Exhibit 10.1

TAX BENEFIT PAYMENT AGREEMENT

This TAX BENEFIT PAYMENT AGREEMENT (this “Agreement”) is entered into as of [•],
by and among PG&E Corporation, a California corporation (“PG&E”), Pacific Gas
and Electric Company, a California corporation (the “Utility”; together with the
Utility, the “Debtors”), and the Fire Victim Trust, a [•] (the “Trust”). PG&E,
the Utility and the Trust are sometimes referred to in this Agreement
individually as a “Party” and collectively as the “Parties”.

RECITALS

WHEREAS, on January 29, 2019, the Debtors filed voluntary petitions for relief
under chapter 11 of title 11 of the U.S. Code in the U.S. Bankruptcy Court of
the Northern District of California (the “Bankruptcy Court”).

WHEREAS, on [•], the Bankruptcy Court entered an order confirming the [•] (the
“Plan”). Capitalized terms used, but not defined in this Agreement, shall have
the meanings given to them in the Plan.

WHEREAS, the Trust is the “Fire Victim Trust” as defined in the Plan and is
organized to administer, process, settle, resolve, liquidate, satisfy, and pay
all Fire Victim Claims.

WHEREAS, pursuant to the Plan, the Debtors have agreed to issue, transfer, or
pay to, as applicable, the Trust for the benefit of holders of Fire Victim
Claims the Aggregate Fire Victim Consideration consisting of, among other
things, (i) on the Effective Date, pursuant to and as more particularly provided
in Section 1.6 of the Plan, $6.750 billion in New HoldCo Common Stock (issued at
Fire Victim Equity Value), which shall not be less than 20.9% of the New HoldCo
Common Stock assuming the Utility’s allowed return on equity as of the date of
the Tort Claimants RSA and $5.40 billion in cash, and other elements
constituting part of the Aggregate Fire Victim Consideration, and (ii) on the
terms set forth in this Agreement and the Plan, an additional $1.350 billion in
cash (the amount described in clause (ii) of this recital, the “Aggregate Tax
Benefit Payment Amount”).

NOW, THEREFORE, in consideration of the foregoing and the respective covenants
and agreements set forth herein, and intending to be legally bound hereby, the
Parties agree as follows:

ARTICLE I

DEFINITIONS; INTERPRETATION

Section 1.1 Definitions. As used in this Agreement, the terms set forth in this
Section 1.1 shall have the following meanings:

(a) “2021 Payment” means an amount in cash payable on or before the First
Payment Date equal to the lesser of (i) $650.0 million and (ii) the Wildfire
Claim Tax Benefits for the Utility’s taxable year ended December 31, 2020.

(b) “2022 Payment” means an amount in cash equal to the 2022 Payment Cap.

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(c) “2022 Payment Cap” means an amount in cash payable on or before the Final
Payment Date equal to the (i) the Aggregate Tax Benefit Payment Amount minus
(ii) the 2021 Payment plus any 2022 Prepayment Amount.

(d) “2022 Prepayment Amount” means an amount, if greater than zero, equal to
(i) the Wildfire Claim Tax Benefits for the Utility’s taxable year ended
December 31, 2020 minus (ii) $650.0 million, up to the Aggregate Tax Benefit
Payment Amount.

(e) “Agreement” has the meaning set forth in the preamble of this Agreement.

(f) “Aggregate Tax Benefit Payment Amount” has the meaning set forth in the
recitals of this Agreement.

(g) “Bankruptcy Court” has the meaning set forth in the recitals of this
Agreement.

(h) “Business Day” means a day other than Saturday, Sunday or any day on which
commercial banks in New York, New York are authorized or required by law to
close.

(i) “Change of Control” means the occurrence of any of the following events at
any time after the Effective Date: (i) if any Person or “group” (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, or any
successor provisions thereto), other than PG&E or the Trust (whether directly or
indirectly, including as a holder of PG&E), shall at any time have acquired
direct or indirect beneficial ownership (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934) of securities of the Utility
representing more than 50% of the combined voting power of the Utility’s then
outstanding voting securities, (ii) if any Person or “group” (within the meaning
of Section 13(d) of the Securities Exchange Act of 1934, or any successor
provisions thereto) (other than the Trust) shall at any time have acquired
direct or indirect beneficial ownership (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934) of securities of PG&E representing
more than 50% of the combined voting power of PG&E’s then outstanding voting
securities, (iii) upon the consummation of any merger, consolidation,
recapitalization, reclassification or other similar transaction involving the
Utility (or PG&E) where, immediately after giving effect to such transaction,
the direct or indirect beneficial owners of the voting securities of the Utility
(or PG&E) immediately prior to such transaction beneficially (directly or
indirectly) own, by reason of such holders owning stock in the Utility (or PG&E)
immediately before the transaction, less than a majority of the voting power of
the outstanding voting securities of the Utility (or PG&E, as applicable), the
Person that is the survivor (or the equivalent) of the transaction, (iv) the
shareholder(s) of the Utility (or the PG&E) approve a plan of liquidation or
dissolution of the Utility or there is consummated an agreement or series of
related agreements for the sale, lease or other disposition, directly or
indirectly, by the Utility of all or substantially all of the Utility’ assets,
or (v) an “Ownership Change” (within the meaning of Section 382(g) of the Tax
Code or any successor provision) of the Utility or the PG&E occurring after and
other than as a result of the occurrence of the Effective Date. For purposes of
this definition, a Person shall not be deemed to have beneficial ownership of
securities subject to a stock purchase agreement, merger agreement or similar
agreement until the consummation of the transactions contemplated by such
agreement.

 

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(j) “Debtors” has the meaning set forth in the recitals of this Agreement.

(k) “Eligible Bank” means any commercial bank having a senior unsecured debt
rating by Moody’s of A3 or better and by S&P of A- or better, which is domiciled
in the United States or has a branch office in the United States and is
domiciled in a country which is a member of the OECD.

(l) “Financing Event” means any transaction or series of transactions pursuant
to which the Utility monetizes, securitizes, sells, assigns, transfers, or
grants a lien, security interest or other encumbrance on any of the Wildfire
Claim Tax Deductions or any of its interests therein and which in all events
shall be deemed to include, without limitation, any securitization referred to
in the Utility Securitization Application.

(m) “First Payment Date” means January 15, 2021, or, if such date is not a
Business Day, the next succeeding Business Day.

(n) “First Payment Shortfall” means, as applicable, either (i) the 2021 Payment
received by the Trust on or prior to the First Payment Date is less than
$650.0 million or (ii) no 2021 Payment was received by the Trust on the First
Payment Date.

(o) “First Payment Shortfall Amount” means (x) in the case of clause (i) of the
definition of First Payment Shortfall, $650.0 million minus the amount of the
2021 Payment received by the Trust on or prior to the First Payment Date, and
(y) in the case of clause (ii) of the definition of First Payment Shortfall,
$650.0 million.

(p) “Final Payment Date” means January 15, 2022, or, if such date is not a
Business Day, the next succeeding Business Day.

(q) “Final Payment Shortfall” means the amount by which, if any, at the end of
the Final Payment Date the total of payments received in cash by the Trust
hereunder is less than the Aggregate Tax Benefit Payment Amount.

(r) “LC” has the meaning set forth in Section 2.2(a) hereof.

(s) “LC Issuance Date” means the date that is fifteen (15) Business Days after
the First Payment Date.

(t) “LC Issuer” has the meaning set forth in Section 2.2(a) hereof.

(u) “Mandatory Prepayment Amount” means an amount equal to, as of the date of a
Mandatory Prepayment Event, the difference between (i) the Aggregate Tax Benefit
Payment Amount and (ii) the aggregate Tax Benefit Payments paid in cash
hereunder to the Trust prior to such date.

(v) “Mandatory Prepayment Event” means the occurrence of a (i) Change of Control
or (ii) a Financing Event.

(w) “Moody’s” means Moody’s Investors Service, Inc., or its successors and
assigns.

 

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(x) “OECD” means the countries constituting the “Contracting Parties” to the
Convention on the Organisation For Economic Co-operation and Development, as
such term is defined in Article 4 of such Convention.

(y) “Party” and “Parties” have the meaning set forth in the preamble to this
Agreement.

(z) “Person” means any individual, corporation, firm, partnership, joint
venture, limited liability company, estate, trust, business association,
organization, governmental entity or other entity.

(aa) “PG&E” has the meaning set forth in the recitals of this Agreement.

(bb) “Plan” has the meaning set forth in the recitals of this Agreement.

(cc) “S&P” means Standard & Poor’s Ratings Services, or its successors and
assigns.

(dd) “Tax Benefit Payment” has the meaning set forth in Section 2.1.

(ee) “Tax Code” means the Internal Revenue Code of 1986, as amended.

(ff) “Tax Rate” means, with respect to the applicable taxable year of the
Utility, the Utility’s expected combined U.S. federal, state, and local income
tax rate, as determined by a nationally recognized public accounting firm
retained by the Utility in good faith. For calendar year 2020, the Tax Rate is
27.9836%.

(gg) “Trust” has the meaning set forth in the preamble of this Agreement.

(hh) “Utility” has the meaning set forth in the preamble of this Agreement.

(ii) “Utility Accounting Firm” has the meaning set forth in Section 2.1.

(jj) “Utility Income Amount” means, with respect to the applicable taxable year
of the Utility, the greater of (i) the amount determined by application of the
formula set forth on Schedule 1.1(j)(j) and (ii) zero dollars ($0).

(kk) “Utility Securitization Application” means the Application of Pacific Gas
And Electric Company (U 39 E) for (1) Administration of Stress Test Methodology
Developed Pursuant to Section 451.2(B) and (2) Determination That $7.5 Billion
of 2017 Catastrophic Wildfire Costs and Expenses are Stress Test Costs that May
Be Financed Through Issuance of Recovery Bonds, dated as of and filed with the
California Public Utilities Commission on April 30, 2020.

(ll) “Wildfire Claim Tax Benefits” means, with respect to the applicable taxable
year of the Utility, an amount equal to the product of (i) the Tax Rate and
(ii) the Wildfire Claim Tax Deductions; provided that the amount of Wildfire
Claim Tax Deductions (1) shall not exceed the Utility Income Amount for such
year (which amount shall be assumed to be the taxable income of the Utility for
U.S. federal (and applicable state and local) income tax purposes for the
applicable taxable year), and (2) shall take into account all applicable
limitations on the utilization of such deductions (including pursuant to
Sections 172 and 382 of the Tax Code).

 

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(mm) “Wildfire Claim Tax Deductions” means the U.S. federal (and state and
local) tax deductions resulting from the payment of cash or delivery of other
consideration to satisfy Fire Claims pursuant to the Plan, including the portion
of any net operating loss carryovers attributable to such deductions.

Section 1.2 Rules of Construction. The words “hereof”, “herein” and “hereunder”
and words of like import used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement. The captions
herein are included for convenience of reference only and shall be ignored in
the construction or interpretation hereof. References to Sections and Schedules
are to Sections and Schedules of this Agreement unless otherwise specified. All
Schedules annexed hereto or referred to herein are hereby incorporated in and
made a part of this Agreement as if set forth in full herein. Any singular term
in this Agreement shall be deemed to include the plural, and any plural term the
singular. Whenever the words “include”, “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation”, whether or not they are in fact followed by those words or words of
like import. “Writing”, “written” and comparable terms refer to printing, typing
and other means of reproducing words (including electronic media) in a visible
form. References to any statute, law or regulation shall be deemed to refer to
such statute, law or regulation as amended from time to time and to any rules or
regulations promulgated thereunder. References from or through any date mean,
unless otherwise specified, from and including or through and including,
respectively. The word “extent” in the phrase “to the extent” shall mean the
degree to which a subject or other theory extends and such phrase shall not mean
“if”. The Parties have participated jointly in the negotiation and drafting of
this Agreement, and, in the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as jointly drafted by
the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any provision of this
Agreement. The terms “or”, “any” and “either” are not exclusive, except to the
extent expressly provided otherwise.

ARTICLE II

TAX BENEFIT PAYMENTS

Section 2.1 Tax Benefit Payments. The Utility shall make the following payments
to the Trust in cash (each, a “Tax Benefit Payment”):

(a) on or before the First Payment Date, the Utility shall (i) pay to the Trust
an amount equal to the 2021 Payment plus the 2022 Prepayment Amount (if any) and
(ii) provide the Trust with a statement, prepared by the Utility in good faith
and in consultation with PriceWaterhouseCoopers LLP, a nationally recognized
accounting firm retained by the Utility (“Utility Accounting Firm”), setting
forth, in reasonable detail, the calculation of such payment in accordance with
this Agreement along with supporting schedules as well as the identification of
any material assumptions that were utilized in preparing such calculation;

 

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(b) on or before the Final Payment Date, the Utility shall (i) pay to the Trust
an amount equal to the 2022 Payment Cap, and (ii) provide the Trust with a
statement, prepared by the Utility in good faith and in consultation with the
Utility Accounting Firm, setting forth, in reasonable detail, the calculation of
such payment in accordance with this Agreement along with supporting schedules
as well as the identification of any material assumptions that were utilized in
preparing such calculation; and

(c) notwithstanding the foregoing, the Utility shall, if applicable, (i) make
any payment when and as required pursuant to Section 2.3 hereof and (ii) provide
the Trust with a statement prepared by the Utility in good faith and in
consultation with the Utility Accounting Firm setting forth, in reasonable
detail, the calculation of such payment in accordance with this Agreement along
with supporting schedules as well as the identification of any material
assumptions that were utilized in preparing such calculation.

Section 2.2 Letter of Credit.

(a) In the event that on the First Payment Date, a First Payment Shortfall
exists for any reason, then the Utility shall, no later than the LC Issuance
Date, cause to be issued one or more unconditional stand-by letters of credit
(individually and collectively, the “LC”) from one or more LC issuers each of
which must be an Eligible Bank (each such issuer, individually and collectively,
an “LC Issuer”) and otherwise reasonably acceptable to the Trust. There shall be
no more than five LC Issuers and no more than five LCs. Each such LC shall be
substantially in the form of Exhibit A hereof and otherwise in form and
substance satisfactory to the Trust, and shall: (i) name the Trust as
beneficiary, (ii) be, in the aggregate with each other LC, in a stated amount
equal to the First Payment Shortfall Amount, (iii) provide that it is payable at
sight, in whole or in part (with no approval or confirmation from the Utility or
other drawing conditions), on or after the Final Payment Date, or, in the case
of a Mandatory Prepayment Event, as set forth pursuant to Section 2.3 hereof,
and (iv) expire no earlier than February 8, 2022. The Trust may draw on the LCs
in an aggregate amount equal to the difference between (i) the Aggregate Tax
Benefit Payment Amount and (ii) the aggregate Tax Benefit Payments previously
paid in cash hereunder to the Trust.

(b) If the LC or LCs have not been issued in accordance with Section 2.2(a)
hereof within ten (10) days of the LC Issuance Date, then the Trust shall have
the right to file the stipulated judgment attached hereto as Exhibit B-1 against
the Utility in any federal or state court of competent jurisdiction in the State
of California the amount of the First Payment Shortfall solely based on a
declaration by the trustee of the Trust that the Utility has failed to comply
with Section 2.2(a) of this Agreement. Such judgment shall unconditionally
require the Utility to pay the First Payment Shortfall. The Debtors hereby waive
the right to contest and appeal such stipulated judgment.

 

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Section 2.3 Mandatory Prepayments.

(a) If a Change of Control occurs, then within fifteen (15) days of such Change
of Control, (i) the Mandatory Prepayment Amount shall become automatically due
and payable without any notice or other action from the Trust; (ii) the Utility
shall pay the Trust the Mandatory Prepayment Amount, (iii) to the extent the
Mandatory Prepayment Amount is not paid in full on such date, and the LC has
been issued and is outstanding pursuant to Section 2.2(a) hereof, the Trust may
draw on the LC up to the lesser of the stated amount thereof and the unpaid
portion of the Mandatory Prepayment Amount, and (iv) the Utility shall provide
the Trust with a statement prepared by the Utility in good faith and in
consultation with the Utility Accounting Firm setting forth, in reasonable
detail, the calculation of such payment in accordance with this Agreement along
with supporting schedules as well as the identification of any material
assumptions that were utilized in preparing such calculation.

(b) If a Financing Event occurs, then (i) the Mandatory Prepayment Amount shall
become automatically due and payable without any notice or other action from the
Trust upon the later of (x) the First Payment Date and (y) fifteen (15) days
after the consummation of such Financing Event; (ii) the Utility shall pay the
Trust on the applicable payment date (as determined pursuant to clause
(i) immediately above) an amount equal to the Mandatory Prepayment Amount,
(iii) to the extent the Mandatory Prepayment Amount is not paid in full on such
date, and the LC has been issued and is outstanding pursuant to Section 2.2(a)
hereof, the Trust may draw on the LC up to the lesser of the stated amount
thereof and the unpaid portion of the Mandatory Prepayment Amount, and (iv) the
Utility shall provide the Trust with a statement prepared by the Utility in good
faith and in consultation with the Utility Accounting Firm setting forth, in
reasonable detail, the calculation of such payment in accordance with this
Agreement along with supporting schedules as well as the identification of any
material assumptions that were utilized in preparing such calculation.

Section 2.4 Final Payment Shortfall. In the event that there is a Final Payment
Shortfall on the Final Payment Date, then on February 8, 2022, the Trust shall
have the right to file the stipulated judgment attached hereto as Exhibit B-2
against the Utility in any federal or state court of competent jurisdiction in
the State of California in the amount of the Final Payment Shortfall solely
based on a declaration by the trustee of the Trust that a Final Payment
Shortfall has occurred in consequence of which the Utility has failed to comply
with this Agreement. Such judgment shall unconditionally require the Utility to
pay the Final Payment Shortfall. The Debtors hereby waive the right to contest
and appeal such stipulated judgement.

Section 2.5 Payment Instructions. All payments by the Utility to the Trust
pursuant to this Agreement shall be paid by wire transfer of immediately
available funds to the bank account or accounts set forth on Schedule 2.5, as
such Schedule may be amended from time to time by the Trust upon written notice
to the Utility.

 

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ARTICLE III

REPRESENTATIONS OF DEBTORS

As a material inducement for the Trust to enter into this Agreement and
consummate the transactions contemplated by this Agreement, the Debtors hereby
represent and warrant to the Trust, as of the date hereof, the following:

Section 3.1 Capacity; Noncontravention.

(a) Each Debtor has all necessary power and authority and all requisite
governmental licenses, authorizations, consents and approvals to execute and
deliver this Agreement and to perform all of its obligations hereunder. This
Agreement has been duly executed and delivered by each Debtor and constitutes a
legal, valid and binding obligation of each Debtor, enforceable against each
Debtor in accordance with its terms except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, receivership, moratorium or other
laws affecting creditors’ rights generally and by general principles of equity.

(b) The execution and delivery of this Agreement, and the consummation by each
Debtor of the transactions described herein, does not (a) contravene the terms
of its corporate charter, by-laws, operating agreement or equivalent,
(b) conflict with or result in any breach or contravention of, or the creation
of any lien under, or require any payment to be made under (i) any material
contract to which the Debtor is a party or affecting such Debtor or the
properties of the Debtors or (ii) any material order, injunction, writ or decree
of any governmental authority or any arbitral award to which any Debtor or its
property is subject or (c) violate any law, regulation, rule, or court order in
any material respect.

Section 3.2 Approvals. All approvals, filings, declarations or registration with
any governmental authority or otherwise which are necessary for each of (i) the
execution and delivery of this Agreement by the Debtors to the Trust, and
(ii) to create a fully binding commitment of the Debtors as of the date of this
Agreement with respect to each of the terms of this Agreement without
modification have, in each case, been made and obtained by the Debtors prior to
the date hereof.

ARTICLE IV

MISCELLANEOUS

Section 4.1 Negative Pledge. During the term of this Agreement, no Debtor shall
enter into any agreement, amendment or other modification governing or
guaranteeing any indebtedness that would prohibit, condition, or restrict the
Utility from timely performing its obligations under this Agreement. Other than
in connection with a transaction that will result in a Mandatory Prepayment
Event under this Agreement, the Utility shall not grant a Lien on or otherwise
encumber the Wildfire Claim Tax Benefits or Wildfire Claim Tax Deductions.

Section 4.2 Termination. This Agreement shall terminate on the date on which the
Aggregate Tax Benefit Payment Amount has been paid in full in cash to the Trust.

Section 4.3 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed duly given and
received (a) on the date of delivery if delivered personally, or by facsimile
upon confirmation of transmission by the sender’s fax machine if sent on a
Business Day (or otherwise on the next Business Day), (b) on the first Business
Day following the date of dispatch if delivered by a recognized next-day courier
service or (c) when sent by electronic mail (with hard copy to follow) during a
Business Day (or on the next Business Day if sent after the close of normal
business hours or on any non-Business Day). All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the Party to receive such notice:

If to the Debtors, to:

PG&E Corporation

77 Beale Street

San Francisco, CA 94105

Attention: Janet Loduca

 

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With a copy (which shall not constitute notice) to:

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

Attention: Stephen Karotkin, Jessica Liou, and Matthew Goren

(stephen.karotkin@weil.com, jessica.liou@weil.com, matthew.goren@weil.com)

- and -

Cravath, Swaine & Moore LLP

825 8th Avenue

New York, NY 10019

Attention: Richard Hall and C. Daniel Haaren (rhall@cravath.com,

dhaaren@cravath.com)

If to the Trust, to:

Hon. John K. Trotter, Trustee

Trustee

PG&E Fire Victim Trust

Two Embarcadero Center

Suite 1500

San Francisco, CA 94111

Email: trustee@firevictimtrust.com

with copies to:

Cathy Yanni Claims Administrator

PG&E Fire Victim Trust

Two Embarcadero Center

Suite 1500

San Francisco, CA 94111

Email: claimsadministrator@firevictimtrust.com

With a copy (which shall not constitute notice) to:

Brown Rudnick LLP

One Financial Center

Boston, MA 02111

Attn: David Molton, Philip Flink and Steven Pohl

Email: DMolton@brownrudnick.com; PFlink@brownrudnick.com;

SPohl@brownrudnick.com

Any Party may change its address or fax number by giving the other Party written
notice of its new address or fax number in the manner set forth above.

 

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Section 4.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the Parties and delivered to the other Parties, it being understood that all
Parties need not sign the same counterpart. Delivery of an executed signature
page to this Agreement by facsimile or electronic transmission (including by
pdf) shall be as effective as delivery of a manually signed counterpart of this
Agreement.

Section 4.5 Entire Agreement; Third Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the Parties with respect to the
subject matter hereof. This Agreement shall be binding upon and inure solely to
the benefit of each Party and its successors and permitted assigns. Except as
otherwise provided in the preceding sentence, nothing in this Agreement, express
or implied, is intended to or shall confer upon any other Person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.

Section 4.6 Governing Law; Jurisdiction; Jury Trial.

(a) Except to the extent the Bankruptcy Code or other U.S. federal law is
applicable, the rights, duties, and obligations arising hereunder shall be
governed by, and construed and enforced in accordance with, the laws of the
State of California, without giving effect to the principles of conflicts of law
thereof to the extent they would result in the application of the laws of any
other jurisdiction.

(b) Each Party hereto: (i) submits for itself and its property in any legal
action or proceeding relating to this Agreement, or for recognition and
enforcement of any judgment in respect thereof, to the jurisdiction of the
Bankruptcy Court, and to the extent the Bankruptcy Court does not have (or
abstains from exercising) jurisdiction, the jurisdiction of state and federal
courts with competent jurisdiction located in the State of California; (ii)
consents that any such action or proceeding may be brought in such courts and
waives any objection that it may now or hereafter have to the venue of any such
action or proceeding in any such court or that such action or proceeding was
brought in an inconvenient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Party at its
address set forth in Section 4.3 or at such other address which has been
notified to the Parties hereto; and (iv) agrees that nothing herein shall affect
the right to effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction.

(c) TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT.

Section 4.7 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially

 

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adverse to any Party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.

Section 4.8 Amendments; Waiver. No provision of this Agreement may be amended
unless such amendment is approved in writing by the Utility and the Trust. No
provision of this Agreement may be waived unless such waiver is in writing and
signed by the Party or Parties against whom the waiver is to be effective.

[Signature Page(s) Follow]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of
the day and year first above written.

 

PG&E CORPORATION By:   /s/ DAVID THOMASON Name:   David Thomason Title:   Vice
President and Controller PACIFIC GAS AND ELECTRIC COMPANY By:   /s/ DAVID
THOMASON Name:   David Thomason Title:   Vice President, Chief Financial Officer
and Controller FIRE VICTIM TRUST By:   /s/ JOHN K. TROTTER Name:   Hon. John K.
Trotter Title:   Trustee

 

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EXHIBIT A

Form of Letter of Credit

(to be attached)

 

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EXHIBIT B-1

Stipulated Judgment – First Payment Shortfall

(to be attached)

 

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Exhibit B-2

Stipulated Judgment – Final Payment Shortfall

 

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Schedule 1.1(j)(j)

Formula for Calculation of Utility Income Amount

[(Rate Base x equity ratio x return on equity)1 / (1 – Tax Rate)] minus PG&E
debt interest minus unrecoverable Utility debt interest minus the Utility’s
required annual contribution to the wildfire fund created by AB 1054

For the purposes of this Schedule 1.1(j)(j), the “Rate Base” shall mean the
total company rate base as approved by the California Public Utilities
Commission in the Utility’s 2020 General Rate Case proceeding but shall not
include any fire risk mitigation capital expenditures that must be excluded from
the Utility’s equity rate base under AB 1054.

 

 

1 

For the avoidance of doubt, should “(rate base x equity ratio x return on
equity)” include any Effective Date or pre-Effective Date net operating losses
of the Debtors, all such net operating losses of the Debtors shall be excluded
when calculating any amount pursuant to the “(rate base x equity ratio x return
on equity)” formula.

 

16