Document:

EX-10.2

 Exhibit 10.2 

Execution Version 

RECOVERY PROPERTY PURCHASE AND SALE AGREEMENT 

by and between 

PG&E RECOVERY FUNDING LLC, 

as Issuer 
 and 

PACIFIC GAS AND ELECTRIC COMPANY, 

as Seller 
 Dated as of
November 12, 2021 
  

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	 ARTICLE I DEFINITIONS
	  	 	1	 
	 SECTION 1.01.
	 	Definitions	  	 	1	 
	 SECTION 1.02.
	 	Other Definitional Provisions	  	 	2	 
		
	 ARTICLE II CONVEYANCE OF RECOVERY PROPERTY
	  	 	2	 
	 SECTION 2.01.
	 	Conveyance of Recovery Property	  	 	2	 
	 SECTION 2.02.
	 	Conditions to Sale of Recovery Property	  	 	3	 
		
	 ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER
	  	 	4	 
	 SECTION 3.01.
	 	Organization and Good Standing	  	 	4	 
	 SECTION 3.02.
	 	Due Qualification	  	 	5	 
	 SECTION 3.03.
	 	Power and Authority	  	 	5	 
	 SECTION 3.04.
	 	Binding Obligation	  	 	5	 
	 SECTION 3.05.
	 	No Violation	  	 	5	 
	 SECTION 3.06.
	 	No Proceedings	  	 	6	 
	 SECTION 3.07.
	 	Consents and Approvals	  	 	6	 
	 SECTION 3.08.
	 	The Recovery Property	  	 	6	 
	 SECTION 3.09.
	 	Change in Law	  	 	9	 
	 SECTION 3.10.
	 	Limitations on Representations and Warranties	  	 	10	 
		
	 ARTICLE IV COVENANTS OF THE SELLER
	  	 	10	 
	 SECTION 4.01.
	 	Existence	  	 	10	 
	 SECTION 4.02.
	 	No Liens	  	 	10	 
	 SECTION 4.03.
	 	Delivery of Collections; Sale of Certain Assets	  	 	10	 
	 SECTION 4.04.
	 	Notice of Liens	  	 	11	 
	 SECTION 4.05.
	 	Compliance with Law	  	 	11	 
	 SECTION 4.06.
	 	Covenants Related to Recovery Bonds and Recovery Property	  	 	11	 
	 SECTION 4.07.
	 	Protection of Title	  	 	13	 
	 SECTION 4.08.
	 	Nonpetition Covenants	  	 	13	 
	 SECTION 4.09.
	 	Taxes	  	 	13	 
	 SECTION 4.10.
	 	Notice of Breach to Rating Agencies, Etc.	  	 	14	 
	 SECTION 4.11.
	 	Use of Proceeds	  	 	14	 
	 SECTION 4.12.
	 	Further Assurances	  	 	14	 
		
	 ARTICLE V THE SELLER
	  	 	14	 
	 SECTION 5.01.
	 	Liability of Seller; Indemnities	  	 	14	 
	 SECTION 5.02.
	 	Merger, Conversion or Consolidation of, or Assumption of the Obligations of, Seller	  	 	15	 
	 SECTION 5.03.
	 	Limitation on Liability of Seller and Others	  	 	16	 
		
	 ARTICLE VI MISCELLANEOUS PROVISIONS
	  	 	16	 
	 SECTION 6.01.
	 	Amendment	  	 	16	 

  
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	 SECTION 6.02.
	 	Notices	  	 	17	 
	 SECTION 6.03.
	 	Assignment	  	 	17	 
	 SECTION 6.04.
	 	Limitations on Rights of Third Parties	  	 	17	 
	 SECTION 6.05.
	 	Severability	  	 	18	 
	 SECTION 6.06.
	 	Separate Counterparts	  	 	18	 
	 SECTION 6.07.
	 	Headings	  	 	18	 
	 SECTION 6.08.
	 	Governing Law	  	 	18	 
	 SECTION 6.09.
	 	Assignment to Indenture Trustee	  	 	18	 
	 SECTION 6.10.
	 	Limitation of Liability	  	 	18	 
	 SECTION 6.11.
	 	Waivers	  	 	19	 

  

  
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 This RECOVERY PROPERTY PURCHASE AND SALE AGREEMENT, dated as of November 12, 2021 (this
“Agreement”), is between PG&E RECOVERY FUNDING LLC, a Delaware limited liability company (the “Issuer”), and PACIFIC GAS AND ELECTRIC COMPANY, a California corporation (together with its successors in interest
to the extent permitted hereunder, the “Seller” or “PG&E”). 
 RECITALS 

WHEREAS, the Issuer desires to purchase the Recovery Property created pursuant to the Wildfire Financing Law and the Financing Order and as
further described in the Issuance Advice Letter; 
 WHEREAS, the Seller is willing to sell its rights and interests in and to the Recovery
Property to the Issuer whereupon such rights and interests will become the Recovery Property; 
 WHEREAS, the Issuer, in order to finance
the purchase of the Recovery Property, will enter into that certain Indenture, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”) between the Issuer and The Bank
of New York Mellon Trust Company, N.A., a national banking association, in its capacity as Indenture Trustee (the “Indenture Trustee”) and in its separate capacity as a securities intermediary (the “Securities
Intermediary”), and issue the Recovery Bonds thereunder and under the Series Supplement (as defined in the Indenture); and 

WHEREAS, the Issuer, to secure its obligations under the Recovery Bonds and the Indenture, will pledge, among other things, all right, title
and interest of the Issuer in and to the Recovery Property and this Agreement to the Indenture Trustee for the benefit of the Secured Parties. 

AGREEMENT 
 NOW, THEREFORE, in
consideration of the premises and the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 

ARTICLE I 

DEFINITIONS 
 SECTION 1.01.
Definitions.  
 (a) Unless otherwise defined herein, capitalized terms used herein shall have the meanings specified in the
Indenture (including Appendix A attached thereto). 
 (b) Whenever used in this Agreement, the following words and phrases shall have
the following meanings: 

 “Financing Order” means the order of the CPUC, D.21-06-030, issued on June 24, 2021, which became effective on July 6, 2021. 

“Fixed Recovery Charges” means the Fixed Recovery Charges authorized to be imposed and collected pursuant to the Financing
Order and the Issuance Advice Letter. 
 “Issuance Advice Letter” means the Issuance Advice Letter filed with the CPUC
pursuant to the Wildfire Financing Law and the Financing Order with respect to the Recovery Bonds. 
 “Recovery Property”
means the “recovery property” as defined in Section 850(b)(11) of the Wildfire Financing Law that is established pursuant to the Financing Order, being all right, title and interest of PG&E: (i) in and to Fixed Recovery
Charges in the amounts authorized to be imposed and collected under the Financing Order, including the rights to obtain adjustments to Fixed Recovery Charges in accordance with Wildfire Financing Law and the Financing Order, and (ii) all
revenues, collections, claims, payments, moneys, or proceeds of or arising from the Fixed Recovery Charges. 
 “Tariff”
means the rate tariff filed with the CPUC as the Issuance Advice Letter delivered pursuant to the Financing Order to evidence the Fixed Recovery Charges, as amended. 

SECTION 1.02. Other Definitional Provisions. 

(a) All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein. 
 (b) The words “hereof,” “herein,” “hereunder” and words of
similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section, Schedule and Exhibit references contained in this Agreement are references to Sections, Schedules
and Exhibits in or to this Agreement unless otherwise specified; and the term “including” shall mean “including without limitation”. 

(c) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. 

ARTICLE II 

CONVEYANCE OF RECOVERY PROPERTY 

SECTION 2.01. Conveyance of Recovery Property.  

(a) In consideration of the Issuer’s payment to the Seller of $850,048,000, subject to the conditions specified in
Section 2.02, the Seller does hereby irrevocably sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse except as otherwise set forth herein, all right, title and interest of the Seller in and
to the Recovery Property (such sale, transfer, assignment, set over and conveyance of the Recovery Property includes, to the fullest 

  
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extent permitted by the Wildfire Financing Law, the assignment of all revenues, collections, claims, rights, payments, money or proceeds of or arising from the Fixed Recovery Charges and the
Tariff evidencing such charges. Such sale, transfer, assignment, set over and conveyance is hereby expressly stated to be a sale and, pursuant to Section 850.4(a) of the Wildfire Financing Law, shall be treated as an absolute transfer of all of
the Seller’s right, title and interest (as in a true sale) and not as a pledge or other financing, of the Recovery Property. This is the statement referred to in Section 850.4(a) of the Wildfire Financing Law. If such sale, transfer,
assignment, set over and conveyance is held not to be a true sale as contemplated by Section 850.4(a) of the Wildfire Financing Law, then such sale, transfer, assignment, set over and conveyance shall be treated as the grant of a security
interest in the Recovery Property and the Seller hereby grants to the Issuer a security interest in the Recovery Property and the proceeds thereof to secure its obligations hereunder. 

(b) Subject to Section 2.02, the Issuer does hereby purchase the Recovery Property from the Seller for the
consideration set forth in Section 2.01(a). 
 SECTION 2.02. Conditions to Sale of Recovery Property.
 
 The obligation of the Issuer to purchase Recovery Property on the Closing Date shall be subject to the satisfaction of each of the
following conditions: 
 (i) on or prior to the Closing Date, the Seller must duly execute and deliver this Agreement to the Issuer; 

(ii) on or prior to the Closing Date, the Seller shall have received the Financing Order creating the Recovery Property; 

(iii) on or prior to the Closing Date, the Seller must have filed the Issuance Advice Letter with the CPUC, and such letter must be effective;

 (iv) as of the Closing Date, the Seller is not insolvent and will not have been made insolvent by such sale and the Seller is not aware of
any pending insolvency with respect to itself; 
 (v) as of the Closing Date, the representations and warranties of the Seller set forth in
this Agreement shall be true and correct with the same force and effect as if made on the Closing Date (except to the extent that they relate to an earlier date); on and as of the Closing Date no breach of any covenant or agreement of the Seller
contained in this Agreement has occurred and is continuing; and no Servicer Default shall have occurred and be continuing; 
 (vi) as of the
Closing Date, (i) the Issuer shall have sufficient funds available to pay the purchase price for the Recovery Property to be conveyed on such date and (B) all conditions to the issuance of the Recovery Bonds intended to provide such funds
set forth in the Indenture shall have been satisfied or waived; 

  
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 (vii) on or prior to the Closing Date, the Seller shall have taken all action required to
transfer to the Issuer ownership of the Recovery Property to be conveyed on such date, free and clear of all Liens other than Liens created by the Issuer pursuant to the Basic Documents and to perfect such transfer, including, without limitation,
filing any statements or filings under the Wildfire Financing Law or the UCC; and the Issuer or the Servicer, on behalf of the Issuer, shall have taken any action required for the Issuer to grant the Indenture Trustee a first priority perfected
security interest in the Recovery Bond Collateral and maintain such security interest as of such date; 
 (viii) the Seller shall have
received and delivered to the Issuer and the Indenture Trustee an opinion or opinions of outside tax counsel (as selected by the Seller, and in form and substance reasonably satisfactory to the Issuer and the Underwriters) to the effect that
(i) the Issuer will not be subject to United States federal income tax as an entity separate from its sole owner and that the Recovery Bonds will be treated as debt of the Issuer’s sole owner for United States federal income tax purposes,
and (ii) the issuance of the Recovery Bonds will not result in gross income to the Seller. The opinion of outside tax counsel described above may, if the Seller so chooses, be conditioned on the receipt by the Seller of one or more letter
rulings from the Internal Revenue Service (unless the Internal Revenue Service has announced that it will not rule on the issues described in this paragraph) and in rendering such opinion outside tax counsel shall be entitled to rely on the rulings
contained in such ruling letters and to rely on the representations made, and information supplied, to the Internal Revenue Service in connection with such letter rulings; 

(ix) on and as of the Closing Date, each of the LLC Agreement, the Servicing Agreement, this Agreement, the Indenture, the Financing Order, the
Tariff and the Wildfire Financing Law shall be in full force and effect; and 
 (x) the Seller shall have delivered to the Indenture Trustee
and the Issuer an Officers’ Certificate confirming the satisfaction of each condition precedent specified in this Section 2.02. 

ARTICLE III 

REPRESENTATIONS AND WARRANTIES OF SELLER 

Subject to Sections 3.10, the Seller makes the following representations and warranties, as of the Closing Date, and the Seller
acknowledges that the Issuer has relied thereon in acquiring the Recovery Property. The representations and warranties shall survive the sale and transfer of Recovery Property to the Issuer and the pledge thereof to the Indenture Trustee pursuant to
the Indenture. The Seller agrees that (i) the Issuer may assign the right to enforce the following representations and warranties to the Indenture Trustee and (ii) the representations and warranties inure to the benefit of the Issuer and
the Indenture Trustee. 
 SECTION 3.01. Organization and Good Standing.  

(a) The Seller is duly organized and validly existing and in good standing under the laws of the State of California, with requisite corporate
power and authority to own its properties as owned on the Closing Date and to conduct its business as conducted by it, on the Closing Date, to obtain the Financing Order and to own, sell and transfer Recovery Property and to execute, deliver and
perform the terms of this Agreement. 

  
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 (b) After giving effect to the sale of the Recovery Property under this Agreement, the
Seller: (i) is solvent and expects to remain solvent, (ii) is adequately capitalized to conduct its business and affairs considering its size and the nature of its business and intended purposes, (iii) is not engaged and does not
expect to engage in a business for which its remaining property represents an unreasonably small capital, (iv) reasonably believes that it will be able to pay its debts as they become due and (v) is able to pay its debts as they mature and
does not intend to incur, nor does it believe that it will incur, indebtedness that it will not be able to repay at its maturity. 
 SECTION
3.02. Due Qualification.  
 The Seller is duly qualified to do business and is in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business shall require such qualifications, licenses or approvals (except where the failure to so qualify or obtain such
licenses and approvals would not be reasonably likely to have a material adverse effect on the Seller’s business, operations, assets, revenues or properties). 

SECTION 3.03. Power and Authority.  

The Seller has the requisite corporate or other power and authority to execute and deliver this Agreement and to carry out its terms; and the
execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the Seller under its organizational or governing documents and laws. 

SECTION 3.04. Binding Obligation.  

This Agreement constitutes a legal, valid and binding obligation of the Seller enforceable against it in accordance with its terms, subject to
applicable insolvency, reorganization, moratorium, fraudulent transfer and other laws relating to or affecting creditors’ or secured parties’ rights generally from time to time in effect and to general principles of equity (including
concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law. 

SECTION 3.05. No Violation.  

The consummation by the Seller of the transactions contemplated by this Agreement (a) do not conflict with the organizational documents of
the Seller or any indenture or other agreement or instrument to which the Seller is a party or by which it or any of its property is bound, nor will consummation by the Seller of the transactions contemplated hereunder result in the creation or
imposition of any Lien upon its properties pursuant to the terms of such indenture, agreement or other instrument (other than any that may be granted under the Basic Documents or the Lien arising under Section 850.3(g) of the Wildfire Financing
Law, the Financing Order and the Issuance Advice Letter) or violate any existing law or any existing order, rule or regulation applicable to the Seller and (b) is consistent with the Wildfire Financing Law and the Financing Order. 

  
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 SECTION 3.06. No Proceedings.  

(a) There are no proceedings pending and, to the Seller’s knowledge, there are no proceedings threatened and, to the Seller’s
knowledge, there are no investigations pending or threatened, before any Governmental Authority having jurisdiction over the Seller or its properties involving or relating to the Seller or the Issuer or, to the Seller’s knowledge, any other
Person: (i) asserting the invalidity of the Wildfire Financing Law, the Financing Order, the Issuance Advice Letter, this Agreement, any of the other Basic Documents or the Recovery Bonds, (ii) seeking to prevent the issuance of the
Recovery Bonds or the consummation of any of the transactions contemplated by this Agreement or any of the other Basic Documents, (d) seeking any determination or ruling that could reasonably be expected to materially and adversely affect the
performance by the Seller of its obligations under, or the validity or enforceability of the Wildfire Financing Law, the Financing Order, the Issuance Advice Letter, this Agreement, any of the other Basic Documents or the Recovery Bonds or
(e) seeking to adversely affect the federal income tax or state income or franchise tax classification of the Recovery Bonds as debt. 

(b) There is no order by any court or regulatory agency providing for the revocation, alteration, limitation or other impairment of the
Wildfire Financing Law, the Financing Order, the Issuance Advice Letter, the Recovery Property or the Fixed Recovery Charges or any rights arising under any of them or that seeks to enjoin the performance of any obligations under the Financing
Order. 
 SECTION 3.07. Consents and Approvals.  

(a) The Seller filed its written consent to the terms and conditions to the Financing Order on June 29, 2021, as required by
Section 850.1(d) of the Wildfire Financing Law. 
 (b) No governmental approvals, authorizations, consents, orders or other actions or
filings, other than filings under the Wildfire Financing Law, are required for the Seller to execute, deliver and perform its obligations under this Agreement except those which have been obtained or made or are required to be made by the Seller in
the future pursuant to this Agreement. 
 SECTION 3.08. The Recovery Property. 

(a) Information. Subject to subsection (f) below, at the Closing Date, all written information, as amended or supplemented
from time to time, provided by the Seller to the Issuer with respect to the Recovery Property is true and correct in all material respects. 

  
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 (b) Title. It is the intention of the parties hereto that (other than for federal
income tax purposes and, to the extent consistent with applicable state tax law, state income and franchise tax purposes) the transfers and assignments herein contemplated each constitute a sale and absolute transfer of the Recovery Property from
the Seller to the Issuer and that no interest in, or right or title to, the Recovery Property shall be part of the Seller’s estate in the event of the filing of a bankruptcy petition by or against the Seller under any bankruptcy law. No portion
of the Recovery Property has been sold, transferred, assigned or pledged or otherwise conveyed by the Seller to any Person other than the Issuer, and no security agreement, financing statement or equivalent security or lien instrument listing the
Seller as debtor covering all or any part of the Recovery Property is on file or of record in any jurisdiction, except such as may have been filed, recorded or made in favor of the Issuer or the Indenture Trustee in connection with the Basic
Documents. The Seller has not authorized the filing of and is not aware (after due inquiry) of any financing statement against it that includes a description of collateral including the Recovery Property other than any financing statement filed,
recorded or made in favor of the Issuer or the Indenture Trustee in connection with the Basic Documents. The Seller is not aware (after due inquiry) of any judgment or tax lien filings against either the Seller or the Issuer. At the Closing Date,
immediately prior to the sale of the Recovery Property hereunder, the Seller is the original and the sole owner of the Recovery Property free and clear of all Liens and rights of any other Person, and no offsets, defenses or counterclaims exist or
have been asserted with respect thereto. 
 (c) Transfer Filings. On the Closing Date, immediately upon the sale under this Agreement,
the Recovery Property transferred on the Closing Date shall be validly transferred and sold to the Issuer, the Issuer shall own all such Recovery Property, free and clear of all Liens, except for the Lien arising under Section 850.3(g) of the
Wildfire Financing Law, the Financing Order and the Issuance Advice Letter, and all filings (including filings with the Secretary of State of California under the Wildfire Financing Law) necessary in any jurisdiction to give the Issuer a perfected
ownership interest in the Recovery Property shall have been made. 
 (d) Financing Order, Issuance Advice Letter and Tariff; Other
Approvals. Under the laws of the State of California (including the Wildfire Financing Law) and the United States in effect on the Closing Date: (i) the Financing Order and the Issuance Advice Letter pursuant to which the rights and the
interests of the Seller have been created, including the right to impose, collect and receive the Fixed Recovery Charges and the interest in and to the Recovery Property is in full force and effect, and the Seller has validly and irrevocably
consented to the terms of the Financing Order, (ii) as of the Closing Date, subject to the limitations set forth in Section 850.1(g) of the Wildfire Financing Law, the Recovery Bonds are entitled to the protection provided in the first
sentence of Section 850.1(e) and the first sentence of Section 850.2(f) of the Wildfire Financing Law, (iii) as of the Closing Date, the Tariff has been filed with the CPUC in accordance with the Financing Order, (iv) the process
by which the Financing Order was approved and the Financing Order, the Issuance Advice Letter and the Tariff comply with all applicable laws and regulations, (v) the Issuance Advice Letter and the Tariff have been filed in accordance with the
Financing Order, (vi) no other approval, authorization, consent, order or other action of, or filing with any governmental authority is required on the part of the Seller in connection with the creation of the Recovery Property, except those
that have been obtained or made, and (vii) under the “contract clause” of the U.S. Constitution and the “contract clause” of the California Constitution, Holders of the Recovery Bonds could, absent a demonstration by the
State of California that such action is necessary to further a significant and legitimate public purpose, successfully challenge the constitutionality of any legislative action that limits, alters, impairs or reduces the value of the recovery
property or the fixed recovery charges so as to impair (a) the terms of the indenture or the bonds or (b) the rights and remedies of the bondholders determined by such court to limit, alter, impair or reduce the value of the recovery
property or the fixed recovery charges prior to the time that the bonds are fully paid and discharged. 

  
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 (e) State Action. Under the Wildfire Financing Law, the State of California has
pledged that it will not take or permit any action that would impair the value of the Recovery Property transferred on such date, or, except as permitted by Section 850.1(g) of the Wildfire Financing Law, reduce, alter or impair the Fixed
Recovery Charges relating to the Recovery Property until the principal, interest and premium and any other charges incurred and contracts to be performed in connection with the Recovery Bonds relating to the Recovery Property have been paid and
performed in full. Under the laws of the State of California and the United States, any law enacted by the State of California, whether by legislation or voter initiative, that repeals or amends the Wildfire Financing Law or take any other action in
contravention of the State pledge would constitute a “taking,” for which just compensation must be paid, if, for a public use, either the law (a) constituted a permanent appropriation of a substantial property interest of the
bondholders in the recovery property or denied all economically productive use of the Recovery Property; (b) destroyed the recovery property other than in response to emergency conditions; or (c) substantially reduced, altered or impaired
the value of the recovery property so as to unduly interfere with the reasonable expectations of the bondholders arising from their investments in the Recovery Bonds. There is no assurance, however, that, even if a court were to award just
compensation it would be sufficient to pay the full amount of principal and interest on the Recovery Bonds. 
 (f) Assumptions. On the
Closing Date, based upon the information available to the Seller on such date, the assumptions used in calculating the Fixed Recovery Charges are reasonable and are made in good faith. Notwithstanding the foregoing, the Seller makes no
representation or warranty, express or implied, that amounts actually collected arising from those Fixed Recovery Charges will in fact be sufficient to meet the payment obligations on the related Recovery Bonds or that the assumptions used in
calculating such Fixed Recovery Charges will in fact be realized. 
 (g) Creation of Recovery Property. Upon the filing of the
Issuance Advice Letter with respect to the Recovery Property pursuant to the Financing Order: (i) the related rights and interests of the Seller under the Financing Order, including the right to impose, collect and receive the Fixed Recovery
Charges established pursuant to the Financing Order, will become Recovery Property, (ii) the Recovery Property will constitute a current property right, (iii) the Recovery Property will include the right, title and interest of the Seller
to the Tariff imposing the Fixed Recovery Charges, and the right to obtain periodic true-up adjustments of the Fixed Recovery Charges, (iv) the owner of the Recovery Property will be legally entitled to
bill Fixed Recovery Charges and collect payments in respect of the Fixed Recovery Charges in the aggregate amount sufficient to pay or fund, in accordance with the Indenture, the principal of the Recovery Bonds, all interest thereon, and all other
Ongoing Financing Costs, and (v) the Recovery Property will not be subject to any Lien, except for the lien arising under Section 850.3(g) of the Wildfire Financing Law, the Financing Order and the Issuance Advice Letter. 

  
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 (h) Nature of Representations and Warranties. The representations and warranties set
forth in this Section 3.08, insofar as they involve conclusions of law, are made not on the basis that the Seller purports to be a legal expert or to be rendering legal advice, but rather to reflect the parties’ good
faith understanding of the legal basis on which the parties are entering into this Agreement and the other Basic Documents and the basis on which the Holders are purchasing the Recovery Bonds, and to reflect the parties’ agreement that, if such
understanding turns out to be incorrect or inaccurate, the Seller will be obligated to indemnify the Issuer and its permitted assigns (to the extent required by and in accordance with Section 5.01), and that the Issuer and
its permitted assigns will be entitled to enforce any rights and remedies under the Basic Documents, on account of such inaccuracy to the same extent as if the Seller had breached any other representations or warranties hereunder. 

(i) Under existing law as of the Closing Date, Holders will not be responsible for, nor will payments to Holders be reduced by, any sales tax,
gross receipts tax, general corporation tax, single business tax, personal property tax, privilege tax, franchise or license tax, or other tax imposed on the Seller or the Issuer as a result of the sale and assignment of the Recovery Property by the
Seller to the Issuer, the acquisition of the Recovery Property by the Issuer or the issuance and sale by the Issuer of the Recovery Bonds, other than withholding of taxes applicable to Recovery Bond payments and any taxes imposed as a result of a
failure of the Issuer or the Seller to properly withhold or remit taxes imposed with respect to payments on any Recovery Bond. 
 (j)
Prospectus. As of the date hereof, the information describing the Seller under the caption “The Depositor, Seller, Initial Servicer and Sponsor” in the prospectus dated November 4, 2021 relating to the Bonds is true and correct
in all material respects. 
 (k) No Court Order. There is no order by any court providing for the revocation, alteration, limitation
or other impairment of the Wildfire Financing Law, the Financing Order, the Recovery Property or the Fixed Recovery Charges or any rights arising under any of them or that seeks to enjoin the performance of any obligations under the Financing Order.

 (l) Survival of Representations and Warranties. The representations and warranties set forth in this
Section 3.08 shall survive the execution and delivery of this Agreement and may not be waived by any party hereto except pursuant to a written agreement executed in accordance with Article VI and as to which the
Rating Agency Condition has been satisfied. 
 SECTION 3.09. Change in Law. 

The representations and warranties in this Agreement speak as of the Closing Date. Any change in the law by legislative enactment,
constitutional amendment or voter initiative that renders untrue any of the representations or warranties in this Agreement will not constitute a breach under this Agreement. 

  
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 SECTION 3.10. Limitations on Representations and Warranties. 

Without prejudice to any of the other rights of the parties, the Seller will not be in breach of any representation or warranty, as a result of
a change in law by means of any legislative enactment, constitutional amendment or voter initiative. THE SELLER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, THAT BILLED FRCS WILL BE ACTUALLY COLLECTED FROM CONSUMERS. 

ARTICLE IV 

COVENANTS OF THE SELLER 

SECTION 4.01. Existence.  

Subject to Section 5.02, so long as any of the Recovery Bonds are Outstanding, the Seller (a) will keep in full
force and effect its existence and remain in good standing under the laws of the jurisdiction of its organization, (b) will obtain and preserve its qualification to do business, in each case to the extent that in each such jurisdiction such
existence or qualification is or shall be necessary to protect the validity and enforceability of this Agreement, the other Basic Documents to which the Seller is a party and each other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby or to the extent necessary for the Seller to perform its obligations hereunder or thereunder and (c) will continue to operate its distribution system to provide service
to its customers. 
 SECTION 4.02. No Liens.  

Except for the conveyances hereunder or any Lien under or in accordance with Section 850.3(g) of the Wildfire Financing Law in favor of
the Indenture Trustee for the benefit of the Holders and any Lien that may be granted under the Basic Documents, the Seller will not sell, pledge, assign or transfer, or grant, create, incur, assume or suffer to exist any Lien on, any of the
Recovery Property, or any interest therein, and the Seller shall defend the right, title and interest of the Issuer and the Indenture Trustee, on behalf of the Secured Parties, in, to and under the Recovery Property against all claims of third
parties claiming through or under the Seller. PG&E, in its capacity as Seller, will not at any time assert any Lien against, or with respect to, any of the Recovery Property. 

SECTION 4.03. Delivery of Collections; Sale of Certain Assets.  

(a) In the event that the Seller receives any FRC Collections or other payments in respect of the Fixed Recovery Charges or the proceeds
thereof other than in its capacity as the Servicer, the Seller agrees to pay to the Servicer, on behalf of the Issuer, all payments received by it in respect thereof as soon as practicable after receipt thereof. Prior to such remittance to the
Servicer by the Seller, the Seller agrees that such amounts are held by it in trust for the Issuer and the Indenture Trustee. 
 (b) The
Seller shall not continue as or become a party to any trade receivables purchase and sale agreement or similar arrangement under which it sells all or any portion of its accounts receivables owing from Consumers unless the Indenture Trustee, the
Seller and the other parties to such additional arrangement shall have entered into a joinder to the Intercreditor Agreement in connection therewith and the terms of the documentation evidencing such trade receivables purchase and sale arrangement
or similar arrangement shall expressly exclude Recovery Property (including Fixed Recovery Charges) from any receivables or other assets pledged or sold under such arrangement. 

  
 10 

 (c) If the Seller enters into a sale agreement selling to any other Affiliate property
consisting of nonbypassable charges payable by Consumers comparable to those sold by the seller pursuant to the sale agreement, the Rating Agency Condition shall be satisfied with respect to the Recovery Bonds prior to or coincident with such sale
and the Seller shall enter into a joinder to the Intercreditor Agreement with the Issuer, the Indenture Trustee, the issuing entity of any such Additional Recovery Bonds or Additional Other Recovery Bonds and the trustee for such Additional Recovery
Bonds or Additional Other Recovery Bonds. 
 SECTION 4.04. Notice of Liens.  

The Seller shall notify the Issuer and the Indenture Trustee promptly after becoming aware of any Lien on any of the Recovery Property, other
than the conveyances hereunder, any Lien under the Basic Documents or any Lien under or in accordance with Section 850.3(g) of the Wildfire Financing Law created in favor of the Indenture Trustee for the benefit of the Holders. 

SECTION 4.05. Compliance with Law.  

The Seller hereby agrees to comply with its organizational or governing documents and all laws, treaties, rules, regulations and determinations
of any Governmental Authority applicable to it, except to the extent that failure to so comply would not materially adversely affect the Issuer’s or the Indenture Trustee’s interests in the Recovery Property or under any of the other Basic
Documents to which the Seller is party or the Seller’s performance of its obligations hereunder or under any of the other Basic Documents to which it is party. 

SECTION 4.06. Covenants Related to Recovery Bonds and Recovery Property. 

(a) So long as any of the Recovery Bonds are Outstanding, the Seller shall treat the Recovery Property as the Issuer’s property for all
purposes other than financial reporting, state or federal regulatory or tax purposes, and treat the Recovery Bonds as debt for all purposes and specifically as debt of the Issuer, other than for financial reporting, state or federal regulatory or
tax purposes. 
 (b) Solely for the purposes of federal taxes and, to the extent consistent with applicable state, local and other tax law,
for purposes of state, local and other taxes, so long as any of the Recovery Bonds are Outstanding, the Seller agrees to treat the Recovery Bonds as indebtedness of the Seller (as the sole owner of the Issuer) secured by the Recovery Bond Collateral
unless otherwise required by appropriate taxing authorities. 
 (c) So long as any of the Recovery Bonds are Outstanding, the Seller shall
disclose in its financial statements that the Issuer and not the Seller is the owner of the Recovery Property and that the assets of the Issuer are not available to pay creditors of the Seller or its Affiliates (other than the Issuer). 

  
 11 

 (d) So long as any of the Recovery Bonds are Outstanding, the Seller shall not own or
purchase any Recovery Bonds. 
 (e) So long as the Recovery Bonds are Outstanding, the Seller shall disclose the effects of all transactions
between the Seller and the Issuer in accordance with generally accepted accounting principles. 
 (f) The Seller agrees that upon the sale by
the Seller of the Recovery Property to the Issuer pursuant to this Agreement, (i) to the fullest extent permitted by law, the Issuer shall have all of the rights originally held by the Seller with respect to such Recovery Property, including
the right to exercise any and all rights and remedies to collect any amounts payable by any Consumer in respect of such Recovery Property, notwithstanding any objection or direction to the contrary by the Seller and (ii) any payment by any
Consumer to the Issuer shall discharge such Consumer’s obligations in respect of such Recovery Property to the extent of such payment, notwithstanding any objection or direction to the contrary by the Seller. 

(g) So long as any of the Recovery Bonds are Outstanding, (i) in all proceedings relating directly or indirectly to the Recovery Property,
the Seller shall affirmatively certify and confirm that it has sold all of its rights and interests in and to such property (other than for financial reporting or tax purposes), (ii) the Seller shall not make any statement or reference in respect of
the Recovery Property that is inconsistent with the ownership interest of the Issuer (other than for financial reporting or tax purposes), (iii) the Seller shall not take any action in respect of the Recovery Property except solely in its capacity
as Servicer pursuant to the Servicing Agreement or as otherwise contemplated by the Basic Documents, and (iv) neither the Seller nor the Issuer shall take any action, file any tax return, or make any election inconsistent with the treatment of
the Issuer, for purposes of federal taxes and, to the extent consistent with applicable state, local and other tax law, for purposes of state, local and other taxes, as a disregarded entity that is not separate from the Seller (or, if relevant, from
another sole owner of the Issuer). 
 (h) The Seller agrees not to withdraw the filing of the Issuance Advice Letter with the CPUC. 

(i) The Seller shall make all reasonable efforts to keep each Tariff that relates to the Recovery Property in full force and effect. 

(j) Promptly after obtaining knowledge of any breach in any material respect of its representations and warranties in this Agreement, the
Seller shall notify the Issuer, the CPUC and the Rating Agencies of the breach. 
 (k) The Seller shall use the proceeds of the sale of the
Recovery Property in accordance with the Financing Order and the Wildfire Financing Law. 
 (l) Upon the request of the Issuer, the Seller
shall execute and deliver such further instruments and do such further acts as may be necessary to carry out the provisions and purposes of this Agreement. 

  
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 (m) The Seller shall not permit the issuance of any Additional Recovery Bonds or Additional
Other Recovery Bonds by any issuing entity, unless the Rating Agency Condition with respect to the Recovery Bonds is satisfied. 
 SECTION
4.07. Protection of Title.  
 The Seller shall execute and file the filings required by law to perfect and continue the
perfection of the interests of the Issuer in the Recovery Property and the Indenture Trustee’s Lien on the Recovery Property, including all filings required under the Wildfire Financing Law and the UCC relating to the transfer of the ownership
of the rights and interests related to the Recovery Bonds under the Financing Order by the Seller to the Issuer and the pledge of the Recovery Property to the Indenture Trustee. The Seller also agrees to take those legal or administrative actions
that may be reasonably necessary (i) to protect the Issuer and Secured Parties from claims, state actions or other actions or proceedings of third parties which, if successfully pursued, would result in a breach of any representation or
warranty of the Seller set forth in Article III, and the costs of any such actions or proceedings will be paid by the Seller and (ii) to block or overturn any attempts to cause a repeal of, modification of or supplement to the Wildfire
Financing Law, the Financing Order, the Issuance Advice Letter or the rights of Holders by legislative enactment or constitutional amendment that would be materially adverse to the Issuer or the Secured Parties or which would otherwise cause an
impairment of the rights of the Issuer or the Secured Parties. The costs of any such actions or proceedings will be payable by the Seller. 

SECTION 4.08. Nonpetition Covenants.  

Notwithstanding any prior termination of this Agreement or the Indenture, the Seller shall not, prior to the date which is one year and one day
after the termination of the Indenture and payment in full of the Recovery Bonds or any other amounts owed under the Indenture, petition or otherwise invoke or cause the Issuer to invoke the process of any Government Authority for the purpose of
commencing or sustaining an involuntary case against the Issuer under any federal or state bankruptcy, insolvency or similar law, appointing a receiver, liquidator, assignee, Indenture Trustee, custodian, sequestrator or other similar official of
the Issuer or any substantial part of the property of the Issuer, or ordering the winding up or liquidation of the affairs of the Issuer. 

SECTION 4.09. Taxes.  

So long as any of the Recovery Bonds are Outstanding, the Seller shall, and shall cause each of its subsidiaries to, pay all taxes, assessments
and governmental charges imposed upon it or any of its properties or assets or with respect to any of its franchises, business, income or property before any penalty accrues thereon if the failure to pay any such taxes, assessments and governmental
charges would, after any applicable grace periods, notices or other similar requirements, result in a Lien on the Recovery Property; provided that no such tax need be paid if the Seller or one of its Affiliates is contesting the same in good faith
by appropriate proceedings promptly instituted and diligently conducted and if the Seller or such Affiliate has established appropriate reserves as shall be required in conformity with generally accepted accounting principles. 

  
 13 

 SECTION 4.10. Notice of Breach to Rating Agencies, Etc.  

Promptly after obtaining knowledge thereof, in the event of a breach in any material respect (without regard to any materiality qualifier
contained in such representation, warranty or covenant) of any of the Seller’s representations, warranties or covenants contained herein, the Seller shall promptly notify the Issuer, the Indenture Trustee, the CPUC and the Rating Agencies of
such breach. For the avoidance of doubt, any breach which would adversely affect scheduled payments on the Recovery Bonds will be deemed to be a material breach for purposes of this Section 4.10. 

SECTION 4.11. Use of Proceeds.  

The Seller shall use the proceeds of the sale of the Recovery Property in accordance with the Financing Order and the Wildfire Financing Law.

 SECTION 4.12. Further Assurances.  

Upon the request of the Issuer, the Seller shall execute and deliver such further instruments and do such further acts as may be reasonably
necessary to carry out more effectually the provisions and purposes of this Agreement. 
 ARTICLE V 

THE SELLER 
 SECTION 5.01.
Liability of Seller; Indemnities.  
 (a) The Seller shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Seller under this Agreement. 
 (b) The Seller shall indemnify the Issuer and the Indenture
Trustee (for itself, for the benefit of the Holders) and each of the Issuer’s and the Indenture Trustee’s respective officers, directors, members, employees and agents and defend and hold harmless each such person from and against
(i) any and all amounts of principal of and interest on the Recovery Bonds not paid when due or when scheduled to be paid in accordance with their terms, (ii) any other amounts payable to any Person in connection with the Recovery Bonds or
in connection with the Recovery Property, including but not limited to Indenture Trustee’s fees and expenses, that are not paid when due or when scheduled to be paid pursuant to the Indenture, (iii) the amount of any other deposits to the
Collection Account required to have been made in accordance with the terms of the Basic Documents and retained in the Capital Subaccount, or in the Excess Funds Subaccount or released to the Issuer free of the lien of the Indenture, which are not
made when so required, (v) any reasonable costs and expenses incurred by such Person that are not recoverable pursuant to the Indenture and (vi) any taxes payable by Holders resulting in a breach of
Section 3.08(i), in each case to the extent resulting from the Seller’s breach of any of its representations, warranties or covenants contained in this Agreement, except to the extent of losses either resulting from
the willful misconduct, bad faith or gross negligence of such indemnified Persons or resulting from a breach of representation or warranty made by such indemnified Persons in the Indenture or any other document that gives rise to the Seller’s
breach. Indemnification under this paragraph shall survive the resignation or removal of the Indenture Trustee. 

  
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 (c) Notwithstanding Section 5.01(b) above, the Seller shall not be
liable for any loss, damages, liability, obligation, claim, action, suit or payment resulting solely from a downgrade in the ratings on the Recovery Bonds or for any consequential damages, including any loss of market value of the Recovery Bonds
resulting from any default or any downgrade of the ratings of the Recovery Bonds. 
 (d) The indemnities described in this Section will
survive the termination of this Agreement and include reasonable fees and expenses of investigation and litigation, including reasonable attorneys’ fees and expenses. The Seller shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Seller under this Agreement. 
 SECTION 5.02. Merger, Conversion or Consolidation of, or
Assumption of the Obligations of, Seller.  
 Any Person (a) into which the Seller may be merged, converted or consolidated
and that succeeds to all or substantially all of the electric distribution business of the Seller, (b) that results from the division of the Seller into two or more Persons and succeeds to all or substantially all of the electric distribution
business of the Seller, (c) that results from any merger or consolidation to which the Seller shall be a party and that succeeds to all or substantially all of the electric distribution business of the Seller, (d) that succeeds to the
properties and assets of the Seller substantially as a whole, or succeeds to all or substantially all of the electric distribution business of the Seller, or (e) that otherwise succeeds to all or substantially all of the electric distribution
business of the Seller, shall be the successor to the Seller under this Agreement without further act on the part of any of the parties to this Agreement; provided, further, that (i) immediately after giving effect to any transaction referred
to above, no representation or warranty made by the Seller pursuant to Article III shall have been breached and, to the extent the Seller is the Servicer, no Servicer Default under the Servicing Agreement, and no event, that after notice or
lapse of time, or both, would become a Servicer Default under the Servicing Agreement will have occurred and be continuing, (ii) the successor to the Seller must execute an agreement of assumption to perform every obligation of the Seller under
this Agreement, (iii) the Rating Agencies shall have received prior written notice of such transaction, and (iv) the Seller shall have delivered to the Issuer and the Indenture Trustee an Officer’s Certificate and an Opinion of
Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied
with. 

  
 15 

 SECTION 5.03. Limitation on Liability of Seller and Others.  

The Seller and any director, officer, employee or agent of the Seller may rely in good faith on the advice of counsel or on any document of any
kind, prima facie properly executed and submitted by any Person, respecting any matters arising hereunder. Subject to Section 4.07, the Seller shall not be under any obligation to appear in, prosecute or defend any legal
action that is not incidental to its obligations under this Agreement, and that in its opinion may involve it in any expense or liability. 

ARTICLE VI 

MISCELLANEOUS PROVISIONS 

SECTION 6.01. Amendment.  

This Agreement may be amended in writing by the Seller and the Issuer with ten (10) Business Days’ prior written notice to the Rating
Agencies, but without the consent of any of the Holders (i) to cure any ambiguity, to correct or supplement any provisions in this Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the
provisions in this Agreement or of modifying in any manner the rights of the Holders; provided, however, that such action shall not, as evidenced by an Officer’s Certificate delivered to the Issuer and the Indenture Trustee, adversely affect in
any material respect the interests of any Holder or (ii) to conform the provisions hereof to the description of this Agreement in the Prospectus. Promptly after execution of any such amendment or consent, the Issuer shall furnish copies of such
amendment or consent to each of the Rating Agencies. 
 In addition, this Agreement may be amended in writing by the Seller and the Issuer
with (i) the prior written consent of the Indenture Trustee, (ii) the satisfaction of the Rating Agency Condition, and (iii) if any amendment would adversely affect in any material respect the interest of any Holder of the Bonds, the
consent of a majority of the Holders of each affected Tranche of Bonds. In determining whether a majority of Holders have consented, Bonds owned by the Issuer, Seller or any Affiliate of the Issuer or Seller shall be disregarded, except that, in
determining whether the Indenture Trustee shall be protected in relying upon any such consent, the Indenture Trustee shall only be required to disregard any Bonds it actually knows to be so owned. Promptly after the execution of any such amendment
or consent, the Issuer shall furnish copies of such amendment or consent to each of the Rating Agencies. 
 It shall not be necessary for
the consent of Holders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. 

Prior to the execution of any amendment to this Agreement, the Issuer and the Indenture Trustee shall be entitled to receive and rely upon an
Opinion of Counsel from external counsel of the Seller stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent have been satisfied and the Opinion of Counsel referred to in
Section 3.01(c)(i) of the Servicing Agreement. The Issuer and the Indenture Trustee may, but shall not be obligated to, enter into any such amendment which affects the Indenture Trustee’s own rights, duties or
immunities under this Agreement or otherwise. 

  
 16 

 SECTION 6.02. Notices.  

All demands, notices and communications upon or to the Seller, the Issuer, the Indenture Trustee or the Rating Agencies under this Agreement
shall be sufficiently given for all purposes hereunder if in writing, and delivered personally, sent by documented delivery service or, to the extent receipt is confirmed telephonically, sent by electronic transmission: 

(a) in the case of the Seller, to Pacific Gas and Electric Company, at 77 Beale Street, P.O. Box 770000, San Francisco, California 94177,
Attention: Brian M. Wong, Vice President, General Counsel and Corporate Secretary, Telephone: (415) 973-1000; 

(b) in the case of the Issuer, to PG&E Recovery Funding LLC, c/o Pacific Gas and Electric Company at 77 Beale Street, P.O. Box 770000, San
Francisco, California 94177, Attention: Brian M. Wong, Vice President, General Counsel and Corporate Secretary, Telephone: (415) 973-1000; 

(c) in the case of the Indenture Trustee, to the Corporate Trust Office; 

(d) in the case of Moody’s, to Moody’s Investors Service, Inc., ABS/RMBS Monitoring Department, 25th Floor, 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, Email: ServicerReports@moodys.com (all such notices to be delivered to Moody’s in writing by email); 

(e) in the case of Standard & Poor’s, to S&P Global Ratings, a division of S&P Global Inc., Structured Credit
Surveillance, 55 Water Street, New York, New York 10041, Telephone: (212) 438-8991, Email: servicer_reports@spglobal.com (all such notices to be delivered to Standard & Poor’s in writing by
email); and 
 (f) as to each of the foregoing, at such other address as shall be designated by written notice to the other parties. 

SECTION 6.03. Assignment.  

Notwithstanding anything to the contrary contained herein, except as provided in Section 5.02, this Agreement may not
be assigned by the Seller. 
 SECTION 6.04. Limitations on Rights of Third Parties.  

The provisions of this Agreement are solely for the benefit of the Seller, the Issuer, the Indenture Trustee (for the benefit of the Secured
Parties) and the other Persons expressly referred to herein, and such Persons shall have the right to enforce the relevant provisions of this Agreement. Nothing in this Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Recovery Property or under or in respect of this Agreement or any covenants, conditions or provisions contained herein. 

  
 17 

 SECTION 6.05. Severability.  

Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the remainder of such provision (if any) or the remaining provisions hereof (unless such construction shall be unreasonable), and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 
 SECTION 6.06. Separate
Counterparts.  
 This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 
 SECTION 6.07.
Headings.  
 The headings of the various Articles and Sections herein are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof. 
 SECTION 6.08. Governing Law.  

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REFERENCE TO
ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 

SECTION 6.09. Assignment to Indenture Trustee.  

The Seller hereby acknowledges and consents to any mortgage, pledge, assignment and grant of a security interest by the Issuer to the Indenture
Trustee pursuant to the Indenture for the benefit of the Secured Parties of all right, title and interest of the Issuer in, to and under this Agreement, the Recovery Property and the proceeds thereof and the assignment of any or all of the
Issuer’s rights hereunder to the Indenture Trustee for the benefit of the Secured Parties. For the avoidance of doubt, the Indenture Trustee is a third-party beneficiary of this Agreement and is entitled to the rights and benefits hereunder and
may enforce the provisions hereof as if it were a party hereto. 
 SECTION 6.10. Limitation of Liability.  

It is expressly understood and agreed by the parties hereto that this Agreement is executed and delivered by the Indenture Trustee, not
individually or personally but solely as Indenture Trustee on behalf of the Secured Parties, in the exercise of the powers and authority conferred and vested in it. The Indenture Trustee in acting hereunder is entitled to all rights, benefits,
protections, immunities and indemnities accorded to it under the Indenture. 

  
 18 

 SECTION 6.11. Waivers.  

Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by the party or parties entitled to the
benefit thereof; provided, however, that no such waiver delivered by the Issuer shall be effective unless the Indenture Trustee has given its prior written consent thereto. Any such waiver shall be validly and sufficiently authorized for the
purposes of this Agreement if, as to any party, it is authorized in writing by an authorized representative of such party. The failure of any party hereto to enforce at any time any provision of this Agreement shall not be construed to be a waiver
of such provision, nor in any way to affect the validity of this Agreement or any part hereof or the right of any party thereafter to enforce each and every such provision. No waiver of any breach of this Agreement shall be held to constitute a
waiver of any other or subsequent breach. 
 [Signature Page Follows] 

  
 19 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
by their respective officers as of the day and year first above written. 
  

			
	 PG&E RECOVERY FUNDING LLC,
 a
Delaware limited liability Company

		
	By:	 	 /s/ Monica Klemann

		 	 Name: Monica Klemann
 Title:
  Manager, Treasurer and Secretary

	
	 PACIFIC GAS AND ELECTRIC COMPANY,
 a
California Corporation

		
	By:	 	 /s/ Margaret K. Becker

		 	Name: Margaret K. Becker
		 	Title:   Vice President and Treasurer

  

			
	ACKNOWLEDGED AND ACCEPTED:
	
	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
	as Indenture Trustee
		
	By:	 	 /s/ Mitchell L. Brumwell

		 	Name: Mitchell L. Brumwell
		 	Title:   Vice President

 Signature Page to 

Recovery Property Purchase and Sale AgreementEX-10.3

 Exhibit 10.3 

Execution Version 

ADMINISTRATION AGREEMENT 

This ADMINISTRATION AGREEMENT, dated as of November 12, 2021 (this “Administration Agreement”), by and between
Pacific Gas and Electric Company, a California corporation (“PG&E”), as administrator (in such capacity, the “Administrator”), and PG&E Recovery Funding LLC, a Delaware limited liability
company (the “Issuer”). Capitalized terms used but not otherwise defined herein shall have the meanings specified in Appendix A attached to the Indenture (as defined below). 

RECITALS 

WHEREAS, the Issuer is issuing Recovery Bonds pursuant to that certain Indenture, dated as of the date hereof (including Appendix
A thereto, the “Indenture”), by and between the Issuer and The Bank of New York Mellon Trust Company, N.A., a national banking association, in its capacity as indenture trustee (the “Indenture Trustee”) and in
its separate capacity as a securities intermediary (the “Securities Intermediary”), as the same may be amended, restated, supplemented or otherwise modified from time to time, and the Series Supplement; 

WHEREAS, the Issuer has entered into certain agreements in connection with the issuance of the Recovery Bonds, including (i) the
Indenture, (ii) the Recovery Property Servicing Agreement, dated as of November 12, 2021 (the “Servicing Agreement”), by and between the Issuer and PG&E, as Servicer, (iii) the Recovery Property Purchase and Sale
Agreement, dated as of November 12, 2021 (the “Sale Agreement”), by and between the Issuer and PG&E, as Seller and (iv) the other Basic Documents to which the Issuer is a party, relating to the Recovery Bonds (the
Indenture, the Servicing Agreement, the Sale Agreement and the other Basic Documents to which the Issuer is a party, as such agreements may be amended and supplemented from time to time, collectively, the “Related Agreements”); 

WHEREAS, pursuant to the Related Agreements, the Issuer is required to perform certain duties in connection with the Related
Agreements, the Recovery Bonds and the Recovery Bond Collateral pledged to the Indenture Trustee pursuant to the Indenture; 

WHEREAS, the Issuer has no employees, other than its officers and managers, and does not intend to hire any employees, and consequently
desires to have the Administrator perform certain of the duties of the Issuer referred to in the preceding clauses and to provide such additional services consistent with the terms of this Administration Agreement and the Related Agreements as the
Issuer may from time to time request; and 
 WHEREAS, the Administrator has the capacity to provide the services and the facilities
required thereby and is willing to perform such services and provide such facilities for the Issuer on the terms set forth herein. 

 AGREEMENT 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows: 
 SECTION 1. Duties of the Administrator – Management
Services. The Administrator hereby agrees to provide the following corporate management services to the Issuer and to cause third parties to provide professional services required for or contemplated by such services in accordance with the
provisions of this Administration Agreement: 
 (a) furnish the Issuer with ordinary clerical, bookkeeping and other corporate administrative
services necessary and appropriate for the Issuer, including, without limitation, the following services: 
 (i) maintain at
the Premises (as defined below) general accounting records of the Issuer (the “Account Records”), subject to year-end audit, in accordance with generally accepted accounting principles,
separate and apart from its own accounting records, prepare or cause to be prepared such quarterly and annual financial statements as may be necessary or appropriate and arrange for year-end audits of the
Issuer’s financial statements by the Issuer’s independent accountants; 
 (ii) prepare and, after execution by the
Issuer, file with the Securities and Exchange Commission (the “Commission”) and any applicable state agencies documents required to be filed by the Issuer with the Commission and any applicable state agencies, including, without
limitation, periodic reports required to be filed under the Securities Exchange Act of 1934, as amended; 
 (iii) prepare for
execution by the Issuer and cause to be filed such income, franchise or other tax returns of the Issuer as shall be required to be filed by applicable law (the “Tax Returns”) and cause to be paid on behalf of the Issuer from the
Issuer’s funds any taxes required to be paid by the Issuer under applicable law; 
 (iv) prepare or cause to be prepared
for execution by the Issuer’s Managers minutes of the meetings of the Issuer’s Managers and such other documents deemed appropriate by the Issuer to maintain the separate limited liability company existence and good standing of the Issuer
(the “Company Minutes”) or otherwise required under the Related Agreements (together with the Account Records, the Tax Returns, the Company Minutes, the LLC Agreement, and the Certificate of Formation, the “Issuer
Documents”); and any other documents deliverable by the Issuer thereunder or in connection therewith; and 
 (v)
hold, maintain and preserve at the Premises (or such other place as shall be required by any of the Related Agreements) executed copies (to the extent applicable) of the Issuer Documents and other documents executed by the Issuer thereunder or in
connection therewith; 

  
 2 

 (b) take such actions on behalf of the Issuer, as are necessary or desirable for the Issuer
to keep in full effect its existence, rights and franchises as a limited liability company under the laws of the state of Delaware and obtain and preserve its qualification to do business in each jurisdiction in which it becomes necessary to be so
qualified; 
 (c) take such actions on the behalf of the Issuer as are necessary for the issuance and delivery of the Recovery Bonds; 

(d) provide for the performance by the Issuer of its obligations under each of the Related Agreements, and prepare, or cause to be prepared,
all documents, reports, filings, instruments, notices, certificates and opinions that it shall be the duty of the Issuer to prepare, file or deliver pursuant to the Related Agreements; 

(e) to the full extent allowable under applicable law, enforce each of the rights of the Issuer under the Related Agreements, at the direction
of the Indenture Trustee (acting at the direction of Holders of a majority of the Outstanding Amount of the Recovery Bonds); 
 (f) provide
for the defense, at the direction of the Issuer’s Managers, of any action, suit or proceeding brought against the Issuer or affecting the Issuer or any of its assets; 

(g) provide office space (the “Premises”) for the Issuer and such reasonable ancillary services as are necessary to carry out
the obligations of the Administrator hereunder, including telecopying, duplicating and word processing services; 
 (h) undertake such other
administrative services as may be appropriate, necessary or requested by the Issuer; and 
 (i) provide such other services as are incidental
to the foregoing or as the Issuer and the Administrator may agree. 
 In providing the services under this
Section 1 and as otherwise provided under this Administration Agreement, the Administrator will not knowingly take any actions on behalf of the Issuer which (i) the Issuer is prohibited from taking under the Related
Agreements, or (ii) would cause the Issuer to be in violation of any federal, state or local law or the LLC Agreement. 
 In performing
its duties hereunder, the Administrator shall use the same degree of care and diligence that the Administrator exercises with respect to performing such duties for its own account and, if applicable, for others. 

SECTION 2. Compensation. As compensation for the performance of the Administrator’s obligations under this Administration
Agreement (including the compensation of Persons serving as Manager(s), other than the Independent Manager(s), and officers of the Issuer, but, for the avoidance of doubt, excluding the performance by PG&E of its obligations in its capacity as
Servicer), the Administrator shall be entitled to $75,000 annually (the “Administration Fee”), payable by the Issuer in installments of $37,500 on each Payment Date, provided that the first payment may be adjusted for a longer or
shorter first Payment Period. In addition, the Administrator shall be entitled to be reimbursed by the Issuer for all costs and expenses of services performed by unaffiliated third parties and actually incurred by the

  
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Administrator in connection with the performance of its obligations under this Administration Agreement in accordance with Section 3 (but, for the avoidance of doubt,
excluding any such costs and expenses incurred by PG&E in its capacity as Servicer), to the extent that such costs and expenses are supported by invoices or other customary documentation and are reasonably allocated to the Issuer
(“Reimbursable Expenses”). 
 SECTION 3. Third Party Services. Any services required for or contemplated by the
performance of the above-referenced services by the Administrator to be provided by unaffiliated third parties (including independent auditors’ fees and counsel fees) may, if provided for or otherwise contemplated by the Financing Order and if
the Issuer deems it necessary or desirable, be arranged by the Issuer or by the Administrator at the direction (which may be general or specific) of the Issuer. Costs and expenses associated with the contracting for such third-party professional
services may be paid directly by the Issuer or paid by the Administrator and reimbursed by the Issuer in accordance with Section 2, or otherwise as the Administrator and the Issuer may mutually arrange. 

SECTION 4. Additional Information to be Furnished to the Issuer. The Administrator shall furnish to the Issuer from time to time such
additional information regarding the Recovery Bond Collateral as the Issuer shall reasonably request. 
 SECTION 5. Independence of the
Administrator. For all purposes of this Administration Agreement, the Administrator shall be an independent contractor and shall not be subject to the supervision of the Issuer with respect to the manner in which it accomplishes the performance
of its obligations hereunder. Unless expressly authorized by the Issuer, the Administrator shall have no authority, and shall not hold itself out as having the authority, to act for or represent the Issuer in any way and shall not otherwise be
deemed an agent of the Issuer. 
 SECTION 6. No Joint Venture. Nothing contained in this Administration Agreement (a) shall
constitute the Administrator and the Issuer as partners or co-members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (b) shall be construed to
impose any liability as such on either of them or (c) shall be deemed to confer on either of them any express, implied or apparent authority to incur any obligation or liability on behalf of the other. 

SECTION 7. Other Activities of Administrator. Nothing herein shall prevent the Administrator or any of its members, managers, officers,
employees, subsidiaries or affiliates from engaging in other businesses or, in its sole discretion, from acting in a similar capacity as an Administrator for any other person or entity even though such person or entity may engage in business
activities similar to those of the Issuer. 
 SECTION 8. Term of Agreement; Resignation and Removal of Administrator. 

(a) This Administration Agreement shall continue in force until the payment in full of the Recovery Bonds and any other amount which may become
due and payable under the Indenture, upon which event this Administration Agreement shall automatically terminate. 

  
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 (b) The Administrator may resign on not less than 30 days’ written notice to the
Issuer. The Administrator may be removed by written notice from the Issuer to the Administrator. Such resignation or removal shall not take effect until a successor has been appointed by the Issuer and has accepted the duties of Administrator. 

(c) The appointment of any successor Administrator shall be effective only after satisfaction of the Rating Agency Condition with respect to
the proposed appointment. 
 SECTION 9. Action upon Termination, Resignation or Removal. Promptly upon the effective date of
termination of this Administration Agreement pursuant to Section 8(b), the resignation of the Administrator or the removal of the Administrator pursuant to Section 8, the Administrator shall be
entitled to be paid a pro-rated portion of the annual fee described in Section 2 hereof through the date of termination and all Reimbursable Expenses incurred by it through the date
of such termination, resignation or removal. The Administrator shall forthwith upon such termination pursuant to Section 8(a) deliver to the Issuer all property and documents of or relating to the Recovery Bond Collateral
then in the custody of the Administrator. In the event of the resignation of the Administrator or the removal of the Administrator pursuant to Section 8, the Administrator shall cooperate with the Issuer and take all
reasonable steps requested to assist the Issuer in making an orderly transfer of the duties of the Administrator. 
 SECTION 10.
Administrator’s Liability. The Administrator shall render the services called for hereunder in good faith, taking into consideration the best interests of the Company. In no event shall the Administrator ever be liable to the Company
under this Agreement or in connection with services provided hereunder for any punitive, incidental, consequential, or indirect damages in tort, contract, or otherwise. 

SECTION 11. Notices. Any notice, report or other communication given hereunder shall be in writing and addressed as follows: 

(a) if to the Issuer, to: 

PG&E Recovery Funding LLC 

c/o Pacific Gas and Electric Company 

77 Beale Street 
 P.O. Box 770000

 San Francisco, California 94177 

Attention: Brian M. Wong 

Telephone: (415) 973-1000 
  

	 	(b)	 if to the Administrator, to: 

Pacific Gas and Electric Company 

77 Beale Street, P.O. Box 770000 

San Francisco, California 94177 

Attention: Brian M. Wong 

Telephone: (415) 973-1000 
  

	 	(c)	 if to the Indenture Trustee, to the Corporate Trust Office; 

  
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 or to such other address as any party shall have provided to the other parties in writing. Any notice
required to be in writing hereunder shall be deemed given if such notice is mailed by certified mail, postage prepaid, or hand-delivered to the address of such party as provided above. 

SECTION 12. Amendments. (a) This Administration Agreement may be amended from time to time by a written amendment duly executed
and delivered by each of the Issuer and the Administrator with ten Business Days’ prior written notice given to the Rating Agencies, (i) to cure any ambiguity, to correct or supplement any provisions in this Administration Agreement or for
the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Administration Agreement or of modifying in any manner the rights of the Holders; provided, however, that the Issuer and the
Indenture Trustee shall receive an Officer’s Certificate stating that the execution of such amendment shall not adversely affect in any material respect the interests of any Holder and that all conditions precedent have been satisfied or
(ii) to conform the provisions hereof to the description of this Administration Agreement in the Prospectus. 
 (b) In addition, this
Administration Agreement may be amended from time to time by a written amendment duly executed and delivered by each of the Issuer and the Administrator with the prior written consent of the Indenture Trustee, the satisfaction of the Rating Agency
Condition; provided that any such amendment may not adversely affect the interest of any Holder in any material respect without the consent of the Holders of a majority of the outstanding principal amount of the Recovery Bonds. Promptly after
the execution of any such amendment or consent, the Issuer shall furnish copies of such amendment or consent to each of the Rating Agencies. 

SECTION 13. Successors and Assigns. This Administration Agreement may not be assigned by the Administrator unless such assignment is
previously consented to in writing by the Issuer and the Indenture Trustee and subject to the satisfaction of the Rating Agency Condition in connection therewith. Any assignment with such consent and satisfaction, if accepted by the assignee, shall
bind the assignee hereunder in the same manner as the Administrator is bound hereunder. Notwithstanding the foregoing, this Administration Agreement may be assigned by the Administrator without the consent of the Issuer or the Indenture Trustee and
without satisfaction of the Rating Agency Condition to a corporation or other organization that is a successor (by merger, reorganization, consolidation or purchase of assets) to the Administrator, including without limitation any Permitted
Successor; provided that such successor or organization executes and delivers to the Issuer an Agreement in which such corporation or other organization agrees to be bound hereunder by the terms of said assignment in the same manner as the
Administrator is bound hereunder. Subject to the foregoing, this Administration Agreement shall bind any successors or assigns of the parties hereto. Upon satisfaction of all of the conditions of this Section 13, the preceding Administrator
shall automatically and without further notice be released from all of its obligations hereunder. 
 SECTION 14. Governing Law. This
Administration Agreement shall be governed by, and construed and interpreted in accordance with the laws of the State of California, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. 

  
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 SECTION 15. Headings. The Section headings hereof have been inserted for convenience
of reference only and shall not be construed to affect the meaning, construction or effect of this Administration Agreement. 
 SECTION 16.
Counterparts. This Administration Agreement may be executed in counterparts, each of which when so executed shall be an original, but all of which together shall constitute but one and the same Administration Agreement. The words
“execution,” “signed,” “delivery,” and words of like import in or relating to this Agreement or any document to be signed in connection with this Agreement shall be deemed to include electronic signatures, deliveries or
the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be,
and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means. 
 SECTION 17. Severability.
Any provision of this Administration Agreement that is prohibited or unenforceable in any jurisdiction shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 

SECTION 18. Nonpetition Covenant. Notwithstanding any prior termination of this Administration Agreement, the Administrator covenants
that it shall not, prior to the date which is one year and one day after payment in full of the Recovery Bonds, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court or government authority for the purpose of
commencing or sustaining an involuntary case against the Issuer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer
or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer. 
 SECTION 19.
Assignment to Indenture Trustee. The Administrator hereby acknowledges and consents to any mortgage, pledge, assignment and grant of a security interest by the Issuer to the Indenture Trustee for the benefit of the Secured Parties pursuant to
the Indenture of any or all of the Issuer’s rights hereunder and the assignment of any or all of the Issuer’s rights hereunder to the Indenture Trustee for the benefit of the Secured Parties. For the avoidance of doubt, the Indenture
Trustee is a third-party beneficiary of this Agreement and is entitled to the rights and benefits hereunder and may enforce the provisions hereof as if it were a party hereto. 

[Signature Page Follows] 

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

			
	PACIFIC GAS AND ELECTRIC COMPANY,
	a California corporation
		
	By:	 	 /s/ Margaret K. Becker

		 	Name: Margaret K. Becker
		 	Title:   Vice President and Treasurer
	
	PG&E RECOVERY FUNDING LLC,
	a Delaware limited liability company
		
	By:	 	 /s/ Monica Klemann

		 	Name: Monica Klemann
		 	Title:   Manager, Treasurer and Secretary

 Signature Page to 

Administration Agreement

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