Document:

exv10w1

Exhibit 10.1

CONSULTING AGREEMENT

This Consulting Agreement (this “Agreement”) is entered into, effective November 1, 2010, by
and between EZCORP, Inc., a Delaware corporation (the “Company”), and Joseph L. Rotunda.

Mr. Rotunda is the former Chief Executive Officer of the Company. The Company desires to continue
to benefit from Mr. Rotunda’s experience and expertise with respect to the Company’s business and,
therefore, desires to engage Mr. Rotunda as a consultant for the purposes set forth in this
Agreement and pursuant to the terms of that certain Employment and Compensation Agreement,
effective January 2, 2009 through October 8, 2010, between the Company and Mr. Rotunda (the
"Employment Agreement”). Mr. Rotunda desires to perform such services for the Company under the
terms and conditions set forth in this Agreement. Therefore, the Company and Mr. Rotunda hereby
agree as follows:

	1.	 	Services — The Company hereby engages Mr. Rotunda to provide consulting and advisory
services with respect to strategic planning, acquisitions, international operations,
organizational planning, general business analysis, and such other similar services as are
determined from time to time by the Chairman of the Company’s Board of Directors, all such
services to be consistent with Mr. Rotunda’s experience and stature (collectively, the
“Services”). The Company acknowledges and agrees that Mr. Rotunda shall not be required to
devote his full time and resources to the performance of the Services, but only such time as
is reasonably necessary to perform the Services, not to exceed in any event an average of 80
hours per month. It is also acknowledged that Mr. Rotunda, as an independent consultant, may
pursue other non-competing engagements and may serve on other boards of directors, provided
such activities have the prior written approval of the Company’s Board of Directors, which
approval will not be unreasonably withheld.

	2.	 	Compensation —

	 	(a)	 	Annual Fee — As consideration for the performance of the Services, the Company
shall pay Mr. Rotunda a consulting fee of $500,000 per annum (the “Annual Fee”), payable
in approximately equal monthly installments on or before the first day of each month
during the term of this Agreement. The first such payment will be made as soon as
practicable after the Effective Date and will be prorated based on the number of days
between the Effective Date and the first day of the immediately succeeding month. From
time to time, the Company may review and consider the Annual Fee for increase, but at no
time shall the Company be under any obligation to increase the amount of the Annual Fee.
	 
	 	(b)	 	Annual Bonus — In addition, Mr. Rotunda will have the opportunity to earn an
annual performance bonus with a target amount equal to 50% of the Annual Fee and a
maximum amount equal to 100% of the Annual Fee (the “Annual Bonus”), based on the
achievement of specific, measurable performance objectives set by the Board of Directors
from time to time during each year of the Agreement. The performance objectives
applicable to each Annual Bonus, the extent to which Mr. Rotunda has achieved those
objectives, and the actual amount of each Annual Bonus payment (subject to the
limitations expressed above) shall be determined by the Compensation Committee of the
Company’s Board of Directors (the “Compensation Committee”), after considering the advice
and recommendation of the Chairman of the Board, and its determinations will be final and
binding on all parties. Each Annual Bonus will be paid to Mr. Rotunda within 60 days
after each anniversary of the Effective Date. Notwithstanding the achievement of the
specified performance objectives, the Compensation Committee, in its sole and absolute
discretion, may elect to not pay an Annual Bonus if it determines that the Company’s
financial performance for the applicable year has not met minimum standards established
by the committee.
	 
	 	(c)	 	Health Insurance — During the term of this Agreement, the Company will provide Mr.
Rotunda with healthcare benefits equal to the benefits Mr. Rotunda was receiving under
the Company’s health insurance plans at the time of his retirement from the Company. The
Company shall satisfy this obligation by allowing Mr. Rotunda to continue to participate
in the Company’s health insurance plans, including the executive health care supplement,
on the same terms as he was participating at the time of his retirement from the Company.
Alternatively, if such continued participation is not available under the terms of the
plans, the Company may satisfy this obligation by either (i) making payments to Mr.
Rotunda sufficient to allow Mr. Rotunda to purchase the benefits described above or (ii)
directly paying the cost of providing such benefits.

	3.	 	Term — The initial term of this Agreement shall expire five years from the Effective Date.
Upon mutual agreement of the parties, the term of this Agreement may be extended for
additional one-year terms. A party desiring to extend the term shall send the other party a
written notice thereof at least 12 months prior to the expiration of the then-current term (in
the case of the first initial extension following the initial term) or six months prior to the
expiration of the then-current term (in the case of subsequent extensions).
	 
	4.	 	Termination — Notwithstanding the provisions of Paragraph 3 above, either party may
terminate this Agreement at any time by giving written notice of termination to the other
party no less than 90 days prior to the effective date of the termination. In addition, this
Agreement will terminate if Mr. Rotunda dies or becomes permanently and totally disabled
during the term of this Agreement. Upon termination of this Agreement, the following
provisions shall apply:

	 	(a)	 	If (i) this Agreement is terminated by the Company because of a material breach by
Mr. Rotunda of any of the provisions of this Agreement and such breach remains uncured 30
days after the Company has provided Mr. Rotunda with written notice of such breach or
(ii) this Agreement is terminated by Mr. Rotunda (other than a termination described in
clause (i) of subparagraph (b) of this Paragraph), then Mr. Rotunda will be entitled to
receive only the portion of the Annual Fee and other payments (other than Annual Bonus)
that have accrued through the effective date of the termination and will not be entitled
to receive any subsequent Annual Bonus or other payments.

 

 

	 	(b)	 	If (i) this Agreement is terminated by Mr. Rotunda because of a material breach by
the Company of any of the provisions of this Agreement and such breach remains uncured 30
days after Mr. Rotunda has provided the Company with written notice of such breach or
(ii) this Agreement is terminated by the Company (other than a termination described in
clause (i) of subparagraph (a) of this Paragraph), then the Company shall pay Mr.
Rotunda, within 30 days following the effective date of the termination, an amount in
cash equal to all Annual Fee payments that would have been payable to Mr. Rotunda had
this Agreement continued until the expiration of the then-current term, plus an
additional $500,000 (which shall be in lieu of all subsequent Annual Bonus amounts), and
shall continue to provide the health insurance benefits described in Paragraph 2(c) until
the expiration of the then-current term.
	 
	 	(c)	 	If this Agreement is terminated because of Mr. Rotunda’s death or permanent
disability, the Company will pay to Mr. Rotunda (or, if appropriate, to his heirs,
beneficiaries, or personal representatives) the following amounts: (i) the portion of
the Annual Fee and other payments (other than Annual Bonus) that have accrued through the
effective date of such death or disability; (ii) a prorated portion of the Annual Bonus
for the year in which such death or disability occurs (calculated assuming such Annual
Bonus would have been paid at 100% of the target amount); and (iii) $750,000. In
addition, the Company will continue the health insurance benefits described in Paragraph
2(c) for one year following the date of such death or disability. For purposes of this
Agreement, Mr. Rotunda will be considered to be permanently and totally disabled if, in
good faith opinion of the Company’s Board of Directors, he becomes physically or mentally
incapable of properly performing his duties under this Agreement and such incapacity will
exist or can reasonably be expected to exist for a period of 90 days or more.

	(d)	 	In the event of a dispute between the parties as to whether there has been a material breach
of this Agreement by either Mr. Rotunda or the Company, the parties waive their right to trial
by jury and agree that such dispute will be settled by arbitration administered by the
American Arbitration Association in accordance with its commercial arbitration rules.
Judgment on the award rendered by the arbitrator may be entered in any court having
jurisdiction over the matter.

	5.	 	Expenses — The Company shall reimburse Mr. Rotunda for all reasonable out-of-pocket expenses
incurred by Mr. Rotunda in connection with the performance of Services under this Agreement.
In order to receive such reimbursement, Mr. Rotunda shall submit monthly expense reports, and
the Company will provide the reimbursement within 30 days of the receipt of those reports.
The Company will also provide Mr. Rotunda with reasonable office space, furniture,
communications, and administrative support in the Austin area to adequately perform his duties
during the term of this Agreement.

	6.	 	Certain Covenants— Mr. Rotunda acknowledges that he remains and will continue to be subject
to confidentiality, non-competition, non-solicitation, and non-interference obligations
described in (a) the Employment Agreement and (b) the Restricted Stock Award Agreement, dated
as of October 2, 2006, between him and the Company. Mr. Rotunda hereby affirms such
obligations (modified as described below) and hereby agrees that, during the term of this
Agreement and for a period of two years thereafter, if he materially breaches any of such
obligations, he shall be required to repay to the Company any and all amounts he has
theretofore received from the Company pursuant to the terms of this Agreement. This
obligation to repay shall be in addition to any other rights or remedies the Company may have
pursuant to such agreements or otherwise (including the right to injunctive relief).
	 
	 	 	It is hereby expressly understood and agreed that the non-competition obligations contained in
the agreements referred to above shall be, and are hereby, expanded to include any entity,
sole proprietorship or other business concern that, anywhere in the world, offers or plans to
offer products or services that are materially competitive with any of the products or
services being offered or marketed, or are being actively developed, by the Company during the
term of this Agreement or as of the date this Agreement is terminated. Mr. Rotunda
understands that the Company and its affiliates have plans to expand the scope of their
activities and the geographic area of their operations with the direct involvement of Mr.
Rotunda; therefore, Mr. Rotunda agrees that the limitations as to time, geographical area, and
scope of activity contained herein do not impose a greater restraint than is necessary to
protect the Company’s goodwill and other business interests, and are therefore reasonable. If
any provision of this covenant is found to be invalid in whole or in part, the Company may
elect, but shall not be required, to have such provision reformed, whether as to time, area
covered, or otherwise, as and to the extent required to render it valid and enforceable under
applicable law.
	 
	 	 	During the term of this Agreement, Mr. Rotunda will not, directly or indirectly, in any
individual or representative capacity, make any statement, oral or written, or perform
any act or omission that is or could be reasonably interpreted to be disparaging of the
Company’s Board of Directors or management or otherwise detrimental in any material
respect to the Company’s reputation and goodwill.

	7.	 	Indemnification —

	 	(a)	 	The Company agrees to indemnify Mr. Rotunda and hold him harmless from and against
any and all claims, costs, expenses, liabilities, losses, and damages (or actions in
respect thereof) related to or arising out of this Agreement or the performance of
Services hereunder; provided, however, that the Company shall not be responsible for any
claims, costs, expenses, liabilities, losses, or damages incurred by Mr. Rotunda to the
extent that it is finally determined by a court or other tribunal of competent
jurisdiction that they resulted primarily from actions taken or omitted to be taken by
Mr. Rotunda due to Mr. Rotunda’s recklessness, willful misconduct, or bad faith.
	 
	 	(b)	 	If any claim, action, or proceeding, including any governmental investigation, is
brought or asserted against Mr. Rotunda with respect to which indemnity may be sought
from the Company, Mr. Rotunda shall promptly notify the Company in writing of his
knowledge of such claim, action, or proceeding and the Company shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to Mr. Rotunda and
the payment of all fees and expenses of such counsel and all other expenses related to
such claim, action, or proceeding. Mr. Rotunda shall have the right to employ separate
counsel in any such claim, action, or proceeding and to participate in the defense
thereof,

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	 	 	 	but the fees and expenses of such separate counsel shall be at Mr. Rotunda’s expense
unless (i) the Company has agreed to pay such fees and expenses or (ii) the Company has
failed to timely assume the defense of such claim, action, or proceeding, to employ
counsel reasonably satisfactory to Mr. Rotunda, or if requested by Mr. Rotunda, to
confirm in writing that it is obligated to indemnify Mr. Rotunda in connection with such
claim, action, or proceeding in accordance with this agreement, or (iii) counsel shall
determine that there is or could reasonably be expected to be a conflict of interest by
reason of having common counsel in such claim, action, or proceeding, in which case, if
Mr. Rotunda notifies the Company in writing that he elects to employ separate counsel at
the expense of the Company, the Company shall not have the right to assume the defense of
such claim, action, or proceeding, it being understood, however, that the Company shall
not, in connection with any one such claim, action, or proceeding or separate but
substantially similar or related claims, actions, or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for Mr. Rotunda, which firm shall be designated in
writing by Mr. Rotunda. The Company shall not be liable for any settlement of any such
claim, action, or proceeding effected without its written consent, which should not be
unreasonably withheld. If settled with the Company’s prior written consent or if there
be a final and nonappealable judgment for the plaintiff in any such claim, action, or
proceeding, the Company agrees to indemnify Mr. Rotunda and hold him harmless from and
against any loss or liability to the extent stated above by reason of such settlement or
judgment.

	 	(c)	 	If for any reason the indemnification provided herein is unavailable to Mr. Rotunda
with respect to any claims, costs, expenses, liabilities, losses, or damages referred to
herein or if such indemnification shall be insufficient to hold Mr. Rotunda harmless from
all such claims, costs, expenses, liabilities, losses, or damages, then the Company, in
lieu of indemnifying Mr. Rotunda, shall contribute to the amount paid or payable by Mr.
Rotunda as a result of such claims, costs, expenses, liabilities, losses, or damages, (i)
in such proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and Mr. Rotunda on the other hand or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) but also
the relative fault of the Company on the one hand and Mr. Rotunda on the other, as well
as any other relevant equitable consideration. The amount paid or payable by a party as
a result of the claims, costs, expenses, liabilities, losses, or damages, referred to
above shall be deemed to include, subject to the limitations set forth in subparagraph
(b) above, any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. Notwithstanding the
provisions herein, Mr. Rotunda shall not be required to contribute any amount in excess
of the amount of fees (including Annual Bonuses) received by him under this Agreement.

	8.	 	Miscellaneous Provisions —

	 	(a)	 	Relationship of the Parties— Nothing contained in this Agreement, nor any action
taken by either party pursuant to this Agreement, is intended or shall be construed to
create or establish any agency, partnership, joint venture, or employer/employee
relationship between the parties. Neither party has any authority, nor shall either
party imply it has any authority, to act for, in any manner bind, acquire any rights as
an employee of, or incur any obligations on behalf of or in the name of the other party.
Mr. Rotunda is an independent contractor in all respects and for all purposes under this
Agreement, and no employee or subcontractor of Mr. Rotunda shall be deemed to be the
employee or agent of the Company. The parties acknowledge and agree that nothing
contained herein creates any fiduciary duties between the parties, and Mr. Rotunda may
perform services for other persons so long as the performance of such services are
approved in accordance with the provisions of Paragraph 1 and such services do not
violate the provisions of Paragraph 6 of this Agreement.
	 
	 	(b)	 	Notices — Any notice or other communication hereunder must be in writing (which
includes facsimile or electronic communication) and may be delivered or sent by mail,
facsimile, or electronic mail to the party to be noticed at the address accompanying such
party’s signature below. Either party may from time to time change its address for
notification purposes by giving the other party written notice of the new address and the
date upon which it will become effective. A written notice shall be deemed to have been
given (i) when personally delivered, (ii) if mailed, on the third day after it is sent by
certified mail, return receipt requested, or (iii) if by facsimile transmission or
electronic mail, when the sender has received appropriate confirmation that it has been
received by the recipient.
	 
	 	(c)	 	Governing Law — This Agreement shall be governed by and construed in accordance
with the substantive laws of the State of Texas. Jurisdiction and venue with respect to
any lawsuit or other action based on this Agreement shall be in Travis County, Texas, and
the Company and Mr. Rotunda hereby irrevocably consent to such jurisdiction and venue.
	 
	 	(d)	 	Attorney’s Fees — In the event that either party is required to obtain the
services of an attorney in order to enforce any right or obligation hereunder, the
prevailing party shall be entitled to recover reasonable attorney’s fees and court costs
from the other party.
	 
	 	(e)	 	Assignment — The rights and obligations of either party hereunder may not be
assigned to any other person without the written consent of the other party.
	 
	 	(f)	 	Validity and Severability — If any provision of this Agreement or the application
of any provision hereof to any circumstance is held invalid, unenforceable, or otherwise
illegal, the remainder of this Agreement and the application of such provision to any
other circumstance shall not be affected, and the provision so held to be invalid,
unenforceable, or otherwise illegal shall be reformed to the extent, and only to the
extent, necessary to make it enforceable, valid, or legal. If any court or other
adjudicative body shall decline to reform any provision of this Agreement held to be
invalid, unenforceable, or otherwise illegal as contemplated by the immediately preceding
sentence, the parties hereto shall take all such action as may be necessary or
appropriate to replace the provision so held to be invalid, unenforceable, or

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	 	 	 	otherwise illegal with one or more alternative provisions that effectuate the purpose and
intent of the original provisions of this Agreement as fully as possible without being
invalid, unenforceable, or otherwise illegal.

	 	(g)	 	Amendments; Waivers — No provision of this Agreement may be amended, modified,
waived, or discharged unless such amendment, modification, waiver, or discharge is agreed
to in writing signed by the Company and Mr. Rotunda. No waiver by either party hereto at
any time of any breach by the other party hereto or compliance with any condition or
provision of this Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
	 
	 	(h)	 	Complete Agreement — No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter hereof have been made by either
party that are not set forth expressly in this Agreement; provided, however, that Mr.
Rotunda expressly acknowledges his continuing obligations pursuant to the other
agreements referred to in Paragraph 6 above (as such obligations are modified by the
provisions of this Agreement).

This Agreement has been executed by the parties on the respective dates indicated below, to be
effective as of the date first set forth above.

	 	 	 	 	 	 	 

	EZCORP, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Sterling B. Brinkley
	 	/s/ Joseph L. Rotunda
	 	 
	 

	 	 
	 	 	 	 
	 

	 	Sterling B. Brinkley,
	 	JOSEPH L. ROTUNDA	 	 
	 

	 	Chairman of the Board	 	 	 	 

	 	 	 	 	 	 	 	 	 

	Date:

	 	 	Date:  	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 

	 	 	 	 	 	 	 

	Address for notices:	 	Address for notices:
	 
	 	 	 	 	 	 
	 

	 	EZCORP, Inc.
	 	 
	3208 Aztec Fall Cove	 
	 

	 	Attention: General Counsel
	 	 	Austin, Texas 78746	 
	 
	 	 	 	 	 	 
	 

	 	1901 Capital Parkway
	 	 	Facsimile: 512-732-7251	 
	 

	 	Austin, Texas 78746
	 	 	Email: joe_rotunda@ezcorp.com	 
	 
	 	 	 	 	 	 
	 

	 	Facsimile: 512-314-3404	 	 	 	 
	 

	 	Email: tom_welch@ezcorp.com	 	 	 	 

4exv4w1

Exhibit 4.1

 

 

Eleventh Supplemental Indenture

Dated as of October 12, 2010

Supplement to the Amended and Restated Indenture

Dated as of April 22, 2005

 

PACIFIC GAS AND ELECTRIC COMPANY

Issuer

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

Trustee

 

 

 

 

 

Table of Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE I DEFINITIONS	 	 	2	 
	ARTICLE II ESTABLISHMENT OF THE FLOATING RATE SENIOR NOTES; TERMS	 	 	2	 
	SECTION 201

	 	Establishment and Designation of the Floating Rate Senior Notes
	 	 	2	 
	SECTION 202

	 	Form of the Floating Rate Senior Notes
	 	 	2	 
	SECTION 203

	 	Principal Amount of the Floating Rate Senior Notes
	 	 	3	 
	SECTION 204

	 	Interest Rates; Stated Maturity of the Floating Rate Senior Notes
	 	 	3	 
	SECTION 205

	 	No Sinking Fund
	 	 	3	 
	SECTION 206

	 	No Redemption
	 	 	3	 
	SECTION 207

	 	Paying Agent and Bond Registrar
	 	 	3	 
	SECTION 208

	 	Calculation Agent
	 	 	3	 
	SECTION 209

	 	Global Securities; Appointment of Depositary for Global Securities
	 	 	3	 
	SECTION 210

	 	Other Terms of the Floating Rate Senior Notes
	 	 	4	 
	ARTICLE III MISCELLANEOUS	 	 	4	 
	SECTION 301

	 	Concerning the Trustee
	 	 	4	 
	SECTION 302

	 	Application of Eleventh Supplemental Indenture
	 	 	4	 
	SECTION 303

	 	Effective Date of Eleventh Supplemental Indenture
	 	 	4	 
	SECTION 304

	 	Counterparts
	 	 	4	 
	EXHIBIT A
	 	 	 	 	 	 

i

 

     ELEVENTH SUPPLEMENTAL INDENTURE, dated as of October 12, 2010 (this “Eleventh Supplemental
Indenture”), by and between PACIFIC GAS AND ELECTRIC COMPANY, a corporation duly organized and
existing under the laws of the State of California (the “Company” or the “Issuer”), and THE BANK OF
NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under
the laws of the United States of America (formerly known as The Bank of New York Trust Company,
N.A.), as Trustee under the Base Indenture (as hereinafter defined) (the “Trustee”).

RECITALS OF THE COMPANY

     A. The Company and the Trustee are parties to that certain Amended and Restated Indenture,
dated as of April 22, 2005 (the “Base Indenture”), as supplemented by the First Supplemental
Indenture, dated as of March 13, 2007 (the “First Supplemental Indenture”), and as further
supplemented by the Second Supplemental Indenture, dated as of December 4, 2007 (the “Second
Supplemental Indenture”), the Third Supplemental Indenture, dated as of March 3, 2008 (the “Third
Supplemental Indenture”), the Fourth Supplemental Indenture, dated as of October 21, 2008 (the
“Fourth Supplemental Indenture”), the Fifth Supplemental Indenture, dated as of November 18, 2008
(the “Fifth Supplemental Indenture”), the Sixth Supplemental Indenture, dated as of March 6, 2009
(the “Sixth Supplemental Indenture”), the Seventh Supplemental Indenture, dated as of June 11, 2009
(the “Seventh Supplemental Indenture”), the Eighth Supplemental Indenture, dated as of November 18,
2009 (the “Eighth Supplemental Indenture”), the Ninth Supplemental Indenture, dated as of April 1,
2010 (the “Ninth Supplemental Indenture”), the Tenth Supplemental Indenture, dated September 15,
2010 ( the “Tenth Supplemental Indenture”), and this Eleventh Supplemental Indenture (this
“Eleventh Supplemental Indenture,” and together with the Base Indenture, the First Supplemental
Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth
Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture, the
Seventh Supplemental Indenture, the Eighth Supplemental Indenture, the Ninth Supplemental Indenture
and the Tenth Supplemental Indenture, the “Indenture”), which supplements, amends and restates that
certain Indenture of Mortgage, dated as of March 11, 2004, as supplemented by the First
Supplemental Indenture thereto, dated as of March 23, 2004 and the Second Supplemental Indenture
thereto, dated as of April 12, 2004, providing for the issuance by the Company of an unlimited
number of series of Bonds (as defined in the Base Indenture) from time to time.

     B. Under the Base Indenture, the Company is authorized to establish one or more series of
Bonds at any time in accordance with and subject to the provisions of the Base Indenture, and the
terms of such series of Bonds may be described by a supplemental indenture executed by the Company
and the Trustee.

     C. The execution and delivery of this Eleventh Supplemental Indenture has been authorized by a
Board Resolution (as defined in the Base Indenture).

     D. Concurrent with the execution hereof, the Company has caused its counsel to deliver to the
Trustee an Opinion of Counsel (as defined in the Base Indenture) pursuant to Section 13.03 of the
Base Indenture, together with the documents required under Article V of the Base Indenture.

 

 

     E. The Company has done all things necessary to make this Eleventh Supplemental Indenture a
valid agreement of the Company, in accordance with its terms.

     NOW, THEREFORE, the Company and the Trustee agree, for the benefit of each other and for the
equal and proportionate benefit of Holders of the Floating Rate Senior Notes (as defined below)
with respect to all provisions herein applicable to such series of notes, as follows:

ARTICLE I

DEFINITIONS

     Unless the context otherwise requires, capitalized terms used but not defined herein have the
meaning set forth in the Indenture. The following additional terms are hereby established for
purposes of this Eleventh Supplemental Indenture and shall have the meanings set forth in this
Eleventh Supplemental Indenture only for purposes of this Eleventh Supplemental Indenture:

     “Calculation Agency Agreement” means the Calculation Agency Agreement, dated as of October 12,
2010, by and between the Company and the Calculation Agent, as such agreement may be amended,
modified or supplemented from time to time.

     “Calculation Agent” means The Bank of New York Mellon Trust Company, N.A. or such other Person
as the Company shall from time to time designate in accordance with the Calculation Agency
Agreement.

     “Floating Rate Senior Notes” has the meaning set forth in Section 201 hereto.

     “Original Issue Date” means October 12, 2010.

 

     The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this
Eleventh Supplemental Indenture as a whole and not to any particular Article, Section or other
subdivision.

ARTICLE II

ESTABLISHMENT OF THE FLOATING RATE SENIOR NOTES; TERMS

     SECTION 201 Establishment and Designation of the Floating Rate Senior Notes.

     Pursuant to the terms hereof and Section 3.01 of the Indenture, the Company hereby establishes
a thirty-first series of Bonds designated as the “Floating Rate Senior Notes due October 11, 2011”
(the “Floating Rate Senior Notes”). The Floating Rate Senior Notes may be reopened, from time to
time, for issuances of additional Bonds of such series, and any additional Bonds issued and
comprising Floating Rate Senior Notes shall have identical terms as the Floating Rate Senior Notes,
except that the issue price, issue date and, in some cases, the first Interest Payment Date may
differ.

2

 

     SECTION 202 Form of the Floating Rate Senior Notes.

     The Floating Rate Senior Notes shall be issued in the form of one or more Global Bonds in
substantially the form set forth in Exhibit A hereto.

     SECTION 203 Principal Amount of the Floating Rate Senior Notes.

     The Floating Rate Senior Notes shall be issued in an initial aggregate principal amount of
$250,000,000.

     SECTION 204 Interest Rates; Stated Maturity of the Floating Rate Senior Notes.

     The rate of interest on the Floating Rate Senior Notes shall be calculated as set forth in the
form of the Floating Rate Senior Notes attached as Exhibit A hereto.

     The Floating Rate Senior Notes shall have a Stated Maturity of October 11, 2011.

     SECTION 205 No Sinking Fund.

     No sinking fund is provided for the Floating Rate Senior Notes.

     SECTION 206 No Redemption.

     The Floating Rate Senior Notes shall not be subject to redemption prior to their Stated
Maturity.

     SECTION 207 Paying Agent and Bond Registrar.

     The Trustee is hereby appointed as initial Paying Agent and initial Bond Registrar for the
Floating Rate Senior Notes. The Place of Payment of the Floating Rate Senior Notes shall be the
Corporate Trust Office of the Trustee.

     SECTION 208 Calculation Agent.

     The Bank of New York Mellon Trust Company, N.A. is hereby appointed as the initial Calculation
Agent for the Floating Rate Senior Notes.

     SECTION 209 Global Securities; Appointment of Depositary for Global Securities.

     The Floating Rate Senior Notes shall be issued in the form of one or more permanent Global
Bonds as provided in Section 3.13 of the Indenture and deposited with, or on behalf of, the
Depositary, or with the Trustee, as custodian for the Depositary, duly executed by the Company and
authenticated by the Trustee.

     The Company hereby initially appoints The Depository Trust Company (“DTC”) to act as the
Depositary with respect to all Floating Rate Senior Notes, and the Floating Rate Senior Notes shall
initially be registered in the name of Cede & Co., as the nominee of DTC.

3

 

     The Company and DTC have executed a Blanket Letter of Representations, and the Trustee is
hereby authorized, in connection with any successor nominee for DTC or any successor Depositary, to
enter into appropriate or comparable arrangements, if necessary, and shall have the same rights
with respect to its actions thereunder as it has with respect to its actions under the Indenture.

     None of the Company, the Trustee, any Paying Agent or any Bond Registrar will have any
responsibility or liability for any aspect of Depositary records relating to, or payments made on
account of, beneficial ownership interests in a Global Bond or for maintaining, supervising or
reviewing any Depositary records relating to such beneficial ownership interests, or for transfers
of beneficial interests in the Bonds or any transactions between the Depositary and beneficial
owners.

     SECTION 210 Other Terms of the Floating Rate Senior Notes.

     The other terms of the Floating Rate Senior Notes shall be as expressly set forth herein and
in Exhibit A.

ARTICLE III

MISCELLANEOUS

     SECTION 301 Concerning the Trustee.

     In acting under and by virtue of this Eleventh Supplemental Indenture, the Trustee shall have
all of the rights, protections and immunities given to it in the Base Indenture. The Trustee shall
have no responsibility for the validity or sufficiency of this Eleventh Supplemental Indenture.

     SECTION 302 Application of Eleventh Supplemental Indenture.

     Except as provided herein, each and every term and condition contained in this Eleventh
Supplemental Indenture that modifies, amends or supplements the terms and conditions of the
Indenture shall apply only to the Floating Rate Senior Notes established hereby and not to any
other series of Bonds established under the Indenture. Except as specifically amended and
supplemented by, or to the extent inconsistent with, this Eleventh Supplemental Indenture, the
Indenture shall remain in full force and effect and is hereby ratified and confirmed.

     SECTION 303 Effective Date of Eleventh Supplemental Indenture.

     This Eleventh Supplemental Indenture shall be effective upon the execution and delivery hereof
by each of the parties hereto.

     SECTION 304 Counterparts.

     This Eleventh Supplemental Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.

4

 

     IN WITNESS WHEREOF, the parties hereto have caused this Eleventh Supplemental Indenture to be
duly executed by their respective officers hereunto duly authorized, all as of the day and year
first above written.

	 	 	 	 	 
	 	PACIFIC GAS AND ELECTRIC COMPANY,

      as Issuer

 	 
	 	By:  	/s/ Nicholas M. Bijur
 	 
	 	 	Name:  	Nicholas M. Bijur 	 
	 	 	Title:  	Treasurer 	 
	 
	 	THE BANK OF NEW YORK MELLON TRUST

COMPANY, N.A.,

      as Trustee

 	 
	 	By:  	/s/ Teresa Petta
 	 
	 	 	Name:  	Teresa Petta 	 
	 	 	Title:  	Vice President 	 
	 

Signature page to Eleventh Supplemental Indenture

 

 

EXHIBIT A

FORM OF FLOATING RATE SENIOR NOTES DUE OCTOBER 11, 2011

     THIS SENIOR NOTE IS A BOND AND A GLOBAL BOND WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR NOTES IN DEFINITIVE FORM, THIS SENIOR NOTE
MAY NOT BE TRANSFERRED EXCEPT 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.

     UNLESS THIS SENIOR NOTE CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SENIOR NOTE CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     THE FOLLOWING SUMMARY OF TERMS IS SUBJECT TO THE INFORMATION SET FORTH ON THE REVERSE HEREOF:

	 	 	 	 	 

	PRINCIPAL AMOUNT :

$250,000,000

	 	ORIGINAL ISSUE DATE:
October 12, 2010
	 	INTEREST RATE: 3-MONTH LIBOR
PLUS 0.58% PER ANNUM
	 
	 	 	 	 
	MATURITY DATE:

	 	INTEREST PAYMENT DATES:
	 	THIS SENIOR NOTE IS A:
	October 11, 2011

	 	January 11, 2011, April 11, 2011, 

July 11, 2011 and the Maturity Date
	 	þ   Global Book-Entry Bond

o   Certificated Bond
	 
	 	 	 	 
	REGISTERED OWNER:
	 	 	 	 
	Cede & Co., as
nominee of The
Depository Trust
Company
	 	 	 	 

A-1

 

PACIFIC GAS AND ELECTRIC COMPANY

FLOATING RATE SENIOR NOTES DUE OCTOBER 11, 2011

(Floating Rate)

			
	 	 	 
	No. R-1
	 	Principal Amount: $250,000,000
	CUSIP No: 694308 GU5	 	 

     PACIFIC GAS AND ELECTRIC COMPANY, a corporation duly organized and existing under the laws of
the State of California (herein called the “Company,” which term includes any successor Person
pursuant to the applicable provisions of the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co., as nominee for The Depository Trust Company, or
registered assigns, the Principal Amount stated above on the Maturity Date stated above, and to pay
interest thereon from and including the Original Issue Date stated above or, in the case of a
Floating Rate Senior Note Due October 11, 2011 issued upon the registration of transfer or
exchange, from and including the most recent Interest Payment Date to which interest has been paid
or duly provided for, quarterly in arrears on the Interest Payment Dates set forth above and on the
Maturity Date stated above until the principal hereof is paid or made available for payment. The
interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will,
as provided in such Indenture, be paid to the Person in whose name this Floating Rate Senior Note
Due October 11, 2011 (this “Senior Note,” and together with all other Floating Rate Senior Notes
Due October 11, 2011, the “Senior Notes”) (or one or more Predecessor Bonds) is registered at the
close of business on the Regular Record Date for such interest, which shall be the 15th day
preceding such Interest Payment Date; provided, however, that interest payable at the Maturity Date
will be paid to the Person to whom principal is payable. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Senior Note (or one or more Predecessor
Bonds) is registered at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Senior
Notes not less than 10 days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of the Indenture and any securities exchange,
if any, on which the Senior Notes may be listed, and upon such notice as may be required by any
such exchange, all as more fully provided in said Indenture.

     Payments of interest on this Senior Note will include interest accrued to but excluding the
respective Interest Payment Dates. Interest payments for this Senior Note shall be computed and
paid on the basis of a 360-day year and the actual days elapsed.

     Payment of principal of, premium, if any, and interest on Senior Notes shall be made 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. Payments of principal of, premium, if any, and interest on
the Senior Notes represented by a Global Bond shall be made by wire transfer of immediately
available funds to the Holder of such Global Bond, provided that, in the case of payments of

A-2

 

principal and premium, if any, such Global Bond is first surrendered to the Paying Agent. If
any of the Senior Notes are no longer represented by a Global Bond, (i) payments of principal,
premium, if any, and interest due on the Maturity Date of such Senior Notes shall be made at the
office of the Paying Agent upon surrender of such Senior Notes to the Paying Agent, and (ii)
payments of interest shall be made, at the option of the Company, subject to such surrender where
applicable, (A) by check mailed to the address of the Person entitled thereto as such address shall
appear in the Bond Register or (B) by wire transfer to registered Holders of at least $10,000,000
in principal amount of Senior Notes at such place and to such account at a banking institution in
the United States as such Holders may designate in writing to the Trustee at least sixteen (16)
days prior to the date for payment.

     REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SENIOR NOTE SET FORTH ON THE
REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET
FORTH AT THIS PLACE.

     Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Senior Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

A-3

 

     In Witness Whereof, the Company has caused this instrument to be duly executed.

     Dated: October 12, 2010

	 	 	 	 	 
	 	PACIFIC GAS AND ELECTRIC COMPANY

 	 
	 	By:  	
 	 
	 	 	Name:  	Kent M. Harvey	 
	 	 	Title:  	
Senior Vice President, Financial
Services 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Nicholas M. Bijur 	 
	 	 	Title:  	Treasurer 	 

A-4

 

	 	 	 	 	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     This Senior Note is one of the Bonds of the series designated as Bonds of the Thirtieth Series
referred to in the within-mentioned Indenture.

     Dated: October 12, 2010

	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., As Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 

A-5

 

	 	 	 	 	 

Reverse of Senior Note

     This Floating Rate Senior Note Due October 11, 2011 is one of a duly authorized issue of
Bonds of the Company, issued and issuable in one or more series under an Amended and Restated
Indenture, dated as of April 22, 2005 (the “Base Indenture”), as heretofore supplemented and as
further supplemented by an Eleventh Supplemental Indenture, dated as of October 12, 2010 (as so
supplemented, and together with all additional indentures supplemental thereto, and any constituent
instruments establishing the terms of particular Bonds, being herein called the “Indenture”),
between the Company and The Bank of New York Mellon Trust Company, N.A. (formerly The Bank of New
York Trust Company, N.A.), as Trustee (herein called the “Trustee,” which term includes any
successor trustee under the Indenture), and reference is hereby made to the Indenture for a
description of the respective rights, limitations of rights, duties and immunities of the Company,
the Trustee and the Holders of Bonds thereunder and of the terms and conditions upon which Bonds
are, and are to be, authenticated and delivered. This Senior Note is a Bond within the meaning of
the Indenture and is one of the Bonds of the thirtieth series designated as the Floating Rate
Senior Note Due October 11, 2011 established by the Company under the Indenture. The acceptance of
this Senior Note shall be deemed to constitute the consent and agreement by the Holder hereof to
all of the terms and provisions of the Indenture.

     The interest rate on the Senior Notes will be reset quarterly on January 11, 2011, April 11,
2011 and July 11, 2011 (each, an “Interest Reset Date”). The Senior Notes will bear interest at a
per annum rate equal to three-month LIBOR (as defined below) for the applicable Interest Reset
Period or Initial Interest Period (each as defined below) plus 0.58% (58 basis points). The
interest rate for the Initial Interest Period will be three-month LIBOR, determined as of two
London Business Days prior to the Original Issue Date, plus 0.58% (58
basis points) per annum, which shall be 0.86906%.

     The “Initial Interest Period” will be the period from and including the Original Issue Date to
but excluding the initial Interest Reset Date. Thereafter, each “Interest Reset Period” will be the
period from and including an Interest Reset Date to but excluding the immediately succeeding
Interest Reset Date; provided that the final Interest Reset Period for the Senior Notes will be the
period from and including the Interest Reset Date immediately preceding the Maturity Date of such
Senior Notes to but excluding the Maturity Date.

     If any Interest Reset Date would otherwise be a day that is not a Business Day, the Interest
Reset Date will be postponed to the immediately succeeding day that is a Business Day, except that
if that Business Day is in the immediately succeeding calendar month, the Interest Reset Date shall
be the immediately preceding Business Day.

     The interest rate in effect on each day will be (i) if that day is an Interest Reset Date, the
interest rate determined as of the Interest Determination Date (as defined below) immediately
preceding such Interest Reset Date or (ii) if that day is not an Interest Reset Date, the interest
rate determined as of the Interest Determination Date immediately preceding the most recent
Interest Reset Date or the Original Issue Date, as the case may be.

     The interest rate applicable to each Interest Reset Period commencing on the related Interest
Reset Date, or the Original Issue Date in the case of the Initial Interest Period, will be the

A-6

 

rate determined as of the applicable Interest Determination Date. The “Interest Determination
Date” will be the second London Business Day immediately preceding the Original Issue Date, in the
case of the initial Interest Reset Period, or thereafter, will be the second London Business Day
immediately preceding the applicable Interest Reset Date. With respect to any Interest
Determination Date, the Calculation Agent will determine three-month LIBOR in accordance with the
following provisions:

     (i) LIBOR is the rate for deposits in U.S. dollars for the 3-month period which appears on
Reuters Screen LIBOR01 Page (as defined below) at approximately 11:00 a.m., London time, on the
applicable Interest Determination Date. “Reuters Screen LIBOR01 Page” means the display designated
on page “LIBOR01” on Reuters Screen (or such other page as may replace the LIBOR01 page on that
service, any successor service or such other service or services as may be nominated by the British
Bankers’ Association for the purpose of displaying London interbank offered rates for U.S. dollar
deposits). If no rate appears on Reuters Screen LIBOR01 Page, LIBOR for such Interest Determination
Date will be determined in accordance with the provisions of paragraph (ii) below.

     (ii) With respect to an Interest Determination Date on which no rate appears on Reuters Screen
LIBOR01 Page as of approximately 11:00 a.m., London time, on such Interest Determination Date, the
Calculation Agent shall request the principal London offices of each of four major reference banks
(which may include affiliates of the underwriters) in the London interbank market selected by the
Calculation Agent (after consultation with the Company) to provide the Calculation Agent with a
quotation of the rate at which deposits of U.S. dollars having a three-month maturity, commencing
on the second London Business Day immediately following such Interest Determination Date, are
offered by it to prime banks in the London interbank market as of approximately 11:00 a.m., London
time, on such Interest Determination Date in a principal amount equal to an amount of not less than
U.S. $1,000,000 that is representative for a single transaction in such market at such time. If at
least two such quotations are provided, LIBOR for such Interest Determination Date will be the
arithmetic mean of such quotations as calculated by the Calculation Agent. If fewer than two
quotations are provided, LIBOR for such Interest Determination Date will be the arithmetic mean of
the rates quoted as of approximately 11:00 a.m., New York City time, on such Interest Determination
Date by three major banks (which may include affiliates of the underwriters) selected by the
Calculation Agent (after consultation with the Company) for loans in U.S. dollars to leading
European banks having a three-month maturity commencing on the second London Business Day
immediately following such Interest Determination Date and in a principal amount equal to an amount
of not less than U.S. $1,000,000 that is representative for a single transaction in such market at
such time; provided, however, that if the banks selected as aforesaid by the Calculation Agent are
not quoting such rates as mentioned in this sentence, LIBOR for such Interest Determination Date
will be LIBOR determined with respect to the immediately preceding Interest Determination Date.

     All percentages resulting from any calculation of any interest rate for the Senior Notes will
be rounded, if necessary, to the nearest one hundred thousandth of a percentage point, with five
one-millionths of a percentage point rounded upward (e.g., 9.876545% (or .09876545) would be
rounded to 9.87655% (or .0987655), and all dollar amounts will be rounded to the nearest cent, with
one-half cent being rounded upward.

A-7

 

     Promptly upon such determination, the Calculation Agent will notify the Company and the
Trustee (if the Calculation Agent is not the Trustee) of the interest rate for the new Interest
Reset Period. Upon request of a Holder of the Senior Notes, the Calculation Agent will provide to
such Holder the interest rate in effect on the date of such request and, if determined, the
interest rate for the next Interest Reset Period.

     All calculations made by the Calculation Agent for the purposes of calculating interest on the
Senior Notes shall be conclusive and binding on the Holders of the Senior Notes and the Company,
absent manifest errors.

     “Business Day” means any day (1) that is not a Saturday or Sunday and that is not a day on
which banking institutions are authorized or obligated by law or executive order to close in The
City of New York and, for any place of payment outside of The City of New York, in such place of
payment, and (2) that is also a “London Business Day”, which is a day on which dealings in deposits
in U.S. dollars are transacted in the London interbank market.

     Interest will be payable on January 11, 2011, April 11, 2011 and July 11, 2011, and on the
Maturity Date (each an “Interest Payment Date”). In the event that any date on which interest is
payable on this Senior Note (other than the Maturity Date) is not a Business Day, then payment of
the interest payable on such date will be made on the next succeeding day that is a Business Day
(and without any interest or payment in respect of any such delay) with the same force and effect
as if made on the date the payment was originally payable, except that if such Business Day is in
the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding
Business Day. If the Maturity Date falls on a day that is not a Business Day, the payment of
principal, premium, if any, and interest may be made on the next succeeding Business Day with the
same force and effect as if made on the date payment was originally payable, and no interest on
such payment shall accrue for the period from and after maturity.

     Unless otherwise specified on the face hereof, interest payments, if any, will be the amount
of interest accrued from and including the last date in respect of which interest has been paid or
duly provided for (or from and including the Original Issue Date stated above if no interest has
been paid or provided for with respect to this Senior Note) to but excluding the Interest Payment
Date or the Maturity Date. Accrued interest hereon from the Original Issue Date stated above or
from the last date to which interest hereon has been paid is calculated by multiplying the face
amount hereof by an accrued interest factor. Such accrued interest factor is computed by adding
the interest factor calculated for each day from the Original Issue Date stated above or from the
last date to which interest shall have been paid, to the date for which accrued interest is being
calculated. The interest factor for each day shall be computed by dividing the interest rate
applicable to such day by 360. All percentages resulting from any calculation hereon will be
rounded to the nearest one hundred-thousandth of a percentage point, with five-one millionths of a
percentage point rounded upwards. For example, 9.876545% (or .09876545) would be rounded to
9.87655% (or .0987655). All dollar amounts used in or resulting from any calculation hereon will
be rounded to the nearest cent.

     The interest rate on the Senior Notes will in no event be higher than the maximum rate
permitted by California law as the same may be modified by United States law of general
applicability.

A-8

 

     This Senior Note shall not be subject to redemption prior to its Stated Maturity.

     As provided in the Indenture and subject to certain limitations therein set forth, this Senior
Note or any portion of the principal amount hereof will be deemed to have been paid for all
purposes of the Indenture and to be no longer Outstanding thereunder, and the Company’s entire
indebtedness in respect thereof will be satisfied and discharged, if there has been irrevocably
deposited with the Trustee or any Paying Agent (other than the Company), in trust, money in an
amount which will be sufficient and/or Eligible Obligations, the principal of and interest on which
when due, without regard to any reinvestment thereof, will provide moneys which, together with
money, if any, deposited with or held by the Trustee or such Paying Agent, will be sufficient to
pay when due the principal of and premium, if any, and interest on this Senior Note when due.

     If an Event of Default shall occur and be continuing, the Trustee or the Holders of not less
than 33% in aggregate principal amount of the Outstanding Bonds, considered as one class, may
declare the principal amount of all Bonds then Outstanding to be due and payable immediately by
notice in writing to the Company (and to the Trustee if given by Holders); provided, however, that
with respect to certain Events of Default relating to bankruptcy, insolvency and similar events,
the principal amount of all Bonds then Outstanding shall be due and payable immediately without
further action by the Trustee or the Holders.

     The Indenture permits, with certain exceptions as therein provided, the Company and the
Trustee to enter into one or more supplemental indentures for the purpose of adding any provisions
to, or changing in any manner or eliminating any of the provisions of, the Indenture with the
consent of the Holders of not less than a majority in aggregate principal amount of the Bonds at
the time Outstanding, considered as one class; provided, however, that if there shall be Bonds of
more than one series Outstanding under the Indenture and if a proposed supplemental indenture shall
directly affect the rights of the Holders of Bonds of one or more, but less than all, of such
series, then the consent only of the Holders of a majority in aggregate principal amount of the
Outstanding Bonds of all series so directly affected, considered as one class, shall be required;
and provided, further, that if the Bonds of any series shall have been issued in more than one
Tranche and if a proposed supplemental indenture shall directly affect the rights of the Holders of
Bonds of one or more, but less than all, of such Tranches, then the consent only of the Holders of
a majority in aggregate principal amount of the Outstanding Bonds of all Tranches so directly
affected, considered as one class, shall be required; and provided, further, that the Indenture
permits the Company and the Trustee to enter into one or more supplemental indentures for certain
purposes without the consent of any Holders of Bonds. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of Bonds, on behalf of the
Holders of all such Bonds, to waive certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Senior Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Senior Note and of any Senior Note
issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether
or not notation of such consent or waiver is made upon this Senior Note.

     As provided in and subject to the provisions of the Indenture, the Holder of this Senior Note
shall not have the right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall

A-9

 

have previously given the Trustee written notice of a continuing Event of Default, the Holders
of at least 33% in aggregate principal amount of the Bonds at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from
the Holders of at least a majority in aggregate principal amount of Bonds at the time Outstanding a
direction inconsistent with such written request, and shall have failed to institute any such
proceeding for 60 days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Senior Note for the enforcement of any
payment of principal hereof or any premium or interest hereon on or after the respective due dates
expressed herein.

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

     As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Senior Note is registrable in the Bond Register, upon surrender of this Senior
Note for registration of transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Senior Note are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Company, the Trustee or
the Bond Registrar, as the case may be, duly executed by the Holder hereof or such Holder’s
attorney duly authorized in writing, and thereupon one or more new Senior Notes of like tenor, of
authorized denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.

     The Senior Notes are issuable only in registered form without coupons in denominations of
$1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Senior Notes are exchangeable for a like aggregate principal amount
of Senior Notes and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

     Prior to due presentment of this Senior Note for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Senior
Note is registered as the owner hereof for all purposes, whether or not this Senior Note is
overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

     This Senior Note shall be governed by, and construed and enforced in accordance with, the laws
of the State of California without regard to the principles of conflicts of laws thereunder, except
to the extent that the Trust Indenture Act shall be applicable.

A-10

 

     As provided in the Indenture, no recourse shall be had for the payment of the principal of,
premium, if any, or interest with respect to this Senior Note, or any part thereof, or for any
claim based hereon or otherwise in respect hereof, or of the indebtedness represented hereby, or
upon any obligation, covenant or agreement under the Indenture, against any incorporator,
shareholder, officer or director, as such, past, present or future, of the Company or of any
predecessor or successor corporation (either directly or through the Company or a predecessor or
successor corporation), whether by virtue of any constitutional provision, statute or rule of law
or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and
understood that the Indenture and all the Bonds are solely corporate obligations and that any such
personal liability is hereby expressly waived and released as a condition of, and as part of the
consideration for, the execution of the Indenture and the issuance of this Senior Note.

     All terms used in this Senior Note which are not defined herein shall have the meanings
assigned to them in the Indenture.

A-11

 

ASSIGNMENT FORM

To assign this Senior Note, fill in the form below: (I) or (we) assign and transfer this
Senior Note to

 
(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 
(Print or type assignee’s name, address and zip code)

and irrevocably appoint  
to transfer this Senior Note on the books of the Company. The agent may substitute another to act
for him.

 

Date: ___________

	 	 	 

	 
	 	 
	 

	 	Your signature:  
	 

	 	(Sign exactly as your name appears on the face of this Senior
Note)
	 
	 	 
	 

	 	Tax Identification No.:  
	 
	 	 
	 

	 	SIGNATURE GUARANTEE:
	 
	 	 
	 

	 	
 

	 
	 	 
	 

	 	Signatures must be guaranteed by an “eligible guarantor
institution” meeting the requirements of the Bond Registrar,
which requirements include membership or participation in the
Securities Transfer Agent Medallion Program (“STAMP”) or such
other “signature guarantee program” as may be determined by
the Bond Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.

A-12

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