Exhibit 10.1

Execution Version

SETTLEMENT AGREEMENT

This Settlement Agreement (this “Agreement”) is entered into and effective as of
April 22, 2019, by and among PG&E Corporation, a California corporation (for
itself and on behalf of the Utility (as defined below), the “Company”), and
BlueMountain Capital Management, LLC, a Delaware limited liability company (for
itself and on behalf of BMCA (as defined below), “BlueMountain” and, together
with the Company and the Utility, the “Parties”).

WHEREAS, on January 29, 2019, the Company and Pacific Gas and Electric Company,
a California corporation (the “Utility”) voluntarily commenced bankruptcy cases
under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in
the United States Bankruptcy Court for the Northern District of California
(together with any related or ancillary proceedings, the “Chapter 11 Cases”);

WHEREAS, pursuant to Article I, Section 2 of the Bylaws of the Company (the
“Bylaws”), on March 1, 2019, Blue Mountain Credit Alternative Master Fund L.P.,
a limited partnership organized under the laws of the Cayman Islands and managed
by BlueMountain (“BMCA”), delivered written notice to the Company (the “Notice”)
nominating 13 persons, including each of Frederick W. Buckman (“Buckman”) and
Christopher A. Hart (“Hart”), for election to the Board of Directors of the
Company (the “Company Board”) and proposing other business for consideration at
the 2019 joint annual meeting of shareholders of the Company and the Utility or
any other meeting of shareholders held in lieu thereof, and any adjournments,
postponements, reschedulings or continuations thereof (the “2019 Annual
Meeting”), and announced its intention to solicit proxies in favor of the
election of such persons to the Company Board and the approval of such other
business at the 2019 Annual Meeting (the “Potential Proxy Contest”);

WHEREAS, representatives of the Company and BlueMountain have participated in
discussions regarding their respective views on the proper composition of the
Company Board and the merits of potential nominees for election or appointment
to the Company Board;

WHEREAS, on April 3, 2019, the Company announced the appointment of 10 new
directors to the Company Board, effective as of the next in-person meeting of
the Company Board, and stated that the then-existing members of the Company
Board (including the 10 newly appointed directors) and William D. Johnson
(“Johnson”) will stand for election to the Company Board at the 2019 Annual
Meeting;

WHEREAS, on April 3, 2019, the Company also announced the appointment of 10 new
directors to the Board of Directors of the Utility (the “Utility Board” and,
together with the Company Board, the “Boards”), effective as of the next
in-person meeting of the Utility Board, and stated that the then-existing
members of the Utility Board (including the 10 newly appointed directors) and
Johnson will stand for election to the Utility Board at the 2019 Annual Meeting;

WHEREAS, on April 9 and 10, 2019, such 10 new directors were seated on the
Company Board, joining 3 continuing directors, with 7 previous directors
resigning from the Company Board;

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WHEREAS, on April 9 and 10, 2019, such 10 new directors were seated on the
Utility Board, joining 3 continuing directors, with 7 previous directors
resigning from the Utility Board, and on April 10, 2019, the Utility Board voted
to appoint Johnson to the Utility Board effective May 1, 2019;

WHEREAS, each of the Parties has considered the qualifications of Buckman to
serve on each of the Boards and of Hart to serve as a safety consultant to the
Chief Executive Officer of the Company;

WHEREAS, each of the Parties believes that the appointment of Buckman to each of
the Boards, the hiring of Hart as a safety consultant to the Chief Executive
Officer of the Company, the nomination of Buckman for election to each of the
Boards at the 2019 Annual Meeting, the identification and appointment of the
Renewable Designee (as defined below) to each of the Boards and a consensual
resolution of the Potential Proxy Contest are in the best interests of each of
the Company and the Utility;

WHEREAS, the Parties have come to an agreement regarding the appointment of
Buckman to each of the Boards, the hiring of Hart as a safety consultant to the
Chief Executive Officer of the Company, the nomination of Buckman for election
to each of the Boards at the 2019 Annual Meeting, the identification and
appointment of the Renewable Designee to each of the Boards and certain other
matters as set forth herein;

WHEREAS, effective as of the execution and delivery hereof, Richard Kelly has
resigned from the Company Board and Buckman has been seated in the vacancy on
the Company Board resulting therefrom; and

WHEREAS, effective as the execution and delivery hereof, Richard Kelly has
resigned from the Utility Board and Buckman has been seated in the vacancy on
the Utility Board resulting therefrom.

NOW, THEREFORE, in consideration of and reliance upon the material covenants and
agreements of the Parties contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the Parties, it is hereby agreed by and among the Parties as follows:

1. Appointment and Nomination.

(a) The Company hereby represents and warrants to BlueMountain that, effective
immediately after the execution and delivery hereof:

(i) Richard Kelly has resigned from the Company Board and all committees thereof
and Buckman has been seated in the vacancy on the Company Board resulting
therefrom; and

(ii) Richard Kelly has resigned from the Utility Board and all committees
thereof and Buckman has been seated in the vacancy on the Utility Board
resulting therefrom.

 

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(b) Each of the Company Board and the Utility Board agrees to promptly appoint
Buckman to appropriate committees of the applicable Board, as determined in such
Board’s reasonable discretion.

(c) The Company shall include a proposal to amend its Restated Articles of
Incorporation (the “Charter”) to increase the maximum size of the Company Board
to 15 members in the joint proxy statement of the Company and the Utility and on
the joint proxy card of the Company and the Utility relating to the 2019 Annual
Meeting and shall use its reasonable best efforts (which shall include the
solicitation of proxies) to obtain the requisite shareholder vote required to so
amend the Charter (it being understood that such efforts shall not be less than
the efforts used by the Company to obtain the requisite vote required to approve
any other proposal included in the joint proxy statement of the Company and the
Utility and on the joint proxy card of the Company and the Utility relating to
the 2019 Annual Meeting).

(d) The Company shall include Buckman as a nominee for election to the Company
Board at the 2019 Annual Meeting recommended by the Company Board in the joint
proxy statement of the Company and the Utility and on the joint proxy card of
the Company and the Utility relating to the 2019 Annual Meeting and shall use
its reasonable best efforts (which shall include the solicitation of proxies) to
obtain the election of Buckman to the Company Board at the 2019 Annual Meeting
(it being understood that such efforts shall not be less than the efforts used
by the Company to obtain the election of any other nominee nominated for
election to the Company Board at the 2019 Annual Meeting).

(e) The Utility shall include Buckman as a nominee for election to the Utility
Board at the 2019 Annual Meeting recommended by the Utility Board in the joint
proxy statement of the Company and the Utility and on the joint proxy card of
the Company and the Utility relating to the 2019 Annual Meeting and shall use
its reasonable best efforts (which shall include the solicitation of proxies) to
obtain the election of Buckman to the Utility Board at the 2019 Annual Meeting
(it being understood that such efforts shall not be less than the efforts used
by the Utility to obtain the election of any other nominee nominated for
election to the Utility Board at the 2019 Annual Meeting), and the Company shall
vote or cause to be voted all of the voting Securities (as defined below) of the
Utility beneficially owned by the Company in favor of the election of Buckman to
the Utility Board at the 2019 Annual Meeting.

(f) The Company and the Utility shall cause the 2019 Annual Meeting to be held
as promptly as practicable following the execution and delivery of this
Agreement, it being understood that in no event shall the 2019 Annual Meeting be
held prior to June 1, 2019.

(g) In consultation with BlueMountain, the Nominating and Governance Committee
of the Company Board shall select in good faith, as promptly as practicable
following the execution and delivery of this Agreement, an additional person to
be appointed to each of the Boards who, in the Company Board’s reasonable
discretion, (i) has clean energy/clean energy technology expertise (whether
leading a business whose primary purpose is to advance or support clean
energy/clean energy technology (excluding nuclear power) or acting as a
recognized expert or policy maker who has publicly advocated for clean
energy/clean energy technology), it being understood that “clean energy/clean
energy technology expertise” shall include, without limitation, expertise
related to storage and network distribution in the clean

 

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energy space and other similar expertise, (ii) is a resident of the State of
California or otherwise has deep ties to the State of California (as evidenced
by having close relationships and support of key California decision makers and
influencers in clean energy), and (iii) brings demonstrated domain expertise
relating to the achievement of California’s clean energy goals (such additional
person, the “Renewable Designee”), provided, that in connection with the process
of selecting the Renewable Designee, the Company, the Utility and each of the
Boards shall give good faith consideration to those persons nominated in the
Notice by BMCA for election to the Company Board at the 2019 Annual Meeting as
the Renewable Designee, and the Company, the Utility and the applicable Board
shall appoint the Renewable Designee to each of the Boards as promptly as
practicable following his or her selection in accordance with this Section 1(g),
subject, in the case of his or her appointment to the Company Board, to approval
of the Charter amendment contemplated by Section 1(c) by the shareholders of the
Company; provided, that, for the avoidance of doubt, the Parties acknowledge and
agree that the Renewable Designee cannot be appointed to the Company Board prior
to the 2019 Annual Meeting.

(h) If Buckman fails to be elected to either Board at the 2019 Annual Meeting,
the Nominating and Governance Committee of the Company Board shall select in
good faith, as promptly as practicable, a person to fill the vacancy resulting
therefrom who, in the Company Board’s reasonable discretion, has senior
management level experience at an electric utility of comparable scope and size
to the Company and the Utility (the “Utility Designee”), and the Company, the
Utility and the applicable Board shall appoint the Utility Designee to each of
the Boards as promptly as practicable following his or her selection in
accordance with this Section 1(h).

(i) If the Renewable Designee is not promptly appointed in accordance with
Section 1(g), ceases to serve on either of the Boards as a result of his or her
death or incapacity at any time prior to the 2020 Annual Meeting, fails to be
elected to either Board at the 2019 Annual Meeting (if nominated for election at
the 2019 Annual Meeting) or is otherwise removed from either Board, the Company,
the Utility (if applicable) and the applicable Board shall promptly, subject, in
the case of the Company Board, to approval of the Charter amendment contemplated
by Section 1(c) by the shareholders of the Company, fill the vacancy resulting
therefrom taking into account the attributes set forth in Section 1(g)(i)
through (iii).

(j) Without limiting any other provision herein, (i) the Company shall cause the
Utility and the Utility Board to comply with the terms of this Agreement and
(ii) each of the Company, the Utility and the Boards shall take all reasonable
actions under its control as promptly as practicable in order to accomplish the
actions contemplated by this Section 1.

2. Safety Consultant. Promptly following the execution and delivery hereof, the
Company shall engage Hart as a safety consultant (the “Safety Consultant”) to
the Chief Executive Officer of the Company and enter into a consulting agreement
with the Safety Consultant on customary market terms for such an engagement.

 

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3. Withdrawal of Notice of Nomination. In connection with the execution and
delivery hereof, BlueMountain hereby does, and to the extent necessary shall
cause BMCA to, withdraw the Notice for any and all purposes, including with
respect to the nomination of persons for election to the Company Board at the
2019 Annual Meeting and the proposal of other business for consideration at the
2019 Annual Meeting.

4. Standstill.

(a) BlueMountain agrees that, during the Standstill Period (as defined below)
(unless specifically requested in writing by the Company, acting through a
resolution of a majority of the Company’s directors), it shall not, and shall
cause each of its Affiliates (as such term is defined in Rule 12b-2 promulgated
by the Securities and Exchange Commission (“SEC”) under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) not to, directly or indirectly, in
any manner, alone or in concert with others:

(i) make, engage in, or in any way participate in, directly or indirectly, any
“solicitation” of “proxies” or become a “participant” in a “solicitation” (as
such terms are used in the proxy rules of the SEC but without regard to the
exclusion set forth in Rule 14a-1(l)(2)(iv) of the Exchange Act) of proxies or
consents with respect to the voting of any securities of the Company or the
Utility or any securities convertible or exchangeable into or exercisable for
any such securities (collectively, “Securities”) for the election of persons to
the Company Board or the Utility Board, respectively, or to approve proposals of
any shareholder of the Company or the Utility;

(ii) knowingly take any affirmative action with the purpose or intent of
advising, encouraging or influencing any other person (other than its
Affiliates) or assist any person or entity not a party to this Agreement other
than its Affiliates (a “Third Party”) with respect to the voting of any
Securities of the Company or the Utility for the election of persons to the
Company Board or the Utility Board, respectively, or to approve proposals of any
shareholder of the Company or the Utility;

(iii) form, join, encourage, influence, advise or in any way participate in any
“group” (as such term is defined in Section 13(d)(3) of the Exchange Act) with
any persons (excluding, for the avoidance of doubt, any group composed solely of
BlueMountain and its Affiliates) with respect to any Securities of the Company
or the Utility or otherwise in any manner agree, attempt, seek or propose to
deposit any Securities of the Company or the Utility in any voting trust or
similar arrangement, or subject any securities of the Company or the Utility to
any arrangement or agreement with respect to the voting thereof (including by
granting any proxy, consent or other authority to vote), except as expressly
contemplated or permitted by this Agreement;

(iv) acquire, offer or propose to acquire, or agree to acquire, directly or
indirectly, through swap or hedging transactions or otherwise, any Securities of
the Company or the Utility or any rights decoupled from the underlying
Securities of the Company or the Utility that would result in BlueMountain, its
Affiliates and any individual or entity that would be deemed to be part of a
“group” (as such term is defined in Section 13(d)(3) of the Exchange Act) with
BlueMountain and or any of its Affiliates (the “13D Group”) owning, controlling
or otherwise having any beneficial or other ownership interest in 5% or more of
the voting Securities of the Company or the Utility outstanding at such time,
based on the total number of shares of the common stock of the Company or the
Utility, as applicable, outstanding as most

 

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recently disclosed by the Company or the Utility in an Annual Report on Form
10-K or a Quarterly Report on Form 10-Q filed with the SEC or otherwise
communicated in writing as of a more recent date by the Company or the Utility
to BlueMountain; provided, that nothing herein will require common stock of the
Company or the Utility to be sold to the extent that the 13D Group exceeds the
ownership limits under this Section 4(a)(iv) as the result of a share repurchase
or similar action by the Company or the Utility that reduces the number of
outstanding shares of common stock of the Company or the Utility, respectively;
provided, further, that this Section 4(a)(iv) shall not in any way restrict
BlueMountain or its Affiliates from participating in any dilutive equity
offering of the Company or the Utility in connection with the Chapter 11 Cases;

(v) effect or seek to effect, offer or propose to effect, cause or participate
in, or in any way assist or facilitate any other person to effect or seek, offer
or propose to effect or participate in, any tender or exchange offer, merger,
consolidation, acquisition, sale of all or substantially all assets or sale,
spinoff, splitoff or other similar separation of one or more business units,
scheme of arrangement, plan of arrangement or other business combination or
other similar extraordinary transaction (other than any recapitalization,
reorganization or other transaction commonly undertaken in a bankruptcy
proceeding similar to the Chapter 11 Cases) involving the Company, the Utility,
any of their respective subsidiaries, joint ventures, Securities or a material
amount of any of their respective assets or businesses (each, an “Extraordinary
Transaction”), or encourage, initiate or support any Third Party in any such
activity; provided that BlueMountain and its Affiliates shall be permitted to
sell or tender their Securities of the Company or the Utility, and otherwise
receive consideration, pursuant to any Extraordinary Transaction;

(vi) (A) call or request the calling of any meeting of shareholders of the
Company or the Utility, including by written consent; (B) seek representation
on, or nominate any candidate to, either of the Boards, except as contemplated
by this Agreement; (C) seek the removal of any member of either of the Boards,
except in connection with the enforcement of its rights under this Agreement;
(D) conduct a referendum of shareholders of the Company or the Utility; or
(E) present any proposal at any annual meeting or any special meeting of the
shareholders of the Company or the Utility;

(vii) make or cause to be made, or in any way knowingly encourage (including by
providing any critical or otherwise disparaging information to any of the
persons nominated for election to the Company Board in the Notice) any other
person to make or cause to be made, any public statement or announcement,
including in any document or report filed with or furnished to the SEC or
through the press, media, analysts or similar persons, that criticizes or
otherwise disparages the Company or any current or former member of the Company
Board or the Utility Board (other than the Renewable Designee or any replacement
thereof); provided, that BlueMountain and its Affiliates shall not be prohibited
from making, causing to be made, or in any way knowingly encouraging any other
person to make or cause to be made any such public statement or announcement if
the Company’s or the Utility’s slate of director nominees for election at the
2019 Annual Meeting changes following the date hereof (other than in accordance
with Section 1(g) );

 

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(viii) make any public disclosure, announcement or statement regarding any
intent, purpose, plan or proposal with respect to (A) the Boards, (B) the
Company or the Utility or their respective managements, policies, affairs,
securities or assets or (C) this Agreement that is inconsistent with the
foregoing provisions of this Section 4(a);

(ix) make any request for stock list materials or other books and records of the
Company or the Utility under Section 1600 or Section 1601 of the California
Corporations Code or other statutory or regulatory provisions providing for
shareholder access to books and records;

(x) institute, solicit, knowingly assist or join any litigation, arbitration or
other proceeding against or involving the Company or any of its current, former
or future directors or officers (including derivative actions) in order to
effect or take any of the actions expressly prohibited by this Section 4(a);
provided, however, that for the avoidance of doubt the foregoing shall not
(A) prevent BlueMountain or any of its Affiliates from (1) bringing litigation
to enforce the provisions of this Agreement, (2) making counterclaims with
respect to any proceeding initiated by, or on behalf of, the Company, the
Utility or any of their respective Affiliates against BlueMountain or any of its
Affiliates, (3) bringing bona fide commercial disputes that do not relate to the
subject matter of this Agreement, or (4) exercising statutory appraisal rights,
or (B) require BlueMountain or any of its Affiliates to opt out of any class
action commenced by a Third Party; provided, further, that the foregoing shall
also not prevent BlueMountain from responding to or complying with a validly
issued legal process;

(xi) enter into any discussions, negotiations, agreements or understandings with
any Third Party to take any action with respect to any of the foregoing, or
knowingly take any affirmative action to advise, assist, encourage or seek to
persuade any Third Party to take any action or make any statement with respect
to any of the foregoing provisions of this Section 4(a), or otherwise take or
cause any action or make any statement inconsistent with any of the foregoing
provisions of this Section 4(a); or

(xii) request, directly or indirectly, any amendment or waiver of the foregoing
provisions of this Section 4(a).

(b) Notwithstanding anything to the contrary in this Agreement, nothing in
Section 4(a) shall be deemed to prohibit BlueMountain, its Affiliates or their
respective directors, officers, partners, employees, members or agents (acting
in such capacity) from (i) communicating privately regarding or privately
advocating for or against any of the matters described in Section 4(a) with, or
from privately requesting an amendment or waiver of any of the foregoing
provisions of Section 4(a) from, the Company or the Utility or the Boards, so
long as such communications, advocacy or requests are not intended to, and would
not reasonably be expected to, require any public disclosure of such
communications, advocacy or requests or (ii) (A) voting on any matter submitted
to shareholders or creditors of the Company for a vote (including proposing,
supporting and voting on a plan of reorganization), (B) filing and prosecuting
any proof of claim or interest on behalf of itself or its Affiliates in the
Chapter 11 Cases (other than as may be expressly prohibited by Section 4(a)),
(C) subject to Section 4(a)(vii) (to the extent the restrictions imposed by
Section 4(a)(vii) are not inconsistent with any duties imposed in connection
with service on any committee), seeking the right to serve, and

 

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thereafter serving, as a member of any official committee appointed in the
Chapter 11 Cases, or any ad hoc committee or engaging in communications and
sharing information with any such committees or otherwise communicating with
shareholders, creditors or other stakeholders regarding the Chapter 11 Cases,
(D) filing any responsive or defensive pleading in opposition to any motion,
claim, contested matter or adversary proceeding or responding to any other
pleading made by any person in connection with or related to the Chapter 11
Cases (other than as may be expressly prohibited by Section 4(a)), or
(E) initiating, prosecuting or appearing in any adversary proceeding or
contested matter to protect BlueMountain’s and its Affiliates’ rights or
interests arising under the Bankruptcy Code or applicable law in connection with
or related to the Chapter 11 Cases and filing any pleadings, objections, motions
or agreements in connection therewith, solely to the extent relating to matters
that are not the subject matter of this Agreement (other than as may be
expressly prohibited by Section 4(a)) or (F) taking any such actions as
BlueMountain deems necessary or advisable to maintain, preserve, advance or
protect its and its Affiliates’ interests in connection with or related to the
Chapter 11 Cases (other than as may be expressly prohibited by Section 4(a)).

(c) Following such time as the Company or the Utility enters into an agreement
with any person or group that provides for an Extraordinary Transaction that
would result in the shareholders of the Company or the Utility immediately prior
to such transaction holding, directly or indirectly, less than 50% of the common
and equivalent equity of the surviving entity resulting from the business
combination after such transaction, BlueMountain and its Affiliates shall not be
prohibited from engaging in any of the activities specified in Section 4(a).

(d) Each of the Company and the Utility agree that, during the Standstill
Period, unless there is a material breach of any provision of this Agreement by
BlueMountain or its Affiliates, it shall not, and shall cause each of its
Affiliates not to, directly or indirectly, in any manner, alone or in concert
with others, make or cause to be made, or in any way knowingly encourage any
other person to make or cause to be made, any public statement or announcement,
including in any document or report filed with or furnished to the SEC or
through the press, media, analysts or similar persons, that criticizes or
otherwise disparages BlueMountain, its Affiliates or any of their respective
current or former directors or officers.

(e) BlueMountain will cause to be present for quorum purposes and vote or cause
to be voted all voting Securities beneficially owned by BlueMountain and its
respective Affiliates that they are entitled to vote as of the applicable record
date in favor of the election of the nominees for election to the Company Board
and the Utility Board at the 2019 Annual Meeting recommended by the Company
Board and the Utility Board in the joint proxy statement of the Company and the
Utility and on the joint proxy card of the Company and the Utility relating to
the 2019 Annual Meeting, so long as such nominees consist solely of the thirteen
members of the Company Board immediately following the execution and delivery of
this Agreement, Johnson and, if nominated for election to the Company Board, the
Renewable Designee;

(f) For purposes of this Agreement the terms “person” or “persons” shall mean
any individual, corporation (whether for-profit or not-for-profit), general or
limited partnership, limited liability or unlimited liability company, joint
venture, estate, trust, association, organization or other entity of any kind or
nature.

 

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(g) For purposes of this Agreement the term “Standstill Period” shall mean the
period commencing on the date BMCA is required to withdraw the Notice in
accordance with Section 3 and ending on the earliest of (i) the date that is
thirty (30) days prior to the expiration of the Company’s advance notice period
for the nomination of persons for election to the Company Board at the 2020
Annual Meeting, (ii) the effective date of any plan of reorganization in the
Chapter 11 Cases that contemplates changes in the composition of either of the
Boards and (iii) the occurrence of a material breach of any provision of this
Agreement by the Company, the Utility, the Company Board or the Utility Board.

5. Public Announcement. The Parties shall issue a press release regarding the
matters contained in this Agreement in the form set forth on Exhibit A no later
than 5:30 a.m. PDT on the next business day following the execution and delivery
hereof.

6. Expenses. The Company agrees that in the event that BlueMountain files an
application under Section 503(b) of the Bankruptcy Code for reimbursement of any
or all of its costs, fees and expenses incurred by BlueMountain or its
Affiliates in connection with the Potential Proxy Contest, other than those
costs, fees, or expenses of the nature set forth on Schedule 1 hereto (which
shall not be included in any such application), the Company, subject to the
fiduciary duties of the Company Board and the Utility Board, will not take a
position with respect to such application that is inconsistent (taking into
account the size, scope and reasonableness of the amount of fees sought and the
relative contributions of all shareholders seeking reimbursement) with the
position that the Company may take in the Bankruptcy Court with respect to any
similar application filed by any other shareholder of the Company or
representative thereof.

7. Notices. All notices and other communications under this Agreement shall be
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by e-mail (upon written confirmation of receipt
by e-mail or otherwise) or by Federal Express or registered or certified mail,
as follows:

If to the Company:

PG&E Corporation

77 Beale Street, Mail Code B24W

San Francisco, California 94105

Attn:        Linda Y. H. Cheng

                Vice President, Corporate Governance and Corporate Secretary

Email:      linda.cheng@pge.com

With copies (which shall not constitute notice) to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attn:        Mario A. Ponce

                Ravi Purushotham

Email:      mponce@stblaw.com

                rpurushotham@stblaw.com

 

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If to BlueMountain:

BlueMountain Capital Management, LLC

280 Park Avenue, 12th Floor

New York, New York 10017

Attn:        Paul Friedman

                General Counsel

Email:      pfriedman@bluemountaincapital.com

With copies (which shall not constitute notice) to:

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, New York 10006

Attn:        David Leinwand

                Paul M. Tiger

Email:      DLeinwand@cgsh.com

                 PTiger@cgsh.com

Irell & Manella LLP

1800 Avenue of the Stars, Suite 900

Los Angeles, California 90067

Attn:        Craig Varnen

                Gregory Klein

Email:     CVarnen@irell.com

                GKlein@irell.com

8. Governing Law; Forum. This Agreement shall be governed by and construed in
accordance with the laws of the state of California, without regard to its
conflict of laws principles. Any action brought to enforce this Agreement shall
be brought in the United States Bankruptcy Court for the Northern District of
California or, if such court does not have jurisdiction, any federal or state
court located in the state of California, and BlueMountain and the Company
hereby agree and irrevocably consent to the jurisdiction of such courts and
waive any objection to such venue on the grounds that it is an inconvenient
forum. BlueMountain and the Company agree and consent to personal jurisdiction
and venue in any such action brought in such courts and consent to service of
process in any such action by registered mail.

9. Equitable Relief. It is understood and agreed that money damages would not be
a sufficient remedy for any breach of this Agreement by any Party and that the
Parties shall be entitled to equitable relief, including injunctive relief
and/or specific performance, to prevent any such breach by the other Party,
without proof of actual damages, and each party expressly waives and forfeits
any statutory requirement to post a bond as a condition to obtaining such
relief. Such remedies shall not be deemed to be the exclusive remedies for a
breach by such other Party but shall be in addition to all other remedies
available at law or equity to the non-breaching Party. It is further understood
and agreed that, pursuant to California Civil Code § 1717, if any action is

 

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initiated by or against any Party to enforce the provisions of this Agreement,
the successful party in any such action shall be entitled to reimbursement from
the party accused of violating the terms hereof for all costs and expenses,
including reasonable counsel fees arising out of or relating to this Agreement,
including any non-contractual claims that contribute to the success of any
contract-based claim.

10. Amendment; Waiver. This Agreement may be modified or waived only by a
separate writing executed by BlueMountain and the Company that expressly so
modifies or waives this Agreement. Failure or delay in exercising any right,
power or privilege hereunder shall not operate as a waiver thereof, and no
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise of any right, power or privilege.

11. Entire Agreement. This Agreement constitutes the entire agreement between
BlueMountain and the Company with respect to the subject matter hereof and
supersedes all prior or contemporaneous agreements, understandings, negotiations
and discussions with respect thereto, whether oral or written.

12. Severability. If at any time subsequent to the date hereof, any provision of
this Agreement shall be held by any court of competent jurisdiction to be
invalid, illegal or unenforceable, such provision shall be of no force and
effect to the extent of such invalidity, illegality or unenforceability, but the
illegality or unenforceability of such provision shall have no effect upon the
legality or enforceability of any other provision of this Agreement.

13. No Party as Drafter. None of the Parties nor their respective attorneys
shall be deemed to be the drafter of this Agreement for purposes of interpreting
or construing any of the provisions of this Agreement. This Agreement shall be
interpreted in accordance with the fair meaning of its language and not strictly
for or against any of the Parties. In this regard, the Parties stipulate and
agree that the terms of this Agreement are neither uncertain nor ambiguous;
accordingly, each Party waives the applicability of California Civil Code §§
1649 and 1654.

14. Authority. Each of the Parties represents and warrants that it has full
power and authority to execute, deliver and perform this Agreement. Each of the
signatories hereto represents and warrants that he or she has been duly
authorized to execute this Agreement on behalf of the Party for whom he or she
signs and to bind such Party to this Agreement. The Parties stipulate and agree
that this Agreement does not need to be approved by any court in connection with
the bankruptcy petition filed by the Company or the Utility, but if such court
ultimately were to conclude that approval is required, the Parties agree, at
their own expense, to take any reasonable actions necessary to obtain such
approval and agree not to take any action, or support any action by any third
party, whether directly or indirectly, to oppose approval of this Agreement.

15. Counterparts. This Agreement may be executed by the signatories hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Pursuant to California Civil Code § 1633.1 et seq., the Parties
confirm their agreement and intention to be bound by electronic signatures
affixed to this Agreement.

[Signature Page Follows]

 

11

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IN WITNESS WHEREOF, each of the Parties has executed this Agreement, or caused
the same to be executed by its duly authorized representative, as of the date
first written above.

 

PG&E CORPORATION By:  

/s/ Janet C. Loduca

Name:

Title:

 

Janet C. Loduca

Senior Vice President and Interim General Counsel

[Signature Page to Settlement Agreement]

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BLUEMOUNTAIN CAPITAL MANAGEMENT, LLC By:  

/s/ David O’Mara

Name:

Title:

 

David O’Mara

Deputy General Counsel

[Signature Page to Settlement Agreement]