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WEIL, GOTSHAL & MANGES LLP

Stephen Karotkin (pro hac vice) 

(stephen.karotkin@weil.com)

Ray C. Schrock, P.C. (pro hac vice) 

(ray.schrock@weil.com)

Jessica Liou (pro hac vice) 

(jessica.liou@weil.com) 

Matthew Goren (pro hac vice) 

(matthew.goren@weil.com)

767 Fifth Avenue

New York, NY 10153-0119 

Tel: 212 310 8000

Fax: 212 310 8007

KELLER & BENVENUTTI LLP

Tobias S. Keller (#151445)

(tkeller@kellerbenvenutti.com) 

Jane Kim (#298192) 

(jkim@kellerbenvenutti.com) 

650 California Street, Suite 1900

San Francisco, CA 94108

Tel: 415 496 6723

Fax: 650 636 9251

Attorneys for Debtors

and Debtors in Possession

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

In re:

PG&E CORPORATION,

- and -

PACIFIC GAS AND ELECTRIC

COMPANY,

Bankruptcy Case No. 19-30088 (DM)

Chapter 11 

(Lead Case) (Jointly Administered)

[Related Docket Ref: Docket No.: 3841] 

SUMMARY OF KEY ELEMENTS OF 

DEBTORS’ JOINT CHAPTER 11 PLAN 

OF REORGANIZATION DATED 

SEPTEMBER 9, 2019 

Date: September 24, 2019

Time: 9:30 a.m. (Prevailing Pacific Time) 

Place: United States Bankruptcy Court

Courtroom 17, 16th Floor

San Francisco, CA 94102

Debtors.

 Affects PG&E Corporation

 Affects Pacific Gas and Electric Company

 Affects both Debtors

* All papers shall be filed in the Lead Case,

No. 19-30088 (DM).

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Pending the filing of a formal Disclosure Statement under section 1125 of the 

Bankruptcy Code with respect to the Debtors’ Joint Chapter 11 Plan of Reorganization, dated 

September 9, 2019 (the “Plan”), the Court requested that PG&E Corporation (“PG&E Corp.”) 

and Pacific Gas and Electric Company (the “Utility” and, together with PG&E Corp., the 

“Debtors”) file with the Plan a brief summary of the principal Plan provisions. That summary is 

annexed hereto as Exhibit A and, as indicated therein, is qualified in its entirety by the actual 

terms and provisions of the Plan that is being filed contemporaneously herewith.

In view of the current uncertainty of the Debtors’ aggregate liability with respect 

to both Subrogation Wildfire Claims and Wildfire Claims held by individuals and public entities 

that have not settled with the Debtors and the upcoming hearings with respect to the estimation 

of such claims, the Plan and the funding associated therewith necessarily will be subject to 

amendment to address the outcome of such proceedings or any consensual resolution of such 

liabilities.

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Exhibit A

Outline of Key Elements of Debtors’ Joint Chapter 11 Plan of Reorganization1

The Debtors’ Joint Chapter 11 Plan of Reorganization (the “Plan”) is structured 

and designed to enable the Debtors to (a) fairly and expeditiously treat prepetition wildfire claims 

in full compliance with California Assembly Bill 1054 (“AB 1054”), (b) achieve a rate-neutral 

solution, on average, for customers, (c) meet the AB 1054 June 30, 2020 timeline for confirmation 

of the Plan, (d) achieve required CPUC approvals, (e) support California’s clean energy goals,

and (f) ensure that the Reorganized Debtors have access to sufficient liquidity upon emergence 

from chapter 11. 

As noted below, the Plan will not become effective unless (a) the Debtors’ 

aggregate liability with respect to Wildfire Claims2 held by individuals (and public entities 

that have not settled with the Debtors), as estimated by the Court, does not exceed $8.4 

billion, and (b) the Debtors’ aggregate liability with respect to Subrogation Wildfire Claims,

as estimated by the Court, does not exceed $8.5 billion.

A. Treatment of Allowed Claims and Equity Interests.

3

1. Administrative Expense Claims.

a.Description: Costs and expenses of administering the chapter 11 cases, 

including claims related to debtor-in-possession financing.

b.Treatment: Paid in full on the Plan Effective Date.

2. Priority Tax and Other Priority Claims.

a.Description: Tax and other claims entitled to priority in payment under 

the Bankruptcy Code.

b.Treatment: Paid in full on the Plan Effective Date, including any 

applicable postpetition interest.

 1 This summary is qualified in its entirety by the actual terms and provisions of the Plan.

2 Capitalized terms used herein but not otherwise defined have the meanings ascribed to such 

terms in the Plan.

3 The following categories of claims and equity interests are presented in a summary form for 

ease of reference, and do not correspond exactly to the more detailed classes of claims and 

equity interests contained in the Plan.

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3. Funded Debt Claims.

a.Description: All prepetition claims based on loans, bonds, or similar 

borrowed money claims outstanding as of the Petition Date.

b.Treatment: All Funded Debt Claims will be paid in full, in cash on the 

Plan Effective Date, including the payment of accrued and unpaid 

prepetition interest at the non-default contract rate, plus postpetition 

interest at the federal judgment rate. The Debtors believe that under the 

documents governing the Funded Debt Claims and applicable law, no 

make-whole premiums or similar amounts are payable upon payment of 

the Funded Debt Claims as provided in the Plan. Accordingly, payment 

of the Funded Debt Claims does not include the payment of any makewhole premiums or similar amounts. Notwithstanding the foregoing, if it 

is determined that any holder of a Funded Debt Claim is entitled to 

payment of a make-whole premium or similar amount or that postpetition 

interest is payable at a rate other than the federal judgment rate, the 

treatment of such claim shall be modified in a manner to render the claim 

unimpaired. 

c.Impairment and Voting: Unimpaired; Not entitled to vote on the Plan.

4. General Unsecured Claims.

a.Description: All prepetition unsecured claims (other than Funded Debt 

Claims, unliquidated Wildfire Claims held by individuals and certain 

limited public entities, Subrogation Wildfire Claims, settled Public 

Entities Wildfire Claims referred to below in paragraph 7, claims related 

to the Ghost Ship Fire, Workers’ Compensation Claims, and 2001 Utility 

Exchange Claims). Includes all prepetition trade claims, prepetition 

litigation claims (other than Wildfire-based litigation claims), and unpaid 

and liquidated Wildfire Claims that are the subject of prepetition 

settlement agreements.

b.Treatment: Paid in full on the Plan Effective Date, including any 

applicable postpetition interest at the federal judgment rate.

c.Impairment and Voting: Unimpaired; Not entitled to vote on the Plan.

5. Wildfire Claims.

a.Description: All Wildfire Claims, including claims for personal injury, 

wrongful death, or property damage, arising out of the Butte Fire (2015), 

the North Bay Wildfires (2017), and the Camp Fire (2018) (other than 

Subrogation Wildfire Claims and Wildfire Claims held by the Public 

Entities that have settled with the Debtors, each as described below). 

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This includes all Wildfire Claims by both uninsured and underinsured 

claimants.4

b.Treatment: In accordance with AB 1054, on the Plan Effective Date, the 

Debtors will fund a trust with cash, bonds, or equity securities (or any 

combination of such cash, bonds, and equity securities) having a value 

equal to the amount estimated by the Court as the Debtors’ aggregate 

liability with respect to such Wildfire Claims.

c.Channeling Injunction: All such Wildfire Claims shall be assumed, 

resolved, and paid solely by the trust and from the trust’s assets in 

accordance with claims resolution procedures to be adopted by the trust 

(and which will be described in the Disclosure Statement). Holders of 

such Wildfire Claims shall have no recourse to the Debtors, the 

Reorganized Debtors, or their assets and properties.

d.Impairment and Voting: Impaired; Holders of such Wildfire Claims are 

entitled to vote on the Plan.

6. Subrogation Wildfire Claims.

a.Description: All Wildfire Claims arising out of the Butte Fire (2015), the 

North Bay Wildfires (2017), and the Camp Fire (2018) held by insurers 

or similar entities in connection with payments made to others on account 

of damages or losses arising from such wildfires.

b.Treatment: In accordance with AB 1054, on the Plan Effective Date, the 

Debtors will fund a trust with cash, bonds, or equity securities (or any 

combination of such cash, bonds, and equity securities) having a value 

equal to the amount estimated by the Court as the Debtors’ aggregate 

liability with respect to the Subrogation Wildfire Claims.

c.Channeling Injunction: All Subrogation Wildfire Claims shall be 

assumed, resolved, and paid solely by the trust and from the trust’s assets 

in accordance with claims resolution procedures to be adopted by the 

trust (and which will be described in the Disclosure Statement). Holders 

of Subrogation Wildfire Claims shall have no recourse to the Debtors, the 

Reorganized Debtors, or their assets and properties.

d.Impairment and Voting: Impaired; Holders of Subrogation Wildfire 

Claims are entitled to vote on the Plan.

7. Public Entities Wildfire Claims.

a.Description: Claims held by those Public Entities that entered into Plan 

Support Agreements with the Debtors that, among other things, settled 

 4 These claims are classified and treated as “Other Wildfire Claims” under the Plan. See Plan 

§§ 4.7, 4.20.

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their claims relating to the Butte Fire (2015), the North Bay Wildfires 

(2017), and the Camp Fire (2018).

b.Treatment: Payment of the settlement amount of $1 billion in cash, plus 

the establishment of a fund in the amount of $10 million to reimburse the 

Public Entities for legal fees and costs associated with any third party 

claims relating to the wildfires that may be brought against the Public 

Entities.

c.Impairment and Voting: Impaired; Public Entities are entitled to vote on 

the Plan.

8. Ghost Ship Fire Claims.

a.Description: Any claims arising from the Ghost Ship Fire.

b.Treatment: Each holder of a Ghost Ship Fire Claim shall be entitled to 

pursue its claim against the Reorganized Debtors.

c.Impairment and Voting: Unimpaired; Not entitled to vote on the Plan.

9. Subordinated Debt Claims. 

a.Description: Any claims subordinated under section 510(b) of the 

Bankruptcy Code arising from rescission of a purchase or sale of a debt 

security of the Debtors, or for damages arising from the purchase or sale 

of such a debt security, including any related claims for reimbursement, 

contribution or indemnification. 

b.Treatment: Paid in full on the Plan Effective Date. 

c.Impairment and Voting: Unimpaired; Not entitled to vote on the Plan. 

10. PG&E Corporation Common Stock.

a.Description: The publicly traded common stock of PG&E Corporation

(parent, holding company), and claims subordinated under section 510 of 

the Bankruptcy Code arising from rescission of a purchase or sale of such 

common stock, or for damages arising from the purchase or sale of such 

common stock, including any related claims for reimbursement, 

contribution or indemnification (collectively, “PG&E Common 

Interests”).

b.Treatment: Each holder of a PG&E Common Interest shall retain such

PG&E Common Interest, subject to dilution from any common stock or 

securities linked to common stock issued under the Plan. If a rights 

offering is implemented in connection with the implementation of the 

Plan, holders of PG&E Common Interests shall have the right to 

participate in the rights offering.

c.Impairment and Voting: Impaired; Holders of PG&E Common Interests

are entitled to vote on the Plan.

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B. Certain Plan Implementation Provisions.

1. AB 1054. The Reorganized Debtors will participate in the go-forward wildfire 

fund established under AB 1054, and will make the following required 

contributions to the fund on the Plan Effective Date:

a.Approximately $4.8 billion initial contribution; and

b.Approximately $193 million initial annual contribution.

2. Assumption of Certain Executory Contracts; Employee Obligations.

a.On the Plan Effective Date, all power purchase agreements and 

community choice aggregation servicing agreements will be assumed;

b.On the Plan Effective Date, all collective bargaining agreements will be 

assumed;

c.All allowed pension and employee claims and obligations will be paid in 

full; and

d.All allowed workers’ compensation claims will be paid in full in the 

ordinary course.

3. CPUC Approvals. Confirmation of the Plan is conditioned on obtaining all 

CPUC approvals required under AB 1054 and section 1129(a)(6) of the 

Bankruptcy Code, including:

a.Satisfactory provisions pertaining to authorized return on equity and 

regulated capital structure;

b.A disposition of proposals for certain potential changes to PG&E’s 

corporate structure and authorizations to operate as a utility;

c.Satisfactory resolution of claims for monetary fines or penalties for 

prepetition conduct;

d.Approval (or exemption from approval) of the financing structure and 

securities to be issued under the Plan; 

e.Approval of any hedges executed by the Utility in consultation with the 

CPUC staff;

f. The Utility’s governance structure; and 

g.Any approvals or determination with respect to the Plan and related 

documents that may be required by AB 1054.

4. Conditions to Occurrence of Plan Effective Date. In addition to certain other 

conditions, the occurrence of the Plan Effective Date is conditioned on the 

following:

a.The Debtors’ aggregate liability with respect to Wildfire Claims held by 

individuals and public entities that have not settled with the Debtors as 

estimated by the Court shall not exceed $8.4 billion; and

b.The Debtors’ aggregate liability with respect to Subrogation Wildfire 

Claims as estimated by the Court shall not exceed $8.5 billion.

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It shall not be a condition to the occurrence of the Plan Effective Date that 

wildfire recovery or similar bonds be available to fund the Plan or that legislation 

authorizing such bonds shall have been enacted. 

C. Summary of Plan Funding.

1. The Plan contemplates that the Debtors will emerge from chapter 11 with 

sufficient liquidity to support their ongoing operations.

2. The Plan will be funded through various sources, including:

a.A new equity offering or offerings; 

b.The issuance or incurrence of new debt at both the PG&E Corp. and 

Utility levels; and

c.If available (but not required), wildfire recovery or similar bonds.

In connection with the foregoing, the Debtors intend to enter into Backstop 

Commitment Letters with various financial institutions to backstop, if necessary, 

an equity offering of up to $14 billion on the terms set forth therein. Executed 

Backstop Commitment Letters from certain financial institutions are annexed 

hereto as Schedule 1, and the Debtors intend to solicit and expect to receive

additional Backstop Commitment Letters aggregating up to $14 billion. 

In addition, as previously disclosed, the Debtors have engaged in discussions 

with several money center banks that have indicated that the Debtors have ample 

access to deep pools of both debt and equity capital in order to finance their 

emergence from chapter 11. Several of these financial institutions have 

expressed high levels of confidence in their ability to raise in excess of $30 

billion of both debt and equity capital to satisfy claims, refinance indebtedness, 

and address other bankruptcy related and post emergence uses. Copies of highly 

confident letters from certain of these financial institutions are annexed hereto as 

Schedule 2. 

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Dated: September 9, 2019

 WEIL, GOTSHAL & MANGES LLP

 KELLER & BENVENUTTI LLP

/s/ Stephen Karotkin

Stephen Karotkin

Attorneys for Debtors and Debtors in Possession

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Schedule 1 

Backstop Commitment Letters

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EXECUTION VERSION

1 

September 9, 2019

PG&E Corporation 

77 Beale Street

P.O. Box 770000 

San Francisco, California 94177 

Re: Chapter 11 Plan Backstop Commitment Letter 

Ladies and Gentlemen:

Reference is hereby made to the chapter 11 bankruptcy cases, lead case no. 19-30088 (the 

“Chapter 11 Cases”), currently pending before the United States Bankruptcy Court for the Northern District 

of California (the “Bankruptcy Court”), in which PG&E Corporation (“PG&E” or the “Company”) and 

Pacific Gas and Electric Company (the “Utility” and together with PG&E, the “Debtors”) are debtors in 

possession. Reference is further made to the Chapter 11 plan of reorganization attached hereto as Exhibit 

A (the “Plan”) to implement the terms and conditions of the reorganization of the Debtors as provided 

therein. Capitalized terms used in this backstop commitment letter (this “Backstop Commitment Letter”) 

or in the exhibits hereto but not otherwise defined shall have the meanings ascribed to them in the Plan. 

The word “including” means “including, without limitation”. 

In order to facilitate the Debtors’ emergence from Chapter 11, pursuant to this Backstop 

Commitment Letter, and subject to the terms, conditions and limitations set forth herein and in consideration 

for the Backstop Commitment Premium, the undersigned Backstop Party (the “Backstop Party”) is willing 

to purchase, on the Effective Date, an amount of New HoldCo Common Stock up to its Backstop 

Commitment Amount (as defined herein) at the Backstop Price (as defined herein). 

In addition, PG&E has separately solicited and negotiated and expects to enter into substantially 

similar backstop commitment letters (“Other Backstop Commitment Letters”) with other funding sources 

(“Other Backstop Parties”) pursuant to which such Other Backstop Parties will commit to purchase New 

HoldCo Common Stock on the Effective Date (such commitments, “Other Backstop Commitments,” and 

together with this Backstop Commitment, the “Aggregate Backstop Commitments”).

1. Equity Offerings.

a. Structure. The Plan, among other things, shall provide that, on the Effective Date,

Reorganized HoldCo shall issue shares of New HoldCo Common Stock for up to $14 billion of aggregate 

net cash proceeds to Reorganized Holdco (the “Equity Offering Cap”). PG&E shall structure the offering 

of any such shares of New HoldCo Common Stock (or rights pursuant to which any such shares may be 

issued or other securities convertible into any such shares) (the “Equity Offering”) in accordance with the 

terms of this Section 1, including the following parameters: 

(i) if the Implied P/E Multiple with respect to such Equity Offering equals

or exceeds the greater of (A) 13.5 and (B) 13.5 times one plus any percentage change of the 

Applicable Utility Index Multiple (as defined herein) as measured on the date of this Backstop 

Commitment Letter and the Determination Date (as defined herein), then PG&E shall be 

permitted to conduct the Equity Offering in any form of primary equity offering (including any 

public offering, regular way offering, at-the-market equity offering, block trade, modified Dutch 

auction or other auction pricing mechanism, rights offering, private placement, “PIPE” sale or 

other registered or unregistered transaction) upon such terms and conditions as may be 

determined by the Board (a “Permitted Equity Offering”), including such terms and conditions 

that are reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation 

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with Jones Day) in order to avoid an “ownership change” within the meaning of Section 382 and 

the Treasury Regulations promulgated thereunder or to otherwise preserve the ability of the 

Debtors to utilize their net operating loss carryforwards and other tax attributes (collectively, the 

“NOLs”);

(ii) if the Implied P/E Multiple with respect to the Equity Offering is less 

than the Implied P/E Multiple required for a Permitted Equity Offering in Section 1(a)(i) above, 

but equals or exceeds the lesser of (A) 12 and (B) 12 times one plus the percentage change of the 

Applicable Utility Index Multiple as measured on the date of this Backstop Commitment Letter 

and the Determination Date (the “Rights Offering Threshold Multiple”), then PG&E shall 

structure the Equity Offering such that (Y) at least 80%, determined assuming the exercise in full 

of all of the Rights, of the aggregate cash proceeds of the Equity Offering is to be raised through 

the exercise of purchase rights (the “Rights”) distributed to holders of PG&E common stock 

(“Existing Shareholders”) as of a record date to be determined by the Board (the “Record Date”) 

to purchase shares of New HoldCo Common Stock for cash at a price set forth below (the “Rights 

Offering”) and (Z) the balance of the aggregate cash proceeds of the Equity Offering is to be 

raised through any other form of primary equity offering (including any public offering, regular 

way offering, at-the-market equity offering, block trade, modified Dutch auction or other auction 

pricing mechanism, private placement, “PIPE” sale or other registered or unregistered 

transaction), provided, that entities holding a majority of the Aggregate Backstop Commitments 

have not objected to the identity of the purchasers and ultimate purchasers, as applicable, in such 

Equity Offering, to the extent such Equity Offering is not a broadly syndicated underwritten 

public offering, within three business days of receipt of notice from PG&E; 

(iii) in both of paragraphs (i) and (ii) above, Reorganized Holdco may also 

raise equity capital (subject to the Equity Offering Cap) by calling on the Backstop Commitments 

(after giving effect to any reduction of the Backstop Commitments in connection with a Permitted 

Equity Offering or a Rights Offering, as applicable); and

(iv) if the Implied P/E Multiple with respect to the Equity Offering would be 

less than the Rights Offering Threshold Multiple or if for any other reason Reorganized Holdco is 

unable to execute an Equity Offering, then Reorganized Holdco shall not utilize either a 

Permitted Equity Offering or a Rights Offering and shall issue shares at the Backstop Price 

pursuant to the Backstop Commitments up to the Equity Offering Cap less the proceeds of any 

Additional Capital Sources. 

“Implied P/E Multiple” means, with respect to any Equity Offering, (A) the price per share at 

which shares of New Holdco Common Stock are offered to be sold in such Equity Offering (which price 

(x) in the case of an Equity Offering of rights, shall be the exercise price to acquire a share of New HoldCo 

Common Stock pursuant to such rights or (y) in the case of an Equity Offering of a security convertible 

into or exchangeable for shares of New HoldCo Common Stock, shall be the per share price implied by the 

conversion ratio used to convert the principal amount, liquidation preference or other face amount of such 

security into a number of shares of New HoldCo Common Stock) (the “Per Share Price”), times (B) the 

number of fully diluted shares of PG&E (calculated using the treasury stock method) that will be 

outstanding as of the Effective Date (assuming such Equity Offering and all other equity transactions 

contemplated by the Plan are consummated and settled on the Effective Date), divided by (C) the 

Normalized Estimated Net Income as of the Determination Date.

b. Additional Capital Sources. PG&E shall conduct the Equity Offering in 

accordance with the Plan. The net cash proceeds to PG&E of the Equity Offering shall not exceed the 

Equity Offering Cap, less the sum of (i) the principal amount of debt that is issued by PG&E in excess of 

$7 billion in connection with the Plan; (ii) the aggregate liquidation preference of preferred stock 

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(“Mandatory Convertible Preferred Stock”) that is distributed pursuant to the Plan to holders of Wildfire 

Claims, on the terms and conditions set forth on Exhibit B pursuant to the Plan; (iii) the principal amount 

of any Wildfire Victim Recovery Bonds issued in connection with the Plan; (iv) the proceeds of any 

preferred stock issued by the Utility (excluding any Utility Preferred Interests that are Reinstated pursuant 

to the Plan); (v) the proceeds of any third-party transactions based upon the monetization of any NOLs; and 

(vi) the principal amount of any other debt that is issued or reinstated by the Utility, excluding any debt that 

may be issued under clause (v) above, in excess of $27.35 billion in connection with the Plan (the 

“Additional Capital Sources”).

c. Rights Offering. With respect to the Rights Offering:

(i) the Rights will have a fixed exercise price equal to (a) the Rights 

Offering Threshold Multiple times (b) the Normalized Estimated Net Income as of the 

Determination Date, divided by (c) the number of fully diluted shares of PG&E (calculated using 

the treasury stock method) that will be outstanding as of the Effective Date (assuming all equity is 

raised by the exercise of all Rights);

(ii) the Rights shall be transferable;

(iii) the Board shall provide that holders of Rights who fully exercise their 

Rights will have over-subscription privileges to subscribe for additional shares of New HoldCo 

Common Stock to the extent other Rights are not exercised, with over-subscription procedures 

(including pro-ration rules) determined by the Board; 

(iv) the Board may provide that the Rights or Rights Offering include such 

terms and conditions that are reasonably advisable (based on the advice of the Debtors’ tax 

advisors after consultation with Jones Day) in order to avoid an “ownership change” within the 

meaning of Section 382 and the Treasury Regulations promulgated thereunder or to otherwise 

preserve the ability of the Debtors to utilize their NOLs, including limitations on the amount of 

Rights that are exercisable by holders who, together with persons who have a formal or informal 

understanding with such holders to make a coordinated acquisition of stock within the meaning of 

Treasury Regulations 1.382-3(a) (an “Entity”), beneficially own in excess of a specified 

percentage (e.g., 4.75%) of the outstanding shares of PG&E common stock, subject to exceptions 

to be determined by the Board; provided, however, that such terms and conditions shall not 

restrict existing holders of PG&E common stock (including any Entity) from acquiring shares 

that do not increase their aggregate beneficial ownership to more than 4.75% of the outstanding 

shares of PG&E common stock immediately after the completion of the Rights Offering; and

(v) the Rights will have such other terms and conditions as may be 

determined by the Board, as long as such other terms and conditions are consistent with the Plan 

and with every other provision of this Backstop Commitment Letter.

d. Subordinated Claims. To the extent provided in the Plan, the Debtors may issue 

Rights or New HoldCo Common Stock to holders of Claims against a Debtor that are subject to 

subordination pursuant to section 510(b) of the Bankruptcy Code and that arise from or are related to any 

equity security of the Debtor. 

e. Documentation. The definitive documentation for any Permitted Equity Offering 

or any Rights Offering shall be consistent with the Plan. For the avoidance of doubt, the organizational 

documents of the Reorganized HoldCo (including its charter) may include limitations and other terms that 

are reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation with Jones 

Day) in order to avoid an “ownership change” within the meaning of Section 382 and the Treasury 

Regulations promulgated thereunder or to otherwise preserve the ability of the Debtors to utilize their 

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NOLs; provided, however, that the organizational documents shall not be modified or amended in a manner 

that would restrict existing holders of PG&E common stock (including any Entity) from acquiring shares 

that do not increase their aggregate beneficial ownership to more than 4.75% of the outstanding shares of 

PG&E common stock immediately after the completion of the Rights Offering.

f. Use of Proceeds. The Debtors shall only use the proceeds of an Equity Offering 

to fund obligations to holders of Wildfire Claims under the Plan.

g. Notices. Promptly, and in any event, within two days of the Board’s determination 

of final pricing of any Equity Offering, PG&E shall publicly disclose the form, structure, amount and terms 

of such Equity Offering, including the Implied P/E Multiple for such Equity Offering. PG&E shall give 

the Backstop Party, as soon as reasonably practicable, but in no event later than two business days prior to 

the Effective Date, (i) written notification setting forth (A) the amount to be funded pursuant to the Backstop 

Commitment, (B) an estimate of the Backstop Price and (C) the targeted Effective Date and (ii) a 

subscription form to be completed by the Backstop Party, or other instructions, to facilitate the Backstop 

Party’s subscription for the New HoldCo Common Stock.

h. Cooperation. As reasonably requested by the Debtors, the Backstop Party shall 

reasonably cooperate with the Debtors with respect to providing information relevant to the preservation of 

the Debtors’ Tax Attributes, including information regarding (i) the number of shares of PG&E common 

stock owned by such party (on a holder-by-holder basis) prior to the Rights Offering and (ii) the amount of 

Rights exercised and shares of New HoldCo Common Stock purchased pursuant to the Backstop 

Commitment by such persons.

2. Backstop. 

a. Subject to the terms and conditions set forth herein and to the payment and 

provision of premium to the Backstop Party as provided in Section 2(c), the Backstop Party, solely on

behalf of itself, hereby commits to purchase on the Effective Date an amount of shares of New HoldCo 

Common Stock at the Backstop Price (the “Backstop Commitment”) up to the dollar amounts set forth on 

Exhibit B hereto (the “Backstop Commitment Amount”). 

b. PG&E and the Backstop Party shall cooperate in good faith to prepare and deliver 

a subscription agreement and any other documentation necessary to effect the private placement of New 

HoldCo Common Stock to the Backstop Party in accordance with the terms of this Backstop Commitment 

Letter, which documentation shall be consistent with this Backstop Commitment Letter and the Plan.

c. The Debtors agree to pay the Backstop Party the Backstop Commitment Premium 

to the extent provided on Exhibit B and to reimburse on a regular basis the Backstop Party for the reasonable 

fees and expenses of Jones Day and a financial advisor incurred prior to termination of this Backstop 

Commitment Letter in connection with the Plan, the Backstop Commitment Letter, and the transactions 

contemplated herein, provided that such reimbursement shall not exceed $17 million for Jones Day in the 

aggregate and $19 million for the financial advisor in the aggregate. The provisions for the payment of the 

Backstop Commitment Premium and the other provisions provided herein are an integral part of the 

transactions contemplated by this Backstop Commitment Letter and without these provisions the Backstop 

Party would not have entered into this Backstop Commitment Letter, and the Backstop Commitment 

Premium shall, pursuant to an order of the Bankruptcy Court approving this Backstop Commitment Letter, 

constitute allowed administrative expenses of the Debtors’ estates under sections 503(b) and 507 of the 

Bankruptcy Code. 

d. Reorganized Holdco will enter into a registration rights agreement with the 

Backstop Party in respect of the shares of New HoldCo Common Stock that the Backstop Party may acquire 

in accordance with the Plan and this Backstop Commitment Letter, which registration rights agreement 

shall be in form and substance reasonably acceptable to the holders of a majority of the Aggregate Backstop 

Commitments.

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e. To the extent that PG&E agrees to terms that are more favorable to an Other

Backstop Party in an Other Backstop Commitment Letter (excluding terms relating to the size of such Other 

Backstop Party’s backstop commitment), PG&E shall provide notice of such terms to the Backstop Party 

no later than 10 days after the Allocation Date and, absent a written objection from the Backstop Party no 

later than 10 days after the date of such notice, such terms shall be deemed without further action to be 

incorporated into this Backstop Commitment Letter. 

3. Backstop Party Representations. The Backstop Party hereby represents and warrants,

solely as to itself, that (a) it has all limited partnership, corporate or other power and authority necessary to 

execute, deliver and perform this Backstop Commitment Letter, (b) the execution, delivery and 

performance of this Backstop Commitment Letter by it has been duly and validly authorized and approved 

by all necessary limited partnership, corporate or other organizational action by it, (c) this Backstop 

Commitment Letter has been duly and validly executed and delivered by it and, assuming due execution 

and delivery by the other parties hereto, constitutes a valid and legally binding obligation of it, enforceable 

against it in accordance with the terms of this Backstop Commitment Letter, (d) the execution, delivery and 

performance by the Backstop Party of this Backstop Commitment Letter do not (i) violate the organizational 

documents of the Backstop Party or (ii) violate any applicable law or judgment applicable to it, (e) as of the 

date of this Backstop Commitment Letter, its Backstop Commitment is, and as of the date of 

commencement of any Rights Offering and as of the Effective Date its Backstop Commitment will be, less 

than the maximum amount that it is permitted to invest in any one portfolio investment pursuant to the 

terms of its constituent documents or otherwise, (f) it has, as of the date of this Backstop Commitment 

Letter, and will have, as of the Effective Date, in the aggregate available undrawn commitments and liquid 

assets at least in the sum of its Backstop Commitment Amount hereunder, and (g) as of September 2, 2019, 

it and its affiliates (excluding any affiliate that is an Other Backstop Party) beneficially owned, directly or 

indirectly, 2,064,629 shares of PG&E common stock and had a “put equivalent position” (as defined in 

Rule 16a-1 under the Securities Exchange Act of 1934, as amended) of zero shares of PG&E common stock 

(the number of shares beneficially owned less the number of shares in the put equivalent position being 

the “Backstop Party’s Shares”). 

In addition, the Backstop Party hereby represents and warrants, solely as to itself, as of the date of 

this Backstop Commitment Letter and as of the Effective Date, that the Backstop Party (i) is acquiring the 

shares of New HoldCo Common Stock for its own account, solely for investment and not with a view 

toward, or for sale in connection with, any distribution thereof in violation of any foreign, federal, state or 

local securities or “blue sky” laws, or with any present intention of distributing or selling such shares in 

violation of any such laws, (ii) has such knowledge and experience in financial and business matters and in 

investments of this type that it is capable of evaluating the merits and risks of its investment in the shares 

of New HoldCo Common Stock and of making an informed investment decision, and (iii) is an “accredited 

investor” within the meaning of Rule 501 of Regulation D under the Securities Act of 1933, as amended 

(the “Securities Act”). The Backstop Party understands that Reorganized HoldCo will be relying on the 

statements contained herein to establish an exemption from registration under the Securities Act and under 

foreign, federal, state and local securities laws and acknowledges that the shares of New HoldCo Common 

Stock will not be registered under the Securities Act or any other applicable law and that such shares may 

not be transferred except pursuant to the registration provisions of the Securities Act (and in compliance 

with any other applicable law) or pursuant to an applicable exemption therefrom. 

4. Conditions to Backstop Party Commitment. The obligations of the Backstop Party to fund

its Backstop Commitment to PG&E in accordance with this Backstop Commitment Letter are further 

expressly conditioned upon and subject to the satisfaction or written waiver by the Backstop Party, in its 

sole discretion, at or prior to the Effective Date of each of the following conditions, which PG&E 

acknowledges are an integral part of the transactions contemplated by this Backstop Commitment Letter 

and without these conditions the Backstop Party would not have entered into this Backstop Commitment 

Letter.

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a. by November 7, 2019, the Debtors shall have received valid and enforceable Other

Backstop Commitments on substantially the same terms and conditions as set forth in this Backstop 

Commitment Letter that in the aggregate with this Backstop Commitment result in Aggregate Backstop 

Commitments of no less than the Equity Offering Cap; 

b. other than the consummation of any Permitted Equity Offering or the Rights

Offering, the satisfaction of all of the other conditions to the Effective Date provided for in the Plan or the 

waiver of any such conditions by the Debtors in accordance with the Plan (to the extent the Plan expressly 

provides for the possibility of such a waiver); 

c. the Bankruptcy Court shall have entered the Confirmation Order, which shall

confirm the Plan with such amendments, modifications, changes and consents as are approved by those 

entities having no less than a majority of the Aggregate Backstop Commitments (such approval not to be 

unreasonably withheld, conditioned or delayed), and such Confirmation Order shall be in full force and 

effect, and no stay thereof shall be in effect; 

d. this Backstop Commitment Letter shall have been approved by an order of the

Bankruptcy Court and such order shall be in full force and effect, and no stay thereof shall be in effect; 

e. the transactions contemplated herein shall have been authorized by an order of the

Bankruptcy Court (which may be the Confirmation Order) such order shall be in full force and effect, and 

no stay thereof shall be in effect;

f. total PG&E weighted average earning rate base (including electric generation,

electric transmission, electric distribution, gas distribution, gas transmission and storage) for estimated 

2021 shall be no less than 95% of $48 billion; and

g. no result, occurrence, fact, change, event, effect, violation, penalty, inaccuracy or

circumstance (whether or not constituting a breach of a representation, warranty or covenant set forth in the 

Plan) that, individually or in the aggregate with any such other results, occurrences, facts, changes, events, 

effects, violations, penalties, inaccuracies, or circumstances, (i) would have or would reasonably be 

expected to have a material adverse effect on the business, operations, assets, liabilities, capitalization, 

financial performance, financial condition or results of operations, in each case, of the Debtors, taken as a 

whole, or (ii) would reasonably be expected to prevent or materially delay the ability of the Debtors to 

consummate the transactions contemplated by this Backstop Commitment Letter or the Plan or perform 

their obligations hereunder or thereunder (each a “Material Adverse Effect”) shall have occurred; provided, 

however, that none of the following results, occurrences, facts, changes, events, effects, violations, 

penalties, inaccuracies, or circumstances shall constitute or be taken into account in determining whether a 

Material Adverse Effect has occurred, is continuing or would reasonably be expected to occur: (A) the 

filing of the Chapter 11 Cases, and the fact that the Debtors are operating in bankruptcy (B) results, 

occurrences, facts, changes, events, effects, violations, inaccuracies, or circumstances affecting (1) the 

electric or gas utility businesses in the United States generally or (2) the economy, credit, financial, capital 

or commodity markets, in the United States or elsewhere in the world, including changes in interest rates, 

monetary policy or inflation, (C) changes or prospective changes in law (other than any law or regulation 

of California or the United States that is applicable to any electrical utility) or in GAAP or accounting 

standards, or any changes or prospective changes in the interpretation or enforcement of any of the 

foregoing, (D) any decline in the market price, or change in trading volume, of any securities of the 

Debtors, (E) any failure to meet any internal or public projections, forecasts, guidance, estimates, 

milestones, credit ratings, budgets or internal or published financial or operating predictions of revenue, 

earnings, cash flow or cash position, (F) any wildfire occurring after the Petition Date and prior to January 1, 

2020, and (G) one or more wildfires, occurring on or after January 1, 2020, that destroys or damages fewer 

than 500 dwellings or commercial structures (“Structures”) in the aggregate (it being understood that (I) 

the exceptions in clauses (D) and (E) shall not prevent or otherwise affect a determination that the 

underlying cause of any such change, decline or failure referred to therein is a Material Adverse Effect and 

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(II) a Material Adverse Effect shall include the occurrence of one or more wildfires on or after January 1,

2020 destroying or damaging at least 500 Structures within PG&E’s service area where none of the

following are true with respect any such wildfire (a) the portion of PG&E’s system at the location of such

wildfire was not de-energized; (b) there has been no determination by a final order that such wildfire was

caused by a person or entity other than the Utility; and (c) there has been no determination that such wildfire

was not caused by the negligence or intentional misconduct of the Utility by a final order of a court having

jurisdiction).

5. Termination by the Backstop Party. Subject to the last paragraph of this Section 5, the

Backstop Party may terminate this Backstop Commitment Letter, solely as to itself, by written notice (which 

shall describe the basis for such termination), on or after the occurrence of any of the following: 

a. the Plan has not been filed with the Bankruptcy Court by 11:59 p.m. Pacific Time

on September 9, 2019 or the Plan filed with the Bankruptcy Court on or after such date differs from the 

draft of the Plan attached hereto as Exhibit A; 

b. the condition set forth in Section 4(a) is not satisfied as of November 7, 2019;

c. the Bankruptcy Court has not entered an order approving this Backstop

Commitment Letter on or before November 20, 2019; 

d. subject to Section 11, (i) the Plan has been amended modified or changed, in each

case without the consent of the entities holding a majority of the Aggregate Backstop Commitments (such 

consent not to be unreasonably withheld, conditioned or delayed) or (ii) any Plan Supplement or any Plan 

Document shall have been filed or finalized without the consent of entities holding a majority of the 

Aggregate Backstop Commitments (such consent not to be unreasonably withheld, conditioned or delayed); 

e. the Confirmation Order has not been entered by the Bankruptcy Court on or before

June 30, 2020 (the “Outside Date”); 

f. the Effective Date has not occurred on or before 60 days after entry of the

Confirmation Order; 

g. the Debtors have failed to perform any of their obligations set forth in this

Backstop Commitment Letter, which failure to perform (i) would give rise to the failure of a condition set 

forth in Section 4(b) or 4(c) and (ii) is incapable of being cured or, if capable of being cured by the Outside 

Date, the Debtors have not cured within 10 calendar days following receipt by the Debtors of written notice 

of such failure to perform from the Backstop Party stating the Backstop Party’s intention to terminate this 

Backstop Commitment Letter pursuant to this Section 5(g) and the basis for such termination; 

h. the occurrence of a Material Adverse Effect;

i. the occurrence of one or more wildfires in the Debtors’ service territory after the

Petition Date and prior to January 1, 2020 that is asserted by any person to arise out of the Debtors’ activities 

and that destroys or damages more than 500 Structures; provided, however, that any notice of termination 

under this clause (i) must be given on or before January 15, 2020; 

j. the Debtors’ aggregate liability with respect to Wildfire Claims is determined

(whether (i) by the Bankruptcy Court (or the District Court to which the reference has been partially 

withdrawn for estimation purposes), (ii) pursuant to an agreement between the Debtors and the holders of 

Wildfire Claims, or (iii) through a combination thereof) to exceed $17.9 billion (the “Wildfire Claims 

Cap”); provided, however, that for purposes of this clause (j), (A) any Wildfire Claim that the CPUC has 

approved or agreed to approve for recovery or pass through by the Utility shall not count in determining 

the Wildfire Claims Cap, and (B) the Wildfire Claims Cap shall be increased by an amount equal to the 

amount of Wildfire Claims consisting of professional fees that the Bankruptcy Court (or the District Court 

to which the reference has been partially withdrawn for estimation purposes) determines to be reasonable;

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k. the CPUC fails to issue all necessary approvals, authorizations and final orders to 

implement the Plan prior to the Outside Date, and to participate in the Go-Forward Wildfire Fund, 

including: (i) provisions satisfactory to entities holding a majority of the Aggregate Backstop Commitments 

(such approval not to be unreasonably withheld, conditioned or delayed) pertaining to authorized return on 

equity and regulated capital structure, (ii) a disposition, satisfactory to entities holding a majority of the 

Aggregate Backstop Commitments (such approval not to be unreasonably withheld, conditioned or 

delayed), of proposals for certain potential changes to PG&E’s corporate structure and authorizations for 

the Utility to operate as a utility, (iii) a resolution, satisfactory to entities holding a majority of the Aggregate 

Backstop Commitments (such approval not to be unreasonably withheld, conditioned or delayed), of claims 

for monetary fines or penalties under the California Public Utilities Code for conduct prior to the Petition 

Date, and (iv) approval (or exemption from approval) of the financing structure and securities to be issued 

under the Plan;

l. if at any time after the first day of the Confirmation Hearing, asserted 

Administrative Expense Claims exceed $250 million, excluding all (i) ordinary course Administrative 

Expense Claims, (ii) Professional Fee Claims, and (iii) Disallowed Administrative Expense Claims;

m. there is in effect an order of a governmental authority of competent jurisdiction 

permanently restraining, enjoining or otherwise prohibiting the consummation of any of the transactions 

contemplated by the Plan, or any law, statute, rule, regulation or ordinance is adopted that makes 

consummation of the transactions contemplated by the Plan illegal or otherwise prohibited.

PG&E shall promptly provide notice to the Backstop Party of (i) the occurrence of any fact, event, 

or omission that is not publicly disclosed that gives rise or reasonably can be expected to give rise to a 

termination right under this Section 5 and (ii) the receipt of any termination notice from any Other Backstop 

Party, including the asserted basis for such termination, whether or not PG&E concurs therewith.

Upon valid termination of this Backstop Commitment Letter by the Backstop Party (such 

terminating Backstop Party, a “Terminating Backstop Party”) pursuant to any of Section 5(a) through (m), 

this Backstop Commitment Letter shall be void and of no further force or effect solely with respect to such 

Terminating Backstop Party is obligated herein, such Terminating Backstop Party shall be released from 

its Backstop Commitments, undertakings and agreements under or related to this Backstop Commitment 

Letter, including its Backstop Commitment, except as explicitly provided herein and there shall be no 

liability or obligation on the part of such Terminating Backstop Party hereunder, except as expressly 

provided herein. Notwithstanding any termination by a Terminating Backstop Party, PG&E shall remain 

liable for the payment of all earned Backstop Commitment Premiums and expense reimbursement 

obligations in this Backstop Commitment Letter.

The Backstop Party’s obligations under this Backstop Commitment Letter shall automatically 

terminate in the event that PG&E has not returned a counter-signed copy of this Backstop Commitment 

Letter agreeing to its terms on or before the date that is two weeks from the day the Backstop Party furnished 

a signed copy of this Backstop Commitment Letter to PG&E.

The Backstop Party may not seek to (i) assert the failure of any condition precedent to any of its 

obligations or agreements under this Backstop Commitment Letter or (ii) terminate this Backstop 

Commitment Letter (including pursuit of any other remedies), in each case unless the Backstop Party has 

given written notice to PG&E of such assertion or termination.

Notwithstanding anything in this Backstop Commitment Letter to the contrary, any notice of 

termination under clauses (d), (g), (h), (i), (k), (l) and (m) shall not be effective unless PG&E has received 

notices of termination from entities constituting a majority of the outstanding Aggregate Backstop 

Commitments with respect to the event or circumstance that is the basis for such notice of termination. 

PG&E shall provide the Backstop Party with a notice of such effective termination within two business 

days of the effectiveness of the termination. 

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In the event that any fact or circumstance would give the Backstop Party the right to terminate 

under more than one clause in this Section 5, the exercise of a termination right under any one clause shall 

not prejudice the Backstop Party from exercising a termination right under any other clause based on the 

same event or circumstance.

6. Termination by PG&E; Defaulting Backstop Party; Extension Options. PG&E may 

terminate this Backstop Commitment Letter (including all Backstop Commitments hereunder) (a) at any 

time prior to countersigning such Backstop Commitment Letter, (b) if, on any date after November 7, 2019, 

the condition set forth in Section 4(a) would not be satisfied if tested on such date, (c) in the event of a 

material breach of a representation or warranty of the Backstop Party set forth in Section 3, (d) in the event 

that the Backstop Party repudiates this Backstop Commitment Letter, purports to terminate this Backstop 

Commitment Letter if such purported termination is not a valid termination of this Backstop Commitment 

Letter as determined in a final order of a court with jurisdiction or fails to fund its Backstop Commitment 

when required to do so in accordance with this Backstop Commitment Letter, (e) if the Backstop 

Commitment Amount has been reduced to zero in accordance with Section 7, (f) if the Backstop Party has 

the right to terminate this Backstop Commitment Letter under clause (h), (i), (j) or (m) of Section 5, or (g) 

if (i) a third party makes a binding proposal to acquire at least 50% of the outstanding PG&E common stock 

(including by means of a merger, joint venture, partnership, consolidation, dissolution, liquidation, tender 

offer, recapitalization, reorganization, share exchange, business combination or similar transaction), (ii) 

either (x) the implementation of such proposal would require the approval of holders of a majority of the 

PG&E common stock or (y) the price contemplated by such proposal would exceed 125% of the Equity 

Offering Cap, and (iii) the Board determines in good faith, after consultation with PG&E’s outside legal 

counsel, that the failure to terminate this Backstop Commitment Letter in response to such proposal would 

be inconsistent with the exercise of its fiduciary duties to the stockholders of PG&E under applicable law. 

In the event of a breach, repudiation, purported termination or failure to fund contemplated by the foregoing 

clause (c) or (d), the Backstop Party shall be deemed to be a “Defaulting Backstop Party”. In the event 

that the Backstop Party becomes a Defaulting Backstop Party, then PG&E may, upon notice to such 

Defaulting Backstop Party, require the Backstop Party to assign and delegate, without recourse, all its 

interests, rights (other than any Backstop Commitment Premiums earned prior to the date of such 

assignment and delegation) and obligations under this Backstop Commitment Letter to a third party that 

shall assume such obligations (which assignee may be an Other Backstop Party, if an Other Backstop Party 

accepts such assignment and delegation). Notwithstanding any termination by PG&E under Sections 6(b), 

(e), (f) or (g), PG&E shall remain liable for the payment of all earned Backstop Commitment Premiums 

and expense reimbursement obligations in this Backstop Commitment Letter.

In the event that any fact or circumstance would give PG&E the right to terminate under more than 

one clause in this Section 6, the exercise of a termination right under any one clause shall not prejudice

PG&E from exercising a termination right under any other clause based on the same event or circumstance.

Notwithstanding anything to the contrary herein, this Backstop Commitment Letter shall 

automatically terminate on January 20, 2020 (the “Initial Termination Date”). Provided that this Backstop 

Commitment Letter remains in full force and effect and has not been otherwise terminated, PG&E may 

extend the Initial Termination Date to April 30, 2020 (the “First Extension Date”) upon providing written 

notice to the Backstop Party of its intent to exercise this option (the “First Extension Notice”) no later than 

three days prior to the Initial Termination Date. In the event that PG&E has provided the Backstop Party a 

timely and proper First Extension Notice and this Backstop Commitment Letter remains in full force and 

effect, PG&E may extend the First Extension Date to the Outside Date (the “Second Extension Date”) 

upon providing written notice to the Backstop Party of its intent to exercise this option (the “Second

Extension Notice”) no later than three days prior to the First Extension Date. In the event that PG&E has 

provided the Backstop Party a timely and proper Second Extension Notice and this Backstop Commitment 

Letter remains in full force and effect, PG&E may extend the Second Extension Date to the 60th day 

following the Outside Date (the “Third Extension Date”) upon providing written notice to the Backstop 

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Party of its intent to exercise this option (the “Third Extension Notice”) no later than three days prior to 

the Second Extension Date.

7. Reduction of Commitments by PG&E. 

a. In the event that on or prior to November 7, 2019, PG&E receives Aggregate 

Backstop Commitments that exceed the Equity Offering Cap (such excess, the “Overallotment Amount”), 

then, on November 8, 2019 (the “Allocation Date”), the Backstop Commitment Amount shall be 

automatically reduced by an amount equal to (i) the Overallotment Amount, times (ii) a fraction, (A) the 

numerator of which is the Backstop Party’s Shares and (B) the denominator of which is the aggregate 

number of shares of PG&E common stock held by the Backstop Party and the Other Backstop Parties, 

collectively, as of September 6, 2019 (without double counting any shares beneficially owned, directly or 

indirectly, by more than one Backstop Party). Notwithstanding the foregoing, on the Allocation Date, in 

the event there is an Overallotment Amount and for the purpose of curing such Overallotment Amount, 

PG&E may reduce the Backstop Commitment Amount as to any Backstop Party to the extent such reduction 

is reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation with Jones Day) 

in order to avoid an “ownership change” within the meaning of Section 382 and the Treasury Regulations 

promulgated thereunder or to otherwise preserve the ability of the Debtors to utilize their NOLs; provided

that such reduction may not be below the amount of Backstop Commitments at which such Backstop Party 

would maintain its existing percentage ownership of the total outstanding shares of PG&E common stock. 

Within three business days of the Allocation Date, PG&E shall provide the Backstop Party with a notice of 

any adjustment to its Backstop Commitment Amount under this Section 7(a).

b. In the event that, after November 7, 2019, the Debtors (i) receive binding 

commitments providing for funding from any Additional Capital Sources that (A) have conditions to 

funding and commitment termination rights that are no less favorable to PG&E than those in this Backstop 

Commitment Letter and (B) are approved by an order of the Bankruptcy Court, or (ii) actually obtain 

funding from any Additional Capital Sources, then (x) in the case of clause (i), PG&E may reduce the 

Backstop Commitment Amount, and (y) in the case of clause (ii), the Backstop Commitment Amount shall 

be automatically reduced (if not already reduced pursuant to clause (i)), in each case by an amount equal to 

(A) the amount of such funding, times (B) a fraction, (1) the numerator of which is the Backstop 

Commitment Amount immediately prior to such reduction and (2) the denominator of which is the 

Aggregate Backstop Commitments as of immediately prior to such reduction. Any reduction in the 

Backstop Commitment pursuant to this Section 7(b) shall not reduce any Backstop Commitment Premium 

earned prior to the date of such reduction.

c. In the event that the Debtors consummate any Permitted Equity Offering or Rights 

Offering, the Backstop Commitment Amount shall be automatically reduced by an amount equal to (i) the 

net cash proceeds of such Permitted Equity Financing or such Rights Offering plus the proceeds of any 

Additional Capital Sources, as applicable, times (ii) a fraction, (A) the numerator of which is the Backstop 

Commitment Amount immediately prior to such reduction and (B) the denominator of which is the 

Aggregate Backstop Commitments as of immediately prior to such reduction.

d. The Debtors shall provide notice to the Backstop Party in the event that the 

Backstop Commitment Amount is reduced as provided above. References herein to “Backstop 

Commitment Amount” or “Backstop Commitment” mean such amounts as adjusted in accordance with the 

terms of this Backstop Commitment Letter. Any Backstop Commitments that have been terminated or 

reduced shall be terminated or reduced, as applicable, permanently.

8. Assignment. This Backstop Commitment Letter (a) is not assignable by the Backstop 

Party, and any purported assignment shall be null and void ab initio; provided, however, Backstop Party 

may assign its Backstop Commitment, in whole or in part, to (i) another Backstop Party, (ii) an affiliate of 

the Backstop Party, or (iii) an investment fund or separately managed account the primary investment 

advisor or sub advisor to which is a Backstop Party or an affiliate thereof, to the extent such assignee 

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Backstop Party agrees in writing to assume all obligations hereunder of such Backstop Party in connection 

with such Backstop Commitment, and any assignment under this proviso shall not relieve the Backstop 

Party from its obligations under this Backstop Commitment Letter, and (b) is intended to be solely for the 

benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, 

any person or entity other than the parties hereto. Notwithstanding the foregoing, a Backstop Party may 

assign all or any portion of its obligations hereunder to a “qualified institutional buyer” (as defined in 

Rule 144A under the Securities Act of 1933, as amended), without the consent of any party, provided, 

however, that (i) absent the prior written consent of PG&E, such assignee (including any Entity) does not, 

and as a result of such assignment will not, beneficially own more than 4.75% of the Aggregate Backstop 

Commitments and (ii) any assignment under this sentence shall not relieve the Backstop Party from its 

obligations under this Backstop Commitment Letter.

9. Entire Agreement. This Backstop Commitment Letter, including all exhibits hereto, 

constitutes the entire understanding among the parties hereto with respect to the subject matter hereof and 

replaces and supersedes all prior agreements and understandings, both written and oral, between the parties 

hereto with respect to the subject matter hereof and, subject to the terms hereof, shall become effective and 

binding upon the mutual exchange of fully executed counterparts by each of the parties hereto.

10. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Backstop 

Commitment Letter shall be governed by, and construed in accordance with, the internal laws of the State 

of New York, without giving effect to the principles of conflict of laws that would require the application 

of the law of any other jurisdiction. By its execution and delivery of this Backstop Commitment Letter, 

each of the parties hereto irrevocably and unconditionally agrees for itself that any legal action, suit or 

proceeding against it with respect to any matter under or arising out of or in connection with this Backstop 

Commitment Letter or for recognition or enforcement of any judgment rendered in any such action, suit or 

proceeding, may be brought only in the Bankruptcy Court. By execution and delivery of this Backstop 

Commitment Letter, each of the parties hereto irrevocably accepts and submits itself to the exclusive 

jurisdiction of the Bankruptcy Court with respect to any such action, suit or proceeding. EACH PARTY 

HERETO UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR 

PROCEEDING REFERRED TO ABOVE.

11. Amendment; Waiver; Counterparts. This Backstop Commitment Letter may not be 

amended or waived by or on behalf of the Backstop Party, and no consent may be given hereunder by or 

on behalf of the Backstop Party (including to an amendment or waiver of any provision of the Plan), except 

in writing signed by the holders of a majority of the Aggregate Backstop Commitments (whether or not the 

Backstop Party signs such amendment or waiver), and confirmed in writing by the Company; provided, 

however, that without the prior written consent of the Backstop Party, this Backstop Commitment Letter 

may not be amended to (a) increase the amount of the Backstop Commitment Amount or Backstop 

Commitment, (b) decrease the Backstop Commitment Premium, (c) extend the Backstop Commitment 

beyond the Third Extension Date, (d) amend the definition of “Backstop Price” or any component thereof, 

and (e) amend, modify, or waive the condition in Section 4(d). This Backstop Commitment Letter may be 

executed in any number of counterparts, each of which will be an original, and all of which, when taken 

together, will constitute one agreement. Delivery of an executed counterpart of this Backstop Commitment 

Letter by e-mail or portable document format (PDF) will be effective as delivery of a manually executed 

counterpart of this Backstop Commitment Letter.

12. Notices. All notices required or permitted to be given under this Backstop Commitment 

Letter, unless otherwise stated herein, shall be given by overnight courier at the addresses specified below, 

or at such other address or addresses as a party may designate for itself in writing, or by email (if confirmed) 

at the email addresses specified below:

If to the Backstop Party, to the name, address and email address located on the Backstop Party’s 

signature page to this Backstop Commitment Letter.

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If to the Debtors:

PG&E Corporation

77 Beale Street

P.O. Box 770000

San Francisco, California 94177

Attention: Janet Loduca, Senior Vice President and General Counsel

Email: J1Lc@pge.com

with a copy to:

Cravath, Swaine & Moore LLP

825 Eighth Avenue

New York, New York 10019

Attention: Richard Hall; Paul Zumbro

Email: RHall@cravath.com; PZumbro@cravath.com

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Attention: Stephen Karotkin

Email: Stephen.karotkin@weil.com

13. No Liability. Notwithstanding anything that may be expressed or implied in this Backstop 

Commitment Letter, each party hereto acknowledges and agrees that no person other than the Backstop 

Party (and it permitted assigns) shall have any obligation hereunder (subject to the limitations provided 

herein) or in connection with the transactions contemplated hereby and that (a) notwithstanding that any 

Backstop Party may be a partnership, limited partnership or limited liability company, no recourse (whether 

at law, in equity, in contract, in tort or otherwise) hereunder or under any document or instrument delivered 

in connection herewith, or in respect of any oral representations made or alleged to be made in connection 

herewith or therewith, shall be had against any former, current or future direct or indirect equity holder, 

controlling person, general or limited partner, shareholder, member, investment manager or adviser, 

manager, director, officer, employee, agent, affiliate, assignee, representative or financing source of any of 

the foregoing) (any such person or entity, other than such Backstop Party, a “Related Party”) or any Related 

Party of any such Related Party, including, without limitation, any liabilities arising under, or in connection 

with, the Plan or this Backstop Commitment Letter and the transactions contemplated thereby and hereby, 

or in respect of any oral representations made or alleged to be made in connection therewith or herewith), 

whether by the enforcement of any judgment or assessment or by any legal or equitable proceeding, or by 

virtue of any statute, regulation or other applicable law and (b) no personal liability whatsoever will attach 

to, be imposed on or otherwise be incurred by any Related Party of the Backstop Party or any Related Party 

of any such Related Party under this Backstop Commitment Letter or any document or instrument delivered 

in connection herewith or with the Plan Term Sheet or the Plan (or in respect of any oral representation 

made or alleged to be made in connection herewith or therewith) or for any action (whether at law, in equity, 

in contract, in tort or otherwise) based on, in respect of, or by reason of such obligations hereunder or by 

their creation.

14. Plan Support. For as long as this Backstop Letter Agreement is in effect, the Backstop 

Party shall (i) use all reasonable efforts to support the Plan with respect to the treatment of HoldCo Common 

Interests and to act in good faith to consummate the Plan with respect to any Equity Offering and the 

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Backstop Commitments, (ii) to the extent the Backstop Party is entitled to vote on the Plan, timely vote (or 

cause to be voted) all of its HoldCo Common Interests and Claims to accept the Plan (and not to change or 

withdraw any such vote), and (iii) timely vote (or cause to be voted) its HoldCo Common Interests and 

Claims to reject any plan of reorganization other than the Plan.

15. The Backstop Party shall not be required, pursuant to the terms of this Backstop 

Commitment Letter, to acquire or purchase any securities or indebtedness in connection with any Equity 

Offering that, pursuant to the terms of a Backstop Commitment Letter or other agreement, are to be acquired 

or subscribed for by any other party, nor shall the Backstop Party be required, pursuant to the terms of this 

Backstop Commitment Letter, to pay any money or other consideration, or exchange any claims 

whatsoever, which are owing from, or to be transferred from or by, any other party pursuant to the terms of 

another Backstop Commitment Letter or other agreement. Nothing in this Backstop Commitment Letter 

shall be deemed to constitute an agreement or a joint venture or partnership with or between any other 

person or entity nor constitute any party as the agent of any other person or entity for any purpose. For the 

avoidance of doubt, no Backstop Party shall, nor shall any action taken by a Backstop Party hereunder, be 

deemed to be acting in concert with any other person or entity with respect to the Backstop Commitment 

or any other matter nor shall the Backstop Commitments hereunder create a presumption that the Backstop 

Party is in any way acting in concert or as a group with any other person or entity whether as a result of this 

commitment or otherwise. 

16. Each party hereto confirms that it has made its own decision to execute this Backstop 

Commitment Letter based upon its own independent assessment of documents and information available 

to it, as it has deemed appropriate.

17. Except as expressly provided in this Backstop Commitment Letter, (a) nothing herein is 

intended to, or does, in any manner waive, limit, impair or restrict the ability of each party hereto to protect 

and preserve its rights, remedies and interests, including, without limitation, any claims against or interests 

in any of the Debtors or other parties, or its full participation in any bankruptcy proceeding, and (b) the 

parties hereto each fully preserve any and all of their respective rights, remedies, claims and interests as of 

the date hereof and upon a termination of this Backstop Commitment Letter. Further, nothing in this 

Backstop Commitment Letter shall be construed to prohibit any party hereto from appearing as a party-ininterest in any matter to be adjudicated in the Chapter 11 Cases, so long as such appearance and the positions 

advocated in connection therewith are consistent with this Backstop Commitment Letter and the Plan, and 

are not for the purpose of, and could not reasonably be expected to have the effect of, hindering, delaying 

or preventing the consummation of the transactions contemplated by the Plan.

[signature page follows]

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Exhibit A 

Plan of Reorganization

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See the Debtors’ Joint Chapter 11 Plan of Reorganization filed at Docket No. 3841.

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Exhibit B 

Mandatory Preferred Stock Term Sheet

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Term Sheet for 

5.00% Mandatory Convertible Preferred Stock

Issuer: PG&E Corporation (“PG&E”)

Title of Securities: 5.00% Mandatory Convertible Preferred Stock of PG&E (the 

“Mandatory Convertible Preferred Stock”)

Shares of Mandatory Convertible 

Preferred Stock Offered by PG&E: Up to [●] shares

Offering Price:

Issue Date:

$1,000 per share of the Mandatory Convertible Preferred 

Stock

The Effective Date of the Plan

Liquidation Preference: $1,000 per share

Dividends: 5.00% of the Liquidation Preference of $1,000 per share of 

the Mandatory Convertible Preferred Stock per year 

(equivalent to $50 per annum per share), when, as and if 

declared by the Board, payable in cash or, by delivery of 

additional shares of Mandatory Convertible Preferred Stock 

or any combination of cash and shares of Mandatory 

Convertible Preferred Stock, as determined by PG&E in its 

sole discretion

Floor Price: 100% of the Initial Price, subject to standard anti-dilution 

adjustments 

Dividend Payment Dates: If declared, January 1, April 1, July 1 and October 1 of each 

year, commencing on (TBD)

Dividend Record Dates: The March 15, June 15, September 15 and December 15 

immediately preceding the next dividend payment date

Redemption: The Mandatory Convertible Preferred Stock will be 

redeemable on terms and conditions to be determined

Initial Price: A per share price equal to (a) the greater of (i) an Implied P/E 

Multiple of 13.5 or (ii) the Implied P/E Multiple of a 

Permitted Equity Offering, times (b) the Normalized 

Estimated Net Income as of the Determination Date, divided 

by (c) the number of fully diluted shares of PG&E (calculated 

using the treasury stock method) that will be outstanding as 

of the Effective Date.

Threshold Appreciation Price: 110% of the Initial Price, subject to standard ant-dilution 

adjustments

Mandatory Conversion Date: 1/8th of the Mandatory Convertible Preferred Stock will 

convert into PG&E common stock 90, 180, 270, 360, 450, 

540, 630, and 720 days from Issue Date

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Conversion Rate: Upon conversion on the Mandatory Conversion Date, the 

conversion rate for each share of the Mandatory Convertible 

Preferred Stock will be not more than [●] shares of PG&E 

common stock (the “Maximum Conversion Rate”) and not 

less than [●] shares of PG&E common stock (the “Minimum 

Conversion Rate”), depending on the Applicable Market 

Value of the PG&E common stock subject to standard antidilution adjustments. The following table illustrates the 

conversion rate per share of the Mandatory Convertible 

Preferred Stock (in each case, subject to standard antidilution adjustments):

Applicable Market Value of

the PG&E Common Stock

Conversion rate (number of shares of 

PG&E Common Stock to be received 

upon

conversion of each share of the 

Mandatory Convertible Preferred 

Stock)

Greater than 110% of the Initial 

Price (which is the Threshold 

Appreciation Price)

[●] shares (approximately equal 

to $1,000 divided by the 

Threshold Appreciation Price)

Equal to or less than the Threshold 

Appreciation Price but greater 

than or equal to the Floor Price

Between [●] and [●] shares, 

determined by dividing $1,000 

by the Applicable Market Value 

of the PG&E common stock

Less than the Floor Price [●] shares (approximately equal 

to $1,000 divided by the Floor 

Price)

Applicable Market Value:

Conversion at the Option of the Holder:

The “Applicable Market Value” shall be the 10-trading day VWAP 

immediately preceding the applicable Mandatory Conversion Date

At any time prior to final Mandatory Conversion Date, holders of the 

Mandatory Convertible Preferred Stock have the option to elect to 

convert their shares of the Mandatory Convertible Preferred Stock in 

whole or in part (but in no event less than one share of the Mandatory 

Convertible Preferred Stock), into shares of PG&E common stock at 

the Minimum Conversion Rate of shares of PG&E common stock per 

share of the Mandatory Convertible Preferred Stock. This Minimum 

Conversion Rate is subject to standard anti-dilution adjustments.

Limitation on Ownership No holder, together with persons who have a formal or informal 

understanding with such assignee to make a coordinated acquisition of 

stock, shall acquire beneficial ownership (within the meaning of 

Section 382 and the Treasury Regulations) of more than 4.75% of the 

outstanding Mandatory Convertible Preferred Stock without the prior 

written consent of PG&E.

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EXECUTION VERSION

1 

September 9, 2019

PG&E Corporation 

77 Beale Street

P.O. Box 770000 

San Francisco, California 94177 

Re: Chapter 11 Plan Backstop Commitment Letter 

Ladies and Gentlemen:

Reference is hereby made to the chapter 11 bankruptcy cases, lead case no. 19-30088 (the 

“Chapter 11 Cases”), currently pending before the United States Bankruptcy Court for the Northern District 

of California (the “Bankruptcy Court”), in which PG&E Corporation (“PG&E” or the “Company”) and 

Pacific Gas and Electric Company (the “Utility” and together with PG&E, the “Debtors”) are debtors in 

possession. Reference is further made to the Chapter 11 plan of reorganization attached hereto as Exhibit 

A (the “Plan”) to implement the terms and conditions of the reorganization of the Debtors as provided 

therein. Capitalized terms used in this backstop commitment letter (this “Backstop Commitment Letter”) 

or in the exhibits hereto but not otherwise defined shall have the meanings ascribed to them in the Plan. 

The word “including” means “including, without limitation”. 

In order to facilitate the Debtors’ emergence from Chapter 11, pursuant to this Backstop 

Commitment Letter, and subject to the terms, conditions and limitations set forth herein and in consideration 

for the Backstop Commitment Premium, the undersigned Backstop Party (the “Backstop Party”) is willing 

to purchase, on the Effective Date, an amount of New HoldCo Common Stock up to its Backstop 

Commitment Amount (as defined herein) at the Backstop Price (as defined herein). 

In addition, PG&E has separately solicited and negotiated and expects to enter into substantially 

similar backstop commitment letters (“Other Backstop Commitment Letters”) with other funding sources 

(“Other Backstop Parties”) pursuant to which such Other Backstop Parties will commit to purchase New 

HoldCo Common Stock on the Effective Date (such commitments, “Other Backstop Commitments,” and 

together with this Backstop Commitment, the “Aggregate Backstop Commitments”).

1. Equity Offerings.

a. Structure. The Plan, among other things, shall provide that, on the Effective Date,

Reorganized HoldCo shall issue shares of New HoldCo Common Stock for up to $14 billion of aggregate 

net cash proceeds to Reorganized Holdco (the “Equity Offering Cap”). PG&E shall structure the offering 

of any such shares of New HoldCo Common Stock (or rights pursuant to which any such shares may be 

issued or other securities convertible into any such shares) (the “Equity Offering”) in accordance with the 

terms of this Section 1, including the following parameters: 

(i) if the Implied P/E Multiple with respect to such Equity Offering equals

or exceeds the greater of (A) 13.5 and (B) 13.5 times one plus any percentage change of the 

Applicable Utility Index Multiple (as defined herein) as measured on the date of this Backstop 

Commitment Letter and the Determination Date (as defined herein), then PG&E shall be 

permitted to conduct the Equity Offering in any form of primary equity offering (including any 

public offering, regular way offering, at-the-market equity offering, block trade, modified Dutch 

auction or other auction pricing mechanism, rights offering, private placement, “PIPE” sale or 

other registered or unregistered transaction) upon such terms and conditions as may be 

determined by the Board (a “Permitted Equity Offering”), including such terms and conditions 

that are reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation 

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with Jones Day) in order to avoid an “ownership change” within the meaning of Section 382 and 

the Treasury Regulations promulgated thereunder or to otherwise preserve the ability of the 

Debtors to utilize their net operating loss carryforwards and other tax attributes (collectively, the 

“NOLs”);

(ii) if the Implied P/E Multiple with respect to the Equity Offering is less 

than the Implied P/E Multiple required for a Permitted Equity Offering in Section 1(a)(i) above, 

but equals or exceeds the lesser of (A) 12 and (B) 12 times one plus the percentage change of the 

Applicable Utility Index Multiple as measured on the date of this Backstop Commitment Letter 

and the Determination Date (the “Rights Offering Threshold Multiple”), then PG&E shall 

structure the Equity Offering such that (Y) at least 80%, determined assuming the exercise in full 

of all of the Rights, of the aggregate cash proceeds of the Equity Offering is to be raised through 

the exercise of purchase rights (the “Rights”) distributed to holders of PG&E common stock 

(“Existing Shareholders”) as of a record date to be determined by the Board (the “Record Date”) 

to purchase shares of New HoldCo Common Stock for cash at a price set forth below (the “Rights 

Offering”) and (Z) the balance of the aggregate cash proceeds of the Equity Offering is to be 

raised through any other form of primary equity offering (including any public offering, regular 

way offering, at-the-market equity offering, block trade, modified Dutch auction or other auction 

pricing mechanism, private placement, “PIPE” sale or other registered or unregistered 

transaction), provided, that entities holding a majority of the Aggregate Backstop Commitments 

have not objected to the identity of the purchasers and ultimate purchasers, as applicable, in such 

Equity Offering, to the extent such Equity Offering is not a broadly syndicated underwritten 

public offering, within three business days of receipt of notice from PG&E; 

(iii) in both of paragraphs (i) and (ii) above, Reorganized Holdco may also 

raise equity capital (subject to the Equity Offering Cap) by calling on the Backstop Commitments 

(after giving effect to any reduction of the Backstop Commitments in connection with a Permitted 

Equity Offering or a Rights Offering, as applicable); and

(iv) if the Implied P/E Multiple with respect to the Equity Offering would be 

less than the Rights Offering Threshold Multiple or if for any other reason Reorganized Holdco is 

unable to execute an Equity Offering, then Reorganized Holdco shall not utilize either a 

Permitted Equity Offering or a Rights Offering and shall issue shares at the Backstop Price 

pursuant to the Backstop Commitments up to the Equity Offering Cap less the proceeds of any 

Additional Capital Sources. 

“Implied P/E Multiple” means, with respect to any Equity Offering, (A) the price per share at 

which shares of New Holdco Common Stock are offered to be sold in such Equity Offering (which price 

(x) in the case of an Equity Offering of rights, shall be the exercise price to acquire a share of New HoldCo 

Common Stock pursuant to such rights or (y) in the case of an Equity Offering of a security convertible 

into or exchangeable for shares of New HoldCo Common Stock, shall be the per share price implied by the 

conversion ratio used to convert the principal amount, liquidation preference or other face amount of such 

security into a number of shares of New HoldCo Common Stock) (the “Per Share Price”), times (B) the 

number of fully diluted shares of PG&E (calculated using the treasury stock method) that will be 

outstanding as of the Effective Date (assuming such Equity Offering and all other equity transactions 

contemplated by the Plan are consummated and settled on the Effective Date), divided by (C) the 

Normalized Estimated Net Income as of the Determination Date.

b. Additional Capital Sources. PG&E shall conduct the Equity Offering in 

accordance with the Plan. The net cash proceeds to PG&E of the Equity Offering shall not exceed the 

Equity Offering Cap, less the sum of (i) the principal amount of debt that is issued by PG&E in excess of 

$7 billion in connection with the Plan; (ii) the aggregate liquidation preference of preferred stock 

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(“Mandatory Convertible Preferred Stock”) that is distributed pursuant to the Plan to holders of Wildfire 

Claims, on the terms and conditions set forth on Exhibit B pursuant to the Plan; (iii) the principal amount 

of any Wildfire Victim Recovery Bonds issued in connection with the Plan; (iv) the proceeds of any 

preferred stock issued by the Utility (excluding any Utility Preferred Interests that are Reinstated pursuant 

to the Plan); (v) the proceeds of any third-party transactions based upon the monetization of any NOLs; and 

(vi) the principal amount of any other debt that is issued or reinstated by the Utility, excluding any debt that 

may be issued under clause (v) above, in excess of $27.35 billion in connection with the Plan (the 

“Additional Capital Sources”).

c. Rights Offering. With respect to the Rights Offering:

(i) the Rights will have a fixed exercise price equal to (a) the Rights 

Offering Threshold Multiple times (b) the Normalized Estimated Net Income as of the 

Determination Date, divided by (c) the number of fully diluted shares of PG&E (calculated using 

the treasury stock method) that will be outstanding as of the Effective Date (assuming all equity is 

raised by the exercise of all Rights);

(ii) the Rights shall be transferable;

(iii) the Board shall provide that holders of Rights who fully exercise their 

Rights will have over-subscription privileges to subscribe for additional shares of New HoldCo 

Common Stock to the extent other Rights are not exercised, with over-subscription procedures 

(including pro-ration rules) determined by the Board; 

(iv) the Board may provide that the Rights or Rights Offering include such 

terms and conditions that are reasonably advisable (based on the advice of the Debtors’ tax 

advisors after consultation with Jones Day) in order to avoid an “ownership change” within the 

meaning of Section 382 and the Treasury Regulations promulgated thereunder or to otherwise 

preserve the ability of the Debtors to utilize their NOLs, including limitations on the amount of 

Rights that are exercisable by holders who, together with persons who have a formal or informal 

understanding with such holders to make a coordinated acquisition of stock within the meaning of 

Treasury Regulations 1.382-3(a) (an “Entity”), beneficially own in excess of a specified 

percentage (e.g., 4.75%) of the outstanding shares of PG&E common stock, subject to exceptions 

to be determined by the Board; provided, however, that such terms and conditions shall not 

restrict existing holders of PG&E common stock (including any Entity) from acquiring shares 

that do not increase their aggregate beneficial ownership to more than 4.75% of the outstanding 

shares of PG&E common stock immediately after the completion of the Rights Offering; and

(v) the Rights will have such other terms and conditions as may be 

determined by the Board, as long as such other terms and conditions are consistent with the Plan 

and with every other provision of this Backstop Commitment Letter.

d. Subordinated Claims. To the extent provided in the Plan, the Debtors may issue 

Rights or New HoldCo Common Stock to holders of Claims against a Debtor that are subject to 

subordination pursuant to section 510(b) of the Bankruptcy Code and that arise from or are related to any 

equity security of the Debtor. 

e. Documentation. The definitive documentation for any Permitted Equity Offering 

or any Rights Offering shall be consistent with the Plan. For the avoidance of doubt, the organizational 

documents of the Reorganized HoldCo (including its charter) may include limitations and other terms that 

are reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation with Jones 

Day) in order to avoid an “ownership change” within the meaning of Section 382 and the Treasury 

Regulations promulgated thereunder or to otherwise preserve the ability of the Debtors to utilize their 

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NOLs; provided, however, that the organizational documents shall not be modified or amended in a manner 

that would restrict existing holders of PG&E common stock (including any Entity) from acquiring shares 

that do not increase their aggregate beneficial ownership to more than 4.75% of the outstanding shares of 

PG&E common stock immediately after the completion of the Rights Offering.

f. Use of Proceeds. The Debtors shall only use the proceeds of an Equity Offering 

to fund obligations to holders of Wildfire Claims under the Plan.

g. Notices. Promptly, and in any event, within two days of the Board’s determination 

of final pricing of any Equity Offering, PG&E shall publicly disclose the form, structure, amount and terms 

of such Equity Offering, including the Implied P/E Multiple for such Equity Offering. PG&E shall give 

the Backstop Party, as soon as reasonably practicable, but in no event later than two business days prior to 

the Effective Date, (i) written notification setting forth (A) the amount to be funded pursuant to the Backstop 

Commitment, (B) an estimate of the Backstop Price and (C) the targeted Effective Date and (ii) a 

subscription form to be completed by the Backstop Party, or other instructions, to facilitate the Backstop 

Party’s subscription for the New HoldCo Common Stock.

h. Cooperation. As reasonably requested by the Debtors, the Backstop Party shall 

reasonably cooperate with the Debtors with respect to providing information relevant to the preservation of 

the Debtors’ Tax Attributes, including information regarding (i) the number of shares of PG&E common 

stock owned by such party (on a holder-by-holder basis) prior to the Rights Offering and (ii) the amount of 

Rights exercised and shares of New HoldCo Common Stock purchased pursuant to the Backstop 

Commitment by such persons.

2. Backstop. 

a. Subject to the terms and conditions set forth herein and to the payment and 

provision of premium to the Backstop Party as provided in Section 2(c), the Backstop Party, solely on

behalf of itself, hereby commits to purchase on the Effective Date an amount of shares of New HoldCo 

Common Stock at the Backstop Price (the “Backstop Commitment”) up to the dollar amounts set forth on 

Exhibit B hereto (the “Backstop Commitment Amount”). 

b. PG&E and the Backstop Party shall cooperate in good faith to prepare and deliver 

a subscription agreement and any other documentation necessary to effect the private placement of New 

HoldCo Common Stock to the Backstop Party in accordance with the terms of this Backstop Commitment 

Letter, which documentation shall be consistent with this Backstop Commitment Letter and the Plan.

c. The Debtors agree to pay the Backstop Party the Backstop Commitment Premium 

to the extent provided on Exhibit B and to reimburse on a regular basis the Backstop Party for the reasonable 

fees and expenses of Jones Day and a financial advisor incurred prior to termination of this Backstop 

Commitment Letter in connection with the Plan, the Backstop Commitment Letter, and the transactions 

contemplated herein, provided that such reimbursement shall not exceed $17 million for Jones Day in the 

aggregate and $19 million for the financial advisor in the aggregate. The provisions for the payment of the 

Backstop Commitment Premium and the other provisions provided herein are an integral part of the 

transactions contemplated by this Backstop Commitment Letter and without these provisions the Backstop 

Party would not have entered into this Backstop Commitment Letter, and the Backstop Commitment 

Premium shall, pursuant to an order of the Bankruptcy Court approving this Backstop Commitment Letter, 

constitute allowed administrative expenses of the Debtors’ estates under sections 503(b) and 507 of the 

Bankruptcy Code. 

d. Reorganized Holdco will enter into a registration rights agreement with the 

Backstop Party in respect of the shares of New HoldCo Common Stock that the Backstop Party may acquire 

in accordance with the Plan and this Backstop Commitment Letter, which registration rights agreement 

shall be in form and substance reasonably acceptable to the holders of a majority of the Aggregate Backstop 

Commitments.

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e. To the extent that PG&E agrees to terms that are more favorable to an Other

Backstop Party in an Other Backstop Commitment Letter (excluding terms relating to the size of such Other 

Backstop Party’s backstop commitment), PG&E shall provide notice of such terms to the Backstop Party 

no later than 10 days after the Allocation Date and, absent a written objection from the Backstop Party no 

later than 10 days after the date of such notice, such terms shall be deemed without further action to be 

incorporated into this Backstop Commitment Letter. 

3. Backstop Party Representations. The Backstop Party hereby represents and warrants,

solely as to itself, that (a) it has all limited partnership, corporate or other power and authority necessary to 

execute, deliver and perform this Backstop Commitment Letter, (b) the execution, delivery and 

performance of this Backstop Commitment Letter by it has been duly and validly authorized and approved 

by all necessary limited partnership, corporate or other organizational action by it, (c) this Backstop 

Commitment Letter has been duly and validly executed and delivered by it and, assuming due execution 

and delivery by the other parties hereto, constitutes a valid and legally binding obligation of it, enforceable 

against it in accordance with the terms of this Backstop Commitment Letter, (d) the execution, delivery and 

performance by the Backstop Party of this Backstop Commitment Letter do not (i) violate the organizational 

documents of the Backstop Party or (ii) violate any applicable law or judgment applicable to it, (e) as of the 

date of this Backstop Commitment Letter, its Backstop Commitment is, and as of the date of 

commencement of any Rights Offering and as of the Effective Date its Backstop Commitment will be, less 

than the maximum amount that it is permitted to invest in any one portfolio investment pursuant to the 

terms of its constituent documents or otherwise, (f) it has, as of the date of this Backstop Commitment 

Letter, and will have, as of the Effective Date, in the aggregate available undrawn commitments and liquid 

assets at least in the sum of its Backstop Commitment Amount hereunder, and (g) as of September 2, 2019, 

it and its affiliates (excluding any affiliate that is an Other Backstop Party) beneficially owned, directly or 

indirectly, 21,225,501 shares of PG&E common stock and had a “put equivalent position” (as defined in 

Rule 16a-1 under the Securities Exchange Act of 1934, as amended) of zero shares of PG&E common stock 

(the number of shares beneficially owned less the number of shares in the put equivalent position being 

the “Backstop Party’s Shares”). 

In addition, the Backstop Party hereby represents and warrants, solely as to itself, as of the date of 

this Backstop Commitment Letter and as of the Effective Date, that the Backstop Party (i) is acquiring the 

shares of New HoldCo Common Stock for its own account, solely for investment and not with a view 

toward, or for sale in connection with, any distribution thereof in violation of any foreign, federal, state or 

local securities or “blue sky” laws, or with any present intention of distributing or selling such shares in 

violation of any such laws, (ii) has such knowledge and experience in financial and business matters and in 

investments of this type that it is capable of evaluating the merits and risks of its investment in the shares 

of New HoldCo Common Stock and of making an informed investment decision, and (iii) is an “accredited 

investor” within the meaning of Rule 501 of Regulation D under the Securities Act of 1933, as amended 

(the “Securities Act”). The Backstop Party understands that Reorganized HoldCo will be relying on the 

statements contained herein to establish an exemption from registration under the Securities Act and under 

foreign, federal, state and local securities laws and acknowledges that the shares of New HoldCo Common 

Stock will not be registered under the Securities Act or any other applicable law and that such shares may 

not be transferred except pursuant to the registration provisions of the Securities Act (and in compliance 

with any other applicable law) or pursuant to an applicable exemption therefrom. 

4. Conditions to Backstop Party Commitment. The obligations of the Backstop Party to fund

its Backstop Commitment to PG&E in accordance with this Backstop Commitment Letter are further 

expressly conditioned upon and subject to the satisfaction or written waiver by the Backstop Party, in its 

sole discretion, at or prior to the Effective Date of each of the following conditions, which PG&E 

acknowledges are an integral part of the transactions contemplated by this Backstop Commitment Letter 

and without these conditions the Backstop Party would not have entered into this Backstop Commitment 

Letter.

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a. by November 7, 2019, the Debtors shall have received valid and enforceable Other 

Backstop Commitments on substantially the same terms and conditions as set forth in this Backstop 

Commitment Letter that in the aggregate with this Backstop Commitment result in Aggregate Backstop 

Commitments of no less than the Equity Offering Cap;

b. other than the consummation of any Permitted Equity Offering or the Rights 

Offering, the satisfaction of all of the other conditions to the Effective Date provided for in the Plan or the 

waiver of any such conditions by the Debtors in accordance with the Plan (to the extent the Plan expressly 

provides for the possibility of such a waiver);

c. the Bankruptcy Court shall have entered the Confirmation Order, which shall 

confirm the Plan with such amendments, modifications, changes and consents as are approved by those 

entities having no less than a majority of the Aggregate Backstop Commitments (such approval not to be 

unreasonably withheld, conditioned or delayed), and such Confirmation Order shall be in full force and 

effect, and no stay thereof shall be in effect; 

d. this Backstop Commitment Letter shall have been approved by an order of the 

Bankruptcy Court and such order shall be in full force and effect, and no stay thereof shall be in effect;

e. the transactions contemplated herein shall have been authorized by an order of the 

Bankruptcy Court (which may be the Confirmation Order) such order shall be in full force and effect, and 

no stay thereof shall be in effect;

f. total PG&E weighted average earning rate base (including electric generation, 

electric transmission, electric distribution, gas distribution, gas transmission and storage) for estimated 

2021 shall be no less than 95% of $48 billion; and

g. no result, occurrence, fact, change, event, effect, violation, penalty, inaccuracy or 

circumstance (whether or not constituting a breach of a representation, warranty or covenant set forth in the 

Plan) that, individually or in the aggregate with any such other results, occurrences, facts, changes, events, 

effects, violations, penalties, inaccuracies, or circumstances, (i) would have or would reasonably be 

expected to have a material adverse effect on the business, operations, assets, liabilities, capitalization, 

financial performance, financial condition or results of operations, in each case, of the Debtors, taken as a 

whole, or (ii) would reasonably be expected to prevent or materially delay the ability of the Debtors to 

consummate the transactions contemplated by this Backstop Commitment Letter or the Plan or perform 

their obligations hereunder or thereunder (each a “Material Adverse Effect”) shall have occurred; provided, 

however, that none of the following results, occurrences, facts, changes, events, effects, violations, 

penalties, inaccuracies, or circumstances shall constitute or be taken into account in determining whether a 

Material Adverse Effect has occurred, is continuing or would reasonably be expected to occur: (A) the 

filing of the Chapter 11 Cases, and the fact that the Debtors are operating in bankruptcy (B) results, 

occurrences, facts, changes, events, effects, violations, inaccuracies, or circumstances affecting (1) the 

electric or gas utility businesses in the United States generally or (2) the economy, credit, financial, capital 

or commodity markets, in the United States or elsewhere in the world, including changes in interest rates, 

monetary policy or inflation, (C) changes or prospective changes in law (other than any law or regulation 

of California or the United States that is applicable to any electrical utility) or in GAAP or accounting 

standards, or any changes or prospective changes in the interpretation or enforcement of any of the 

foregoing, (D) any decline in the market price, or change in trading volume, of any securities of the 

Debtors, (E) any failure to meet any internal or public projections, forecasts, guidance, estimates, 

milestones, credit ratings, budgets or internal or published financial or operating predictions of revenue, 

earnings, cash flow or cash position, (F) any wildfire occurring after the Petition Date and prior to January 1, 

2020, and (G) one or more wildfires, occurring on or after January 1, 2020, that destroys or damages fewer 

than 500 dwellings or commercial structures (“Structures”) in the aggregate (it being understood that (I) 

the exceptions in clauses (D) and (E) shall not prevent or otherwise affect a determination that the 

underlying cause of any such change, decline or failure referred to therein is a Material Adverse Effect and 

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(II) a Material Adverse Effect shall include the occurrence of one or more wildfires on or after January 1, 

2020 destroying or damaging at least 500 Structures within PG&E’s service area where none of the 

following are true with respect any such wildfire (a) the portion of PG&E’s system at the location of such 

wildfire was not de-energized; (b) there has been no determination by a final order that such wildfire was 

caused by a person or entity other than the Utility; and (c) there has been no determination that such wildfire 

was not caused by the negligence or intentional misconduct of the Utility by a final order of a court having 

jurisdiction).

5. Termination by the Backstop Party. Subject to the last paragraph of this Section 5, the 

Backstop Party may terminate this Backstop Commitment Letter, solely as to itself, by written notice (which 

shall describe the basis for such termination), on or after the occurrence of any of the following:

a. the Plan has not been filed with the Bankruptcy Court by 11:59 p.m. Pacific Time 

on September 9, 2019 or the Plan filed with the Bankruptcy Court on or after such date differs from the 

draft of the Plan attached hereto as Exhibit A; 

b. the condition set forth in Section 4(a) is not satisfied as of November 7, 2019;

c. the Bankruptcy Court has not entered an order approving this Backstop 

Commitment Letter on or before November 20, 2019;

d. subject to Section 11, (i) the Plan has been amended modified or changed, in each 

case without the consent of the entities holding a majority of the Aggregate Backstop Commitments (such 

consent not to be unreasonably withheld, conditioned or delayed) or (ii) any Plan Supplement or any Plan 

Document shall have been filed or finalized without the consent of entities holding a majority of the 

Aggregate Backstop Commitments (such consent not to be unreasonably withheld, conditioned or delayed); 

e. the Confirmation Order has not been entered by the Bankruptcy Court on or before 

June 30, 2020 (the “Outside Date”); 

f. the Effective Date has not occurred on or before 60 days after entry of the 

Confirmation Order;

g. the Debtors have failed to perform any of their obligations set forth in this 

Backstop Commitment Letter, which failure to perform (i) would give rise to the failure of a condition set 

forth in Section 4(b) or 4(c) and (ii) is incapable of being cured or, if capable of being cured by the Outside 

Date, the Debtors have not cured within 10 calendar days following receipt by the Debtors of written notice 

of such failure to perform from the Backstop Party stating the Backstop Party’s intention to terminate this 

Backstop Commitment Letter pursuant to this Section 5(g) and the basis for such termination; 

h. the occurrence of a Material Adverse Effect; 

i. the occurrence of one or more wildfires in the Debtors’ service territory after the 

Petition Date and prior to January 1, 2020 that is asserted by any person to arise out of the Debtors’ activities 

and that destroys or damages more than 500 Structures; provided, however, that any notice of termination 

under this clause (i) must be given on or before January 15, 2020; 

j. the Debtors’ aggregate liability with respect to Wildfire Claims is determined 

(whether (i) by the Bankruptcy Court (or the District Court to which the reference has been partially 

withdrawn for estimation purposes), (ii) pursuant to an agreement between the Debtors and the holders of 

Wildfire Claims, or (iii) through a combination thereof) to exceed $17.9 billion (the “Wildfire Claims 

Cap”); provided, however, that for purposes of this clause (j), (A) any Wildfire Claim that the CPUC has 

approved or agreed to approve for recovery or pass through by the Utility shall not count in determining 

the Wildfire Claims Cap, and (B) the Wildfire Claims Cap shall be increased by an amount equal to the 

amount of Wildfire Claims consisting of professional fees that the Bankruptcy Court (or the District Court 

to which the reference has been partially withdrawn for estimation purposes) determines to be reasonable;

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k. the CPUC fails to issue all necessary approvals, authorizations and final orders to 

implement the Plan prior to the Outside Date, and to participate in the Go-Forward Wildfire Fund, 

including: (i) provisions satisfactory to entities holding a majority of the Aggregate Backstop Commitments 

(such approval not to be unreasonably withheld, conditioned or delayed) pertaining to authorized return on 

equity and regulated capital structure, (ii) a disposition, satisfactory to entities holding a majority of the 

Aggregate Backstop Commitments (such approval not to be unreasonably withheld, conditioned or 

delayed), of proposals for certain potential changes to PG&E’s corporate structure and authorizations for 

the Utility to operate as a utility, (iii) a resolution, satisfactory to entities holding a majority of the Aggregate 

Backstop Commitments (such approval not to be unreasonably withheld, conditioned or delayed), of claims 

for monetary fines or penalties under the California Public Utilities Code for conduct prior to the Petition 

Date, and (iv) approval (or exemption from approval) of the financing structure and securities to be issued 

under the Plan;

l. if at any time after the first day of the Confirmation Hearing, asserted 

Administrative Expense Claims exceed $250 million, excluding all (i) ordinary course Administrative 

Expense Claims, (ii) Professional Fee Claims, and (iii) Disallowed Administrative Expense Claims;

m. there is in effect an order of a governmental authority of competent jurisdiction 

permanently restraining, enjoining or otherwise prohibiting the consummation of any of the transactions 

contemplated by the Plan, or any law, statute, rule, regulation or ordinance is adopted that makes 

consummation of the transactions contemplated by the Plan illegal or otherwise prohibited.

PG&E shall promptly provide notice to the Backstop Party of (i) the occurrence of any fact, event, 

or omission that is not publicly disclosed that gives rise or reasonably can be expected to give rise to a 

termination right under this Section 5 and (ii) the receipt of any termination notice from any Other Backstop 

Party, including the asserted basis for such termination, whether or not PG&E concurs therewith.

Upon valid termination of this Backstop Commitment Letter by the Backstop Party (such 

terminating Backstop Party, a “Terminating Backstop Party”) pursuant to any of Section 5(a) through (m), 

this Backstop Commitment Letter shall be void and of no further force or effect solely with respect to such 

Terminating Backstop Party is obligated herein, such Terminating Backstop Party shall be released from 

its Backstop Commitments, undertakings and agreements under or related to this Backstop Commitment 

Letter, including its Backstop Commitment, except as explicitly provided herein and there shall be no 

liability or obligation on the part of such Terminating Backstop Party hereunder, except as expressly 

provided herein. Notwithstanding any termination by a Terminating Backstop Party, PG&E shall remain 

liable for the payment of all earned Backstop Commitment Premiums and expense reimbursement 

obligations in this Backstop Commitment Letter.

The Backstop Party’s obligations under this Backstop Commitment Letter shall automatically 

terminate in the event that PG&E has not returned a counter-signed copy of this Backstop Commitment 

Letter agreeing to its terms on or before the date that is two weeks from the day the Backstop Party furnished 

a signed copy of this Backstop Commitment Letter to PG&E.

The Backstop Party may not seek to (i) assert the failure of any condition precedent to any of its 

obligations or agreements under this Backstop Commitment Letter or (ii) terminate this Backstop 

Commitment Letter (including pursuit of any other remedies), in each case unless the Backstop Party has 

given written notice to PG&E of such assertion or termination.

Notwithstanding anything in this Backstop Commitment Letter to the contrary, any notice of 

termination under clauses (d), (g), (h), (i), (k), (l) and (m) shall not be effective unless PG&E has received 

notices of termination from entities constituting a majority of the outstanding Aggregate Backstop 

Commitments with respect to the event or circumstance that is the basis for such notice of termination. 

PG&E shall provide the Backstop Party with a notice of such effective termination within two business 

days of the effectiveness of the termination. 

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In the event that any fact or circumstance would give the Backstop Party the right to terminate 

under more than one clause in this Section 5, the exercise of a termination right under any one clause shall 

not prejudice the Backstop Party from exercising a termination right under any other clause based on the 

same event or circumstance.

6. Termination by PG&E; Defaulting Backstop Party; Extension Options. PG&E may 

terminate this Backstop Commitment Letter (including all Backstop Commitments hereunder) (a) at any 

time prior to countersigning such Backstop Commitment Letter, (b) if, on any date after November 7, 2019, 

the condition set forth in Section 4(a) would not be satisfied if tested on such date, (c) in the event of a 

material breach of a representation or warranty of the Backstop Party set forth in Section 3, (d) in the event 

that the Backstop Party repudiates this Backstop Commitment Letter, purports to terminate this Backstop 

Commitment Letter if such purported termination is not a valid termination of this Backstop Commitment 

Letter as determined in a final order of a court with jurisdiction or fails to fund its Backstop Commitment 

when required to do so in accordance with this Backstop Commitment Letter, (e) if the Backstop 

Commitment Amount has been reduced to zero in accordance with Section 7, (f) if the Backstop Party has 

the right to terminate this Backstop Commitment Letter under clause (h), (i), (j) or (m) of Section 5, or (g) 

if (i) a third party makes a binding proposal to acquire at least 50% of the outstanding PG&E common stock 

(including by means of a merger, joint venture, partnership, consolidation, dissolution, liquidation, tender 

offer, recapitalization, reorganization, share exchange, business combination or similar transaction), (ii) 

either (x) the implementation of such proposal would require the approval of holders of a majority of the 

PG&E common stock or (y) the price contemplated by such proposal would exceed 125% of the Equity 

Offering Cap, and (iii) the Board determines in good faith, after consultation with PG&E’s outside legal 

counsel, that the failure to terminate this Backstop Commitment Letter in response to such proposal would 

be inconsistent with the exercise of its fiduciary duties to the stockholders of PG&E under applicable law. 

In the event of a breach, repudiation, purported termination or failure to fund contemplated by the foregoing 

clause (c) or (d), the Backstop Party shall be deemed to be a “Defaulting Backstop Party”. In the event 

that the Backstop Party becomes a Defaulting Backstop Party, then PG&E may, upon notice to such 

Defaulting Backstop Party, require the Backstop Party to assign and delegate, without recourse, all its 

interests, rights (other than any Backstop Commitment Premiums earned prior to the date of such 

assignment and delegation) and obligations under this Backstop Commitment Letter to a third party that 

shall assume such obligations (which assignee may be an Other Backstop Party, if an Other Backstop Party 

accepts such assignment and delegation). Notwithstanding any termination by PG&E under Sections 6(b), 

(e), (f) or (g), PG&E shall remain liable for the payment of all earned Backstop Commitment Premiums 

and expense reimbursement obligations in this Backstop Commitment Letter.

In the event that any fact or circumstance would give PG&E the right to terminate under more than 

one clause in this Section 6, the exercise of a termination right under any one clause shall not prejudice

PG&E from exercising a termination right under any other clause based on the same event or circumstance.

Notwithstanding anything to the contrary herein, this Backstop Commitment Letter shall 

automatically terminate on January 20, 2020 (the “Initial Termination Date”). Provided that this Backstop 

Commitment Letter remains in full force and effect and has not been otherwise terminated, PG&E may 

extend the Initial Termination Date to April 30, 2020 (the “First Extension Date”) upon providing written 

notice to the Backstop Party of its intent to exercise this option (the “First Extension Notice”) no later than 

three days prior to the Initial Termination Date. In the event that PG&E has provided the Backstop Party a 

timely and proper First Extension Notice and this Backstop Commitment Letter remains in full force and 

effect, PG&E may extend the First Extension Date to the Outside Date (the “Second Extension Date”) 

upon providing written notice to the Backstop Party of its intent to exercise this option (the “Second

Extension Notice”) no later than three days prior to the First Extension Date. In the event that PG&E has 

provided the Backstop Party a timely and proper Second Extension Notice and this Backstop Commitment 

Letter remains in full force and effect, PG&E may extend the Second Extension Date to the 60th day 

following the Outside Date (the “Third Extension Date”) upon providing written notice to the Backstop 

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Party of its intent to exercise this option (the “Third Extension Notice”) no later than three days prior to 

the Second Extension Date.

7. Reduction of Commitments by PG&E. 

a. In the event that on or prior to November 7, 2019, PG&E receives Aggregate 

Backstop Commitments that exceed the Equity Offering Cap (such excess, the “Overallotment Amount”), 

then, on November 8, 2019 (the “Allocation Date”), the Backstop Commitment Amount shall be 

automatically reduced by an amount equal to (i) the Overallotment Amount, times (ii) a fraction, (A) the 

numerator of which is the Backstop Party’s Shares and (B) the denominator of which is the aggregate 

number of shares of PG&E common stock held by the Backstop Party and the Other Backstop Parties, 

collectively, as of September 6, 2019 (without double counting any shares beneficially owned, directly or 

indirectly, by more than one Backstop Party). Notwithstanding the foregoing, on the Allocation Date, in 

the event there is an Overallotment Amount and for the purpose of curing such Overallotment Amount, 

PG&E may reduce the Backstop Commitment Amount as to any Backstop Party to the extent such reduction 

is reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation with Jones Day) 

in order to avoid an “ownership change” within the meaning of Section 382 and the Treasury Regulations 

promulgated thereunder or to otherwise preserve the ability of the Debtors to utilize their NOLs; provided

that such reduction may not be below the amount of Backstop Commitments at which such Backstop Party 

would maintain its existing percentage ownership of the total outstanding shares of PG&E common stock. 

Within three business days of the Allocation Date, PG&E shall provide the Backstop Party with a notice of 

any adjustment to its Backstop Commitment Amount under this Section 7(a).

b. In the event that, after November 7, 2019, the Debtors (i) receive binding 

commitments providing for funding from any Additional Capital Sources that (A) have conditions to 

funding and commitment termination rights that are no less favorable to PG&E than those in this Backstop 

Commitment Letter and (B) are approved by an order of the Bankruptcy Court, or (ii) actually obtain 

funding from any Additional Capital Sources, then (x) in the case of clause (i), PG&E may reduce the 

Backstop Commitment Amount, and (y) in the case of clause (ii), the Backstop Commitment Amount shall 

be automatically reduced (if not already reduced pursuant to clause (i)), in each case by an amount equal to 

(A) the amount of such funding, times (B) a fraction, (1) the numerator of which is the Backstop 

Commitment Amount immediately prior to such reduction and (2) the denominator of which is the 

Aggregate Backstop Commitments as of immediately prior to such reduction. Any reduction in the 

Backstop Commitment pursuant to this Section 7(b) shall not reduce any Backstop Commitment Premium 

earned prior to the date of such reduction.

c. In the event that the Debtors consummate any Permitted Equity Offering or Rights 

Offering, the Backstop Commitment Amount shall be automatically reduced by an amount equal to (i) the 

net cash proceeds of such Permitted Equity Financing or such Rights Offering plus the proceeds of any 

Additional Capital Sources, as applicable, times (ii) a fraction, (A) the numerator of which is the Backstop 

Commitment Amount immediately prior to such reduction and (B) the denominator of which is the 

Aggregate Backstop Commitments as of immediately prior to such reduction.

d. The Debtors shall provide notice to the Backstop Party in the event that the 

Backstop Commitment Amount is reduced as provided above. References herein to “Backstop 

Commitment Amount” or “Backstop Commitment” mean such amounts as adjusted in accordance with the 

terms of this Backstop Commitment Letter. Any Backstop Commitments that have been terminated or 

reduced shall be terminated or reduced, as applicable, permanently.

8. Assignment. This Backstop Commitment Letter (a) is not assignable by the Backstop 

Party, and any purported assignment shall be null and void ab initio; provided, however, Backstop Party 

may assign its Backstop Commitment, in whole or in part, to (i) another Backstop Party, (ii) an affiliate of 

the Backstop Party, or (iii) an investment fund or separately managed account the primary investment 

advisor or sub advisor to which is a Backstop Party or an affiliate thereof, to the extent such assignee 

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Backstop Party agrees in writing to assume all obligations hereunder of such Backstop Party in connection 

with such Backstop Commitment, and any assignment under this proviso shall not relieve the Backstop 

Party from its obligations under this Backstop Commitment Letter, and (b) is intended to be solely for the 

benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, 

any person or entity other than the parties hereto. Notwithstanding the foregoing, a Backstop Party may 

assign all or any portion of its obligations hereunder to a “qualified institutional buyer” (as defined in 

Rule 144A under the Securities Act of 1933, as amended), without the consent of any party, provided, 

however, that (i) absent the prior written consent of PG&E, such assignee (including any Entity) does not, 

and as a result of such assignment will not, beneficially own more than 4.75% of the Aggregate Backstop 

Commitments and (ii) any assignment under this sentence shall not relieve the Backstop Party from its 

obligations under this Backstop Commitment Letter.

9. Entire Agreement. This Backstop Commitment Letter, including all exhibits hereto, 

constitutes the entire understanding among the parties hereto with respect to the subject matter hereof and 

replaces and supersedes all prior agreements and understandings, both written and oral, between the parties 

hereto with respect to the subject matter hereof and, subject to the terms hereof, shall become effective and 

binding upon the mutual exchange of fully executed counterparts by each of the parties hereto.

10. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Backstop 

Commitment Letter shall be governed by, and construed in accordance with, the internal laws of the State 

of New York, without giving effect to the principles of conflict of laws that would require the application 

of the law of any other jurisdiction. By its execution and delivery of this Backstop Commitment Letter, 

each of the parties hereto irrevocably and unconditionally agrees for itself that any legal action, suit or 

proceeding against it with respect to any matter under or arising out of or in connection with this Backstop 

Commitment Letter or for recognition or enforcement of any judgment rendered in any such action, suit or 

proceeding, may be brought only in the Bankruptcy Court. By execution and delivery of this Backstop 

Commitment Letter, each of the parties hereto irrevocably accepts and submits itself to the exclusive 

jurisdiction of the Bankruptcy Court with respect to any such action, suit or proceeding. EACH PARTY 

HERETO UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR 

PROCEEDING REFERRED TO ABOVE.

11. Amendment; Waiver; Counterparts. This Backstop Commitment Letter may not be 

amended or waived by or on behalf of the Backstop Party, and no consent may be given hereunder by or 

on behalf of the Backstop Party (including to an amendment or waiver of any provision of the Plan), except 

in writing signed by the holders of a majority of the Aggregate Backstop Commitments (whether or not the 

Backstop Party signs such amendment or waiver), and confirmed in writing by the Company; provided, 

however, that without the prior written consent of the Backstop Party, this Backstop Commitment Letter 

may not be amended to (a) increase the amount of the Backstop Commitment Amount or Backstop 

Commitment, (b) decrease the Backstop Commitment Premium, (c) extend the Backstop Commitment 

beyond the Third Extension Date, (d) amend the definition of “Backstop Price” or any component thereof, 

and (e) amend, modify, or waive the condition in Section 4(d). This Backstop Commitment Letter may be 

executed in any number of counterparts, each of which will be an original, and all of which, when taken 

together, will constitute one agreement. Delivery of an executed counterpart of this Backstop Commitment 

Letter by e-mail or portable document format (PDF) will be effective as delivery of a manually executed 

counterpart of this Backstop Commitment Letter.

12. Notices. All notices required or permitted to be given under this Backstop Commitment 

Letter, unless otherwise stated herein, shall be given by overnight courier at the addresses specified below, 

or at such other address or addresses as a party may designate for itself in writing, or by email (if confirmed) 

at the email addresses specified below:

If to the Backstop Party, to the name, address and email address located on the Backstop Party’s 

signature page to this Backstop Commitment Letter.

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If to the Debtors:

PG&E Corporation

77 Beale Street

P.O. Box 770000

San Francisco, California 94177

Attention: Janet Loduca, Senior Vice President and General Counsel

Email: J1Lc@pge.com

with a copy to:

Cravath, Swaine & Moore LLP

825 Eighth Avenue

New York, New York 10019

Attention: Richard Hall; Paul Zumbro

Email: RHall@cravath.com; PZumbro@cravath.com

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Attention: Stephen Karotkin

Email: Stephen.karotkin@weil.com

13. No Liability. Notwithstanding anything that may be expressed or implied in this Backstop 

Commitment Letter, each party hereto acknowledges and agrees that no person other than the Backstop 

Party (and it permitted assigns) shall have any obligation hereunder (subject to the limitations provided 

herein) or in connection with the transactions contemplated hereby and that (a) notwithstanding that any 

Backstop Party may be a partnership, limited partnership or limited liability company, no recourse (whether 

at law, in equity, in contract, in tort or otherwise) hereunder or under any document or instrument delivered 

in connection herewith, or in respect of any oral representations made or alleged to be made in connection 

herewith or therewith, shall be had against any former, current or future direct or indirect equity holder, 

controlling person, general or limited partner, shareholder, member, investment manager or adviser, 

manager, director, officer, employee, agent, affiliate, assignee, representative or financing source of any of 

the foregoing) (any such person or entity, other than such Backstop Party, a “Related Party”) or any Related 

Party of any such Related Party, including, without limitation, any liabilities arising under, or in connection 

with, the Plan or this Backstop Commitment Letter and the transactions contemplated thereby and hereby, 

or in respect of any oral representations made or alleged to be made in connection therewith or herewith), 

whether by the enforcement of any judgment or assessment or by any legal or equitable proceeding, or by 

virtue of any statute, regulation or other applicable law and (b) no personal liability whatsoever will attach 

to, be imposed on or otherwise be incurred by any Related Party of the Backstop Party or any Related Party 

of any such Related Party under this Backstop Commitment Letter or any document or instrument delivered 

in connection herewith or with the Plan Term Sheet or the Plan (or in respect of any oral representation 

made or alleged to be made in connection herewith or therewith) or for any action (whether at law, in equity, 

in contract, in tort or otherwise) based on, in respect of, or by reason of such obligations hereunder or by 

their creation.

14. Plan Support. For as long as this Backstop Letter Agreement is in effect, the Backstop 

Party shall (i) use all reasonable efforts to support the Plan with respect to the treatment of HoldCo Common 

Interests and to act in good faith to consummate the Plan with respect to any Equity Offering and the 

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Backstop Commitments, (ii) to the extent the Backstop Party is entitled to vote on the Plan, timely vote (or 

cause to be voted) all of its HoldCo Common Interests and Claims to accept the Plan (and not to change or 

withdraw any such vote), and (iii) timely vote (or cause to be voted) its HoldCo Common Interests and 

Claims to reject any plan of reorganization other than the Plan.

15. The Backstop Party shall not be required, pursuant to the terms of this Backstop 

Commitment Letter, to acquire or purchase any securities or indebtedness in connection with any Equity 

Offering that, pursuant to the terms of a Backstop Commitment Letter or other agreement, are to be acquired 

or subscribed for by any other party, nor shall the Backstop Party be required, pursuant to the terms of this 

Backstop Commitment Letter, to pay any money or other consideration, or exchange any claims 

whatsoever, which are owing from, or to be transferred from or by, any other party pursuant to the terms of 

another Backstop Commitment Letter or other agreement. Nothing in this Backstop Commitment Letter 

shall be deemed to constitute an agreement or a joint venture or partnership with or between any other 

person or entity nor constitute any party as the agent of any other person or entity for any purpose. For the 

avoidance of doubt, no Backstop Party shall, nor shall any action taken by a Backstop Party hereunder, be 

deemed to be acting in concert with any other person or entity with respect to the Backstop Commitment 

or any other matter nor shall the Backstop Commitments hereunder create a presumption that the Backstop 

Party is in any way acting in concert or as a group with any other person or entity whether as a result of this 

commitment or otherwise. 

16. Each party hereto confirms that it has made its own decision to execute this Backstop 

Commitment Letter based upon its own independent assessment of documents and information available 

to it, as it has deemed appropriate.

17. Except as expressly provided in this Backstop Commitment Letter, (a) nothing herein is 

intended to, or does, in any manner waive, limit, impair or restrict the ability of each party hereto to protect 

and preserve its rights, remedies and interests, including, without limitation, any claims against or interests 

in any of the Debtors or other parties, or its full participation in any bankruptcy proceeding, and (b) the 

parties hereto each fully preserve any and all of their respective rights, remedies, claims and interests as of 

the date hereof and upon a termination of this Backstop Commitment Letter. Further, nothing in this 

Backstop Commitment Letter shall be construed to prohibit any party hereto from appearing as a party-ininterest in any matter to be adjudicated in the Chapter 11 Cases, so long as such appearance and the positions 

advocated in connection therewith are consistent with this Backstop Commitment Letter and the Plan, and 

are not for the purpose of, and could not reasonably be expected to have the effect of, hindering, delaying 

or preventing the consummation of the transactions contemplated by the Plan.

[signature page follows]

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Exhibit A 

Plan of Reorganization 

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See the Debtors’ Joint Chapter 11 Plan of Reorganization filed at Docket No. 3841.

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Exhibit B 

Mandatory Preferred Stock Term Sheet

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Term Sheet for 

5.00% Mandatory Convertible Preferred Stock

Issuer: PG&E Corporation (“PG&E”)

Title of Securities: 5.00% Mandatory Convertible Preferred Stock of PG&E (the 

“Mandatory Convertible Preferred Stock”)

Shares of Mandatory Convertible 

Preferred Stock Offered by PG&E: Up to [●] shares

Offering Price:

Issue Date:

$1,000 per share of the Mandatory Convertible Preferred 

Stock

The Effective Date of the Plan

Liquidation Preference: $1,000 per share

Dividends: 5.00% of the Liquidation Preference of $1,000 per share of 

the Mandatory Convertible Preferred Stock per year 

(equivalent to $50 per annum per share), when, as and if 

declared by the Board, payable in cash or, by delivery of 

additional shares of Mandatory Convertible Preferred Stock 

or any combination of cash and shares of Mandatory 

Convertible Preferred Stock, as determined by PG&E in its 

sole discretion

Floor Price: 100% of the Initial Price, subject to standard anti-dilution 

adjustments 

Dividend Payment Dates: If declared, January 1, April 1, July 1 and October 1 of each 

year, commencing on (TBD)

Dividend Record Dates: The March 15, June 15, September 15 and December 15 

immediately preceding the next dividend payment date

Redemption: The Mandatory Convertible Preferred Stock will be 

redeemable on terms and conditions to be determined

Initial Price: A per share price equal to (a) the greater of (i) an Implied P/E 

Multiple of 13.5 or (ii) the Implied P/E Multiple of a 

Permitted Equity Offering, times (b) the Normalized 

Estimated Net Income as of the Determination Date, divided 

by (c) the number of fully diluted shares of PG&E (calculated 

using the treasury stock method) that will be outstanding as 

of the Effective Date.

Threshold Appreciation Price: 110% of the Initial Price, subject to standard ant-dilution 

adjustments

Mandatory Conversion Date: 1/8th of the Mandatory Convertible Preferred Stock will 

convert into PG&E common stock 90, 180, 270, 360, 450, 

540, 630, and 720 days from Issue Date

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Conversion Rate: Upon conversion on the Mandatory Conversion Date, the 

conversion rate for each share of the Mandatory Convertible 

Preferred Stock will be not more than [●] shares of PG&E 

common stock (the “Maximum Conversion Rate”) and not 

less than [●] shares of PG&E common stock (the “Minimum 

Conversion Rate”), depending on the Applicable Market 

Value of the PG&E common stock subject to standard antidilution adjustments. The following table illustrates the 

conversion rate per share of the Mandatory Convertible 

Preferred Stock (in each case, subject to standard antidilution adjustments):

Applicable Market Value of

the PG&E Common Stock

Conversion rate (number of shares of 

PG&E Common Stock to be received 

upon

conversion of each share of the 

Mandatory Convertible Preferred 

Stock)

Greater than 110% of the Initial 

Price (which is the Threshold 

Appreciation Price)

[●] shares (approximately equal 

to $1,000 divided by the 

Threshold Appreciation Price)

Equal to or less than the Threshold 

Appreciation Price but greater 

than or equal to the Floor Price

Between [●] and [●] shares, 

determined by dividing $1,000 

by the Applicable Market Value 

of the PG&E common stock

Less than the Floor Price [●] shares (approximately equal 

to $1,000 divided by the Floor 

Price)

Applicable Market Value:

Conversion at the Option of the Holder:

The “Applicable Market Value” shall be the 10-trading day VWAP 

immediately preceding the applicable Mandatory Conversion Date

At any time prior to final Mandatory Conversion Date, holders of the 

Mandatory Convertible Preferred Stock have the option to elect to 

convert their shares of the Mandatory Convertible Preferred Stock in 

whole or in part (but in no event less than one share of the Mandatory 

Convertible Preferred Stock), into shares of PG&E common stock at 

the Minimum Conversion Rate of shares of PG&E common stock per 

share of the Mandatory Convertible Preferred Stock. This Minimum 

Conversion Rate is subject to standard anti-dilution adjustments.

Limitation on Ownership No holder, together with persons who have a formal or informal 

understanding with such assignee to make a coordinated acquisition of 

stock, shall acquire beneficial ownership (within the meaning of 

Section 382 and the Treasury Regulations) of more than 4.75% of the 

outstanding Mandatory Convertible Preferred Stock without the prior 

written consent of PG&E.

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EXECUTION VERSION

1 

September 9, 2019

PG&E Corporation 

77 Beale Street

P.O. Box 770000 

San Francisco, California 94177 

Re: Chapter 11 Plan Backstop Commitment Letter 

Ladies and Gentlemen:

Reference is hereby made to the chapter 11 bankruptcy cases, lead case no. 19-30088 (the 

“Chapter 11 Cases”), currently pending before the United States Bankruptcy Court for the Northern District 

of California (the “Bankruptcy Court”), in which PG&E Corporation (“PG&E” or the “Company”) and 

Pacific Gas and Electric Company (the “Utility” and together with PG&E, the “Debtors”) are debtors in 

possession. Reference is further made to the Chapter 11 plan of reorganization attached hereto as Exhibit 

A (the “Plan”) to implement the terms and conditions of the reorganization of the Debtors as provided 

therein. Capitalized terms used in this backstop commitment letter (this “Backstop Commitment Letter”) 

or in the exhibits hereto but not otherwise defined shall have the meanings ascribed to them in the Plan. 

The word “including” means “including, without limitation”. 

In order to facilitate the Debtors’ emergence from Chapter 11, pursuant to this Backstop 

Commitment Letter, and subject to the terms, conditions and limitations set forth herein and in consideration 

for the Backstop Commitment Premium, the undersigned Backstop Party (the “Backstop Party”) is willing 

to purchase, on the Effective Date, an amount of New HoldCo Common Stock up to its Backstop 

Commitment Amount (as defined herein) at the Backstop Price (as defined herein). 

In addition, PG&E has separately solicited and negotiated and expects to enter into substantially 

similar backstop commitment letters (“Other Backstop Commitment Letters”) with other funding sources 

(“Other Backstop Parties”) pursuant to which such Other Backstop Parties will commit to purchase New 

HoldCo Common Stock on the Effective Date (such commitments, “Other Backstop Commitments,” and 

together with this Backstop Commitment, the “Aggregate Backstop Commitments”).

1. Equity Offerings.

a. Structure. The Plan, among other things, shall provide that, on the Effective Date,

Reorganized HoldCo shall issue shares of New HoldCo Common Stock for up to $14 billion of aggregate 

net cash proceeds to Reorganized Holdco (the “Equity Offering Cap”). PG&E shall structure the offering 

of any such shares of New HoldCo Common Stock (or rights pursuant to which any such shares may be 

issued or other securities convertible into any such shares) (the “Equity Offering”) in accordance with the 

terms of this Section 1, including the following parameters: 

(i) if the Implied P/E Multiple with respect to such Equity Offering equals

or exceeds the greater of (A) 13.5 and (B) 13.5 times one plus any percentage change of the 

Applicable Utility Index Multiple (as defined herein) as measured on the date of this Backstop 

Commitment Letter and the Determination Date (as defined herein), then PG&E shall be 

permitted to conduct the Equity Offering in any form of primary equity offering (including any 

public offering, regular way offering, at-the-market equity offering, block trade, modified Dutch 

auction or other auction pricing mechanism, rights offering, private placement, “PIPE” sale or 

other registered or unregistered transaction) upon such terms and conditions as may be 

determined by the Board (a “Permitted Equity Offering”), including such terms and conditions 

that are reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation 

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with Jones Day) in order to avoid an “ownership change” within the meaning of Section 382 and 

the Treasury Regulations promulgated thereunder or to otherwise preserve the ability of the 

Debtors to utilize their net operating loss carryforwards and other tax attributes (collectively, the 

“NOLs”);

(ii) if the Implied P/E Multiple with respect to the Equity Offering is less 

than the Implied P/E Multiple required for a Permitted Equity Offering in Section 1(a)(i) above, 

but equals or exceeds the lesser of (A) 12 and (B) 12 times one plus the percentage change of the 

Applicable Utility Index Multiple as measured on the date of this Backstop Commitment Letter 

and the Determination Date (the “Rights Offering Threshold Multiple”), then PG&E shall 

structure the Equity Offering such that (Y) at least 80%, determined assuming the exercise in full 

of all of the Rights, of the aggregate cash proceeds of the Equity Offering is to be raised through 

the exercise of purchase rights (the “Rights”) distributed to holders of PG&E common stock 

(“Existing Shareholders”) as of a record date to be determined by the Board (the “Record Date”) 

to purchase shares of New HoldCo Common Stock for cash at a price set forth below (the “Rights 

Offering”) and (Z) the balance of the aggregate cash proceeds of the Equity Offering is to be 

raised through any other form of primary equity offering (including any public offering, regular 

way offering, at-the-market equity offering, block trade, modified Dutch auction or other auction 

pricing mechanism, private placement, “PIPE” sale or other registered or unregistered 

transaction), provided, that entities holding a majority of the Aggregate Backstop Commitments 

have not objected to the identity of the purchasers and ultimate purchasers, as applicable, in such 

Equity Offering, to the extent such Equity Offering is not a broadly syndicated underwritten 

public offering, within three business days of receipt of notice from PG&E; 

(iii) in both of paragraphs (i) and (ii) above, Reorganized Holdco may also 

raise equity capital (subject to the Equity Offering Cap) by calling on the Backstop Commitments 

(after giving effect to any reduction of the Backstop Commitments in connection with a Permitted 

Equity Offering or a Rights Offering, as applicable); and

(iv) if the Implied P/E Multiple with respect to the Equity Offering would be 

less than the Rights Offering Threshold Multiple or if for any other reason Reorganized Holdco is 

unable to execute an Equity Offering, then Reorganized Holdco shall not utilize either a 

Permitted Equity Offering or a Rights Offering and shall issue shares at the Backstop Price 

pursuant to the Backstop Commitments up to the Equity Offering Cap less the proceeds of any 

Additional Capital Sources. 

“Implied P/E Multiple” means, with respect to any Equity Offering, (A) the price per share at 

which shares of New Holdco Common Stock are offered to be sold in such Equity Offering (which price 

(x) in the case of an Equity Offering of rights, shall be the exercise price to acquire a share of New HoldCo 

Common Stock pursuant to such rights or (y) in the case of an Equity Offering of a security convertible 

into or exchangeable for shares of New HoldCo Common Stock, shall be the per share price implied by the 

conversion ratio used to convert the principal amount, liquidation preference or other face amount of such 

security into a number of shares of New HoldCo Common Stock) (the “Per Share Price”), times (B) the 

number of fully diluted shares of PG&E (calculated using the treasury stock method) that will be 

outstanding as of the Effective Date (assuming such Equity Offering and all other equity transactions 

contemplated by the Plan are consummated and settled on the Effective Date), divided by (C) the 

Normalized Estimated Net Income as of the Determination Date.

b. Additional Capital Sources. PG&E shall conduct the Equity Offering in 

accordance with the Plan. The net cash proceeds to PG&E of the Equity Offering shall not exceed the 

Equity Offering Cap, less the sum of (i) the principal amount of debt that is issued by PG&E in excess of 

$7 billion in connection with the Plan; (ii) the aggregate liquidation preference of preferred stock 

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(“Mandatory Convertible Preferred Stock”) that is distributed pursuant to the Plan to holders of Wildfire 

Claims, on the terms and conditions set forth on Exhibit B pursuant to the Plan; (iii) the principal amount 

of any Wildfire Victim Recovery Bonds issued in connection with the Plan; (iv) the proceeds of any 

preferred stock issued by the Utility (excluding any Utility Preferred Interests that are Reinstated pursuant 

to the Plan); (v) the proceeds of any third-party transactions based upon the monetization of any NOLs; and 

(vi) the principal amount of any other debt that is issued or reinstated by the Utility, excluding any debt that 

may be issued under clause (v) above, in excess of $27.35 billion in connection with the Plan (the 

“Additional Capital Sources”).

c. Rights Offering. With respect to the Rights Offering:

(i) the Rights will have a fixed exercise price equal to (a) the Rights 

Offering Threshold Multiple times (b) the Normalized Estimated Net Income as of the 

Determination Date, divided by (c) the number of fully diluted shares of PG&E (calculated using 

the treasury stock method) that will be outstanding as of the Effective Date (assuming all equity is 

raised by the exercise of all Rights);

(ii) the Rights shall be transferable;

(iii) the Board shall provide that holders of Rights who fully exercise their 

Rights will have over-subscription privileges to subscribe for additional shares of New HoldCo 

Common Stock to the extent other Rights are not exercised, with over-subscription procedures 

(including pro-ration rules) determined by the Board; 

(iv) the Board may provide that the Rights or Rights Offering include such 

terms and conditions that are reasonably advisable (based on the advice of the Debtors’ tax 

advisors after consultation with Jones Day) in order to avoid an “ownership change” within the 

meaning of Section 382 and the Treasury Regulations promulgated thereunder or to otherwise 

preserve the ability of the Debtors to utilize their NOLs, including limitations on the amount of 

Rights that are exercisable by holders who, together with persons who have a formal or informal 

understanding with such holders to make a coordinated acquisition of stock within the meaning of 

Treasury Regulations 1.382-3(a) (an “Entity”), beneficially own in excess of a specified 

percentage (e.g., 4.75%) of the outstanding shares of PG&E common stock, subject to exceptions 

to be determined by the Board; provided, however, that such terms and conditions shall not 

restrict existing holders of PG&E common stock (including any Entity) from acquiring shares 

that do not increase their aggregate beneficial ownership to more than 4.75% of the outstanding 

shares of PG&E common stock immediately after the completion of the Rights Offering; and

(v) the Rights will have such other terms and conditions as may be 

determined by the Board, as long as such other terms and conditions are consistent with the Plan 

and with every other provision of this Backstop Commitment Letter.

d. Subordinated Claims. To the extent provided in the Plan, the Debtors may issue 

Rights or New HoldCo Common Stock to holders of Claims against a Debtor that are subject to 

subordination pursuant to section 510(b) of the Bankruptcy Code and that arise from or are related to any 

equity security of the Debtor. 

e. Documentation. The definitive documentation for any Permitted Equity Offering 

or any Rights Offering shall be consistent with the Plan. For the avoidance of doubt, the organizational 

documents of the Reorganized HoldCo (including its charter) may include limitations and other terms that 

are reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation with Jones 

Day) in order to avoid an “ownership change” within the meaning of Section 382 and the Treasury 

Regulations promulgated thereunder or to otherwise preserve the ability of the Debtors to utilize their 

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NOLs; provided, however, that the organizational documents shall not be modified or amended in a manner 

that would restrict existing holders of PG&E common stock (including any Entity) from acquiring shares 

that do not increase their aggregate beneficial ownership to more than 4.75% of the outstanding shares of 

PG&E common stock immediately after the completion of the Rights Offering.

f. Use of Proceeds. The Debtors shall only use the proceeds of an Equity Offering 

to fund obligations to holders of Wildfire Claims under the Plan.

g. Notices. Promptly, and in any event, within two days of the Board’s determination 

of final pricing of any Equity Offering, PG&E shall publicly disclose the form, structure, amount and terms 

of such Equity Offering, including the Implied P/E Multiple for such Equity Offering. PG&E shall give 

the Backstop Party, as soon as reasonably practicable, but in no event later than two business days prior to 

the Effective Date, (i) written notification setting forth (A) the amount to be funded pursuant to the Backstop 

Commitment, (B) an estimate of the Backstop Price and (C) the targeted Effective Date and (ii) a 

subscription form to be completed by the Backstop Party, or other instructions, to facilitate the Backstop 

Party’s subscription for the New HoldCo Common Stock.

h. Cooperation. As reasonably requested by the Debtors, the Backstop Party shall 

reasonably cooperate with the Debtors with respect to providing information relevant to the preservation of 

the Debtors’ Tax Attributes, including information regarding (i) the number of shares of PG&E common 

stock owned by such party (on a holder-by-holder basis) prior to the Rights Offering and (ii) the amount of 

Rights exercised and shares of New HoldCo Common Stock purchased pursuant to the Backstop 

Commitment by such persons.

2. Backstop. 

a. Subject to the terms and conditions set forth herein and to the payment and 

provision of premium to the Backstop Party as provided in Section 2(c), the Backstop Party, solely on

behalf of itself, hereby commits to purchase on the Effective Date an amount of shares of New HoldCo 

Common Stock at the Backstop Price (the “Backstop Commitment”) up to the dollar amounts set forth on 

Exhibit B hereto (the “Backstop Commitment Amount”). 

b. PG&E and the Backstop Party shall cooperate in good faith to prepare and deliver 

a subscription agreement and any other documentation necessary to effect the private placement of New 

HoldCo Common Stock to the Backstop Party in accordance with the terms of this Backstop Commitment 

Letter, which documentation shall be consistent with this Backstop Commitment Letter and the Plan.

c. The Debtors agree to pay the Backstop Party the Backstop Commitment Premium 

to the extent provided on Exhibit B and to reimburse on a regular basis the Backstop Party for the reasonable 

fees and expenses of Jones Day and a financial advisor incurred prior to termination of this Backstop 

Commitment Letter in connection with the Plan, the Backstop Commitment Letter, and the transactions 

contemplated herein, provided that such reimbursement shall not exceed $17 million for Jones Day in the 

aggregate and $19 million for the financial advisor in the aggregate. The provisions for the payment of the 

Backstop Commitment Premium and the other provisions provided herein are an integral part of the 

transactions contemplated by this Backstop Commitment Letter and without these provisions the Backstop 

Party would not have entered into this Backstop Commitment Letter, and the Backstop Commitment 

Premium shall, pursuant to an order of the Bankruptcy Court approving this Backstop Commitment Letter, 

constitute allowed administrative expenses of the Debtors’ estates under sections 503(b) and 507 of the 

Bankruptcy Code. 

d. Reorganized Holdco will enter into a registration rights agreement with the 

Backstop Party in respect of the shares of New HoldCo Common Stock that the Backstop Party may acquire 

in accordance with the Plan and this Backstop Commitment Letter, which registration rights agreement 

shall be in form and substance reasonably acceptable to the holders of a majority of the Aggregate Backstop 

Commitments.

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e. To the extent that PG&E agrees to terms that are more favorable to an Other 

Backstop Party in an Other Backstop Commitment Letter (excluding terms relating to the size of such Other 

Backstop Party’s backstop commitment), PG&E shall provide notice of such terms to the Backstop Party 

no later than 10 days after the Allocation Date and, absent a written objection from the Backstop Party no 

later than 10 days after the date of such notice, such terms shall be deemed without further action to be 

incorporated into this Backstop Commitment Letter.

3. Backstop Party Representations. The Backstop Party hereby represents and warrants, 

solely as to itself, that (a) it has all limited partnership, corporate or other power and authority necessary to 

execute, deliver and perform this Backstop Commitment Letter, (b) the execution, delivery and 

performance of this Backstop Commitment Letter by it has been duly and validly authorized and approved 

by all necessary limited partnership, corporate or other organizational action by it, (c) this Backstop 

Commitment Letter has been duly and validly executed and delivered by it and, assuming due execution 

and delivery by the other parties hereto, constitutes a valid and legally binding obligation of it, enforceable 

against it in accordance with the terms of this Backstop Commitment Letter, (d) the execution, delivery and 

performance by the Backstop Party of this Backstop Commitment Letter do not (i) violate the organizational 

documents of the Backstop Party or (ii) violate any applicable law or judgment applicable to it, (e) as of the 

date of this Backstop Commitment Letter, its Backstop Commitment is, and as of the date of 

commencement of any Rights Offering and as of the Effective Date its Backstop Commitment will be, less 

than the maximum amount that it is permitted to invest in any one portfolio investment pursuant to the 

terms of its constituent documents or otherwise, (f) it has, as of the date of this Backstop Commitment 

Letter, and will have, as of the Effective Date, in the aggregate available undrawn commitments and liquid 

assets at least in the sum of its Backstop Commitment Amount hereunder, and (g) as of September 2, 2019, 

it and its affiliates (excluding any affiliate that is an Other Backstop Party) beneficially owned, directly or 

indirectly, 700,113 shares of PG&E common stock and had a “put equivalent position” (as defined in Rule 

16a-1 under the Securities Exchange Act of 1934, as amended) of zero shares of PG&E common stock (the 

number of shares beneficially owned less the number of shares in the put equivalent position being the 

“Backstop Party’s Shares”).

In addition, the Backstop Party hereby represents and warrants, solely as to itself, as of the date of 

this Backstop Commitment Letter and as of the Effective Date, that the Backstop Party (i) is acquiring the 

shares of New HoldCo Common Stock for its own account, solely for investment and not with a view 

toward, or for sale in connection with, any distribution thereof in violation of any foreign, federal, state or 

local securities or “blue sky” laws, or with any present intention of distributing or selling such shares in 

violation of any such laws, (ii) has such knowledge and experience in financial and business matters and in 

investments of this type that it is capable of evaluating the merits and risks of its investment in the shares 

of New HoldCo Common Stock and of making an informed investment decision, and (iii) is an “accredited 

investor” within the meaning of Rule 501 of Regulation D under the Securities Act of 1933, as amended 

(the “Securities Act”). The Backstop Party understands that Reorganized HoldCo will be relying on the 

statements contained herein to establish an exemption from registration under the Securities Act and under 

foreign, federal, state and local securities laws and acknowledges that the shares of New HoldCo Common 

Stock will not be registered under the Securities Act or any other applicable law and that such shares may 

not be transferred except pursuant to the registration provisions of the Securities Act (and in compliance 

with any other applicable law) or pursuant to an applicable exemption therefrom.

4. Conditions to Backstop Party Commitment. The obligations of the Backstop Party to fund 

its Backstop Commitment to PG&E in accordance with this Backstop Commitment Letter are further 

expressly conditioned upon and subject to the satisfaction or written waiver by the Backstop Party, in its 

sole discretion, at or prior to the Effective Date of each of the following conditions, which PG&E 

acknowledges are an integral part of the transactions contemplated by this Backstop Commitment Letter 

and without these conditions the Backstop Party would not have entered into this Backstop Commitment 

Letter.

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a. by November 7, 2019, the Debtors shall have received valid and enforceable Other 

Backstop Commitments on substantially the same terms and conditions as set forth in this Backstop 

Commitment Letter that in the aggregate with this Backstop Commitment result in Aggregate Backstop 

Commitments of no less than the Equity Offering Cap;

b. other than the consummation of any Permitted Equity Offering or the Rights 

Offering, the satisfaction of all of the other conditions to the Effective Date provided for in the Plan or the 

waiver of any such conditions by the Debtors in accordance with the Plan (to the extent the Plan expressly 

provides for the possibility of such a waiver);

c. the Bankruptcy Court shall have entered the Confirmation Order, which shall 

confirm the Plan with such amendments, modifications, changes and consents as are approved by those 

entities having no less than a majority of the Aggregate Backstop Commitments (such approval not to be 

unreasonably withheld, conditioned or delayed), and such Confirmation Order shall be in full force and 

effect, and no stay thereof shall be in effect; 

d. this Backstop Commitment Letter shall have been approved by an order of the 

Bankruptcy Court and such order shall be in full force and effect, and no stay thereof shall be in effect;

e. the transactions contemplated herein shall have been authorized by an order of the 

Bankruptcy Court (which may be the Confirmation Order) such order shall be in full force and effect, and 

no stay thereof shall be in effect;

f. total PG&E weighted average earning rate base (including electric generation, 

electric transmission, electric distribution, gas distribution, gas transmission and storage) for estimated 

2021 shall be no less than 95% of $48 billion; and

g. no result, occurrence, fact, change, event, effect, violation, penalty, inaccuracy or 

circumstance (whether or not constituting a breach of a representation, warranty or covenant set forth in the 

Plan) that, individually or in the aggregate with any such other results, occurrences, facts, changes, events, 

effects, violations, penalties, inaccuracies, or circumstances, (i) would have or would reasonably be 

expected to have a material adverse effect on the business, operations, assets, liabilities, capitalization, 

financial performance, financial condition or results of operations, in each case, of the Debtors, taken as a 

whole, or (ii) would reasonably be expected to prevent or materially delay the ability of the Debtors to 

consummate the transactions contemplated by this Backstop Commitment Letter or the Plan or perform 

their obligations hereunder or thereunder (each a “Material Adverse Effect”) shall have occurred; provided, 

however, that none of the following results, occurrences, facts, changes, events, effects, violations, 

penalties, inaccuracies, or circumstances shall constitute or be taken into account in determining whether a 

Material Adverse Effect has occurred, is continuing or would reasonably be expected to occur: (A) the 

filing of the Chapter 11 Cases, and the fact that the Debtors are operating in bankruptcy (B) results, 

occurrences, facts, changes, events, effects, violations, inaccuracies, or circumstances affecting (1) the 

electric or gas utility businesses in the United States generally or (2) the economy, credit, financial, capital 

or commodity markets, in the United States or elsewhere in the world, including changes in interest rates, 

monetary policy or inflation, (C) changes or prospective changes in law (other than any law or regulation 

of California or the United States that is applicable to any electrical utility) or in GAAP or accounting 

standards, or any changes or prospective changes in the interpretation or enforcement of any of the 

foregoing, (D) any decline in the market price, or change in trading volume, of any securities of the 

Debtors, (E) any failure to meet any internal or public projections, forecasts, guidance, estimates, 

milestones, credit ratings, budgets or internal or published financial or operating predictions of revenue, 

earnings, cash flow or cash position, (F) any wildfire occurring after the Petition Date and prior to January 1, 

2020, and (G) one or more wildfires, occurring on or after January 1, 2020, that destroys or damages fewer 

than 500 dwellings or commercial structures (“Structures”) in the aggregate (it being understood that (I) 

the exceptions in clauses (D) and (E) shall not prevent or otherwise affect a determination that the 

underlying cause of any such change, decline or failure referred to therein is a Material Adverse Effect and 

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(II) a Material Adverse Effect shall include the occurrence of one or more wildfires on or after January 1, 

2020 destroying or damaging at least 500 Structures within PG&E’s service area where none of the 

following are true with respect any such wildfire (a) the portion of PG&E’s system at the location of such 

wildfire was not de-energized; (b) there has been no determination by a final order that such wildfire was 

caused by a person or entity other than the Utility; and (c) there has been no determination that such wildfire 

was not caused by the negligence or intentional misconduct of the Utility by a final order of a court having 

jurisdiction).

5. Termination by the Backstop Party. Subject to the last paragraph of this Section 5, the 

Backstop Party may terminate this Backstop Commitment Letter, solely as to itself, by written notice (which 

shall describe the basis for such termination), on or after the occurrence of any of the following:

a. the Plan has not been filed with the Bankruptcy Court by 11:59 p.m. Pacific Time 

on September 9, 2019 or the Plan filed with the Bankruptcy Court on or after such date differs from the 

draft of the Plan attached hereto as Exhibit A; 

b. the condition set forth in Section 4(a) is not satisfied as of November 7, 2019;

c. the Bankruptcy Court has not entered an order approving this Backstop 

Commitment Letter on or before November 20, 2019;

d. subject to Section 11, (i) the Plan has been amended modified or changed, in each 

case without the consent of the entities holding a majority of the Aggregate Backstop Commitments (such 

consent not to be unreasonably withheld, conditioned or delayed) or (ii) any Plan Supplement or any Plan 

Document shall have been filed or finalized without the consent of entities holding a majority of the 

Aggregate Backstop Commitments (such consent not to be unreasonably withheld, conditioned or delayed); 

e. the Confirmation Order has not been entered by the Bankruptcy Court on or before 

June 30, 2020 (the “Outside Date”); 

f. the Effective Date has not occurred on or before 60 days after entry of the 

Confirmation Order;

g. the Debtors have failed to perform any of their obligations set forth in this 

Backstop Commitment Letter, which failure to perform (i) would give rise to the failure of a condition set 

forth in Section 4(b) or 4(c) and (ii) is incapable of being cured or, if capable of being cured by the Outside 

Date, the Debtors have not cured within 10 calendar days following receipt by the Debtors of written notice 

of such failure to perform from the Backstop Party stating the Backstop Party’s intention to terminate this 

Backstop Commitment Letter pursuant to this Section 5(g) and the basis for such termination; 

h. the occurrence of a Material Adverse Effect; 

i. the occurrence of one or more wildfires in the Debtors’ service territory after the 

Petition Date and prior to January 1, 2020 that is asserted by any person to arise out of the Debtors’ activities 

and that destroys or damages more than 500 Structures; provided, however, that any notice of termination 

under this clause (i) must be given on or before January 15, 2020; 

j. the Debtors’ aggregate liability with respect to Wildfire Claims is determined 

(whether (i) by the Bankruptcy Court (or the District Court to which the reference has been partially 

withdrawn for estimation purposes), (ii) pursuant to an agreement between the Debtors and the holders of 

Wildfire Claims, or (iii) through a combination thereof) to exceed $17.9 billion (the “Wildfire Claims 

Cap”); provided, however, that for purposes of this clause (j), (A) any Wildfire Claim that the CPUC has 

approved or agreed to approve for recovery or pass through by the Utility shall not count in determining 

the Wildfire Claims Cap, and (B) the Wildfire Claims Cap shall be increased by an amount equal to the 

amount of Wildfire Claims consisting of professional fees that the Bankruptcy Court (or the District Court 

to which the reference has been partially withdrawn for estimation purposes) determines to be reasonable;

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k. the CPUC fails to issue all necessary approvals, authorizations and final orders to 

implement the Plan prior to the Outside Date, and to participate in the Go-Forward Wildfire Fund, 

including: (i) provisions satisfactory to entities holding a majority of the Aggregate Backstop Commitments 

(such approval not to be unreasonably withheld, conditioned or delayed) pertaining to authorized return on 

equity and regulated capital structure, (ii) a disposition, satisfactory to entities holding a majority of the 

Aggregate Backstop Commitments (such approval not to be unreasonably withheld, conditioned or 

delayed), of proposals for certain potential changes to PG&E’s corporate structure and authorizations for 

the Utility to operate as a utility, (iii) a resolution, satisfactory to entities holding a majority of the Aggregate 

Backstop Commitments (such approval not to be unreasonably withheld, conditioned or delayed), of claims 

for monetary fines or penalties under the California Public Utilities Code for conduct prior to the Petition 

Date, and (iv) approval (or exemption from approval) of the financing structure and securities to be issued 

under the Plan;

l. if at any time after the first day of the Confirmation Hearing, asserted 

Administrative Expense Claims exceed $250 million, excluding all (i) ordinary course Administrative 

Expense Claims, (ii) Professional Fee Claims, and (iii) Disallowed Administrative Expense Claims;

m. there is in effect an order of a governmental authority of competent jurisdiction 

permanently restraining, enjoining or otherwise prohibiting the consummation of any of the transactions 

contemplated by the Plan, or any law, statute, rule, regulation or ordinance is adopted that makes 

consummation of the transactions contemplated by the Plan illegal or otherwise prohibited.

PG&E shall promptly provide notice to the Backstop Party of (i) the occurrence of any fact, event, 

or omission that is not publicly disclosed that gives rise or reasonably can be expected to give rise to a 

termination right under this Section 5 and (ii) the receipt of any termination notice from any Other Backstop 

Party, including the asserted basis for such termination, whether or not PG&E concurs therewith.

Upon valid termination of this Backstop Commitment Letter by the Backstop Party (such 

terminating Backstop Party, a “Terminating Backstop Party”) pursuant to any of Section 5(a) through (m), 

this Backstop Commitment Letter shall be void and of no further force or effect solely with respect to such 

Terminating Backstop Party is obligated herein, such Terminating Backstop Party shall be released from 

its Backstop Commitments, undertakings and agreements under or related to this Backstop Commitment 

Letter, including its Backstop Commitment, except as explicitly provided herein and there shall be no 

liability or obligation on the part of such Terminating Backstop Party hereunder, except as expressly 

provided herein. Notwithstanding any termination by a Terminating Backstop Party, PG&E shall remain 

liable for the payment of all earned Backstop Commitment Premiums and expense reimbursement 

obligations in this Backstop Commitment Letter.

The Backstop Party’s obligations under this Backstop Commitment Letter shall automatically 

terminate in the event that PG&E has not returned a counter-signed copy of this Backstop Commitment 

Letter agreeing to its terms on or before the date that is two weeks from the day the Backstop Party furnished 

a signed copy of this Backstop Commitment Letter to PG&E.

The Backstop Party may not seek to (i) assert the failure of any condition precedent to any of its 

obligations or agreements under this Backstop Commitment Letter or (ii) terminate this Backstop 

Commitment Letter (including pursuit of any other remedies), in each case unless the Backstop Party has 

given written notice to PG&E of such assertion or termination.

Notwithstanding anything in this Backstop Commitment Letter to the contrary, any notice of 

termination under clauses (d), (g), (h), (i), (k), (l) and (m) shall not be effective unless PG&E has received 

notices of termination from entities constituting a majority of the outstanding Aggregate Backstop 

Commitments with respect to the event or circumstance that is the basis for such notice of termination. 

PG&E shall provide the Backstop Party with a notice of such effective termination within two business 

days of the effectiveness of the termination. 

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In the event that any fact or circumstance would give the Backstop Party the right to terminate 

under more than one clause in this Section 5, the exercise of a termination right under any one clause shall 

not prejudice the Backstop Party from exercising a termination right under any other clause based on the 

same event or circumstance.

6. Termination by PG&E; Defaulting Backstop Party; Extension Options. PG&E may 

terminate this Backstop Commitment Letter (including all Backstop Commitments hereunder) (a) at any 

time prior to countersigning such Backstop Commitment Letter, (b) if, on any date after November 7, 2019, 

the condition set forth in Section 4(a) would not be satisfied if tested on such date, (c) in the event of a 

material breach of a representation or warranty of the Backstop Party set forth in Section 3, (d) in the event 

that the Backstop Party repudiates this Backstop Commitment Letter, purports to terminate this Backstop 

Commitment Letter if such purported termination is not a valid termination of this Backstop Commitment 

Letter as determined in a final order of a court with jurisdiction or fails to fund its Backstop Commitment 

when required to do so in accordance with this Backstop Commitment Letter, (e) if the Backstop 

Commitment Amount has been reduced to zero in accordance with Section 7, (f) if the Backstop Party has 

the right to terminate this Backstop Commitment Letter under clause (h), (i), (j) or (m) of Section 5, or (g) 

if (i) a third party makes a binding proposal to acquire at least 50% of the outstanding PG&E common stock 

(including by means of a merger, joint venture, partnership, consolidation, dissolution, liquidation, tender 

offer, recapitalization, reorganization, share exchange, business combination or similar transaction), (ii) 

either (x) the implementation of such proposal would require the approval of holders of a majority of the 

PG&E common stock or (y) the price contemplated by such proposal would exceed 125% of the Equity 

Offering Cap, and (iii) the Board determines in good faith, after consultation with PG&E’s outside legal 

counsel, that the failure to terminate this Backstop Commitment Letter in response to such proposal would 

be inconsistent with the exercise of its fiduciary duties to the stockholders of PG&E under applicable law. 

In the event of a breach, repudiation, purported termination or failure to fund contemplated by the foregoing 

clause (c) or (d), the Backstop Party shall be deemed to be a “Defaulting Backstop Party”. In the event 

that the Backstop Party becomes a Defaulting Backstop Party, then PG&E may, upon notice to such 

Defaulting Backstop Party, require the Backstop Party to assign and delegate, without recourse, all its 

interests, rights (other than any Backstop Commitment Premiums earned prior to the date of such 

assignment and delegation) and obligations under this Backstop Commitment Letter to a third party that 

shall assume such obligations (which assignee may be an Other Backstop Party, if an Other Backstop Party 

accepts such assignment and delegation). Notwithstanding any termination by PG&E under Sections 6(b), 

(e), (f) or (g), PG&E shall remain liable for the payment of all earned Backstop Commitment Premiums 

and expense reimbursement obligations in this Backstop Commitment Letter.

In the event that any fact or circumstance would give PG&E the right to terminate under more than 

one clause in this Section 6, the exercise of a termination right under any one clause shall not prejudice

PG&E from exercising a termination right under any other clause based on the same event or circumstance.

Notwithstanding anything to the contrary herein, this Backstop Commitment Letter shall 

automatically terminate on January 20, 2020 (the “Initial Termination Date”). Provided that this Backstop 

Commitment Letter remains in full force and effect and has not been otherwise terminated, PG&E may 

extend the Initial Termination Date to April 30, 2020 (the “First Extension Date”) upon providing written 

notice to the Backstop Party of its intent to exercise this option (the “First Extension Notice”) no later than 

three days prior to the Initial Termination Date. In the event that PG&E has provided the Backstop Party a 

timely and proper First Extension Notice and this Backstop Commitment Letter remains in full force and 

effect, PG&E may extend the First Extension Date to the Outside Date (the “Second Extension Date”) 

upon providing written notice to the Backstop Party of its intent to exercise this option (the “Second

Extension Notice”) no later than three days prior to the First Extension Date. In the event that PG&E has 

provided the Backstop Party a timely and proper Second Extension Notice and this Backstop Commitment 

Letter remains in full force and effect, PG&E may extend the Second Extension Date to the 60th day 

following the Outside Date (the “Third Extension Date”) upon providing written notice to the Backstop 

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Party of its intent to exercise this option (the “Third Extension Notice”) no later than three days prior to 

the Second Extension Date.

7. Reduction of Commitments by PG&E. 

a. In the event that on or prior to November 7, 2019, PG&E receives Aggregate 

Backstop Commitments that exceed the Equity Offering Cap (such excess, the “Overallotment Amount”), 

then, on November 8, 2019 (the “Allocation Date”), the Backstop Commitment Amount shall be 

automatically reduced by an amount equal to (i) the Overallotment Amount, times (ii) a fraction, (A) the 

numerator of which is the Backstop Party’s Shares and (B) the denominator of which is the aggregate 

number of shares of PG&E common stock held by the Backstop Party and the Other Backstop Parties, 

collectively, as of September 6, 2019 (without double counting any shares beneficially owned, directly or 

indirectly, by more than one Backstop Party). Notwithstanding the foregoing, on the Allocation Date, in 

the event there is an Overallotment Amount and for the purpose of curing such Overallotment Amount, 

PG&E may reduce the Backstop Commitment Amount as to any Backstop Party to the extent such reduction 

is reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation with Jones Day) 

in order to avoid an “ownership change” within the meaning of Section 382 and the Treasury Regulations 

promulgated thereunder or to otherwise preserve the ability of the Debtors to utilize their NOLs; provided

that such reduction may not be below the amount of Backstop Commitments at which such Backstop Party 

would maintain its existing percentage ownership of the total outstanding shares of PG&E common stock. 

Within three business days of the Allocation Date, PG&E shall provide the Backstop Party with a notice of 

any adjustment to its Backstop Commitment Amount under this Section 7(a).

b. In the event that, after November 7, 2019, the Debtors (i) receive binding 

commitments providing for funding from any Additional Capital Sources that (A) have conditions to 

funding and commitment termination rights that are no less favorable to PG&E than those in this Backstop 

Commitment Letter and (B) are approved by an order of the Bankruptcy Court, or (ii) actually obtain 

funding from any Additional Capital Sources, then (x) in the case of clause (i), PG&E may reduce the 

Backstop Commitment Amount, and (y) in the case of clause (ii), the Backstop Commitment Amount shall 

be automatically reduced (if not already reduced pursuant to clause (i)), in each case by an amount equal to 

(A) the amount of such funding, times (B) a fraction, (1) the numerator of which is the Backstop 

Commitment Amount immediately prior to such reduction and (2) the denominator of which is the 

Aggregate Backstop Commitments as of immediately prior to such reduction. Any reduction in the 

Backstop Commitment pursuant to this Section 7(b) shall not reduce any Backstop Commitment Premium 

earned prior to the date of such reduction.

c. In the event that the Debtors consummate any Permitted Equity Offering or Rights 

Offering, the Backstop Commitment Amount shall be automatically reduced by an amount equal to (i) the 

net cash proceeds of such Permitted Equity Financing or such Rights Offering plus the proceeds of any 

Additional Capital Sources, as applicable, times (ii) a fraction, (A) the numerator of which is the Backstop 

Commitment Amount immediately prior to such reduction and (B) the denominator of which is the 

Aggregate Backstop Commitments as of immediately prior to such reduction.

d. The Debtors shall provide notice to the Backstop Party in the event that the 

Backstop Commitment Amount is reduced as provided above. References herein to “Backstop 

Commitment Amount” or “Backstop Commitment” mean such amounts as adjusted in accordance with the 

terms of this Backstop Commitment Letter. Any Backstop Commitments that have been terminated or 

reduced shall be terminated or reduced, as applicable, permanently.

8. Assignment. This Backstop Commitment Letter (a) is not assignable by the Backstop 

Party, and any purported assignment shall be null and void ab initio; provided, however, Backstop Party 

may assign its Backstop Commitment, in whole or in part, to (i) another Backstop Party, (ii) an affiliate of 

the Backstop Party, or (iii) an investment fund or separately managed account the primary investment 

advisor or sub advisor to which is a Backstop Party or an affiliate thereof, to the extent such assignee 

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Backstop Party agrees in writing to assume all obligations hereunder of such Backstop Party in connection 

with such Backstop Commitment, and any assignment under this proviso shall not relieve the Backstop 

Party from its obligations under this Backstop Commitment Letter, and (b) is intended to be solely for the 

benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, 

any person or entity other than the parties hereto. Notwithstanding the foregoing, a Backstop Party may 

assign all or any portion of its obligations hereunder to a “qualified institutional buyer” (as defined in 

Rule 144A under the Securities Act of 1933, as amended), without the consent of any party, provided, 

however, that (i) absent the prior written consent of PG&E, such assignee (including any Entity) does not, 

and as a result of such assignment will not, beneficially own more than 4.75% of the Aggregate Backstop 

Commitments and (ii) any assignment under this sentence shall not relieve the Backstop Party from its 

obligations under this Backstop Commitment Letter.

9. Entire Agreement. This Backstop Commitment Letter, including all exhibits hereto, 

constitutes the entire understanding among the parties hereto with respect to the subject matter hereof and 

replaces and supersedes all prior agreements and understandings, both written and oral, between the parties 

hereto with respect to the subject matter hereof and, subject to the terms hereof, shall become effective and 

binding upon the mutual exchange of fully executed counterparts by each of the parties hereto.

10. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Backstop 

Commitment Letter shall be governed by, and construed in accordance with, the internal laws of the State 

of New York, without giving effect to the principles of conflict of laws that would require the application 

of the law of any other jurisdiction. By its execution and delivery of this Backstop Commitment Letter, 

each of the parties hereto irrevocably and unconditionally agrees for itself that any legal action, suit or 

proceeding against it with respect to any matter under or arising out of or in connection with this Backstop 

Commitment Letter or for recognition or enforcement of any judgment rendered in any such action, suit or 

proceeding, may be brought only in the Bankruptcy Court. By execution and delivery of this Backstop 

Commitment Letter, each of the parties hereto irrevocably accepts and submits itself to the exclusive 

jurisdiction of the Bankruptcy Court with respect to any such action, suit or proceeding. EACH PARTY 

HERETO UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR 

PROCEEDING REFERRED TO ABOVE.

11. Amendment; Waiver; Counterparts. This Backstop Commitment Letter may not be 

amended or waived by or on behalf of the Backstop Party, and no consent may be given hereunder by or 

on behalf of the Backstop Party (including to an amendment or waiver of any provision of the Plan), except 

in writing signed by the holders of a majority of the Aggregate Backstop Commitments (whether or not the 

Backstop Party signs such amendment or waiver), and confirmed in writing by the Company; provided, 

however, that without the prior written consent of the Backstop Party, this Backstop Commitment Letter 

may not be amended to (a) increase the amount of the Backstop Commitment Amount or Backstop 

Commitment, (b) decrease the Backstop Commitment Premium, (c) extend the Backstop Commitment 

beyond the Third Extension Date, (d) amend the definition of “Backstop Price” or any component thereof, 

and (e) amend, modify, or waive the condition in Section 4(d). This Backstop Commitment Letter may be 

executed in any number of counterparts, each of which will be an original, and all of which, when taken 

together, will constitute one agreement. Delivery of an executed counterpart of this Backstop Commitment 

Letter by e-mail or portable document format (PDF) will be effective as delivery of a manually executed 

counterpart of this Backstop Commitment Letter.

12. Notices. All notices required or permitted to be given under this Backstop Commitment 

Letter, unless otherwise stated herein, shall be given by overnight courier at the addresses specified below, 

or at such other address or addresses as a party may designate for itself in writing, or by email (if confirmed) 

at the email addresses specified below:

If to the Backstop Party, to the name, address and email address located on the Backstop Party’s 

signature page to this Backstop Commitment Letter.

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If to the Debtors:

PG&E Corporation

77 Beale Street

P.O. Box 770000

San Francisco, California 94177

Attention: Janet Loduca, Senior Vice President and General Counsel

Email: J1Lc@pge.com

with a copy to:

Cravath, Swaine & Moore LLP

825 Eighth Avenue

New York, New York 10019

Attention: Richard Hall; Paul Zumbro

Email: RHall@cravath.com; PZumbro@cravath.com

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Attention: Stephen Karotkin

Email: Stephen.karotkin@weil.com

13. No Liability. Notwithstanding anything that may be expressed or implied in this Backstop 

Commitment Letter, each party hereto acknowledges and agrees that no person other than the Backstop 

Party (and it permitted assigns) shall have any obligation hereunder (subject to the limitations provided 

herein) or in connection with the transactions contemplated hereby and that (a) notwithstanding that any 

Backstop Party may be a partnership, limited partnership or limited liability company, no recourse (whether 

at law, in equity, in contract, in tort or otherwise) hereunder or under any document or instrument delivered 

in connection herewith, or in respect of any oral representations made or alleged to be made in connection 

herewith or therewith, shall be had against any former, current or future direct or indirect equity holder, 

controlling person, general or limited partner, shareholder, member, investment manager or adviser, 

manager, director, officer, employee, agent, affiliate, assignee, representative or financing source of any of 

the foregoing) (any such person or entity, other than such Backstop Party, a “Related Party”) or any Related 

Party of any such Related Party, including, without limitation, any liabilities arising under, or in connection 

with, the Plan or this Backstop Commitment Letter and the transactions contemplated thereby and hereby, 

or in respect of any oral representations made or alleged to be made in connection therewith or herewith), 

whether by the enforcement of any judgment or assessment or by any legal or equitable proceeding, or by 

virtue of any statute, regulation or other applicable law and (b) no personal liability whatsoever will attach 

to, be imposed on or otherwise be incurred by any Related Party of the Backstop Party or any Related Party 

of any such Related Party under this Backstop Commitment Letter or any document or instrument delivered 

in connection herewith or with the Plan Term Sheet or the Plan (or in respect of any oral representation 

made or alleged to be made in connection herewith or therewith) or for any action (whether at law, in equity, 

in contract, in tort or otherwise) based on, in respect of, or by reason of such obligations hereunder or by 

their creation.

14. Plan Support. For as long as this Backstop Letter Agreement is in effect, the Backstop 

Party shall (i) use all reasonable efforts to support the Plan with respect to the treatment of HoldCo Common 

Interests and to act in good faith to consummate the Plan with respect to any Equity Offering and the 

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Backstop Commitments, (ii) to the extent the Backstop Party is entitled to vote on the Plan, timely vote (or 

cause to be voted) all of its HoldCo Common Interests and Claims to accept the Plan (and not to change or 

withdraw any such vote), and (iii) timely vote (or cause to be voted) its HoldCo Common Interests and 

Claims to reject any plan of reorganization other than the Plan.

15. The Backstop Party shall not be required, pursuant to the terms of this Backstop 

Commitment Letter, to acquire or purchase any securities or indebtedness in connection with any Equity 

Offering that, pursuant to the terms of a Backstop Commitment Letter or other agreement, are to be acquired 

or subscribed for by any other party, nor shall the Backstop Party be required, pursuant to the terms of this 

Backstop Commitment Letter, to pay any money or other consideration, or exchange any claims 

whatsoever, which are owing from, or to be transferred from or by, any other party pursuant to the terms of 

another Backstop Commitment Letter or other agreement. Nothing in this Backstop Commitment Letter 

shall be deemed to constitute an agreement or a joint venture or partnership with or between any other 

person or entity nor constitute any party as the agent of any other person or entity for any purpose. For the 

avoidance of doubt, no Backstop Party shall, nor shall any action taken by a Backstop Party hereunder, be 

deemed to be acting in concert with any other person or entity with respect to the Backstop Commitment 

or any other matter nor shall the Backstop Commitments hereunder create a presumption that the Backstop 

Party is in any way acting in concert or as a group with any other person or entity whether as a result of this 

commitment or otherwise. 

16. Each party hereto confirms that it has made its own decision to execute this Backstop 

Commitment Letter based upon its own independent assessment of documents and information available 

to it, as it has deemed appropriate.

17. Except as expressly provided in this Backstop Commitment Letter, (a) nothing herein is 

intended to, or does, in any manner waive, limit, impair or restrict the ability of each party hereto to protect 

and preserve its rights, remedies and interests, including, without limitation, any claims against or interests 

in any of the Debtors or other parties, or its full participation in any bankruptcy proceeding, and (b) the 

parties hereto each fully preserve any and all of their respective rights, remedies, claims and interests as of 

the date hereof and upon a termination of this Backstop Commitment Letter. Further, nothing in this 

Backstop Commitment Letter shall be construed to prohibit any party hereto from appearing as a party-ininterest in any matter to be adjudicated in the Chapter 11 Cases, so long as such appearance and the positions 

advocated in connection therewith are consistent with this Backstop Commitment Letter and the Plan, and 

are not for the purpose of, and could not reasonably be expected to have the effect of, hindering, delaying 

or preventing the consummation of the transactions contemplated by the Plan.

[signature page follows]

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Exhibit A 

Plan of Reorganization

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See the Debtors’ Joint Chapter 11 Plan of Reorganization filed at Docket No. 3841.

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Exhibit B 

Mandatory Preferred Stock Term Sheet

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Term Sheet for 

5.00% Mandatory Convertible Preferred Stock

Issuer: PG&E Corporation (“PG&E”)

Title of Securities: 5.00% Mandatory Convertible Preferred Stock of PG&E (the 

“Mandatory Convertible Preferred Stock”)

Shares of Mandatory Convertible 

Preferred Stock Offered by PG&E: Up to [●] shares

Offering Price:

Issue Date:

$1,000 per share of the Mandatory Convertible Preferred 

Stock

The Effective Date of the Plan

Liquidation Preference: $1,000 per share

Dividends: 5.00% of the Liquidation Preference of $1,000 per share of 

the Mandatory Convertible Preferred Stock per year 

(equivalent to $50 per annum per share), when, as and if 

declared by the Board, payable in cash or, by delivery of 

additional shares of Mandatory Convertible Preferred Stock 

or any combination of cash and shares of Mandatory 

Convertible Preferred Stock, as determined by PG&E in its 

sole discretion

Floor Price: 100% of the Initial Price, subject to standard anti-dilution 

adjustments 

Dividend Payment Dates: If declared, January 1, April 1, July 1 and October 1 of each 

year, commencing on (TBD)

Dividend Record Dates: The March 15, June 15, September 15 and December 15 

immediately preceding the next dividend payment date

Redemption: The Mandatory Convertible Preferred Stock will be 

redeemable on terms and conditions to be determined

Initial Price: A per share price equal to (a) the greater of (i) an Implied P/E 

Multiple of 13.5 or (ii) the Implied P/E Multiple of a 

Permitted Equity Offering, times (b) the Normalized 

Estimated Net Income as of the Determination Date, divided 

by (c) the number of fully diluted shares of PG&E (calculated 

using the treasury stock method) that will be outstanding as 

of the Effective Date.

Threshold Appreciation Price: 110% of the Initial Price, subject to standard ant-dilution 

adjustments

Mandatory Conversion Date: 1/8th of the Mandatory Convertible Preferred Stock will 

convert into PG&E common stock 90, 180, 270, 360, 450, 

540, 630, and 720 days from Issue Date

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Conversion Rate: Upon conversion on the Mandatory Conversion Date, the 

conversion rate for each share of the Mandatory Convertible 

Preferred Stock will be not more than [●] shares of PG&E 

common stock (the “Maximum Conversion Rate”) and not 

less than [●] shares of PG&E common stock (the “Minimum 

Conversion Rate”), depending on the Applicable Market 

Value of the PG&E common stock subject to standard antidilution adjustments. The following table illustrates the 

conversion rate per share of the Mandatory Convertible 

Preferred Stock (in each case, subject to standard antidilution adjustments):

Applicable Market Value of

the PG&E Common Stock

Conversion rate (number of shares of 

PG&E Common Stock to be received 

upon

conversion of each share of the 

Mandatory Convertible Preferred 

Stock)

Greater than 110% of the Initial 

Price (which is the Threshold 

Appreciation Price)

[●] shares (approximately equal 

to $1,000 divided by the 

Threshold Appreciation Price)

Equal to or less than the Threshold 

Appreciation Price but greater 

than or equal to the Floor Price

Between [●] and [●] shares, 

determined by dividing $1,000 

by the Applicable Market Value 

of the PG&E common stock

Less than the Floor Price [●] shares (approximately equal 

to $1,000 divided by the Floor 

Price)

Applicable Market Value:

Conversion at the Option of the Holder:

The “Applicable Market Value” shall be the 10-trading day VWAP 

immediately preceding the applicable Mandatory Conversion Date

At any time prior to final Mandatory Conversion Date, holders of the 

Mandatory Convertible Preferred Stock have the option to elect to 

convert their shares of the Mandatory Convertible Preferred Stock in 

whole or in part (but in no event less than one share of the Mandatory 

Convertible Preferred Stock), into shares of PG&E common stock at 

the Minimum Conversion Rate of shares of PG&E common stock per 

share of the Mandatory Convertible Preferred Stock. This Minimum 

Conversion Rate is subject to standard anti-dilution adjustments.

Limitation on Ownership No holder, together with persons who have a formal or informal 

understanding with such assignee to make a coordinated acquisition of 

stock, shall acquire beneficial ownership (within the meaning of 

Section 382 and the Treasury Regulations) of more than 4.75% of the 

outstanding Mandatory Convertible Preferred Stock without the prior 

written consent of PG&E.

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EXECUTION VERSION

1 

September 9, 2019

PG&E Corporation 

77 Beale Street

P.O. Box 770000 

San Francisco, California 94177 

Re: Chapter 11 Plan Backstop Commitment Letter 

Ladies and Gentlemen:

Reference is hereby made to the chapter 11 bankruptcy cases, lead case no. 19-30088 (the 

“Chapter 11 Cases”), currently pending before the United States Bankruptcy Court for the Northern District 

of California (the “Bankruptcy Court”), in which PG&E Corporation (“PG&E” or the “Company”) and 

Pacific Gas and Electric Company (the “Utility” and together with PG&E, the “Debtors”) are debtors in 

possession. Reference is further made to the Chapter 11 plan of reorganization attached hereto as Exhibit 

A (the “Plan”) to implement the terms and conditions of the reorganization of the Debtors as provided 

therein. Capitalized terms used in this backstop commitment letter (this “Backstop Commitment Letter”) 

or in the exhibits hereto but not otherwise defined shall have the meanings ascribed to them in the Plan. 

The word “including” means “including, without limitation”. 

In order to facilitate the Debtors’ emergence from Chapter 11, pursuant to this Backstop 

Commitment Letter, and subject to the terms, conditions and limitations set forth herein and in consideration 

for the Backstop Commitment Premium, the undersigned Backstop Party (the “Backstop Party”) is willing 

to purchase, on the Effective Date, an amount of New HoldCo Common Stock up to its Backstop 

Commitment Amount (as defined herein) at the Backstop Price (as defined herein). 

In addition, PG&E has separately solicited and negotiated and expects to enter into substantially 

similar backstop commitment letters (“Other Backstop Commitment Letters”) with other funding sources 

(“Other Backstop Parties”) pursuant to which such Other Backstop Parties will commit to purchase New 

HoldCo Common Stock on the Effective Date (such commitments, “Other Backstop Commitments,” and 

together with this Backstop Commitment, the “Aggregate Backstop Commitments”).

1. Equity Offerings.

a. Structure. The Plan, among other things, shall provide that, on the Effective Date,

Reorganized HoldCo shall issue shares of New HoldCo Common Stock for up to $14 billion of aggregate 

net cash proceeds to Reorganized Holdco (the “Equity Offering Cap”). PG&E shall structure the offering 

of any such shares of New HoldCo Common Stock (or rights pursuant to which any such shares may be 

issued or other securities convertible into any such shares) (the “Equity Offering”) in accordance with the 

terms of this Section 1, including the following parameters: 

(i) if the Implied P/E Multiple with respect to such Equity Offering equals

or exceeds the greater of (A) 13.5 and (B) 13.5 times one plus any percentage change of the 

Applicable Utility Index Multiple (as defined herein) as measured on the date of this Backstop 

Commitment Letter and the Determination Date (as defined herein), then PG&E shall be 

permitted to conduct the Equity Offering in any form of primary equity offering (including any 

public offering, regular way offering, at-the-market equity offering, block trade, modified Dutch 

auction or other auction pricing mechanism, rights offering, private placement, “PIPE” sale or 

other registered or unregistered transaction) upon such terms and conditions as may be 

determined by the Board (a “Permitted Equity Offering”), including such terms and conditions 

that are reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation 

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with Jones Day) in order to avoid an “ownership change” within the meaning of Section 382 and 

the Treasury Regulations promulgated thereunder or to otherwise preserve the ability of the 

Debtors to utilize their net operating loss carryforwards and other tax attributes (collectively, the 

“NOLs”);

(ii) if the Implied P/E Multiple with respect to the Equity Offering is less 

than the Implied P/E Multiple required for a Permitted Equity Offering in Section 1(a)(i) above, 

but equals or exceeds the lesser of (A) 12 and (B) 12 times one plus the percentage change of the 

Applicable Utility Index Multiple as measured on the date of this Backstop Commitment Letter 

and the Determination Date (the “Rights Offering Threshold Multiple”), then PG&E shall 

structure the Equity Offering such that (Y) at least 80%, determined assuming the exercise in full 

of all of the Rights, of the aggregate cash proceeds of the Equity Offering is to be raised through 

the exercise of purchase rights (the “Rights”) distributed to holders of PG&E common stock 

(“Existing Shareholders”) as of a record date to be determined by the Board (the “Record Date”) 

to purchase shares of New HoldCo Common Stock for cash at a price set forth below (the “Rights 

Offering”) and (Z) the balance of the aggregate cash proceeds of the Equity Offering is to be 

raised through any other form of primary equity offering (including any public offering, regular 

way offering, at-the-market equity offering, block trade, modified Dutch auction or other auction 

pricing mechanism, private placement, “PIPE” sale or other registered or unregistered 

transaction), provided, that entities holding a majority of the Aggregate Backstop Commitments 

have not objected to the identity of the purchasers and ultimate purchasers, as applicable, in such 

Equity Offering, to the extent such Equity Offering is not a broadly syndicated underwritten 

public offering, within three business days of receipt of notice from PG&E; 

(iii) in both of paragraphs (i) and (ii) above, Reorganized Holdco may also 

raise equity capital (subject to the Equity Offering Cap) by calling on the Backstop Commitments 

(after giving effect to any reduction of the Backstop Commitments in connection with a Permitted 

Equity Offering or a Rights Offering, as applicable); and

(iv) if the Implied P/E Multiple with respect to the Equity Offering would be 

less than the Rights Offering Threshold Multiple or if for any other reason Reorganized Holdco is 

unable to execute an Equity Offering, then Reorganized Holdco shall not utilize either a 

Permitted Equity Offering or a Rights Offering and shall issue shares at the Backstop Price 

pursuant to the Backstop Commitments up to the Equity Offering Cap less the proceeds of any 

Additional Capital Sources. 

“Implied P/E Multiple” means, with respect to any Equity Offering, (A) the price per share at 

which shares of New Holdco Common Stock are offered to be sold in such Equity Offering (which price 

(x) in the case of an Equity Offering of rights, shall be the exercise price to acquire a share of New HoldCo 

Common Stock pursuant to such rights or (y) in the case of an Equity Offering of a security convertible 

into or exchangeable for shares of New HoldCo Common Stock, shall be the per share price implied by the 

conversion ratio used to convert the principal amount, liquidation preference or other face amount of such 

security into a number of shares of New HoldCo Common Stock) (the “Per Share Price”), times (B) the 

number of fully diluted shares of PG&E (calculated using the treasury stock method) that will be 

outstanding as of the Effective Date (assuming such Equity Offering and all other equity transactions 

contemplated by the Plan are consummated and settled on the Effective Date), divided by (C) the 

Normalized Estimated Net Income as of the Determination Date.

b. Additional Capital Sources. PG&E shall conduct the Equity Offering in 

accordance with the Plan. The net cash proceeds to PG&E of the Equity Offering shall not exceed the 

Equity Offering Cap, less the sum of (i) the principal amount of debt that is issued by PG&E in excess of 

$7 billion in connection with the Plan; (ii) the aggregate liquidation preference of preferred stock 

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(“Mandatory Convertible Preferred Stock”) that is distributed pursuant to the Plan to holders of Wildfire 

Claims, on the terms and conditions set forth on Exhibit B pursuant to the Plan; (iii) the principal amount 

of any Wildfire Victim Recovery Bonds issued in connection with the Plan; (iv) the proceeds of any 

preferred stock issued by the Utility (excluding any Utility Preferred Interests that are Reinstated pursuant 

to the Plan); (v) the proceeds of any third-party transactions based upon the monetization of any NOLs; and 

(vi) the principal amount of any other debt that is issued or reinstated by the Utility, excluding any debt that 

may be issued under clause (v) above, in excess of $27.35 billion in connection with the Plan (the 

“Additional Capital Sources”).

c. Rights Offering. With respect to the Rights Offering:

(i) the Rights will have a fixed exercise price equal to (a) the Rights 

Offering Threshold Multiple times (b) the Normalized Estimated Net Income as of the 

Determination Date, divided by (c) the number of fully diluted shares of PG&E (calculated using 

the treasury stock method) that will be outstanding as of the Effective Date (assuming all equity is 

raised by the exercise of all Rights);

(ii) the Rights shall be transferable;

(iii) the Board shall provide that holders of Rights who fully exercise their 

Rights will have over-subscription privileges to subscribe for additional shares of New HoldCo 

Common Stock to the extent other Rights are not exercised, with over-subscription procedures 

(including pro-ration rules) determined by the Board; 

(iv) the Board may provide that the Rights or Rights Offering include such 

terms and conditions that are reasonably advisable (based on the advice of the Debtors’ tax 

advisors after consultation with Jones Day) in order to avoid an “ownership change” within the 

meaning of Section 382 and the Treasury Regulations promulgated thereunder or to otherwise 

preserve the ability of the Debtors to utilize their NOLs, including limitations on the amount of 

Rights that are exercisable by holders who, together with persons who have a formal or informal 

understanding with such holders to make a coordinated acquisition of stock within the meaning of 

Treasury Regulations 1.382-3(a) (an “Entity”), beneficially own in excess of a specified 

percentage (e.g., 4.75%) of the outstanding shares of PG&E common stock, subject to exceptions 

to be determined by the Board; provided, however, that such terms and conditions shall not 

restrict existing holders of PG&E common stock (including any Entity) from acquiring shares 

that do not increase their aggregate beneficial ownership to more than 4.75% of the outstanding 

shares of PG&E common stock immediately after the completion of the Rights Offering; and

(v) the Rights will have such other terms and conditions as may be 

determined by the Board, as long as such other terms and conditions are consistent with the Plan 

and with every other provision of this Backstop Commitment Letter.

d. Subordinated Claims. To the extent provided in the Plan, the Debtors may issue 

Rights or New HoldCo Common Stock to holders of Claims against a Debtor that are subject to 

subordination pursuant to section 510(b) of the Bankruptcy Code and that arise from or are related to any 

equity security of the Debtor. 

e. Documentation. The definitive documentation for any Permitted Equity Offering 

or any Rights Offering shall be consistent with the Plan. For the avoidance of doubt, the organizational 

documents of the Reorganized HoldCo (including its charter) may include limitations and other terms that 

are reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation with Jones 

Day) in order to avoid an “ownership change” within the meaning of Section 382 and the Treasury 

Regulations promulgated thereunder or to otherwise preserve the ability of the Debtors to utilize their 

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NOLs; provided, however, that the organizational documents shall not be modified or amended in a manner 

that would restrict existing holders of PG&E common stock (including any Entity) from acquiring shares 

that do not increase their aggregate beneficial ownership to more than 4.75% of the outstanding shares of 

PG&E common stock immediately after the completion of the Rights Offering.

f. Use of Proceeds. The Debtors shall only use the proceeds of an Equity Offering 

to fund obligations to holders of Wildfire Claims under the Plan.

g. Notices. Promptly, and in any event, within two days of the Board’s determination 

of final pricing of any Equity Offering, PG&E shall publicly disclose the form, structure, amount and terms 

of such Equity Offering, including the Implied P/E Multiple for such Equity Offering. PG&E shall give 

the Backstop Party, as soon as reasonably practicable, but in no event later than two business days prior to 

the Effective Date, (i) written notification setting forth (A) the amount to be funded pursuant to the Backstop 

Commitment, (B) an estimate of the Backstop Price and (C) the targeted Effective Date and (ii) a 

subscription form to be completed by the Backstop Party, or other instructions, to facilitate the Backstop 

Party’s subscription for the New HoldCo Common Stock.

h. Cooperation. As reasonably requested by the Debtors, the Backstop Party shall 

reasonably cooperate with the Debtors with respect to providing information relevant to the preservation of 

the Debtors’ Tax Attributes, including information regarding (i) the number of shares of PG&E common 

stock owned by such party (on a holder-by-holder basis) prior to the Rights Offering and (ii) the amount of 

Rights exercised and shares of New HoldCo Common Stock purchased pursuant to the Backstop 

Commitment by such persons.

2. Backstop. 

a. Subject to the terms and conditions set forth herein and to the payment and 

provision of premium to the Backstop Party as provided in Section 2(c), the Backstop Party, solely on

behalf of itself, hereby commits to purchase on the Effective Date an amount of shares of New HoldCo 

Common Stock at the Backstop Price (the “Backstop Commitment”) up to the dollar amounts set forth on 

Exhibit B hereto (the “Backstop Commitment Amount”). 

b. PG&E and the Backstop Party shall cooperate in good faith to prepare and deliver 

a subscription agreement and any other documentation necessary to effect the private placement of New 

HoldCo Common Stock to the Backstop Party in accordance with the terms of this Backstop Commitment 

Letter, which documentation shall be consistent with this Backstop Commitment Letter and the Plan.

c. The Debtors agree to pay the Backstop Party the Backstop Commitment Premium 

to the extent provided on Exhibit B and to reimburse on a regular basis the Backstop Party for the reasonable 

fees and expenses of Jones Day and a financial advisor incurred prior to termination of this Backstop 

Commitment Letter in connection with the Plan, the Backstop Commitment Letter, and the transactions 

contemplated herein, provided that such reimbursement shall not exceed $17 million for Jones Day in the 

aggregate and $19 million for the financial advisor in the aggregate. The provisions for the payment of the 

Backstop Commitment Premium and the other provisions provided herein are an integral part of the 

transactions contemplated by this Backstop Commitment Letter and without these provisions the Backstop 

Party would not have entered into this Backstop Commitment Letter, and the Backstop Commitment 

Premium shall, pursuant to an order of the Bankruptcy Court approving this Backstop Commitment Letter, 

constitute allowed administrative expenses of the Debtors’ estates under sections 503(b) and 507 of the 

Bankruptcy Code. 

d. Reorganized Holdco will enter into a registration rights agreement with the 

Backstop Party in respect of the shares of New HoldCo Common Stock that the Backstop Party may acquire 

in accordance with the Plan and this Backstop Commitment Letter, which registration rights agreement 

shall be in form and substance reasonably acceptable to the holders of a majority of the Aggregate Backstop 

Commitments.

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e. To the extent that PG&E agrees to terms that are more favorable to an Other

Backstop Party in an Other Backstop Commitment Letter (excluding terms relating to the size of such Other 

Backstop Party’s backstop commitment), PG&E shall provide notice of such terms to the Backstop Party 

no later than 10 days after the Allocation Date and, absent a written objection from the Backstop Party no 

later than 10 days after the date of such notice, such terms shall be deemed without further action to be 

incorporated into this Backstop Commitment Letter. 

3. Backstop Party Representations. The Backstop Party hereby represents and warrants,

solely as to itself, that (a) it has all limited partnership, corporate or other power and authority necessary to 

execute, deliver and perform this Backstop Commitment Letter, (b) the execution, delivery and 

performance of this Backstop Commitment Letter by it has been duly and validly authorized and approved 

by all necessary limited partnership, corporate or other organizational action by it, (c) this Backstop 

Commitment Letter has been duly and validly executed and delivered by it and, assuming due execution 

and delivery by the other parties hereto, constitutes a valid and legally binding obligation of it, enforceable 

against it in accordance with the terms of this Backstop Commitment Letter, (d) the execution, delivery and 

performance by the Backstop Party of this Backstop Commitment Letter do not (i) violate the organizational 

documents of the Backstop Party or (ii) violate any applicable law or judgment applicable to it, (e) as of the 

date of this Backstop Commitment Letter, its Backstop Commitment is, and as of the date of 

commencement of any Rights Offering and as of the Effective Date its Backstop Commitment will be, less 

than the maximum amount that it is permitted to invest in any one portfolio investment pursuant to the 

terms of its constituent documents or otherwise, (f) it has, as of the date of this Backstop Commitment 

Letter, and will have, as of the Effective Date, in the aggregate available undrawn commitments and liquid 

assets at least in the sum of its Backstop Commitment Amount hereunder, and (g) as of September 2, 2019, 

it and its affiliates (excluding any affiliate that is an Other Backstop Party) beneficially owned, directly or 

indirectly, 3,110,096 shares of PG&E common stock and had a “put equivalent position” (as defined in 

Rule 16a-1 under the Securities Exchange Act of 1934, as amended) of zero shares of PG&E common stock 

(the number of shares beneficially owned less the number of shares in the put equivalent position being 

the “Backstop Party’s Shares”). 

In addition, the Backstop Party hereby represents and warrants, solely as to itself, as of the date of 

this Backstop Commitment Letter and as of the Effective Date, that the Backstop Party (i) is acquiring the 

shares of New HoldCo Common Stock for its own account, solely for investment and not with a view 

toward, or for sale in connection with, any distribution thereof in violation of any foreign, federal, state or 

local securities or “blue sky” laws, or with any present intention of distributing or selling such shares in 

violation of any such laws, (ii) has such knowledge and experience in financial and business matters and in 

investments of this type that it is capable of evaluating the merits and risks of its investment in the shares 

of New HoldCo Common Stock and of making an informed investment decision, and (iii) is an “accredited 

investor” within the meaning of Rule 501 of Regulation D under the Securities Act of 1933, as amended 

(the “Securities Act”). The Backstop Party understands that Reorganized HoldCo will be relying on the 

statements contained herein to establish an exemption from registration under the Securities Act and under 

foreign, federal, state and local securities laws and acknowledges that the shares of New HoldCo Common 

Stock will not be registered under the Securities Act or any other applicable law and that such shares may 

not be transferred except pursuant to the registration provisions of the Securities Act (and in compliance 

with any other applicable law) or pursuant to an applicable exemption therefrom. 

4. Conditions to Backstop Party Commitment. The obligations of the Backstop Party to fund

its Backstop Commitment to PG&E in accordance with this Backstop Commitment Letter are further 

expressly conditioned upon and subject to the satisfaction or written waiver by the Backstop Party, in its 

sole discretion, at or prior to the Effective Date of each of the following conditions, which PG&E 

acknowledges are an integral part of the transactions contemplated by this Backstop Commitment Letter 

and without these conditions the Backstop Party would not have entered into this Backstop Commitment 

Letter.

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a. by November 7, 2019, the Debtors shall have received valid and enforceable Other 

Backstop Commitments on substantially the same terms and conditions as set forth in this Backstop 

Commitment Letter that in the aggregate with this Backstop Commitment result in Aggregate Backstop 

Commitments of no less than the Equity Offering Cap;

b. other than the consummation of any Permitted Equity Offering or the Rights 

Offering, the satisfaction of all of the other conditions to the Effective Date provided for in the Plan or the 

waiver of any such conditions by the Debtors in accordance with the Plan (to the extent the Plan expressly 

provides for the possibility of such a waiver);

c. the Bankruptcy Court shall have entered the Confirmation Order, which shall 

confirm the Plan with such amendments, modifications, changes and consents as are approved by those 

entities having no less than a majority of the Aggregate Backstop Commitments (such approval not to be 

unreasonably withheld, conditioned or delayed), and such Confirmation Order shall be in full force and 

effect, and no stay thereof shall be in effect; 

d. this Backstop Commitment Letter shall have been approved by an order of the 

Bankruptcy Court and such order shall be in full force and effect, and no stay thereof shall be in effect;

e. the transactions contemplated herein shall have been authorized by an order of the 

Bankruptcy Court (which may be the Confirmation Order) such order shall be in full force and effect, and 

no stay thereof shall be in effect;

f. total PG&E weighted average earning rate base (including electric generation, 

electric transmission, electric distribution, gas distribution, gas transmission and storage) for estimated 

2021 shall be no less than 95% of $48 billion; and

g. no result, occurrence, fact, change, event, effect, violation, penalty, inaccuracy or 

circumstance (whether or not constituting a breach of a representation, warranty or covenant set forth in the 

Plan) that, individually or in the aggregate with any such other results, occurrences, facts, changes, events, 

effects, violations, penalties, inaccuracies, or circumstances, (i) would have or would reasonably be 

expected to have a material adverse effect on the business, operations, assets, liabilities, capitalization, 

financial performance, financial condition or results of operations, in each case, of the Debtors, taken as a 

whole, or (ii) would reasonably be expected to prevent or materially delay the ability of the Debtors to 

consummate the transactions contemplated by this Backstop Commitment Letter or the Plan or perform 

their obligations hereunder or thereunder (each a “Material Adverse Effect”) shall have occurred; provided, 

however, that none of the following results, occurrences, facts, changes, events, effects, violations, 

penalties, inaccuracies, or circumstances shall constitute or be taken into account in determining whether a 

Material Adverse Effect has occurred, is continuing or would reasonably be expected to occur: (A) the 

filing of the Chapter 11 Cases, and the fact that the Debtors are operating in bankruptcy (B) results, 

occurrences, facts, changes, events, effects, violations, inaccuracies, or circumstances affecting (1) the 

electric or gas utility businesses in the United States generally or (2) the economy, credit, financial, capital 

or commodity markets, in the United States or elsewhere in the world, including changes in interest rates, 

monetary policy or inflation, (C) changes or prospective changes in law (other than any law or regulation 

of California or the United States that is applicable to any electrical utility) or in GAAP or accounting 

standards, or any changes or prospective changes in the interpretation or enforcement of any of the 

foregoing, (D) any decline in the market price, or change in trading volume, of any securities of the 

Debtors, (E) any failure to meet any internal or public projections, forecasts, guidance, estimates, 

milestones, credit ratings, budgets or internal or published financial or operating predictions of revenue, 

earnings, cash flow or cash position, (F) any wildfire occurring after the Petition Date and prior to January 1, 

2020, and (G) one or more wildfires, occurring on or after January 1, 2020, that destroys or damages fewer 

than 500 dwellings or commercial structures (“Structures”) in the aggregate (it being understood that (I) 

the exceptions in clauses (D) and (E) shall not prevent or otherwise affect a determination that the 

underlying cause of any such change, decline or failure referred to therein is a Material Adverse Effect and 

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(II) a Material Adverse Effect shall include the occurrence of one or more wildfires on or after January 1, 

2020 destroying or damaging at least 500 Structures within PG&E’s service area where none of the 

following are true with respect any such wildfire (a) the portion of PG&E’s system at the location of such 

wildfire was not de-energized; (b) there has been no determination by a final order that such wildfire was 

caused by a person or entity other than the Utility; and (c) there has been no determination that such wildfire 

was not caused by the negligence or intentional misconduct of the Utility by a final order of a court having 

jurisdiction).

5. Termination by the Backstop Party. Subject to the last paragraph of this Section 5, the 

Backstop Party may terminate this Backstop Commitment Letter, solely as to itself, by written notice (which 

shall describe the basis for such termination), on or after the occurrence of any of the following:

a. the Plan has not been filed with the Bankruptcy Court by 11:59 p.m. Pacific Time 

on September 9, 2019 or the Plan filed with the Bankruptcy Court on or after such date differs from the 

draft of the Plan attached hereto as Exhibit A; 

b. the condition set forth in Section 4(a) is not satisfied as of November 7, 2019;

c. the Bankruptcy Court has not entered an order approving this Backstop 

Commitment Letter on or before November 20, 2019;

d. subject to Section 11, (i) the Plan has been amended modified or changed, in each 

case without the consent of the entities holding a majority of the Aggregate Backstop Commitments (such 

consent not to be unreasonably withheld, conditioned or delayed) or (ii) any Plan Supplement or any Plan 

Document shall have been filed or finalized without the consent of entities holding a majority of the 

Aggregate Backstop Commitments (such consent not to be unreasonably withheld, conditioned or delayed); 

e. the Confirmation Order has not been entered by the Bankruptcy Court on or before 

June 30, 2020 (the “Outside Date”); 

f. the Effective Date has not occurred on or before 60 days after entry of the 

Confirmation Order;

g. the Debtors have failed to perform any of their obligations set forth in this 

Backstop Commitment Letter, which failure to perform (i) would give rise to the failure of a condition set 

forth in Section 4(b) or 4(c) and (ii) is incapable of being cured or, if capable of being cured by the Outside 

Date, the Debtors have not cured within 10 calendar days following receipt by the Debtors of written notice 

of such failure to perform from the Backstop Party stating the Backstop Party’s intention to terminate this 

Backstop Commitment Letter pursuant to this Section 5(g) and the basis for such termination; 

h. the occurrence of a Material Adverse Effect; 

i. the occurrence of one or more wildfires in the Debtors’ service territory after the 

Petition Date and prior to January 1, 2020 that is asserted by any person to arise out of the Debtors’ activities 

and that destroys or damages more than 500 Structures; provided, however, that any notice of termination 

under this clause (i) must be given on or before January 15, 2020; 

j. the Debtors’ aggregate liability with respect to Wildfire Claims is determined 

(whether (i) by the Bankruptcy Court (or the District Court to which the reference has been partially 

withdrawn for estimation purposes), (ii) pursuant to an agreement between the Debtors and the holders of 

Wildfire Claims, or (iii) through a combination thereof) to exceed $17.9 billion (the “Wildfire Claims 

Cap”); provided, however, that for purposes of this clause (j), (A) any Wildfire Claim that the CPUC has 

approved or agreed to approve for recovery or pass through by the Utility shall not count in determining 

the Wildfire Claims Cap, and (B) the Wildfire Claims Cap shall be increased by an amount equal to the 

amount of Wildfire Claims consisting of professional fees that the Bankruptcy Court (or the District Court 

to which the reference has been partially withdrawn for estimation purposes) determines to be reasonable;

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k. the CPUC fails to issue all necessary approvals, authorizations and final orders to 

implement the Plan prior to the Outside Date, and to participate in the Go-Forward Wildfire Fund, 

including: (i) provisions satisfactory to entities holding a majority of the Aggregate Backstop Commitments 

(such approval not to be unreasonably withheld, conditioned or delayed) pertaining to authorized return on 

equity and regulated capital structure, (ii) a disposition, satisfactory to entities holding a majority of the 

Aggregate Backstop Commitments (such approval not to be unreasonably withheld, conditioned or 

delayed), of proposals for certain potential changes to PG&E’s corporate structure and authorizations for 

the Utility to operate as a utility, (iii) a resolution, satisfactory to entities holding a majority of the Aggregate 

Backstop Commitments (such approval not to be unreasonably withheld, conditioned or delayed), of claims 

for monetary fines or penalties under the California Public Utilities Code for conduct prior to the Petition 

Date, and (iv) approval (or exemption from approval) of the financing structure and securities to be issued 

under the Plan;

l. if at any time after the first day of the Confirmation Hearing, asserted 

Administrative Expense Claims exceed $250 million, excluding all (i) ordinary course Administrative 

Expense Claims, (ii) Professional Fee Claims, and (iii) Disallowed Administrative Expense Claims;

m. there is in effect an order of a governmental authority of competent jurisdiction 

permanently restraining, enjoining or otherwise prohibiting the consummation of any of the transactions 

contemplated by the Plan, or any law, statute, rule, regulation or ordinance is adopted that makes 

consummation of the transactions contemplated by the Plan illegal or otherwise prohibited.

PG&E shall promptly provide notice to the Backstop Party of (i) the occurrence of any fact, event, 

or omission that is not publicly disclosed that gives rise or reasonably can be expected to give rise to a 

termination right under this Section 5 and (ii) the receipt of any termination notice from any Other Backstop 

Party, including the asserted basis for such termination, whether or not PG&E concurs therewith.

Upon valid termination of this Backstop Commitment Letter by the Backstop Party (such 

terminating Backstop Party, a “Terminating Backstop Party”) pursuant to any of Section 5(a) through (m), 

this Backstop Commitment Letter shall be void and of no further force or effect solely with respect to such 

Terminating Backstop Party is obligated herein, such Terminating Backstop Party shall be released from 

its Backstop Commitments, undertakings and agreements under or related to this Backstop Commitment 

Letter, including its Backstop Commitment, except as explicitly provided herein and there shall be no 

liability or obligation on the part of such Terminating Backstop Party hereunder, except as expressly 

provided herein. Notwithstanding any termination by a Terminating Backstop Party, PG&E shall remain 

liable for the payment of all earned Backstop Commitment Premiums and expense reimbursement 

obligations in this Backstop Commitment Letter.

The Backstop Party’s obligations under this Backstop Commitment Letter shall automatically 

terminate in the event that PG&E has not returned a counter-signed copy of this Backstop Commitment 

Letter agreeing to its terms on or before the date that is two weeks from the day the Backstop Party furnished 

a signed copy of this Backstop Commitment Letter to PG&E.

The Backstop Party may not seek to (i) assert the failure of any condition precedent to any of its 

obligations or agreements under this Backstop Commitment Letter or (ii) terminate this Backstop 

Commitment Letter (including pursuit of any other remedies), in each case unless the Backstop Party has 

given written notice to PG&E of such assertion or termination.

Notwithstanding anything in this Backstop Commitment Letter to the contrary, any notice of 

termination under clauses (d), (g), (h), (i), (k), (l) and (m) shall not be effective unless PG&E has received 

notices of termination from entities constituting a majority of the outstanding Aggregate Backstop 

Commitments with respect to the event or circumstance that is the basis for such notice of termination. 

PG&E shall provide the Backstop Party with a notice of such effective termination within two business 

days of the effectiveness of the termination. 

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In the event that any fact or circumstance would give the Backstop Party the right to terminate 

under more than one clause in this Section 5, the exercise of a termination right under any one clause shall 

not prejudice the Backstop Party from exercising a termination right under any other clause based on the 

same event or circumstance.

6. Termination by PG&E; Defaulting Backstop Party; Extension Options. PG&E may 

terminate this Backstop Commitment Letter (including all Backstop Commitments hereunder) (a) at any 

time prior to countersigning such Backstop Commitment Letter, (b) if, on any date after November 7, 2019, 

the condition set forth in Section 4(a) would not be satisfied if tested on such date, (c) in the event of a 

material breach of a representation or warranty of the Backstop Party set forth in Section 3, (d) in the event 

that the Backstop Party repudiates this Backstop Commitment Letter, purports to terminate this Backstop 

Commitment Letter if such purported termination is not a valid termination of this Backstop Commitment 

Letter as determined in a final order of a court with jurisdiction or fails to fund its Backstop Commitment 

when required to do so in accordance with this Backstop Commitment Letter, (e) if the Backstop 

Commitment Amount has been reduced to zero in accordance with Section 7, (f) if the Backstop Party has 

the right to terminate this Backstop Commitment Letter under clause (h), (i), (j) or (m) of Section 5, or (g) 

if (i) a third party makes a binding proposal to acquire at least 50% of the outstanding PG&E common stock 

(including by means of a merger, joint venture, partnership, consolidation, dissolution, liquidation, tender 

offer, recapitalization, reorganization, share exchange, business combination or similar transaction), (ii) 

either (x) the implementation of such proposal would require the approval of holders of a majority of the 

PG&E common stock or (y) the price contemplated by such proposal would exceed 125% of the Equity 

Offering Cap, and (iii) the Board determines in good faith, after consultation with PG&E’s outside legal 

counsel, that the failure to terminate this Backstop Commitment Letter in response to such proposal would 

be inconsistent with the exercise of its fiduciary duties to the stockholders of PG&E under applicable law. 

In the event of a breach, repudiation, purported termination or failure to fund contemplated by the foregoing 

clause (c) or (d), the Backstop Party shall be deemed to be a “Defaulting Backstop Party”. In the event 

that the Backstop Party becomes a Defaulting Backstop Party, then PG&E may, upon notice to such 

Defaulting Backstop Party, require the Backstop Party to assign and delegate, without recourse, all its 

interests, rights (other than any Backstop Commitment Premiums earned prior to the date of such 

assignment and delegation) and obligations under this Backstop Commitment Letter to a third party that 

shall assume such obligations (which assignee may be an Other Backstop Party, if an Other Backstop Party 

accepts such assignment and delegation). Notwithstanding any termination by PG&E under Sections 6(b), 

(e), (f) or (g), PG&E shall remain liable for the payment of all earned Backstop Commitment Premiums 

and expense reimbursement obligations in this Backstop Commitment Letter.

In the event that any fact or circumstance would give PG&E the right to terminate under more than 

one clause in this Section 6, the exercise of a termination right under any one clause shall not prejudice

PG&E from exercising a termination right under any other clause based on the same event or circumstance.

Notwithstanding anything to the contrary herein, this Backstop Commitment Letter shall 

automatically terminate on January 20, 2020 (the “Initial Termination Date”). Provided that this Backstop 

Commitment Letter remains in full force and effect and has not been otherwise terminated, PG&E may 

extend the Initial Termination Date to April 30, 2020 (the “First Extension Date”) upon providing written 

notice to the Backstop Party of its intent to exercise this option (the “First Extension Notice”) no later than 

three days prior to the Initial Termination Date. In the event that PG&E has provided the Backstop Party a 

timely and proper First Extension Notice and this Backstop Commitment Letter remains in full force and 

effect, PG&E may extend the First Extension Date to the Outside Date (the “Second Extension Date”) 

upon providing written notice to the Backstop Party of its intent to exercise this option (the “Second

Extension Notice”) no later than three days prior to the First Extension Date. In the event that PG&E has 

provided the Backstop Party a timely and proper Second Extension Notice and this Backstop Commitment 

Letter remains in full force and effect, PG&E may extend the Second Extension Date to the 60th day 

following the Outside Date (the “Third Extension Date”) upon providing written notice to the Backstop 

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Party of its intent to exercise this option (the “Third Extension Notice”) no later than three days prior to 

the Second Extension Date.

7. Reduction of Commitments by PG&E. 

a. In the event that on or prior to November 7, 2019, PG&E receives Aggregate 

Backstop Commitments that exceed the Equity Offering Cap (such excess, the “Overallotment Amount”), 

then, on November 8, 2019 (the “Allocation Date”), the Backstop Commitment Amount shall be 

automatically reduced by an amount equal to (i) the Overallotment Amount, times (ii) a fraction, (A) the 

numerator of which is the Backstop Party’s Shares and (B) the denominator of which is the aggregate 

number of shares of PG&E common stock held by the Backstop Party and the Other Backstop Parties, 

collectively, as of September 6, 2019 (without double counting any shares beneficially owned, directly or 

indirectly, by more than one Backstop Party). Notwithstanding the foregoing, on the Allocation Date, in 

the event there is an Overallotment Amount and for the purpose of curing such Overallotment Amount, 

PG&E may reduce the Backstop Commitment Amount as to any Backstop Party to the extent such reduction 

is reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation with Jones Day) 

in order to avoid an “ownership change” within the meaning of Section 382 and the Treasury Regulations 

promulgated thereunder or to otherwise preserve the ability of the Debtors to utilize their NOLs; provided

that such reduction may not be below the amount of Backstop Commitments at which such Backstop Party 

would maintain its existing percentage ownership of the total outstanding shares of PG&E common stock. 

Within three business days of the Allocation Date, PG&E shall provide the Backstop Party with a notice of 

any adjustment to its Backstop Commitment Amount under this Section 7(a).

b. In the event that, after November 7, 2019, the Debtors (i) receive binding 

commitments providing for funding from any Additional Capital Sources that (A) have conditions to 

funding and commitment termination rights that are no less favorable to PG&E than those in this Backstop 

Commitment Letter and (B) are approved by an order of the Bankruptcy Court, or (ii) actually obtain 

funding from any Additional Capital Sources, then (x) in the case of clause (i), PG&E may reduce the 

Backstop Commitment Amount, and (y) in the case of clause (ii), the Backstop Commitment Amount shall 

be automatically reduced (if not already reduced pursuant to clause (i)), in each case by an amount equal to 

(A) the amount of such funding, times (B) a fraction, (1) the numerator of which is the Backstop 

Commitment Amount immediately prior to such reduction and (2) the denominator of which is the 

Aggregate Backstop Commitments as of immediately prior to such reduction. Any reduction in the 

Backstop Commitment pursuant to this Section 7(b) shall not reduce any Backstop Commitment Premium 

earned prior to the date of such reduction.

c. In the event that the Debtors consummate any Permitted Equity Offering or Rights 

Offering, the Backstop Commitment Amount shall be automatically reduced by an amount equal to (i) the 

net cash proceeds of such Permitted Equity Financing or such Rights Offering plus the proceeds of any 

Additional Capital Sources, as applicable, times (ii) a fraction, (A) the numerator of which is the Backstop 

Commitment Amount immediately prior to such reduction and (B) the denominator of which is the 

Aggregate Backstop Commitments as of immediately prior to such reduction.

d. The Debtors shall provide notice to the Backstop Party in the event that the 

Backstop Commitment Amount is reduced as provided above. References herein to “Backstop 

Commitment Amount” or “Backstop Commitment” mean such amounts as adjusted in accordance with the 

terms of this Backstop Commitment Letter. Any Backstop Commitments that have been terminated or 

reduced shall be terminated or reduced, as applicable, permanently.

8. Assignment. This Backstop Commitment Letter (a) is not assignable by the Backstop 

Party, and any purported assignment shall be null and void ab initio; provided, however, Backstop Party 

may assign its Backstop Commitment, in whole or in part, to (i) another Backstop Party, (ii) an affiliate of 

the Backstop Party, or (iii) an investment fund or separately managed account the primary investment 

advisor or sub advisor to which is a Backstop Party or an affiliate thereof, to the extent such assignee 

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Backstop Party agrees in writing to assume all obligations hereunder of such Backstop Party in connection 

with such Backstop Commitment, and any assignment under this proviso shall not relieve the Backstop 

Party from its obligations under this Backstop Commitment Letter, and (b) is intended to be solely for the 

benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, 

any person or entity other than the parties hereto. Notwithstanding the foregoing, a Backstop Party may 

assign all or any portion of its obligations hereunder to a “qualified institutional buyer” (as defined in 

Rule 144A under the Securities Act of 1933, as amended), without the consent of any party, provided, 

however, that (i) absent the prior written consent of PG&E, such assignee (including any Entity) does not, 

and as a result of such assignment will not, beneficially own more than 4.75% of the Aggregate Backstop 

Commitments and (ii) any assignment under this sentence shall not relieve the Backstop Party from its 

obligations under this Backstop Commitment Letter.

9. Entire Agreement. This Backstop Commitment Letter, including all exhibits hereto, 

constitutes the entire understanding among the parties hereto with respect to the subject matter hereof and 

replaces and supersedes all prior agreements and understandings, both written and oral, between the parties 

hereto with respect to the subject matter hereof and, subject to the terms hereof, shall become effective and 

binding upon the mutual exchange of fully executed counterparts by each of the parties hereto.

10. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Backstop 

Commitment Letter shall be governed by, and construed in accordance with, the internal laws of the State 

of New York, without giving effect to the principles of conflict of laws that would require the application 

of the law of any other jurisdiction. By its execution and delivery of this Backstop Commitment Letter, 

each of the parties hereto irrevocably and unconditionally agrees for itself that any legal action, suit or 

proceeding against it with respect to any matter under or arising out of or in connection with this Backstop 

Commitment Letter or for recognition or enforcement of any judgment rendered in any such action, suit or 

proceeding, may be brought only in the Bankruptcy Court. By execution and delivery of this Backstop 

Commitment Letter, each of the parties hereto irrevocably accepts and submits itself to the exclusive 

jurisdiction of the Bankruptcy Court with respect to any such action, suit or proceeding. EACH PARTY 

HERETO UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR 

PROCEEDING REFERRED TO ABOVE.

11. Amendment; Waiver; Counterparts. This Backstop Commitment Letter may not be 

amended or waived by or on behalf of the Backstop Party, and no consent may be given hereunder by or 

on behalf of the Backstop Party (including to an amendment or waiver of any provision of the Plan), except 

in writing signed by the holders of a majority of the Aggregate Backstop Commitments (whether or not the 

Backstop Party signs such amendment or waiver), and confirmed in writing by the Company; provided, 

however, that without the prior written consent of the Backstop Party, this Backstop Commitment Letter 

may not be amended to (a) increase the amount of the Backstop Commitment Amount or Backstop 

Commitment, (b) decrease the Backstop Commitment Premium, (c) extend the Backstop Commitment 

beyond the Third Extension Date, (d) amend the definition of “Backstop Price” or any component thereof, 

and (e) amend, modify, or waive the condition in Section 4(d). This Backstop Commitment Letter may be 

executed in any number of counterparts, each of which will be an original, and all of which, when taken 

together, will constitute one agreement. Delivery of an executed counterpart of this Backstop Commitment 

Letter by e-mail or portable document format (PDF) will be effective as delivery of a manually executed 

counterpart of this Backstop Commitment Letter.

12. Notices. All notices required or permitted to be given under this Backstop Commitment 

Letter, unless otherwise stated herein, shall be given by overnight courier at the addresses specified below, 

or at such other address or addresses as a party may designate for itself in writing, or by email (if confirmed) 

at the email addresses specified below:

If to the Backstop Party, to the name, address and email address located on the Backstop Party’s 

signature page to this Backstop Commitment Letter.

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If to the Debtors:

PG&E Corporation

77 Beale Street

P.O. Box 770000

San Francisco, California 94177

Attention: Janet Loduca, Senior Vice President and General Counsel

Email: J1Lc@pge.com

with a copy to:

Cravath, Swaine & Moore LLP

825 Eighth Avenue

New York, New York 10019

Attention: Richard Hall; Paul Zumbro

Email: RHall@cravath.com; PZumbro@cravath.com

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Attention: Stephen Karotkin

Email: Stephen.karotkin@weil.com

13. No Liability. Notwithstanding anything that may be expressed or implied in this Backstop 

Commitment Letter, each party hereto acknowledges and agrees that no person other than the Backstop 

Party (and it permitted assigns) shall have any obligation hereunder (subject to the limitations provided 

herein) or in connection with the transactions contemplated hereby and that (a) notwithstanding that any 

Backstop Party may be a partnership, limited partnership or limited liability company, no recourse (whether 

at law, in equity, in contract, in tort or otherwise) hereunder or under any document or instrument delivered 

in connection herewith, or in respect of any oral representations made or alleged to be made in connection 

herewith or therewith, shall be had against any former, current or future direct or indirect equity holder, 

controlling person, general or limited partner, shareholder, member, investment manager or adviser, 

manager, director, officer, employee, agent, affiliate, assignee, representative or financing source of any of 

the foregoing) (any such person or entity, other than such Backstop Party, a “Related Party”) or any Related 

Party of any such Related Party, including, without limitation, any liabilities arising under, or in connection 

with, the Plan or this Backstop Commitment Letter and the transactions contemplated thereby and hereby, 

or in respect of any oral representations made or alleged to be made in connection therewith or herewith), 

whether by the enforcement of any judgment or assessment or by any legal or equitable proceeding, or by 

virtue of any statute, regulation or other applicable law and (b) no personal liability whatsoever will attach 

to, be imposed on or otherwise be incurred by any Related Party of the Backstop Party or any Related Party 

of any such Related Party under this Backstop Commitment Letter or any document or instrument delivered 

in connection herewith or with the Plan Term Sheet or the Plan (or in respect of any oral representation 

made or alleged to be made in connection herewith or therewith) or for any action (whether at law, in equity, 

in contract, in tort or otherwise) based on, in respect of, or by reason of such obligations hereunder or by 

their creation.

14. Plan Support. For as long as this Backstop Letter Agreement is in effect, the Backstop 

Party shall (i) use all reasonable efforts to support the Plan with respect to the treatment of HoldCo Common 

Interests and to act in good faith to consummate the Plan with respect to any Equity Offering and the 

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Backstop Commitments, (ii) to the extent the Backstop Party is entitled to vote on the Plan, timely vote (or 

cause to be voted) all of its HoldCo Common Interests and Claims to accept the Plan (and not to change or 

withdraw any such vote), and (iii) timely vote (or cause to be voted) its HoldCo Common Interests and 

Claims to reject any plan of reorganization other than the Plan.

15. The Backstop Party shall not be required, pursuant to the terms of this Backstop 

Commitment Letter, to acquire or purchase any securities or indebtedness in connection with any Equity 

Offering that, pursuant to the terms of a Backstop Commitment Letter or other agreement, are to be acquired 

or subscribed for by any other party, nor shall the Backstop Party be required, pursuant to the terms of this 

Backstop Commitment Letter, to pay any money or other consideration, or exchange any claims 

whatsoever, which are owing from, or to be transferred from or by, any other party pursuant to the terms of 

another Backstop Commitment Letter or other agreement. Nothing in this Backstop Commitment Letter 

shall be deemed to constitute an agreement or a joint venture or partnership with or between any other 

person or entity nor constitute any party as the agent of any other person or entity for any purpose. For the 

avoidance of doubt, no Backstop Party shall, nor shall any action taken by a Backstop Party hereunder, be 

deemed to be acting in concert with any other person or entity with respect to the Backstop Commitment 

or any other matter nor shall the Backstop Commitments hereunder create a presumption that the Backstop 

Party is in any way acting in concert or as a group with any other person or entity whether as a result of this 

commitment or otherwise. 

16. Each party hereto confirms that it has made its own decision to execute this Backstop 

Commitment Letter based upon its own independent assessment of documents and information available 

to it, as it has deemed appropriate.

17. Except as expressly provided in this Backstop Commitment Letter, (a) nothing herein is 

intended to, or does, in any manner waive, limit, impair or restrict the ability of each party hereto to protect 

and preserve its rights, remedies and interests, including, without limitation, any claims against or interests 

in any of the Debtors or other parties, or its full participation in any bankruptcy proceeding, and (b) the 

parties hereto each fully preserve any and all of their respective rights, remedies, claims and interests as of 

the date hereof and upon a termination of this Backstop Commitment Letter. Further, nothing in this 

Backstop Commitment Letter shall be construed to prohibit any party hereto from appearing as a party-ininterest in any matter to be adjudicated in the Chapter 11 Cases, so long as such appearance and the positions 

advocated in connection therewith are consistent with this Backstop Commitment Letter and the Plan, and 

are not for the purpose of, and could not reasonably be expected to have the effect of, hindering, delaying 

or preventing the consummation of the transactions contemplated by the Plan.

[signature page follows]

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Exhibit A 

Plan of Reorganization

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See the Debtors’ Joint Chapter 11 Plan of Reorganization filed at Docket No. 3841.

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Exhibit B 

Mandatory Preferred Stock Term Sheet

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Term Sheet for 

5.00% Mandatory Convertible Preferred Stock

Issuer: PG&E Corporation (“PG&E”)

Title of Securities: 5.00% Mandatory Convertible Preferred Stock of PG&E (the 

“Mandatory Convertible Preferred Stock”)

Shares of Mandatory Convertible 

Preferred Stock Offered by PG&E: Up to [●] shares

Offering Price:

Issue Date:

$1,000 per share of the Mandatory Convertible Preferred 

Stock

The Effective Date of the Plan

Liquidation Preference: $1,000 per share

Dividends: 5.00% of the Liquidation Preference of $1,000 per share of 

the Mandatory Convertible Preferred Stock per year 

(equivalent to $50 per annum per share), when, as and if 

declared by the Board, payable in cash or, by delivery of 

additional shares of Mandatory Convertible Preferred Stock 

or any combination of cash and shares of Mandatory 

Convertible Preferred Stock, as determined by PG&E in its 

sole discretion

Floor Price: 100% of the Initial Price, subject to standard anti-dilution 

adjustments 

Dividend Payment Dates: If declared, January 1, April 1, July 1 and October 1 of each 

year, commencing on (TBD)

Dividend Record Dates: The March 15, June 15, September 15 and December 15 

immediately preceding the next dividend payment date

Redemption: The Mandatory Convertible Preferred Stock will be 

redeemable on terms and conditions to be determined

Initial Price: A per share price equal to (a) the greater of (i) an Implied P/E 

Multiple of 13.5 or (ii) the Implied P/E Multiple of a 

Permitted Equity Offering, times (b) the Normalized 

Estimated Net Income as of the Determination Date, divided 

by (c) the number of fully diluted shares of PG&E (calculated 

using the treasury stock method) that will be outstanding as 

of the Effective Date.

Threshold Appreciation Price: 110% of the Initial Price, subject to standard ant-dilution 

adjustments

Mandatory Conversion Date: 1/8th of the Mandatory Convertible Preferred Stock will 

convert into PG&E common stock 90, 180, 270, 360, 450, 

540, 630, and 720 days from Issue Date

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Conversion Rate: Upon conversion on the Mandatory Conversion Date, the 

conversion rate for each share of the Mandatory Convertible 

Preferred Stock will be not more than [●] shares of PG&E 

common stock (the “Maximum Conversion Rate”) and not 

less than [●] shares of PG&E common stock (the “Minimum 

Conversion Rate”), depending on the Applicable Market 

Value of the PG&E common stock subject to standard antidilution adjustments. The following table illustrates the 

conversion rate per share of the Mandatory Convertible 

Preferred Stock (in each case, subject to standard antidilution adjustments):

Applicable Market Value of

the PG&E Common Stock

Conversion rate (number of shares of 

PG&E Common Stock to be received 

upon

conversion of each share of the 

Mandatory Convertible Preferred 

Stock)

Greater than 110% of the Initial 

Price (which is the Threshold 

Appreciation Price)

[●] shares (approximately equal 

to $1,000 divided by the 

Threshold Appreciation Price)

Equal to or less than the Threshold 

Appreciation Price but greater 

than or equal to the Floor Price

Between [●] and [●] shares, 

determined by dividing $1,000 

by the Applicable Market Value 

of the PG&E common stock

Less than the Floor Price [●] shares (approximately equal 

to $1,000 divided by the Floor 

Price)

Applicable Market Value:

Conversion at the Option of the Holder:

The “Applicable Market Value” shall be the 10-trading day VWAP 

immediately preceding the applicable Mandatory Conversion Date

At any time prior to final Mandatory Conversion Date, holders of the 

Mandatory Convertible Preferred Stock have the option to elect to 

convert their shares of the Mandatory Convertible Preferred Stock in 

whole or in part (but in no event less than one share of the Mandatory 

Convertible Preferred Stock), into shares of PG&E common stock at 

the Minimum Conversion Rate of shares of PG&E common stock per 

share of the Mandatory Convertible Preferred Stock. This Minimum 

Conversion Rate is subject to standard anti-dilution adjustments.

Limitation on Ownership No holder, together with persons who have a formal or informal 

understanding with such assignee to make a coordinated acquisition of 

stock, shall acquire beneficial ownership (within the meaning of 

Section 382 and the Treasury Regulations) of more than 4.75% of the 

outstanding Mandatory Convertible Preferred Stock without the prior 

written consent of PG&E.

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EXECUTION VERSION 

1

September 9, 2019 

PG&E Corporation 

77 Beale Street 

P.O. Box 770000 

San Francisco, California 94177 

Re: Chapter 11 Plan Backstop Commitment Letter 

Ladies and Gentlemen: 

Reference is hereby made to the chapter 11 bankruptcy cases, lead case no. 19-30088 (the 

“Chapter 11 Cases”), currently pending before the United States Bankruptcy Court for the Northern District 

of California (the “Bankruptcy Court”), in which PG&E Corporation (“PG&E” or the “Company”) and 

Pacific Gas and Electric Company (the “Utility” and together with PG&E, the “Debtors”) are debtors in 

possession. Reference is further made to the Chapter 11 plan of reorganization attached hereto as Exhibit 

A (the “Plan”) to implement the terms and conditions of the reorganization of the Debtors as provided 

therein. Capitalized terms used in this backstop commitment letter (this “Backstop Commitment Letter”) 

or in the exhibits hereto but not otherwise defined shall have the meanings ascribed to them in the Plan. 

The word “including” means “including, without limitation”. 

In order to facilitate the Debtors’ emergence from Chapter 11, pursuant to this Backstop 

Commitment Letter, and subject to the terms, conditions and limitations set forth herein and in consideration 

for the Backstop Commitment Premium, the undersigned Backstop Party (the “Backstop Party”) is willing 

to purchase, on the Effective Date, an amount of New HoldCo Common Stock up to its Backstop 

Commitment Amount (as defined herein) at the Backstop Price (as defined herein). 

In addition, PG&E has separately solicited and negotiated and expects to enter into substantially 

similar backstop commitment letters (“Other Backstop Commitment Letters”) with other funding sources 

(“Other Backstop Parties”) pursuant to which such Other Backstop Parties will commit to purchase New 

HoldCo Common Stock on the Effective Date (such commitments, “Other Backstop Commitments,” and 

together with this Backstop Commitment, the “Aggregate Backstop Commitments”). 

1. Equity Offerings.

a. Structure. The Plan, among other things, shall provide that, on the Effective Date,

Reorganized HoldCo shall issue shares of New HoldCo Common Stock for up to $14 billion of aggregate 

net cash proceeds to Reorganized Holdco (the “Equity Offering Cap”). PG&E shall structure the offering 

of any such shares of New HoldCo Common Stock (or rights pursuant to which any such shares may be 

issued or other securities convertible into any such shares) (the “Equity Offering”) in accordance with the 

terms of this Section 1, including the following parameters: 

(i) if the Implied P/E Multiple with respect to such Equity Offering equals

or exceeds the greater of (A) 13.5 and (B) 13.5 times one plus any percentage change of the 

Applicable Utility Index Multiple (as defined herein) as measured on the date of this Backstop 

Commitment Letter and the Determination Date (as defined herein), then PG&E shall be 

permitted to conduct the Equity Offering in any form of primary equity offering (including any 

public offering, regular way offering, at-the-market equity offering, block trade, modified Dutch 

auction or other auction pricing mechanism, rights offering, private placement, “PIPE” sale or 

other registered or unregistered transaction) upon such terms and conditions as may be 

determined by the Board (a “Permitted Equity Offering”), including such terms and conditions 

that are reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation 

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with Jones Day) in order to avoid an “ownership change” within the meaning of Section 382 and 

the Treasury Regulations promulgated thereunder or to otherwise preserve the ability of the 

Debtors to utilize their net operating loss carryforwards and other tax attributes (collectively, the 

“NOLs”); 

(ii) if the Implied P/E Multiple with respect to the Equity Offering is less 

than the Implied P/E Multiple required for a Permitted Equity Offering in Section 1(a)(i) above, 

but equals or exceeds the lesser of (A) 12 and (B) 12 times one plus the percentage change of the 

Applicable Utility Index Multiple as measured on the date of this Backstop Commitment Letter 

and the Determination Date (the “Rights Offering Threshold Multiple”), then PG&E shall 

structure the Equity Offering such that (Y) at least 80%, determined assuming the exercise in full 

of all of the Rights, of the aggregate cash proceeds of the Equity Offering is to be raised through 

the exercise of purchase rights (the “Rights”) distributed to holders of PG&E common stock 

(“Existing Shareholders”) as of a record date to be determined by the Board (the “Record Date”) 

to purchase shares of New HoldCo Common Stock for cash at a price set forth below (the “Rights 

Offering”) and (Z) the balance of the aggregate cash proceeds of the Equity Offering is to be 

raised through any other form of primary equity offering (including any public offering, regular 

way offering, at-the-market equity offering, block trade, modified Dutch auction or other auction 

pricing mechanism, private placement, “PIPE” sale or other registered or unregistered 

transaction), provided, that entities holding a majority of the Aggregate Backstop Commitments 

have not objected to the identity of the purchasers and ultimate purchasers, as applicable, in such 

Equity Offering, to the extent such Equity Offering is not a broadly syndicated underwritten 

public offering, within three business days of receipt of notice from PG&E; 

(iii) in both of paragraphs (i) and (ii) above, Reorganized Holdco may also 

raise equity capital (subject to the Equity Offering Cap) by calling on the Backstop Commitments 

(after giving effect to any reduction of the Backstop Commitments in connection with a Permitted 

Equity Offering or a Rights Offering, as applicable); and 

(iv) if the Implied P/E Multiple with respect to the Equity Offering would be 

less than the Rights Offering Threshold Multiple or if for any other reason Reorganized Holdco is 

unable to execute an Equity Offering, then Reorganized Holdco shall not utilize either a 

Permitted Equity Offering or a Rights Offering and shall issue shares at the Backstop Price 

pursuant to the Backstop Commitments up to the Equity Offering Cap less the proceeds of any 

Additional Capital Sources. 

“Implied P/E Multiple” means, with respect to any Equity Offering, (A) the price per share at 

which shares of New Holdco Common Stock are offered to be sold in such Equity Offering (which price 

(x) in the case of an Equity Offering of rights, shall be the exercise price to acquire a share of New HoldCo 

Common Stock pursuant to such rights or (y) in the case of an Equity Offering of a security convertible 

into or exchangeable for shares of New HoldCo Common Stock, shall be the per share price implied by the 

conversion ratio used to convert the principal amount, liquidation preference or other face amount of such 

security into a number of shares of New HoldCo Common Stock) (the “Per Share Price”), times (B) the 

number of fully diluted shares of PG&E (calculated using the treasury stock method) that will be 

outstanding as of the Effective Date (assuming such Equity Offering and all other equity transactions 

contemplated by the Plan are consummated and settled on the Effective Date), divided by (C) the 

Normalized Estimated Net Income as of the Determination Date. 

b. Additional Capital Sources. PG&E shall conduct the Equity Offering in 

accordance with the Plan. The net cash proceeds to PG&E of the Equity Offering shall not exceed the 

Equity Offering Cap, less the sum of (i) the principal amount of debt that is issued by PG&E in excess of 

$7 billion in connection with the Plan; (ii) the aggregate liquidation preference of preferred stock 

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(“Mandatory Convertible Preferred Stock”) that is distributed pursuant to the Plan to holders of Wildfire 

Claims, on the terms and conditions set forth on Exhibit B pursuant to the Plan; (iii) the principal amount 

of any Wildfire Victim Recovery Bonds issued in connection with the Plan; (iv) the proceeds of any 

preferred stock issued by the Utility (excluding any Utility Preferred Interests that are Reinstated pursuant 

to the Plan); (v) the proceeds of any third-party transactions based upon the monetization of any NOLs; and 

(vi) the principal amount of any other debt that is issued or reinstated by the Utility, excluding any debt that 

may be issued under clause (v) above, in excess of $27.35 billion in connection with the Plan (the 

“Additional Capital Sources”). 

c. Rights Offering. With respect to the Rights Offering: 

(i) the Rights will have a fixed exercise price equal to (a) the Rights 

Offering Threshold Multiple times (b) the Normalized Estimated Net Income as of the 

Determination Date, divided by (c) the number of fully diluted shares of PG&E (calculated using 

the treasury stock method) that will be outstanding as of the Effective Date (assuming all equity is 

raised by the exercise of all Rights); 

(ii) the Rights shall be transferable; 

(iii) the Board shall provide that holders of Rights who fully exercise their 

Rights will have over-subscription privileges to subscribe for additional shares of New HoldCo 

Common Stock to the extent other Rights are not exercised, with over-subscription procedures 

(including pro-ration rules) determined by the Board; 

(iv) the Board may provide that the Rights or Rights Offering include such 

terms and conditions that are reasonably advisable (based on the advice of the Debtors’ tax 

advisors after consultation with Jones Day) in order to avoid an “ownership change” within the 

meaning of Section 382 and the Treasury Regulations promulgated thereunder or to otherwise 

preserve the ability of the Debtors to utilize their NOLs, including limitations on the amount of 

Rights that are exercisable by holders who, together with persons who have a formal or informal 

understanding with such holders to make a coordinated acquisition of stock within the meaning of 

Treasury Regulations 1.382-3(a) (an “Entity”), beneficially own in excess of a specified 

percentage (e.g., 4.75%) of the outstanding shares of PG&E common stock, subject to exceptions 

to be determined by the Board; provided, however, that such terms and conditions shall not 

restrict existing holders of PG&E common stock (including any Entity) from acquiring shares 

that do not increase their aggregate beneficial ownership to more than 4.75% of the outstanding 

shares of PG&E common stock immediately after the completion of the Rights Offering; and 

(v) the Rights will have such other terms and conditions as may be 

determined by the Board, as long as such other terms and conditions are consistent with the Plan 

and with every other provision of this Backstop Commitment Letter. 

d. Subordinated Claims. To the extent provided in the Plan, the Debtors may issue 

Rights or New HoldCo Common Stock to holders of Claims against a Debtor that are subject to 

subordination pursuant to section 510(b) of the Bankruptcy Code and that arise from or are related to any 

equity security of the Debtor. 

e. Documentation. The definitive documentation for any Permitted Equity Offering 

or any Rights Offering shall be consistent with the Plan. For the avoidance of doubt, the organizational 

documents of the Reorganized HoldCo (including its charter) may include limitations and other terms that 

are reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation with Jones 

Day) in order to avoid an “ownership change” within the meaning of Section 382 and the Treasury 

Regulations promulgated thereunder or to otherwise preserve the ability of the Debtors to utilize their 

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NOLs; provided, however, that the organizational documents shall not be modified or amended in a manner 

that would restrict existing holders of PG&E common stock (including any Entity) from acquiring shares 

that do not increase their aggregate beneficial ownership to more than 4.75% of the outstanding shares of 

PG&E common stock immediately after the completion of the Rights Offering. 

f. Use of Proceeds. The Debtors shall only use the proceeds of an Equity Offering 

to fund obligations to holders of Wildfire Claims under the Plan. 

g. Notices. Promptly, and in any event, within two days of the Board’s determination 

of final pricing of any Equity Offering, PG&E shall publicly disclose the form, structure, amount and terms 

of such Equity Offering, including the Implied P/E Multiple for such Equity Offering. PG&E shall give 

the Backstop Party, as soon as reasonably practicable, but in no event later than two business days prior to 

the Effective Date, (i) written notification setting forth (A) the amount to be funded pursuant to the Backstop 

Commitment, (B) an estimate of the Backstop Price and (C) the targeted Effective Date and (ii) a 

subscription form to be completed by the Backstop Party, or other instructions, to facilitate the Backstop 

Party’s subscription for the New HoldCo Common Stock. 

h. Cooperation. As reasonably requested by the Debtors, the Backstop Party shall 

reasonably cooperate with the Debtors with respect to providing information relevant to the preservation of 

the Debtors’ Tax Attributes, including information regarding (i) the number of shares of PG&E common 

stock owned by such party (on a holder-by-holder basis) prior to the Rights Offering and (ii) the amount of 

Rights exercised and shares of New HoldCo Common Stock purchased pursuant to the Backstop 

Commitment by such persons. 

2. Backstop. 

a. Subject to the terms and conditions set forth herein and to the payment and 

provision of premium to the Backstop Party as provided in Section 2(c), the Backstop Party, solely on 

behalf of itself, hereby commits to purchase on the Effective Date an amount of shares of New HoldCo 

Common Stock at the Backstop Price (the “Backstop Commitment”) up to the dollar amounts set forth on 

Exhibit B hereto (the “Backstop Commitment Amount”). 

b. PG&E and the Backstop Party shall cooperate in good faith to prepare and deliver 

a subscription agreement and any other documentation necessary to effect the private placement of New 

HoldCo Common Stock to the Backstop Party in accordance with the terms of this Backstop Commitment 

Letter, which documentation shall be consistent with this Backstop Commitment Letter and the Plan. 

c. The Debtors agree to pay the Backstop Party the Backstop Commitment Premium 

to the extent provided on Exhibit B and to reimburse on a regular basis the Backstop Party for the reasonable 

fees and expenses of Jones Day and a financial advisor incurred prior to termination of this Backstop 

Commitment Letter in connection with the Plan, the Backstop Commitment Letter, and the transactions 

contemplated herein, provided that such reimbursement shall not exceed $17 million for Jones Day in the 

aggregate and $19 million for the financial advisor in the aggregate. The provisions for the payment of the 

Backstop Commitment Premium and the other provisions provided herein are an integral part of the 

transactions contemplated by this Backstop Commitment Letter and without these provisions the Backstop 

Party would not have entered into this Backstop Commitment Letter, and the Backstop Commitment 

Premium shall, pursuant to an order of the Bankruptcy Court approving this Backstop Commitment Letter, 

constitute allowed administrative expenses of the Debtors’ estates under sections 503(b) and 507 of the 

Bankruptcy Code. 

d. Reorganized Holdco will enter into a registration rights agreement with the 

Backstop Party in respect of the shares of New HoldCo Common Stock that the Backstop Party may acquire 

in accordance with the Plan and this Backstop Commitment Letter, which registration rights agreement 

shall be in form and substance reasonably acceptable to the holders of a majority of the Aggregate Backstop 

Commitments. 

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e. To the extent that PG&E agrees to terms that are more favorable to an Other 

Backstop Party in an Other Backstop Commitment Letter (excluding terms relating to the size of such Other 

Backstop Party’s backstop commitment), PG&E shall provide notice of such terms to the Backstop Party 

no later than 10 days after the Allocation Date and, absent a written objection from the Backstop Party no 

later than 10 days after the date of such notice, such terms shall be deemed without further action to be 

incorporated into this Backstop Commitment Letter. 

3. Backstop Party Representations. The Backstop Party hereby represents and warrants, 

solely as to itself, that (a) it has all limited partnership, corporate or other power and authority necessary to 

execute, deliver and perform this Backstop Commitment Letter, (b) the execution, delivery and 

performance of this Backstop Commitment Letter by it has been duly and validly authorized and approved 

by all necessary limited partnership, corporate or other organizational action by it, (c) this Backstop 

Commitment Letter has been duly and validly executed and delivered by it and, assuming due execution 

and delivery by the other parties hereto, constitutes a valid and legally binding obligation of it, enforceable 

against it in accordance with the terms of this Backstop Commitment Letter, (d) the execution, delivery and 

performance by the Backstop Party of this Backstop Commitment Letter do not (i) violate the organizational 

documents of the Backstop Party or (ii) violate any applicable law or judgment applicable to it, (e) as of the 

date of this Backstop Commitment Letter, its Backstop Commitment is, and as of the date of 

commencement of any Rights Offering and as of the Effective Date its Backstop Commitment will be, less 

than the maximum amount that it is permitted to invest in any one portfolio investment pursuant to the 

terms of its constituent documents or otherwise, (f) it has, as of the date of this Backstop Commitment 

Letter, and will have, as of the Effective Date, in the aggregate available undrawn commitments and liquid 

assets at least in the sum of its Backstop Commitment Amount hereunder, and (g) as of September 2, 2019, 

it and its affiliates (excluding any affiliate that is an Other Backstop Party) beneficially owned, directly or 

indirectly, 17,131,521 shares of PG&E common stock and had a “put equivalent position” (as defined in 

Rule 16a-1 under the Securities Exchange Act of 1934, as amended) of zero shares of PG&E common stock 

(the number of shares beneficially owned less the number of shares in the put equivalent position being the 

“Backstop Party’s Shares”). 

In addition, the Backstop Party hereby represents and warrants, solely as to itself, as of the date of 

this Backstop Commitment Letter and as of the Effective Date, that the Backstop Party (i) is acquiring the 

shares of New HoldCo Common Stock for its own account, solely for investment and not with a view 

toward, or for sale in connection with, any distribution thereof in violation of any foreign, federal, state or 

local securities or “blue sky” laws, or with any present intention of distributing or selling such shares in 

violation of any such laws, (ii) has such knowledge and experience in financial and business matters and in 

investments of this type that it is capable of evaluating the merits and risks of its investment in the shares 

of New HoldCo Common Stock and of making an informed investment decision, and (iii) is an “accredited 

investor” within the meaning of Rule 501 of Regulation D under the Securities Act of 1933, as amended 

(the “Securities Act”). The Backstop Party understands that Reorganized HoldCo will be relying on the 

statements contained herein to establish an exemption from registration under the Securities Act and under 

foreign, federal, state and local securities laws and acknowledges that the shares of New HoldCo Common 

Stock will not be registered under the Securities Act or any other applicable law and that such shares may 

not be transferred except pursuant to the registration provisions of the Securities Act (and in compliance 

with any other applicable law) or pursuant to an applicable exemption therefrom. 

4. Conditions to Backstop Party Commitment. The obligations of the Backstop Party to fund 

its Backstop Commitment to PG&E in accordance with this Backstop Commitment Letter are further 

expressly conditioned upon and subject to the satisfaction or written waiver by the Backstop Party, in its 

sole discretion, at or prior to the Effective Date of each of the following conditions, which PG&E 

acknowledges are an integral part of the transactions contemplated by this Backstop Commitment Letter 

and without these conditions the Backstop Party would not have entered into this Backstop Commitment 

Letter. 

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a. by November 7, 2019, the Debtors shall have received valid and enforceable Other 

Backstop Commitments on substantially the same terms and conditions as set forth in this Backstop 

Commitment Letter that in the aggregate with this Backstop Commitment result in Aggregate Backstop 

Commitments of no less than the Equity Offering Cap; 

b. other than the consummation of any Permitted Equity Offering or the Rights 

Offering, the satisfaction of all of the other conditions to the Effective Date provided for in the Plan or the 

waiver of any such conditions by the Debtors in accordance with the Plan (to the extent the Plan expressly 

provides for the possibility of such a waiver); 

c. the Bankruptcy Court shall have entered the Confirmation Order, which shall 

confirm the Plan with such amendments, modifications, changes and consents as are approved by those 

entities having no less than a majority of the Aggregate Backstop Commitments (such approval not to be 

unreasonably withheld, conditioned or delayed), and such Confirmation Order shall be in full force and 

effect, and no stay thereof shall be in effect; 

d. this Backstop Commitment Letter shall have been approved by an order of the 

Bankruptcy Court and such order shall be in full force and effect, and no stay thereof shall be in effect; 

e. the transactions contemplated herein shall have been authorized by an order of the 

Bankruptcy Court (which may be the Confirmation Order) such order shall be in full force and effect, and 

no stay thereof shall be in effect; 

f. total PG&E weighted average earning rate base (including electric generation, 

electric transmission, electric distribution, gas distribution, gas transmission and storage) for estimated 

2021 shall be no less than 95% of $48 billion; and 

g. no result, occurrence, fact, change, event, effect, violation, penalty, inaccuracy or 

circumstance (whether or not constituting a breach of a representation, warranty or covenant set forth in the 

Plan) that, individually or in the aggregate with any such other results, occurrences, facts, changes, events, 

effects, violations, penalties, inaccuracies, or circumstances, (i) would have or would reasonably be 

expected to have a material adverse effect on the business, operations, assets, liabilities, capitalization, 

financial performance, financial condition or results of operations, in each case, of the Debtors, taken as a 

whole, or (ii) would reasonably be expected to prevent or materially delay the ability of the Debtors to 

consummate the transactions contemplated by this Backstop Commitment Letter or the Plan or perform 

their obligations hereunder or thereunder (each a “Material Adverse Effect”) shall have occurred; provided, 

however, that none of the following results, occurrences, facts, changes, events, effects, violations, 

penalties, inaccuracies, or circumstances shall constitute or be taken into account in determining whether a 

Material Adverse Effect has occurred, is continuing or would reasonably be expected to occur: (A) the 

filing of the Chapter 11 Cases, and the fact that the Debtors are operating in bankruptcy (B) results, 

occurrences, facts, changes, events, effects, violations, inaccuracies, or circumstances affecting (1) the 

electric or gas utility businesses in the United States generally or (2) the economy, credit, financial, capital 

or commodity markets, in the United States or elsewhere in the world, including changes in interest rates, 

monetary policy or inflation, (C) changes or prospective changes in law (other than any law or regulation 

of California or the United States that is applicable to any electrical utility) or in GAAP or accounting 

standards, or any changes or prospective changes in the interpretation or enforcement of any of the 

foregoing, (D) any decline in the market price, or change in trading volume, of any securities of the 

Debtors, (E) any failure to meet any internal or public projections, forecasts, guidance, estimates, 

milestones, credit ratings, budgets or internal or published financial or operating predictions of revenue, 

earnings, cash flow or cash position, (F) any wildfire occurring after the Petition Date and prior to January 1, 

2020, and (G) one or more wildfires, occurring on or after January 1, 2020, that destroys or damages fewer 

than 500 dwellings or commercial structures (“Structures”) in the aggregate (it being understood that (I) 

the exceptions in clauses (D) and (E) shall not prevent or otherwise affect a determination that the 

underlying cause of any such change, decline or failure referred to therein is a Material Adverse Effect and 

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(II) a Material Adverse Effect shall include the occurrence of one or more wildfires on or after January 1, 

2020 destroying or damaging at least 500 Structures within PG&E’s service area where none of the 

following are true with respect any such wildfire (a) the portion of PG&E’s system at the location of such 

wildfire was not de-energized; (b) there has been no determination by a final order that such wildfire was 

caused by a person or entity other than the Utility; and (c) there has been no determination that such wildfire 

was not caused by the negligence or intentional misconduct of the Utility by a final order of a court having 

jurisdiction). 

5. Termination by the Backstop Party. Subject to the last paragraph of this Section 5, the 

Backstop Party may terminate this Backstop Commitment Letter, solely as to itself, by written notice (which 

shall describe the basis for such termination), on or after the occurrence of any of the following: 

a. the Plan has not been filed with the Bankruptcy Court by 11:59 p.m. Pacific Time 

on September 9, 2019 or the Plan filed with the Bankruptcy Court on or after such date differs from the 

draft of the Plan attached hereto as Exhibit A; 

b. the condition set forth in Section 4(a) is not satisfied as of November 7, 2019; 

c. the Bankruptcy Court has not entered an order approving this Backstop 

Commitment Letter on or before November 20, 2019; 

d. subject to Section 11, (i) the Plan has been amended modified or changed, in each 

case without the consent of the entities holding a majority of the Aggregate Backstop Commitments (such 

consent not to be unreasonably withheld, conditioned or delayed) or (ii) any Plan Supplement or any Plan 

Document shall have been filed or finalized without the consent of entities holding a majority of the 

Aggregate Backstop Commitments (such consent not to be unreasonably withheld, conditioned or delayed); 

e. the Confirmation Order has not been entered by the Bankruptcy Court on or before 

June 30, 2020 (the “Outside Date”); 

f. the Effective Date has not occurred on or before 60 days after entry of the 

Confirmation Order; 

g. the Debtors have failed to perform any of their obligations set forth in this 

Backstop Commitment Letter, which failure to perform (i) would give rise to the failure of a condition set 

forth in Section 4(b) or 4(c) and (ii) is incapable of being cured or, if capable of being cured by the Outside 

Date, the Debtors have not cured within 10 calendar days following receipt by the Debtors of written notice 

of such failure to perform from the Backstop Party stating the Backstop Party’s intention to terminate this 

Backstop Commitment Letter pursuant to this Section 5(g) and the basis for such termination; 

h. the occurrence of a Material Adverse Effect; 

i. the occurrence of one or more wildfires in the Debtors’ service territory after the 

Petition Date and prior to January 1, 2020 that is asserted by any person to arise out of the Debtors’ activities 

and that destroys or damages more than 500 Structures; provided, however, that any notice of termination 

under this clause (i) must be given on or before January 15, 2020; 

j. the Debtors’ aggregate liability with respect to Wildfire Claims is determined 

(whether (i) by the Bankruptcy Court (or the District Court to which the reference has been partially 

withdrawn for estimation purposes), (ii) pursuant to an agreement between the Debtors and the holders of 

Wildfire Claims, or (iii) through a combination thereof) to exceed $17.9 billion (the “Wildfire Claims 

Cap”); provided, however, that for purposes of this clause (j), (A) any Wildfire Claim that the CPUC has 

approved or agreed to approve for recovery or pass through by the Utility shall not count in determining 

the Wildfire Claims Cap, and (B) the Wildfire Claims Cap shall be increased by an amount equal to the 

amount of Wildfire Claims consisting of professional fees that the Bankruptcy Court (or the District Court 

to which the reference has been partially withdrawn for estimation purposes) determines to be reasonable; 

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k. the CPUC fails to issue all necessary approvals, authorizations and final orders to 

implement the Plan prior to the Outside Date, and to participate in the Go-Forward Wildfire Fund, 

including: (i) provisions satisfactory to entities holding a majority of the Aggregate Backstop Commitments 

(such approval not to be unreasonably withheld, conditioned or delayed) pertaining to authorized return on 

equity and regulated capital structure, (ii) a disposition, satisfactory to entities holding a majority of the 

Aggregate Backstop Commitments (such approval not to be unreasonably withheld, conditioned or 

delayed), of proposals for certain potential changes to PG&E’s corporate structure and authorizations for 

the Utility to operate as a utility, (iii) a resolution, satisfactory to entities holding a majority of the Aggregate 

Backstop Commitments (such approval not to be unreasonably withheld, conditioned or delayed), of claims 

for monetary fines or penalties under the California Public Utilities Code for conduct prior to the Petition 

Date, and (iv) approval (or exemption from approval) of the financing structure and securities to be issued 

under the Plan; 

l. if at any time after the first day of the Confirmation Hearing, asserted 

Administrative Expense Claims exceed $250 million, excluding all (i) ordinary course Administrative 

Expense Claims, (ii) Professional Fee Claims, and (iii) Disallowed Administrative Expense Claims; 

m. there is in effect an order of a governmental authority of competent jurisdiction 

permanently restraining, enjoining or otherwise prohibiting the consummation of any of the transactions 

contemplated by the Plan, or any law, statute, rule, regulation or ordinance is adopted that makes 

consummation of the transactions contemplated by the Plan illegal or otherwise prohibited. 

PG&E shall promptly provide notice to the Backstop Party of (i) the occurrence of any fact, event, 

or omission that is not publicly disclosed that gives rise or reasonably can be expected to give rise to a 

termination right under this Section 5 and (ii) the receipt of any termination notice from any Other Backstop 

Party, including the asserted basis for such termination, whether or not PG&E concurs therewith. 

Upon valid termination of this Backstop Commitment Letter by the Backstop Party (such 

terminating Backstop Party, a “Terminating Backstop Party”) pursuant to any of Section 5(a) through (m), 

this Backstop Commitment Letter shall be void and of no further force or effect solely with respect to such 

Terminating Backstop Party is obligated herein, such Terminating Backstop Party shall be released from 

its Backstop Commitments, undertakings and agreements under or related to this Backstop Commitment 

Letter, including its Backstop Commitment, except as explicitly provided herein and there shall be no 

liability or obligation on the part of such Terminating Backstop Party hereunder, except as expressly 

provided herein. Notwithstanding any termination by a Terminating Backstop Party, PG&E shall remain 

liable for the payment of all earned Backstop Commitment Premiums and expense reimbursement 

obligations in this Backstop Commitment Letter. 

The Backstop Party’s obligations under this Backstop Commitment Letter shall automatically 

terminate in the event that PG&E has not returned a counter-signed copy of this Backstop Commitment 

Letter agreeing to its terms on or before the date that is two weeks from the day the Backstop Party furnished 

a signed copy of this Backstop Commitment Letter to PG&E. 

The Backstop Party may not seek to (i) assert the failure of any condition precedent to any of its 

obligations or agreements under this Backstop Commitment Letter or (ii) terminate this Backstop 

Commitment Letter (including pursuit of any other remedies), in each case unless the Backstop Party has 

given written notice to PG&E of such assertion or termination. 

Notwithstanding anything in this Backstop Commitment Letter to the contrary, any notice of 

termination under clauses (d), (g), (h), (i), (k), (l) and (m) shall not be effective unless PG&E has received 

notices of termination from entities constituting a majority of the outstanding Aggregate Backstop 

Commitments with respect to the event or circumstance that is the basis for such notice of termination. 

PG&E shall provide the Backstop Party with a notice of such effective termination within two business 

days of the effectiveness of the termination. 

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In the event that any fact or circumstance would give the Backstop Party the right to terminate 

under more than one clause in this Section 5, the exercise of a termination right under any one clause shall 

not prejudice the Backstop Party from exercising a termination right under any other clause based on the 

same event or circumstance. 

6. Termination by PG&E; Defaulting Backstop Party; Extension Options. PG&E may 

terminate this Backstop Commitment Letter (including all Backstop Commitments hereunder) (a) at any 

time prior to countersigning such Backstop Commitment Letter, (b) if, on any date after November 7, 2019, 

the condition set forth in Section 4(a) would not be satisfied if tested on such date, (c) in the event of a 

material breach of a representation or warranty of the Backstop Party set forth in Section 3, (d) in the event 

that the Backstop Party repudiates this Backstop Commitment Letter, purports to terminate this Backstop 

Commitment Letter if such purported termination is not a valid termination of this Backstop Commitment 

Letter as determined in a final order of a court with jurisdiction or fails to fund its Backstop Commitment 

when required to do so in accordance with this Backstop Commitment Letter, (e) if the Backstop 

Commitment Amount has been reduced to zero in accordance with Section 7, (f) if the Backstop Party has 

the right to terminate this Backstop Commitment Letter under clause (h), (i), (j) or (m) of Section 5, or (g) 

if (i) a third party makes a binding proposal to acquire at least 50% of the outstanding PG&E common stock 

(including by means of a merger, joint venture, partnership, consolidation, dissolution, liquidation, tender 

offer, recapitalization, reorganization, share exchange, business combination or similar transaction), (ii) 

either (x) the implementation of such proposal would require the approval of holders of a majority of the 

PG&E common stock or (y) the price contemplated by such proposal would exceed 125% of the Equity 

Offering Cap, and (iii) the Board determines in good faith, after consultation with PG&E’s outside legal 

counsel, that the failure to terminate this Backstop Commitment Letter in response to such proposal would 

be inconsistent with the exercise of its fiduciary duties to the stockholders of PG&E under applicable law. 

In the event of a breach, repudiation, purported termination or failure to fund contemplated by the foregoing 

clause (c) or (d), the Backstop Party shall be deemed to be a “Defaulting Backstop Party”. In the event 

that the Backstop Party becomes a Defaulting Backstop Party, then PG&E may, upon notice to such 

Defaulting Backstop Party, require the Backstop Party to assign and delegate, without recourse, all its 

interests, rights (other than any Backstop Commitment Premiums earned prior to the date of such 

assignment and delegation) and obligations under this Backstop Commitment Letter to a third party that 

shall assume such obligations (which assignee may be an Other Backstop Party, if an Other Backstop Party 

accepts such assignment and delegation). Notwithstanding any termination by PG&E under Sections 6(b), 

(e), (f) or (g), PG&E shall remain liable for the payment of all earned Backstop Commitment Premiums 

and expense reimbursement obligations in this Backstop Commitment Letter. 

In the event that any fact or circumstance would give PG&E the right to terminate under more than 

one clause in this Section 6, the exercise of a termination right under any one clause shall not prejudice 

PG&E from exercising a termination right under any other clause based on the same event or circumstance. 

Notwithstanding anything to the contrary herein, this Backstop Commitment Letter shall 

automatically terminate on January 20, 2020 (the “Initial Termination Date”). Provided that this Backstop 

Commitment Letter remains in full force and effect and has not been otherwise terminated, PG&E may 

extend the Initial Termination Date to April 30, 2020 (the “First Extension Date”) upon providing written 

notice to the Backstop Party of its intent to exercise this option (the “First Extension Notice”) no later than 

three days prior to the Initial Termination Date. In the event that PG&E has provided the Backstop Party a 

timely and proper First Extension Notice and this Backstop Commitment Letter remains in full force and 

effect, PG&E may extend the First Extension Date to the Outside Date (the “Second Extension Date”) 

upon providing written notice to the Backstop Party of its intent to exercise this option (the “Second

Extension Notice”) no later than three days prior to the First Extension Date. In the event that PG&E has 

provided the Backstop Party a timely and proper Second Extension Notice and this Backstop Commitment 

Letter remains in full force and effect, PG&E may extend the Second Extension Date to the 60th day 

following the Outside Date (the “Third Extension Date”) upon providing written notice to the Backstop 

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Party of its intent to exercise this option (the “Third Extension Notice”) no later than three days prior to 

the Second Extension Date. 

7. Reduction of Commitments by PG&E. 

a. In the event that on or prior to November 7, 2019, PG&E receives Aggregate 

Backstop Commitments that exceed the Equity Offering Cap (such excess, the “Overallotment Amount”), 

then, on November 8, 2019 (the “Allocation Date”), the Backstop Commitment Amount shall be 

automatically reduced by an amount equal to (i) the Overallotment Amount, times (ii) a fraction, (A) the 

numerator of which is the Backstop Party’s Shares and (B) the denominator of which is the aggregate 

number of shares of PG&E common stock held by the Backstop Party and the Other Backstop Parties, 

collectively, as of September 6, 2019 (without double counting any shares beneficially owned, directly or 

indirectly, by more than one Backstop Party). Notwithstanding the foregoing, on the Allocation Date, in 

the event there is an Overallotment Amount and for the purpose of curing such Overallotment Amount, 

PG&E may reduce the Backstop Commitment Amount as to any Backstop Party to the extent such reduction 

is reasonably advisable (based on the advice of the Debtors’ tax advisors after consultation with Jones Day) 

in order to avoid an “ownership change” within the meaning of Section 382 and the Treasury Regulations 

promulgated thereunder or to otherwise preserve the ability of the Debtors to utilize their NOLs; provided

that such reduction may not be below the amount of Backstop Commitments at which such Backstop Party 

would maintain its existing percentage ownership of the total outstanding shares of PG&E common stock. 

Within three business days of the Allocation Date, PG&E shall provide the Backstop Party with a notice of 

any adjustment to its Backstop Commitment Amount under this Section 7(a). 

b. In the event that, after November 7, 2019, the Debtors (i) receive binding 

commitments providing for funding from any Additional Capital Sources that (A) have conditions to 

funding and commitment termination rights that are no less favorable to PG&E than those in this Backstop 

Commitment Letter and (B) are approved by an order of the Bankruptcy Court, or (ii) actually obtain 

funding from any Additional Capital Sources, then (x) in the case of clause (i), PG&E may reduce the 

Backstop Commitment Amount, and (y) in the case of clause (ii), the Backstop Commitment Amount shall 

be automatically reduced (if not already reduced pursuant to clause (i)), in each case by an amount equal to 

(A) the amount of such funding, times (B) a fraction, (1) the numerator of which is the Backstop 

Commitment Amount immediately prior to such reduction and (2) the denominator of which is the 

Aggregate Backstop Commitments as of immediately prior to such reduction. Any reduction in the 

Backstop Commitment pursuant to this Section 7(b) shall not reduce any Backstop Commitment Premium 

earned prior to the date of such reduction. 

c. In the event that the Debtors consummate any Permitted Equity Offering or Rights 

Offering, the Backstop Commitment Amount shall be automatically reduced by an amount equal to (i) the 

net cash proceeds of such Permitted Equity Financing or such Rights Offering plus the proceeds of any 

Additional Capital Sources, as applicable, times (ii) a fraction, (A) the numerator of which is the Backstop 

Commitment Amount immediately prior to such reduction and (B) the denominator of which is the 

Aggregate Backstop Commitments as of immediately prior to such reduction. 

d. The Debtors shall provide notice to the Backstop Party in the event that the 

Backstop Commitment Amount is reduced as provided above. References herein to “Backstop 

Commitment Amount” or “Backstop Commitment” mean such amounts as adjusted in accordance with the 

terms of this Backstop Commitment Letter. Any Backstop Commitments that have been terminated or 

reduced shall be terminated or reduced, as applicable, permanently. 

8. Assignment. This Backstop Commitment Letter (a) is not assignable by the Backstop 

Party, and any purported assignment shall be null and void ab initio; provided, however, Backstop Party 

may assign its Backstop Commitment, in whole or in part, to (i) another Backstop Party, (ii) an affiliate of 

the Backstop Party, or (iii) an investment fund or separately managed account the primary investment 

advisor or sub advisor to which is a Backstop Party or an affiliate thereof, to the extent such assignee 

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Backstop Party agrees in writing to assume all obligations hereunder of such Backstop Party in connection 

with such Backstop Commitment, and any assignment under this proviso shall not relieve the Backstop 

Party from its obligations under this Backstop Commitment Letter, and (b) is intended to be solely for the 

benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, 

any person or entity other than the parties hereto. Notwithstanding the foregoing, a Backstop Party may 

assign all or any portion of its obligations hereunder to a “qualified institutional buyer” (as defined in 

Rule 144A under the Securities Act of 1933, as amended), without the consent of any party, provided, 

however, that (i) absent the prior written consent of PG&E, such assignee (including any Entity) does not, 

and as a result of such assignment will not, beneficially own more than 4.75% of the Aggregate Backstop 

Commitments and (ii) any assignment under this sentence shall not relieve the Backstop Party from its 

obligations under this Backstop Commitment Letter. 

9. Entire Agreement. This Backstop Commitment Letter, including all exhibits hereto, 

constitutes the entire understanding among the parties hereto with respect to the subject matter hereof and 

replaces and supersedes all prior agreements and understandings, both written and oral, between the parties 

hereto with respect to the subject matter hereof and, subject to the terms hereof, shall become effective and 

binding upon the mutual exchange of fully executed counterparts by each of the parties hereto. 

10. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Backstop 

Commitment Letter shall be governed by, and construed in accordance with, the internal laws of the State 

of New York, without giving effect to the principles of conflict of laws that would require the application 

of the law of any other jurisdiction. By its execution and delivery of this Backstop Commitment Letter, 

each of the parties hereto irrevocably and unconditionally agrees for itself that any legal action, suit or 

proceeding against it with respect to any matter under or arising out of or in connection with this Backstop 

Commitment Letter or for recognition or enforcement of any judgment rendered in any such action, suit or 

proceeding, may be brought only in the Bankruptcy Court. By execution and delivery of this Backstop 

Commitment Letter, each of the parties hereto irrevocably accepts and submits itself to the exclusive 

jurisdiction of the Bankruptcy Court with respect to any such action, suit or proceeding. EACH PARTY 

HERETO UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR 

PROCEEDING REFERRED TO ABOVE. 

11. Amendment; Waiver; Counterparts. This Backstop Commitment Letter may not be 

amended or waived by or on behalf of the Backstop Party, and no consent may be given hereunder by or 

on behalf of the Backstop Party (including to an amendment or waiver of any provision of the Plan), except 

in writing signed by the holders of a majority of the Aggregate Backstop Commitments (whether or not the 

Backstop Party signs such amendment or waiver), and confirmed in writing by the Company; provided, 

however, that without the prior written consent of the Backstop Party, this Backstop Commitment Letter 

may not be amended to (a) increase the amount of the Backstop Commitment Amount or Backstop 

Commitment, (b) decrease the Backstop Commitment Premium, (c) extend the Backstop Commitment 

beyond the Third Extension Date, (d) amend the definition of “Backstop Price” or any component thereof, 

and (e) amend, modify, or waive the condition in Section 4(d). This Backstop Commitment Letter may be 

executed in any number of counterparts, each of which will be an original, and all of which, when taken 

together, will constitute one agreement. Delivery of an executed counterpart of this Backstop Commitment 

Letter by e-mail or portable document format (PDF) will be effective as delivery of a manually executed 

counterpart of this Backstop Commitment Letter. 

12. Notices. All notices required or permitted to be given under this Backstop Commitment 

Letter, unless otherwise stated herein, shall be given by overnight courier at the addresses specified below, 

or at such other address or addresses as a party may designate for itself in writing, or by email (if confirmed) 

at the email addresses specified below: 

If to the Backstop Party, to the name, address and email address located on the Backstop Party’s 

signature page to this Backstop Commitment Letter. 

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If to the Debtors: 

PG&E Corporation 

77 Beale Street 

P.O. Box 770000 

San Francisco, California 94177 

Attention: Janet Loduca, Senior Vice President and General Counsel 

Email: J1Lc@pge.com 

with a copy to: 

Cravath, Swaine & Moore LLP 

825 Eighth Avenue 

New York, New York 10019 

Attention: Richard Hall; Paul Zumbro 

Email: RHall@cravath.com; PZumbro@cravath.com 

Weil, Gotshal & Manges LLP 

767 Fifth Avenue 

New York, New York 10153 

Attention: Stephen Karotkin 

Email: Stephen.karotkin@weil.com 

13. No Liability. Notwithstanding anything that may be expressed or implied in this Backstop 

Commitment Letter, each party hereto acknowledges and agrees that no person other than the Backstop 

Party (and it permitted assigns) shall have any obligation hereunder (subject to the limitations provided 

herein) or in connection with the transactions contemplated hereby and that (a) notwithstanding that any 

Backstop Party may be a partnership, limited partnership or limited liability company, no recourse (whether 

at law, in equity, in contract, in tort or otherwise) hereunder or under any document or instrument delivered 

in connection herewith, or in respect of any oral representations made or alleged to be made in connection 

herewith or therewith, shall be had against any former, current or future direct or indirect equity holder, 

controlling person, general or limited partner, shareholder, member, investment manager or adviser, 

manager, director, officer, employee, agent, affiliate, assignee, representative or financing source of any of 

the foregoing) (any such person or entity, other than such Backstop Party, a “Related Party”) or any Related 

Party of any such Related Party, including, without limitation, any liabilities arising under, or in connection 

with, the Plan or this Backstop Commitment Letter and the transactions contemplated thereby and hereby, 

or in respect of any oral representations made or alleged to be made in connection therewith or herewith), 

whether by the enforcement of any judgment or assessment or by any legal or equitable proceeding, or by 

virtue of any statute, regulation or other applicable law and (b) no personal liability whatsoever will attach 

to, be imposed on or otherwise be incurred by any Related Party of the Backstop Party or any Related Party 

of any such Related Party under this Backstop Commitment Letter or any document or instrument delivered 

in connection herewith or with the Plan Term Sheet or the Plan (or in respect of any oral representation 

made or alleged to be made in connection herewith or therewith) or for any action (whether at law, in equity, 

in contract, in tort or otherwise) based on, in respect of, or by reason of such obligations hereunder or by 

their creation. 

14. Plan Support. For as long as this Backstop Letter Agreement is in effect, the Backstop 

Party shall (i) use all reasonable efforts to support the Plan with respect to the treatment of HoldCo Common 

Interests and to act in good faith to consummate the Plan with respect to any Equity Offering and the 

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Backstop Commitments, (ii) to the extent the Backstop Party is entitled to vote on the Plan, timely vote (or 

cause to be voted) all of its HoldCo Common Interests and Claims to accept the Plan (and not to change or 

withdraw any such vote), and (iii) timely vote (or cause to be voted) its HoldCo Common Interests and 

Claims to reject any plan of reorganization other than the Plan. 

15. The Backstop Party shall not be required, pursuant to the terms of this Backstop 

Commitment Letter, to acquire or purchase any securities or indebtedness in connection with any Equity 

Offering that, pursuant to the terms of a Backstop Commitment Letter or other agreement, are to be acquired 

or subscribed for by any other party, nor shall the Backstop Party be required, pursuant to the terms of this 

Backstop Commitment Letter, to pay any money or other consideration, or exchange any claims 

whatsoever, which are owing from, or to be transferred from or by, any other party pursuant to the terms of 

another Backstop Commitment Letter or other agreement. Nothing in this Backstop Commitment Letter 

shall be deemed to constitute an agreement or a joint venture or partnership with or between any other 

person or entity nor constitute any party as the agent of any other person or entity for any purpose. For the 

avoidance of doubt, no Backstop Party shall, nor shall any action taken by a Backstop Party hereunder, be 

deemed to be acting in concert with any other person or entity with respect to the Backstop Commitment 

or any other matter nor shall the Backstop Commitments hereunder create a presumption that the Backstop 

Party is in any way acting in concert or as a group with any other person or entity whether as a result of this 

commitment or otherwise. 

16. Each party hereto confirms that it has made its own decision to execute this Backstop 

Commitment Letter based upon its own independent assessment of documents and information available 

to it, as it has deemed appropriate. 

17. Except as expressly provided in this Backstop Commitment Letter, (a) nothing herein is 

intended to, or does, in any manner waive, limit, impair or restrict the ability of each party hereto to protect 

and preserve its rights, remedies and interests, including, without limitation, any claims against or interests 

in any of the Debtors or other parties, or its full participation in any bankruptcy proceeding, and (b) the 

parties hereto each fully preserve any and all of their respective rights, remedies, claims and interests as of 

the date hereof and upon a termination of this Backstop Commitment Letter. Further, nothing in this 

Backstop Commitment Letter shall be construed to prohibit any party hereto from appearing as a party-ininterest in any matter to be adjudicated in the Chapter 11 Cases, so long as such appearance and the positions 

advocated in connection therewith are consistent with this Backstop Commitment Letter and the Plan, and 

are not for the purpose of, and could not reasonably be expected to have the effect of, hindering, delaying 

or preventing the consummation of the transactions contemplated by the Plan. 

[signature page follows] 

 

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Exhibit A 

Plan of Reorganization 

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See the Debtors’ Joint Chapter 11 Plan of Reorganization filed at Docket No. 3841.

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Exhibit B 

Mandatory Preferred Stock Term Sheet 

 

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Term Sheet for 

5.00% Mandatory Convertible Preferred Stock 

 

Issuer: PG&E Corporation (“PG&E”) 

Title of Securities: 

 

5.00% Mandatory Convertible Preferred Stock of PG&E (the 

“Mandatory Convertible Preferred Stock”) 

Shares of Mandatory Convertible 

Preferred Stock Offered by PG&E: Up to [●] shares 

 

Offering Price: 

Issue Date: 

$1,000 per share of the Mandatory Convertible Preferred 

Stock 

The Effective Date of the Plan 

Liquidation Preference: $1,000 per share 

Dividends: 

 

5.00% of the Liquidation Preference of $1,000 per share of 

the Mandatory Convertible Preferred Stock per year 

(equivalent to $50 per annum per share), when, as and if 

declared by the Board, payable in cash or, by delivery of 

additional shares of Mandatory Convertible Preferred Stock 

or any combination of cash and shares of Mandatory 

Convertible Preferred Stock, as determined by PG&E in its 

sole discretion 

 

Floor Price: 

 

100% of the Initial Price, subject to standard anti-dilution 

adjustments 

Dividend Payment Dates: 

 

If declared, January 1, April 1, July 1 and October 1 of each 

year, commencing on (TBD) 

Dividend Record Dates: 

 

The March 15, June 15, September 15 and December 15 

immediately preceding the next dividend payment date 

Redemption: 

 

The Mandatory Convertible Preferred Stock will be 

redeemable on terms and conditions to be determined 

Initial Price: 

 

A per share price equal to (a) the greater of (i) an Implied P/E 

Multiple of 13.5 or (ii) the Implied P/E Multiple of a 

Permitted Equity Offering, times (b) the Normalized 

Estimated Net Income as of the Determination Date, divided 

by (c) the number of fully diluted shares of PG&E (calculated 

using the treasury stock method) that will be outstanding as 

of the Effective Date. 

Threshold Appreciation Price: 

 

110% of the Initial Price, subject to standard ant-dilution 

adjustments 

Mandatory Conversion Date: 

 

1/8th of the Mandatory Convertible Preferred Stock will 

convert into PG&E common stock 90, 180, 270, 360, 450, 

540, 630, and 720 days from Issue Date 

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Conversion Rate: 

 

Upon conversion on the Mandatory Conversion Date, the 

conversion rate for each share of the Mandatory Convertible 

Preferred Stock will be not more than [●] shares of PG&E 

common stock (the “Maximum Conversion Rate”) and not 

less than [●] shares of PG&E common stock (the “Minimum 

Conversion Rate”), depending on the Applicable Market 

Value of the PG&E common stock subject to standard antidilution adjustments. The following table illustrates the 

conversion rate per share of the Mandatory Convertible 

Preferred Stock (in each case, subject to standard antidilution adjustments): 

Applicable Market Value of

the PG&E Common Stock 

Conversion rate (number of shares of 

PG&E Common Stock to be received 

upon 

conversion of each share of the 

Mandatory Convertible Preferred 

Stock)

Greater than 110% of the Initial 

Price (which is the Threshold 

Appreciation Price) 

[●] shares (approximately equal 

to $1,000 divided by the 

Threshold Appreciation Price) 

Equal to or less than the Threshold 

Appreciation Price but greater 

than or equal to the Floor Price 

 

Between [●] and [●] shares, 

determined by dividing $1,000 

by the Applicable Market Value 

of the PG&E common stock 

Less than the Floor Price 

 

[●] shares (approximately equal 

to $1,000 divided by the Floor 

Price) 

Applicable Market Value: 

Conversion at the Option of the Holder: 

 

The “Applicable Market Value” shall be the 10-trading day VWAP 

immediately preceding the applicable Mandatory Conversion Date 

At any time prior to final Mandatory Conversion Date, holders of the 

Mandatory Convertible Preferred Stock have the option to elect to 

convert their shares of the Mandatory Convertible Preferred Stock in 

whole or in part (but in no event less than one share of the Mandatory 

Convertible Preferred Stock), into shares of PG&E common stock at 

the Minimum Conversion Rate of shares of PG&E common stock per 

share of the Mandatory Convertible Preferred Stock. This Minimum 

Conversion Rate is subject to standard anti-dilution adjustments. 

Limitation on Ownership No holder, together with persons who have a formal or informal 

understanding with such assignee to make a coordinated acquisition of 

stock, shall acquire beneficial ownership (within the meaning of 

Section 382 and the Treasury Regulations) of more than 4.75% of the 

outstanding Mandatory Convertible Preferred Stock without the prior 

written consent of PG&E. 

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Exhibit C 

Backstop Terms 

Backstop Party Backstop Commitment Amount 

Knighthead Capital Management, LLC 

solely on behalf of certain funds and 

accounts it managed and/or advises 

$1,000,000,000 

Payments 

The Backstop Commitment Premium shall be earned as follows: 

 75 basis points of the Backstop Commitment Premium shall be earned on the later to occur of 

(a) the date that the Backstop Party and PG&E have fully executed this Backstop 

Commitment Letter and (b) Bankruptcy Court approval of this Backstop Commitment Letter, 

unless this Backstop Commitment Letter shall have earlier been terminated; 

 125 basis points of the Backstop Commitment Premium shall be earned on the date on which 

the Backstop Party receives the First Extension Notice; 

 250 basis points of the Backstop Commitment Premium shall be earned on the date on which 

the Backstop Party receives the Second Extension Notice; and 

 50 basis points of the Backstop Commitment Premium shall be earned on the date on which 

the Backstop Party receives the Third Extension Notice 

In addition, if PG&E terminates this Backstop Commitment Letter pursuant to Section 6(g), 100% of the 

Backstop Commitment Premium shall be fully earned and become due and payable in cash three business 

days after the date of such termination. 

Except as provided in the immediately preceding paragraph, the Backstop Commitment Premium shall be 

payable in shares of New HoldCo Common Stock to be issued on the Effective Date, based on the 

Backstop Price. 

Certain Defined Terms 

“Applicable Utility Index Multiple” shall mean the average normalized 2021 estimated price-to-earnings 

ratio of the U.S. regulated utilities in the S&P 500 Utilities (Sector) Index (after excluding AES, AWK, 

EXC, NRG, PEG, and PPL) over the 20-day trading period before the applicable measurement date per 

Capital IQ Consensus Estimates. 

“Backstop Commitment Premium” shall mean a commitment premium equal to 500 basis points on the 

total amount of Backstop Commitment Amount. If and when any portion of the Backstop Commitment 

Premium is earned in accordance with the foregoing provisions of this Exhibit C, (a) it shall be calculated 

by reference to the Backstop Commitment Amount in effect at the time of such earning, and (b) the 

amount of the Backstop Commitment Premium so earned shall not be subject to reduction based upon any 

subsequent reduction of the Backstop Commitment Amount or termination of this Backstop Commitment 

Letter, other than termination pursuant to Section 6(c) or 6(d) of this Backstop Commitment Letter. 

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“Backstop Multiple” shall mean the lesser of (a) 10 and (b) 10 times one plus the percentage change of 

the Applicable Utility Index Multiple as measured on the date of this Backstop Commitment Letter and 

the fifth business day prior to the Effective Date. For the avoidance of doubt, the Backstop Multiple shall 

never exceed 10.

“Backstop Price” means (a) the Backstop Multiple times (b) the Normalized Estimated Net Income as of 

the Determination Date, divided by (c) the number of fully diluted shares of PG&E (calculated using the 

treasury stock method) that will be outstanding as of the Effective Date (assuming all equity is raised by 

funding all Aggregate Backstop Commitments). 

“Board” means the Board of Directors of PG&E. With respect to any matter, references to the Board 

include a committee of the Board that is duly authorized to act with respect to such matter. 

“Code” means the Internal Revenue Code of 1986, as amended. 

“Determination Date” shall mean the earlier of (a) the first day of the Confirmation Hearing and (b) if 

(i) the Per Share Price for a Permitted Equity Offering is to be finally determined prior to such first day, 

the date of such determination or (ii) if the exercise price of the Rights is finally determined prior to such 

first day, the date of such determination. 

“Normalized Estimated Net Income” shall mean, in each case with respect to the estimated year 2021, 

(a) on a component-by-component basis (e.g., distribution, generation, gas transmission and storage, and 

electrical transmission), the sum of (i) the Utility’s estimated earning rate base for such component, times

(ii) the equity percentage of the Utility’s authorized capital structure, times (iii) the Utility’s authorized 

rate of return on equity for such component, less (b) the projected post-tax difference in interest expense 

or preferred dividends for the entire company and the authorized interest expense or preferred dividends 

expected to be collected in rates, less (c) without duplication of any amount included in clause (b), the 

amount of any post-tax offset or credit to any charge imposed in connection with the issuance of Wildfire 

Victims Recovery Bonds, if any, less (d) the amount of the Utility’s post-tax annual contribution to the 

Go-Forward Wildfire Fund. 

“Section 382” means Section 382 of the Code, or any successor provision or replacement provision. 

 “Treasury Regulations” means final, temporary and proposed tax regulations promulgated under the 

Code, as amended. 

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Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153-0119

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Schedule 2

Highly Confident Letters 

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PG&E Corporation 

Pacific Gas and Electric Company 

77 Beale Street 

P.O. Box 770000 

San Francisco, California 94177 

Senior Management and Members of the Board: 

August 21, 2019 

Barclays Capital Inc. ("Barclays") has been advised of the intention of PG&E Corporation 

("PG&E") and Pacific Gas and Electric Company (the "Utility" and, together with PG&E, the "Company") 

to explore financing alternatives in support of the reorganization and emergence of the Company from its 

bankruptcy cases (the "Cases") in the United States Bankruptcy Court for the District ofNorthern California 

(the "Bankruptcy Court"). 

We understand that the cash proceeds necessary to effect the Company's reorganization will be 

approximately $35-$40 billion. We anticipate that the exit financing supporting such reorganization could 

include (x) $10-$15 billion of debt financing at the Utility and $5-$10 billion of debt financing at PG&E 

( collectively, the "Debt Financing") and (y) the issuance by PG&E ofup to $15 billion of equity and equitylinked securities (the "Equity Financing" and, together with the Debt Financing, the "Exit Financing"). We 

understand that in addition to the Exit Financing, the Company may have the ability to re-instate or keep in 

place certain existing indebtedness of the Utility. We are pleased to confirm that, based upon current market 

conditions and our present understanding of the Exit Financing, as of the date hereof we are highly confident 

of our ability to arrange the Debt Financing and place the Equity Financing. 

Barclays' view as to our ability to arrange the Debt Financing and place the Equity Financing is 

based upon the assumption that each of the following conditions will be satisfied: 

(i) Barclays obtaining all required internal approvals;

(ii) Barclays' satisfaction in its sole discretion with the documentation and terms of the Company's

plan(s) ofreorganization and the satisfaction of all conditions thereto;

(iii)the Company having received a Confirmation Order in the Cases from the Bankruptcy Court

as well as any other required regulatory or governmental approvals required to effectuate any

plan(s) ofreorganization related thereto on or before June 30, 2020;

(iv) Barclays and its representatives having completed and being satisfied with the results of their

continuing financial, business, environmental and legal due diligence investigations of the

Company, the plan(s) of reorganization and the Exit Financing, including but not limited to,

the Company's ability to participate in and seek reimbursement from the wildfire insurance

fund as provided under California AB-1054;

(v) there not having occurred any material adverse change in the financial condition, results of

operations, business or prospects of the Company since the June 30, 2019 Monthly Operating

Repoti filed with the Bankruptcy CoUii on August 15, 2019;

(vi) the completion of all documentation relating to the Exit Financing, including but not limited to

the preparation of a confidential information memorandum for any credit facilities and a

prospectus or offering circular for any debt, equity or equity-linked securities, each containing

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the required audited and unaudited historical and pro forma financial statements of PG&E and 

the Utility, a credit agreement for any credit facilities and an indenture or other applicable 

agreement governing any debt, equity or equity-linked securities, in each case in form and 

substance satisfactory to Barclays in its sole discretion; 

(vii) in the sole judgment of Barclays there not having occurred any disruption or change in the

market for syndicated loans or new issties of investment grade or high yield debt or equity or

equity-linked securities, or the financial or capital markets in general;

(viii)in the sole judgment of Barclays there not having occurred any disruption or change in the

regulatory relationship between the California Public Utilities Commission and the Utility;

and

(ix) Barclays having a reasonable period of time to market the Exit Financing based on Barclays'

experience in comparable transactions.

This letter is rendered to the Company solely for its use in connection with its decision to submit a 

plan(s) of reorganization to the Bankruptcy Court and does not confer any rights or remedies on any party, 

including any other party in interest in the Cases or any financing sources for the Company. This letter is 

confidential and is delivered to you on the understanding that neither this letter nor any of its terms or 

substance has been or shall be disclosed, directly or indirectly, by you to any other person without our prior 

written consent except you may disclose this letter: (i) to your directly involved officers, financial advisors, 

accountants and lawyers or (ii) as may be compelled in a judicial or administrative proceeding or as 

otherwise required by law (in which case you agree to inform us promptly in advance of disclosure thereof), 

in each case on i;t confidential and need-to-know basis only. 

This letter does not constitute a legally binding obligation or commitment by Barclays or any of its 

affiliates to act as underwriter, initial purchaser or placement agent for the Exit Financing or any other 

financing or any representations or warranties in respect of the foregoing. Any such obligation on the part 

of Barclays will exist only upon the execution of a final, written underwriting, purchase or placement agent 

agreement, or commitment letter or loan agreement, as the case may be, in form and substance satisfactory 

to Barclays, and then only in accordance with the terms and conditions thereof. 

This letter is not intended as and shall not be construed as proposal of a plan of reorganization or 

solicitation of votes thereunder. 

This letter shall be governed by, and construed in accordance with, New York law. 

We value our long standing relationship with PG&E Corporation and we look forward to working 

with you on this transaction. 

Very truly yours, 

BARCLAYS CAPITAL INC. 

Title: Managing 

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September 9, 2019

PG&E Corporation

Pacific Gas and Electric Company

77 Beale Street

San Francisco, CA 94177

Ladies and Gentlemen:

You have advised Citigroup Global Markets Inc. (“CGMI”) that PG&E Corporation (“PG&E”, the 

“Company”, “HoldCo”, or “you”) and its regulated utility, Pacific Gas & Electric Company (“PacGas”, the 

“Utility”, the “OpCo”), collectively, (the “Debtors”) intend to file a Plan of Reorganization outlining its 

financing strategy for the Debtors’ exit from bankruptcy (the “Restructuring”). We understand that the Debtors 

are required to exit bankruptcy prior to June 30, 2020, to avail themselves of the Wildfire Insurance Fund, put in 

place as part of California Assembly Bill 1054 (“AB 1054”). You have requested that CGMI provide this letter

confirming the ability of the Company to raise approximately $35 billion of financing (“Financing”), upon 

confirmation of your Plan of Reorganization and successful exit from bankruptcy (the “Exit”). For purposes of 

this letter, “Citi,” “we” or “us” means CGMI and/or any of its affiliates as may be appropriate to consummate the 

transactions contemplated hereby.

In evaluating the Restructuring, we have made certain assumptions and analyzed publicly available 

information and certain other due diligence materials. We note Citi has not had access to the Company’s financial 

model and projections, and our analysis is based, in part, on an internally-developed utility rate base model, 

review of relevant equity analyst reports, review of relevant credit rating agency reports, review of Senate Bill 

901 (“SB 901”) and AB 1054, and review of financing proposals made by ad hoc equity shareholders, ad hoc 

bondholders, and wildfire subrogation claims holders. We have assumed and relied, without assuming any 

responsibility for independent verification, upon the accuracy and completeness of all such information reviewed 

by us for the purpose of this letter. With respect to financial forecasts and projections which have not been 

created by us, we have assumed that such financial forecasts and projections have been reasonably prepared on a 

basis reflecting the best currently available estimates and judgments of the person(s) creating such forecasts and 

projections. 

In analyzing the request, we have assumed the absence of any adverse change in general economic 

conditions and the absence of adverse capital market conditions from those existing on the date hereof. This is 

not a financing commitment or a commitment to underwrite securities. If we were to provide such a financing or 

securities underwriting commitment, we would go through normal and customary credit approval and capital 

commitment processes. As a result of our analysis, we have assumed the Debtors exit bankruptcy on June 30, 

2020 and would need to raise the aforementioned Financing concurrent with the Exit. We have considered 

various financing alternatives comprised of all or some of the following: new HoldCo debt issuance, new OpCo 

debt issuance, new equity issuance, estimated collection under the Utility’s insurance coverage and Wildfire 

Victim Recovery Bonds (“WVRBs”). 

CGMI is pleased to inform you, based on and subject to the terms and conditions of this letter and 

assuming that Citi were to be appointed the lead book-runner and lead underwriter or placement agent for the 

Financing, that Citi is highly confident of its ability to underwrite, privately place, arrange on a best efforts basis

or syndicate, as applicable, the Financing. Actual underwriting or placement of the Financing would occur 

pursuant to separate written agreements acceptable to Citi in its sole discretion and would be subject to, among 

other things, (a) final agreement on the pricing, terms and conditions for the Financing; (b) the receipt of audited 

financial statements for most recently ended fiscal year and the subsequent most recently ended quarters for the 

Debtors, in all respects satisfactory to Citi; (c) satisfactory completion of Citi’s customary due diligence review; 

(d) the execution and delivery of documentation for the financing referred to above, including the underwriting or 

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purchase and registration agreements, and credit documentation, as applicable, for the Financing in form and 

substance satisfactory to Citi and its counsel; (e) receipt of any necessary governmental, contractual, regulatory, 

board of directors or security holders’ consents or approvals in connection with the Financing; (f) the receipt of 

ratings from Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services for the applicable portions 

of the Financing, in all respects satisfactory to Citi; (g) the consummation of the Restructuring pursuant to 

documentation satisfactory to Citi; and (h) the pro forma capitalization of the Company, satisfactory to Citi. 

It should be noted that Citi's expression of its confidence in its ability to underwrite, privately place, or 

arrange on a best efforts basis, as applicable, the Financing is further contingent upon (i) there not having 

occurred any material adverse change in the business, condition (financial or otherwise), operations, performance, 

properties or prospects of (A) the Debtors, taken as a whole since the date of their respective most recently 

audited financial statements; (ii) there not having occurred any circumstance, change or condition (including the 

continuation of any existing condition) in loan syndication, financial, banking or capital markets that, in Citi's 

judgment, could make it inadvisable or impractical to proceed with the Restructuring or any portion of the 

financing thereof; and (iii) there not having occurred any material adverse change in the legal or regulatory 

environment of the Company or the Company and its subsidiaries, taken as a whole, in each case since the date of 

their respective most recently audited financial statements.

This letter is not intended to be, and shall not constitute, a commitment or undertaking by Citi to place or 

purchase or commit to place or purchase any securities on a principal or agency basis, or a commitment or 

undertaking to provide or arrange or commit to provide or arrange any portion of the Financing. By accepting 

delivery of this letter, the Company acknowledges that Citi may provide financing, equity capital, financial 

advisory and/or other services to parties whose interests may conflict with the Company’s interests and agrees 

that this letter is for the Debtors’ confidential use only and that neither its existence nor its terms may be disclosed 

by it to any person other than the Debtors’ officers, directors, employees, accountants, attorneys and other 

advisors, agents and representatives (the “Company Representatives”), and then only on a confidential and 

“need to know” basis; provided, however, that the Debtors may (i) disclose this letter in connection with the 

Restructuring (with our prior written consent) and (ii) make such other public disclosures of the existence and 

terms of this letter to the extent required by applicable law, in the opinion of its counsel. Notwithstanding any 

other provision in this letter, Citi hereby confirms that the Debtors and the Company Representatives shall not be 

limited from disclosing the U.S. tax treatment or U.S. tax structure of the transactions contemplated hereby.

Citi shall not have any liability (whether in contract, tort or otherwise) to any Debtor or any other person, 

including, without limitation, any of the Debtors’ security holders or creditors, for or in connection with the 

delivery of this letter. In addition, Citi shall not be liable on any theory of liability for any special, indirect, 

consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated 

savings).

This letter will be construed in accordance with the law of the State of New York.

We appreciate this opportunity to work with you on this important financing.

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Very truly yours,

CITIGROUP GLOBAL MARKETS INC.

By: _________________________________________________

Name: Joseph Sauvage

 Title: Authorized Signatory

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