Document:

Exhibit 10.1

    

     

    

    
      

      

      September 13, 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 filed by the Debtors with the Bankruptcy Court on September 9, 2019 at ECF No. 3841 (as may be amended,
        modified or otherwise changed in accordance with this Backstop Commitment Letter, 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 September 9, 2019 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 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 September
        9, 2019 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 amount of
        the Aggregate Backstop Commitments 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 (“Mandatory Convertible Preferred Stock”) that is distributed pursuant to the Plan to holders of Wildfire

      

      

      
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      Claims, on the terms and conditions set forth in the exhibits 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 NOLs; provided, however, that the organizational
        documents shall not be modified or amended in a manner

      

      

      
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        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, (ii) the amount of Rights exercised and
          shares of New HoldCo Common Stock purchased pursuant to the Backstop Commitment by such persons, and (iii) the amount of Backstop Party’s Shares (as defined below) at any time prior to the Allocation Date upon at least three business days’ notice
          to the Backstop Party.

        

        

        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 A 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 A 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, as of a date determined by PG&E, but no more than two
        business days prior to the Allocation Date, 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 at a time when the
        portion of PG&E’s system at the location of such wildfire was not de-energized).

      

      

      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.         [reserved];

      

      

      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 $18.9 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;

      

      

      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

      

      

      
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      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(b) 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.

      

      

      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,

      

      

      
        8

        
          

      

      

      

      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
        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 the earlier of (x) five business days thereafter and (y) November 8, 2019 (the “Allocation Date”), the Backstop Commitment
        Amount shall be automatically reduced as follows:

      

      

      
        9

        
          

      

      

      

      (i)          If the Backstop Party is an Initial Shareholder Backstop Party and the aggregate amount of Initial Shareholder Backstop Commitments is less than the Shareholder
        Commitment Allocation, then such the Backstop Commitment shall not be reduced.

      

      

      (ii)          If the Backstop Party is an Initial Shareholder Backstop Party and the aggregate amount of Initial Shareholder Backstop Commitments exceeds the Shareholder
        Commitment Allocation, then the Backstop Commitment shall be reduced to an amount equal to the Backstop Party’s Shareholder Commitment Amount plus its Non-Shareholder Commitment Amount.  For the purposes of
        this clause (ii), the Backstop Party’s (A) “Shareholder Commitment Amount” shall be the lesser of its Backstop Commitment Amount and its pro rata share of the Shareholder Commitment
        Allocation based upon the proportion of the amount of its Backstop Party’s Shares to the aggregate amount of Backstop Party’s Shares held by all Initial Shareholder Backstop Parties, and (B) “Non-Shareholder

          Commitment Amount” shall be equal to its pro rata share of the Non-Shareholder Commitment Allocation based upon the proportion of its Remaining Commitment to the aggregate amount of Initial Non-Shareholder Commitments plus all Remaining Commitments for Initial Shareholder Backstop Parties.  For purposes of determining the Backstop Party’s Shareholder Commitment Amount, the calculation set forth in clause (A) shall be run in
        an iterative fashion until either the Backstop Party’s Shareholder Commitment Amount equals its Backstop Commitment Amount or the entire Shareholder Commitment Allocation has been allocated to the Backstop Party and the Initial Shareholder Backstop
        Parties, with each subsequent iteration excluding from the denominator of the pro rata calculation any Backstop Party’s Shares held by Initial Shareholder Backstop Parties whose Shareholder Commitment Amount (prior to such iteration) is equal to
        its Backstop Commitment Amount.

      

      

      (iii)          If the Backstop Party is a Subsequent Shareholder Backstop Party and the Remaining Shareholder Allocation is greater than zero, then the Backstop Commitment shall
        be reduced to the Backstop Party’s Shareholder Commitment Amount plus its Non-Shareholder Commitment Amount.  For the purposes of this clause (iii), the Backstop Party’s (A) “Shareholder Commitment Amount” shall be the lesser of its Backstop Commitment Amount and its pro rata share of the Remaining Shareholder Allocation based upon the proportion of its Backstop Party’s Shares to the
        aggregate amount of Backstop Party’s Shares held by all Subsequent Shareholder Backstop Parties and (B) “Non-Shareholder Commitment Amount” shall be equal to its pro rata share of the
        Remaining Non-Shareholder Commitment Allocation based upon the proportion of its Remaining Commitment to the aggregate amount of Subsequent Non-Shareholder Commitments and Remaining Commitments.  For the purpose of determining the Backstop Party’s
        Shareholder Commitment Amount, the calculation set forth in clause (A) shall be run in an iterative fashion until either the Backstop Party’s Shareholder Commitment Amount equals its Backstop Commitment or the entire Remaining Shareholder
        Allocation has been allocated to the Backstop Party and the other Subsequent Shareholder Backstop Parties, with each subsequent iteration excluding from the denominator of the pro rata calculation any Backstop Party’s Shares held by Subsequent
        Shareholder Backstop Parties whose Shareholder Commitment Amount (prior to such iteration) is equal to its Backstop Commitment Amount.

      

      

      (iv)          If the Backstop Party is a Subsequent Shareholder Backstop Party and the aggregate amount of Initial Shareholder Backstop Commitments exceeds the Shareholder
        Commitment Allocation, then the Backstop Party shall be treated as a Subsequent Non-Shareholder Backstop Party as set forth in clause (vi) below.

      

      

      
        10

        
          

      

      

      

      (v)          If the Backstop Party is an Initial Non-Shareholder Backstop Party, then the Backstop Commitment Amount shall be reduced to the Backstop Party’s pro rata share of
        the Non-Shareholder Commitment Allocation based upon the proportion of the Backstop Commitment to the aggregate amount of Initial Non-Shareholder Backstop Commitments plus any Remaining Commitments held by
        Initial Shareholder Backstop Parties.

      

      

      (vi)      If the Backstop Party is a Subsequent Non-Shareholder Backstop Party, then the Backstop Commitment Amount shall be reduced to the Backstop Party’s pro rata share of the
        Remaining Non-Shareholder Commitment Allocation based upon the proportion of the Backstop Commitment to the aggregate amount of Subsequent Non-Shareholder Backstop Commitments plus any Remaining Commitments
        held by Subsequent Shareholder Backstop Parties.  In the event that the Remaining Non-Shareholder Commitment Allocation is zero, the Backstop Commitment shall be reduced to zero.

      

      

      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, 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

      

      

      
        11

        
          

      

      

      

      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 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 (including the Chapter 11 Plan Backstop Commitment Letter dated as of
        September 9, 2019) 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, (e) amend, modify, or waive the condition in Section 4(d) or (f) amend, modify or waive clauses (a), (b), (c), (e), (f) or (j) of Section 5 or the first sentence of the penultimate paragraph of Section 5.  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,

      

      

      
        12

        
          

      

      

      

      

      

      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.

      

      

      

      

      	 	
              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

            
	 	 	 
	 	 	
              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,

      

      

      
        13

        
          

      

      

      

      

      

      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 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.          Potential Subrogation Settlement.

      

      

      a.          For all purposes under this Backstop Commitment Letter, the Backstop Party will be deemed to have consented to the Specified Plan Amendment.

      

      

      b.          If the Bankruptcy Court does not approve the RSA on or prior to October 16, 2019, then (i) the Wildfire Claims Cap shall be reduced to $17.9 billion (it being understood that such
        amount will continue to be subject to the proviso in Section 5(j) for purposes of Section 5(j)) and (ii) the Debtors shall amend the Plan to be in the form of the Plan prior to making the Specified Plan Amendment.

      

      

      16.          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.

      

      

      17.          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.

      

      

      18.          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-in-interest 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]

      

      

      
        14

        
          

      

      

      

      
        	 	Sincerely,	 
	 	 	 
	 	Backstop Party:	 
	 	 	 
	 	
                Knighthead Capital Management, LLC, 

                solely on behalf of certain funds and accounts it managed and/or advises

                

              	 
	 	 	 	 
	
                

                

              	
                By: 

              	/s/ Thomas A. Wagner 	 
	 	 	Name:	Thomas A. Wagner

              	 
	 	 	Title:	Managing Member

              	 
	 	 	 	 

      

      

      

      
        	 	Notice Information:	 
	 	 	 
	 	
                Knighthead Capital Management, LLC, 

                solely on behalf of certain funds and accounts it managed and/or advises

              	 
	 	Attention:  General Counsel

              	 
	 	1140 Avenue of the Americas

              	 
	 	12th Floor

              	 
	 	New York, NY 10036

              	 

      

      

      

      
        15

        
          

      

    

     

    

     Accepted and agreed this 12th day of September, 2019, by:
      

      

      
        	PG&E CORPORATION	 	 
	 	 	 	 
	
                By: 

              	/s/ John R. Simon

              	 	 
	 	Name:	John R. Simon	 	 
	 	Title:	Executive Vice President, Law, Strategy and Policy

              	 	 
	 	 	 	 

      

      

      
        16

        
          

      

      

      

      

      

      Exhibit A

      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 A, (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.

      

      

      “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 September 9, 2019 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.

      

      

      “Initial Non-Shareholder Backstop Party” means the Backstop Party and any Other Backstop Party if it does not hold Backstop Party’s Shares as of the Allocation Date that delivers a
        Backstop Commitment Letter to PG&E on or before 5:00 p.m. Pacific on September 20, 2019.

      

      

      “Initial Non-Shareholder Commitments” means the aggregate amount of all Backstop Commitments of Initial Non-Shareholder Backstop Parties.

      

      

      “Initial Shareholder Backstop Commitments” means the aggregate amount of all Backstop Commitments of Initial Shareholder Backstop Parties.

      

      

      “Initial Shareholder Backstop Parties” means all Shareholder Backstop Parties that deliver Backstop Commitment Letters to PG&E on or before 5:00 p.m. Pacific on September 20, 2019.

      

      

      “Non-Shareholder Commitment Allocation” means an amount equal to 40% of the Equity Offering Cap.

      

      

      “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.

      

      

      “Remaining Commitment” means an amount equal to the Backstop Party’s Backstop Commitment Amount prior to any reductions set forth in this Section 7 less
        its Shareholder Commitment Amount.

      

      

      “Remaining Non-Shareholder Commitment Allocation” means an amount equal to the Non-Shareholder Commitment Allocation less the sum of (a) the
        Remaining Commitments held by Initial Shareholder Backstop Parties plus (b) the Initial Non-Shareholder Commitments.

      

      

      “Remaining Shareholder Allocation” means the greater of (a) the Shareholder Commitment Allocation less the Initial Shareholder Backstop
        Commitments and (b) zero.

      

      

      
        18

        
          

      

      
      

      

      “Section 382” means Section 382 of the Code, or any successor provision or replacement provision.

      

      

      “Shareholder Backstop Party” means a Backstop Party or Other Backstop Party that has Backstop Party Shares.

      

      

      “Shareholder Commitment Allocation” means an amount equal to 60% of the Equity Offering Cap.

      

      

      “Specified Plan Amendment” means one or more amendments to the Plan in order to incorporate the terms of an agreement in principle between the Debtors and the Ad Hoc Group of
        Subrogation Claim Holders, as publicly announced on the date hereof, to settle Subrogation Wildfire Claims, which amendment or amendments shall include (i) the settlement and allowance of Wildfire Subrogation Claims under the Plan in the aggregate
        allowed amount of $11 billion (the “Subrogation Claims Amount”), (ii) the satisfaction and discharge of all Subrogation Wildfire Claims against the Debtors for consideration equal to the
        Subrogation Claims Amount to a trust for the benefit of holders of Subrogation Wildfire Claims, (iii) provision for the Debtors to pay or reimburse the members of the Ad Hoc Group of Subrogation Claim Holders for an aggregate amount of up to $55
        million of reasonable, documented and contractual professional fees and (iv) such other terms and conditions as may be reasonably necessary to incorporate such agreement in principle or the definitive documentation for such agreement in principle
        (the “RSA”) into the Plan.

      

      

      “Subsequent Non-Shareholder Backstop Party” means (a) the Backstop Party or any Other Backstop Party if they do not hold
        Backstop Party’s Shares as of the Allocation Date and (b) any Subsequent Shareholder Backstop Party in the event that the aggregate amount of Initial Shareholder Backstop Party Commitments exceeds the Shareholder Commitment Allocation, in each case
        that deliver Backstop Commitment Letters to PG&E after 5:00 p.m. Pacific on September 20, 2019.

      

      

      “Subsequent Non-Shareholder Commitments” means the aggregate amount of Backstop Commitments of Subsequent Non-Shareholder
        Backstop Parties.

      

      

      “Subsequent Shareholder Backstop Parties” means all Shareholder Backstop Parties that deliver Backstop Commitment Letters to PG&E after 5:00 p.m. Pacific on September 20, 2019.

      

      

      “Treasury Regulations” means final, temporary and proposed tax regulations promulgated under the Code, as amended.

      

      

      

      

      
        19

        
          

      

      

      

      
        Schedule 1

        

        

        Equity Backstop Commitment Letters

        

        

        

        

        	
                Backstop Party

              	
                Backstop Commitment Amount

              	
                Backstop Party’s Shares

              
	
                Knighthead Capital Management, LLC*

              	
                $1,000,000,000

              	
                17,131,521

              
	
                Abrams Capital Partners I, L.P.

              	
                $22,461,000

              	
                2,064,629

              
	
                Abrams Capital Partners II, L.P.

              	
                $337,868,000

              	
                21,225,501

              
	
                Whitecrest Partners, LP

              	
                $39,671,000

              	
                3,110,096

              
	
                Riva Capital Partners V, L.P.

              	
                $100,000,000

              	
                700,113

              

        

        

        

        

        

        

        * Denotes that agreement was filed with this Form 8-K. Other agreements listed on this schedule were omitted in accordance with Instruction 2 to Item 601 of Regulation
          S-K.EX-4.1

 Exhibit 4.1 

Execution Version 

THIRD SUPPLEMENTAL INDENTURE 

Dated as of September 13, 2019 

Supplementing that Certain 

INDENTURE 
 Dated as of
June 15, 2015 
 Among 

FORTUNE BRANDS HOME & SECURITY, INC. 

and 
 WILMINGTON TRUST, NATIONAL
ASSOCIATION, 
 Trustee 
 and

 CITIBANK, N.A., 
 Securities
Agent 
 3.250% SENIOR NOTES DUE 2029 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	 ARTICLE I. DEFINITIONS
	  	 	1	 
	 SECTION 1.1.
	 	Certain Terms Defined in the Indenture	  	 	1	 
	 SECTION 1.2.
	 	Definitions	  	 	2	 
	ARTICLE II. FORM AND TERMS OF THE NOTES	  	 	9	 
	 SECTION 2.1.
	 	Form and Dating	  	 	9	 
	 SECTION 2.2.
	 	Certain Terms of the Notes	  	 	10	 
	 SECTION 2.3.
	 	Optional Redemption	  	 	11	 
	 SECTION 2.4.
	 	Change of Control	  	 	12	 
	 SECTION 2.5.
	 	Limitations on Liens	  	 	14	 
	 SECTION 2.6.
	 	Limitation on Sale and Leaseback Transactions	  	 	15	 
	 SECTION 2.7.
	 	Defeasance	  	 	15	 
	ARTICLE III. MISCELLANEOUS	  	 	15	 
	 SECTION 3.1.
	 	Relationship with Indenture	  	 	15	 
	 SECTION 3.2.
	 	Trust Indenture Act Controls	  	 	15	 
	 SECTION 3.3.
	 	Governing Law	  	 	16	 
	 SECTION 3.4.
	 	Multiple Counterparts	  	 	16	 
	 SECTION 3.5.
	 	Severability	  	 	16	 
	 SECTION 3.6.
	 	Ratification	  	 	16	 
	 SECTION 3.7.
	 	Headings	  	 	16	 
	 SECTION 3.8.
	 	Effectiveness	  	 	16	 
		
	 EXHIBIT A – Form of 3.250% Senior Note due 2029
	  	 	A-1	 

  
 -i- 

 THIRD SUPPLEMENTAL INDENTURE 

This Third Supplemental Indenture, dated as of September 13, 2019 (this “Third Supplemental Indenture”), among FORTUNE
BRANDS HOME & SECURITY, INC., a Delaware corporation (hereinafter called the “Company”), having its principal office at 520 Lake Cook Road, Deerfield, IL 60015, WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking
association (hereinafter called the “Trustee”) having a corporate trust office at Rodney Square North, 1100 N. Market Street Wilmington, DE 19890 and CITIBANK, N.A., a national banking association (hereinafter called the
“Securities Agent”) having a corporate trust office at 388 Greenwich Street, 14th Floor, New York, NY 10013, supplements that certain Indenture, dated as of June 15, 2015, among the Company, the Trustee and the Securities
Agent (the “Indenture”). 
 RECITALS OF THE COMPANY 

WHEREAS, the Company has duly authorized the execution and delivery of the Indenture to provide for the issuance from time to time of its
unsecured debentures, notes or other evidences of indebtedness to be issued in one or more series as provided for in the Indenture; 

WHEREAS, the Indenture provides that the Securities shall be in the form as may be established by or pursuant to a Board Resolution and set
forth in an Officers’ Certificate or as may be established in one or more supplemental indentures thereto, in each case with such appropriate insertions, omissions, substitutions, and other variations as are required or permitted by the
Indenture; and 
 WHEREAS, the Company has determined to issue and deliver, and the Securities Agent shall authenticate, a series of
Securities designated as the Company’s “3.250% Senior Notes due 2029” (hereinafter called the “Notes”) pursuant to the terms of this Third Supplemental Indenture and substantially in the form as herein set forth, with
such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Indenture and this Third Supplemental Indenture. 

NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH: 

For and in consideration of the premises stated herein and the purchase of the Notes by the Holders thereof, the parties hereto hereby enter
into this Third Supplemental Indenture, for the equal and proportionate benefit of all Holders of the Notes, as follows: 
 ARTICLE I.

 DEFINITIONS 

SECTION 1.1.    Certain Terms Defined in the Indenture. 

For purposes of this Third Supplemental Indenture, all capitalized terms used but not defined herein shall have the meanings ascribed to such
terms in the Indenture, as amended and supplemented hereby. 

 SECTION 1.2.    Definitions. 

For the benefit of the Holders of the Notes, Section 1.01 of the Indenture shall be amended by adding or
substituting, as applicable, the following new definitions: 
 “Adjusted Treasury Rate” means, with respect to any
Redemption Date, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for that Redemption Date. 
 “Attributable Debt” in respect of a Sale and Leaseback Transaction means, at
the time of determination, the present value discounted at the rate of interest implicit in the terms of the lease (as determined in good faith by the Company) of the obligations of the lessee under such lease for net rental payments during the
remaining term of the lease (including any period for which such lease has been extended or may, at the Company’s option, be extended). 

“Below Investment Grade Rating Event” means the rating on the Notes is lowered and is rated below an Investment Grade Rating
by each of the three Rating Agencies on any date from the date of the public notice of an arrangement that could result in a Change of Control until the end of the 60-day period following public notice of the
occurrence of the Change of Control (which 60-day period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade below investment grade by any of
the Rating Agencies); provided, that a Below Investment Grade Rating Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not
be deemed a Below Investment Grade Rating Event for purposes of the definition of Change of Control Repurchase Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly
confirm or inform the Trustee and the Securities Agent in writing at the request of the Company that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the
applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Below Investment Grade Rating Event). 

“Business Day” means any day, other than a Saturday or Sunday, that is not a legal holiday, or a day on which banking
institutions are authorized or required by law or regulation to close in The City of New York. 
 “Capital Lease
Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with generally
accepted accounting principles in the United States of America. 
 “Change of Control” means the occurrence of any of the
following: 
 (1) the Company sells, assigns, transfers, leases or otherwise conveys (other than by way of merger or
consolidation) all or substantially all of its properties and assets to any Person (including any “person” (as that term is used in Section 13(d)(3) of the Securities Exchange Act, as amended (the “Exchange Act”))
other than the Company or one of its Subsidiaries; 

  
 2 

 (2) the consummation of any transaction (including without limitation, any
merger or consolidation) the result of which is that any Person (including any “person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act)) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the outstanding Voting Stock of the Company;

 (3) the Company consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or
into, the Company, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of the Company (or any other Voting Stock into which the Voting Stock of the Company is reclassified, consolidated, exchanged or changed) is
converted into or exchanged for cash, securities or other property, other than any such transaction where the shares of the Voting Stock of the Company (or any other Voting Stock into which the Voting Stock of the Company is reclassified,
consolidated, exchanged or changed) outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving Person immediately after giving effect to such transaction; or

 (4) the adoption of a plan relating to the liquidation or dissolution of the Company. 

Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (i) the Company becomes a wholly owned
subsidiary of a holding company that has agreed to be bound by the terms of the Notes and (ii) the holders of the Voting Stock of such holding company immediately following that transaction are the holders of at least a majority of the Voting
Stock of the Company immediately prior to that transaction. 
 “Change of Control Repurchase Event” means the occurrence of
both a Change of Control and a Below Investment Grade Rating Event. 
 “Comparable Treasury Issue” means the United States
Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Notes to be redeemed (assuming, for this purpose, that the Notes mature on the Par Call Date) that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes (assuming, for this purpose, that the Notes mature on the Par Call Date).

 “Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the Reference Treasury
Dealer Quotations for that redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Quotation Agent obtains fewer than four Reference Treasury Dealer Quotations, the average of all Reference
Treasury Dealer Quotations so received. 
 “Consolidated Net Tangible Assets” means the excess over current liabilities of
all assets as determined by the Company and set forth in a consolidated balance sheet of the Company and its consolidated Subsidiaries prepared in accordance with generally accepted accounting principles as of a date within 90 days of the date
of such determination, after deducting goodwill, trademarks, patents, other like intangibles and the minority interest of others. 

  
 3 

 “Fitch” means Fitch, Inc. 

“Funded Debt” means debt for borrowed money which by its terms matures more than one year from the date of creation, or which
is extendable or renewable at the sole option of the obligor so that it may become payable more than one year from such date or which is classified, in accordance with generally accepted accounting principles, as long-term debt on the consolidated
balance sheet for the most-recently ended fiscal quarter (or if incurred subsequent to the date of such balance sheet, would have been so classified) of the person for which the determination is being made. Funded Debt does not include
(1) obligations created pursuant to leases, (2) any debt or portion thereof maturing by its terms within one year from the time of any computation of the amount of outstanding Funded Debt unless such debt shall be extendable or renewable
at the sole option of the obligor in such manner that it may become payable more than one year from such time, (3) any debt for which money in the amount necessary for the payment or redemption of such debt is deposited in trust either at or
before the maturity date thereof, (4) endorsements of negotiable instruments for collection, deposit or negotiation, or (5) guarantees by the Company or a Restricted Subsidiary arising in connection with the sale, discount, guarantee or
pledge of notes, chattel mortgages, leases, accounts receivable, trade acceptances and other paper arising, in the ordinary course of business, out of installment or conditional sales to or by, or transactions involving title retention with,
distributors, dealers or other customers, of merchandise, equipment or services. The Company or a Restricted Subsidiary shall be deemed to have assumed any Funded Debt secured by any mortgage upon any of its property or assets whether or not it has
actually done so. 
 “Indebtedness” means, with respect to any specified Person, any indebtedness of such Person, whether
or not contingent: 
 (1) in respect of borrowed money; 

(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect
thereof); 
 (3) in respect of bankers’ acceptances; 

(4) representing Capital Lease Obligations; or 

(5) representing the balance deferred and unpaid of the purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable. 
 “Investment Grade Rating” means a rating equal to or higher than Baa3
(or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P and Fitch, and the equivalent investment grade credit rating from any replacement rating agency or rating agencies selected by the
Company. 

  
 4 

 “Lien” means, with respect to Principal Property, any mortgage or deed of
trust, pledge, hypothecation, security interest, lien, encumbrance or other security arrangement of any kind or nature on or with respect to such property or assets. 

“Moody’s” means Moody’s Investors Service, Inc. 

“Par Call Date” means June 15, 2029. 

“Permitted Liens” means: 

(1) Liens (other than Liens created or imposed under the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”)), for taxes, assessments or governmental charges or levies not yet subject to penalties for non timely payment or Liens for taxes being contested in good faith by appropriate proceedings for which adequate reserves
determined in accordance with generally accepted accounting principles have been established (and as to which the property or assets subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof); 

(2) statutory Liens of landlords and Liens of mechanics, materialmen, warehousemen, carriers and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of title arising in the ordinary course of business, provided that any such Liens which are material secure only amounts not yet due and payable or, if due and payable, are unfiled
and no other action has been taken to enforce the same or are being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with generally accepted accounting principles have been established (and as
to which the property or assets subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof); 

(3) Liens (other than Liens created or imposed under ERISA) incurred or deposits made by us and our subsidiaries in the
ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, laws or regulations, or to secure the performance of tenders, statutory obligations, bids, leases, trade or
government contracts, surety, indemnification, appeal, performance and return-of-money bonds, letters of credit, bankers acceptances and other similar obligations
(exclusive of obligations for the payment of borrowed money), or as security for customs or import duties and related amounts; 

(4) Liens in connection with attachments or judgments (including judgment or appeal bonds), provided that the judgments secured
shall, within 30 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall have been discharged within 30 days after the expiration of any such stay; 

(5) Liens securing Indebtedness (including capital leases) incurred to finance the purchase price or cost of construction of
property or assets (or additions, repairs, alterations or improvements thereto), provided that such Liens and the Indebtedness secured thereby are incurred within twelve months of the later of acquisition or completion of construction (or addition,
repair, alteration or improvement) and full operation thereof; 

  
 5 

 (6) Liens securing industrial revenue bonds, pollution control bonds or
similar types of tax-exempt bonds; 
 (7) Liens arising from deposits with, or the
giving of any form of security to, any governmental agency required as a condition to the transaction of business or exercise of any privilege, franchise or license; 

(8) encumbrances, covenants, conditions, restrictions, easements, reservations and rights of way or zoning, building code or
other restrictions, (including defects or irregularities in title and similar encumbrances) as to the use of real property, or Liens incidental to conduct of the business or to the ownership of our or our subsidiaries’ properties not securing
Indebtedness that does not in the aggregate materially impair the use of said properties in the operation of our business, including our subsidiaries, taken as a whole; 

(9) leases, licenses, subleases or sublicenses granted to others not interfering in any material respect with our business,
including our Subsidiaries, taken as a whole; 
 (10) Liens on property or assets at the time such property or assets are
acquired by the Company or any of its Subsidiaries; provided that such Liens were in existence prior to the contemplation of such acquisition of property or assets acquired by the Company or any of its Subsidiaries; 

(11) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with the Company or
any of its Subsidiaries; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company or such
Subsidiary; 
 (12) Liens on receivables from customers sold to third parties pursuant to credit arrangements in the ordinary
course of business; 
 (13) Liens existing on the date of this Third Supplemental Indenture or any extensions, amendments,
renewals, refinancings, replacements or other modifications thereto; provided that (a) such extension, renewal or replacement Lien is limited to the same property that secured the original Lien (plus improvements and accessions to
such property) and (b) the Indebtedness secured by the new Lien (other than any Indebtedness incurred from transaction costs) is not greater than the Indebtedness secured by the Lien that is extended, renewed or replaced; 

(14) Liens on any property or assets created, assumed or otherwise brought into existence in contemplation of the sale,
assignment, transfer, lease or other conveyance of the underlying property or assets, whether directly or indirectly, by way of share disposition, merger, consolidation or otherwise; 

(15) Liens in favor of the United States of America or any State thereof, or any department, agency or instrumentality or
political subdivision thereof, to secure partial, progress, advance or other payments; 

  
 6 

 (16) Liens arising solely by virtue of any statutory or common law
provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depositary institution; 

(17) Liens arising from financing statement filings regarding operating leases; 

(18) Liens in favor of customs and revenue authorities to secure custom duties in connection with the importation of goods;

 (19) Liens securing the financing of insurance premiums payable on insurance policies; provided, that such Liens shall
only encumber unearned premiums with respect to such insurance, interests in any state guarantee fund relating to such insurance and subject and subordinate to the rights and interests of any loss payee, loss payments which shall reduce such
unearned premiums; 
 (20) Liens securing cash management obligations (that do not constitute Indebtedness), or arising out
of conditional sale, title retention, consignment or similar arrangements for sale of goods and contractual rights of set-off relating to purchase orders and other similar arrangements, in each case in the
ordinary course of business; and 
 (21) Liens on any property or assets of any Subsidiaries organized under the laws of a
jurisdiction other than the United States or any state thereof securing Indebtedness of such Subsidiaries (but not Indebtedness of the Company). 

“Person” means any individual, partnership, corporation, limited liability company, joint stock company, business trust,
trust, unincorporated association, joint venture or other entity, or a government or political subdivision or agency thereof. 

“Principal Property” means any building, structure or other facility, together with the land upon which it is erected and
fixtures (other than machinery or equipment) comprising a part thereof, owned or leased by the Company or any Restricted Subsidiary, used primarily for manufacturing and located in the United States, the gross book value on the books of the Company
or such Restricted Subsidiary (without deduction of any depreciation reserve) of which on the date as of which the determination is being made exceeds 2% of Consolidated Net Tangible Assets, other than any such building, structure or other facility
or any portion thereof or any such fixture (together with the land upon which it is erected and any such fixtures comprising a part thereof) (i) which is financed by industrial development bonds which are tax exempt pursuant to Section 103
of the Internal Revenue Code of 1986, as amended (or which receive similar tax treatment under any subsequent amendments thereto or successor laws thereof), or (ii) which, in the opinion of the Board of Directors, is not of material importance
to the total business conducted by the Company and its Subsidiaries taken as a whole. 
 “Quotation Agent” means the
Reference Treasury Dealer appointed by the Company. 
 “Rating Agencies” means (i) each of Fitch, Moody’s and
S&P; and (ii) if Fitch, Moody’s or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of our control, a “nationally recognized statistical rating organization”
within the 

  
 7 

 
meaning of Section 3(a)(62) of the Exchange Act, selected by the Company (as certified by a resolution of the Board of Directors) as a replacement agency for Fitch, Moody’s or S&P,
or any of them, as the case may be. 
 “Reference Treasury Dealer” means each of BofA Securities, Inc., Citigroup Global
Markets Inc., J.P. Morgan Securities LLC and at least one other primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”) selected by the Company; provided, however, that if any of the
foregoing shall cease to be a Primary Treasury Dealer, the Company shall substitute therefor another Primary Treasury Dealer. 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the
average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Quotation Agent by that Reference Treasury Dealer
at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date. 
 “Restricted Subsidiary”
means any Subsidiary other than (i) each Subsidiary organized and existing under laws other than the laws of the United States or a state thereof, (ii) each Subsidiary substantially all of the physical properties of which are located, or
substantially all of the business of which is carried on, outside of the United States, (iii) each Subsidiary the primary business of which consists of finance, banking, credit, leasing, insurance, financial services, or similar operations or
any combination thereof, (iv) each Subsidiary the primary business of which consists of the ownership, construction, management, operation, sale or leasing of real property or improvements thereon, or similar operations or any combination
thereof, (v) each Subsidiary the primary business of which consists of the exploration for, or the extraction, production, transporting, or marketing of, petroleum or gas or other extracted substances, or similar operations or any combination
thereof, (vi) each Subsidiary the primary business of which consists of the ownership or operation of one or more transportation businesses or facilities or equipment related thereto or similar operations or any combination thereof,
(vii) each Subsidiary the primary business of which consists of obtaining funds with which to make investments outside of the United States, (viii) each Subsidiary substantially all of the assets of which consist of the ownership directly
or indirectly of the capital stock of one or more Subsidiaries covered by the preceding clauses (i) through (vii), (ix) each Subsidiary which the Company or any Subsidiary is, by the terms of the final order of any court of competent
jurisdiction from which no further appeal may be taken, required to dispose of and which shall by Board Resolution be determined not to be a Restricted Subsidiary, effective as of the date specified in such resolution and (x) any corporation a
majority of the voting shares of which shall at the time be owned directly or indirectly by one or more corporations specified in the preceding clauses (i) through (ix); provided, however, that the Board of Directors may by Board
Resolution declare any such Subsidiary to be a Restricted Subsidiary, effective as of the date such resolution is adopted. 

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of S&P Global Inc. and its
successors. 
 “Sale and Leaseback Transaction” has the meaning specified in Section 2.6. 

  
 8 

 “Voting Stock” of any specified Person as of any date means the capital
stock of such Person that is at the time entitled to vote generally in the election of the board of directors of such Person. 
 ARTICLE
II. 
 FORM AND TERMS OF THE NOTES 

SECTION 2.1.    Form and Dating. 

The Notes and the Securities Agent’s certificate of authentication shall be substantially in the form of
Exhibit A attached hereto. The Notes shall be executed on behalf of the Company by two of the officers of the Company specified in Section 3.03 of the Indenture. The Notes may have notations,
legends or endorsements required by law, stock exchange rules or usage. Each Note shall be dated the date of its authentication. 
 The
terms and notations contained in the Notes shall constitute, and are hereby expressly made, a part of the Indenture as supplemented by this Third Supplemental Indenture; and the Company, the Trustee and the Securities Agent, by their execution and
delivery of this Third Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby; provided that, to the extent of any inconsistency between the terms and provisions in the Indenture, as supplemented by this
Third Supplemental Indenture, and those contained in the Notes, the Indenture, as supplemented by this Third Supplemental Indenture, shall govern. 

(a)    Global Notes. The Notes designated herein shall be issued initially in the form of one or more
fully-registered permanent global Securities, which shall be held by the Securities Agent as custodian for The Depository Trust Company, New York, New York (the “Depositary”), and registered in the name of Cede & Co., the
Depositary’s nominee, duly executed by the Company, authenticated by the Securities Agent. The aggregate principal amount of outstanding Notes may from time to time be increased or decreased by adjustments made on the records of the Securities
Agent and the Depositary or its nominee as hereinafter provided. 
 Unless and until the Global Notes are exchanged in whole or in part for
the individual Notes represented thereby pursuant to Section 3.05 of the Indenture, such Global Notes may not be transferred except as a whole by the Depositary to its nominee or by its nominee to the Depositary or another
nominee of the Depositary or by the Depositary or any of its nominees to a successor depositary or any nominee of such successor depositary. Upon the occurrence of the events specified in Section 3.05 of the Indenture in
relation thereto for the Notes, the Company shall execute, and the Securities Agent shall, upon receipt of a Company Order for authentication, authenticate and deliver, Notes in definitive form in an aggregate principal amount equal to the principal
amount of the Global Notes in exchange for such Global Note. 
 (b)    Book-Entry Provisions. This
Section 2.1(b) shall apply only to the Global Notes deposited with or on behalf of the Depositary. 
 The Company
shall execute and the Securities Agent shall, in accordance with this Section 2.1(b), authenticate and deliver the Global Notes that shall be registered in the name of the Depositary or the nominee of the Depositary and
shall be held by the Securities Agent as custodian for the Depositary. 

  
 9 

 Participants of the Depositary shall have no rights either under the Indenture or with
respect to any Global Notes. The Depositary shall be treated by the Company, the Securities Agent, the Trustee and any agent of the Company, the Securities Agent or the Trustee as the absolute owner of such Global Note for all purposes under the
Indenture. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Securities Agent or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between
the Depositary and its participants, the operation of customary practices of such Depositary governing the exercise of the rights of an owner of a beneficial interest in the Global Notes. 

(c)    Definitive Notes. Definitive Notes issued in physical, certificated form, registered in the name of the
beneficial owner thereof, shall be substantially in the forms of Exhibit A and Exhibit B attached hereto, but without including the text referred to therein as applying only to Global Notes. Except
as provided above in subsection (a), owners of beneficial interests in the Global Notes will not be entitled to receive physical delivery of certificated Notes. 

(d)    Transfer and Exchange of the Notes. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the Indenture and the procedures of the Depositary therefor. Beneficial interests in the Global Notes may be transferred to Persons who take delivery thereof in the form of a beneficial
interest in the Global Notes. 
 (e)    Paying Agent. The Company appoints the Securities Agent as the initial
agent of the Company for the payment of the principal of (and premium, if any) and interest on and any Additional Amounts with respect to the Notes, and the applicable Corporate Trust Office of the Securities Agent, be and hereby is, designated as
the office or agency where the Notes may be presented for payment and where notices to or demands upon the Company in respect of the Notes and this Third Supplemental Indenture and the Indenture pursuant to which the Notes are to be issued may be
made. 
 SECTION 2.2.    Certain Terms of the Notes. 

The following terms relating to the Notes are hereby established: 

(a)    Title. The Notes shall constitute a series of Securities having the title “3.250% Senior Notes
due 2029.” 
 (b)    Principal Amount. The aggregate principal amount of the Notes that may be
initially authenticated and delivered under the Indenture (except for Notes authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 3.04,
3.05, 3.06 or 11.07 of the Indenture) shall be SEVEN HUNDRED MILLION DOLLARS ($700,000,000). The Company may, from time to time, without notice to, or the consent of, the Holders of the Notes, issue and sell additional
Securities (“Additional Securities”) ranking equally and ratably with the Notes in all respects (other than the issue date, and to the 

  
 10 

 
extent applicable, issue price, initial date of interest accrual and initial interest payment date of such Additional Securities), provided that such Additional Securities are fungible
with the previously issued series of Notes for U.S. federal income tax purposes. Any such Additional Securities shall be consolidated and form a single series with the Notes for such series for all purposes under the Indenture, including
voting. 
 (c)    Maturity Date. The entire outstanding principal of the Notes shall be payable on
September 15, 2029. 
 (d)    Interest Rate. The rate at which the Notes shall bear interest shall be
3.250% per annum, computed on the basis of a 360-day year comprised of twelve 30-day months; the date from which interest shall accrue on the Notes shall be
September 13, 2019, or the most recent Interest Payment Date to which interest has been paid or duly provided for; the Interest Payment Dates for the Notes shall be the 15th day of March and September of each year, commencing on March 15,
2020; the interest so payable, and punctually paid or duly provided for, on any Interest Payment Date, will be paid, in immediately available funds, to the Persons in whose names the Notes (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be the 1st day of March and September (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not punctually paid
or duly provided for shall forthwith cease to be payable to the respective Holders on such Regular Record Date, and such defaulted interest may be paid to the Persons in whose names the Notes (or one or more Predecessor Securities) is registered at
the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Securities Agent, notice whereof shall be given to Holders of Notes not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner not inconsistent with requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.
Payment of principal of, and premium, if any, and interest on, the Notes will be made at the applicable Corporate Trust Office of the Securities Agent or such other office or agency of the Company as may be designated for such purpose, in such coin
or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that each installment of interest, premium, if any, and principal on, the Notes may at
the Company’s option be paid in immediately available funds by check mailed to the Person entitled thereto at its address on the Security Register or by wire transfer to an account maintained by the payee located in the United States. 

(e)    Currency. The currency of denomination of the Notes is United States dollars. Payment of principal of and
interest and premium, if any, on, the Notes will be made in United States dollars. 
 SECTION 2.3.    Optional
Redemption. 
 (a)    Applicability of Article Eleven. The provisions of Article Eleven of the Indenture
shall apply to the Notes, as supplemented by Sections 2.3(a) and (b) and Section 2.4 below. 

  
 11 

 (b)    Redemption Price. Prior to the Par Call Date, the Notes
shall be redeemable for cash, in whole, at any time, or in part, from time to time, at the Company’s option upon not less than 30 nor more than 60 days’ notice at a Redemption Price, plus accrued and unpaid interest to, but not
including, the Redemption Date (subject to the rights of holders of Notes on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date occurring on or prior to the Redemption Date), equal to the greater of: 

 

	 	•	 	 100% of the principal amount of the Notes being redeemed, or 

 

	 	•	 	 the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being
redeemed (not including any portion of any payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate as determined by the Quotation Agent, plus 20 basis points. 

On and after the Par Call Date, the Notes will be redeemable, in whole at any time or in part from time to time for cash, at the
Company’s option upon not less than 30 nor more than 60 days’ notice at a Redemption Price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest to, but not including, the Redemption Date
(subject to the rights of holders of Notes on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date occurring on or prior to the Redemption Date). 

In addition, the Company may at any time purchase Notes by tender, in the open market or by private agreement, subject to applicable law. 

(c)    Interest Payable. On and after any Redemption Date for the Notes, interest will cease to accrue on the Notes
or any portion thereof called for redemption, unless the Company defaults in the payment of the Redemption Price. 
 SECTION
2.4.    Change of Control. 
 (a) Upon the occurrence of a Change of Control Repurchase Event, unless the Company
has exercised its right to redeem the Notes pursuant to Section 2.3, the Company shall make an offer (a “Change of Control Offer”) to each Holder to repurchase, in cash, all or any part (in integral
multiples of $1,000) of each Holder’s Notes at a purchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, on the Notes repurchased, to, but not including the date of repurchase, subject to
the rights of holders of Notes on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date (the “Change of Control Payment”). Within 30 days following any Change of Control Repurchase
Event, or at the Company’s option, prior to any Change of Control but after the public announcement of the pending Change of Control, the Company shall, by first class mail (or use such electronic means as are acceptable to the applicable
Depositary for any Notes), send a notice to Holders of the Notes (with a copy to the Trustee and the Securities Agent) describing the transaction or transactions that constitute the Change of Control Repurchase Event, stating: 

 

	 	(1)	 that the Change of Control Offer is being made pursuant to this Section 2.4 and that
all Notes tendered will be accepted for payment; 

  
 12 

	 	(2)	 the repurchase price and the repurchase date, which shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed (the “Change of Control Payment Date”); 

  

	 	(3)	 that any Note not tendered will continue to accrue interest; 

 

	 	(4)	 that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for
payment pursuant to the Change of Control Offer will cease to accrue interest on and after the Change of Control Payment Date; 

  

	 	(5)	 that Holders electing to have any Notes repurchased pursuant to a Change of Control Offer will be required to
surrender the Notes, with the form entitled “Option of Holder to Elect Repurchase” on the reverse of the Note completed, to the Paying Agent at the address specified in the notice or transfer such Notes to the Paying Agent by book-entry
transfer pursuant to the applicable procedures of the Paying Agent, prior to the close of business on the third Business Day preceding the Change of Control Payment Date; 

 

	 	(6)	 that Holders will be entitled to withdraw their election if the Paying Agent receives, no later than the close
of business on the second Business Day preceding the Change of Control Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes delivered for repurchase, and a statement that such
Holder is withdrawing his election to have the Notes repurchased; 

  

	 	(7)	 that Holders whose Notes are being repurchased only in part will be issued new Notes equal in principal amount
to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $2,000 in principal amount or an integral multiple thereof; and 

 

	 	(8)	 if such notice is mailed prior to the consummation of the Change of Control, that the Change of Control Offer
is conditioned on the Change of Control being consummated on or prior to the Change of Control Payment Date. 

(b)    The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control Repurchase Event. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of this Section 2.4, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its
obligations under this Section 2.4 by virtue of such compliance. 
 (c)    On the Change of
Control Payment Date, the Company will, to the extent lawful, 
  

	 	(1)	 accept for payment all Notes or portions thereof properly tendered and not withdrawn pursuant to the Change of
Control Offer; 

  
 13 

	 	(2)	 deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or
portions of Notes accepted for payment; and 

  

	 	(3)	 deliver or cause to be delivered to the Securities Agent the Notes properly accepted together with an
Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being repurchased by the Company. 

(d)    The Paying Agent will promptly mail to each Holder of Notes accepted for payment the Change of Control Payment for
such Notes deposited pursuant to (c)(2) above, and the Securities Agent will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each new Note will be in a principal amount of $2,000 or any integral multiple of $1,000 in excess of $2,000. The Company will publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date. Except as described above with respect to a Change of Control, this Third Supplemental Indenture does not contain provisions that permit Holders of the Notes to require the Company to repurchase
or redeem the Notes in the event of a takeover, recapitalization or similar transaction. 
 (e)    Notwithstanding
anything to the contrary in this Section 2.4, the Company shall not be required to make a Change of Control Offer upon a Change of Control Repurchase Event if (1) a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth in this Section 2.4 and repurchases all Notes validly tendered and not withdrawn under the Change of Control Offer; or (2) notice of
redemption has been given pursuant to Section 11.04 of the Indenture, unless and until there is a default in the payment of the applicable Redemption Price. 

(f)    Except as set forth in Section 2.4(a), the Company has no obligation to redeem, repay,
prepay or purchase Notes pursuant to any sinking fund or analogous provisions or at the option of any Holder of Notes. 
 SECTION
2.5.    Limitations on Liens. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, create, incur, issue, assume or guarantee any debt for borrowed money of the Company or any of its Restricted
Subsidiaries secured by a Lien (other than Permitted Liens) upon any Principal Property or on any capital stock of any Restricted Subsidiary (in each case, whether owned on the date of this Third Supplemental Indenture or thereafter acquired),
without making effective provision to secure all of the Outstanding Notes, equally and ratably with any and all other debt for borrowed money thereby secured, so long as any of such debt shall be so secured, unless the aggregate principal amount of
all outstanding debt for borrowed money of the Company and its Restricted Subsidiaries that is secured by Liens (other than Permitted Liens) on any Principal Property or upon the capital stock of any Restricted Subsidiary (in each case, whether
owned on the date of this Third Supplemental Indenture or thereafter acquired) plus the amount of all outstanding Attributable Debt incurred in respect of Sale and Leaseback Transactions involving any Principal Properties would not exceed 15% of
Consolidated Net Tangible Assets calculated as of the date of the creation or incurrence of the Lien. 

  
 14 

 SECTION 2.6.    Limitation on Sale and Leaseback Transactions.
The Company shall not, and shall not permit any Restricted Subsidiary of the Company to, enter into any arrangement with any Person providing for the leasing by the Company or any Restricted Subsidiary of the Company of any property or assets that
have been or are to be sold or transferred by the Company or such Restricted Subsidiary of the Company to such Person, with the intention of taking back a lease of such property or assets (a “Sale and Leaseback Transaction”) unless
either: 
 (a)    within 12 months after the receipt of the proceeds of the sale or transfer, the Company or any
Restricted Subsidiary of the Company applies an amount equal to the greater of the net proceeds of the sale or transfer or the fair value (as determined in good faith by the Company’s Board of Directors) of such property or assets at the time
of such sale or transfer to the prepayment or retirement (other than any mandatory prepayment or retirement) of Funded Debt which ranks equally with or senior to the Notes; or 

(b)    the Company or such Restricted Subsidiary of the Company would be entitled, at the effective date of the sale or
transfer, to incur debt for borrowed money secured by a Lien on such property or assets in an amount at least equal to the Attributable Debt in respect of the Sale and Leaseback Transaction, without equally and ratably securing the Notes pursuant to
Section 2.5. 
 The foregoing restriction in the paragraph above shall not apply to any Sale and Leaseback
Transaction (i) for a term of not more than three years including renewals; (ii) between the Company and a Restricted Subsidiary of the Company or between Restricted Subsidiaries of the Company, provided that the lessor is the Company or a
wholly owned Restricted Subsidiary of the Company; or (iii) entered into within 120 days after the later of the acquisition or completion of construction of the subject property or assets. 

SECTION 2.7.    Defeasance. Section 4.03 (including subparagraph (4) thereof and
clause (B), but not clause (A), of such subparagraph) and Section 10.06 (including subparagraph (5) thereof) of the Indenture will apply to the Notes. 

ARTICLE III. 

MISCELLANEOUS 
 SECTION
3.1.    Relationship with Indenture. 
 The terms and provisions contained in the Indenture will constitute, and
are hereby expressly made, a part of this Third Supplemental Indenture. However, to the extent any provision of the Indenture conflicts with the express provisions of this Third Supplemental Indenture, the provisions of this Third Supplemental
Indenture will govern and be controlling. 
 SECTION 3.2.    Trust Indenture Act Controls. 

If any provision of this Third Supplemental Indenture limits, qualifies or conflicts with another provision which is required to be included
in this Third Supplemental Indenture by the Trust Indenture Act, the required provision shall control. If any provision of this Third 

  
 15 

 
Supplemental Indenture modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed to apply to this Third Supplemental
Indenture as so modified or to be excluded, as the case may be. 
 SECTION 3.3.    Governing Law. 

This Third Supplemental Indenture, the Notes and the Guarantee shall be governed by and construed in accordance with the laws of the State of
New York without regard to conflicts of law principles of such State other than New York General Obligations Law Section 5-1401. 

SECTION 3.4.    Multiple Counterparts. 

The parties may sign multiple counterparts of this Third Supplemental Indenture. Each signed counterpart shall be deemed an original
regardless of whether delivered in physical or electronic form, but all of them together represent one and the same Third Supplemental Indenture. 

SECTION 3.5.    Severability. 

Each provision of this Third Supplemental Indenture shall be considered separable and if for any reason any provision which is not essential
to the effectuation of the basic purpose of this Third Supplemental Indenture or the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired
thereby and a Holder shall have no claim therefor against any party hereto. 
 SECTION 3.6.    Ratification. 

The Indenture, as supplemented and amended by this Third Supplemental Indenture, is in all respects ratified and confirmed. The Indenture and
this Third Supplemental Indenture shall be read, taken and construed as one and the same instrument. All provisions included in this Third Supplemental Indenture supersede any conflicting provisions included in the Indenture unless not permitted by
law. The parties hereto accept the trusts created by the Indenture, as supplemented by this Third Supplemental Indenture, and agree to perform the same upon the terms and conditions of the Indenture, as supplemented by this Third Supplemental
Indenture. 
 SECTION 3.7.    Headings. 

The Section headings in this Third Supplemental Indenture are for convenience only and shall not affect the construction thereof. 

SECTION 3.8.    Effectiveness. 

The provisions of this Third Supplemental Indenture shall become effective as of the date hereof. 

[Remainder of Page Intentionally Left Blank] 

  
 16 

 IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be
duly executed as of the date first above written. 
  

			
	FORTUNE BRANDS HOME & SECURITY, INC.
		
	By:	 	 /s/ Patrick D. Hallinan

	Name:	 	Patrick D. Hallinan
	Title:	 	Senior Vice President and Chief Financial Officer
	
	WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee
		
	By:	 	 /s/ Shawn Goffinet

	Name:	 	Shawn Goffinet
	Title:	 	Assistant Vice President
	
	CITIBANK, N.A., not in its individual capacity but solely as Securities Agent
		
	By:	 	 /s/ Karen Schluter

	Name:	 	Karen Schluter
	Title:	 	Senior Trust Officer

 [Signature page to Third Supplemental Trust Indenture] 

 EXHIBIT A 

FORM OF 3.250% SENIOR NOTE DUE 2029 

  
 Exh. A-1 

 [FACE OF NOTE] 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY
TRUST COMPANY (THE “DEPOSITARY”) OR A NOMINEE OF THE DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY) MAY BE MADE EXCEPT IN LIMITED CIRCUMSTANCES. 

UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY (AS DEFINED HEREIN) OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT THEREON IS MADE TO
CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
  

			
	 REGISTERED
	  	REGISTERED
	 Number
	  	U.S.$                
	 R-
	  	

  

			
	 FORTUNE BRANDS HOME & SECURITY, INC.

3.250% Senior Notes due 2029

		  	CUSIP 34964C AE6

  
  

FORTUNE BRANDS HOME & SECURITY, INC., a Delaware corporation (the “Company”), for value received, hereby promises to
pay to CEDE & CO. or registered assigns, the principal sum of                DOLLARS on September 15, 2029, and to pay interest, semiannually in arrears in
cash on March 15 and September 15 of each year (each, an “Interest Payment Date”) commencing March 15, 2020, on said principal sum at the rate of 3.250% per annum from the most recent Interest Payment Date to which
interest has been paid or duly provided for, as the case may be, next preceding the date of this Security to which interest has been paid, unless the date hereof is a date to which interest has been paid, in which case from the date of this
Security, or unless no interest has been paid on the Securities, in which case from September 13, 2019, until payment of said principal sum has been made or duly provided for. 

  
 Exh. A-2 

 
Notwithstanding the foregoing, if the date hereof is after a March 1 or September 1, as the case may be, and before the following Interest Payment Date, this Security shall bear
interest from such Interest Payment Date; provided, however, that if the Company shall default in the payment of interest due on such Interest Payment Date then this Security shall bear interest from the next preceding Interest Payment Date
to which interest has been paid, or, if no interest has been paid on the Securities, from September 13, 2019. The interest so payable on any March 15 or September 15 will, subject to certain exceptions provided in the Indenture dated
as of June 15, 2015 (the “Base Indenture”), as supplemented by the Third Supplemental Indenture dated as of September 13, 2019 (as so supplemented, the “Supplemental Indenture”, and as amended, modified or
supplemented in accordance with the terms thereof by any other indenture supplemental thereto with respect to the Securities of this series, the “Indenture”), among the Company, Wilmington Trust, National Association, as trustee
(the “Trustee,” which term includes any successor trustee under the Indenture with respect to the Securities of this series), and Citibank, N.A., as securities agent (the “Securities Agent,” which term includes any
successor securities agent under the Indenture with respect to the Securities of this series), be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the March 1 or
September 1, as the case may be, next preceding such Interest Payment Date. The principal of (and premium, if any) and interest on this Security are payable at the office or agency of the Company in the Borough of Manhattan, The City of New
York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided; however; that each installment of interest, premium, if any, and principal on
this Security may be paid, at the option of the Company, by check mailed to the Person entitled thereto at its address on the Security Register or by wire transfer to an account maintained by the Persons entitled thereto located in the United
States. Any interest not punctually paid or duly provided for shall be payable as provided in said Indenture. 

  
 Exh. A-3 

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 

Dated: September 13, 2019 
  

			
	FORTUNE BRANDS HOME & SECURITY, INC.

 
			
		
	By:	 	  

	Name:	 	
	Title:	 	

  

			
	Attest:
		
	By:	 	  

	Name:	 	
	Title:	 	

  
 Exh A-4 

 SECURITIES AGENT’S CERTIFICATE OF AUTHENTICATION 

This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture. 

Dated: September 13, 2019 
  

			
	CITIBANK, N.A., not in its individual capacity but solely as Securities Agent
		
	By:	 	  

		 	Authorized Officer

  
 Exh A-5 

 [REVERSE OF NOTE] 

FORTUNE BRANDS HOME & SECURITY, INC. 

3.250% Senior Notes due 2029 

This Security is one of a duly authorized issue of Securities of the Company designated as its 3.250% Senior Notes due 2029 (Securities of
such series being hereinafter called the “Securities”), initially issued in an aggregate principal amount of $700,000,000 (but subject to additional issuances from time to time in accordance with the terms of the Indenture), issued
and to be issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Company,
the Trustee, the Securities Agent and the Holders of the Securities, and the terms upon which the Securities are, and are to be, authenticated and delivered. Capitalized terms which are used and not otherwise defined in this Security have the
meanings given to those terms in the Indenture. 
 The Indenture imposes certain limitations on the ability of the Company and any
Restricted Subsidiary to create, incur, issue, assume or guarantee any debt for borrowed money of the Company or any of its Restricted Subsidiaries secured by a Lien or engage in Sale and Leaseback Transactions, in each case, subject to exceptions
as set forth in the Indenture. The Indenture also imposes certain limitations on the ability of the Company to consolidate with or merge into any other person or sell, assign, transfer, lease or otherwise convey all or substantially all of the
properties and assets of the Company to any other person, subject to exceptions as set forth in the Indenture. 
 Except as otherwise
provided in the Indenture, this Security will be issued in global form only and registered in the name of the Depositary or its nominee. This Security will not be issued in definitive form, except as otherwise provided in the Indenture, and
ownership of this Security shall be maintained in book-entry form by the Depositary for the accounts of participating organizations of the Depositary. 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Security at the times, place and rate, and in the coin and currency, herein prescribed. 

As provided in the Indenture and subject to certain limitations therein set forth, this Security may be registered for transfer on the
Security Register of the Company, upon surrender of this Security for registration of transfer at the Corporate Trust Office of the Securities Agent in Jersey City, New Jersey, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company, the Securities Agent and the Security Registrar duly executed by, the registered Holder hereof or its attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated transferee or transferees. 

  
 Exh A-6 

 The Company may, from time to time, without notice to or the consent of the Holders of the
Securities, increase the aggregate principal amount of the Securities which may be authenticated and delivered under the Indenture and issue such increased principal amount (or any portion thereof), in which case any additional Securities so issued
will have the same form and terms (other than the date of issuance and, under certain circumstances, the date from which interest thereon will begin to accrue), and will carry the same right to receive principal and accrued and unpaid interest, as
the Securities previously issued, and such additional Securities will form a single series with the Securities previously issued; provided that such additional Securities are fungible with the Securities previously issued for
U.S. federal income tax purposes. 
 The Securities are issuable only as Registered Securities in minimum denominations of $2,000 and
integral multiples of $1,000 in excess thereof. As provided in the Indenture, and subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate principal amount of Registered Securities of different authorized
denominations, as requested by the Holder surrendering the same. 
 No service charge will be made for any such registration of transfer or
exchange, but the Company or the Securities Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith subject to certain exceptions as set forth in the Indenture. 

The Company, the Trustee, the Securities Agent and any agent of the Company, the Trustee or the Securities Agent may treat the Person in whose
name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor the Securities Agent nor any such agent shall be affected by notice to the contrary. 

The Securities of this series are subject to redemption at the Company’s option as provided in the Indenture. 

Upon the occurrence of a Change of Control Repurchase Event, unless the Company has exercised its right to redeem the Securities, the
Indenture contains provisions for the Company to make an offer to each Holder to repurchase, in cash, all or any part (in integral multiples of $1,000) of each Holder’s Securities at a purchase price equal to 101% of the aggregate principal
amount of the Securities to be repurchased plus accrued and unpaid interest, if any, on the Securities repurchased, to but not including the date of repurchase (subject to the rights of Holders of Securities on the relevant Regular Record Date to
receive interest due on the relevant Interest Payment Date) as provided in, and subject to the terms of, the Indenture. 
 The Indenture
contains provisions for defeasance at any time of the entire indebtedness of this Security and certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with certain conditions set forth in the
Indenture. 
 If an Event of Default, as defined in the Indenture, with respect to the Securities shall occur, the principal of all the
Securities may be declared due and payable in the manner and with the effect provided in the Indenture. 

  
 Exh A-7 

 The Indenture permits, with certain exceptions as therein provided, the amendment thereof
and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company with the consent of the Holders of a majority in aggregate principal amount of the then
Outstanding Securities of this series and of each other series issued under the Indenture and affected by such amendment or modification. The Indenture also permits the Holders of a majority in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive certain past defaults under the Indenture with respect to the Securities and their consequences if all amounts due to the Trustee and the Securities Agent have been paid in
full. Any such consent or waiver shall be conclusive and binding upon the Holder of this Security and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu
hereof whether or not a notation of such consent or waiver is made upon this Security. 
 No recourse shall be had for the payment of the
principal of or the interest on this Security, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto with respect to the Securities of this series, against any
incorporator, stockholder, officer or director, as such, past, present or future, of the Company or any successor Person, either directly or through the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. 

This Security is not subject to any sinking fund. 

THIS SECURITY SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID STATE. 
 Unless the certificate of authentication hereon has been executed by the
Securities Agent by the manual signature of one of its authorized officers, this Security shall not be entitled to any benefit under said Indenture, or be valid or obligatory for any purpose 

  
 Exh A-8

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