Document:

Exhibit 10.3

  

  

  Execution Version

  

  

  

  

  	
          JPMORGAN CHASE BANK, N.A.

          383 Madison Avenue

          New York, NY 10179

           

        	
          BANK OF AMERICA, N.A.

          BofA SECURITIES, INC.

          One Bryant Park

          New York, NY 10036

           

        
	
          BARCLAYS

          745 Seventh Avenue

          New York, NY 10019

           

        	
          CITIGROUP GLOBAL MARKETS INC.

          388 Greenwich Street

          New York, NY 10013

           

        
	
          GOLDMAN SACHS BANK USA

          GOLDMAN SACHS LENDING PARTNERS LLC

          200 West Street

          New York, NY 10282

           

        	
          BNP PARIBAS

          787 Seventh Avenue

          New York, New York 10019

        
	
          CREDIT SUISSE AG, CAYMAN ISLANDS

          BRANCH

          Eleven Madison Avenue

          New York, New York 10010

           

        	
          MORGAN STANLEY BANK, N.A.

          1585 Broadway

          New York, New York 10036

           

        
	
          MUFG UNION BANK, N.A.

          1221 Avenue of the Americas

          New York, NY 10020

           

        	
          WELLS FARGO BANK, NATIONAL

          ASSOCIATION

          550 S Tryon St.

          Charlotte, NC 28202

           

        
	
          MIZUHO BANK, LTD.

          1251 Avenue of the Americas

          New York, NY 10020

           

        	 

  

  

  PERSONAL AND CONFIDENTIAL

  

  

  December 20, 2019

  

  

  PG&E Corporation

  Pacific Gas and Electric Company

  77 Beale Street

  P.O. Box 77000

  San Francisco, California 94177

  Attention:          Nicholas M. Bijur

  

  

  Pacific Gas and Electric Company

  Amendment No. 2 to Commitment Letter

  

  

  Ladies and Gentlemen:

  

  

  Reference is made to that certain Commitment Letter, dated as of October 4, 2019 (together with the annexes thereto, as supplemented by
    that certain Joinder Letter dated as of October 28, 2019, that certain Amendment No. 1 to Commitment Letter dated as of November 18, 2019, that certain Joinder Letter dated as of December 2, 2019 and as further amended from time to time in accordance
    with the terms thereof, the “Commitment Letter”), between PG&E Corporation, a California corporation (or

  

  

  
    
      

  

  
  

  

  any domestic entity formed to hold all of the assets of PG&E Corporation upon emergence
      from bankruptcy) (“PG&E”), Pacific
      Gas and Electric Company, a California corporation (the “Utility”) (together with any domestic entity formed to hold all of the assets of the Utility upon emergence from bankruptcy, the “Borrower” and together with PG&E, the “Debtors” or “you”), JPMorgan Chase Bank, N.A. (“JPMorgan”), Bank of America, N.A. (“BANA”), BofA Securities, Inc. (or any of its designated affiliates, “BofA”, and together with BANA, “Bank of America”), Barclays Bank PLC (“Barclays”), Citigroup Global Markets Inc. on behalf of Citi (as defined below), Goldman Sachs Bank USA (“GS Bank”) and Goldman Sachs Lending Partners LLC (“GSLP”, and together with GS Bank, “Goldman Sachs”) (JPMorgan, Bank of America,
      Barclays, Citi and Goldman Sachs, collectively, the “Initial Commitment Parties”) and BNP Paribas (“BNP”), Credit Suisse AG, Cayman Islands Branch (“Credit Suisse”), Morgan Stanley Bank, N.A. (“Morgan Stanley”), MUFG Union Bank, N.A. (“MUFG”), Wells Fargo Bank, National Association (“Wells
      Fargo”) and Mizuho Bank, Ltd. (“Mizuho”, collectively with BNP, Credit Suisse, Morgan Stanley, MUFG, Wells Fargo and the Initial Commitment Parties, the “Commitment Parties” , “we” or “us”), regarding a $27,350 million senior secured bridge facility defined therein as the Facility and the related transactions described
      therein. “Citi” shall mean Citigroup
      Global Markets Inc., Citibank N.A., Citicorp USA, Inc., Citicorp North America, Inc. and/or any of their affiliates as any of them shall determine to be appropriate to provide the services contemplated herein. Capitalized terms used but not defined
      herein are used with the meanings assigned to them in the Commitment Letter.

  

  

  Each party to this Amendment No. 2 to Commitment Letter (this “Amendment”) hereby agrees that the Commitment Letter
      is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in Schedule I hereto. The Commitment Letter shall be deemed to be replaced
      in its entirely by the Commitment Letter modified to reflect the terms set forth in Schedule I hereto, and each person party hereto as a Commitment Party shall be the sole Commitment Parties under the Commitment Letter on the date hereof after giving
      effect to this Amendment, and shall have and hereby reaffirm their commitments under the Commitment Letter set forth in Schedule II to the Commitment Letter, subject to the terms and conditions set forth in the Commitment Letter as amended by this
      Amendment.

  

  

  Each party hereto agrees to maintain the confidentiality of this Amendment and the terms hereof, subject to the confidentiality
    provisions contained in the Commitment Letter. The provisions of the third paragraph of Section 9 of the Commitment Letter are incorporated herein, mutatis mutandis, as if the references to the Commitment Letter were to this Amendment. Each of the
    parties hereto (for itself and its affiliates) (a) waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating
    to the Commitment Letter, this Amendment, or the transactions contemplated thereby or hereby, in any such New York State court or in any such Federal court and (b) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to
    the maintenance of such action or proceeding in any such court.

  

  

  Except as specifically amended by this Amendment, the Commitment Letter shall remain in full force and effect. This Amendment shall be
    construed in connection with and form part of the Commitment Letter, and any reference to the Commitment Letter shall be deemed to be a reference to the Commitment Letter as amended by this Amendment. Neither this Amendment nor the Commitment Letter
    (including the attachments hereto and thereto) may be amended or any term or provision hereof or thereof waived or modified except by an instrument in writing signed by each of the parties hereto. This Amendment may be executed in any number of
    counterparts, each of which when executed will be an original, and all of which, when taken together, will constitute one agreement. Delivery of an executed

  

  

  
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  counterpart of a signature page to this Amendment by telecopier, facsimile or other electronic transmission (e.g., “pdf” or “tif”) shall be effective as
    delivery of a manually executed counterpart thereof.

  

  

  [Remainder of page intentionally left blank]

  

  

  
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  We are pleased to have been given the opportunity to assist you in connection with the financing for the Transactions.

   

  

  
    	 	Very truly yours,	 
	 	 	 
	 	JPMORGAN CHASE BANK, N.A.	 
	 	 	 	 
	
            

            

          	
            By: 

          	/s/ Sandeep S. Parihar	 
	 	 	Name:	 Sandeep S. Parihar	 
	 	 	Title:	 Executive Director	 
	 	 	 	 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  [Signature Page to Amendment No. 2 to Commitment Letter (Utility)]

  

  

  
    
      

  

  

  

   

  
    	 	BofA SECURITIES, INC.	 
	 	 	 	 
	
            

            

          	
            By: 

          	/s/ B. Timothy Keller	 
	 	 	Name:	 B. Timothy Keller	 
	 	 	Title:	 Managing Director	 
	 	 	 	 

  

  

  

  

  

  
    	 	BANK OF AMERICA, N.A.	 
	 	 	 	 
	
            

            

          	
            By: 

          	/s/ Maggie Halleland	 
	 	 	Name:	 Maggie Halleland	 
	 	 	Title:	 Vice President	 
	 	 	 	 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  [Signature Page to Amendment No. 2 to Commitment Letter (Utility)]

  

  

  
    
      

  

  

  

  
    	 	BARCLAYS BANK PLC	 
	 	 	 	 
	
            

            

          	
            By: 

          	/s/ Sydney G. Dennis	 
	 	 	Name:	 Sydney G. Dennis	 
	 	 	Title:	 Director	 
	 	 	 	 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  [Signature Page to Amendment No. 2 to Commitment Letter (Utility)]

  

  

  
    
      

  

  

  

  
    	 	CITIGROUP GLOBAL MARKETS INC.	 
	 	 	 	 
	
            

            

          	
            By: 

          	/s/ Richard D. Rivera	 
	 	 	Name:	 Richard D. Rivera	 
	 	 	Title:	 Authorized Signatory	 
	 	 	 	 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  [Signature Page to Amendment No. 2 to Commitment Letter (Utility)]

  

  

  
    
      

  

  

  

  
    	 	GOLDMAN SACHS BANK USA	 
	 	 	 	 
	
            

            

          	
            By: 

          	/s/ Charles D. Johnston	 
	 	 	Name:	 Charles D. Johnston	 
	 	 	Title:	 Authorized Signatory	 
	 	 	 	 

  

  

  

  

  

  
    	 	GOLDMAN SACHS LENDING PARTNERS LLC	 
	 	 	 	 
	
            

            

          	
            By: 

          	/s/ Charles D. Johnston	 
	 	 	Name:	 Charles D. Johnston	 
	 	 	Title:	 Authorized Signatory	 
	 	 	 	 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  [Signature Page to Amendment No. 2 to Commitment Letter (Utility)]

  

  

  
    
      

  

  

  

  
    	 	BNP PARIBAS	 
	 	 	 	 
	
            

            

          	
            By: 

          	/s/ Dennis O’Meara	 
	 	 	Name:	 Dennis O’Meara	 
	 	 	Title:	 Managing Director	 
	 	 	 	 

  

  

  

  

  

  
    	
            

            

          	
            By: 

          	/s/ Ravina Advani	 
	 	 	Name:	 Ravina Advani	 
	 	 	Title:	 Managing Director	 
	 	 	 	 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  [Signature Page to Amendment No. 2 to Commitment Letter (Utility)]

  

  

  
    
      

  

  

  

  
    	 	CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH	 
	 	 	 	 
	
            

            

          	
            By: 

          	/s/ Mikhail Faybusovich	 
	 	 	Name:	 Mikhail Faybusovich	 
	 	 	Title:	 Authorized Signatory	 
	 	 	 	 

  

  

  

  

  

  
    	
            

            

          	
            By: 

          	/s/ SoVonna Day-Goins	 
	 	 	Name:	 SoVonna Day-Goins	 
	 	 	Title:	 Authorized Signatory	 
	 	 	 	 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  [Signature Page to Amendment No. 2 to Commitment Letter (Utility)]

  

  

  
    
      

  

  

  

  
    	 	MORGAN STANLEY BANK, N.A.	 
	 	 	 	 
	
            

            

          	
            By: 

          	/s/ Mrinalini MacDonough	 
	 	 	Name:	 Mrinalini MacDonough	 
	 	 	Title:	 Authorized Signatory	 
	 	 	 	 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  [Signature Page to Amendment No. 2 to Commitment Letter (Utility)]

  

  

  
    
      

  

  

  

  
    	 	MUFG UNION BANK, N.A.	 
	 	 	 	 
	
            

            

          	
            By: 

          	/s/ Viet-Linh Fujitaki	 
	 	 	Name:	 Viet-Linh Fujitaki	 
	 	 	Title:	 Vice President	 
	 	 	 	 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  [Signature Page to Amendment No. 2 to Commitment Letter (Utility)]

  

  

  
    
      

  

  

  

  
    	 	WELLS FARGO BANK, NATIONAL ASSOCIATION	 
	 	 	 	 
	
            

            

          	
            By: 

          	/s/ Gregory R Gredvig	 
	 	 	Name:	 Gregory R Gredvig	 
	 	 	Title:	 Director	 
	 	 	 	 

  

   

  

   

  

  

  

  

  

  

  

  

  

  

  

  

  

  [Signature Page to Amendment No. 2 to Commitment Letter (Utility)]

  

  

  
    
      

  

  

  

  
    	 	MIZUHO BANK, LTD.	 
	 	 	 	 
	
            

            

          	
            By: 

          	/s/ Raymond Ventura	 
	 	 	Name:	 Raymond Ventura	 
	 	 	Title:	 Managing Director	 
	 	 	 	 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  [Signature Page to Amendment No. 2 to Commitment Letter (Utility)]

  

  

  
    
      

  

  

  

  
    	ACCEPTED AND AGREED AS OF

            THE DATE FIRST WRITTEN ABOVE:	 
	 	 
	PG&E CORPORATION	 
	 	 	 
	
            By: 

          	/s/ Nicholas M. Bijur	 
	 	Name:	 Nicholas M. Bijur	 
	 	Title:	 Vice President and Treasurer	 
	 	 	 

  

  

  

  

  

  	PACIFIC GAS AND ELECTRIC COMPANY	 
	 	 	 
	
          By: 

        	/s/ Nicholas M. Bijur	 
	 	Name	 Nicholas M. Bijur	 
	 	Title	 Vice President and Treasurer	 
	 	 	 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  [Signature Page to Amendment No. 2 to Commitment Letter (Utility)]

  

  

  
    
      

  

  

  

  SCHEDULE I

  

  

  [Attached]

  

  

  
    
      

  

  
  

  

  Execution Version

  

  

  

  

  	
          JPMORGAN CHASE BANK, N.A.

          383 Madison Avenue

          New York, NY 10179

           

        	
          BANK OF AMERICA, N.A.

          BofA SECURITIES, INC.

          One Bryant Park

          New York, NY 10036

           

        
	
          BARCLAYS

          745 Seventh Avenue

          New York, NY 10019

           

        	
          CITIGROUP GLOBAL MARKETS INC.

          388 Greenwich Street

          New York, NY 10013

           

        
	
          GOLDMAN SACHS BANK USA

          GOLDMAN SACHS LENDING PARTNERS LLC

          200 West Street

          New York, NY 10282

           

        	 

  

  

  

  

  PERSONAL AND CONFIDENTIAL

  

  

  October 4, 2019

  

  

  PG&E Corporation

  Pacific Gas and Electric Company

  77 Beale Street

  P.O. Box 77000

  San Francisco, California 94177

  Attention:          Nicholas M. Bijur

  

  

  Pacific Gas and Electric Company

  Commitment Letter

  

  

  Ladies and Gentlemen:

  

  

  Reference is hereby made to (i) the Chapter 11 bankruptcy cases, jointly administered under
      lead case number 19-30088 (the “Chapter 11 Cases”),
      currently pending before the United States Bankruptcy Court for the Northern District of California (the “Bankruptcy Court”), in which PG&E Corporation, a California corporation (or any domestic entity formed to hold
      all of the assets of PG&E upon emergence from bankruptcy) (“PG&E”), and Pacific Gas and Electric Company, a California corporation (the “Utility”) (together with any domestic entity formed to hold all of the assets of the Utility upon emergence from bankruptcy, the “Borrower” and together with PG&E, the “Debtors” or “you”), are debtors and debtors in possession and (ii) the first amendedjoint Chapter 11 plan of reorganization filed by the Debtors and the shareholder proponents with the Bankruptcy Court on September 23December 12, 2019 at ECF No. 39665101 (as may be further amended, modified or otherwise changed in accordance with this Commitment Letter, the “Plan”) to implement the terms and conditions of the reorganization of the Debtors as provided therein. Capitalized terms used and not defined in this letter (together with Annexes A
      and B hereto, this “Commitment Letter”) have the meanings
      assigned to them in Annexes A and B hereto as the context may require. JPMorgan, Bank of America, N.A. (“BANA”), BofA Securities, Inc. (or any of its designated affiliates, “BofA”, and together with BANA, “Bank of America”), Barclays Bank PLC (“Barclays”), Citigroup Global Markets Inc. on behalf of Citi (as defined below), Goldman Sachs Bank USA (“GS

      Bank”), Goldman Sachs Lending Partners LLC (“GSLP”, and together with GS Bank, “Goldman Sachs”) and any other Lenders that become parties to this Commitment Letter as additional “Commitment Parties” as provided in Section 3 hereof (including those entities listed in

  

  

  
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  Schedule I attached hereto) are referred to herein, collectively, as the “Commitment Parties,” “we” or “us.”

  

  

  You have informed us that, in connection with the consummation of the transactions contemplated by the Plan, the Borrower intends to (a) enter into a new revolving credit
    facility in an aggregate committed amount of $3,500 million (the “Revolving Credit Facility”) and (b) issue senior secured notes pursuant to a registered public
    offering or Rule 144A or other private placement (the “Notes”). In connection therewith, the Borrower desires to enter into a $27,350 million senior secured bridge
    loan facility (the “Facility”) having the terms and subject to the conditions set forth herein and in the Annexes hereto, to be available in the event that the
    Notes are not issued on or prior to the Closing Date (as defined in Annex A) for any reason.

  

  

  The transactions described in the preceding paragraphs are collectively referred to herein as the “Transactions.”

  

  

  For purposes of this Commitment Letter, “Citi” shall mean
    Citigroup Global Markets Inc., Citibank N.A., Citicorp USA, Inc., Citicorp North America, Inc. and/or any of their affiliates as any of them shall determine to be appropriate to provide the services contemplated herein.

  

  

  1.          Commitments; Titles and Roles.

  

  

  (a) (i) Each of JPMorgan, BofA, Barclays, Citi and GS Bank is pleased to confirm its agreement to act, and you hereby appoint
      each of JPMorgan, BofA, Barclays, Citi and GS Bank to act, as a joint lead arranger and joint bookrunner (in such capacities, the “Arrangers”) and, except in the case of JPMorgan, co-syndication agent in connection with the Facility and (ii) each other Commitment Party accepts, on its own behalf or on behalf of its designated affiliate, the title(s) agreed to by the Borrower in writing and set forth adjacent to its name on Schedule
        I attached hereto under the heading “Title(s)”; (b) JPMorgan is pleased to confirm its agreement to act, and you hereby appoint JPMorgan to act, as
      administrative agent and collateral agent (the “Administrative Agent”) for the Facility; and (c) each of JPMorgan, BANA, Barclays, Citi, GSLP and GS Bank (in such capacity, the “Initial Lenders”) and each other Commitment Party is pleased to commit, and hereby commits, on a several and not joint basis, to provide the Borrower 20%, 20%, 20%, 20%, 11.042047532% and 8.957952468%, respectively,a portion of the aggregate principal amount of the Facility equal
        to the principal amount set forth adjacent to its name on Schedule II attached hereto under the heading “Commitment” on the terms contained in this Commitment
      Letter and subject to the conditions expressly set forth in Annex B hereto; provided that the amount of the Facility shall be automatically reduced as provided under “Mandatory Prepayments and Commitment Reductions” in Annex A hereto with any such reduction to be applied pro rata among the Initial
      Lenders. It is further agreed that JPMorgan will appear on the top left (and the Arrangers, other than JPMorgan, will appear in alphabetical order immediately to the right thereof) of the cover page of any marketing materials for the Facility and
      will hold the roles and responsibilities conventionally understood to be associated with such name placement. Our fees for our commitment and for services related to the Facility are set forth in a separate fee letter (the “Fee Letter”) entered into by you and the Commitment Parties on the date
      hereof. It is agreed that no other agents, co-agents, arrangers, co-arrangers or bookrunners will be appointed and no other titles will be awarded in connection with the Facility, and no compensation will be paid in order to obtain such person’s
      commitment to participate in the Facility (other than the compensation expressly contemplated by this Commitment Letter and the Fee Letter) in connection with the Facility, unless the Arrangers and you shall so agree; provided, however, that you may award
      agent (other than administrative agent and co-syndication agent) and similar titles to any additional Commitment Party that becomes a Commitment Party hereunder in accordance with the second paragraph of Section 3 hereof;

  

  

  
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  provided, further, for the avoidance of doubt, no additional Commitment Party shall receive a bookrunner title.

  

  

  You agree that JPMorgan may perform its responsibilities hereunder through its affiliate, J.P. Morgan Securities LLC.

  

  

  2.          Conditions Precedent.

  

  

  Notwithstanding anything to the contrary in this Commitment Letter, the Fee Letter or any other agreement or other undertaking concerning the financing of
    the Transactions, (a) the Commitment Parties’ commitments and agreements hereunder with respect to the Facility are subject solely to the satisfaction or waiver of the conditions expressly set forth in Annex B hereto and (b) the terms of the Facility
    Documentation shall be in a form such that they do not impair the availability of the Facility on the Closing Date if the conditions described in the immediately preceding clause (a) are satisfied.

  

  

  3.          Syndication.

  

  

  The Arrangers reserve the right, in accordance with the provisions of this Section 3, prior to or after the Closing Date, to syndicate the Facility to the Lenders (as
    defined in Annex A). The syndication of the Facility, including determinations as to the timing of offers to prospective Lenders, the selection of Lenders, the acceptance and final allocation of commitments, the awarding of titles or roles to any
    Lenders and the amounts offered and the compensation provided to each Lender from the amounts to be paid to the Arrangers pursuant to the terms of this Commitment Letter and the Fee Letter, will be conducted by the Arrangers in consultation with the
    Borrower. Notwithstanding the foregoing, during the period commencing on the date hereof and ending November 20, 2019 (the “Initial Syndication Period”), the
    Facility will be syndicated only to those financial institutions approved by you in writing prior to the date hereof or other financial institutions as may be approved by you in your sole discretion (such financial institutions, collectively, the “Approved Lenders”). Following the
    Initial Syndication Period, if and for so long as a Successful Syndication (as defined in the Fee Letter) has not been achieved, the syndication of the Facility shall be conducted by the Arrangers in consultation with the Borrower. Following the
    achievement of a Successful Syndication of the Facility, further assignments and commitments shall be in accordance with the section captioned “Assignments and Participations” in the Term Sheet attached hereto as Annex A.

  

  

  The aggregate commitments of the Commitment Parties with respect to the Facility shall be reduced dollar-for-dollar (and on a pro rata basis) by the amount
    of each commitment for the Facility received from additional Lenders selected in accordance with the preceding paragraph to the extent such Lender becomes (a) party to this Commitment Letter as an additional “Commitment Party” pursuant to a customary
    joinder agreement or other documentation reasonably satisfactory to the Arrangers and you (each, a “Joinder Agreement”) or (b) party to the Facility Documentation
    as a Lender; provided that any reduction of Goldman Sachs’s commitments under the Facility in accordance with the previous sentence or as a result of a
    reduction of the overall commitments of GSLP and GS Bank, each in its capacity as an Initial Lender, pursuant to the terms of this Commitment Letter shall be allocated between GSLP’s and GS Bank’s respective commitments as determined by GSLP and GS
    Bank in their sole discretion. Notwithstanding the Arrangers’ right to syndicate the Facility and receive commitments with respect thereto, and except as provided in the immediately preceding sentence, (i) no Commitment Party shall be relieved,
    released or novated from its obligations hereunder (including its obligation to fund the Facility on the Closing Date) in connection with any syndication, assignment or participation of the Facility, including its commitment in respect thereof, until
    after the initial funding of the Facility

  

  

  
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  on the Closing Date has occurred, (ii) no assignment or novation shall become effective with
      respect to all or any portion of the Commitment Parties’ commitments in respect of the Facility until the initial funding of the Facility on the Closing Date and
      (iii) unless you otherwise agree in writing, each Commitment Party shall retain exclusive control over all rights and obligations with respect to its commitments in respect of the Facility, including all rights with respect to consents,
      modifications, supplements, waivers and amendments, until the initial funding of the Facility on the Closing Date has occurred.

  

  

  To facilitate an orderly and successful syndication of the Facility, you agree that, until
      the earlier of (a) the achievement of a Successful Syndication (as defined in the Fee Letter) and (b) 60 days following the Closing Date (such earlier date, the “Syndication Date”), PG&E and the Borrower will not syndicate or issue, attempt to syndicate or issue or announce the syndication or issuance of
      any competing debt facility or any debt or equity security (other than common equity) of PG&E, the Borrower or any of their respective subsidiaries that would reasonably be expected to materially impair the primary syndication of the Facility, in
      each case without the prior written consent of the Arrangers (such consent not to be unreasonably withheld, delayed or conditioned), other than (i) the Facility, (ii) the Notes, (iii) the Revolving Credit Facility, (iv) incremental facilities under
      the Borrower’s current debtor-in-possession credit agreement or any new debtor-in-possession facilities, in either case that are to be paid in full in cash at emergence from the Chapter 11 Cases, (v) securitization securities or facilities
      contemplated by the Plan, (vi) ordinary-course purchase money indebtedness, facility and equipment financings, other debt incurred in the ordinary course of business for capital expenditures and working capital purposes, financial leases or capital
      lease obligations, overdraft protection, ordinary course letter of credit facilities, hedging and cash management, and similar obligations, (vii) roll-over, “take-back” or reinstated debt that may be contemplated by the Plan and (viii) common and preferred equity issued in accordance with the Plan in satisfaction of claims.

  

  

  Without limiting your obligations to assist with the syndication efforts as set forth
      herein, it is understood that the Initial Lender’s commitmentCommitment Parties’ commitments hereunder isare not
      conditioned upon the syndication of, or receipt of commitments in respect of, the Facility and in no event shall the commencement or successful completion of syndication of the Facility constitute a condition to the availability of the Facility on
      the Closing Date.

  

  

  Until the Syndication Date, you agree to actively assist the Arrangers in achieving a syndication satisfactory to you and us. Such assistance shall include
    (a) your use of commercially reasonable efforts to ensure that the Arrangers’ syndication efforts benefit from your and your affiliates’ existing lending relationships, (b) your using commercially reasonable efforts to assist in the preparation of one
    or more information packages for the Facility in form and substance customary for transactions of this type regarding the business, operations, financial projections and prospects of the Borrower (after giving effect to the Transactions) (collectively,
    the “Confidential Information Memorandum”), (c) your using commercially reasonable efforts to obtain, as promptly as practicable prior to the launch of the
    syndication of the Facility, a Public Debt Rating for the Borrower from each of Moody’s Investor Services, Inc. (“Moody’s”) and Standard & Poor’s Financial
    Services LLC (“S&P”), in each case giving effect to the Transactions, (d) your executing and delivering one or more Joinder Agreements delivered to you in
    respect of prospective Lenders which are selected in accordance with the provisions of this Section 3, as soon as reasonably practicable following commencement of syndication of the Facility, (e) the presentation of one or more customary information
    packages for the Facility in format and content reasonably satisfactory to the Arrangers (collectively, the “Lender Presentation”) in a reasonable number of
    meetings at reasonable times and locations mutually agreed upon and (f) arranging for direct contact between senior management and representatives, with appropriate seniority and expertise, of the Borrower with prospective Lenders and participation of
    such persons in a reasonable number of meetings at reasonable times and locations mutually agreed upon. In connection with the Arrangers’ syndication efforts, you shall not be required to provide information the disclosure of which would violate any
    (i) attorney-client privilege (and you shall not be required to waive any such privilege), (ii) law, rule or regulation applicable to the Borrower or its affiliates or (iii) obligation of confidentiality from a third

  

  

  
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    person is a party thereto, whether or not such Proceedings are brought by you, your equity
        holders, affiliates, creditors or any other person, and to reimburse each indemnified person upon demand for reasonable, documented and invoiced out-of-pocket legal expenses of one primary firm of counsel, one regulatory counsel and one special bankruptcy counsel for all such indemnified persons, taken as a whole, and,
        if necessary, of a single firm of local counsel in each appropriate jurisdiction (which may include a single firm of special counsel acting in multiple jurisdictions) for all such indemnified persons, taken as a whole (and, in the case of an actual
        or perceived conflict of interest where the indemnified person affected by such conflict informs you of such conflict and thereafter retains its own counsel, of another firm of counsel for such affected indemnified person and, if necessary, of one regulatory counsel, one special bankruptcy counsel and a single firm of local counsel in each appropriate jurisdiction (which may include a single firm of special counsel acting in multiple jurisdictions) for such affected indemnified person) (the foregoing, the “Counsel Limitation”) or other reasonable, documented and invoiced
        out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing; provided that the foregoing indemnity will not, as to any indemnified person, apply to losses, claims, damages, liabilities or related expenses to the extent they are found by a final, non-appealable
        judgment of a court of competent jurisdiction to (i) have arisen or resulted from the willful misconduct, bad faith or gross negligence of such indemnified person, (ii) have resulted from a claim brought by you or any of your subsidiaries against
        such indemnified person for material breach of such indemnified person’s obligations hereunder or (iii) have not resulted from an act or omission by you or any of your affiliates and have been brought by an indemnified person against any other
        indemnified person (other than any claims against any Commitment Party in its capacity or in fulfilling its role as an arranger or agent or any similar role hereunder, except to the extent such acts or omissions are determined by a court of
        competent jurisdiction by a final and non-appealable judgment to have constituted the gross negligence, bad faith or willful misconduct of such indemnified party in such capacity), and (b) to reimburse the Commitment Parties and their respective
        affiliates on demand for all out-of-pocket expenses (including due diligence expenses, syndication expenses, travel expenses, and reasonable fees, charges and disbursements of counsel) incurred in connection with the Facility and any related
        documentation (including this Commitment Letter, the Fee Letter and the definitive documentation relating to the Facility) or the administration, amendment, modification or waiver thereof. You acknowledge that we may receive a benefit, including
        without limitation, a discount, credit or other accommodation, from any of such counsel based on the fees such counsel may receive on account of their relationship with us including, without limitation, fees paid pursuant hereto. None of the
        indemnified persons or you shall have any liability for any special, indirect, consequential or punitive damages in connection with activities related to the Facility or the Transactions; provided that nothing contained in this sentence shall limit your indemnity and reimbursement obligations to the extent set
        forth in this paragraph.

    

    

  

  No indemnified person shall be liable for any damages arising from the use by others of Information or other materials obtained through electronic,
    telecommunications or other information transmission systems, including an Platform or otherwise via the internet, and you agree, to the extent permitted by applicable law, to not assert any claims against any indemnified person with respect to the
    foregoing.

  

  

  You shall not, without the prior written consent of an indemnified person (which consent
      shall not be unreasonably withheld, conditioned or delayed), effect any settlement of any pending or threatened Proceedings in respect of which indemnity could have been sought hereunder by such indemnified person unless such settlement (a) such settlement includes an unconditional release of such indemnified
      person in form and substance reasonably satisfactory to such indemnified person from all liability on claims that are the subject matter of such Proceedings and (b) does not include any statement as to or any admission of fault, culpability or a
      failure to act by or on behalf of any indemnified person or any injunctive relief or other non-monetary remedy. You acknowledge that any failure to comply with your obligations under the preceding sentence may cause irreparable harm to the Commitment
      Parties and the other indemnified persons. You shall not be liable for any settlement of any Proceeding if the amount of such settlement

  

  

  
    7

    
      

  

  
  

  

  from the rights and obligations of the parties pursuant to this Commitment Letter, and none of such rights and obligations under such other agreements
    shall be affected by any Commitment Party’s performance or lack of performance of services hereunder. You hereby agree that each Commitment Party may render its services under this Commitment Letter notwithstanding any actual or potential conflict of
    interest presented by the foregoing, and you agree that you will not claim any conflict of interest relating to the relationship among such Commitment Party and you and your affiliates in connection with the commitments and services contemplated
    hereby, on the one hand, and the exercise by any Commitment Party or any of its affiliates of any of their rights and duties under any credit agreement or other agreement (including the Funded Debt Documents and the DIP Facility Credit Agreement) on
    the other hand.

  

  

  In addition, please note that the Commitment Entities do not provide accounting, tax or legal advice.

  

  

  9.          Miscellaneous.

  

  

  Neither this Commitment Letter nor the Fee Letter may be amended or any term or provision hereof or thereof waived or otherwise modified except by an instrument in writing
    signed by each of the parties hereto or thereto, as applicable, and any term or provision hereof or thereof may be amended or waived only by a written agreement executed and delivered by all parties hereto or thereto.

  

  

  The provisions set forth under Sections 3, 4, 5, 7 and 8 hereof (in each case other than any provision therein that expressly terminates upon execution of the Facility
    Documentation), this Section 9 and the provisions of the Fee Letter will remain in full force and effect regardless of whether the Facility Documentation is executed and delivered, except that the provisions of Sections 3 and 4 shall not survive if the
    commitments and undertakings of the Commitment Parties are terminated prior to the effectiveness of the Facility; provided that (x) the foregoing provisions in
    this paragraph (other than with respect to the provisions set forth in the Fee Letter and under Sections 7, 8 and this Section 9 hereof, which will remain in full force and effect notwithstanding the expiration or termination of this Commitment Letter
    or the Commitment Parties’ respective commitments and agreements hereunder) shall be superseded in each case, to the extent covered thereby, by the applicable provisions contained in the Facility Documentation upon execution thereof and thereafter
    shall have no further force and effect and (y) the provisions of Sections 3 and 4 shall terminate on the Syndication Date (or, in the
        case of the second paragraph of Section 4, the Closing Date if later).

  

  

  Each of the parties hereto (for itself and its affiliates) agrees that any suit or proceeding arising in respect of this Commitment
    Letter or the Commitment Parties’ commitments or agreements hereunder or the Fee Letter will be tried exclusively in (i) subject to clause (ii)(B), until the Effective Date (as defined in the Plan) of the Plan, the Bankruptcy Court and (ii)(A)
    thereafter or (B) if the Bankruptcy Court refuses to accept, or the Bankruptcy Court or any appellate court from the Bankruptcy Court determines in a final, non-appealable order that the Bankruptcy Court does not have, jurisdiction, any Federal court
    of the United States of America sitting in the Borough of Manhattan or, if that court does not have subject matter jurisdiction, in any state court located in the City and County of New York, and each party hereby submits to the exclusive jurisdiction
    of, and to venue in, such court. Any right to trial by jury with respect to any action or proceeding arising in connection with or as a result of either the Commitment Parties’ commitments or agreements or any matter referred to in this Commitment
    Letter or the Fee Letter is hereby waived by the parties hereto (to the fullest extent permitted by applicable law). Each of the parties hereto (for itself and its affiliates) agrees that a final judgment in any such action or proceeding shall be
    conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Service of any process, summons, notice or document by registered mail or overnight courier addressed to any of the parties hereto at
    the addresses above shall be effective

  

  

  
    12

    
      

  

  

  

  
    service of process against such party for any suit, action or proceeding brought in any such court. This Commitment Letter and the Fee
      Letter and any claim, controversy or dispute arising hereunder or thereunder will be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws.

    

    

  

  10.          PATRIOT Act Notification.

  

  

  The Commitment Parties hereby notify the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law
    October 26, 2001)) (the “Patriot Act”) and the requirements of 31 C.F.R. § 1010.230 (the “Beneficial Ownership Regulation”) the Commitment Parties and each Lender may be required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower
    and other information that will allow the Commitment Parties and each Lender to identify the Borrower in accordance with the Patriot Act and the Beneficial Ownership Regulation. This notice is given in accordance with the requirements of the Patriot
    Act and is effective for the Commitment Parties and each Lender.

  

  

  11.          Acceptance and Termination.

  

  

  Each of the parties hereto agrees that this Commitment Letter is a binding and enforceable agreement with respect to subject matter contained herein,
    including an agreement to negotiate in good faith the Facility Documentation by the parties hereto in a manner consistent with this Commitment Letter, it being acknowledged and agreed that the commitments provided hereunder by the Commitment Parties
    are subject to the conditions expressly set forth in Annex B hereto.

  

  

  This Commitment Letter may be executed in any number of counterparts, each of which when executed will be an original, and all of which, when taken
    together, will constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission or other electronic transmission (e.g., “pdf” or “tif”) will be effective as delivery of a manually
    executed counterpart hereof. This Commitment Letter and the Fee Letter are the only agreements that have been entered into among the parties hereto with respect to the Facility and set forth the entire understanding of the parties with respect thereto
    and supersede any prior written or oral agreements among the parties hereto with respect to the Facility.

  

  

  The Commitment Parties’ commitments and agreements hereunder will terminate upon the first
      to occur of (i) the execution and delivery of the Facility Documentation by each of the parties thereto, (ii) the Effective Date of the Plan without using the loans under the Facility, (iii) 11:59 p.m., New York City time, on (A) June 30, 2020, if
      the Confirmation Order has not been entered prior to such time or (B) August 29, 2020, if the Closing Date has not occurred prior to such time, (iv)(A) the Plan or the Approval Order is amended or modified or any condition contained therein waived,
      in a manner that is adverse to the Commitment Parties in their capacities as such, in either case without the consent of (I) prior to the date that an
        additional “Commitment Party” becomes party to this Commitment Letter pursuant to a Joinder Agreement, the Commitment Parties party hereto on the date hereof (the “Initial Commitment Parties”) and (II) thereafter, the Administrative Agent and the Commitment Parties holding 66 2/3% of the commitments hereunder in respect of the Facility (clauses (I) and (II), collectively, the “the “Required Commitment Parties”) (such consent not to be unreasonably
      withheld, conditioned or delayed; provided that
      modifications to the Plan solely as a result of an increase in roll-over, “take-back” or reinstatement of any existing debt of the Debtors shall be deemed not to be adverse to the Commitment Parties for the purposes of this clause (A)), (B) any Plan
      Supplement or any Plan Document (each as defined in the Plan) that is adverse to the interests of the Commitment Parties in their capacities as such is filed or finalized without the consent of the Required Commitment Parties (such consent not to be
      unreasonably withheld, conditioned or delayed), (v) the Chapter 11 Case with respect to any Debtor is

  

  

  
    13

    
      

  

  
  

  

  dismissed or converted to a proceeding under chapter 7 of the Bankruptcy Code, (vi) a
      trustee or examiner with enlarged powers (having powers beyond those set forth in section 1106(a)(3) and 1106(a)(4) of the Bankruptcy Code) is appointed with respect to any of the Debtors, (vii) there is in effect an order of a governmental authority
      of competent jurisdiction permanently restraining, enjoining or otherwise prohibiting the consummation of any of the transactions contemplated by the Plan, or any law, statute, rule, regulation or ordinance is adopted that makes consummation of the
      transactions contemplated by the Plan illegal or otherwise prohibited; (viii) the Bankruptcy Court shall not have entered an
        order approving the relief requested in the motion filed with the Bankruptcy Court authorizing the Borrower’s entry into and performance under this Commitment
      Letter, the Fee Letter and any related engagement letter (the “Approval Order”), in form and substance reasonably satisfactory to the Commitment Parties, on or before December 20, 2019January 31, 2020; (ix) the Debtors’ aggregate liability with respect to WildfireFire Claims (as defined in the Plan) is determined (whether (A) by the Bankruptcy Court (or the District Court to which the
      reference has been partially withdrawn for estimation purposes), (B) pursuant to an agreement between the Debtors and the holders of Wildfire ClaimsFire Claims that is subject to an order of the Bankruptcy Court approving such agreement, or (C) through a combination
      thereof) to exceed $18.925.5 billion (the “WildfireFire Claims Cap”); provided, however, that for purposes of this clause (ix), (1) any Wildfire Claim that the California Public
        Utilities Commission has approved or agreed to approve for recovery or pass through by the Utility shall not count in determining the Wildfire Claims Cap and (2) the Wildfire Claims Cap shall be increased by an amount equal to the amount of
        Wildfire Claims consisting of professional fees that the Bankruptcy Court (or the District Court to which the reference has been partially withdrawn for estimation purposes) determines to be reasonable; (x) (A) the occurrence of one or more wildfires within PG&E’s service area after the Petition Date (as defined in the Plan) and prior to January 1, 2020 that is asserted by any person to
      arise out of the Debtors’ activities and that destroys or damages more than 500 dwellings or commercial structures (“Structures”); provided, however, that any notice of termination under this clause (x)(A) must be given on or
      before January 15, 2020the

        entry of the Approval Order, or (B) the occurrence of one or more wildfires on or after January 1, 2020 destroying or damaging at least 500 Structures within
      PG&E’s service area at a time when the portion of PG&E’s system at the location of such wildfire was not successfully de-energized; (xi) the Debtors shall not have received at least $14,00012,000 million of equity commitments by November 7,December 24, 2019 on terms reasonably satisfactory to the Commitment Parties, (xii) since June 30, 2019, a
      Material Adverse Effect shall have occurred; (xiii) the Debtors have failed to perform any of their obligations set forth in this Commitment Letter, which failure to perform (A) would give rise to the failure of the condition set forth in paragraph
      1(a) or 1(d) on Annex B hereto and (B) is incapable of being cured or, if capable of being cured by June 30, 2020, the Debtors have not cured within 10 calendar days following receipt by the Debtors of written notice of such failure to perform from
      the Commitment Parties holding a majority of the commitments in respect of the Facility, (xiv) to the extent that there is a similar termination event
        under the BCLs as of the applicable date of determination, if at any time after the first day of the Confirmation Hearing (as defined in the Plan), either (A) asserted Administrative Expense Claims
      (as defined in the Plan) exceed $250 million (excluding all ordinary course Administrative Expense Claims, Professional Fee Claims, and Disallowed Administrative Expense Claims and the
        portion of an Administrative Expense Claim that is covered by insurance (in each case, as defined in the Plan) and including for the avoidance of doubt, any
      such expenses or claims with respect to the Facility) and (collectively, the “Excluded Administrative Expense Claims”)) or (B) the Debtors have reserved for and/or paid more than $250 million in the aggregate for Administrative Expense Claims, excluding
        the Excluded Administrative Expense Claims, (xv) on or prior to June 30, 2020, the Borrower shall not have received from the California Public Utilities Commission (the “CPUC”) all necessary approvals, authorizations and
      final orders to implement the Plan, and to participate in the Go-Forward Wildfire Fund (as defined in the Plan),
    including (iA) provisions pertaining to authorized return on equity and regulated capital structure, (iiB) a disposition of proposals for certain potential changes to PG&E’s corporate structure and authorizations for the Utility to operate as a utility, (iiiC) resolution of claims for monetary fines or penalties under the California Public Utilities Code for

  

  

  
    14

    
      

  

  

  

  conduct prior to the Petition Date and (ivD) approval (or exemption from approval) of the financing structure and the securities to be issued under the Plan, (xvi) if at any time the Bankruptcy Court determines that the Debtors are insolvent and (xvii) the Plan, any Plan Supplement or any Plan Document is amended, modified or changed, in each case without the consent of the Required
        Commitment Parties to include a process for transferring the license and operating assets of the Utility to the State of California or a third party (a “Transfer”) or PG&E effects a Transfer other than pursuant to the
        Plan; (the earliest date in clauses (ii) through (xvxvii) being the “Commitment Termination Date”); provided that the termination of any commitment pursuant to this sentence does not prejudice your rights and
      remedies in respect of any breach of this Commitment Letter. You will have the right to terminate this Commitment Letter in the event that the Debtor’s exclusive periods to file and solicit acceptances of a plan of reorganization are terminated or
      modified.

  

  

  Please confirm that the foregoing is in accordance with your understanding by signing and returning to JPMorgan an executed copy of this Commitment Letter,
    together, if not previously executed and delivered, with an executed copy of the Fee Letter, on or before 11:59 p.m., New York City time, on October 11, 2019, whereupon this Commitment Letter and the Fee Letter will become binding agreements between
    us. This offer will terminate on such date if this Commitment Letter and the Fee Letter have not been signed and returned as described in the preceding sentence. We look forward to working with you on this transaction.

  

  

  [Remainder of page intentionally left blank]

  

  

  
    15

    
      

  

  

  

  Schedule I

  

  

  Titles

  

  

  	
          Commitment Party (or its designated affiliate)

           

        	
          Title(s)

        
	
          BNP Paribas

        	
           

          Joint Lead Arranger and Co-

           Documentation Agent

        
	
          Credit Suisse AG, Cayman Islands Branch

        	
           

          Joint Lead Arranger and Co-

           Documentation Agent

        
	
          Morgan Stanley Bank, N.A.

        	
           

          Joint Lead Arranger and Co-

           Documentation Agent

        
	
          MUFG Union Bank, N.A.

        	
           

          Joint Lead Arranger and Co-

           Documentation Agent

        
	
          Wells Fargo Bank, National Association

        	
           

          Joint Lead Arranger and Co-

           Documentation Agent

        
	
          Mizuho Bank, Ltd.

        	
           

          Joint Lead Arranger and Co-

           Documentation Agent

        

  

  

  
    
      

  

  

  

  Schedule II

  

  

  Commitments

  

  

  	
           

          Commitment Party

           

        	
           

          Commitment

           

        
	
          JPMorgan Chase Bank, N.A.

           

           

        	
          $4,582,972,973.00

           

        
	
          Bank of America, N.A.

           

           

        	
          $4,582,972,972.98

           

        
	
          Barclays Bank PLC

           

        	
          $4,582,972,972.98

           

        
	
          Citi

           

           

        	
          $4,582,972,972.98

           

        
	
          Goldman Sachs Lending Partners LLC

           

           

        	
          $2,132,972,972.98

           

        
	
          Goldman Sachs Bank USA

           

           

        	
          $2,450,000,000.00

           

        
	
          BNP Paribas

           

           

        	
          $739,189,189.18

           

        
	
          Credit Suisse AG, Cayman Islands Branch

           

           

        	
          $739,189,189.18

           

        
	
          Morgan Stanley Bank, N.A.

           

           

        	
          $739,189,189.18

           

        
	
          MUFG Union Bank, N.A.

           

           

        	
          $739,189,189.18

           

        
	
          Wells Fargo Bank, National Association

           

           

        	
          $739,189,189.18

           

        

  

  

  
    
      

  

  

  

  	
          Mizuho Bank, Ltd.

           

           

        	
          $739,189,189.18

           

        
	
          Total:

           

           

        	
          $27,350,000,000.00

           

           

        

  

  

  
    
      

    A-3

  

  
  

  

  
    	 	
            any Qualifying Bank Financing of PG&E;

          
	 	 
	 	
            provided, however, that until such time as the Backstop Commitments (as defined in those certain Chapter 11 Plan Backstop Commitment
                Letters (the “BCLs”), as in effect on the date hereofDecember 20,
                  2019) have been reduced to $0, except as contemplated by the proviso to the Excluded Debt definition below, the commitments in respect of the
                Facility shall not be reduced by any cash proceeds from any Additional Capital Source (as defined in the BCLs, as in effect on the date hereofDecember 20, 2019) to the extent that
                such cash proceeds also reduce the Backstop Commitments.

          
	 	 
	 	
            Mandatory prepayments or reductions under clause (a) and (b) above, or the proviso to the Excluded Debt definition below, may be applied, at the
              option of the Borrower, either to prepay loans or reduce commitments under the Facility and that certain senior unsecured bridge facility of PG&E described in the commitment letter dated as of the date hereof among PG&E, the Borrower,
              JPMorgan and the other “Commitment Parties” party thereto (such facility, the “PG&E Facility”), provided that (i) the Borrower may not prepay loans
              or reduce commitments under the Facility without prepaying or reducing the PG&E Facility on a pro rata basis and (ii) Net Cash Proceeds of any Notes issued by the Borrower shall be applied to prepay loans or reduce commitments under the
              Facility before being applied to prepay or reduce the PG&E Facility. The application of Net Cash Proceeds received by the Utility to prepay or reduce the PG&E Facility shall be subject to requisite regulatory approvals (and such Net
              Cash Proceeds shall be applied to prepay or reduce the Facility to the extent not permitted to be applied to prepay or reduce the PG&E Facility). For the avoidance of doubt, each dollar from a mandatory prepayment or reduction event
              described under this heading shall be applied to reduce either (but not both) of the commitments under the Facility or the commitments under the PG&E Facility, or to prepay either (but not both) the loans under the Facility or the loans
              under the PG&E Facility, in each case in accordance with the terms described under this heading.

          
	 	 
	 	
            Furthermore, the obligations of the Commitment Parties to fund on the Closing Date in respect of the Facility under the Commitment Letter or
              under the Facility Documentation (as applicable) shall be automatically and permanently reduced, without penalty or premium and on a dollar-for-dollar basis, by (without duplication of any of the clauses above) the aggregate principal amount
              of any roll-over, “take-back” or reinstated debt (the “Surviving Debt”) of the Borrower or its subsidiaries.

          
	 	 
	 	
            “Net Cash Proceeds” shall mean:

          
	 	 
	 	
            (a) with respect to a sale or other disposition of any assets of the Borrower, PG&E or any of their respective subsidiaries, the excess,

          

    

    

  

  

  
    
      

    A-5

  

  
  

  

  
    	 	
            
              up to an aggregate amount not to exceed the amount of the revolving commitments
                  in effect thereunder on the date of the Commitment Letter, (v) incremental facilities under the DIP Facility Credit Agreement (or refinancings thereof) or any new debtor-in-possession facilities, in either case that are to be paid in full
                  in cash at emergence from the Chapter 11 Cases, (vi) securitization securities or facilities contemplated by the Plan,, and (vii) issuances of debt by
                  PG&E in a principal amount not to exceed $7,000 million and debt or unfunded commitments under a revolving credit facility to be entered into by PG&E in an amount not to exceed $500 million, in each case as contemplated by the
                  Plan; provided that, notwithstanding the
                  foregoing, if (A) the aggregate principal amount of Specified Debt issued or incurred by the Borrower or its subsidiaries plus the aggregate principal amount of Excluded Debt issued or incurred by the Borrower or its subsidiaries pursuant
                  to clause (iv), (v) or (vi) plus the principal amount of Surviving Debt of the Borrower or its subsidiaries exceeds $30,000 million, or (B) the aggregate principal amount of Specified Debt issued or incurred by PG&E plus the aggregate
                  principal amount of Excluded Debt issued or incurred by PG&E pursuant to clause (vi) or (vii) plus the principal amount of Surviving Debt of PG&E exceeds $7,000 million, then in either case the commitments with respect to the
                  Facility shall be reduced, or the loans under the Facility shall be prepaid, by an equivalent amount (for the avoidance of doubt, until such commitments or the aggregate principal amount of such loans, in either case, equal zero).

               

             

          
	 	 
	 	
            “Excluded Equity Offerings” shall mean (i) issuances pursuant to employee compensation plans, employee benefit plans, employee based
                incentive plans or arrangements, employee stock purchase plans, dividend reinvestment plans and retirement plans or issued as compensation to officers and/or non-employee directors or upon conversion or exercise of outstanding options or
                other equity awards, (ii) issuances of directors’ qualifying shares and/or other nominal amounts required to be held by persons other than PG&E, the Borrower and their respective subsidiaries under applicable law, (iii) issuances to or
                by the Borrower or any subsidiary of the Borrower to PG&E, the Borrower or any other subsidiary of the Borrower (including in connection with existing joint venture arrangements), (iv) any equity issued pursuant to the Plan in an
                aggregate amount not to exceed $14,00012,000 million and (v) additional exceptions to be agreed.

          
	 	 
	 	
            “Qualifying Bank Financing” shall mean a committed but
              unfunded bank or other credit facility for the incurrence of debt for borrowed money by PG&E or the Borrower that has become effective for the purposes of financing the Transactions (excluding, for the avoidance of doubt, the Facility),
              subject to conditions to funding that are, in the written determination of the Borrower, no less favorable to the Borrower than the conditions to the funding of

          

    

    

  

  
    
      

    A-6

  

  
  

  

     
  	 	
          the Facility set forth herein.

        
	 	
          In addition, with respect to any Included Securitization Transaction, (x) if the proceeds of such Included Securitization Transaction are received, or commitments with respect thereto are entered into, on or
              prior to the Closing Date, such proceeds or committed amounts shall be applied as set forth under “Closing Date Securitization Waterfall” below and (y) if the proceeds of such Included Securitization Transaction are received after the Closing
              Date, then, without duplication of any reduction pursuant to clause (x) above, such proceeds shall be applied to prepay the PG&E Facility to the maximum extent permitted by applicable law and regulatory approvals and thereafter shall be
              applied to prepay the Facility.

        
	 	
          
            “Included Securitization Transaction” shall mean any
                  securitization transaction of PG&E, the Borrower or its Subsidiaries other than any non-recourse pass-through securitization transaction contemplated by A.B. 1054, 2019 Assemb. (Cal. 2019) (for the avoidance of doubt, non-recourse
                  pass-through securitization transactions shall not include any securitization all or a portion of which is, directly or indirectly, credited, rebated or otherwise paid to customers).

          

           
	 	
          “Fire Victim Trust Securitization” shall mean a tax benefits securitization all or a portion of the proceeds
              of which will be utilized to finance the Fire Victim Trust contemplated by (and as defined in) the Plan.

              

        
	 	
          In addition, the aggregate commitments in respect of the Facility shall be permanently reduced to zero on the Commitment Termination Date.

        
	 	
          The Borrower shall provide the Administrative Agent with prompt written notice of any mandatory prepayment or commitment reduction being required
            hereunder.

        
	 	
          Amounts borrowed under the Facility that are repaid or prepaid may not be reborrowed.

        
	
          Closing Date Securitization Waterfall:

           

        	
          
            On or prior to the Closing Date, the proceeds of all Included
                  Securitization Transactions shall be applied as follows (the “Closing Date Securitization Waterfall”):

          

        
	 	
          
            First, to the extent constituting proceeds of a Fire Victim Trust Securitization, to finance the Fire Victim Trust as contemplated by the Plan, up to $1,350 million;

            

           

              

          
            
              Second, to reduce commitments under the PG&E Facility on a dollar-for-dollar basis in accordance with the Mandatory Prepayments and Commitment
                    Reductions section above, up to $2,000 million;

              

             

        

  

  

  
    
      

    A-7

  

  

  

  

  

  	 	
          
             Third, to be deposited as cash on the balance sheet of PG&E, the Borrower or its Subsidiaries on the Closing Date, up to $650 million;

            

          

          

          
            Fourth, at the Borrower’s election, in lieu of (and to reduce) the minimum equity requirement (and the intended use of proceeds thereof) as specified in clause 14 of
                  Annex B, up to $4,000 million;

            

        
	 	
          
            
              Thereafter, as the Borrower shall direct (but, for the avoidance of doubt, with no further reduction to the minimum equity requirement, as specified in
                    clause 14 of Annex B).

              

             

        
	
          Voluntary Prepayments and

           
          Reductions in Commitments:

           

        	
          Prepayments of borrowings under the Facility will be permitted at any time, in whole or in part and in minimum principal amounts to be agreed upon,
            without premium or penalty, subject to reimbursement of the Lenders’ redeployment costs in the case of a prepayment of Adjusted LIBOR borrowings other than on the last day of the relevant interest period. The Borrower may voluntarily reduce
            unutilized portions of the commitments under the Facility at any time without penalty.

        
	 	
          Amounts borrowed under the Facility that are repaid or prepaid may not be reborrowed.

        
	
          Documentation:

           

        	
          The making of the loans under the Facility will be governed by definitive loan and related agreements and documentation (collectively, the “Facility Documentation” and the principles set forth in this paragraph, the “Documentation

              Principles”) to be negotiated in good faith, which will be based on the Borrower’s Second Amended and Restated Credit Agreement, dated as of April 27, 2015, among the Borrower, the financial institutions from time to time party thereto
            and Citibank, N.A., as administrative agent (as amended from time to time prior to the date hereof, the “Pre-Petition Credit Agreement”). The Facility
            Documentation will contain only those representations and warranties, affirmative and negative covenants, mandatory prepayments and commitment reductions, and events of default expressly set forth in the Commitment Letter (including this Annex
            A). The Facility Documentation shall include modifications to the Pre-Petition Credit Agreement (a) as are necessary to reflect the terms set forth in the Commitment Letter (including this Annex A) and the Fee Letter, (b) to reflect any changes
            in law or accounting standards since the date of the Pre-Petition Credit Agreement, (c) to reflect the operational or administrative requirements of the Administrative Agent and operational requirements of the Borrower and its subsidiaries, (d)
            to reflect the nature of the Facility as a bridge facility, (e) to reflect the Borrower’s pro forma capital structure, (f) to reflect certain provisions in the DIP Facility Credit Agreement to be agreed and (g)

           

        

  

  

  
    
      

    ANNEX A-1

  

  
  

  

  

  

  	
          Interest Rates:

        	
          The interest rates under the Facility will be, at the option of the Borrower, (a) Adjusted LIBO Rate plus the Applicable Adjusted LIBO Rate Margin
            (each as defined below) or (b) ABR (as defined below) plus the Applicable Adjusted LIBO Rate Margin minus 1.00% (but in any event not less than 0.00%).

        
	 	 
	 	
          The Borrower may elect interest periods of 1, 2, 3 or 6 months for Adjusted LIBO Rate borrowings. Calculation of interest shall be on the basis of
            the actual number of days elapsed in a year of 360 days (or 365 or 366 days, as the case may be, in the case of ABR loans based on the prime rate) and interest shall be paid in arrears (i) at the end of each interest period and no less
            frequently than quarterly, in the case of Adjusted LIBO Rate advances, and (ii) quarterly, in the case of ABR advances.

        
	 	 
	 	
          “ABR” is the Alternate Base Rate, which is the greatest of
            (i) the Prime Rate, (ii) the NYFRB Rate from time to time plus 0.5% and (iii) the Adjusted LIBO Rate for a one month interest period on the applicable date plus 1%.

           

        
	 	 
	 	
          “Adjusted LIBO Rate” means the LIBO Rate, as adjusted for
            statutory reserve requirements for eurocurrency liabilities.

           

        
	 	
          “Interpolated Rate” means, at any time, for any interest period, the rate per annum (rounded to the same number of decimal places as the LIBO Screen
              Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate for the
              longest period (for which the LIBO Screen Rate is available for the applicable currency) that is shorter than the Impacted Interest Period; and (b) the LIBO Screen Rate for the shortest period (for which that LIBO Screen Rate is available for the applicable currency)) that exceeds the Impacted Interest Period, in each case, at such time; provided that if any Interpolated Rate as so determined would be less than zero, such rate shall be deemed to be zero for the
              purposes of the Facility Documentation.

        
	 	 
	 	
          “LIBO Rate” means, with respect to any EurocurrencyEurodollar borrowing for any applicable currency and for any interest period, the LIBO Screen Rate at approximately 11:00 a.m., London time, two business days prior to the commencement of such interest period; provided that if the LIBO Screen Rate shall not be
              available at such time for such interest period (an “Impacted Interest Period”) with respect to the

        

  

  

  
    
      

    B-1-2

  

  
  

  

  	 	
          applicable currency then the LIBO Rate shall be the Interpolated Rate.

        
	 	 
	 	
          “LIBO Screen Rate” means, for any day and time, with respect to any EurocurrencyEurodollar borrowing for any applicable currency and for any interest period, the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of
              such rate) for the relevant currency for a period equal in length to such interest period as displayed on such day and time on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any
              successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable
              discretion); provided that if the LIBO
              Screen Rate as so determined would be less than zero, such rate shall be deemed to zero for the purposes of calculating such rate.

        
	 	 
	 	
          “NYFRB” means the Federal Reserve Bank of New York.

        
	 	 
	 	
          “NYFRB Rate” means, for any day, the greater of (i) the
            Federal Funds Effective Rate in effect on such day and (ii) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a business day, for the immediately preceding business day); provided that if none of such rates are published for any day that is a business day, the term “NYFRB Rate” means the rate quoted for such day for a federal funds transaction at
            11:00 a.m., New York City time, on such day received by the Administrative Agent from a federal funds broker of recognized standing selected by it; provided,
            further, that if any of the aforesaid rates as so determined would be less than zero, such rate shall be deemed to be zero for purposes of the Facility
            Documentation.

        
	 	 
	 	
          “Overnight Bank Funding Rate” means, for any day, the rate
            comprised of both overnight federal funds and overnight eurodollar borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on its public website from time to
            time, and published on the next succeeding business day by the NYFRB as an overnight bank funding rate.

        
	 	 
	 	
          “Prime Rate” means the rate of interest last quoted by The
            Wall Street Journal as the “Prime Rate” in the U.S.

        

  

  

  

  

  
    
      

  

  

  

  ANNEX B

  

  

  

  

  $27,350 Million Senior Secured 364-Day Facility

  Conditions3

  

  

  The borrowing under the Facility shall be subject to the satisfaction or waiver by the Commitment Parties of the following conditions:

  

  

  1.          (a) The Bankruptcy Court shall have entered (x) the Approval Order and (y) a confirmation order confirming the Plan with respect to the Debtors in form and substance reasonably satisfactory to the
        Required Commitment Parties (the “Confirmation Order”) by
        no later than June 30, 2020, each of which shall (i) not be stayed, (ii) be in full force and effect, (iii) be final and non-appealable, and (iv) not have been reversed, vacated, amended, supplemented, or otherwise modified in a manner adverse to
        the interests of the Commitment Parties without the consent of the Required Commitment Parties (such consent not to be unreasonably withheld, conditioned or delayed; provided modifications to the Plan solely as a result of an increase in roll-over, “take-back” or reinstatement of any existing debt of
        the Debtors shall be deemed not to be adverse to the Commitment Parties for the purposes of this clause (iv)), (b) none of the Plan, the Confirmation Order or the Approval Order shall have been amended or modified or any condition contained therein
        waived, in either case without the consent of the Required Commitment Parties (such consent not to be unreasonably withheld, conditioned or delayed), (c) the Plan shall have become effective in accordance with its terms no later than 60 days after the entry of the Confirmation
        Order, and all conditions precedent to the effectiveness of the Plan shall have been, or substantially contemporaneously with the closing under the Facility, will be, satisfied or waived (to the extent adverse to their interests, with the prior
        consent of the Required Commitment Parties (such consent not to be unreasonably withheld, conditioned or delayed)), (d) the transactions as described and defined in the Plan to occur upon the Effective Date of the Plan shall have been consummated,
        or substantially concurrently with the closing of the Facility will be consummated, on the Closing Date, (e) the Debtors shall be in compliance in all material respects with the Confirmation Order and (f) all documents necessary to implement the
        Plan and the financings and distributions contemplated thereunder shall have been executed (each, to the extent of which shall either (x) not be adverse to theirthe interests, of the Commitment Parties or (y)
          be in form and substance reasonably acceptable to the Required Commitment Parties).

  

  

  2.          (x) The Arrangers shall have received (a) U.S. GAAP audited consolidated balance sheets and related consolidated statements of income and comprehensive income, of shareholders’ equity and of cash
        flows of the Borrower and its subsidiaries for the three most recent fiscal years ended at least 60 days prior to the Closing Date and (b) U.S. GAAP unaudited consolidated balance sheets and related consolidated statements of income and
        comprehensive income, of shareholders’ equity and of cash flows of the Borrower and its subsidiaries for each subsequent fiscal quarter ended at least 40 days before the Closing Date (other than the last fiscal quarter of any fiscal year); provided that in each case the financial statements required to be
        delivered by this paragraph 2(x) shall meet the requirements of Regulation S-X under the Securities Act, and all other accounting rules and regulations of the SEC promulgated thereunder applicable to a registration statement on Form S-1, in all
        material respects. The Arrangers hereby acknowledgesacknowledge receipt of the financial statements of the Utility in the foregoing clause (a) for the fiscal years ended
        December 31, 2018, December 31, 2017 and December 31, 2016, and in the foregoing clause (b) for the fiscal quarters ended June 30, 2019 and March 31, 2019. The Borrower’s filing of any required audited financial statements with respect to the
        Borrower on Form 10-K or required unaudited financial statements with respect to the Borrower on Form 10-Q, in each case, will satisfy the requirements under clauses (a) or (b), as applicable, of this paragraph.

  

  

  

  

  

  

  

  3 All capitalized terms used but not defined herein have the meanings given to them
      in the Commitment Letter to which this Annex B is attached, including Annex A thereto.

   

    

  
    
      

    B-3

  

  
  

  

  respect to any real property that constitutes Collateral, the Commitment Parties shall be satisfied that flood insurance due diligence and flood insurance compliance has
    been completed.

  

  

  10.          The Borrower shall have
      received investment grade senior secured debt ratings of (i) in the case of Moody’s, Baa3 or better and (ii) in the case of S&P, BBB- or better and in each case, with a stable or better outlook.

  

  

  11.          Total PG&E weighted average earning rate base (including electric generation, electric transmission, electric distribution, gas distribution, gas transmission and storage) for estimated 2021 as
        approved by the California Public Utilities Commission (the “CPUC”) shall be no less than 95% of $48 billion.

  

  

  12.          Since June 30, 2019, no result, occurrence, fact, change, event, effect, violation, penalty, inaccuracy or circumstance (whether or not constituting a breach of a representation, warranty or covenant
        set forth in the Plan) that, individually or in the aggregate with any such other results, occurrences, facts, changes, events, effects, violations, penalties, inaccuracies, or circumstances, (i) would have or would reasonably be expected to have a
        material adverse effect on the business, operations, assets, liabilities, capitalization, financial performance, financial condition or results of operations, in each case, of the Debtors, taken as a whole, or (ii) would reasonably be expected to
        prevent or materially delay the ability of the Debtors to consummate the transactions contemplated by this Commitment Letter or the Plan or perform their obligations hereunder or thereunder, including their obligations under the Facility or the
        PG&E Facility (each a “Material Adverse Effect”) shall have occurred; provided, however,
      that none of the following results, occurrences, facts, changes, events, effects, violations, penalties, inaccuracies or circumstances shall constitute or be taken into
        account in determining whether a Material Adverse Effect has occurred, is continuing or would reasonably be expected to occur: (A) the filing of the Chapter 11 Cases, and the fact that the Debtors are operating in bankruptcy, (B) results,
        occurrences, facts, changes, events, violations, inaccuracies or circumstances affecting (1) the electric or gas utility businesses in the United States generally or (2) the economy, credit, financial, capital or commodity markets, in the United
        States or elsewhere in the world, including changes in interest rates, monetary policy or inflation, (C) changes or prospective changes in law (other than any law or regulation of California or the United States that is applicable to any electrical
        utility) or in GAAP or accounting standards, or any changes or prospective changes in the interpretation or enforcement of any of the foregoing, (D) any decline in the market price, or change in trading volume, of any securities of the Debtors, (E)
        any failure to meet any internal or public projections, forecasts, guidance, estimates, milestones, credit ratings, budgets or internal or published financial or operating predictions of revenue, earnings, cash flow or cash position, (F) any
        wildfire occurring after the Petition Date and prior to January 1, 2020, and (G) one or more wildfires, occurring on or after January 1, 2020, that destroys or damages fewer than 500 Structures in the aggregate (it being understood that (I) the
        exceptions in clauses (D) and (E) shall not prevent or otherwise affect a determination that the underlying cause of any such change, decline or failure referred to therein is a Material Adverse Effect, and (II) a Material Adverse Effect shall
        include the occurrence of one or more wildfires on or after January 1, 2020 destroying or damaging at least 500 Structures within PG&E’s service area at a time when the portion of PG&E’s system at the location of such wildfire was not
        successfully de-energized.

  

  

  13.          The Debtors’ aggregate liability with respect to WildfireFire Claims shall be determined (whether (i) by the Bankruptcy Court (or the District Court to which the reference has been partially withdrawn for estimation purposes), (ii)
        pursuant to an agreement between the Debtors and the holders of WildfireFire Claims, or (iii) through a combination thereof) not to exceed the Wildfire Claims Cap; provided, however, that for purposes of this paragraph 13, (A) any Wildfire Claim that the CPUC has approved or agreed to approve for recovery or pass through by the Utility shall not
          count in determining the Wildfire Claims Cap and (B) the Wildfire Claims Cap shall be increased by an amount equal to the

  

  

  
    
      

    B-4

  

  
  

  

  amount of Wildfire Claims consisting of professional fees that the Bankruptcy Court
        (or the District Court to which the reference has been partially withdrawn for estimation purposes) determines to be reasonable.Fire Claims Cap.

  

  

  14.          PG&E shall have received at least $14,00012,000 million of proceeds from the issuance of equity, on terms acceptable to each
        Commitment Party in its sole discretion, provided that (i) up to $2,000 million of such proceeds shall
        be permitted to come from the proceeds of preferred equity, or equity-linked securities or

          securitizations issued by PG&E or the Utility, so long as such issuance could not reasonably be expected to negatively impact cash distributions
        to PG&E or distributions that will be available to service debt at PG&E. and (ii) such amount may be reduced by up to $4,000 million from the proceeds of any Included Securitization Transaction on terms reasonably satisfactory to the Commitment Parties
          subject to compliance with the Closing Date Securitization Waterfall set forth in Annex A. The economic benefit of the net operating loss carryforwards and other tax attributes of PG&E, the Borrower or its subsidiaries shall not have been
          transferred (pursuant to a tax monetization transaction or otherwise) except on terms that could not reasonably be expected to negatively impact the cash flows of PG&E, the Borrower or its subsidiaries as determined by the Arrangers in their
          sole discretion.

  

  

  15.          The Utility has both
      (i) elected, and received Bankruptcy Court approval, to participate in the Go-Forward Wildfire Fund (as defined in the Plan) and (ii) satisfied the other conditions to participation in the Go-Forward Wildfire Fund set forth in the Wildfire
      Legislation (as defined in the Plan).

  

  

  16.          PG&E shall own
      directly 100% of the common stock of the Borrower.

  

  

  17.          No order of a governmental authority of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation or funding of any transactions contemplated by the Plan shall have been
        received by the Debtors, and no law, statute, rule, regulation or ordinance shall have been adopted that makes the consummation or funding of any transactions contemplated by the Plan illegal or otherwise prohibited. The Borrower shall have delivered to the Arrangers a financial model satisfactory to the Arrangers reflecting sources and uses and capital structure,
          together with a certification by the Borrower that such financial model demonstrates compliance with all regulatory requirements (including all CPUC approvals).

  

  

  18.          One or more investment
      banks reasonably satisfactory to the Commitment Parties shall have been engaged to publicly sell or privately place the Notes for the purpose of reducing, replacing or refinancing the Facility.Exhibit 4.1

 

NEITHER THIS SECURITY NOR THE SECURITIES AS TO WHICH THIS SECURITY MAY BE EXERCISED HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

FORM OF COMMON STOCK PURCHASE WARRANT

 

JAGUAR HEALTH, INC.

 

Warrant No.:

Warrant Shares:

Date of Issuance: December     , 2019 (the “Issuance Date”)

 

THIS COMMON STOCK PURCHASE WARRANT certifies that, for value received,                                or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time during the period (the “Exercise Period”) commencing on the date that is six (6) months after the Issuance Date and ending on 11:59 p.m., New York City time, on the Expiration Date (as defined below) but not thereafter, to subscribe for and purchase from Jaguar Health, Inc., a Delaware corporation (the “Company”), up to                             (                      ) shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).  This Warrant (including any Warrants to purchase Common Stock issued in exchange, transfer or replacement hereof, this “Warrant”) is one of the Warrants to purchase Common Stock (the “SPA Warrants”) issued pursuant to Section 1 of the Securities Purchase Agreement (as defined below).

 

Section 1.              Definitions.  In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the closing bid price of the Common Stock for the Trading Day in question (or the nearest

 

1

 

preceding Trading Day until the close of the current Trading Day) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by in good faith by the Company.

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

 

“Common Stock Equivalents” means any securities of the Company or its subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Expiration Date” means the earliest to occur of the following: (a) 5:00 p.m. (New York City time) on the date that is five (5) years from the Issuance Date, or if such date falls on a day other than a Business Day or on which trading does not take place on the Trading Market (a “Holiday”), the next date that is not a Holiday, (b) the closing of (i) a merger, reorganization, tender offer or similar transaction involving the Company or its securities with or into another entity in which the holders of voting securities of the Company immediately prior to such transaction will hold less than 50% of the voting securities of the surviving entity immediately following such transaction as a result of shares held prior to such transaction or (ii) a sale or license of all or substantially all of the assets of the Company (each, a “Fundamental Transaction”), and (c) a “Liquidation Event” as defined in the Company’s Certificate of Designation of Series A Convertible Participating Preferred Stock occurs, provided that, in the case of clauses (b) and (c) hereof, such termination shall be effected by delivery of written notice to the Holder regarding such termination, and such written notice shall include an option for the Holder to choose, in its sole discretion, to exercise this Warrant in lieu of termination at that time.

 

2

 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Required Holders” means the holders of the SPA Warrants representing at least a majority of shares of Common Stock underlying the SPA Warrants then outstanding.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Securities Purchase Agreement” means the securities purchase agreement, dated as of December 20, 2019, among the Company and the investors referred to therein, as amended, modified or supplemented from time to time in accordance with its terms.

 

“Trading Day” means a day on which the Common Stock is traded on a Trading Market.

 

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing.

 

“Transfer Agent” means American Stock Transfer and Trust Company LLC, the current transfer agent of the Company, with a mailing address of 6201 15th Avenue, Brooklyn, NY 11219 and a facsimile number of (718) 234-5001 and any successor transfer agent of the Company.

 

Section 2.      Exercise.

 

a)            Exercise of Warrant.  Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times during the Exercise Period by delivery to the Company of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(c)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  The Holder and

 

3

 

the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof. In no event will the Company be required to net cash settle a Warrant exercise.

 

b)                                     Exercise Price.  For purposes of this Warrant, “Exercise Price” means $0.78 per share, subject to adjustment hereunder.

 

c)                                      Mechanics of Exercise.

 

i.      Delivery of Warrant Shares Upon Exercise.  The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise.   Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise.  The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable.  As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.  Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Securities Purchase Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date.

 

ii.     Delivery of New Warrants Upon Exercise.  If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder

 

4

 

and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii.    No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

iv.    Charges, Taxes and Expenses.  Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.  The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

 

v.     Closing of Books.  The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

d)            Holder’s Exercise Limitations.  The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or

 

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Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other  Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties.  Except as set forth in the preceding sentence, for purposes of this Section 2(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.   To the extent that the limitation contained in this Section 2(d) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.  In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  For purposes of this Section 2(d), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any SPA Warrants, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.  The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(d), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(d) shall continue to apply.  Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership

 

6

 

Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

Section 3.              Certain Adjustments.

 

a)            Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b)            Pro Rata Distributions.  During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

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c)             Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

d)            Notice to Holder.

 

i.      Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii.     Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the Company effects a Fundamental Transaction, or (E) a Liquidation Event occurs, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 10 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such Fundamental Transaction is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such Fundamental Transaction; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.  To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of its subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.  The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

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Section 4.      Transfer of Warrant.

 

a)            Transferability.  Each Holder understands that, except as provided in the Securities Purchase Agreement: (i) the SPA Warrants have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, or (B) such Holder shall have delivered to the Company an opinion of counsel, in a form reasonably acceptable to the Company, to the effect that such SPA Warrants to be sold, assigned or transferred may be sold, assigned or transferred pursuant to Rule 144, as amended, promulgated under the Securities Act (or a successor rule thereto) (“Rule 144”) or an exemption from such registration, (ii) any sale of the SPA Warrants made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the SPA Warrants under circumstances in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder, and (iii) neither the Company nor any other Person is under any obligation to register the SPA Warrants under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

 

b)            New Warrants. This Warrant may be divided or combined with other SPA Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new warrant or warrants in exchange for this Warrant or SPA Warrants to be divided or combined in accordance with such notice. All warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c)             Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

Section 5.      Miscellaneous.

 

a)            No Rights as Stockholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(c)(i), except as expressly set forth in Section 3.

 

b)            Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of this Warrant, shall not include the posting of any

 

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bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c)             Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

 

d)            Authorized Shares.

 

The Company covenants that, during the period this Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number

 

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of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e)             Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of California, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the County of San Francisco in the State of California. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the County of San Francisco in the State of California for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

f)             Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.

 

g)             Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies.  Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

h)            Notices.  Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 7(i) of

 

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the Securities Purchase Agreement. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.

 

i)              Limitation of Liability.  No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

j)             Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k)            Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l)              Amendment.  The provisions of this Warrant may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Required Holders; provided that no such action may (i) increase the exercise price of any Warrant, (ii) decrease the number of shares or class of stock obtainable upon exercise of any Warrant, (iii) shorten the Expiration Date, or (iv) amend Section 3 without the written consent of the Holder. No such amendment shall be effective to the extent that it applies to less than all of the holders of the SPA Warrants then outstanding.

 

m)           Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

n)            Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

********************

 

(Signature Page Follows)

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

 

	
 
    	
JAGUAR   HEALTH, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

13

 

NOTICE OF EXERCISE

 

TO:         JAGUAR HEALTH, INC.

 

(1)    The undersigned hereby elects to purchase             Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any, in the sum of $                 in accordance with the terms of the Warrant.

 

(2)    Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

 

 

 

The Warrant Shares shall be delivered to the following DWAC Account Number:

 

 

 

 

 

 

 

 

 

 

[SIGNATURE OF HOLDER]

 

	
Name   of Investing Entity:
    	
 
    

 

	
Signature   of Authorized Signatory of Investing Entity:
    	
 
    

 

	
Name   of Authorized Signatory:
    	
 
    

 

	
Title   of Authorized Signatory:
    	
 
    

 

	
Date:
    	
 
    

 

 

 

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute this form and supply required information.  Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
(Please Print)
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    
	
 
    	
 
    	
(Please Print)
    
	
 
    	
 
    	
 
    
	
Phone Number:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Email Address:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:
    	
                                                   ,
    	
 
    	
      
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Holder’s   Signature:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Holder’s   Address:
    	
 
    	
 
    	
 
    
								

 

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