Document:

EX-4.27

 Exhibit 4.27 
 [FORM OF SUPPLEMENTAL INDENTURE] 
  

 

             Supplemental Indenture 

Dated as of                     ,
20     
 Supplement to the Amended and Restated Indenture 

Dated as of April 22, 2005 
  

 
 PACIFIC GAS
AND ELECTRIC COMPANY 
 Issuer 
 and 
 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. 

Trustee 
  

 
  

 

 TABLE OF CONTENTS 

 

							
	 	  	Page	 
	 ARTICLE I DEFINITIONS
	  	 	2	  
		
	 [ARTICLE [II] ESTABLISHMENT OF THE FLOATING RATE SENIOR NOTES; TERMS]
	  	 	4	  
			
	 [SECTION 201
	 	Establishment and Designation of the Floating Rate Senior Notes.]	  	 	4	  
			
	 [SECTION 202
	 	Form of the Floating Rate Senior Notes.]	  	 	5	  
			
	 [SECTION 203
	 	Principal Amount of the Floating Rate Senior Notes.]	  	 	5	  
			
	 [SECTION 204
	 	Interest Rates; Stated Maturity of the Floating Rate Senior Notes.]	  	 	5	  
			
	 [SECTION 205
	 	No Sinking Fund.]	  	 	5	  
			
	 [SECTION 206
	 	No Redemption.]	  	 	5	  
			
	 [SECTION 207
	 	Paying Agent and Bond Registrar.]	  	 	5	  
			
	 [SECTION 208
	 	Calculation Agent.]	  	 	5	  
			
	 [SECTION 209
	 	Global Securities; Appointment of Depositary for Global Securities.]	  	 	5	  
			
	 [SECTION 210
	 	Other Terms of the Floating Rate Senior Notes.]	  	 	6	  
		
	 [ARTICLE [III] ESTABLISHMENT OF THE              % SENIOR
NOTES; TERMS]
	  	 	6	  
			
	 [SECTION 301
	 	Establishment and Designation of the             % Senior Notes.]	  	 	6	  
			
	 [SECTION 302
	 	Form of the             % Senior Notes.]	  	 	6	  
			
	 [SECTION 303
	 	Principal Amount of the             % Senior Notes.]	  	 	7	  
			
	 [SECTION 304
	 	Interest Rates; Stated Maturity of the             % Senior Notes; Minimum Denomination.]	  	 	7	  
			
	 [SECTION 305
	 	No Sinking Fund.]	  	 	7	  
			
	 [SECTION 306
	 	Paying Agent and Bond Registrar.]	  	 	7	  
			
	 [SECTION 307
	 	Global Securities; Appointment of Depositary for Global Securities.]	  	 	7	  
			
	 [SECTION 308
	 	Optional Redemption of the             % Senior Notes.]	  	 	8	  
			
	 [SECTION 309
	 	Other Terms of the             % Senior Notes.]	  	 	9	  
		
	 [ARTICLE [IV] REOPENING OF             % SENIOR
NOTES]
	  	 	9	  
		
	 ARTICLE [V] MISCELLANEOUS
	  	 	9	  
			
	 SECTION [501]
	 	Concerning the Trustee.	  	 	9	  
			
	 SECTION [502]
	 	Application of              Supplemental Indenture.	  	 	10	  
			
	 SECTION [503]
	 	Effective Date of              Supplemental Indenture.	  	 	10	  
			
	 SECTION [504]
	 	Counterparts.	  	 	10	  
		
	 EXHIBIT [    ]
	  			

  
 i 

             SUPPLEMENTAL INDENTURE,
dated as of                     , 20         (this “
         Supplemental Indenture”), by and between PACIFIC GAS AND ELECTRIC COMPANY, a corporation duly organized and existing under the laws of the State of California (the “Company” or
the “Issuer”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America (formerly known as The Bank of New York Trust Company, N.A.),
as Trustee under the Base Indenture (as hereinafter defined) (the “Trustee”). 
 RECITALS OF THE COMPANY 

A. The Company and the Trustee are parties to that certain Amended and Restated Indenture, dated as of April 22, 2005 (the “Base
Indenture”), as supplemented by the First Supplemental Indenture, dated as of March 13, 2007 (the “First Supplemental Indenture”), the Second Supplemental Indenture, dated as of December 4, 2007 (the “Second Supplemental
Indenture”), the Third Supplemental Indenture, dated as of March 3, 2008 (the “Third Supplemental Indenture”), the Fourth Supplemental Indenture, dated as of October 21, 2008 (the “Fourth Supplemental Indenture”), the Fifth
Supplemental Indenture, dated as of November 18, 2008 (the “Fifth Supplemental Indenture”), the Sixth Supplemental Indenture, dated as of March 6, 2009 (the “Sixth Supplemental Indenture”), the Seventh Supplemental Indenture,
dated as of June 11, 2009 (the “Seventh Supplemental Indenture”), the Eighth Supplemental Indenture, dated as of November 18, 2009 (the “Eighth Supplemental Indenture”), the Ninth Supplemental Indenture, dated as of April 1, 2010
(the “Ninth Supplemental Indenture”), the Tenth Supplemental Indenture, dated as of September 15, 2010 (the “Tenth Supplemental Indenture”), the Eleventh Supplemental Indenture, dated as of October 12, 2010 (the “Eleventh
Supplemental Indenture”), the Twelfth Supplemental Indenture, dated as of November 18, 2010 (the “Twelfth Supplemental Indenture”), the Thirteenth Supplemental Indenture, dated as of May 13, 2011 (the “Thirteenth Supplemental
Indenture”), the Fourteenth Supplemental Indenture, dated as of September 12, 2011 (the “Fourteenth Supplemental Indenture”), the Fifteenth Supplemental Indenture, dated as of November 22, 2011 (the “Fifteenth Supplemental
Indenture”), the Sixteenth Supplemental Indenture, dated as of December 1, 2011 (the “Sixteenth Supplemental Indenture”), the Seventeenth Supplemental Indenture, dated as of April 16, 2012 (the “Seventeenth Supplemental
Indenture”), the Eighteenth Supplemental Indenture, dated as of August 16, 2012 (the “Eighteenth Supplemental Indenture”), the Nineteenth Supplemental Indenture, dated as of June 14, 2013 (the “Nineteenth Supplemental
Indenture”), the Twentieth Supplemental Indenture, dated as of November 12, 2013 (the “Twentieth Supplemental Indenture”), the Twenty-First Supplemental Indenture, dated as of February 21, 2014 (the “Twenty-First
Supplemental Indenture”), the Twenty-Second Supplemental Indenture, dated as of May 12, 2014 (the “Twenty-Second Supplemental Indenture”), the Twenty-Third Supplemental Indenture, dated as of
August 18, 2014 (the “Twenty-Third Supplemental Indenture”), the Twenty-Fourth Supplemental Indenture, dated as of November 6, 2014 (the “Twenty-Fourth Supplemental Indenture”), the Twenty-Fifth Supplemental Indenture, dated as
of June 12, 2015 (the “Twenty-Fifth Supplemental Indenture”), the Twenty-Sixth Supplemental Indenture, dated as of November 5, 2015 (the “Twenty-Six Supplemental Indenture”), the Twenty-Seventh Supplemental Indenture, dated
as of March 1, 2016 (the “Twenty-Seventh Supplemental Indenture”), the Twenty-Eighth Supplemental Indenture, dated as of December 1, 2016, and the          Supplemental Indenture,
dated as of                     , 20         (this “
         Supplemental Indenture,” and together with the Base 

 
Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth
Supplemental Indenture, the Seventh Supplemental Indenture, the Eighth Supplemental Indenture, the Ninth Supplemental Indenture, the Tenth Supplemental Indenture, the Eleventh Supplemental Indenture, the Twelfth Supplemental Indenture, the
Thirteenth Supplemental Indenture, the Fourteenth Supplemental Indenture, the Fifteenth Supplemental Indenture, the Sixteenth Supplemental Indenture, the Seventeenth Supplemental Indenture, the Eighteenth Supplemental Indenture, the Nineteenth
Supplemental Indenture, the Twentieth Supplemental Indenture and the Twenty-First Supplemental Indenture, the Twenty-Second Supplemental Indenture, the Twenty-Third Supplemental Indenture, the Twenty-Fourth Supplemental Indenture, the Twenty-Fifth
Supplemental Indenture, and the Twenty-Sixth Supplemental Indenture, the Twenty-Seventh Supplemental Indenture, the Twenty-Eighth Supplemental Indenture, [and the
             Supplemental Indenture], the “Indenture”), which supplements, amends and restates that certain Indenture of Mortgage, dated as of March 11, 2004, as supplemented by
the First Supplemental Indenture thereto, dated as of March 23, 2004 and the Second Supplemental Indenture thereto, dated as of April 12, 2004, providing for the issuance by the Company of an unlimited number of series of Bonds (as defined in the
Base Indenture) from time to time. 
 B. Under the Base Indenture, the Company is authorized to establish one or more series of Bonds at any
time in accordance with and subject to the provisions of the Base Indenture, and the terms of such series of Bonds may be described by a supplemental indenture executed by the Company and the Trustee. 

C. The execution and delivery of this          Supplemental Indenture has been authorized by a Board
Resolution (as defined in the Base Indenture). 
 D. Concurrent with the execution hereof, the Company has caused its counsel to deliver to
the Trustee an Opinion of Counsel (as defined in the Base Indenture) pursuant to Section 13.03 of the Base Indenture, together with the documents required under Article V of the Base Indenture. 

E. The Company has done all things necessary to make this          Supplemental Indenture a valid
agreement of the Company, in accordance with its terms. 
 NOW, THEREFORE, the Company and the Trustee agree, for the benefit of each other
and for the equal and proportionate benefit of Holders of [the Floating Rate Senior Notes] [the     % Senior Notes] (as defined below) with respect to all provisions herein applicable to such series of notes, as follows:

 ARTICLE [I]  

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

  
 2 

 [“     % Senior Notes” has the meaning set forth
in Section          hereto.] 
 [“Adjusted Treasury Rate” means, with respect to
any Redemption Date for any     % Senior Notes, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.]
 [“Calculation Agency
Agreement” means the Calculation Agency Agreement, dated as of                     ,
20         , by and between the Company and the Calculation Agent, as such agreement may be amended, modified or supplemented from time to time.] 

[“Calculation Agent” means                 
or such other Person as the Company shall from time to time designate in accordance with the Calculation Agency Agreement.] 

[“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity
comparable to the remaining term of the     % Senior Notes to be redeemed, assuming, for such purpose, that the     % Senior Notes matured on
                    , 20          (the date that is         
months prior to the maturity date) (the “remaining term”), that would be used, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the
remaining term.] 
 [“Comparable Treasury Price” means, with respect to any Redemption Date for any
    % Senior Notes, (1) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest of the Reference Treasury Dealer Quotations or (2) if the Company obtains
fewer than four Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations so received.] 

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

 [“Original Issue Date”
means                     , 20          .] 

[“Primary Treasury Dealer” means a primary U.S. Government Securities dealer in the United States.] 

[“Quotation Agent” means the Reference Treasury Dealer appointed by the Company.] 

[“Redemption Price” means the price at which     % Senior Notes may be redeemed pursuant to Section
         or Section          hereto, as applicable.] 

[“Reference Treasury Dealer” means (1) each
of              and             , and their respective successors, unless any of them ceases to be a Primary
Treasury Dealer, in which case the Company shall substitute another Primary Treasury Dealer; and (2) any other Primary Treasury Dealer selected by the Company.] 

  
 3 

 [“Reference Treasury Dealer Quotations” means, with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Company by
that Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date. For purposes of this definition only, “Business Day” means any day that is not a day on which banking
institutions in New York City are authorized or required by law or regulation to close.] 
 [“Remaining Scheduled Payments”
means, with respect to each of the     % Senior Notes that the Company is redeeming pursuant to Section          hereto, the remaining scheduled payments of principal and interest that
would be due after the applicable Redemption Date if such     % Senior Notes were not redeemed. However, if the Redemption Date is not a scheduled Interest Payment Date with respect to
such     % Senior Notes, the amount of the next succeeding scheduled interest payment on such     % Senior Notes will be reduced by the amount of interest accrued on
such     % Senior Notes to the Redemption Date.] 
 [“U.S. Government Securities” means securities
which are (a) direct obligations of the United States of America for the payment on which its full faith and credit is pledged or (b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States of America, and which in the case of (a) and (b) are not callable or redeemable at the option of the issuer thereof, and shall
also include a depositary receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Security or a specific payment of interest on or principal of any such U.S. Government Security held by such custodian for the
account of the holder of a depositary receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the
custodian in respect of the U.S. Government Security evidenced by such depositary receipt.] 
  

 
 The words
“herein,” “hereof” and “hereunder” and other words of similar import refer to this          Supplemental Indenture as a whole and not to any particular Article, Section or other
subdivision. 
 ARTICLE [II] 
 NOTE: THE
FOLLOWING IS APPLICABLE TO SENIOR NOTES WITH A FLOATING INTEREST RATE 
 [ESTABLISHMENT OF THE FLOATING RATE SENIOR NOTES; TERMS]

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

Pursuant to the terms hereof and Section 3.01 of the Indenture, the Company hereby establishes a
         series of Bonds designated as the “Floating Rate Senior Notes due                     , 20
         ” (the “Floating Rate Senior Notes”). The Floating Rate Senior Notes may be reopened, 

  
 4 

 
from time to time, for issuances of additional Bonds of such series, and any additional Bonds issued and comprising Floating Rate Senior Notes shall have identical terms as the Floating Rate
Senior Notes, except that the issue price, issue date and, in some cases, the first Interest Payment Date may differ.] 
 [SECTION 202
Form of the Floating Rate Senior Notes. 
 The Floating Rate Senior Notes shall be issued in the form of one or more Global
Bonds in substantially the form set forth in Exhibit A hereto.] 
 [SECTION 203 Principal Amount of the Floating Rate Senior
Notes. 
 The Floating Rate Senior Notes shall be issued in an initial aggregate principal amount of $     .]

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

The rate of interest on the Floating Rate Senior Notes shall be calculated as set forth in the form of the Floating Rate Senior Notes attached
as Exhibit A hereto.] 
 [The Floating Rate Senior Notes shall have a Stated Maturity
of                     , 20          .] 

[SECTION 205 No Sinking Fund. 

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

[SECTION 206 No Redemption. 

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

[SECTION 207 Paying Agent and Bond Registrar. 

The Trustee is hereby appointed as initial Paying Agent and initial Bond Registrar for the Floating Rate Senior Notes. The Place of
Payment of the Floating Rate Senior Notes shall be the Corporate Trust Office of the Trustee.]
 [SECTION 208 Calculation
Agent. 
 The             is hereby appointed as the initial Calculation
Agent for the Floating Rate Senior Notes.] 
 [SECTION 209 Global Securities; Appointment of Depositary for Global Securities.

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

  
 5 

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

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

None of the Company, the Trustee, any Paying Agent or any Bond Registrar will have any responsibility or liability for any aspect of
Depositary records relating to, or payments made on account of, beneficial ownership interests in a Global Bond or for maintaining, supervising or reviewing any Depositary records relating to such beneficial ownership interests, or for transfers of
beneficial interests in the Bonds or any transactions between the Depositary and beneficial owners.] 
 [SECTION 210 Other Terms of
the Floating Rate Senior Notes. 
 The other terms of the Floating Rate Senior Notes shall be as expressly set forth herein and in
Exhibit [    ].] 
 ARTICLE [III] 

NOTE: THE FOLLOWING IS APPLICABLE TO SENIOR NOTES WITH A FIXED INTEREST RATE 

[ESTABLISHMENT OF THE     % SENIOR NOTES; TERMS] 

[SECTION 301 Establishment and Designation of the     % Senior Notes. 

Pursuant to the terms hereof and Section 3.01 of the Indenture, the Company hereby establishes a
             series of Bonds designated as the “     % Senior Notes
due                     , 20          ” (the “     % Senior
Notes”). The     % Senior Notes may be reopened, from time to time, for issuances of additional Bonds of such series, and any additional Bonds issued and comprising     % Senior Notes shall
have identical terms as the     % Senior Notes, except that the issue price, issue date and, in some cases, the first Interest Payment Date may differ.] 

[SECTION 302 Form of the     % Senior Notes. 

The     % Senior Notes shall be issued in the form of one or more Global Bonds in substantially the form set forth in
Exhibit [    ] hereto.] 

  
 6 

 [SECTION 303 Principal Amount of
the     % Senior Notes. 
 The     % Senior Notes
shall be issued in an initial aggregate principal amount of $     .] 
 [SECTION 304 Interest Rates; Stated
Maturity of the     % Senior Notes; Minimum Denomination. 

The     % Senior Notes shall bear interest at the rate of     % per annum and shall have a
Stated Maturity of                     , 20     . 

The     % Senior Notes are issuable in denominations of $         and any
integral multiple of $1,000 in excess thereof.] 
 [SECTION 305 No Sinking Fund. 

No sinking fund is provided for the     % Senior Notes.] 

[SECTION 306 Paying Agent and Bond Registrar. 

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

[SECTION 307 Global Securities; Appointment of Depositary for Global Securities. 

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

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

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

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

  
 7 

 [SECTION 308 Optional Redemption of
the     % Senior Notes. 
 (a) Subject to the terms and conditions of the
Indenture, at any time prior to                     , 20          (the date that is
         months prior to the Maturity Date), the     % Senior Notes are redeemable at the option of the Company in whole or in part at a Redemption Price equal to the greater of: 

(i) 100% of the principal amount of the     % Senior Notes to be redeemed; or 

(ii) as determined by the Quotation Agent, the sum of the present values of the Remaining Scheduled Payments of principal and
interest on the     % Senior Notes to be redeemed (not including any portion of payments of interest accrued as of the Redemption Date), calculated as if the Maturity Date of such     % Senior
Notes was                 , 20          (the date that is          months
prior to the Maturity Date), discounted to the Redemption Date on a semiannual basis at the Adjusted Treasury Rate, plus          basis points; 

plus, in either of the above cases, accrued and unpaid interest thereon to but not including the Redemption Date. 

(b) Subject to the terms and conditions of the Indenture, at any time on or
after                     , 20          (the date that is
         months prior to the Maturity Date), the     % Senior Notes are redeemable at the option of the Company in whole or in part at 100% of the principal amount of
the     % Senior Notes to be redeemed, plus accrued and unpaid interest thereon to but not including the Redemption Date. 

(c) The Redemption Price shall be calculated assuming a 360-day year consisting of twelve 30-day months. 

  
 8 

 (d) The Company shall calculate the Redemption Price for the redemption of
any     % Senior Notes pursuant to Section          or Section             , and notify the Trustee of such Redemption
Price before it sends the amount of the Redemption Price to the Trustee or any Paying Agent. 
 (e) Notice of any redemption pursuant to
Section          or Section          shall be given to Holders of the     % Senior Notes not less than ten (10) days nor more than sixty (60)
days prior to the Redemption Date in the manner set forth in Section 6.04 of the Indenture and by e-mail to the Depositary; provided, however, that such notice need not state the dollar amount of the Redemption Price if such dollar amount has not
been determined as of the date such notice is being given to the Holders of the     % Senior Notes being redeemed. Notwithstanding Section 6.02 of the Indenture, if the Company elects to
redeem     % Senior Notes pursuant to Section          or Section          hereof, it shall give written notice to the Trustee of such
Redemption Date and of the principal amount of the     % Senior Notes to be redeemed at least twenty (20) days prior to the redemption date fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee).] 
 [SECTION 309 Other Terms of the     % Senior Notes. 

The other terms of the     % Senior Notes shall be as expressly set forth herein and in Exhibit
[    ].] 
 ARTICLE [IV] 

NOTE: THE FOLLOWING IS APPLICABLE TO A REOPENING OF A SERIES OF SENIOR NOTES 

[REOPENING OF              % SENIOR NOTES] 

[Pursuant to the Section              of the
             Supplemental Indenture, the         % series of Bonds established by said section and designated as the
“        % Senior Notes due                     ,
20        ” (the “        % Senior Notes”) is reopened and additional Bonds comprising part of such series shall be issued in the aggregate principal
amount of $            and shall be issued in the form of one or more Global Bonds in substantially the form set forth in Exhibit [    ] hereto. As a result of the
further issuance of $             aggregate principal amount of Bonds of the             series
on                    , 20        , the issued amount of Bonds of such series now totals
$            .] 
 ARTICLE [V]  

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

  
 9 

 SECTION [502] Application of         
Supplemental Indenture. 
 Except as provided herein, each and every term and condition contained in this
         Supplemental Indenture that modifies, amends or supplements the terms and conditions of the Indenture shall apply only to the
            Senior Notes established hereby and not to any other series of Bonds established under the Indenture. Except as specifically amended and supplemented by, or to the extent
inconsistent with, this          Supplemental Indenture, the Indenture shall remain in full force and effect and is hereby ratified and confirmed. 

SECTION [503] Effective Date of          Supplemental Indenture. 

This          Supplemental Indenture shall be effective upon the execution and delivery hereof by each
of the parties hereto. 
 SECTION [504] Counterparts. 

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

  
 10 

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

 

					
	 PACIFIC GAS AND ELECTRIC COMPANY,

	 as Issuer

		
	By:	 	  

	Name:	 	
	Title:	 	
	
	 THE BANK OF NEW YORK MELLON TRUST

	   COMPANY, N.A.,

	 as Trustee

		
	By:	 	  

	Name:	 	
	Title:	 	

 Signature Page to             Supplemental
Indenture 

 NOTE: This form to be used for senior notes with a floating interest rate. 

EXHIBIT      

FORM OF FLOATING RATE SENIOR NOTES DUE                 ,
20     
 THIS SENIOR NOTE IS A BOND AND A GLOBAL BOND WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR NOTES IN DEFINITIVE FORM, THIS SENIOR NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. 

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

					
	 PRINCIPAL AMOUNT :

$             
	  	ORIGINAL ISSUE DATE:	  	INTEREST RATE:
			
	 MATURITY DATE:
	  	INTEREST PAYMENT DATES:	  	 THIS SENIOR NOTE IS A:
 ☒ Global
Book-Entry Bond
 ☐ Certificated Bond

			
	 REGISTERED OWNER: Cede & Co., as

nominee of The Depository Trust Company
	  		  	

  
 1 

 PACIFIC GAS AND ELECTRIC COMPANY 

FLOATING RATE SENIOR NOTES DUE                 ,
20     
 (Floating Rate) 
  

			
	No. R-            	  	Principal Amount: $            
	CUSIP No:            	  	

 PACIFIC GAS AND ELECTRIC COMPANY, a corporation duly organized and existing under the laws of the State of
California (herein called the “Company,” which term includes any successor Person pursuant to the applicable provisions of the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., as nominee for
The Depository Trust Company, or registered assigns, the Principal Amount stated above on the Maturity Date stated above, and to pay interest thereon from and including the Original Issue Date stated above or, in the case of a Floating Rate Senior
Note due                 , 20     issued upon the registration of transfer or exchange, from and including the most recent Interest Payment Date to
which interest has been paid or duly provided for, quarterly in arrears on the Interest Payment Dates set forth above and on the Maturity Date stated above until the principal hereof is paid or made available for payment. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Floating Rate Senior Note due
                , 20     (this “Senior Note,” and together with all other Floating Rate Senior Notes
due                 , 20    , the “Senior Notes”) (or one or more Predecessor Bonds) is registered at the close of business on the
Regular Record Date for such interest, which shall be the         day preceding such Interest Payment Date, as applicable; provided, however, that interest payable at the Maturity Date will be
paid to the Person to whom principal is payable. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this
Senior Note (or one or more Predecessor Bonds) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Senior Notes not less
than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of the Indenture and any securities exchange, if any, on which the Senior Notes may be listed, and upon such
notice as may be required by any such exchange, all as more fully provided in said Indenture. 
 Payments of interest on this Senior Note
will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for this Senior Note shall be computed and paid on the basis of a 360-day year and the actual days elapsed.

Payment of principal of, premium, if any, and interest on Senior Notes shall be made in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private debts. Payments of principal of, premium, if any, and interest on the Senior Notes represented by a Global Bond shall be made by wire transfer of immediately available
funds to the Holder of such Global Bond, provided that, in the case of payments of 

  
 2 

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

REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SENIOR NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. 
 Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Senior Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 

  
 3 

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

Dated:                      ,
20         
  

					
	 PACIFIC GAS AND ELECTRIC COMPANY

		
	 By:
	 	  

		 	 Name:

		 	 Title:

		
	 By:
	 	  

		 	 Name:

		 	 Title:

  
 4 

 TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

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

Dated:                     ,
20     
  

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

		 	Authorized Signatory

  
 5 

 Reverse of Senior Note 

This Floating Rate Senior Note
due                     , 20     is one of a duly authorized issue of Bonds of the Company, issued and issuable in one or
more series under an Amended and Restated Indenture, dated as of April 22, 2005 (the “Base Indenture”), as heretofore supplemented and as further supplemented by a             
Supplemental Indenture, dated as of                     , 20     (as so supplemented, and together with all additional
indentures supplemental thereto, and any constituent instruments establishing the terms of particular Bonds, being herein called the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A. (formerly The Bank
of New York Trust Company, N.A.), as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a description of the respective rights,
limitations of rights, duties and immunities of the Company, the Trustee and the Holders of Bonds thereunder and of the terms and conditions upon which Bonds are, and are to be, authenticated and delivered. This Senior Note is a Bond within the
meaning of the Indenture and is one of the Bonds of the              series designated as the Floating Rate Senior Notes
due                     , 20    , established by the Company under the Indenture. The acceptance of this Senior Note
shall be deemed to constitute the consent and agreement by the Holder hereof to all of the terms and provisions of the Indenture. 
 The
interest rate on the Senior Notes will be reset quarterly on                     ,
20      and                     , 20     (each, an “Interest Reset Date”). The
Senior Notes will bear interest at a per annum rate equal to     -month LIBOR (as defined below) for the applicable Interest Reset Period or Initial Interest Period (each as defined below) plus     %
(          basis points). The interest rate for the Initial Interest Period will be      -month LIBOR, determined as of two London Business Days prior to the Original Issue Date,
plus     % (          basis points) per annum, which shall be     %.

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

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

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

  
 6 

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

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

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

All percentages resulting from any calculation of any interest rate for the Senior Notes will be rounded, if necessary, to the nearest one
hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upward (e.g., 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)), and all dollar amounts will be rounded to the nearest cent, with
one-half cent being rounded upward. 
 Promptly upon such determination, the Calculation Agent will notify the Company and the Trustee (if
the Calculation Agent is not the Trustee) of the interest rate for the new Interest 

  
 7 

 
Reset Period. Upon request of a Holder of the Senior Notes, the Calculation Agent will provide to such Holder the interest rate in effect on the date of such request and, if determined, the
interest rate for the next Interest Reset Period. 
 All calculations made by the Calculation Agent for the purposes of calculating interest
on the Senior Notes shall be conclusive and binding on the Holders of the Senior Notes and the Company, absent manifest errors. 

“Business Day” means any day (1) that is not a Saturday or Sunday and that is not a day on which banking institutions are authorized
or obligated by law or executive order to close in The City of New York and, for any place of payment outside of The City of New York, in such place of payment, and (2) that is also a “London Business Day”, which is a day on which dealings
in deposits in U.S. dollars are transacted in the London interbank market. 
 Interest will be payable
on                     , 20    ,
                     20     and on the Maturity Date (each an “Interest Payment Date”). In the event that any
date on which interest is payable on this Senior Note (other than the Maturity Date) is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or
payment in respect of any such delay) with the same force and effect as if made on the date the payment was originally payable, except that if such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the
immediately preceding Business Day. If the Maturity Date falls on a day that is not a Business Day, the payment of principal, premium, if any, and interest may be made on the next succeeding Business Day with the same force and effect as if
made on the date payment was originally payable, and no interest on such payment shall accrue for the period from and after maturity. 

Unless otherwise specified on the face hereof, interest payments, if any, will be the amount of interest accrued from and including the last
date in respect of which interest has been paid or duly provided for (or from and including the Original Issue Date stated above if no interest has been paid or provided for with respect to this Senior Note) to but excluding the Interest Payment
Date or the Maturity Date. Accrued interest hereon from the Original Issue Date stated above or from the last date to which interest hereon has been paid is calculated by multiplying the face amount hereof by an accrued interest
factor. Such accrued interest factor is computed by adding the interest factor calculated for each day from the Original Issue Date stated above or from the last date to which interest shall have been paid, to the date for which accrued
interest is being calculated. The interest factor for each day shall be computed by dividing the interest rate applicable to such day by 360. All percentages resulting from any calculation hereon will be rounded to the nearest one
hundred-thousandth of a percentage point, with five-one millionths of a percentage point rounded upwards. For example, 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655). All dollar amounts used in or resulting from any
calculation hereon will be rounded to the nearest cent. 
 The interest rate on the Senior Notes will in no event be higher than the maximum
rate permitted by California law as the same may be modified by United States law of general applicability. 
 This Senior Note shall not be
subject to redemption prior to its Stated Maturity. 

  
 8 

 As provided in the Indenture and subject to certain limitations therein set forth, this Senior
Note or any portion of the principal amount hereof will be deemed to have been paid for all purposes of the Indenture and to be no longer Outstanding thereunder, and the Company’s entire indebtedness in respect thereof will be satisfied and
discharged, if there has been irrevocably deposited with the Trustee or any Paying Agent (other than the Company), in trust, money in an amount which will be sufficient and/or Eligible Obligations, the principal of and interest on which when due,
without regard to any reinvestment thereof, will provide moneys which, together with money, if any, deposited with or held by the Trustee or such Paying Agent, will be sufficient to pay when due the principal of and premium, if any, and interest on
this Senior Note when due. 
 If an Event of Default shall occur and be continuing, the Trustee or the Holders of not less than 33% in
aggregate principal amount of the Outstanding Bonds, considered as one class, may declare the principal amount of all Bonds then Outstanding to be due and payable immediately by notice in writing to the Company (and to the Trustee if given by
Holders); provided, however, that with respect to certain Events of Default relating to bankruptcy, insolvency and similar events, the principal amount of all Bonds then Outstanding shall be due and payable immediately without further action by the
Trustee or the Holders. 
 The Indenture permits, with certain exceptions as therein provided, the Company and the Trustee to enter into one
or more supplemental indentures for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Indenture with the consent of the Holders of not less than a majority in aggregate principal amount
of the Bonds at the time Outstanding, considered as one class; provided, however, that if there shall be Bonds of more than one series Outstanding under the Indenture and if a proposed supplemental indenture shall directly affect the rights of the
Holders of Bonds of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Bonds of all series so directly affected, considered as one class, shall be
required; and provided, further, that if the Bonds of any series shall have been issued in more than one Tranche and if a proposed supplemental indenture shall directly affect the rights of the Holders of Bonds of one or more, but less than all, of
such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Bonds of all Tranches so directly affected, considered as one class, shall be required; and provided, further, that the Indenture
permits the Company and the Trustee to enter into one or more supplemental indentures for certain purposes without the consent of any Holders of Bonds. The Indenture also contains provisions permitting the Holders of a majority in aggregate
principal amount of Bonds, on behalf of the Holders of all such Bonds, to waive certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Senior Note shall be conclusive and binding upon
such Holder and upon all future Holders of this Senior Note and of any Senior Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Senior
Note. 
 As provided in and subject to the provisions of the Indenture, the Holder of this Senior Note shall not have the right to institute
any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default, the Holders
of at least 33% in aggregate principal amount of the Bonds at the time Outstanding shall have made 

  
 9 

 
written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from
the Holders of at least a majority in aggregate principal amount of Bonds at the time Outstanding a direction inconsistent with such written request, and shall have failed to institute any such proceeding for 60 days after receipt of such notice,
request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Senior Note for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates
expressed herein. 
 No reference herein to the Indenture and no provision of this Senior Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Senior Note at the times, place and rate, and in the coin or currency, herein prescribed. 

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

The Senior Notes are issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations therein set forth, Senior Notes are exchangeable for a like aggregate principal amount of Senior Notes and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same. 
 No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 
 Prior to
due presentment of this Senior Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Senior Note is registered as the owner hereof for all purposes, whether or
not this Senior Note is overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. 

This Senior Note shall be governed by, and construed and enforced in accordance with, the laws of the State of California without regard to
the principles of conflicts of laws thereunder, except to the extent that the Trust Indenture Act shall be applicable. 
 As provided in the
Indenture, no recourse shall be had for the payment of the principal of, premium, if any, or interest with respect to this Senior Note, or any part thereof, or for any claim based hereon or otherwise in respect hereof, or of the indebtedness
represented hereby, or upon 

  
 10 

 
any obligation, covenant or agreement under the Indenture, against any incorporator, shareholder, officer or director, as such, past, present or future, of the Company or of any predecessor or
successor corporation (either directly or through the Company or a predecessor or successor corporation), whether by virtue of any constitutional provision, statute or rule of law or by the enforcement of any assessment or penalty or otherwise; it
being expressly agreed and understood that the Indenture and all the Bonds are solely corporate obligations and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the
execution of the Indenture and the issuance of this Senior Note. 
 All terms used in this Senior Note which are not defined herein shall
have the meanings assigned to them in the Indenture. 

  
 11 

 ASSIGNMENT FORM 

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

 
  
  

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

 
  
  

 
  
  

 
  
  

 
  

(Print or type assignee’s name, address and zip code) 
 and
irrevocably appoint  
  
 to
transfer this Senior Note on the books of the Company. The agent may substitute another to act for him. 
  
  

 

Date:                         
     
  

			
		 	
Your signature:               
                                         
                                         
  

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

		
		 	
Tax Identification No.:             
                                         
                               

		
		 	 SIGNATURE GUARANTEE:

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

  
 12 

 NOTE: This form to be used for senior notes with a fixed interest rate 

EXHIBIT      

FORM OF     % SENIOR NOTES
DUE                     , 20     

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

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

					
	 PRINCIPAL AMOUNT :
 $
	  	ORIGINAL ISSUE DATE:	  	INTEREST RATE:
			
	MATURITY DATE:	  	INTEREST PAYMENT DATES:	  	 THIS SENIOR NOTE IS A:
  

☒ Global Book-Entry Bond
 ☐ Certificated
Bond

	 REGISTERED OWNER: Cede & Co., as

nominee of The Depository Trust Company
	  		  	

  
 1 

 PACIFIC GAS AND ELECTRIC COMPANY 

    % SENIOR NOTES
DUE                     , 20     

(Fixed Rate) 
  

			
	 No. R-             
	  	Principal Amount: $             
	 CUSIP No:
            
	  	

 PACIFIC GAS AND ELECTRIC COMPANY, a corporation duly organized and existing under the laws of the State of
California (herein called the “Company,” which term includes any successor Person pursuant to the applicable provisions of the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., as nominee for
The Depository Trust Company, or registered assigns, the Principal Amount stated above on the Maturity Date stated above, and to pay interest thereon from and including the Original Issue Date stated above or, in the case of
a     % Senior Note due                 , 20     issued upon the registration of transfer or exchange, from and
including the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on the Interest Payment Dates set forth above and on the Maturity Date stated above,
commencing                 , 20     at the rate of     % per annum until the principal hereof is paid or made available
for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this     % Senior Note
due                 , 20     (this “Senior Note,” and together with all other     % Senior Notes
due                 , 20    , the “Senior Notes”) (or one or more Predecessor Bonds) is registered at the close of business on the
Regular Record Date for such interest, which shall be the              and              preceding such Interest
Payment Date; provided, however, that interest payable at the Maturity Date or on a Redemption Date will be paid to the Person to whom principal is payable. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Senior Note (or one or more Predecessor Bonds) is registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Senior Notes not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of the Indenture and any securities exchange, if any, on which the Senior Notes may be listed, and upon such notice as may be required by any such exchange, all as more fully provided in said Indenture. 

Payments of interest on this Senior Note will include interest accrued to but excluding the respective Interest Payment Dates. Interest
payments for this Senior Note shall be computed and paid on the basis of the 360-day year of twelve 30-day months and will accrue from                 ,
20     or from the most recent Interest Payment Date to which interest has been paid or duly provided for. In the event that any date on which interest is payable on this Senior Note (other than the Maturity Date) is not a
Business Day then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or payment in respect of any such delay) with the same force and effect as if made on the

  
 2 

 
date the payment was originally payable. If the Maturity Date falls on a day that is not a Business Day, the payment of principal, premium, if any, and interest may be made on the next
succeeding Business Day, and no interest on such payment shall accrue for the period from and after maturity. 
 Payment of principal of,
premium, if any, and interest on Senior Notes shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal of, premium, if any,
and interest on the Senior Notes represented by a Global Bond shall be made by wire transfer of immediately available funds to the Holder of such Global Bond, provided that, in the case of payments of principal and premium, if any, such Global Bond
is first surrendered to the Paying Agent. If any of the Senior Notes are no longer represented by a Global Bond, (i) payments of principal, premium, if any, and interest due on the Maturity Date or earlier redemption of such Senior Notes shall
be made at the office of the Paying Agent upon surrender of such Senior Notes to the Paying Agent, and (ii) payments of interest shall be made, at the option of the Company, subject to such surrender where applicable, (A) by check mailed to the
address of the Person entitled thereto as such address shall appear in the Bond Register or (B) by wire transfer to registered Holders of at least $10,000,000 in principal amount of Senior Notes at such place and to such account at a banking
institution in the United States as such Holders may designate in writing to the Trustee at least sixteen (16) days prior to the date for payment. 

REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SENIOR NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. 
 Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Senior Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 

  
 3 

 IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed. 
 Dated:
                            , 20 

 

			
	PACIFIC GAS AND ELECTRIC COMPANY
		
	By:	 	  

		 	    Name:
		 	     Title:

		
	 By:
	 	  

		 	    Name:
		 	     Title:

  
 4 

 TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

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

Dated:                     ,
20     
  

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

		 	Authorized Signatory

  
 5 

 Reverse of Senior Note 

This     % Senior Note
due                 , 20          is one of a duly authorized issue of Bonds of the Company, issued and issuable in one or
more series under an Amended and Restated Indenture, dated as of April 22, 2005 (the “Base Indenture”), as heretofore supplemented and as further supplemented by a          Supplemental Indenture,
dated as of                 , 20          (as so supplemented, and together with all additional indentures supplemental
thereto, and any constituent instruments establishing the terms of particular Bonds, being herein called the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A. (formerly The Bank of New York Trust
Company, N.A.), as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a description of the respective rights, limitations of rights,
duties and immunities of the Company, the Trustee and the Holders of Bonds thereunder and of the terms and conditions upon which Bonds are, and are to be, authenticated and delivered. [This Senior Note is a Bond within the meaning of the
Indenture and is one of the Bonds of the          series designated as the     % Senior Notes
due                 , 20          established by the Company under the Indenture.] [This Senior Note is a Bond within the
meaning of the Indenture and is one of the Bonds of the              series designated as the     % Senior Notes due
                    , 20     established by the Company under the Indenture and initially issued in an aggregate principal amount
of $         on                     , 20    . As a result of the further issuance of
$         aggregate principal amount of Bonds of the              series on
                    , 20    , the issued amount of Bonds of such series now totals
$        .] The acceptance of this Senior Note shall be deemed to constitute the consent and agreement by the Holder hereof to all of the terms and provisions of the Indenture. 

Subject to the terms and conditions of the Indenture, the Senior Notes are redeemable at the option of the Company (“Optional
Redemption”), in whole or in part, (a) at any time prior to                 , 20     (the date that is
         months prior to the Maturity Date) at a Redemption Price equal to the greater of: 

(i) 100% of the principal amount of the Senior Notes to be redeemed; or 

(ii) as determined by the Quotation Agent, the sum of the present values of the Remaining Scheduled Payments of principal and
interest on the Senior Notes to be redeemed (not including any portion of payments of interest accrued as of the Redemption Date), calculated as if the Maturity Date of such Senior Notes
was                 , 20     (the date that is          months prior to the Maturity Date), discounted
to the Redemption Date on a semi-annual basis at the Adjusted Treasury Rate, plus              basis points, 

plus, in either of the above cases, accrued and unpaid interest thereon to but not including the Redemption Date; and (b) at any time on or
after                 , 20     (the date that is          months prior to the Maturity Date) at 100% of
the principal amount of the Senior Notes to be redeemed, plus accrued and unpaid interest thereon to but not including the Redemption Date. 

Interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to Holders of such Senior Notes, or one or
more Predecessor Bonds, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture. 

  
 6 

 In the case of an Optional Redemption, notice of redemption will be in writing and mailed
first-class postage-prepaid not less than 10 days nor more than 60 days prior to the Redemption Date to each Holder of Senior Notes to be redeemed at the Holder’s registered address; provided, however, that such notice need not state the dollar
amount of the Redemption Price if such dollar amount has not been determined as of the date such notice is being given to the Holders of the Senior Notes being redeemed. If money sufficient to pay the Redemption Price of all Senior Notes (or
portions thereof) to be redeemed on the Redemption Date is deposited with the Paying Agent or the Trustee on or prior to the Redemption Date, from and after such Redemption Date such Senior Notes or portions thereof shall cease to bear
interest. Senior Notes in denominations larger than $2,000 in principal amount may be redeemed in part but only in integral multiples of $1,000. 

In the event of redemption of this Senior Note in part only, a new Senior Note or Senior Notes of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the surrender hereof. 
 As provided in the Indenture and subject to certain
limitations therein set forth, this Senior Note or any portion of the principal amount hereof will be deemed to have been paid for all purposes of the Indenture and to be no longer Outstanding thereunder, and the Company’s entire indebtedness
in respect thereof will be satisfied and discharged, if there has been irrevocably deposited with the Trustee or any Paying Agent (other than the Company), in trust, money in an amount which will be sufficient and/or Eligible Obligations, the
principal of and interest on which when due, without regard to any reinvestment thereof, will provide moneys which, together with money, if any, deposited with or held by the Trustee or such Paying Agent, will be sufficient to pay when due the
principal of and premium, if any, and interest on this Senior Note when due. 
 If an Event of Default shall occur and be continuing, the
Trustee or the Holders of not less than 33% in aggregate principal amount of the Outstanding Bonds, considered as one class, may declare the principal amount of all Bonds then Outstanding to be due and payable immediately by notice in writing to the
Company (and to the Trustee if given by Holders); provided, however, that with respect to certain Events of Default relating to bankruptcy, insolvency and similar events, the principal amount of all Bonds then Outstanding shall be due and payable
immediately without further action by the Trustee or the Holders. 
 The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee to enter into one or more supplemental indentures for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Indenture with the consent of the Holders of not less than
a majority in aggregate principal amount of the Bonds at the time Outstanding, considered as one class; provided, however, that if there shall be Bonds of more than one series Outstanding under the Indenture and if a proposed supplemental indenture
shall directly affect the rights of the Holders of Bonds of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Bonds of all series so directly affected,
considered as one class, shall be 

  
 7 

 
required; and provided, further, that if the Bonds of any series shall have been issued in more than one Tranche and if a proposed supplemental indenture shall directly affect the rights of the
Holders of Bonds of one or more, but less than all, of such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Bonds of all Tranches so directly affected, considered as one class, shall be
required; and provided, further, that the Indenture permits the Company and the Trustee to enter into one or more supplemental indentures for certain purposes without the consent of any Holders of Bonds. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of Bonds, on behalf of the Holders of all such Bonds, to waive certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this
Senior Note shall be conclusive and binding upon such Holder and upon all future Holders of this Senior Note and of any Senior Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Senior Note. 
 As provided in and subject to the provisions of the Indenture, the Holder of this
Senior Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written
notice of a continuing Event of Default, the Holders of at least 33% in aggregate principal amount of the Bonds at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of at least a majority in aggregate principal amount of Bonds at the time Outstanding a direction inconsistent with such written request,
and shall have failed to institute any such proceeding for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Senior Note for the enforcement of any
payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein. 
 No reference herein
to the Indenture and no provision of this Senior Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Senior Note at the
times, place and rate, and in the coin or currency, herein prescribed. 
 As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Senior Note is registrable in the Bond Register, upon surrender of this Senior Note for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and
interest on this Senior Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company, the Trustee or the Bond Registrar, as the case may be, duly executed by the Holder hereof or such
Holder’s attorney duly authorized in writing, and thereupon one or more new Senior Notes of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 

The Senior Notes are issuable only in registered form without coupons in denominations of $2,000 and any integral multiple of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations therein set forth, Senior Notes are exchangeable for a like aggregate principal amount of Senior Notes and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same. 

  
 8 

 No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 
 The
Company shall not be required to execute or to provide for the registration of the transfer of or the exchange of (A) any Senior Note of this series during a period of 15 days immediately preceding the date notice is to be given identifying the
serial numbers of the Senior Notes called for redemption, or (B) any Senior Note selected for redemption in whole or in part, except the unredeemed portion of any Senior Note being redeemed in part. 

Prior to due presentment of this Senior Note for registration of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Senior Note is registered as the owner hereof for all purposes, whether or not this Senior Note is overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the
contrary. 
 This Senior Note shall be governed by, and construed and enforced in accordance with, the laws of the State of California
without regard to the principles of conflicts of laws thereunder, except to the extent that the Trust Indenture Act shall be applicable. 

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

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

  
 9 

 ASSIGNMENT FORM 
  

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

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

	
	  

	
	  

	
	  

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

  

							
	and irrevocably appoint 	 	  

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

 

							
	Date:                         	  		  	

  

			
	Your signature:	 	  

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

 
			
		
	Tax Identification No.:	 	  

			
	
	SIGNATURE GUARANTEE:
	  

                     
                            
	 	

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

  
 10XENETIC
BIOSCIENCE INC. 

EMPLOYMENT AGREEMENT

 

This
Employment Agreement
("Agreement"
) is entered
into as of this 1st day of
January 2017
by and
between Xenetic
Bioscience,
Inc.,
a Nevada corporation
with a principal place of business
in Lexington , Massachusetts
(the "Company"),
and Curtis
Lockshin,
an individual
(the " Executive").

 

WHEREAS,
the Company and
the Executive wish to set forth
the terms and conditions for the employment
of the Executive by the Company;

 

NOW
THEREFORE, in consideration of
the mutual covenants
and agreements contained herein, and other good and
valuable consideration
the receipt of which is
hereby acknowledged, the
parties mutually agree as follows:

 

Section
1. Term of Employment.

 

(a)           
General. The Company will
employ Executive, and
Executive will be employed by
the Company,
for
the period set
forth in Section
1(b), in
the positions set
forth
in Section 2,
and upon
the other
terms and conditions herein
provided commencing on January
1st, 2017 (the "Effective
Date").

 

(b)          
Term. The Agreement shall
become effective on the Effective
Date and shall continue unless
earlier terminated
as provided in Section 7
(the "Term").
The Executive's
employment
with the Company
shall be
"at
will,"
meaning
that the Executive's
employment may be terminated
by the Company or
the Executive at any time
and for
any reason provided that Executive may not
voluntarily terminate
his employment upon less than ninety
days prior written
notice delivered
to the Company,
or upon
such
shorter notices as
Company and Executive
agree.

 

(c)           
Location. During the Term,
the Executive's
principal place of employment
shall be
in Lexington, MA.
The Executive acknowledges that
Executive's duties and responsibilities shall
require
the Executive
to travel on
business
to the extent
reasonably necessary
to fully perform Executive
's
duties
and responsibilities hereunder.

 

Section
2. Duties and Exclusivity.

 

(a)          
During the Term, the Executive
(i) shall
serve as Chief Scientific Officer
of the Company, with responsibilities,
duties and
authority customary
for such position, subject
to direction by the Chief
Executive Officer of the
Company, (ii) shall
report directly to the Chief
Executive Officer; (iii)
shall devote all
the Executive'
s working time
and efforts to
the business and affairs of
the Company and
its subsidiaries;
and (iv)
agrees to observe and
comply with the Company's rules
and policies as adopted by the Company
from time to time. The Executive's
duties, responsibilities and
authority may include services
for one
or more subsidiaries of the Company.

 

(b)
      Notwithstanding
anything to
the contrary
in Section 2(a)
above, the
Executive may
(i) serve as a director
, trustee
or officer or otherwise
participate in not-for-profit educational, welfare,
social,
religious and
civic organizations.
During the
Term, Executive
shall not
accept any
other employment or consultancy
or serve on
the board of directors or similar body of
any entity unless such
position is
approved by the Chief
Executive Officer.

    	 	1	 

     

    

 

 

(c)          
Exclusivity. The Executive hereby
represents to the
Company that: (i) the execution
and delivery of this
Agreement
by the
Executive
and the
Company
and the performance
by the Executive of the
Executive's
duties hereunder do not and
shall not constitute
a breach of, conflict
with,
or otherwise contravene
or cause
a
default under,
the terms of any
other agreement or policy
to
which the
Executive is
a party
or
otherwise bound or
any
judgment,
order or
decree to which
the Executive is
subject; (ii)
that the Executive
has no information
(including, without
limitation, confidential information
and trade
secrets)
relating to any
other Person which
would prevent, or
be violated by,
the Executive entering into
this Agreement or carrying out
his duties
hereunder;
(iii)
the Executive is
not bound
by any agreement with
any previous employer or
other party
to refrain
from (A) competing with the
business of, or (B) soliciting
the customers of, that employer or party,
in each
case,
which
would be violated by
your
employment
with
the
Company; and (iv) the
Executive understands the Company
will rely upon
the accuracy
and truth of the representations
and warranties of the
Executive
set forth
herein
and
the Executive
consents to such reliance.

 

(d)          
Deemed Resignation.
Upon termination of Executive's employment for any reason,
Executive shall
be deemed
to have
resigned from all offices, if
any, then held with
the Company
or any of its subsidiaries,
and,
at the Company's request,
Executive shall execute such
documents as
are necessary
or desirable
to effectuate such  resignations.

 

Section
3. Compensation.

 

(a)           
Salary. In consideration
of all of the services rendered by
the Executive under
the terms
of
this Agreement, the Company shall
pay to the
Executive a base salary at the
annualized rate
of Two Hundred
Fifty Thousand Dollars
United States $250,000.00 per
annum, less
payroll deductions
and all required
withholdings.
Executive's
Base Salary
shall
be subject
to annual
review
and upward
adjustment
only
by
the Board of
Directors
of
the Company (the
" Board")
or a committee
thereof, beginning
in
fiscal 2017.
The Base Salary shall be paid
in accordance
with the
customary payroll
practices of the Company in
effect from time
to time.
The Executive's salary, as
adjusted from
time to
time under this
Section 3(a),
is
referred
to as
("Base
Salary").

 

(b)           
Annual Bonus. With respect
to each Company fiscal
year that
ends during the Term,
commencing with fiscal
year 2017, the
Executive shall be
eligible to receive an annual
performance-based
cash bonus
(the "Annual
Bonus")
which shall
be payable based upon
the attainment
of individual
and/or Company performance goals
established by the Board or
a committee thereof. The
target
amount of such
Annual Bonus
shall
equal
35% of Executive's
Base Salary
in the
year to
which
the Annual
Bonus relates,
provided
that the
actual amount of the Annual
Bonus may be greater
or less
than
such
target
amount (the "Target
Bonus").
Each Annual
Bonus,
if
any, for a
fiscal year
shall be payable, less
payroll deductions
and all required
withholdings, not later
than the fifteenth day
of the
third month following
the
end of such
year. Except as provided in
Section 7, notwithstanding any
other provision of
this Section
3(b), no bonus shall
be payable with
respect to
a Company fiscal
year
unless the Executive
remains continuously
employed
with the Company
until the
last
day of such
year.

 

(c)           
Reimbursement of
Expenses. The Company will
promptly reimburse
Executive
for all reasonable
out-of-pocket
business
expenses
that are
incurred
by
Executive
in furtherance of
the Company's
business
in accordance
with the
Company's
policies with
respect thereto
as in effect
from time
to time. The
Executive
shall
be reimbursed
by the Company
for the reasonable
attorneys
' fees
and costs incurred
by him
in connection
with the negotiation
and preparation of
this
Agreement
(and related
equity award
documentation),
up
to
a maximum
of $3,000
provided that
the Executive
shall
submit invoices to
the
Company within ninety
(90)
days of incurrence
of the expense, and the
Company shall
reimburse
Executive
within sixty (60) days
thereafter.

    	 	2	 

     

    

 

 

(d)           
Fringe Benefits. In
addition to
any benefits
provided
by
this
Agreement,
Executive
shall be entitled
to participate generally
in
all
employee benefit,
welfare
and other plans,
practices, policies
and programs
and fringe benefits
maintained by the Company
from time to time on
a basis no
less favorable
than those
provided
to other
similarly-situated
executives of
the Company. The
Executive understands that, except
when prohibited by applicable
law, the Company's
benefit plans
and fringe benefits
may be
amended, enlarged,
diminished or
terminated prospectively by
the Company
from time to time,
in its sole
discretion,
and that
such shall not
be deemed to be a breach
of
this Agreement.

 

(e)           
Vacation. Executive
shall be entitled to accrue four
(4) weeks
of paid vacation days
per
year in
accordance with and subject
to the terms of
the
Company '
s vacation policy
applicable to other executive
officers of the Company,
as it
may be amended prospectively
from  time to time.

 

Section
4. Insurance; Indemnification.

 

During
Executive'
s employment
with the
Company, the
Company shall maintain
the insurance it currently has
with respect
to (i) directors'
and officers' liability ,
(ii) errors
and omissions
and
(iii) general liability
insurance
providing
coverage
to
Executive
to
the same
extent as
other senior executives of the Company. Executive's
coverage under
such
insurance
shall terminate
upon Executive'
s leaving
of
the Company's employ for any
reason. The
Executive will be entitled
to indemnification with
respect to
Executive' s
services
provided
hereunder pursuant
to Nevada
law,
the terms and
conditions of Company's articles
of incorporation and/or
bylaws ,
Company's
directors
and officers
("D&O")
liability
insurance
policy,
and
Company 's
standard indemnification agreement
for directors
and officers
as
executed
by Company
and Executive.

 

Section
5. Equity Awards.

 

(a)           
Initial
Grant.
As incentive to
enter into and
undertake
employment
pursuant
to this Agreement,
the Company shall grant to Executive
on the
Effective Date a non-qualified
stock
option to
purchase
175,000
shares of
common stock
of the Company (the "Option")
under the Company's
Equity Incentive
Plan, effective
January 23, 2014
(the "Plan")
at an exercise
price equal
to
the fair
market
value
of the
Company's
common stock
on
the grant
date. The
Option shall vest one-third upon
the first
anniversary of the
Effective Date,
one-third upon
the second anniversary of the
Effective Date and one-third
upon the third anniversary
of the Effective
Date, provided the Executive
remains employed
with the Company
on the applicable
vesting date and
further provided that,
in the
event of a Change in
Control, as
defined in
the
Plan,
while Executive
is employed by the Company
any unvested portion
of
the
Option shall vest
immediately upon the Change in
Control. [Notwithstanding
the
foregoing in
no event
may (i) Executive
exercise
87,500
shares with respect
to the Option (the "
Unapproved Portion"
) prior to
the Company receiving
shareholder approval
of an increase
in the number of
shares of common stock authorized under
the Plan (or adoption of a new
plan covering the
Unapproved Portion)
which amendment to
the Plan
or adoption of
a new
plan shall
include provision for the issuance
of shares of common
stock underlying
the
Unapproved
Portion; and (ii) if
shareholder approval
is
not
obtained
for
any reason on or prior
to December 1,
2017, the Unapproved Portion
shall be
cancelled (from the unvested
portion of the
Option) and
of no further force
and effect.] The Option
shall be evidenced
in writing by, and
subject to the terms and
conditions of, the Plan and,
except
as otherwise
set forth herein,
the Company's
standard form of stock
option agreement,
which agreement shall expire
ten (10)
years from
the date of grant except as otherwise
provided herein,
in the stock
option
agreement or the Plan.

 

    	 	3	 

     

    

 

(b)          
Sale of Shares. Executive agrees that he will not
loan or pledge any securities
of the Company
owned by
him or
which he
may
accrue
in the
future
through Options or
other equity awards as
collateral for any indebtedness.

 

Section
6. Compliance with
Company Policy.

 

During
the Term, the Executive
shall observe all Company rules, regulations,
policies, procedures
and practices in effect
from time to time,
including, without limitation,
such
policies and procedures
as are contained in
the Company policy and procedures
manual, as may be amended
or superseded from time to time.

 

Section
7. Termination
of Employment.

 

Executive's
employment
with the
Company may
be
terminated
during Term 
of this
Agreement
for any of
the
following
reasons:

 

(a)           
By The
Company For Cause. At any time during the Term,
the
Company may terminate
Executive's employment
hereunder for Cause.
For purposes
of
this Agreement, "Cause"
shall mean the occurrence of any of the following events, as determined by
the Board or
a committee
designated by
the
Board, in
its sole
discretion: (i)
conduct by
Executive constituting
a material act
of willful misconduct in
connection with the performance
of his duties,
including,
without limitation,
misappropriation of funds or
property of the Company or any
of its
affiliates other than
the occasional, customary and
de minimis
use of
Company property for personal purposes; (ii) the
commission by Executive of a
felony or any misdemeanor involving moral turpitude, deceit,
dishonesty or fraud,
or conduct by Executive
that
would reasonably be expected to result
in material injury to the
Company if he
were retained in
his position;
(iii) continued, willful and deliberate
non-performance by Executive
of his
duties
hereunder
(other
than by
reason of Executive's physical
or
mental
illness,
incapacity
or
disability) which has
continued for more
than thirty (30)
days
following written notice of
such non-performance
from the
Company; (iv) a material
breach by
Executive of any of the
provisions
contained in Paragraph
7 of this Agreement; (v) a material
violation by
Executive of the
Company'
s
employment policies
which has continued for more than thirty (30) days
following written notice
of such violation
from the
Company; or (vi) willful
failure to cooperate with a bona
fide internal investigation or an investigation by
regulatory
or law
enforcement authorities,
after being
instructed
by
the
Company to
cooperate, or the
willful destruction
or
failure to
preserve documents or
other materials known
to
be
relevant to such investigation or
the willful inducement of
others to
fail to
cooperate
or to produce
documents
or other
materials.

 

		(b)	By
                                         The
                                         Company
                                         Without
                                         Cause.

 

At
any time during
the Term,
the Company
may terminate Executive's
employment hereunder without
Cause.

 

		(c)	By
                                         The
                                         Executive.

 

At
any
time
during
the
Term,
Executive may terminate
his employment
hereunder for any reason,
including but not
limited
to Good
Reason.
For purposes
of
this Agreement,
"Good
Reason"
shall mean
that Executive
has complied
with the "Good
Reason
Process"
(hereinafter
defined) following the occurrence
of any of the following
events: (i) a
substantial diminution or other
substantive adverse change, not
consented to
by Executive, in
the nature or scope of Executive'
s responsibilities,
authorities, powers, functions
or duties;
(ii) a
breach by the Company
of any of its other
material obligations under this
Agreement, including
but not limited to failure of
the
Company to
make any material payment or provide any
material benefit under this Agreement,
or (iii) a change in the geographic
location at
which
Executive must
perform his services as
provided under this
Agreement to a location more
than fifty miles from the location set
forth in this
Agreement; provided that, a change
in the employment
of Executive to another affiliate
of Company
does not
in and
of itself
constitute
" Good
Reason." "Good
Reason Process"
shall
mean that (A)
Executive reasonably
determines in good
faith
that a "Good
Reason"
event
has occurred; (B) Executive
notifies
the Company
in writing
of the occurrence
of
the Good
Reason
event within ninety
(90) days of
the occurrence of such event;
(C) Executive
cooperates in good faith with
the Company's efforts,
for a
period not less than sixty
(60) days following
such notice ,
to modify Executive'
s employment situation in
a manner acceptable to Executive
and Company; (D) notwithstanding
such efforts,
one or more
of the
Good Reason
events continues to exist and
has not been
modified in a
manner acceptable
to Executive;
and (E) Executive terminates his
employment no later
than sixty (60)
days after the end
of the
sixty (60) day
cure period.
If the
Company
cures the Good
Reason event
in a manner
acceptable to Executive
during
the sixty
(60) day
period, Good
Reason shall
be deemed not to have
occurred.

 

    	 	4	 

     

    

 

		(d)	Right
                                         to Severance.

 

In
the event the Company terminates
Executive's employment Without
Cause or
the Executive terminates employment
for Good
Reason as
provided in Section 7(c)
and if Executive executes
and does not revoke during any
applicable revocation
period a
general release of all claims against the
Company and
its affiliates in
a form
acceptable to the Company (a
" Release
of Claims")
within a
reasonable period of time specified
by the
Company and
in compliance with applicable
law,
following such
termination, then in addition
to any accrued
obligations payable
under Section 7(e)(i) below,
the Company 
shall:

 

(i)
Pay to the Executive one year
of Executive's Base Salary,
less payroll deductions and
all required withholdings, paid
over time
in accordance with the
Company's payroll
practices
then in effect;
and

 

(ii)  The Company
shall notify Executive of any
right to
continue group
health plan
coverage
sponsored by
the Company
immediately
prior to Executive
's
date
of termination
pursuant to the
provisions
of applicable law
including,
but not limited to,
the
provisions
of the Consolidated
Omnibus Budget
Reconciliation Act of
1985, as
amended ("COBRA").
If Executive
elects to receive such
continued healthcare coverage,
the
Company shall
directly
pay, or
reimburse
Executive for,
the premium
for Executive
and
Executive' s
covered
dependents, less the
amount
of Executive's monthly
premium contributions for
such coverage
prior to termination, for
the period commencing
on the first
day of the first full calendar
month following such
employment termination
through the earlier
of (i) the last day of the
month for twelve
(12) full calendar months (such
period consistent with
the severance
payment period set
forth in
Section 7(d)(i)
above)
following
the
date
the Release of
Claims becomes effective
and irrevocable;
and (ii)
the date Executive and Executive's
covered dependents,
if any,
become eligible for
healthcare coverage
under another employer's
plan(s). Executive
shall notify the Company
immediately if
Executive becomes
covered by a
group health
plan of
a subsequent
employer. After
the Company ceases to
pay premiums pursuant to this
subsection,

 

Executive
may,
if
eligible,
elect to continue
healthcare coverage
at Executive's
expense in accordance
the provisions of
COBRA or other
applicable
law.

 

    	 	5	 

     

    

 

For
purposes of
this Sect ion
7(d),
Executive's
termination of
employment at
the end of the
Term following an earlier notice
of nonrenewal by the Company
shall be
treated as a termination of the
Executive'
s employment
by the Company
without Cause
as of the
last
day of
the Term.

 

(e)           
Upon
a
termination
of the Executive's
employment
for
any
reason
,
(i)
the
Executive
shall
be entitled to
receive: (A) any
portion of
the
Executive's Base
Salary through
the date of
employment termination not theretofore
paid, (B) any
expenses owed to the
Executive under Section
3(c) above, (C) any accrued but unused
vacation pay
owed to
the Executive pursuant
to
Section
3(e) above,
and (D) any
amount arising
from the
Executive's
participation in,
or benefits
under, any
employee
benefit plans,
programs or
arrangements under
Section 3(e), which amounts shall
be payable
in accordance
with the terms
and conditions
of such
employee benefit plans, programs
or
arrangements.

 

(f)            
The payments and
benefits described
in this Section
7 shall be the
only payments and benefits
payable in
the event
of the Executive'
s termination
of employment
for any
reason.

 

Section
8. Survival of Obligations.

 

The
obligations of the Executive
as set
forth in Section
4,
Section
7 and Sections
9 through 1
7
below
shall
sur
vive
the
term of
this Agreement and
the
termination of
Executive
's
employment
hereunder regardless
of the reason(s)
therefor.

 

Section
9. Non-Competition and Conflicting
Employment.

 

(a)           
During the Term, the Executive
shall
not,
directly or
indirectly,
either as an Executive, employer,
employee, consultant, agent,
principal, partner,
officer,
director, shareholder, member,
investor or in any
other individual
or representative
capacity,
engage or participate in
any business or
business
related activity of any kind
that is in competition
in any
manner whatever
with the business
of the Company or any
business
activity related
to the
business in
which the Company
is
now
involved
or becomes
involved
during the Executive '
s employment.
For these
purposes,
the current
business of
the Company
is
described in the Company's
prospectus
dated November
1, 2016. The
Executive also agrees that,
during his
employment with
the Company, he
will not
engage in
any other
activities that
materially
conflict with his
obligations
to the Company,
it being
understood that
activities
approved by the Board under Section
2(b) or
otherwise in writing
shall
not be considered
to
violate
this
Section 
9(a).

 

(b)           
As a material
inducement to the Company
to continue
the employment
of the
Executive,
and
in order to
protect the Company'
s Confidential
In format ion
and
good will,
the
Executive agrees
that:

 

(i)           
For a period of twelve
(12) months following
termination of
the
Executive'
s employment
with the Company
or its
affiliates
for any
reason, Executive
will not
directly or indirectly
solicit
or divert
or accept business
relating
in any
manner
to Competing
Products or to
products, processes
or services
of the Company,
from any of the customers
or accounts of
the Company
with
which
the
Executive had any
contact
as a
result of Executive's
employment
with the
Company;
and

    	 	6	 

     

    

 

(c)           
For
a
period
of
twelve
( 12) months
after
termination
of
Executive's employment
with
the
Company
or its affiliates
for any reason,
Executive
will
not (A) render services
directly or indirectly
, as
an Executive, consultant
or otherwise, to any
Competing
Organization in connection
with
research on or
the acquisition,
development,
production,
distribution, marketing or providing
of
any Competing Product,
or
(B) own
any interest in
any Competing
Organization except
as
an
investor or
stockholder
of
more than 2% of the
equity securities
of any
entity:

 

(i)           
"Competing
Products"
means
any product,
process,
or
service of
any person
or organization
other than
the Company,
in existence
or under
development
(a) which is
identical to, substantially
the same
as, or an
adequate substitute
for any product, process or
service
of the Company
in existence
or under
development,
based on
any
patent or
patent application
(provisional
or otherwise),
or other
intellectual property of the
Company
about which
the
Executive
acquires
Confidential
Information,
and
(b) which
is
(or could
reasonably be anticipated
to
be) marketed
or distributed in such
a manner
and in such
a geographic
area
as to
actually
compete with such
product, process
or service
of
the
Company;
and

 

(ii)
"Competing
Organization "
means
any person
or organization,
including
the Executive,
engaged
in,
or about to
become engaged in,
research
on or the
acquisition,
development, production, distribution,
marketing or
providing
of a
Competing
Product.

 

(d)          
The
parties
agree
that
the
Company
is
entitled
to
protection
of its
interests
in
these areas.
The parties further agree
that the
limitations
as to
time,
geographical
area, and
scope of
activity
to
be restrained
do not impose
a greater
restraint upon
Executive than
is necessary to protect
the goodwill
or
other
business
interest of
the Company.
The parties
further agree that in the
event of a
violation of
this
Covenant Not To
Compete, that
the Company
shall
be entitled
to the
recovery of damages
from Executive
and
injunctive relief against
Executive
for
the
breach
or violation
or continued breach
or violation
of this Covenant.
The Executive agrees
that if
a court of competent
jurisdiction
determines that the
length of
time
or any
other restriction,
or portion
thereof, set
forth
in this
Section
9 is overly
restrictive
and unenforceable,
the court may
reduce
or modify
such
restrictions
to those
which
it deems
reasonable
and enforceable under
the circumstances, and
as so
reduced or
modified, the
parties
hereto
agree
that
the restrictions
of this Section 9
shall remain
in
full force
and effect. The
Executive further
agrees that
if a
court of competent
jurisdiction determines that
any
provision of this Section 9
is
invalid or
against
public policy, the
remaining
provisions of this
Section 9 and
the remainder of this
Agreement shall
not be affected
thereby, and
shall
remain in
full
force and
effect.

 

Section
10. Confidentiality.

 

(a)           
Executive recognizes and
acknowledges
that
he will have
access to
certain information
of
members
of
the
Company
and that
such
information
is confidential
and
constitutes
valuable,
special
and
unique property
of such members
of the
Company. The
parties agree
that the
Company
has
a legitimate
interest in
protecting
the Confidential
Information,
as defined
below. The parties
agree that
the Company
is
entitled to
protection
of its interests
in the
Confidential
Information.
The
Executive
shall
not at
any time,
either during
his
employment
and for seven
(7) years
after the
termination
of his employment
with the
Company for
any reason,
or indefinitely
to the
extent
the Confidential
Information
constitutes
a trade
secret under
applicable
law,
disclose
to others, use,
copy or
permit to
be
copied,
except
in pursuance
of
his
duties for
and on
behalf
of the
Company, its
successors,
assigns
or nominees,
any Confidential
Information
of any member
of the
Company (regardless
of whether
developed
by
the Executive)
without the
prior written
consent of the Company.
Executive
acknowledges that
the use or
disclosure of the Confidential Information
to anyone
or any third
party
could cause
monetary loss
and
damages to the Company
as well as
irreparable harm. The
parties
further agree that in
the event of
a violation of this
covenant against
non-use and non-disclosure
of Confidential
Information, that
the Company shall be
entitled to
a recovery of damages
from Executive and/or to
obtain an injunction
against Executive for the
breach or violation, continued
breach,
threatened breach
or violation of this
covenant.

 

    	 	7	 

     

    

 

(b)          
As used
herein, the term " Confidential
Information" with respect
to any person
means any secret
or confidential information
or know-how and shall
include, but
shall not be limited
to, plans,
financial and
operating information,
customers, supplier
arrangements, contracts, costs,
prices,
uses, and
applications of products
and services,
results of investigation
s, studies
or experiments owned or used
by such person,
and all apparatus, products,
processes,
compositions, samples, formulas,
computer programs, computer hardware
designs,
computer firmware designs,
and servicing, marketing
or manufacturing methods
and techniques
at any time
used, developed,
investigated,
made or
sold
by such
person, before or during
the term of this
Agreement, that are not readily
available to the public
or that are maintained
as confidential
by such
person. The
Executive shall
maintain in
confidence any Confidential Information
of third
parties received as a result
of his
employment with
the Company
in accordance with
the Company's
obligations to such
third parties
and
the policies established
by the
Company.

 

(c)           
As used herein , "Confidential
Information" with
respect to
the Company means any Company proprietary
information, technical data,
trade secrets, know-how
or other business
information disclosed to the
Executive by the
Company either directly
or indirectly
in writing, orally or by drawings
or inspection
or unintended view
of parts, equipment, data,
documents or the
like,
including, without
 limitation:

 

(i)
Medical and drug research
and testing results and information,
research and development techniques,
processes, methods, formulas,
trade secrets,
patents,
patent applications,
computer programs,
software, electronic codes,
mask works, inventions,
machine s, improvements,
data, formats, projects
and research
 projects;

 

(ii)
Information about costs, profits,
markets,
sales, pricing,
contracts and lists
of customers,
distributors and/or
vendors and business,
marketing and/or
strategic plans;

 

(iii)  Forecasts, unpublished
financial information, budgets,
projections, and customer identities,
characteristics and agreements
as well as all business opportunities,
conceived, designed, devised,
developed, perfected or made
by the Executive whether alone
or in conjunction
with others, and related in
any manner to the
actual
or
anticipated business
of
the Company or
to
actual
or anticipated areas of research
and development;
and

 

(iv)
Executive personnel
files and
compensation information.

 

(d)           
Notwithstanding the foregoing, Confidential Information
as defined
in Sections
1O(b)
and (c)
does not
include
any
of the foregoing
items
which
(i)
has become publicly
known or
made generally
available to the
public through
no wrongful
act of Executive;
(ii) has been disclosed to
Executive
by a
third party
having no duty to
keep Company matter confidential;
(iii)
has been developed by Executive independently
of employment
with the
company; (iv)
has been disclosed by the Company
to a
third party without
restriction
on disclosure;
(v) has
been
disclosed with the Company's
written consent,
or (vi) the Company's investors,
shareholder
s and
other capital sources.

 

    	 	8	 

     

    

 

(e)           
Executive
hereby
acknowledges
and agrees that
all
Confidential
Information shall
at
all
times
remain
the
property
of the Company.

 

(t)
Executive
agrees that
Executive will not
improperly use or disclose any
Confidential Information, proprietary
information
or trade secrets
of any former
employer
or
other person or entity
or entity with
which Executive
has an agreement or duty to
keep in confidence
information
acquired
by Executive
and that
Executive
will
not bring onto
Company
premises any unpublished
document or proprietary information belonging to
any such employer,
person
or entity
unless consented to in
writing by such
employer, person
or entity.

 

(g)          
Executive
recognizes that the
Company
has
received and
in the future will receive from
third pat1ies
their
confidential
or proprietary information subject
to a duty
on the
Company's part to
maintain the confidentiality
of such
information and
to use
it
only for
certain limited purposes.
Executive agrees to hold all
such confidential
or proprietary information in the
strictest
of confidence and not to
disclose
it to
any person,
firm or entity
or to use it except
as necessary in carrying out
Executive
's work
for the Company
consistent with Company
' s
agreement with such
third
party.

 

(h)          
Executive represents
and warrants that
from the
time of
the Executive's
first contact with the Company,
Executive has
held in
strict
confidence all Confidential Information
and has
not disclosed any
Confidential Information directly
or indirectly
to anyone outside the
Company, or used,
copied, published
or summarized
any Confidential Information,
except to
the extent otherwise
permitted
under the
terms of this
Agreement.

 

(i)           
Executive will
not disclose to the
Company or use on its
behalf any
confidential information belonging
to others and Executive
will not bring onto the premises
of the
Company any confidential
information belonging
to any such party unless consented
to in writing
by such
party.

 

Section
11. Inventions.

 

(a)           
Attached hereto
as Exhibit
A is
a list
describing
all ide
as, processes,
trademarks, service marks, inventions, designs, technologies,
computer
hardware or
software,
original works of
authorship, formulas, discoveries,
patents, copyrights, copyrightable
works, products, marketing
and business ideas,
and
all improvements,
know-how,
data rights, and
claims
related
to the foregoing,
whether or not
patentable, registrable or copyrightable,
which were conceived, developed or
created
by
Executive prior
to Executive's employment
or
first contact
with Company (collectively referred to
herein as
" Prior
Inventions"
), (A)
which belong
to
Executive, (B) which relate to
the
Company'
s current
or contemplated business,
products or
research
and development, and (C)
which are not
assigned to
the Company hereunder. If there
is
no Exhibit
A or no items
thereon, the
Executive represents
that there
are no
such Prior Inventions.
If in
the course
of Executive's employment
with
the Company, the Executive incorporates
or embodies into
a Company product,
service or process a Prior Invention
owned by
the Executive
or in
which the
Executive has
an
interest,
the
Company is
hereby granted
and shall
have a
non-exclusive, royalty free,
irrevocable, perpetual,
world-wide license
to make,
have made,
modify,
use and
sell such Prior
Invention
as part
of
or in
connection
with such product,
service
or process.

    	 	9	 

     

    

 

(b)           
Executive agrees that
Executive will
promptly make full, written disclosure
to the Company
and will hold
in trust for the sole
right and benefit of the Company,
and the Executive
hereby
assigns to the Company, or
its designee,
all of the
Executive'
s right,
title and
interest in and
to any and all ideas, process,
trademarks,
service
marks, inventions, designs, technologies,
computer hardware or software,
original works of authorship,
formulas, discoveries, patents
, copyrights,
copyrightable works, products,
marketing and
business ideas, and all improvements,
know-how, data, rights and claims related to the foregoing, whether
or not patentable, registrable
or copyrightable,
which Executive
may, on or after the Effective
Date of this Agreement, solely
or jointly
with others conceive
or develop or reduce
to
practice, or cause
to be
conceived or developed or
reduced to
practice, during
the period of time the Executive
is in the employ of the Company
(collectively referred
to
herein
as
"Intellectual
Property
Items");
and
the Executive further
agrees that the foregoing shall
also apply to
Intellectual Property Items which
relate to the business of the Company or to the Company's anticipated business
as of the end of the Executive's
employment and which are conceived,
developed or reduced to practice
during a period
of one year after the end of
such employment. Without limiting
the foregoing, the Executive
further acknowledges that all original works of authorship which are
made by Executive (solely
or jointly with others) within
the scope
of Executive
' employment
and which are protectable by copyright are works made for hire
as that term is
defined in the
United Stated Copyright 
Act.

 

(c)           
Executive agrees to keep
and maintain adequate
and current written records of
all Intellectual Property Items
made by Executive
(solely or jointly with
others) during the term
of Executive's employment with
the Company. The records will be in the
form of notes,
sketches,
drawings and any other format
that may
be specified by the
Company.
The records
will be available
to, and remain the
sole
property
of, the Company
at
all times.

 

Section
12. Return of Company
Property.

 

Executive
agrees that, at any time
upon request
of the
Company, and, in any event, at
the time
of leaving
the
Company's employ, Executive
will
deliver
to the Company
(and will not
keep originals
or copies in Executive's possession or
deliver them
to anyone
else)
any
and all devices,
records,
data, notes,
reports, proposals, lists,
correspondence, specifications,
drawings, blueprints, sketches,
material, equipment or other documents or property, or reproduction
of any of the aforementioned
items, containing
Confidential Information
or otherwise belonging
to the Company, its successors
or assigns, whether prepared by the Executive or supplied to the Executive by the Company. Notwithstanding the foregoing, it is
understood
that names
and contacts
in the
Executive's address book
acquired both
prior to
and during employment, including
shareholders
of the Company, will remain property
of the Executive
who will not be restricted from doing business with them
subject to
the limitations
Sections 10
and
14 hereof and applicable law.

 

Section
13. Non-Solicitation.

 

Executive
agrees that Executive shall not,
during Executive's
employment or other involvement
with
the Company and for
a period of
twelve (12)
months
immediately following
the
termination
of
the Executive ' s
employment with the Company,
for any reason, whether with
or without cause, (i) either
directly or indirectly
solicit
or take away, or attempt to
solicit
or take
away executives of the
Company, either for the
Executive's own business or
for any other person or entity
and/or (ii) either
directly or indirectly
recruit, solicit
or otherwise induce or influence
any investor, lessor,
supplier,
customer, agent,
representative or
any other
person which
has a business
relationship with the
Company to discontinue,
reduce or modify such employment,
agency or business relationship with the
Company.

    	 	10	 

     

    

 

Section
14. Publications.

 

Executive
agrees that Executive will,
in advance
of publication, provide
the Company with copies of all writings and materials
which Executive proposes to
publish during the term of Executive's
employment and for
twenty-four (24) months
thereafter. Executive
also agrees that
Executive will, at the
Company's request
and sole discretion,
cause to
be deleted from such writings
and materials any
information the Company
believes discloses or will
disclose Confidential
Information. The
Company' s
good faith judgment in these
matters will be
final. The Executive will also,
at the Company'
request and
in its sole
discretion, cause to be deleted
any reference whatsoever to
the Company from
such writings and 
materials.

 

Section
15. Equitable
Remedies.

 

Executive
agrees that any
damages awarded
the Company for any breach of
Sections 9 through 14
of
this Agreement
by
Executive
would be inadequate.
Accordingly, in
addition
to
any damages
and
other rights
or
remedies available
to the Company,
the Company
shall be entitled
to obtain injunctive relief from
a court of competent jurisdiction
temporarily,
preliminarily and permanently
restraining and enjoining any
such breach or threatened breach
and to
specific performance
of any such provision
of this
Agreement. In
the event that either party
commences litigation against
the other
under this Agreement the prevailing
party in said litigation
shall be entitled to
recover from the other all costs
and expenses incurred to
enforce the terms of this Agreement
and/or recover damages for
any breaches thereof,
including without limitation
reasonable attorneys'
fees.

 

Section
16. Representations and Warranties.

 

(a)           
Executive represents and
warrants as follows
that: (i)
Executive has
no obligations, legal or
otherwise, inconsistent
with the
terms of this
Agreement or with the
Executive's undertaking
a relationship with the Company;
and (ii) Executive has not
entered into, nor
will Executive enter into,
any agreement (whether
oral or written)
in
conflict
with this
Agreement.

 

(b)          
The Company represents
and warrants
to
the Executive that
this Agreement
and the
Options grant have
been duly authorized by
the Company's Board of Directors
and are the
valid and
binding
obligations
of the Company,
enforceable
in accordance
with their
respective terms.

 

Section
17. Miscellaneous.

 

(a)           
Entire Agreement. This
Agreement, the exhibits attached
hereto, and
the Options granted
concurrently herewith under Section
5(a) hereof, contain
the entire
understanding of
the parties
and
supersede all previous
contracts,
arrangements or understandings,
express
or implied,
between the Executive and the
Company with respect to the
subject matter hereof or
his engagement by the Company
as Chief Scientific Officer.
No agreements or
representations, oral or
otherwise,
express or implied,
with
respect to
the
subject matter hereof have
been made
by either party which
are not expressly set forth in
this Agreement
or
in
the attached
exhibits.

 

(b)           
Section
Headings.
The
section headings
herein
are for the
purpose
of
convenience only
and
are not
intended to define
or
limit
the contents of
any section.

 

    	 	11	 

     

    

 

(c)           
Severability. If any
provision of
this Agreement shall be declared
to be invalid
or unenforceable, in whole
or in part,
the remainder of this Agreement
shall be amended
to
provide the
parties with
the equivalent
of the same rights and obligations
as provided
in the original provisions
of this Agreement.

 

(d)           
No Oral
Modification; Waiver or
Discharge.
No
provisions
of
this Agreement may be
modified, waived or discharged
orally, but
only by
a waiver, modification
or discharge in writing
signed
by the Executive
and such officer as
may
be designated by
the
Board of Directors
of the Company
to execute
such
a waiver, modification
or discharge.
No waiver by
either party
hereto
at any time
of any breach
by the other party
hereto
of, or
failure to be
in compliance with, any condition
or provision
of
this Agreement
to
be performed by such
other party
shall
be deemed a
waiver of similar or dissimilar
provisions or conditions at
the
time or
at any
prior
or
subsequent time.

 

(e)           
Invalid Provisions.
Should any portion
of this
Agreement be adjudged or held
to be
invalid,
unenforceable
or
void, such holding
shall not
have
the
effect of invalidating
or
voiding the remainder
of this Agreement
and the parties
hereby agree
that the
portion so
held invalid,
unenforceable or void
shall, if
possible,
be deemed
amended
or reduced
in
scope, or otherwise be
stricken
from this Agreement to the
extent required for the
purposes
of
validity and enforcement

 

(f)            
Execution In
Counterparts.
The parties may sign this
Agreement in
counterparts, all
of which shall
be considered
one and the same
instrument. Facsimile transmissions,
or electronic
transmissions in
.pdf format, of
any
executed original document
and/or
retransmission of any
executed facsimile or .pdf transmission
shall be deemed
to be
the same as the delivery
of an
executed original of
this Agreement.

 

(g)           
Governing Law And
Performance.
This Agreement shall be
governed, construed, interpreted
and enforced in accordance
with the substantive
laws of
the Commonwealth
of Massachusetts, without giving effect to any choice of law
or conflict of
law provision
or rule
(whether of the
Commonwealth of Massachusetts
or any other jurisdiction)
that would cause the
application of the
law of any jurisdiction other
than the Commonwealth
of Massachusetts.
Any legal
action or
proceeding with respect to this
Agreement shall
be brought
in the courts of the
Commonwealth of Massachusetts
or of the
United States of
America for the
District of Massachusetts.
By execution
and delivery
of this
Agreement, each
of the parties hereto
accepts for
itself and
in
respect of
its
property,
generally and unconditionally,
the exclusive
jurisdiction
of the
aforesaid courts. ANY ACTION,
DEMAND, CLAIM,
OR COUNTERCLAIM ARISING UNDER OR
RELATING TO THIS AGREEMENT SHALL
BE RESOLVED BY A JUDGE
ALONE
AND EACH OF
COMPANY
AND EXECUTIVE
WAIVES ANY
RIGHT
TO A
JURY TRIAL
THEREOF.

 

(h)           
Successor and Assigns.
This Agreement
shall be binding on and inure to
the benefit of the
successors
in interest of
the parties, including ,
in the case
of the Executive,
the Executive's
heirs,
executors and estate.
The Executive
may
not assign
Executive's obligations under
this Agreement. Any successor to the
Company (whether direct or indirect
and whether by
purchase, merger,
consolidation,
liquidation or
otherwise) to all
or substantially all of the Company's business
and/or assets shall assume the
obligations under
this Agreement and agree expressly
to perform the obligations
under this
Agreement in
the same manner and to
the same extent
as the Company would be
required to perform such obligations
in the absence of a succession.
For all
purposes under this Agreement,
the term "Company"
shall include any successor
to the Company's
business and/or
assets which executes and delivers
the assumption agreement described
in this Section l 7(h) or which
becomes bound by the terms of
this Agreement by operation of  law.

    	 	12	 

     

    

 

(i)            
Notices. Any
notices or other communications
provided for hereunder may be
made by hand,
by certified
or registered
mail, postage prepaid, return
receipt
requested, or by nationally recognized
express courier services provided
that the same are addressed to
the party
required to be
notified
at its
address
first
written
above, or
such
other address as
may
hereafter
be established
by
a
party
by written notice
to the other
party. Notice shall
be considered
accomplished
on the date delivered, three
days after
being mailed or
one day after
deposit with
the express courier, as
applicable.

 

Section
18. Section 409A.

 

(a)           
It
is
intended
that any
compensation or
benefits under this
Agreement satisfy,
to
the greatest extent
possible, the exemptions from
the application of Section
409A of the
Internal Revenue Code of l986,
as
amended ("Section
409A")
provided under
Treasury Regulations Sections
l. 409A- l (b), and
this Agreement
will be
construed to
the greatest extent possible
as consistent with those
provisions, and
to
the extent not
so exempt,
this
Agreement (and any
definitions hereunder) will
be construed
in a manner that complies with
Section 409A. For purposes of
Section 409A,
the Executive's
right
to receive any
installment
payments under this
Agreement shall be
treated as a
right to receive
a series
of separate
payments and,
accordingly,
each installment payment hereunder
shall
at all
times
be considered
a separate and
distinct payment. Severance
benefits under Section 7(d) shall
not commence until the Executive
has a "
separation
from
service"
for purposes
of
Section 409A.

 

(b)          
To the
extent that any
reimbursement of expenses
or in-kind benefits constitutes
defe1Ted compensation
under Section 409A,
such
reimbursement or benefit shall
be provided no later
than December 31
of the
year following
the year
in which
the
expense was
incurred. The amount
of expenses reimbursed in one
year shall not affect
the amount eligible for reimbursement
in any subsequent year. The
amount of any in-kind benefits
provided in
one year shall not
affect the
amount of in-kind
benefits provided in any other
year.

 

(c)           
If the Executive
is deemed at
the time of
his
separation from service to be
a specified employee
for purposes
of Section
409A(a)(2)(B)(i) of the Code,
to the
extent delayed commencement
of any portion
of the compensation
and
benefits
to
which
the
Executive is
entitled
under this
Agreement is
required in
order to avoid a prohibited
distribution under
Section 409A(a)(2)(B)(i)
of the
Code, such
portion of the Executive '
s termination
benefits shall
be provided to the
Executive immediately after
the earlier
of (A) the expiration
of the six-month
period measured from the
date
of
the
Executive'
s separation
from service
with the Company
(as such term is defined in the
Treasury Regulations issued under
Section 409A
of the Code)
or (B) the date of
the Executive's death in
a lump
sum,
and any
remaining payments due under the Agreement
shall be paid
as otherwise
provided herein.

 

Section
19. Limitation
of Payments upon Certain
Events.

 

(a)          
Limitation on Payments. Notwithstanding
anything in this Agreement to
the contrary, if
any payment or distribution
Executive would
receive pursuant to this Agreement
or
otherwise
("Payment")
would
(a)
constitute
a
"
parachute
payment"
within
the
meaning
of
Section 280G
of the Code),
and
(b) but
for this
sentence, be
subject
to the excise
tax
imposed by Section 4999 of
the Code
(the "
Excise Tax"),
then
the Company
shall
cause to
be
determined, before
any amounts of the
Payment are paid
to Executive,
which
of the
following
alternative
forms of payment would
maximize Executive's
after-tax proceeds: (i) payment
in full of the entire
amount of
the Payment (a "
Full Payment"),
or (ii)
payment
of only a
part of the Payment so
that Executive receives
that largest Payment possible
without
being subject
to the
Excise Tax (a
" Reduced
Payment"),
whichever
of
the foregoing amounts,
taking into
account
the applicable federal,
state and local
income taxes and
the Excise Tax (all
computed at the highest marginal
rate, net of the maximum
reduction in federal
income taxes which
could be obtained
from a deduction of
such
state
and local
taxes),
results in
Executive's
receipt,
on an
after-tax basis, of the
greater amount of the
Payment, notwithstanding
that all or some portion
the Payment may
be subject
to the Excise Tax.

 

    	 	13	 

     

    

 

(b)          
The independent registered public
accounting firm engaged by
the Company for general
audit purposes
as of the
day prior to the date the first
Payment is due shall make
all
determinations required to
be made under this Section
19.
If the independent
registered
public accounting
firm so engaged
by
the Company
is
serving
as accountant or
auditor
for
the individual, group
or entity
effecting
the transaction, the
Company shall
appoint a nationally
recognized independent registered public
accounting
firm
to make
the determinations required hereunder. The
Company shall
bear all
expenses
with respect to
the determinations by such
independent registered public
accounting
firm required
to
be made
hereunder.

 

(c)          
The independent
registered public accounting
firm engaged
to make the determinations hereunder
shall
provide its
calculations, together
with detailed
supporting documentation,
to
the Company
and Executive
at such time as
requested
by the
Company
or Executive.
If the independent registered
public accounting firm determines that no
Excise Tax is
payable
with
respect to
a
Payment,
either before
or
after
the application
of
the Reduced Payment,
it shall
furnish the Company and Executive
with an
opinion reasonably acceptable
to Executive
that
no
Excise
Tax will be
imposed
with respect
to such
Payment. Any
good faith
determinations of the
accounting
firm made hereunder
shall be
final,
binding
and
conclusive upon
the Company and Executive.

 

IN
WITNESS WHEREOF,
the parties
hereto have
executed this Employment Agreement
under seal
as of the date
and year first above written.

 

	Company:

         

        Xenetic
        Biosciences, Inc.

         

         

        By:
        /s/ Scott Maguire

        Scott
        Maguire

        Chief
        Executive Officer
	Executive

         

         

         

         

        /s/
        Curtis Lockshin

        Curtis
        Lockshin

 

    	 	14

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