3 800 000
Banco Bilbao Vizcaya Argentaria		1 900 000
BNP Paribas		5 700 000
Bred Banque Populaire		1 900 000
Caisse Régionale de Crédit Agricole Mutuel de Paris et d’Ile de France		2 000 000
Crédit du Nord		1 900 000
Crédit Lyonnais SA		5 700 000
Banque Commerciale pour le Marché de l’Entreprise		3 800 000
Crédit Suisse International		1 900 000
HSBC France		1 900 000
ING Belgium SA, Succursale en France		3 800 000
Natixis		4 300 000
		40 000 000

24.

Schedule 5.
FORM OF NOTICE

To:	NATIXIS
	in its capacity as Bank Accounts Holder
Copy to:	AQUITAINE RHONE GAZandGAZ ENERGIE DISTRIBUTION
	in their capacity as Account Holders
Copy to:	ANTARGAZ
	in its capacity as Pledgor

(Re:Bank Account number [ARG 30007 99999 3N019091001 88 / GED 30007 99999 3N019091002 85])

Dear Sirs,

We refer to the financial securities account pledge agreement dated 16 March 2011, entered into between, amongst others, ANTARGAZ as Pledgor, NATIXIS as Security Agent, the Beneficiaries, and NATIXIS as Bank Accounts Holder (the “Pledge Agreement”).

Capitalized terms used herein shall have the meaning ascribed to them under the Pledge Agreement.

This notice is sent to you for the purpose of Clause 4.4 (Income and Proceeds) of the Pledge Agreement.

We hereby inform you that an Event of Default has occurred and is continuing and that, as from the date hereof, the Pledgor is not entitled to use the monies held on the Bank Accounts in accordance with the provisions of the Pledge Agreement (in particular Clause 4.4(c)). Notwithstanding the foregoing provisions, the Pledgor is entitled to use the monies held on the Bank Accounts exclusively in order to perform payments due under the Secured Liabilities.

In accordance with Clause 4.4(d) of the Pledge Agreement, the Pledgor will be entitled again to use all monies held on the Bank Accounts as soon as we notify you that such Event of Default is remedied or waived and so long as no other Event of Default occurs and is continuing.

Signed in Paris, on [_____]

NATIXIS
as Security Agent

By:

25.